DARIEN, Conn.--(BUSINESS WIRE)--Genesee & Wyoming Inc. (G&W) (NYSE:GWR)

Fourth Quarter 2018 Consolidated Highlights Compared with Fourth Quarter 2017

• Operating revenues increased 0.7% to $575.6 million from $571.6 million.
• Reported operating income decreased 0.8% to $105.7 million; Adjusted operating income increased 5.6% to $109.9 million.⁽¹⁾
• Reported diluted earnings per share (EPS) were $0.94 with 58.9 million weighted average shares outstanding, compared with reported diluted EPS in the fourth quarter of 2017 of $6.81 with 62.7 million weighted average shares outstanding; Adjusted diluted EPS increased 29.9% to $1.00.⁽¹⁾
• G&W repurchased approximately 2.4 million shares of its Class A Common Stock for $189.6 million during the fourth quarter of 2018.
• Net cash provided by operating activities for the year ended December 31, 2018 increased 15.4% to $553.1 million; adjusted free cash flow attributable to G&W before new business investments and grant funded projects increased 20.8% to $326.0 million; adjusted free cash flow attributable to G&W increased 12.1% to $280.6 million.⁽¹⁾
• A number of items affect comparability between the fourth quarter of 2018 and 2017, the most significant of which was the impact of the U.S. Tax Cuts and Jobs Act (TCJA) enacted in December 2017.

Fourth Quarter 2018 Segment Highlights Compared with Fourth Quarter of 2017

• North America: Operating revenues from G&W's North American Operations increased 5.5% to $338.0 million from $320.2 million. Reported operating income from G&W's North American Operations increased 16.7% to $87.2 million; Adjusted operating income from G&W's North American Operations increased 18.1% to $89.3 million.⁽¹⁾
• Australia: Operating revenues from G&W's Australian Operations decreased 5.8% to $71.1 million from $75.5 million. Reported operating income from G&W's Australian Operations remained relatively flat at $17.7 million. Adjusted operating income from G&W's Australian Operations decreased 21.2% to $17.7 million.⁽¹⁾
• U.K./Europe: Operating revenues from G&W's U.K./European Operations decreased 5.3% to $166.5 million from $175.8 million. Revenues in the fourth quarter of 2017 included $12.2 million of revenues from G&W's Continental Europe intermodal business, ERS Railways B.V. (ERS), which was sold in June 2018. Reported operating income from G&W's U.K./European Operations, which included $0.8 million in 2017 from ERS, decreased to $0.8 million, compared with $14.2 million in 2017; Adjusted operating income from G&W's U.K./European Operations decreased 51.8% to $2.8 million.⁽¹⁾

Jack Hellmann, Chairman and CEO of G&W, commented, “In the fourth quarter of 2018, our reported diluted EPS were $0.94 compared with $6.81 in the fourth quarter of 2017. Our adjusted diluted EPS increased 30% to $1.00 in the fourth quarter of 2018, led by a 17% increase in our North American operating income due to 5.8% growth in carloads and a 250 basis point improvement in our operating ratio. The strong results in North America more than offset weaker performance in our Australian and U.K./European operations.”⁽¹⁾

“For the full year, our reported diluted EPS were $4.03 in 2018 compared with $8.79 in 2017. Our adjusted diluted EPS increased 32.3% to $3.85 in 2018 and we expect double digit adjusted diluted EPS growth in 2019.”⁽¹⁾

“In addition to solid earnings growth, G&W generated record cash flow in 2018. With strong cash generation, which significantly exceeded our reported net income, and approximately $455 million of availability under our revolving credit facility, we continue to evaluate potential investments in multiple geographies as well as investments in our own shares. During the fourth quarter of 2018, we repurchased 2.4 million shares of our common stock for approximately $190 million.”

Financial Results

G&W's operating revenues increased $4.0 million, or 0.7%, to $575.6 million, in the fourth quarter of 2018, compared with $571.6 million in the fourth quarter of 2017. G&W's reported operating income in the fourth quarter of 2018 was $105.7 million, compared with $106.5 million in the fourth quarter of 2017. Excluding the net impact of certain items affecting comparability between periods as discussed below, G&W's adjusted operating income in the fourth quarter of 2018 was $109.9 million, compared with $104.0 million in the fourth quarter of 2017.⁽¹⁾

Reported net income attributable to G&W in the fourth quarter of 2018 was $55.6 million, compared with $426.6 million in the fourth quarter of 2017. Excluding the net impact of certain items affecting comparability between periods as discussed below, adjusted net income attributable to G&W in the fourth quarter of 2018 was $59.1 million, compared with $48.6 million in the fourth quarter of 2017.⁽¹⁾

G&W's reported diluted EPS in the fourth quarter of 2018 were $0.94 with 58.9 million weighted average shares outstanding, compared with reported diluted EPS in the fourth quarter of 2017 of $6.81 with 62.7 million weighted average shares outstanding. Excluding certain items affecting comparability listed below, G&W's adjusted diluted EPS in the fourth quarter of 2018 were $1.00 with 58.9 million weighted average shares outstanding, compared with adjusted diluted EPS in the fourth quarter of 2017 of $0.77 with 62.7 million weighted average shares outstanding.⁽¹⁾

Items Affecting Comparability

In the fourth quarter of 2018 and 2017, G&W’s results included certain items affecting comparability between the periods that are set forth in the following table (in millions, except per share amounts).

			Income/(Loss) Before Income Taxes Impact					After-Tax Net Income/(Loss) Attributable to G&W Impact					Diluted EPS Impact
Three Months Ended December 31, 2018
Restructuring and related costs			$	(2.2	)			$	(1.7	)			$	(0.03	)
Canadian railroad lease return costs			$	(2.1	)			$	(1.5	)			$	(0.02	)
Gain on sale of investment			$	1.4				$	1.0				$	0.02
Prior period tax adjustments			$	—				$	(1.4	)			$	(0.02	)
Three Months Ended December 31, 2017
Buyout of Freightliner deferred consideration agreements			$	8.9				$	8.9				$	0.14
Australia impairment and related costs			$	(4.9	)			$	(1.8	)			$	(0.03	)
Restructuring costs			$	(1.4	)			$	(1.2	)			$	(0.02	)
Corporate development and related costs			$	(1.1	)			$	(0.7	)			$	(0.01	)
U.K. coal restructuring and related charges			$	1.1				$	0.9				$	0.01
Impact of U.S. Tax Cuts and Jobs Act (TCJA)			$	—				$	371.9				$	5.94

In the fourth quarter of 2018, G&W’s results included $2.2 million of restructuring and related costs, primarily in the U.K., lease return costs of $2.1 million associated with two railroad leases in Canada that expired in the fourth quarter of 2018, a $1.4 million gain on sale of an investment and $1.4 million of tax adjustments associated with prior periods.

In the fourth quarter of 2017, G&W’s results included an $8.9 million reduction to other expenses as a result of the buyout of the Freightliner Group Limited (Freightliner) deferred consideration agreements with certain former Freightliner management holders, Australia impairment and related charges of $4.9 million, which included $5.9 million related to the write-down of track assets on idle branch lines in South Australia, partially offset by a $0.9 million recovery of prior year impairment and related costs associated with Arrium Limited's voluntary administration, $1.4 million of restructuring costs, $1.1 million of corporate development and related costs and a $1.1 million reduction to expense associated with a prior year accrual established for the restructuring of our U.K. coal business. The fourth quarter of 2017 also included a $371.9 million estimated income tax benefit primarily as a result of reducing the value of our net deferred tax liabilities from a 35% U.S. federal income tax rate to the newly enacted rate of 21% associated with the TCJA signed into law in December 2017.

Fourth Quarter Results by Segment

Operating revenues from G&W's North American Operations increased $17.8 million, or 5.5%, to $338.0 million in the fourth quarter of 2018, compared with $320.2 million in the fourth quarter of 2017.

G&W's North American Operations had operating income in the fourth quarter of 2018 of $87.2 million, compared with $74.7 million in the fourth quarter of 2017. The operating ratio for North American Operations was 74.2% in the fourth quarter of 2018, compared with an operating ratio of 76.7% in the fourth quarter of 2017. Adjusted operating income from G&W's North American Operations in the fourth quarter of 2018 was $89.3 million, compared with $75.6 million in the fourth quarter of 2017. The adjusted operating ratio for North American Operations was 73.6% in the fourth quarter of 2018, compared with 76.4% in the fourth quarter of 2017.⁽¹⁾

Operating revenues from G&W's Australian Operations decreased $4.4 million, or 5.8%, to $71.1 million in the fourth quarter of 2018, compared with $75.5 million in the fourth quarter of 2017. Excluding a $5.0 million decrease due to the impact of foreign currency depreciation, Australian Operations revenues increased by $0.6 million, or 0.8%.⁽²⁾

G&W's Australian Operations had operating income in the fourth quarter of 2018 of $17.7 million, compared with $17.6 million in the fourth quarter of 2017. The operating ratio for Australian Operations was 75.1% in the fourth quarter of 2018, compared with an operating ratio of 76.7% in the fourth quarter of 2017. Adjusted operating income from G&W's Australian Operations in the fourth quarter of 2018 was $17.7 million, compared with $22.5 million in the fourth quarter of 2017. The adjusted operating ratio for Australian Operations was 75.1% in the fourth quarter of 2018, compared with 70.2% in the fourth quarter of 2017.⁽¹⁾

Operating revenues from G&W's U.K./European Operations decreased $9.3 million, or 5.3%, to $166.5 million in the fourth quarter of 2018, compared with $175.8 million in the fourth quarter of 2017. Excluding $12.2 million from G&W's divested ERS operations for the fourth quarter of 2017 and a $5.2 million decrease due to the impact of foreign currency depreciation, U.K./European Operations same railroad revenues increased $8.1 million, or 5.1%.⁽²⁾

G&W's U.K./European Operations had operating income in the fourth quarter of 2018 of $0.8 million, compared with $14.2 million in the fourth quarter of 2017, which included $0.8 million from ERS. The operating ratio for U.K./European Operations was 99.5% in the fourth quarter of 2018, compared with 91.9% in the fourth quarter of 2017. Adjusted operating income from G&W's U.K./European Operations in the fourth quarter of 2018 was $2.8 million, compared with $5.9 million in the fourth quarter of 2017, which included $1.3 million from ERS. The adjusted operating ratio for U.K./European Operations was 98.3% in the fourth quarter of 2018, compared with 96.7% in the fourth quarter of 2017.⁽¹⁾

Consolidated Annual Results

2018 Annual Segment Highlights Compared with 2017

• North America: Operating revenues from G&W's North American Operations increased 6.6% to $1,358.9 million from $1,274.3 million. Reported operating income from G&W's North American Operations increased 12.8% to $343.1 million from $304.3 million; Adjusted operating income from G&W's North American Operations increased 10.7% to $346.3 million from $312.9 million.⁽¹⁾
• Australia: Operating revenues from G&W's Australian Operations decreased 1.9% to $301.7 million from $307.5 million. Reported operating income from G&W's Australian Operations increased 3.9% to $80.3 million from $77.3 million; Adjusted operating income from G&W's Australian Operations decreased to $73.1 million from $82.2 million.⁽¹⁾
• U.K./Europe: Operating revenues from G&W's U.K./European Operations increased 9.9% to $688.0 million from $626.2 million, primarily due to new operations from the Pentalver Transport Limited (Pentalver) acquisition, as well as a $19.3 million benefit from foreign currency appreciation. Reported operating income from G&W's U.K./European Operations decreased to $0.1 million from $10.5 million; Adjusted operating income from G&W's U.K./European Operations increased to $15.3 million from $13.8 million.⁽¹⁾⁽²⁾

G&W's provision for income taxes for the year ended December 31, 2018 was $64.5 million compared with a benefit from income taxes of $261.3 million for the year ended December 31, 2017. The income tax provision for the year ended December 31, 2018 included an income tax benefit of $31.6 million associated with the retroactive extension of the United States Short Line Tax Credit for fiscal year 2017, which was enacted in February 2018, income tax expense adjustments of $5.1 million related primarily to deferred income taxes recorded in prior periods and a $1.6 million measurement period adjustment to the one-time transition (toll) tax on earnings of certain foreign subsidiaries. The benefit from income taxes for year ended December 31, 2017 included an income tax benefit of approximately $394 million resulting from reducing the value of our net deferred tax liabilities from a 35% United States federal income tax rate to the newly enacted rate of 21%, partially offset by an estimated transitional (toll) tax of approximately $22 million, both associated with the TCJA.

Reported net income attributable to G&W for the year ended December 31, 2018 was $244.4 million, compared with $549.1 million for the year ended December 31, 2017. Excluding the impact of certain items affecting comparability listed below, adjusted net income attributable to G&W for the year ended December 31, 2018 was $233.6 million, compared with $182.0 million for the year ended December 31, 2017.⁽¹⁾

G&W’s diluted EPS for the year ended December 31, 2018 were $4.03 with 60.6 million weighted average shares outstanding, compared with diluted EPS of $8.79 with 62.5 million weighted average shares outstanding for the year ended December 31, 2017. Excluding certain items affecting comparability listed below, G&W’s adjusted diluted EPS for the year ended December 31, 2018 were $3.85 with 60.6 million weighted average shares outstanding, compared with adjusted diluted EPS of $2.91 with 62.5 million weighted average shares outstanding for the year ended December 31, 2017.⁽¹⁾

G&W’s 2018 and 2017 annual results included certain items affecting comparability between the periods that are set forth in the following table (in millions, except per share amounts).

			Income/(Loss) Before Income Taxes Impact					After-Tax Net Income/(Loss) Attributable to G&W Impact					Diluted EPS Impact
Year Ended December 31, 2018
Corporate development and related costs			$	(0.8	)			$	(0.6	)			$	(0.01	)
Restructuring and related costs			$	(15.1	)			$	(12.2	)			$	(0.20	)
Credit facility refinancing-related costs			$	(2.7	)			$	(2.0	)			$	(0.03	)
Gain on settlement			$	7.3				$	2.6				$	0.04
Loss on sale of business			$	(1.4	)			$	(1.4	)			$	(0.02	)
Canadian railroad lease return costs			$	(2.1	)			$	(1.5	)			$	(0.02	)
Gain on sale of investment			$	1.4				$	1.0				$	0.02
2017 Short Line Tax Credit			$	—				$	31.6				$	0.52
Prior period tax adjustment			$	—				$	(5.1	)			$	(0.08	)
TCJA measurement period adjustment			$	—				$	(1.6	)			$	(0.03	)
Year Ended December 31, 2017
Corporate development and related costs			$	(11.9	)			$	(8.1	)			$	(0.13	)
Restructuring costs			$	(10.2	)			$	(9.0	)			$	(0.14	)
Australia impairment and related costs			$	(4.9	)			$	(1.8	)			$	(0.03	)
Buyout of Freightliner deferred consideration agreements			$	8.9				$	8.9				$	0.14
Gain on sale of investment			$	1.6				$	1.0				$	0.02
U.K. coal restructuring and related charges			$	1.1				$	0.9				$	0.01
Impact of TCJA			$	—				$	371.9				$	5.96
Recognition of unrecognized tax benefits			$	—				$	3.3				$	0.05

Adjusted Free Cash Flow Measures ⁽¹⁾

Adjusted free cash flow measures for the years ended December 31, 2018 and 2017 were as follows (in millions):

			Years Ended
			2018					2017
Net cash provided by operating activities			$	553.1				$	479.2
Allocation of adjusted cash flow to noncontrolling interest(a)			(21.4		)			(27.6		)
Adjusted net cash provided by operating activities attributable to G&W			531.7					451.6
Core capital expenditures(b)			(205.7		)			(181.8		)
Adjusted free cash flow attributable to G&W before new business investments and grant funded projects			326.0					269.8
New business investments			(44.0		)			(8.6		)
Grant funded projects, net of proceeds received from outside parties(c)			(1.4		)			(11.0		)
Adjusted free cash flow attributable to G&W			$	280.6				$	250.2

(a)		Allocation of adjusted cash flow to noncontrolling interest (Macquarie Infrastructure and Real Assets' (MIRA) 48.9% equity ownership of G&W Australia Holdings LP (GWA) since December 1, 2016) is calculated as 48.9% of the total of (i) cash flow provided by operating activities of G&W’s Australian Operations, less (ii) net purchases of property and equipment of G&W’s Australian Operations. The timing and amount of actual distributions, if any, from GWA to G&W and MIRA made in any given period will vary and could differ materially from the amounts presented. During the year ended December 31, 2018, GWA made A$65.0 million of such distributions of which A$33.2 million (or $24.6 million at the applicable exchange rates at the time the payments were made) and A$31.8 million (or $23.6 million at the applicable exchange rates at the time the payments were made) was distributed to G&W and MIRA, respectively, and no such distributions were made for the year ended December 31, 2017. G&W expressly disclaims any direct correlation between the allocation of adjusted cash flow to noncontrolling interest and actual distributions made in any given period.
(b)		Core capital expenditures represent purchases of property and equipment, as presented on the Consolidated Statement of Cash Flows, less grant proceeds from outside parties, insurance proceeds for the replacement of assets and proceeds from disposition of property and equipment, each of which as presented on the Consolidated Statement of Cash Flows, less new business investments and grant funded projects.
(c)		Grant funded projects represent purchases of property and equipment for projects partially or entirely funded by outside parties, net of grant proceeds from outside parties as presented on the Consolidated Statement of Cash Flows.

Share Repurchase Program

During the fourth quarter of 2018, G&W repurchased 2.4 million shares of Class A Common Stock for $189.6 million, which resulted in a reduction of 0.8 million shares in our weighted average diluted shares outstanding for the fourth quarter of 2018. During the year ended December 31, 2018, G&W repurchased 6.0 million shares of Class A Common Stock for $460.1 million, which resulted in a reduction of 2.4 million shares in our weighted average diluted shares outstanding for the year ended December 31, 2018.

Conference Call and Webcast Details

As previously announced, G&W’s conference call to discuss financial results for the fourth quarter of 2018 will be held on Wednesday, February 6, 2019, at 11 a.m. EST. The dial-in number for the teleconference in the U.S. is (800) 230-1085; outside the U.S. is (612) 288-0329, or the call may be accessed live over the Internet (listen only) at www.gwrr.com/investors. Management will be referring to a slide presentation that will also be available at gwrr.com/investors. The webcast will be archived at www.gwrr.com/investors until the following quarter’s earnings press release. Telephone replay is available for 30 days beginning at 1 p.m. EST on February 6, 2019 by dialing (800) 475-6701 (or outside the U.S., dial 320-365-3844). The access code is 458664.

About G&W

G&W owns or leases 120 freight railroads organized in nine locally managed operating regions with 8,000 employees serving 3,000 customers.

• G&W's seven North American regions serve 41 U.S. states and four Canadian provinces and include 114 short line and regional freight railroads, with more than 13,000 track-miles.
• G&W's Australia Region serves New South Wales, the Northern Territory and South Australia and operates the 1,400-mile Tarcoola-to-Darwin rail line. The Australia Region is 51.1% owned by G&W and 48.9% owned by a consortium of funds and clients managed by Macquarie Infrastructure and Real Assets.
• G&W's U.K./Europe Region includes the U.K.'s largest rail maritime intermodal operator and second-largest freight rail provider, as well as regional services in Continental Europe.

G&W subsidiaries and joint ventures also provide rail service at more than 40 major ports, rail-ferry service between the U.S. Southeast and Mexico, transload services, contract coal loading, and industrial railcar switching and repair.

From time to time, we may use our website as a channel of distribution of material company information. Financial and other material information regarding G&W is routinely posted on and accessible at www.gwrr.com/investors. In addition, you may automatically receive email alerts and other information about us by enrolling your email address in the "Email Alerts" section of www.gwrr.com/investors. The information contained on or connected to our Internet website is not deemed to be incorporated by reference in this press release or filed with the United States Security and Exchange Commission.

Cautionary Statement Concerning Forward-Looking Statements

This press release contains forward-looking statements regarding future events and the future performance of Genesee & Wyoming Inc. that are based on current expectations, estimates and projections about our industry, management’s beliefs and assumptions made by management. Words such as “anticipates,” “intends,” “plans,” “believes,” “could,” “should,” “seeks,” “expects,” “will,” “estimates,” “trends,” “outlook,” variations of these words and similar expressions are intended to identify these forward-looking statements. These statements are not guarantees of future performance and are subject to certain risks, uncertainties and assumptions that are difficult to forecast, including the following: risks related to the operation of our railroads; severe weather conditions and other natural occurrences, which could result in shutdowns, derailments, railroad network and port congestion or other substantial disruption of operations; customer demand and changes in our operations or loss of important customers; exposure to the credit risk of customers and counterparties; changes in commodity prices; consummation and integration of acquisitions; economic, political and industry conditions, including employee strikes or work stoppages; retention and contract continuation; legislative and regulatory developments, including changes in environmental and other laws and regulations to which we or our customers are subject; increased competition in relevant markets; funding needs, funding costs and financing sources, including our ability to obtain government funding for capital projects; international complexities of operations, currency fluctuations, finance, tax and decentralized management; challenges of managing rapid growth including retention and development of senior leadership; unpredictability of fuel costs; susceptibility to and outcome of various legal claims, lawsuits and arbitrations; increase in, or volatility associated with, expenses related to estimated claims, self-insured retention amounts and insurance coverage limits; consummation of new business opportunities; decrease in revenues and/or increase in costs and expenses; susceptibility to the risks of doing business in foreign countries; uncertainties arising from a referendum in which voters in the United Kingdom (U.K.) approved an exit from the European Union (E.U.), commonly referred to as Brexit; our ability to integrate acquired businesses successfully or to realize the expected synergies associated with acquisitions; risks associated with substantial indebtedness; failure to maintain satisfactory working relationships with partners in Australia; failure to maintain an effective system of internal control over financial reporting as well as disclosure controls and procedures and other risks including, but not limited to, those noted in our 2017 Annual Report on Form 10-K and our Quarterly Reports on Form 10-Q under “Risk Factors.” Therefore, actual results may differ materially from those expressed or forecasted in any such forward-looking statements. Forward-looking statements speak only as of the date of this press release or as of the date they were made. G&W does not undertake, and expressly disclaims, any duty to publicly update any forward-looking statement, whether as a result of new information, future events, or otherwise, except as required by law.

1.		Adjusted operating income, adjusted operating ratio, adjusted net income attributable to G&W, adjusted diluted earnings per common share (EPS) and the adjusted free cash flow measures of adjusted net cash provided by operating activities attributable to G&W, adjusted free cash flow attributable to G&W and adjusted free cash flow attributable to G&W before new business investments and grant funded projects are non-GAAP financial measures and are not intended to replace financial measures calculated in accordance with GAAP. The information required by Item 10(e) of Regulation S-K under the Securities Act of 1933 and the Securities Exchange Act of 1934 and Regulation G under the Securities Exchange Act of 1934, including a reconciliation to their most directly comparable financial measures calculated in accordance with GAAP, is included in the tables attached to this press release.
2.		Foreign exchange impact is calculated by comparing the prior year period results translated from local currency to U.S. dollars using current period exchange rates to the prior period results in U.S. dollars as reported.

GENESEE & WYOMING INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THREE AND TWELVE MONTHS ENDED DECEMBER 31, 2018 AND 2017
(in thousands, except per share amounts)
(unaudited)
				Three Months Ended										Twelve Months Ended
				December 31,										December 31,
				2018					2017					2018					2017
OPERATING REVENUES				$	575,595				$	571,576				$	2,348,550				$	2,208,044
OPERATING EXPENSES				469,941					465,070					1,925,038					1,816,063
OPERATING INCOME				105,654					106,506					423,512					391,981
INTEREST INCOME				1,757					811					3,256					2,082
INTEREST EXPENSE				(27,114		)			(26,860		)			(107,719		)			(107,291		)
OTHER INCOME/(LOSS), NET				49					4,228					(188		)			8,747
INCOME BEFORE INCOME TAXES				80,346					84,685					318,861					295,519
(PROVISION FOR)/BENEFIT FROM INCOME TAXES				(22,966		)			343,291					(64,535		)			261,259
NET INCOME				57,380					427,976					254,326					556,778
LESS:	NET INCOME ATTRIBUTABLE TO NONCONTROLLING INTEREST			1,818					1,410					9,908					7,727
NET INCOME ATTRIBUTABLE TO GENESEE & WYOMING INC.				$	55,562				$	426,566				$	244,418				$	549,051
BASIC EARNINGS PER COMMON SHARE ATTRIBUTABLE TO GENESEE & WYOMING INC. COMMON STOCKHOLDERS				$	0.96				$	6.90				$	4.09				$	8.92
WEIGHTED AVERAGE SHARES - BASIC				58,093					61,780					59,745					61,579
DILUTED EARNINGS PER COMMON SHARE ATTRIBUTABLE TO GENESEE & WYOMING INC. COMMON STOCKHOLDERS				$	0.94				$	6.81				$	4.03				$	8.79
WEIGHTED AVERAGE SHARES - DILUTED				58,892					62,676					60,628					62,464

GENESEE & WYOMING INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
AS OF DECEMBER 31, 2018 AND 2017
(in thousands)
(unaudited)
			December 31,
			2018					2017
ASSETS
CURRENT ASSETS:
Cash and cash equivalents			$	90,387				$	80,472
Accounts receivable, net			426,305					416,705
Materials and supplies			56,716					57,750
Prepaid expenses and other			54,185					34,606
Total current assets			627,593					589,533
PROPERTY AND EQUIPMENT, net			4,613,014					4,656,921
GOODWILL			1,115,849					1,165,587
INTANGIBLE ASSETS, net			1,430,197					1,567,038
DEFERRED INCOME TAX ASSETS, net			4,616					3,343
OTHER ASSETS, net			77,192					52,475
Total assets			$	7,868,461				$	8,034,897
LIABILITIES AND EQUITY
CURRENT LIABILITIES:
Current portion of long-term debt			$	28,303				$	27,853
Accounts payable			288,070					253,993
Accrued expenses			165,280					185,935
Total current liabilities			481,653					467,781
LONG-TERM DEBT, less current portion			2,425,235					2,303,442
DEFERRED INCOME TAX LIABILITIES, net			877,721					873,194
DEFERRED ITEMS - grants from outside parties			326,520					321,592
OTHER LONG-TERM LIABILITIES			127,280					172,796
TOTAL EQUITY			3,630,052					3,896,092
Total liabilities and equity			$	7,868,461				$	8,034,897

GENESEE & WYOMING INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE TWELVE MONTHS ENDED DECEMBER 31, 2018 AND 2017
(in thousands)
(unaudited)
			Twelve Months Ended
			December 31,
			2018					2017
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income			$	254,326				$	556,778
Adjustments to reconcile net income to net cash provided by operating activities:
Depreciation and amortization			263,216					250,457
Stock-based compensation			17,652					17,554
Deferred income taxes			23,373					(319,249		)
Net (gain)/loss on sale and impairment of assets			(3,246		)			4,254
Changes in assets and liabilities which (used) provided cash, net of effect of acquisitions:
Accounts receivable, net			(35,902		)			(12,969		)
Materials and supplies			(2,193		)			2,474
Prepaid expenses and other			(10,113		)			23,973
Accounts payable and accrued expenses			37,431					(35,341		)
Other assets and liabilities, net			8,549					(8,725		)
Net cash provided by operating activities			553,093					479,206
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment			(284,102		)			(228,472		)
Grant proceeds from outside parties			20,527					20,249
Cash paid for acquisitions, net of cash acquired			—					(107,586		)
Contributions to joint venture			(13,671		)			—
Proceeds from sale of business			7,927					—
Proceeds from sale of investments			1,386					2,100
Insurance proceeds for the replacement of assets			3,008					1,590
Proceeds from disposition of property and equipment			9,479					5,225
Net cash used in investing activities			(255,446		)			(306,894		)
CASH FLOWS FROM FINANCING ACTIVITIES:
Principal payments on revolving line-of-credit, long-term debt and capital lease obligations			(849,827		)			(661,561		)
Proceeds from revolving line-of-credit and long-term borrowings			1,055,695					523,672
Debt amendment/issuance costs			(5,762		)			—
Common share repurchases			(460,092		)			—
Distributions to noncontrolling interest			(23,583		)			—
Installment payments on Freightliner deferred consideration			(6,255		)			—
Other financing-related activities, net			5,580					6,980
Net cash used in financing activities			(284,244		)			(130,909		)
EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS			(3,488		)			6,750
INCREASE IN CASH AND CASH EQUIVALENTS			9,915					48,153
CASH AND CASH EQUIVALENTS, beginning of period			80,472					32,319
CASH AND CASH EQUIVALENTS, end of period			$	90,387				$	80,472

GENESEE & WYOMING INC. AND SUBSIDIARIES
SELECTED CONSOLIDATED FINANCIAL INFORMATION
(dollars in thousands)
(unaudited)
			Three Months Ended December 31,																	Twelve Months Ended December 31,
			2018									2017								2018									2017
			Amount					% of Revenue				Amount				% of Revenue				Amount					% of Revenue				Amount				% of Revenue
Operating revenues:
Freight revenues			$	401,220				69.7	%			$	392,240			68.6	%			$	1,642,465				70.0	%			$	1,553,875			70.4	%
Freight-related revenues			142,546					24.8	%			145,770				25.5	%			571,595					24.3	%			533,651				24.2	%
All other revenues			31,829					5.5	%			33,566				5.9	%			134,490					5.7	%			120,518				5.4	%
Total operating revenues			$	575,595				100.0	%			$	571,576			100.0	%			$	2,348,550				100.0	%			$	2,208,044			100.0	%
Operating expenses:
Labor and benefits(a)			$	170,328				29.6	%			$	165,829			29.0	%			$	709,735				30.2	%			$	666,765			30.2	%
Equipment rents(b)			33,993					5.9	%			32,504				5.7	%			138,207					5.9	%			132,903				6.0	%
Purchased services(c)			56,039					9.7	%			67,761				11.9	%			234,903					10.0	%			244,119				11.0	%
Depreciation and amortization(d)			66,089					11.5	%			63,948				11.2	%			263,216					11.2	%			250,457				11.3	%
Diesel fuel used in train operations			46,950					8.1	%			41,709				7.3	%			184,437					7.9	%			147,427				6.7	%
Electricity used in train operations			2,583					0.4	%			1,449				0.3	%			9,603					0.4	%			7,521				0.3	%
Casualties and insurance			12,672					2.2	%			13,647				2.4	%			45,534					2.0	%			46,993				2.1	%
Materials			31,492					5.5	%			29,658				5.2	%			129,081					5.5	%			107,519				4.9	%
Trackage rights			20,624					3.6	%			20,838				3.6	%			87,743					3.7	%			87,490				4.0	%
Net (gain)/loss on sale and impairment of assets(d)			(745		)			(0.1	)%			5,350				0.9	%			(3,246		)			(0.1	)%			4,254				0.2	%
Restructuring and related costs			2,157					0.4	%			1,416				0.2	%			15,088					0.6	%			10,160				0.5	%
Other expenses(e)			27,759					4.8	%			20,961				3.7	%			110,737					4.7	%			110,455				5.0	%
Total operating expenses			$	469,941				81.6	%			$	465,070			81.4	%			$	1,925,038				82.0	%			$	1,816,063			82.2	%
Operating income			$	105,654								$	106,506							$	423,512								$	391,981
Expenditures for additions to property & equipment, net of grants from outside parties			$	86,139								$	75,116							$	263,575								$	208,223

(a)		Includes $0.5 million of corporate development and related costs for the twelve months ended December 31, 2018. Includes $3.2 million of corporate development and related costs for the twelve months ended December 31, 2017.
(b)		Includes $1.1 million reduction to expense related to U.K coal restructuring and related charges for both the three and twelve months ended December 31, 2017.
(c)		Includes $0.2 million and $0.5 million of corporate development and related costs for the three and twelve months ended December 31, 2018, respectively. Includes $0.1 million and $0.5 million of corporate development and related costs for the three and twelve months ended December 31, 2017, respectively.
(d)		Includes an impairment charge of $5.8 million associated with our Australia business for both the three and twelve months ended December 31, 2017.
(e)		Includes a $7.3 million gain on settlement related to Arrium Limited's voluntary administration for the twelve months ended December 31, 2018. Includes a $0.3 million and $0.1 million reduction of corporate development and related costs for the three and twelve months ended December 31, 2018, respectively. Includes $0.9 million and $8.2 million of corporate development and related costs for the three and twelve months ended December 31, 2017, respectively. Includes $0.9 million recovery of prior year impairment and related costs associated with Arrium's voluntary administration for both the three and twelve months ended December 31, 2017. Includes an $8.9 million reduction to expense as a result of a buyout of the Freightliner deferred consideration agreements for both the three and twelve months ended December 31, 2017.

GENESEE & WYOMING INC. AND SUBSIDIARIES
NORTH AMERICAN OPERATIONS SELECTED CONSOLIDATED FINANCIAL INFORMATION
(dollars in thousands)
(unaudited)
			Three Months Ended December 31,																		Twelve Months Ended December 31,
			2018									2017									2018									2017
			Amount					% of Revenue				Amount					% of Revenue				Amount					% of Revenue				Amount					% of Revenue
Operating revenues:
Freight revenues			$	258,832				76.6	%			$	241,734				75.5	%			$	1,037,549				76.4	%			$	961,356				75.4	%
Freight-related revenues			63,818					18.9	%			62,809					19.6	%			257,162					18.9	%			249,623					19.6	%
All other revenues			15,324					4.5	%			15,665					4.9	%			64,159					4.7	%			63,306					5.0	%
Total operating revenues			$	337,974				100.0	%			$	320,208				100.0	%			$	1,358,870				100.0	%			$	1,274,285				100.0	%
Operating expenses:
Labor and benefits(a)			$	103,631				30.7	%			$	101,166				31.6	%			$	432,777				31.9	%			$	416,098				32.7	%
Equipment rents			12,999					3.8	%			13,146					4.1	%			54,573					4.0	%			53,139					4.2	%
Purchased services(b)			16,576					4.9	%			14,465					4.5	%			60,126					4.4	%			59,815					4.7	%
Depreciation and amortization			42,359					12.5	%			40,184					12.6	%			165,625					12.2	%			158,006					12.4	%
Diesel fuel used in train operations			25,015					7.4	%			22,814					7.1	%			96,978					7.1	%			76,852					6.0	%
Casualties and insurance			9,829					2.9	%			10,730					3.4	%			33,078					2.4	%			37,262					2.9	%
Materials			13,509					4.0	%			11,344					3.6	%			52,698					3.9	%			49,757					3.9	%
Trackage rights			10,373					3.1	%			9,905					3.1	%			40,598					3.0	%			38,637					3.0	%
Net (gain)/loss on sale and impairment of assets			(648		)			(0.2	)%			(586		)			(0.2	)%			(2,772		)			(0.2	)%			(1,456		)			(0.1	)%
Restructuring and related costs			11					—	%			83					—	%			53					—	%			467					—	%
Other expenses(c)			17,126					5.1	%			22,250					6.9	%			82,024					6.1	%			81,456					6.4	%
Total operating expenses			$	250,780				74.2	%			$	245,501				76.7	%			$	1,015,758				74.8	%			$	970,033				76.1	%
Operating income			$	87,194								$	74,707								$	343,112								$	304,252
Expenditures for additions to property & equipment, net of grants from outside parties			$	53,038								$	60,745								$	182,645								$	166,685

(a)		Includes $0.5 million of corporate development and related costs for the twelve months ended December 31, 2018. Includes $3.1 million of corporate development and related costs for the twelve months ended December 31, 2017, primarily associated with severance costs related to the integration of the Providence and Worcester Railroad Company.
(b)		Includes $0.1 million of corporate development and related costs for the twelve months ended December 31, 2017.
(c)		Includes $0.2 million of corporate development and related costs for the twelve months ended December 31, 2018. Includes $0.8 million and $5.0 million of corporate development and related costs for the three and twelve months ended December 31, 2017, respectively.

GENESEE & WYOMING INC. AND SUBSIDIARIES
AUSTRALIAN OPERATIONS SELECTED CONSOLIDATED FINANCIAL INFORMATION*
(dollars in thousands)
(unaudited)
			Three Months Ended December 31,																	Twelve Months Ended December 31,
			2018									2017								2018									2017
			Amount					% of Revenue				Amount				% of Revenue				Amount					% of Revenue				Amount				% of Revenue
Operating revenues:
Freight revenues			$	60,687				85.3	%			$	63,622			84.3	%			$	255,022				84.5	%			$	254,653			82.8	%
Freight-related revenues			9,038					12.7	%			10,607				14.0	%			41,252					13.7	%			46,696				15.2	%
All other revenues			1,387					2.0	%			1,295				1.7	%			5,404					1.8	%			6,161				2.0	%
Total operating revenues			$	71,112				100.0	%			$	75,524			100.0	%			$	301,678				100.0	%			$	307,510			100.0	%
Operating expenses:
Labor and benefits			$	16,714				23.5	%			$	16,488			21.8	%			$	72,032				23.9	%			$	68,935			22.4	%
Equipment rents			1,255					1.7	%			1,362				1.8	%			5,205					1.7	%			5,577				1.8	%
Purchased services			5,019					7.1	%			6,448				8.5	%			24,622					8.2	%			26,269				8.6	%
Depreciation and amortization			14,534					20.4	%			15,227				20.2	%			60,766					20.1	%			61,142				19.9	%
Diesel fuel used in train operations			7,948					11.2	%			6,323				8.4	%			31,505					10.5	%			25,236				8.2	%
Casualties and insurance			1,359					1.9	%			1,283				1.7	%			6,557					2.2	%			5,502				1.8	%
Materials			2,549					3.6	%			2,077				2.7	%			11,274					3.7	%			10,706				3.5	%
Trackage rights			1,621					2.3	%			2,241				3.0	%			8,131					2.7	%			12,633				4.1	%
Net (gain)/loss on sale and impairment of assets(a)			(136		)			(0.2	)%			5,856				7.7	%			(269		)			(0.1	)%			5,797				1.9	%
Restructuring and related costs			—					—	%			—				—	%			—					—	%			338				0.1	%
Other expenses(b)			2,557					3.6	%			653				0.9	%			1,578					0.5	%			8,124				2.6	%
Total operating expenses			$	53,420				75.1	%			$	57,958			76.7	%			$	221,401				73.4	%			$	230,259			74.9	%
Operating income			$	17,692								$	17,566							$	80,277								$	77,251
Expenditures for additions to property & equipment, net of grants from outside parties			$	14,786								$	6,355							$	42,722								$	16,076

*		Amounts shown represent 100% of our Australian Operations, which is 51.1% owned by G&W.
(a)		Includes the write down of track assets on idle branch lines in South Australia of $5.8 million for both the three and twelve months ended December 31, 2017.
(b)		Includes $7.3 million gain on settlement related to Arrium Limited's voluntary administration for the twelve months ended December 31, 2018. Includes $0.1 million of corporate development and related costs for the twelve months ended December 31, 2018. Includes a $0.3 million reduction of corporate development and related costs for the twelve months ended December 31, 2017 associated with a refund. Includes a $0.9 million recovery of prior year impairment and related costs associated with Arrium's voluntary administration for both the three and twelve months ended December 31, 2017.

GENESEE & WYOMING INC. AND SUBSIDIARIES
U.K./EUROPEAN OPERATIONS SELECTED CONSOLIDATED FINANCIAL INFORMATION
(dollars in thousands)
(unaudited)
			Three Months Ended December 31,																	Twelve Months Ended December 31,
			2018								2017									2018									2017
			Amount				% of Revenue				Amount					% of Revenue				Amount					% of Revenue				Amount					% of Revenue
Operating revenues:
Freight revenues			$	81,701			49.1	%			$	86,884				49.4	%			$	349,894				50.9	%			$	337,866				53.9	%
Freight-related revenues			69,690				41.8	%			72,354					41.1	%			273,181					39.7	%			237,332					37.9	%
All other revenues			15,118				9.1	%			16,606					9.5	%			64,927					9.4	%			51,051					8.2	%
Total operating revenues			$	166,509			100.0	%			$	175,844				100.0	%			$	688,002				100.0	%			$	626,249				100.0	%
Operating expenses:
Labor and benefits(a)			$	49,983			30.0	%			$	48,175				27.4	%			$	204,926				29.8	%			$	181,732				29.0	%
Equipment rents (b)			19,739				11.8	%			17,996					10.2	%			78,429					11.4	%			74,187					11.8	%
Purchased services(c)			34,444				20.7	%			46,848					26.7	%			150,155					21.8	%			158,035					25.3	%
Depreciation and amortization			9,196				5.5	%			8,537					4.9	%			36,825					5.3	%			31,309					5.0	%
Diesel fuel used in train operations			13,987				8.4	%			12,572					7.1	%			55,954					8.1	%			45,339					7.2	%
Electricity used in train operations			2,583				1.5	%			1,449					0.8	%			9,603					1.4	%			7,521					1.2	%
Casualties and insurance			1,484				0.9	%			1,634					0.9	%			5,899					0.9	%			4,229					0.7	%
Materials			15,434				9.3	%			16,237					9.2	%			65,109					9.5	%			47,056					7.5	%
Trackage rights			8,630				5.2	%			8,692					5.0	%			39,014					5.7	%			36,220					5.8	%
Net loss/(gain) on sale and impairment of assets			39				—	%			80					—	%			(205		)			—	%			(87		)			—	%
Restructuring and related costs			2,146				1.3	%			1,333					0.8	%			15,035					2.2	%			9,355					1.5	%
Other expenses (d)			8,076				4.9	%			(1,942		)			(1.1	)%			27,135					3.9	%			20,875					3.3	%
Total operating expenses			$	165,741			99.5	%			$	161,611				91.9	%			$	687,879				100.0	%			$	615,771				98.3	%
Operating income			$	768							$	14,233								$	123								$	10,478
Expenditures for additions to property & equipment, net of grants from outside parties			$	18,315							$	8,016								$	38,208								$	25,462

(a)		Includes $0.1 million of corporate development and related costs for the twelve months ended December 31, 2017.
(b)		Includes a $1.1 million reduction to expense related to U.K coal restructuring and related charges for both the three and twelve months ended December 31, 2017.
(c)		Includes $0.2 million and $0.5 million of corporate development and related costs for the three and twelve months ended December 31, 2018, respectively. Includes $0.1 million and 0.4 million of corporate development and related costs for the three and twelve months ended December 31, 2017, respectively, associated with the acquisition and integration of Pentalver.
(d)		Includes a $0.3 million and $0.4 million reduction of corporate development and related costs for the three and twelve months ended December 31, 2018, respectively. Includes $0.1 million and $3.4 million of corporate development and related costs for the three and twelve months ended December 31, 2017, respectively, associated with the acquisition and integration of Pentalver. Includes an $8.9 million reduction to expense as a result of a buyout of the Freightliner deferred consideration agreements for both the three and twelve months ended December 31, 2017.

GENESEE & WYOMING INC. AND SUBSIDIARIES
FREIGHT REVENUES, CARLOADS AND AVERAGE REVENUES PER CARLOAD
COMPARISON BY COMMODITY GROUP
(dollars in thousands, except average revenues per carload)
(unaudited)
Three Months Ended December 31, 2018			North American Operations											Australian Operations*											U.K./European Operations											Total Operations
Commodity Group			Freight Revenues				Carloads**			Average Revenues Per Carload				Freight Revenues				Carloads**			Average Revenues Per Carload				Freight Revenues				Carloads**			Average Revenues Per Carload				Freight Revenues				Carloads**			Average Revenues Per Carload
Agricultural Products			$	31,202			51,768			$	603			$	2,996			3,532			$	848			$	1,494			1,105			$	1,352			$	35,692			56,405			$	633
Autos & Auto Parts			4,882				7,604			642				—				—			—				—				—			—				4,882				7,604			642
Chemicals & Plastics			38,134				43,381			879				—				—			—				—				—			—				38,134				43,381			879
Coal & Coke			21,124				63,725			331				29,093				92,717			314				2,955				5,319			556				53,172				161,761			329
Food & Kindred Products			8,774				15,129			580				—				—			—				—				—			—				8,774				15,129			580
Intermodal			462				4,318			107				17,397				14,395			1,209				56,904				181,466			314				74,763				200,179			373
Lumber & Forest Products			21,566				34,043			633				—				—			—				—				—			—				21,566				34,043			633
Metallic Ores			3,124				3,991			783				9,038				6,816			1,326				—				—			—				12,162				10,807			1,125
Metals			30,788				38,321			803				—				—			—				—				—			—				30,788				38,321			803
Minerals & Stone			33,188				51,179			648				2,026				16,609			122				19,733				46,233			427				54,947				114,021			482
Petroleum Products			21,307				29,709			717				137				58			2,362				615				2,288			269				22,059				32,055			688
Pulp & Paper			31,254				42,886			729				—				—			—				—				—			—				31,254				42,886			729
Waste			7,733				14,946			517				—				—			—				—				—			—				7,733				14,946			517
Other			5,294				17,388			304				—				—			—				—				—			—				5,294				17,388			304
Totals			$	258,832			418,388			$	619			$	60,687			134,127			$	452			$	81,701			236,411			$	346			$	401,220			788,926			$	509

Three Months Ended December 31, 2017			North American Operations											Australian Operations*											U.K./European Operations											Total Operations
Commodity Group			Freight Revenues				Carloads**			Average Revenues Per Carload				Freight Revenues				Carloads**			Average Revenues Per Carload				Freight Revenues				Carloads**			Average Revenues Per Carload				Freight Revenues				Carloads**			Average Revenues Per Carload
Agricultural Products			$	31,329			51,679			$	606			$	4,825			8,105			$	595			$	1,748			1,323			$	1,321			$	37,902			61,107			$	620
Autos & Auto Parts			5,882				9,541			616				—				—			—				—				—			—				5,882				9,541			616
Chemicals & Plastics			36,592				43,041			850				—				—			—				—				—			—				36,592				43,041			850
Coal & Coke			18,812				53,614			351				31,386				88,306			355				2,508				4,070			616				52,706				145,990			361
Food & Kindred Products			8,568				15,216			563				—				—			—				—				—			—				8,568				15,216			563
Intermodal			254				2,525			101				17,320				14,695			1,179				63,691				220,881			288				81,265				238,101			341
Lumber & Forest Products			22,297				35,836			622				—				—			—				—				—			—				22,297				35,836			622
Metallic Ores			2,872				4,085			703				7,820				5,344			1,463				—				—			—				10,692				9,429			1,134
Metals			25,182				32,392			777				—				—			—				—				—			—				25,182				32,392			777
Minerals & Stone			33,065				53,552			617				2,091				16,478			127				18,937				47,733			397				54,093				117,763			459
Petroleum Products			17,692				24,593			719				180				71			2,535				—				—			—				17,872				24,664			725
Pulp & Paper			27,763				41,041			676				—				—			—				—				—			—				27,763				41,041			676
Waste			6,063				12,620			480				—				—			—				—				—			—				6,063				12,620			480
Other			5,363				15,687			342				—				—			—				—				—			—				5,363				15,687			342
Totals			$	241,734			395,422			$	611			$	63,622			132,999			$	478			$	86,884			274,007			$	317			$	392,240			802,428			$	489

* Australian Operations is 51.1% owned by G&W as of December 1, 2016.

** Represents physical railcars and the estimated railcar equivalents of commodities transported by metric ton or other measure, as well as intermodal units.

GENESEE & WYOMING INC. AND SUBSIDIARIES
FREIGHT REVENUES, CARLOADS AND AVERAGE REVENUES PER CARLOAD
COMPARISON BY COMMODITY GROUP
(dollars in thousands, except average revenues per carload)
(unaudited)
Twelve Months Ended December 31, 2018		North American Operations											Australian Operations*											U.K./European Operations											Total Operations
Commodity Group		Freight Revenues				Carloads**			Average Revenues Per Carload				Freight Revenues				Carloads**			Average Revenues Per Carload				Freight Revenues				Carloads**			Average Revenues Per Carload				Freight Revenues				Carloads**			Average Revenues Per Carload
Agricultural Products		$	122,832			208,283			$	590			$	18,635			37,348			$	499			$	4,567			3,454			$	1,322			$	146,034			249,085			$	586
Autos & Auto Parts		21,568				34,150			632				—				—			—				—				—			—				21,568				34,150			632
Chemicals & Plastics		151,759				175,911			863				—				—			—				—				—			—				151,759				175,911			863
Coal & Coke		83,162				255,351			326				125,599				393,664			319				11,706				19,523			600				220,467				668,538			330
Food & Kindred Products		34,361				60,531			568				—				—			—				—				—			—				34,361				60,531			568
Intermodal		1,665				16,140			103				68,010				55,716			1,221				249,317				781,306			319				318,992				853,162			374
Lumber & Forest Products		91,928				145,354			632				—				—			—				—				—			—				91,928				145,354			632
Metallic Ores		13,940				17,490			797				33,808				23,737			1,424				—				—			—				47,748				41,227			1,158
Metals		126,579				158,117			801				—				—			—				—				—			—				126,579				158,117			801
Minerals & Stone		140,310				221,527			633				8,273				66,176			125				83,582				188,810			443				232,165				476,513			487
Petroleum Products		74,177				105,940			700				697				284			2,454				722				2,530			285				75,596				108,754			695
Pulp & Paper		121,600				170,408			714				—				—			—				—				—			—				121,600				170,408			714
Waste		29,049				57,623			504				—				—			—				—				—			—				29,049				57,623			504
Other		24,619				74,148			332				—				—			—				—				—			—				24,619				74,148			332
Totals		$	1,037,549			1,700,973			$	610			$	255,022			576,925			$	442			$	349,894			995,623			$	351			$	1,642,465			3,273,521			$	502

Twelve Months Ended December 31, 2017		North American Operations											Australian Operations*											U.K./European Operations											Total Operations
Commodity Group		Freight Revenues				Carloads**			Average Revenues Per Carload				Freight Revenues				Carloads**			Average Revenues Per Carload				Freight Revenues				Carloads**			Average Revenues Per Carload				Freight Revenues				Carloads**			Average Revenues Per Carload
Agricultural Products		$	124,285			209,471			$	593			$	22,562			51,909			$	435			$	5,280			4,359			$	1,211			$	152,127			265,739			$	572
Autos & Auto Parts		22,901				37,246			615				—				—			—				—				—			—				22,901				37,246			615
Chemicals & Plastics		148,252				177,602			835				—				—			—				—				—			—				148,252				177,602			835
Coal & Coke		75,935				224,278			339				117,678				359,791			327				9,972				22,403			445				203,585				606,472			336
Food & Kindred Products		33,424				59,307			564				—				—			—				—				—			—				33,424				59,307			564
Intermodal		980				9,838			100				69,433				58,848			1,180				253,854				890,844			285				324,267				959,530			338
Lumber & Forest Products		87,200				140,856			619				—				—			—				—				—			—				87,200				140,856			619
Metallic Ores		13,391				17,925			747				37,415				29,458			1,270				—				—			—				50,806				47,383			1,072
Metals		103,863				136,888			759				—				—			—				—				—			—				103,863				136,888			759
Minerals & Stone		130,511				214,469			609				6,878				51,872			133				68,760				174,943			393				206,149				441,284			467
Petroleum Products		68,388				98,414			695				687				277			2,480				—				—			—				69,075				98,691			700
Pulp & Paper		107,453				161,872			664				—				—			—				—				—			—				107,453				161,872			664
Waste		25,063				52,081			481				—				—			—				—				—			—				25,063				52,081			481
Other		19,710				62,935			313				—				—			—				—				—			—				19,710				62,935			313
Totals		$	961,356			1,603,182			$	600			$	254,653			552,155			$	461			$	337,866			1,092,549			$	309			$	1,553,875			3,247,886			$	478

* Australian Operations is 51.1% owned by G&W as of December 1, 2016.

** Represents physical railcars and the estimated railcar equivalents of commodities transported by metric ton or other measure, as well as intermodal units.

Non-GAAP Financial Measures

This earnings release contains references to adjusted operating income, adjusted operating ratio, adjusted net income attributable to G&W, adjusted diluted earnings per common share (EPS) and the adjusted free cash flow measures of adjusted net cash provided by operating activities attributable to G&W, adjusted free cash flow attributable to G&W and adjusted free cash flow attributable to G&W before new business investments and grant funded projects, which are “non-GAAP financial measures” as this term is defined in Item 10(e) of Regulation S-K under the Securities Act of 1933 and the Securities Exchange Act of 1934 and Regulation G under the Securities Exchange Act of 1934. In accordance with these rules, G&W has reconciled these non-GAAP financial measures to their most directly comparable U.S. GAAP measures.

Management views these non-GAAP financial measures as important measures of G&W’s operating performance or, in the case of the adjusted free cash flow measures, a useful indicator of cash flow that may be available for discretionary use by G&W. Management also views these non-GAAP financial measures as a way to assess comparability between periods. Key limitations of the adjusted free cash flow measures include the assumptions that G&W will be able to refinance its existing debt when it matures and meet other cash flow obligations from financing activities, such as principal payments on debt.

These non-GAAP financial measures are not intended to represent, and should not be considered more meaningful than, or as an alternative to, their most directly comparable GAAP measures. These non-GAAP financial measures may be different from similarly-titled non-GAAP financial measures used by other companies.

The following tables set forth reconciliations of each of these non-GAAP financial measures to their most directly comparable GAAP measure (in millions, except percentages and per share amounts).

Reconciliations of Non-GAAP Financial Measures

Adjusted Operating Income

			Three Months Ended
			December 31, 2018
			North American Operations					Australian Operations					U.K./European Operations					Total Operations
Operating revenues			$	338.0				$	71.1				$	166.5				$	575.6
Operating expenses			250.8					53.4					165.7					469.9
Operating income(a)			$	87.2				$	17.7				$	0.8				$	105.7
Operating ratio(b)			74.2		%			75.1		%			99.5		%			81.6		%
Operating expenses			$	250.8				$	53.4				$	165.7				$	469.9
Restructuring and related costs			—					—					(2.1		)			(2.2		)
Canadian railroad lease return costs			(2.1		)			—					—					(2.1		)
Adjusted operating expenses			$	248.7				$	53.4				$	163.7				$	465.7
Adjusted operating income			$	89.3				$	17.7				$	2.8				$	109.9
Adjusted operating ratio			73.6		%			75.1		%			98.3		%			80.9		%

			Three Months Ended
			December 31, 2017
			North American Operations				Australian Operations				U.K./European Operations				Total Operations
Operating revenues			$	320.2			$	75.5			$	175.8			$	571.6
Operating expenses			245.5				58.0				161.6				465.1
Operating income(a)			$	74.7			$	17.6			$	14.2			$	106.5
Operating ratio(b)			76.7%				76.7%				91.9%				81.4%
Operating expenses			$	245.5			$	58.0			$	161.6			$	465.1
Australia impairment and related costs			—				(4.9)				—				(4.9)
Restructuring costs			(0.1)				—				(1.3)				(1.4)
Corporate development and related costs			(0.9)				—				(0.3)				(1.1)
Buyout of Freightliner deferred consideration agreements			—				—				8.9				8.9
U.K. coal restructuring and related charges			—				—				1.1				1.1
Adjusted operating expenses			$	244.6			$	53.0			$	170.0			$	467.6
Adjusted operating income			$	75.6			$	22.5			$	5.9			$	104.0
Adjusted operating ratio			76.4%				70.2%				96.7%				81.8%

			Twelve Months Ended
			December 31, 2018
			North American Operations				Australian Operations				U.K./European Operations				Total Operations
Operating revenues			$	1,358.9			$	301.7			$	688.0			$	2,348.6
Operating expenses			1,015.8				221.4				687.9				1,925.0
Operating income(a)			$	343.1			$	80.3			$	0.1			$	423.5
Operating ratio(b)			74.8%				73.4%				100.0%				82.0%
Operating expenses			$	1,015.8			$	221.4			$	687.9			$	1,925.0
Restructuring and related costs			(0.1)				—				(15.0)				(15.1)
Canadian railroad lease return costs			(2.1)				—				—				(2.1)
Corporate development and related costs			(0.7)				(0.1)				(0.1)				(0.8)
Credit facility refinancing-related costs			(0.4)				—				—				(0.4)
Gain on settlement			—				7.3				—				7.3
Adjusted operating expenses			$	1,012.5			$	228.6			$	672.7			$	1,913.9
Adjusted operating income			$	346.3			$	73.1			$	15.3			$	434.7
Adjusted operating ratio			74.5%				75.8%				97.8%				81.5%

			Twelve Months Ended
			December 31, 2017
			North American Operations					Australian Operations					U.K./European Operations					Total Operations
Operating revenues			$	1,274.3				$	307.5				$	626.2				$	2,208.0
Operating expenses			970.0					230.3					615.8					1,816.1
Operating income(a)			$	304.3				$	77.3				$	10.5				$	392.0
Operating ratio(b)			76.1		%			74.9		%			98.3		%			82.2		%
Operating expenses			$	970.0				$	230.3				$	615.8				$	1,816.1
Corporate development and related costs			(8.2		)			0.3					(4.0		)			(11.9		)
Restructuring costs			(0.5		)			(0.3		)			(9.4		)			(10.2		)
Australia impairment and related costs			—					(4.9		)			—					(4.9		)
Buyout of Freightliner deferred consideration agreements			—					—					8.9					8.9
U.K. coal restructuring and related charges			—					—					1.1					1.1
Adjusted operating expenses			$	961.3				$	225.3				$	612.4				$	1,799.0
Adjusted operating income			$	312.9				$	82.2				$	13.8				$	409.0
Adjusted operating ratio			75.4		%			73.3		%			97.8		%			81.5		%

(a)		Operating income is calculated as operating revenues less operating expenses.
(b)		Operating ratio is calculated as operating expenses divided by operating revenues.

Adjusted Net Income and Adjusted Diluted Earnings Per Common Share

Three Months Ended December 31, 2018			Income Before Income Taxes					Benefit from/ (Provision for) Income Taxes					Net Income Attributable to G&W					Diluted EPS
As reported			$	80.3				$	(23.0	)			$	55.6				$	0.94
Adjusted for:
Restructuring and related costs			2.2					(0.4		)			1.7					0.03
Canadian railroad lease return costs			2.1					(0.6		)			1.5					0.02
Gain on sale of investment			(1.4		)			0.4					(1.0		)			(0.02		)
Prior period tax adjustments			—					1.4					1.4					0.02
As adjusted			$	83.2				$	(22.2	)			$	59.1				$	1.00

Three Months Ended December 31, 2017			Income Before Income Taxes					Benefit from/ (Provision for) Income Taxes					Net Income Attributable to G&W					Diluted EPS
As reported			$	84.7				$	343.3				$	426.6				$	6.81
Adjusted for:
Australia impairment and related costs			4.9					(1.5		)			1.8					0.03
Restructuring costs			1.4					(0.2		)			1.2					0.02
Corporate development and related costs			1.1					(0.4		)			0.7					0.01
Buyout of Freightliner deferred consideration agreements			(8.9		)			—					(8.9		)			(0.14		)
U.K. coal restructuring and related charges			(1.1		)			0.2					(0.9		)			(0.01		)
Impact of U.S. Tax Cuts and Jobs Act (TCJA)			—					(371.9		)			(371.9		)			(5.94		)
As adjusted			$	82.2				$	(30.5	)			$	48.6				$	0.77

Twelve Months Ended December 31, 2018			Income Before Income Taxes					Benefit from/ (Provision for) Income Taxes					Net Income Attributable to G&W					Diluted EPS
As reported			$	318.9				$	(64.5	)			$	244.4				$	4.03
Adjusted for:
Restructuring and related costs			15.1					(2.9		)			12.2					0.20
Credit facility refinancing-related costs			2.7					(0.7		)			2.0					0.03
Corporate development and related costs			0.8					(0.2		)			0.6					0.01
Canadian railroad lease return costs			2.1					(0.6		)			1.5					0.02
Loss on sale of business			1.4					—					1.4					0.02
Gain on settlement			(7.3		)			2.2					(2.6		)			(0.04		)
Gain on sale of investment			(1.4		)			0.4					(1.0		)			(0.02		)
2017 Short Line Tax Credit			—					(31.6		)			(31.6		)			(0.52		)
Prior period tax adjustment			—					5.1					5.1					0.08
TCJA measurement period adjustment			—					1.6					1.6					0.03
As adjusted			$	332.3				$	(91.2	)			$	233.6				$	3.85

Twelve Months Ended December 31, 2017			Income Before Income Taxes					Benefit from/ (Provision for) Income Taxes					Net Income Attributable to G&W					Diluted EPS
As reported			$	295.5				$	261.3				$	549.1				$	8.79
Adjusted for:
Corporate development and related costs			11.9					(4.3		)			8.1					0.13
Restructuring costs			10.2					(1.0		)			9.0					0.14
Australia impairment and related costs			4.9					(1.5		)			1.8					0.03
Buyout of Freightliner deferred consideration agreements			(8.9		)			—					(8.9		)			(0.14		)
Gain on sale of investment			(1.6		)			0.7					(1.0		)			(0.02		)
U.K. coal restructuring and related charges			(1.1		)			0.2					(0.9		)			(0.01		)
Impact of TCJA			—					(371.9		)			(371.9		)			(5.96		)
Recognition of unrecognized tax benefits			—					(3.3		)			(3.3		)			(0.05		)
As adjusted			$	310.9				$	(119.8	)			$	182.0				$	2.91

Adjusted Free Cash Flow Measures

				Twelve Months Ended December 31,
				2018					2017
Net cash provided by operating activities				$	553.1				$	479.2
Allocation of adjusted cash flow to noncontrolling interest(a)				(21.4		)			(27.6		)
Adjusted net cash provided by operating activities attributable to G&W				531.7					451.6
Purchase of property and equipment, net(b)				(251.1		)			(201.4		)
Adjusted free cash flow attributable to G&W				$	280.6				$	250.2
Net cash paid for new business investments(b)				44.0					8.6
Net cash paid for grant funded projects(b)				1.4					11.0
Adjusted free cash flow attributable to G&W before new business investments and grant funded projects				$	326.0				$	269.8

(a)		Allocation of adjusted cash flow to noncontrolling interest (MIRA's 48.9% equity ownership of GWA since December 1, 2016) is calculated as 48.9% of the total of (i) cash flow provided by operating activities of G&W’s Australian Operations, less (ii) net purchases of property and equipment of G&W’s Australian Operations. The timing and amount of actual distributions, if any, from GWA to G&W and MIRA made in any given period will vary and could differ materially from the amounts presented. During the twelve months ended December 31, 2018, GWA made A$65.0 million of such distributions of which A$33.2 million (or $24.6 million at the applicable exchange rates at the time the payments were made) and A$31.8 million (or $23.6 million at the applicable exchange rates at the time the payments were made) was distributed to G&W and MIRA, respectively, and no such distributions were made for the twelve months ended December 31, 2017. G&W expressly disclaims any direct correlation between the allocation of adjusted cash flow to noncontrolling interest and actual distributions made in any given period.
(b)		See breakout below.

			Twelve Months Ended December 31, 2018
			Core Capital (1)					New Business Investments					Grant Funded Projects (2)					Total
Purchase of property and equipment			$	(218.2	)			$	(44.0	)			$	(21.9	)			$	(284.1	)
Grant proceeds from outside parties			—					—					20.5					20.5
Insurance proceeds for the replacement of assets			3.0					—					—					3.0
Proceeds from disposition of property and equipment			9.5					—					—					9.5
Purchase of property and equipment, net			$	(205.7	)			$	(44.0	)			$	(1.4	)			$	(251.1	)
			Twelve Months Ended December 31, 2017
			Core Capital (1)					New Business Investments					Grant Funded Projects (2)					Total
Purchase of property and equipment			$	(188.6	)			$	(8.7	)			$	(31.2	)			$	(228.5	)
Grant proceeds from outside parties			—					0.1					20.2					20.2
Insurance proceeds for the replacement of assets			1.6					—					—					1.6
Proceeds from disposition of property and equipment			5.2					—					—					5.2
Purchase of property and equipment, net			$	(181.8	)			$	(8.6	)			$	(11.0	)			$	(201.4	)

	(1)		Core capital expenditures represent purchases of property and equipment, as presented on the Consolidated Statement of Cash Flows, less grant proceeds from outside parties, insurance proceeds for the replacement of assets and proceeds from disposition of property and equipment, each of which as presented on the Consolidated Statement of Cash Flows, less new business investments and grant funded projects.
	(2)		Grant funded projects represents purchases of property and equipment for projects partially or entirely funded by outside parties, net of grant proceeds from outside parties as presented on the Consolidated Statement of Cash Flows.

Michael Williams of G&W Corporate Communications
1-203-202-8900
mwilliams@gwrr.com