Customer Focus of Short Line Railroads, on a Global Scale

Transcription

1 Customer Focus of Short Line Railroads, on a Global Scale Gary Long, Senior Vice President, Midwest Region Railroads Genesee & Wyoming Railroad Services, Inc. November 17,

2 Overview NYSE: Listed as GWR with ~$4B market capitalization Railroads: 121 railroads with ~16,000 track miles (80% North America; 20% Australia/Europe) People: 7,200 Customers: 2,800 Equipment: 1,350 locomotives Carloads: ~3.0 million annually 2

3 North America Australia 2016 U.K./Europe 3

4 G&W Operating Income by Segment U.K./ Europe ~10% Australia ~10% North America ~80% 4

5 Revenue Diversity by Commodity YTD2016 Freight Revenue by Commodity (67% of total revenues) 5

6 3 Top 3 Facts You Didn t Know About G&W 6

7 3 G&W s logo was created by renowned graphic designer Milton Glaser 7

8 2 G&W subsidiaries operate in more states and countries than any other freight railroad U.S. States (41) Countries (10) Australia Belgium Canada Germany Italy The Netherlands Poland Saudi Arabia United Kingdom United States 8

9 1 The Wyoming in Genesee & Wyoming doesn t refer to the state of Wyoming but to a county in Upstate New York. The Genesee and Wyoming Railroad doesn t operate in either Genesee or Wyoming counties! 9

10 1899 The original Genesee & Wyoming Railroad; 14-miles in upstate NY serving one customer that we still serve today 10

11 Building a Global Footprint: Components of Growth

12 Components of Growth 1.Traditional Class I spinoffs after Staggers Act 12

13 1. Traditional Class I spinoffs First & Last Mile to the Customer 13

14 Components of Growth 2.Railroads embedded in industrial facilities 14

15 2. Embedded Industrial Railroads Non-Core Competence for Owners 15

16 Components of Growth 3.Contiguous railroads as building blocks of regional rail systems 16

17 From Retsof to Chicago: Building Our Regions via Contiguous / Nearby Acquisitions 1977 Genesee & Wyoming Railroad (GNWR) 1985 Dansville & Mount Morris Railroad (DMM) 1986 Rochester & Southern Railroad (RSR) 1988 Buffalo & Pittsburgh Railroad (BPRR) 1992 Allegheny & Eastern Railroad (ALY) 1996 Pittsburg & Shawmut Railroad (PS) 2001 South Buffalo Railway (SB) 2008 Ohio Lines 2012 RailAmerica lines 17

18 Components of Growth 4.International privatizations 18

19 G&W in Australia: de facto Class I Railroad Above and Below Rail Operations Above Rail Operations 19

20 Components of Growth 5.Consolidation of short line industry with G&W acquisition of RailAmerica 20

21 G&W acquisition of RailAmerica: Natural progression in the evolution of the rail industry since deregulation Step 1: rationalization and dramatic improvements by Class I railroads; industry now capable of earning its cost of capital and reinvesting in its network for decades to come 21

22 G&W acquisition of RailAmerica: Natural progression in the evolution of the rail industry since deregulation Step 2: consolidation of lower-density short lines, creating the ability to invest in long-term infrastructure and provide customers world-class service from door to door 22

23 Building a Global Footprint: How We Manage Growth

24 G&W s Decentralized Operating Philosophy 10 regions with strong local management backed by centralized corporate staff support Continuous Safety Improvement Focused Regional Marketing Lower Operating Costs Efficient Use of Capital Our local focus is key to G&W s strong safety and customersatisfaction results 24

25 Regional Operating Structure: Designed to be Close to Customers Midwest Region Safety Finance HR IT Marketing /Sales Transportation Mechanical Engineering Customers 25

26 Investing with Customers

27 Long-Term Investments with Customers (U.S.) Customer Partnership G&W acquisition of 3 GP-owned short lines in 2003 Railcar investment and long-term transportation contract Now serve 15 GP mills nationwide 27

28 Long-Term Investments with Customers (U.S.) Customer Partnership G&W acquisition of serving short line (Arizona Eastern) in 2011 US$30 million investment in track, locomotives & equipment Long-term transportation contract >30% traffic increase 28

29 Long-Term Investments with Customers (Canada) Customer Partnership New 21-km railroad constructed and owned by G&W since 2014 Long-term transportation contract 29

30 Long-Term Investments with Customers (Australia): Customer Commodity Partnership Global Commodities Firm Grain in South Australia (Above/Below Rail) Standard- & Narrow-Gauge service with ownership of all assets ~700km of G&W-owned track 20+ locomotives 200+ wagons Long-term contracts Coal & Grain in New South Wales (Above Rail) i. Operating contract on customer equipment ii.operating contract on G&W owned equipment 30

31 Our Core Purpose To be the safest and most respected rail service provider in the world. 31

32 Progress Towards Safest Industry-Leading Safety Performance Injury Frequency Rate per 200,000 Hours Short Lines Class I 32

33 Progress Towards Most Respected Industry-Leading Customer Satisfaction 8.0 = Our Goal Trucking Other Railroads 33

34 Progress Towards Most Respected Investment in Infrastructure (Capex in millions) More than $1.3 billion invested in last five years 34

35 Progress Towards Most Respected Consistent Long-Term Revenue Growth UK/ Europe ($ millions) Australia Initial Public Offering North America 35

36 36