greg pauline, genesee and wyoming: win win
DESCRIPTION
Greg Pauline, Managing Director, Genesee and Wyoming delivered this presentation at the 2013 Mining South Australia conference. The conference has been produced specifically for the South Australian mining and regional development community and represents a unique opportunity to hear the latest developments from the major projects, mines and explorers in South Australia. For more information on the annual event, please visit the conference website: http://www.informa.com.au/miningsa2013TRANSCRIPT
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’’…
0
0.2
0.4
0.6
0.8
1
1.2
1.4
1.6
1.8
0
20
40
60
80
100
120
AR
RIU
M S
har
e P
rice
GW
RR
Sh
are
Pri
ce
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.