greg pauline, genesee and wyoming: win win

26
1 Genesee & Wyoming Inc. Genesee & Wyoming Australia 26 th November, 2013

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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/miningsa2013

TRANSCRIPT

Page 1: Greg Pauline, Genesee and Wyoming: Win WIN

1 Genesee & Wyoming Inc.

Genesee & Wyoming Australia

26th November, 2013

Page 2: Greg Pauline, Genesee and Wyoming: Win WIN

2 Genesee & Wyoming Inc.

Agenda

1. Overview of G&W Inc.

2. Arrium and G&W

Win Win…

3. Our rail services to Arrium

Page 3: Greg Pauline, Genesee and Wyoming: Win WIN

3 Genesee & Wyoming Inc.

Genesee & Wyoming Inc. 1899

The original

Genesee & Wyoming Railroad

14-miles in upstate NY

Serving one customer

Page 4: Greg Pauline, Genesee and Wyoming: Win WIN

4 Genesee & Wyoming Inc.

G&W Board of Directors 1899

Page 5: Greg Pauline, Genesee and Wyoming: Win WIN

5 Genesee & Wyoming Inc.

Early G&W Power

Page 6: Greg Pauline, Genesee and Wyoming: Win WIN

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

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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

Page 8: Greg Pauline, Genesee and Wyoming: Win WIN

8 Genesee & Wyoming Inc.

Genesee & Wyoming 2013

Page 9: Greg Pauline, Genesee and Wyoming: Win WIN

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

Page 10: Greg Pauline, Genesee and Wyoming: Win WIN

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

Page 11: Greg Pauline, Genesee and Wyoming: Win WIN

11 Genesee & Wyoming Inc.

Illustrative Partnership with Class I: G&W now handles 11% of CSX Carloads

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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

Page 13: Greg Pauline, Genesee and Wyoming: Win WIN

13 Genesee & Wyoming Inc.

Cultural Changes in Safety

Injury Frequency Rate per 200,000 man-hours

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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

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15 Genesee & Wyoming Inc.

Only US Publicly Traded Short Line

(market cap in billions)

Page 16: Greg Pauline, Genesee and Wyoming: Win WIN

16 Genesee & Wyoming Inc.

Traditional Class I spinoffs “First & Last Mile” to the Customer

Page 17: Greg Pauline, Genesee and Wyoming: Win WIN

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

Page 18: Greg Pauline, Genesee and Wyoming: Win WIN

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

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19 Genesee & Wyoming Inc.

Arrium and GWA

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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

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21 Genesee & Wyoming Inc.

Optimising Capacity & Operating Performance

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22 Genesee & Wyoming Inc.

Our Rail Services to Arrium

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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

Page 24: Greg Pauline, Genesee and Wyoming: Win WIN

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

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25 Genesee & Wyoming Inc.

Question and Answer

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26 Genesee & Wyoming Inc.