<PAGE>
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
Quarterly report pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
for the quarter ended September 30, 1997 Commission File No. 0-20847
------------------ -------
GENESEE & WYOMING INC.
(Exact name of registrant as specified in its charter)
Delaware 06-0984624
- ------------------------ -------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
71 Lewis Street, Greenwich, Connecticut 06830
- --------------------------------------- ----------
(Address of principal executive offices) (Zip Code)
(203) 629-3722
- ----------------
(Telephone No.)
Shares of common stock outstanding as of the close of business on November 11,
1997:
Class Number of Shares Outstanding
- ----- -----------------------------
Class A Common Stock 4,404,024
Class B Common Stock 846,556
Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
[X] Yes [_] NO
<PAGE>
INDEX
Part I - Financial Information
Item 1. Financial Statements: Page
-------
Consolidated Statements of Income - For the
Three Months and Nine Months Ended September
30, 1996 and 1997................................. 3
Consolidated Balance Sheets - December 31, 1996
and September 30, 1997
Consolidated Statements of Cash Flows - For the
Nine Months Ended September 30, 1996 and 1997..... 4
Notes to Consolidated Financial Statements.......... 6 - 9
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations.... 10 - 17
Item 3. Quantitative and Qualitative Disclosures About
Market Risk...................................... 17
Part II - Other Information..................................... 18
Index to Exhibits............................................... 19 - 20
Signatures...................................................... 21
2
<PAGE>
GENESEE & WYOMING INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF INCOME
(in thousands, except per share amounts)
(Unaudited)
<TABLE>
<CAPTION>
Three Months Nine Months
Ended September 30, Ended September 30,
1996 1997 1996 1997
--------------------------------------------------
<S> <C> <C> <C> <C>
OPERATING REVENUES $ 19,022 $ 23,670 $ 54,640 $ 71,241
--------------------------------------------------
OPERATING EXPENSES:
Transportation 4,354 7,114 13,012 21,098
Maintenance of ways and structures 2,392 2,586 6,914 7,605
Maintenance of equipment 3,621 3,854 10,143 11,748
General and administrative 3,461 4,451 9,496 13,698
Depreciation and amortization 1,585 1,764 4,479 4,985
--------------------------------------------------
Total operating expenses 15,413 19,769 44,044 59,134
--------------------------------------------------
INCOME FROM OPERATIONS 3,609 3,901 10,596 12,107
Interest expense (796) (629) (3,803) (1,850)
Other income 150 273 411 503
--------------------------------------------------
Income before provision for income taxes 2,963 3,545 7,204 10,760
Provision for income tax 1,200 1,418 2,918 4,342
--------------------------------------------------
NET INCOME $ 1,763 $ 2,127 $ 4,286 $ 6,418
--------------------------------------------------
EARNINGS PER COMMON SHARE AND
COMMON SHARE EQUIVALENT:
NET INCOME $ 0.33 $ 0.39 $ 1.25 $ 1.18
==================================================
WEIGHTED AVERAGE NUMBER OF COMMON
SHARE AND COMMON SHARE EQUIVALENTS OUTSTANDING 5,399 5,443 3,432 5,454
===================================================
</TABLE>
3
<PAGE>
GENESEE & WYOMING INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(in thousands)
<TABLE>
<CAPTION>
December 31, September 30,
1996 1997
ASSETS (Unaudited)
---------------------------
<S> <C> <C>
CURRENTS ASSETS:
Cash and cash equivalents $ 14,121 $ 11,911
Accounts receivable, net 19,133 16,900
Materials and supplies 4,173 4,424
Prepaid expenses and other 1,771 7,356
Deferred income tax assets, net 1,632 1,748
---------------------------
Total current assets 40,830 42,339
PROPERTY AND EQUIPMENT, net 78,822 87,945
---------------------------
SERVICE ASSURANCE AGREEMENT, net 14,312 13,750
---------------------------
OTHER ASSETS, net 11,375 11,421
---------------------------
Total assets $145,339 $155,455
===========================
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Current portion of long-term debt $ 271 $ 308
Accounts payable 33,583 22,293
Accrued expenses 6,122 5,164
---------------------------
Total current liabilities 39,976 27,765
---------------------------
LONG-TERM DEBT 18,460 30,341
---------------------------
OTHER LIABILITIES 2,699 2,872
---------------------------
DEFERRED INCOME TAX LIABILITIES, net 4,720 6,922
---------------------------
DEFERRED ITEMS--grants from governmental agencies 12,899 14,824
---------------------------
DEFERRED GAIN--sale/leaseback 4,902 4,551
---------------------------
STOCKHOLDERS' EQUITY:
Class A common stock, $0.01 par value, one vote per share;
12,000,000 shares authorized; 4,399,463 and 4,403,143 issued and
outstanding on December 31, 1996 and September 30, 1997, respectively 44 44
Class B common stock, $0.01 par value, 10 votes per share;
1,500,000 shares authorized; 846,556 issued and outstanding 8 8
Additional paid-in capital 46,102 46,179
Warrants outstanding 471 471
Retained earnings 15,058 21,478
---------------------------
Total stockholders' equity 61,683 68,180
---------------------------
Total liabilities and stockholders' equity $145,339 $155,455
===========================
</TABLE>
4
<PAGE>
GENESEE & WYOMING INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
(IN THOUSANDS)
(UNAUDITED)
<TABLE>
<CAPTION>
Nine Months Ended
September 30,
1996 1997
----------------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $4,286 $6,418
Adjustments to reconcile net income to net cash provided
by operating activities-
Depreciation and amortization 4,479 4,985
Deferred income taxes 1,858 2,086
Gain on disposition of property and equipment (44) (12)
Changes in assets and liabilities, net of balances
assumed through acquisitions-
Receivables (4,900) 2,233
Materials and supplies (2,093) (251)
Prepaid expenses and other (29) (5,585)
Accounts payable and accrued expenses 5,030 (12,248)
Other assets and liabilities, net 759 (532)
-----------------------------
Net cash provided by (used in) operating activities 9,346 (2,906)
-----------------------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment (3,692) (7,444)
Purchase of assets of Chicago & Illinois Midland Railway Company (26,330) ---
Purchase of assets of Pittsburg & Shawmut Railroad Company,
Mountain Laurel Railroad Company and Red Bank Railroad Company (11,966) ---
Proceeds from disposition of property 4,436 293
-----------------------------
Net cash used in investing activities (37,552) (7,151)
-----------------------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Principal payments on long-term borrowings, including capital leases (53,736) (9,577)
Proceeds from issuance of long-term debt 41,945 14,880
Debt issuance costs (1,561) ---
Net (payments) proceeds on grants (163) 2,465
Dividends paid (32) ----
Proceeds from issuance of common stock --- 79
Proceeds from issuance of stock warrants 471 ---
Net proceeds from initial public offering 44,780 ---
-----------------------------
Net cash provided by financing activities 31,704 7,847
-----------------------------
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 3,498 (2,210)
CASH AND CASH EQUIVALENTS, beginning of period 2,115 14,121
-----------------------------
CASH AND CASH EQUIVALENTS, end of period $5,613 $11,911
=============================
CASH PAID DURING PERIOD FOR:
Interest $3,763 $1,733
Incomes taxes 1,396 4,508
=============================
SUPPLEMENTAL NON-CASH INVESTING ACTIVITIES:
Assumption of liabilities in connection with purchase of
assets of Chicago & Illinois Midland Railway Company $1,394 ---
Assumption of deferred credits from governmental agencies in connection
with purchase of assets of Pittsburg & Shawmut Railroad Company,
Mountain Laurel Railroad Company and Red Bank Railroad Company 3,194 ---
Capital lease obligation --- $6,546
=============================
</TABLE>
5
<PAGE>
GENESEE & WYOMING INC. AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
1. PRINCIPLES OF CONSOLIDATION AND BASIS OF PRESENTATION:
The interim consolidated financial statements presented herein include the
accounts of Genesee & Wyoming Inc. and its subsidiaries. References to "GWI" or
the "Company" mean Genesee & Wyoming Inc. and, unless the context indicates
otherwise, its consolidated subsidiaries. All significant intercompany
transactions and accounts have been eliminated in consolidation. These interim
consolidated financial statements have been prepared by the Company, without
audit, pursuant to the rules and regulations of the Securities and Exchange
Commission (the "SEC"). In the opinion of management, the unaudited financial
statements for the three-month and nine-month periods ended September 30, 1996
and 1997, are presented on a basis consistent with audited financial statements
and contain all adjustments, consisting only of normal recurring adjustments,
necessary for a fair presentation. The interim consolidated financial
statements should be read in conjunction with the audited financial statements
and notes thereto for the year ended December 31, 1996 included in the Company's
Form 10-K.
The results of operations for interim periods are not necessarily indicative
of results of operations for the full year.
2. CORPORATE DEVELOPMENTS:
Australia - On August 28, 1997 the Company announced that its wholly owned
subsidiary, Genesee & Wyoming Australia Pty Ltd ("GWIA"), had been awarded the
contract to purchase certain railroad assets of SA Rail, a division of
Australian National Railway, through the Commonwealth of Australia Office of
Asset Sales. SA Rail provides intrastate freight services in South Australia,
interstate haulage of contract freight, rolling stock rental and maintenance,
and interstate track maintenance. GWIA bid as part of a consortium including
EDI Clyde Engineering and Transfield Pty Ltd. EDI Clyde is a major Australian
provider of railway rolling stock and holds the Australian license for GM/EMD
locomotives. Transfield is a major Australian engineering, construction and
infrastructure maintenance provider. On November 8, 1997 GWIA closed on the
purchase and commenced operation of freight service under the name of Australia
Southern Railroad Pty. Ltd.
Mexico - On October 21, 1997 the Company announced that it has a memorandum of
understanding to operate, service and provide technical support on the Coahuila-
Durango short line railroad in Mexico for Grupo Acerero del Norte and Industrias
Penoles, the successful bidders for the line. The memorandum of understanding
is subject to the parties' negotiation and execution of a definitive agreement
and the satisfaction of various closing conditions. If finalized, the railroad
would operate over approximately 782 miles of track, primarily in the northern
Mexican states of Coahuila and Durango.
In 1996, the Company acquired the Illinois & Midland Railroad, Inc., Pittsburg
& Shawmut Railroad, Inc. and Rail Link, Inc. The reader is referred to the
Company's 1996 Form 10-K for further discussion of these acquisitions.
Pro Forma for Acquisitions and Initial Public Common Stock Offering - Results
of the operations of Illinois & Midland Railroad, Inc., Pittsburg & Shawmut
Railroad, Inc. and Rail Link, Inc. are included within the consolidated
financial statements commencing February 9, 1996, April 29, 1996, and November
8, 1996, respectively. Unaudited pro forma results assuming all three
acquisitions and the sale by the Company of 2,897,200 shares of Class A
6
<PAGE>
Common Stock in the Common Stock Offering (see Note 3) had taken place as of
January 1, 1996 are as follows (in thousands, except per share amounts):
<TABLE>
<CAPTION>
Three Months Ended Nine Months Ended
--------------------- ---------------------
9/30/96 9/30/97 9/30/96 9/30/97
--------- ---------- ---------- ----------
(Unaudited) (Unaudited) (Unaudited) (Unaudited)
<S> <C> <C> <C> <C>
Revenues....................... $22,066 $ 23,670 $ 66,254 $ 71,241
Net income..................... $ 1,757 $ 2,127 $ 4,319 $ 6,418
Number of common shares........ 5,246 5,443 5,245 5,454
Net income per share........... $ 0.33 $ 0.39 $ 0.82 $ 1.18
======== ======== ======== ========
</TABLE>
Such pro forma information is not necessarily indicative of the results of
future operations.
3. SUPPLEMENTAL EARNINGS PER SHARE:
On June 28, 1996 the Company closed an underwritten initial public offering
("IPO") of 3,045,200 shares of Class A Common Stock (the "Common Stock
Offering"), of which 2,897,200 shares were offered by the Company and 148,000
shares were offered by a selling stockholder. Had the IPO occurred on January
1, 1996, earnings per share and weighted average shares outstanding for the
nine-month period ending September 30, 1996 would have been as follows:
Net income per share...................................$0.99
Weighted average shares and equivalent shares
outstanding (in thousands)............................5,526
The supplemental earnings per share information is not necessarily indicative
of the results of future operations.
4. JOINT VENTURE:
The Company has formed a joint venture, Genesee Rail-One Corp. ("GRO") to
acquire railroads in Canada. GRO is a joint venture with Rail-One Corporation,
a subsidiary of The Cygnus Group which is an integrated transportation
facilities, services and infrastructure provider in Canada.
GRO commenced operations on November 11, 1997 of the Quebec Gatineau Railway
Inc. ("QGRY"), a 354 mile railroad linking Quebec City, Montreal and Hull in
Southeastern Quebec. QGRY purchased the assets for this railroad from St.
Lawrence & Hudson Railway Company Limited which is a subsidiary of Canadian
Pacific Railway Company. QGRY will serve approximately 70 customers and
anticipates handling approximately 35,000 carloads annually.
On July 29, 1997 GRO commenced operations of the Huron Central Railway Inc.
("HCRY"), a 180 mile railroad located in Central Ontario. HCRY leases its rail
line from the Canadian Pacific Railway for a 20 year term and is responsible for
operation and maintenance of the leased line.
Based on GWI's ownership portion of 47.5%, the Company is reporting the
results of operations of GRO under the equity method of accounting for
investments. The results of operations of GRO are translated into US. dollars
at a weighted average exchange rate for each period.
7
<PAGE>
5. LEASES:
On March 31, 1997 a subsidiary of the Company entered into a long-term capital
lease agreement with a leasing company for the acquisition of up to $13 million
of rolling stock. As of September 30, 1997 the subsidiary, at the subsidiary's
election, had acquired rolling stock valued at $6.6 million under this lease.
The Company guarantees the subsidiary's performance under the lease. The lease
requires minimum monthly rent payments equal to the monthly interest payable
with respect to the outstanding balance on the $13,000,000 note from the Lessor
to a bank until September 30, 1998. Interest on the note is at LIBOR plus
1.875%. After September 30, 1998, based on the present amount of equipment
subject to the lease, the monthly lease payment will be $128,730 until March 31,
2017. The subsidiary has the right to purchase all the equipment from the
lessor prior to September 30, 1998 at the balance outstanding under the note.
6. CONTINGENCIES:
On June 23, 1997 CSX Transportation, Inc. ("CSX") and Norfolk Southern Corp.
("NS"), submitted a plan to the Surface Transportation Board ("STB") to control
and divide the assets of Consolidated Rail Corporation ("Conrail"). The STB has
announced that it will take up to 395 calendar days to respond to this proposal.
Railroads in the Company's New York and Pennsylvania region interchange with one
or more of these railroads, and rely on them in some cases for providing
overhead traffic, defined as traffic neither originating nor terminating on any
of the Company's subsidiaries. In their joint filing with the STB, CSX and NS
estimated that approximately $8.3 million in freight revenue related to overhead
traffic on one of the Company's subsidiaries may be diverted as a result of the
proposed transaction. The Company agrees with this estimate and is considering
its options for restructuring the operations of the railroad to minimize the
impact. On October 21, 1997 the Company and several of its subsidiaries entered
into a confidential Rate and Route Agreement with CSX that the Company believes
will facilitate the operations restructuring process. Based on its initial
studies the Company believes that no impairment of assets will occur.
7. RECENTLY ISSUED ACCOUNTING STANDARDS:
In March 1997, the Financial Accounting Standards Board issued SFAS No. 128,
Earnings Per Share, which simplifies the standards for computing earnings per
share. It replaces the presentation of primary EPS with a presentation of basic
EPS. Is also requires dual presentation of basic and diluted EPS on the face of
the income statement and a reconciliation between the two computations. The
SFAS No. 128 presentation is required for the year ended December 31, 1997, and
will be adopted by the Company at that time. Had the Company calculated EPS
using SFAS No. 128 for the three-month period ended September 30, 1997, basic
EPS and diluted EPS would have approximated $0.41 per share and $0.39 per share,
respectively; and for the three-month period ended September 30, 1996, basic EPS
and diluted EPS would have approximated $0.34 per share and $0.32 per share,
respectively. Had the Company calculated EPS using SFAS No. 128 for the nine-
month period ended September 30, 1997, basic EPS and diluted EPS would have
approximated $1.22 per share and $1.17 per share, respectively; and for the
nine-month period ended September 30, 1996, basic EPS and diluted EPS would have
approximated $1.28 per share and $1.24 per share, respectively.
The Financial Accounting Standards Board recently issued SFAS No. 130,
Reporting Comprehensive Income, which establishes standards for reporting and
display of comprehensive income. The objective of this standard is to report a
measure of changes in equity of an enterprise that result from transactions
other than with owners. Comprehensive income is the total of net income and
8
<PAGE>
all other nonowner changes in equity. Adoption of this statement is required no
later than with fiscal year 1998.
The Financial Accounting Standards Board recently issued SFAS No. 131,
Disclosures about Segments of an Enterprise and Related Information, which
establishes new guidelines for segment reporting. The objective of this
standard is to redefine the reporting requirements of segment information to an
approach that is based on the way the chief operating decision maker organizes
segments within a company for making operating decisions and assessing
performance. Adoption of this statement is required no later than with fiscal
year 1998, which is when the Company expects to adopt it.
The remainder of this page is intentionally left blank.
9
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following discussion should be read in conjunction with the Company's
consolidated financial statements and related notes included elsewhere in this
Quarterly Report on Form 10-Q, and with the consolidated financial statements,
related notes and other financial information included in the Company's 1996
Form 10-K.
General
The Company is a holding company whose subsidiaries own and operate short line
and regional freight railroads and provide related rail services. The Company,
through its industrial switching subsidiary, also provides railroad switching
and related services to North American industries with extensive railroad
facilities within their complexes. The Company generates revenues primarily
from the movement of freight over track owned or operated by its railroads. The
Company also generates non-freight revenues primarily by providing industrial
switching and related rail services such as railcar leasing, repair and storage
to industries with extensive railroad facilities within their complexes, to
shippers along its lines, and to the Class I railroads that connect with its
lines.
The Company's operating expenses include wages and benefits, equipment rents
(including car hire), purchased services, depreciation and amortization, diesel
fuel, casualties and insurance, materials and other expenses. Car hire is a
charge paid by a railroad to the owners of railcars used by that railroad in
moving freight. Other expenses generally include property and other non-income
taxes, professional services, communication and data processing costs and
general overhead expense.
When comparing the Company's results of operations from one reporting period
to another, the following factors should be taken into consideration. The
Company has historically experienced fluctuations in revenues and expenses such
as one-time freight moves, customer plant expansions and shut-downs, railcar
sales, accidents and derailments. In periods when these events occur, results
of operations are not easily comparable to other periods. In addition, much of
the Company's growth to date has resulted from acquisitions. The Company
completed the acquisitions of the Illinois & Midland and Pittsburg & Shawmut
railroads during the first four months of 1996, and Rail Link, Inc. in November
1996. Because of variations in the structure, timing and size of these
acquisitions and differences in economics among the Company's railroads
resulting from differences in the rates and other material terms established
through negotiation, the Company's results of operations in any reporting period
may not be directly comparable to its results of operations in other reporting
periods.
Results of Operations
Three Months Ended September 30, 1997 Compared to Three Months Ended September
30, 1996
Operating Revenues
Operating revenues were $23.7 million in the quarter ended September 30, 1997
compared to $19.0 million in the quarter ended September 30 1996, an increase of
$4.7 million or 24.4%. The increase was attributable to a $863,000 increase in
freight revenues and a $3.8 million increase in non-freight revenues.
10
<PAGE>
Freight revenues were $16.5 million in the third quarter of 1997 compared to
$15.6 million in the third quarter of 1996, an increase of $863,000 or 5.5% of
which $328,000 or 2.1% was due to operations on new acquisitions.
The following table compares freight revenues, carloads and average freight
revenues per carload for the third quarters of 1996 and 1997:
Freight Revenues and Carloads Comparison by Commodity Group
Three Months Ended September 30, 1996 and 1997
<TABLE>
<CAPTION>
AVERAGE
FREIGHT
REVENUES
FREIGHT REVENUES CARLOADS PER CARLOAD
----------------------------------- --------------------------------- -----------------
(DOLLARS IN THOUSANDS EXCEPT REVENUES PER CARLOAD)
% OF % OF % OF % OF
COMMODITY GROUP 1996 TOTAL 1997 TOTAL 1996 TOTAL 1997 1996 1997 1997
------- ------- ------- ------- ------- ------- ------ ------- ------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
COAL, COKE & ORES $ 4,758 30.3% $ 4,543 27.5% 20,009 38.9% 16,929 32.2% $ 238 $ 268
PETROLEUM PRODUCTS 2,079 13.3% 2,350 14.2% 4,256 8.3% 5,053 9.6% 488 465
PULP & PAPER 1,774 11.3% 2,042 12.4% 4,835 9.4% 5,365 10.2% 367 381
LUMBER & FOREST
PRODUCTS 1,354 8.6% 1,550 9.4% 4,350 8.4% 4,702 9.0% 311 330
CHEMICALS 1,170 7.5% 1,399 8.5% 2,300 4.5% 2,464 4.7% 509 568
METALS 1,322 8.4% 1,231 7.4% 5,013 9.7% 4,972 9.5% 264 248
FARM & FOOD PRODUCTS 1,045 6.7% 1,001 6.1% 3,482 6.8% 3,552 6.8% 300 282
MINERALS & STONE 831 5.4% 965 5.8% 2,970 5.7% 3,780 7.2% 280 255
AUTOS & AUTO PARTS 873 5.6% 742 4.5% 1,662 3.2% 1,409 2.7% 525 527
OTHER 454 2.9% 700 4.2% 2,652 5.1% 4,293 8.1% 171 163
------- ----- ------- ----- ------ ----- ------ ----- ------- -------
TOTAL $15,660 100.0% $16,523 100.0% 51,529 100.0% 52,519 100.0% $ 304 $ 315
======= ===== ======= ===== ====== ===== ====== ===== ======= =======
</TABLE>
The increase in freight revenues was largely attributable to increases in
Petroleum Products of $271,000 or 13.1%, Pulp & Paper of $268,000 or 15.1%,
Lumber & Forest Products of $196,000 or 14.5% and Chemicals of $229,000 or
19.5%. Combined freight revenues from all other commodities except coal
resulted in a net increase of $114,000 or 2.5% in the third quarter of 1997
compared to the third quarter of 1996. However, all of these increases were
partially offset by a decline in the shipment of coal, which generated freight
revenues of $4.5 million in the third quarter of 1997, compared to $4.8 million
in the third quarter of 1996, a decrease of $215,000 or 4.5%. The decrease is
primarily due to reduced carloads to a major customer in the 1997 quarter
because of a planned reduction of the customer's coal inventory.
Total carloads were 52,519 in the third quarter of 1997 compared to 51,529 in
the third quarter of 1996, an increase of 990 or 1.9%.
Non-freight revenues were $7.2 million in the third quarter of 1997 compared
to $3.4 million in the third quarter of 1996, an increase of $3.8 million or
111.8%. Revenues from switching activities were $4.2 million in the third
quarter of 1997 compared to $606,000 in the third quarter of 1996, an increase
of $3.6 million or 590.9%. These increases were primarily attributable to
switching revenues generated by new acquisitions, primarily Rail Link, Inc.
Revenues from car hire and car rentals were $1.4 million in the third quarter of
1997 compared to $1.2 million in the third quarter of 1996, an increase of
$227,000 or 19.0% due primarily from existing operations.
11
<PAGE>
Operating Expenses
Operating expenses were $19.8 million in the third quarter of 1997 compared to
$15.4 million in the third quarter of 1996, an increase of $4.4 million or
28.3%. Expenses associated with new acquisitions represented $4.1 million of
the increase.
The Company's operating ratio increased to 83.5% in the third quarter of 1997
from 81.0% in the third quarter of 1996. The increase is primarily attributable
to the labor-intensive nature of Rail Link, Inc.'s industrial switching and
other rail-related services operation and particularly to start-up costs it has
incurred in connection with new contracts; and to a change in the traffic mix,
principally related to temporarily decreased coal movements.
The following table sets forth a comparison of the Company's operating
expenses for the third quarters of 1996 and 1997:
Operating Expense Comparison
Three Months Ended September 30, 1996 and 1997
<TABLE>
<CAPTION>
1996 1997
---------------------------- ------------------------
(in thousands)
% of % of
Operating Operating
Amount Revenues Amount Revenues
------------ --------- -------- ---------
<S> <C> <C> <C> <C>
Labor and benefits $ 6,288 33.1% $ 9,272 39.2%
Equipment rents 2,191 11.5% 2,159 9.1%
Purchased services 821 4.3% 1,020 4.3%
Depreciation and
amortization 1,585 8.3% 1,764 7.5%
Diesel fuel 986 5.2% 1,019 4.3%
Casualties and insurance 1,173 6.2% 1,049 4.4%
Materials 752 3.9% 1,202 5.1%
Other 1,617 8.5% 2,284 9.6%
------- ----- ------- -----
Total $15,413 81.0% $19,769 83.5%
======= ===== ======= ======
</TABLE>
Labor and benefits expense was $9.3 million in the third quarter of 1997
compared to $6.3 million in the third quarter of 1996, an increase of $3.0
million or 47.5%, primarily due to the commencement of operations on a new
acquisition. Labor costs increased as a percentage of revenues to 39.2% in the
third quarter of 1997 from 33.1% in the third quarter of 1996. The increase is
largely attributable to the labor-intensive nature of Rail Link, Inc.'s
industrial switching and other rail-related services operation. Purchased
services expense was $1.0 million in the third quarter of 1997 compared to
$821,000 in the third quarter of 1996, an increase of $199,000 or 24.2%,
primarily due to track repair contracted services. Materials expense was $1.2
million in the third quarter of 1997 compared to $752,000 in the third quarter
of 1996, an increase of $450,000 or 59.8%, primarily due to locomotive and
maintenance of way repair projects. Other expense was $2.3 million in the third
quarter of 1997 compared to $1.6 million in the third quarter of 1996, an
increase of $667,000 or 41.2%, primarily due to general and administrative costs
related to a new acquisition.
12
<PAGE>
Interest Expense and Income Taxes
Interest expense in the third quarter of 1997 was $629,000 compared to
$796,000 in the third quarter of 1996, a decrease of $167,000 or 21.0%. The
decrease generally reflects the lower overall debt outstanding during the 1997
period. The Company's effective income tax rate was 40.0% and 40.5% in the
third quarters of 1997 and 1996, respectively.
Net Income
The Company's net income in the third quarter of 1997 was $2.1 million
compared to $1.8 million in the third quarter of 1996, an increase of $364,000
or 20.6%.
Nine Months Ended September 30, 1997 Compared to Nine Months Ended September 30,
1996
Operating Revenues
Operating revenues were $71.2 million in the first nine months of 1997
compared to $54.6 million in the first nine months of 1996, an increase of $16.6
million or 30.4%. The increase was attributable to a $5.9 million increase in
freight revenues and a $10.7 million increase in non-freight revenues.
Freight revenues were $50.4 million in the first nine months of 1997 compared
to $44.5 million in the first nine months of 1996, an increase of $5.9 million
or 13.3%. The following table compares freight revenues, carloads and average
freight revenues per carload for the first nine months of 1996 and 1997:
Freight Revenues and Carloads Comparison by Commodity Group
Nine Months Ended September 30, 1996 and 1997
<TABLE>
<CAPTION>
AVERAGE
FREIGHT
REVENUES
FREIGHT REVENUES CARLOADS PER CARLOAD
------------------------------------------- -------------------------- ------------------
(DOLLARS IN THOUSANDS EXCEPT REVENUES PER CARLOAD)
% OF % OF % OF % OF
COMMODITY GROUP 1996 TOTAL 1997 TOTAL 1996 TOTAL 1997 TOTAL 1996 1997
------- ------- ------- ------- ------- ------- -------- ------- ------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
COAL, COKE & ORES $13,227 29.8% $15,956 31.6% 53,251 37.5% 62,029 38.0% $ 248 $ 257
PETROLEUM PRODUCTS 6,507 14.6% 6,441 12.8% 13,195 9.3% 13,368 8.2% 493 482
PULP & PAPER 5,194 11.7% 5,842 11.6% 13,985 9.9% 15,351 9.4% 371 381
LUMBER & FOREST
PRODUCTS 4,043 9.1% 4,545 9.0% 13,143 9.3% 13,536 8.3% 308 336
CHEMICALS 3,311 7.4% 4,456 8.8% 6,281 4.4% 8,190 5.0% 527 544
METALS 3,801 8.5% 3,668 7.3% 14,682 10.4% 15,321 9.4% 259 239
FARM & FOOD PRODUCTS 2,622 5.9% 2,908 5.8% 8,198 5.8% 10,069 6.2% 320 289
AUTOS & AUTO PARTS 2,688 6.0% 2,607 5.2% 5,096 3.6% 4,906 3.0% 527 531
MINERALS & STONE 1,830 4.1% 2,402 4.7% 6,372 4.5% 9,097 5.5% 287 264
OTHER 1,304 2.9% 1,618 3.2% 7,518 5.3% 11,563 7.0% 173 140
------- ----- ------- ----- ------- ----- ------- ----- ------- -------
TOTAL $44,527 100.0% $50,443 100.0% 141,721 100.0% 163,430 100.0% $ 314 $ 309
======= ===== ======= ===== ======= ===== ======= ===== ======= =======
</TABLE>
13
<PAGE>
The increase in freight revenues was largely attributable to the operations on
new acquisitions, which generated freight revenues of $16.7 million in the first
nine months of 1997, $14.1 of which were revenues from the shipment of coal,
compared to $12.2 million in the first nine months of 1996, $10.9 million of
which were revenues from the shipment of coal. Of the $4.5 million or 36.9%
increase, $3.2 million or 26.2% were revenues from the shipment of coal.
Total carloads were 163,430 in the first nine months of 1997 compared to
141,721 in the first nine months of 1996, an increase of 21,709 or 15.3%. The
increase was largely attributable to 63,890 carloads transported by the
operations on new acquisitions, which consisted primarily of coal, compared to
47,770 for the same period in 1996, which was also primarily coal.
Non-freight revenues were $20.8 million in the first nine months of 1997
compared to $10.1 million in the first nine months of 1996, an increase of $10.7
million or 105.7%. Revenues from switching activities were $12.0 million in the
first nine months of 1997 compared to $2.0 in the first nine months of 1996, an
increase of $10.0 million or 509.2%. These increases were attributable to
switching revenues generated by new acquisitions, primarily Rail Link, Inc.
Revenues from car hire and car rentals were $3.9 million for both the first nine
months of 1997 and 1996. However, the 1996 period included a gain on the sale
of railcars of $593,000. Other car hire and car rentals revenue for 1997
increased by approximately $603,000 due to $380,000 from operations on new
acquisitions and a $223,000 increase in revenues on existing operations. Other
non-freight revenue was $4.9 million in the first nine months of 1997 compared
to $4.2 million in the first nine months of 1996, an increase of $669,000 or
15.6%. This increase was due to approximately $295,000 of other revenues
generated by operations on new acquisitions and to an increase of approximately
$374,000 on existing operations, primarily in demurrage and storage.
Operating Expenses
Operating expenses were $59.1 million in the first nine months of 1997
compared to $44.0 million in the first nine months of 1996, an increase of $15.1
million or 34.3%. Expenses associated with new acquisitions represented $14.4
million of the increase.
The Company's operating ratio increased to 83.0% in the first nine months of
1997 from 80.6% in the first nine months of 1996. The increase is primarily
attributable to the labor-intensive nature of Rail Link, Inc.'s industrial
switching and other rail-related services operation.
The remainder of this page is intentionally left blank.
14
<PAGE>
The following table sets forth a comparison of the Company's operating
expenses for the first nine months of 1996 and 1997:
Operating Expense Comparison
Nine Months Ended September 30, 1996 and 1997
<TABLE>
<CAPTION>
1996 1997
------------------------ --------------------------
(in thousands)
% of % of
Operating Operating
Amount Revenues Amount Revenues
------------ --------- -------- ---------
<S> <C> <C> <C> <C>
Labor and benefits $17,822 32.6% $27,005 37.9%
Equipment rents 6,194 11.3% 6,711 9.4%
Purchased services 2,432 4.5% 3,018 4.2%
Depreciation and
amortization 4,479 8.2% 4,985 7.0%
Diesel fuel 3,105 5.7% 3,525 4.9%
Casualties and insurance 3,191 5.8% 3,682 5.2%
Materials 2,185 4.0% 3,315 4.7%
Other 4,636 8.5% 6,893 9.7%
------- ----- ------- ------
Total $44,044 80.6% $59,134 83.0%
======= ====== ======== ======
</TABLE>
Labor and benefits expense was $27.0 million in the first nine months of 1997
compared to $17.8 million in the first nine months of 1996, an increase of $9.2
million or 51.5%, primarily due to the operations of acquisitions. Labor costs
increased as a percentage of revenues to 37.9% in the first nine months of 1997
from 32.6% in the first nine months of 1996. The increase is largely
attributable to the labor-intensive nature of Rail Link, Inc.'s industrial
switching and other rail-related services operation. With the exception of
minor increases in Materials and Other, all other categories of operating
expenses decreased as percentages of operating revenues because of the effect of
the Rail Link acquisition. All categories of operating expenses increased in
amount primarily because of the effect of the three 1996 acquisitions.
Interest Expense and Income Taxes
Interest expense in the first nine months of 1997 was $1.9 million compared to
$3.8 million in the first nine months of 1996, a decrease of $1.9 million or
51.4%. The decrease generally reflects the lower overall debt outstanding due
to the application of proceeds from the Company's June 24, 1996 initial public
offering to reduce debt. The Company's effective income tax rate was 40.4% and
40.5% in the first nine months of 1997 and 1996, respectively.
Net Income
The Company's net income in the first nine months of 1997 was $6.4 million
compared to $4.3 million in the first nine months of 1996, an increase of $2.1
million or 49.7%.
15
<PAGE>
Liquidity and Capital Resources
During the nine months ended September 30, 1997 the Company used cash in
operations of $2.9 million, had a net increase in debt of $5.3 million, entered
into a $6.6 million long-term capital lease for rolling stock and recorded $2.5
million in net proceeds on governmental grants. A total of $14.0 million was
invested in capital assets of which $6.6 million represented rolling stock under
the long-term capital lease. The Company received $293,000 in proceeds from the
disposition of property.
During the first nine months of 1996, the Company generated cash from
operations of $9.3 million. Of this amount, $695,000 was generated by an excess
of trade accounts payable over trade accounts receivable as recorded by Illinois
& Midland and Pittsburg & Shawmut. The Company received $4.4 million in
proceeds from the sale of equipment.
The Company has budgeted $15.2 million in capital expenditures in 1997. As of
September 30, 1997, $14.0 million, which included rolling stock under capital
lease of $5.3 million, was completed.
At September 30, 1997 the Company had long-term debt (including current
portion) totaling $30.6 million, which comprised 31.0% of its total
capitalization. This compares to long-term debt, including current portion, of
$18.7 million at December 31, 1996, comprising 23.3% of total capitalization.
The Company has historically relied primarily on cash generated from
operations to fund working capital and capital expenditures relating to ongoing
operations, while relying on borrowed funds to finance acquisitions and
equipment needs (primarily rolling stock) related to acquisitions. The Company
believes that its cash flow from operations together with amounts available
under its credit facilities will enable the Company to meet its liquidity and
capital expenditure requirements relating to ongoing operations for at least the
duration of its credit facilities.
New Accounting Standards
For a discussion of the possible effect of certain new accounting standards
issued by the Financial Accounting Standards Board, see Note 7 to the financial
statements contained in Item 1. of this report.
Corporate Developments and Contingencies
Australia - On August 28, 1997 the Company announced that its wholly owned
subsidiary, Genesee & Wyoming Australia Pty Ltd ("GWIA"), had been awarded the
contract to purchase certain railroad assets of SA Rail, a division of
Australian National Railway, through the Commonwealth of Australia Office of
Asset Sales. SA Rail provides intrastate freight services in South Australia,
interstate haulage of contract freight, rolling stock rental and maintenance,
and interstate track maintenance. GWIA bid as part of a consortium including
EDI Clyde Engineering and Transfield Pty Ltd. EDI Clyde is a major Australian
provider of railway rolling stock and holds the Australian license for GM/EMD
locomotives. Transfield is a major Australian engineering, construction and
infrastructure maintenance provider. On November 8, 1997 GWIA closed on the
purchase and commenced operation of freight service under the name of Australia
Southern Railroad Pty. Ltd.
Mexico - On October 21, 1997 the Company announced that it has a memorandum of
understanding to operate, service and provide technical support on the Coahuila-
Durango short line railroad in Mexico for Grupo Acerero del Norte and Industrias
Penoles, the successful bidders for the line. The memorandum of
16
<PAGE>
understanding is subject to the parties' negotiation and execution of a
definitive agreement and the satisfaction of various closing conditions. If
finalized, the railroad would operate over approximately 782 miles of track,
primarily in the northern Mexican states of Coahuila and Durango.
Joint Venture - The Company has formed a joint venture, Genesee Rail-One
Corp. ("GRO") to acquire railroads in Canada. GRO is a joint venture with Rail-
One Corporation, a subsidiary of The Cygnus Group which is an integrated
transportation facilities, services and infrastructure provider in Canada.
GRO commenced operations on November 11, 1997 of the Quebec Gatineau Railway
Inc. ("QGRY"), a 354 mile railroad linking Quebec City, Montreal and Hull in
Southeastern Quebec. QGRY purchased the assets for this railroad from St.
Lawrence & Hudson Railway Company Limited which is a subsidiary of Canadian
Pacific Railway Company. QGRY will serve approximately 70 customers and
anticipates handling approximately 35,000 carloads annually.
On July 29, 1997 GRO commenced operations of the Huron Central Railway Inc.
("HCRY"), a 180 mile railroad located in Central Ontario. HCRY leases its rail
line from the Canadian Pacific Railway for a 20 year term and is responsible for
operation and maintenance of the leased line.
Based on GWI's ownership portion of 47.5%, the Company is reporting the
results of operations of GRO under the equity method of accounting for
investments. The results of operations of GRO are translated into US. dollars
at a weighted average exchange rate for each period.
Conrail Contingency - On June 23, 1997 CSX Transportation, Inc. ("CSX") and
Norfolk Southern Corp. ("NS"), submitted a plan to the Surface Transportation
Board ("STB") to control and divide the assets of Consolidated Rail Corporation
("Conrail"). The STB has announced that it will take up to 395 calendar days to
respond to this proposal. Railroads in the Company's New York and Pennsylvania
region interchange with one or more of these railroads, and rely on them in some
cases for providing overhead traffic, defined as traffic neither originating nor
terminating on any of the Company's subsidiaries. In their joint filing with
the STB, CSX and NS estimated that approximately $8.3 million in freight revenue
related to overhead traffic on one of the Company's subsidiaries may be diverted
as a result of the proposed transaction. The Company agrees with this estimate
and is considering its options for restructuring the operations of the railroad
to minimize the impact. On October 21, 1997 the Company and several of its
subsidiaries entered into a confidential Rate and Route Agreement with CSX that
the Company believes will facilitate the operations restructuring process. Based
on its initial studies the Company believes that no impairment of assets will
occur.
Item 3. Quantitative and Qualitative Disclosures About Market Risk.
Not applicable.
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17
<PAGE>
PART II. OTHER INFORMATION
ITEM 1. LEGAL PROCEEDINGS - NONE
ITEM 2. CHANGES IN SECURITIES - NONE
ITEM 3. DEFAULTS UPON SENIOR SECURITIES - NONE
ITEM 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS - NONE
ITEM 5. OTHER INFORMATION - NONE
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
(A). EXHIBITS - SEE INDEX TO EXHIBITS
(B) REPORTS ON FORM 8-K:
No Reports on Form 8-K were filed by the Registrant during the
period covered by this Report.
The remainder of this page is intentionally left blank.
18
<PAGE>
INDEX TO EXHIBITS
(2) PLAN OF ACQUISITION, REORGANIZATION, ARRANGEMENT, LIQUIDATION OR
SUCCESSION
Not applicable.
(3) (i) ARTICLES OF INCORPORATION
The Form of Restated Certificate of Incorporation referenced under
(4)(a) hereof is incorporated herein by reference.
(ii) By-Laws
The By-laws referenced under (4)(b) hereof are incorporated herein
by reference.
(4) INSTRUMENTS DEFINING THE RIGHTS OF SECURITY HOLDERS, INCLUDING
INDENTURES
(a) Form of Restated Certificate of Incorporation (Exhibit 3.2)/2/
(b) By-laws (Exhibit 3.3)/1/
(c) Specimen stock certificate representing shares of
Class A Common Stock (Exhibit 4.1)/3/
(d) Form of Class B Stockholders' Agreement dated as of May 20, 1996
among the Registrant, its executive officers and its Class B
stockholders (Exhibit 4.2)/2/
(e) Promissory Note dated October 7, 1991 of Buffalo & Pittsburgh
Railroad, Inc. in favor of CSX Transportation, Inc. (Exhibit 4.6)/1/
(f) Amended and Restated Revolving Credit and Term Loan Agreement dated
as of February 8, 1996 among the Registrant and certain of its
Subsidiaries, the First National Bank of Boston, as agent, and the
Banks party thereto (Exhibit 4.10))/1/
(g) Revolving Credit Note dated as of February 8, 1996 of the Registrant
and certain of its subsidiaries in favor of The First National Bank
of Boston (Exhibit 4.11)/1/
(h) Amended and Restated Security Agreement dated as of February 8, 1996
among the Registrant, certain of its Subsidiaries and The First
National Bank of Boston (Exhibit 4.13)/1/
(i) Amended and Restated Stock Pledge Agreement dated as of February 8,
1996 between the Registrant and the First National Bank of Boston
(Exhibit 4.14)/1/
(j) Amended and Restated Collateral Assignment of Partnership Interests
dated as of February 8, 1996 of the Registrant and GWI Dayton, Inc.
in favor of The First National Bank of Boston (Exhibit 4.15)/1/
19
<PAGE>
(k) Amendment No. 1 to Amended and Restated Revolving Credit and Term
Loan Agreement dated as of April 26, 1996 among the Registrant and
certain of its Subsidiaries. The First National Bank of Boston, as
agent, and the Banks party thereto (Exhibit 4.16)\2\
(10) MATERIAL CONTRACTS
Not applicable.
*(11.1) STATEMENT RE COMPUTATION OF PER SHARE EARNINGS
(15) LETTER RE UNAUDITED INTERIM FINANCIAL INFORMATION
Not applicable.
(18) LETTER RE CHANGE IN ACCOUNTING PRINCIPLES
Not applicable.
(19) REPORT FURNISHED TO SECURITY HOLDERS
Not applicable.
(22) PUBLISHED REPORT REGARDING MATTERS SUBMITTED TO VOTE OF SECURITY
HOLDERS
Not applicable.
(23) CONSENTS OF EXPERTS AND COUNSEL
Not applicable.
(24) POWER OF ATTORNEY
Not applicable.
*(27) FINANCIAL DATA SCHEDULE
(99) ADDITIONAL EXHIBITS
____________________________
*Exhibit filed with this Report.
/1/Exhibit previously filed as part of, and incorporated herein by
reference to, the Registrant's Registration Statement on Form S-1 (Registration
No. 333-3972). The exhibit number contained in parenthesis refers to the
exhibit number in such Registration Statement.
/2/Exhibit previously filed as part of, and incorporated herein by
reference to, Amendment No. 1 to the Registrant's Registration Statement on Form
S-1 (Registration No. 333-3972). The exhibit number contained in parenthesis
refers to the exhibit number in such Amendment.
/3/Exhibit previously filed as part of, and incorporated herein by
reference to, Amendment No. 2 to the Registrant's Registration Statement on Form
S-1 (Registration No. 333-3972). The exhibit number contained in parenthesis
refers to the exhibit number in such Amendment.
20
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, as
amended, the Registrant has duly caused this report to be signed on its behalf
by the undersigned, thereunto duly authorized.
GENESEE & WYOMING INC.
Date: November 14, 1997 By: /s/ Mortimer B. Fuller, III
---------------------------
Name: Mortimer B. Fuller, III
Title: Chairman and CEO
Date: November 14, 1997 By: /s/ Alan R. Harris
---------------------------
Name: Alan R. Harris
Title: Senior Vice President and
Chief Accounting Officer
The remainder of this page is intentionally left blank.
21
<PAGE>
EXHIBIT 11.1
GENESEE & WYOMING INC. AND SUBSIDIARIES
COMPUTATION OF EARNINGS PER COMMON SHARE
(in thousands, except per share amounts)
(Unaudited)
<TABLE>
<CAPTION>
Three Months Nine Months
Ended September 30 Ended September 30
------------------ ------------------
1996 1997 1996 1997
<S> <C> <C> <C> <C>
PRIMARY EARNINGS PER SHARE CALCULATION:
- -----------------------------------------------------------
Net Income $1,763 $2,127 $4,286 $6,418
Weighted average number of common stock and common
stock equivalents outstanding:
Weighted average number of shares outstanding 5,246 5,250 3,353 5,250
Common stock equivalents applicable to warrants 42 42 42 42
Common stock equivalents issuable under stock option plans 111 152 37 162
---------------------------------------------
Common stock and common stock equivalents 5,399 5,444 3,432 5,454
=============================================
Earnings per share $0.33 $0.39 $1.25 $1.18
=============================================
FULLY DILUTED EARNINGS PER SHARE CALCULATION:
- -----------------------------------------------------------
Net Income $1,763 $2,127 $4,286 $6,418
Weighted average number of common stock and common
stock equivalents outstanding:
Weighted average number of shares outstanding 5,246 5,250 3,353 5,250
Common stock equivalents applicable to warrants 42 42 42 42
Common stock equivalents issuable under stock option plans 144 161 50 176
---------------------------------------------
Common stock assuming full dilution 5,432 5,453 3,445 5,468
=============================================
Earnings per share - fully diluted (1) $0.32 $0.39 $1.24 $1.17
=============================================
</TABLE>
(1) This calculation is submitted in accordance with the regulations of the
Securities and Exchange Commission although not required by APB Opinion No.
15 because it results in dilution of less than 3%.
<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-START> JUN-01-1997
<PERIOD-END> SEP-30-1997
<CASH> 11,911
<SECURITIES> 0
<RECEIVABLES> 16,900
<ALLOWANCES> 0
<INVENTORY> 4,424
<CURRENT-ASSETS> 42,339
<PP&E> 110,440
<DEPRECIATION> 22,495
<TOTAL-ASSETS> 155,455
<CURRENT-LIABILITIES> 27,765
<BONDS> 30,341
0
0
<COMMON> 52
<OTHER-SE> 68,128
<TOTAL-LIABILITY-AND-EQUITY> 155,455
<SALES> 71,241
<TOTAL-REVENUES> 71,241
<CGS> 59,134
<TOTAL-COSTS> 59,134
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 1,850
<INCOME-PRETAX> 10,760
<INCOME-TAX> 4,342
<INCOME-CONTINUING> 6,418
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 6,418
<EPS-PRIMARY> 1.18
<EPS-DILUTED> 1.17
</TABLE>
