Genesee & Wyoming Reports Results for the Fourth Quarter of 2007

GREENWICH, Conn., Feb. 13, 2008 /PRNewswire-FirstCall/ -- Genesee & Wyoming Inc. (GWI) (NYSE: GWR) reported net income in the fourth quarter of 2007 of $13.9 million, compared with net income of $14.3 million in the fourth quarter of 2006. GWI's diluted earnings per share (EPS) in the fourth quarter of 2007 were $0.38 with 35.9 million shares outstanding, compared with diluted earnings per share of $0.34 with 42.2 million shares outstanding in the fourth quarter of 2006.

GWI's income from continuing operations in the fourth quarter of 2007 was $14.5 million, or $0.40 per diluted share, compared with income from continuing operations of $15.7 million, or $0.37 per diluted share in the fourth quarter of 2006.

As previously reported, GWI commenced the liquidation of its hurricane damaged operations in Mexico on June 25, 2007, and had no remaining employees as of September 30, 2007. Results from GWI's Mexican operations for the three and twelve months ended December 31, 2007 and 2006, are now included in results from discontinued operations.

GWI's results for the fourth quarter of 2007 included gains on the sale of assets of $0.8 million ($0.5 million after-tax, or $0.02 per share), compared with $2.8 million ($1.7 million after-tax, or $0.04 per share) in the fourth quarter of 2006. Changes in Canadian tax laws in the fourth quarter of 2007 generated a tax benefit of $0.6 million (or $0.02 per share). GWI's results for the fourth quarter of 2006 included a net tax benefit of $1.2 million (or $0.03 per share), primarily associated with regulations issued in late 2006 clarifying the calculation of the short line tax credit.

Continuing Operations

In the fourth quarter of 2007, GWI's revenues increased $16.8 million, or 14.3%, to $134.5 million, compared with $117.7 million in the fourth quarter of 2006. Freight revenues increased $7.0 million, or 9.3%, primarily due to an increase in average freight revenues per carload of 15.8%, partially offset by a 5.6% decrease in carloads. The average freight revenues per carload in the fourth quarter of 2007 benefited 3.7% from the appreciation of the Australian dollar and Canadian dollar relative to the U.S. dollar. Non- freight revenues increased $9.9 million, or 23.1%, primarily due to stronger fuel sales, crewing and equipment rentals in Australia, as well as higher rates and volumes at GWI's U.S. port railroads.

GWI's operating income in the fourth quarter of 2007 increased 20.3% to $22.5 million, compared with $18.7 million in the fourth quarter of 2006. The operating ratio was 83.3% in the fourth quarter of 2007, compared with an operating ratio of 84.1% in the fourth quarter of 2006. Operating income for the fourth quarter of 2007 included $0.8 million of net gains on the sale of assets, compared with $2.8 million in the fourth quarter of 2006.

Comments from the Chief Executive Officer

John C. Hellmann, Chief Executive Officer of GWI commented, "Despite significant weakness in the U.S. housing and paper markets as well as a drought in Australia, our revenues in the fourth quarter of 2007 increased in nine out of eleven commodity groups. Particularly noteworthy was the increase in our coal shipments, increased exports moving through our port railroads and higher revenues per carload. This revenue strength combined with effective cost controls resulted in a 20% increase in our fourth quarter operating income."

"The newly-acquired Maryland Midland Railway has been integrated as planned and we are pleased to welcome 30 new employees to the G&W family. We continue to pursue acquisition targets in the U.S. and abroad, and we intend to use our strong balance sheet in pursuit of these opportunities. Even with the uncertain U.S. economic environment, the outlook for our core railroads in 2008 is positive, primarily due to the expected start-up of major new customers in four of our eight operating regions."

Annual Consolidated Results - Continuing Operations

For the year ended December 31, 2007, GWI reported income from continuing operations of $69.2 million, compared with $172.6 million for the year ended December 31, 2006. GWI's diluted earnings per share were $1.77 in 2007 (with 39.1 million shares outstanding), compared with $4.07 in 2006 (with 42.4 million shares outstanding).

GWI's 2007 results included a net tax benefit of $3.7 million (or $0.09 per share) associated with the sale of GWI's 50% interest in the Western Australia operations and certain other assets of the Australian Railroad Group (ARG) (ARG Sale) in 2006. GWI's 2006 results included a net gain from the ARG Sale of $114.5 million after-tax (or $2.70 per share) and a non-cash investment write-down in Bolivia of $5.9 million after-tax (or $0.14 per share).

Free Cash Flow (1)

GWI's continuing operations generated free cash flow of $79.5 million for the year ended December 31, 2007. For the year ended December 31, 2006, GWI's continuing operations generated $29.5 million in free cash flow.

On June 1, 2006, GWI completed the ARG Sale. Also on June 1, 2006, GWI completed the acquisition of certain South Australian operations of ARG (GWA Purchase). The net proceeds from these transactions totaled $291.6 million in the year ended December 31, 2006. Although the ARG Sale occurred in 2006, the taxes to the Australian government related to the transaction were paid in June 2007.

    ($ in millions)                                          Year Ended                                                             December 31,                                                           2007        2006    Net cash provided by operating activities (a)         $34.5        $85.2    Net cash (used in) provided by investing     activities (b) (c)                                   (70.0)       230.7    Cash paid for acquisitions/proceeds from ARG Sale      19.4       (286.4)    Australian taxes on ARG Sale                           95.6            -    Free cash flow (1)                                    $79.5        $29.5    (a) Includes Australian taxes on the ARG Sale totaling $95.6 million paid        in 2007.    (b) Includes net proceeds of $291.6 million from the ARG Sale and GWA        Purchase in 2006.    (c) Includes the acquisition of Maryland Midland Railway (Maryland        Midland) in 2007 for $26.9 million offset by $7.5 million of Maryland        Midland cash on hand at the acquisition date.

Including the Australian tax payment, for the year ended December 31, 2007, GWI generated net cash from operating activities of $34.5 million. For the year ended December 31, 2006, GWI generated net cash from operating activities of $85.2 million. Net cash used in investing activities in the year ended December 31, 2007, included $61.8 million in net purchases of property and equipment, partially offset by $1.7 million in insurance proceeds for capital projects completed in 2006 and $9.4 million in cash from asset dispositions. Net cash provided by investing activities in the year ended December 31, 2006, included $59.5 million in net purchases of property and equipment.

Discontinued Operations

During the second quarter of 2007, GWI's Mexican Subsidiary, Ferrocarriles Chiapas-Mayab, S.A. de C.V. (FCCM), resigned its operating concession, ceased operations and commenced liquidation proceedings. The Ministry of Communications and Transportation (SCT) in Mexico has contested the resignation of the concession and in the third quarter of 2007 commenced an official action to seize substantially all of FCCM's operating assets in response to the liquidation. GWI believes the SCT's actions were unlawful and is pursuing all legal remedies to recover its operating assets.

For the year ended December 31, 2007, GWI reported a net loss from discontinued operations of $14.1 million (or $0.36 per share), compared with a net loss of $38.6 million (or $0.91 per share) for the year ended December 31, 2006. For discontinued operations, cash used in operating activities was $14.0 million and $1.8 million for the years ended December 31, 2007 and 2006, respectively. Cash used in investing activities of discontinued operations was $0.5 million and $3.2 million for the years ended December 31, 2007 and 2006, respectively. Free cash flow used in discontinued operations was $14.5 million and $5.1 million for the years ended December 31, 2007 and 2006, respectively (1). As of December 31, 2007, there was a net liability of $1.7 million remaining on GWI's balance sheet associated with its Mexican operations.

Conference Call and Webcast Details

As previously announced, GWI's conference call to discuss financial results for the fourth quarter will be held Wednesday, February 13, 2008 at 11:00 a.m. (Eastern Time). The dial-in number for the teleconference is (888) 423-3280; outside U.S., call (612) 332-0720, or the call may be accessed live over the Internet (listen only) under the "Investors" tab of GWI's website (http://www.gwrr.com), by selecting "Fourth Quarter Earnings Audio Webcast." An audio replay of the conference call will be accessible via the Investors tab of GWI's website starting at 1:00 p.m. Wednesday, February 13, 2008.

About Genesee & Wyoming Inc.

GWI is a leading owner and operator of short line and regional freight railroads in the United States, Canada and Australia and owns a minority interest in a railroad in Bolivia. Operations currently include 48 railroads organized in eight regions, with more than 5,700 miles of owned and leased track and approximately 3,000 additional miles under track access arrangements. GWI provides rail service at 12 U.S. ports and also performs contract coal loading and railcar switching for industrial customers.

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 involve risks and uncertainties that could cause actual results to differ materially from its current expectations including, but not limited to, economic, political and industry conditions; customer demand, retention and contract continuation; legislative and regulatory developments; increased competition in relevant markets; funding needs and financing sources; susceptibility to various legal claims and lawsuits; strikes or work stoppages; severe weather conditions and other natural occurrences; and others. Words such as "anticipates," "intends," "plans," "believes," "seeks," "expects," "estimates," variations of these words and similar expressions are intended to identify these forward-looking statements. GWI refers you to the documents that it files from time to time with the Securities and Exchange Commission, such as GWI's Forms 10-Q and 10-K which contain additional important factors that could cause its actual results to differ from its current expectations and from the forward-looking statements contained in this press release. GWI disclaims any intention to update the current expectations or forward-looking statements contained in this press release.

(1) Free Cash Flow is a non-GAAP financial measure and is not intended to replace net cash provided by operating activities, its most directly comparable GAAP measure. The information required by Regulation G under the Securities Exchange Act of 1934, including a reconciliation to net cash provided by operating activities is included in the tables attached to this press release.

    Michael Williams of GWI Corporate Communications    1-203-629-3722    mwilliams@gwrr.com                   GENESEE & WYOMING INC. AND SUBSIDIARIES                      CONSOLIDATED STATEMENTS OF OPERATIONS         FOR THE THREE AND TWELVE MONTHS ENDED DECEMBER 31, 2007 AND 2006                     (In thousands, except per share amounts)                                   (unaudited)                                       Three Months Ended Twelve Months Ended                                          December 31,        December 31,                                         2007      2006      2007      2006    OPERATING REVENUES                 $134,542  $117,702  $516,167  $450,683    OPERATING EXPENSES                  112,075    98,960   419,339   369,026    INCOME FROM OPERATIONS               22,467    18,742    96,828    81,657    GAIN ON SALE OF EQUITY INVESTMENT     IN ARG                                   -         -         -   218,845    INVESTMENT LOSS - BOLIVIA                 -         -         -    (5,878)    EQUITY LOSS OF UNCONSOLIDATED     INTERNATIONAL AFFILIATES                 -         -         -   (10,752)    INTEREST INCOME                         744     3,372     7,813     7,839    INTEREST EXPENSE                     (4,109)   (3,500)  (14,735)  (16,007)    OTHER INCOME, NET                        43       141       889       252    INCOME FROM CONTINUING OPERATIONS     BEFORE INCOME TAXES                 19,145    18,755    90,795   275,956    PROVISION FOR INCOME TAXES            4,621     3,016    21,548   103,309    INCOME FROM CONTINUING OPERATIONS    14,524    15,739    69,247   172,647    LOSS FROM DISCONTINUED OPERATIONS,     NET OF TAX                            (578)   (1,393)  (14,072)  (38,644)    NET INCOME                          $13,946   $14,346   $55,175  $134,003    BASIC EARNINGS PER COMMON SHARE     FROM CONTINUING OPERATIONS           $0.46     $0.42     $2.00     $4.59    BASIC LOSS PER COMMON SHARE FROM     DISCONTINUED OPERATIONS              (0.02)    (0.04)    (0.41)    (1.03)    BASIC EARNINGS PER COMMON SHARE       $0.44     $0.38     $1.59     $3.56      WEIGHTED AVERAGE SHARES - BASIC    31,429    37,618    34,625    37,609    DILUTED EARNINGS PER COMMON SHARE     FROM CONTINUING OPERATIONS           $0.40     $0.37     $1.77     $4.07    DILUTED LOSS PER COMMON SHARE FROM     DISCONTINUED OPERATIONS              (0.02)    (0.03)    (0.36)    (0.91)    DILUTED EARNINGS PER COMMON SHARE     $0.38     $0.34     $1.41     $3.16      WEIGHTED AVERAGE SHARES - DILUTED  35,919    42,216    39,148    42,417                   GENESEE & WYOMING INC. AND SUBSIDIARIES                           CONSOLIDATED BALANCE SHEETS                  AS OF DECEMBER 31, 2007 AND DECEMBER 31, 2006                                 (In thousands)                                   (unaudited)                                               December 31,      December 31,    ASSETS                                        2007              2006    CURRENT ASSETS:      Cash and cash equivalents                  $46,684          $240,206      Accounts receivable, net                   125,934           117,099      Materials and supplies                       7,555            11,302      Prepaid expenses and other                  18,147            14,695      Current assets of discontinued operations    2,213                 -      Deferred income tax assets, net              7,495             7,617        Total current assets                     208,028           390,919    PROPERTY AND EQUIPMENT, net                  696,990           573,292    INVESTMENT IN UNCONSOLIDATED AFFILIATES        4,696             4,644    GOODWILL                                      39,352            37,788    INTANGIBLE ASSETS, net                       117,106           120,669    OTHER ASSETS, net                             10,276            11,055    DEFERRED INCOME TAX ASSETS, net                1,353             2,697     Total assets                             $1,077,801        $1,141,064    LIABILITIES AND STOCKHOLDERS' EQUITY    CURRENT LIABILITIES:      Current portion of long-term debt           $2,247            $4,372      Accounts payable                           128,038            98,186      Accrued expenses                            36,436            38,364      Income tax payable - Australia               1,356            91,925      Current liabilities of       discontinued operations                     3,919                 -      Deferred income tax liabilities, net            66               291        Total current liabilities                172,062           233,138    LONG-TERM DEBT, less current portion         270,519           241,313    DEFERRED INCOME TAX LIABILITIES, net          93,336            72,876    DEFERRED ITEMS - grants from     government agencies                          94,651            56,588    OTHER LONG-TERM LIABILITIES                   15,144            16,668    MINORITY INTEREST                              1,108               294    TOTAL STOCKHOLDERS' EQUITY                   430,981           520,187      Total liabilities and       stockholders' equity                   $1,077,801        $1,141,064                     GENESEE & WYOMING INC. AND SUBSIDIARIES                      CONSOLIDATED STATEMENTS OF CASH FLOWS                                 (In thousands)                                   (unaudited)                                                   Year Ended December 31,                                                   2007              2006    CASH FLOWS FROM OPERATING ACTIVITIES:      Net income                                  $55,175          $134,003      Adjustments to reconcile net income to net       cash provided by operating activities:          Loss from discontinued           operations, net of tax                  14,072            38,644          Depreciation and amortization            31,773            27,907          Compensation cost related to equity           awards                                   5,412             8,455          Excess tax benefit from share-based           compensation                            (1,159)           (4,544)          Deferred income taxes                     7,994            13,907          Gain on insurance recovery                    -            (1,937)          Gain on sale of equity investment in ARG      -          (218,845)          Net gain on sale of assets               (6,742)           (3,078)          Investment loss -  Bolivia                    -             5,878          Equity loss of unconsolidated           international affiliates, net of tax         -             7,500          Changes in assets and liabilities           which provided (used) cash, net           of effect of acquisitions:              Accounts receivable, net             (5,412)           (7,936)              Materials and supplies                2,400            (1,760)              Prepaid expenses and other           (6,159)           (5,140)              Accounts payable and accrued               expenses                            29,160             6,571              Income tax payable - Australia      (92,982)           86,358              Other assets and liabilities, net       989              (762)                Net cash provided by operating                 activities from continuing                 operations                        34,521            85,221                Net cash used in operating                 activities from discontinued                 operations                       (14,000)           (1,843)                Net cash provided by operating                 activities                        20,521            83,378    CASH FLOWS FROM INVESTING ACTIVITIES:      Purchase of property and equipment, net       of grants from government agencies         (61,774)          (59,545)      Proceeds from ARG Sale                            -           306,746      Cash paid for acquisitions, net of       cash acquired                              (19,424)          (20,354)      Insurance proceeds for the replacement of       assets                                       1,747                 -      Cash received from unconsolidated        international affiliates                        -               378      Proceeds from  disposition of        property and equipment                      9,404             3,447          Net cash (used in) provided by           investing activities from           continuing operations                  (70,047)          230,672          Net cash used in investing activities           from discontinued operations              (517)           (3,232)          Net cash (used in) provided by           investing activities                   (70,564)          227,440    CASH FLOWS FROM FINANCING ACTIVITIES:      Principal payments on long-term borrowings,       including capital leases                    (21,448)        (182,711)      Proceeds from issuance of long-term debt      55,000           92,500      Net proceeds from employee stock purchases     3,384            6,856      Treasury stock purchases                    (175,637)         (11,334)      Excess tax benefits from share-based       compensation                                  1,159            4,544          Net cash used in financing activities           from continuing operations             (137,542)         (90,145)          Net cash used in financing activities           from discontinued operations            (13,301)          (2,478)          Net cash used in financing activities   (150,843)         (92,623)    EFFECT OF EXCHANGE RATE CHANGES ON     CASH AND CASH EQUIVALENTS                       7,581            3,342    CHANGE IN CASH BALANCES INCLUDED IN     CURRENT ASSETS OF DISCONTINUED OPERATIONS        (217)               -    (DECREASE) INCREASE IN CASH AND CASH     EQUIVALENTS                                  (193,522)         221,537    CASH AND CASH EQUIVALENTS, beginning     of period                                     240,206           18,669    CASH AND CASH EQUIVALENTS, end of period       $46,684         $240,206                   GENESEE & WYOMING INC. AND SUBSIDIARIES                   SELECTED CONSOLIDATED FINANCIAL INFORMATION                              (dollars in thousands)                                   (unaudited)                                                   Three Months Ended                                                      December 31,                                                 2007              2006                                                      % of              % of                                            Amount  Revenue   Amount  Revenue    Revenues:      Freight                               $82,137   61.0%   $75,147   63.8%      Non-freight                            52,405   39.0%    42,555   36.2%          Total revenues                   $134,542  100.0%  $117,702  100.0%    Operating Expense Comparison:    Natural Classification    Labor and benefits                      $43,348   32.2%   $39,671   33.7%    Equipment rents                           9,460    7.0%    10,615    9.0%    Purchased services                        9,631    7.2%    10,164    8.6%    Depreciation and amortization             8,258    6.1%     7,502    6.4%    Diesel fuel used in operations           13,801   10.3%     9,795    8.3%    Diesel fuel sold to third parties         8,933    6.6%     5,756    4.9%    Casualties and insurance                  3,694    2.8%     3,655    3.1%    Materials                                 5,798    4.3%     4,736    4.0%    Net gain on sale of assets                 (828)  -0.6%    (2,835)  -2.4%    Other expenses                            9,980    7.4%     9,901    8.5%    Total operating expenses               $112,075   83.3%   $98,960   84.1%    Functional Classification    Transportation                          $44,132   32.8%   $39,538   33.6%    Maintenance of ways and structures       10,534    7.8%    10,145    8.6%    Maintenance of equipment                 17,708   13.2%    18,695   15.9%    Diesel fuel sold to third parties         8,933    6.6%     5,756    4.9%    General and administrative               23,338   17.4%    20,159   17.1%    Net gain on sale of assets                 (828)  -0.6%    (2,835)  -2.4%    Depreciation and amortization             8,258    6.1%     7,502    6.4%    Total operating expenses               $112,075   83.3%   $98,960   84.1%                     GENESEE & WYOMING INC. AND SUBSIDIARIES                   SELECTED CONSOLIDATED FINANCIAL INFORMATION                              (dollars in thousands)                                   (unaudited)                                                  Twelve Months Ended                                                      December 31,                                                 2007              2006                                                      % of              % of                                            Amount  Revenue   Amount  Revenue    Revenues:      Freight                              $329,184   63.8%  $311,310   69.1%      Non-freight                           186,983   36.2%   139,373   30.9%          Total revenues                   $516,167  100.0%  $450,683  100.0%    Operating Expense Comparison:    Natural Classification    Labor and benefits                     $167,066   32.4%  $152,566   33.9%    Equipment rents                          37,106    7.2%    37,561    8.3%    Purchased services                       39,583    7.7%    33,728    7.5%    Depreciation and amortization            31,773    6.1%    27,907    6.2%    Diesel fuel used in operations           45,718    8.8%    40,061    8.9%    Diesel fuel sold to third parties        26,975    5.2%    13,189    2.9%    Casualties and insurance                 16,179    3.1%    13,062    2.9%    Materials                                23,208    4.5%    19,718    4.4%    Net gain on sale of assets               (6,742)  -1.3%    (3,078)  -0.7%    Gain on insurance recovery                    -    0.0%    (1,937)  -0.4%    Other expenses                           38,473    7.5%    36,249    8.0%    Total operating expenses               $419,339   81.2%  $369,026   81.9%    Functional Classification    Transportation                         $166,146   32.2%  $147,874   32.8%    Maintenance of ways and structures       45,364    8.8%    40,233    8.9%    Maintenance of equipment                 70,330   13.6%    64,419   14.3%    Diesel fuel sold to third parties        26,975    5.2%    13,189    2.9%    General and administrative               85,493   16.6%    80,419   17.9%    Net gain on sale of assets               (6,742)  -1.3%    (3,078)  -0.7%    Gain on insurance recovery                    -    0.0%    (1,937)  -0.4%    Depreciation and amortization            31,773    6.1%    27,907    6.2%    Total operating expenses               $419,339   81.2%  $369,026   81.9%                     GENESEE & WYOMING INC. AND SUBSIDIARIES       RAILROAD FREIGHT REVENUE, CARLOADS AND AVERAGE REVENUE PER CARLOAD                          COMPARISON BY COMMODITY GROUP            (dollars in thousands, except average revenue per carload)                                   (unaudited)                                 Three Months Ended                                 December 31, 2007                                                     Average                               Freight               Revenue    Commodity Group            Revenues  Carloads  Per Carload    Pulp & Paper               $17,849    30,102      $593    Coal, Coke & Ores           15,861    51,543       308    Metals                       9,113    18,334       497    Farm & Food Products         9,000    16,671       540    Lumber & Forest Products     8,263    19,955       414    Minerals & Stone             7,663    29,833       257    Chemicals-Plastics           6,717     9,891       679    Petroleum Products           4,568     7,035       649    Autos & Auto Parts           1,780     3,301       539    Intermodal                     204       428       477    Other                        1,119     4,766       235    Totals                     $82,137   191,859       428                                   Three Months Ended                                   December 31, 2006                                                     Average                               Freight               Revenue    Commodity Group            Revenues  Carloads  Per Carload    Pulp & Paper               $17,073    31,861      $536    Coal, Coke & Ores           12,292    47,249       260    Metals                       8,218    18,610       442    Farm & Food Products         8,150    21,338       382    Lumber & Forest Products     7,426    19,443       382    Minerals & Stone             6,798    27,766       245    Chemicals-Plastics           5,883    10,370       567    Petroleum Products           4,034     6,723       600    Autos & Auto Parts           1,346     2,719       495    Intermodal                     341       878       388    Other                        3,586    16,274       220    Totals                     $75,147   203,231       370                     GENESEE & WYOMING INC. AND SUBSIDIARIES       RAILROAD FREIGHT REVENUE, CARLOADS AND AVERAGE REVENUE PER CARLOAD                          COMPARISON BY COMMODITY GROUP            (dollars in thousands, except average revenue per carload)                                   (unaudited)                                  Twelve Months Ended                                   December 31, 2007                                                    Average                              Freight               Revenue    Commodity Group           Revenues  Carloads  Per Carload    Pulp & Paper              $69,598    122,706      $567    Coal, Coke & Ores          60,164    195,393       308    Metals                     36,569     78,191       468    Farm & Food Products       36,561     74,095       493    Lumber & Forest Products   35,967     85,309       422    Minerals & Stone           30,932    122,006       254    Chemicals-Plastics         26,014     40,928       636    Petroleum Products         16,319     25,750       634    Autos & Auto Parts          7,096     13,853       512    Intermodal                  1,060      2,108       503    Other                       8,904     40,930       218    Totals                   $329,184    801,269       411                                 Twelve Months Ended                                   December 31, 2006                                                   Average                             Freight               Revenue    Commodity Group          Revenues  Carloads  Per Carload    Pulp & Paper             $69,049    136,128       $507    Coal, Coke & Ores         59,367    198,075        300    Metals                    35,558     82,938        429    Farm & Food Products      27,355     75,574        362    Lumber & Forest Products  34,714     90,017        386    Minerals & Stone          25,995     95,759        271    Chemicals-Plastics        24,708     42,680        579    Petroleum Products        14,460     24,873        581    Autos & Auto Parts         6,281     12,839        489    Intermodal                 1,651      3,936        419    Other                     12,172     58,203        209    Totals                  $311,310    821,022        379                 Reconciliation of non-GAAP Financial Measure

This earnings release contains free cash flow which is a "non-GAAP financial measure" as this term is defined in Regulation G of the Securities Exchange Act of 1934. In accordance with Regulation G, GWI has reconciled this non-GAAP financial measure to its most directly comparable U.S. GAAP measures.

Free Cash Flow Description and Discussion

Management views Free Cash Flow as an important financial measure of how well GWI is managing its assets. Subject to the limitations discussed below, Free Cash Flow is a useful indicator of cash flow that may be available for discretionary use by GWI. Free Cash Flow is defined as Net Cash Provided by Operating Activities in Continuing Operations less Net Cash Used in/Provided by Investing Activities in Continuing Operations, excluding the Cost of Acquisitions/Proceeds from Divestitures and directly related tax effects. Free Cash Flow in Discontinued Operations is defined as Net Cash Used in/Provided by Operating Activities in Discontinued Operations less Net Cash Used in/Provided by Investing Activities in Discontinued Operations. Key limitations of the Free Cash Flow measure include the assumptions that GWI 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. Free Cash Flow is not intended to represent, and should not be considered more meaningful than, or as an alternative to, measures of cash flow determined in accordance with GAAP.

    The following table sets forth a reconciliation of GWI's Net Cash Providedby Operating Activities in Continuing Operations to GWI's Free Cash Flow ($ inmillions):                                                              Year Ended                                                              December 31,                                                             2007      2006    Net cash provided by operating activities from     continuing operations                                  $34.5     $85.2    Net cash (used in) provided by investing     activities from continuing operations                  (70.0)    230.7    Cash paid for acquisitions/proceeds from ARG Sale        19.4    (286.4)    Australian taxes on ARG Sale                             95.6         -    Free cash flow                                          $79.5     $29.5

The following table sets forth a reconciliation of GWI's Net Cash Used In Operating Activities from Discontinued Operations to GWI's Free Cash Flow from Discontinued Operations ($ in millions):

                                                              Year Ended                                                              December 31,                                                             2007      2006    Net cash used in operating activities from     discontinued operations                               $(14.0)    $(1.9)    Net cash used in investing activities from     discontinued operations                                 (0.5)     (3.2)    Free cash flow                                         $(14.5)    $(5.1)