Genesee & Wyoming Reports Results for the Second Quarter of 2011

Genesee & Wyoming Inc. (GWI) (NYSE: GWR) reported net income in the second quarter of 2011 of $31.1 million, compared with net income of $20.6 million in the second quarter of 2010. GWI's diluted earnings per share (EPS) increased 49% from $0.49 with 41.7 million weighted average shares outstanding in the second quarter of 2010 to $0.73 with 42.8 million weighted average shares outstanding in the second quarter of 2011.

GWI's effective income tax rate in the second quarter of 2011 was 26.8%, compared with 36.8% in the second quarter of 2010, primarily due to a benefit of $2.5 million from the extension of the short line tax credit in the fourth quarter of 2010.

Comments from the Chief Executive Officer

Jack Hellmann, President and CEO of GWI, commented, "Our financial results for the second quarter of 2011 were good, as revenue increased 32% to $210 million and operating income increased 35% to $51 million, both Company records. Our financial performance was well balanced by geography, as our North American and European Operations reported an operating ratio of 75.8% and our Australian Operations reported an operating ratio of 75.2%. Of particular note, our business strengthened over the course of the quarter, thereby supporting our outlook for the second half of 2011.”

Mr. Hellmann continued, "We continued to advance our business development initiatives in the quarter, as we started service to a new iron ore mine in Canada in June, we began shipments related to the expansion of a major steel facility in the United States in June, and we commenced new port operations in Belgium in May. In addition, a new iron ore customer in Australia recently received final government approval for certain permits, keeping the new mine on schedule for start-up in the second quarter of 2012. At the same time, we remain actively engaged in other potential acquisitions and investments related to the natural resources sector in both North America and Australia.”

Results from Continuing Operations

In the second quarter of 2011, GWI's operating revenues increased $51.1 million, or 32.3%, to $209.6 million, compared with $158.5 million in the second quarter of 2010. Excluding $37.6 million in revenues from GWA (North) Pty Ltd (GWA North), GWI’s subsidiary that acquired FreightLink, same railroad operating revenues increased $20.8 million, or 13.1%. During the second quarter of 2011, the appreciation of the Australian dollar, the Canadian dollar and the Euro versus the U.S. dollar increased same railroad operating revenues by $6.8 million. Excluding the impact from foreign currency, GWI’s same railroad operating revenues increased $14.0 million, or 8.8%.

Same railroad freight revenues in the second quarter of 2011 increased by $11.4 million, or 11.4%, to $111.6 million, compared with $100.2 million in the second quarter of 2010. Excluding the $3.0 million increase from foreign currency appreciation, GWI’s same railroad freight revenues increased by $8.4 million, or 8.4%.

GWI's traffic in the second quarter of 2011 was 249,508 carloads, an increase of 31,801 carloads, or 14.6%, compared with the second quarter of 2010. Excluding 20,194 carloads from GWA North, same railroad traffic in the second quarter of 2011 increased 11,607 carloads, or 5.3%. The traffic increase was principally due to increases of 3,515 carloads of coal and coke traffic, 2,685 carloads of farm and food products traffic, 2,253 carloads of pulp and paper traffic and 2,253 carloads of minerals and stone traffic. All remaining traffic increased by a net 901 carloads.

Same railroad average freight revenues per carload increased 5.9% in the second quarter of 2011. The appreciation of the Australian and Canadian dollars versus the U.S. dollar and higher fuel surcharges increased average revenues per carload by 3.2% and 2.5%, respectively, partially offset by a 0.3% reduction in average revenues per carload due to a change in commodity mix. Excluding these factors, same railroad average freight revenues per carload increased 0.5%. Average revenues per carload were negatively impacted by changes in the mix of customers within certain commodity groups, primarily due to length of haulage.

GWI’s same railroad non-freight revenues in the second quarter of 2011 increased $9.4 million, or 16.1%, to $67.6 million compared with $58.3 million in the second quarter of 2010. Excluding the $3.8 million increase from foreign currency appreciation, GWI’s same railroad non-freight revenues increased $5.6 million, or 9.6%, primarily due to higher switching revenues in the U.S., Canada and the Netherlands.

GWI's income from operations in the second quarter of 2011 increased $13.3 million, or 35.1%, from $37.9 million in the second quarter of 2010 to $51.2 million in the second quarter of 2011. The operating ratio (operating expenses divided by operating revenues) was 75.6% in the second quarter of 2011 compared with an operating ratio of 76.1% in the second quarter of 2010.

Six Month Consolidated Results – Continuing Operations

For the six months ended June 30, 2011, GWI reported income from continuing operations of $53.3 million, a 45.3% increase over $36.7 million for the six months ended June 30, 2010. GWI's diluted earnings per share from continuing operations were $1.25 for the six months ended June 30, 2011 (with 42.7 million weighted average shares outstanding), a 42.0% increase over $0.88 for the six months ended June 30, 2010 (with 41.6 million weighted average shares outstanding). For the six months ended June 30, 2011, GWI's operating revenues increased $97.5 million, or 32.1%, to $401.5 million, compared with $304.0 million in the six months ended June 30, 2010. GWI's income from operations for the six months ended June 30, 2011 increased $22.4 million, or 32.9%, from $90.4 million for the six months ended June 30, 2010 to $68.0 million for six months ended June 30, 2011.

GWI’s 2011 results include a tax benefit of $4.7 million ($0.11 per diluted share) associated with the short line tax credit, which was extended in December 2010.

Free Cash Flow from Continuing Operations (1)

($ in millions)					Six Months Ended
					June 30, 2011
					2011								2010
Net cash provided by operating activities					$	52.0							$	73.8
Net cash used in investing activities, excluding
new Australian equipment investments						(23.7	)							(7.1	)
Net cash (received)/paid for divestitures/acquisitions						(0.9	)							-
Cash paid for acquisition-related expenses (a)						13.0								-
Free cash flow before new Australian
equipment investments						40.4								66.7
New Australian locomotives						(22.6	)							-
Free cash flow (1)					$	17.8							$	66.7
(a) Reflects expenses accrued as of December 31, 2010, but paid in 2011.

GWI’s continuing operations generated free cash flow of $17.8 million and $66.7 million for the six months ended June 30, 2011 and 2010, respectively. For the six months ended June 30, 2011 and 2010, changes in working capital decreased cash flow from operating activities by $42.3 million and $0.7 million, respectively. Of the $42.3 million for the six months ended June 30, 2011, $17.6 million was due to an increase in accounts receivable driven by the increase in business in 2011 and $24.2 million was due to a reduction in accounts payable and accrued expenses. Of the $24.2 million, $13.0 million was associated with the payment of stamp duty for the acquisition of FreightLink in Australia.

Net cash used in investing activities of $46.3 million for the six months ended June 30, 2011, included $62.1 million in purchases of property and equipment, including $22.6 million for the investment in new Australian locomotives, partially offset by $11.7 million in grant proceeds received from outside parties, $3.1 million from sale of assets and $1.4 million in proceeds from sale of investments. Net cash used in investing activities for the six months ended June 30, 2010, included $28.6 million in purchases of property and equipment, partially offset by $18.0 million in cash received from outside parties and $3.3 million from sale of assets.

Conference Call and Webcast Details

As previously announced, GWI's conference call to discuss financial results for the second quarter will be held Tuesday, August 2, 2011, at 11 a.m. EDT. Management will be referring to a slide presentation that will also be available at www.gwrr.com/investors prior to the conference call. The dial-in number for the teleconference is (800) 230-1059; outside U.S., call (612) 234-9959, or the call may be accessed live over the Internet (listen only) at www.gwrr.com/investors.

An audio replay of the conference call will be accessible at www.gwrr.com/investors starting at 1 p.m. EDT on August 2, 2011, until the following quarter’s earnings press release. Telephone replay is available for 30 days beginning at 1 p.m. EDT on August 2, 2011, by dialing (800) 475-6701 (or outside U.S., dial (320) 365-3844). The access code is 186289.

About Genesee & Wyoming Inc.

GWI owns and operates short line and regional freight railroads and provides railcar switching services in the United States, Canada, Australia, the Netherlands and Belgium. In addition, we operate the Tarcoola to Darwin rail line, which links the Port of Darwin to the Australian interstate rail network in South Australia. Operations currently include 63 railroads organized in nine regions, with approximately 7,400 miles of owned and leased track and approximately 1,400 additional miles under track access arrangements. We provide rail service at 17 ports in North America and Europe and perform 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 are based on current expectations, estimates and projections about our industry, management's beliefs, and assumptions made by management. Words such as "anticipates," "intends," "plans," "believes," "potential, " "outlook, " "should," "seeks," "expects," "estimates," variations of these words and similar expressions are intended to identify these forward-looking statements. These statements are not guarantees of future performance and are subject to certain risks, uncertainties and assumptions, including the following risks applicable to all of our operations: risks related to the acquisition and integration of railroads; economic and competitive uncertainties and contingencies and third-party approvals; economic, political and industry conditions; customer demand, retention and contract continuation; legislative and regulatory developments, including changes in environmental and other laws and regulations to which we are subject; increased competition in relevant markets; funding needs and financing sources; unpredictability of fuel costs; susceptibility to various legal claims and lawsuits; strikes or work stoppages; severe weather conditions and other natural occurrences; and others including but not limited to, those noted in our 2010 Annual Report on Form 10-K and our Quarterly Reports on Form 10-Q under "Risk Factors,” many of which are beyond our control. Therefore, actual results may differ materially from those expressed or forecasted in any such forward-looking statements. Forward-looking statements speak only as of the date of this press release or as of the date they were made. 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 Item 10(e) of Regulation S-K under the Securities Act of 1933 and the Securities Exchange Act of 1934 and 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.

GENESEE & WYOMING INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
FOR THE THREE AND SIX MONTHS ENDED JUNE 30, 2011 AND 2010
(in thousands, except per share amounts)
(unaudited)
					Three Months Ended														Six Months Ended
					June 30,														June 30,
					2011							2010							2011							2010
OPERATING REVENUES					$	209,589						$	158,453						$	401,500						$	304,032
OPERATING EXPENSES						158,424							120,580							311,132							236,053
INCOME FROM OPERATIONS						51,165							37,873							90,368							67,979
INTEREST INCOME						858							471							1,633							894
INTEREST EXPENSE						(10,253	)						(5,411	)						(20,192	)						(10,773	)
GAIN ON SALE OF INVESTMENTS						625							-							894							-
OTHER INCOME/(EXPENSE), NET						170							(175	)						469							275
INCOME FROM CONTINUING OPERATIONS BEFORE INCOME TAXES						42,565							32,758							73,172							58,375
PROVISION FOR INCOME TAXES						11,420							12,067							19,905							21,708
INCOME FROM CONTINUING OPERATIONS						31,145							20,691							53,267							36,667
LOSS FROM DISCONTINUED OPERATIONS, NET OF TAX						-							(56	)						-							(72	)
NET INCOME					$	31,145							20,635						$	53,267							36,595
BASIC EARNINGS PER SHARE:
BASIC EARNINGS PER COMMON SHARE FROM CONTINUING OPERATIONS					$	0.78						$	0.53						$	1.34						$	0.95
BASIC LOSS PER COMMON SHARE FROM DISCONTINUED OPERATIONS						-							-							-							-
BASIC EARNINGS PER COMMON SHARE					$	0.78						$	0.53						$	1.34						$	0.95
WEIGHTED AVERAGE SHARES - BASIC						39,903							38,831							39,695							38,711
DILUTED EARNINGS PER SHARE:
DILUTED EARNINGS PER COMMON SHARE FROM CONTINUING OPERATIONS					$	0.73						$	0.50						$	1.25						$	0.88
DILUTED LOSS PER COMMON SHARE FROM DISCONTINUED OPERATIONS						-							-							-							-
DILUTED EARNINGS PER COMMON SHARE					$	0.73						$	0.49						$	1.25						$	0.88
WEIGHTED AVERAGE SHARES - DILUTED						42,757							41,723							42,654							41,595

GENESEE & WYOMING INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
AS OF JUNE 30, 2011 AND DECEMBER 31, 2010
(in thousands)
(unaudited)
					June 30,						December 31,
ASSETS					2011						2010
CURRENT ASSETS:
Cash and cash equivalents					$	25,938					$	27,417
Accounts receivable, net						153,331						132,225
Materials and supplies						15,524						13,259
Prepaid expenses and other						12,559						14,529
Deferred income tax assets, net						21,889						21,518
Total current assets						229,241						208,948
PROPERTY AND EQUIPMENT, net						1,503,388						1,444,177
GOODWILL						162,737						160,629
INTANGIBLE ASSETS, net						235,029						237,355
DEFERRED INCOME TAX ASSETS, net						2,420						2,879
OTHER ASSETS, net						13,144						13,572
Total assets					$	2,145,959					$	2,067,560
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES:
Current portion of long-term debt					$	102,771					$	103,690
Accounts payable						132,258						124,948
Accrued expenses						51,806						76,248
Total current liabilities						286,835						304,886
LONG-TERM DEBT, less current portion						462,150						475,174
DEFERRED INCOME TAX LIABILITIES, net						274,325						263,361
DEFERRED ITEMS - grants from outside parties						190,796						183,356
OTHER LONG-TERM LIABILITIES						28,135						23,543
TOTAL STOCKHOLDERS' EQUITY						903,718						817,240
Total liabilities and stockholders' equity					$	2,145,959					$	2,067,560

GENESEE & WYOMING INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF CASH FLOWS
FOR THE SIX MONTHS ENDED JUNE 30, 2011 AND 2010
(in thousands)
(unaudited)
					Six Months Ended
					June 30,
					2011							2010
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income					$	53,267						$	36,595
Adjustments to reconcile net income to net cash provided
by operating activities:
Loss from discontinued operations, net of tax						-							72
Depreciation and amortization						32,158							24,900
Compensation cost related to equity awards						3,839							3,694
Excess tax benefits from share-based compensation						(2,049	)						(969	)
Deferred income taxes						11,071							12,063
Net gain on sale of assets						(2,098	)						(1,848	)
Gain on sale of investments						(894	)						-
Gain on insurance recoveries						(1,043	)						-
Insurance proceeds received						24							-
Changes in assets and liabilities which provided (used) cash, net of effect of acquisitions:
Accounts receivable, net						(17,612	)						(5,796	)
Materials and supplies						(1,763	)						(314	)
Prepaid expenses and other						2,048							(1,989	)
Accounts payable and accrued expenses						(24,174	)						8,526
Other assets and liabilities, net						(813	)						(1,155	)
Net cash provided by operating activities from continuing operations						51,961							73,779
Net cash used in operating activities from discontinued operations						(5	)						(87	)
Net cash provided by operating activities						51,956							73,692
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property and equipment						(62,065	)						(28,599	)
Grant proceeds from outside parties						11,700							17,986
Cash paid for acquisitions, net of cash acquired						(440	)						-
Proceeds from sale of investments						1,369							208
Proceeds from disposition of property and equipment						3,106							3,293
Net cash used in investing activities from continuing operations						(46,330	)						(7,112	)
CASH FLOWS FROM FINANCING ACTIVITIES:
Principal payments on long-term borrowings, including capital leases						(115,764	)						(13,637	)
Proceeds from issuance of long-term debt						94,612							-
Debt amendment costs						-							(1,641	)
Proceeds from employee stock purchases						12,631							5,219
Treasury stock purchases						(1,287	)						(846	)
Excess tax benefits from share-based compensation						2,049							969
Net cash used in financing activities from continuing operations						(7,759	)						(9,936	)
EFFECT OF EXCHANGE RATE CHANGES ON CASH AND CASH EQUIVALENTS						653							(3,147	)
CHANGE IN CASH BALANCES INCLUDED IN CURRENT ASSETS OF DISCONTINUED OPERATIONS						1							87
(DECREASE) / INCREASE IN CASH AND CASH EQUIVALENTS						(1,479	)						53,584
CASH AND CASH EQUIVALENTS, beginning of period						27,417							105,707
CASH AND CASH EQUIVALENTS, end of period					$	25,938						$	159,291

GENESEE & WYOMING INC. AND SUBSIDIARIES
SELECTED CONSOLIDATED FINANCIAL INFORMATION
(dollars in thousands)
(unaudited)
					Three Months Ended
					June 30,
					2011													2010
												% of													% of
					Amount							Revenue						Amount							Revenue
Revenues:
Freight					$	146,788						70.0	%					$	100,194						63.2	%
Non-freight						62,801						30.0	%						58,259						36.8	%
Total revenues					$	209,589						100.0	%					$	158,453						100.0	%
Operating Expense Comparison:
Natural Classification
Labor and benefits					$	58,966						28.1	%					$	51,329						32.4	%
Equipment rents						11,011						5.3	%						8,266						5.2	%
Purchased services						19,942						9.5	%						12,895						8.1	%
Depreciation and amortization						16,297						7.8	%						12,452						7.9	%
Diesel fuel used in operations						22,629						10.8	%						10,605						6.7	%
Diesel fuel sold to third parties						4,500						2.1	%						3,910						2.4	%
Casualties and insurance						6,228						3.0	%						3,123						2.0	%
Materials						6,090						2.9	%						6,004						3.8	%
Net gain on sale of assets						( 1,088	)					(0.5	%)						( 1,399	)					(0.9	%)
Gain on insurance recoveries						( 1,018	)					(0.5	%)						-						0.0	%
Other expenses						14,867						7.1	%						13,395						8.5	%
Total operating expenses					$	158,424						75.6	%					$	120,580						76.1	%
Functional Classification
Transportation					$	69,240						33.0	%					$	45,783						28.9	%
Maintenance of ways and structures						19,668						9.4	%						14,057						8.9	%
Maintenance of equipment						22,862						10.9	%						18,897						11.9	%
Diesel fuel sold to third parties						4,500						2.1	%						3,910						2.4	%
General and administrative						27,963						13.4	%						26,880						17.0	%
Net gain on sale of assets						( 1,088	)					(0.5	%)						( 1,399	)					(0.9	%)
Gain on insurance recoveries						( 1,018	)					(0.5	%)						-						0.0	%
Depreciation and amortization						16,297						7.8	%						12,452						7.9	%
Total operating expenses					$	158,424						75.6	%					$	120,580						76.1	%

GENESEE & WYOMING INC. AND SUBSIDIARIES
SELECTED CONSOLIDATED FINANCIAL INFORMATION
(dollars in thousands)
(unaudited)
					North American
					& European						Australian							Total
Three Months Ended June 30, 2011					Operations						Operations							Operations
Revenues:
Freight					$	96,598					$	50,190						$	146,788
Non-freight (excluding fuel sales)						42,737						15,472							58,209
Fuel sales to third parties						-						4,592							4,592
Total revenues						139,335						70,254							209,589
Operating expenses:
Labor and benefits						46,167						12,799							58,966
Equipment rents						6,513						4,498							11,011
Purchased services						7,117						12,825							19,942
Depreciation and amortization						11,565						4,732							16,297
Diesel fuel used in operations						14,056						8,573							22,629
Diesel fuel sold to third parties						-						4,500							4,500
Casualties and insurance						4,733						1,495							6,228
Materials						5,650						440							6,090
Net gain on sale of assets						(1,076	)					(12	)						(1,088	)
Gain on insurance recoveries						-						(1,018	)						(1,018	)
Other expenses						10,873						3,994							14,867
Total operating expenses						105,598						52,826							158,424
Income from Operations					$	33,737					$	17,428						$	51,165
Operating statistics:
Operating ratio						75.8	%					75.2	%						75.6	%
Carloads						195,677						53,831							249,508
Net expenditures for additions to property & equipment					$	14,742					$	27,412						$	42,154
					North American
					& European						Australian							Total
Three Months Ended June 30, 2010					Operations						Operations							Operations
Revenues:
Freight					$	88,421					$	11,773						$	100,194
Non-freight (excluding fuel sales)						38,583						15,432							54,015
Fuel sales to third parties						-						4,244							4,244
Total revenues						127,004						31,449							158,453
Operating expenses:
Labor and benefits						42,877						8,452							51,329
Equipment rents						7,093						1,173							8,266
Purchased services						6,857						6,038							12,895
Depreciation and amortization						10,908						1,544							12,452
Diesel fuel used in operations						9,188						1,417							10,605
Diesel fuel sold to third parties						-						3,910							3,910
Casualties and insurance						2,827						296							3,123
Materials						5,685						319							6,004
Net gain on sale of assets						(1,389	)					(10	)						(1,399	)
Gain on insurance recoveries						-						-							-
Other expenses						11,805						1,590							13,395
Total operating expenses						95,851						24,729							120,580
Income from Operations					$	31,153					$	6,720						$	37,873
Operating statistics:
Operating ratio						75.5	%					78.6	%						76.1	%
Carloads						185,654						32,053							217,707
Net expenditures for additions to property & equipment					$	5,181					$	1,204						$	6,385

GENESEE & WYOMING INC. AND SUBSIDIARIES
RAILROAD FREIGHT REVENUES, CARLOADS AND AVERAGE REVENUES PER CARLOAD
COMPARISON BY COMMODITY GROUP
(dollars in thousands, except average revenues per carload)
(unaudited)
Three Months Ended June 30, 2011
				North American & European Operations(1)															Australian Operations															Total Operations
				Freight									Average Revenues						Freight									Average Revenues						Freight									Average Revenues
Commodity Group				Revenues					Carloads				Per Carload						Revenues					Carloads				Per Carload						Revenues					Carloads				Per Carload
Intermodal(2)				$	120				1,010				$	119					$	21,929				14,213				$	1,543					$	22,049				15,223				$	1,448
Coal & Coke					20,122				47,531					423						-				-					-						20,122				47,531					423
Farm & Food Products					5,871				13,881					423						11,569				18,434					628						17,440				32,315					540
Pulp & Paper					15,480				23,823					650						-				-					-						15,480				23,823					650
Metallic Ores					1,319				2,096					629						12,607				5,855					2,153						13,926				7,951					1,751
Metals					11,686				22,198					526						-				-					-						11,686				22,198					526
Minerals & Stone					9,105				20,127					452						3,408				15,203					224						12,513				35,330					354
Chemicals & Plastics					11,376				15,135					752						-				-					-						11,376				15,135					752
Lumber & Forest Products					8,224				16,961					485						-				-					-						8,224				16,961					485
Petroleum Products					5,255				6,915					760						677				126					5,373						5,932				7,041					842
Autos & Auto Parts					2,203				2,881					765						-				-					-						2,203				2,881					765
Other					5,837				23,119					252						-				-					-						5,837				23,119					252
Totals				$	96,598				195,677				$	494					$	50,190				53,831				$	932					$	146,788				249,508				$	588
(1) We currently do not generate any freight revenues in Europe.
(2) Represents intermodal units
Three Months Ended June 30, 2010
				North American & European Operations(1)															Australian Operations															Total Operations
				Freight									Average Revenues						Freight									Average Revenues						Freight									Average Revenues
Commodity Group				Revenues					Carloads				Per Carload						Revenues					Carloads				Per Carload						Revenues					Carloads				Per Carload
Intermodal(2)				$	92				856				$	107					$	-				-				$	-					$	92				856				$	107
Coal & Coke					18,178				44,016					413						-				-					-						18,178				44,016					413
Farm & Food Products					6,038				12,752					473						8,917				16,878					528						14,955				29,630					505
Pulp & Paper					13,180				21,570					611						-				-					-						13,180				21,570					611
Metallic Ores					1,112				2,124					524						-				-					-						1,112				2,124					524
Metals					11,983				23,916					501						-				-					-						11,983				23,916					501
Minerals & Stone					7,985				17,902					446						2,856				15,175					188						10,841				33,077					328
Chemicals & Plastics					9,840				14,262					690						-				-					-						9,840				14,262					690
Lumber & Forest Products					7,609				16,766					454						-				-					-						7,609				16,766					454
Petroleum Products					4,916				6,851					718						-				-					-						4,916				6,851					718
Autos & Auto Parts					2,257				3,013					749						-				-					-						2,257				3,013					749
Other					5,231				21,626					242						-				-					-						5,231				21,626					242
Totals				$	88,421				185,654				$	476					$	11,773				32,053				$	367					$	100,194				217,707				$	460
(1) We currently do not generate any freight revenues in Europe.
(2) Represents intermodal units

GENESEE & WYOMING INC. AND SUBSIDIARIES
SELECTED CONSOLIDATED FINANCIAL INFORMATION
(dollars in thousands)
(unaudited)
					Six Months Ended
					June 30,
					2011													2010
												% of													% of
					Amount							Revenue						Amount							Revenue
Revenues:
Freight					$	279,593						69.6	%					$	189,760						62.4	%
Non-freight						121,907						30.4	%						114,272						37.6	%
Total revenues					$	401,500						100.0	%					$	304,032						100.0	%
Operating Expense Comparison:
Natural Classification
Labor and benefits					$	117,048						29.1	%					$	101,517						33.4	%
Equipment rents						21,578						5.4	%						15,915						5.2	%
Purchased services						37,384						9.3	%						23,292						7.7	%
Depreciation and amortization						32,158						8.0	%						24,900						8.2	%
Diesel fuel used in operations						44,027						11.0	%						21,642						7.1	%
Diesel fuel sold to third parties						8,579						2.1	%						7,703						2.5	%
Casualties and insurance						11,666						2.9	%						7,027						2.3	%
Materials						12,673						3.2	%						11,481						3.8	%
Net gain on sale of assets						( 2,098	)					(0.5	%)						( 1,848	)					(0.6	%)
Gain on insurance recoveries						( 1,043	)					(0.3	%)						-						0.0	%
Other expenses						29,160						7.3	%						24,424						8.0	%
Total operating expenses					$	311,132						77.5	%					$	236,053						77.6	%
Functional Classification
Transportation					$	132,646						33.0	%					$	90,399						29.7	%
Maintenance of ways and structures						37,562						9.4	%						26,886						8.8	%
Maintenance of equipment						44,933						11.2	%						35,801						11.8	%
Diesel fuel sold to third parties						8,579						2.1	%						7,703						2.5	%
General and administrative						58,395						14.6	%						52,212						17.2	%
Net gain on sale of assets						( 2,098	)					(0.5	%)						( 1,848	)					(0.6	%)
Gain on insurance recoveries						( 1,043	)					(0.3	%)						-						0.0	%
Depreciation and amortization						32,158						8.0	%						24,900						8.2	%
Total operating expenses					$	311,132						77.5	%					$	236,053						77.6	%

GENESEE & WYOMING INC. AND SUBSIDIARIES
SELECTED CONSOLIDATED FINANCIAL INFORMATION
(dollars in thousands)
(unaudited)
					North American
					& European						Australian						Total
Six Months Ended June 30, 2011					Operations						Operations						Operations
Revenues:
Freight					$	187,327					$	92,266					$	279,593
Non-freight (excluding fuel sales)						84,315						28,581						112,896
Fuel sales to third parties						-						9,011						9,011
Total revenues						271,642						129,858						401,500
Operating expenses:
Labor and benefits						92,626						24,422						117,048
Equipment rents						13,006						8,572						21,578
Purchased services						13,482						23,902						37,384
Depreciation and amortization						22,911						9,247						32,158
Diesel fuel used in operations						29,033						14,994						44,027
Diesel fuel sold to third parties						-						8,579						8,579
Casualties and insurance						8,056						3,610						11,666
Materials						11,912						761						12,673
Net gain on sale of assets						(2,084	)					(14	)					(2,098	)
Gain on insurance recoveries						(25	)					(1,018	)					(1,043	)
Other expenses						22,053						7,107						29,160
Total operating expenses						210,970						100,162						311,132
Income from Operations					$	60,672					$	29,696					$	90,368
Operating statistics:
Operating ratio						77.7	%					77.1	%					77.5	%
Carloads						389,907						104,157						494,064
Net expenditures for additions to property & equipment					$	21,811					$	28,554					$	50,365
					North American
					& European						Australian						Total
Six Months Ended June 30, 2010					Operations						Operations						Operations
Revenues:
Freight					$	169,022					$	20,738					$	189,760
Non-freight (excluding fuel sales)						75,218						30,694						105,912
Fuel sales to third parties						-						8,360						8,360
Total revenues						244,240						59,792						304,032
Operating expenses:
Labor and benefits						84,724						16,793						101,517
Equipment rents						13,595						2,320						15,915
Purchased services						12,310						10,982						23,292
Depreciation and amortization						21,823						3,077						24,900
Diesel fuel used in operations						19,276						2,366						21,642
Diesel fuel sold to third parties						-						7,703						7,703
Casualties and insurance						6,405						622						7,027
Materials						10,926						555						11,481
Net gain on sale of assets						(1,846	)					(2	)					(1,848	)
Gain on insurance recoveries						-						-						-
Other expenses						21,863						2,561						24,424
Total operating expenses						189,076						46,977						236,053
Income from Operations					$	55,164					$	12,815					$	67,979
Operating statistics:
Operating ratio						77.4	%					78.6	%					77.6	%
Carloads						361,490						58,939						420,429
Net expenditures for additions to property & equipment					$	5,877					$	4,736					$	10,613

GENESEE & WYOMING INC. AND SUBSIDIARIES
RAILROAD FREIGHT REVENUES, CARLOADS AND AVERAGE REVENUES PER CARLOAD
COMPARISON BY COMMODITY GROUP
(dollars in thousands, except average revenues per carload)
(unaudited)
Six Months Ended June 30, 2011
				North American & European Operations(1)														Australian Operations														Total Operations
				Freight									Average Revenues					Freight									Average Revenues					Freight									Average Revenues
Commodity Group				Revenues					Carloads				Per Carload					Revenues					Carloads				Per Carload					Revenues					Carloads				Per Carload
Intermodal(2)				$	218				1,856				$	117				$	39,762				27,085				$	1,468				$	39,980				28,941				$	1,381
Coal & Coke					38,993				101,735					383					-				-					-					38,993				101,735					383
Farm & Food Products					12,721				28,161					452					21,373				35,036					610					34,094				63,197					539
Pulp & Paper					30,259				48,132					629					-				-					-					30,259				48,132					629
Metallic Ores					2,844				4,874					584					23,272				10,046					2,317					26,116				14,920					1,750
Metals					23,023				44,738					515					-				-					-					23,023				44,738					515
Minerals & Stone					15,399				34,276					449					6,780				31,781					213					22,179				66,057					336
Chemicals & Plastics					21,840				29,484					741					-				-					-					21,840				29,484					741
Lumber & Forest Products					15,613				32,536					480					-				-					-					15,613				32,536					480
Petroleum Products					11,303				14,620					773					1,079				209					5,163					12,382				14,829					835
Autos & Auto Parts					4,349				5,771					754					-				-					-					4,349				5,771					754
Other					10,765				43,724					246					-				-					-					10,765				43,724					246
Totals				$	187,327				389,907				$	480				$	92,266				104,157				$	886				$	279,593				494,064				$	566
(1) We currently do not generate any freight revenues in Europe.
(2) Represents intermodal units
Six Months Ended June 30, 2010
				North American & European Operations(1)														Australian Operations														Total Operations
				Freight									Average Revenues					Freight									Average Revenues					Freight									Average Revenues
Commodity Group				Revenues					Carloads				Per Carload					Revenues					Carloads				Per Carload					Revenues					Carloads				Per Carload
Intermodal(2)				$	142				1,311				$	108				$	-				-				$	-				$	142				1,311				$	108
Coal & Coke					37,283				96,154					388					-				-					-					37,283				96,154					388
Farm & Food Products					12,458				26,333					473					15,004				28,192					532					27,462				54,525					504
Pulp & Paper					25,410				41,876					607					-				-					-					25,410				41,876					607
Metallic Ores					2,234				4,616					484					-				-					-					2,234				4,616					484
Metals					21,116				42,174					501					-				-					-					21,116				42,174					501
Minerals & Stone					13,972				31,677					441					5,734				30,747					186					19,706				62,424					316
Chemicals & Plastics					18,592				26,893					691					-				-					-					18,592				26,893					691
Lumber & Forest Products					14,129				31,424					450					-				-					-					14,129				31,424					450
Petroleum Products					10,290				14,302					719					-				-					-					10,290				14,302					719
Autos & Auto Parts					4,023				5,692					707					-				-					-					4,023				5,692					707
Other					9,373				39,038					240					-				-					-					9,373				39,038					240
Totals				$	169,022				361,490				$	468				$	20,738				58,939				$	352				$	189,760				420,429				$	451
(1) We currently do not generate any freight revenues in Europe.
(2) Represents intermodal units

Reconciliation of non-GAAP Financial Measures

This earnings release contains references to 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 measure.

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 from Continuing Operations less Net Cash Used in Investing Activities from Continuing Operations, excluding cash (received)/paid for divestitures/acquisitions and cash paid for acquisition-related expenses. 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. Free Cash Flow may be different from similarly-titled non-GAAP financial measures used by other companies.

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

				Six Months Ended
				June 30,
				2011							2010
Net cash provided by operating activities
from continuing operations				$	52.0						$	73.8
Net cash used in investing activities from
continuing operations (1)					(46.3	)						(7.1	)
Net cash (received)/paid for
divestitures/acquisitions					(0.9	)						-
Cash paid for acquisition-related expenses					13.0							-
Free cash flow				$	17.8						$	66.7
(1) Includes $22.6 million for the investment in new Australian locomotives in 2011