NRC Annual Conference Hotel del Coronado, San Diego, CA Genesee - - PowerPoint PPT Presentation

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NRC Annual Conference Hotel del Coronado, San Diego, CA Genesee & Wyoming Railroad Services Inc. January 7, 2020 Prepared by: Kristine Storm Genesee & Wyoming Inc. 1 Agenda 1. Overview 2. Operations & Infrastructure 3. Sale

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1 Genesee & Wyoming Inc.

NRC Annual Conference

Hotel del Coronado, San Diego, CA

Genesee & Wyoming Railroad Services Inc.

January 7, 2020 Prepared by: Kristine Storm

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3 Genesee & Wyoming Inc.

Agenda

  • 1. Overview
  • 2. Operations & Infrastructure
  • 3. Sale to Infrastructure

Investors

  • 4. Culture & Safety
  • 5. Purchasing Vision & Overview
  • 6. Engineering Capital
  • 7. Specialty Contract Services
  • 8. Mechanical & Facility Capital
  • 9. Supplier Relationship
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4 Genesee & Wyoming Inc.

  • Railroads: 118 railroads with ~16,000

track miles

(90% North America; 10% Europe)

  • People: 8,000
  • Customers: 3,000
  • Equipment: 1,350 locomotives
  • Carloads: ~3.3 million annually

Overview

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5 Genesee & Wyoming Inc.

  • Largest UK Intermodal

Rail Operator with Key Real Estate at Ports and Inland Terminals; Offers Trains, Trucks & Storage

  • #3 Rail Operator with

Long-Term Track Concession & Contracts

  • Largest Short Line Operator

Serving 41 U.S. States, 4 Canadian Provinces, and Ports on All 3 Coasts

North America UK/Europe Australia

Current Footprint

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6 Genesee & Wyoming Inc.

| 12

  • Now Privatized
  • $8.4 billion transaction with

Brookfield Infrastructure Partners (NYSE:BIP) and GIC

  • Closed on 12.30.19
  • Acquirers’ long-term investment

horizons perfectly aligned with the long lives of G&W’s railroad assets

  • Changes are expected…….

Acquisition Update

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7 Genesee & Wyoming Inc.

Our Core Purpose & Values

Core Purpose: Core Values: To be the safest and most respected transportation service provider in the world.

Safety We have an unconditional commitment to the well- being of our people and the safety of our

  • perations

Integrity We possess the courage to do the right thing always Transparency We communicate openly to enable well-informed decision making Innovation We embrace creativity, technology and new ideas Service We have an absolute commitment to our customers based on a philosophy of mutual success Respect We treat all people with dignity and fairness, fostering diversity and inclusion Accountability We set high standards and take full ownership

  • f our results as an

individual and a team Excellence We have relentless focus on continuous improvement and excellence in all we do

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8 Genesee & Wyoming Inc.

Industry-Leading Safety: About People, Not Statistics

* G&W results include April 2015 acquisition of Freightliner Group

1 2 3 4 5

Class I Short Lines

Injury Frequency Rate per 200,000 Hours

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9 Genesee & Wyoming Inc.

Progress Towards “Most Respected”

Industry-Leading Customer Satisfaction

Trucking Other Railroads

8.0 = Our Goal

5 6 7 8 9 10

2007 2009 2011 2013 2015 2017

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10 Genesee & Wyoming Inc.

In 2017-19 2,000+ presentations to more than 285,000+ schoolchildren & professionals

Progress Towards “Most Respected”

G&WCommunity

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11 Genesee & Wyoming Inc.

Purchasing Vision:

Now & Future State to Support the Regions

Leverage of Spend

  • Annual Bids for Capital Requirements
  • Forward Buying Ahead of Markets
  • Increased Quality at a Reduced Cost
  • Maximizing our Total Cost of Ownership

Single Procurement Unit ALL CAPITAL RUNS THRU THE G&W CENTRALIZED PURCHASING PROCESS

  • 2016-2020 Engineering & Mechanical Requirements – 99%
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12 Genesee & Wyoming Inc.

North America 2020 Capital Procurement Overview

  • G&W’s capital plan will be submitted to Brookfield approval in February

is expected.

  • Purchasing obtained Brookfield approval to obtain key material items

in September 2019 in support of the 2020 capital programs

  • 2020 capital program has a marginal uptick compared to last year
  • Capital Track/Bridge Programs RFP’s will be solicited

Dec-19 thru Feb-20; South to North

  • Capital Mechanical Overhauls RFP will be solicited February
  • Capital Upfitted vehicles will be solicited Jan-20 thru Mar-20
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13 Genesee & Wyoming Inc.

$89 $120 $179 $232 $249 $331 $372 $280 $288 $344 $348

2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019B

(Capex In Millions)

> $1.5 billion invested in past 5 years Respected by Our Customers & Shareholders:

Capital Investment in Infrastructure

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14 Genesee & Wyoming Inc.

2020 Capital Spend Allocation: Engineering & Mechanical

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15 Genesee & Wyoming Inc.

What and how much does G&W Outsource:

Engineering design and construction 100% Switch & cross tie installation 30% Surfacing 30% Turnout installation and upgrades 100% CWR and jointed rail installation 100% Crossing Rehabilitations 90% Major bridge component upgrades 65% Signal installation, maintenance, and upgrades 90% Civil, earth & subgrade work 100% Locomotive Overhauls 15% Freight Car Repairs - RIP & LOR 50%

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16 Genesee & Wyoming Inc.

Impact of Weather on Railroad Infrastructure

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17 Genesee & Wyoming Inc.

Genesee & Wyoming Inc. | 21

Winter

  • Increased snowfall leads to

more snow clearing/de-icing

  • More winter freeze/thaw leads to more

damage to structures Spring

  • Faster transition between winter and

summer leads to larger floods

  • Higher risk of washouts

Summer

  • Higher temperature

increases risk of rail buckling / sun kinks

  • Higher risk of major storms, tornados
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18 Genesee & Wyoming Inc.

2019 Extraordinary Event:

  • Heavy rains on saturated soil caused

30 washouts (10 major) totaling 57 days of main-line closures from May-August

  • Number & size of culverts expanded
  • Heavier ballast
  • Replacing timber bents with steel
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19 Genesee & Wyoming Inc.

2019 G&W West Coast Bridge Challenges

  • G&W’s SJVR

Bridge over a field

  • Complete loss
  • Removal of

structure, replaced with 6 culverts

  • Back in service 3

days later; thanks to Industrial Railways Company, Contech, Cal-Sierra Pipe.

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SLIDE 19

ENGINEERING CAPITAL 2020

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21 Genesee & Wyoming Inc.

G&W Engineering Infrastructure

North America

~ 14,800 total track miles operated and maintained

  • 12,800 mainline (87%)

~ 45M wood ties ~ 8,500 switches and several hundred crossing diamonds ~ 9,200 grade crossings

  • 3,520 signalized protected
  • 5,600 non-signalized

~ 7,000 bridges

  • 4,700 timber bridges (70%)
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22 Genesee & Wyoming Inc.

2020 Typical North American Capital & Grant Scope

Total (Units) Ties 1,000,000 Rail (Lineal Miles) 200 Surfacing (Track Miles) 2,000 Switches 75 Bridges $29 million Grade Crossing Rehabs 125 Signals (Crossing Warning Devices) 100+ New Track (Track Feet) 8,450 TF (1 siding, 1 yard expansion)

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23 Genesee & Wyoming Inc.

Legend:

Rail – Linear Miles Ties – Each Surfacing – Track Miles Bridge - $’s

Rail - 4 Ties-175,000 Surfacing– 250 Bridge – $2.5M Rail - 83 Ties-175,000 Surfacing– 475 Bridge – $3.4M Rail – 7 Ties-65,000 Surfacing– 150 Bridge – $3.1M Rail - 41 Ties-225,000 Surfacing– 425 Bridge – $7.0M Rail – 30 Ties - 90,000 Surfacing – 225 Bridge – $3.5M Rail – 35 Ties-270,000 Surfacing– 475 Bridge – $9.5M

2020 Typical North American Capital & Grant Projects depicted by individual Region

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24 Genesee & Wyoming Inc.

Bridges Capital Scope of Work

  • Predominately Timber Repairs (80%)
  • New Tie Decks
  • Cap & Stringer Replacements
  • Pile Posting / Bent Framing
  • Concrete work predominately masonry
  • Some select steel repair for section

loss (<10%)

  • $29M Budget in core, above core

initiative (strengthening program) & grants resulting in working 200+ addt bridges.

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ENGINEERING GRANT OVERVIEW 2020

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26 Genesee & Wyoming Inc.

2020 Engineering Grants Summary $85M+ Total Funding

Southern Coastal Northeast Midwest

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27 Genesee & Wyoming Inc.

2020 Southern Region

KWT - $2.5M

  • 14,000 Ties
  • 25 TM Surfacing
  • $800k Bridge Rehab

Tennessee DOT

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28 Genesee & Wyoming Inc.

2020 Southern Region Georgia DOT CRISI Grant

CCKY - $2.7M

  • 14,000 Ties
  • 17.5 TM Surfacing
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29 Genesee & Wyoming Inc.

2020 Southern Region Georgia DOT

*CCKY - $5M

  • 41,000 LF Rail
  • 5 Turnouts
  • $1.5M Bridge Upgrades
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30 Genesee & Wyoming Inc.

*GSWR - $6M

  • 41,000 LF Rail
  • 14,000 Ties
  • 8 Turnouts
  • 17.5 TM Surfacing

2020 Southern Region Georgia DOT: Lynn to Cuthbert, GA

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31 Genesee & Wyoming Inc.

GSWR - $5.2M

  • 60,000 LF Rail
  • 8,000 Ties
  • 10 TM Surfacing

2020 Southern Region Georgia DOT CRISI Grant

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32 Genesee & Wyoming Inc.

2020 Coastal

GCLP - $8M

  • 42,000 LF Rail
  • 35,000 Ties
  • 100 TM Surfacing
  • 3 Crossing Rehabs
  • $700K Bridge Upgrades

Georgia DOT CRISI Grant

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33 Genesee & Wyoming Inc.

GSWR - $5.2M

  • 60,000 LF Rail
  • 8,000 Ties
  • 10 Miles Surfacing

NECR - $30M

  • 45 LM of Rail
  • 30,000 Ties
  • 55 TM Surfacing
  • 30 Turnouts
  • 16 Bridge Rehabs

2020 Northeast Region Build America MassDOT Grant

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34 Genesee & Wyoming Inc.

2020 Northeast Region CRISI Amtrak Grant

NECR - $4.6M

  • 18,000 Ties
  • 23 TM Surfacing
  • Rockslide Remediation
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35 Genesee & Wyoming Inc.

2020 Northeast Region CRISI Brookville Grant

BPRR - $3M

  • 15,500 Ties
  • 23 TM Surfacing
  • 7 Crossing Rehabs
  • 14 Structure Rehabs
  • (Bridges, Culverts, Embankments)
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36 Genesee & Wyoming Inc.

2020 Midwest Region Delta Grant

IORY - $7.9M

  • 40,000 LF Rail
  • 15,000 Ties
  • 10 TM Surfacing
  • 10 Turnouts
  • 7,450 New Siding Expansion
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37 Genesee & Wyoming Inc.

KYLE - $2.5M

  • 29 Bridge Upgrades

286k b/w Colorado State Line and Belleville, KS

2020 Midwest Region Bridge Strengthening Grant

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38 Genesee & Wyoming Inc.

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39 Genesee & Wyoming Inc.

North American 2020 Specialty Engineering Services

  • Rail Flaw Detection: 18,900 TM’s
  • Geometry Testing: 14,300 TM’s
  • Tie Testing: 8,000 TM’s
  • Vegetation Control: 16,000 TM’s
  • Upfitted Vehicles: 80 each
  • Derailment Services & Emergency Response
  • Environmental Services
  • Maintenance Welding
  • Support for Production

– Material Distribution, Tie & OTM clean up, crossing support, etc

  • Flagging
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MECHANICAL CAPITAL Overview 2020

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41 Genesee & Wyoming Inc.

Locomotive Fleet & Overhauls

  • Total locomotive fleet count for G&W is 1,350 units;

including Europe

  • North America’s fleet consists of:
  • 726 of 4 axles
  • 623 of 6 axles
  • 2018 – 8 units, 4 axles were completed

– 17 units, purchase upgrade (trade ins)

  • 2019 – 20 units, 4 axles planned

– 20 units, purchase upgrade (trade ins) – 10 units, EPA Tier 0+ Upgrade Kits

  • 2020 – 15 units, 6 axles planned

– 6 units, Tier 4 purchase – 22 units, purchase upgrade GP38-2’s (trade ins) locomotives improving the aged fleet. – 25+ units, EPA Tier 0+ Upgrade Kits

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42 Genesee & Wyoming Inc.

PTC Status Update

  • 2020 will be a big year for Class I/Shortline PTC interoperability with the

12/31/20 Deadline looming.

  • G&W has primarily onboard PTC equipment only and limited back office

server requirements, no wayside requirements

  • All under contract, deploying three types of PTC (I-ETMS/ACSES/E-ATC).
  • YTD completed onboard installation on 81 locomotives.
  • Thirteen RR’s operating in revenue service: AGR, AKMD, AZER, CFNR,

CORP, DGNO, LDRR, LRWN, MNA, OTVR, PNWR, PSAP and UTAH.

  • Currently interoperable with BNSF, CSX, NS and UP.
  • G&W has 10 Corys PTC tabletop simulators in its system deployed across
  • ur PTC network for T&E training.
  • 2020 target is to equip an additional 27 locomotives with I-ETMS / ACSES.
  • G&W estimated capital budget for 2020 PTC is ($5m) and expect to be fully

implemented across our system on those RR’s applicable.

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43 Genesee & Wyoming Inc.

Shop Facility Upgrades and Repairs

  • BAYL

– Complete shop rebuild due to structural damage from Hurricane Michael

  • DGNO

– Completion Preliminary Engineering on New Shop – New Locomotive Shop Facility Final Design, Build

  • CORP

– Completion Preliminary Engineering on New Shop

  • MNAR

– Completion Preliminary Engineering on Shop Expansion

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44 Genesee & Wyoming Inc.

Information Technology Improvements

  • Engineering Software currently being utilized by G&W
  • Electronic Track Inspection
  • Electronic Signal Inspection
  • Electronic Bridge Inspection

– Drone Utilization

  • Track testing: rail, geometry & ties
  • GIS integration b/w real estate, engineering
  • Witronix, onboard locomotive intel
  • Continue exploring & implementing IT solutions that supports

the operations and recognizes the financial benefit.

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45 Genesee & Wyoming Inc.

G&W Purchasing Organization Update Website

https://www.gwrr.com/suppliers

Tom Dutrieux

Director Locomotive Fuel & Lube Oil Vehicles

Vacant

Assistant Manager

Contract & PO Administration

Kristine Storm VP

Engineering Materials & Services Logistics Indirect Services

Bill Grove

Director Engineering Materials & Services

Alan Pettigrew

Manager

Mechanical Materials & Services

Richard Lutz

Manager

Mechanical Materials & Services

Allen Wengert

Manager

Engineering Services Contractor Management

Matt Seinfeld

Manager

Engineering Materials Contract & PO Administration

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46 Genesee & Wyoming Inc.

Region / Railroad Point of Contacts

Purchasing & Request for Proposals: – Kristine Storm, Alan Pettigrew, Bill Grove, Allen Wengert, Matt Seinfeld, Rich Lutz – Website (https://www.gwrr.com/suppliers)

  • New vendor qualification assessment

Regional Vice Presidents of Engineering: – Western Region – Kenton Esbenshade – Southern Region – Dale Hanshew – Coastal Region – Ken Whisenant & Rob Myer – North East Region – Todd Dragland – Canada Region – Andre Lapalme – Midwest Region – Dale Summers – Australia – Tom Hampton (National Track Manager)

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47 Genesee & Wyoming Inc.

Region / Railroad Point of Contacts

  • Regional Vice Presidents of Mechanical:

– Western Region – Juan Mendoza – Southern Region – Brad Landers – Coastal Region – Kris Kempel – Northeast Region – Mike Collier – Canada Region – Daniel Vaillancourt – Midwest Region – Dale Bennett (West) or Chad Gibson (East)

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48 Genesee & Wyoming Inc.

Supplier Relationship

Track Capital Maintenance Programs

  • Matching up the footprint, serving those railroads within

your reach while not compromising SAFETY, quality or price

  • Efficiencies, in and out
  • Safety Program to the G&W standard
  • Innovative partnership on improving the infrastructure
  • Extension to our resources
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49 Genesee & Wyoming Inc.

Thank you to our 2019 contractors!

Sharma & Associates Collins Engineering Auto Truck RELCO Locomotives Asplundh Reforestation Services HDR All American Ferrosafe GREX National Railway Equipment Co. Alfred & Benesh Co. Sperry Rail Service Industrial Railways Co. R&J Construction Holland Railstar Engineering H&S Engineering Patrick Engineering Balfour Beatty Aecom US Trackworks Track Services Railworks Road & Rail Tri-County Ready Mix Concrete Mountain States Contracting V&H Interrail CR Construction All American Track J-Track Hamilton H&H Engineering Construction Trak-Time Xorail Delta Atlas Frontier Ames Construction Koppers Midwest MO Nordco Progress Rail RJ Corman Hulcher Osage National Signal Bartlett & West LRL Construction GE / Alstom Custom Truck Asplundh Reforestation TCR Railroad Signal Services Progress Rail Siemens TEC Associates MidSouth Railway Signal Construction Musselman & Hall West Rail

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50 Genesee & Wyoming Inc. Genesee & Wyoming Inc.

Any Questions?

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51 Genesee & Wyoming Inc.