This earnings release contains references to adjusted operating income, adjusted operating ratios and free cash flow, which are "non-GAAP financial measures" as this term is defined in Regulation G of the Securities Exchange Act of 1934. In accordance with Regulation G, GWI has reconciled these non-GAAP financial measures to its most directly comparable U.S. GAAP measures.
Adjusted Operating Income and Adjusted Operating Ratios Description and Discussion
Management views its Operating Income, calculated as Operating Revenues less Operating Expenses, and Operating Ratio, calculated as Operating Expenses divided by Operating Revenues, as an important measure of GWI’s operating performance. Because management believes this information is useful for investors in assessing GWI’s financial results compared with the same period in the prior year, the Operating Income and Operating Ratio for the three months ended June 30, 2012, used to calculate Adjusted Operating Income and Adjusted Operating Ratio, is presented excluding net gain on sale of assets, gain on insurance recoveries, business/corporate development expenses and the impact of the Canadian Pacific Railway strike. The Operating Income and Operating Ratio for the three months ended June 30, 2011, used to calculate Adjusted Operating Income and Adjusted Operating Ratio, is presented excluding net gain on sale of assets, gain on insurance recoveries and business/corporate development expenses. The Adjusted Operating Income and Operating Ratios presented excluding these effects are not intended to represent, and should not be considered more meaningful than, or as an alternative to, the Operating Income and Operating Ratios calculated using amounts in accordance with GAAP. Adjusted Operating Income and Operating Ratios may be different from similarly-titled non-GAAP financial measures used by other companies.
The following table sets forth a reconciliation of GWI’s Operating Income and Operating Ratios by segment calculated using amounts determined in accordance with GAAP to the Adjusted Operating Income and Operating Ratios by segment described above ($ in millions):
|Three months ended June 30, 2012||North American& EuropeanOperations||AustralianOperations||TotalOperations|
|Impact of Canadian Pacific Railway strike||0.7||-||0.7|
|Adjusted operating revenues||$||145.7||$||72.4||$||218.1|
|Net gain on sale of assets||6.2||-||6.2|
|Gain on insurance recoveries||-||5.2||5.2|
|Business/corporate development expenses||(1.1||)||(0.8||)||(1.9||)|
|Impact of Canadian Pacific Railway strike||0.2||-||0.2|
|Adjusted operating expenses||$||110.5||$||54.2||$||164.7|
|Adjusted operating income||$||34.6||$||18.2||$||52.8|
|Adjusted operating ratio||75.8||%||74.9||%||75.5||%|
|Three months ended June 30, 2011||North American& EuropeanOperations||AustralianOperations||TotalOperations|
|Net gain on sale of assets||1.1||-||1.1|
|Gain on insurance recoveries||-||1.0||1.0|
|Business/corporate development expenses||-||(0.4||)||(0.4||)|
|Adjusted operating expenses||$||106.7||$||53.4||$||160.1|
|Adjusted operating income||$||32.6||$||16.8||$||49.5|
|Adjusted operating ratio||76.6||%||76.1||%||76.4||%|
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