1012620--2/27/2009--GENESEE_&_WYOMING

related topics

{operation, international, foreign}

{cost, regulation, environmental}

{customer, product, revenue}

{loss, insurance, financial}

{condition, economic, financial}

{acquisition, growth, future}

{operation, natural, condition}

{regulation, government, change}

{gas, price, oil}

{cost, operation, labor}

{debt, indebtedness, cash}

{competitive, industry, competition}

{cost, contract, operation}

{financial, litigation, operation}

{investment, property, distribution}

GENERAL RISKS ASSOCIATED WITH OUR BUSINESS Adverse macroeconomic and business conditions could negatively impact our business. If we are unable to consummate additional acquisitions or investments, then we may not be able to implement our growth strategy successfully. We may need additional capital to fund our acquisitions. If we are unable to obtain additional capital at a reasonable cost, then we may forego potential acquisitions, which would impair the execution of our growth strategy. Our inability to acquire or integrate acquired businesses successfully or to realize the anticipated cost savings and other benefits could have adverse consequences to our business. Our credit facilities and note purchase agreements contain numerous covenants that impose certain restrictions on the way we operate our business. We are exposed to the credit risk of our customers and counterparties and their failure to meet their financial obligations could adversely affect our business. The loss of important customers or contracts may adversely affect our operating results, financial condition and liquidity. Because we depend on Class I railroads and other connecting carriers for a majority of our operations, our operating results, financial condition and liquidity may be adversely affected if our relationships with these carriers deteriorate. We are dependent on lease agreements with Class I railroads and other third parties for our operations, strategy and growth. We face competition from numerous sources, including those relating to geography, substitute products, other types of transportation and other rail operators. We are subject to significant governmental regulation of our railroad operations. The failure to comply with governmental regulations could have a material adverse effect on our operating results, financial condition and liquidity. Changes to the legislative and regulatory environment, if adopted, could have a significant impact on our railroad operations. Market and regulatory responses to climate change could adversely affect our operating costs and decrease demand for the commodities we transport. We could incur significant costs for violations of, or liabilities under, environmental laws and regulations. Rising fuel costs could materially adversely affect our operating results, financial condition and liquidity. We may be affected by supply constraints resulting from disruptions in the fuel markets. As a common carrier by rail, we are required to transport hazardous materials, regardless of risk. The occurrence of losses or other liabilities that are either not covered by insurance or that exceed our insurance limits could materially adversely affect our operating results, financial condition and liquidity. Some of our employees belong to labor unions, and strikes or work stoppages could adversely affect our operating results, financial condition and liquidity. If we are unable to employ a sufficient number of skilled workers, then our operating results, financial condition and liquidity may be materially adversely affected. Our operations are dependent on our ability to obtain railcars, locomotives and other critical railroad items from suppliers. We may be subject to various claims and lawsuits that could result in significant expenditures. Our results of operations are susceptible to severe weather conditions and other natural occurrences. Certain of our capital projects may be impacted by our ability to obtain government funding. Acts of terrorism or anti-terrorism measures may adversely affect us. ADDITIONAL RISKS ASSOCIATED WITH OUR FOREIGN OPERATIONS We are subject to the risks of doing business in foreign countries. Because some of our significant subsidiaries and affiliates transact business in foreign currencies and because a significant portion of our net income comes from the operations of our foreign subsidiaries, future exchange rate fluctuations may adversely affect us and may affect the comparability of our results between financial periods. Failure to meet concession commitments with respect to operations of our rail lines could result in the loss of our investment and a related loss of revenues. Open access regimes in Australia and the Netherlands could lead to additional competition for rail services and decreased revenues and profit margins. Changes to the open access regimes in Australia and the Netherlands could have a significant impact on our operations. GWA is subject to several contractual restrictions on its ability to compete.

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1012620--2/27/2009--GENESEE_&_WYOMING_INC