Blanchard Railroad Week in Review, Third Quarter 2007

The Railroad Week in Review:
Third Quarter 2007

Current Issues

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Week in Review, 7/7/2007
No Week in Review published.
Week in Review, 7/13/2007
NS and Watco establish Joint Venture in Michigan. Pacific Harbor Lines to acquire 16 fuel-efficient locos from WAB, partially funded by LA and Long Beach. More ethanol opportunities for short lines. Using your head and gut when selecting partners and acquisitions. B&P leases 36 miles in NY from NS. CSX to decentralize dispatching; reflections on span of control.
Week in Review, 7/20/2007
STB notes "best practices" benefits of Fortress acquiring FEC to complement RRA interests. CP rebuffs buy-out attempt for now; rail and analyst communities generally against the idea. CSX and UP open earnings week producing revenue, operating income and net income gains in spite of declining revenue-unit counts.Amtrak performance on UP and CSX still unacceptable indicating neither freight rail is operating as well as they would have us believe. Chris Burger on "Span of Control." RailTrends 2007 announcement.
Week in Review, 7/27/2007
Five more roads reported this week. Revenues were generally up across the board, though NS was off less than a point. CP was the strongest performer with revenues up 7% and revenue units up 5.7%. CN took the OR honors with a 60, acually up a quarter of a point. The chart following the disclaimer provides some comps.
Week in Review, 8/3/2007
Why housing’s woes cascade through a much wider swath of commodities than just the usual suspects. CSX steps up public image campaign. DME sale momentum seems to have slowed. Genesee & Wyoming call not one of their better presentations. Norfolk Southern rolls out the Roanoke red carpet for more than 370 short line owners and operators.
Week in Review, 8/10/2007
WNYP begins ops on the Buffalo line as STB denies UTU request for a stay. I speak with the GWR re transparency and learn a lot. Rick Paterson on Buffett's BNSF buy; William Greene on transport outlook. CURE and others seek a cure. Shareholder returns may be detrimental to your railroad's health.Walter Rich passes away.
Week in Review, 8/17/2007
P&W net in 2Q07 increased 38% yoy as asset sales double, covering 52% slide in ops income on lower volumes. How the current liquidity crunch can hurt handling-fee shortlines; why fixed-fee switching contracts are particularly helpful in this environment. Ramifications of STB changing cost-of-capital calculation. American RailCar posts record revenues and gets beat up anyway. RMI RailConnect charts.
Week In Review, 8/24/2007
More ethanol plants open on short lines, P&W begins serving Motiva's new Providence (RI) facility. NECR sees more light at the end of the Bellows Falls tunnel. DM&E progress; Foster gives more color on its 13% stake. UBS resets CP target price. Personnel comings and goings on the LAL properties. STB sharpens its cost-of-capital pencil. Why my PWX numbers differ from the 10-Q.
Week in Review, 8/31/2007
Highlights from UP's Annual Short Line Meeting. Implications of the re-reg threat and why shortlines could be particularly at risk. Berkshire Hathaway increases railroad stake in BNSF and possibly UP and NS. More on Intrinsic value. Short line car counts lag the Class Is. Waco's Stillwater Central embargoed due to flooding; reroutes in place.
Week in Review, 9/7/2007
Two long stories this week: The how and why behind CP's purchase of the DM&E and some observations on the CSX Analyst Day on Thursday. The CP deal is basically a straight railroad buy with an option to expand into the PRB if conditions warrant. How FSTR shareholders doubled their money in the bargain. CSX talks about the state of the railroad business in general, the role of CSX in particular and what it's doing to increase stakeholder value. Lessons for short lines abound but you've got to listen to the call to gain full measure of value.
Week in Review, 9/14/2007
A slew of Wall Street reports following the Sep 6 CSX investors meeting in NYC. Further comment on the CP bid for the DME. Tom Murray's insights on activist shareholders for railroads. Why trucks may be out after still more of your carload business. UBS upgrades KCS to a Buy.
Week in Review, 9/21/2007
Warning: Being in the short line business may become hazardous to your health if Congress and the STB have their way. See how EP 644, EP 646 and HR 2125 can turn the railroad clock back to the bad old pre-Staggers days. The impact on short lines will be devastating.DME redux: Why CP may have overpaid.

THE BLANCHARD COMPANY
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Roy Blanchard.215-913-7740 mobile, royblan@icloud.com
Laura Blanchard, email preferred lblanchard@rblanchard.com