Blanchard Railroad Week in Review, Fourth Quarter 2006

The Railroad Week in Review:
Fourth Quarter 2006

Current Issues

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Week in Review, 10/6/2006
STB rebukes motion for confidential DM&E files. CP shortline conference notes. Further comment on my FLA stock trade. Encouraging words from UP analyst conference; more to come next week. Do the math on NS' Shelocta investment.
Week in Review, 10/13/2006
More on the UP analysts meeting as promised with three take-aways for shortliners. LAL hosts FRA Adminstrator Joseph Broadman and shows how it's done.
Week in Review, 10/20/2006
CSX, UP and CN lead off the RR earnings season with solid earnings growth on aggressive pricing and improved execution. Car builders capitalize on demand for rail transportation services. Why it's important to listen to the earnings conference calls and what to listen for.
Week in Review, 10/27/2006
We finish off the Class I railroads' earnings season with reports from BNSF, CP and NS. Tables comparing all six on metrics of particular interest to shortline operators. CN, CP and NS post biggest earnings surprises (table). Comments on FAK handling allowances and how they can hurt shortlines when carload volumes are flat to down.
Week in Review, 11/3/2006
The RR earnings season concludes with RRA, KCS, GWR and FEC. All enjoyed solid revenue increases though volumes were so-so in line with what we've seen from the Big Six. GWR and KCS net incomes were particularly hard to follow given all the below-the-line noise; the bath GWR took in Mexico killed both ops income and the net. See www.gwrr.com for details.
Week in Review, 11/10/2006
Why shortline railroad operators need to watch the truckload sector as well as their own. Are the rails really taking trucks off all the highways or just making more money for doing the same thing? Velocity and how to improve it was the unifying theme of the BNSF and CN shortline meetings. American Railcar Industries (NYSE: ARII) 3Q report looks good for the carload sector.
Week in Review, 11/17/2006
RailAmerica goes private in a billion-dollar deal. Implications for shortlines and Class Is intriguing. Clearly the opening innings of what promises to be a very interesting game.Economic outlook courtesy of Barron's Roundtable. NSC stock prices dip creating buying opportunity. Gary Marino's Patriot Rail picks up Tennessee Southern for undisclosed amount.
No Week in Review, 11/24/2006. Happy Thanksgiving.
Week in Review, 12/1/2006
Competitive Advantage for Railroads. Eye on the Economy. Further thoughts on the RRA transaction. CN buys back Alberta Lines from Savage. Why it's time to buy more NSC. Dan Mazur promoted to VP Strat Planning at NS. New short haul, short consist unit train in New England.
Week in Review, 12/8/2006
Merrill downgrades BNSF, CN on volume outlooks; I take exception. Truckers' problems create rail opportunities but could hurt some Class I railroad "market pricing" practices. Record-high corn prices good for shortlines? Outlook for 2007. Merch carloads and computer chips; ECP for merch loads? Roger Nober to BNSF. Malcolm Clarke to Railinc.
Week in Review, 12/15/2006
Fourth quarter traffic outlook softens, YTD and Week 49 so-so. UP Nov coal loadings up 8% to a record 20 mm tons. Minnesota PRB commentary on PRB build-in project, Blanchard quoted. Larry Kaufman on rail stock analysis. Further notes on ethanol. Infrastructure tax credit at risk? FreightCar America builds 100,000th aluminum coal hopper.
Week in Review, 12/21/2006
Final 2006 WIR. Rail Analysts issue a flurry of downgrades and the common theme is slowing carload volumes. Shortline model of better asset turns, lower unit cost, and improved margins per revenue unit reinforced. DM&E comments (WIR 12/15/2006) bring responses both pro and con. Genesee & Wyoming to realign its North American operations effective Jan 1, 2007.Bear Stearns holds conference call on the outlook for basic materials; ag implications for ethanol. Florida Central Railroad celebrates its 20th birthday. Greenbrier warns.

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Roy Blanchard.215-913-7740 mobile, royblan@icloud.com
Laura Blanchard, 215-985-1445, lblanchard@rblanchard.com