<PAGE>
Form 10-Q
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 1995
OR
[_] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the transition period from to
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Commission file number 2-26520
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UNION TANK CAR COMPANY
(Exact name of registrant as specified in its charter)
Delaware 36-3104688
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
225 West Washington Street, Chicago, Illinois 60606
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(Address of principal executive offices)
Registrant's telephone number, including area code: (312) 372-9500
Indicate by check mark whether the registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934
during the preceding 12 months (or for such shorter period that the registrant
was required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.
Yes X No
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There is no voting stock held by non-affiliates of the registrant. This report
is being filed by the registrant as a result of undertakings made pursuant to
Section 15(d) of the Securities Exchange Act of 1934 with respect to certain
long-term debt of the registrant.
Included in this filing are 9 pages, sequentially numbered in the bottom center
of each page.
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UNION TANK CAR COMPANY AND SUBSIDIARIES
FORM 10-Q
INDEX
Page
----
Part I. Financial Information
Item 1.
Condensed consolidated statement of income -
three months ended March 31, 1995 and 1994 3
Condensed consolidated balance sheet -
March 31, 1995 and December 31, 1994 4
Condensed consolidated statement of cash flows -
three months ended March 31, 1995 and 1994 5
Notes to condensed consolidated financial
statements 6 - 7
Item 2.
Management's Discussion and Analysis of
Financial Condition and Results of Operations 7
Part II. Other Information
Item 1.
Legal Proceedings 8
Item 6.
Exhibits and Reports on Form 8-K 8
Signatures 9
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PART I. FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
UNION TANK CAR COMPANY AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF INCOME
(Dollars in Thousands)
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended
March 31,
--------------------
1995 1994
--------- ---------
<S> <C> <C>
Revenues
Services (leasing and other) $111,992 $109,865
Net sales 53,950 24,142
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165,942 134,007
Other income 5,529 3,004
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171,471 137,011
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Costs and expenses
Cost of services 59,679 57,058
Cost of sales 46,310 19,247
General and administrative 13,802 13,404
Interest 21,117 23,981
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140,908 113,690
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Income before income taxes 30,563 23,321
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Provision for income taxes
Current 8,008 4,566
Deferred 4,109 4,974
Deferred investment tax credits (618) (651)
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11,499 8,889
-------- --------
Net income $ 19,064 $ 14,432
======== ========
</TABLE>
See notes to condensed consolidated financial statements.
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<PAGE>
UNION TANK CAR COMPANY AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEET
(Dollars in Thousands)
(Unaudited)
ASSETS
<TABLE>
<CAPTION>
March 31, December 31,
1995 1994
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<S> <C> <C>
Cash and cash equivalents $ 21,352 $ 15,303
Accounts receivable 65,708 61,005
Inventories 59,660 64,644
Due from affiliate 13,228 13,191
Prepaid expenses and deferred charges 8,255 7,423
Advances to parent company,
principally at LIBOR plus 1% 191,661 194,729
Railcar lease fleet, net 1,476,006 1,451,999
Fixed assets, net 130,940 130,895
Investment in direct financing lease 37,230 37,213
Other assets 27,049 41,370
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$2,031,089 $2,017,772
========== ==========
LIABILITIES, DEFERRED ITEMS AND STOCKHOLDER'S EQUITY
Accounts payable $ 15,425 $ 16,096
Accrued liabilities 143,509 129,059
Borrowed debt 872,738 882,407
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1,031,672 1,027,562
Deferred items
Income taxes 463,631 459,893
Investment tax credits 24,714 25,309
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488,345 485,202
Stockholder's equity
Common stock and additional capital 111,341 111,341
Retained earnings 399,731 393,667
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Total stockholder's equity 511,072 505,008
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$2,031,089 $2,017,772
========== ==========
</TABLE>
See notes to condensed consolidated financial statements.
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<PAGE>
UNION TANK CAR COMPANY AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENT OF CASH FLOWS
(Dollars in Thousands)
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended March 31,
------------------------------
1995 1994
-------------- --------------
<S> <C> <C>
Cash flows from operating activities:
Net income $ 19,064 $ 14,432
Adjustments to reconcile net income to net cash
provided by operating activities:
Depreciation and amortization 25,518 25,635
Other non-cash income and expenses 125 (251)
Changes in assets and liabilities:
Accounts receivable (8,164) (2,255)
Inventories 3,029 (9,620)
Prepaid expenses and deferred charges (1,573) (984)
Accounts payable and accrued expenses 16,411 5,471
Deferred taxes 3,491 4,323
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Net cash provided by operating activities 57,901 36,751
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Cash flows from investing activities:
Construction and purchase of railcars and other fixed assets (50,180) (61,956)
Proceeds from disposals of railcars and other fixed assets 1,631 5,201
Decrease (increase) in advance to parent 5,209 (56,184)
Decrease in other assets and investments 14,365 1,265
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Net cash used in investing activities (28,975) (111,674)
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Cash flows from financing activities:
Proceeds on issuance of long-term debt - 100,000
Principal payments of long-term debt (9,943) (8,478)
Net commercial paper borrowings - 1,448
Cash dividends (13,000) (10,000)
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Net cash (used in) provided by financing activities (22,943) 82,970
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Effect of exchange rates on cash and cash equivalents 66 (1,383)
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Net increase in cash and cash equivalents 6,049 6,664
Cash and cash equivalents at beginning of year 15,303 34,013
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Cash and cash equivalents at end of period $ 21,352 $ 40,677
======== =========
Cash paid during the period for:
Interest (net of amount capitalized) $ 10,908 $ 11,802
Income taxes 7,896 7,122
</TABLE>
See notes to condensed consolidated financial statements.
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<PAGE>
UNION TANK CAR COMPANY AND SUBSIDIARIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
(Dollars in Thousands)
(Unaudited)
1. Union Tank Car Company (the Company) is a wholly-owned subsidiary of Marmon
Industrial Corporation (Marmon Industrial). Marmon Industrial is a wholly-
owned indirect subsidiary of Marmon Holdings, Inc. (Marmon Holdings),
substantially all of the stock of which is owned, directly or indirectly, by
trusts for the benefit of certain members of the Pritzker family. As used
herein, "Pritzker family" refers to the lineal descendants of Nicholas J.
Pritzker, deceased.
2. The accompanying unaudited condensed consolidated financial statements
include all adjustments, consisting of normal recurring accruals, which the
Company considers necessary for a fair presentation. These interim
financial statements do not include all disclosures normally provided in
annual financial statements. Accordingly, they should be read in
conjunction with the consolidated financial statements and notes thereto in
the Company's 1994 Annual Report on Form 10-K.
Certain prior year amounts have been reclassified to conform to the current
year's presentation.
The 1995 interim results presented herein are not necessarily indicative of
the results of operations for the full year 1995.
3. As more fully described in the Company's 1994 Annual Report on Form 10-K,
under an arrangement with Marmon Industrial, the Company is included in the
consolidated federal income tax return of Marmon Holdings. As a member of
a consolidated federal income tax group, the Company is contingently liable
for the federal income taxes of the other members of the group.
4. The Company and its subsidiaries have been named as defendants in a number
of lawsuits, and certain claims are pending. The Company has accrued what
it reasonably expects to pay in resolution of these matters and, in the
opinion of management, their ultimate resolution will not have a material
effect on the Company's consolidated financial position or results of
operations.
5. Foreign currency translation adjustments and transaction gains and losses
are assumed by the Company's parent. For the three months ended March 31,
1995 and 1994, Marmon Industrial absorbed a gain of $260 and a loss of $74,
respectively.
6. The Company's Canadian subsidiaries enter into foreign currency forward
contracts to hedge against U. S. dollar exposures. Foreign currency forward
contracts, all with initial maturities of less than one year, amounted to
$11.2 million at March 31, 1995, and $12.6 million at December 31, 1994.
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<PAGE>
7. Summarized Financial Information of Procor Limited
Summarized consolidated financial information for the Company's wholly-owned
subsidiary, Procor Limited, is as follows:
<TABLE>
<CAPTION>
March 31, December 31,
1995 1994
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<S> <C> <C>
Balance Sheet:
Railcar lease fleet, net $234,303 $236,565
All other assets 160,709 153,055
Borrowed debt 145,860 146,180
All other liabilities 160,856 158,760
Three Months Ended
March 31,
-----------------------
1995 1994
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Statement of Income:
Services and net sales $ 30,179 $ 25,393
Gross profit 9,688 7,536
Net income 3,374 1,729
</TABLE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
Results of Operations
- ---------------------
1st Quarter 1995 versus 1994
- ----------------------------
Service revenues increased $2.1 million primarily due to the effect of cars
added to the railcar lease fleet. Gross margin percentages remained relatively
unchanged from the comparable period in 1994.
Sales revenues increased primarily due to increased railcar sales of $24.1
million and increased sulphur services revenues of $3.6 million.
Other income increased primarily due to interest income resulting from higher
market interest rates, as well as higher average outstanding balances on
advances to the Company's parent.
Financial Condition
- -------------------
1995 versus 1994
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Operating activities provided $57.9 million of cash. These funds were used to
provide financing for railcar additions, service long-term debt obligations and
pay a dividend to the Company's stockholder.
Management expects future cash from operating activities and long-term railcar
financings will be adequate to provide for the continued expansion of the
Company's business and enable it to meet its debt service obligations.
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<PAGE>
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
Reference is made to "Business - Environmental Matters" in the
Company's Annual Report on Form 10-K for the year ended December 31,
1994 for a description of certain environmental matters.
Item 6. Exhibits and Reports on Form 8-K
b. No report on Form 8-K was filed during the quarter ended March 31,
1995.
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<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
UNION TANK CAR COMPANY
REGISTRANT
Dated: May 5, 1995 /s/ R.C. Gluth
------------------------------------
R.C. Gluth
Executive Vice President and Director
(principal financial officer and
principal accounting officer)
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<TABLE> <S> <C>
<PAGE>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the March
31, 1995 condensed consolidated balance sheet, condensed consolidated statement
of income for the quarter ended March 31, 1995, and the notes thereto, and is
qualified in its entirety by reference to such financial statements.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> MAR-31-1995
<CASH> 21,352
<SECURITIES> 0
<RECEIVABLES> 70,839
<ALLOWANCES> 5,131
<INVENTORY> 59,660
<CURRENT-ASSETS> 0<F1>
<PP&E> 2,708,342
<DEPRECIATION> 1,101,396
<TOTAL-ASSETS> 2,031,089
<CURRENT-LIABILITIES> 0
<BONDS> 872,738
<COMMON> 106,689
0
0
<OTHER-SE> 404,383
<TOTAL-LIABILITY-AND-EQUITY> 2,031,089
<SALES> 53,950
<TOTAL-REVENUES> 171,471<F2>
<CGS> 46,310
<TOTAL-COSTS> 105,989
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 265
<INTEREST-EXPENSE> 21,117
<INCOME-PRETAX> 30,563
<INCOME-TAX> 11,499
<INCOME-CONTINUING> 19,064
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 19,064
<EPS-PRIMARY> 0<F3>
<EPS-DILUTED> 0
<FN>
<F1> The Company issues financial statements utilizing a non-classified balance
sheet.
<F2> The Company's revenues are derived primarily from railcar leasing.
<F3> The Company is a wholly-owned subsidiary.
</FN>
</TABLE>
