Form 1O-Q
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Quarterly Report Under Section 13 or
15(d) of the
Securities Exchange Act of 1934
For the Quarter Ended September 30, 1995
Commission File No. 0-1392
Central Coal & Coke Corporation and Subsidiaries
Incorporated in State of Delaware IRS Number: 44-0195290
127 West 10th Street, Room 666
Kansas City, Missouri 64105
Phone: 816-842-2430
Common stock outstanding as of September 30, 1995
$1 par value; 373,830 shares
The Registrant (l) has filed all reports required to be filed by
Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding twelve months, and (2) has been subject to such
filing requirements for the past ninety days.
Yes [X] No [ ]
<PAGE>
CENTRAL COAL & COKE CORPORATION
Table of Contents
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements:
Consolidated Balance Sheets - September 30, 1995 and
December 31, 1994
Consolidated Statements of Earnings and Retained Earnings
-Nine and three months ended September 30, 1995 and 1994
Consolidated Statements of Cash Flows - Nine months
ended September 30, 1995 and 1994
Notes to Consolidated Financial Statements
Item 2. Management's Discussion and Analysis of Financial
Condition and Results of Operations
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
Item 2. Changes in Securities
Item 3. Defaults Upon Senior Securities
Item 4. Submission of Matters to a Vote of Security Holders
Item 5. Other Information
Item 6. Exhibits and Reports on Form 8-K
SIGNATURES
<PAGE>
<TABLE>
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
CENTRAL COAL & COKE CORPORATION
Consolidated Balance Sheets
September 30, 1995 and December 31, 1994
(Unaudited)
(amounts in unit dollars)
<CAPTION>
ASSETS 1995 1994
_________ __________
<S> <C> <C>
Current assets:
Cash and cash equivalents $ 1,098,699 1,588,952
Accounts receivable 0 22,500
Securities maturing within one year,
at amortized cost (note 3):
Municipal bonds 40,000 40,000
U. S. government securities 8,405,450 6,172,887
__________ __________
8,445,450 6,212,887
Accrued interest receivable 27,241 49,283
Other 53,143 34,131
__________ ___________
Total current assets 9,624,533 7,907,753
Securities maturing beyond one year,
at amortized cost (note 3):
U. S. government and government
agency securities 0 999,751
Equity securities, at fair value (note 3) 626,615 606,969
Coal deposits, real estate, equipment
and leasehold improvements:
Coal deposits 1,602,882 1,602,882
Mineral rights 39,988 39,988
Surface land 29,333 29,894
Equipment and leasehold improvements 365,838 144,327
__________ __________
2,038,041 1,817,091
Less accumulated depletion and depreciation 614,119 591,048
Net coal deposits, real estate, __________ __________
equipment and leasehold improvements 1,423,922 1,226,043
Deferred income taxes 0 1,164
__________ __________
$ 11,675,070 10,741,680
</TABLE>
<TABLE>
<CAPTION>
LIABILITIES AND STOCKHOLDERS' EQUITY
<S> <C> <C>
Current liabilities:
Deferred oil lease bonus $ 77,885 0
Accounts payable and accrued expenses 50,031 17,321
Federal and state income taxes 250,002 39,715
Dividend Payable 598,128 0
__________ __________
Total current liabilities 976,046 57,036
Deferred income taxes 52,801 0
Stockholders' equity:
Common stock of $1 par value; authorized
500,000 shares; issued 376,688 shares 376,688 376,688
Additional capital 1,631,200 1,631,200
Retained earnings 8,651,478 8,771,546
__________ __________
10,659,366 10,779,434
Less cost of 2,858 shares in treasury (74,058) (74,058)
Net unrealized appreciation (depreciation)
of investments available for sale, net of
deferred taxes of $32,801 and $(11,164) at
September 30, 1995 and December 31, 1994 60,915 (20,732)
__________ __________
Total stockholders' equity 10,646,223 10,684,644
__________ __________
$ 11,675,070 10,741,680
<FN>
See accompanying notes to consolidated financial statements.
</TABLE>
<PAGE>
<TABLE>
CENTRAL COAL & COKE CORPORATION
Consolidated Statements of Earnings and Retained Earnings
Nine months ended September 30, 1995 and 1994 and
Three months ended September 30, 1995 and 1994
(Unaudited)
(amounts in unit dollars)
<CAPTION>
Nine months Three months
ended September 30, ended September 30,
1995 1994 1995 1994
________ ________ ________ ________
<S> <C> <C> <C> <C>
Operating revenue:
Coal royalties $ 55,700 49,811 25,315 25,511
Oil and gas royalties 341,459 353,058 136,906 148,904
Oil and other lease
rentals and bonuses 359,835 101,063 88,372 3,501
Food sales 597,760 232,955 198,540 63,111
________ ________ ________ ________
Total operating revenue 1,354,754 736,887 449,133 241,027
Operating expenses:
Cost of food sales 243,586 143,080 80,855 38,936
Food operations 357,224 173,181 137,192 61,699
General and administrative
expenses 371,074 183,540 144,607 61,822
________ ________ ________ ________
Total operating expenses 971,884 499,801 362,654 162,427
Operating income 382,870 237,086 86,479 78,600
Nonoperating income:
Investment income 454,356 362,515 154,803 110,576
Gain on sale of real estate 55,682 32,925 53,888 0
Other 12,022 71 85 13
________ ________ ________ ________
Total nonoperating income 522,060 395,511 208,776 110,589
Earnings before income
taxes 904,930 632,597 295,255 189,189
Income taxes (note 2) 333,412 257,149 114,184 83,592
________ ________ ________ ________
Net earnings 571,518 375,448 181,071 105,597
Retained earnings at beginning
of period 8,771,546 8,675,962 9,068,535 8,758,898
Deduct cash dividends declared
of $1.85 per share in 1995 and
$.50 per share in 1994 (691,586) (186,915) (598,128) 0
________ ________ _________ _________
Retained earnings at end of
period $ 8,651,478 8,864,495 8,651,478 8,864,495
Earnings per share $ 1.53 1.00 .48 .28
Weighted average number of
shares of common stock
outstanding 373,830 373,830 373,830 373,830
<FN>
See accompanying notes to consolidated financial statements.
</TABLE>
<PAGE>
<TABLE>
CENTRAL COAL & COKE CORPORATION
Consolidated Statements of Cash Flows
Nine months ended September 30, 1995 and 1994
(Unaudited)
(amounts in unit dollars)
<CAPTION>
1995 1994
_________ __________
<S> <C> <C>
Cash flows from operating activities:
Net earnings $ 571,518 375,448
Adjustments to reconcile net earnings to
net cash provided by operating activities:
Depletion and depreciation 24,505 12,105
Amortization of premiums and
discounts of securities, net (302,005) (90,846)
Deferred income taxes 10,000 30,000
Gain on sale of real estate (55,682) (32,925)
Gain on sale of equity securities (26,307) (27,253)
Changes in assets and liabilities:
Accounts receivable 22,500 22,508
Accrued interest receivable
and other assets 1,596 (13,689)
Deferred oil lease bonus 77,885 0
Accounts payable and accrued expenses 32,710 23,701
Federal and state income taxes 210,287 (60,032)
__________ __________
Total adjustments (4,511) (136,431)
Net cash provided by operating activities 567,007 239,017
Cash flows from investing activities:
Additions to equipment (221,511) (53,083)
Proceeds from matured/called investment
debt securities 13,250,000 8,250,000
Purchases of investment debt securities (14,180,807) (7,840,322)
Proceeds from sale of real estate 56,243 33,500
Purchases of equity securities (51,546) (589,353)
Proceeds from sales of equity
securities 183,819 192,886
__________ __________
Net cash used in investing activities (963,802) (6,372)
Cash flows from financing activities:
Dividends paid (93,458) (186,915)
Net cash used by financing activities (93,458) (186,915)
Net increase (decrease) in cash
and cash equivalents (490,253) 45,730
Cash and cash equivalents,
beginning of period 1,588,952 1,729,515
Cash and cash equivalents,
end of period $ 1,098,699 1,775,245
<FN>
See accompanying notes to consolidated financial statements.
</TABLE>
<PAGE>
CENTRAL COAL & COKE CORPORATION
Notes to Consolidated Financial Statements
September 30, 1995
Note (1) Basis of Presentation:
In the opinion of the Central Coal & Coke Corporation (the
Company), the accompanying unaudited consolidated financial statements
contain all adjustments (consisting of only normal recurring accruals)
necessary to present fairly the financial position as of September 30, 1995,
and the results of operations and cash flows for the periods ended
September 30, 1995 and 1994.
Oil Lease Bonuses
Oil lease bonuses which relate to future periods are deferred and
recognized as income over the related future periods (generally one
year).
Note (2) Income Taxes:
The Company's Missouri corporation income tax returns for the years
1985, 1986, 1987, 1989, 1990 and 1991 were examined by the Missouri
Department of Revenue, and additional taxes and interest thereon were
assessed. The Company made certain payments under protest in 1993 and
1994 in connection with the examination adjustments.
On February 3, 1995, the Company entered into a settlement
agreement with the Missouri Director of Revenue which settled all issues
relating to the examinations. The Company had adequately provided for
its tax obligations with respect to this matter.
Note (3) Securities, Common Stocks and Options:
The Company adopted the provisions of Statement of Financial
Accounting Standards No. 115, "Accounting for Certain Investments in
Debt and Equity Securities" (Statement 115) on January 1, 1994. This
statement requires that investments in debt and certain equity
securities be classified in one of three categories: (1)held-to-
maturity securities, which are carried at amortized cost; (2)trading
securities, which are carried at fair market value, with unrealized
gains and losses included in earnings; and (3)available-for-sale
securities, which are carried at fair value, with unrealized gains and
losses excluded from earnings and reported in a separate component of
stockholders' equity, net of related income taxes. The effect on the
Company's consolidated financial statements at January 1, 1994 of
initially adopting Statement 115 was immaterial.
(Continued)
<PAGE>
2
CENTRAL COAL & COKE CORPORATION
Notes to Consolidated Financial Statements
The amortized cost, gross unrealized holding gains, gross
unrealized holding losses and fair value for held-to-maturity and
available-for-sale securities by major security type at September 30, 1995
and December 31, 1994 are as follows:
<TABLE>
<CAPTION>
Gross Gross
unrealized unrealized
Amortized holding holding Fair
September 30, 1995 cost gains losses value
__________________ __________ __________ __________ __________
<S> <C> <C> <C> <C>
Held-to-maturity:
U. S. government
securities $ 8,405,450 18,213 (3,699) 8,419,964
Municipal bonds 40,000 0 0 40,000
__________ __________ __________ __________
$ 8,445,450 18,213 (3,699) 8,459,964
Available-for-sale:
Equity securities $ 532,899 118,287 (24,571) 626,615
</TABLE>
<TABLE>
<CAPTION>
December 31, 1994
_________________
<S> <C> <C> <C> <C>
Held-to-maturity:
U. S. government
securities $ 7,172,638 3,309 (900) 7,175,047
Municipal bonds 40,000 400 0 40,400
__________ __________ __________ __________
$ 7,212,638 3,709 (900) 7,215,447
Available-for-sale:
Equity securities $ 638,865 21,526 (53,422) 606,969
</TABLE>
Note (4) Dividends:
During the quarter ended September 30, 1995 the Company's Board
of Directors declared a $1.60 dividend per share which is payable
November 1, 1995.
<PAGE>
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
There was no significant change in the financial condition of the
Registrant during the first nine months of 1995 from the end of the
last fiscal year, and it continues very strong. The liquidity of
the Registrant continues to be high.
Revenue from coal royalties was up slightly in the first nine months
of 1995 over the first nine months of 1994 due to an increase
in production. Revenue from oil and gas royalties was down
somewhat in the first nine months of 1995 from the first nine
months of 1994 and also down in the third quarter of 1995 from the
third quarter of 1994. The decreases in both periods were due to
lower gas prices and slightly lower production. Revenue from oil
and other lease rentals and bonuses was up substantially in the
first nine months of 1995 over the first nine months of 1994 due
primarily to three new leases entered into in the first quarter
of 1995 generating substantial bonus income in that quarter,
including one fairly sizable lease on a portion of the
Registrant's Texas property. Also included in revenue from this
source during the first nine months of 1995 was a substantial
rental payment received in the first quarter of 1995 for a
lease extension entered into with respect to certain of the
Registrant's property in Vernon Parish, Louisiana. Revenue from
this source was up substantially in the third quarter of 1995
over the third quarter of 1994 due to a bonus payment on a
lease extension entered into during the quarter and also receipt of
a quarterly installment of a bonus payment on the Texas lease
referred to above.
Revenue from food sales increased substantially in the first nine
months of 1995 over the first nine months of 1994 and also in the third
quarter of 1995 over the third quarter of 1994. These increases
resulted from the operation of Beekman's Deli Systems, Limited
Liability Company, a limited liability company in which the
Registrant is a majority member (hereinafter "Beekman's") which
is the successor by statutory merger to a wholly-owned subsidiary
of the Registrant which carried on this business activity in 1994.
Only one fast food bagel and delicatessen facility was in operation
in early 1994 (that being the one in Athens, Ohio), with a second
facility (located in Columbus, Ohio) being opened in the third
quarter of 1994, and a third facility (that being located in State
College, Pennsylvania) opening in the third quarter of 1995. The
increased number of facilities in operation primarily accounts for
the increased revenue in the current periods, from the earlier
periods under comparison, with a slight increase in sales volume
of existing facilities.
Revenue from investment income was higher in the first nine months
of 1995 over the first nine months of 1994, and in the third quarter
of 1995 compared to the third quarter of 1994 due to the overall
rate of return on investments being higher in the current periods
and a somewhat greater amount of funds being invested in the current
periods than in the earlier periods under comparison. There was
significantly more income from gain on sale of real estate during
the first nine months of 1995 over the first nine months of 1994 and
also in the third quarter of 1995 over the third quarter of 1994
due to more gain on occasional nonrecurring sales of real estate in
the current periods. Other revenue was significantly higher
in the first nine months of 1995 over the first nine months of
1994 due to revenue from a timber sale in the second
quarter of 1995.
Included in operating expenses for the first nine months of 1995 and
the first nine months of 1994 are cost of food sales and food
operations. Both occur in connection with the fast food bagel and
delicatessen business now being conducted by Beekman's as discussed
above. The primary reason for the substantially increased amount
of expenditures in these categories in the first nine months of
1995 over the first nine months of 1994, and the third quarter of
1995 over the third quarter of 1994 is the same as explained above
in connection with revenue from this operation, that during the
1994 periods there was only one facility in operation while two
facilities were in operation during all of 1995, and a third
facility was opened in the third quarter of 1995. Also
contributing to the increased operating expenses in the current
periods were increased payments to outside service providers in
connection with the bagel and delicatessen business.
<PAGE>
2
Income taxes were materially higher for the first nine months of 1995
over the first nine months of 1994 as a result of increased earnings
before income taxes.
The Registrant adopted the provisions of Statement of Financial
Accounting Standards No. 115, "Accounting for Certain Investments in
Debt and Equity Securities" (Statement 115) on January 1, 1994. The
effect on the Registrant's consolidated financial statements at
January 1, 1994 of initially adopting Statement 115 was immaterial.
See note 3 to the accompanying consolidated financial statements for
a more detailed explanation of this accounting change.
Net cash provided by operating activities was up substantially in
the first nine months of 1995 over the first nine months of 1994. A
contributing factor to this increase was the receipt of certain
deferred oil lease bonuses and rentals in the first quarter of 1995
but which were deferred and recognized as income over the related
future periods for income purposes.
The Board of Directors declared an extraordinary dividend of
$1.60 per share payable on November 1, 1995 to stockholders
of on record October 16, 1995.
Concerning capital commitments, as reported last quarter, in
addition to the two locations of the fast food bagel and
delicatessen business then being operated by Beekman's,
negotiations were concluded during the second quarter of 1995
for a third facility located in State College, Pennsylvania
and that facility commenced operations during the third quarter
of 1995. The capital commitment of the Registrant in connection
with the first two facilities was approximately $220,000
in aggregate through the end of 1994. The aggregate capital
commitment in connection with the facility at State
College, Pennsylvania will total approximately $200,000. Other
than these capital expenditures, the Registrant has no
specific commitments for material capital expenditures at the
present time. Expansion in the number of facilities of the fast
food bagel and delicatessen business are planned, but specific
locations have not as yet been determined. In addition to
the expansion of the fast food bagel and delicatessen business,
the Registrant continues to actively review other business
opportunities which would result in a more productive deployment
of its assets and ultimately increase earnings. As reflected
in the accompanying financial statements and discussed
above, aggressive pursuit of the development of increased royalty
and rental and bonus income from oil and gas properties has already
resulted in increased revenue in 1995. Management plans to continue
to aggressively pursue development of such income from its real
property and mineral interests.
<PAGE>
PART II - OTHER INFORMATION
Item 1. Legal Proceedings - None
Item 2. Changes in Securities - None
Item 3. Defaults Upon Senior Securities - None
Item 4. Submission of Matters to a Vote of Security Holders - None
Item 5. Other Information - None
Item 6. Exhibits and Reports on Form 8-K - None
<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.
CENTRAL COAL & COKE CORPORATION
(Registrant)
Date: November 15, 1995
By: Gary J. Pennington
(Signature)
Gary J. Pennington,
Assistant Secretary-
General Manager, Principal
Financial and Accounting Officer
Date: November 15, 1995
By: Leonard L. Noah
(Signature)
Leonard L. Noah,
Vice President, Treasurer
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-START> JAN-01-1995
<PERIOD-END> Sep-30-1995
<CASH> 1098699
<SECURITIES> 8445450
<RECEIVABLES> 0
<ALLOWANCES> 0
<INVENTORY> 0
<CURRENT-ASSETS> 9624533
<PP&E> 2038041
<DEPRECIATION> 614119
<TOTAL-ASSETS> 11675070
<CURRENT-LIABILITIES> 976046
<BONDS> 0
<COMMON> 376688
0
0
<OTHER-SE> 10269535
<TOTAL-LIABILITY-AND-EQUITY> 11675070
<SALES> 597760
<TOTAL-REVENUES> 1354754
<CGS> 243586
<TOTAL-COSTS> 971884
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 0
<INCOME-PRETAX> 904930
<INCOME-TAX> 333412
<INCOME-CONTINUING> 571518
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 571518
<EPS-PRIMARY> 1.53
<EPS-DILUTED> 1.53
</TABLE>
