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 March 31, 1996
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 March 31, 1996
$1 par value; 371,716 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 [ ]
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CENTRAL COAL & COKE CORPORATION
Table of Contents
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements:
Consolidated Balance Sheets - March 31, 1996 and
December 31, 1995
Consolidated Statements of Earnings and Retained Earnings
- Three months ended March 31, 1996 and 1995
Consolidated Statements of Cash Flows - Three months
ended March 31, 1996 and 1995
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
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<TABLE>
PART I - FINANCIAL INFORMATION
ITEM 1. FINANCIAL STATEMENTS
CENTRAL COAL & COKE CORPORATION
Consolidated Balance Sheets
March 31, 1996 and December 31, 1995
(Unaudited)
(amounts in unit dollars)
<CAPTION>
ASSETS 1996 1995
_________ __________
<S> <C> <C>
Current assets:
Cash and cash equivalents $ 908,963 755,422
Accounts receivable 0 22,500
Securities maturing within one year,
at amortized cost (note 2):
U. S. government securities 8,399,850 8,337,926
Accrued interest receivable 18,881 38,724
Other 54,903 43,836
__________ ___________
Total current assets 9,382,597 9,198,408
Equity securities, at fair value (note 2) 538,705 576,749
Coal deposits, real estate, equipment
and leasehold improvements:
Coal deposits 1,602,882 1,602,882
Mineral rights 39,988 39,988
Surface land 29,306 29,320
Equipment and leasehold improvements 380,631 379,164
__________ __________
2,052,807 2,051,354
Less accumulated depletion and depreciation 660,941 644,965
Net coal deposits, real estate, __________ __________
equipment and leasehold improvements 1,391,866 1,406,389
__________ __________
$ 11,313,168 11,181,546
</TABLE>
<TABLE>
<CAPTION>
LIABILITIES AND STOCKHOLDERS' EQUITY
<S> <C> <C>
Current liabilities:
Deferred oil lease bonus $ 78,750 0
Accounts payable and accrued expenses 21,987 25,534
Dividend Payable 92,929 0
Federal and state income taxes 155,465 218,527
__________ __________
Total current liabilities 349,131 244,061
Deferred income taxes 41,218 38,138
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 8,992,885 8,910,623
__________ __________
11,000,773 10,918,511
Less cost of shares in treasury, 4,972 in
1996 and 2,858 in 1995 (138,539) (74,058)
Net unrealized appreciation of investments
available for sale, net of deferred taxes
of $32,623 and $29,559 at March 31, 1996
and December 31, 1995 60,585 54,894
__________ __________
Total stockholders' equity 10,922,819 10,899,347
__________ __________
$ 11,313,168 11,181,546
<FN>
See accompanying notes to consolidated financial statements.
</TABLE>
<PAGE>
<TABLE>
CENTRAL COAL & COKE CORPORATION
Consolidated Statements of Earnings and Retained Earnings
Three months ended March 31, 1996 and 1995
(Unaudited)
(amounts in unit dollars)
<CAPTION>
1996 1995
_________ __________
<S> <C> <C>
Operating revenue:
Coal royalties $ 1,969 3,754
Oil and gas royalties 187,745 100,032
Oil and other mineral lease rentals
and bonuses 69,735 193,502
Food sales 290,135 205,929
__________ __________
Total operating revenue 549,584 503,217
Operating expenses:
Cost of food sales 121,493 83,422
Food operations 184,444 107,594
General and administrative expenses 129,023 150,205
__________ __________
Total operating expenses 434,960 341,221
Operating income 114,624 161,996
Nonoperating income:
Investment income 152,755 142,181
Gain on sale of real estate 785 0
Other 43 2,580
__________ __________
Total nonoperating income 153,583 144,761
Earnings before income taxes 268,207 306,757
Income taxes 93,016 114,821
__________ __________
Net earnings 175,191 191,936
Retained earnings at beginning of period 8,910,623 8,771,546
Deduct cash dividends declared of $.25 per
share in 1996 and 1995 (92,929) (93,458)
__________ __________
Retained earnings at end of period $ 8,992,885 8,870,024
Earnings per share $ .47 .51
Weighted average number of shares of
common stock outstanding 372,936 373,830
<FN>
See accompanying notes to consolidated financial statements.
</TABLE>
<PAGE>
<TABLE>
CENTRAL COAL & COKE CORPORATION
Consolidated Statements of Cash Flows
Nine months ended March 31, 1996 and 1995
(Unaudited)
(amounts in unit dollars)
<CAPTION>
1996 1995
_________ __________
<S> <C> <C>
Cash flows from operating activities:
Net earnings $ 175,191 191,936
Adjustments to reconcile net earnings to
net cash provided by operating activities:
Depletion and depreciation 15,976 6,156
Amortization of premiums and
discounts of securities, net (96,692) (83,634)
Deferred income taxes 16 10,000
Gain on sale of real estate (785) 0
Gain on sale of equity securities (25,497) (5,457)
Changes in assets and liabilities:
Accounts receivable 22,500 22,500
Accrued interest receivable
and other assets 8,776 12,348
Deferred oil lease bonus 78,750 233,657
Accounts payable and accrued expenses (3,547) 784
Federal and state income taxes (63,062) 126,149
__________ __________
Total adjustments (63,565) 322,503
Net cash provided by operating activities 111,626 514,439
Cash flows from investing activities:
Capital Expenditures (1,467) 0
Proceeds from matured/called investment
debt securities 1,500,000 6,250,000
Purchases of investment debt securities (1,465,232) (5,797,438)
Proceeds from sale of real estate 799 0
Purchases of equity securities (115,203) (37,262)
Proceeds from sales of equity
securities 187,499 13,250
__________ __________
Net cash used in investing activities 106,396 428,550
Cash flows from financing activities - purchase
of treasury stock (64,481) 0
Net increase in cash and cash equivalents 153,541 942,989
Cash and cash equivalents,
beginning of period 755,422 1,558,952
Cash and cash equivalents,
end of period $ 908,963 2,531,941
<FN>
See accompanying notes to consolidated financial statements.
</TABLE>
<PAGE>
CENTRAL COAL & COKE CORPORATION
Notes to Consolidated Financial Statements
March 31, 1996
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 March 31, 1996,
and the results of operations and cash flows for the three months ended
March 31, 1996 and 1995.
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) Investment Securities:
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 March 31, 1996
and December 31, 1995 are as follows:
<TABLE>
<CAPTION>
Gross Gross
unrealized unrealized
Amortized holding holding Fair
March 31, 1996 cost gains losses value
__________________ __________ __________ __________ __________
<S> <C> <C> <C> <C>
Held-to-maturity:
U. S. government
securities $ 8,399,850 10,395 (744) 8,409,471
Available-for-sale:
Equity securities $ 445,497 114,221 (21,013) 538,705
</TABLE>
<TABLE>
<CAPTION>
December 31, 1995
_________________
<S> <C> <C> <C> <C>
Held-to-maturity:
U. S. government
securities $ 8,337,926 15,527 (742) 8,352,711
Available-for-sale:
Equity securities $ 492,296 111,891 (27,438) 576,749
</TABLE>
Note (3) Dividends:
During the quarter ended March 31, 1996 the Company's Board
of Directors declared a $.25 dividend per share which is payable
May 1, 1996.
<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 quarter of 1996 from the end of the last
fiscal year, and it continues very strong. The liquidity of the
Registrant continues to be high.
Revenue from oil and gas royalties increased almost 88% in the first
quarter of 1996 over the first quarter of 1995 due to increased
production and higher oil prices. Revenue from oil and other mineral
lease rentals and bonuses decreased approximately 64% in the first
quarter of 1996 over the first quarter of 1995. This was due to fewer
new leases being made, with three new leases being made during the first
quarter of 1995 which paid substantial bonuses, and only one new lease
made during the first quarter of 1996.
Revenue from food sales shows a substantial increase in the first
quarter of 1996 over the first quarter of 1995 (over 40% increase) which
results from the operation of Beekman's Deli Systems, Limited Liability
Company, a limited liability company in which the Registrant is a
majority member (Beekman's). During the first quarter of 1995, only two
fast food bagel and delicatessen facilities were in operation (Athens,
Ohio and Columbus, Ohio), but a third facility was opened in State
College, Pennsylvania in the third quarter of 1995, so that there were
three such facilities fully operational during the first quarter of
1996. A fourth facility is due to open in May 1996 in an area of San
Diego, California known as Pacific Beach.
Revenue from investment income was higher in the first quarter of 1996
over the first quarter of 1995 due to the overall rate of return on
investments being higher in the current period.
Included in operating expenses 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 increased amount of expenditures in
these categories in the first quarter of 1996 over the first quarter of
1995 is the same as explained above in connection with revenue from this
operation, that during the 1995 period there were only two facilities in
operation, while three facilities were in operation in the current
period. General and administrative expenses were down in the first
quarter of 1996 from the first quarter of 1995 due to decreased payments
to outside service providers. In 1995 these expenses were higher due to
professional expenses in connection with the successful resolution of
disputes with the Missouri Department of Revenue regarding state income
taxes for several years.
Income taxes were somewhat lower for the first quarter of 1996 over the
first quarter of 1995 as a result of decreased earnings before income
taxes.
There was positive net cash provided by operating activities in the
first quarter of 1996, but not as much in the first quarter of 1995.
The reason for this is that during the first quarter of 1996, the
Registrant received substantially less in certain deferred oil lease
bonuses and rentals which were deferred and recognized as income over
the related future periods for income purposes.
There were substantially less net proceeds from investment debt
securities in 1996 than in 1995 due to the timing of maturities.
The Board of Directors declared a dividend of $.25 per share payable on
May 1, 1996 to stockholders of record on April 15, 1996.
<PAGE>
2
Regarding capital commitments, in addition to the three currently
operational facilities of the fast food bagel and delicatessen business
currently being operated by Beekman's, a new facility is being opened in
San Diego, California as is mentioned above. It is estimated that the
capital commitment necessary to open this new facility will be
approximately $100,000. Other than this capital expenditure, the
Registrant has no specific commitment for material capital expenditures
at the present time. However, the Registrant continues to actively
review other business opportunities which will result in a more
productive deployment of its assets and ultimately increase earnings.
As reflected in the accompanying consolidated financial statements and
as is discussed above, aggressive pursuit of development of increased
royalty income from oil and gas properties has already resulted in
increased royalty revenue in 1996. 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: May 14, 1996
By: Gary J. Pennington
(Signature)
Gary J. Pennington,
Assistant Secretary-
General Manager, Principal
Financial and Accounting Officer
Date: May 14, 1996
By: Leonard L. Noah
(Signature)
Leonard L. Noah,
Vice President, Treasurer
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