<PAGE> COVER
FORM 10-Q
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549-1004
(Mark One)
[ X ] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended September 30, 1994
OR
[ ] TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from________________________ to _____________________
Commission file number 1-7817
MISSOURI PACIFIC RAILROAD COMPANY
(Exact name of Registrant as specified in its charter)
DELAWARE 43-1118635
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1416 DODGE STREET, OMAHA, NEBRASKA
(Address of principal executive offices)
68179
(Zip Code)
(402) 271-5000
(Registrant's telephone number, including area code)
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
------- -------
As of October 31, 1994, the Registrant had outstanding 920
shares of its Common Stock, $1 par value, and 80 shares of its Class A
Stock, $1 par value.
THE REGISTRANT MEETS THE CONDITIONS SET FORTH IN GENERAL
INSTRUCTIONS H(1)(a) AND (b) OF FORM 10-Q AND IS THEREFORE FILING THIS FORM
WITH THE REDUCED DISCLOSURE FORMAT.
<PAGE>
MISSOURI PACIFIC RAILROAD COMPANY
INDEX
PART I. FINANCIAL INFORMATION
------------------------------
Page Number
-----------
ITEM 1: CONDENSED CONSOLIDATED FINANCIAL STATEMENTS:
CONDENSED STATEMENT OF CONSOLIDATED FINANCIAL POSITION -
At September 30, 1994 and December 31, 1993. . . . . . 1 - 2
CONDENSED STATEMENT OF CONSOLIDATED INCOME AND
RETAINED EARNINGS - For the Three Months and Nine Months
Ended September 30, 1994 and 1993. . . . . . . . . . . 3
CONDENSED STATEMENT OF CONSOLIDATED CASH FLOWS - For
the Nine Months Ended September 30, 1994 and 1993. . . 4
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS . . 5
MANAGEMENT'S NARRATIVE ANALYSIS OF THE RESULTS OF
OPERATIONS . . . . . . . . . . . . . . . . . . . . . . 6
PART II. OTHER INFORMATION
---------------------------
ITEM 6: EXHIBITS AND REPORTS ON FORM 8-K . . . . . . . . . . . . 7
SIGNATURES . . . . . . . . . . . . . . . . . . . . . . . . . . . 8
<PAGE> 1
PART I - FINANCIAL INFORMATION
- ------------------------------
ITEM 1. CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
<TABLE>
<CAPTION>
MISSOURI PACIFIC RAILROAD COMPANY AND SUBSIDIARY COMPANIES
CONDENSED STATEMENT OF CONSOLIDATED FINANCIAL POSITION
------------------------------------------------------
(Thousands of Dollars)
(Unaudited)
September 30, December 31,
ASSETS 1994 1993
- ------ ------------- ------------
<S> <C> <C>
Current Assets:
Cash and temporary investments . . . . . . . . . . . $ 7,106 $ 7,131
Accounts receivable - net. . . . . . . . . . . . . . 91,381 84,425
Materials and supplies . . . . . . . . . . . . . . . 98,798 83,563
Deferred income taxes. . . . . . . . . . . . . . . . 63,823 63,823
Other current assets . . . . . . . . . . . . . . . . 74,707 72,293
----------- -----------
Total Current Assets . . . . . . . . . . . . . . . 335,815 311,235
----------- -----------
Investments:
Investments in and advances to
affiliated companies . . . . . . . . . . . . . . . 50,804 42,588
Other investments. . . . . . . . . . . . . . . . . . 12,242 12,743
----------- -----------
Total Investments. . . . . . . . . . . . . . . . . 63,046 55,331
----------- -----------
Properties:
Road . . . . . . . . . . . . . . . . . . . . . . . 4,173,772 4,021,672
Equipment. . . . . . . . . . . . . . . . . . . . . . 1,762,636 1,760,363
Other . . . . . . . . . . . . . . . . . . . . . . 73,407 76,050
----------- -----------
Total Properties . . . . . . . . . . . . . . . . . 6,009,815 5,858,085
Accumulated depreciation and
amortization . . . . . . . . . . . . . . . . . . (1,826,039) (1,752,358)
----------- -----------
Properties - Net . . . . . . . . . . . . . . . . . 4,183,776 4,105,727
----------- -----------
Intangible and Other Assets. . . . . . . . . . . . . . 70,136 82,787
----------- -----------
Total Assets . . . . . . . . . . . . . . . . . . . . $4,652,773 $4,555,080
=========== ===========
</TABLE>
<PAGE> 2
<TABLE>
<CAPTION>
MISSOURI PACIFIC RAILROAD COMPANY AND SUBSIDIARY COMPANIES
CONDENSED STATEMENT OF CONSOLIDATED FINANCIAL POSITION
------------------------------------------------------
(Thousands of Dollars, Except Share and Per Share Amounts)
(Unaudited)
September 30, December 31,
LIABILITIES AND STOCKHOLDER'S EQUITY 1994 1993
- ------------------------------------ ------------- ------------
<S> <C> <C>
Current Liabilities:
Accounts payable . . . . . . . . . . . . . . . . . . $ 18,846 $ 26,266
Accrued wages and vacation . . . . . . . . . . . . . 129,914 125,974
Income and other taxes payable . . . . . . . . . . . 134,896 86,541
Interest payable . . . . . . . . . . . . . . . . . . 12,314 17,525
Restructuring reserve . . . . . . . . . . . . . . . 67,000 67,000
Debt due within one year . . . . . . . . . . . . . . 40,851 53,253
Due to affiliated companies - net. . . . . . . . . . 808,000 796,523
Casualty and other reserves. . . . . . . . . . . . . 108,571 109,769
Other current liabilities. . . . . . . . . . . . . . 110,484 93,669
------------ -----------
Total Current Liabilities. . . . . . . . . . . . . 1,430,876 1,376,520
------------ -----------
Debt Due After One Year. . . . . . . . . . . . . . . . 398,468 433,438
------------ -----------
Deferred Income Taxes . . . . . . . . . . . . . . . . 1,212,507 1,209,390
------------ ------------
Retiree Benefits Obligation . . . . . . . . . . . . . 161,627 160,564
------------ ------------
Restructuring Reserve. . . . . . . . . . . . . . . . . 3,958 44,432
------------ ------------
Other Liabilities (Note 4) . . . . . . . . . . . . . . 173,912 183,830
------------ ------------
Stockholder's Equity:
Common stock - $1.00 par value; 920
shares authorized and outstanding in
1994 and 1993. . . . . . . . . . . . . . . . . . . 1 1
Class A stock - $1.00 par value; 80
shares authorized and outstanding. . . . . . . . . -- --
Capital surplus. . . . . . . . . . . . . . . . . . . 205,342 205,342
Retained earnings. . . . . . . . . . . . . . . . . . 1,066,082 941,563
------------ ------------
Total Stockholder's Equity . . . . . . . 1,271,425 1,146,906
------------ ------------
Total Liabilities and
Stockholder's Equity . . . . . . . . $4,652,773 $4,555,080
============ ============
</TABLE>
<PAGE> 3
<TABLE>
<CAPTION>
MISSOURI PACIFIC RAILROAD COMPANY AND SUBSIDIARY COMPANIES
CONDENSED STATEMENT OF CONSOLIDATED INCOME AND RETAINED EARNINGS
For The Three Months and Nine Months Ended September 30, 1994 and 1993
----------------------------------------------------------------------
(Thousands of Dollars)
(Unaudited)
Three Months Ended Nine Months Ended
September 30, September 30,
1994 1993 1994 1993
------------------------ -----------------------
<S> <C> <C> <C> <C>
Operating Revenues . . . . . . . . . . . . . . $ 583,197 $ 529,843 $1,740,083 $1,598,964
---------- ----------- ---------- ----------
Operating Expenses:
Salaries, wages and employee benefits. . . . 198,657 199,520 590,904 589,649
Equipment and other rents. . . . . . . . . . 63,971 55,103 202,315 160,171
Depreciation and amortization. . . . . . . . 54,201 51,925 160,808 154,558
Fuel and utilities (Note 3). . . . . . . . . 37,412 36,405 115,614 112,165
Materials and supplies . . . . . . . . . . . 26,910 31,862 94,343 94,827
Other costs. . . . . . . . . . . . . . . . . 68,344 56,080 216,196 189,227
---------- ----------- ---------- ----------
Total. . . . . . . . . . . . . . . . . . . 449,495 430,895 1,380,180 1,300,597
---------- ----------- ---------- ----------
Operating Income . . . . . . . . . . . . . . . 133,702 98,948 359,903 298,367
Other Income - Net . . . . . . . . . . . . . . 4,080 9,357 22,105 22,633
Interest Expense . (23,887) (25,015) (72,996) (77,268)
---------- ----------- ---------- ----------
Income Before Income Taxes and the
Cumulative Effect of Accounting Changes. . . 113,895 83,290 309,012 243,732
Income Taxes . . . . . . . . . . . . . . . . . (42,229) (56,324) (113,993) (114,475)
---------- ----------- ---------- ----------
Income Before Cumulative Effect of Changes
in Accounting Principles . . . . . . . . . . 71,666 26,966 195,019 129,257
Cumulative Effect to January 1, 1993 of
Changes in Accounting Principles (Note 2). . -- -- -- (125,168)
---------- ----------- ---------- ----------
Net Income . . . . . . . . . . . . . . . . $ 71,666 $ 26,966 $ 195,019 $ 4,089
========== =========== ========== ==========
Retained Earnings:
Beginning of period. . . . . . . . . . . . . $1,017,916 $ 889,919 $ 941,563 $ 957,796
Net Income . . . . . . . . . . . . . . . . . 71,666 26,966 195,019 4,089
Dividends to parent. . . . . . . . . . . . . (23,500) (22,500) (70,500) (67,500)
----------- ----------- ---------- ----------
End of Period. . . . . . . . . . . . . . . . $1,066,082 $ 894,385 $1,066,082 $ 894,385
========== =========== ========== ===========
</TABLE>
<PAGE> 4
<TABLE>
<CAPTION>
MISSOURI PACIFIC RAILROAD COMPANY AND SUBSIDIARY COMPANIES
CONDENSED STATEMENT OF CONSOLIDATED CASH FLOWS
For the Nine Months Ended September 30, 1994 and 1993
----------------------------------------------------------
(Thousands of Dollars)
(Unaudited)
1994 1993
-------------- --------------
<S> <C> <C>
Cash Flows from Operating Activities:
Net Income (Loss). . . . . . . . . . . . . . . . . . . . $ 195,019 $ 4,089
Non-Cash Charges to Income:
Depreciation and amortization. . . . . . . . . . . . . 160,808 154,558
Deferred income taxes. . . . . . . . . . . . . . . . . 2,432 42,934
Cumulative effect of changes in
accounting principles (Note 2) . . . . . . . . . . . -- 125,168
Other - Net. . . . . . . . . . . . . . . . . . . . . . 8,642 43,640
Changes in Current Assets and Liabilities. . . . . . . 18,274 (50,557)
Cash Used for Special Charge . . . . . . . . . . . . . (40,474) (66,487)
-------------- --------------
Cash from Operations. . . . . . . . . . . . . . . . . 344,701 253,345
-------------- --------------
Investing Activities:
Capital Investments. . . . . . . . . . . . . . . . . . . (218,681) (215,071)
Other - Net . . . . . . . . . . . . . . . . . . . . . . (19,013) (16,815)
-------------- --------------
Cash Used in Investing Activities. . . . . . . . . . . . . (237,694) (231,886)
-------------- --------------
Financing Activities:
Debt Repaid . . . . . . . . . . . . . . . . . . . . . . (48,009) (93,986)
Dividends to Parent. . . . . . . . . . . . . . . . . . . (70,500) (67,500)
Advances from (to) Affiliated
Companies - Net . . . . . . . . . . . . . . . . . . . 11,477 143,837
-------------- --------------
Cash Generated (Used) in
Financing Activities . . . . . . . . . . . . . . . . (107,032) (17,649)
--------------- --------------
Net Change in Cash and Temporary
Investments. . . . . . . . . . . . . . . . . . . . . $ (25) $ 3,810
=============== ==============
</TABLE>
<PAGE> 5
MISSOURI PACIFIC RAILROAD COMPANY AND SUBSIDIARY COMPANIES
NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS
----------------------------------------------------
(Unaudited)
1. RESPONSIBILITIES FOR FINANCIAL STATEMENTS - The condensed consolidated
financial statements of the Registrant, a wholly-owned indirect subsidiary
of Union Pacific Corporation (the "Corporation"), are unaudited and reflect
all adjustments (consisting only of normal and recurring adjustments) that
are, in the opinion of management, necessary for a fair presentation of
the financial position and operating results for the interim periods.
The Condensed Statement of Consolidated Financial Position at
December 31, 1993 is derived from audited financial statements. The
condensed consolidated financial statements should be read in conjunction
with the consolidated financial statements and notes thereto contained in
the Registrant's Annual Report on Form 10-K for the year ended
December 31, 1993. The results of operations for the three and nine months
ended September 30, 1994 are not necessarily indicative of the results for
the year ending December 31, 1994.
2. ACCOUNTING CHANGES - In January 1993, the Registrant adopted the Financial
Accounting Standards Board's pronouncements covering the recognition of
postretirement benefits other than pensions and accounting for income
taxes, as well as a pro-rata method of recognizing transportation revenues
and expenses. The cumulative effect of adopting these accounting
changes was a one-time, after-tax charge to earnings of $125 million.
Prior years' financial statements were not restated.
3. PRICE RISK MANAGEMENT - The Registrant utilizes swap agreements as hedges
to manage variability of diesel fuel costs. Gains and losses on these
contracts are recognized upon delivery of the commodity. The Registrant
has purchased fixed price contracts to hedge approximately 30 percent of
its remaining 1994 diesel fuel consumption at $0.44 per gallon. Credit
risk related to these activities is minimal.
4. CONTINGENCIES - There are various lawsuits pending against the Registrant
and certain of its subsidiaries. The Registrant is also subject to
Federal, state and local environmental laws and regulations and is currently
participating in the investigation and remediation of numerous sites.
Where the remediation costs can be reasonably determined, and where such
remediation is probable, the Registrant has recorded a liability. The
Registrant does not expect that the lawsuits or environmental costs
will have a material adverse effect on its consolidated financial
position or its results of operations.
<PAGE> 6
MISSOURI PACIFIC RAILROAD COMPANY AND SUBSIDIARY COMPANIES
MANAGEMENT'S NARRATIVE ANALYSIS OF THE RESULTS OF OPERATIONS
Nine Months Ended September 30, 1994 Compared to September 30, 1993
-------------------------------------------------------------------
Operating Revenues
- ------------------
Operating revenues grew $141 million (9%) to $1.74 billion, primarily
reflecting an 11% gain in carloadings. Commodity groups showing
year-over-year carloadings improvement included energy (23%), automotive (19%),
intermodal (25%), chemicals (6%), and food/consumer/government (4%).
Metals, minerals and forest traffic declined 1%, while grain volumes declined
4%. Higher volumes were partially offset by a 2% decline in average revenue per
per car.
Operating Expenses
- ------------------
Operating expenses totaled $1.38 billion, $80 million (6%) higher than a
year ago. Growing volumes accounted for an increase of $42 million in
equipment rents. Personal injury expense rose $22 million, as continuing
declines in the number of injuries were more than offset by higher settlement
costs. Fuel costs increased $3 million, the result of an 11% increase in
gross ton-miles, which was partially offset by a 6% decrease in fuel price.
Salaries, wages and employee benefits increased $1 million, as higher
volumes and benefits inflation were largely offset by continued improvements
in labor productivity. Depreciation expense increased $6 million because
of continued investment in equipment and capacity.
Operating Income
- ----------------
Operating income increased $62 million (21%) to $360 million, as a result of
the volume improvements.
Other Changes
- -------------
Interest expense decreased $4 million as a result of lower interest on
equipment trust obligations.
<PAGE> 7
PART II. OTHER INFORMATION
- ---------------------------
Item 6. EXHIBITS AND REPORTS ON FORM 8-K
--------------------------------
(a) Exhibits
--------
27 - Financial Data Schedule.
(b) Reports on Form 8-K
-------------------
No reports on Form 8-K were filed during the quarter ended
September 30, 1994.
<PAGE> 8
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized, on this 14th day of November, 1994.
MISSOURI PACIFIC RAILROAD COMPANY
By /s/ C. E. Billingsley
-----------------------------------
C. E. Billingsley,
Chief Accounting Officer
By /s/ D. C. Lewis
-----------------------------------
D. C. Lewis,
Assistant Vice President - Finance
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1994
<PERIOD-END> SEP-30-1994
<CASH> 7,106
<SECURITIES> 0
<RECEIVABLES> 91,381
<ALLOWANCES> 0
<INVENTORY> 98,798
<CURRENT-ASSETS> 335,815
<PP&E> 6,009,815
<DEPRECIATION> 1,826,039
<TOTAL-ASSETS> 4,652,773
<CURRENT-LIABILITIES> 1,430,876
<BONDS> 398,468
<COMMON> 1
0
0
<OTHER-SE> 1,271,424
<TOTAL-LIABILITY-AND-EQUITY> 4,652,773
<SALES> 0
<TOTAL-REVENUES> 1,740,083
<CGS> 0
<TOTAL-COSTS> 1,380,180
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 72,996
<INCOME-PRETAX> 309,012
<INCOME-TAX> 113,993
<INCOME-CONTINUING> 195,019
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 195,019
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
