<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, 1995
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
---- ----
On October 31, 1995, 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> INDEX
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, 1995 and December 31, 1994. . . . . . . 1 - 2
CONDENSED STATEMENT OF CONSOLIDATED INCOME AND
RETAINED EARNINGS - For the Three Months and Nine Months Ended
September 30, 1995 and 1994. . . . . . . . . . . . . . . 3
CONDENSED STATEMENT OF CONSOLIDATED CASH FLOWS - For
the Nine Months Ended September 30, 1995 and 1994 . . . 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 1995 1994
- ------ ----------- -----------
<S> <C> <C>
Current Assets:
Cash and temporary investments . . . . . . $ 6,830 $ 7,640
Accounts receivable - net. . . . . . . . . 77,211 75,678
Inventories . . . . . . . . . . . . . . . 100,901 102,936
Deferred income taxes. . . . . . . . . . . 68,529 68,529
Other current assets . . . . . . . . . . . 28,396 75,555
----------- -----------
Total Current Assets. . . . . . . . . . 281,867 330,338
----------- -----------
Investments:
Investments in and advances to
affiliated companies. . . . . . . . . . 64,082 49,158
Other investments. . . . . . . . . . . . . 43,530 13,020
----------- -----------
Total Investments . . . . . . . . . . . 107,612 62,178
----------- -----------
Properties:
Road . . . . . . . . . . . . . . . . . . . 4,374,820 4,220,652
Equipment. . . . . . . . . . . . . . . . . 1,711,926 1,717,873
Other . . . . . . . . . . . . . . . . . . 68,981 73,416
----------- -----------
Total Properties. . . . . . . . . . . . 6,155,727 6,011,941
Accumulated depreciation and
amortization . . . . . . . . . . . (1,887,720) (1,808,772)
----------- -----------
Properties - Net. . . . . . . . . . . . 4,268,007 4,203,169
----------- -----------
Intangible and Other Assets. . . . . . . . . 63,582 76,069
----------- -----------
Total Assets . . . . . . . . . . . . . . . $ 4,721,068 $ 4,671,754
=========== ===========
</TABLE>
<PAGE> 2
<TABLE>
<CAPTION>
MISSOURI PACIFIC RAILROAD COMPANY AND SUBSIDIARY COMPANIES
CONDENSED STATEMENT OF CONSOLIDATED FINANCIAL POSITION
----------------------------------------------------------
(Thousands of Dollars, Except Per Share Amounts)
(Unaudited)
September 30, December 31,
LIABILITIES AND STOCKHOLDER'S EQUITY 1995 1994
- ------------------------------------ ------------ ------------
<S> <C> <C>
Current Liabilities:
Accounts payable . . . . . . . . . . . . . $ 27,657 $ 26,220
Accrued wages and vacation . . . . . . . . 115,669 107,580
Income and other taxes payable . . . . . . 104,419 91,206
Interest payable . . . . . . . . . . . . . 12,427 14,012
Debt due within one year . . . . . . . . . 27,639 38,664
Due to affiliated companies - net. . . . . 797,964 816,795
Casualty and other reserves. . . . . . . . 114,259 118,029
Other current liabilities. . . . . . . . . 111,304 173,086
------------ ------------
Total Current Liabilities . . . . . . . 1,311,338 1,385,592
------------ ------------
Debt Due After One Year. . . . . . . . . . . 369,147 389,429
------------ ------------
Deferred Income Taxes . . . . . . . . . . . 1,248,514 1,250,141
------------ ------------
Retiree Benefits Obligation . . . . . . . . 163,677 161,198
------------ ------------
Other Liabilities. . . . . . . . . . . . . . 200,483 184,964
------------ ------------
Stockholder's Equity:
Common stock - $1.00 par value; 920
shares authorized and outstanding in
1995 and 1994 . . . . . . . . . . . . . 1 1
Class A stock - $1.00 par value; 80
shares authorized and outstanding . . . -- --
Capital surplus. . . . . . . . . . . . . . 205,342 205,342
Retained earnings. . . . . . . . . . . . . 1,222,566 1,095,087
------------ -------------
Total Stockholder's Equity. . . . . . . 1,427,909 1,300,430
------------ -------------
Total Liabilities and
Stockholder's Equity. . . . . . . . . $ 4,721,068 $ 4,671,754
============ =============
</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, 1995 and 1994
----------------------------------------------------------------------
(Thousands of Dollars)
(Unaudited)
Three Months Ended Nine Months Ended
September 30, September 30,
1995 1994 1995 1994
------------------------ -------------------------
<S> <C> <C> <C> <C>
Operating Revenues . . . . . . . . . . . . . . . $ 585,846 $ 583,197 $1,763,542 $1,740,083
---------- ---------- ---------- ----------
Operating Expenses:
Salaries, wages and employee benefits. . . . . 182,655 198,657 579,772 590,904
Equipment and other rents. . . . . . . . . . . 75,963 63,971 204,315 202,315
Depreciation and amortization. . . . . . . . . 55,321 54,201 165,005 160,808
Fuel and utilities (Note 2). . . . . . . . . . 39,855 37,412 121,356 115,614
Materials and supplies . . . . . . . . . . . . 30,450 26,910 94,445 94,343
Other costs. . . . . . . . . . . . . . . . . . 82,159 68,344 230,357 216,196
---------- ---------- ---------- ----------
Total . . . . . . . . . . . . . . . . . . . 466,403 449,495 1,395,250 1,380,180
---------- ---------- ---------- ----------
Operating Income . . . . . . . . . . . . . . . . 119,443 133,702 368,292 359,903
Other Income - Net . . . . . . . . . . . . . . . 15,912 4,080 42,774 22,105
Interest Expense . . . . . . . . . . . . . . . . (22,537) (23,887) (67,024) (72,996)
---------- ---------- ---------- ----------
Income Before Income Taxes . . . . . . . . . . . 112,818 113,895 344,042 309,012
Income Taxes . . . . . . . . . . . . . . . . . . (41,544) (42,229) (127,013) (113,993)
---------- ---------- ---------- ----------
Net Income . . . . . . . . . . . . . . . . $ 71,274 $ 71,666 $ 217,029 $ 195,019
========== ========== ========== ==========
Retained Earnings:
Beginning of period. . . . . . . . . . . . . . $1,181,142 $1,017,916 $1,095,087 $ 941,563
Net income . . . . . . . . . . . . . . . . . . 71,274 71,666 217,029 195,019
Dividends to parent. . . . . . . . . . . . . . (29,850) (23,500) (89,550) (70,500)
---------- ---------- ---------- ----------
End of Period. . . . . . . . . . . . . . . . . $1,222,566 $1,066,082 $1,222,566 $1,066,082
========== ========== ========== ==========
</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, 1995 and 1994
----------------------------------------------------------
(Thousands of Dollars)
(Unaudited)
1995 1994
-------- -------
<S> <C> <C>
Cash Flows from Operating Activities:
Net Income . . . . . . . . . . . . . . . . . . . . $ 217,029 $ 195,019
Non-Cash Charges to Income:
Depreciation and amortization . . . . . . . . . 165,005 160,808
Deferred income taxes . . . . . . . . . . . . . 18 2,432
Other - net . . . . . . . . . . . . . . . . . . 42,696 8,642
Changes in Current Assets and Liabilities. . . . . (7,762) 18,274
Cash Used for Special Charge . . . . . . . . . . . (7,545) (40,474)
--------- ---------
Cash from Operations. . . . . . . . . . . . . . 409,441 344,701
--------- ---------
Investing Activities:
Capital Investment . . . . . . . . . . . . . . . . (196,690) (218,681)
Other - Net. . . . . . . . . . . . . . . . . . . . (73,403) (19,013)
--------- ---------
Cash Used in Investing Activities . . . . . . . (270,093) (237,694)
--------- ---------
Financing Activities:
Debt Repaid . . . . . . . . . . . . . . . . . . . (31,777) (48,009)
Dividends Paid to Parent . . . . . . . . . . . . . (89,550) (70,500)
Advances to Affiliated Companies - Net . . . . . . (18,831) 11,477
--------- ---------
Cash Used in Financing Activities . . . . . . . (140,158) (107,032)
--------- ---------
Net Change in Cash and Temporary
Investments . . . . . . . . . . . . . . . . . $ (810) $ (25)
========= =========
</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, 1994 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, 1994. The results of operations for the
three and nine months ended September 30, 1995 are not necessarily
indicative of the results for the year ending December 31, 1995.
2. PRICE RISK MANAGEMENT - The Registrant utilizes futures contracts,
option contracts and 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 3 percent of its remaining
1995 diesel fuel consumption at approximately $0.46 per gallon.
Credit risk related to these activities is minimal.
3. 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, 1995 Compared to September 30, 1994
-------------------------------------------------------------------
Operating Revenues
- ------------------
Operating revenues grew $23 million (1%), primarily reflecting a slight
gain in carloadings, partially offset by a 1% drop in average revenue per car.
The commodity groups that showed year-over-year carloading improvements
included energy (12%), automotive (7%), grain (4%), and chemicals
(1%), while declines occurred in intermodal (9%), food/consumer/government
(7%), forest (6%) and metals/minerals (3%).
Operating Expenses
- ------------------
Operating expenses totaled $1.4 billion, $15 million (1%) higher than a
year ago. The $6 million increase in fuel and utilities cost reflects the
growth in gross ton miles and a rise in average price, partly offset by a lower
consumption rate. Depreciation and amortization expense increased $4 million
driven by continued investment in capacity. Equipment and other rents
rose $2 million due to increased volume. Other costs increased $14 million
(7%) primarily the result of a 1994 insurance settlement for damages related
to the 1993 floods. Salaries, wages and employee benefits decreased
$11 million, as benefit inflation was more than offset by flat volumes,
reduced accruals for lump sum agreement contract payments and a special
railroad retirement tax refund.
Operating Income
- ----------------
Operating income increased $8 million (2%) to $368 million as a result of
volume improvements.
Other Changes
- -------------
Interest expense decreased $6 million as a result of lower interest on
equipment trust obligations. Other income increased $21 million, primarily due
to payments from Southern Pacific Rail Corporation for trackage rights,
gains on the sale of certain real estate, and interest received on the
settlement of railroad retirement and supplemental annuity tax claims.
<PAGE> 7
PART II. OTHER INFORMATION
- ---------------------------
Item 6. EXHIBITS AND REPORTS ON FORM 8-K
--------------------------------
(a) Exhibits
---------
27 - Financial Data Schedule.
(b) Reports on Form 8-K
-------------------
No reports on Form 8-K were filed during the quarter ended
September 30, 1995.
<PAGE> 8
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
Registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized, on this 9th day of November, 1995.
MISSOURI PACIFIC RAILROAD COMPANY
By /s/ M. B. Smith
-------------------------------
M. B. Smith,
Chief Accounting Officer
By /s/ E. L. Butler
-------------------------------
E. L. Butler,
Assistant Vice President - Finance
<PAGE> Exhibit Index
MISSOURI PACIFIC RAILROAD COMPANY
EXHIBIT INDEX
Exhibit No. Description
----------- -----------
27 Financial Data Schedule
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
MISSOURI PACIFIC RAILROAD COMPANY AND SUBSIDIARY COMPANIES
FINANCIAL DATA SCHEDULE - EXHIBIT 27
($ in thousands)
Schedule contains summary financial information extracted from
the Statements of Consolidated Income and Consolidated Financial
Position and is qualified in its entirety by reference to such
financial statements.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1994
<PERIOD-END> SEP-30-1995
<CASH> 6,830
<SECURITIES> 0
<RECEIVABLES> 77,211
<ALLOWANCES> 0
<INVENTORY> 100,901
<CURRENT-ASSETS> 281,867
<PP&E> 6,155,727
<DEPRECIATION> 1,887,720
<TOTAL-ASSETS> 4,721,068
<CURRENT-LIABILITIES> 1,311,338
<BONDS> 369,147
<COMMON> 1
0
0
<OTHER-SE> 1,427,908
<TOTAL-LIABILITY-AND-EQUITY> 4,721,068
<SALES> 1,763,542
<TOTAL-REVENUES> 1,763,542
<CGS> 1,395,250
<TOTAL-COSTS> 1,395,250
<OTHER-EXPENSES> 0
<LOSS-PROVISION> 5,086
<INTEREST-EXPENSE> 67,024
<INCOME-PRETAX> 344,042
<INCOME-TAX> 127,013
<INCOME-CONTINUING> 217,029
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 217,029
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
