SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-Q
[X] QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d)
OF THE SECURITIES EXCHANGE ACT OF 1934
For the period ended September 30, 1997
[ ] 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 1-7092
ILLINOIS CENTRAL RAILROAD COMPANY
(Exact name of registrant as specified in its charter)
Illinois 36-2728842
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
455 North Cityfront Plaza Drive, Chicago, Illinois 60611-5504
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (312) 755-7500
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 September 30, 1997, 100 common shares were outstanding.
THE REGISTRANT IS A WHOLLY-OWNED SUBSIDIARY OF ILLINOIS CENTRAL CORPORATION AND
MEETS THE CONDITIONS SET FORTH IN GENERAL INSTRUCTIONS H(1)(a) AND (b) OF THE
FORM 10-Q AND IS THEREFORE FILING THIS FORM WITH THE REDUCED DISCLOSURE FORMAT.
<PAGE>
ILLINOIS CENTRAL RAILROAD COMPANY
AND SUBSIDIARIES
FORM 10-Q
Three and Nine Months Ended September 30, 1997
CONTENTS
Part I - Financial Information: Page
Item 1. Financial Statements:
Consolidated Statements of Income 3
Consolidated Balance Sheets 4
Consolidated Statements of Cash Flows 5
Notes to Consolidated Financial Statements 6
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations 7
Part II - Other Information:
Item 1. Legal Proceedings 14
Item 6. Exhibits and Reports on Form 8-K 14
Signatures 15
<PAGE>
ILLINOIS CENTRAL RAILROAD COMPANY AND SUBSIDIARIES
Consolidated Statements of Income
($ in millions)
(Unaudited)
Three Months Nine Months
Ended September 30, Ended September 30,
1997 1996 1997 1996
Revenues $ 152.9 $ 150.8 $ 455.0 $ 462.8
Operating expenses:
Labor and fringe benefits 47.1 44.5 133.9 136.0
Leases and car hire 13.0 14.5 39.3 42.4
Diesel fuel 7.4 7.8 24.5 25.0
Materials and supplies 8.6 7.9 24.1 23.8
Depreciation and amortization 8.3 7.6 24.7 23.2
Casualty, insurance and losses 3.9 3.6 11.2 8.7
Other taxes 4.2 5.0 14.7 13.5
Other 8.0 5.0 16.4 25.2
Operating expenses 100.5 95.9 288.8 297.8
Operating income 52.4 54.9 166.2 165.0
Other income, net 4.1 0.1 6.3 1.7
Interest expense, net (7.3) (6.7) (21.8) (19.7)
Income before income taxes 49.2 48.3 150.7 147.0
Provision for income taxes 18.4 18.1 55.1 57.1
Net income $ 30.8 $ 30.2 $ 95.6 $ 89.9
The following notes are an integral part of the consolidated financial
statements.
<PAGE>
ILLINOIS CENTRAL RAILROAD COMPANY AND SUBSIDIARIES
Consolidated Balance Sheets
($ in millions)
ASSETS September 30, 1997 December 30, 1996
Current assets:
Cash and temporary cash investment $ 21.0 $ 46.3
Receivables, net of allowance for
doubtful accounts of $1.2 in 1997
and $1.3 in 1996 85.5 84.4
Loans to affiliates 7.0 14.9
Materials and supplies, at average cost 17.9 17.3
Deferred income taxes - current 18.1 18.1
Other current assets 6.0 7.8
Total current assets 155.5 188.8
Investments 11.9 11.7
Loans to affiliates 158.5 138.2
Properties:
Transportation:
Road and structures, including land 1,168.3 1,118.0
Equipment 167.2 165.2
Other, principally land 41.3 41.5
Total properties 1,376.8 1,324.7
Accumulated depreciation (41.7) (38.4)
Net properties 1,335.1 1,286.3
Other assets 23.7 20.9
Total assets $ 1,684.7 $1,645.9
LIABILITIES AND STOCKHOLDER'S EQUITY
Current liabilities:
Current maturities of long-term debt $ 22.7 $ 2.8
Accounts payable 49.1 56.3
Dividends payable - -
Income taxes payable 10.4 1.2
Casualty and freight claims 20.5 20.9
Employee compensation and vacations 15.1 18.4
Taxes other than income taxes 10.1 15.4
Accrued redundancy reserves 4.3 4.3
Other accrued expenses 76.4 72.6
Total current liabilities 208.6 191.9
Long-term debt 552.2 590.3
Deferred income taxes 287.1 263.5
Other liabilities and reserves 106.9 117.5
Stockholder's equity:
<PAGE>
Common stock authorized,
issued and outstanding
100 shares, $1 par value - -
Additional paid-in capital 129.6 129.6
Retained income 400.3 353.1
Total stockholder's equity 529.9 482.7
Total liabilities and stockholder's
equity $1,684.7 $1,645.9
The following notes are an integral part of the consolidated financial
statements.
<PAGE>
ILLINOIS CENTRAL RAILROAD COMPANY AND SUBSIDIARIES
Consolidated Statement
($ in millions)
(Unaudited)
Nine Months Ended September 30,
1997 1996
Cash flows from operating activities :
Net income $ 95.6 $ 89.9
Reconciliation of net income to net cash
provided by (used for) operating activities :
Depreciation and amortization 24.7 23.2
Deferred income taxes 23.6 18.6
Equity in undistributed earnings of affiliates,
net of dividends received (0.8) (0.3)
Net gains on sales of real estate (1.1) (1.5)
Cash changes in working capital (2.8) (10.1)
Changes in other assets (3.0) (0.8)
Changes in other liabilities and reserves (10.6) (14.5)
Net cash provided by operating activities 125.6 104.5
Cash flows from investing activities :
Additions to properties (66.6) (80.1)
Proceeds from real estate sales 2.2 2.6
Proceeds from equipment sales 2.5 2.6
Loans to affiliated companies (12.4) (54.3)
Proceeds from sales of investments 0.6 0.2
Other (6.1) (7.3)
Net cash (used for) investing activities (79.8) (136.3)
Cash flows from financing activities :
Proceeds from issuance of debt - 130.0
Principal payments on debt (2.6) (8.3)
Net proceeds (payments) in commercial paper (20.0) 5.0
Dividends paid (48.5) (88.7)
Purchase of subsidiary's common stock - (0.7)
Net cash provided by (used for) financing
activities (71.1) 37.3
Changes in cash and temporary cash investments (25.3) 5.5
Cash and temporary cash investments at
beginning of period 46.3 3.0
Cash and temporary cash investments at end
of period $ 21.0 $ 8.5
Supplemental disclosure of cash flow
information :
Cash paid during the year for:
Interest (net of amount capitalized) $ 31.5 $ 20.2
Income taxes $ 22.3 $ 45.4
The following notes are an integral part of the consolidated financial
statements.
<PAGE>
ILLINOIS CENTRAL RAILROAD COMPANY
AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Unaudited)
1. Basis of Presentation
Except as described below, the accompanying unaudited consolidated
financial statements have been prepared in accordance with accounting
policies described in the 1996 Annual Report on Form 10-K and should be
read in conjunction with the disclosures therein.
In the opinion of management, these interim financial statements reflect
all adjustments, consisting of normal recurring accruals, necessary to
present fairly the financial position, results of operations and cash
flows for the periods presented. Interim results are not necessarily
indicative of results for the full year. Certain 1996 amounts have been
reclassified to conform with the presentation used in the 1997 financial
statements.
Income Per Share
Income per common share has been omitted as ICR is a wholly-owned
subsidiary of Illinois Central Corporation ("IC").
2. Equity and Restrictions on Dividends
For the nine month period ended September 30, 1997, ICR has paid cash
dividends of $48.5 million to IC. Covenants of the ICR Revolver require
specified levels of tangible net worth. At September 30, 1997, ICR
exceeded its tangible net worth covenant by $26.2 million.
In June 1996, ICR paid a dividend of $50.0 million to IC for the
acquisition of CCP Holdings, Inc. ("CCPH"). In March 1996, ICRR
transferred its ownership in the Chicago Intermodal Company ("CIC") via a
dividend of CIC stock to IC. The book value of the CIC investment was
$5.7 million.
3. Receivable Sales Agreement
On January 1, 1997, the ICRR adopted SFAS 125. The accounting and
reporting of sales relating to ICRR's accounts receivable agreement was
not changed.
4. Litigation
ICRR is one of several defendants in a New Orleans class action in which
a jury has returned a verdict against the ICRR for $125 million in
punitive damages as a result of a tank car fire. The Louisiana Supreme
Court has stayed entry of judgement pending further trial court
proceedings. ICRR believes the verdict has no basis and intends to
continue to challenge it vigorously.
While the final outcome of this proceeding cannot be determined, in the
opinion of management, based on present information, the ultimate
resolution of this case will not have a material adverse effect on ICRR's
financial position, results of operations, cash flow or liquidity.
<PAGE>
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
Results of Operations
Three Months Ended September 30, 1997 Compared to Three Months Ended
September 30, 1996
Total revenues for 1997 increased from the prior year quarter by $2.1
million or 1.4% to $152.9 million. Total freight carloads of 230,389 were flat
with the mix of commodities causing revenue per car and in total to increase
compared with 1996.
Grain and grain mill accounted for 14% of ICRR's carloads and 20% of
ton-miles in the third quarter of 1997. While 1997's rail rates were higher on
average versus last year and demand for grain domestically was strong as
processors returned to more normal production levels, the negative impact of
weak export grain traffic was only partially offset. Export grain movements
began to improve late in the quarter and are continuing in the fourth quarter of
1997.
Coal accounted for 22% of ICRR's carloads and 26% of ton-miles in the third
quarter of 1997. Against 1996, carloads and revenues were down 7% and 11%
respectively, with ton-miles flat.
Chemicals accounted for 16% of ICRR's carloads and 19% of ton-miles in
1997. Against 1996, carloads and ton-miles were up 6% and 7%, respectively, with
revenue flat, reflecting the new haulage agreement with BNSF entered into in
late 1996.
Paper and Forest Products were 16% of 1997 carloads and 17% of ton-miles.
Carloads were up 8%, ton-miles were up 1% and revenues were up 10% versus 1996.
Bulk commodities contributed 7% of carloads and 6% of ton-miles in 1997.
Bulk commodities are primarily stone and other construction materials and are
closely tied to state highway projects. This smaller commodity group fluctuates
with the timing of projects as well as the availability of freight cars for this
lower-margin business.
Finally, Intermodal accounted for 20% of loads and 7% of ton-miles. Versus
1996, carloads were down 3%, with ton-miles down and revenues up 4%.
Operating expenses increased $4.6 million or 4.8% in 1997. Labor and fringe
costs were up modestly reflecting contract increases partially offset by
efficiencies. Leases and car hire returned to more normal operating levels. Fuel
expense reflects the decrease in cost per gallon (4.5%) partially offset by
increased usage (1.1%). The expense category Casualty, Insurance and Losses
reflects normal operating levels.
Operating income for 1997 decreased by $2.5 million or 4.6% to $52.4
million for the reasons cited above.
Other income, net in 1997 includes a $3.3 million pre-tax gain for the sale
of outdoor advertising rights.
<PAGE>
Interest expense, net of $7.3 million for 1997 increased 9.0% compared to
$6.7 million in 1996. The 1997 expense includes borrowings to support the $109.9
million transferred from ICRR in mid-June 1996 in connection with the
acquisition of CCPH.
Nine Months Ended September 30, 1997 Compared to Nine Months Ended
September 30, 1996
Revenues for 1997 decreased from the prior year period by $7.8 million or
1.7 % to $455.0 million.
Total freight carloads of 686,206 were down .3%, primarily reflecting weak
export grain which had a negative impact on the revenue mix.
Grain and grain mill accounted for 15% of ICRR's carloads and 25% of
ton-miles in 1997. While 1997's rail rates were higher on average versus last
year and demand for grain domestically was strong as processors returned to more
normal production levels, the negative impact of weak export grain traffic was
only partially offset. Export grain movements began to improve late in the
quarter and are continuing in the fourth quarter of 1997.
Coal accounted for 21% of ICRR's carloads and 24% of ton-miles in 1997.
Against 1996, carloads and revenues were down 1% and 8%, respectively, ton-miles
were up 1% versus 1996. Increased one time moves and new business offset
production difficulties at several shippers' operations.
Chemicals accounted for 16% of ICRR's carloads and 18% of ton-miles in
1997. Against 1996, carloads, ton-miles and revenues were up 8%, 9% and 2%,
respectively, with ton-miles up 1%, reflecting the new haulage agreement with
BNSF entered into in late 1996.
Paper and Forest Products were 15% of 1997 carloads and 15% of ton-miles.
Carloads were down 2%, revenues were down 2% and ton miles were up 3% versus
1996.
Bulk Commodities contributed 6% of carloads and 5% of ton-miles in 1997.
Bulk commodities are primarily stone and other construction materials and are
closely tied to state highway projects. This smaller commodity group fluctuates
with the timing of projects as well as the availability of freight cars for this
lower-margin business.
Finally, Intermodal accounted for 21% of loads and 7% of ton-miles. Versus
1996, carloads were up 1%, ton-miles were up 1% and revenues up 6%.
Operating expenses decreased $9.0 million or 3.0% in 1997. Labor and fringe
costs were down modestly reflecting cost efficiencies experienced at ICRR.
Leases and car hire returned to more normal operating levels. Fuel expense
reflects the increase in cost per gallon (.6%) offset by decreased usage (2.4%).
The expense category Casualty, Insurance and Losses reflects normal operating
levels. Other expenses reflect recovery of prior period expenses in relation to
a derailment.
Operating income, net for 1997 increased by $1.2 million or .7 % to $166.2
million for the reasons cited above.
<PAGE>
Other income, net in 1997 includes a $3.3 million pre-tax gain for the sale
of outdoor advertising rights.
Interest expense, net of $21.8 million for 1997 increased 10.7% compared to
$19.7 million in 1996. The 1997 expense includes borrowings to support the
$109.9 million transferred from ICRR in mid-June 1996 in connection with the
acquisition of CCPH.
Liquidity and Capital Resources
Operating Data ($ in millions): Nine Months Ended September 30,
-------------------------------
1997 1996
---- ----
Cash flows provided by (used for):
Operating activities.............. $125.6 $104.5
Investing activities............. (79.8) (136.3)
Financing activities............. (71.1) 37.3
--------- --------
Net change in cash and
temporary cash investments $ (25.3) $ 5.5
======== ========
Cash from operating activities in 1997 and 1996 was primarily net income
before depreciation and deferred taxes.
Investing Data ($ in millions):
Additions to property were as follows:
Nine Months Ended September 30,
1997 1996
---- ----
Communications and signals............ $ 10.9 $ 14.2
Equipment/rolling stock............... 4.0 21.5
Track and bridges..................... 45.3 38.3
Other................................. 6.4 6.1
------ ------
Total................................. $ 66.6 $ 80.1
====== ======
Property retirements and removals generated proceeds of $4.7 million and
$5.2 million in 1997 and 1996, respectively.
ICRR still anticipates that total capital expenditures for 1997 will be
approximately $93 million.
Financing Activities
In October 1997 and 1996, ICRR paid $14.5 million and $14.5 million,
respectively, in cash dividends to IC. Through October, ICRR paid dividends of
$63.0 million and $109.8 million in 1997 and 1996, respectively, to IC, which
included $50.0 million for the purchase of CCPH in 1996. Also included in the
1996 dividends to IC is the March 1996 transfer by ICRR of its ownership in the
Chicago Intermodal Company ("CIC") via a dividend of CIC stock. The book value
of the CIC investment was $5.7 million.
ICRR has a $250 million Revolver with its bank lending group, which expires
in 2001. Fees
<PAGE>
and borrowing spreads are predicated on ICRR's long-term credit ratings. The
Revolver is used primarily for backup for ICRR's commercial paper program but
can be used for general corporate purposes. The available amount is reduced by
the outstanding amount of commercial paper borrowings and any letters of credit
issued on behalf of ICRR under the facility. At September 30, 1997, the full
$250 million was available but undrawn.
In 1994, ICRR entered into a revolving agreement to sell undivided
percentage interests in certain of its accounts receivable, with recourse, to a
financial institution. The agreement, which expires in June 1998, allows for
sales of accounts receivable up to a maximum of $50 million at any one time.
ICRR services the accounts receivable sold under the agreement and retains the
same exposure to credit loss as existed prior to the sale. At September 30,
1997, $50 million had been sold pursuant to the agreement. Costs related to the
agreement fluctuate with changes in prevailing interest rates. These costs,
which are included in Other Income, Net, were $2.3 million each for the nine
month periods ended September 30, 1997 and 1996. ICRR's accounting and reporting
for the sale of accounts receivable was not changed by the implementation of
SFAS No.
125.
Certain covenants of ICRR's debt agreements require among others specific
levels of tangible net worth but not a specific dividend restriction. At
September 30, 1997, ICRR exceeded its tangible net worth covenants by $26.2
million. ICRR was in compliance with all covenants at September 30, 1997, and
does not contemplate any difficulty maintaining such compliance.
A shelf registration from 1996 can be used to issue an additional $70
million in MTN's or other debt until 2000. Currently, there are no plans to
issue additional debt but capital investments in the terminal facilities and
other ventures could necessitate use.
ICRR believes that its available cash, cash generated by its operations and
cash available from the facilities described above will be sufficient to meet
foreseeable liquidity requirements. Additionally, ICRR believes it has access to
the public debt market if needed.
Year 2000 Conversion
ICRR has entered into an agreement to replace a portion of its "non-2000
compliant" programs. ICRR is accumulating and evaluating the costs associated
with modifying the remaining software programs for the year 2000 compliance.
Determination of the approach for the remaining programs has not been finalized.
Miscellaneous
ICRR has entered into various diesel fuel collar agreements designed to
mitigate significant changes in fuel prices. As a result, approximately 60% of
ICRR's short-term diesel fuel requirements through July 1998 are protected
against significant price changes.
In January 1997, the United Transportation Union ("UTU") ratified a new
agreement which settles wage and work rule issues through 2000. The UTU
agreement is similar to the nationally negotiated agreement in effect with other
Class I carriers. The main distinction is timing of the various lump sum payouts
and scheduled wage increases. In May 1997, the Brotherhood of
<PAGE>
Locomotive Engineers ("BLE") ratified a local agreement which settles wage and
work rule issues through 2000. The BLE agreement increased wage rates
approximately 4.9% upon ratification.
Environmental Liabilities
ICRR's operations are subject to comprehensive environmental regulation by
federal, state and local authorities. Compliance with such regulation requires
ICRR to modify its operations and expend substantial manpower and financial
resources.
Under the federal Comprehensive Environmental Response, Compensation and
Liability Act of 1980 ("Superfund"), and similar state and federal laws, ICRR is
potentially liable for the cost of clean-up of various contaminated sites. ICRR
generally participates in the clean-up at sites where other substantial parties
share responsibility through cost-sharing arrangements, but under Superfund and
other similar laws ICRR can be held jointly and severally liable for all
environmental costs associated with such sites.
ICRR is aware of approximately 25 contaminated sites at which it is
probably liable for some portion of any required clean-up. Of these, 17 involve
contamination primarily by diesel fuel which can be remediated without material
cost. Five other sites are expected to require more than $1 million in clean-up
costs. At four of these sites other parties are expected to contribute the
majority of the costs incurred. ICRR anticipates expenditures of approximately
$2.8 million annually for the investigation and remediation at all sites.
For all known sites of environmental contamination where ICRR's loss or
liability is probable, ICRR has recorded an estimated liability at the time when
a reasonable estimate of remediation cost and ICRR liability can first be
determined. Adjustments to initial estimates are recorded as necessary based
upon additional information developed in subsequent periods. Estimates of the
ICRR`s potential financial exposure for environmental claims or incidents are
necessarily imprecise because of the difficulty of determining in advance the
nature and extent of contamination, the varying costs of alternative methods of
remediation, the regulatory clean-up standards which will be applied, and the
appropriate allocation of liability among multiple responsible parties. At
September 30, 1997, ICRR estimated the probable range of its liability to be $10
million to $50 million, and in accordance with the provisions of SFAS No. 5 had
a reserve of $10 million for environmental contingencies. This amount is not
reduced for potential insurance recoveries or third-party contributions.
The risk of incurring environmental liability in connection with both past
and current activities is inherent in railroad operations. Decades-old railroad
housekeeping practices were not always consistent with contemporary standards.
Historically ICRR has leased substantial amounts of property to industrial
tenants, and ICRR continues to haul hazardous materials which are subject to
occasional accidental release. Because the ultimate cost of known contaminated
sites cannot be definitively established and because additional contaminated
sites yet unknown may be discovered or future operations may result in
accidental releases, no assurance can be given that ICRR will not incur material
environmental liabilities in the future. However, based on its assessments of
the facts and circumstances now known, management believes that it has recorded
adequate reserves for known liabilities and does not expect future environmental
charges or expenditures, based on these known facts and circumstances, to have a
material adverse effect
<PAGE>
on ICRR`s financial position, results of operations, cash flow or liquidity.
Litigation
ICRR is one of several defendants in a New Orleans class action in which a
jury has returned a verdict against ICRR for $125 million in punitive
damages as a result of a tank car fire. The Louisiana Supreme Court has
vacated the judgement and remanded the case to the trial court for further
proceedings. (See Part II-Other Information - Item .1 - Legal Proceedings) ICRR
believes the verdict has no basis and intends to continue to challenge it
vigorously.
While the final outcome of this proceeding can not be determined, in the
opinion of management, based on present information, the ultimate resolution of
this case will not have a material adverse effect on ICRR's financial position,
results of operations, cash flow or liquidity.
Recent Accounting Pronouncements
The FASB has released Statement of Financial Accounting Standard No. 129
"Disclosure of Information about Capital Structure" ("SFAS No. 129"). ICRR
complies with all the requirements of the standard which is effective for
periods ending after December 15, 1997.
In June 1997, the FASB issued two new standards which will be effective for
periods ending after December 15, 1997.
Statement of Financial Accounting Standards No. 130, "Reporting
Comprehensive Income" ("SFAS No. 130") establishes standards for reporting and
display of comprehensive income and its components (revenues, expenses, gains
and losses) in a full set of general-purpose financial statements. SFAS No. 130
requires that all items that are required to be recognized under accounting
standards as components of comprehensive income be reported in a financial
statement that is displayed with the same prominence as other financial
statements. ICRR does not expect to adopt this standard early.
Statement of Financial Accounting Standards No. 131, "Disclosures about
Segments of an Enterprise and Related Information" ("SFAS No. 131") establishes
standards for the way that public business enterprises report information about
operating segments in annual financial statements and requires that those
enterprises report selected information about operating segments in interim
financial reports issued to shareholders. It also establishes standards for
related disclosures about products and services, geographic areas, and major
customers. This Statement supersedes FASB Statement No. 14, "Financial Reporting
for Segments of a Business Enterprise," but retains the requirement to report
information about major customers. SFAS No. 131 will not apply to interim
periods until the second year of application. ICRR will not adopt this standard
early.
ICRR is currently assessing the impact, if any, these standards will have
on its consolidated financial statements.
<PAGE>
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
ICRR is one of several defendants in a class action stemming from the
leakage and fire from a tanker of butadiene in East New Orleans in 1987. In
August 1997 a jury in the Central District Court of Orleans Parish, Louisiana
returned a verdict of $1.9 million as compensatory damages for 20 named members
of the class. ICRR was found liable for 5% of the damages, which combined with
prejudgment interest, approximates $200,000. The compensatory claims of the rest
of the class remain unresolved. The same jury in September 1997 returned a
verdict for punitive damages against five defendants on behalf of the entire
putative class of some 8,000 individuals. The jury awarded $125 million in
punitive damages against ICRR out of a total punitive damage award exceeding
$3.4 billion. The Louisiana Supreme Court has vacated and set aside the
judgement for procedural reasons and remanded the case to the trial court for
further proceedings. Post trial motions are pending before the trial judge
to overturn or reduce both the compensatory and punitive awards. See Item
2. Management's Discussion and Analysis of Financial Conditions and Results
of Operations - Litigation.
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits:
See Exhibit Index on page E-1
<PAGE>
ILLINOIS CENTRAL RAILROAD COMPANY
Signatures
Pursuant to the requirements of the Securities Exchange Act of 1934, ICRR
has duly caused this report to be signed on its behalf by the undersigned
hereto duly authorized.
ILLINOIS CENTRAL RAILROAD COMPANY
/s/ John V. Mulvaney
John V. Mulvaney
Controller
Date: November 7, 1997
<PAGE>
ILLINOIS CENTRAL RAILROAD COMPANY AND SUBSIDIARIES
EXHIBIT INDEX
Exhibit Sequential
No. Description Page No.
27 Financial Data Schedule (This exhibit is required to be
submitted electronically pursuant to the rules and
regulations of the Securities and Exchange Commission
and shall not be deemed filed for the purposes of
Section 11 of the Securities Act of 1933 or Section 18 of
the Securities Exchange Act of 1934).
<PAGE>
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<ARTICLE> 5
<S> <C>
<PERIOD-TYPE> 9-MOS
<FISCAL-YEAR-END> DEC-31-1997
<PERIOD-END> SEP-30-1997
<CASH> 21000
<SECURITIES> 0
<RECEIVABLES> 85500
<ALLOWANCES> 1200
<INVENTORY> 17900
<CURRENT-ASSETS> 155500
<PP&E> 1376800
<DEPRECIATION> 41700
<TOTAL-ASSETS> 1684700
<CURRENT-LIABILITIES> 208600
<BONDS> 552200
<COMMON> 0
0
0
<OTHER-SE> 529900
<TOTAL-LIABILITY-AND-EQUITY> 1684700
<SALES> 455000
<TOTAL-REVENUES> 455000
<CGS> 288800
<TOTAL-COSTS> 288800
<OTHER-EXPENSES> (6300)
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 21800
<INCOME-PRETAX> 150700
<INCOME-TAX> 55100
<INCOME-CONTINUING> 95600
<DISCONTINUED> 0
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