<PAGE> 1
FORM 10-Q
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
(X) QUARTERLY REPORT UNDER SECTION 13 OR 15 (d) OF THE SECURITIES EXCHANGE ACT
OF 1934
For Quarter Ended March 31, 1995
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or
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15 (d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from to
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Commission File Number 2-39895
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MIDLAND ENTERPRISES INC.
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(Exact name of registrant as specified in its charter)
DELAWARE 04-2284434
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1400-580 BUILDING, CINCINNATI, OHIO 45202
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(Address of principal executive offices) (Zip code)
Registrant's telephone number, including area code 513-721-4000
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NONE
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(Former name, former address and former fiscal year, if changed since last
report.)
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
--- ---
________________________________________________________________________________
The number of shares of common stock of Midland Enterprises Inc. outstanding as
of the date of this report was 15 1/2, all held by Eastern Enterprises.
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.
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FORM 10-Q
PAGE 2
ITEM 1.
FINANCIAL STATEMENTS
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COMPANY OR GROUP OF COMPANIES FOR WHICH REPORT IS FILED:
MIDLAND ENTERPRISES INC. AND SUBSIDIARIES ("MIDLAND")
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CONSOLIDATED STATEMENTS OF INCOME
- ---------------------------------
<TABLE>
(000 OMITTED)
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FOR THE THREE MONTHS ENDED
MARCH 31, 1995 MARCH 31, 1994
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<S> <C> <C>
Operating Revenues $ 72,727 $ 58,166
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Operating Costs and Expenses:
Operating expenses 43,973 40,094
Depreciation and amortization 5,716 5,670
Selling, general & administrative expenses 2,447 2,528
Overhead allocation from Parent 675 711
Taxes, other than income 4,616 4,138
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57,427 53,141
-------- --------
Operating earnings 15,300 5,025
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Other Income (Expense):
Interest income from Parent 1,049 531
Interest income other 76 7
Gain (loss) on sale of assets
and other, net 2 (3)
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1,127 535
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Interest Expense:
Long-term debt 3,703 3,897
Other, including amortization of
debt expense 28 26
Interest capitalized during
construction - (38)
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3,731 3,885
-------- --------
Earnings before income taxes 12,696 1,675
Provision for income taxes 4,563 529
-------- --------
Net Earnings $ 8,133 $ 1,146
======== ========
</TABLE>
The accompanying notes are an integral
part of these financial statements.
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FORM 10-Q
PAGE 3
<TABLE>
MIDLAND ENTERPRISES INC. AND SUBSIDIARIES
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CONSOLIDATED BALANCE SHEETS
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(000 OMITTED)
---------------------------------------------
MARCH 31, DEC. 31, MARCH 31,
1995 1994 1994
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<S> <C> <C> <C>
Assets
Current Assets:
Cash and cash equivalents $ 15,002 $ 4,088 $ 89
Receivables -
Trade, net 23,927 24,641 24,379
Parent 67,333 61,866 60,660
Other 1,126 659 1,329
Materials, supplies & fuel 7,678 8,299 12,491
Prepaid expenses 1,419 2,550 1,233
----------- ----------- ----------
Total current assets 116,485 102,103 100,181
----------- ----------- ----------
Property and Equipment, at cost 581,620 581,647 603,859
Less-Accumulated depreciation 298,497 293,375 292,238
----------- ----------- ----------
Net property and equipment 283,123 288,272 311,621
----------- ----------- ----------
Other Assets:
Deferred pension charges 12,052 11,835 10,730
Other 5,574 5,281 5,145
----------- ----------- ----------
Total other assets 17,626 17,116 15,875
----------- ----------- ----------
Total assets $ 417,234 $ 407,491 $ 427,677
=========== =========== ==========
</TABLE>
The accompanying notes are an integral
part of these financial statements.
<PAGE> 4
FORM 10-Q
PAGE 4
<TABLE>
MIDLAND ENTERPRISES INC. AND SUBSIDIARIES
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CONSOLIDATED BALANCE SHEETS
- ---------------------------
(000 OMITTED)
----------------------------
MARCH 31, DEC. 31, MARCH 31,
1995 1994 1994
--------- -------- ---------
<S> <C> <C> <C>
Liabilities and Stockholder's Equity
Current Liabilities:
Current portion of long-term debt $ 3,426 $ 3,354 $ 5,944
Accounts Payable -
Trade 10,772 11,705 11,202
Parent - - 161
Income taxes payable 4,957 918 781
Accrued expenses 13,507 9,917 14,382
Other current liabilities 16,373 15,217 15,188
-------- -------- --------
Total current liabilities 49,035 41,111 47,658
-------- -------- --------
Long-Term Debt 147,849 148,808 156,101
-------- -------- --------
Other Liabilities:
Deferred income taxes 55,242 54,644 58,545
Unamortized investment
tax credits 4,009 4,161 5,021
Post-retirement health care 8,743 8,713 9,052
Other reserves 1,418 1,148 1,125
-------- -------- --------
Total other liabilities 69,412 68,666 73,743
-------- -------- --------
Stockholder's Equity:
Common stock, $100 par value -
Authorized - 1,000 shares
Shares issued & outstanding -
15 1/2 shares 1 1 1
Capital in excess of par value 52,519 52,519 52,519
Retained earnings 98,418 96,386 97,655
-------- -------- --------
Total stockholder's equity 150,938 148,906 150,175
-------- -------- --------
Total liabilities and stockholder's equity $417,234 $407,491 $427,677
======== ======== ========
</TABLE>
The accompanying notes are an integral
part of these financial statements.
<PAGE> 5
FORM 10-Q
PAGE 5
<TABLE>
MIDLAND ENTERPRISES INC. AND SUBSIDIARIES ("MIDLAND")
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CONSOLIDATED STATEMENTS OF CASH FLOWS
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(000 OMITTED)
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FOR THE THREE MONTHS
ENDED
MARCH 31, MARCH 31,
1995 1994
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<S> <C> <C>
Cash Flows from Operating Activities:
- -------------------------------------
Net earnings $ 8,133 $ 1,146
Adjustments to reconcile net earnings to
net cash provided by operating activities:
Depreciation and amortization 5,716 5,670
Deferred and current income taxes 4,637 (1,897)
Net (gain) loss on sale of assets (13) 2
Other changes in assets and liabilities:
Trade and other receivables 247 1
Materials, supplies & fuel 621 474
Accounts payable (933) (1,608)
Accrued expenses and other current liabilities 4,746 3,024
Other 1,097 (117)
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Net Cash Provided by
Operating Activities 24,251 6,695
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Cash Flows from Investing Activities:
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Capital expenditures (880) (1,119)
(Increase) decrease in Parent receivable (5,467) (3,708)
Proceeds from asset dispositions 13 429
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Net Cash Used in Investing Activities (6,334) (4,398)
Cash Flows from Financing Activities:
- -------------------------------------
Issuance of long-term debt - -
Repayment of long-term debt (903) (1,436)
Cash dividends paid to Parent (6,100) (860)
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Net Cash Provided by (Used in)
Financing Activities (7,003) (2,296)
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Net Increase (Decrease) in Cash and Cash Equivalents 10,914 1
Cash and Cash Equivalents at Beginning of Period 4,088 88
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Cash and Cash Equivalents at End of Period $15,002 $ 89
======= =======
Supplemental Disclosures of Cash Flow Information:
- -------------------------------------------------
Cash paid during the period for:
Interest, net of amounts capitalized $ 813 $ 916
Income taxes $ (75) $ 2,092
</TABLE>
The accompanying notes are an integral
part of these financial statements.
<PAGE> 6
FORM 10-Q
PAGE 6
MIDLAND ENTERPRISES INC. AND SUBSIDIARIES
NOTES TO FINANCIAL STATEMENTS
MARCH 31, 1995
(1) ACCOUNTING POLICIES
It is Midland's opinion that the financial information contained in
this report reflects all adjustments necessary to present a fair statement of
the results for the periods reported, but such results are not necessarily
indicative of results to be expected for the year, due to the somewhat seasonal
nature of Midland's operations. All such adjustments were of a normal,
recurring nature. Certain information and footnote disclosures normally
included in financial statements prepared in accordance with generally accepted
accounting principles have been condensed or omitted in this Form 10-Q pursuant
to the rules and regulations of the Securities and Exchange Commission.
However, the disclosures herein when read with the annual report for 1994 filed
on Form 10-K are adequate to make the information presented not misleading.
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FORM 10-Q
PAGE 7
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
RESULTS OF OPERATIONS:
- ---------------------
First quarter revenues and operating earnings increased 25% and 200%,
respectively, over 1994, on record first quarter ton miles, up 22% over the
same period last year. Contributing to the growth in earnings, in addition to
the increased volume, were significantly higher spot transportation rates,
particularly on grain and most non-coal commodities. Efficiencies from traffic
pattern improvements and unseasonably good operating conditions, as well as
continued benefits from cost reduction programs initiated in 1994, contributed
to the improved earnings. During the first quarter of 1994, Midland incurred
higher operating costs from inefficiencies due to flooding and severe winter
icing conditions.
Coal tonnage and ton miles increased 16% and 20%, respectively, over 1994
primarily reflecting increased demand by electric utilities under long-term
contracts. During the first quarter of 1994, contract utility coal tonnage for
one of Midland's largest customers was reduced by a contractual dispute
(favorably resolved later in the year) and another had an unscheduled plant
shutdown. While first quarter 1995 spot and export coal tonnage declined 6%,
related ton miles increased 23% over 1994, reflecting longer average trip
lengths. Non-coal tonnage increased 13% over 1994 with increased shipments of
grain, scrap, steel and ores, some of which represented increased backhaul
opportunities associated with water-borne imports to the United States.
Increased throughput at Midland's coal terminals and lower corporate overhead
costs also contributed to the higher operating earnings.
As a result of the improved operating results discussed above, and lower net
interest costs, Midland's net earnings for the first quarter of 1995 increased
610% as compared to last year.
LIQUIDITY AND CAPITAL RESOURCES
- -------------------------------
Capital expenditures debt repayments and dividends and advances to Parent were
funded from cash provided by operating activities in the first quarter of 1995.
<PAGE> 8
FORM 10-Q
PAGE 8
PART II. OTHER INFORMATION
ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K
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(a) Exhibit 27 Financial Data Schedule
(b) Reports on Form 8-K
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There were no reports on Form 8-K filed in the first quarter of 1995.
<PAGE> 9
FORM 10-Q
PAGE 9
SIGNATURE
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It is Midland's opinion that the financial information contained in
this report reflects all normal, recurring adjustments necessary for a fair
statement of results for the period reported, but such results are not
necessarily indicative of results to be expected for the year, due to the
seasonal nature of Midland's operations. All accounting policies have been
applied in a manner consistent with prior periods. Such financial information
is subject to year end adjustments and annual audit by independent public
accountants.
Pursuant to the requirements of the Securities Exchange Act of 1934,
Midland has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.
MIDLAND ENTERPRISES INC.
BY: R. L. DOETTLING
---------------------------
R. L. DOETTLING
SENIOR VICE PRESIDENT
FINANCE AND ADMINISTRATION
PRINCIPAL FINANCIAL OFFICER
AND DULY AUTHORIZED OFFICER
Date: May 1, 1995
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1000
<S> <C>
<PERIOD-TYPE> 3-MOS
<FISCAL-YEAR-END> DEC-31-1994
<PERIOD-START> JAN-01-1995
<PERIOD-END> MAR-31-1995
<CASH> 15,002
<SECURITIES> 0
<RECEIVABLES> 92,858
<ALLOWANCES> 472
<INVENTORY> 7,678
<CURRENT-ASSETS> 116,485
<PP&E> 581,620
<DEPRECIATION> 298,497
<TOTAL-ASSETS> 417,234
<CURRENT-LIABILITIES> 49,035
<BONDS> 147,849
<COMMON> 1
0
0
<OTHER-SE> 150,938
<TOTAL-LIABILITY-AND-EQUITY> 417,234
<SALES> 0
<TOTAL-REVENUES> 72,727
<CGS> 0
<TOTAL-COSTS> 54,154
<OTHER-EXPENSES> 2,146
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 3,731
<INCOME-PRETAX> 12,696
<INCOME-TAX> 4,563
<INCOME-CONTINUING> 8,133
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 8,133
<EPS-PRIMARY> 0
<EPS-DILUTED> 0
</TABLE>
