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 quarter ended March 31, 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: 1-8627
SANTA FE PACIFIC CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 36-3258709
(State of Incorporation) (I.R.S. Employer Identification No.)
1700 East Golf Road, Schaumburg, Illinois 60173-5860
(Address of principal executive offices) (zip code)
Registrant's telephone number, including area code: (708) 995-6000
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 [ ].
Indicate the number of shares outstanding of each of the issuer's
classes of common stock, as of the latest practicable date.
Shares Outstanding
Class at March 31, 1994
----------------------------- ----------------------
Common Stock, $1.00 par value 186,282,761 shares
<PAGE>
<TABLE>
PART I
FINANCIAL INFORMATION (a)
SANTA FE PACIFIC CORPORATION AND SUBSIDIARY COMPANIES
CONSOLIDATED STATEMENT OF OPERATIONS (b)
(UNAUDITED)
(In millions, except per share data)
Three Months
Ended March 31,
1994 (c) 1993
---------- ----------
<S> <C> <C>
Revenues
Rail $ 631.5 $ 583.2
Gold 84.3 64.4
Pipeline 6.3 5.7
---------- ----------
Total Revenues 722.1 653.3
---------- ----------
Operating Expenses
Rail 540.8 512.0
Gold 62.7 35.8
---------- ----------
Total Operating Expenses 603.5 547.8
---------- ----------
Operating Income 118.6 105.5
Other Income (Expense)-Net 26.1 (5.1)
Gain on Sale of California Lines - 145.4
Interest Expense 31.7 38.6
---------- ----------
Income Before Income Taxes 113.0 207.2
Income Tax 44.9 80.1
---------- ----------
Net Income $ 68.1 $ 127.1
========== ==========
Net Income Per Share $ 0.36 $ 0.68
========== ==========
Average Number of Common and Common Equivalent Shares 189.9 185.9
========== ==========
</TABLE>
(See accompanying notes to Consolidated Financial Statements)
-1-
<PAGE>
<TABLE>
SANTA FE PACIFIC CORPORATION AND SUBSIDIARY COMPANIES
CONSOLIDATED BALANCE SHEET
(In millions)
(Unaudited)
March 31, December 31,
1994 1993
-------------- --------------
<S> <C> <C>
Assets
Current Assets
Cash and cash equivalents, at cost which approximates market $ 26.3 $ 96.4
Accounts receivable, less allowances 124.4 103.5
Inventories 132.1 120.4
Note receivable - current 72.5 72.5
Current portion of deferred income taxes 80.5 78.1
Other 111.5 107.6
-------------- --------------
Total Current Assets 547.3 578.5
-------------- --------------
Note Receivable - 36.2
Other Long-Term Assets 315.1 326.1
Properties, Plant and Equipment 6,783.8 6,664.4
Less-accumulated depreciation, depletion and amortization 1,705.2 1,668.2
-------------- --------------
Net Properties 5,078.6 4,996.2
-------------- --------------
Total Assets $ 5,941.0 $ 5,937.0
============== ==============
Liabilities and Shareholders' Equity
Current Liabilities
Accounts payable and accrued liabilities $ 696.3 $ 715.7
Deferred gold revenues - current 19.3 15.4
Long-term debt due within one year 181.8 190.7
-------------- --------------
Total Current Liabilities 897.4 921.8
-------------- --------------
Long-Term Debt Due After One Year 1,106.7 1,185.1
Postretirement Benefits Liability 292.7 291.2
Restructuring Liability 229.9 257.8
Deferred Gold Revenues 124.8 133.8
Other Long-Term Liabilities 692.8 644.4
Deferred Income Taxes 1,254.3 1,234.6
-------------- --------------
Total Liabilities 4,598.6 4,668.7
-------------- --------------
Shareholders' Equity
Common stock 190.0 190.0
Paid-in capital 855.3 869.7
Retained income 408.4 340.3
Treasury stock, at cost (111.3) (131.7)
-------------- --------------
Total Shareholders' Equity 1,342.4 1,268.3
-------------- --------------
Total Liabilities and Shareholders' Equity $ 5,941.0 $ 5,937.0
============== ==============
</TABLE>
(See accompanying notes to Consolidated Financial Statements)
-2-
<PAGE>
<TABLE>
SANTA FE PACIFIC CORPORATION AND SUBSIDIARY COMPANIES
CONSOLIDATED STATEMENT OF CASH FLOWS
(UNAUDITED)
(In millions)
Three Months
Ended March 31,
1994 1993
---------- ----------
<S> <C> <C>
Operating Activities
Net income $ 68.1 $ 127.1
Adjustments to reconcile net income to operating cash flows:
Depreciation, depletion and amortization 68.2 55.2
Deferred income taxes 17.2 56.4
Rail restructuring costs paid (19.8) (18.3)
Imputed interest expense 5.2 7.1
Gain on sales of property, plant and equipment (0.6) (147.1)
Other-net (23.6) (3.6)
Changes in working capital:
Accounts receivable (22.4) (18.2)
Inventories (16.6) (16.6)
Accounts payable and accrued liabilities (18.6) 3.6
Short-term investments and other current assets (8.8) (4.7)
---------- ----------
Net Cash Provided By Operating Activities 48.3 40.9
---------- ----------
Investing Activities
Cash used for capital expenditures (103.9) (70.4)
Proceeds from sale of property, plant and equipment 5.4 168.5
Other-net 68.6 37.6
---------- ----------
Net Cash Provided By (Used For) Investing Activities (29.9) 135.7
---------- ----------
Financing Activities
Proceeds from long-term borrowings and deferred gold revenues - 10.0
Principal payments on long-term borrowings and deferred gold revenues (92.6) (201.4)
Other-net 4.1 3.5
---------- ----------
Net Cash Used For Financing Activities (88.5) (187.9)
---------- ----------
Decrease in Cash and Cash Equivalents (70.1) (11.3)
Cash and Cash Equivalents:
Beginning of period 96.4 100.1
---------- ----------
End of period $ 26.3 $ 88.8
========== ==========
Supplemental Disclosure of Cash Flow Information
Cash paid (refunded) during the period for:
Interest $ 24.8 $ 27.8
Income taxes $ (0.3) $ (11.2)
</TABLE>
(See accompanying notes to Consolidated Financial Statements)
-3-
<PAGE>
SANTA FE PACIFIC CORPORATION AND SUBSIDIARY COMPANIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(UNAUDITED)
(a) The consolidated financial statements should be read in
conjunction with the Santa Fe Pacific Corporation ("SFP",
"Registrant" or "Company") Annual Report on Form 10-K for the
year ended December 31, 1993, including those financial
statements and notes thereto incorporated by reference from the
Registrant's 1993 Annual Report to Shareholders.
(b) In the opinion of SFP management, the consolidated statement of
operations for the three months ended March 31, 1994 and 1993
reflects all adjustments necessary for a fair statement of the
results of operations.
(c) The consolidated statement of operations for the three months
ended March 31, 1994 is not necessarily indicative of the results
of operations for the full year 1994.
(d) On April 15, 1994, the Company's wholly-owned subsidiary, Santa
Fe Pacific Gold Corporation ("Gold"), filed a registration
statement with the Securities and Exchange Commission for the
public offering of approximately 15% of its common stock.
Following a successful completion of the offering, SFP management
and the board of directors will decide whether to distribute the
remaining stock of Gold to SFP shareholders. SFP has received a
ruling from the Internal Revenue Service that a distribution of
its shares in Gold to SFP shareholders would not result in the
recognition of taxable income by the Company, its subsidiaries,
or its shareholders.
(e) In the first quarter of 1993, The Atchison, Topeka and Santa
Fe Railway Company ("Santa Fe Railway") completed the second
stage of three scheduled closings on the sale to eight
southern California transportation agencies of certain
interests in approximately 340 miles of rail lines and
additional property. Santa Fe Railway received $166.9
million in cash proceeds resulting in a pre-tax gain of
$145.4 million. The gain recognized is net of the cost of
the properties and other expenses of the sale. Proceeds of
$126 million were used to retire debt. The final closing
occurred in the second quarter of 1993.
- 4 -
<PAGE>
MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS
OF OPERATIONS AND FINANCIAL CONDITION
Results of Operations
---------------------
Current Quarter Compared with Same Quarter of Preceding Year
------------------------------------------------------------
Including special items, SFP reported first quarter net income of
$68.1 million or $0.36 per share compared to net income of $127.1
million or $0.68 per share last year. Other income-net in 1994
includes pre-tax gains of $34.2 million related to a gain on the sale
of an investment and a favorable litigation settlement. The first
quarter of 1993 included a pre-tax gain of $145.4 million related to
the sale of rail lines in southern California discussed in Note (e) of
the notes to consolidated financial statements. Excluding these
special items, SFP reported net income of $47.5 million or $0.25 per
share compared to $37.9 million or $0.20 per share last year.
Operating income at Santa Fe Railway for the quarter was $90.7
million, an increase of $19.5 million or 27% over the $71.2 million
reported in the first quarter of 1993. The operating ratio improved
to 85.6% from 87.8%. Operating revenues of $631.5 million, which
include revenue from miscellaneous transportation related items,
improved 8% primarily driven by higher business volumes handled.
Freight revenues by business group for the three months ended March
31, 1994 and 1993 were as follows:
- 5 -
<PAGE>
Three Months
Ended March 31,
1994 1993
------ ------
(In millions)
Intermodal
Intermodal Marketing Companies $ 97.9 $ 92.1
Direct Marketing 113.2 93.6
International 51.0 45.6
------ ------
Total Intermodal 262.1 231.3
------ ------
Carload Commodities
Petroleum 35.5 35.6
Chemicals & Plastics 33.6 31.5
Consumer/Food Products 34.0 32.6
Building Materials & Paper Products 29.7 26.0
Metals 21.2 18.0
------ ------
Total Carload Commodities 154.0 143.7
------ ------
Bulk Products
Coal 59.2 53.2
Minerals, Ores & Other 35.3 36.2
Grain 32.7 41.9
Grain Products 20.8 20.9
------ ------
Total Bulk Products 148.0 152.2
------ ------
Automotive
Motor Vehicles 51.0 38.8
Vehicle Parts 6.8 7.4
------ ------
Total Automotive 57.8 46.2
------ ------
Total Freight Revenue $621.9 $573.4
====== ======
Intermodal revenues increased 13% to $262.1 million, reflecting higher
direct marketing and international shipments. Direct marketing
revenues increased 21% primarily due to increased UPS shipments and
higher less-than-truckload shipments. International revenues
increased 12% principally reflecting increased volumes with existing
customers. Carload Commodity revenues increased 7% to $154.0 million
reflecting increased shipments of metals and other commodities,
partially offset by a decline in average rates. Bulk Products
revenues declined 3% as lower export grain shipments were offset by
increased coal shipments. Automotive revenues increased 25% due to
increased shipments of finished vehicles.
- 6 -
<PAGE>
Santa Fe Railway's quarterly operating expenses of $540.8 million
increased 6%, principally due to the increase in volume. Operating
expenses for the three months ended March 31, 1994 and 1993 consisted
of the following:
Three Months
Ended March 31,
1994 1993
------ ------
(In millions)
Compensation and benefits $207.6 $200.9
Contract services 84.0 72.1
Fuel 58.9 59.2
Equipment rents 60.4 51.7
Depreciation and amortization 49.1 46.0
Materials and supplies 32.5 29.0
Other 48.3 53.1
------ ------
Total operating expenses $540.8 $512.0
====== ======
Compensation and benefits expense of $207.6 million increased only 3%
as increases due to the higher traffic were partially offset by
operating efficiencies. Contract services expense was $11.9 million
higher principally due to increased intermodal and other traffic.
Equipment rents of $60.4 million increased $8.7 million primarily
reflecting the increased volume.
Gold quarterly operating income of $21.6 million decreased $7.0
million compared to the same quarter last year; however, the prior
year included operating income from coal and aggregate assets,
including the receipt of a $16.0 million annual coal royalty payment,
which assets were exchanged with Hanson Natural Resources Company on
June 25, 1993. Gold sales increased 156,000 ounces to 209,000 ounces
due to the addition of the mines acquired as part of the asset
exchange, as well as increased production at the properties owned
prior to the transaction. Operating expenses increased reflecting the
increase in production and higher exploration expenses due to Gold's
expanded exploration program.
SFP's equity investment in the Pipeline Partnership produced operating
income of $6.3 million in the first quarter, compared to $5.7 million
last year, reflecting an increase in revenues from commercial and
military shipments.
- 7 -
<PAGE>
Other income-net of $26.1 million increased $31.2 million due
principally to a $23.7 million gain on the sale of SFP's investment in
a publicly-traded insurance company and a pre-tax gain of $10.5
million related to a favorable litigation settlement. Excluding these
items, other income-net was $3.0 million below last year due to lower
income from real estate activities at Santa Fe Railway. Interest
expense of $31.7 million decreased $6.9 million from 1993 reflecting
favorable interest rates, lower imputed interest and higher
capitalized interest.
Financial Condition and Other Matters
-------------------------------------
Year-to-Date Cash Flow
----------------------
For the three months ended March 31, 1994, net cash provided by
operations totaled $48.3 million. Principal sources of cash from
operations included net earnings before depreciation and deferred
taxes. Uses of cash from operations included restructuring payments
(primarily representing severance, relocation and other labor
payments) and changes in working capital. Additional cash was
provided through the sale of an investment previously discussed.
Total capital expenditures, which include noncash transactions, for
the first three months of 1994 were $151.2 million. Noncash
transactions of $47.3 million primarily represent directly financed
locomotive acquisitions and reimbursable projects. Capital spending
was primarily funded through cash generated from operations, equipment
financings and available cash balances.
Approximately 90% of these expenditures were used for equipment, new
facilities, and improvements to track structure and other road
properties at Santa Fe Railway with the balance for development of
gold properties. Through March 31, 1994, Santa Fe Railway had
acquired 27 new locomotives at a cost of $33.4 million, and has
received an additional 23 new locomotives in the second quarter of
1994. Also, Santa Fe Railway has recently committed to acquire an
additional 50 locomotives which are anticipated to be received in the
third and fourth quarters of 1994. It is currently anticipated that
these locomotives will be directly financed. SFP's total 1994 capital
expenditures are now expected to exceed $650 million including a total
of 100 locomotives.
Gold Registration Statement
---------------------------
On April 15, 1994, the Company's wholly-owned subsidiary, Gold, filed
a registration statement with the Securities and Exchange Commission
for the public offering of approximately 15% of its common stock.
Following a successful completion of the offering, SFP management and
the board of directors will decide whether to distribute the remaining
stock of Gold to SFP shareholders. SFP has received a ruling from the
Internal Revenue Service that a distribution of its shares in Gold to
SFP shareholders would not result in the recognition of taxable income
by the Company, its subsidiaries, or its shareholders.
- 8 -
<PAGE>
Subsequent Event
----------------
On April 22, 1994, the Company received an adverse appellate decision
involving pension obligations of a subsidiary which was sold in 1984.
The Company has filed a petition for reconsideration of this decision.
The Company may record a charge related to this decision in the second
quarter, depending upon the court's action on the petition for
reconsideration. The magnitude of the net charge, if any, would not
be expected to exceed $8 million, or $0.04 per share.
PART II. OTHER INFORMATION
--------------------------
Item 4. Submission of Matters to a Vote of Security Holders
------------------------------------------------------------
At the April 26, 1994, annual meeting of stockholders, the
Registrant's stockholders voted on one matter; 186,217,883 shares of
common stock were outstanding and entitled to vote as of the March 1,
1994, record date.
Election of Four Directors
---------------------------
The stockholders elected the four nominees as directors for a
three year term by the following vote:
Nominees Elected For Withheld
---------------- --------------- ---------------
Bill M. Lindig 156,558,490 938,283
Roy S. Roberts 156,451,467 1,045,306
John S. Runnells II 156,578,205 918,568
Robert H. West 156,630,643 866,130
Directors Whose Terms of Office Continue
----------------------------------------
Joseph F. Alibrandi
George Deukmejian
Jean Head Sisco
Robert D. Krebs
Michael A. Morphy
Edward F. Swift
- 9 -
<PAGE>
Item 6. Exhibits and Reports on Form 8-K
-----------------------------------------
(a) See Index to Exhibits on page E-1 for a description of the
exhibits filed as part of this Report.
(b) Reports on Form 8-K.
During the quarter ended March 31, 1994 a report on Form 8-K
dated January 19, 1994 was filed, reporting on SFP's 1993
earnings.
- 10 -
<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.
SANTA FE PACIFIC CORPORATION
(Registrant)
/s/ Thomas N. Hund
------------------------------------------
Thomas N. Hund
Vice President & Controller
(On Behalf of the Registrant and as
Principal Accounting Officer)
Schaumburg, Illinois
May 12, 1994
- 11 -
<PAGE>
EXHIBIT INDEX
-------------
EXHIBIT
NUMBER Description of Exhibit
------- ----------------------
10(a)* Santa Fe Pacific Corporation Supplemental
Retirement and Savings Plan
12 Statement regarding computation of ratio of
earnings to fixed charges (as of March 31, 1994).
21 Subsidiaries of Santa Fe Pacific Corporation
* Management contract or compensatory plan or arrangement.
E-1
SANTA FE PACIFIC CORPORATION
SUPPLEMENTAL RETIREMENT AND SAVINGS PLAN
ARTICLE I
GENERAL
Section 1.1 Establishment of Plan and Purpose. Santa Fe
Pacific Corporation (hereinafter the "Company"), has established
the Santa Fe Pacific Supplemental Retirement and Savings Plan,
(hereinafter the "Plan"), effective May 1, 1994. The purpose of
this Plan is to provide certain highly compensated employees of
the Company and certain of its subsidiaries (hereinafter the
"Employing Companies"), the opportunity to defer the receipt of
compensation and to receive additional retirement income from the
Employing Companies. This plan is not intended to qualify under
Section 401(a) of the Internal Revenue Code of 1986, as amended
(hereinafter the "Code"), or be subject to Part 2, 3, or 4 of
Title I of the Employee Retirement Income Security Act of 1974,
as amended, (hereinafter "ERISA").
Section 1.2 Affiliated Companies. The term "Affiliated
Company" shall mean every corporation (including the Company)
which is a member of a controlled group of corporations (within
the meaning of Section 414(b) of the Internal Revenue Code). The
Company and each Affiliated Company which, with the consent of
the Company adopts the Plan are referred to herein collectively
as the "Employing Companies" and individually as an"Employing
Company".
Section 1.3 Plan Administration. The authority to control
and manage the operation and administration of the Plan shall be
vested in the Employee Benefits Committee (hereinafter the
"Committee"), appointed to act under The Santa Fe Pacific
Retirement and Savings Plan for Salaried Employees (hereinafter
the "Savings Plan"). Any interpretation of the Plan by the
Committee or its delegate and any decision made by the Committee
or its delegate on any other matter within its discretion are
final and binding on all persons. The Committee shall have
discretionary authority to administer, construe and interpret the
Plan, to decide all questions including but not limited to
eligibility, payment of any benefits hereunder and to make all
other determinations deemed necessary or advisable for the
administration of the Plan.
The Committee shall act with or without a meeting by the
vote or concurrence of a majority of its members; but no member
of the Committee who is a Participant shall take part in any
Committee action or any matter that has particular reference to
his own interest hereunder. The Committee shall administer this
Plan and discharge its responsibilities hereunder in a uniform
and non-discriminatory manner as to all Participants.
<PAGE>
Section 1.4 Non-Alienation. Benefits payable to any
individual under the Plan may not be voluntarily or involuntarily
assigned, alienated, pledged or subject to attachment,
anticipation, garnishment, levy, execution or other legal or
equitable process.
Section 1.5 Source of Benefits. Subject to the terms and
conditions of the Plan, any amount payable to or on account of a
Participant under this Plan by any Employing Company shall be
paid from the general assets of that Employing Company or from
one or more trusts, the assets of which are subject to the claims
of the Employing Companies' general creditors. None of the
individuals entitled to benefits under the Plan shall have any
preferred claim on, or any beneficial ownership interest in, any
assets of any Employing Company or of any such trust, and any
rights of such individuals under the Plan or any such trust shall
constitute unsecured contractual rights only.
Section 1.6 Plan Not Contract of Employment. The Plan does
not constitute a contract of employment, and nothing in the Plan
will give any participant the right to be retained in the employ
of any Employing Company, nor any right or claim to any benefit
under the Plan, except to the extent specifically provided under
the terms of the Plan.
Section 1.7 Notices. Any notice or document required to be
given to or filed with an Employing Company, the Company or the
Committee shall be considered to be given or filed:
(a) on the date delivered to the Vice President - Human
Resources of the Company;
or
(b) three days after the date sent by certified mail to the
Secretary of the Company.
Section 1.8 Applicable Law. The Plan shall be construed
and administered in accordance with the internal laws of the
State of Illinois.
Section 1.9 Gender and Number. Where the context admits,
words in any gender shall include any other gender, words in the
singular shall include the plural and the plural shall include
the singular.
Section 1.10 Plan Year. The Plan Year shall be the calendar
year.
<PAGE>
ARTICLE II
PARTICIPATION
Section 2.1 Participation. The Compensation and Benefits
Committee of the Company shall establish from time to time the
Employing Companies which may participate and the class of
highly-compensated employees of each Employing Company who shall
be eligible for the benefits provided in Article IV below
(hereinafter the "Participants"); provided, however, that the
class of eligible employees of each Employing Company shall be
limited to employees who are members of a select group of
management or highly compensated employees within the meaning of
Section 401(a)(1) of ERISA. If the Company determines that
participation by one or more Participants shall cause the Plan as
applied to any Employing Company to be subject to Part 2, 3, or 4
of Title I of ERISA, the entire interest of such Participant or
Participants under the Plan shall be immediately paid to such
Participant by the applicable Employing Company, notwithstanding
any election of the Participant, or shall otherwise be segregated
from the Plan in the discretion of the Company, and such
Participant or Participants shall cease to have any interest
under the Plan.
ARTICLE III
VESTING
Section 3.1 Vesting. A Participant shall be fully vested
in his deferral amounts and earnings at all times and subject to
investment gains and losses. A Participant shall be vested in
Employer Matching Contributions in accordance with the vesting
schedule set forth in Section 6.3 of the Savings Plan.
ARTICLE IV
DEFERRALS
Section 4.1 Deferral Elections. To become a Participant,
subject to such additional terms, conditions and limitations as
the Committee may from time to time impose, a Participant may
make an irrevocable election to defer receipt of certain eligible
compensation otherwise payable to him by his Employer for a Plan
Year by filing a Deferral Election Form indicating his or her
desire to have a portion of his or her eligible compensation
deferred. Such deferral elections shall be made as follows:
(a) With the approval of the Compensation and Benefits
Committee of the Board, a Participant may elect not to
participate in the Savings Plan and may elect to defer up to 12%
of i) Compensation as defined in the Savings Plan, ii) base
salary that is not eligible compensation under the Savings Plan,
and iii) one-half of any cash incentive payments otherwise
payable to him by his Employing Company that Plan Year; or
<PAGE>
(b) Unless the Compensation and Benefits Committee of the
Board otherwise specifies, a Participant may elect to defer i) up
to 12% of base salary that is not eligible Compensation under the
Savings Plan, ii) up to 12% of one-half of any cash incentive
payments, and iii) that to the extent that a Participant is
subject to a limitation on before-tax contributions under Section
402(g)(1) of the Code to the Savings Plan, the amounts which
could have been deferred into the Savings Plan but for such
limitation may be deferred under this Plan ("Deferred
Compensation").
(c) Such elections shall be made annually and in writing,
and filed with the Committee at such time and in such manner as
the Committee shall provide. A Participant must specify the
percentage, if any, which he chooses to defer and authorize his
Employing Company to make regular payroll deductions. A separate
notice will be required for deferrals in each Plan Year. Each
such notice shall specify the year in which the deferred
compensation shall be paid, which may not be sooner than two (2)
years after the compensation is earned. A Participant may make
additional deferral elections for amounts payable on a specified
date, provided such elections are made at least one (1) year
prior to the specified date for payment. A Participant may
further defer such payment until his early retirement date under
the Santa Fe Pacific Retirement Plan and may thereafter make one
further election to defer such amount to a subsequent date. In
the absence of a specified date for payment, such deferred
compensation shall be paid in accordance with Article VI. The
Account (as described below) of each Participant shall be
credited with the amount deferred by the Participant as of the
date on which the amount of such Deferred Compensation is
communicated to the Plan recordkeeper which shall be as soon as
reasonably practicable after the date the compensation would
otherwise have been payable to Participant, or, if such date is
not an Accounting Date, as of the first Accounting Date occurring
thereafter.
(d) A Participant may elect to suspend all future deferrals
in a Plan Year other than in respect to incentive payments, and
will not be permitted to resume participation until the next Plan
Year.
Section 4.2 Employer Matching Contribution. Subject to
such limitations as the Committee may from time to time impose,
for each Plan Year, Participants shall be credited with an
"Employer Matching Contribution" equal to 100% of the
compensation deferred hereunder that would be payable during that
Plan Year provided that Employer Matching Contributions shall not
exceed 4% of the compensation eligible for deferral hereunder,
and provided further that amounts described in clause (iii) of
subsection 4.1(b) shall not be treated as deferred or eligible
for deferral for purposes of Employer Matching Contributions.
<PAGE>
ARTICLE V
PLAN ACCOUNTING
Section 5.1 Accounts. The Committee shall establish an
Account for each Participant who files a Deferral Election Form
under subsection 4.1. Each Account shall be adjusted in
accordance with this Article V in a uniform, non-discriminatory
manner, as of such periodic "Accounting Dates" as may be
determined by the Committee from time to time (which Accounting
Dates shall be not less frequent than quarterly.) As of each
Accounting Date, the balance of each Account shall be adjusted as
follows:
(a) first, charge to the Account balance the amount of any
distributions under the Plan with respect to that Account that
have not previously been charged;
(b) then, credit to the Account balance the amount of the
compensation to be deferred by the Participant in accordance with
the provisions of subsection 4.1 and the amount of Employer
Matching Contributions to be credited in accordance with Section
4.2 that have not previously been credited;
(c) then, adjust the Account balance for the applicable
assumed rate of earnings in accordance with subsection 5.2.
Section 5.2 Adjustment of Accounts for Earnings. The
amounts credited to a Participant's Account in accordance with
subsections 4.1 and 4.2 shall be adjusted as of each Accounting
Date to reflect the value of an investment equal to the
Participant's Account balance in one or more assumed investments
that the Committee offers from time to time, and which the
Participant directs the Committee to use for purposes of
adjusting his Account. Such amount shall be determined without
regard to taxes that would be payable with respect to any such
assumed investment. The Committee may eliminate any assumed
investment alternative at any time; provided, however, that the
Committee may not retroactively eliminate any assumed investment
alternative. To the extent permitted by the Committee, the
Participant may elect to have different portions of his Account
balance for any period adjusted on the basis of different assumed
investments. Notwithstanding the election by Participants of
certain assumed investments and the adjustment of their Accounts
based on such investment decisions, the Plan does not require,
and no trust or other instrument maintained in connection with
the Plan shall require that any assets or amounts which are set
aside in a trust or otherwise for the purpose of paying Plan
benefits shall actually be invested in the investment
alternatives selected by Participants.
Section 5.3 Participant Statements. At least quarterly,
the Committee shall cause to be furnished to each Participant a
statement indicating, on the basis of the latest available
information, the status of the Participants' Accounts.
<PAGE>
ARTICLE VI
PAYMENT OF DEFERRED AMOUNTS
Section 6.1 Termination of Employment. Subject to the
provisions of subsection 1.5, upon a Participant's death or
termination of active employment, the Participant's entire
Account balance, including the Employer's Matching Contribution
on amounts deferred prior to the Participant's death or
termination date, shall be paid to or on account of the
Participant as follows:
(a) in a single lump sum payment as soon as practicable
after his date of death or termination of active employment, or
if elected by the Participant at least one year prior to
termination, on January 31 of the year following termination; or
(b) if elected by the Participant at least one year prior
to the distribution or such time period as may be established by
the Committee, in annual installments over a period of ten or
fewer years, beginning as soon as practicable after date of death
or termination of active employment.
Section 6.2 Beneficiary Designation. Each Participant may,
from time to time by signing a form furnished by the Committee,
designate any legal or natural person or persons (who may be
designated contingently or successively) to whom his benefits
under the Plan are to be paid if he dies before he receives all
of his benefits. A beneficiary designation form will be
effective only when the signed form is filed with the Committee
while the Participant is alive and will cancel all beneficiary
designation forms filed earlier. If a deceased Participant
failed to designate a beneficiary as provided above, or if the
designated beneficiary of a deceased Participant died before him,
his benefits shall be paid in accordance with the following order
of priority: (i) to his surviving spouse, if any; (ii) to his
surviving children in equal shares; or (iii)
the estate of the last to die of the Participant or his
designated beneficiary. The benefits under this plan shall be
paid in a lump sum unless the beneficiary has completed an
election form in accordance with subsection 6.1(b).
Section 6.3 Withholding for Tax Liability. The Company may
withhold or cause to be withheld from any payment of benefits
made pursuant to the Plan any taxes required to be withheld with
regard to such payment.
Section 6.4 Hardship Distributions. The Committee may,
pursuant to rules adopted by it and applied in a uniform manner,
accelerate the date of distribution of a Participant's Account
because of hardship at any time. "Hardship" shall mean an
unforeseeable, severe financial condition resulting from (a) a
sudden and unexpected illness or accident of the Participant or
his dependent (as defined in section 152(a) of the Code); (b)
loss of the Participant's property due to casualty; or (c) other
similar extraordinary and unforeseeable circumstances arising as
a result of events beyond the control of the Participant, but
which may not be relieved through other available resources of
the Participant, as determined by the Committee in accordance
with uniform rules adopted by it.
<PAGE>
ARTICLE VII
CHANGE IN CONTROL
Section 7.1 Change in Control. In the event of a change in
control as defined in The Atchison, Topeka and Santa Fe Railway
Company Severance Program, all Accounts shall be fully vested and
the Company shall be obligated to transmit funds equal to the
outstanding liabilities under this Plan to such trust as may be
established by the Company to provide for security of benefits
hereunder.
ARTICLE VIII
AMENDMENT OR TERMINATION
Section 8.1 Administrative Amendments. The Chief Executive
Officer of the Company may make minor or administrative
amendments to the Plan.
Section 8.2 Amendments and Termination. The Board of
Directors of the Company may amend the Plan at any time and may
terminate the Plan at any time without the consent of the
participants or beneficiaries, provided however, that no
amendment shall divest any Participant or beneficiary of the
credits to his Account, or any rights to which he would have been
entitled if the Plan had been terminated immediately prior to the
effective date of such amendment. Any Employing Company may
terminate its participation in the Plan at any time, provided
that it has made adequate provision for any amount payable by it
under the terms of the Plan as in effect on the date it
terminates its participation in the Plan. Upon termination of
the Plan as to any Employing Company, the Company may, in its
discretion applied in a uniform manner, provided that amounts
attributed to that Employing Company shall be distributed in
accordance with the provisions of 6.1. Upon termination of the
Plan as to all Employing Companies, the Company may, in its sole
discretion applied in a uniform manner to all Participants, cause
a lump sum payment of all benefits for all Participants to be
made as soon as reasonably practicable or the date established
for payment under subsection 4.1(c).
Exhibit 12
Santa Fe Pacific Corporation
Statement of Computation of Ratio of Earnings to Fixed Charges
(as of March 31, 1994)
(In millions, except ratio)
Three Months Ended
March 31, 1994
------------------
Earnings:
Income from continuing operations
before income taxes $ 113.0
Less income of unconsolidated subsidiaries
greater than distributions (0.2)
Amortization of capitalized interest 0.6
Fixed charges before interest
capitalized (see below) 41.1
----------
Total Earnings $ 154.5
==========
Fixed Charges:
Interest expense including
amortization of debt discount $ 31.7
Portion of rentals representing
an interest factor 9.4
----------
Fixed charges before interest
capitalized 41.1
Interest capitalized 3.0
----------
Total Fixed Charges $ 44.1
==========
Ratio of Earnings to Fixed Charges 3.5
==========
Exhibit 21
SUBSIDIARIES OF SANTA FE PACIFIC CORPORATION
--------------------------------------------
PINE CANYON LAND COMPANY (DE) 100%
SANTA FE PACIFIC INSURANCE COMPANY (VT) 100%
THE ATCHISON, TOPEKA AND SANTA FE RAILWAY COMPANY (DE) 100%
Alameda Belt Line (CA) 50%
Aubrey Water Company (AZ) 100%
The Belt Railway Company of Chicago (IL) 8.33%
Central California Traction Company (CA) 33.33%
The Dodge City and Cimarron Valley Railway Company (KS) 100%
The Gulf and Inter-State Railway Company of Texas (TX) 100%
Houston Belt & Terminal Railway Company (TX) 25%
Kansas City Terminal Railway Company (MO) 8.33%
Los Angeles Junction Railway Company (CA) 100%
The Oakland Terminal Railway (CA) 50%
Oklahoma City Junction Railway Company (OK) 100%
Rio Grande, El Paso and Santa Fe Railroad Company (TX) 100%
St. Joseph Terminal Railroad Company (MO) 50%
Santa Fe Financial Holdings, Inc. (DE) 100%
Santa Fe Forwarding Company (DE) 100%
Santa Fe Rail Equipment Company (DE) 100%
Santa Fe Terminal Services, Inc. (DE) 100%
Star Lake Railroad Company (DE) 100%
Sunset Railway Company (CA) 50%
Texas City Terminal Railway Company (TX) 33.33%
TTX Company (DE) 10.9%
The Wichita Union Terminal Railway Company (KS) 33.33%
CONSTELLATION 130, INC. (CA) 100%
LIMITED PARTNERSHIP MANAGEMENT, INC. (DE) 100%
SANTA FE PACIFIC GOLD CORPORATION (DE) 100%
Santa Fe Canadian Mining, LTD. 100%
Minera Gold Fields De Mexico, S.A. 100%
Minera Santa Fe Pacific Chile Limitada 99%
Santa Fe Pacific Capital, Inc. (IL) 100%
Santa Fe Pacific Gold South America, Inc. 100%
(1% in Minera Santa Fe Pacific Chile Limitada)
San Juan Basin Coal Holding Company 100%
Santa Fe Pacific Mining, Inc. (KS) 100%
Hospah Coal Company (DE) 100%
SFPG Mining Company (DE) 100%
Compania Minera Florida, S.A. 100%
Compania Minera Santa Fe Uruguay S.A. 100%
Lone Tree Mining, Inc. (DE) 100%
Rabbit Creek Mining, Inc. (DE) 100%
SANTA FE PACIFIC RAILROAD COMPANY (Act of Congress) 100%
SFP PIPELINE HOLDINGS, INC. (DE) 100%
Santa Fe Pacific Pipelines, Inc. (DE) 100%
SUNSET COMMUNICATIONS COMPANY (DE) 100%
WALKER-KURTH LUMBER COMPANY (TX) 100%
THE ZIA COMPANY (DE) 100%
