TOTAL AGGREGATE
NUMBER OF PAGES:_19_
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
FORM 10-Q
Quarterly Report Under Section 13 or 15(d) of the
Securities Exchange Act of 1934
For Quarter Ended: September 30, 1996
Commission File Number: 0-12985
DELAWARE OTSEGO CORPORATION
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NEW YORK 16-0913491
- ------------------------------- ------------------------------------
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
1 Railroad Avenue, Cooperstown, New York 13326
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(Address of principal executive offices)
(607) 547-2555
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(Registrant's telephone number, including area code)
No Change
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(Former name, former address, and former fiscal year, if changed
from 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_______
Indicate the number of shares outstanding of each of the issuer's
classes of common stock, as of the latest practicable date.
Common Stock, $ .125 Par Value 1,744,177
- ------------------------------ ---------------------------------
(Title of Class) Outstanding at September 30, 1996
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INDEX
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DELAWARE OTSEGO CORPORATION AND SUBSIDIARIES
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Page
----
PART 1. FINANCIAL INFORMATION
- -------------------------------
Item 1. Financial Statements (Unaudited)
Condensed Consolidated Balance Sheets - 3
September 30, 1996 and December 31, 1995
Condensed Consolidated Statements of 5
Operations - Three months ended September
30, 1996 and September 30, 1995; Nine
months ended September 30, 1996 and
September 30, 1995
Condensed Consolidated Statements of 6
Cash Flows - Nine months ended September
30, 1996 and September 30, 1995
Notes to Condensed Consolidated 7
Financial Statements (Unaudited)
Item 2. Management's Discussion and Analysis 8
of Financial Condition and Results
of Operations
PART II. OTHER INFORMATION 14
- ----------------------------
SIGNATURES 18
- ----------
- 2 -
<PAGE>
<TABLE>
Part I - Financial Information
DELAWARE OTSEGO CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(THOUSANDS)
- ----------------------------------------------------------------------------
<CAPTION>
Sep 30, 1996 Dec 31, 1995
------------ ------------
(Unaudited)
<S> <C> <C>
ASSETS
CURRENT ASSETS
Cash and cash equivalents $ 1,219 $ 1,213
Accounts receivable 8,538 5,406
Reimbursable construction costs 1,410 1,212
Materials and supplies 822 742
Deferred income taxes 332 332
Prepaid expenses 925 698
Other current assets 177 665
------------ ------------
TOTAL CURRENT ASSETS 13,423 10,268
PROPERTY, PLANT AND EQUIPMENT
Property, plant and equipment 95,770 92,401
Less accumulated depreciation and amortization (32,642) (29,414)
------------ ------------
TOTAL PROPERTY, PLANT AND EQUIPMENT 63,128 62,987
OTHER ASSETS
Other assets 1,154 1,523
Investment in Affiliate 2,259 -
------------ ------------
TOTAL OTHER ASSETS 3,413 1,523
------------ ------------
TOTAL ASSETS $ 79,964 $ 74,778
============ ============
The accompanying notes are an integral part of the financial statements.
</TABLE>
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<PAGE>
<TABLE>
Part I - Financial Information
DELAWARE OTSEGO CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED BALANCE SHEETS
(THOUSANDS)
- ----------------------------------------------------------------------------
<CAPTION>
Sep 30, 1996 Dec 31, 1995
------------ ------------
(Unaudited)
<S> <C> <C>
LIABILITIES AND STOCKHOLDERS' EQUITY
CURRENT LIABILITIES
Notes payable to bank $ 3,200 $ 2,100
Accounts payable 12,758 10,400
Accrued and other current liabilities 2,033 1,977
Current maturities of long-term debt 1,603 1,075
------------ ------------
TOTAL CURRENT LIABILITIES 19,594 15,552
LONG-TERM LIABILITIES
Long-term debt 12,580 12,802
Deferred income tax 10,465 10,398
SUBORDINATED NOTES
6.5% Convertible subordinated notes 3,580 3,580
------------ ------------
TOTAL LONG-TERM LIABILITIES 26,625 26,780
------------ ------------
TOTAL LIABILITIES 46,219 42,332
------------ ------------
STOCKHOLDERS' EQUITY
Common stock and additional paid-in capital 5,478 4,231
Contributed capital 19,250 18,021
Retained earnings 9,017 10,194
------------ ------------
TOTAL STOCKHOLDERS' EQUITY 33,745 32,446
------------ ------------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $ 79,964 $ 74,778
============ ============
The accompanying notes are an integral part of the financial statements.
</TABLE>
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<PAGE>
<TABLE>
DELAWARE OTSEGO CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
Unaudited
(THOUSANDS, EXCEPT PER SHARE AMOUNTS)
- ----------------------------------------------------------------------------
<CAPTION>
THREE MONTHS ENDED NINE MONTHS ENDED
September 30, September 30,
------------------ ------------------
1996 1995 1996 1995
-------- -------- -------- --------
<S> <C> <C> <C> <C>
OPERATING REVENUES
Railway operating revenues $ 8,036 $ 8,773 $ 22,504 $ 24,369
Other operating revenues 548 418 1,405 1,618
-------- -------- -------- --------
TOTAL OPERATING REVENUES 8,584 9,191 23,909 25,987
OPERATING EXPENSES
Maintenance, transportation
and car hire 5,464 6,724 17,889 20,113
Depreciation and amortization 1,163 1,054 3,427 3,101
General, administrative and other 1,228 1,227 3,537 3,891
-------- -------- -------- --------
TOTAL OPERATING EXPENSES 7,855 9,005 24,853 27,105
-------- -------- -------- --------
INCOME (LOSS) FROM OPERATIONS 729 186 (944) (1,118)
OTHER INCOME (EXPENSE)
Interest expense, net (371) (348) (1,125) (985)
Gain on sale of property, equipment
and other 59 36 310 5,260
-------- -------- -------- --------
OTHER INCOME (EXPENSE), NET (312) (312) (815) 4,275
-------- -------- -------- --------
Income (Loss) before income taxes 417 (126) (1,759) 3,157
Provision for income tax
(expense) benefit (167) 42 573 (1,042)
-------- -------- -------- --------
INCOME (LOSS) BEFORE EQUITY
INTEREST IN INCOME OF AFFILIATE 250 (84) (1,186) 2,115
EQUITY INTEREST IN
INCOME OF AFFILIATE 68 - 9 -
-------- -------- -------- --------
NET INCOME (LOSS) $ 318 $ (84) $ (1,177) $ 2,115
======== ======== ======== ========
Primary Earnings (Loss) per Share $ 0.18 $ (0.05) $ (0.68) $ 1.31
======== ======== ======== ========
Fully Diluted Earnings
(Loss) per Share $ 0.17 - - $ 1.14
======== ======== ======== ========
The accompanying notes are an integral part of the financial statements.
</TABLE>
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<PAGE>
<TABLE>
DELAWARE OTSEGO CORPORATION AND SUBSIDIARIES
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
Unaudited
(THOUSANDS)
- ----------------------------------------------------------------------------
<CAPTION>
NINE MONTHS ENDED
----------------------------
Sep 30, 1996 Sep 30, 1995
------------ ------------
<S> <C> <C>
OPERATING ACTIVITIES
Net (loss) income $ (1,177) $ 2,115
Adjustments to reconcile net
(loss) income to net cash provided (used)
by operating activities:
Depreciation and amortization 3,427 3,101
Provision for losses on accounts receivable 6 (10)
Provision for deferred income taxes (567) 996
Gain on sale of fixed assets (297) (5,261)
Equity interest in income of affiliate (9) -
Amortization of deferred income - (127)
Changes in operating assets and liabilities:
(Increase) Decrease in accounts receivable (3,138) 262
Decrease (Increase) in materials, supplies,
prepaids and other current assets 29 (750)
Increase (Decrease) in accounts payable and
accrued expenses 2,414 (368)
Increase in other assets (233) (65)
---------- ----------
Net Cash Provided (Used) by Operating Activities 455 (107)
INVESTING ACTIVITIES
Additions to property, plant and equipment (3,610) (8,336)
Investment in affiliate (2,000) -
Acquisition of intangible assets - (23)
Proceeds and deposits from sale
of assets\easement 326 6,277
Contributed capital 1,862 1,716
---------- ----------
Net Cash Used by Investing Activities (3,422) (366)
FINANCING ACTIVITIES
Increase (decrease) in notes payable 1,100 (2,200)
Proceeds from long-term borrowings 1,171 4,575
Principal payments on long-term debt (865) (1,774)
Proceeds from (payments on) other borrowings 577 (406)
Issuance of common stock 998 -
Dividends paid (8) (7)
---------- ----------
Net Cash Provided By Financing Activities 2,973 188
INCREASE (DECREASE) IN CASH AND CASH EQUIVALENTS 6 (285)
Cash and cash equivalents at beginning of period 1,213 1,308
---------- ----------
CASH AND CASH EQUIVALENTS AT END OF PERIOD $ 1,219 $ 1,023
========== ==========
The accompanying notes are an integral part of the financial statements.
</TABLE>
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<PAGE>
DELAWARE OTSEGO CORPORATION AND SUBSIDIARIES
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NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
- ----------------------------------------------------------------
1. The accompanying unaudited condensed consolidated financial
statements have been prepared in accordance with generally
accepted accounting principles for interim financial
information and with the instructions to Form 10-Q and Rule
10-01 of Regulation S-X. Accordingly, they do not include all
of the information and footnotes required by generally
accepted accounting principles for complete financial
statements. In the opinion of management, all adjustments
(consisting of normal recurring accruals) considered necessary
for a fair presentation have been included.
2. The results of operations for the nine months ended September
30, 1996, are not necessarily indicative of the results to be
expected for the year ended December 31, 1996, due to certain
freight revenues subject to seasonal variations. For further
information, refer to the consolidated financial statements
and footnotes thereto included in the Company's Annual Report
on Form 10-K for the year ended December 31, 1995.
3. Certain prior year data has been reclassified to conform to
the 1996 presentation.
4. Earnings per common share have been adjusted retroactively to
reflect a 5% stock dividend declared January 26, 1996.
5. Investment in affiliate on the consolidated balance sheet and
equity interest in income of affiliate on the consolidated
statement of operations reflects the Company's acquisition of
a 40% interest in The Toledo, Peoria and Western Railroad
Corporation ("TP&W") on January 31, 1996. During the three
and eight month periods ended September 30, 1996, the TP&W
realized a net income of $163 and $15, respectively. The
investment is accounted for under Accounting Principles Board
Opinion No. 18, The Equity Method of Accounting for
Investments in Common Stock.
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<PAGE>
Item 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL
CONDITION AND RESULTS OF OPERATIONS (THOUSANDS)
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JANUARY, 1996 ACQUISITION
- -------------------------
On January 31, 1996, the Company completed the purchase of a 40%
interest in The Toledo, Peoria and Western Railroad Corporation
("TP&W") for consideration totalling $2.25 million, including
125,000 shares of the Company's common stock. The non-stock
portion of the consideration for the acquisition was funded through
a $1 million loan. Additionally, the Company issued warrants to
purchase 60,000 common shares to another party involved in the
transaction. The exercise price of each warrant is $9.53 per
share, after giving effect to the 5% stock dividend declared
January 26, 1996. The Company performs administrative services for
the TP&W which have had a positive impact on general and
administrative expenses for 1996 and are expected to continue to
have a positive impact in the future. At December 31, 1995, the
Company had incurred $592 of advances related to the purchase which
were recorded in other current assets. The $592 was reimbursed at
closing on January 31, 1996. The investment is accounted for under
the provisions of APB 18, The Equity Method of Accounting for
Investments in Common Stock.
The following Management's Discussion and Analysis of Financial
Condition and Results of Operations relates to the continuing
operations of the Company.
LIQUIDITY AND CAPITAL RESOURCES
- -------------------------------
The Company's cash and cash equivalents at September 30, 1996,
totaled $1,219. Cash generated from operations, sales of property,
additional debt and contributed capital are the Company's principal
sources of liquidity and are used primarily for capital
expenditures, debt service, and working capital requirements.
At September 30, 1996, the Company's working capital deficit was
$6,171, compared to $5,284 at December 31, 1995, resulting in a
working capital ratio of 68.5% compared to 66.0% at December 31,
1995. Total long-term liabilities at September 30, 1996 were
$26,625. Long-term debt (exclusive of current maturities)
including convertible subordinated notes, as a percentage of equity
- 8 -
<PAGE>
at September 30, 1996, was 47.9% compared to 50.5% at December 31,
1995, and total capitalization (long-term debt, convertible
subordinated notes and equity) was $49,905 compared to $48,828 at
December 31, 1995.
At September 30, 1996, notes payable consist of a secured advance
under a $5 million line of credit with Manufacturers and Traders
Trust Company. Interest on these borrowings is at prime plus
1.25%. Prime at September 30, 1996 was 8.25%. Available
borrowings are based on and secured by eligible accounts
receivable. At September 30, 1996, eligible accounts receivable
were $5.7 million and borrowings on the line were $3.2 million.
The Company may borrow up to $500 from an equipment line of credit
with Key Bank of New York which expires on April 30, 1997. At
September 30, 1996, the Company had drawn down $171 on the line.
The interest rate is the lender's base rate plus three quarters
percent (3/4%.) At September 30, 1996 the lender's base rate was
8.25%.
During the three and nine month periods ended September 30, 1996,
the Company borrowed $21 and $577, respectively from the cash value
of certain key-man life insurance contracts. Interest rates on
these borrowings range from 7.30% to 8.00%.
In the nine month period ended September 30, 1996, additions to
property, plant and equipment were $3,610 of which $1,862 or 51.6%
was funded by grants from the New York and New Jersey Departments
of Transportation. The balance was provided by additional debt.
Based upon the availability of funds, the Company's capital
spending program for the balance of 1996 is anticipated to be
approximately $6 million, of which $2 million is for railway
projects. The balance is for acquisition of land, discussed below,
terminal upgrades and technological advances. It is anticipated
that funding for the capital program for the balance of 1996 will
be met by grants from participating state governments, available
funds from the lines of credit, cash generated by operations,
additional long-term debt and proceeds from sales of non-operating
assets. The Company believes it has adequate working capital to
fund existing and anticipated operations for at least the next
twelve months.
The Company is under contract to acquire certain property which it
currently leases for use as a bulk distribution facility. The
purchase price of approximately $3.5 million will be funded from a
- 9 -
<PAGE>
$500,000 deposit made in 1995, $2.5 million of new long-term debt
and the Company's working capital. The transaction will be
finalized upon the resolution of certain issues relating to the
real property taxation of the property, which is expected to occur
in late 1996 or early 1997.
As was reported in the December 31, 1995 Annual Report on Form 10-
K, the Company entered into a contract to sell certain parcels of
railroad property of a non-operating Company subsidiary for $500,
which is anticipated to close during 1996 or early 1997. The
carrying amount is estimated at $110. A portion of the purchase
price is subject to the buyers obtaining government funding. The
proceeds will be used for working capital purposes.
RESULTS OF OPERATIONS
- ---------------------
The Company relies on, and its ability to compete is dependent upon
its rail connections with CP and with Conrail for a substantial
portion of its rail traffic. Changes in the operations of either
of these carriers could have a material adverse impact on the
Company. Please note the discussion of proposed changes in the
ownership of Conrail set forth below.
The Company has two major customers that provided approximately
$15,947 or 67% and $17,174 or 66% of the Company's operating
revenues for the nine month periods ended September 30, 1996 and
1995, respectively. The loss of either customer would have a
material adverse effect on the company's results of operations.
Railway operating revenues, consisting of intermodal, carload and
other railway operating revenues, declined $737 and $1,865 for the
three and nine month periods ended September 30, 1996 respectively,
compared to the same periods in 1995. For the three and nine month
periods ended September 30, 1996, intermodal revenues, the largest
component of railway operating revenues, declined $1,110 and $2,009
respectively, compared to the same periods in 1995, due principally
to weak international volumes in the second and third quarters of
1996.
Carload revenues for the three and nine month periods ended
September 30, 1996 increased $423 and $183 respectively, compared
to the same periods in 1995, due mainly to movements of
contaminated soil in the third quarter of 1996, partially offset by
year-to-date declines in shipments for plastics, paper, lumber,
- 10 -
<PAGE>
building materials and motor vehicles. The contaminated soil
shipments are expected to continue until December, 1996.
Other operating revenues for the three month period ended
September 30, 1996 rose $130 over the corresponding period of 1995,
due mainly to an increase in construction related revenues.
However, other operating revenues were $213 lower in the nine month
period ended September 30, 1996 compared to the same period in
1995, due principally to reduced rent revenue and lower overall
billable construction costs.
Maintenance, transportation and car hire expenses in the aggregate
for the three and nine month periods ended September 30, 1996
declined $1,260 and $2,224 respectively, compared to the same
periods in 1995.
Maintenance expenses in the aggregate for the three and nine month
periods ended September 30, 1996 declined $370 and $181
respectively, compared to the same periods in 1995. The Company
recognized an adjustment for an overpayment of fees under a
trackage rights agreement in the third quarter of 1996 and $252 of
the decreased maintenance expenses is attributable to that
adjustment. Also contributing to declined expenses are the effects
of lower traffic levels and the Company's on-going cost-cutting
initiatives, offset in part for the nine month period by expenses
related to severe winter weather in January, 1996.
Transportation expenses in the aggregate for the three and nine
month periods ended September 30, 1996 declined $1,021 and $2,278
respectively, compared to the same periods in 1995, due principally
to lower traffic volumes, the effects of a new haulage agreement
and cost-cutting measures. During the second quarter of 1996, the
Company renegotiated a haulage agreement with a connecting Class I
carrier that will create new marketing initiatives and result in
overall lower haulage related expenses, offset principally by
incremental increases in fuel, locomotive lease costs and car hire.
Car hire expenses for the three and nine month periods ended
September 30, 1996 increased $131 and $235 respectively, compared
to the same periods in 1995, due to these changes in the haulage
agreement.
Depreciation and amortization expenses for the three and nine month
periods ended September 30, 1996 increased $109 and $326
respectively, compared to the 1995 periods, due mainly to additions
to property, plant and equipment.
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<PAGE>
General, administrative and other expenses in the aggregate for the
three and nine month periods ended September 30, 1996 increased $1
and declined $354 respectively, compared to the 1995 periods, due
principally to the payment of a $337 company-wide bonus in the
second quarter of 1995. Additionally, the positive effects of
recovering amounts in excess of incremental expenses for
administrative and clerical support provided to the TP&W pursuant
to an Administrative Services Agreement entered into January 31,
1996 contributed to the reduced expenses, principally offset by
increased marketing and legal expenses.
As a result of the foregoing, the operating ratios for the three
and nine month periods ended September 30, 1996 were 91.5% and
103.9% respectively, compared to 98.0% and 104.3% for the
comparable 1995 periods. The operating ratio is computed by
dividing operating expenses by operating revenues.
Interest expense net, consisting of interest expense (net of
capitalized interest) and interest income for the three and nine
month periods ended September 30, 1996 increased $23 and $140
respectively, compared to the 1995 periods. In the three and nine
month periods of 1996, total interest expense was $432 and $1,275
respectively, compared to $391 and $1,102 in the respective 1995
periods, due principally to interest rate and average outstanding
debt differentials.
Gain on sale of property, equipment and other for the three and
nine month periods ended September 30, 1996 increased $23 and
declined approximately $5 million, respectively compared to the
1995 periods due to the recognition of real estate sales during the
periods in which such transactions closed.
The Company's effective income tax rate on income (loss) before
income taxes for the nine month period ended September 30, 1996 was
32.6% compared to 33.0% in the respective 1995 period.
On January 26, 1996, the Company declared a 5% stock dividend
payable to stockholders of record February 17, 1996. The dividend
was paid on March 20, 1996, resulting in the issuance of 82,297
shares of common stock. All data in the accompanying financial
statements and related exhibits have been restated to give effect
to the dividend.
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<PAGE>
POTENTIAL CHANGE IN OWNERSHIP OF CONRAIL
- ----------------------------------------
On October 15, 1996 CSX Corporation and Conrail announced plans to
merge. Thereafter, Norfolk Southern announced a competing tender
offer to acquire ownership of Conrail. The Company's main
operating subsidiary, NYS&W, derives approximately 47% of its
operating revenue from traffic hauled for a CSX subsidiary, and
derives approximately 20% of its operating revenue from Hanjin from
intermodal traffic hauled in conjunction with Norfolk Southern.
The Company has multi year contracts for both of these revenues
sources. The Company is unable to predict either the final outcome
of the restructuring of the eastern U.S. railroad system at this
time, or the impact such restructuring, if it occurs, will have on
the Company in the future.
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<PAGE>
PART II
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OTHER INFORMATION
- ----------------------------------------------------------------------------
Item 1. Legal Proceedings
- ---------------------------
None.
Item 2. Changes in Rights of Security Holders
- -----------------------------------------------
None.
Item 3. Defaults on Senior Securities
- ---------------------------------------
None.
Item 4. Submission of Matters to a Vote of Security Holders
- -------------------------------------------------------------
None.
Item 5. Other Information
- ---------------------------
None.
Item 6. Exhibits and Reports on Form 8-K
- ------------------------------------------
a) Exhibits:
Filed herewith (-) or
Incorporated by Reference to
----------------------------
3.1 Restated Certificate of Exhibit 3.1 to Registrant's
Incorporation of the Annual Report on Form 10-K
Delaware Otsego Corporation dated December 31, 1991
dated June 1, 1991
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<PAGE>
3.2 Certificate of Amendment of Exhibit 3.2 to Registrant's
Certificate of Incorporation of Form 10-Q dated June 30, 1996
Delaware Otsego Corporation
dated June 3, 1996
3.3 By-Laws of DOC dated April 5, Exhibit 3.8 to Registrant's
1988 Annual Report on Form 10-K
dated December 31, 1988
10.1 Employment Agreement between Exhibit 10.1 to Registrant's
DOC and Walter Rich dated Form 10-Q dated June 30, 1995
June 3, 1995
10.2 Direct Loan Agreement between Exhibit 10(g) to Registration
New Jersey Economic Develop- Statement on Form S-1,
ment Authority and NYS&W No. 2-94319
dated August 6, 1982
10.3 Agreement between Conrail Exhibit 10(p) to Registration
and NYS&W dated March 30, Statement on Form S-1,
1982 relating to trackage No. 2-94319
rights over line of Conrail
from Binghamton, New York to
Warwick, New York via
Campbell Hall and Maybrook,
New York
10.4 Financing Agreement between Exhibit 19.11 to Form 10-Q
NYS&W and FRA dated dated November 13, 1986
September 30, 1985
10.5 Agreement Amending Financing Exhibit 19.12 to Form 10-Q
Agreement between FRA and dated November 13, 1986
NYS&W dated July 30, 1986
10.6 Amendment to Direct Loan Exhibit 19.18 to Form 10-Q
Agreement between New Jersey dated November 13, 1986
Economic Development
Authority and NYS&W dated
July 15, 1986
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<PAGE>
10.7 Amendment to Direct Loan Exhibit 19.19 to Form 10-Q
Agreement between New Jersey dated November 13, 1986
Economic Development
Authority and NYS&W dated
September 2, 1986
10.8 Amended and Restated Credit Exhibit 10.8 to Form 10-Q
Agreement between Manufac- dated November 11, 1994
turers and Traders Trust
Company and DOC dated
May 27, 1994
10.9 Agreement between NYS&W Exhibit 10.9 to Registrant's
and Brotherhood of Locomotive Annual Report on Form 10-K
Engineers dated March 30, 1994 dated March 27, 1995
10.10 Agreement between NYS&W and Exhibit 10.10 to Registrant's
Brotherhood of Maintenance of Annual Report on Form 10-K
Way Employes dated October 13, dated March 24, 1996
1995
10.11 Modification to Direct Loan Exhibit 10(hh) to Registration
Agreement and Direct Loan Statement on Form S-1,
Promissory Note dated as of No. 2-94319
August 6, 1982 between the
New Jersey Economic Develop-
ment Authority and NYS&W
dated July 17, 1984
10.22 Delaware Otsego Corporation Exhibit B to Definitive
1987 Stock Option Plan Proxy Statement Dated
October 7, 1987
10.23 Delaware Otsego Corporation Exhibit B to Definitive
1993 Stock Option Plan Proxy Statement Dated
May 5, 1993
10.27 Form of Delaware Otsego Exhibit 1 to Registrant's
Corporation 6.5% Convertible Form 8-K dated October 19,
Subordinated Note Due on 1993
September 1, 2003
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<PAGE>
10.28 Guarantee Commitment between Exhibit 10.28 to Registrant's
the Federal Railroad Adminis- Annual Report on Form 10-K
tration and DOC dated dated March 27, 1995
September 29, 1994
10.29 Warrant Agreement between Exhibit 10.29 to Registrant's
DOC and Creditanstalt Annual Report on Form 10-K
Corporate Finance, Inc. dated dated March 24, 1996
January 31, 1996
10.30 Deficiency Guarantee among Exhibit 10.30 to Registrant's
DOC and others and Credit- Annual Report on Form 10-K
anstalt Corporate Finance, Inc. dated March 24, 1996
dated January 31, 1996
10.31 Cash Collateral Agreement Exhibit 10.31 to Registrant's
among DOC and others and Annual Report on Form 10-K
Creditanstalt Corporate Finance, dated March 24, 1996
Inc. dated January 31, 1996
11 Computation of Earnings -
Per Share
21 Subsidiaries of Registrant Exhibit 21 to Registrant's
Annual Report on Form 10-K
dated March 24, 1996
b) Reports on Form 8-K:
None.
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<PAGE>
SIGNATURES
- ----------
Pursuant to the requirements of the Securities and Exchange Act
of 1934, the Registrant has duly caused this report to be signed on its
behalf by the undersigned thereunto duly authorized.
DELAWARE OTSEGO CORPORATION
(Registrant)
WALTER G. RICH
Date: November 13, 1996 ---------------------------
Walter G. Rich
President and
Chief Executive Officer
WILLIAM B. BLATTER
---------------------------
William B. Blatter
Senior Vice President and
Chief Financial Officer
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<TABLE>
DELAWARE OTSEGO CORPORATION AND SUBSIDIARIES
COMPUTATION OF EARNINGS PER SHARE
EXHIBIT 11
Unaudited
(THOUSANDS, EXCEPT PER SHARE AMOUNTS)
- ----------------------------------------------------------------------------
<CAPTION>
THREE MONTHS ENDED NINE MONTHS ENDED
--------------------------- ---------------------------
Sep 30, 1996 Sep 30, 1995 Sep 30, 1996 Sep 30, 1995
------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
PRIMARY (1)
- ---------------------
Weighted Average
Shares Outstanding 1,744 1,613 1,729 1,613
============= ============= ============= =============
Net Income (Loss) $ 318 $ (84) $ (1,177) $ 2,115
============= ============= ============= =============
Earnings (Loss)
per Share $ 0.18 $ (0.05) $ (0.68) $ 1.31
============= ============= ============= =============
FULLY DILUTED (1)
- ---------------------
Average Shares
Outstanding 1,744 1,613 1,729 1,613
Assumed Conversion
of 6.5% Convertible
Subordinated Notes 338 * * 338
------------- ------------- ------------- -------------
2,082 1,613 1,729 1,951
============= ============= ============= =============
Net Income (Loss) $ 318 $ (84) $ (1,177) $ 2,115
Add: 6.5% Convertible
Subordinated Note
Interest, net of tax 35 * * 117
------------- ------------- ------------- -------------
Totals $ 353 $ (84) $ (1,177) $ 2,232
============= ============= ============= =============
Earnings (Loss) per Share $ 0.17 * * $ 1.14
============= ============= ============= =============
* Conversion of Convertible Subordinated Notes not assumed due to
anti-dilutive effect.
(1) Exercise of potentially dilutive outstanding stock options and warrants
has not been assumed in the primary and fully diluted earnings per share
calculations as the exercise prices of the respective options and
warrants exceeded the applicable market price of the Company's stock.
</TABLE>
- 19 -
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