SECURITIES AND EXCHANGE COMMISSION
Washington, D. C. 20549
FORM 10-K
Annual Report Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
For the fiscal year ended December 31, 1999 Commission File Number 1-5447
PITTSBURGH & WEST VIRGINIA RAILROAD
(Exact name of registrant as specified in its charter)
Pennsylvania 25-6002536
(State of organization) (I.R.S. Employer Identification No.)
#2 Port Amherst Drive, Charleston, WV 25306-6699
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (304) 926-1124
Securities Registered Pursuant to Section 12(b) of the Act:
Name of each exchange
Title of each class on which registered
Shares of beneficial interest, American Stock Exchange
without par value
Securities Registered Pursuant to Section 12(g) of the Act: None
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 requirement for the past 90 days:
Yes X No
The aggregate market value of the voting stock held by nonaffiliates of
the registrant as of March 1, 2000, was $9,786,400.
At March 1, 2000, there were 1,510,000 outstanding shares of beneficial
interest.
Notices and communications from the Securities and Exchange Commission
for the registrant may be sent to Robert A. Hamstead, Vice President
and Secretary-Treasurer, #2 Port Amherst Drive, Charleston, WV 25306.
The information required by Part III hereof is incorporated by
reference from Registrant's Proxy Statement, which will be filed with
the Securities and Exchange Commission within 120 days after
December 31, 1999.
PART I
Item 1. BUSINESS
Pittsburgh & West Virginia Railroad (the "Registrant") was organized
in Pennsylvania in 1967, as a business trust, for the purpose of acquiring
the business and property of a small leased railroad. The railroad was
leased in 1964 to Norfolk and Western Railway Company ("N&W"), by
Registrant's predecessor company, for 99 years with the right of unlimited
renewal.
Registrant's business consists solely of the ownership of the
properties subject to the lease, and of collection of rent thereon.
The rent received is $915,000 per year, in cash, which amount is fixed and
unvarying for the life of the lease. In addition, the lease provides that
certain non-cash items be recorded as rent income each year. These entries
are equal in amount to the sum of (1) Registrant's federal income tax
deductions for depreciation, retirements, and amortization of debt discount
expense, and (2) all other expenses of the Registrant, except those expenses
incurred for the benefit of its shareholders. For financial reporting
purposes, only the cash income is reported, as the non-cash items, although
recorded under the terms of the lease, have no financial value because of
the unlimited settlement date.
The Lease provided that N&W would assume payment of the principal of
and interest on Registrant's long-term debt. The debt was paid off during
1982.
Registrant has elected to be treated for tax purposes as a "real estate
investment trust." As such, the trust itself is exempt from federal income
tax, to the extent that its income is distributed to shareholders. However,
dividends paid by Registrant are taxable income to its shareholders. In order
to maintain qualified status, at least 95% of ordinary taxable income must be
distributed. It is Registrant's policy to distribute annually approximately
100% of ordinary taxable income.
Item 2. PROPERTIES
The properties leased to N&W consist of 112 miles of main line road
extending from Pittsburgh Junction, Ohio, through parts of West Virginia, to
Connellsville, Pennsylvania; approximately 20 miles of branch lines; and
other assets used in the operation of the railroad, such as real estate,
machinery and equipment, and supplies, but excluding rolling stock all of which
was sold to N&W prior to the effective date of the lease.
The more significant provisions of the lease applicable to the properties
are:
N&W at its own expense and without deduction from the rent, will maintain,
manage and operate the leased property and make such improvements thereto as it
considers desirable. Such improvements made by N&W become the property of
the Registrant, and the cost thereof constitutes a recorded indebtedness of
Registrant to N&W. The indebtedness is offset when non-cash rental is recorded
over the depreciable life of the improvements. Such part of the leased
property as is, in the opinion of N&W, not necessary, may be disposed of.
Item 2. PROPERTIES (Continued)
The proceeds of any disposition are retained by N&W and constitute an
indebtedness of N&W to Registrant. Because of the unlimited settlement date
for non-cash items, such transactions and balances have not been reported in
the financial statements since 1982. If N&W should ever terminate the lease,
all properties covered by the lease would be returned to Registrant, together
with sufficient cash and other assets to permit operation of the railroad for
one year.
Item 3. LEGAL PROCEEDINGS
The Company is a defendant in a personal injury suit seeking unspecified
damages. Although the eventual outcome of this matter cannot be determined,
management is of the opinion the claim is without merit and intends to
vigorously defend the Company.
Item 4. SUBMISSION OF MATTERS TO A VOTE OF SECURITY HOLDERS
No matters were submitted during the fourth quarter to a vote of security
holders.
PART II
Item 5. MARKET FOR REGISTRANT'S COMMON STOCK AND
RELATED SECURITY HOLDER MATTERS
Registrant's shares are listed for trading on the American Stock Exchange.
At March 1, 2000 there were approximately 1,103 holders of record of
registrant's shares of beneficial interest.
[CAPTION]
Stock Market and Dividend information per share of beneficial interest.
1999 Quarters Ended
3/31 6/30 9/30 12/31
<TABLE>
Sales price of traded shares
<S> <C> <C> <C> <C>
High . . . $ 8-1/8 $ 8-3/8 $ 7-13/16 $ 7-1/4
Low. . . . 7-5/8 7-9/16 6-11/16 6-9/16
Dividends paid. .13 .14 .14 .14
1998 Quarters Ended
3/31 6/30 9/30 12/31
Sales price of traded shares
High . . . $ 7-5/8 $ 7-1/2 $ 7-3/4 $ 8-1/8
Low. . . . 7-1/4 7-1/8 7-1/8 7-5/8
Dividends paid. .13 .14 .14 .14
</TABLE>
Item 6. SELECTED FINANCIAL DATA
($Thousands, except per share amounts)
1999 1998 1997 1996 1995
<TABLE>
<S> <C> <C> <C> <C> <C>
Revenues $ 915 $ 915 $ 915 $ 915 $ 918
Income available for
distribution 832 832 835 822 828
Net income 832 832 835 822 828
Total assets 9,193 9,191 9,189 9,170 9,174
Per share amounts:
Net income .55 .55 .55 .54 .55
Income available for
distribution .55 .55 .55 .54 .55
Cash dividend .55 .55 .54 .55 .55
</TABLE>
Item 7. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION
AND RESULTS OF OPERATIONS
All of the Registrant's railroad properties are leased to Norfolk and
Western Railway Company ("N&W") for 99 years, with unlimited renewals on the
same terms. Cash rental is a fixed amount of $915,000 per year, with no
provision for change. This cash rental, and small amounts of interest
income, are the only source of funds. Although the lease provides for
additional rentals to be recorded, these amounts do not increase cash flow
as they are charged to N&W's settlement account with no requirement for
payment.
Revenues and income available for distribution were the same in
1999 as in 1998
Registrant's only cash outlays, other than dividend payments, are for
general and administrative expenses, which were slightly higher in 1999 than
in 1998. The leased properties are maintained entirely at N&W's expense.
Since cash revenue is fixed in amount and outlays for expenses are
relatively modest, inflation has had no material impact on Registrant's
reported net income.
Item 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA
Quarterly financial data (in $thousands, except per share amounts)
1999 1st Qtr. 2nd Qtr. 3rd Qtr. 4th Qtr.
<TABLE>
<S> <C> <C> <C> <C>
Revenues $ 229 $ 229 $ 229 $ 228
Net income 212 207 205 209
Per share .13 .14 .14 .14
1998
Revenues $ 229 $ 229 $ 229 $ 228
Net income 209 204 209 211
Per share .13 .14 .14 .14
</TABLE>
Detailed financial statements of Registrant appear on pages F-3
through F-8 of this report. Per share data for the year is slightly different
from the sum of four quarters due to rounding.
Item 9. DISAGREEMENTS ON ACCOUNTING AND FINANCIAL DISCLOSURES
There were no disagreements on accounting and financial disclosures.
PART III
Item 10. DIRECTORS AND EXECUTIVE OFFICERS OF REGISTRANT
Item 11. EXECUTIVE COMPENSATION
Item 12. SECURITY OWNERSHIP OF CERTAIN BENEFICIAL OWNERS AND MANAGEMENT
Management's ownership of Registrant's shares of beneficial interest
as of March 2, 2000.
Shares Percent of
Name of Beneficially Outstanding
Trustee Owned Shares
<TABLE>
<S> <C> <C>
Herbert E. Jones, Jr. 4,000 0.265
Charles T. Jones 200 0.013
Virgil E. Wenger 200 0.013
All trustees and officers
as a group (3 persons) 4,400 0.291
</TABLE>
Item 13.
Information required by items 10, 11, and 13 is set forth in
Registrant's 2000 Proxy Statement, which is incorporated herein by reference.
PART IV
Item 14. EXHIBITS, FINANCIAL STATEMENT SCHEDULES AND REPORTS ON FORM 8-K
(a) 1. A list of all financial statements and financial statement
schedules filed as part of this report is set forth on
page F-1 herein.
2. Exhibits - all the below listed exhibits are incorporated
herewith by reference to Form 8 Amendment to Annual Report
on Form 10-K for the year ended December 31, 1988:
3.1 Pittsburgh & West Virginia Railroad Declaration of
Trust dated February 18, 1967.
3.2 Pittsburgh & West Virginia Railroad Regulations.
3.3 Plan and Agreement of Reorganization, dated February
18, 1967, between Pittsburgh & West Virginia Railroad
and The Pittsburgh and West Virginia Railway Company.
3.4 Amendment No. 1 to Plan and Agreement of Reorganization
dated February 18, 1967, between The Pittsburgh and
West Virginia Railway Company and Pittsburgh &
West Virginia Railroad.
10.1 Lease of railroad properties, dated July 12, 1962,
between the Pittsburgh and West Virginia Railway
Company and Norfolk and Western Railway Company.
10.2 Assignment of lease by The Pittsburgh and
West Virginia Railway Company to Pittsburgh &
West Virginia Railroad.
(b) No report on Form 8-K was filed during the fourth quarter of 1999.
SIGNATURES
Pursuant to the requirements of Section 13 or 15(d) 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.
PITTSBURGH & WEST VIRGINIA RAILROAD
By /s/ Robert A. Hamstead
Robert A. Hamstead
Vice President and Secretary-Treasurer
Date: March 15, 2000
Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the dates indicated.
/s/ Herbert E. Jones, Jr. /s/ Virgil E. Wenger
Herbert E. Jones, Jr. Virgil E. Wenger
Chairman of the Board and Trustee Assistant Secretary, Assistant
Treasurer and Trustee
/s/ Charles T. Jones
Charles T. Jones
Alternate Chairman, President and
Trustee
Date: March 15, 2000
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<PERIOD-END> DEC-31-1999
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0
0
<COMMON> 9145
<OTHER-SE> 25
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<CGS> 0
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<NET-INCOME> 832
<EPS-BASIC> .55
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