UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
Form 10-Q
X QUARTERLY REPORT PURSUANT TO SECTION 13 or 15 (d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 2000
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 0-16704
PROVIDENCE AND WORCESTER RAILROAD COMPANY
(Exact name of registrant as specified in its charter)
Rhode Island 05-0344399
----------------------------- --------------------------
(State or other jurisdiction of I.R.S. Employer Identification No.
incorporation or organization)
75 Hammond Street, Worcester, Massachusetts 01610
----------------------------- --------------------------
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (508) 755-4000
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.
As of August 1, 2000, the registrant has 4,344,386 shares of common stock, par
value $.50 per share, outstanding.
<PAGE>
PROVIDENCE AND WORCESTER RAILROAD COMPANY
Index
Part I - Financial Information
Item 1 - Financial Statements:
Balance Sheets - June 30, 2000 and December 31, 1999 ...... 3
Statements of Income - Three and Six Months Ended
June 30, 2000 and 1999 .................................... 4
Statements of Cash Flows - Six Months
Ended June 30, 2000 and 1999 .............................. 5
Notes to Financial Statements ............................. 6-7
Item 2 - Management's Discussion and Analysis of
Financial Condition and Results of Operations ............. 8-12
Item 3 - Quantitative and Qualitative Disclosures About Market Risk. 12
Part II - Other Information:
Item 4 Submission of Matters to a Vote of Security Holders......... 13
Item 6 Exhibits and Reports on Form 8-K .......................... 13
Signatures ............................................................ 14
2
<PAGE>
Item 1. Financial Statements
-----------------------------
PROVIDENCE AND WORCESTER RAILROAD COMPANY
BALANCE SHEETS
(Dollars in Thousands Except Per Share Amounts)
<TABLE>
ASSETS
JUNE 30, DECEMBER 31,
2000 1999
(Unaudited)
------- -------
<S> <C> <C>
Current Assets:
Cash and equivalents ................................ $ 4,565 $ 4,626
Accounts receivable, net of allowance for
doubtful accounts of $125 in 2000 and 1999 ......... 4,609 3,251
Materials and supplies .............................. 1,725 2,107
Prepaid expenses and other .......................... 132 181
Deferred income taxes ............................... 91 58
------- -------
Total Current Assets ............................... 11,122 10,223
Property and Equipment, net .......................... 64,670 64,156
Land Held for Development ............................ 11,851 11,851
Goodwill, net ........................................ 94 141
------- -------
Total Assets ......................................... $87,737 $86,371
======= =======
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Accounts payable .................................... $ 2,465 $ 2,347
Accrued expenses .................................... 649 650
Income taxes ........................................ 468 --
------- -------
Total Current Liabilities .......................... 3,582 2,997
------- -------
Profit-Sharing Plan Contribution ..................... 176 400
------- -------
Deferred Grant Income ................................ 7,333 7,421
------- -------
Deferred Income Taxes ................................ 8,845 8,870
Commitments and Contingent Liabilities
Shareholders' Equity:
Preferred stock, 10% noncumulative, $50 par
value; authorized, issued and outstanding
647 shares ......................................... 32 32
Common stock, $.50 par value; authorized
15,000,000 shares; issued and outstanding
4,344,386 shares in 2000 and 4,281,280
shares in 1999 ..................................... 2,172 2,141
Additional paid-in capital .......................... 28,922 28,519
Retained earnings ................................... 36,675 35,991
------- -------
Total Shareholders' Equity ......................... 67,801 66,683
------- -------
Total Liabilities and Shareholders' Equity ........... $87,737 $86,371
======= =======
</TABLE>
The accompanying notes are an integral part of the
financial statements.
3
<PAGE>
PROVIDENCE AND WORCESTER RAILROAD COMPANY
STATEMENTS OF INCOME (Unaudited)
(Dollars in Thousands Except Per Share Amounts)
<TABLE>
Three Months Ended Six Months Ended
June 30, June 30,
2000 1999 2000 1999
------- ------- ------- -------
<S> <C> <C> <C> <C>
Operating Revenues - Freight
and Non-Freight ................... $ 6,041 $ 5,507 $11,307 $10,433
------- ------- ------- -------
Operating Expenses:
Maintenance of way and
structures ....................... 1,059 804 2,014 1,524
Maintenance of equipment .......... 532 559 1,157 1,100
Transportation .................... 1,630 1,414 3,107 2,689
General and administrative ........ 1,074 990 2,025 1,893
Depreciation ...................... 633 600 1,266 1,164
Taxes, other than income
taxes ............................ 644 579 1,268 1,199
Car hire, net ..................... 186 95 371 262
------- ------- ------- -------
Total Operating Expenses ......... 5,758 5,041 11,208 9,831
------- ------- ------- -------
Income from Operations ............. 283 466 99 602
Other Income ....................... 1,277 153 1,498 422
------- ------- ------- -------
Income before Income Taxes ......... 1,560 619 1,597 1,024
Provision for Income Taxes ......... 542 230 565 375
------- ------- ------- -------
Net Income ......................... 1,018 389 1,032 649
Preferred Stock Dividends .......... -- -- 3 3
------- ------- ------- -------
Net Income Available to Common
Shareholders ...................... $ 1,018 $ 389 $ 1,029 $ 646
======= ======= ======= =======
Basic Income Per Common Share ...... $ .24 $ .09 $ .24 $ .15
======= ======= ======= =======
Diluted Income Per Common
Share ............................. $ .23 $ .09 $ .24 $ .15
======= ======= ======= =======
</TABLE>
The accompanying notes are an integral part of the
financial statements.
4
<PAGE>
PROVIDENCE AND WORCESTER RAILROAD COMPANY
STATEMENTS OF CASH FLOWS (Unaudited)
(Dollars in Thousands)
<TABLE>
Six Months Ended June 30,
2000 1999
------- -------
<S> <C> <C>
Cash flows from operating activities:
Net income ........................................... $ 1,032 $ 649
Adjustments to reconcile net income to net
cash flows from operating activities:
Depreciation and amortization ....................... 1,313 1,206
Amortization of deferred grant income ............... (87) (83)
Profit-sharing plan contribution to be
funded with common stock ........................... 168 69
Gain from sales of properties, equipment
and easements, net ................................. (1,119) (70)
Deferred income taxes ............................... (58) 95
Increase (decrease) in cash from:
Accounts receivable ................................ (616) (407)
Materials and supplies ............................. 382 (298)
Prepaid expenses and other ......................... 49 212
Accounts payable and accrued expenses .............. 839 (265)
------- -------
Net cash flows provided by operating
activities .......................................... 1,903 1,108
------- -------
Cash flows from Investing Activities:
Purchase of property and equipment ................... (2,052) (4,837)
Proceeds from sale of properties, equipment
and easements ....................................... 106 85
Proceeds from deferred grant income .................. 290 162
------- -------
Net cash flows used by investing activities .......... (1,656) (4,590)
------- -------
Cash Flows from Financing Activities:
Dividends paid ....................................... (348) (301)
Issuance of common shares for stock options
exercised and employee stock purchases .............. 40 61
------- -------
Net cash flows used by financing activities .......... (308) (240)
------- -------
Decrease in Cash and Equivalents ..................... (61) (3,722)
Cash and Equivalents, Beginning of Period ............ 4,626 7,294
------- -------
Cash and Equivalents, End of Period .................. $ 4,565 $ 3,572
------- -------
Supplemental disclosures:
Cash paid during the period for Income taxes ......... $ 35 $ 86
======= =======
</TABLE>
Non-cash transactions are described in Note 2.
The accompanying notes are an integral part of the
financial statements.
5
<PAGE>
PROVIDENCE AND WORCESTER RAILROAD COMPANY
NOTES TO FINANCIAL STATEMENTS (Unaudited)
SIX MONTHS ENDED JUNE 30, 2000 AND 1999
(Dollars in Thousands Except Per Share Amounts)
1. In the opinion of management, the accompanying interim financial statements
contain all adjustments (consisting solely of normal recurring adjustments)
necessary to present fairly the financial position as of June 30, 2000 and
the results of operations and cash flows for the interim periods ended June
30, 2000 and 1999. Results for interim periods may not necessarily be
indicative of the results to be expected for the year. These interim
financial statements should be read in conjunction with the Company's 1999
Annual Report on Form 10-K for the year ended December 31, 1999 filed with
the Securities and Exchange Commission.
2. Changes in Shareholders' Equity:
<TABLE>
Total
Additional Share
Preferred Common Paid-in Retained holders'
Stock Stock Capital Earnings Equity
------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C>
Balance December 31,1999. $ 32 $ 2,141 $28,519 $35,991 $66,683
Issuance of 6,688
common shares for
employee stock
purchases and other .... 3 40 43
Issuance of 56,418
common shares to
fund the Company's
1999 profit sharing
plan contribution ...... 28 363 391
Dividends:
Preferred stock,
$5.00 per share ........ (3) (3)
Common stock, $.08
per share .............. (345) (345)
Net income for the
period ................. 1,032 1,032
------- ------- ------- ------- -------
Balance June 30, 2000 ... $ 32 $ 2,172 $28,922 $36,675 $67,801
======= ======= ======= ======= =======
</TABLE>
During the six months ended June 30, 1999 the Company issued 31,095 shares
of its common stock with an aggregate fair market value of $385 to fund its
1998 profit sharing plan contribution and issued 7,500 shares of its common
stock with an aggregate fair market value of $82 in connection with the
April 1998 acquisition of Connecticut Central Railroad Company.
3. Other Income:
<TABLE>
Three Months Ended Six Months Ended
June 30, June 30,
------------------- ------------------
2000 1999 2000 1999
------ ------ ------ ------
<S> <C> <C> <C> <C>
Gain from sales of
properties, equipment
and easements, net ....... $1,087 $ 7 $1,119 $ 70
Rentals ................... 122 103 244 251
Interest .................. 68 43 135 101
------ ------ ------ ------
$1,277 $ 153 $1,498 $ 422
====== ====== ====== ======
</TABLE>
Gain from sales of properties, equipment and easements for 2000 includes
$1,041 from the sale of easements in June, which amount is included in
accounts receivable as of June 30, 2000. The Company subsequently received
payment of these funds in July 2000.
6
<PAGE>
4. Income per Share:
Basic income per common share is computed using the weighted average number
of common shares outstanding during each year. Diluted income per common
share reflects the effect of the Company's outstanding convertible
preferred stock, options and warrants except where such items would be
antidilutive.
A reconciliation of weighted average shares used for the basic computation
and that used for the diluted computation is as follows:
<TABLE>
Three Months Ended Six Months Ended
June 30, June 30,
--------------------- ---------------------
2000 1999 2000 1999
--------- --------- --------- ---------
<S> <C> <C> <C> <C>
Weighted average shares
for basic ..................... 4,317,752 4,256,878 4,299,573 4,243,539
Dilutive effect of
convertible preferred
stock, options and
warrants ...................... 67,192 77,066 67,747 84,133
--------- --------- --------- ---------
Weighted average shares
for diluted ................... 4,384,944 4,333,944 4,367,320 4,327,672
========= ========= ========= =========
</TABLE>
Options and warrants to purchase 205,205 shares of common stock were
outstanding for the three and six month periods ended June 30, 2000, and
options and warrants to purchase 182,710 and 190,890 shares of common stock
were outstanding for the three and six month periods ended June 30, 1999
respectively, but were not included in the computation of diluted earnings
per share because their effect would be antidilutive.
5. Commitments and Contingent Liabilities:
The Company is a defendant in certain lawsuits relating to casualty losses,
many of which are covered by insurance subject to a deductible. The Company
believes that adequate provision has been made in the financial statements
for any expected liabilities which may result from disposition of such
lawsuits.
While it is possible that some of the foregoing matters may be settled at a
cost greater than that provided for, it is the opinion of management based
upon the advice of counsel that the ultimate liability, if any, will not be
material to the Company's financial statements.
6. Dividends:
On July 26, 2000, the Company declared a dividend of $.04 per share on its
outstanding common stock payable August 24, 2000 to shareholders of record
August 10, 2000.
7
<PAGE>
PROVIDENCE AND WORCESTER RAILROAD COMPANY
ITEM 2-MANAGEMENT'S DISCUSSION AND ANALYSIS OF
----------------------------------------------
FINANCIAL CONDITION AND RESULTS OF OPERATIONS
----------------------------------------------
The statements contained in Management's Discussion and Analysis of Financial
Condition and Results of Operations ("MDA") which are not historical are
"forward-looking statements" within the meaning of Section 27A of the Securities
Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934,
as amended. These forward-looking statements represent the Company's present
expectations or beliefs concerning future events. The Company cautions, however,
that actual results could differ materially from those indicated in MDA.
Results of Operations
---------------------
The following table sets forth the Company's operating revenues by category in
dollars and as a percentage of operating revenues:
<TABLE>
Three Months Ended June 30, Six Months Ended June 30,
---------------------------- -----------------------------
2000 1999 2000 1999
------------- ------------- -------------- --------------
(In thousands, except percentages)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Freight Revenues:
Conventional
carloads ...... $4,974 82.3% $4,550 82.6% $ 9,194 81.3% $8,560 82.1%
Containers ..... 747 12.4 536 9.7 1,379 12.2 1,046 10.0
Non-Freight
Operating
Revenues:
Transportation
services ...... 249 4.1 98 1.8 508 4.5 238 2.3
Other .......... 71 1.2 323 5.9 226 2.0 589 5.6
------ ------ ------ ------ ------- ------ ------- -----
Total ........ $6,041 100.0% $5,507 100.0% $11,307 100.0% $10,433 100.0%
====== ====== ====== ====== ======= ====== ======= ======
</TABLE>
The following table sets forth a comparison of the Company's operating expenses
expressed in dollars and as a percentage of operating revenues:
<TABLE>
Three Months Ended June 30, Six Months Ended June 30,
---------------------------- -----------------------------
2000 1999 2000 1999
------------- ------------- -------------- --------------
(In thousands, except percentages)
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Salaries, wages,
payroll taxes
and employee
benefits ....... $3,284 54.4% $3,092 56.1% $ 6,375 56.4% $ 6,019 57.7%
Casualties and
insurance ...... 241 4.0 173 3.1 391 3.5 330 3.2%
Depreciation and
amortization ... 657 10.9 625 11.4 1,313 11.6 1,206 11.5
Diesel fuel ..... 298 4.9 192 3.5 591 5.2 307 2.9
Car hire, net ... 186 3.1 95 1.7 371 3.3 262 2.5
Purchased
services,
including legal
and professional
fees ........... 359 5.9 612 11.1 633 5.6 1,036 9.9
Repair and
maintenance of
equipment ...... 239 4.0 263 4.8 557 4.9 532 5.1
Track and signal
materials ...... 715 11.8 470 8.5 1,236 10.9 873 8.4
Other materials
and supplies ... 231 3.8 232 4.2 493 4.4 564 5.4
Other ........... 412 6.8 346 6.3 784 6.9 749 7.2
------ ------ ------ ------ ------- ------ ------- ------
Total .......... 6,622 109.6 6,100 110.7 12,744 112.7 11,878 113.8
Less capitalized
and recovered
costs ......... 864 14.3 1,059 19.2 1,536 13.6 2,047 19.6
------ ------ ------ ------ ------- ------ ------- ------
Total ........ $5,758 95.3% $5,041 91.5% $11,208 99.1% $ 9,831 94.2%
====== ====== ====== ====== ======= ====== ======= ======
</TABLE>
8
<PAGE>
Six Months Ended June 30, 2000 Compared to Six Months Ended June 30, 1999
Operating Revenues:
Operating revenues increased $874,000, or 8.4%, to $11.3 million in the six
months ended June 30, 2000 from $10.4 million in 1999. This increase is the net
result of a $634,000 (7.4%) increase in conventional freight revenues and a
$333,000 (31.8%) increase in net-container freight revenues partially offset by
a $93,000 (11.2%) decrease in non-freight operating revenues.
The increase in conventional freight revenues is attributable to an increase in
traffic volume and to a small increase in the average revenue received per
conventional carloading of 1.1%. The Company's conventional freight carloadings
increased by 827, or 6.3%, to 14,044 in 2000 from 13,217 in 1999. The increase
in conventional carloadings results from new customers as well as increased rail
traffic from certain existing customers. The increase in the average revenue
received per conventional carloading is the net result of some moderate
increases in freight rates offset, in part, by a small change in the mix of
traffic toward lower margin commodities.
The increase in net container freight revenues is primarily the result of an
increase in container traffic volume. Total intermodal containers handled
increased by 7,255, or 27.4%, to 33,775 in the first six months of 2,000 from
26,520 in 1999. The average revenue received per container increased by 3.5% due
to increases in certain railroad industry cost indices and to variations in the
mix of containers handled.
The decrease in non-freight operating revenues is the net result of decreases in
maintenance departmental billings partially offset by increases in demurrage and
other transportation-related revenues. Such revenues can vary from period to
period depending upon customer needs.
Operating Expenses:
Operating expenses increased $1.4 million, or 14.0%, to $11.2 million in the six
months ended June 30, 2000 from $9.8 million in 1999. Operating expenses as a
percentage of operating revenues ("operating ratio") increased to 99.1% in 2000
from 94.2% in 1999. The increase in operating expenses is attributable to a
number of factors, among the more significant of which are the following:
o Diesel fuel expense increased by $284,000, or 92.5%, to $591,000 in 2000
from $307,000 in 1999 due to sharply increased costs in effect for
petroleum products.
o Depreciation and amortization expense increased by $107,000, or 8.9%, to
$1.3 million in 2000 from $1.2 million in 1999 due to recent property and
equipment additions and amortization of goodwill.
o Costs capitalized or recovered through projects funded by public grants and
contracts decreased by $511,000, or 25.0%, to $1.5 million in 2000 from
$2.0 million in 1999. The total costs recovered from such government grants
and contracts can vary significantly from period to period.
o The Company incurred a casualty loss of $100,000 in May 2000 as a result of
the derailment of several rail cars.
9
<PAGE>
o Employee profit sharing expense increased by $99,000, or 142.8%, to
$168,000 in 2000 from $69,000 in 1999. This increase is entirely
attributable to the significant increase in non- operating income which the
Company earned in 2000 compared with 1999.
The Company's operating expenses are of a relatively fixed nature and do not
increase or decrease proportionately with variations in operating revenues.
Other Income:
Other income increased $1.1 million, or 255.0%, to $1.5 million in the six
months ended June 30, 2000 from $422,000 in 1999. This increase is primarily the
result of a gain from the sale of easements in June 2000 in the amount of $1.0
million, payment of which was subsequently received in July 2000. While the
Company has historically realized substantial amounts of income of this nature,
the amount of such income can vary significantly from period to period.
Three Months Ended June 30, 2000 Compared to Three Months Ended June 30, 1999
Operating Revenues:
Operating revenues increased $534,000, or 9.7%, to $6.0 million in the second
quarter of 2000 from $5.5 million in 1999. This increase is the net result of a
$424,000 (9.3%) increase in conventional freight revenues and a $211,000 (39.4%)
increase in net container freight revenues partially offset by a $101,000
(24.0%) decrease in non-freight operating revenues.
The increase in conventional freight revenues is attributable to an increase in
traffic volume and to a 4.3% increase in the average revenue received per
conventional carloading. The Company's conventional freight carloadings
increased by 391, or 4.9%, to 8,449 in the second quarter of 2000 from 8,058 in
1999. The increase in conventional carloadings results from new customers as
well as increased rail traffic from certain existing customers. The increase in
the average revenue received per conventional carloading is the result of some
moderate increases in freight rates as well as a change to the mix of traffic
toward higher margin commodities.
The increase in net container freight revenues for the quarter is primarily the
result of an increase in container traffic volume. Total intermodal containers
handled increased by $4,668, or 34.5%, to 18,206 in the second quarter of 2000
from 13,538 in 1999. The average revenue received per container for the quarter
increased by 3.6% due to increases in certain railroad industry cost indices and
to variations in the mix of containers handled.
The decrease in non-freight operating revenues for the quarter is the net result
of decreases in maintenance departmental billings partially offset by a
increases in demurrage and other transportation-related revenues. Such revenues
can vary from period to period depending upon customer needs.
Operating Expenses:
Operating expenses increased $717,000, or 14.2%, to $5.8 million in the second
quarter of 2000 from $5.0 million in 1999. The operating ratio for the quarter
increased to 95.3% in 2000 from 91.5% in 1999. The increase in operating
expenses is attributable to a number of factors, among the more significant of
which are the following:
o Diesel fuel expense for the quarter increased by $106,000, or 55.2%, to
$298,000 in 2000 from $192,000 in 1999 due to sharply increased costs in
effect for petroleum products.
10
<PAGE>
o Depreciation and amortization expense increased by $32,000, or 5.1%, to
$657,000 in the second quarter of 2000 from $625,000 in 1999 due to recent
property and equipment additions and amortization of goodwill.
o Costs capitalized or recovered through projects funded by public grants and
contracts decreased by $195,000, or 18.4%, to $864,000 in the second
quarter of 2000 from $1.1 million in 1999. The total costs recovered from
such government grants and contracts can vary significantly from period to
period.
o The Company incurred a casualty loss of $100,000 in May 2000 as a result of
the derailment of several rail cars.
o Employee profit sharing expense increased by $99,000, or 142.8%, to
$168,000 in the second quarter of 2000 from $69,000 in 1999. This increase
is entirely attributable to the significant increase in non-operating
income which the Company earned during the second quarter of 2000 compared
with 1999.
Other Income:
Other income increased $1.1 million to $1.3 million in the second quarter of
2000 from $153,000 in 1999. This increase is due to a substantial increase in
net gains realized from the sale of property and easements, principally $1.0
million derived from the sale of easements in June 2000. While the Company has
historically realized substantial amounts of income of this nature, the amount
of such income can vary significantly from period to period.
Liquidity and Capital Resources
-------------------------------
During the six months ended June 30, 2000 the Company generated $1.9 million of
cash from operations. Total cash and equivalents, however, decreased by $61,000
during the six month period. The principal utilization of cash during the period
was for the payment of dividends and for expenditures for property and
equipment, of which $1.1 million was for additions and improvements to the
Company's track structure and bridges.
In management's opinion cash generated from operations during the remainder of
2000 will be sufficient to enable the Company to meet its operating expense,
capital expenditure and dividend requirements.
Seasonality
-----------
Historically, the Company's operating revenues are lowest for the first quarter
due to the absence of aggregate shipments during a portion of this period and to
winter weather conditions.
Recent Accounting Pronouncements
--------------------------------
In June 1998, the Financial Accounting Standards Board issued Statement of
Financial Accounting Standards ("SFAS") No. 133, "Accounting for Derivative
Instruments and Hedging Activities", subsequently amended in June 1999 and
effective for fiscal years beginning after June 15, 2000. The new standard
requires that all companies record derivatives on the balance sheet as assets or
liabilities, measured at fair value. Gains or losses resulting from changes in
the values of those derivatives would be accounted for depending on the use of
the derivative and whether it qualifies for hedge accounting. Management is
currently assessing the impact of SFAS No. 133 on the financial statements of
the Company. The Company will adopt this accounting standard on January 1, 2001,
as required.
11
<PAGE>
In December 1999, the Securities and Exchange Commission issued Staff Accounting
Bulleting ("SAB") No. 101, "Revenue Recognition in financial Statements." SAB
No. 101 provides guidance on applying generally accepted accounting principles
to revenue recognition issues in financial statements. SAB 101 must be adopted
in the quarter ended December 31, 2000 and requires companies to report any
changes in revenue recognition as a cumulative effect from a change in
accounting principle at the time of adoption. Management is currently assessing
the impact of SAB No. 101 on the Company's financial statements.
Item 3. Quantitative and Qualitative Disclosures About Market Risk
------------------------------------------------------------------
Cash and Equivalents
As of June 30, 2000, the Company is exposed to market risks which primarily
include changes in U.S. interest rates.
The Company invests cash balances in excess of operating requirements in
short-term securities, generally with maturities of 90 days or less. In
addition, the Company's revolving line of credit agreement provides for
borrowings which bear interest at variable rates based on either prime rate or
one and one half percent over either the one or three month London Interbank
Offered Rates. The Company had no borrowings outstanding pursuant to the
revolving line of credit agreement at June 30, 2000. The Company believes that
the effect, if any, of reasonably possible near-term changes in interest rates
on the Company's financial position, results of operations, and cash flows
should not be material.
12
<PAGE>
PART II - Other Information
---------------------------
Item 4. Submission of Matters to a Vote of Security Holders
---------------------------------------------------
The Annual Meeting of Stockholders was held on April 26, 2000. Of the
4,281,280 shares of common stock entitled to vote, 3,261,734 shares
were present, in person or by proxy. Of the 647 shares of preferred
stock entitled to vote, 510 shares were present, in person or by
proxy.
All directors of the Company are elected on an annual basis and the
following were so elected at this Annual Meeting:
Richard W. Anderson, Robert H. Eder and Merrill W. Sherman were
elected Common Stock Directors. Mr. Anderson received 3,212,483
affirmative votes and 49,251 negative votes, Mr. Eder received
3,200,883 affirmative votes and 60,851 negative votes and Ms. Sherman
received 3,212,783 affirmative votes and 48,951 negative votes of
common shares.
Frank W. Barrett, John H. Cronin, J. Joseph Garrahy, Orville R.
Harrold, John J. Healy and Charles M. McCollam, Jr. were elected
Preferred Stock Directors. Each director received 510 affirmative
votes and no negative votes of preferred shares.
A resolution was presented for the appointment of Deloitte & Touche
LLP as independent auditors of the accounts of the Company for 2000.
The resolution received 3,232,738 affirmative votes and 26,617
negative votes of common shares with 2,379 common shares abstaining.
The resolution received 510 affirmative votes and no negative votes of
preferred shares.
Item 6. Exhibits and Reports on Form 8-K
--------------------------------
(b) A report on Form 8-K was filed on June 9, 2000 reporting that by
press release dated June 8, 2000 the Registrant announced to the
general public the commencement of construction of a 12 mile
right-of-way bringing freight service into Hartford, Connecticut.
13
<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.
PROVIDENCE AND WORCESTER
RAILROAD COMPANY
By: /s/ Orville R. Harrold
-------------------------------------
Orville R. Harrold,
President
By: /s/ Robert J. Easton
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Robert J. Easton
Treasurer and Principal
Financial Officer
DATED: August 9, 2000
