<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
Current Report
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): April 22, 1994
CHICAGO AND NORTH WESTERN HOLDINGS CORP.
(Exact name of Registrant as specified in its charter)
DELAWARE 33-30874 13-3526817
(State or other (Commission File (IRS Employer
jurisdiction of Number) Identification No.)
incorporation)
ONE NORTH WESTERN CENTER
CHICAGO, ILLINOIS 60606
(Address of principal (Zip code)
executive offices)
Registrant's telephone number, including area code:
(312) 559-6156<PAGE>
ITEM 5. OTHER EVENTS
The event being reported is the issuance on April 22, 1994,
of the Company's press release, filed herewith as Exhibit 99,
hereto.
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(c) Exhibit 99 -- Press release issued by the Company
on April 22, 1994.
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 hereunto duly authorized.
CHICAGO AND NORTH WESTERN HOLDINGS CORP.
Registrant
By: /s/ ROBERT SCHMIEGE
ROBERT SCHMIEGE
President<PAGE>
EXHIBIT INDEX
EXHIBIT
NO.
99 Press release issued by the Company on April 22, 1994<PAGE>
EXHIBIT 99
NEWS RELEASE
Release Date: Immediate
Contact: James M. Foote
(312) 559-6165
Leslie Cleveland Hague
(312) 559-6124
CHICAGO AND NORTH WESTERN HOLDINGS CORP.
ANNOUNCES ESTIMATE FOR FIRST QUARTER RESULTS
AND RESULTS OF INVESTIGATION
Chicago, Illinois, April 22, 1994 -- Chicago and North Western
Holdings Corp. (NYSE: CNW) today announced that next week it
expects to report first quarter 1994 net income of approximately
$16.5 million, or 35 to 37 cents per share, compared with net
income of $14.6 million, or 33 cents per share, in the first
quarter of last year. This year's results were achieved despite
the effects of severe winter weather and reflect a net accounting
adjustment resulting from errors and irregularities that reduced
net income by $800,000, or 2 cents per share (a reduction of $1.3
million in pre-tax income).
The net adjustment reflects the conclusions of an
investigation, conducted for the audit committee of the company's
board of directors, by the company's outside counsel and Arthur
Andersen & Co., the company's independent public accountants, as
well as a review, conducted by special counsel to the audit<PAGE>
2
committee, of a part of the investigation. The company noted
that the net adjustment is not material to the company's
financial position or results of operations of past periods, and
because the net adjustment is not material to the first quarter
of 1994, the company will not restate its past annual and
quarterly financial statements. The investigation also concluded
that there was no evidence that any funds or other assets were
improperly diverted from the company.
The net adjustment results from errors and irregularities
that increased net income in past periods by approximately $3.2
million, offset by those that decreased net income in past
periods by approximately $2.4 million. The problems were the
result of inappropriate recording of certain operating expenses,
and relate primarily to the fourth quarter of 1993, resulting in
a net overstatement of $1.0 million ($.02 per share) in 1993
fourth quarter reported net income of $24.5 million, or $.54 per
share (an overstatement of $1.6 million in pre-tax income), and a
net overstatement of approximately $500,000 ($.01 per share) in
1993 reported net income of $53.2 million, or $1.20 per share (an
overstatement of $800,000 in pre-tax income). The investigation
also identified errors and irregularities in the earlier quarters
in 1993 and in fiscal 1992 and 1991, that resulted in a net
understatement of $.02 per share in reported loss in 1991 (in
which there was a reported net loss of $4.72 per share); no net
effect on reported net loss per share for 1992; a net
understatement of $.01 per share in reported earnings in each of<PAGE>
3
the first two quarters of 1993 (in which there were reported net
earnings per share of $.33 and $.43, respectively); and no effect
on reported loss per share for the third quarter of 1993.
The company is taking immediate action to review and tighten
its financial controls and to review and strengthen its program
for assuring observance of the highest legal and ethical
standards by company personnel.
In addition, although they were not involved in any way in
the underlying errors and irregularities, Mr. Thomas A. Tingleff,
senior vice president--Finance and Accounting, and Mr. R. Scott
Morgan, vice president and controller, have been dismissed
because of the manner in which they handled the matter after they
discovered it. Two other company employees were also dismissed.
The Operating department is being restructured and Mr. Robert A.
Jahnke, senior vice president--Operations, although not involved
in the errors and irregularities, is being reassigned to the
position of senior vice president--Planning.
The company also announced that Mr. John M. Butler, retired
senior vice president--Finance and chief financial officer of the
company, will return to that position on an interim basis.
"Although the amounts involved are small and not material to
the company's financial results for the periods affected, we take
this matter very seriously," Robert Schmiege, the company's
chairman, president and chief executive officer, said. "We have
taken decisive steps to prevent any recurrence. The two cent per
share adjustment should not obscure the company's performance<PAGE>
4
during the first quarter, which was strong in spite of severe
weather conditions," Schmiege added.
Chicago and North Western Holdings Corp. is the holding
company for the Chicago and North Western Transportation Company,
a leading railroad freight hauler in the central transcontinental
corridor and major transporter of coal, grain and double-stack
containers.
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