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 period ended June 30, 1995
[ ] 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 1-10720
ILLINOIS CENTRAL CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 13-3545405
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
455 North Cityfront Plaza Drive, Chicago, Illinois 60611-5504
(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code:(312) 755-7500
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
As of June 30, 1995, 41,769,602 common shares were
outstanding.
ILLINOIS CENTRAL CORPORATION
AND SUBSIDIARIES
FORM 10-Q
Three Month and Six Month Periods Ended June 30, 1995
CONTENTS
Part I - Financial Information:
Item 1. Financial Statements:
Consolidated Statements of Income 3
Consolidated Balance Sheets 4
Consolidated Statements of Cash Flows 5
Notes to Consolidated Financial Statements 6
Item 2. Management's Discussion and Analysis of
Financial Condition and Results
of Operations 8
Part II - Other Information:
Item 6. Exhibits and Reports on Form 8-K 13
Signatures 14
Exhibit 11 E-1
ILLINOIS CENTRAL CORPORATION AND SUBSIDIARIES
Consolidated Statements of Income
($ in millions, except share
(Unaudited)
Three Months Six Months
Ended June 30, Ended June 30,
1995 1994 1995 1994
Revenues $ 156.2 $ 145.2 $ 323.7 $ 292.7
Operating expenses:
Labor and fringe benefits 47.5 45.0 94.3 91.9
Leases and car hire 9.8 14.3 23.2 27.1
Diesel fuel 8.3 7.6 17.1 15.4
Materials and supplies 8.4 8.5 18.6 18.8
Depreciation and
amortization 8.6 6.6 16.1 13.1
Casualty, insurance and
losses 1.4 5.9 7.6 10.7
Other taxes 5.4 4.6 10.5 8.4
Other 10.9 7.5 17.9 11.5
Operating expenses 100.3 100.0 205.3 196.9
Operating income 55.9 45.2 118.4 95.8
Other income (expense), net - 1.0 (0.2) 1.6
Interest expense, net (8.5) (6.7) (15.9) (14.0)
Income before income taxes and
extraordinary item, net 47.4 39.5 102.3 83.4
Provision for income taxes 17.8 14.7 38.4 30.9
Income before extraordinary
item, 29.6 24.8 63.9 52.5
Extraordinary item, net (11.4) - (11.4) -
Net income $ 18.2 $ 24.8 $ 52.5 $ 52.5
Income per share:
Income before extraordinary
item, net $ 0.71 $ 0.58 $ 1.51 $ 1.23
Extraordinary item, net (0.27) - (0.27) -
Income per share $ 0.44 $ 0.58 $ 1.24 $ 1.23
Weighted average number of shares
of common stock and common stock
equivalents outstanding 42,034,340 42,719,256 42,89,429 42,721,663
The following notes are an integral part of the consolidated financial
statements.
ILLINOIS CENTRAL CORPORATION AND SUBSIDIARIES
Consolidated Balance Sheets
($ in millions)
(Unaudited)
ASSETS June 30, December 31,
1995 1995
Current assets:
Cash and temporary cash investments $ 11.3 $ 24.2
Receivables, net of allowance for
doubtful accounts of $2.0 in 1995
and $2.1 in 1994 33.7 33.9
Materials and supplies, at average cost 17.5 15.7
Assets held for disposition 8.2 9.1
Deferred income taxes - current 21.3 21.8
Other current assets 4.0 3.3
Total current assets 96.0 108.0
Investments 13.2 13.5
Properties:
Transportation:
Road and structures, including land 1,019.8 994.9
Equipment 191.1 165.6
Other, principally land 40.8 40.8
Total properties 1,251.7 1,201.3
Accumulated depreciation (36.2) (30.0)
Net properties 1,215.5 1,171.3
Other assets 16.1 15.9
Total assets $ 1,340.8 $ 1,308.7
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Current maturities of long-term
debt $ 24.6 $ 11.1
Accounts payable 50.8 54.5
Dividends payable 10.5 10.7
Income taxes payable 3.5 0.9
Casualty and freight claims 24.9 24.9
Employee compensation and vacations 16.2 16.5
Taxes other than income taxes 16.2 16.2
Accrued redundancy reserves 6.1 6.8
Other accrued expenses 28.8 31.8
Total current liabilities 181.6 173.4
Long-term debt 352.1 328.6
Deferred income taxes 219.0 218.2
Other liabilities and reserves 130.4 134.4
Contingencies and commitments
Stockholders' equity:
Common stock, par value $.001,
authorized 100,000,000 shares,
42,853,564 shares issued and 41,769,602
shares outstanding - -
Additional paid-in capital 165.6 165.1
Retained income 324.5 293.0
Treasury stock (1,083,962 shares) (32.4) (4.0)
Total stockholders' equity 457.7 454.1
Total liabilities and stockholders'
equity $ 1,340.8 $ 1,308.7
The following notes are an integral part of the consolidated financial
statements
ILLINOIS CENTRAL CORPORATION AND SUBSIDIAR
Consolidated Statements of Cash Flows
$ in millions)
(Unaudited)
Six Months Ended June 30,
1995 1994
Cash flows from operating activities :
Net income $ 52.5 $ 52.5
Reconciliation of net income to net cash
provided by (used for) operating
activities :
Extraordinary item, net 11.4 -
Depreciation and amortization 16.1 13.1
Deferred income taxes 8.1 0.9
Equity in undistributed earnings of
affiliates, net of dividends
received (0.3) (0.3)
Net gains on sales of real estate (0.2) 0.1
Cash changes in working capital (7.9) 56.0
Changes in other assets (2.2) (0.6)
Changes in other liabilities and
reserves (2.5) (3.3)
Net cash provided by (used for)
operating activities 75.0 118.4
Cash flows from investing activities :
Additions to properties (53.0) (35.4)
Proceeds from real estate sales 1.5 0.2
Proceeds from equipment sales 1.5 2.8
Proceeds from sales of investments 0.5 0.5
Other (1.0) 0.5
Net cash provided by (used for) investing
activities (50.5) (31.4)
Cash flows from financing activities :
Proceeds from issuance of debt 200.0 33.0
Principal payments on debt (242.7) (75.1)
Net proceeds (payments) in commercial
paper 55.0 (22.1)
Dividends paid (21.2) (17.8)
Proceeds from exercise of stock options
and warrants - -
Stock repurchases (28.4) -
Purchase of subsidiary's common stock (0.1) (1.2)
Net cash provided by (used for) financing
activities (37.4) (83.2)
Changes in cash and temporary cash investments (12.9) 3.8
Cash and temporary cash investments at
beginning of period 24.2 10.7
Cash and temporary cash investments at end $ 11.3 $ 14.5
Supplemental disclosure of cash flow information :
Cash paid during the year for:
Interest (net of amount capitalized) $ 20.6 $ 14.7
Income taxes $ 27.6 $ 24.1
The following notes are an integral part of the consolidated financial
statements.
ILLINOIS CENTRAL CORPORATION
AND SUBSIDIARIES
Notes to Consolidated Financial Statements (Unaudited)
1. Basis of Presentation
Except as described below, the accompanying unaudited consolidated
financial statements have been prepared in accordance with
accounting policies described in the 1994 Annual Report on Form 10-K
and should be read in conjunction with the disclosures therein.
In the opinion of management, these interim financial statements
reflect all adjustments, consisting of normal recurring accruals,
necessary to present fairly the financial position, results of
operations and cash flows for the periods presented. Interim
results are not necessarily indicative of results for the full year.
Certain 1994 amounts have been reclassified to conform with the
presentation used in the 1995 financial statements.
Income Per Share
Income per common share of the Company is based on the weighted
average number of shares of common stock and common stock
equivalents outstanding during the period.
2. Sale of Accounts Receivable
In 1994, the Railroad entered into a revolving agreement to sell
undivided percentage interests in certain of its accounts
receivable, with recourse, to a financial institution. The
agreement allows for sales of accounts receivable up to a maximum
of $50 million at any one time. The Railroad services the
accounts receivable sold under the agreement. During June 1995, the
agreement was extended one year and now expires in June 1998. At
June 30, 1995, $50 million in accounts receivable had been sold
pursuant to the agreement. The Railroad retains the same exposure
to credit loss as existed prior to the sale. Costs related to the
agreement vary in correlation with changes in prevailing interest
rates. These costs, which are included in Other Income (Expense),
Net, were $1.8 million and $.9 million for the six month periods
ended June 30, 1995 and 1994, respectively.
3. Common Stock and Dividends
On June 1, 1995, the Board of Directors approved a quarterly
dividend of $.25 per share which was paid July 6, 1995. This is the
fourteenth consecutive quarterly dividend. Actual dividends are
declared by the Board of Directors based on profitability, capital
expenditure requirements, debt service and other factors. The Railroad
is no longer subject to specific dividend restrictions. At June 30,
1995, the Railroad exceeded its tangible net worth covenant by $59
million.
4. Stock Repurchase Program
For the six month period ended June 30, 1995, the Company paid $28.0
million to acquire 828,100 shares of Common Stock under its ongoing
stock repurchase program. Such purchases were funded in part by a
$15 million payment by the Railroad to the Company under the special
$60 million dividend which was declared in 1994 and will be paid as
requested by the Company. On July 12, 1995, the Railroad paid
another $5 million under the $60 million special dividend. Further
purchases are dependent on market conditions, the economy, cash
needs and alternative investment opportunities.
5. Prepayment of Senior Notes
On May 4, 1995, the Railroad prepaid the holders of its $160 million
Senior Notes at face value plus accrued interest and a prepayment
penalty. The monies used to fund the prepayment were provided by
commercial paper, the net proceeds of the recently issued $100
million 7.75% 10 year-notes due May 2005 and $40 million from
existing lines of credit. The prepayment resulted in an
extraordinary charge of $18.4 million, $11.4 million after-tax ($.27
per share). In connection with the prepayment, the Railroad amended
and restated its revolver with its bank lending group (the "New
Revolver"). The New Revolver was increased to $250 million and
expires in the year 2000. The $40 million borrowed to help fund
the prepayment was replaced with the proceeds of two Medium-Term-
Notes ("MTN") issued in the second quarter of 1995 totaling $50
million. The MTN's expire as follows: $30 million (coupon 6.83%)
in 2000 and $20 million (coupon 6.27%) in 1998. An additional $50
million of MTN's were issued in July 1995. These notes expire in
2007 and have a coupon of 6.98%.
Item 2.MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND
RESULTS OF OPERATIONS
The discussion below takes into account the financial condition and
results of operations of the Company for the periods presented in the
consolidated financial statements.
Results of Operations
Three Months Ended June 30, 1995 Compared to Three Months Ended June 30,
1994
Revenues for 1995 increased from the prior year quarter by $11.0
million or 7.6% to $156.2 million. The increase was a result of a 5.8%
increase in the number of carloads coupled with an increase of 2.5% in
gross freight revenue per carload. For the quarter, the Company
experienced carloading increases in intermodal (47.1%), grain and grain
mill and food products (25.3%), paper (7.9%) and chemicals (3.3%),
partially offset by decreased coal loads (19.7%).
Operating expenses for 1995 approximated 1994. Increases in fuel,
labor and depreciation were offset by decreased lease and car hire
expense and casualties, insurance and losses. Casualty, insurance and
losses benefited in part from a litigation insurance settlement of $2.8
million in the quarter and improved safety performance resulting in lower
accruals. Lease and car hire expense on a combined basis reflects an $7.3
million decline in lease expense primarily as a result of the Company's
shift from leasing to ownership of its fleet partially offset by a $2.8
million increase in car hire costs as increased export grain and grain
mill traffic resulted in higher costs. Marketing and other costs
associated with the rise in business levels ($.8 million) and
miscellaneous equipment and maintenance charges ($1.7 million) were
primarily responsible for the shift in other operating expense between
quarters.
Operating income for 1995 increased 23.7% ($10.7 million) to $55.9
million from $45.2 million in 1994, primarily as a result of increased
revenues cited above.
In the second quarter of 1995, the Company recorded an extraordinary
item of $11.4 million, net of taxes of $7.0 million. The extraordinary
item covers costs associated with prepaying the Railroad's $160 million
Senior Notes (i.e., premium on repurchase, the write-off of unamoritized
financing fees and costs associated with calling the Notes).
Six Months Ended June 30, 1995 Compared to Six Months Ended June 30, 1994
Revenues for 1995 increased from the prior year by $31.0 million or
10.6% to $323.7 million. The increase was a result of a 9.3% in the
number of carloads coupled with an increase of 2.3% in gross freight
revenue per carload. For the six month period, the Company experienced
carloading increases in intermodal (57.2%), grain and grain mill and food
products (30.6%), chemicals (8.5%) and paper (7.4%), partially offset by
decreased coal loads (14.5%).
Operating expenses for 1995 were $8.4 million (4.3%) higher than
1994. Most of the variance was experienced in the first quarter of the
year. For the six months ended June 30, 1995, strong carloadings of
export grain and grain mill products contributed to car hire costs
exceeding 1994 by $7.8 million. The Company's lease conversion program
reduced lease expense by $11.7 million to offset the car hire increase.
The conversion program and higher capital expenditures contributed to the
increase in depreciation expense for the six months. Casualty, insurance
and losses reflects the aforementioned litigation insurance settlement and
safety performance.
Operating income for 1995 increased 23.6% ($22.6 million) to $118.4
million from $95.8 million in 1994, primarily as a result of increased
revenue partially offset by increased expenses, as cited above.
Liquidity and Capital Resources
Operating Data:
Six Months Ended June30,
1995 1994
($ in millions)
Cash flows provided by (used for):
Operating activities $ 75.0 $118.4
Investing activities (50.5) (31.4)
Financing activities (37.4) (83.2)
Net change in cash and
temporary cash investments $ (12.9) $ 3.8
Operating activities in 1995 provided $75.0 million in cash,
primarily from net income before depreciation, deferred taxes and
extraordinary item.
During 1995, additions to property of $53.0 million included
approximately $21.8 million for track and bridge rehabilitation and
approximately $23.2 million for equipment upgrades. In February 1995, the
Railroad placed a $25.8 million order for 20 new SD70 locomotives to be
delivered in the fourth quarter of 1995, to update the locomotive fleet.
For the full year 1995, the Company continues to expect base capital
spending (expenses for track and track structures) to be approximately $65
million, with the locomotive purchases and lease conversions the total
capital spending could be approximately $100 million to $110 million.
These expenditures are expected to be met from current operations and
other available sources.
In 1994, the Railroad entered into a revolving agreement to sell
undivided percentage interests in certain of its accounts receivable, with
recourse, to a financial institution. The agreement allows for sales of
accounts receivable up to a maximum of $50 million at any one time. The
Railroad services the accounts receivable sold under the agreement.
During June 1995, the agreement was extended one year and now expires in
June 1998. At June 30, 1995, $50 million in accounts receivable had been
sold pursuant to the agreement. The Railroad retains the same exposure
to credit loss as existed prior to the sale. Costs related to the
agreement vary in correlation with changes in prevailing interest rates.
These costs, which are included in Other Income (Expense), Net, were $1.8
million, and $.9 million for the six month periods ended June 30, 1995 and
1994, respectively.
Under the Railroad's expanded commercial paper program a total of
$150 million can be issued and outstanding. The program is supported by
the revolver with the Railroad's bank lending group (see below). At June
30, 1995, $70.0 million was outstanding. For the six months then ended
the rates ranged from 6.07% to 6.60%. The Railroad views this program as
a significant long-term funding source and intends to issue replacement
notes as each existing issue matures. Therefore, commercial paper
borrowings are classified as long-term.
In connection with the Railroad's prepayment of its $160 million
Senior Notes (see below), the Railroad and its bank lending group
renegotiated the Railroad's $150 million revolver which had been amended
and restated in November 1994. The New Revolver is for $250 million and
expires in 2000. Fees and interest rates are predicated on the Railroad's
long-term credit ratings. Currently, the annual fee is 17 basis points
and borrowings under this agreement are at LIBOR plus 32.5 basis points.
The New Revolver will be used primarily for backup for the Railroad's
commercial paper program but can be used for general corporate purposes.
The available amount is reduced by the outstanding amount of commercial
paper borrowings and any letters of credit issued on behalf of the
Railroad under the facility. At June 30, 1995, $70.0 million in
commercial paper was outstanding and $1.4 million in letters of credit had
been issued thereby reducing the amount available under the New Revolver.
No amounts had been drawn under the New Revolver or any prior revolving
agreements with its bank lending group.
On May 4, 1995, the Railroad prepaid its then outstanding $160
million Senior Notes at fair market value plus accrued interest and a
prepayment penalty of $16.4 million. The prepayment resulted in an
extraordinary charge of $18.4 million ( $11.4 million after-tax or $.27
per share) recorded in the second quarter of 1995. The monies used to
fund the prepayment were provided by Commercial Paper, the net proceeds
of the recently issued $100 million 7.75% 10-year notes due 2005 (the "New
Notes") and $40 million borrowed from various institutions under
uncommitted lines of credit at interest ranging from 6.36% to 6.4%. The
$40 million was replaced with the proceeds from the Railroad's Medium-
Term-Note ("MTN") program. Two issuances of MTN's totaling $50 million
were made in the quarter. The two issues of MTN's expire as follows: $30
million (coupon 6.83%) in 2000 and $20 million (coupon 6.27%) in 1998.
An additional $50 million of the MTN's were issued in July 1995. These
notes expire in 2007 and have a coupon of 6.98%.The New Notes and the
MTN's are covered by a $200 million shelf registration filed with the
Securities and Exchange Commission on April 12, 1995. As of July 7, 1995,
the entire $200 million had been used . The New Notes pay interest semi-
annually in May and November and were issued pursuant to an indenture.
The MTN's pay interest semi-annually in January and July.
At June 30, 1995, the Railroad's public debt was rated Baa2 by
Moody's and BBB by S&P and the Railroad's commercial paper program was
rated A2 by S&P, P2 by Moody's and F2 by Fitch.
In 1994, in order to facilitate the stock repurchase program, the
Company entered into a $50 million 364-day floating-rate revolving loan
agreement which charges a 20 basis point annual fee, interest between
LIBOR plus 62.5 basis points to LIBOR plus 100 basis points, expires in
August 1995 and was not drawn upon through June 30, 1995. The Company's
financing/leasing subsidiaries have used several long-term borrowing
agreements to acquire a total of 61 locomotives during 1993 and 1991 and
1,522 freight cars in 1993. During the quarter, one such agreement was
paid off through an intercompany loan of $18.2 million from the Railroad.
At June 30, 1995, $12.1 million remains outstanding under the agreements.
The Company believes that its available cash, cash generated by its
operations and cash available from the facilities described above will be
sufficient to meet foreseeable liquidity requirements.
Various borrowings of the Company's subsidiaries are governed by
agreements which contain financial and operating covenants. All entities
were in compliance with these covenant requirements at June 30, 1995, and
management does not anticipate any difficulty in maintaining such
compliance.
The Railroad has entered into various hedge agreements designed to
mitigate significant changes in fuel prices. On July 1, 1995 new
agreements covering 60% of the Railroad's short term diesel fuel
requirements through June 1996 were entered into protecting against
significant price changes.
The Company anticipates that in addition to the $2.7 million paid
through June 30, 1995, an additional $3.0 million will be required in 1995
related to all previously signed labor agreements. These requirements are
expected to be met from current operating activities or other available
sources. At June 30, 1995, eight of the eleven unions representing 42%
of the Company's represented workforce have reached agreements covering
wages and work rules through 1999. Each agreement provides for salary
increases of 3% - 4% in each year. As the Company continues to negotiate
with its three operating unions on a local level, agreements may be
reached that could require significant lump sum payments. The Company can
not determine whether separate agreements will be reached but management
believes available funding sources will be sufficient to meet any required
payments.
Long-Term Equity Enhancement Program
The Company paid its fourteenth consecutive quarterly cash dividend
paid on July 6, 1995. The Board believes quarterly dividends are an
integral part of its announced Long-Term Equity Enhancement Program
designed to increase stockholder value through dividend payments and stock
repurchases. Actual dividends are declared by the Board of Directors
based on profitability, capital expenditure requirements, debt service and
other factors. The Railroad is no longer subject to specific dividend
restrictions. At June 30, 1995, the Railroad exceeded its tangible net
worth covenant by $59 million.
For the six months ended June 30, 1995, the Company paid $28.0
million to acquire 828,100 shares of Common Stock under its announced $60
million 1995 stock repurchase program. From inception of the stock
repurchase program in 1994 to July 28, 1995, the Company has paid an
aggregate $31.3 million to acquire 913,300 shares of Common Stock. Such
purchases were funded in part by a $15 million payment by the Railroad's
prepayment of $20 million to the Company under the special $60 million
dividend which was declared in 1994 and will be paid as requested by the
Company. This special dividend is excluded from the aforementioned
covenant requirements. Further purchases are dependent on market
conditions, the economy, cash needs and alternative investment
opportunities. The Board intends to review the level of stock
repurchases annually.
Environmental Liabilities
The Company's operations are subject to comprehensive environmental
regulation by federal, state and local authorities. Compliance with such
regulation requires the Company to modify its operations and expend
substantial manpower and financial resources.
Under the federal Comprehensive Environmental Response, Compensation
and Liability Act of 1980 ("Superfund"), and similar state and federal
laws, the Company is potentially liable for the cost of clean-up of
various contaminated sites. The Company has been notified that it is a
potentially responsible party at sites ranging from those with hundreds
of potentially responsible parties to sites at which the Company is
primarily responsible. The Company generally participates in the clean-up
at sites where other substantial parties share responsibility through
cost-sharing arrangements, but under Superfund and other similar laws the
Company can be held jointly and severally liable for all environmental
costs associated with such sites.
The Company is aware of approximately 20 contaminated sites and
various fueling facilities at which it is probably liable for some portion
of the clean-up. The Company has paid approximately $1.6 million in 1995
toward the investigation and remediation of those sites, and anticipates
annual expenditures of $3.0 million. During the quarter, the Company
spent an additional $1.4 million remediating environmental spills
resulting from derailments and other operating activities. Furthermore,
recent amendments to the Clean Air Act require the Environmental
Protection Agency to promulgate regulations restricting the level of
pollutants in locomotive emissions which could impose significant
retrofitting requirements, operational inefficiencies or capital
expenditures in the future.
For all known sites of environmental contamination where Company
loss or liability is probable, the Company has recorded an estimated
liability at the time when a reasonable estimate of remediation cost and
Company liability can first be determined. Adjustments to initial
estimates are recorded as necessary based upon additional information
developed in subsequent periods. Estimates of the Company`s potential
financial exposure for environmental claims or incidents are necessarily
imprecise because of the difficulty of determining in advance the nature
and extent of contamination, the varying costs of alternative methods of
remediation, the regulatory clean-up standards which will be applied, and
the appropriate allocation of liability among multiple responsible
parties. At June 30, 1995, the Company estimated the probable range of
its estimated liability to be $14 million to $50 million and in accordance
with SFAS No. 5 had a reserve of $14 million for environmental
contingencies. This amount has not been reduced for potential insurance
recoveries or third-party contribution where the Company is primarily
liable.
The risk of incurring environmental liability in connection with
both past and current activities is inherent in railroad operations.
Decades-old railroad housekeeping practices were not always consistent
with contemporary standards, historically the Company leased substantial
amounts of property to industrial tenants, and the Railroad continues to
haul hazardous materials which are subject to occasional accidental
release. Because the ultimate cost of known contaminated sites cannot be
definitively established and because additional contaminated sites yet
unknown may be discovered or future operations may result in accidental
releases, no assurance can be given that the Company will not incur
material environmental liabilities in the future. However, based on its
assessments of the facts and circumstances now known, management believes
that it has recorded adequate reserves for known liabilities and does not
expect future environmental charges or expenditures to have a material
adverse effect on the Company`s financial position, results of operations,
cash flow or liquidity.
Recent Accounting Pronouncements
In March 1995, the Financial Accounting Standards Board issued
"Statement of Financial Accounting Standards No. 121 - Accounting for the
Impairment of Long-Lived Assets and for Long-Lived Assets to Be Disposed
Of" (SFAS 121). SFAS 121 requires that long-lived assets and certain
identifiable intangibles to be held or used by an entity be reviewed for
impairment whenever events or changes in circumstances indicate the
carrying amount may not be recoverable. The statement is effective for
fiscal year beginning after December 15, 1995. The Company is reviewing
this statement to determine its impact, if any. Early adoption is not
anticipated.
PART II - OTHER INFORMATION
Item 6. Exhibits and Reports on Form 8-K
(a) Exhibits:
See Exhibit Index on Page 15.
(b) Reports on Form 8-K:
None
ILLINOIS CENTRAL CORPORATION
Signatures
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Company has duly caused this report to be signed on its behalf
by the undersigned hereto duly authorized.
ILLINOIS CENTRAL CORPORATION
Dale W. Phillips
Vice President & Chief Financial
Officer
John V. Mulvaney
Controller
Date: August 3, 1995
ILLINOIS CENTRAL CORPORATION
AND SUBSIDIARIES
EXHIBIT INDEX
Exhibit Sequential
No. Description Page No.
4.1 Third Amended and Restated Revolving
Credit Agreement between Illinois
Central Railroad Company and the banks
named therein dated as of April 2, 1993,
amended and restated as of October 27,
1993, further amended and restated as
of November 1, 1994 and further amended and
restated as of April 28, 1995.
(Incorporated by reference to
Exhibit 4.1 to the quarterly reports of
Illinois Central Railroad in Form 10-Q
for the three months ended June 30, 1995.
(SEC File No. 1-7092))
11 Computation of Earnings Per Share E-1
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<OTHER-EXPENSES> (200)
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 15900
<INCOME-PRETAX> 102300
<INCOME-TAX> 38400
<INCOME-CONTINUING> 63900
<DISCONTINUED> 0
<EXTRAORDINARY> (11400)
<CHANGES> 0
<NET-INCOME> 52500
<EPS-PRIMARY> 1.24
<EPS-DILUTED> 1.24
</TABLE>
ILLINOIS CENTRAL CORPORATION AND SUBSIDIARIES
COMPUTATION OF INCOME PER COMMON SHARE
($ in millions, except share data)
Three Months Six Months
Ended June 30, Ended June 30,
1995 1994 1995 1994
Income before
extraordinary
item $ 29.6 $ 24.8 $ 63.9 $ 52.5
Extraordinary item, net (11.4) - (11.4) -
Net income $ 18.2 $ 24.8 $ 52.5 $ 52.5
Calculation of average
number of shares
outstanding:
Primary:
Weighted average number
of common shares
outstanding 41,895,758 42,604,829 42,154,438 42,604,639
Effect of shares
issuable under stock
options 138,582 114,427 134,991 117,024
42,034,340 42,719,256 42,289,429 42,721,663
Fully diluted:
Weighted average
number of common
shares
outstanding 41,895,758 42,604,829 42,154,438 42,604,639
Effect of shares
issuable under
stock options(1) 137,895 109,477 137,895 122,961
42,033,653 42,714,306 42,292,333 43,727,600
Income per common
share:
Primary:
Before extra-
ordinary
item $ 0.71 $ 0.58 $ 1.51 $ 1.23
Extraordinary
item, net (0.27) - (0.27) -
Net income $ 0.44 $ 0.58 $ 1.24 $ 1.23
Fully diluted:
Before extra-
ordinary item $ 0.71 $ 0.58 $ 1.51 $ 1.20
Extra-
ordinary item,
net (0.27) - (0.27) -
Net income $ 0.44 $ 0.58 $ 1.24 $ 1.20
(1) Such items are included in primary calculation.
Additional shares represent difference between average
price of common stock for the period and the end of period
price.
