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 September 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 October 18, 1995, 41,216,673 common shares were outstanding.
ILLINOIS CENTRAL CORPORATION
AND SUBSIDIARIES
FORM 10-Q
Three Month and Nine Month Periods Ended September 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 14
Signatures 15
Exhibit 11 E-1
ILLINOIS CENTRAL CORPORATION AND SUBSIDIARIES
Consolidated Statements of Income
($ in millions, except share data)
(Unaudited)
Three Months Nine Months
Ended September 30, Ended September 30,
1995 1994 1995 1994
Revenues $ 161.0 $ 146.7 $ 484.7 $ 439.4
Operating
expenses:
Labor and fringe
benefits 50.2 46.0 144.5 137.9
Leases and car hire 16.2 13.4 39.4 40.5
Diesel fuel 8.2 7.7 25.3 23.1
Materials and
supplies 8.8 9.2 27.4 28.0
Depreciation and
amortization 7.9 6.8 24.0 19.9
Casualty, insurance
and losses 3.5 6.0 11.1 16.7
Other taxes 3.0 4.5 13.5 12.9
Other 10.1 7.2 28.0 18.7
Operating expenses 107.9 100.8 313.2 297.7
Operating income 53.1 45.9 171.5 141.7
Other income
(expense), net 0.4 2.0 0.2 3.6
Interest expense,
net (6.8) (6.8) (22.7) (20.8)
Income before
income taxes and
extraordinary
item, net 46.7 41.1 149.0 124.5
Provision for
income taxes 17.5 15.2 55.9 46.1
Income before
extraordinary
item, net 29.2 25.9 93.1 78.4
Extraordinary
item, net - - (11.4) -
Net income $ 29.2 $ 25.9 $ 81.7 $ 78.4
Income per share:
Income before
extraordinary
item, net $ 0.70 $ 0.61 $ 2.21 $ 1.84
Extraordinary
item, net - - (0.27) -
Income per
share $ 0.70 $ 0.61 $ 1.94 $ 1.84
Weighted average
number of shares
of common stock
and common stock
equivalents
outstanding 41,730,177 42,705,087 42,105,119 42,720,811
The following notes are an integral part of the consolidated
financial statements.
ILLINOIS CENTRAL CORPORATION AND SUBSIDIARIES
Consolidated Balance Sheets
($ in millions)
(Unaudited)
ASSETS September 30, 1995 December 31, 1994
Current assets:
Cash and temporary cash
investments $ 13.2 $ 24.2
Receivables, net of
allowance for doubtful
accounts of $1.9 in
1995 and $2.1 in 1994 47.9 33.9
Materials and supplies,
at average cost 17.0 15.7
Assets held for disposition 8.2 9.1
Deferred income taxes
- current 22.3 21.8
Other current assets 3.8 3.3
Total current assets 112.4 108.0
Investments 13.3 13.5
Properties:
Transportation:
Road and structures,
including land 1,033.0 994.9
Equipment 195.6 165.6
Other, principally land 40.6 40.8
Total properties 1,269.2 1,201.3
Accumulated depreciation (37.5) (30.0)
Net properties 1,231.7 1,171.3
Other assets 15.8 15.9
Total asset $ 1,373.2 $ 1,308.7
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Current maturities of
long-term debt $ 16.5 $ 11.1
Accounts payable 65.2 54.5
Dividends payable 10.3 10.7
Income taxes payable 3.7 0.9
Casualty and freight claims 24.9 24.9
Employee compensation and
vacations 13.9 16.5
Taxes other than income
taxes 13.3 16.2
Accrued redundancy
reserves 6.1 6.8
Other accrued expenses 39.1 31.8
Total current liabilities 193.0 173.4
Long-term debt 357.7 328.6
Deferred income taxes 237.5 218.2
Other liabilities and reserves 126.7 134.4
Contingencies and commitments
Stockholders' equity:
Common stock, par value $.001,
authorized 100,000,000 shares,
42,856,564 shares issued and
41,297,379 shares outstanding - -
Additional paid-in capital 166.0 165.1
Retained income 343.4 293.0
Treasury stock
(1,559,185 shares) (51.1) (4.0)
Total stockholders' equity 458.3 454.1
Total liabilities and
stockholders' equitity $ 1,373.2 $ 1,308.7
The following notes are an integral part of the consolidated
financial statements.
ILLINOIS CENTRAL CORPORATION AND SUBSIDIARIES
Consolidated Statements of Cash Flows
($ in millions)
(Unaudited)
Nine Months Ended September 30,
1995 1994
Cash flows from operating activities :
Net income $ 81.7 $ 78.4
Reconciliation of net income to
net cash provided by (used for)
operating activities :
Extraordinary item, net 11.4 -
Depreciation and amortization 24.0 19.9
Deferred income taxes 25.6 5.2
Equity in undistributed earnings
of affiliates,net of dividends
received (0.5) (0.4)
Net gains on sales of real estate (0.3) (2.0)
Cash changes in working capital (1.9) 55.5
Changes in other assets (2.1) (0.8)
Changes in other liabilities and
reserves (5.8) (4.7)
Net cash provided by (used for)
operating activities 132.1 151.1
Cash flows from investing activities :
Additions to properties (76.3) (61.9)
Proceeds from real estate sales 2.1 3.6
Proceeds from equipment sales 2.2 3.9
Proceeds from sales of investments 0.7 0.4
Other (2.8) (1.1)
Net cash provided by (used for)
investing activities (74.1) (55.1)
Cash flows from financing activities :
Proceeds from issuance of debt 250.0 114.7
Principal payments on debt (255.2) (159.8)
Net proceeds (payments) in commercial
paper 15.0 (1.1)
Dividends paid (31.6) (26.8)
Stock repurchases (47.1) -
Purchase of subsidiary's common stock (0.1) (2.5)
Net cash provided by (used for)
financing activities (69.0) (75.5)
Changes in cash and temporary cash
investments (11.0) 20.5
Cash and temporary cash investments at
beginning of period 24.2 10.7
Cash and temporary cash investments at
end of period $ 13.2 $ 31.2
Supplemental disclosure of cash flow information :
Cash paid during the year for:
Interest (net of amount capitalized)$ 22.8 $ 24.4
Income taxes $ 28.7 $ 33.3
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 and retains the same exposure to credit loss as
existed prior to the sale. During June 1995, the
agreement was extended one year and now expires in June
1998. At September 30, 1995, the maximum had been sold
pursuant to the agreement. Costs related to the agreement
fluctuate with changes in prevailing interest rates. These
costs, which are included in Other Income (Expense), Net,
were $2.3 million and $1.5 million for the nine month
periods ended September 30, 1995 and 1994, respectively.
3. Common Stock and Dividends
On September 7, 1995, the Board of Directors approved a
quarterly dividend of $.25 per share which was paid October
5, 1995. This is the fifteenth consecutive quarterly
dividend. Actual dividends are declared by the Board of
Directors based on profitability, capital expenditure
requirements, debt service and other factors. At
September 30, 1995, the Railroad exceeded its tangible net
worth covenant by $63 million.
4. Stock Repurchase Program
For the nine month period ended September 30, 1995, the
Company paid $46.6 million to acquire 1,301,700 shares of
Common Stock under its ongoing stock repurchase program.
Such purchases were funded in part by a $35 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 October 3, 1995, the Railroad
paid another $1.1 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
Medium-Term-Notes ("MTN"). The MTN's expire as follows:
$30 million (coupon 6.83%) in 2000, $20 million (coupon
6.27%) in 1998 and $50 million (coupon 6.98%) in 2007.
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 September 30, 1995 Compared to Three Months
Ended September 1994
Revenues for 1995 increased from the prior year quarter by
$14.3 million or 9.7% to $161.0 million. The increase was a
result of a 4.3% increase in the number of carloads coupled with
an increase of 4.5% in gross freight revenue per carload. For the
quarter, the Company experienced carloading increases in intermodal
(17.9%), grain and grain mill and food products (12.0%), paper (9.1%)
and chemicals (3.9%), partially offset by decreased coal loads (9.4%).
Operating expenses for 1995 were $7.1 million (7.0%) higher
than 1994. Increases in fuel, labor, lease and car hire and
depreciation were offset by decreased casualty, insurance and
losses and other taxes expense. Casualty, insurance and losses
benefited from improved safety performance resulting in lower
accruals. Temporary traffic congestion experienced in July and
August and the high movements of export grain and grain mill products
had a negative impact on labor costs and car hire expense.Lease and
car hire expense on a combined basis reflects the $6.2 million increase
in car hire incurred in the quarter which was partially offset by a
$3.4 million decline in lease expense primarily as a result of the
Company's shift from leasing to ownership of its fleet. Marketing
and other costs associated with the rise in business levels ($.6
million) and miscellaneous equipment and maintenance charges
($1.1 million) were primarily responsible for the shift in Other
operating expense between quarters.
Operating income for 1995 increased 15.7% ($7.2 million) to
$53.1 million from $45.9 million in 1994, primarily as a result of
increased revenues offset by increased expenses cited above.
Nine Months Ended September 30, 1995 Compared to Nine Months Ended
September 30, 1994
Revenues for 1995 increased from the prior year by $45.3
million or 10.3% to $484.7 million. The increase was a result of
a 7.6% in the number of carloads coupled with an increase of 3.0%
in gross freight revenue per carload. For the nine month period,
the Company experienced carloading increases in intermodal (41.4%),
grain and grain mill and food products (24.1%), chemicals (6.9%) and
paper (8.0%), partially offset by decreased coal loads (13.0%).
Operating expenses for 1995 were $15.5 million (5.2%) higher
than 1994. For the nine months ended September 30, 1995, strong
carloadings of export grain and grain mill products contributed to
car hire costs exceeding 1994 by $14.0 million. The Company's
lease conversion program reduced lease expense by $15.1 million to
offset the car hire increase. The conversion program and higher
capital expenditures contributed to the increase in depreciation
expense for the nine months. Casualty, insurance and losses
reflects the benefits of a litigation insurance settlement of $2.8
million and safety performance.
Operating income for 1995 increased 21.0% ($29.8 million) to
$171.5 million from $141.7 million in 1994, primarily as a result
of increased revenue partially offset by increased expenses, as
cited above.
In the second quarter of 1995, the Company recorded an
extraordinary item of $11.4 million, net of $7.0 million for
taxes. The extraordinary item covers costs associated with
prepaying the Railroad's $160 million Senior Notes (i.e., premium
on repurchase, the write-off of unamoritized financing fees and
costs associated with calling the Notes).
Liquidity and Capital Resources
Operating Data:
Nine Months Ended September 30,
1995 1994
($ in millions)
Cash flows provided by (used for):
Operating activities $ 132.1 $ 151.1
Investing activities (74.1) (55.1)
Financing activities (69.0) 75.5)
Net change in cash and
temporary cash investments $ (11.0) $ 20.5
Operating activities in 1995 provided $132.1 million in
cash, primarily from net income before depreciation, deferred
taxes and extraordinary item.
During 1995, additions to property of $76.3 million included
approximately $34.9 million for track and bridge rehabilitation
and approximately $29.2 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 $125 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 and retains the same
exposure to credit loss as existed prior to the sale. . During
June 1995, the agreement was extended one year and now expires in
June 1998. At September 30, 1995, the maximum had been sold
pursuant to the agreement. Costs related to the agreement
fluctuate with changes in prevailing interest rates. These costs,
which are included in Other Income (Expense), Net, were $2.3
million, and $1.5 million for the nine month periods ended
September 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 September 30, 1995, $30.0 million was
outstanding. For the nine months then ended the rates ranged from
5.90% 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 September 30, 1995, $30.0 million in commercial
paper was outstanding and $.9 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 prepayment was funded 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. The MTN's expire
as follows: $30 million (coupon 6.83%) in 2000, $20 million
(coupon 6.27%) in 1998 and $50 million (coupon $6.98%) in 2007.
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 September 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 17.5 basis point
annual fee, interest between LIBOR plus 40.5 basis points,
expires in August 1996 and was not drawn upon through September
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 second quarter, one such agreement was paid off through
an intercompany loan of $18.2 million from the Railroad. At
September 30, 1995, $11.7 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 September 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. At
September 30, 1995, agreements covering 60% of the Railroad's
short term diesel fuel requirements through June 1996 to protect
against significant price changes.
The Company anticipates that in addition to the $3.8
million paid through September 30, 1995, an additional $1.5
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
September 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 fifteenth consecutive quarterly cash
dividend paid on October 5, 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.
At September 30, 1995, the Railroad exceeded its tangible net
worth covenant by $63 million.
From inception of the stock repurchase program in 1994
through September 30, 1995, the Company has paid an aggregate
$46.8 million to acquire 1,309,700 shares of Common Stock, $46.6
million in 1995. Such purchases were funded in part by the
Railroad's payment of $35 million to the Company under the special
$60 million dividend which was declared in 1994 and will be paid
as requested by the Company. 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 25 contaminated sites
and various fueling facilities at which it is probably liable for
some portion of the clean-up. The Company anticipates annual
costs covering the investigation and remediation of those sites to
be approximately $3 million. Additionally, remediation of
environmental spills resulting from derailments and day-to-day
operations are expensed currently. For the nine months ended
September 30, 1995, a total of $4.3 million has been paid for all
environmental sites or situations. 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 September 30, 1995, the Company
estimated the probable range of its estimated liability to be $13
million to $50 million and in accordance with SFAS No. 5 had a
reserve of $13 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.
In October 1995, the Financial Accounting Standards Board issued
"Statement of Financial Accounting Standards N0. 123 - Accounting for
Stock-Based Compensation " (SFAS 123). SFAS 123 requires that an employer's
financial statements include certain disclosures about stock-based
compensation arrangements. The required disclosures are effective for
financial statements for fiscal years begiining after December 15, 1995.
Disclosures for fiscal years beginning after December 15, 1994 will also
be required if such year is presented with a later fiscal year. Early
adoption of SFAS 123 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
/s/ Dale W. Phillips
Dale W. Phillips
Vice President & Chief
Financial Officer
/s/ John V. Mulvaney
John V. Mulvaney
Controller
Date: November 2, 1995
ILLINOIS CENTRAL CORPORATION
AND SUBSIDIARIES
EXHIBIT INDEX
Exhibit Sequential
No. Description Page No.
11 Computation of Earnings Per Share E-1
ILLINOIS CENTRAL CORPORATION AND SUBSIDIARIES
COMPUTATION OF INCOME PER COMMON SHARE
($ in millions, except share data)
Three Months Nine Months
Ended September 30, Ended September 30,
1995 1994 1995 1994
Income before
extraordinary item $ 29.2 $ 25.9 $ 93.1 $ 78.4
Extraordinary
item, net - - (11.4) -
Net income $ 29.2 $ 25.9 $ 81.7 $ 78.4
Calculation of average number
of shares outstanding:
Primary:
Weighted average
number of common
shares outstanding 41,548,320 42,603,079 41,950,116 42,602,953
Effect of shares
issuable under stock
options 181,857 102,008 155,003 117,858
41,730,177 42,705,087 42,105,119 42,720,811
Fully diluted:
Weighted average
number ofcommon
shares outstanding 41,548,320 42,603,079 41,950,116 42,602,953
Effect of shares
issuable under
stock options 179,607 102,008 179,607 117,858
41,727,927 42,705,087 42,129,723 42,720,811
Income per common share:
Primary:
Before extraordinary
item $ 0.70 $ 0.61 $ 2.21 $ 1.84
Extraordinary
item, net - - (0.27) -
Net income $ 0.70 $ 0.61 $ 1.94 $ 1.84
Fully diluted:
Before extraordinary
item $ 0.70 $ 0.61 $ 2.21 $ 1.84
Extraordinary
item, net - - (0.27) -
Net income $ 0.70 $ 0.61 $ 1.94 $ 1.84
(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.
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<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> SEP-30-1995
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<PP&E> 1269200
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<COMMON> 0
0
0
<OTHER-SE> 458300
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<SALES> 484700
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<EXTRAORDINARY> (11400)
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<EPS-PRIMARY> 1.94
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