UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-Q
Quarterly Report Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
For the quarterly period ended June 30, 1996
Commission File Number 0-19150
WISCONSIN CENTRAL TRANSPORTATION CORPORATION
(Exact name of registrant as specified in its charter)
Delaware 36-3541743
(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification Number)
6250 North River Road, Suite 9000
Rosemont, Illinois 60018
(Address of principal executive offices) (Zip Code)
Registrant's telephone number,
including area code (847) 318-4600
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.
[X] YES [ ] NO
Indicate the number of shares outstanding of the
Issuer's common stock as of July 31, 1996: 50,718,329 shares
<PAGE>
PART I - FINANCIAL INFORMATION
Item 1. Financial Statements
<TABLE>
WISCONSIN CENTRAL TRANSPORTATION CORPORATION AND SUBSIDIARIES
Consolidated Balance Sheets
(in thousands)
Assets
<CAPTION>
June 30, December 31,
1996 1995
---------- -----------
(Unaudited) (Audited)
<S> <C> <C>
Current assets:
Cash and cash equivalents $ 8,452 $ 1,472
Receivables, net of allowance
for doubtful accounts of $2,093
and $2,096 at June 30, 1996 and
December 31, 1995 70,192 50,770
Receivables from insurance companies 10,672 --
Income taxes receivable -- 900
Note receivable -- 13,213
Materials and supplies 20,145 17,245
Deferred income taxes 1,400 1,400
Other current assets 1,818 1,148
------ ------
Total current assets 112,679 86,148
Investment in affiliates 88,837 41,416
Properties:
Roadway and structures 401,179 383,905
Equipment 86,200 78,764
------ ------
Total properties 487,379 462,669
Less accumulated depreciation (57,224) (51,174)
------ ------
Net properties 430,155 411,495
Deferred financing and organization
costs, net 1,435 1,673
------ ------
Total assets $ 633,106 $ 540,732
====== ======
<FN>
The accompanying notes to consolidated financial statements
are an integral part of these financial statements.
</TABLE>
<PAGE>
<TABLE>
WISCONSIN CENTRAL TRANSPORTATION CORPORATION AND SUBSIDIARIES
Consolidated Balance Sheets
(in thousands, except share amounts)
Liabilities and Stockholders' Equity
<CAPTION>
June 30, December 31,
1996 1995
---------- -----------
(Unaudited) (Audited)
<S> <C> <C>
Current liabilities:
Short-term debt $ 651 $ 13,619
Accounts payable 38,918 33,857
Accrued expenses 68,455 54,228
Accrued derailment claims 6,910 --
Accrued disputed switching charges 16,778 --
Interest payable on disputed
switching charges 2,493 --
Other interest payable 1,040 746
------ ------
Total current liabilities 135,245 102,450
Long-term debt 164,640 123,721
Other liabilities 3,624 3,693
Deferred income taxes 61,090 60,772
Deferred income 11,506 12,401
------ ------
Total liabilities 376,105 303,037
Stockholders' equity:
Preferred stock, par value $1.00;
authorized 1,000,000 shares;
none issued or outstanding -- --
Common stock, par value $0.01;
authorized 150,000,000 shares;
issued and outstanding, 50,604,116
shares at June 30, 1996 and
50,459,418 shares at December 31, 1995 506 505
Paid in capital 106,739 104,801
Cumulative currency translation
adjustment 6,373 4,600
Retained earnings 143,383 127,789
------ ------
Total stockholders' equity 257,001 237,695
------ ------
Total liabilities and stockholders'
equity $ 633,106 $ 540,732
====== ======
<FN>
The accompanying notes to consolidated financial statements
are an integral part of these financial statements.
</TABLE>
<PAGE>
<TABLE>
WISCONSIN CENTRAL TRANSPORTATION CORPORATION AND SUBSIDIARIES
Consolidated Statements of Income
(in thousands, except per share amounts)
(Unaudited)
<CAPTION>
For the Quarter For the Six Months
Ended June 30, Ended June 30,
------------------- -------------------
1996 1995 1996 1995
---- ---- ---- ----
<S> <C> <C> <C> <C>
Operating revenues:
Operating revenues
before disputed
switching charges $ 69,482 $ 64,254 $134,510 $127,151
Disputed switching
charges (13,278) -- (13,278) --
------ ------ ------ ------
Operating revenues 56,204 64,254 121,232 127,151
Operating expenses:
Roadway and structures 9,263 7,642 19,196 16,152
Equipment 15,613 14,208 34,065 28,534
Transportation 21,378 18,420 45,984 37,011
General and administrative 8,380 7,759 16,002 15,312
------ ------ ------ ------
Operating expenses 54,634 48,029 115,247 97,009
------ ------ ------ ------
Income from operations 1,570 16,225 5,985 30,142
Other income (expense):
Interest on disputed
switching charges (2,493) -- (2,493) --
Other interest expense (2,337) (2,635) (4,380) (5,062)
Other, net 989 443 1,918 979
------ ------ ------ ------
Total other income
(expense), net (3,841) (2,192) (4,955) (4,083)
------ ------ ------ ------
Income (loss) before income
taxes and equity in net
income of affiliates (2,271) 14,033 1,030 26,059
(Credit) provision for
income taxes (899) 5,558 408 10,320
------ ------ ------ ------
Income (loss) before equity
in net income of
affiliates (1,372) 8,475 622 15,739
Equity in net income of
affiliates 8,900 3,690 14,972 6,291
------ ------ ------ ------
Net income $ 7,528 $ 12,165 $ 15,594 $ 22,030
====== ====== ====== ======
Earnings per common share
outstanding $ .15 $ .24 $ .31 $ .44
====== ====== ====== ======
Average common shares
outstanding 50,582 50,163 50,551 50,082
====== ====== ====== ======
<FN>
The accompanying notes to consolidated financial statements
are an integral part of these financial statements.
</TABLE>
<PAGE>
<TABLE>
WISCONSIN CENTRAL TRANSPORTATION CORPORATION AND SUBSIDIARIES
Consolidated Statements of Cash Flows
(in thousands)
(Unaudited)
<CAPTION>
For the Six Months Ended
June 30,
------------------------
1996 1995
---- ----
<S> <C> <C>
Cash flows from operating activities:
Net income $ 15,594 $ 22,030
Reconciliation of net income
to net cash provided by operating
activities:
Depreciation and amortization 6,386 5,812
Deferred income taxes 318 7,941
Equity in net income of affiliates (14,972) (6,291)
Gains on property sales (533) (172)
Net amortization of deferred gain
on sale-leaseback of equipment (895) (357)
Changes in working capital:
Accounts receivable (19,422) (9,493)
Receivables from insurance
companies (10,672) --
Note receivable 13,213 --
Materials and supplies (2,900) (6,542)
Other current assets, excluding
deferred income taxes 230 (191)
Accrued derailment claims 6,910 --
Accrued disputed switching
charges 16,778 --
Interest payable on disputed
switching charges 2,493 --
Current liabilities 6,614 2,587
Other, net (69) 186
------ ------
Net cash provided by operating
activities 19,073 15,510
------ ------
Cash flows from investing activities:
Property acquisition -- (19,310)
Property additions (25,602) (33,830)
Property sales and other transactions 1,328 5,148
Return of capital from affiliate -- 21,045
Investment in affiliates (30,676) (2,856)
Deferred costs (1) (527)
------ ------
Net cash used for investing activities (54,951) (30,330)
------ ------
Cash flows from financing activities:
Long-term debt issued 40,919 43,006
Repayments of long-term debt -- (30,000)
Deferred financing costs -- (65)
Issuance of common stock under
stock option plans 1,939 627
------ ------
Net cash provided by financing
activities 42,858 13,568
------ ------
Net increase (decrease) in cash
and cash equivalents 6,980 (1,252)
Cash and cash equivalents, beginning
of period 1,472 5,247
------ ------
Cash and cash equivalents, end of
period $ 8,452 $ 3,995
====== ======
Supplemental cash flow information:
Cash paid (received) during the
period for:
Interest $ 4,491 $ 4,645
Income taxes (810) 5,180
<FN>
The accompanying notes to consolidated financial statements
are an integral part of these financial statements.
</TABLE>
<PAGE>
WISCONSIN CENTRAL TRANSPORTATION CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements
(Unaudited)
June 30, 1996
Basis of Presentation
The consolidated financial statements presented herein include the
results of operations of Wisconsin Central Transportation Corporation
("WCTC") and its wholly owned subsidiaries: Wisconsin Central Ltd. ("WCL");
Fox Valley & Western Ltd. ("FV&W"); WCL Railcars, Inc. ("Railcars"); Sault
Ste. Marie Bridge Company; Wisconsin Central International, Inc. ("WCI"); WC
Canada Holdings, Inc.; and Algoma Central Railway Inc. ("ACRI"). Wisconsin
Central Transportation Corporation and its subsidiaries are hereinafter
referred to as the Company. Certain information and footnote disclosures
normally included in financial statements prepared in accordance with
generally accepted accounting principles have been condensed or omitted.
Accordingly, these unaudited consolidated financial statements should be read
in conjunction with the Company's audited financial statements and the notes
thereto for the year ended December 31, 1995. Certain amounts in the 1995
financial statements have been reclassified to conform to the 1996
presentation. In the opinion of management, the information provided in
these statements reflects all adjustments necessary to present fairly such
information. The results of operations for any interim period are not
necessarily indicative of the results of operations for the entire year.
Stock Split
On May 16, 1996, the Company's Board of Directors announced a
three-for-one split of the Company's common stock in the form of a stock
dividend to stockholders of record as of May 17, 1996 which was effective May
31, 1996. The stated par value of each share was not changed from $.01. All
share and per share amounts have been restated to reflect the common stock
split.
Authorized Shares
On May 16, 1996, the Company's shareholders approved an amendment of
the Company's Certificate of Incorporation to increase to 150,000,000 the
number of authorized shares of common stock.
Weyauwega Derailment
On March 4, 1996, the Company had a derailment in Weyauwega,
Wisconsin involving thirty-five cars, fourteen of which contained propane or
liquified petroleum gas and two of which contained sodium hydroxide solution.
Although no one was injured in the derailment, all residents within two miles
of the site were evacuated for approximately sixteen days. In addition, many
structures received water damage as a result of burst pipes. The total cost
for the derailment is estimated at $27.2 million. During the first quarter
of 1996, the Company recorded a pretax provision of $2.5 million, which
represents the combined deductibles under its property damage and liability
insurance policies. The Company believes that its insurance policies will
cover substantially all expenses, in excess of the deductibles, due to the
derailment. Through June 30, 1996, the Company had funded $20.3 million in
costs incurred as a result of this derailment and received $14.0 million in
reimbursements from insurance companies; the Company carried an insurance
receivable of $10.7 million as of June 30, 1996. The Company has been
successful in resolving the vast majority of claims directly with the
claimant. Through July 31, 1996, approximately 97% of affected residents and
93% of affected businesses had resolved their claims against the Company. A
complaint was filed against the Company on March 26, 1996 by nine individuals
seeking to represent the class of persons who suffered damages as a result of
this derailment. The complaint seeks punitive and treble damages. Any
punitive damages and treble damages may not be covered by the Company's
insurance. The Company does not believe there is any basis for an award of
such damages. On July 9, 1996, the court declined to certify a class action
lawsuit against the Company. The court did, however, indicate it would
appoint a guardian ad litem to review all settlements made on behalf of
affected minors and would notify all claimants who had not settled their
claims of the existence of the action so that these claimants would have the
option of joining the lawsuit should they desire. Such appointment and
notification has not yet occurred.
Investments in Great Britain Rail Companies
In the fourth quarter of 1995, a consortium of investors, including
WCI and Berkshire Fund III Investment Corporation, an affiliate of an
American private equity firm ("Berkshire") of which one of the Company's
directors is an executive officer, director and beneficial owner of shares,
established a holding company, North and South Railways Limited, now named
English, Welsh & Scottish Railway Holdings Limited ("EW&S"), to acquire
various rail assets of British Rail from the British government as a part of
its privatization of British Rail. On December 9, 1995, EW&S acquired the
stock of Rail express systems Limited ("Res"). The principal activity of Res
is the carriage of letters for the Royal Mail, a division of the British Post
Office. On February 24, 1996, EW&S acquired stock ownership of British
Rail's three trainload freight companies ("TLFs"), Loadhaul Limited, Mainline
Freight Limited and Transrail Freight Limited. These companies are the
largest part of British Rail's operations to be sold and employ over 7,000
staff utilizing 910 locomotives and 19,300 freight cars to haul primarily
bulk commodities such as coal, ore, steel and aggregates throughout Great
Britain. The TLFs had combined revenues of approximately $865 million in
their fiscal year ended March 31, 1995.
WCI has invested approximately $44.5 million in EW&S for a 32%
ownership interest as of June 30, 1996. Of this amount, WCI had invested
approximately $13.2 million through December 31, 1995 in connection with
EW&S's acquisition of Res. The Company had also incurred $683,000 of
investment related costs through December 31, 1995, which were reimbursed by
EW&S during the first quarter of 1996. The Company has been granted
performance-based options to acquire additional shares in EW&S to compensate
it for its leadership of the consortium, and has entered into a management
consulting agreement with EW&S.
In connection with the EW&S investment, the Company loaned $13.2
million to Berkshire in December 1995 to temporarily finance its portion of
the purchase price. This loan earned interest at approximately 9.0% and was
repaid on February 22, 1996, prior to the consummation of the purchase of the
three trainload freight companies.
Tranz Rail Initial Public Offering
WCTC, through its WCI subsidiary, holds an equity interest in Tranz
Rail Holdings Limited ("Tranz Rail"), which operates 2,400 route miles of
railroad in New Zealand. Tranz Rail completed an initial public offering of
its common stock on June 18, 1996 and is listed on the NASDAQ stock exchange
in the United States and the New Zealand stock exchange in New Zealand. As
a result of this offering, the Company's ownership position declined to 22.7%
from 30.2%. As of June 30, 1996, the Company owned the equivalent of
9,561,639 American Depository Shares ("ADS") of Tranz Rail with a quoted
closing price on NASDAQ of $13.875 per ADS.
BOCT Complaint
On June 4, 1993, WCL was served with a complaint filed by the
Baltimore and Ohio Chicago Terminal Railroad Company ("BOCT") in the United
States District Court for the Northern District of Illinois, Eastern
Division. In its complaint, the BOCT claimed that WCL owed BOCT for
intermediate switching and car hire reclaim charges allegedly incurred from
July 1988 through February 1993. Arbitration hearings were held in Chicago
from October 24, 1995 to November 9, 1995. On June 10, 1996, the arbitration
panel ruled in favor of BOCT. The arbitration panel's ruling awarded BOCT
$16,778,000 of disputed switching and car hire reclaim charges, and
$2,493,000 of interest relating to such charges. Based upon the arbitration
panel's ruling, the Company has recorded a pretax provision of $15,771,000,
representing amounts awarded in excess of previously recorded accruals, in
its second quarter results.
The litigation between BOCT and the Company continues, with the
Company attempting to raise additional defenses that were not subject to
arbitration and BOCT attempting to confirm the arbitration award.
Waukesha Environmental
On April 2, 1996, WCL received a grand jury subpoena from the U.S.
Department of Justice ("DOJ") requesting documents relating to the demolition
of a foundry and roundhouse on the Company's property in Waukesha, Wisconsin,
performed by contractors for WCL in 1993. WCL has complied with the
subpoena. Previously, in March 1994, WCL had received a notice of violation
of the Clean Air Act (the "Act") and the National Emission Standard for
Asbestos (the "Asbestos NESHAP") promulgated thereunder from the U.S.
Environmental Protection Agency ("USEPA") in connection with the demolition.
The USEPA held a conference with WCL on April 11, 1994 to discuss the notice
prior to a determination of any enforcement action to be taken under section
113 of the Act. Although not currently a target of the DOJ investigation, if
it were to be determined that WCL violated the Asbestos NESHAP, WCL could be
subject to criminal prosecution with fines of up to $500,000 per violation or
civil enforcement with fines of up to $25,000 per day for each violation.
Item 2 - Management's Discussion and Analysis of
Financial Condition and Results of Operations
The following discussion should be read in conjunction with the
unaudited consolidated financial statements and related notes included
herein.
Results of Operations: Second Quarter 1996 Compared to Second Quarter 1995
The Company's net income for the quarter ended June 30, 1996 was $7.5
million compared with $12.2 million for the same period in 1995. Second
quarter net income was reduced by $9.5 million, due to the switching charges
and interest awarded in the BOCT arbitration.
Operating revenues. Operating revenues for the second quarter of
1996 were $56.2 million, which was $8.1 million, or 12.5 percent lower than
the year-ago period. Operating revenues for the second quarter of 1996 were
reduced by $13.3 million as the result of the accrual for switching charges
awarded in the BOCT arbitration. Excluding these switching charges, second
quarter operating revenues increased by $5.2 million, or 8.1 percent, to
$69.5 million. Gross revenues for the quarter ended June 30, 1996 increased
in 11 of 15 commodity groups, compared with the same period in 1995.
Overall, gross revenues increased 5.7%. Traffic volume, as measured by
carloads handled (including as a carload each loaded trailer or container),
for the quarter ended June 30, 1996 approximated 113,100 carloads compared
with approximately 106,300 carloads in 1995, an increase of 6,800 carloads or
approximately 6.4%. Increases in WCTC's revenue totals occurred in paper,
pulpboard, lumber, sand, stone and minerals, coal, steel and intermodal.
Intermodal volume increased by more than 5,800 carloads or 61.9%
compared to the same period in 1995. The Company together with Canadian
National Railway ("CN") began a new joint rate intermodal service on April 1,
1996. This service provides U.S. and Canadian customers with potential
transit time savings in the Chicago/Western Canada corridor by utilizing the
Company's lines, which offer the shortest mileage between Chicago and
Superior, Wisconsin.
Paper volume and gross revenues increased by 8.1% and 11.2%,
respectively, from the year ago period primarily due to a softness in the
paper market which has increased market share for shipments by rail versus
truck. Volume and gross revenues for pulpboard increased by 7.8% and 13.9%,
respectively, primarily due to increased market share. Lumber gross revenues
increased by 28.6% compared with the same period in 1995 primarily due to
higher revenues per carload as a result of longer hauls. Volume and gross
revenues for sand, stone and minerals increased by 13.1% and 28.5%,
respectively, primarily due to increased market shares in cement and
aggregates as well as an increase in sand shipments for the oil and gas
industry. Volume and gross revenues for coal increased by 27.9% and 28.0%,
respectively, primarily due to increased market share of inbound coal for
Wisconsin utilities. Volume and gross revenues for steel increased by 16.0%
and 19.4%, respectively, primarily due to increased demand from a major
customer of ACRI.
Volume and gross revenues from shipments of chemical and petroleum
products decreased by 14.1% and 8.8%, respectively, primarily due to a
decline in shipments of paper coating chemicals related to the current
softness in the paper market. Volume and gross revenues for clay products
decreased by 11.8% and 13.6%, respectively, primarily due to a slowdown in
shipments of roofing granules and the softness in coating clays for the paper
industry. Metallic ore revenues declined by 6.0% compared to the same period
in 1995 primarily due to production disruptions at various mining facilities
related to the severe weather experienced during the winter and spring
months.
Operating expenses. Operating expenses for the second quarter of
1996 were $54.6 million compared with $48.0 million for the same period in
1995, an increase of 13.8%. Increases in labor, fuel and joint facilities
were the primary causes of the increased operating expenses. The Company's
operating ratio (operating expenses as a percentage of operating revenues)
was 97.2% in the second quarter of 1996, including the accrual for the
switching charges awarded in the BOCT arbitration. Excluding these switching
charges, the Company's operating ratio was 78.6%, compared to 74.7% in the
second quarter of 1995.
Labor expense increased by $2.7 million or 13.9% in the second
quarter of 1996 as compared to the same period in 1995 primarily due to a
5.0% increase in the work force to handle the increased traffic and an
average 4.5% increase in wages and salaries granted to employees at the
beginning of the year. Fuel expense increased by $0.5 million or 10.0% in
the second quarter of 1996 as compared with the same period of 1995 primarily
due to a 13.0% increase in fuel prices during the quarter. Joint facilities
expense increased by $1.0 million in the second quarter of 1996 as compared
to the same period in 1995 primarily due to continued train congestion
through the Chicago corridor as well as costs associated with the CN
intermodal service which started on April 1, 1996.
Other Income, Interest Expense and Income Taxes. Other income, net,
amounted to $1.0 million for the second quarter of 1996 compared to $0.4
million in the second quarter of 1995. The increase is largely due to $0.4
million of management fees received from EW&S.
Included in interest expense for the second quarter of 1996 is $2.5
million interest on the switching charges awarded in the BOCT arbitration.
Other interest expense decreased $0.3 million in the second quarter of 1996
to $2.3 million primarily due to the restructuring of debt which occurred in
late 1995 and has resulted in a lower effective interest rate. The income
tax provision for the second quarter of 1996 was $(0.9) million, a decrease
of $6.5 million over the second quarter of 1995, due to the reduction in
pre-tax income as a result of the switching charges and interest awarded in
the BOCT arbitration.
Equity in net income of affiliates. The Company's 1996 second
quarter results included equity in net income of its affiliates of $8.9
million as compared to $3.7 million for the same period of 1995. The
Company's equity in net income of affiliates included contributions from
Tranz Rail of $3.1 million, versus $3.7 million in the year-ago period, and
from EW&S of $5.8 million. The second quarter of 1996 is the first full
quarter of EW&S's operations to be included in the Company's financial
statements.
Results of Operations: First Six Months of 1996 Compared to First Six Months
of 1995
The Company's net income for the six months ended June 30, 1996 was
$15.6 million compared with $22.0 million for the same period in 1995. Net
income for the first six months of 1996 was reduced by $9.5 million due to
the BOCT arbitration award.
Operating revenues. Operating revenues during the six months ended
June 30, 1996 were $121.2 million compared with $127.2 million for the same
period in 1995, a decrease of 4.7%. Operating revenues for the first six
months of 1996 were negatively affected by the switching charges awarded in
the BOCT arbitration. Excluding these switching charges, operating revenues
for the first six months increased by $7.4 million or 5.8% to $134.5 million.
Gross revenues for the six months ended June 30, 1996 increased in 10 of 15
commodity groups compared with the same period in 1995. Overall, gross
revenues increased 3.1%. Traffic volume, as measured by carloads handled
(including as a carload each loaded trailer or container), for the six months
ended June 30, 1996 approximated 227,900 carloads compared with approximately
221,300 carloads in 1995, an increase of 6,600 carloads or approximately
3.0%.
Intermodal volume increased by more than 6,900 carloads or 35.2%
compared to the same period in 1995 primarily due to the new joint rate
intermodal service which the Company together with CN started on April 1,
1996. Other large increases in WCTC's revenue totals occurred in paper,
lumber, sand, stone and minerals, coal and steel.
Paper volume and gross revenues increased by 14.2% and 14.5%,
respectively, from the year ago period, primarily due to a softness in the
paper market which has increased market share for shipments by rail versus
truck. Volume and gross revenues for lumber increased by 2.7% and 32.7%,
respectively, primarily due to increased market share and higher revenues per
carload due to longer hauls. Volume and gross revenues for sand, stone and
minerals increased by 7.8% and 21.5%, respectively, primarily due to
increased market shares in cement and aggregates as well as an increase in
sand shipments for the oil and gas industry. Volume and gross revenues for
coal increased by 27.8% and 19.5%, respectively, primarily due to increased
market share of inbound coal for Wisconsin utilities. Volume and gross
revenues for steel increased by 10.7% and 14.7%, respectively, primarily due
to increased demand from a major customer of ACRI.
Operating expenses. Operating expenses for the first six months of
1996 were $115.2 million compared with $97.0 million for the same period in
1995, an increase of 18.8%. The increase was primarily the result of severe
winter weather, a weaker than expected economy and the Weyauwega derailment.
The Weyauwega derailment led to a $2.5 million increase in operating expenses
to account for the combined deductible under the Company's two insurance
policies. Other increases in operating expenses occurred in labor, fuel,
equipment rents, materials, joint facilities and casualties and insurance.
The Company's operating ratio (operating expenses as a percentage of
operating revenues) was 95.1% in the first six months of 1996, including the
accrual for the switching charges awarded in the BOCT arbitration. Excluding
these switching charges, the Company's operating ratio was 85.7% compared to
76.3% in the first six months of 1995.
Labor expense increased by $5.7 million or 14.2% in the first six
months of 1996 as compared to the same period in 1995 primarily due to a 8.6%
increase in the work force to handle the increased traffic and an average
4.5% increase in wages and salaries granted to employees at the beginning of
the year. Fuel expense increased by $1.0 million or 10.3% in the first six
months of 1996 as compared with the same period of 1995 primarily due to a
10.5% increase in fuel prices over 1995. Net equipment rent expense
increased by $1.8 million or 14.7% primarily due to additional equipment
under operating leases as a result of sale-leaseback transactions in 1995 and
increased traffic congestion in the Chicago corridor. Materials expense
increased by $1.9 million or 17.6% in the first six months of 1996 as
compared with the same period of 1995 primarily as a result of increased
costs associated with maintenance of the Company's car and locomotive fleet,
largely due to unusually severe weather during the winter and spring months.
Joint facilities expense increased $1.1 million in the first six months of
1996 as compared with the same period of 1995 primarily due to the continued
congestion through the Chicago corridor as well as costs associated with the
CN intermodal move which started on April 1, 1996. Casualties and insurance
costs increased by $1.2 million largely due to derailments, other than
Weyauwega, experienced during the first six months of 1996.
Other Income, Interest Expense and Income Taxes. Other income, net,
of $1.9 million for the first six months of 1996 was $0.9 million higher
than for the same period of 1995. The increase is largely due to $0.6
million of management fees received from EW&S.
Included in interest expense for the first six months of 1996 is $2.5
million of interest awarded in the BOCT arbitration. Other interest expense
decreased $0.7 million in the first six months of 1996 to $4.4 million,
primarily due to the restructuring of debt which occurred in late 1995 and
has resulted in a lower effective interest rate. The income tax provision
for the first six months of 1996 was $0.4 million, a decrease of $9.9 million
over the first six months of 1995, primarily due to the reduction of pretax
income as a result of the switching charges and interest awarded in the BOCT
arbitration.
Equity in net income of affiliates. The Company's 1996 first six
months results included equity in net income of its affiliates of $15.0
million as compared to $6.3 million for the same period of 1995. The
Company's equity in net income of affiliates included contributions from
Tranz Rail of $6.1 million, versus $6.3 million in the same period a year
ago, and contributions from EW&S of $8.9 million.
Financial Condition: June 30, 1996 Compared to December 31, 1995
The Company generated cash in the amount of $20.4 million during the
first six months of 1996 from operations and the sale of assets and $42.9
million from financing activities. These resources, as well as cash on hand,
were used to finance the Company's investment in EW&S of $30.7 million and
other capital-related expenditures of $25.6 million.
The Company had $165.3 million of total debt outstanding at June 30,
1996, which constituted 40.0% of its total capitalization, compared to 36.6%
at December 31, 1995. At June 30, 1996, the Company's aggregate unused
borrowing availability under its loan facilities totaled $72.8 million.
<PAGE>
PART II - OTHER INFORMATION
Item 4. Submission of Matters to a Vote of Security Holders
The Company's annual stockholders' meeting was held on May 16, 1996.
At the meeting, Edward A. Burkhardt, Carl Ferenbach, Michael R. Haverty,
Roland V. McPherson, Thomas F. Power, Jr., Thomas W. Rissman and Robert H.
Wheeler were re-elected as directors of the Company. Votes on election of
the directors were as follows:
<TABLE>
<CAPTION>
Votes Against or Abstentions and
Nominee Votes For Withheld Broker Non-Votes
------- ---------- ----------- ----------------
<S> <C> <C> <C>
E. A. Burkhardt 14,990,246 42,971 0
C. Ferenbach 14,990,488 42,729 0
M. R. Haverty 14,963,014 70,203 0
R. V. McPherson 14,989,487 43,730 0
T. F. Power, Jr. 14,990,264 42,953 0
T. W. Rissman 14,988,733 44,484 0
R. H. Wheeler 14,990,488 42,729 0
</TABLE>
At the meeting a proposal to approve an amendment of the Company's
Certificate of Incorporation to increase to 150,000,000 the number of
authorized shares of common stock passed, with 12,348,943 votes cast for the
proposal, 2,558,664 votes cast against the proposal or withheld and 125,610
abstentions and broker non-votes.
At the meeting a proposal to approve an amendment of the WCTC
Employee Stock Purchase Plan to change the definition of "designated
participating corporation" passed, with 14,887,303 votes cast for the
proposal, 44,051 votes cast against the proposal or withheld and 101,863
abstentions and broker non-votes.
On May 31, 1996, Michael R. Haverty resigned as a director of the
Company, stating that the increased demands on his time as the Chief
Executive Officer of the Kansas City Southern Railway did not leave him
sufficient time to attend to the affairs of the Company. The vacancy created
by Mr. Haverty's resignation remained unfilled as of June 30, 1996.
Item 6. Exhibits and Reports on Form 8-K
a. Exhibits
Exhibit 3. Restated Certificate of Incorporation, as amended.
Exhibit 11. Statement re Computation of Per Share Earnings.
Exhibit 27. Financial Data Schedule.
b. Reports on Form 8-K
The Company filed no reports on Form 8-K during the quarter for
which this report is filed.
<PAGE>
WISCONSIN CENTRAL TRANSPORTATION 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 thereunto duly authorized.
WISCONSIN CENTRAL TRANSPORTATION
CORPORATION
Date: August 12, 1996 By: Walter C. Kelly
Walter C. Kelly
Vice President, Finance
Date: August 12, 1996 By: Walter C. Kelly
Walter C. Kelly
Chief Accounting Officer
<PAGE>
INDEX TO EXHIBITS
Exhibit No. Description Code
- ----------- -------------------------- ----
3 Amended Articles of
Incorporation
11 Statement re Computation
of Per Share Earnings
27 Financial Data Schedule
CERTIFICATE OF AMENDMENT
OF
CERTIFICATE OF INCORPORATION
OF
WISCONSIN CENTRAL TRANSPORTATION CORPORATION
WISCONSIN CENTRAL TRANSPORTATION CORPORATION, a corporation organized
and existing under the laws of the State of Delaware, hereby certifies as
follows:
1. The name of the corporation (hereinafter called the
"corporation") is WISCONSIN CENTRAL TRANSPORTATION CORPORATION.
2. The date of filing of the original certificate of incorporation
of the corporation with the Delaware Secretary of State was August 12, 1987.
The date of filing of the restated certificate of incorporation of the
corporation was May 20, 1991.
3. Article 4 of the Restated Certificate of Incorporation of the
corporation is amended to read in its entirety as follows:
"Article 4. The aggregate number of shares of capital stock which the
Corporation shall have authority to issue is 151,000,000, consisting of
150,000,000 shares of common stock, with a par value of $.01 per share
("Common Stock"), and 1,000,000 shares of preferred stock, with a par value
of $1.00 per share ("Preferred Stock").
A. Reclassification of Outstanding Common Stock
Each share of Class A Common Stock, Class B Common Stock and Class C
Common Stock outstanding immediately prior to the effective date of this
Restated Certificate of Incorporation is reclassified as 337.831 shares of
Common Stock, and any fractional shares resulting from the reclassification
are converted into the right to receive cash in an amount per share equal to
the price at which Common Stock is offered to the public in the initial
public offering of Common Stock. Certificates evidencing shares of Class A
Common Stock, Class B Common Stock and Class C Common Stock shall evidence
the number of shares of Common Stock into which they have been reclassified.
B. Preferred Stock
(1) The Board of Directors is specifically authorized to issue
shares of Preferred Stock in one or more series. The shares of each series
shall have such voting powers, full or limited, or no voting powers, and such
designations, preferences, and relative, optional or other special rights and
qualifications, limitations and restrictions thereof, and such redemption
provisions as are stated and expressed in the resolutions providing for the
issuance of the series adopted by the Board of Directors.
(2) All or any part of any series of Preferred Stock may be
redeemed at any time or times at the option of the Corporation, by resolution
of the Board of Directors, in accordance with the terms and conditions fixed
by the Board of Directors in the resolution or resolutions providing for the
issuance of such series. The Corporation may redeem shares of any one or
more series of Preferred Stock without redeeming shares of any other series
except as may be otherwise provided in the resolution or resolutions
providing for the issuance of the series of Preferred Stock."
4. This amendment was duly adopted in accordance with the provisions
of Section 242 of the General Corporation Law of Delaware.
Signed on May 20, 1996.
/s/ Thomas W. Rissman
Name: Thomas W. Rissman
Title: Secretary
<PAGE>
CERTIFICATE OF AMENDMENT
OF
CERTIFICATE OF INCORPORATION
OF
WISCONSIN CENTRAL TRANSPORTATION CORPORATION
WISCONSIN CENTRAL TRANSPORTATION CORPORATION, a corporation organized
and existing under the laws of the State of Delaware, hereby certifies as
follows:
1. The name of the corporation (hereinafter called the
"corporation") is WISCONSIN CENTRAL TRANSPORTATION CORPORATION.
2. The date of filing of the original certificate of incorporation
of the corporation with the Delaware Secretary of State was August 12, 1987.
The date of filing of the restated certificate of incorporation of the
corporation was May 20, 1991.
3. Article 4 of the Restated Certificate of Incorporation of the
corporation is amended to read in its entirety as follows:
"Article 4. The aggregate number of shares of capital stock which the
Corporation shall have authority to issue is 41,000,000, consisting of
40,000,000 shares of common stock, with a par value of $.01 per share
("Common Stock"), and 1,000,000 shares of preferred stock, with a par value
of $1.00 per share ("Preferred Stock").
A. Reclassification of Outstanding Common Stock
Each share of Class A Common Stock, Class B Common Stock and Class C
Common Stock outstanding immediately prior to the effective date of this
Restated Certificate of Incorporation is reclassified as 337.831 shares of
Common Stock, and any fractional shares resulting from the reclassification
are converted into the right to receive cash in an amount per share equal to
the price at which Common Stock is offered to the public in the initial
public offering of Common Stock. Certificates evidencing shares of Class A
Common Stock, Class B Common Stock and Class C Common Stock shall evidence
the number of shares of Common Stock into which they have been reclassified.
B. Preferred Stock
(1) The Board of Directors is specifically authorized to issue
shares of Preferred Stock in one or more series. The shares of each series
shall have such voting powers, full or limited, or no voting powers, and such
designations, preferences, and relative, optional or other special rights and
qualifications, limitations and restrictions thereof, and such redemption
provisions as are stated and expressed in the resolutions providing for the
issuance of the series adopted by the Board of Directors.
(2) All or any part of any series of Preferred Stock may be
redeemed at any time or times at the option of the Corporation, by resolution
of the Board of Directors, in accordance with the terms and conditions fixed
by the Board of Directors in the resolution or resolutions providing for the
issuance of such series. The Corporation may redeem shares of any one or
more series of Preferred Stock without redeeming shares of any other series
except as may be otherwise provided in the resolution or resolutions
providing for the issuance of the series of Preferred Stock."
4. This amendment was duly adopted in accordance with the provisions
of Section 242 of the General Corporation Law of Delaware.
Signed on June 2, 1993.
/s/ Edward A. Burkhardt
Name: Edward A. Burkhardt
Title: President
ATTEST /s/ Thomas W. Rissman
Name: Thomas W. Rissman
Title: Secretary
<PAGE>
RESTATED
CERTIFICATE OF INCORPORATION
OF
WISCONSIN CENTRAL TRANSPORTATION CORPORATION
WISCONSIN CENTRAL TRANSPORTATION CORPORATION, a corporation
organized and existing under the laws of the State of Delaware, hereby
certifies as follows:
1. The name of the corporation (hereinafter called the
"corporation") is WISCONSIN CENTRAL TRANSPORTATION CORPORATION. The name of
the corporation under which it was originally incorporated was THE WISCONSIN
CORPORATION.
2. The date of filing of the original certificate of incorporation
of the corporation with the Delaware Secretary of State was August 12, 1987.
3. The Certificate of Incorporation of the corporation is amended
and restated to read in its entirety as set forth in Exhibit A hereto.
4. This amendment was duly adopted in accordance with the provisions
of Section 242 of the General Corporation Law of Delaware.
Signed on April 24, 1991.
/s/ Edward A. Burkhardt
Name: Edward A. Burkhardt
Title: President
ATTEST /s/ Thomas W. Rissman
Name: Thomas W. Rissman
Title: Assistant Secretary
<PAGE>
EXHIBIT A
RESTATED CERTIFICATE OF INCORPORATION
OF
WISCONSIN CENTRAL TRANSPORTATION CORPORATION
Article 1. The name of this Corporation is Wisconsin Central
Transportation Corporation.
Article 2. The address of the Corporation's registered office in the
State of Delaware is The Corporation Trust Center, 1209 Orange Street, in the
City of Wilmington, County of New Castle. The name of the Corporation's
registered agent at that address is The Corporation Trust Company.
Article 3. The purpose of the Corporation is to engage in any lawful act
or activity for which corporations may be organized under the General
Corporation Law of Delaware.
Article 4. The aggregate number of shares of capital stock which the
Corporation shall have authority to issue is 11,000,000, consisting of
10,000,000 shares of common stock, with a par value of $.01 per share
("Common Stock"), and 1,000,000 shares of preferred stock, with a par value
of $1.00 per share ("Preferred Stock").
A. Reclassification of Outstanding Common Stock
Each share of Class A Common Stock, Class B Common Stock and Class C
Common Stock outstanding immediately prior to the effective date of this
Restated Certificate of Incorporation is reclassified as 337.831 shares of
Common Stock, and any fractional shares resulting from the reclassification
are converted into the right to receive cash in an amount per share equal to
the price at which Common Stock is offered to the public in the initial
public offering of Common Stock. Certificates evidencing shares of Class A
Common Stock, Class B Common Stock and Class C Common Stock shall evidence
the number of shares of Common Stock into which they have been reclassified.
B. Preferred Stock.
(1) The Board of Directors is specifically authorized to issue
shares of Preferred Stock in one or more series. The shares of each series
shall have such voting powers, full or limited, or no voting powers, and such
designations, preferences, and relative, optional or other special rights and
qualifications, limitations and restrictions thereof, and such redemption
provisions as are stated and expressed in the resolutions providing for the
issuance of the series adopted by the Board of Directors.
(2) All or any part of any series of Preferred Stock may be
redeemed at any time or times at the option of the Corporation, by resolution
of the Board of Directors, in accordance with the terms and conditions fixed
by the Board of Directors in the resolution or resolutions providing for the
issuance of such series. The Corporation may redeem shares of any one or
more series of Preferred Stock without redeeming shares of any other series
except as may be otherwise provided in the resolution or resolutions
providing for the issuance of the series of Preferred Stock.
Article 5. Except as otherwise provided in this Restated Certificate of
Incorporation, the power to alter, amend or repeal the By-Laws or adopt new
By-Laws, subject to repeal or change by action of the stockholders, shall be
vested in the Board of Directors of the Corporation.
Article 6. The Corporation is to have perpetual existence.
Article 7. (i) Any person who was or is a party or is threatened to be
made a party to any threatened, pending or completed action, suit or
proceeding, whether civil, criminal, administrative or investigative (other
than an action by or in the right of the corporation) by reason of the fact
that he is or was a director, officer, employee or agent of the Corporation,
or is or was serving at the request of the Corporation as a director,
officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise, shall be indemnified by the Corporation
against expenses (including attorneys' fees), judgments, fines and amounts
paid in settlement actually and reasonably incurred by him in connection with
such action, suit or proceeding if he acted in good faith and in a manner he
reasonably believed to be in or not opposed to the best interests of the
Corporation, and, with respect to any criminal action or proceeding, had no
reasonable cause to believe his conduct was unlawful. The termination of any
action, suit or proceeding by judgment, order, settlement, conviction, or
upon a plea of nolo contendere or its equivalent, shall not, of itself,
create a presumption that the person did not act in good faith and in a
manner which he reasonably believed to be in or not opposed to the best
interests of the corporation, and, with respect to any criminal action or
proceeding, had reasonable cause to believe that his conduct was unlawful.
(ii) The Corporation shall indemnify any person who
was or is a party or is threatened to be made a party to any threatened,
pending or completed action or suit by or in the right of the Corporation to
procure a judgment in its favor by reason of the fact that he is or was a
director, officer, employee or agent of the corporation, or is or was serving
at the request of the corporation as a director, officer, employee or agent
of another corporation, partnership, joint venture, trust or other enterprise
against expenses (including attorneys' fees) actually and reasonably incurred
by him in connection with the defense or settlement of such action or suit if
he acted in good faith and in a manner he reasonably believed to be in or not
opposed to the best interests of the Corporation and except that no
indemnification shall be made in respect of any claim, issue or matter as to
which such person shall have been adjudged to be liable to the Corporation,
unless and only to the extent that the Court of Chancery of Delaware or the
court in which such action or suit was brought shall determine upon
application that, despite the adjudication of liability but in view of all
the circumstances of the case, such person is fairly and reasonably entitled
to indemnity for such expenses which the Court of Chancery of Delaware or
such other court shall deem proper.
(iii) To the extent that a director, officer,
employee or agent of the Corporation has been successful on the merits or
otherwise in defense of any action, suit or proceeding referred to in
subsections (i) and (ii) of this Article 7, or in defense of any claim, issue
or matter therein, he shall be indemnified against expenses (including
attorneys' fees) actually and reasonably incurred by him in connection
therewith.
(iv) Any indemnification under subsections (i) and
(ii) of this Article 7 shall be made by the Corporation only as authorized in
the specific case upon a determination that indemnification of the director,
officer, employee or agent is proper in the circumstances because he has met
the applicable standard of conduct set forth in subsections (i) and (ii) of
this Article 7. Except as otherwise expressly required in such subsections
(i) and (ii), such determination shall be made (i) by the Board of Directors
by a majority vote of a quorum consisting of directors who were not parties
to such action, suit or proceeding, or (ii) if such a quorum is not
obtainable, or, even if obtainable, if a quorum of disinterested directors so
directs, by independent legal counsel in a written opinion, or (iii) by the
stockholders.
(v) The Corporation shall advance attorneys' fees or
other expenses incurred, or, in the judgment of the Board of Directors
reasonably expected to be incurred, by any of its directors, officers,
employees or agents in any action, suit or proceeding, in advance of the
final disposition of such action, suit or proceeding, upon receipt of an
undertaking of such party to repay the advance if it is ultimately determined
that such party is not entitled to indemnification hereunder.
(vi) The indemnification and advancement of expenses
provided by, or granted pursuant to, the other subsections of this Article 7
shall not be deemed exclusive of any other rights to which those seeking
indemnification or advancement of expenses may be entitled under any by-law,
agreement, vote of stockholders or disinterested directors or otherwise, both
as to action in his official capacity and as to action in another capacity
while holding such office.
(vii) The Corporation shall have power to purchase
and maintain insurance on behalf of any person who is or was a director,
officer, employee or agent of the Corporation, or is or was serving at the
request of the Corporation as a director, officer, employee or agent of
another corporation, partnership, joint venture, trust or other enterprise
against any liability asserted against him and incurred by him in any such
capacity, or arising out of his status as such, whether or not the
Corporation would have the power to indemnify him against such liability
under the provisions of this Article 7 and regardless of whether he would
have been entitled to indemnification by the Corporation.
(viii) For the purposes of this Article 7,
references to "the Corporation" shall include, in addition to the resulting
corporation, any constituent corporation (including any constituent of a
constituent) absorbed in a consolidation or merger which, if its separate
existence had continued, would have had power and authority to indemnify its
directors, officers, employees or agents, so that any person who is or was a
director, officer, employee or agent of such constituent corporation, or is
or was serving at the request of such constituent corporation as a director,
officer, employee or agent of another corporation, partnership, joint
venture, trust or other enterprise, shall stand in the same position under
the provisions of this Article 7 with respect to the resulting or surviving
corporation as he would have with respect to such constituent corporation if
its separate existence had continued.
(ix) For purposes of this Article 7, references to
"other enterprises" shall include employee benefit plans; references to
"fines" shall include any excise taxes assessed on a person with respect to
an employee benefit plan; and references to "serving at the request of the
corporation" shall include any service as a director, officer, employee or
agent of the Corporation which imposes duties on, or involves services by,
such director, officer, employee, or agent with respect to an employee
benefit plan, its participants, or beneficiaries; and a person who acted in
good faith and in a manner he reasonably believed to be in the interest of
the participants and beneficiaries of an employee benefit plan shall be
deemed to have acted in a manner "not opposed to the best interests of the
Corporation" as referred to in this Article 7.
(x) The indemnification and advancement of expenses
provided by, or granted pursuant to, this Article 7 shall continue as to a
person who has ceased to be a director, officer, employee or agent and shall
inure to the benefit of the heirs, executors and administrators of such a
person.
(xi) Notwithstanding the foregoing provisions of
Article 7, the Corporation shall indemnify any person who is or was a
director, officer, employee or agent of the Corporation, or is or was serving
at the request of the Corporation as a director, officer, employee or agent
of another corporation, partnership, joint venture, trust or other enterprise
to the full extent permitted by the Delaware General Corporation Law or any
other applicable law, as may from time to time be in effect.
Article 8. No person who was or is a director of the Corporation shall
be personally liable to the Corporation or its stockholders for monetary
damages for breach of fiduciary duty as a director, except for liability (i)
for breach of the duty of loyalty to the corporation or its stockholders;
(ii) for acts or omissions not in good faith or which involve intentional
misconduct or knowing violation of law; (iii) under Section 174 of the
Delaware General Corporation Law; or (iv) for any transaction from which the
director derived an improper personal benefit. If the Delaware General
Corporation Law is amended after the effective date of this Article to
further eliminate or limit, or to authorize further elimination or limitation
of, the personal liability of directors for breach of fiduciary duty as a
director, then the personal liability of a director to the Corporation or its
stockholders shall be eliminated or limited to the full extent permitted by
the Delaware General Corporation Law, as so amended. For purposes of this
Article, "fiduciary duty as a director" shall include any fiduciary duty
arising out of serving at the request of the Corporation as a director of
another corporation, partnership, joint venture, trust or other enterprise,
and "personally liable to the Corporation" shall include any liability to
such other corporation, partnership, joint venture, trust or other
enterprise, and any liability to the Corporation in its capacity as security
holder, joint venturer, partner, beneficiary, creditor or investor of or in
any such other corporation, partnership, joint venture, trust or other
enterprise. Any repeal or modification of the foregoing paragraph by the
stockholders of the Corporation shall not adversely affect the elimination or
limitation of the personal liability of a director for any act or omission
occurring prior to the effective date of such repeal or modification. This
provision shall not eliminate or limit the liability of a director for any
act or omission occurring prior to the effective date of this Article.
Article 9. Elections of directors need not be by written ballot unless
the By-Laws of the Corporation shall so provide. Meetings of stockholders
may be held within or without the State of Delaware, as the By-Laws may
provide. The books of the Corporation may be kept (subject to any provision
contained in the statutes) outside the State of Delaware at such places as
may be designated from time to time by the Board of Directors or in the
By-Laws of the Corporation.
Article 10. The Corporation reserves the right to amend, alter, change or
repeal any provision contained in this Restated Certificate of Incorporation,
in the manner prescribed by statute, and all rights conferred upon
stockholders are granted subject to this reservation.
EXHIBIT NO. 11
Statement re Computation of Per Share Earnings
WISCONSIN CENTRAL TRANSPORTATION CORPORATION
(in thousands, except per share amounts)
(Unaudited)
<TABLE>
<CAPTION>
For the Quarter For the Six Months
Ended June 30, Ended June 30,
--------------- -----------------
1996 1995 1996 1995
---- ---- ---- ----
<S> <C> <C> <C> <C>
Net income $ 7,528 $ 12,165 $ 15,594 $ 22,030
====== ====== ====== ======
Weighted average common
shares outstanding:
Primary 50,582 50,163 50,551 50,082
====== ====== ====== ======
Fully diluted 51,713 51,585 51,704 51,585
====== ====== ====== ======
Earnings per common
share outstanding:
Primary $ .15 $ .24 $ .31 $ .44
====== ====== ====== ======
Fully diluted $ .15 $ .24 $ .30 $ .43
====== ====== ====== ======
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<LEGEND>
This schedule contains summary financial information extracted from the
Condensed Consolidated Balance Sheet at June 30, 1996 (unaudited) and the
Condensed Consolidated Statement of Income for the Six Months Ended June 30,
1996 (unaudited) and is qualified in its entirety by reference to such
financial statements.
</LEGEND>
<MULTIPLIER> 1,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1996
<PERIOD-END> JUN-30-1996
<CASH> 8,452
<SECURITIES> 0
<RECEIVABLES> 72,258
<ALLOWANCES> 2,093
<INVENTORY> 20,145
<CURRENT-ASSETS> 112,679
<PP&E> 487,379
<DEPRECIATION> 57,224
<TOTAL-ASSETS> 633,106
<CURRENT-LIABILITIES> 135,245
<BONDS> 164,640
0
0
<COMMON> 506
<OTHER-SE> 256,495
<TOTAL-LIABILITY-AND-EQUITY> 633,106
<SALES> 0
<TOTAL-REVENUES> 121,232
<CGS> 0
<TOTAL-COSTS> 115,247
<OTHER-EXPENSES> 1,918
<LOSS-PROVISION> 300
<INTEREST-EXPENSE> 6,873
<INCOME-PRETAX> 1,030
<INCOME-TAX> 408
<INCOME-CONTINUING> 622
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 15,594
<EPS-PRIMARY> 0.31
<EPS-DILUTED> 0.30
</TABLE>
