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Previous: MUNIYIELD CALIFORNIA INSURED FUND INC, N-30D, 1996-12-11 |
Next: AMERICAN MEDICAL RESPONSE INC, S-8, 1996-12-11 |
<PAGE> 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 8-KA
CURRENT REPORT
Pursuant to Section 13 or 15(d) of The
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): October 11, 1996
RailAmerica, Inc.
- --------------------------------------------------------------------------------
(Exact Name of Registrant as Specified in its Charter)
Delaware 0-20618 65-0328006
- ---------------------- --------------- ------------
State of Incorporation Commission File IRS Employer
Number Identification no.
301 Yamato Road, Suite 1190, Boca Raton, Florida 33431
- --------------------------------------------------------------------------------
Address of Principal Executive Office
Registrant's telephone number, including area code: (954) 994-6015
<PAGE> 2
INFORMATION INCLUDED IN THE REPORT
Item 7. Financial Statements and Exhibits
(a) Financial statements of business acquired.
See "Index to Financial Statements" on page 4.
(b) Pro forma financial information.
See "Index to Financial Statements" on page 4.
(c) Exhibits.*
2.1 Stock Purchase Agreement, dated as of September 20,
1996 by and among Otter Tail Valley Railroad
Company, Inc., a Minnesota corporation, and the
shareholders of Otter Tail Railroad Company, Inc.,
and Dakota Rail., a South Dakota corporation, less
exhibits and schedules, which will be furnished
supplementally to the commission upon request.
- -----------------
* Previously filed.
<PAGE> 3
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized, on this 27th day of November 1996.
RAILAMERICA, INC.
BY: /s/ Gary O. Marino
----------------------
Gary O. Marino
Chairman and Chief Executive Officer
3
<PAGE> 4
INDEX TO FINANCIAL STATEMENTS
(a) Financial statements of business acquired
Independent Auditor's Report on 1995 and 1994 Financial Statements
Balance Sheets as of December 31, 1995 and December 31, 1994
Statement of Stockholders' Equity for the Years Ended December 31,
1995 and December 31, 1994
Statements of Income for the Years Ended December 31, 1995 and
December 31, 1994
Statements of Cash Flows for the Years Ended December 31, 1995 and
December 31, 1994
Notes to the 1995 and 1994 Financial Statements
Unaudited Balance Sheet as of September 30, 1996
Unaudited Statement of Income for the Nine and Three Months Ended
September 30, 1996
Unaudited Statement of Cash Flows for the Nine Months Ended
September 30, 1996
(b) Pro Forma Financial Statements
Pro Forma Consolidated Balance Sheet as of September 30, 1996
Pro Forma Consolidated Statement of Income for the Nine Months Ended
September 30, 1996
Pro Forma Consolidated Statement of Income for the year ended
December 31, 1995
Notes To Pro Forma Consolidated Financial Statements
4
<PAGE> 5
OTTER TAIL VALLEY RAILROAD
COMPANY, INC.
FERGUS FALLS, MINNESOTA
FINANCIAL STATEMENTS
AS OF DECEMBER 31, 1995, AND 1994
WITH INDEPENDENT AUDITOR'S REPORT
<PAGE> 6
1
EIDE HELMEKE PLLP
Certified Public Accountants & Consultants
INDEPENDENT ACCOUNTANT'S REVIEW REPORT
The Board of Directors
Otter Tail Valley Railroad Company, Inc.
Fergus Falls, Minnesota
We have audited the accompanying balance sheets of Otter Tail Valley Railroad
Company, Inc., as of December 31, 1995, and 1994, and the related statements of
operations, shareholders' equity and cash flows for the years then ended.
These financial statements are the responsibility of the company's management.
Our responsibility is to express an opinion on these financial statements based
on our audit.
We conducted our audit in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to
obtain reasonable assurance about whether the financial statements are free of
material misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An audit
also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audit provides a reasonable basis
for our opinion.
In our opinion, the financial statements referred to above present fairly, in
all material respects, the financial position of Otter Tail Valley Railroad
Company, Inc., at December 31, 1995, and 1994, and the results of its
operations and its cash flows for the periods then ended in conformity with
generally accepted accounting principles.
/s/ Eide Helmeke PLLP
July 2, 1996
Fargo, North Dakota
<PAGE> 7
2
OTTER TAIL VALLEY RAILROAD COMPANY, INC.
BALANCE SHEETS
DECEMBER 31, 1995, AND 1994
<TABLE>
<CAPTION>
1995 1994
-------------------------------
<S> <C> <C>
ASSETS
- ------
CURRENT ASSETS:
Cash and cash equivalents $ 234,699 $ 472,972
Short-term investments 517,373 473,425
Trade accounts receivable 141,002 181,418
Prepaid expenses 23,250 23,250
Material and supplies 37,960 46,540
-------------------------------
Total current assets 954,284 1,197,605
-------------------------------
PROPERTY, PLANT AND EQUIPMENT: 4,183,739 4,006,979
Less accumulated depreciation (1,776,389) (1,491,140)
-------------------------------
Net property, plant and equipment 2,407,350 2,515,839
-------------------------------
$ 3,361,634 $ 3,713,444
===============================
LIABILITIES AND SHAREHOLDERS' EQUITY
- ------------------------------------
CURRENT LIABILITIES:
Current portion of long-term debt $ 27,114 $
Accounts payable 60,726 79,398
Accrued taxes 11,760 9,492
Accrued interest 34,386
-------------------------------
Total current liabilities 133,986 88,890
LONG-TERM DEBT 2,201,740 2,228,854
-------------------------------
Total liabilities 2,335,726 2,317,744
-------------------------------
SHAREHOLDERS' EQUITY:
Common stock: authorized and issued 11,666 shares of which
6,256 shares are held in treasury at December 31, 1995, and 1994 35,817 35,817
Retained earnings 1,132,578 1,502,370
-------------------------------
1,168,395 1,538,187
Less cost of treasury stock (142,487) (142,487)
-------------------------------
1,025,908 1,395,700
-------------------------------
$ 3,361,634 $ 3,713,444
===============================
</TABLE>
See Notes to Financial Statements.
<PAGE> 8
4
OTTER TAIL VALLEY RAILROAD COMPANY, INC.
STATEMENTS OF SHAREHOLDERS' EQUITY
FOR THE YEARS ENDED DECEMBER 31, 1995, AND 1994
<TABLE>
<CAPTION>
COMMON RETAINED TREASURY
STOCK EARNINGS STOCK TOTAL
-------- ----------- ---------- -----------
<S> <C> <C> <C> <C>
BALANCE, DECEMBER 31, 1993 $ 35,817 $ 1,669,276 $ (142,487) $ 1,562,606
Cash dividends paid (977,879) (977,879)
Net income 810,973 810,973
-------- ----------- ---------- -----------
BALANCE, DECEMBER 31, 1994 35,817 1,502,370 (142,487) 1,395,700
Cash dividends paid (1,337,226) (1,337,226)
Net income 967,434 967,434
-------- ----------- ---------- -----------
BALANCE, DECEMBER 31, 1995 $ 35,817 $ 1,132,578 $ (142,487) $ 1,025,908
======== =========== ========== ===========
</TABLE>
See Notes to Financial Statements.
<PAGE> 9
3
OTTER TAIL VALLEY RAILROAD COMPANY, INC.
STATEMENTS OF OPERATIONS
FOR THE YEARS ENDED DECEMBER 31, 1995, AND 1994
<TABLE>
<CAPTION>
1995 1994
--------------------------------
<S> <C> <C>
REVENUE:
Freight $ 1,716,917 $ 1,612,104
Demurrage 7,183 22,200
Other 337,404 135,854
--------------------------------
2,061,504 1,770,158
--------------------------------
EXPENSES:
Operating expenses 790,115 734,218
Depreciation 297,714 274,493
--------------------------------
1,087,829 1,008,711
--------------------------------
OPERATING INCOME 973,675 761,447
--------------------------------
OTHER INCOME (EXPENSE):
Interest income 29,144 22,973
Interest expense (222,885) (224,447)
Gain on sale of asset 2,000
Base annual payment adjustments 188,500 250,000
--------------------------------
(5,241) 50,526
--------------------------------
NET INCOME BEFORE INCOME TAXES 968,434 811,973
PROVISION FOR INCOME TAXES 1,000 1,000
--------------------------------
NET INCOME $ 967,434 $ 810,973
================================
</TABLE>
See Notes to Financial Statements.
<PAGE> 10
5
OTTER TAIL VALLEY RAILROAD COMPANY, INC.
STATEMENTS OF CASH FLOWS
FOR THE YEARS ENDED DECEMBER 31, 1995, AND 1994
<TABLE>
<CAPTION>
1995 1994
--------------------------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 967,434 $ 810,973
Adjustment to reconcile net income and net cash
provided by operating activities:
Gain on sale of asset (2,000)
Depreciation 297,714 274,493
Debt credited by Burlington Northern (25,559)
Changes in assets and liabilities:
Trade accounts receivables 40,416 (17,491)
Prepaid expenses (23,175)
Material and supplies 8,580 23,209
Accounts payable (18,672) 36,312
Accrued interest 34,386
Accrued taxes 2,268 9,068
--------------------------
Net cash provided by operating activities 1,332,126 1,085,830
--------------------------
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of property, plant and equipment (189,225) (138,211)
Proceeds from sale of equipment 2,000
Purchases of short-term investments, net (43,948) (122,714)
--------------------------
Net cash used in investing activities (233,173) (258,925)
--------------------------
CASH FLOWS FROM FINANCING ACTIVITIES:
Cash dividends paid (1,337,226) (977,879)
--------------------------
NET DECREASE IN CASH (238,273) (150,974)
CASH AND CASH EQUIVALENTS AT BEGINNING OF YEAR 472,972 623,946
--------------------------
CASH AND CASH EQUIVALENTS AT END OF YEAR $ 234,699 $ 472,972
==========================
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION:
Cash payments for income taxes $ 1,000 $ 1,000
==========================
</TABLE>
See Notes to Financial Statements.
<PAGE> 11
6
OTTER TAIL VALLEY RAILROAD COMPANY, INC.
NOTES TO FINANCIAL STATEMENTS
FOR THE YEARS ENDED DECEMBER 31, 1995, AND 1994
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Property, Plant and Equipment - All property, plant and equipment is stated at
cost. Depreciation is computed on the straight-line method over 5 to 35 years.
Maintenance, repairs and minor renewals are charged to expense in the period
incurred.
Cash and Cash Equivalents - For purposes of the statement of cash flows, the
company considers all highly liquid debt instruments purchased with a maturity
of three months or less to be cash equivalents.
Short-term Investments - Short-term investments consist of government
securities and are valued at the lower of cost which approximates market.
These securities are intended to be held to maturity.
Materials and Supplies - Materials and supplies consist of railroad materials
for use in repairs and maintenance of the railroad line and are carried at the
lower of cost or market.
Income Taxes - For federal income tax purposes, the company and its
shareholders have elected to be taxed as an S corporation. Under this
election, the company, as such, is not subject to federal income taxes.
Instead, each shareholder is taxed on his proportionate share of corporate
taxable earnings. The company is subject to state income taxes for income
allocated to nonresident shareholders. In addition, the shareholders have
elected to file a composite state tax return, whereby the corporation files the
tax return for the nonresident shareholders, and any taxes due are treated as
distributions to such shareholders.
Estimates - The preparation of the financial statements in conformity with
generally accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities at
the date of the financial statements and the reported amounts of revenues and
expenses during the reporting period. Actual results could differ from those
estimates.
NOTE 2 - NATURE OF OPERATIONS AND CONCENTRATION OF CREDIT RISK
Otter Tail Railroad Company, Inc. provides rail freight transportation service
to various businesses along its rail properties from Fergus Falls, MN to
Moorhead, MN. The principal commodities are coal, grain and agricultural
chemicals. The company is located in Fergus Falls, Minnesota.
NOTE 3 - OPERATIONS
On October 26, 1986, the corporation acquired 77 route miles of rail properties
from Burlington Northern Railroad Company (BN) located in Minnesota. The
acquisition was accounted for as a purchase using the purchase price specified
in the sales contract. The cost of the road property assets acquired was
allocated to individual assets based on their relative share of that price.
The final purchase price will be the net liquidation value of those assets.
Fair values were substantially in excess of cost, resulting in no recording of
goodwill for the transaction.
(continued on next page)
<PAGE> 12
7
NOTES TO THE FINANCIAL STATEMENTS - PAGE 2
NOTE 4 - PROPERTY, PLANT AND EQUIPMENT
Details pertaining to the company's property, plant and equipment are as
follows:
<TABLE>
<CAPTION>
1995
------------------------------------------
ACCUMULATED 1994
COST DEPRECIATION NET NET
---- ------------ --- ---
<S> <C> <C> <C> <C>
Land $ 471,346 $ $ 471,346 $ 471,346
Road property 2,834,971 1,273,463 1,561,508 1,616,280
Buildings and bridges 309,240 77,225 232,015 241,168
Railroad equipment 456,789 355,636 101,153 147,809
Automobiles 76,439 42,085 34,354 29,565
Office equipment 34,954 27,980 6,974 9,671
---------- ---------- ---------- ----------
$4,183,732 $1,776,389 $2,407,350 $2,515,839
========== ========== ========== ==========
</TABLE>
Depreciation expense for the years ended December 31, 1995, and 1994, totaled
$297,714 and $274,493, respectively.
NOTE 5 - LONG-TERM DEBT
Long-term debt at December 31, 1995, and 1994, consists of the following:
<TABLE>
<CAPTION>
1995 1994
---- ----
<S> <C> <C>
Burlington Northern Railroad Company (BN) rail facilities
installment purchase obligation, annual payments of
$250,000 per year, including 10% annual interest,
due through October 26, 2116. If cars interlined with
BN fall below 6,500, BN will credit payments on this
debt for the company (see below) $ 2,228,854 $ 2,228,854
Less current portion 27,114
----------- -----------
Long-term debt $ 2,201,740 $ 2,228,854
=========== ===========
</TABLE>
(continued on next page)
<PAGE> 13
8
NOTES TO FINANCIAL STATEMENTS - PAGE 3
Burlington Northern Railroad Company Debt Terms - Payments on the rail
facilities installment purchase obligations are as follows:
In any calendar year in which actual carloads interlined with BN are
less than 6,500 cars, BN will credit Otter Tail Valley Railroad $250,
first to accrued interest and then to principal, for each car under
the 6,500 limit to a maximum of the $250,000 annual installment. For
the years ended December 31, 1995, and 1994, BN credited $0 and
$25,559 of principal and $188,500 and $224,441 of interest,
respectively, due to this agreement. Actual cars interlined with BN
for the years ended December 31, 1995, and 1994, totaled 5,746 and
5,275, respectively. The credit is being presented separately in the
statement of operations as a base annual payment adjustment.
Debt Covenants - The purchase agreement that is related to the rail facilities
obligations contains requirements of, among other things, insurance coverage,
track maintenance, and record keeping. The company was in compliance with the
debt covenants for the years ended December 31, 1995, and 1994.
Because of the aforementioned carload credit, it is not possible to determine
future maximum principal payments related to the BN indebtedness.
NOTE 6 - RELATED-PARTY TRANSACTIONS
The corporation made the following payments to other organizations related to
shareholders.
<TABLE>
<CAPTION>
1995 1994
---- ----
<S> <C> <C>
Legal fees $ 7,326 $ 88
======= ======
Consulting fees $48,785 $39,554
======= =======
</TABLE>
NOTE 7 - MAJOR CUSTOMERS
For the years ended December 31, 1995, and 1994, 83% and 89% of net revenues,
respectively, are with Burlington Northern Railroad Company. At December 31,
1995, and 1994, $163,929 and $102,901, respectively, of receivables are due from
Burlington Northern Railroad Company.
NOTE 8 - INCOME TAXES
The components of the provision for income taxes are as follows:
<TABLE>
<S> <C>
Provision for current year income taxes $ 1,000
=======
</TABLE>
(continued on next page)
<PAGE> 14
9
NOTES TO FINANCIAL STATEMENTS - PAGE 4
NOTE 9 - FAIR VALUE OF FINANCIAL INSTRUMENTS
The fair value of a financial instrument is generally defined as the amount at
which the instrument could be exchanged in a current transaction between
willing parties, other than in a forced liquidation sale. Quoted market prices
are generally not available for the company's financial instruments.
Accordingly, fair values are based on judgments regarding anticipated cash
flows, future expected loss experience, current economic conditions, risk
characteristics of various financial instruments and other factors. These
estimates involve uncertainties and matters of judgment, and, therefore, cannot
be determined with precision. Changes in assumptions could significantly
affect the estimates.
The following methods and assumptions were used by the company to estimate fair
value of the financial instruments disclosed:
Short-term Investments - Short-term Investments are carried at market, which
approximates fair value.
Long-term Debt - Based upon current borrowing rates with similar maturities,
the fair value of the long-term debt approximates the carrying values as of
December 31, 1995.
<PAGE> 15
<TABLE>
<CAPTION>
OTTER TAIL VALLEY RAILROAD COMPANY, INC.
SCHEDULES OF OPERATING EXPENSES
FOR THE YEARS ENDED DECEMBER 31, 1995, AND 1994
- --------------------------------------------------------------------------------
1995 1994
------------ ------------
<S> <C> <C>
Salaries and wages 282,525 259,698
Payroll taxes and railroad retirement 76,514 70,354
Professional fees 82,154 70,578
Engine fuel 66,048 69,341
Engine maintenance 53,607 47,945
Employee fringe benefits 37,202 40,123
Hy-rail and other maintenance expenses 30,967 34,161
Contract labor 20,091 23,900
Repair and maintenance - general 6,510 6,389
Dues and subscriptions 8,300 9,730
Transportation supplies 6,327 5,190
Vegetation control 11,439 9,197
Car hire (net) (1,063) 4,966
Telephone 6,555 7,077
Freight 1,918 1,030
Utilities 6,322 5,981
Promotional 821 3,130
Car hire accounting 7,343 6,500
Travel 3,453 3,669
Insurance 7,108 7,528
Hazardous material disposal 6,547 3,879
Signal material 9,510 9,459
Uninsured claims 2,642 10,926
Lodging 1,903 984
Office supplies 2,124 2,638
Equipment rental 17,838 3,480
Postage 1,001 1,108
Tariff 306 1,413
Meals 735 905
Snow removal 400 3,276
Miscellaneous 32,968 9,663
------------ ------------
$ 790,115 $ 734,218
============ ============
</TABLE>
<PAGE> 16
OTTER TAIL VALLEY RAILROAD COMPANY, INC
BALANCE SHEET
September 30, 1996
(Unaudited)
<TABLE>
<CAPTION>
September 30,
1996
------------
ASSETS
<S> <C>
Current assets:
Cash $ 607,956
Short term investments
Trade accounts receivable 212,691
Other accounts receivable 70,942
Prepaid expenses 5,794
Materials and supplies 35,542
------------
Total current assets 932,925
Property, plant and equipment, net 2,303,609
Deposits 75
Segregated cash - purchase price deposit 250,000
------------
$ 3,486,609
============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Current maturities of long-term debt $ --
Accounts payable 37,975
Accrued expenses 310,815
Accrued taxes 34,766
Accrued interest --
Deferred Income 5,793
Uninsured claim liability 25,444
------------
Total current liabilities 414,793
------------
Long-term debt, less current maturities 2,489,202
------------
Commitments and contingent liabilities --
Total liabilities 2,903,995
------------
Stockholders' equity:
Common stock, authorized and issued 11,666 of which
6,256 were held in treasury as of December 31, 1995 35,817
Retained earnings 1,414,601
Dividends paid (725,317)
Less cost of treasury stock (142,487)
------------
Total stockholders' equity 582,614
------------
$ 3,486,609
============
</TABLE>
<PAGE> 17
OTTER TAIL VALLEY RAILROAD COMPANY, INC.
STATEMENTS OF INCOME
For the Three and Nine Months Ended September 30, 1996
(Unaudited)
<TABLE>
<CAPTION>
Three Months Ended September 30, Nine Months Ended September 30,
-------------------------------- -----------------------------
1996 1995 1996 1995
-------------- --------------- -------------- --------------
<S> <C> <C> <C> <C>
Revenues:
Transportation revenue $ 479,950 $ 491,769 $ 1,320,929 $ 1,435,711
Lease income 12,411 13,867 33,327 36,767
Property tax income 33,870 30,900 101,610 91,500
Other 69,373 275,329 120,511 322,488
-------------- --------------- -------------- --------------
595,604 811,865 1,576,377 1,886,466
-------------- --------------- -------------- --------------
Operating expenses:
Railroad operations 266,748 189,548 599,006 579,765
Selling, general and administrative 285,584 63,593 459,515 214,901
Depreciation and amortization 83,319 70,371 234,831 213,692
-------------- --------------- -------------- --------------
635,651 323,512 1,293,352 1,008,358
-------------- --------------- -------------- --------------
Operating income (40,047) 488,353 283,025 878,108
-------------- --------------- -------------- --------------
Other income (expense):
Interest expense - - (1,000) -
Other, net - - 0 -
-------------- --------------- -------------- --------------
0 0 (1,000) 0
-------------- --------------- -------------- --------------
Income before income taxes (40,047) 488,353 282,025 878,108
Provision for income taxes - - - -
-------------- --------------- -------------- --------------
Net income $ (40,047) $ 488,353 $ 282,025 $ 878,108
============== =============== ============== ==============
</TABLE>
<PAGE> 18
OTTER TAIL VALLEY RAILROAD COMPANY, INC.
STATEMENT OF CASH FLOWS
For the Nine Months Ended September 30, 1996
(Unaudited)
<TABLE>
<S> <C>
Cash flows from operating activities:
Net income $ 282,025
Adjustments to reconcile net income
to net cash provided by operating activities:
Depreciation and amortization 234,831
Changes in operating assets and liabilities:
Accounts receivable (89,171)
Other current assets 17,381
Accounts payable (3,737)
Unearned income 5,794
Accrued liabilities 217,720
------------
Net cash provided by operating activities 664,843
------------
Cash flows from investing activities:
Purchase of properties (121,105)
Investment in marketable securities 517,373
Receipt of purchase price deposit 287,462
------------
Net cash provided by investing activities 683,730
------------
Cash flows (used in) financing activities:
Dividends paid to stockholders (725,317)
------------
Net cash (used in) financing activities (725,317)
------------
Net increase in cash 623,256
Cash, beginning of period 234,700
------------
Cash, end of period $ 857,956
============
</TABLE>
<PAGE> 19
RAILAMERICA, INC. AND SUBSIDIARIES
PRO FORMA CONSOLIDATED BALANCE SHEET
September 30, 1996
(Unaudited)
<TABLE>
<CAPTION>
Proforma
RailAmerica, Otter Tail Proforma RailAmerica,
Inc. Valley Adjustments Inc.
-------------- ------------ ------------- -------------
ASSETS
Current assets:
<S> <C> <C> <C> <C>
Cash $ 4,200,410 $ 375,495 a (480,669) $ 95,236
d (4,000,000)
Restricted cash 175,000 - 175,000
Accounts receivable 4,513,954 283,633 f (350,000) 4,447,587
Inventories 3,238,651 35,542 3,274,193
Other current assets 527,957 5,794 533,751
Deferred income taxes 329,000 - 329,000
-------------- ------------ -------------
Total current assets 12,984,972 700,464 8,854,767
Property, plant and equipment, net 37,263,068 2,303,609 b 6,498,055 46,064,732
Excess of cost over net assets of companies
acquired, net 2,911,599 - 2,911,599
Other assets, net 2,383,999 75 2,384,074
============== ============ =============
$ 55,543,638 $ 3,004,148 $ 60,215,172
============== ============ =============
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Current maturities of long-term debt $ 1,538,937 $ - $ 1,538,937
Current maturities of subordinated debt 212,392 - 212,392
Accounts payable 2,629,350 37,975 2,667,325
Accrued liabilities 1,603,202 181,819 1,785,021
-------------- ------------ -------------
Total current liabilities 5,983,881 219,794 6,203,675
-------------- ------------ -------------
Long-term debt, less current maturities 29,092,536 2,201,740 c 250,000 31,544,276
-------------- ------------ -------------
Subordinated debt, less current maturities 3,530,980 - 3,530,980
-------------- ------------ -------------
Deferred income taxes 3,195,712 - g 2,000,000 5,195,712
-------------- ------------ -------------
Commitments and contingencies - -
Stockholders' equity:
Common stock 6,113 35,817 e (35,817) 6,113
Additional paid-in capital 11,793,883 - 11,793,883
Retained earnings (accumulated deficit) 3,002,741 1,414,602 e (1,414,602) 3,002,741
Dividends paid (725,317)e 725,317 0
Cumulative translation adjustment 77,061 - 77,061
Less: treasury stock (1,139,269) (142,488)e 142,488 (1,139,269)
-------------- ------------ -------------
Total stockholders' equity 13,740,529 582,614 13,740,529
-------------- ------------ -------------
$ 55,543,638 $ 3,004,148 $ 60,215,172
============== ============ =============
</TABLE>
The accompanying notes are an integral part of the pro forma consolidated
financial statements.
<PAGE> 20
RAILAMERICA, INC. AND SUBSIDIARIES
PRO FORMA CONSOLIDATED STATEMENT OF INCOME
For the Nine Months Ended September 30, 1996
(Unaudited)
<TABLE>
<CAPTION>
Proforma
RailAmerica, Otter Tail Proforma RailAmerica,
Inc. Valley Adjustments Inc.
-------------- ------------- ------------- -------------
<S> <C> <C> <C> <C>
Revenues:
Transportation revenue - railroad $ 6,676,372 $ 1,354,256 $ 8,030,628
Transportation revenue - motor carrier 5,481,245 - 5,481,245
Manufacturing revenue 11,573,409 - 11,573,409
Other 1,407,848 222,121 1,629,969
-------------- ------------- -------------
25,138,874 1,576,377 26,715,251
-------------- ------------- -------------
Operating expenses:
Costs of goods sold - manufacturing 8,938,913 - 8,938,913
Railroad and distribution 2,994,009 599,006 3,593,015
Motor carrier 4,953,286 - 4,953,286
Selling, general and administrative 4,385,665 459,515 4,845,180
Depreciation and amortization 1,441,539 234,831 a 267,804 1,709,343
b (234,831)
-------------- ------------- -------------
22,713,412 1,293,352 24,039,737
-------------- ------------- -------------
Operating income 2,425,462 283,025 2,675,514
-------------- ------------- -------------
Other income (expense):
Interest expense (1,548,051) (1,000) c (21,875) (1,570,926)
Other, net 15,831 - 15,831
-------------- ------------- -------------
(1,532,220) (1,000) (1,555,095)
-------------- ------------- -------------
Income before income taxes 893,242 282,025 1,120,419
Provision for income taxes 330,394 - d 81,800 412,194
-------------- ------------- -------------
Net income $ 562,848 $ 282,025 $ 708,225
============== ============= =============
==================================================================================================================================
Net earnings attributable to common shares and
dilutive common share equivalents (for primary) $ 562,848 $ 708,225
============== =============
Earnings per common share and dilutive
common share equivalents:
Primary $ 0.12 $ 0.12
============== =============
Fully Diluted $ 0.12 $ 0.12
============== =============
Weighted average common shares and
common share equivalents outstanding:
Primary 4,661,943 5,911,943
============== =============
Fully Diluted 4,661,943 5,911,943
============== =============
</TABLE>
The accompanying notes are an integral part of the pro forma consolidated
financial statements.
<PAGE> 21
RAILAMERICA, INC. AND SUBSIDIARIES
PRO FORMA CONSOLIDATED STATEMENT OF INCOME
For the Year Ended December 31, 1995
(Unaudited)
<TABLE>
<CAPTION>
Proforma
RailAmerica, Otter Tail Proforma RailAmerica,
Inc. Valley Adjustments Inc.
-------------- ------------- ------------ -------------
<S> <C> <C> <C>
Revenues:
Transportation revenue $ 11,969,597 $ 1,724,100 $ 13,693,697
Manufacturing revenue 17,872,777 - 17,872,777
Other 437,797 337,404 775,201
-------------- ------------- -------------
30,280,171 2,061,504 32,341,675
-------------- ------------- -------------
Operating expenses:
Costs of goods sold - manufacturing 13,398,740 - 13,398,740
Railroad and distribution 3,148,830 790,115 3,938,945
Motor carrier 4,468,306 - 4,468,306
Selling, general and administrative 4,808,190 - 4,808,190
Depreciation and amortization 1,495,276 297,714 a 357,072 1,852,348
b (297,714)
-------------- ------------- -------------
27,319,342 1,087,829 28,466,529
-------------- ------------- -------------
Operating income 2,960,829 973,675 3,875,146
-------------- ------------- -------------
Other income (expense):
Interest expense (1,442,955) (222,885)c (21,875) (1,687,715)
Base annual payment adjustments - 188,500 188,500
Other, net 128,758 29,144 157,902
-------------- ------------- -------------
(1,314,197) (5,241) (1,341,313)
-------------- ------------- -------------
Income before income taxes 1,646,632 968,434 2,533,833
Provision for income taxes 778,299 1,000 d 319,342 1,098,641
-------------- ------------- -------------
Net income $ 868,333 $ 967,434 $ 1,435,192
============== ============= =============
================================================================================================================================
Net earnings attributable to common shares and
dilutive common share equivalents (for primary) $ 201,668 $ 768,527
============== =============
Earnings per common share and dilutive
common share equivalents:
Primary $ 0.04 $ 0.13
============== =============
Fully Diluted $ 0.04 $ 0.13
============== =============
Weighted average common shares and
common share equivalents outstanding:
Primary 4,554,285 5,804,285
============== =============
Fully Diluted 4,554,285 5,804,285
============== =============
</TABLE>
The accompanying notes are an integral part of the pro forma consolidated
financial statements.
<PAGE> 22
RAILAMERICA, INC. AND SUBSIDIARIES
NOTES TO UNAUDITED PRO FORMA
CONSOLIDATED FINANCIAL STATEMENTS
Note 1 BASIS OF COMBINATION
The pro forma consolidated financial statements for September 30,
1996 combine the unaudited balance sheet and statement of income for the nine
month period then ended of RailAmerica, Inc. and subsidiaries (the "Company")
and the unaudited balance sheet and statement of income for the nine month
period then ended of Otter Tail Valley Railroad Company, Inc. ("OTVR").
The pro forma consolidated income statement for December 31, 1995
combines the statement of income of the Company and OTVR for the year ended
December 31, 1995.
Note 2 PRO FORMA BALANCE SHEET ADJUSTMENTS
The following were made to arrive at the pro forma consolidated balance
sheet:
a. Cash paid for excess working capital
b. Property, plant and equipment were restated based on estimated
fair market value
c. Debt used to finance the acquisition
d. Cash used to finance the acquisition
e. Elimination of common stock, retained earnings, dividends
paid, and treasury stock of OTVR
f. Capitalized into the purchase price the deferred acquisition
cost associated with the acquisition
g. Reflects recording of deferred tax liability resulting from
carry over basis in the fixed assets for tax purpose
Note 3 PRO FORMA STATEMENT OF INCOME ADJUSTMENTS
The following were adjustments made to arrive at the pro forma
consolidated statement of income:
a. Depreciation resulting from write-up to fair market value of
the property, plant and equipment
b. Elimination of depreciation taken before write-up to fair
market value of the property, plant and equipment
c. Increase in interest expense reflecting the acquisition debt
d. Inclusion of tax provision at a statutory rate of 36%
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