Item 1. Business.
and
Item 2.
Item 2. Properties.
Allegheny and Western Railway Company (the "Company") is a railroad incorporated in the Commonwealth of Pennsylvania on January 22, 1898. It owns a line of railroad 62 miles long which lies between Punxsutawney and Butler Junction, Pennsylvania. Pursuant to leases dated October 1, 1898, and January 15, 1900, between the Company and Buffalo, Rochester and Pittsburgh Railway Company ("BR&P") the Company leased its railroad to BR&P for the duration of the Company's corporate existence, at an annual rental equal to 4% on its bonded debt and 6% on its common stock ($100 par value). The principal and interest on the Company's bonds are guaranteed by BR&P.
Under an agreement dated December 15, 1931, as amended, CSX Transportation, Inc. ("CSXT"), as successor by merger, operated the properties of BR&P, and incident thereto also operated the properties of the Company in the name and for the account of CSXT without separation or segregation of the results of such operations. Under such agreement CSXT agreed to pay all leased line rentals but did not assume or guarantee payment of the principal on the bonds. In addition to the rental paid by CSXT for the payment of the Company's dividends and bond interest, CSXT paid all the expenses of the Company, including all taxes assessed against it.
On July 18, 1988, CSXT, BR&P and Buffalo & Pittsburgh Railroad, Inc. ("B&P") entered into certain agreements collectively referred to as the "Purchase and Sale Agreement" and closed in escrow. The B&P took possession and control of operations of the line of railroad of BR&P on July 19, 1988. The purchase and sale agreement provided that BR&P and CSXT shall assign, transfer, and convey to B&P all their obligations and duties arising under the lease agreements. On October 7, 1991, CSXT, BR&P and B&P executed an Assignment and Assumption Agreement which concluded the escrow and B&P assumed all of the terms and conditions of the Purchase and Sale Agreement with the exception that CSXT would retain its right, title and interest in the 16,159 shares of common stock of the Company, being all the stock of the Company owned by CSXT at that time. CSXT currently owns 16,189 shares of common stock of the Company, or 50.63%.
Since the interest and dividends on the Company's bonds and common stock are paid from moneys obtained from the lessee, reference is made to CSXT's Form 10-K for the fiscal year ended December 31, 1993, a copy of which is available from Patricia J. Aftoora, Vice President and Corporate Secretary of CSXT, S/C J-160, 500 Water Street, Jacksonville, FL 32202.
Item 3.
Item 3. Legal Proceedings.
None.
Item 4.
Item 4. Submission of Matters to a Vote of Security Holders.
None.
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PART II
Item 5.
Item 5. Market for Registrant's Common Stock and Related Security Holder Matters.
There is no market in which the common stock of the Company is traded.
As of March 18, 1994, there were approximately 194 stockholders of $100 par value capital stock.
Dividends on the Company's capital stock are guaranteed under the terms of the lease agreement referred to in Items 1 and 2, Business and Properties.
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Item 6.
Item 6. Selected Financial Data.
and
Item 7.
Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations.
Five year selected data:
1993 1992 1991 1990 1989 ---------- ---------- ---------- ---------- ---------- Rental income $ 229,096 $ 229,096 $ 229,116 $ 229,136 $ 229,136 Interest on funded debt 75,920 75,920 75,940 75,960 75,960 Federal income taxes 58,130 58,130 58,130 58,130 58,130 ---------- ---------- ---------- ---------- ---------- Earnings for the year $ 95,046 $ 95,046 $ 95,046 $ 95,046 $ 95,046 ========== ========== ========= ========= ========== Weighted average number of common shares (a) 15,841 15,841 15,841 15,841 15,841 ========== ========== ========== ========== ==========
Earnings per common share (a) $ 6.00 $ 6.00 $ 6.00 $ 6.00 $ 6.00 ========== ========== ========== ========== ==========
Dividends per common share (a) $ 6.00 $ 6.00 $ 6.00 $ 6.00 $ 6.00 ========== ========== ========== ========== ==========
Total assets $6,834,324 $6,834,324 $6,834,324 $6,834,324 $6,834,324 ========== ========== ========== ========== ==========
Long term debt $1,965,000 $1,965,000 $1,965,000 $1,965,000 $1,965,000 ========== ========== ========== ========== ==========
(a) Calculations exclude the 16,189 shares held directly by CSXT.
Item 8.
Item 8. Financial Statements and Supplementary Data.
Due to the nature of CSXT's obligations under the lease agreement referred to in Items 1 and 2, Business and Properties, financial statements and notes thereto in response to this item are not included herein. In lieu thereof, the financial statements and notes included in the Form 10-K filed on behalf of CSXT on March 11, 1994, are incorporated herein by reference.
Item 9.
Item 9. Changes in and Disagreements with Accountants on the Accounting and Financial Disclosures.
None.
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PART III
Item 10.
Item 10. Directors and Executive Officers of the Registrant:
The following sets forth certain information relating to the Company's directors and executive officers as of March 18, 1994. Directors are elected annually and serve until the next annual meeting of stockholders or until their successors are elected. Officers are elected annually at the annual meeting of the Board and hold office until the next annual meeting of the Board or until their successors are elected. There are no arrangements or understandings between any director or executive officer and any other person pursuant to which the director or officer was selected. Patricia J. Aftoora and Albert B. Aftoora are married. There are no other family relationships among these officers and directors.
Name, Age, Present Position with the Business Experience during last 5 Years, Company Company Directorships in Public Corporations - ------------------ -------------------------------------------- JERRY R. DAVIS, 55 President of the Company since March 1990. President and Director From July 1989 to July 1991, Mr. Davis served as President-CSX Rail Transport of CSXT; from July 1991 to January 1992, he was Executive Vice President-Operations and from January 1992 to present he serves as Executive Vice President and Chief Operating Officer of CSXT. From 1986 to 1989, Mr. Davis served as Executive Vice President of Operations of Union Pacific Railroad.
P. MICHAEL GIFTOS, 47 Senior Vice President of the Company since Senior Vice President October 1990. During the past five years, Mr. and Director Giftos has served as an executive officer of CSX Corporation ("CSX") and certain CSX affiliates and is currently Senior Vice President and General Counsel of CSXT.
PAUL R. GOODWIN, 51 Executive Vice President of the Company since Executive Vice President March 1990. During the past five years, Mr. and Director Goodwin has served as an officer of certain CSXT affiliates and is currently Senior Vice President-Finance of CSXT.
GERALD L. NICHOLS, 58 Senior Vice President of the Company since June Senior Vice President 1985. Mr. Nichols has served in various and Director executive capacities for certain CSXT affiliates during the past five years and is currently Senior Vice President - Administration of CSXT.
PATRICIA J. AFTOORA, 54 Vice President of the Company since March 1990 Vice President, and Corporate Secretary of the Company since Corporate Secretary December 1980. Mrs. Aftoora has served as an and Director officer of CSX and certain CSX affiliates during the past five years and is currently Vice President and Corporate Secretary of CSXT. - 5 -
Name, Age, Present Position with the Business Experience during last 5 Years, Company Company Directorships in Public Corporations - ------------------ -------------------------------------------
EARL J. CURRIE, 54 Vice President of the Company since June, Vice President 1992. From 1989 to January 1, 1992, Mr. Currie served as Vice President - Engineering of CSXT and from January 1, 1992 to the present, he serves as Vice President and Chief Transportation Officer of CSXT. From prior to 1989, Mr. Currie was Executive Vice President - Operations of the Soo Line Railroad.
FREDERICK J. FAVORITE, JR., 40 Vice President of the Company since October Vice President 1990. During the past five years, Mr. Favorite has served as an officer of certain CSXT affiliates and is currently Vice President and Controller of CSXT.
THOMAS P. SCHMIDT, 46 Vice President of the Company since June, Vice President 1992. Mr. Schmidt has served as an officer of certain CSXT affiliates during the past five years and is currently Vice President - Engineering of CSXT.
ALBERT B. AFTOORA, 54 Assistant Vice President and Treasurer of Assistant Vice President the Company since October 1990 and Treasurer and Treasurer prior thereto. Mr. Aftoora has served as an officer of certain CSXT affiliates during the past five years and is currently Assistant Vice President and Treasurer of CSXT.
There have been no events under any bankruptcy act, no criminal proceedings, orders, judgments, decrees or injunctions material to the evaluation of the ability and integrity of any director or executive officer during the past five years.
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Item 11.
Item 11. Executive Compensation
All directors and officers of the Company are also officers and employees of CSXT, and serve without compensation from the Company.
Item 12.
Item 12. Security Ownership of Certain Beneficial Owners and Management
As of March 18, 1994, 50.63% of the voting securities of the Company (16,189 shares of $100 par value capital stock) were beneficially held by CSXT, who, in turn, is beneficially owned by CSX Corporation (CSX), Richmond, VA, through ownership of 100% of CSXT's outstanding voting securities.
As of March 14, 1994, all directors and officers of the Company as a group (9 persons) beneficially owned 455,089 shares of $1 par value common stock of CSX, (including 178,751 shares exercisable under option within 60 days), representing 0.43% of the outstanding shares. The number of CSX shares owned by each director as of March 14, 1994, is set forth below:
Number of Number of shares of CSX shares of CSX exercisable within beneficially owned 60 days under stock Name as of March 14, 1994 (1)(2) option plans ---- --------------------------- -------------------
P. J. Aftoora 9,894 15,522 J. R. Davis 53,455 16,600 P. M. Giftos 22,340 21,988 P. R. Goodwin 58,403 58,404 G. L. Nichols 61,374 21,367
(1) Includes shares pledged to secure loans under the CSX 1991 Stock Purchase and Loan Plan, which shares were acquired under that plan.
(2) Includes shares held in trust under certain deferred compensation plans.
Item 13.
Item 13. Certain Relationships and Related Transactions.
None.
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PART IV
Item 14.
Item 14. Exhibits, Financial Statement Schedules and Reports on Form 8-K.
(a) 1. Financial Statements.
Refer to response to Item 8 on page 4.
2. Financial Statement Schedules
Refer to response to Item 8 on page 4.
3. Exhibits
(3.1) Articles of Incorporation incorporated herein by reference to Registrant's Form 12 Application for Registration, filed on May 13, 1935.
(3.2) By-laws of the Company incorporated herein by reference to Registrant's Form 10-K Report for the year ended December 31, 1984, filed on March 26, 1985.
(23) Consent of Independent Auditors (See page I-1).
(b) Reports on Form 8-K
No reports on Form 8-K were filed for the three-month period ended December 31, 1993.
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Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized, on the 30th day of March, 1994.
ALLEGHENY AND WESTERN RAILWAY COMPANY
/s/ PATRICIA J. AFTOORA -------------------------------------- Patricia J. Aftoora, Vice President and Corporate Secretary
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below by the following persons on behalf of the Registrant and in the capacities and on the dates indicated.
/s/Jerry R. Davis President and Director - ------------------------ (Principal Executive Officer) Jerry R. Davis*
/s/Paul R. Goodwin Senior Vice President and Director - ------------------------ (Principal Finance Officer) Paul R. Goodwin*
/s/P. Michael Giftos Senior Vice President, General Counsel - ------------------------ and Director P. Michael Giftos*
/s/Gerald L. Nichols Senior Vice President - ------------------------ and Director Gerald L. Nichols*
/s/Patricia J. Aftoora Vice President, Corporate Secretary - ------------------------ and Director Patricia J. Aftoora*
/s/Frederick J. Favorite, Jr. Vice President and Controller - ----------------------------- Frederick J. Favorite, Jr.*
/s/ Patricia J. Aftoora - ------------------------ Patricia J. Aftoora March 30, 1994 *(Attorney-in-Fact)
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