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SANTA FE PACIFIC CORP. REPORTS FIRST QUARTER NET INCOME UP SIGNIFICANTLY

 Highlights - First Quarter 1993
 OVERALL RESULTS
 -- Adjusted net income of $37.9 million, up 34 percent
 -- $0.20 earnings per share up from $0.15 per share in 1992
 -- Second of three closings of southern California line sale
 resulted in proceeds of $166.9 million and net gain of
 $89.2 million or $0.48 per share
 -- Net income including line sale gain is $127.1 million or $0.68
 per share.
 RAILWAY RESULTS
 -- 23 percent increase in operating income to $71.2 million
 -- 8 percent increase in traffic volumes keyed to continued
 intermodal growth and new automotive business
 -- Operating efficiencies result in only 5 percent expense increase
 despite volume growth and inflation
 -- Improvement in operating ratio to 87.8 percent from 89.4 percent
 MINERALS RESULTS
 -- Operating income decline 13 percent to $28.6 million due to
 timing of gold production
 -- 53,000 ounces of gold sold vs. 64,000 ounces in 1992
 -- 1,086,000 tons of coal sold vs. 941,000 in 1992
 OTHER RESULTS
 -- Pipeline Partners operating income of $5.7 million, even with
 1992
 -- Interest expense of $38.6 million, down 19 percent
 -- Debt reduced more than $500 million since March 31, 1992
 SCHAUMBURG, Ill., April 21 /PRNewswire/ -- Santa Fe Pacific Corp. ("SFP") (NYSE: SFX) today reported first quarter net income of $37.9 million or $0.20 per share excluding special items compared to $28.2 million or $0.15 per share a year ago.
 During the first quarter of 1993, the second of three scheduled closings for the sale of railway lines in southern California to various transit agencies resulted in sale proceeds of $166.9 million and a net gain of $89.2 million or $0.48 per share. During the 1992 quarter, a net charge of $163.0 million or $0.88 per share was taken for adoption of a new accounting method for health and life insurance and disability benefits for retired and inactive employees. Including both special items, SFP's first quarter net income was $127.1 million or $0.68 per share compared to a net loss of $134.8 million or $0.73 per share last year.
 "Continued strong performance at Santa Fe Railway and lower interest expense were responsible for most of the improvement," said Robert D. Krebs, chairman, president and chief executive officer. "Both traffic growth and continued operating efficiencies contributed to Santa Fe Railway's improved results."
 Railway Results
 Operating income of $71.2 million increased 23 percent over the $57.8 million reported in the first quarter of 1992. The quarterly operating ratio improved to 87.8 percent from 89.4 percent last year. Revenues increased 7 percent to $583.2 million due to an 8 percent growth in carloadings partially offset by a slight decline in revenue per car.
 Continued strength in direct marketing and international business contributed to an 11 percent growth in intermodal shipments. Carload shipments were up 6 percent reflecting growth in vehicles and parts, and coal business. The vehicles and parts business increased principally because of additional automotive business moving in the Arizona and southern California corridors under a new long-term contract with General Motors. Coal shipments reflect traffic resulting from Wisconsin Electric's long-term coal purchase from the Pittsburg & Midway Coal Mine located near Raton, N.M., which commenced in late 1992.
 Santa Fe Railway's quarterly operating expenses of $512.0 million increased by $24.7 million or 5 percent reflecting both volume and inflationary pressures. Compensation and benefits expense decreased 2 percent to $200.9 million, reflecting continued operating efficiencies including the impact of the reduced crew agreement reached in September 1992 with the United Transportation Union on the eastern half of the railroad.
 Fuel expense of $59.2 million increased 20 percent over last year, reflecting 12 percent higher prices and a volume driven increase of 7 percent in consumption. Equipment rents increased by $10.9 million to $51.7 million due to both the higher volumes and the leasing cost of 90 locomotives acquired during the last three quarters of 1992. Materials and supplies expense decreased $6.0 million to $29.0 million as a result of lower locomotive maintenance activity. Other expenses increased $13.3 million to $125.2 million due to the increased business volumes and contracted services.
 Minerals Results
 Santa Fe Pacific Minerals' operating income for the first quarter decreased $4.2 million to $28.6 million. Both 1993 and 1992 include the receipt of a $16.0 million annual coal royalty payment. The current year decrease in operating income is due principally to the timing of gold production. Gold sales were 53,000 ounces in 1993 compared to 64,000 ounces in 1992. "We expect lower production and sales to be made up later in 1993," said Krebs. "We continue to work on closing the previously announced agreement to acquire certain gold assets of Hanson Natural Resources Company in exchange for coal and quarry assets. Negotiations to obtain approvals necessary to complete this transaction are in progress," said Krebs.
 Pipeline Results
 SFP's equity investment in Santa Fe Pacific Pipeline Partners, L.P., produced $5.7 million in operating income, even with the prior year.
 Interest Expense and Other Income
 Interest expense of $38.6 million declined $9.3 million due principally to lower outstanding debt levels. Since March 31, 1992, outstanding debt has been reduced more than $500 million through scheduled repayments and additional payments using a portion of the proceeds from the sales of the California lines. Other income-net decreased $2.1 million primarily reflecting reduced interest income.
 SANTA FE PACIFIC CORP.
 Consolidated Statement of Operations
 (Unaudited; in millions, except per share data)
 Three months ended March 31 1993 1992
 Revenues:
 Rail $ 583.2 $ 545.1
 Minerals 64.4 65.9
 Pipeline 5.7 5.7
 Total revenues 653.3 616.7
 Operating income:
 Rail 71.2 57.8
 Minerals 28.6 32.8
 Pipeline 5.7 5.7
 Total operating income 105.5 96.3
 Other income-net (5.1) (3.0)
 Gain on sale of California lines 145.4 --
 Interest expense 38.6 47.9
 Income before income taxes 207.2 45.4
 Income tax 80.1 17.2
 Income before cumulative effect of a change
 in accounting 127.1 28.2
 Cumulative effect of a change in accounting
 for postretirement and postemployment
 benefits, net of income taxes -- (163.0)
 Net income (loss) $ 127.1 $(134.8)
 Income (loss) per share of common stock:
 Before change in accounting $ 0.68 $ 0.15
 Cumulative effect of change in accounting -- (0.88)
 Net income (loss) $ 0.68 $(0.73)
 Average number of common and common
 equivalent shares 185.9 184.7
 SANTA FE PACIFIC CORP.
 Condensed Balance Sheet
 (Unaudited; in millions)
 3/31/93 12/31/92
 Assets:
 Cash and cash equivalents $ 88.8 $ 100.1
 Other current assets 463.8 437.5
 Total current assets 552.6 537.6
 Properties and other assets 4,791.4 4,807.8
 Total assets $5,344.0 $5,345.4
 Liabilities and stockholders' equity:
 Current liabilities $ 904.1 $ 942.0
 Long-term debt due after one year 1,079.0 1,245.7
 Other liabilities 2,302.2 2,229.2
 Stockholders' equity 1,058.7 928.5
 Total liabilities and stockholders'
 equity $5,344.0 $5,345.4
 Condensed Statement of Cash Flows
 Three months ended March 31 1993 1992
 Cash provided by operations $ 40.9 $ 52.9
 Cash Used for Capital Expendures (70.4) (38.4)
 Proceeds from sale of property,
 plant and equipment 168.5 4.9
 Net repayment of borrowings (191.4) (68.0)
 Cash provided by other activities 41.1 45.8
 Decrease in cash and cash equivalents $ (11.3) $ (2.8)
 SANTA FE PACIFIC CORP.
 Supplemental Data
 (Unaudited)
 Three months ended March 31 1993 1992
 RAIL:
 Operating expenses (in millions)
 Compensation and benefits $ 200.9 $ 205.5
 Fuel 59.2 49.1
 Equipment rents 51.7 40.8
 Depreciation and amortization 46.0 45.0
 Materials and supplies 29.0 35.0
 Other 125.2 111.9
 Total operating expenses $ 512.0 $ 487.3
 Operating ratio 87.8 pct 89.4 pct
 Revenue ton-miles (billions) 22.5 20.9
 Revenue per revenue ton mile (cents) 2.55 2.56
 Carloadings (thousands) 434.9 403.0
 Average revenue per car $ 1,318 $ 1,327
 Employees (period-end) 13,938 13,595
 MINERALS:
 Gold ounces sold (thousands) 53 64
 Average price (per ounce) $396.59 $398.93
 Coal tons sold (thousands) 1,086 941
 Average price (per ton) $ 21.73 $ 22.43
 Employees (period-end) 1,060 887
 -0- 4/21/93
 /CONTACT: Catherine Westphal of Santa Fe public relations, 708-995-6273/
 (SFX)


CO: Santa Fe Pacific Corp. ST: Illinois IN: TRN SU: ERN

GK -- NY019 -- 8544 04/21/93 09:26 EDT
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Publication:PR Newswire
Date:Apr 21, 1993
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