-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, NMNJGRqBWhh+OD66XLqFQ4Y9bq6zOoEI804CseeI1aBvVyfJcNtmZXruZmGaw/kE IVaiIlMA1QiFxnahRJFeoA== 0000950157-97-000057.txt : 19970129 0000950157-97-000057.hdr.sgml : 19970129 ACCESSION NUMBER: 0000950157-97-000057 CONFORMED SUBMISSION TYPE: SC 14D9/A PUBLIC DOCUMENT COUNT: 5 FILED AS OF DATE: 19970128 SROS: NYSE SROS: PHLX SUBJECT COMPANY: COMPANY DATA: COMPANY CONFORMED NAME: CONRAIL INC CENTRAL INDEX KEY: 0000897732 STANDARD INDUSTRIAL CLASSIFICATION: RAILROADS, LINE-HAUL OPERATING [4011] IRS NUMBER: 232728514 STATE OF INCORPORATION: PA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 14D9/A SEC ACT: 1934 Act SEC FILE NUMBER: 005-42777 FILM NUMBER: 97511733 BUSINESS ADDRESS: STREET 1: TWO COMMERCE SQ STREET 2: P O BOX 41417 CITY: PHILADELPHIA STATE: PA ZIP: 19101-1417 BUSINESS PHONE: 2152094434 MAIL ADDRESS: STREET 1: P.O. BOX 41429 STREET 2: 2001 MARKET STREET CITY: PHILADELPHIA STATE: PA ZIP: 19101-1429 FILED BY: COMPANY DATA: COMPANY CONFORMED NAME: CONRAIL INC CENTRAL INDEX KEY: 0000897732 STANDARD INDUSTRIAL CLASSIFICATION: RAILROADS, LINE-HAUL OPERATING [4011] IRS NUMBER: 232728514 STATE OF INCORPORATION: PA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: SC 14D9/A BUSINESS ADDRESS: STREET 1: TWO COMMERCE SQ STREET 2: P O BOX 41417 CITY: PHILADELPHIA STATE: PA ZIP: 19101-1417 BUSINESS PHONE: 2152094434 MAIL ADDRESS: STREET 1: P.O. BOX 41429 STREET 2: 2001 MARKET STREET CITY: PHILADELPHIA STATE: PA ZIP: 19101-1429 SC 14D9/A 1 AMENDMENT NO. 17 SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 ------------------------------------ AMENDMENT NO. 17 to SCHEDULE 14D-9 SOLICITATION/RECOMMENDATION STATEMENT Pursuant to Section 14(d)(4) of the Securities Exchange Act of 1934 ------------------------------------ CONRAIL INC. (Name of Subject Company) ------------------------------------ CONRAIL INC. (Name of Person(s) Filing Statement) ------------------------------------ Common Stock, par value $1.00 per share (including the associated Common Stock Purchase Rights) (Title of Class of Securities) 208368 10 0 (CUSIP Number of Class of Securities) ------------------------------------ Series A ESOP Convertible Junior Preferred Stock, without par value (including the associated Common Stock Purchase Rights) (Title of Class of Securities) N/A (CUSIP Number of Class of Securities) ------------------------------------ James D. McGeehan Corporate Secretary Conrail Inc. 2001 Market Street Two Commerce Square Philadelphia, Pennsylvania 19101 (215) 209-4000 (Name, Address and Telephone Number of Person Authorized to Receive Notices and Communications on Behalf of the Person(s) Filing Statement) With a copy to: Robert A. Kindler, Esq. Cravath, Swaine & Moore Worldwide Plaza 825 Eighth Avenue New York, New York 10019 (212) 474-1000 INTRODUCTION Conrail Inc. ("Conrail") hereby amends and supplements its Solicitation/Recommendation Statement on Schedule 14D-9, originally filed on November 6, 1996, and amended on November 7, 1996, November 8, 1996, November 13, 1996, November 18, 1996, November 20, 1996, November 21, 1996, November 26, 1996, December 3, 1996, December 6, 1996, December 12, 1996, December 20, 1996, January 3, 1997, January 10, 1997, January 14, 1997, January 16, 1997 and January 21, 1997 (as amended, the "Norfolk Schedule 14D-9"), with respect to an offer by Atlantic Acquisition Corporation, a Pennsylvania corporation ("Atlantic") and a wholly owned subsidiary of Norfolk Southern Corporation, a Virginia corporation ("Norfolk"), to purchase all the issued and outstanding Shares of Conrail. Capitalized terms not defined herein have the meanings assigned thereto in the Norfolk Schedule 14D-9. Item 2. Tender Offer of the Bidder. Item 2 of the Norfolk Schedule 14D-9 is hereby amended and supplemented by adding the following text to the end thereof: On January 22, 1997, Norfolk and Atlantic amended the Norfolk Offer. Atlantic is now offering to purchase up to 8.2 million Shares (approximately 9.9% of the outstanding Shares) at $115 per Share, net to the seller in cash and without interest, upon the terms and conditions set forth in the amended Norfolk Offer to Purchase. According to the amended Norfolk Offer to Purchase, the amended Norfolk Offer is no longer subject to any conditions. Except as set forth above, the amended Norfolk Offer remains unchanged. Certain additional terms of the amended Norfolk Offer are described in the original Norfolk Schedule 14D-9 filed with the Commission on November 6, 1996 (the "Original Norfolk Schedule 14D-9"). The amended Norfolk Offer will expire at midnight on February 4, 1997. Item 4. The Solicitation or Recommendation. Item 4 of the Norfolk Schedule 14D-9 is hereby amended and supplemented by adding the following text thereto: THE CONRAIL BOARD HAS DETERMINED THAT A MERGER OF EQUALS WITH CSX IS IN THE BEST INTERESTS OF CONRAIL AND THAT A BUSINESS COMBINATION WITH NORFOLK IS NOT IN THE BEST INTERESTS OF CONRAIL. At a meeting held on January 27, 1997, the Conrail Board, including the disinterested members of the Conrail Board, unanimously determined to express no opinion with respect to the amended Norfolk Offer because it believes that Conrail shareholders who desire to receive cash now for a portion of their Shares should feel free to tender their Shares pursuant to the amended Norfolk Offer. On the other hand, Conrail shareholders who desire to participate in the long-term growth of the railroad industry and the substantial upside potential of the CSX Merger should not tender their Shares pursuant to the amended Norfolk Offer and should support the CSX Merger. Based on its earlier determination that the terms of the CSX Merger Agreement are in the best interests of Conrail (taking into account all the Conrail constituencies affected by the transactions proposed therein, the short-term and long-term interests of Conrail, the resources, intent and conduct (past, stated and potential) of any person seeking to acquire control of Conrail, and all other pertinent factors), the Conrail Board continues to recommend that, whether or not they tender their Shares pursuant to the amended Norfolk Offer, the shareholders of Conrail who desire to receive cash for a portion of their Shares should tender their remaining Shares pursuant to the Second CSX Offer. The Conrail Board has been advised that the directors and executive officers of Conrail will not tender their Shares pursuant to the amended Norfolk Offer. Copies of a press release announcing the Board's determinations, and a letter to the shareholders of Conrail communicating the Board's recommendations are filed as Exhibits (a)(24) and (a)(25) hereto, respectively, are incorporated herein by reference, and the foregoing is qualified by reference to such Exhibits. Item 8. Additional Information to be Furnished. Item 8 of the Norfolk Schedule 14D-9 is hereby amended and supplemented by adding the following text thereto: On January 22, 1997, CSX extended the Second CSX Offer until 5:00 p.m., Eastern Standard Time, on February 14, 1997. On January 22, 1997, Conrail issued a press release in which it reported its fourth quarter earnings and announced that for the third consecutive quarter Conrail produced record results in net income, earnings per share and operating ratio. A copy of the text of the press release is attached as Exhibit (a)(26) hereto and is incorporated herein by reference and the foregoing summary is qualified in its entirety by reference to such Exhibit. On January 23, 1997, Conrail issued a press release announcing that the Conrail shareholders voted against the opt out proposal at the Pennsylvania Special Meeting. A copy of the text of the press release is attached as Exhibit (a)(27) hereto and is incorporated herein by reference and the foregoing summary is qualified in its entirety by reference to such Exhibit. Item 9. Materials to be filed as Exhibits. Item 9 of the Norfolk Schedule 14D-9 is hereby amended and supplemented by adding the following text thereto: (a)(24) Text of press release issued by Conrail dated January 28, 1997. (a)(25) Letter to shareholders of Conrail dated January 28, 1997. (a)(26) Text of press release issued by Conrail dated January 22, 1997. (a)(27) Text of press release issued by Conrail dated January 23, 1997. SIGNATURE After due inquiry and to the best of my knowledge and belief, I certify that the information set forth in this statement is true, complete and correct. CONRAIL INC. By /s/ Timothy T. O'Toole ---------------------- Name: Timothy T. O'Toole Title: Senior Vice President--Finance Dated as of January 28, 1997 EXHIBIT INDEX Exhibit Description Page No. - ------- ----------- -------- *(a)(1) Text of press release issued by Conrail dated October 23, 1996 (incorporated by reference to Exhibit (a)(9) to the Solicitation/Recommendation Statement on Schedule 14D-9 of Conrail Inc. dated October 16, 1996, as amended (the "CSX 14D-9")).................................... *(a)(2) Text of press release issued by Norfolk, dated October 23, 1996 (incorporated by reference to Exhibit (a)(8) to the CSX 14D-9)...................................... *(a)(3) Text of press release issued by Conrail and CSX dated November 6, 1996........................................ *(a)(4) Letter to shareholders of Conrail dated November 6, 1996............................ *(a)(5) Text of press release issued by Conrail, dated November 7, 1996 (incorporated by reference to Exhibit (a)(16) to the CSX 14D-9)...................................... *(a)(6) Text of press release issued by Conrail, dated November 7, 1996 (incorporated by reference to Exhibit (a)(17) to the CSX 14D-9)...................................... *(a)(7) Text of press release issued by Conrail, dated November 8, 1996 (incorporated by reference to Exhibit (a)(18) to the CSX 14D-9)...................................... *(a)(8) Text of press release issued by Conrail and CSX, dated November 13, 1996 (incorporated by reference to Exhibit (a)(19) to the CSX 14D-9)................... *(a)(9) Text of press release issued by Conrail and CSX dated November 19, 1996 (incorporated by reference to Exhibit (a)(20) to the CSX 14D-9)........... *(a)(10) Text of press release issued by Conrail and CSX dated November 20, 1996 (incorporated by reference to Exhibit (a)(21) to the CSX 14D-9)................... Exhibit Description Page No. - ------- ----------- -------- *(a)(11) Text of press release issued by CSX dated November 21, 1996 (incorporated by reference to Exhibit (a)(22) to the CSX 14D-9)...................................... *(a)(12) Text of press release issued by Conrail, dated November 25, 1996........................................ *(a)(13) Text of press release issued by CSX, dated November 26, 1996 (incorporated by reference to Exhibit (a)(23) to the CSX 14D-9)...................................... *(a)(14) Text of press release issued by Conrail and CSX dated December 5, 1996........................................ *(a)(15) Text of press release issued by Conrail and CSX dated December 10, 1996 (incorporated by reference to Exhibit (a)(8) to the Solicitation/Recommendation Statement on Schedule 14D-9 of Conrail dated December 6, 1996, as amended, relating to the second tender offer by CSX (the "Second CSX 14D-9"))........................ *(a)(16) Text of press release issued by CSX and Conrail dated December 19, 1996 (incorporated by reference to Exhibit (a)(12) to the Second CSX 14D-9)............ *(a)(17) Text of press release issued by Conrail dated December 20, 1996 (incorporated by reference to Exhibit (a)(13) to the Second CSX 14D-9)........................... *(a)(18) Text of joint advertisement published by Conrail and CSX on December 10, 1996 (incorporated by reference to Exhibit (a)(14) to the Second CSX 14D-9)............ *(a)(19) Text of joint advertisement published by Conrail and CSX on December 12, 1996 (incorporated by reference to Exhibit (a)(15) to the Second CSX 14D-9)............ *(a)(20) Text of joint press release issued by Conrail and CSX on January 9, 1997 (incorporated by reference to Exhibit (a)(16) to the Second CSX 14D-9).... *(a)(21) Text of joint press release issued by Conrail and CSX on January 13, 1997 (incorporated by reference to Exhibit (a)(17) to the Second CSX 14D-9).... Exhibit Description Page No. - ------- ----------- -------- *(a)(22) Text of joint press release issued by Conrail and CSX dated January 15, 1997 (incorporated by reference to Exhibit (a)(18) to the Second CSX 14D-9)...................................... *(a)(23) Text of press release issued by Conrail dated January 17, 1997 (incorporated by reference to Exhibit (a)(19) to the Second CSX 14D-9)...................................... (a)(24) Text of press release issued by Conrail dated January 28, 1997...................... **(a)(25) Letter to shareholders of Conrail dated January 28, 1997............................ (a)(26) Text of press release issued by Conrail dated January 22, 1997...................... (a)(27) Text of press release issued by Conrail dated January 23, 1997...................... (b) Not applicable.......................... *(c)(1) Pages 4-5 and 9-14 of Conrail's Proxy Statement dated April 3, 1996 (incorporated by reference to Exhibit (c)(7) to the CSX 14D-9).................... *(c)(2) Employment Agreement of Mr. David M. LeVan dated as of October 14, 1996 (incorporated by reference to Exhibit (c)(5) to the CSX 14D-9).................... *(c)(3) Change of Control Agreement of Mr. David M. LeVan dated as of October 14, 1996 (incorporated by reference to Exhibit (c)(6) to the CSX 14D-9).................... *(c)(4) First Amended Complaint in Norfolk Southern et al. v. Conrail Inc., et al., No. 96-CV- 7167, filed on October 28, 1996 in the United States District Court for the Eastern District of Pennsylvania (incorporated by reference to Exhibit (c)(9) to the CSX 14D-9).................... Exhibit Description Page No. - ------- ----------- -------- *(c)(5) Second Amended Complaint in Norfolk Southern et. al. v. Conrail Inc., et al., No. 96-CV-7167, filed on November 15, 1996 in the United States District Court for the Eastern District of Pennsylvania (incorporated by reference to Exhibit (c)(12) to the CSX 14D-9).................................. *(c)(6) Text of opinion of Judge Donald VanArtsdalen of the United States District Court for the Eastern District of Pennsylvania as delivered from the bench on November 20, 1996.................. *(c)(7) Conrail's Definitive Proxy Statement, dated November 25, 1996..................... *(c)(8) Answer and Defenses of Conrail, CSX and the individual defendants to Second Amended Complaint, and Counterclaim of Conrail and CSX in Norfolk Southern et al. v. Conrail Inc. et al., filed on December 5, 1996, in the United States District Court for the Eastern District of Pennsylvania............................. *(c)(9) Second Amendment to Agreement and Plan of Merger dated as of December 18, 1996, (incorporated by reference to Exhibit (c)(10) to the Second CSX 14D-9)...................................... *(c)(10) Form of Amended and Restated Voting Trust Agreement (incorporated by reference to Exhibit (c)(11) to the Second CSX 14D-9)........................... *(c)(11) Text of opinion of Judge Donald VanArtsdalen of the United States District Court for the Eastern District of Pennsylvania as delivered from the bench on January 9, 1997 (incorporated by reference to Exhibit (c)(12) to the Second CSX 14D-9)........................... *(c)(12) Text of STB Decision No. 5 of STB Finance Docket No. 33220 dated January 8, 1997 (incorporated by reference to Exhibit (c)(13) to the Second CSX 14D-9)........................... - --------------------- * Previously filed ** Included in materials delivered to shareholders of Conrail. EX-99.24 2 PRESS RELEASE EXHIBIT (a)(24) FOR IMMEDIATE RELEASE CONTACTS: Conrail Inc. Abernathy MacGregor Group Craig MacQueen Joele Frank/Matthew Sherman (215) 209-4594 (212) 371-5999 CONRAIL BOARD FULLY COMMITTED TO CSX MERGER: TAKES NO POSITION WITH RESPECT TO AMENDED NORFOLK SOUTHERN OFFER Phildelphia, PA (January 28, 1997) -- Conrail Inc. (NYSE: CRR) announced today that while the Conrail Board of Directors remains fully committed to the CSX Conrail merger because it firmly believes that such a combination will create the world's leading freight transportation and logistics company, and in doing so will best serve the interests of all of Conrail's constituencies, the Board is not taking a position with respect to Norfolk Southern's amended offer for approximately 9.9% of the Conrail shares at $115 per share. The Conrail Board believes that Conrail shareholders who wish to receive cash now for a portion of their shares should feel free to tender their shares into the amended Norfolk Southern offer. On the other hand, shareholders who desire to continue to participate in the future growth of the railroad industry and in the substantial upside potential of the CSX-Conrail transaction should retain their shares and not tender into the amended Norfolk Southern offer. The text of the January 28, 1996 letter to Conrail shareholder follows: [Conrail logo] January 28, 1997 Dear Shareholders: Last week Norfolk Southern Corporation amended its tender offer and is now offering to purchase 8.2 million Conrail shares (or approximately 9.9% of the outstanding shares) at $115 per share, as more fully described in the enclosed amendment to the Schedule 14D-9 filed by Conrail with the Securities and Exchange Commission. This action was Norfolk's last-minute enticement to cause Conrail shareholders to vote against the opt out proposal at the January 17 Conrail shareholders' meeting. The Conrail Board remains fully committed to the CSX/Conrail merger because it firmly believes that such a combination will create the world's leading freight transportation and logistics company, and in doing so, will best serve the interests of all of Conrail's constituencies. In addition, the Conrail Board continues to believe that a sale to Norfolk is not in the best interests of Conrail. The Conrail Board is not taking a position with respect to the amended Norfolk offer because it believes that Conrail shareholders who desire to receive cash now for a portion of their shares should feel free to tender their shares into the amended Norfolk offer. On the other hand, Conrail shareholders who desire to continue to participate in the long term growth of the railroad industry and the substantial upside potential of the CSX/Conrail merger, in what is expected to be a tax-free transaction, should retain their Conrail shares and not tender into the amended Norfolk offer. You should consider carefully the information contained in the supplement to the offer to purchase relating to the amended Norfolk offer that you have received, and make your own decision whether or not to tender your shares into the amended Norfolk offer. We have been advised by Conrail's directors and executive officers that they will not tender their shares into the amended Norfolk offer. Whether or not you decide to tender, the Conrail Board recommends that, following consummation of the amended Norfolk offer, Conrail shareholders who desire to receive cash for a portion of their remaining shares should tender into the second CSX tender offer. We believe that CSX is the superior strategic partner with whom Conrail can realize the extraordinary value and significant upside potential in the railroad industry for its shareholders and all its other constituencies. Sincerely, /s/ David M. LeVan ------------------ DAVID M. LEVAN Chairman, President and Chief Executive Officer Conrail, with corporate headquarters in Phildelphia, PA, operates an 11,000-mile rail freight network in 12 northeastern and midwestern states, the District of Columbia, and the Province of Quebec. Conrail's home page on the Internet can be reached at http://www.CONRAIL.com. EX-99.25 3 PRESS RELEASE EXHIBIT (a)(25) [Conrail logo] January 28, 1997 Dear Shareholders: Last week Norfolk Southern Corporation amended its tender offer and is now offering to purchase 8.2 million Conrail shares (or approximately 9.9% of the outstanding shares) at $115 per share, as more fully described in the enclosed amendment to the Schedule 14D-9 filed by Conrail with the Securities and Exchange Commission. This action was Norfolk's last-minute enticement to cause Conrail shareholders to vote against the opt out proposal at the January 17 Conrail shareholders' meeting. The Conrail Board remains fully committed to the CSX/Conrail merger because it firmly believes that such a combination will create the world's leading freight transportation and logistics company, and in doing so, will best serve the interests of all of Conrail's constituencies. In addition, the Conrail Board continues to believe that a sale to Norfolk is not in the best interests of Conrail. The Conrail Board is not taking a position with respect to the amended Norfolk offer because it believes that Conrail shareholders who desire to receive cash now for a portion of their shares should feel free to tender their shares into the amended Norfolk offer. On the other hand, Conrail shareholders who desire to continue to participate in the long term growth of the railroad industry and the substantial upside potential of the CSX/Conrail merger, in what is expected to be a tax-free transaction, should retain their Conrail shares and not tender into the amended Norfolk offer. You should consider carefully the information contained in the supplement to the offer to purchase relating to the amended Norfolk offer that you have received, and make your own decision whether or not to tender your shares into the amended Norfolk offer. We have been advised by Conrail's directors and executive officers that they will not tender their shares into the amended Norfolk offer. Whether or not you decide to tender, the Conrail Board recommends that, following consummation of the amended Norfolk offer, Conrail shareholders who desire to receive cash for a portion of their remaining shares should tender into the second CSX tender offer. We believe that CSX is the superior strategic partner with whom Conrail can realize the extraordinary value and significant upside potential in the railroad industry for its shareholders and all its other constituencies. Sincerely, /s/ David M. LeVan ------------------ DAVID M. LEVAN Chairman, President and Chief Executive Officer EX-99.26 4 PRESS RELEASE Conrail Reports $147 Million Net Income For Fourth Quarter PHILADELPHIA, Jan. 22, 1997 -- Conrail (NYSE: CRR) today reported net income of $147 million ($1.86 and $1.70 per share, primary and fully diluted basis, respectively) for the fourth quarter of 1996, compared with a loss of $30 million ($.43 per share, primary and fully diluted basis) for the fourth quarter of 1995. For the full year 1996, net income was $342 million ($4.25 and $3.89 per share, primary and fully diluted basis, respectively), compared with net income of $264 million ($3.19 and $2.94 per share, primary and fully diluted basis, respectively) for 1995. Excluding unusual items in 1996 and 1995, Conrail would have reported fourth quarter 1996 net income of $157 million ($1.99 and $1.82 per share, primary and fully diluted, respectively), full year 1996 net income of $435 million ($5.45 and $4.96 per share, primary and fully diluted, respectively), fourth quarter 1995 net income of $146 million ($1.82 and $1.65 per share, primary and fully diluted, respectively), and full year 1995 net income of $419 million ($5.16 and $4.69 per share, primary and fully diluted, respectively). The unusual items were: merger- related costs of $16 million in the fourth quarter of 1996 ($10 million after income tax effect), a one-time charge in the second quarter of 1996 of $135 million ($83 million after income tax effect) for non-union voluntary employee early retirement and separation programs and related costs, a special charge in the fourth quarter of 1995 of $285 million which reduced net income by $176 million (after tax benefits of $109 million) for the disposition of underutilized rail lines and other operating assets, and the favorable impact on deferred income taxes ($21 million) from a reduction of a state income tax rate in the second quarter of 1995. Revenue for the fourth quarter of 1996 totaled $943 million compared with fourth quarter revenue of $951 million. Full year 1996 revenue was $3.714 billion, versus $3.686 billion in 1995. Excluding unusual items, the fourth quarter operating ratio for 1996 was 72.5 percent compared with 74.9 percent for the same period of 1995. The full year operating ratios, excluding unusual items, were 79.7 percent for 1996 and 79.9 percent for 1995. For the fourth quarter, expenses decreased in every major category compared with the fourth quarter of 1995 except fuel, which increased 30 percent primarily due to higher prices. Major improvements were reported in compensation and benefits (down 8.2 percent), materials and supplies (down 6.1 percent), and casualties and insurance (down 21.2 percent). "Though we began the year with one of the harshest winters on record, we finished 1996 on a very strong note," said David M. LeVan, Conrail's Chairman, President and Chief Executive Officer. "This is the third consecutive quarter that we produced record results in net income, earnings per share and operating ratio. More importantly, despite the potential for distractions resulting from our proposed merger with CSX, our people clearly focused on controlling costs, improving safety, and maintaining high levels of service to our customers." Conrail reported that its safety program continued to make major strides in reducing the number of lost time injuries. For the fourth quarter, lost time injuries declined by 36 percent compared with the same period of 1995. In addition, lost time injuries for the full year showed a 21 percent improvement over 1995. "The dramatic reduction in lost time injuries is testimony to the fact that safety is, and will continue to be, our number one priority," said LeVan. Fourth quarter 1996 traffic in units (freight cars and intermodal shipments) increased 4.7 percent. Volume increased 15.2 percent for the Intermodal Service Group and was unchanged for the Unit Train Service Group. Traffic decreased 1.0 percent for the Core Service Group and 6.6 percent for the Automotive Service Group. Within the Core Service Group, Petrochemicals increased 1.2 percent and Forest & Manufactured Products increased 1.1 percent. Metals and Food & Agriculture Products decreased 3.0 percent and 3.7 percent, respectively. For the full year, traffic increased 2.1 percent in 1996. Intermodal increased 7.6 percent and Unit Train was unchanged. Core traffic declined 1.6 percent and Automotive traffic declined 1.7 percent. Within the Core Service Group, Metals increased 4.0 percent, Petrochemicals decreased 2.5 percent, Food & Agriculture Products decreased 2.8 percent, and Forest & Manufactured Products were down 5.3 percent. Looking ahead, LeVan reiterated that the company's commitment to the strategic merger of equals with CSX was firmly intact, and that the company's areas of focus remain unchanged. "The proposed merger with CSX is clearly in the best interests of all Conrail constituents," said LeVan. "As we work to complete this merger, we will not lose sight of the areas that have been the hallmark of our success: safety, customer service, cost control and employee development." Conrail, with corporate headquarters in Philadelphia, operates 11,000-mile rail freight network in 12 Northeaster and Midwestern states, the District of Columbia, and the Province of Quebec. Contact: Rudy Husband of Conrail at (215) 209- 4594. Conrail news releases are archived at its site on the World Wide Web: http://www.conrail.com. CONRAIL INC. CONDENSED CONSOLIDATED STATEMENTS OF INCOME (In Millions Except Per Share Data)
Quarters Ended Years Ended December 31, December 31, ------------------- ------------------- 1996 1995 1996 1995 ================================================================================================== Revenues $943 $951 $3,714 $3,686 - -------------------------------------------------------------------------------------------------- Operating expenses Before one-time charges 700 712 2,978 2,945 Voluntary separation programs 135 Asset disposition charge 285 285 ---- ---- ------ ------ - -------------------------------------------------------------------------------------------------- Income (loss) from operations 243 (46) 601 456 - -------------------------------------------------------------------------------------------------- Interest expense (45) (47) (182) (194) - -------------------------------------------------------------------------------------------------- Other income, net 29 41 112 130 ---- ---- ----- ----- - -------------------------------------------------------------------------------------------------- Income (loss) before income taxes 227 (52) 531 392 - -------------------------------------------------------------------------------------------------- Income taxes (benefit) 80 (22) 189 128 ---- ---- ------ ----- - -------------------------------------------------------------------------------------------------- Net income (loss) $ 147 $ (30) $342 $264 ---- ----- ---- ---- - -------------------------------------------------------------------------------------------------- Net income (loss) per common share - -------------------------------------------------------------------------------------------------- Primary $1.86 $(.43) $4.25 $3.19 - -------------------------------------------------------------------------------------------------- Fully diluted 1.70 (.43) 3.89 2.94 ================================================================================================== Notes: 1. Merger-related costs of $16 million ($10 million after taxes) are included in the fourth quarter 1996 operating expenses. Without these costs, net income for the quarter would have been $157 million ($1.99 and $1.82 per share, primary and fully diluted, respectively). During the second quarter of 1996, the Company recorded a one-time charge of $135 million (which reduced net income by $83 million after tax benefits of $52 million) for non-union employee voluntary early retirement and separation programs and related costs. Without this charge and the merger-related costs, net income for the year ended December 31, 1996 would have been $435 million ($5.45 and $4.96 per share, primary and fully diluted, respectively). 2. During the fourth quarter of 1995, the Company recorded a special charge of $285 million which reduced net income by $176 million (after tax benefits of $109 million). The special charge represented the expected loss on the disposition of the underutilized rail lines and other operating assets. Without this charge, net income for the fourth quarter of 1995 would have been $146 million ($1.82 and $1.65 per share, primary and fully diluted, respectively). Also, in 1995, as a result of a decrease in a state income tax rate enacted during the second quarter of 1995, income tax expense included a reduction of $21 million representing the effects of adjusting deferred income taxes for the rate decrease as required under SFAS 109, "Accounting for Income Taxes". Without these items, net income for 1995 would have been $419 million ($5.16 and $4.69 per share, primary and fully diluted, respectively).
EX-99.27 5 PRESS RELEASE EXHIBIT (a)(27) FOR IMMEDIATE RELEASE CONTACTS: Conrail Inc. Abernathy MacGregor Group Craig MacQueen Joele Frank/Matthew Sherman (215) 209-4594 (212) 371-5999 CONRAIL ANNOUNCES RESULTS OF SHAREHOLDERS VOTE; CONRAIL BOARD FULLY COMMITTED TO CSX MERGER Phildelphia, PA (January 23, 1997) -- Conrail Inc. (NYSE: CRR) announced today that its shareholders had voted against the proposal to opt out of a Pennsylvania statute at its January 17 special meeting. The date for a new special meeting has not yet been determined. David M. LeVan, chairman, president and chief executive officer, said "The outcome of the shareholder meeting was not unexpected given Norfolk Southern's last-minute enticement to purchase 9.9% of the Conrail shares. Norfolk knew that our shareholders would support the CSX transaction, and made this offer solely to undermine this vote. The vote has no implications as to how our shareholders will ultimately decide on the CSX merger. "The Conrail Board of Directors remains fully committed to the CSX-Conrail merger and will not approve a transaction with Norfolk Southern." The results of the shareholder vote on January 17, with approximately 77 million shares properly voted, were that 49,898,715 shares voted against the opt out proposal, 26,782,745 shares voted for the opt out proposal and 313,066 shares voted to abstain. Conrail, with corporate headquarters in Philadelphia, PA, operates an 11,000-mile rail freight network in 12 northeastern and midwestern states, the District of Columbia, and the Province of Quebec. Conrail's home page on the Internet can be reached at http://www.CONRAIL.com. -----END PRIVACY-ENHANCED MESSAGE-----