UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
Form 10-Q
X QUARTERLY REPORT PURSUANT TO SECTION 13 or 15 (d) OF THE SECURITIES EXCHANGE
ACT OF 1934 For the quarterly period ended March 31, 2007
TRANSITION REPORT PURSUANT TO SECTION 13 or 15(d) OF THE SECURITIES EXCHANGE
ACT OF 1934
For the transition period from _______________ to _______________
Commission file number 0-16704
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PROVIDENCE AND WORCESTER RAILROAD COMPANY
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(Exact name of registrant as specified in its charter)
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Rhode Island 05-0344399
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(State or other jurisdiction of I.R.S. Employer Identification No.
incorporation or organization)
75 Hammond Street, Worcester, Massachusetts 01610
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code (508) 755-4000
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.
YES X NO ___
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Indicate by check mark whether the registrant is a large accelerated filer, an
accelerated filer, or a non-accelerated filer. See definition of "accelerated
filer and large accelerated filer" in Rule 12b-2 of the Exchange Act (check one)
Large accelerated filer___ Accelerated filer___ Non-accelerated filer X
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Indicate by check mark whether the registrant is a shell company (as defined in
Rule 12b-2 of the Exchange Act).
YES ___ NO X
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Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the latest practicable date.
As of May 1, 2007, the registrant has 4,547,713 shares of common stock, par
value $.50 per share, outstanding.
PROVIDENCE AND WORCESTER RAILROAD COMPANY
Index
Part I - Financial Information
Item 1 - Financial Statements:
Balance Sheets - March 31, 2007
(Unaudited) and December 31, 2006............................3
Statements of Operations (Unaudited) -
Three Months Ended March 31, 2007 and 2006...................4
Statements of Cash Flows (Unaudited) -
Three Months Ended March 31, 2007 and 2006...................5
Notes to Financial Statements (Unaudited)..................6-9
Item 2 - Management's Discussion and Analysis of
Financial Condition and Results of Operations............10-12
Item 3 - Quantitative and Qualitative Disclosures About Market Risk..12
Item 4 - Controls and Procedures.....................................12
Part II - Other Information:
Item 5 - Reports on Form 8-K.........................................13
Item 6 - Exhibits....................................................13
Signatures.............................................................14
2
Item 1. Financial Statements
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PROVIDENCE AND WORCESTER RAILROAD COMPANY
BALANCE SHEETS
(Dollars in Thousands Except Per Share Amounts)
ASSETS
MARCH 31, DECEMBER 31,
2007 2006
(Unaudited)
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Current Assets:
Cash and cash equivalents ........................... $ 475 $ 1,253
Accounts receivable, net of allowance for
doubtful accounts of $175 in 2007 and 2006 ......... 2,735 3,244
Materials and supplies .............................. 1,576 1,483
Prepaid expenses and other current assets ........... 164 148
Deferred income taxes ............................... 358 347
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Total Current Assets ............................... 5,308 6,475
Property and Equipment, net .......................... 76,737 76,591
Land Held for Development ............................ 11,958 11,958
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Total Assets ......................................... $94,003 $95,024
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LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Accounts payable .................................... $ 3,582 $ 2,717
Accrued expenses .................................... 1,498 1,433
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Total Current Liabilities .......................... 5,080 4,150
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Profit-Sharing Plan Contribution ..................... 178 178
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Deferred Income Taxes ................................ 11,422 12,051
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Deferred Grant Income ................................ 7,961 8,021
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Commitments and Contingent Liabilities (Note 6).......
Shareholders' Equity:
Preferred stock, 10% noncumulative, $50 par
value; authorized, issued and outstanding
640 shares in 2007 and 2006 ........................ 32 32
Common stock, $.50 par value; authorized
15,000,000 shares; issued and outstanding
4,537,606 shares in 2007 and 4,534,056
shares in 2006 ..................................... 2,269 2,267
Additional paid-in capital .......................... 30,762 30,680
Retained earnings ................................... 36,299 37,645
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Total Shareholders' Equity ......................... 69,362 70,624
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Total Liabilities and Shareholders' Equity ........... $94,003 $95,024
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The accompanying notes are an integral part of the financial statements.
3
PROVIDENCE AND WORCESTER RAILROAD COMPANY
STATEMENTS OF OPERATIONS (Unaudited)
(Dollars in Thousands Except Per Share Amounts)
Three Months Ended March 31,
2007 2006
(as restated,
see Note 2)
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Revenues:
Operating Revenues .................................. $ 5,185 $ 6,607
Other Income ........................................ 115 180
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Total Revenues .................................... 5,300 6,787
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Operating Expenses:
Maintenance of way and structures ................... 1,344 1,408
Maintenance of equipment ............................ 840 905
Transportation ...................................... 1,954 2,105
General and administrative .......................... 1,328 1,041
Depreciation ........................................ 707 691
Taxes, other than income taxes ...................... 591 590
Car hire, net ....................................... 183 236
Employee retirement plans ........................... 59 57
Track usage fees .................................... 95 155
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Total Operating Expenses .......................... 7,101 7,188
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Loss before Income Tax Benefit ....................... (1,801) (401)
Income Tax Benefit ................................... (640) (132)
======= =======
Net Loss ............................................. (1,161) (269)
Preferred Stock Dividends ............................ 3 3
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Net Loss Attributable to Common Shareholders ......... $(1,164) $ (272)
======= =======
Basic and Diluted Loss Per Common Share .............. $ (.26) $ (.06)
======= =======
The accompanying notes are an integral part of the financial statements.
4
PROVIDENCE AND WORCESTER RAILROAD COMPANY
STATEMENTS OF CASH FLOWS (Unaudited)
(Dollars in Thousands)
Three Months Ended March 31,
2007 2006
(as restated,
see Note 2)
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Cash Flows from Operating Activities:
Net loss ............................................. $(1,161) $ (269)
Adjustments to reconcile net loss to net cash
flows from (used in) operating activities:
Depreciation ........................................ 707 691
Amortization of deferred grant income ............... (60) (59)
Gains from sale and disposal of property,
equipment and easements, net ....................... (6) (31)
Deferred income taxes ............................... (640) 133
Share-based compensation ............................ 66 46
Increase (decrease) in cash from:
Accounts receivable ................................ 509 (357)
Materials and supplies ............................. (93) (420)
Prepaid expenses and other current assets .......... (16) (202)
Accounts payable and accrued expenses .............. 1,223 323
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Net cash flows from (used in) operating
activities .......................................... 529 (145)
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Cash flows from Investing Activities:
Purchase of property and equipment ................... (1,146) (547)
Proceeds from sale of property, equipment and
easements ........................................... 6 116
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Net cash flows used in investing activities .......... (1,140) (431)
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Cash Flows from Financing Activities:
Dividends paid ....................................... (185) (183)
Issuance of common shares for stock options
exercised and employee stock purchases .............. 18 23
Proceeds from deferred grant income .................. -- 87
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Net cash flows used in financing activities .......... (167) (73)
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Decrease in Cash and Cash Equivalents ................ (778) (649)
Cash and Cash Equivalents, Beginning of
Period .............................................. 1,253 2,063
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Cash and Cash Equivalents, End of Period ............. $ 475 $ 1,414
======= =======
Supplemental Disclosures:
Cash paid during the three months for
income taxes ....................................... $ -- $ 51
======= =======
The accompanying notes are an integral part of the financial statements.
5
PROVIDENCE AND WORCESTER RAILROAD COMPANY
NOTES TO FINANCIAL STATEMENTS (Unaudited)
THREE MONTHS ENDED MARCH 31, 2007 AND 2006
(Dollars in Thousands Except Per Share Amounts)
1. In the opinion of management, the accompanying interim financial statements
of the Providence and Worcester Railroad Company (the "Company") contain
all adjustments (consisting solely of normal recurring adjustments)
necessary to present fairly the financial position as of March 31, 2007 and
the results of operations and cash flows for the three months ended March
31, 2007 and 2006. Results for interim periods may not be necessarily
indicative of the results to be expected for the year. These interim
financial statements should be read in conjunction with the Company's
Annual Report on Form 10-K for the year ended December 31, 2006 filed with
the Securities and Exchange Commission.
2. Restatement of Previously issued financial statements:
Prior to the issuance of the 2006 financial statements, the Company
determined that its liability for accrued compensated time off had not been
recorded.
The Company's contracts with the labor unions representing its union
employees require the Company to provide employees with accrued compensated
time off at the rate of one or one and one half hours, as applicable, for
each hour worked in excess of eight hours per day (for a five-day work
week) or forty hours per week. The Company did not accrue any liability for
such compensation and related payroll taxes in the past.
The Company has restated its financial statements for 2004, 2005 and the
first three quarters of 2006 to reflect this liability reduced by the
related deferred income tax benefit.
In addition, the Company has reclassified the proceeds from deferred grant
income in the statement of cash flows from investing activities to
financing activities.
The effects of the restatement adjustments on the Statements of Operations
and Cash Flows for the Three Months Ended March 31, 2006 are summarized as
follows:
6
As
Previously As
Reported Adjustment Restated
---------- ---------- --------
Statement of Operations:
Operating Expenses:
Maintenance of way and structures .. $ 1,399 $ 9 $ 1,408
Maintenance of equipment ........... 893 12 905
Taxes, other than income taxes ..... 585 5 590
Total Operating Expenses ............ 7,162 26 7,188
Loss before Income Tax Benefit ...... (375) (26) (401)
Income Tax Benefit .................. (123) (9) (132)
Net Loss ............................ (252) (17) (269)
Net Loss Attributable to Common
Shareholders ....................... (255) (17) (272)
Statements of Cash Flows:
Cash flows from Operating Activities:
Net loss ........................... $ (252) $ (17) $ (269)
Deferred income taxes .............. 142 (9) 133
Accounts payable and accrued
expenses .......................... 297 26 323
Net cash flows used in operating
activities ........................ (145) -- (145)
Net cash flows used in investing
activities ........................ (344) (87) (431)
Net cash flows used in financing
activities ........................ (160) 87 (73)
3. Changes in Shareholders' Equity:
Total
Additional Share
Preferred Common Paid-in Retained holders'
Stock Stock Capital Earnings Equity
------- ------- ------- ------- -------
Balance December 31,2006..$ 32 $ 2,267 $30,680 $37,645 $70,624
Issuance of 3,550
common shares for
employee stock
purchases, and
employee stock awards .. 2 57 59
Share-based
compensation,
options granted ........ 25 25
Dividends:
Preferred stock,
$5.00 per share ........ (3) (3)
Common stock, $.04
per share .............. (182) (182)
Net loss for the
period ................. (1,161) (1,161)
------- ------- ------- ------- -------
Balance March 31, 2007 .. $ 32 $ 2,269 $30,762 $36,299 $69,362
======= ======= ======= ======= =======
4. Other Income:
2007 2006
---- ----
Gains from sale and disposal of
property, equipment and easements,
net .............................. $ 6 $ 31
Rentals ........................... 99 135
Interest .......................... 10 14
---- ----
$115 $180
==== ====
7
5. Loss per Common Share:
Basic loss per common share is computed using the weighted-average number
of common shares outstanding during the period. Diluted loss per common
share reflects the effect of the Company's outstanding convertible
preferred stock and stock options except where such items would be
anti-dilutive.
A reconciliation of weighted-average shares used for the basic computation
and that used for the diluted computation is as follows:
2007 2006
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Weighted-average shares for basic ...... 4,534,518 4,509,119
Dilutive effect of convertible preferred
stock and stock options ............... -- --
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Weighted-average shares for diluted .... 4,534,518 4,509,119
========= =========
Preferred Stock convertible into 64,000 shares of Common Stock at the rate
of 100 shares of Common Stock for each one share of Preferred Stock was
outstanding during the quarters ended March 31, 2007 and 2006. In addition,
options to purchase 48,732 and 50,449 shares of common stock were
outstanding during the quarters ended March 31, 2007 and 2006,
respectively. These Common Stock equivalents were not included in the
computation of the diluted loss per share in either of the quarters because
their effect would be anti-dilutive.
6. Commitments and Contingent Liabilities:
The Company is a defendant in certain lawsuits relating to casualty losses,
many of which are covered by insurance subject to a deductible. The Company
believes that adequate provision has been made in the financial statements
for any expected liabilities which may result from disposition of such
lawsuits.
On January 29, 2002, the Company received a "Notice of Potential Liability"
from the United States Environmental Protection Agency ("EPA") regarding an
existing Superfund Site that includes the J.M. Mills Landfill in
Cumberland, Rhode Island. EPA sends these "Notice" letters to potentially
responsible parties ("PRPs") under the Comprehensive Environmental
Response, Compensation, and Liability Act ("CERCLA"). EPA identified the
Company as a PRP based on its status as an owner and/or operator because
its railroad property traverses the Site. Via these Notice letters, EPA
makes a demand for payment of past costs (identified in the letter as $762)
and future costs associated with the response actions taken to address the
contamination at the Site, and requests PRPs to indicate their willingness
to participate and resolve their potential liability at the Site. The
Company has responded to EPA by stating that it does not believe it has any
liability for this Site, but that it is interested in cooperating with EPA
to address issues concerning liability at the Site. At this point, two
other parties have already committed via a consent order with EPA to pay
for the Remedial Investigation/Feasibility Study ("RI/FS") phase of the
clean-up at the Site, which will take approximately two or more years to
complete. After that, EPA will likely seek to negotiate the cost of the
Remedial Design and implementation of the remedy at the Site with the PRPs
it has identified via these Notice Letters (which presently includes over
sixty parties, and is likely to increase after EPA completes its
investigation of the identity of PRPs). On December 15, 2003, the EPA
issued a second "Notice of Potential Liability" letter to the Company
regarding the Site. EPA again identified the Company as a PRP, this time
because EPA "believes that [the Company] accepted hazardous substance for
transport to disposal or treatment facilities and selected the site for
8
disposal." The Company responded again to EPA stating that it is interested
in cooperating with EPA but that it does not believe it has engaged in any
activities that caused contamination at the Site. The Company believes that
none of its activities caused contamination at the Site, and will contest
this claim by EPA and therefore no liability has been accrued for this
matter.
In connection with the EPA claim described above, the two parties who have
committed to conduct the RI/FS at the Site filed a complaint in the U.S.
District Court of Rhode Island against the Company, in an action entitled
CCL Custom Manufacturing, Inc. v. Arkwright Incorporated, et al
(consolidated with Unilever Bestfoods v. American Steel & Aluminum Corp. et
al), C.A. No. 01-496/L, on December 18, 2002. The Company was one of about
sixty parties named by Plaintiffs, in this suit, to recover response costs
incurred in investigating and responding to the releases of hazardous
substances at the Site. Plaintiffs alleged that the Company is liable under
42 U.S.C. ss. 961(a)(3) of CERCLA as an "arranger" or "generator" of waste
that ended up at the Site. The Company entered into a Generator Cooperation
Agreement with other defendants to allocate costs in responding to this
suit, and to share technical costs and information in evaluating the
Plaintiffs' claims. Although the Company does not believe it generated any
waste that ended up at this Site, or that its activities caused
contamination at the Site, the Company paid $45 to settle this suit in
March 2006.
7. Dividends:
On April 25, 2007, the Company declared a dividend of $.04 per share on its
outstanding Common Stock payable May 21, 2007 to shareholders of record May
7, 2007.
9
PROVIDENCE AND WORCESTER RAILROAD COMPANY
ITEM 2-MANAGEMENT'S DISCUSSION AND ANALYSIS OF
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FINANCIAL CONDITION AND RESULTS OF OPERATIONS
---------------------------------------------
The statements contained in Management's Discussion and Analysis of Financial
Condition and Results of Operations ("MDA") which are not historical are
"forward-looking statements" within the meaning of Section 27A of the Securities
Act of 1933, as amended, and Section 21E of the Securities Exchange Act of 1934,
as amended. These forward-looking statements represent the Company's present
expectations or beliefs concerning future events. The Company cautions, however,
that actual results could differ materially from those indicated in MDA.
Critical Accounting Policies
- ----------------------------
The Securities and Exchange Commission ("SEC") defines critical accounting
policies as those that require application of management's most difficult,
subjective or complex judgments, often as a result of the need to make estimates
about the effect of matters that are inherently uncertain and may change in
subsequent periods.
The Company's significant accounting policies are described in Note 1 of the
Notes to Financial Statements in its Annual Report on Form 10-K. Not all of
these significant accounting policies require management to make difficult,
subjective or complex judgments or estimates. Management believes that the
Company's policy for the evaluation of long-lived asset impairment meets the SEC
definition of critical.
The Company evaluates long-lived assets for impairment whenever events or
changes in circumstances indicate that the carrying amount of an asset may not
be recoverable. When factors indicate that assets should be evaluated for
possible impairment, the Company uses an estimate of the related undiscounted
future cash flows over the remaining lives of the assets in measuring whether
the carrying amounts of the assets are recoverable.
Results of Operations
- ---------------------
The following table sets forth the Company's operating revenues by category in
dollars and as a percentage of operating revenues:
Three Months Ended March 31,
-----------------------------------
2007 2006
-----------------------------------
(In thousands, except percentages)
Freight Revenues:
Conventional carloads ....... $4,181 80.6% $5,305 80.3%
Containers .................. 772 14.9 842 12.7
Other freight related ....... 150 2.9 264 4.0
Other operating revenues ...... 82 1.6 196 3.0
------ ----- ------ -----
Total .................... $5,185 100.0% $6,607 100.0%
====== ===== ====== =====
10
The following table sets forth a comparison of the Company's operating expenses
expressed in dollars and as a percentage of operating revenues:
Three Months Ended March 31,
-----------------------------------
2007 2006
-----------------------------------
(In thousands, except percentages)
Salaries, wages, payroll taxes
and employee benefits ........ $3,750 72.3% $3,816 57.8%
Casualties and insurance ...... 233 4.5 186 2.8
Depreciation .................. 707 13.6 691 10.5
Diesel fuel ................... 464 9.0 601 9.1
Car hire, net ................. 183 3.5 236 3.6
Purchased services, including
legal and professional fees .. 468 9.0 385 5.8
Repair and maintenance of
equipment .................... 417 8.1 446 6.8
Track and signal materials .... 416 8.0 904 13.7
Track usage fees .............. 95 1.8 155 2.3
Other materials and supplies .. 334 6.5 344 5.2
Other ......................... 505 9.7 439 6.6
------ ----- ------ -----
Total ....................... 7,572 146.0 8,203 124.2
Less capitalized and
recovered costs ............ 471 9.1 1,015 15.4
------ ----- ------ -----
Total .................... $7,101 136.9% $7,188 108.8%
====== ===== ====== =====
Operating Revenues:
Operating revenues decreased $1.4 million, or 21.5%, to $5.2 million in the
first quarter of 2007 from $6.6 million in the first quarter of 2006. This
decrease results from a $1.1 million (21.2%) decrease in conventional freight
revenues, a $70,000 (8.3%) decrease in container freight revenues, a $114,000
(43.2%) decrease in other freight related revenues and a $114,000 (58.2%)
decrease in other operating revenues.
The decrease in conventional freight revenues is attributable to a 28.5%
decrease in traffic volume partially offset by a 10.2% increase in the average
revenue received per carloading. The Company's conventional carloadings
decreased by 1,871 to 4,698 in the first quarter of 2007 from 6,569 in the first
quarter of 2006.
Consistent with much of the railroad industry in North America the Company
experienced a significant decrease in conventional traffic volume during the
first quarter of 2007. Declines in carloadings of coal, steel ingots and
contaminated soil were particularly steep. The volumes of these three
commodities handled by the Company have historically varied throughout the year.
The fact that traffic in all three of these commodities declined significantly
during the first quarter of 2007 appears to be largely coincidental. The
Company's traffic volumes in these and other commodities have returned to levels
more consistent with prior years in April. The fact that coal and contaminated
soil are lower rated commodities largely accounts for the increase in the
average revenue per carload achieved during the quarter. It should be noted that
the Company had experienced significant increases in carloadings of conventional
freight during the first quarter of 2006 from 2005, which was a more typical
first quarter.
The decrease in container freight revenues is the result of a 12.7% decline in
traffic volume partially offset by a 5.0% increase in the average revenue
11
received per container. Container traffic volume decreased by 1,927 containers
to 13,265 in the first quarter of 2007 from 15,192 in the first quarter of 2006.
The increase in the average revenue received per container is attributable to
contractual rate adjustments based upon railroad industry cost indices.
The decline in other freight related revenues is the result of decreased
billings for demurrage and secondary switching services. These decreases reflect
the significant reduction in conventional traffic volume.
The decrease in other operating revenues reflects lower maintenance department
billings. Revenue of this nature varies from period to period depending upon the
needs of freight customers and other outside parties.
Other Income:
Other income for the first quarter of 2007 decreased by $65,000 to $115,000 from
$180,000 in the first quarter of 2006. This decrease is the result of declines
in rental income and gains from the sale of property and equipment.
Operating Expenses:
Operating expenses for the first quarter of 2007 decreased by $87,000, or 1.2%,
to $7.1 million from $7.2 million in 2006. As described in Note 2 to the
financial statements the Company has restated its statement of operations for
the first quarter of 2006 to reflect its liability for accrued compensated time
off and related payroll taxes. The impact of this restatement was to increase
operating expenses (salaries, wages, payroll taxes and employee benefits) by
$26,000.
Income Tax Benefit:
The income tax benefit for the first quarter of 2007 is 35.5% of the pre
tax-loss. This is the effective federal and state income tax rate which the
Company expects to realize for all of 2007 before giving effect to any track
maintenance credits to which it may be entitled. The income tax benefit for the
first quarter of 2006 was increased by $9,000 as a result of the restatement of
the statement of operations previously discussed.
Liquidity and Capital Resources
- -------------------------------
During the first quarter of 2007 the Company's operating activities generated
$529,000 of cash. Total cash and cash equivalents, however, decreased by
$778,000 for the quarter. The principal utilization of cash during the quarter,
other than for operations, was for expenditures for property and equipment and
for the payment of dividends.
Subsequently, during April 2007, the Company borrowed $750,000 under its
revolving line of credit, at an interest rate of 6.82%, for working capital
purposes. Management intends to repay this debt by the end of 2007.
In management's opinion cash generated from operations during the remainder of
2007 will be sufficient to enable the Company to meet its operating expenses and
capital expenditure and dividend requirements as well as to repay the borrowings
under its revolving line of credit.
Seasonality
- -----------
Historically, the Company's operating revenues are lowest for the first quarter
due to the absence of construction aggregate shipments during a portion of this
period and to winter weather conditions.
12
Item 3. Quantitative and Qualitative Disclosures About Market Risk
- ------------------------------------------------------------------
Cash and Equivalents
As of March 31, 2007, the Company is exposed to market risks which primarily
include changes in U.S. interest rates.
The Company invests cash balances in excess of operating requirements in
short-term securities, generally with maturities of 90 days or less. In
addition, the Company's revolving line of credit agreement provides for
borrowings which bear interest at variable rates based on either prime rate or
one and one half percent over either the one or three month London Interbank
Offered Rates. The Company had no borrowings outstanding pursuant to the
revolving line of credit agreement at March 31, 2007. The Company believes that
the effect, if any, of reasonably possible near-term changes in interest rates
on the Company's financial position, results of operations, and cash flows
should not be material.
Item 4. Controls and Procedures
- -------------------------------
As required by Rule 13a-15 under the Securities Exchange Act of 1934, as amended
(the "Exchange Act"), the Company carried out an evaluation of the effectiveness
of the design and operation of the Company's disclosure controls and procedures
as of the end of the period covered by this report. This evaluation was carried
out under the supervision and with the participation of the Company's
management, including the Company's Chief Executive Officer and the Company's
Treasurer. Based upon that evaluation, the Chief Executive Officer and the
Treasurer concluded that the Company's disclosure controls and procedures are
effective to ensure that information required to be disclosed by the Company in
reports that it files or submits under the Exchange Act is recorded, processed,
summarized and reported within the time periods specified in the Securities and
Exchange Commission rules and forms.
There was no significant change in the Company's internal control over financial
reporting that occurred during the Company's most recent fiscal quarter that has
materially affected, or is reasonably likely to affect, the Company's internal
control over financial reporting.
PART II - Other Information
- ---------------------------
Item 5. Reports on Form 8-K
-------------------
(a) A report on Form 8-K was filed on February 20, 2007 in which the
Company reported its intention to restate its previously issued
financial statements for 2004 and 2005 to reflect its liability for
compensated time off and related payroll taxes reduced by the related
deferred income tax benefit.
A report on Form 8-K was filed on February 23, 2007 in which the
Company reported that Mary A. Tanona, its Secretary and General
Counsel had delivered notice to the Company of her resignation,
effective April 30, 2007.
Item 6. Exhibits
--------
(31.1)Rule 13a-14(a) Certification of Chairman of the Board and Chief
Executive Officer pursuant to Section 302 of the Sarbanes-Oxley Act of
2002
(31.2)Rule 13a-14(a) Certification of Treasurer and Principal Financial
Officer pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
13
(32) Certifications of Chairman of the Board and Chief Executive Officer
and Treasurer and Principal Financial Officer pursuant to 18 U.S.C
Section 1350 as adopted pursuant to Section 906 of the Sarbanes-Oxley
Act of 2002
14
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 thereunto duly authorized.
PROVIDENCE AND WORCESTER
RAILROAD COMPANY
By: /s/ Robert H. Eder
----------------------------
Robert H. Eder,
Chairman of the Board
And Chief Executive Officer
By: /s/ Robert J. Easton
----------------------------
Robert J. Easton
Treasurer and Principal
Financial Officer
DATED: May 14, 2007
15
EXHIBIT 31.1
Providence and Worcester Railroad Company
Certification Pursuant to
Section 302 of the Sarbanes-Oxley Act of 2002
I, ROBERT H. EDER, certify that:
1. I have reviewed this quarterly report on Form 10-Q of Providence and
Worcester Railroad Company;
2. Based on my knowledge, this report does not contain any untrue statement of a
material fact or omit to state a material fact necessary to make the statements
made, in light of the circumstances under which such statements were made, not
misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this quarterly report;
4. The registrant's other certifying officer and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-15(e) and 15d-15 (e)) for the registrant and we have:
a) Designed such disclosure controls and procedures, or caused such
disclosure controls and procedures to be designed under our
supervision, to ensure that material information relating to the
registrant, is made known to us by others within those entities,
particularly during the period in which this report is being prepared;
b) Evaluated the effectiveness of the registrant's disclosure controls
and procedures and presented in this report our conclusions about the
effectiveness of the disclosure controls and procedures, as of the end
of the period covered by this report, based on our evaluation; and
c) Disclosed in this report any change in the registrant's internal
control over financial reporting that occurred during the registrant's
most recent fiscal quarter that has materially affected, or is
reasonably likely to materially affect, the registrant's internal
control over financial reporting; and
5. The registrant's other certifying officer and I have disclosed, based on our
most recent evaluation of internal control over financial reporting, to the
registrant's auditors and the audit committee of registrant's board of
directors:
a) All significant deficiencies and material weaknesses in the design or
operation of internal control over financial reporting which are
reasonably likely to adversely affect the registrant's ability to
record, process, summarize and report financial information; and
b) Any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal
control over financial reporting.
DATE: May 14, 2007
By: /s/ Robert H. Eder
----------------------------
Robert H. Eder
Chairman of the Board
and Chief Executive Officer
16
EXHIBIT 31.2
Providence and Worcester Railroad Company
Certification Pursuant to
Section 302 of the Sarbanes-Oxley Act of 2002
I, ROBERT J. EASTON certify that:
1. I have reviewed this quarterly report on Form 10-Q of Providence and
Worcester Railroad Company;
2. Based on my knowledge, this report does not contain any untrue statement of a
material fact or omit to state a material fact necessary to make the statements
made, in light of the circumstances under which such statements were made, not
misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial
information included in this quarterly report, fairly present in all material
respects the financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this quarterly report;
4. The registrant's other certifying officer and I are responsible for
establishing and maintaining disclosure controls and procedures (as defined in
Exchange Act Rules 13a-15(e) and 15d-15 (e)) for the registrant and we have:
a) Designed such disclosure controls and procedures, or caused such
disclosure controls and procedures to be designed under our
supervision, to ensure that material information relating to the
registrant, is made known to us by others within those entities,
particularly during the period in which this report is being prepared;
b) Evaluated the effectiveness of the registrant's disclosure controls
and procedures and presented in this report our conclusions about the
effectiveness of the disclosure controls and procedures, as of the end
of the period covered by this report, based on our evaluation; and
c) Disclosed in this report any change in the registrant's internal
control over financial reporting that occurred during the registrant's
most recent fiscal quarter that has materially affected, or is
reasonably likely to materially affect, the registrant's internal
control over financial reporting; and
5. The registrant's other certifying officer and I have disclosed, based on our
most recent evaluation of internal control over financial reporting, to the
registrant's auditors and the audit committee of registrant's board of
directors:
a) All significant deficiencies and material weaknesses in the design or
operation of internal control over financial reporting which are
reasonably likely to adversely affect the registrant's ability to
record, process, summarize and report financial information; and
b) Any fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal
control over financial reporting.
DATE: May 14, 2007
By: /s/ Robert J. Easton
----------------------------
Robert J. Easton
Treasurer and Principal
Financial Officer
17
EXHIBIT 32
PROVIDENCE AND WORCESTER RAILROAD COMPANY
CERTIFICATIONS PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report of Providence and Worcester Railroad
Company (the Company) on form 10-Q for the quarterly period ended March 31,
2007, as filed with the Securities and Exchange Commission on the date hereof
(the Report), I, Robert H. Eder, Chief Executive Officer of the Company,
certify, pursuant to 18 U.S.C. ss. 1350, as adopted pursuant to Section 906 of
the Sarbanes-Oxley Act of 2002, that:
(1) The Report fully complies with the requirements of Section 13(a) or
15(d) of the Securities Exchange Act of 1934; and
(2) The information contained in the Report fairly presents, in all
material respects, the financial condition and results of operations
of the Company.
/s/ Robert H. Eder
-----------------------------
Robert H. Eder,
Chairman of the Board And Chief
Executive Officer
May 14, 2007
In connection with the Quarterly Report of Providence and Worcester Railroad
Company (the Company) on form 10-Q for the quarterly period ended March 31,
2007, as filed with the Securities and Exchange Commission on the date hereof
(the Report), I, Robert J. Easton, Chief Financial Officer of the Company,
certify, pursuant to 18 U.S.C. ss. 1350, as adopted pursuant to Section 906 of
the Sarbanes-Oxley Act of 2002, that:
(1) The Report fully complies with the requirements of Section 13(a) or
15(d) of the Securities Exchange Act of 1934; and
(2) The information contained in the Report fairly presents, in all
material respects, the financial condition and results of operations
of the Company.
/s/ Robert J. Easton
-----------------------------
Robert J. Easton,
Treasurer and Chief Financial Officer
May 14, 2007