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 Quarter ended March 31, 2006
Commission File Number 1-5447
PITTSBURGH & WEST VIRGINIA RAILROAD
Pennsylvania 25-6002536
(State of Organization) (I.R.S. Employer Identification No.)
(Address of principal executive offices)
Telephone - (304)926-1124*
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 _____
Indicate by check mark whether the registrant is a large accelerated filer,
an accelerated filer, or a non-accelerated filer.
Large accelerated filer _____ Accelerated filer _____ Non-accelerated filer_X_
Indicate by check mark whether the registrant is a shell company (as defined
in Rule 12b-2 of the Exchange Act).
Yes _____ No __X__
PITTSBURGH & WEST VIRGINIA RAILROAD
FORM 10-Q
Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of the close of the period covered by this report.
1,510,000 shares of beneficial interest, without par value.
* Notices and communications from the Securities and Exchange Commission for
the registrant may be sent to Robert A. Hamstead, Secretary and Treasurer,
#2 Port Amherst Drive, Charleston, WV 25306.
PART I. FINANCIAL INFORMATION
Item 1. Financial Statements
STATEMENT OF INCOME
(Dollars in Thousands except Per Share Amounts)
(Unaudited)
Three Months Ended
March 31,
2006 2005
INCOME AVAILABLE FOR DISTRIBUTION:
Interest income from capital lease $ 229 $ 229
Less: general and administrative expenses 56 65
NET INCOME $ 173 $ 164
Per Share:
(1,510,000 average shares outstanding)
Net Income $ .11 $ .11
Cash Dividends $ .13 $ .14
The accompanying notes are an integral part of these financial statements.
PITTSBURGH & WEST VIRGINIA RAILROAD
FORM 10-Q
BALANCE SHEET
(Dollars in Thousands)
(Unaudited)
March 31 December 31
2006 2005
ASSETS
Net investment in capital lease $ 9,150 $ 9,150
Cash 47 54
$ 9,197 $ 9,204
LIABILITIES AND SHAREHOLDERS' EQUITY
Liabilities:
Accounts payable and accrued liabilities $ 25 $ 9
Shareholders' equity:
Shares of beneficial interest, at no par
value , 1,510,000 shares issued
outstanding 9,145 9,145
Retained earnings 27 50
Total shareholders' equity 9,172 9,195
Total liabilities and shareholders'
equity $ 9,197 $ 9,204
The accompanying notes are an integral part of these financial statements.
PITTSBURGH & WEST VIRGINIA RAILROAD
FORM 10-Q
STATEMENT OF CASH FLOWS
(Dollars in Thousands)
(Unaudited)
Three Months Ended
March 31,
2006 2005
Cash flows from operating activities:
Net income $ 173 $ 164
Changes in operating assets and liabilities:
Increase (decrease) in accounts payable 16 -
Cash provided by operating activities $ 189 $ 164
Cash flows from financing activities:
Dividends paid 196 212
Net increase (decrease) in cash (7) (48)
Cash, beginning of period 54 59
Cash, end of period $ 47 $ 11
The accompanying notes are an integral part of these financial statements.
PITTSBURGH & WEST VIRGINIA RAILROAD
FORM 10-Q
Notes to financial statements:
(1) The foregoing interim financial statements are unaudited but, in the
opinion of management, reflect all adjustments necessary for a fair
presentation of the results of operations for the interim periods
presented. All adjustments are of a normal recurring nature.
(2) Registrant has elected to be treated for tax purposes as a real
estate investment trust. As such, the Trust is exempt from paying
federal corporate income tax on any income that is distributed to
shareholders. It has been Registrant's policy to distribute annually
all of its ordinary taxable income. Consequently, no provision has
been made for federal income tax.
(3) Under the terms of the lease, Norfolk Southern Corporation has leased
all of Pittsburgh & West Virginia Railroad's real properties,
including its railroad lines, for a term of 99 years, renewable by
the lessee upon the same terms for additional 99-year terms in
perpetuity. The lease provides for a cash rental of $915,000 per year
for the current lease period and all renewal periods. The net
investment in capital lease, recognizing renewal options in
perpetuity, was estimated to have a current value of $9,150,000
assuming an implicit interest rate of 10%.
(4) Under the provisions of the lease, the Trust may not issue, without
the prior written consent of Norfolk Southern, any shares or options
to purchase shares or declare any dividends on its shares of
beneficial interest in an amount exceeding the value of the assets
not covered by the lease plus the annual cash rent of $915,000 to be
received under the lease, less any expenses incurred for the benefit
of shareholders. At March 31, 2005, all net assets are covered by the
lease. The Trust may not borrow any money or assume any guarantees
except with the prior written consent of Norfolk Southern.
Item 2. MANAGEMENTS' DISCUSSION AND ANALYSIS
All of Registrant's railroad properties are on long-term lease
to Norfolk and Western Railway Company for the fixed, unvarying amount of
$915,000 cash rental per year. The lease also requires that additional
amounts be accounted for as noncash rent income to be settled or paid at
lease termination. Because this noncash income will not be settled until
the expiration of the lease, no values have been reported in the
accompanying interim financial statements for the balance of the account
or the transactions affecting the balance.
With fixed revenue and expenses relatively constant, there is very
little fluctuation in operating results between periods. In comparing the
first quarter of 2006 with the preceding fourth quarter of 2005 and the
first quarter of 2005, revenues totaled $229,000, $229,000, and $229,000,
respectively. Net income and income available for distribution was
$173,000, $209,000, and $164,000, respectively.
Since cash revenue is fixed in amount and outlays for general and
administrative expenses are relatively modest, inflation has had no
material impact on Registrant's reported net income for the past three
years. Although recent inflationary trends have been relatively low,
annual rental income is a fixed amount for the current lease term and any
renewal periods, and inflation could affect the real dollar value of the
rental income over time. Changes in inflationary trends could also affect
the general and administration expenses.
Item 4. CONTROLS AND PROCEDURES
Within 90 days prior to the date of this report, the Registrant
carried out an evaluation under the supervision and with the participation
of the Registrant's management, including the Chief Executive Officer and
Chief Financial Officer, of the effectiveness of the design and operation
of the disclosure controls and procedures pursuant to Rule 13a-14 under
the Securities Exchange Act of 1934, as amended. Based on that
evaluation, the Chief Executive Officer and Chief Financial Officer have
concluded that the Registrant's disclosure controls and procedures are
adequate and effective in timely alerting them to material information
relating to the Registrant required to be included in the Registrant's
periodic filings with the SEC.
There have been no significant changes in the Registrant's internal
controls or in other factors that that could significantly affect
internal controls subsequent to the date the Registrant carried out its
evaluation.
PART II. OTHER INFORMATION
Item 1. Legal Proceedings
None
Item 1A. Risk Factors
None
Item 6. Exhibits and Reports on Form 8-K
None
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.
PITTSBURGH & WV RAILROAD
/s/ Herbert E. Jones, Jr.
Herbert E. Jones, Jr.
Chairman of the Board
/s/ Robert A. Hamstead
Robert A. Hamstead
Secretary and Treasurer
Date: May 10, 2006
I, Herbert E. Jones, Jr., Chairman of the Board, certify that;
1. I have reviewed this quarterly report on Form 10-Q of The Pittsburgh &
West Virginia Railroad;
2. Based on my knowledge, this quarterly 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 quarterly 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 officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant
and we have:
a. Designed such disclosure controls and procedures to ensure that
material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within
those entities, particularly during the period in which this
quarterly report is being prepared;
b. Evaluated the effectiveness of the registrant's disclosure
controls and procedures as of a date within 90 days prior to the
filing date of this quarterly report (the "Evaluation Date"); and
c. Presented in this quarterly report our conclusions about the
effectiveness of the disclosure controls and procedures based on
our evaluation as of the Evaluation Date;
5. The registrant's other certifying officers and I have disclosed, based
on our most recent evaluation, to the registrant's board of directors
(or persons performing the equivalent function):
a. All significant deficiencies in the design or operation of
internal controls which could adversely affect the registrant's
ability to record, process, summarize and report financial data
and have identified for the registrant's auditors any material
weaknesses in internal controls; and
b. Any fraud, whether or not material, that involves management or
other employees who have a significant role in the registrant's
internal controls; and
6. The registrant's other certifying officers and I have indicated in
this quarterly report whether or not there were significant changes in
internal controls or in other factors that could significantly affect
internal controls subsequent to the date of our most recent evaluation,
including any corrective actions with regard to significant
deficiencies and material weaknesses.
Date: May 10, 2006
/s/ Herbert E. Jones, Jr.
Herbert E. Jones, Jr.
Chairman of the Board
CERTIFICATION:
I, Herbert E. Jones, III, President, certify that;
1. I have reviewed this quarterly report on Form 10-Q of The Pittsburgh &
West Virginia Railroad;
2. Based on my knowledge, this quarterly 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 quarterly 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 officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant
and we have:
a. Designed such disclosure controls and procedures to ensure that
material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within
those entities, particularly during the period in which this
quarterly report is being prepared;
b. Evaluated the effectiveness of the registrant's disclosure
controls and procedures as of a date within 90 days prior to the
filing date of this quarterly report (the "Evaluation Date"); and
c. Presented in this quarterly report our conclusions about the
effectiveness of the disclosure controls and procedures based on
our evaluation as of the Evaluation Date;
5. The registrant's other certifying officers and I have disclosed, based
on our most recent evaluation, to the registrant's board of directors
(or persons performing the equivalent function):
a. All significant deficiencies in the design or operation of
internal controls which could adversely affect the registrant's
ability to record, process, summarize and report financial data
and have identified for the registrant's auditors any material
weaknesses in internal controls; and
b. Any fraud, whether or not material, that involves management or
other employees who have a significant role in the registrant's
internal controls; and
6. The registrant's other certifying officers and I have indicated in
this quarterly report whether or not there were significant changes
in internal controls or in other factors that could significantly
affect internal controls subsequent to the date of our most recent
evaluation, including any corrective actions with regard to
significant deficiencies and material weaknesses.
Date: May 10, 2006
/s/ Herbert E. Jones, III
Herbert E. Jones, III
President
CERTIFICATION:
I, Robert A. Hamstead, Vice President, Secretary and Treasurer, certify that;
1. I have reviewed this quarterly report on Form 10-Q of The Pittsburgh &
West Virginia Railroad;
2. Based on my knowledge, this quarterly 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 quarterly 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 officers and I are responsible for
establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant
and we have:
a. Designed such disclosure controls and procedures to ensure that
material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within
those entities, particularly during the period in which this
quarterly report is being prepared;
b. Evaluated the effectiveness of the registrant's disclosure
controls and procedures as of a date within 90 days prior to the
filing date of this quarterly report (the "Evaluation Date"); and
c. Presented in this quarterly report our conclusions about the
effectiveness of the disclosure controls and procedures based on
our evaluation as of the Evaluation Date;
5. The registrant's other certifying officers and I have disclosed, based
on our most recent evaluation, to the registrant's board of directors
(or persons performing the equivalent function):
a. All significant deficiencies in the design or operation of
internal controls which could adversely affect the registrant's
ability to record, process, summarize and report financial data
and have identified for the registrant's auditors any material
weaknesses in internal controls; and
b. Any fraud, whether or not material, that involves management or
other employees who have a significant role in the registrant's
internal controls; and
6. The registrant's other certifying officers and I have indicated in
this quarterly report whether or not there were significant changes in
internal controls or in other factors that could significantly affect
internal controls subsequent to the date of our most recent evaluation,
including any corrective actions with regard to significant
deficiencies and material weaknesses.
Date: May 10, 2006
/s/ Robert A. HAmstead
Robert A. Hamstead
VP, Secretary and Treasurer
CERTIFICATION
Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
(Subsections (a) and (b) of Section 1350, Chapter 63
of Title 18, United States Code)
Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
(Subsections (a) and (b) of Section 1350, Chapter 63 of Title 18, United
States Code), each of the undersigned officers of Pittsburgh & West
Virginia Railroad, does hereby certify that:
The Quarterly Report on Form 10-Q for the quarter ended March 31, 2006
(the Form 10-Q) of the Pittsburgh & West Virginia Railroad fully complies
with the requirements of Section 13(a) or 15(d) of the Securities Exchange
Act of 1934 and information contained in the Form 10-Q fairly represents in
all material respects, the financial condition and results of operations of
the Pittsburg & West Virginia Railroad.
Dated: May 10, 2006 /s/ Herbert E. Jones, Jr.
Herbert E. Jones, Jr.
Chairman of the Board
Dated: May 10, 2006 /s/ Herbert E. Jones, III
Herbert E. Jones, III
President
Dated: May 10, 2006 /s/ Robert A. Hamstead
Robert A. Hamstead
Vice President, Secretary
and Treasurer