DELAWARE | 1-4717 | 44-0663509 |
(State or other jurisdiction | (Commission | (IRS Employer |
of incorporation) | file number) | Identification Number) |
By: | /s/ Mary K. Stadler |
Name: Mary K. Stadler | |
Title: Senior Vice President & Chief Accounting Officer | |
(Principal Accounting Officer) |
Exhibit No | Description | |
99.1 | Press Release dated January 23, 2015 issued by Kansas City Southern entitled “Kansas City Southern Reports Record Fourth Quarter and Full-Year 2014”. |
• | Revenue of $643 million, an increase of 4% over fourth quarter 2013. |
• | Operating income of $214 million, 9% higher than a year ago. |
• | Operating ratio of 66.7%, compared with 68.1% in fourth quarter 2013. |
• | Diluted earnings per share of $1.28. Adjusted diluted earnings per share of $1.27 for fourth quarter 2014. |
Reconciliation of Diluted Earnings per Share to Adjusted | |||||||||||||||
Diluted Earnings per Share | Three Months Ended December 31, 2014 | ||||||||||||||
Income Before Income Taxes | Income Tax Expense | Net Income | Diluted Earnings per Share | ||||||||||||
As reported | $ | 170.2 | $ | 28.5 | $ | 141.7 | $ | 1.28 | |||||||
Adjustments for: | |||||||||||||||
Foreign exchange loss | 31.4 | 9.4 | 22.0 | 0.20 | |||||||||||
Foreign exchange component of income taxes | — | 22.9 | (22.9 | ) | (0.21 | ) | |||||||||
Adjusted | $ | 201.6 | $ | 60.8 | 140.8 | ||||||||||
Less: Noncontrolling interest | (i) | (ii) | (0.7 | ) | |||||||||||
Adjusted net income available to common | |||||||||||||||
stockholders - see (a) below | $ | 140.1 | $ | 1.27 | |||||||||||
Adjusted effective income tax rate - see (a) below | 30.2 | % | |||||||||||||
(ii)/(i) |
Three Months Ended December 31, 2013 | |||||||||||||||
Income Before Income Taxes | Income Tax Expense | Net Income | Diluted Earnings per Share | ||||||||||||
As reported | $ | 180.9 | $ | 66.5 | $ | 114.4 | $ | 1.03 | |||||||
Adjustments for: | |||||||||||||||
Debt retirement costs | 5.4 | 1.6 | 3.8 | 0.03 | |||||||||||
Foreign exchange gain | (4.9 | ) | (1.4 | ) | (3.5 | ) | (0.03 | ) | |||||||
Foreign exchange component of income taxes | — | 0.4 | (0.4 | ) | — | ||||||||||
Adjusted | $ | 181.4 | $ | 67.1 | 114.3 | ||||||||||
Less: Noncontrolling interest | (i) | (ii) | (0.6 | ) | |||||||||||
Adjusted net income available to common | |||||||||||||||
stockholders - see (a) below | $ | 113.7 | $ | 1.03 | |||||||||||
Adjusted effective income tax rate - see (a) below | 37.0 | % | |||||||||||||
(ii)/(i) |
Reconciliation of Diluted Earnings per Share to Adjusted | |||||||||||||||
Diluted Earnings per Share (continued) | Twelve Months Ended December 31, 2014 | ||||||||||||||
Income Before Income Taxes | Income Tax Expense | Net Income | Diluted Earnings per Share | ||||||||||||
As reported | $ | 713.1 | $ | 208.8 | $ | 504.3 | $ | 4.55 | |||||||
Adjustments for: | |||||||||||||||
Lease termination costs | 38.3 | 13.0 | 25.3 | 0.23 | |||||||||||
Debt retirement costs | 6.6 | 2.2 | 4.4 | 0.04 | |||||||||||
Foreign exchange loss | 35.5 | 10.6 | 24.9 | 0.22 | |||||||||||
Foreign exchange component of income taxes | — | 24.2 | (24.2 | ) | (0.22 | ) | |||||||||
Adjusted | $ | 793.5 | $ | 258.8 | 534.7 | ||||||||||
Less: Noncontrolling interest and preferred | (i) | (ii) | |||||||||||||
stock dividends | (1.9 | ) | |||||||||||||
Adjusted net income available to common | |||||||||||||||
stockholders - see (a) below | $ | 532.8 | $ | 4.82 | |||||||||||
Adjusted effective income tax rate - see (a) below | 32.6 | % | |||||||||||||
(ii)/(i) |
Twelve Months Ended December 31, 2013 | |||||||||||||||
Income Before Income Taxes | Income Tax Expense | Net Income | Diluted Earnings per Share | ||||||||||||
As reported | $ | 551.6 | $ | 198.3 | $ | 353.3 | $ | 3.18 | |||||||
Adjustments for: | |||||||||||||||
Debt retirement costs | 119.2 | 35.9 | 83.3 | 0.76 | |||||||||||
Foreign exchange loss | 5.2 | 1.6 | 3.6 | 0.03 | |||||||||||
Foreign exchange component of income taxes | — | (1.3 | ) | 1.3 | 0.01 | ||||||||||
Adjusted | $ | 676.0 | $ | 234.5 | 441.5 | ||||||||||
Less: Noncontrolling interest and preferred | (i) | (ii) | |||||||||||||
stock dividends | (2.1 | ) | |||||||||||||
Adjusted net income available to common | |||||||||||||||
stockholders - see (a) below | $ | 439.4 | $ | 3.98 | |||||||||||
Adjusted effective income tax rate - see (a) below | 34.7 | % | |||||||||||||
(ii)/(i) |
Reconciliation of Operating Expenses to Adjusted | Twelve Months Ended | ||||||||
Operating Expenses | December 31, | ||||||||
2014 | 2013 | ||||||||
Operating expenses as reported | $ | 1,768.0 | $ | 1,630.7 | |||||
Adjustment for lease termination costs | (38.3 | ) | — | ||||||
Adjusted operating expenses - see (b) below | $ | 1,729.7 | $ | 1,630.7 | |||||
Operating income as reported | $ | 809.1 | $ | 738.6 | |||||
Adjusted operating income - see (b) below | 847.4 | 738.6 | |||||||
Operating ratio (c) as reported | 68.6 | % | 68.8 | % | |||||
Adjusted operating ratio - see (b) and (c) below | 67.1 | % | 68.8 | % |
(a) | The Company believes adjusted diluted earnings per share and the related adjusted effective income tax rate are meaningful as these measures allow investors to evaluate the Company's performance for different periods on a more comparable basis by excluding the impact of changes in foreign currency exchange rates and items that are not directly related to the ongoing operations of the Company. |
(b) | The Company believes adjusted operating expenses, operating income and operating ratio are meaningful as they allow investors to evaluate the Company's performance for different periods on a more comparable basis by excluding items that are not directly related to the ongoing operations of the Company. |
(c) | Operating ratio is calculated by dividing operating expenses by revenues; or in the case of adjusted operating ratio, adjusted operating expenses divided by revenues. |
Kansas City Southern and Subsidiaries | |||||||||||||||
Consolidated Statements of Income | |||||||||||||||
(In millions, except share and per share amounts) | |||||||||||||||
(Unaudited) | |||||||||||||||
Three Months Ended | Twelve Months Ended | ||||||||||||||
December 31, | December 31, | ||||||||||||||
2014 | 2013 | 2014 | 2013 | ||||||||||||
Revenues | $ | 642.5 | $ | 615.6 | $ | 2,577.1 | $ | 2,369.3 | |||||||
Operating expenses: | |||||||||||||||
Compensation and benefits | 123.2 | 113.2 | 474.5 | 441.6 | |||||||||||
Purchased services | 62.0 | 57.2 | 245.2 | 217.6 | |||||||||||
Fuel | 95.1 | 103.0 | 415.9 | 389.6 | |||||||||||
Equipment costs | 29.6 | 40.5 | 119.2 | 160.5 | |||||||||||
Depreciation and amortization | 67.3 | 58.3 | 258.1 | 223.3 | |||||||||||
Materials and other | 51.4 | 47.3 | 216.8 | 198.1 | |||||||||||
Lease termination costs | — | — | 38.3 | — | |||||||||||
Total operating expenses | 428.6 | 419.5 | 1,768.0 | 1,630.7 | |||||||||||
Operating income | 213.9 | 196.1 | 809.1 | 738.6 | |||||||||||
Equity in net earnings of unconsolidated affiliates | 4.5 | 5.0 | 21.1 | 18.8 | |||||||||||
Interest expense | (18.3 | ) | (19.4 | ) | (72.8 | ) | (80.6 | ) | |||||||
Debt retirement costs | — | (5.4 | ) | (6.6 | ) | (119.2 | ) | ||||||||
Foreign exchange gain (loss) | (31.4 | ) | 4.9 | (35.5 | ) | (5.2 | ) | ||||||||
Other income (expense), net | 1.5 | (0.3 | ) | (2.2 | ) | (0.8 | ) | ||||||||
Income before income taxes | 170.2 | 180.9 | 713.1 | 551.6 | |||||||||||
Income tax expense | 28.5 | 66.5 | 208.8 | 198.3 | |||||||||||
Net income | 141.7 | 114.4 | 504.3 | 353.3 | |||||||||||
Less: Net income attributable to noncontrolling interest | 0.7 | 0.6 | 1.7 | 1.9 | |||||||||||
Net income attributable to Kansas City Southern and subsidiaries | 141.0 | 113.8 | 502.6 | 351.4 | |||||||||||
Preferred stock dividends | — | — | 0.2 | 0.2 | |||||||||||
Net income available to common stockholders | $ | 141.0 | $ | 113.8 | $ | 502.4 | $ | 351.2 | |||||||
Earnings per share: | |||||||||||||||
Basic earnings per share | $ | 1.28 | $ | 1.03 | $ | 4.56 | $ | 3.19 | |||||||
Diluted earnings per share | $ | 1.28 | $ | 1.03 | $ | 4.55 | $ | 3.18 | |||||||
Average shares outstanding (in thousands): | |||||||||||||||
Basic | 110,227 | 110,021 | 110,163 | 109,973 | |||||||||||
Potentially dilutive common shares | 266 | 386 | 270 | 367 | |||||||||||
Diluted | 110,493 | 110,407 | 110,433 | 110,340 | |||||||||||
Kansas City Southern and Subsidiaries | ||||||||||||||||||||||||||||||
Revenue & Carload/Units by Commodity - Fourth Quarter 2014 and 2013 | ||||||||||||||||||||||||||||||
Revenues | Carloads and Units | Revenue per | ||||||||||||||||||||||||||||
(in millions) | (in thousands) | Carload/Unit | ||||||||||||||||||||||||||||
Fourth Quarter | % | Fourth Quarter | % | Fourth Quarter | % | |||||||||||||||||||||||||
2014 | 2013 | Change | 2014 | 2013 | Change | 2014 | 2013 | Change | ||||||||||||||||||||||
Chemical & Petroleum | ||||||||||||||||||||||||||||||
Chemicals | $ | 53.3 | $ | 51.5 | 3 | % | 28.3 | 27.8 | 2 | % | $ | 1,883 | $ | 1,853 | 2 | % | ||||||||||||||
Petroleum | 32.4 | 27.1 | 20 | % | 17.0 | 16.0 | 6 | % | 1,906 | 1,694 | 13 | % | ||||||||||||||||||
Plastics | 29.6 | 27.2 | 9 | % | 16.3 | 15.5 | 5 | % | 1,816 | 1,755 | 3 | % | ||||||||||||||||||
Total | 115.3 | 105.8 | 9 | % | 61.6 | 59.3 | 4 | % | 1,872 | 1,784 | 5 | % | ||||||||||||||||||
Industrial & Consumer Products | ||||||||||||||||||||||||||||||
Forest Products | 67.4 | 64.1 | 5 | % | 32.4 | 30.7 | 6 | % | 2,080 | 2,088 | — | |||||||||||||||||||
Metals & Scrap | 65.4 | 66.8 | (2 | %) | 33.9 | 33.7 | 1 | % | 1,929 | 1,982 | (3 | %) | ||||||||||||||||||
Other | 18.3 | 18.6 | (2 | %) | 17.6 | 18.7 | (6 | %) | 1,040 | 995 | 5 | % | ||||||||||||||||||
Total | 151.1 | 149.5 | 1 | % | 83.9 | 83.1 | 1 | % | 1,801 | 1,799 | — | |||||||||||||||||||
Agriculture & Minerals | ||||||||||||||||||||||||||||||
Grain | 65.7 | 70.2 | (6 | %) | 34.7 | 37.5 | (7 | %) | 1,893 | 1,872 | 1 | % | ||||||||||||||||||
Food Products | 35.9 | 36.7 | (2 | %) | 15.9 | 16.4 | (3 | %) | 2,258 | 2,238 | 1 | % | ||||||||||||||||||
Ores & Minerals | 5.5 | 5.5 | — | 5.7 | 5.7 | — | 965 | 965 | — | |||||||||||||||||||||
Stone, Clay & Glass | 6.6 | 6.7 | (1 | %) | 2.9 | 3.0 | (3 | %) | 2,276 | 2,233 | 2 | % | ||||||||||||||||||
Total | 113.7 | 119.1 | (5 | %) | 59.2 | 62.6 | (5 | %) | 1,921 | 1,903 | 1 | % | ||||||||||||||||||
Energy | ||||||||||||||||||||||||||||||
Utility Coal | 42.7 | 41.0 | 4 | % | 44.2 | 41.9 | 5 | % | 966 | 979 | (1 | %) | ||||||||||||||||||
Coal & Petroleum Coke | 10.9 | 10.1 | 8 | % | 15.4 | 14.4 | 7 | % | 708 | 701 | 1 | % | ||||||||||||||||||
Frac Sand | 15.4 | 14.2 | 8 | % | 7.8 | 6.9 | 13 | % | 1,974 | 2,058 | (4 | %) | ||||||||||||||||||
Crude Oil | 7.5 | 5.1 | 47 | % | 4.2 | 3.2 | 31 | % | 1,786 | 1,594 | 12 | % | ||||||||||||||||||
Total | 76.5 | 70.4 | 9 | % | 71.6 | 66.4 | 8 | % | 1,068 | 1,060 | 1 | % | ||||||||||||||||||
Intermodal | 102.4 | 94.4 | 8 | % | 261.0 | 242.9 | 7 | % | 392 | 389 | 1 | % | ||||||||||||||||||
Automotive | 60.6 | 53.5 | 13 | % | 32.5 | 29.3 | 11 | % | 1,865 | 1,826 | 2 | % | ||||||||||||||||||
TOTAL FOR COMMODITY GROUPS | 619.6 | 592.7 | 5 | % | 569.8 | 543.6 | 5 | % | $ | 1,087 | $ | 1,090 | — | |||||||||||||||||
Other Revenue | 22.9 | 22.9 | — | |||||||||||||||||||||||||||
TOTAL | $ | 642.5 | $ | 615.6 | 4 | % | ||||||||||||||||||||||||
Kansas City Southern and Subsidiaries | ||||||||||||||||||||||||||||||
Revenue & Carload/Units by Commodity - Years Ended December 31, 2014 and 2013 | ||||||||||||||||||||||||||||||
Revenues | Carloads and Units | Revenue per | ||||||||||||||||||||||||||||
(in millions) | (in thousands) | Carload/Unit | ||||||||||||||||||||||||||||
Years Ended | % | Years Ended | % | Years Ended | % | |||||||||||||||||||||||||
2014 | 2013 | Change | 2014 | 2013 | Change | 2014 | 2013 | Change | ||||||||||||||||||||||
Chemical & Petroleum | ||||||||||||||||||||||||||||||
Chemicals | $ | 214.3 | $ | 208.2 | 3 | % | 115.2 | 113.1 | 2 | % | $ | 1,860 | $ | 1,841 | 1 | % | ||||||||||||||
Petroleum | 124.5 | 110.9 | 12 | % | 68.2 | 67.3 | 1 | % | 1,826 | 1,648 | 11 | % | ||||||||||||||||||
Plastics | 114.2 | 107.6 | 6 | % | 63.5 | 63.0 | 1 | % | 1,798 | 1,708 | 5 | % | ||||||||||||||||||
Total | 453.0 | 426.7 | 6 | % | 246.9 | 243.4 | 1 | % | 1,835 | 1,753 | 5 | % | ||||||||||||||||||
Industrial & Consumer Products | ||||||||||||||||||||||||||||||
Forest Products | 271.5 | 258.6 | 5 | % | 129.6 | 126.0 | 3 | % | 2,095 | 2,052 | 2 | % | ||||||||||||||||||
Metals & Scrap | 272.3 | 249.2 | 9 | % | 141.4 | 133.0 | 6 | % | 1,926 | 1,874 | 3 | % | ||||||||||||||||||
Other | 79.5 | 76.0 | 5 | % | 76.4 | 78.8 | (3 | %) | 1,041 | 964 | 8 | % | ||||||||||||||||||
Total | 623.3 | 583.8 | 7 | % | 347.4 | 337.8 | 3 | % | 1,794 | 1,728 | 4 | % | ||||||||||||||||||
Agriculture & Minerals | ||||||||||||||||||||||||||||||
Grain | 258.2 | 200.8 | 29 | % | 137.7 | 116.3 | 18 | % | 1,875 | 1,727 | 9 | % | ||||||||||||||||||
Food Products | 137.6 | 133.9 | 3 | % | 60.0 | 59.9 | — | 2,293 | 2,235 | 3 | % | |||||||||||||||||||
Ores & Minerals | 23.0 | 22.7 | 1 | % | 24.0 | 23.1 | 4 | % | 958 | 983 | (3 | %) | ||||||||||||||||||
Stone, Clay & Glass | 27.8 | 26.5 | 5 | % | 12.2 | 12.7 | (4 | %) | 2,279 | 2,087 | 9 | % | ||||||||||||||||||
Total | 446.6 | 383.9 | 16 | % | 233.9 | 212.0 | 10 | % | 1,909 | 1,811 | 5 | % | ||||||||||||||||||
Energy | ||||||||||||||||||||||||||||||
Utility Coal | 199.1 | 201.7 | (1 | %) | 192.5 | 194.9 | (1 | %) | 1,034 | 1,035 | — | |||||||||||||||||||
Coal & Petroleum Coke | 40.9 | 41.3 | (1 | %) | 60.3 | 58.6 | 3 | % | 678 | 705 | (4 | %) | ||||||||||||||||||
Frac Sand | 63.7 | 58.8 | 8 | % | 32.3 | 28.4 | 14 | % | 1,972 | 2,070 | (5 | %) | ||||||||||||||||||
Crude Oil | 23.1 | 24.8 | (7 | %) | 14.1 | 13.8 | 2 | % | 1,638 | 1,797 | (9 | %) | ||||||||||||||||||
Total | 326.8 | 326.6 | — | 299.2 | 295.7 | 1 | % | 1,092 | 1,104 | (1 | %) | |||||||||||||||||||
Intermodal | 395.8 | 356.6 | 11 | % | 1,019.6 | 965.6 | 6 | % | 388 | 369 | 5 | % | ||||||||||||||||||
Automotive | 238.4 | 201.5 | 18 | % | 127.1 | 110.3 | 15 | % | 1,876 | 1,827 | 3 | % | ||||||||||||||||||
TOTAL FOR COMMODITY GROUPS | 2,483.9 | 2,279.1 | 9 | % | 2,274.1 | 2,164.8 | 5 | % | $ | 1,092 | $ | 1,053 | 4 | % | ||||||||||||||||
Other Revenue | 93.2 | 90.2 | 3 | % | ||||||||||||||||||||||||||
TOTAL | $ | 2,577.1 | $ | 2,369.3 | 9 | % | ||||||||||||||||||||||||
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