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 October 16, 2015 issued by Kansas City Southern entitled “Kansas City Southern Reports Third Quarter Results”. |
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• | Revenue of $632 million, a decrease of 7% compared to third quarter 2014. |
• | Operating income of $220 million, 4% lower than a year ago. |
• | Record third quarter operating ratio of 65.2%, compared with 66.1% in third quarter 2014. |
• | Diluted earnings per share of $1.20. Adjusted diluted earnings per share of $1.21 for third quarter 2015, a 6% decrease compared to third quarter 2014. |
Reconciliation of Diluted Earnings per Share to | |||||||||||||||
Adjusted Diluted Earnings per Share | Three Months Ended September 30, 2015 | ||||||||||||||
Income Before Income Taxes | Income Tax Expense | Net Income | Diluted Earnings per Share | ||||||||||||
As reported | $ | 171.9 | $ | 40.0 | $ | 131.9 | $ | 1.20 | |||||||
Adjustments for: | |||||||||||||||
Foreign exchange loss | 30.0 | 9.0 | 21.0 | 0.19 | |||||||||||
Foreign exchange component of income taxes | — | 19.6 | (19.6 | ) | (0.18 | ) | |||||||||
Adjusted | $ | 201.9 | $ | 68.6 | 133.3 | ||||||||||
Less: Noncontrolling interest and preferred stock dividends | (0.4 | ) | |||||||||||||
Adjusted net income available to common | |||||||||||||||
stockholders - see (a) below | $ | 132.9 | $ | 1.21 |
Three Months Ended September 30, 2014 | |||||||||||||||
Income Before Income Taxes | Income Tax Expense | Net Income | Diluted Earnings per Share | ||||||||||||
As reported | $ | 203.6 | $ | 65.2 | $ | 138.4 | $ | 1.25 | |||||||
Adjustments for: | |||||||||||||||
Foreign exchange loss | 12.5 | 3.8 | 8.7 | 0.07 | |||||||||||
Foreign exchange component of income taxes | — | 3.7 | (3.7 | ) | (0.03 | ) | |||||||||
Adjusted | $ | 216.1 | $ | 72.7 | 143.4 | ||||||||||
Less: Noncontrolling interest and preferred stock dividends | (0.4 | ) | |||||||||||||
Adjusted net income available to common | |||||||||||||||
stockholders - see (a) below | $ | 143.0 | $ | 1.29 |
Revenue Change Excluding Estimated Foreign Exchange | ||||||||
and U.S. Fuel Price Impacts | ||||||||
Change % | ||||||||
Reported revenues for the three months ended September 30, 2015 | $ | 631.9 | ||||||
Reported revenues for the three months ended September 30, 2014 | 677.5 | |||||||
Revenue change | (45.6 | ) | (7 | %) | ||||
Estimated foreign exchange impact | 27.9 | |||||||
Estimated U.S. fuel price impact | 27.5 | |||||||
Revenue change excluding foreign exchange and U.S. fuel price | ||||||||
impacts - see (b) below | $ | 9.8 | 1 | % |
Operating Expense Change Excluding Estimated Foreign | ||||||||
Exchange and U.S. Fuel Price Impacts | ||||||||
Change % | ||||||||
Reported operating expenses for the three months ended September 30, 2015 | $ | 412.0 | ||||||
Reported operating expenses for the three months ended September 30, 2014 | 448.1 | |||||||
Operating expense change | (36.1 | ) | (8 | %) | ||||
Estimated foreign exchange impact | 25.4 | |||||||
Estimated U.S. fuel price impact | 20.8 | |||||||
Operating expense change excluding foreign exchange and U.S. fuel price | ||||||||
impacts - see (b) below | $ | 10.1 | 2 | % |
(a) | The Company believes adjusted diluted earnings per share is meaningful as it allows 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 revenue and operating expense changes excluding foreign exchange and U.S. fuel price impacts are meaningful measures as they allow investors to evaluate the Company's performance for different periods on a more comparable basis by excluding the impacts of fluctuations in foreign currency exchange rates and U.S. fuel price by holding these rates constant between the reporting periods. |
Kansas City Southern and Subsidiaries | |||||||||||||||
Consolidated Statements of Income | |||||||||||||||
(In millions, except share and per share amounts) | |||||||||||||||
(Unaudited) | |||||||||||||||
Three Months Ended | Nine Months Ended | ||||||||||||||
September 30, | September 30, | ||||||||||||||
2015 | 2014 | 2015 | 2014 | ||||||||||||
Revenues | $ | 631.9 | $ | 677.5 | $ | 1,820.8 | $ | 1,934.6 | |||||||
Operating expenses: | |||||||||||||||
Compensation and benefits | 112.7 | 125.2 | 338.3 | 351.3 | |||||||||||
Purchased services | 57.0 | 64.2 | 172.1 | 183.2 | |||||||||||
Fuel | 78.5 | 109.2 | 237.0 | 320.8 | |||||||||||
Equipment costs | 31.2 | 28.4 | 90.2 | 89.6 | |||||||||||
Depreciation and amortization | 71.4 | 65.0 | 210.7 | 190.8 | |||||||||||
Materials and other | 61.2 | 56.1 | 178.0 | 165.4 | |||||||||||
Lease termination costs | — | — | 9.6 | 38.3 | |||||||||||
Total operating expenses | 412.0 | 448.1 | 1,235.9 | 1,339.4 | |||||||||||
Operating income | 219.9 | 229.4 | 584.9 | 595.2 | |||||||||||
Equity in net earnings of unconsolidated affiliates | 5.0 | 5.0 | 14.4 | 16.6 | |||||||||||
Interest expense | (21.9 | ) | (17.9 | ) | (58.2 | ) | (54.5 | ) | |||||||
Debt retirement costs | — | — | — | (6.6 | ) | ||||||||||
Foreign exchange loss | (30.0 | ) | (12.5 | ) | (52.1 | ) | (4.1 | ) | |||||||
Other expense, net | (1.1 | ) | (0.4 | ) | (3.1 | ) | (3.7 | ) | |||||||
Income before income taxes | 171.9 | 203.6 | 485.9 | 542.9 | |||||||||||
Income tax expense | 40.0 | 65.2 | 140.6 | 180.3 | |||||||||||
Net income | 131.9 | 138.4 | 345.3 | 362.6 | |||||||||||
Less: Net income attributable to noncontrolling interest | 0.3 | 0.3 | 1.1 | 1.0 | |||||||||||
Net income attributable to Kansas City Southern and subsidiaries | 131.6 | 138.1 | 344.2 | 361.6 | |||||||||||
Preferred stock dividends | 0.1 | 0.1 | 0.2 | 0.2 | |||||||||||
Net income available to common stockholders | $ | 131.5 | $ | 138.0 | $ | 344.0 | $ | 361.4 | |||||||
Earnings per share: | |||||||||||||||
Basic earnings per share | $ | 1.20 | $ | 1.25 | $ | 3.12 | $ | 3.28 | |||||||
Diluted earnings per share | $ | 1.20 | $ | 1.25 | $ | 3.12 | $ | 3.27 | |||||||
Average shares outstanding (in thousands): | |||||||||||||||
Basic | 109,692 | 110,182 | 110,109 | 110,141 | |||||||||||
Potentially dilutive common shares | 209 | 259 | 203 | 271 | |||||||||||
Diluted | 109,901 | 110,441 | 110,312 | 110,412 | |||||||||||
Kansas City Southern and Subsidiaries | ||||||||||||||||||||||||||||||
Revenue & Carload/Units by Commodity - Third Quarter 2015 and 2014 | ||||||||||||||||||||||||||||||
Revenues | Carloads and Units | Revenue per | ||||||||||||||||||||||||||||
(in millions) | (in thousands) | Carload/Unit | ||||||||||||||||||||||||||||
Third Quarter | % | Third Quarter | % | Third Quarter | % | |||||||||||||||||||||||||
2015 | 2014 | Change | 2015 | 2014 | Change | 2015 | 2014 | Change | ||||||||||||||||||||||
Chemical & Petroleum | ||||||||||||||||||||||||||||||
Chemicals | $ | 55.9 | $ | 55.9 | — | 30.0 | 30.0 | — | $ | 1,863 | $ | 1,863 | — | |||||||||||||||||
Petroleum | 35.8 | 31.7 | 13 | % | 20.6 | 17.1 | 20 | % | 1,738 | 1,854 | (6 | %) | ||||||||||||||||||
Plastics | 31.3 | 29.8 | 5 | % | 17.6 | 16.2 | 9 | % | 1,778 | 1,840 | (3 | %) | ||||||||||||||||||
Total | 123.0 | 117.4 | 5 | % | 68.2 | 63.3 | 8 | % | 1,804 | 1,855 | (3 | %) | ||||||||||||||||||
Industrial & Consumer Products | ||||||||||||||||||||||||||||||
Forest Products | 69.5 | 71.2 | (2 | %) | 32.4 | 33.7 | (4 | %) | 2,145 | 2,113 | 2 | % | ||||||||||||||||||
Metals & Scrap | 58.4 | 71.9 | (19 | %) | 32.8 | 36.5 | (10 | %) | 1,780 | 1,970 | (10 | %) | ||||||||||||||||||
Other | 22.3 | 23.8 | (6 | %) | 19.0 | 20.4 | (7 | %) | 1,174 | 1,167 | 1 | % | ||||||||||||||||||
Total | 150.2 | 166.9 | (10 | %) | 84.2 | 90.6 | (7 | %) | 1,784 | 1,842 | (3 | %) | ||||||||||||||||||
Agriculture & Minerals | ||||||||||||||||||||||||||||||
Grain | 60.6 | 59.9 | 1 | % | 35.8 | 32.2 | 11 | % | 1,693 | 1,860 | (9 | %) | ||||||||||||||||||
Food Products | 35.9 | 31.7 | 13 | % | 16.3 | 14.2 | 15 | % | 2,202 | 2,232 | (1 | %) | ||||||||||||||||||
Ores & Minerals | 6.7 | 6.2 | 8 | % | 7.3 | 6.5 | 12 | % | 918 | 954 | (4 | %) | ||||||||||||||||||
Stone, Clay & Glass | 7.4 | 6.8 | 9 | % | 3.2 | 2.8 | 14 | % | 2,313 | 2,429 | (5 | %) | ||||||||||||||||||
Total | 110.6 | 104.6 | 6 | % | 62.6 | 55.7 | 12 | % | 1,767 | 1,878 | (6 | %) | ||||||||||||||||||
Energy | ||||||||||||||||||||||||||||||
Utility Coal | 42.7 | 58.8 | (27 | %) | 53.5 | 54.2 | (1 | %) | 798 | 1,085 | (26 | %) | ||||||||||||||||||
Coal & Petroleum Coke | 9.9 | 10.3 | (4 | %) | 16.3 | 15.7 | 4 | % | 607 | 656 | (7 | %) | ||||||||||||||||||
Frac Sand | 9.3 | 14.4 | (35 | %) | 5.7 | 7.5 | (24 | %) | 1,632 | 1,920 | (15 | %) | ||||||||||||||||||
Crude Oil | 11.8 | 7.2 | 64 | % | 8.3 | 4.4 | 89 | % | 1,422 | 1,636 | (13 | %) | ||||||||||||||||||
Total | 73.7 | 90.7 | (19 | %) | 83.8 | 81.8 | 2 | % | 879 | 1,109 | (21 | %) | ||||||||||||||||||
Intermodal | 95.2 | 106.7 | (11 | %) | 252.7 | 269.9 | (6 | %) | 377 | 395 | (5 | %) | ||||||||||||||||||
Automotive | 54.6 | 65.8 | (17 | %) | 31.9 | 34.1 | (6 | %) | 1,712 | 1,930 | (11 | %) | ||||||||||||||||||
TOTAL FOR COMMODITY GROUPS | 607.3 | 652.1 | (7 | %) | 583.4 | 595.4 | (2 | %) | $ | 1,041 | $ | 1,095 | (5 | %) | ||||||||||||||||
Other Revenue | 24.6 | 25.4 | (3 | %) | ||||||||||||||||||||||||||
TOTAL | $ | 631.9 | $ | 677.5 | (7 | %) | ||||||||||||||||||||||||
Kansas City Southern and Subsidiaries | ||||||||||||||||||||||||||||||
Revenue & Carload/Units by Commodity - Year to Date September 30, 2015 and 2014 | ||||||||||||||||||||||||||||||
Revenues | Carloads and Units | Revenue per | ||||||||||||||||||||||||||||
(in millions) | (in thousands) | Carload/Unit | ||||||||||||||||||||||||||||
Year to Date | % | Year to Date | % | Year to Date | % | |||||||||||||||||||||||||
2015 | 2014 | Change | 2015 | 2014 | Change | 2015 | 2014 | Change | ||||||||||||||||||||||
Chemical & Petroleum | ||||||||||||||||||||||||||||||
Chemicals | $ | 162.7 | $ | 161.0 | 1 | % | 87.8 | 86.9 | 1 | % | $ | 1,853 | $ | 1,853 | — | |||||||||||||||
Petroleum | 101.6 | 92.1 | 10 | % | 55.9 | 51.2 | 9 | % | 1,818 | 1,799 | 1 | % | ||||||||||||||||||
Plastics | 89.5 | 84.6 | 6 | % | 49.5 | 47.2 | 5 | % | 1,808 | 1,792 | 1 | % | ||||||||||||||||||
Total | 353.8 | 337.7 | 5 | % | 193.2 | 185.3 | 4 | % | 1,831 | 1,822 | — | |||||||||||||||||||
Industrial & Consumer Products | ||||||||||||||||||||||||||||||
Forest Products | 205.5 | 204.1 | 1 | % | 97.3 | 97.2 | — | 2,112 | 2,100 | 1 | % | |||||||||||||||||||
Metals & Scrap | 176.4 | 206.9 | (15 | %) | 95.4 | 107.5 | (11 | %) | 1,849 | 1,925 | (4 | %) | ||||||||||||||||||
Other | 58.9 | 61.2 | (4 | %) | 55.4 | 58.8 | (6 | %) | 1,063 | 1,041 | 2 | % | ||||||||||||||||||
Total | 440.8 | 472.2 | (7 | %) | 248.1 | 263.5 | (6 | %) | 1,777 | 1,792 | (1 | %) | ||||||||||||||||||
Agriculture & Minerals | ||||||||||||||||||||||||||||||
Grain | 174.3 | 192.5 | (9 | %) | 101.2 | 103.0 | (2 | %) | 1,722 | 1,869 | (8 | %) | ||||||||||||||||||
Food Products | 105.2 | 101.7 | 3 | % | 47.1 | 44.1 | 7 | % | 2,234 | 2,306 | (3 | %) | ||||||||||||||||||
Ores & Minerals | 20.2 | 17.5 | 15 | % | 20.9 | 18.3 | 14 | % | 967 | 956 | 1 | % | ||||||||||||||||||
Stone, Clay & Glass | 21.0 | 21.2 | (1 | %) | 9.1 | 9.3 | (2 | %) | 2,308 | 2,280 | 1 | % | ||||||||||||||||||
Total | 320.7 | 332.9 | (4 | %) | 178.3 | 174.7 | 2 | % | 1,799 | 1,906 | (6 | %) | ||||||||||||||||||
Energy | ||||||||||||||||||||||||||||||
Utility Coal | 96.4 | 156.4 | (38 | %) | 120.8 | 148.3 | (19 | %) | 798 | 1,055 | (24 | %) | ||||||||||||||||||
Coal & Petroleum Coke | 30.2 | 30.0 | 1 | % | 45.0 | 44.9 | — | 671 | 668 | — | ||||||||||||||||||||
Frac Sand | 32.5 | 48.3 | (33 | %) | 19.0 | 24.5 | (22 | %) | 1,711 | 1,971 | (13 | %) | ||||||||||||||||||
Crude Oil | 25.4 | 15.6 | 63 | % | 16.7 | 9.9 | 69 | % | 1,521 | 1,576 | (3 | %) | ||||||||||||||||||
Total | 184.5 | 250.3 | (26 | %) | 201.5 | 227.6 | (11 | %) | 916 | 1,100 | (17 | %) | ||||||||||||||||||
Intermodal | 288.1 | 293.4 | (2 | %) | 746.0 | 758.6 | (2 | %) | 386 | 387 | — | |||||||||||||||||||
Automotive | 164.0 | 177.8 | (8 | %) | 93.7 | 94.6 | (1 | %) | 1,750 | 1,879 | (7 | %) | ||||||||||||||||||
TOTAL FOR COMMODITY GROUPS | 1,751.9 | 1,864.3 | (6 | %) | 1,660.8 | 1,704.3 | (3 | %) | $ | 1,055 | $ | 1,094 | (4 | %) | ||||||||||||||||
Other Revenue | 68.9 | 70.3 | (2 | %) | ||||||||||||||||||||||||||
TOTAL | $ | 1,820.8 | $ | 1,934.6 | (6 | %) | ||||||||||||||||||||||||
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