SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported):
October 31, 2002
KANSAS CITY SOUTHERN
(Exact name of company as specified in its charter)
DELAWARE 1-4717 44-0663509
(State or other jurisdiction (Commission file (IRS Employer
of incorporation) number) Identification Number)
427 West 12th Street, Kansas City, Missouri 64105
(Address of principal executive offices) (Zip Code)
Company's telephone number, including area code:
(816) 983 - 1303
Not Applicable
(Former name or former address if changed since last report)
Item 7. Financial Statements and Exhibits
(c) Exhibits
Exhibit No. Document
(99) Additional Exhibits
99.1 Press Release issued by Kansas City
Southern dated October 31, 2002
entitled, "Kansas City Southern Reports
Third Quarter and Year to Date 2002
Earnings," is attached hereto as Exhibit
99.1
99.2 The following schedules are attached
hereto as Exhibit 99.2 - Kansas City
Southern Railway Operating Statements,
Kansas City Southern Railway Carloadings
by Commodity, Kansas City Southern
Consolidated Balance Sheets
Item 9. Regulation FD Disclosure
Kansas City Southern ("KCS" or "Company") is furnishing under Item 9 of this
Current Report on Form 8-K the information included as Exhibit 99.1 and Exhibit
99.2 of this report. Exhibit 99.1 is the Company's press release, dated October
31, 2002, announcing KCS's third quarter and year to date 2002 earnings and
operating results. Included in Exhibit 99.2 are schedules regarding certain
financial information discussed at the Company's third quarter 2002 conference
call.
The information included in this Current Report on Form 8-K, including Exhibit
99.1 and Exhibit 99.2, is furnished pursuant to Item 9 and shall not be deemed
to be "filed" for the purposes of Section 18 of the Securities Exchange Act of
1934 or otherwise subject to the liabilities of that Section.
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the Company
has duly caused this Report to be signed on its behalf by the undersigned
hereunto duly authorized.
Kansas City Southern
Date: November 5, 2002 By: /s/ Louis G. Van Horn
------------------------------
Louis G. Van Horn
Vice President and Comptroller
(Principal Accounting Officer)
EXHIBIT 99.1
Date: October 31, 2002
Media Contact: William H. Galligan 816/983-1551
William.h.galligan@kcsr.com
Kansas City Southern Reports Third Quarter and Year to Date 2002 Earnings
Earnings Analysis & Commentary
Kansas City Southern ("KCS" or the "Company") reported net income of $10.6
million (17(cent) per diluted share) for the third quarter of 2002, a 17%
increase from net income of $9.0 million (15(cent) per diluted share) reported
for the third quarter of 2001. This increase resulted from a $5.6 million
increase in other income, a $2.3 million increase in equity in earnings from
Grupo Transportacion Ferroviaria Mexicana, S.A. de C.V. ("Grupo TFM"), a $1.9
million reduction in the income tax provision and a $1.7 million decline in
interest expense. These factors were partially offset by a $9.8 million decrease
in consolidated operating income in the third quarter of 2002 compared to the
same period in 2001. As previously announced, in July 2002, KCS initiated a
switch-over from its legacy system operating platform to a state- of-the-art
Management Control System ("MCS"). Although the issues with the implementation
of MCS have been largely resolved, the initial difficulties experienced by
office and field personnel in transitioning to this new platform led to
congestion issues and operating inefficiencies during the third quarter of 2002,
which contributed to this decline in consolidated operating income.
For the nine months ended September 30, 2002, net income was $36.8 million
(59(cent) per diluted share) compared to $19.6 million (32(cent) per diluted
share) for the nine months ended September 30, 2001. This $17.2 million period
to period increase resulted from a $12.3 million increase in other income, a
$9.6 million decline in interest expense, a $4.4 million gain realized on the
sale of Mexrail, Inc. ("Mexrail") to KCS's affiliate in Mexico, TFM, S.A. de
C.V. ("TFM") and a $4.1 million increase in equity in earnings from Grupo TFM.
These items were partially offset by an $8.3 million increase in the income tax
provision, a $1.7 million increase in equity in losses from other unconsolidated
affiliates and a $0.9 million decline in operating income. Additionally, net
income for the nine months ended September 30, 2002 includes extraordinary debt
retirement costs of $2.7 million (after-tax) associated with the early
retirement of term debt in June 2002. Equity in earnings for 2001 reflects the
Company's proportionate share ($9.1 million) of the income recorded by Grupo TFM
relating to the reversion of certain concession assets to the Mexican
government. Additionally, net income for 2001 includes a $0.4 million charge
relating to the implementation of Statement of Financial Accounting Standard No.
133, Accounting for Derivative Instruments and Hedging Activities, which is
presented as a cumulative effect of an accounting change in 2001.
Diluted earnings per share information is as follows:
Third Quarter Year to Date
--------------------------- ----------------------------
2002 2001 2002 2001
----------- ----------- ----------- -----------
U.S. operations $ 0.08 $ 0.10 $ 0.39 $ 0.17
Grupo TFM and PCRC (includes allocated interest) 0.09 0.05 0.24 0.16
----------- ----------- ----------- -----------
Income before extraordinary item and cumulative effect
of accounting change 0.17 0.15 0.63 0.33
Extraordinary debt retirement costs, net of income taxes - - (0.04) -
Cumulative effect of accounting change, net of income taxes - - - (0.01)
----------- ----------- ----------- -----------
Diluted earnings per share - Net income $ 0.17 $ 0.15 $ 0.59 $ 0.32
----------- ----------- ----------- -----------
Third Quarter
For the third quarter of 2002, consolidated revenues declined $7.0 million and
consolidated operating expenses increased $2.8 million compared to the third
quarter of 2001, resulting in a $9.8 million decline in operating income quarter
to quarter. These fluctuations resulted almost entirely from operating
difficulties arising from the implementation of MCS, which contributed to higher
costs and lower revenues at Kansas City Southern Railway Company ("KCSR"), the
Company's principal subsidiary. These operating difficulties have been largely
resolved and the operation of the railroad is rapidly returning to normal.
During the third quarter of 2002, KCSR experienced revenue growth in several
commodity groups, including chemical and petroleum products, certain forest
products and intermodal traffic compared to the third quarter of 2001,
continuing the positive revenue trends noted for these commodities during the
first half of 2002 and in spite of the MCS difficulties encountered this
quarter. The increase in revenue for these shipments was driven by volume gains,
increased length of haul and price improvements in key traffic lanes. Revenues
for these commodities as well as certain other traffic would have improved even
further, (approximately $4.5 million higher based on Company estimates) during
the quarter, but were adversely affected by lower carloadings arising from MCS
related congestion. The MCS implementation slowed the railroad as employees
learned to respond to the data discipline demanded by this new system. These
quarter to quarter revenue improvements were offset by comparatively lower
revenues for coal, automotive and grain business. Coal revenues declined $6.7
million quarter to quarter primarily because of a rate reduction at a major
customer, which took effect on January 1, 2002, as well as reduced volume
associated with the expiration of another coal customer's contract effective
April 1, 2002. Automotive revenues were $1.6 million lower due to the loss of
certain business and grain revenues declined $1.5 million as a result of a
comparatively weak export market quarter to quarter and MCS-related service
issues. As a result, third quarter 2002 revenues for KCSR were $6.4 million
lower than the comparable prior year quarter.
Third quarter 2002 costs and expenses for KCSR were $5.8 million higher compared
to the prior year quarter resulting mostly from higher compensation and car hire
costs, which increased as a direct result of the MCS implementation issues.
Depreciation expense also increased due to the implementation of MCS. These
factors contributed to a higher operating ratio for KCSR of 94.2% for the
quarter ended September 30, 2002 compared to 85.9% for the same period in 2001.
The Company's equity in earnings from Grupo TFM increased approximately $2.3
million quarter to quarter. Exclusive of the results from Mexrail, which was
consolidated into Grupo TFM effective April 1, 2002, third quarter 2002 Grupo
TFM revenues declined approximately 3% compared to the third quarter of 2001.
Operating expenses also declined approximately 4% quarter to quarter (under
accounting principles generally accepted in the United States of America - "U.S.
GAAP"). Third quarter 2002 results for Grupo TFM include a $14.2 million
deferred tax benefit (calculated under U.S. GAAP) compared to a deferred tax
benefit of $12.0 million in the third quarter of 2001. The variance in the
deferred tax calculation of Grupo TFM is mostly attributable to fluctuations in
the peso exchange rate and tax benefits derived from the impact of inflation in
Mexico. The Company reports its equity in Grupo TFM under U.S. GAAP, while Grupo
TFM reports under International Accounting Standards ("IAS").
Equity in losses from other unconsolidated affiliates were $0.7 million for the
third quarter of 2002 compared to $0.6 million for the third quarter of 2001.
For both periods, losses from the operations of the Panama Canal Railway Company
("PCRC") were partially offset by earnings from Southern Capital Corporation
("Southern Capital"). PCRC is currently not operating at full capacity due to
delays in the completion of expansion at the port of Balboa in Panama. The
Balboa port expansion is expected to be complete by the summer of 2003, at which
time the revenues of PCRC are anticipated to increase, which should improve the
financial performance of PCRC.
KCS's consolidated third quarter 2002 interest expense decreased $1.7 million
from the prior year quarter as a result of slightly lower effective interest
rates and lower overall debt balances. Other items affecting the Company's third
quarter results include a pre-tax gain of approximately $4.9 million on the sale
of the Company's interest in Wyandotte Garage Corporation, which is reflected in
other income.
Year to Date
For the nine months ended September 30, 2002, consolidated operating income
declined $0.9 million compared to the same period in 2001 as a result of a $13.8
million decrease in revenues, partially offset by lower operating expenses,
which declined $12.9 million period to period. KCSR's year to date 2002 revenue
dropped $10.1 million compared to year to date 2001, primarily as a result of
lower coal and automotive revenue, partially offset by higher revenue for
chemical and petroleum products, agriculture and minerals, paper and forest
products and intermodal business. These revenue fluctuations resulted from
trends similar to those discussed in the third quarter analysis, except for
grain, which increased period to period on the strength of the export market in
the first quarter of 2002. Revenue from other subsidiaries decreased
approximately $3.7 million period to period due to demand driven volume
declines. KCSR's year to date 2002 costs and expenses were $9.1 million lower
than the prior year period due mostly to a decline in costs associated with
compensation, fuel, car hire and casualties, partially offset by higher fringe
benefit costs and depreciation expense. Despite the overall improvement in
operating income, year to date operating results were adversely impacted by the
MCS related congestion issues arising in the third quarter of 2002. KCSR's
operating ratio was unchanged at 89.3% for each of the nine months ended
September 30, 2002 and 2001.
The Company's equity in earnings from Grupo TFM increased approximately $4.1
million period to period. In 2001, however, equity in earnings reflected the
Company's proportionate share ($9.1 million) of the income recorded by Grupo TFM
relating to the reversion of certain concession assets to the Mexican
government. Exclusive of this 2001 income, KCS's year to date 2002 equity in
earnings from Grupo TFM increased $13.2 million compared to same period last
year. Exclusive of Mexrail's results for year to date 2002, Grupo TFM's revenues
were essentially flat compared to year to date 2001 and operating expenses
(under U.S. GAAP) were approximately 5% lower (exclusive of the 2001 reversion
income). For the nine months ended September 30, 2002, Grupo TFM's results
include a $53.1 million deferred tax benefit (calculated under U.S. GAAP)
compared to a deferred tax expense of $12.6 million in the same period in 2001.
This variance was caused by several factors, including a deferred tax expense
recorded in 2001 related to the income from the line reversion, the weakening of
the peso exchange rate, as well as tax benefits derived from the impact of
Mexican inflation in 2002. The fluctuation in the peso exchange rate also
contributed to a $14.4 million exchange loss for year to date 2002 compared to
an exchange loss of $3.0 million for the same period in 2001.
Equity in losses from the Company's other unconsolidated affiliates increased to
$1.9 million for the year to date 2002 compared to $0.2 million for the same
period in 2001. In 2002, losses associated with PCRC were $2.9 million compared
to $1.0 million in 2001. As mentioned in the third quarter analysis, in 2002
PCRC is not operating at full capacity as initially planned due to the delay in
completion of the port expansion at Balboa. During 2001, losses were primarily
related to the start-up of operations at PCRC. Additionally, the Company
reported equity losses from Mexrail of $0.7 million in 2001 compared to
essentially a break-even amount for 2002 prior to its sale to TFM. These losses
were offset by equity earnings from Southern Capital of $1.0 million and $1.5
million for the nine months ended September 30, 2002 and 2001, respectively.
KCS's consolidated year to date interest expense decreased $9.6 million (22%)
from the same prior year period as a result of lower interest rates and lower
overall debt balances. Other items affecting the Company's year to date results
include a gain of approximately $7.3 million on the sale of certain
non-operating properties at a smaller subsidiary and a $4.9 million gain on the
sale of Wyandotte Garage Corporation as discussed above. Both of these items are
reported as other income. Additionally, the Company reported a $4.4 million gain
on the sale of Mexrail as a separate item in the accompanying consolidated
condensed statements of income.
During the second quarter of 2002, the Company refinanced approximately $200
million of term debt and other secured indebtedness using proceeds received from
the private placement of $200 million of 7 1/2% senior notes due June 15, 2009
("Note Offering"). In conjunction with the Note Offering, the Company amended
and restated its credit agreement. KCS reported an extraordinary charge of $2.7
million (after-tax) related to this refinancing transaction. The Company's debt
balance at the end of September 30, 2002 was $588.7 million compared to $684.8
million at September 30, 2001, a reduction of nearly $100 million over the past
twelve months.
Outlook from the Chairman
Michael R. Haverty, KCS's Chairman, President and Chief Executive Officer said,
"both the financial and operational performance of KCS during the third quarter
did not follow the trends experienced during the first two quarters of 2002, due
mostly to congestion related issues arising from the implementation of MCS in
July 2002. These congestion issues had a negative impact on some revenues and
certain costs during the third quarter. The struggling economy and a lower
contractual rate for our major coal customer also adversely affected quarterly
revenues. Despite these challenges, we continue to work diligently to improve
our revenue base through targeted price improvements, longer hauls and volume
increases and to enhance our cost structure through more efficient operations.
Further, we have recently made progress at reducing congestion, and traffic flow
on the railroad is substantially improved. In the long-term, the implementation
of MCS will provide KCS with a superior management tool to both manage our
railroad more effectively and better serve our customers.
The Company's important Mexican investment, Grupo TFM, continues to show why
it's one of the leaders in the North American rail industry. Even during the
tough economic environment in North America during 2002, Grupo TFM has been able
to maintain its revenue base while continuing to maintain effective control over
its cost structure, resulting in higher ongoing operating profits year to date.
KCS's ownership percentage of Grupo TFM increased to approximately 46.6% on July
29, 2002 following completion of the purchase of the Mexican government's 24.6%
ownership of Grupo TFM by TFM. We are excited about our increased ownership
position in Grupo TFM, which we believe will lead to higher profitability for
KCS for the foreseeable future.
As previously announced, a three-judge panel of the Court of the First Circuit
in Mexico City has ruled in favor of Grupo TFM with respect to its Value Added
Tax ("VAT") lawsuit. Although we must await the conclusion of the legal process,
we are optimistic about the ultimate outcome of this matter and, upon final
resolution, it is expected to provide both KCS and Grupo TMM with the
opportunity to enhance and further grow the value of the investment in TFM and
the NAFTA rail network. Because the legal process has not been finalized, KCS
has not reflected the recovery of the VAT in its financial statements for the
quarter and year to date periods ended September 30, 2002.
During the remainder of 2002, we will focus on improving our domestic operations
under the newly implemented operating system to ensure that we are ready to take
advantage of an economic recovery when it occurs, which we hope will be sometime
in early 2003. We believe that our MCS technology is second to none in the
industry and now that the operational difficulties are resolved in the field, we
are poised to capitalize on this competitive advantage. We continue to strive
toward reducing our operating ratio through improved revenues and cost control
and are committed to taking the necessary actions to accomplish this task. Our
long-term goal continues to be to maximize shareholder value through improved
performance, and we are committed and focused to achieve this goal."
KCS is comprised of, among others, The Kansas City Southern Railway Company
("KCSR") and equity investments in Grupo TFM, Southern Capital Corporation
("Southern Capital") and Panama Canal Railway Company ("PCRC").
This press release includes statements concerning potential future events
involving the Company, which could materially differ from the events that
actually occur. The differences could be caused by a number of factors including
those factors identified in Company's December 31, 2001 Form 10-K and the
Current Report on Form 8-K dated December 11, 2001, each filed by the Company
with the Securities and Exchange Commission ("SEC") (Commission file no.
1-4717). The Company will not update any forward-looking statements in this
press release to reflect future events or developments.
(Financial Information Attached)
KANSAS CITY SOUTHERN
CONDENSED CONSOLIDATED STATEMENTS OF INCOME
(dollars in millions, except per share data)
(Unaudited)
Three Months Nine Months
Ended September 30, Ended September 30,
------------------------- -------------------------
2002 2001 2002 2001
---------- --------- --------- ---------
Revenues $ 137.6 $ 144.6 $ 418.0 $ 431.8
Costs and expenses 115.6 113.9 338.6 353.2
Depreciation and amortization 15.8 14.7 45.3 43.6
---------- --------- --------- ---------
Operating income 6.2 16.0 34.1 35.0
Equity in net earnings (losses) of unconsolidated affiliates:
Grupo Transportacion Ferroviaria Mexicana, S.A. de C.V.
(preliminary) 9.8 7.5 27.6 23.5
Other (0.7) (0.6) (1.9) (0.2)
Gain on sale of Mexrail, Inc. - - 4.4 -
Interest expense (11.5) (13.2) (33.3) (42.9)
Other income 6.5 0.9 15.3 3.0
---------- --------- --------- ---------
Income before income taxes, extraordinary item and
Cumulative effect of accounting change 10.3 10.6 46.2 18.4
Income tax provision (benefit) (0.3) 1.6 6.7 (1.6)
---------- --------- --------- ---------
Income before extraordinary item and cumulative effect of
accounting change 10.6 9.0 39.5 20.0
Extraordinary item, net of income taxes - - (2.7) -
Cumulative effect of accounting change, net of income taxes - - - (0.4)
---------- --------- --------- ---------
Net Income $ 10.6 $ 9.0 $ 36.8 $ 19.6
========= ======== ======== ========
Per Share Data:
Basic Weighted Average Common shares outstanding (in thousands) 60,481 58,656 60,123 58,442
Basic Earnings (Loss) per Common share
Income before extraordinary item and cumulative effect of
accounting change $ 0.17 $ 0.15 $ 0.65 $ 0.34
Extraordinary item, net of income taxes - - (0.04) -
Cumulative effect of accounting change - - - (0.01)
========= ======== ======== ========
Net Income $ 0.17 $ 0.15 $ 0.61 $ 0.33
========= ======== ======== ========
Diluted Weighted Average Common shares outstanding (in thousands) 62,453 61,171 62,213 60,934
Diluted Earnings (Loss) per Common share
Income before extraordinary item and cumulative effect of
accounting change $ 0.17 $ 0.15 $ 0.63 $ 0.33
Extraordinary item, net of income taxes - - (0.04) -
Cumulative effect of accounting change - - - (0.01)
--------- -------- -------- --------
Net Income $ 0.17 $ 0.15 $ 0.59 $ 0.32
========= ======== ======== ========
EXHIBIT 99.2
Kansas City Southern Railway
Operating Statements
Dollars in Millions
Third Quarter Third Quarter Year to Date Year to Date
2002 2001 Sept. 30, 2002 Sept. 30, 2001
----------------- ------------------- ------------------- --------------------
Revenues
Freight Revenue $ 87.3 $ 87.0 $ 264.0 $ 253.4
Intermodal and Automotive Revenue 14.0 14.3 43.4 50.9
Unit Coal Revenue 23.7 30.3 72.9 84.8
Haulage Revenue 4.1 3.4 10.5 9.6
Other Revenue 7.2 7.7 22.1 24.3
----------------- ------------------- ------------------- --------------------
Total Revenues 136.3 142.7 412.9 423.0
----------------- ------------------- ------------------- --------------------
Operating Expenses
Compensation 35.4 33.5 100.1 101.1
Fringe Benefits 14.9 14.1 43.8 40.4
Fuel 9.0 11.5 27.7 35.3
Material and Supplies 7.1 7.5 22.8 22.1
Car Hire 5.6 3.5 14.9 15.7
Purchased Services 14.3 13.5 37.7 37.0
Casualties & Insurance 6.3 5.8 20.3 27.6
Other 3.8 2.6 8.2 7.6
----------------- ------------------- ------------------- --------------------
Net Operating Expenses 96.4 92.0 275.5 286.8
----------------- ------------------- ------------------- --------------------
Fixed Expenses
Leases, Net 13.3 13.6 39.6 40.9
Depreciation 15.0 13.7 42.6 40.7
Taxes (Other Than Income) 3.7 3.3 11.1 9.5
----------------- ------------------- ------------------- --------------------
Total Fixed Expenses 32.0 30.6 93.3 91.1
----------------- ------------------- ------------------- --------------------
Total Expenses 128.4 122.6 368.8 377.9
----------------- ------------------- ------------------- --------------------
Operating Income $ 7.9 $ 20.1 $ 44.1 $ 45.1
================= =================== =================== ====================
Kansas City Southern Railway
Carloadings By Commodity - Year To Date September 30,2002
Dollars in Thousands
Carloadings Revenue
Year to Date % Year to Date %
------------------------------ ----------------------------
2002 2001 Change 2002 2001 Change
-------------- ------------- --------- ------------ ------------- -----------
Coal
152,203 144,267 5.5% Unit Coal $ 72,907 $ 84,836 (14.1)%
3,153 3,726 (15.4)% Other Coal 1,748 2,120 (17.5)%
-------------- ------------- ------------ -------------
155,356 147,993 5.0% Total 74,655 86,956 (14.1)%
-------------- ------------- ------------ -------------
Chemical & Petroleum Products
4,404 4,927 (10.6)% Agri Chemicals 3,173 3,913 (18.9)%
10,671 8,404 27.0% Gases 10,469 7,674 36.4%
16,839 16,779 0.4% Organic 17,474 16,864 3.6%
15,153 14,594 3.8% Inorganic 16,296 15,373 6.0
40,252 46,979 (14.3)% Petroleum 28,963 29,742 (2.6)%
21,980 20,142 9.1% Plastics 21,758 20,257 7.4%
-------------- ------------- ------------ -------------
109,299 111,825 (2.3)% Total 98,133 93,823 4.6%
-------------- ------------- ------------ -------------
Agriculture and Minerals
34,641 35,809 (3.3)% Domestic Grain 24,634 24,569 0.3%
9,782 8,471 15.5% Export Grain 7,027 5,595 25.6%
20,762 19,766 5.0% Food Products 17,106 16,260 5.2
16,399 17,951 (8.6)% Ores and Minerals 9,233 9,570 (3.5)%
11,924 11,479 3.9% Stone, Clay & Glass 9,188 8,482 8.3%
-------------- ------------- ------------ -------------
93,508 93,476 0.0% Total 67,188 64,476 4.2%
-------------- ------------- ------------ -------------
Paper & Forest Products
65,608 63,248 3.7% Pulp/Paper 49,698 44,665 11.3%
4,597 5,078 (9.5)% Scrap Paper 2,708 2,740 (1.2)%
24,424 26,946 (9.4)% Pulpwood/Logchips 10,112 11,185 (9.6)%
20,869 19,967 4.5% Lumber/Plywood 19,183 17,364 10.5%
13,904 16,286 (14.6)% Metal/Scrap 11,487 12,622 (9.0)%
5,425 5,625 (3.6)% Military/Other Carloads 7,569 7,821 (3.2)%
-------------- ------------- ------------ -------------
134,827 137,150 (1.7)% Total 100,757 96,397 4.5%
-------------- ------------- ------------ -------------
Intermodal & Automotive
11,177 28,642 (61.0)% Automotive 7,800 17,783 (56.1)%
202,427 192,042 5.4% Intermodal 35,545 33,137 7.3%
-------------- ------------- ------------ -------------
213,604 220,684 (3.2)% Total 43,345 50,920 (14.9)
-------------- ------------- ------------ -------------
706,594 711,128 (0.6)% TOTAL FOR BUSINESS UNITS 384,078 392,572 (2.2)%
26,666 25,565 4.3% Haulage 10,531 9,644 9.2
(4,934) (7,028) 29.8% Adjustments (3,815) (3,481) (9.6)%
-------------- ------------- ------------ -------------
728,326 729,665 (0.2)% TOTAL $ 390,794 $ 398,735 (2.0)%
============== ============= ============ =============
Kansas City Southern Railway
Carloadings By Commodity - Third Quarter 2002
Dollars in Thousands
Carloadings Revenue
Third Quarter % Third Quarter %
------------------------------ ----------------------------
2002 2001 Change 2002 2001 Change
-------------- ------------- --------- ------------ ------------- -----------
Coal
49,108 51,953 (5.5)% Unit Coal $ 23,701 $ 30,321 (21.8)%
1,141 1,322 (13.7)% Other Coal 666 773 (13.8)%
-------------- ------------- ------------ -------------
50,249 53,275 (5.7)% 24,367 31,094 (21.6)%
-------------- ------------- ------------ -------------
Chemical & Petroleum Products
1,191 1,336 (10.9)% Agri Chemicals 836 1,067 (21.6)%
3,843 2,743 40.1% Gases 3,762 2,509 49.9%
5,447 5,392 1.0% Organic 5,944 5,514 7.8%
4,917 4,933 (0.3)% Inorganic 5,431 5,424 0.1%
13,099 13,049 0.4% Petroleum 9,309 9,298 0.1%
7,101 6,503 9.2% Plastics 7,179 6,605 8.7%
-------------- ------------- ------------ -------------
35,598 33,956 4.8% Total 32,461 30,417 6.7%
-------------- ------------- ------------ -------------
Agriculture and Minerals
10,376 11,313 (8.3)% Domestic Grain 7,467 8,120 (8.0)
2,336 3,422 (31.7)% Export Grain 1,453 2,397 (39.4)%
6,907 6,557 5.3% Food Products 5,678 5,609 1.2
5,352 6,366 (15.9)% Ores and Minerals 3,052 3,276 (6.8)%
4,123 3,923 5.1% Stone, Clay & Glass 3,154 2,906 8.5%
-------------- ------------- ------------ -------------
29,094 31,581 (7.9)% Total 20,804 22,308 (6.7)%
-------------- ------------- ------------ -------------
Paper & Forest Products
22,979 22,217 3.4% Pulp/Paper 17,732 16,230 9.3%
1,671 1,658 0.8% Scrap Paper 978 968 1.0%
7,320 9,214 (20.6)% Pulpwood/Logs/Chips 3,151 3,788 (16.8)%
7,103 7,143 (0.6)% Lumber/Plywood 6,577 6,293 4.5%
4,960 4,997 (0.7)% Metal/Scrap 3,945 3,892 1.4%
1,926 2,250 (14.4)% Military/Other carloads 2,294 3,392 (32.4)%
-------------- ------------- ------------ -------------
45,959 47,479 (3.2)% Total 34,677 34,563 0.3%
-------------- ------------- ------------ -------------
Intermodal & Automotive
1,696 4,899 (65.4)% Automotive 1,472 3,084 (52.3)%
73,637 65,469 12.5% Intermodal 12,555 11,278 11.3%
-------------- ------------- ------------ -------------
75,333 70,368 7.1% Total 14,027 14,362 (2.3)%
-------------- ------------- ------------ -------------
236,233 236,659 (0.2)% TOTAL FOR BUSINESS UNITS 126,336 132,744 (4.8)%
8,538 8,361 2.1% Haulage 4,049 3,353 20.8%
(1,411) (2,031) 30.5% Adjustments (1,275) (1,129) (12.9)%
-------------- ------------- ------------ -------------
243,360 242,989 0.2% TOTAL $ 129,110 $ 134,968 (4.3)%
============== ============= ============ =============
Kansas City Southern
------------------------
Consolidated Balance Sheets Preliminary
(Dollars in Millions) ------------------------
September 30, 2002 December 31, 2001
(Unaudited)
Assets
Cash $ 35.5 $ 24.7
Accounts receivable 112.3 130.0
Inventories 35.3 27.9
Other current assets 38.3 71.8
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Total current assets 221.4 254.4
Investments held for operating purposes 404.6 386.8
Properties, net of depreciation 1,336.3 1,327.4
Other assets 33.4 42.3
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Total assets $ 1,995.7 $ 2,010.9
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Liabilities and Stockholders' Equity
Current portion of long-term debt $ 10.0 $ 46.7
Accounts payable 40.3 50.4
Accrued liabilities 168.9 160.4
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Total current liabilities 219.2 257.5
Long-term debt 578.7 611.7
Deferred income taxes 374.3 370.2
Other 93.9 91.2
Stockholders' equity 729.6 680.3
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Total liabilities and stockholders' equity $ 1,995.7 $ 2,010.9
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