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):
July 25, 2001
KANSAS CITY SOUTHERN INDUSTRIES, INC.
-------------------------------------
(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)
114 West 11th 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
Industries, Inc. dated July
25, 2001 entitled, "Kansas
City Southern Industries
Reports Second Quarter
Operating Results", is
attached hereto as Exhibit
99.1
99.2 The following schedules are
attached hereto as Exhibit
99.2 - Combined Kansas City
Southern Railway and Gateway
Western Operating
Statements, Combined Kansas
City Southern
Railway/Gateway Western
Carloadings by Commodity and
Kansas City Southern
Industries, Inc. Preliminary
Consolidated Balance Sheets
Item 9. Regulation FD Disclosure
Kansas City Southern Industries, Inc. ("KCSI" 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 July 25,
2001, announcing KCSI's second quarter and year to date 2001
operating results. Included in Exhibit 99.2 are schedules regarding
certain financial information discussed at the Company's second
quarter 2001 meeting and 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 Industries, Inc.
Date: July 30, 2001 By: /s/ Louis G. Van Horn
------------------------
Louis G. Van Horn
Vice President and Comptroller
(Principal Accounting Officer)
EXHIBIT 99.1
Date: July 25, 2001
Kansas City Southern Media Contact: William Galligan 816-983-1551
Industries, Inc. email: william.h.galligan@kcsr.com
114 West 11th Street
Kansas City, MO 64105
NYSE Symbol: KSU
Kansas City Southern Industries Reports Second Quarter Operating Results
Earnings Analysis & Commentary
Kansas City Southern Industries, Inc. ("KCSI", "the Company") reported income
from continuing operations of $4.7 million (8(cent) per diluted share) for the
second quarter of 2001 compared to income from continuing operations of $8.8
million (15(cent) per diluted share) for the second quarter of 2000. This $4.1
million quarter to quarter decline resulted from declines in domestic operating
income and equity earnings from Grupo Transportacion Ferroviaria Mexicana, S.A.
de C.V. ("Grupo TFM") of $5.5 million and $3.1 million, respectively, partially
offset by a $3.9 million decrease in interest expense and lower income taxes of
$1.3 million. KCSI's consolidated second quarter 2001 revenues declined $1.2
million and operating expenses rose $4.3 million compared to the second quarter
of 2000.
For the six months ended June 30, 2001, income from continuing operations was
$11.0 million (18(cent) per diluted share) compared to $19.2 million (33(cent)
per diluted share) for the six months ended June 30, 2000. This $8.2 million
period to period decline was primarily due to a $17.4 million decrease in
domestic operating income, a $1.6 million decline in equity earnings from
unconsolidated affiliates and a $1.5 million decrease in other, net, partially
offset by a decrease in interest expense of $6.2 million and lower income taxes
of $6.1 million for the current six-month period. For the first six months of
2001, KCSI's consolidated revenues declined 2% and consolidated operating
expenses were 4% higher compared with the same 2001 period. Equity earnings from
Grupo TFM remained relatively flat period to period. Our equity earnings for the
six months ended June 30, 2001 reflect 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.
DILUTED EARNINGS PER SHARE AND COMMON SHARES COMPARISONS (1)
Second Quarter Year to Date
-------------- ------------
2001 2000 2001 2000
---- ---- ---- ----
Income from continuing operations:
U.S. operations $ 0.07 $ 0.11 $ 0.07 $ 0.23
Grupo TFM and associated interest 0.01 0.04 0.11 0.10
-------- -------- ------- -------
Income (loss) from continuing operations 0.08 0.15 0.18 0.33
Extraordinary debt retirement costs, net of income tax - - - (0.10)
Cumulative effect of accounting change,
net of income tax - - (0.01) -
-------- ------- ------- --------
Total diluted earnings (loss) per share from
continuing operations, adjusted for
extraordinary item and cumulative effect
of accounting change $ 0.08 $ 0.15 $ 0.17 $ 0.23
======== ======== ====== =======
Common Shares Outstanding (thousands):
Weighted Average Diluted 60,916 57,614 60,849 57,539
Actual 58,455 55,750 58,455 55,750
(1)Earnings per share and common share information for each period presented
reflect a one-for-two reverse stock split that occurred on July 12, 2000 in
conjunction with the spin-off of Stilwell Financial Inc., the Company's
formerly owned financial services segment.
Second Quarter
KCSI is comprised of, among others, The Kansas City Southern Railway Company
("KCSR"), Gateway Western Railway Company ("Gateway Western") and equity
investments in Grupo TFM, Mexrail, Inc. and the Panama Canal Railway Company.
KCSI reported $4.7 million of income from continuing operations for the quarter
ended June 30, 2001 compared to income from continuing operations of $8.8
million for the comparable prior year quarter.
KCSI's consolidated second quarter 2001 revenues totaled $143.2 million compared
to $144.4 million in the second quarter of 2000. This $1.2 million decline
resulted from lower KCSR/Gateway Western revenues of approximately $1.8 million
partially offset by slightly higher revenues from certain other smaller
subsidiaries. Second quarter 2001 revenue growth occurred in coal (8%) and
automotive (172%) compared to the second quarter of 2000. Paper and forest
product and chemical and petroleum product revenues declined approximately 5%
and 6%, respectively, quarter to quarter. Weakness in these sectors resulted
primarily from lower industry production reflecting the continuing impact of the
slowdown in the U.S. economy. Agriculture and mineral product revenues declined
approximately 10% quarter to quarter due mostly to lower domestic grain
shipments and shorter hauls. A general decline in the production of poultry in
the United States has decreased demand for grain deliveries to our chicken
producing customers. Additionally, flooding in Iowa and Minnesota during the
second quarter forced a temporary shift in the origination of some domestic
grain shipments to Illinois and Indiana, which resulted in significantly shorter
hauls for KCSR.
KCSI's consolidated costs and expenses increased $4.3 million (3.4%) to $130.3
million in the second quarter of 2001 compared to $126.0 million in the second
quarter of 2000, resulting from higher KCSR/Gateway Western expenses of $3.0
million and higher expenses at certain other smaller subsidiaries. Quarter to
quarter increases in fringe benefit costs ($1.0 million) and car hire costs
($1.5 million) were the primary causes for the higher KCSR/Gateway Western
expenses. Smaller increases for fuel, purchased services, casualties and
insurance and other employee expenses were mostly offset by declines in salaries
and wages expense and materials and supplies expense. Despite a lower overall
employee count quarter to quarter, second quarter 2001 fringe benefit costs
increased as a result of higher health insurance costs, which have risen over
15% compared to the second quarter of 2000. Contributing to the increase in car
hire expense was a higher number of freight cars from other railroads on the
Company's rail line coupled with a lower number of KCSR freight cars offline
being used by other railroads. Also contributing to the increase in car hire
expense was the larger number of auto rack cars being used to serve the increase
in automotive traffic. As operations became more fluid in the second quarter,
car hire costs showed improvement, declining approximately 12.6% compared to the
first quarter of 2001. Despite a 2% decline in usage, fuel costs increased 4% in
the second quarter of 2001 compared to the second quarter of 2000, due to a 6%
increase in the average price per gallon. The Company's consolidated expenses
for the second quarter also include an approximate $0.9 million non-recurring
gain on the sale of certain real estate and an approximate $1.1 million expense
related to the settlement of litigation at another subsidiary. The KCSR/Gateway
Western operating ratio was 88.1% for the second quarter of 2001 compared to
84.9% for the second quarter of 2000 and 94.0% for the first quarter of 2001.
Equity earnings from the Company's investment in Grupo TFM was $4.9 million for
the second quarter of 2001 compared to $8.0 million for the same quarter in the
prior year. Grupo TFM revenues improved 5.3% to $171.9 million in the second
quarter of 2001 compared to $163.3 million in the second quarter of 2000. These
higher revenues were offset by an approximate 16.8% increase in operating
expenses related primarily to salaries and wages, fringe benefits, fuel, car
hire and lease costs. These higher expenses led to a decline in operating income
of approximately 19% quarter to quarter. TFM's operating ratio was 74.6% for the
second quarter of 2001 compared to 67.7% for the second quarter of 2000.
Additionally, second quarter 2001 results include a $2.9 million deferred tax
provision (calculated under U.S. generally accepted accounting principles -"U.S.
GAAP") compared to a deferred tax benefit of $3.2 million in the second quarter
of 2000. The Company reports its equity in Grupo TFM under U.S. GAAP while Grupo
TFM reports under International Accounting Standards.
KCSI's consolidated second quarter 2001 interest expense decreased $3.9 million
(21.2%) from the prior year quarter primarily as a result of lower interest
rates on our variable rate debt (variable rate debt approximates $419 million at
June 30, 2001) and lower amortization related to debt issue costs.
YEAR TO DATE
KCSI's income from continuing operations for the six months ended June 30, 2001
totaled $11.0 million versus $19.2 million in the same 2000 period.
KCSI's consolidated year to date 2001 revenues totaled $287.2 million compared
to $293.3 million in the same 2000 period. This $6.1 million decline resulted
from lower KCSR/Gateway Western revenues of approximately $8.0 million partially
offset by higher revenues from certain other smaller subsidiaries. Year to date
2001 revenue growth occurred for certain commodities, including coal (1%),
automotive (159%), plastics (17%) and military/other revenues (40%) compared to
the same 2000 period; however, these improvements were offset by lower revenues
for most other commodity groups resulting from demand driven declines as
discussed above. Year to date 2001 revenues for chemical and petroleum products,
agriculture and mineral products and paper and forest products have decreased
approximately 2%, 12%, and 7%, respectively, compared to the six months ended
June 30, 2000.
KCSI's consolidated costs and expenses increased $11.3 million (4.4%) to $268.2
million in the first half of 2001 compared to $256.9 million in the first half
of 2000, resulting from higher KCSR/Gateway Western expenses of $8.9 million and
higher expenses at certain other smaller subsidiaries. The increase in
KCSR/Gateway Western expenses was attributable to higher costs for casualty and
insurance, car hire and fuel. For the six months ended June 30, 2001, casualty
and insurance costs rose approximately $9.1 million, the majority of which ($8.5
million) related to several significant first quarter derailments and the
settlement of personal injury claims. These first quarter 2001 derailments and
the ongoing economic weakness in the United States resulted in some congestion
during the first three months of 2001. The effects of this congestion and
certain other factors as discussed above contributed to an increase in car hire
expense of approximately $5.3 million period to period. For the six months ended
June 30, 2001, fuel usage decreased approximately 7% compared to the same 2000
period; however, fuel expense increased 3% due to an increase in the average
price per gallon of nearly 11%. These increases were partially offset by lower
year to date costs for salaries and wages, fringe benefits, materials and
supplies, purchased services and operating leases.
Equity earnings from Grupo TFM for the six months ended June 30, 2001 was $16.0
million compared to $16.2 million for the six months ended June 30, 2000. During
the first quarter of 2001, TFM recorded approximately $60 million of pre-tax
income relating to the reversion of certain concession assets to the Mexican
government. The Company's year to date 2001 equity earnings from Grupo TFM
reflect our proportionate share of this income of approximately $9.1 million.
Grupo TFM revenues increased 5.8% to $327.9 million for the six months ended
June 30, 2001 from $310.0 million for the six months ended June 30, 2000. These
higher revenues were offset by an approximate 16.6% increase in operating
expenses (exclusive of the income related to the reversion of certain concession
assets) resulting in a 19.5% decline in ongoing operating income period to
period. Under U.S. GAAP, the deferred tax provision was $24.6 million for the
six months ended June 30, 2001 compared to a deferred tax benefit of $18.8
million for the six months ended June 30, 2000.
Similar to the second quarter of 2001, the Company's interest expense for the
six months ended June 30, 2001 declined $6.2 million compared to the six months
ended June 30, 2000 due to lower borrowing rates.
Effective January 1, 2001 the Company implemented Statement of Financial
Accounting Standard No. 133, Accounting for Derivative Instruments and Hedging
Activities ("FAS 133"). As a result of this change in the method of accounting
for derivative financial instruments, the Company recorded an after-tax charge
to earnings of $0.4 million in the first quarter of 2001. This charge is
presented as a cumulative effect of an accounting change in the accompanying
consolidated condensed statements of income for the six months ended June 30,
2001. In the first quarter of 2000, the Company completed a debt refinancing
whereby it retired approximately $400 million of its debt securities prior to
maturity. Accordingly, the Company recorded debt retirement costs of
approximately $5.9 million (after-tax) in the first quarter of 2000. This is
presented as an extraordinary item in the accompanying consolidated condensed
statements of income for the six months ended June 30, 2000.
BUSINESS OUTLOOK
Michael R. Haverty, KCSI Chairman, President and Chief Executive Officer, said,
"Although our revenue base has not rebounded as quickly as we had planned, our
cost structure is beginning to realize some of the benefits we expected from the
cost reduction strategy implemented at the end of the first quarter.
Our freight revenues have continued to suffer the effects of the economic
slowdown, particularly in the paper and forest products and certain chemical
markets, which have typically shown a strong correlation with the strength of
the economy. We expect these trends to improve when economic conditions improve.
Our agriculture and mineral revenues have also suffered due mostly to declining
demand for domestic grain for the poultry industry. Despite a slow first
quarter, coal revenues for the first half of 2001 increased about 1% compared to
the first half of 2000 and 8.5% quarter to quarter. Additionally, we have
expanded our service to the automotive industry as evidenced by the 159%
increase in related revenue for the first six months of this year compared to
the first six months of last year.
Despite higher casualty and car hire costs for the first half of 2001, our cost
structure is improving. The operating ratio for KCSR/Gateway Western for the
second quarter of 2001 was 88.1% compared to 94.0% for the first quarter of
2001. Our consolidated expenses have declined from $137.9 million in the first
quarter of 2001 to $130.3 million in the second quarter.
Equity earnings from Grupo TFM continue to comprise a significant portion of our
earnings. Despite a downturn in the U.S and Mexican economy, Grupo TFM has been
able to increase its revenues by nearly 6% compared to 2000 and has maintained
an operating ratio below 80%. We believe this is a significant accomplishment
given the existing operating environment and is one of the reasons we are
excited about the prospects of purchasing an additional ownership percentage in
Grupo TFM. We and our partner, Transportacion Maritima Mexicana, S.A. de C.V.,
have already announced our intention to exercise our call and cause TFM to
purchase the 24.6% interest in Grupo TFM currently owned by the Mexican
government. We believe this is an opportunity to add value to a key component of
our NAFTA franchise.
During the middle part of June 2001, the Surface Transportation Board ("STB")
issued its new rules governing mergers involving two or more Class I railroads.
The STB recognized that, because of KCSR's size, a merger between KCSR and
another Class I carrier would not raise the same risks and concerns as other
potential mergers and thus, waived application of the new rules to a merger
involving KCSR. We believe the STB was prudent in its decision with respect to a
potential merger involving KCSR.
During the second half of 2001, we will place our focus on these goals: 1)
increasing domestic revenues; 2) improving the profitability of U.S. operations;
3) reducing our corporate debt structure. We continue to believe in the NAFTA
vision and are committed to achieving our ultimate goal of building shareholder
value."
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 KCSI's December 31, 2000 Form 10-K and the Current
Report on Form 8-K/A dated June 3, 1997, each filed by the Company with the
Securities and Exchange Commission ("SEC") (Commission file no. 1-4717) and
those factors identified in the "Risk Factors" section of the Company's
Registration Statement on Form S-4, as amended and declared effective on March
15, 2001, which is on file with the SEC (File No. 333-54262), and those factors
identified in the "Risk Factors" section of the Company's Registration Statement
on Form S-3, as amended and declared effective on June 5, 2001, which is on file
with the SEC (File No. 333-61006). 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 INDUSTRIES, INC. and SUBSIDIARY COMPANIES
CONSOLIDATED CONDENSED STATEMENTS OF INCOME
(excludes Stilwell Financial Inc.)
(dollars in millions, except per share data)
(Unaudited)
Three Months Six Months
Ended June 30, Ended June 30,
-------------- --------------
2001 2000 2001 2000
------ ------ ----- ------
Revenues $143.2 $144.4 $287.2 $293.3
Costs and expenses 115.8 111.7 239.3 228.3
Depreciation and amortization 14.5 14.3 28.9 28.6
------ ------ ----- ------
Operating income 12.9 18.4 19.0 36.4
Equity in net earnings of unconsolidated affiliates:
Grupo Transportacion Ferroviaria
Mexicana, S.A. de C.V. 4.9 8.0 16.0 16.2
Other 0.3 1.2 0.4 1.8
Interest expense (14.5) (18.4) (29.7) (35.9)
Other, net 1.1 0.9 2.1 3.6
------ ------ ----- ------
Income from continuing operations
before income taxes, extraordinary
item and cumulative effect of
accounting change 4.7 10.1 7.8 22.1
Income tax provision (benefit) - 1.3 (3.2) 2.9
------ ------ ----- ------
Income from continuing operations
before extraordinary item and
cumulative effect of accounting change 4.7 8.8 11.0 19.2
Extraordinary item, net of income taxes:
Debt retirement costs - - - (5.9)
Cumulative effect of accounting
change, net of income taxes - - (0.4) -
====== ====== ====== ======
Income from continuing operations,
net of extraordinary item and
cumulative effect of accounting
change 4.7 8.8 10.6 13.3
------ ------ ----- ------
Per Share Data:
Basic Weighted Average Common shares
outstanding (in thousands) 58,380 55,724 58,321 55,624
Basic Earnings (Loss) per
Common share from continuing
operations $ 0.08 $ 0.16 $0.19 $0.34
Extraordinary item - - - (0.10)
Cumulative effect of
accounting change - - (0.01) -
------ ------ ------ ------
Basic Earnings per Common
share, net of extraordinary
item and cumulative effect of
accounting change $0.08 $0.16 $0.18 $0.24
------ ------ ----- ------
Diluted Weighted Average Common shares
outstanding (in thousands) 60,916 57,614 60,849 57,539
Diluted Earnings (Loss) per Common
share from continuing operations $0.08 $0.15 $0.18 $0.33
Extraordinary item - - - (0.10)
Cumulative effect of
accounting change - - (0.01) -
------ ------ ----- ------
Diluted Earnings per Common share,
net of extraordinary item and
cumulative effect of
accounting change $ 0.08 $ 0.15 $ 0.17 $ 0.23
------ ------ ------ ------
KANSAS CITY SOUTHERN INDUSTRIES, INC. and SUBSIDIARY COMPANIES
CONSOLIDATED CONDENSED STATEMENTS OF INCOME
(dollars in millions, except per share data)
(Unaudited)
Three Months Six Months
Ended June 30, Ended June 30,
-------------- --------------
2001 2000 2001 2000
------ ------ ----- ------
Revenues $143.2 $144.4 $287.2 $293.3
Costs and expenses 115.8 111.7 239.3 228.3
Depreciation and amortization 14.5 14.3 28.9 28.6
------ ------ ----- ------
Operating income 12.9 18.4 19.0 36.4
Equity in net earnings of unconsolidated affiliates:
Grupo Transportacion Ferroviaria
Mexicana, S.A. de C.V. 4.9 8.0 16.0 16.2
Other 0.3 1.2 0.4 1.8
Interest expense (14.5) (18.4) (29.7) (35.9)
Other, net 1.1 0.9 2.1 3.6
------ ------ ----- ------
Income from continuing operations
before income taxes, extraordinary
item and cumulative effect of
accounting change 4.7 10.1 7.8 22.1
Income tax provision (benefit) - 1.3 (3.2) 2.9
------ ------ ----- ------
Income from continuing operations
before extraordinary item and
cumulative effect of accounting change 4.7 8.8 11.0 19.2
Income from discontinued operations
(1) (net of income taxes) - 151.7 - 340.4
------ ------ ----- ------
Income before extraordinary item and
cumulative effect of accounting change 4.7 160.5 11.0 359.6
Extraordinary item, net of income taxes:
Debt retirement costs - - - (5.9)
Cumulative effect of accounting
change, net of income taxes - - (0.4) -
------ ------ ----- ------
Net income $ 4.7 $160.5 $10.6 $353.7
====== ====== ====== ======
Per Share Data:
Basic Weighted Average Common shares
outstanding (in thousands) 58,380 55,724 58,321 55,624
Basic Earnings per Common share
Continuing operations $0.08 $0.16 $0.19 $0.34
Discontinued operations - 2.72 - 6.12
------ ------ ----- ------
Basic Earnings (Loss) per Common share
before extraordinary item and
cumulative effect of accounting change 0.08 2.88 0.19 6.46
Extraordinary item - - - (0.10)
Cumulative effect of accounting change - - (0.01) -
------ ------ ------ ------
Basic Earnings per Common share $ 0.08 $ 2.88 $ 0.18 $ 6.36
====== ====== ====== ======
Diluted Weighted Average Common shares
outstanding (in thousands) 60,916 57,614 60,849 57,539
Diluted Earnings per Common share
Continuing operations $ 0.08 $ 0.15 $ 0.18 $ 0.33
Discontinued operations - 2.59 - 5.82
------ ------ ----- ------
Diluted Earnings (Loss) per Common share
before extraordinary item and
cumulative effect of accounting change 0.08 2.74 0.18 6.15
Extraordinary item - - - (0.10)
Cumulative effect of accounting change - - (0.01) -
------ ------ ----- ------
Diluted Earnings per Common share $0.08 $2.74 $0.17 $ 6.05
====== ====== ====== ======
(1) - Stilwell Financial Inc., the Company's formerly
owned financial services segment
EXHIBIT 99.2
Combined KCSR and Gateway Western
Operating Statements
Dollars in Millions
Second Quarter Second Quarter Six Months Six Months
2001 2000 2001 2000
----------- ----------- ----------- -----------
Revenues
Freight Revenue $ 82.9 $ 88.8 $ 166.4 $ 178.4
Intermodal and
Automotive Revenue 18.0 15.5 36.6 30.7
Unit Coal Revenue 27.6 25.7 54.5 54.7
Haulage Revenue 3.3 2.7 6.3 6.1
Other Revenue 8.4 9.3 16.6 18.5
----------- ----------- ----------- -----------
Total Revenues 140.2 142.0 280.4 288.4
----------- ----------- ----------- -----------
Operating Expenses
Salaries & Wages 32.2 33.2 67.6 68.6
Fringe Benefits 14.1 13.1 26.4 27.5
Fuel 11.4 11.0 23.8 23.1
Material and Supplies 7.3 7.9 14.6 16.1
Car Hire 5.7 4.2 12.2 6.9
Purchased Services 12.5 12.0 23.5 24.9
Casualties & Insurance 7.4 6.7 21.8 12.7
Other 1.9 1.4 5.0 4.1
----------- ----------- ----------- -----------
Net Operating
Expenses 92.5 89.5 194.9 183.9
----------- ----------- ----------- -----------
Fixed Expenses
Leases, Net 13.9 14.2 27.3 28.6
Depreciation 13.6 13.2 27.0 26.4
Taxes (Other Than
Income) 3.6 3.7 6.2 7.6
----------- ----------- ----------- -----------
Total Fixed
Expenses 31.1 31.1 60.5 62.6
----------- ----------- ----------- -----------
Total Expenses 123.6 120.6 255.4 246.5
----------- ----------- ----------- -----------
Operating Income 16.6 21.4 25.0 41.9
Combined Kansas City Southern Railway/Gateway Western
Carloadings By Commodity - Year to Date June 30, 2001
Dollars in Thousands
Carloadings Revenue
Year to Date Year to Date
------------------- % ------------------ %
2001 2000 Change 2001 2000 Change
--------- -------- ------ -------- -------- -------
Coal
92,314 92,976 (0.7)% Unit Coal $54,515 $54,717 (0.4)%
2,404 1,568 53.3% Other Coal 1,347 532 153.2%
--------- -------- -------- --------
94,718 94,544 0.2% Total 55,862 55,249 1.1%
Chemical & Petroleum Products
3,591 4,708 (23.7)% Agri Chemicals 2,846 3,321 (14.3)%
5,661 7,074 (20.0)% Gases 5,165 6,451 (19.9)%
11,387 13,297 (14.4)% Organic 11,350 12,601 (9.9)%
9,661 8,705 11.0% Inorganic 9,949 10,184 (2.3)%
33,185 31,404 5.7% Petroleum 19,806 19,937 (0.7)%
13,503 12,988 4.0% Plastics 13,652 11,671 17.0%
--------- -------- -------- --------
76,988 78,176 (1.5)% Total 62,768 64,165 (2.2)%
--------- -------- -------- --------
Agriculture and Minerals
24,496 26,791 (8.6)% Domestic Grain 16,449 19,692 (16.5)%
5,049 4,967 1.7% Export Grain 3,198 3,289 (2.8)%
13,209 14,545 (9.2)% Food Products 10,651 11,626 (8.4)%
11,585 13,177 (12.1)% Ores and Minerals 6,294 6,737 (6.6)%
7,556 8,856 (14.7)% Stone, Clay & Glass 5,576 6,553 (14.9)%
--------- -------- -------- --------
61,895 68,336 (9.4)% Total 42,168 47,897 (12.0)%
--------- -------- -------- --------
Paper & Forest Products
41,031 46,119 (11.0)% Pulp/Paper 28,435 31,500 (9.7)%
3,420 3,404 0.5% Scrap Paper 1,772 1,820 (2.6)%
17,732 18,054 (1.8)% Pulpwood/Logchips 7,397 7,234 2.3%
12,824 14,692 (12.7)% Lumber/Plywood 11,071 12,947 (14.5)%
11,289 13,907 (18.8)% Metal/Scrap 8,730 10,359 (15.7)%
Military/Other
4,256 3,910 8.8% Carloads 5,067 3,632 39.5%
--------- -------- -------- --------
90,552 100,086 (9.5)% Total 62,472 67,492 (7.4)%
--------- -------- -------- --------
Intermodal & Automotive
23,743 10,018 137.0% Automotive 14,699 5,667 159.4%
126,573 111,264 13.8% Intermodal 21,859 25,005 (12.6)%
--------- -------- -------- --------
150,316 121,282 23.9% Total 36,558 30,672 19.2%
--------- -------- -------- --------
TOTAL FOR BUSINESS
474,469 462,424 2.6% UNITS 259,828 265,475 (2.1)%
17,204 22,646 (24.0)% Haulage 6,291 6,117 2.8%
(4,997) (3,600) 38.8% Adjustments (2,352) (1,733) 35.7%
--------- -------- -------- --------
486,676 481,470 1.1% TOTAL $263,767 $269,859 (2.3)%
========= ======== ======== ========
Combined Kansas City Southern Railway/Gateway Western
Carloadings By Commodity - Second Quarter 2001
Dollars in Thousands
Carloadings Revenue
Second Quarter Second Quarter
------------------- % -------------------- %
2001 2000 Change 2001 2000 Change
--------- -------- ------ -------- -------- -------
Coal
47,120 45,716 3.1% Unit Coal 27,574 25,745 7.1%
1,151 864 33.2% Other Coal 672 297 126.3%
--------- -------- -------- --------
48,271 46,580 3.6% 28,246 26,042 8.5%
Chemical & Petroleum Products
1,722 2,301 (25.2)% Agri Chemicals 1,408 1,632 (13.7)%
2,866 3,513 (18.4)% Gases 2,563 3,211 (20.2)%
5,675 6,492 (12.6)% Organic 5,656 6,208 (8.9)%
4,869 4,305 13.1% Inorganic 5,062 5,064 (0.0)%
14,613 14,763 (1.0)% Petroleum 9,336 9,901 (5.7)%
6,508 7,001 (7.0)% Plastics 6,479 6,316 2.6%
--------- -------- -------- --------
36,253 38,375 (5.5)% Total 30,504 32,332 (5.7)%
--------- -------- -------- --------
Agriculture and Minerals
12,435 13,076 (4.9)% Domestic Grain 8,233 9,791 (15.9)%
1,867 1,779 4.9% Export Grain 906 952 (4.8)%
6,940 7,209 (3.7)% Food Products 5,639 5,802 (2.8)%
5,970 6,681 (10.6)% Ores and Minerals 3,228 3,397 (5.0)%
3,833 4,504 (14.9)% Stone, Clay & Glass 2,853 3,335 (14.5)%
--------- -------- -------- --------
31,045 33,249 (6.6)% Total 20,859 23,277 (10.4)%
--------- -------- -------- --------
Paper & Forest Products
20,450 23,165 (11.7)% Pulp/Paper 14,468 16,120 (10.2)%
1,772 1,701 4.2% Scrap Paper 922 926 (0.4)%
9,062 8,821 2.7% Pulpwood/Logs/Chips 3,768 3,550 6.1%
6,833 7,470 (8.5)% Lumber/Plywood 5,953 6,705 (11.2)%
5,208 6,946 (25.0)% Metal/Scrap 4,160 4,973 (16.3)%
Military/Other
2,379 1,602 48.5% carloads 2,829 1,494 89.4%
--------- -------- -------- --------
45,704 49,705 (8.0)% Total 32,100 33,768 (4.9)%
--------- -------- -------- --------
Intermodal & Automotive
12,198 4,826 152.8% Automotive 7,583 2,791 171.7%
61,294 58,718 4.4% Intermodal 10,395 12,742 (18.4)%
--------- -------- -------- --------
73,492 63,544 15.7% Total 17,978 15,533 15.7%
--------- -------- -------- --------
TOTAL FOR BUSINESS
UNITS 129,687 130,952 (1.0)%
234,765 231,453 1.4%
8,589 12,040 (28.7)% Haulage 3,265 2,657 22.9%
(2,833) (1,730) 63.8% Adjustments (1,169) (872) 34.1%
--------- -------- -------- --------
240,521 241,763 (0.5)% TOTAL 131,783 132,737 (0.7)%
========= ======== ======== ========
Kansas City Southern Industries, Inc.
Consolidated Balance Sheets Preliminary
Unaudited
(Dollars in Millions)
June 30, 2001 December 31, 2000
Assets
Cash $ 18.6 $ 21.5
Accounts receivable 136.3 135.0
Inventories 29.7 34.0
Other current assets 21.6 25.9
-------------- --------------
Total current assets 206.2 216.4
Investments held for operating
purposes 375.3 358.2
Properties, net of depreciation 1,322.8 1,327.8
Other assets 41.9 42.1
-------------- --------------
Total assets $ 1,946.2 $ 1,944.5
============== ==============
Liabilities and Stockholders' Equity
Current portion of long-term debt $ 40.3 $ 36.2
Accounts payable 46.0 52.9
Accrued liabilities 142.7 159.9
-------------- --------------
Total current liabilities 229.0 249.0
Long-term debt 646.2 638.4
Deferred income taxes 343.0 332.2
Other 72.7 81.5
Stockholders' equity 655.3 643.4
-------------- --------------
Total liabilities and stockholders'
equity $ 1,946.2 $ 1,944.5
============== ==============