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Kansas City Southern Reports Record Fourth Quarter And Full-Year 2012 Revenues, Carloads And Operating Income

Stocks in this article: KSU

This news release contains “forward-looking statements” within the meaning of the securities laws concerning potential future events involving KCS and its subsidiaries, which could materially differ from the events that actually occur. The words “projects,” “estimates,” “forecasts,” “believes,” “intends,” “expects,” “anticipates,” and similar expressions are intended to identify forward-looking statements. Such forward-looking statements are based upon information currently available to management and management’s perception thereof as of the date of this news release. Differences that actually occur could be caused by a number of external factors over which management has little or no control, including: competition and consolidation within the transportation industry; the business environment in industries that produce and consume rail freight; revocation of the rail concession of KCS’s subsidiary, Kansas City Southern de México, S.A. de C.V.; the termination, or failure to renew, agreements with customers, other railroads and third parties; interest rates; access to capital; disruptions to KCS’s technology infrastructure, including its computer systems; natural events such as severe weather, hurricanes and floods; market and regulatory responses to climate change; credit risk of customers and counterparties and their failure to meet their financial obligations; legislative and regulatory developments and disputes; rail accidents or other incidents or accidents along KCS’s rail network, facilities or customer facilities involving the release of hazardous materials, including toxic inhalation hazards; fluctuation in prices or availability of key materials, in particular diesel fuel; dependency on certain key suppliers of core rail equipment; changes in securities and capital markets; loss of key personnel; labor difficulties, including strikes and work stoppages; insufficiency of insurance to cover lost revenue, profits or other damages; acts of terrorism or risk of terrorist activities; war or risk of war; domestic and international economic conditions; political and economic conditions in Mexico and the level of trade between the United States and Mexico; the outcome of claims and litigation involving KCS or its subsidiaries; and other factors affecting the operation of the business. More detailed information about these factors may be found in filings by KCS with the Securities and Exchange Commission, including KCS’s Annual Report on Form 10-K for the year ended December 31, 2011 (File No. 1-4717) and subsequent reports. Forward-looking statements are not, and should not be relied upon as, a guarantee of future performance or results, nor will they necessarily prove to be accurate indications of the times at or by which any such performance or results will be achieved. As a result, actual outcomes and results may differ materially from those expressed in forward-looking statements. KCS is not obligated to update any forward-looking statements in this news release to reflect future events or developments.

         

Kansas City Southern

Consolidated Statements of Income

(In millions, except share and per share amounts)
(Unaudited)
Three Months Ended Twelve Months Ended
December 31, December 31,
2012 2011 2012 2011
Revenues $ 568.4   $ 530.3   $ 2,238.6   $ 2,098.3  
Operating expenses:
Compensation and benefits 107.0 109.7 430.5 423.8
Purchased services 50.5 51.3 219.8 204.8
Fuel 94.9 88.5 359.6 346.5
Equipment costs 42.8 42.8 167.1 172.0
Depreciation and amortization 51.9 47.1 198.8 186.2
Materials and other 47.7 40.5 189.9 179.0
Elimination of deferred statutory profit sharing liability, net (43.0 )
Gain on insurance recoveries related to hurricane damage       (25.6 )
Total operating expenses 394.8   379.9   1,522.7   1,486.7  
Operating income 173.6 150.4 715.9 611.6
Equity in net earnings of unconsolidated affiliates 4.2 4.6 19.3 18.2
Interest expense (23.8 ) (31.4 ) (100.4 ) (129.1 )
Debt retirement costs (2.1 ) (24.5 ) (20.1 ) (38.7 )
Foreign exchange gain (loss) (1.4 ) (2.3 ) 2.7 (9.2 )
Other income (expense), net (0.2 ) (0.1 ) (1.0 ) 2.2  
Income before income taxes 150.3 96.7 616.4 455.0
Income tax expense 57.8   0.7   237.0   123.1  
Net income 92.5 96.0 379.4 331.9
Less: Net income attributable to noncontrolling interest 0.7   0.3   2.1   1.6  
Net income attributable to Kansas City Southern and subsidiaries 91.8 95.7 377.3 330.3
Preferred stock dividends   0.1   0.2   1.6  
Net income available to common stockholders $ 91.8   $ 95.6   $ 377.1   $ 328.7  
 
Earnings per share:
Basic earnings per share $ 0.84   $ 0.87   $ 3.44   $ 3.04  
Diluted earnings per share $ 0.83   $ 0.87   $ 3.43   $ 3.00  
 
Average shares outstanding ( in thousands):
Basic 109,793 109,566 109,712 108,208
Potentially dilutive common shares 344   346   368   1,622  
Diluted 110,137   109,912   110,080   109,830  
 
Cash dividends declared per common share $ 0.195   $   $ 0.780   $  
 
 

Kansas City Southern

Revenue & Carloads/Units by Commodity - Fourth Quarter 2012 and 2011

                   
Revenues Carloads and Units Revenue per
(in millions) (in thousands) Carload/Unit
Fourth Quarter % Fourth Quarter   % Fourth Quarter %
2012 2011 Change 2012 2011 Change 2012 2011 Change
 
Chemical & Petroleum
Chemicals $ 50.7 $ 44.1 15 % 27.7 26.3 5 % $ 1,830 $ 1,677 9 %
Petroleum 26.6 23.6 13 % 17.9 16.6 8 % 1,486 1,422 5 %
Plastics 26.7   23.9   12 % 16.0   15.8   1 % 1,669   1,513   10 %
Total 104.0   91.6   14 % 61.6   58.7   5 % 1,688   1,560   8 %
 
Industrial & Consumer Products
Forest Products 64.0 59.0 8 % 31.7 32.0 (1 %) 2,019 1,844 9 %
Metals & Scrap 56.2 46.2 22 % 31.2 26.7 17 % 1,801 1,730 4 %
Other 17.1   18.1   (6 %) 19.0   18.4   3 % 900   984   (9 %)
Total 137.3   123.3   11 % 81.9   77.1   6 % 1,676   1,599   5 %
 
Agriculture & Minerals
Grain 45.9 54.0 (15 %) 27.3 33.3 (18 %) 1,681 1,622 4 %
Food Products 35.0 36.7 (5 %) 15.3 16.8 (9 %) 2,288 2,185 5 %
Ores & Minerals 5.0 5.7 (12 %) 5.2 5.7 (9 %) 962 1,000 (4 %)
Stone, Clay & Glass 6.0   6.6   (9 %) 3.0   3.1   (3 %) 2,000   2,129   (6 %)
Total 91.9   103.0   (11 %) 50.8   58.9   (14 %) 1,809   1,749   3 %
 
Energy (i)
Utility Coal 54.1 66.9 (19 %) 51.5 66.7 (23 %) 1,050 1,003 5 %
Coal & Petroleum Coke 10.1 8.1 25 % 13.2 10.1 31 % 765 802 (5 %)
Frac Sand 13.1 9.7 35 % 5.9 5.7 4 % 2,220 1,702 30 %
Crude Oil 7.3   0.8   813 % 3.5   0.7   400 % 2,086   1,143   83 %
Total 84.6   85.5   (1 %) 74.1   83.2   (11 %) 1,142   1,028   11 %
 
Intermodal 80.0   69.9   14 % 234.8   220.3   7 % 341   317   8 %
 
Automotive 49.1   37.0   33 % 28.5   23.6   21 % 1,723   1,568   10 %
 
TOTAL FOR COMMODITY GROUPS 546.9 510.3 7 % 531.7   521.8   2 % $ 1,029   $ 978   5 %
 
Other Revenue 21.5   20.0   8 %
 
TOTAL $ 568.4   $ 530.3   7 %

( i) Effective January 1, 2012, the Company established the Energy commodity group, which includes the previous Coal commodity group and certain amounts previously included within the Agriculture & Minerals and Chemicals & Petroleum commodity groups. Prior period amounts have been reclassified to conform to the current year presentation.

 

Kansas City Southern

Revenue & Carload/Units by Commodity - Years Ended December 31, 2012 and 2011

                   
Revenues Carloads and Units Revenue per
(in millions) (in thousands) Carload/Unit
Years Ended % Years Ended   % Years Ended %
2012 2011 Change 2012 2011 Change 2012 2011 Change
 
Chemical & Petroleum
Chemicals $ 200.2 $ 192.0 4 % 111.9 115.5 (3 %) $ 1,789 $ 1,662 8 %
Petroleum 105.8 106.8 (1 %) 70.7 72.1 (2 %) 1,496 1,481 1 %
Plastics 104.3   97.5   7 % 64.2   64.5     1,625   1,512   7 %
Total 410.3   396.3   4 % 246.8   252.1   (2 %) 1,662   1,572   6 %
 
Industrial & Consumer Products
Forest Products 253.9 233.0 9 % 129.1 128.8 1,967 1,809 9 %
Metals & Scrap 224.8 195.3 15 % 126.7 117.1 8 % 1,774 1,668 6 %
Other 72.4   75.3   (4 %) 80.3   80.7     902   933   (3 %)
Total 551.1   503.6   9 % 336.1   326.6   3 % 1,640   1,542   6 %
 
Agriculture & Minerals
Grain 213.1 212.1 122.8 128.3 (4 %) 1,735 1,653 5 %
Food Products 140.0 150.3 (7 %) 61.8 69.8 (11 %) 2,265 2,153 5 %
Ores & Minerals 21.6 27.5 (21 %) 21.4 27.1 (21 %) 1,009 1,015 (1 %)
Stone, Clay & Glass 25.8   25.7     12.9   13.4   (4 %) 2,000   1,918   4 %
Total 400.5   415.6   (4 %) 218.9   238.6   (8 %) 1,830   1,742   5 %
 
Energy (i)
Utility Coal 211.0 245.5 (14 %) 211.6 245.8 (14 %) 997 999
Coal & Petroleum Coke 34.6 36.5 (5 %) 46.5 42.3 10 % 744 863 (14 %)
Frac Sand 50.8 31.8 60 % 25.6 21.3 20 % 1,984 1,493 33 %
Crude Oil 16.4   3.6   356 % 8.7   2.6   235 % 1,885   1,385   36 %
Total 312.8   317.4   (1 %) 292.4   312.0   (6 %) 1,070   1,017   5 %
 
Intermodal 306.5   251.8   22 % 914.2   798.8   14 % 335   315   6 %
 
Automotive 174.4   139.2   25 % 103.7   85.6   21 % 1,682   1,626   3 %
 
TOTAL FOR COMMODITY GROUPS 2,155.6 2,023.9 7 % 2,112.1   2,013.7   5 % $ 1,021   $ 1,005   2 %
 
Other Revenue 83.0   74.4   12 %
 
TOTAL $ 2,238.6   $ 2,098.3   7 %

( i) Effective January 1, 2012, the Company established the Energy commodity group, which includes the previous Coal commodity group and certain amounts previously included within the Agriculture & Minerals and Chemicals & Petroleum commodity groups. Prior period amounts have been reclassified to conform to the current year presentation.



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