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, 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
July 25, 2002 entitled, "Kansas City Southern
Reports Substantial Improvement in Second 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 July 25,
2002, announcing KCS's second quarter and year to date 2002 operating results.
Included in Exhibit 99.2 are schedules regarding certain financial information
discussed at the Company's second quarter 2002 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
Date: July 30, 2002 By: /S/ LOUIS G. VAN HORN
---------------------------------------
Louis G. Van Horn
Vice President and Comptroller
(Principal Accounting Officer)
EXHIBIT 99.1
KANSAS CITY SOUTHERN PRESS RELEASE
427 WEST 12TH STREET, KANSAS CITY, MISSOURI 64105 NYSE SYMBOL: KSU
Date: July 25, 2002
Media Contact: William H. Galligan Phone: 816/983-1551
william.h.galligan@kcsr.com Fax: 816/983-1590
KANSAS CITY SOUTHERN REPORTS SUBSTANTIAL IMPROVEMENT IN SECOND QUARTER AND YEAR
TO DATE 2002 EARNINGS
EARNINGS ANALYSIS & COMMENTARY
Kansas City Southern ("KCS" or the "Company") reported net income of $14.5
million (23(cent) per diluted share) for the second quarter of 2002, more than
triple the $4.7 million (8(cent) per diluted share) reported for the second
quarter of 2001. This $9.8 million quarter to quarter increase resulted from a
$6.9 million decline in consolidated operating expenses, a $4.0 million decrease
in interest expense, a $3.3 million increase in other income and an $8.1 million
increase in equity in earnings from Grupo Transportacion Ferroviaria Mexicana,
S.A. de C.V. ("Grupo TFM"). These factors, which led to an increase in net
income, were reduced by a $5.3 million decline in consolidated revenue, a $1.6
million decrease in equity in earnings (losses) from other unconsolidated
affiliates and a $2.9 million increase in the income tax provision. Net income
for the second quarter of 2002 also includes extraordinary debt retirement costs
of $2.7 million (after-tax) associated with the early retirement of term debt in
June 2002.
For the six months ended June 30, 2002, net income was $26.2 million (42(cent)
per diluted share) compared to $10.6 million (17(cent) per diluted share) for
the six months ended June 30, 2001. This $15.6 million period to period increase
was due to an $8.9 million increase in domestic operating income, a $1.8 million
increase in equity in earnings from Grupo TFM, a $7.9 million decline in
interest expense, a $6.7 million increase in other income and 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"). These items were partially offset by a $1.6
million decline in equity in earnings (losses) from other unconsolidated
affiliates and a $10.2 million increase in the income tax provision.
Additionally, net income for the first six months of 2002 includes the
extraordinary debt retirement costs discussed above. Equity in 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. Net income for year to date
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 ("SFAS 133"). This charge is presented as a cumulative
effect of an accounting change for year to date 2001.
Diluted earnings per share information is as follows:
SECOND QUARTER YEAR TO DATE
--------------------------- -----------------------------
2002 2001 2002 2001
----------- ----------- ----------- -----------
U.S. operations $ 0.13 $ 0.07 $ 0.31 $ 0.07
Grupo TFM and PCRC (includes allocated interest) 0.14 0.01 0.15 0.11
---------- ----------- ----------- -----------
INCOME BEFORE EXTRAORDINARY ITEM AND CUMULATIVE EFFECT
OF ACCOUNTING CHANGE 0.27 0.08 0.46 0.18
Extraordinary debt retirement costs, net of income taxes (0.04) - (0.04) -
Cumulative effect of accounting change,
net of income taxes - - - (0.01)
---------- ----------- ----------- -----------
Diluted earnings per share - Net income $ 0.23 $ 0.08 $ 0.42 $ 0.17
----------- ----------- ----------- -----------
SECOND QUARTER
Operating income for the quarter ended June 30, 2002 increased $1.6 million to
$14.5 million compared to $12.9 million for the second quarter of 2001 as a $6.9
million decline in operating expenses more than offset a $5.3 million decline in
revenue quarter to quarter. Revenue from the Company's principal subsidiary, The
Kansas City Southern Railway Company ("KCSR") declined $3.9 million compared
with the prior year quarter due to lower coal and automotive revenue, partially
offset by an increase in chemical and petroleum products, agriculture and
minerals, paper and forest products and intermodal revenue. Revenue improvements
for these commodity groups were driven primarily by rate increases, increased
length of haul and traffic volume gains for certain commodities. Coal revenue
declined primarily as a result of a rate reduction at a major customer, which
took effect on January 1, 2002, as well as lower volume related to the
expiration of another coal customer's contract. Automotive revenue was lower due
to the loss of Ford business, which occurred in the second half of 2001. Revenue
from other subsidiaries decreased approximately $1.4 million quarter to quarter
due to demand driven volume declines. Second quarter 2002 costs and expenses for
KCSR were $5.6 million lower compared to the prior year quarter resulting mostly
from declines in costs for compensation, fuel, car hire, purchased services and
casualties. These factors resulted in a lower operating ratio for KCSR, which
improved to 86.5% for the quarter ended June 30, 2002 compared to 88.1% for the
same period in 2001.
The Company's equity in earnings from Grupo TFM increased approximately $8.1
million quarter to quarter. Exclusive of the results from Mexrail, which was
consolidated into Grupo TFM effective April 1, 2002, second quarter 2002 Grupo
TFM revenues improved 1% compared to the second quarter of 2001 and operating
expenses were 8% lower (under accounting principles generally accepted in the
United States of America - "U.S. GAAP"). Second quarter 2002 results for Grupo
TFM include a $27.8 million deferred tax benefit (calculated under U.S. GAAP)
compared to a deferred tax expense of $2.9 million in the second quarter of
2001. This variance was caused by a weakening of the peso exchange rate as well
as tax benefits derived from the impact of Mexican inflation. The fluctuation in
the peso exchange rate also contributed to an $18.4 million exchange loss for
the second quarter of 2002 compared to an exchange gain of $1.1 million in the
second quarter of 2001. The Company reports its equity in Grupo TFM under U.S.
GAAP while Grupo TFM reports under International Accounting Standards ("IAS").
KCS's consolidated second quarter 2002 interest expense decreased $4.0 million
(28%) from the prior year quarter as a result of lower interest rates and lower
overall debt balances. Other items affecting the Company's second quarter
results include a gain of approximately $3.5 million on the sale of certain
non-operating property at a smaller subsidiary, which is reflected as other
income.
During the second quarter, 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.
YEAR TO DATE
For the first six months of 2002, KCS's operating income rose $8.9 million as a
result of lower operating expenses, which declined $15.7 million (6%) compared
to the first six months of 2001, partially offset by a $6.8 million (2%) decline
in consolidated revenue period to period. KCSR's year to date 2002 revenue
dropped $3.7 million compared to year to date 2001. Similar to the second
quarter, this decline resulted primarily from 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.
Revenue from other subsidiaries decreased approximately $3.1 million period to
period due to demand driven volume declines. KCSR's year to date 2002 costs and
expenses were $15.0 million lower compared to the prior year period resulting
mostly from declines in costs for compensation, fuel, car hire and casualties,
partially offset by higher fringe benefit costs. KCSR's operating ratio was
86.9% for the first six months of 2002 compared to 91.1% for the same period in
2001.
The Company's equity in earnings from Grupo TFM increased approximately $1.8
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 $10.9 million compared to same period last
year. Exclusive of Mexrail's results for year to date 2002, Grupo TFM's revenue
improved nearly 1% compared to year to date 2001 and operating expenses (under
U.S. GAAP) were 5% lower (exclusive of the 2001 reversion income). For the six
months ended June 30, 2002, Grupo TFM's results include a $31.3 million deferred
tax benefit (calculated under U.S. GAAP) compared to a deferred tax expense of
$24.6 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 $17.6 million exchange loss for
year to date 2002 compared to an exchange gain of $4.2 million for the same
period in 2001.
KCS's consolidated year to date interest expense decreased $7.9 million (27%)
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 $6.8 million on the sale of certain
non-operating property at a smaller subsidiary, which is reported as other
income, and a gain on the sale of Mexrail of approximately $4.4 million. The
gain from the sale of Mexrail is presented as a separate item in the
accompanying financial statements.
BUSINESS ANALYSIS AND OUTLOOK FROM THE CHAIRMAN
Michael R. Haverty, KCS's Chairman, President and Chief Executive Officer said,
"we have been able to improve our bottom line in 2002 and pay down debt despite
the continued economic distress in North America and its impact on revenue.
Efforts to maintain our cost structure have proven effective as operating income
for both second quarter and year to date 2002 has increased compared to those
same periods in 2001, despite revenue declines in both periods. Revenue for the
second quarter and year to date, while improved for certain commodity groups,
was below our expectations. The cause of the revenue declines, as pointed out in
recent periods, was primarily due to lower coal revenue arising from a rate
reduction at one coal customer and the loss of business from another coal
customer. Also contributing to the revenue decline was the loss of automotive
traffic with Ford. Revenue gains experienced in other commodity groups were
obtained mostly through targeted rate increases, favorable changes in traffic
patterns and certain traffic volume improvements.
During 2002, Grupo TFM has been the most profitable part of our business and
provided a significant contribution to our net income. Grupo TFM revenue
continues to grow, while TFM management has been able to maintain effective
control over its costs. This is a tremendous accomplishment in such a tough
economic environment and shows the strong leadership of the Grupo TFM management
team. We, along with our partner, Grupo TMM, are in the final stages of
completing the purchase of the Mexican government's 24.6% ownership in Grupo TFM
through TFM. Our call option expires on July 31, 2002 and we expect this
transaction to be completed on or prior to that date. We are
excited about increasing our ownership position in Grupo TFM, which, we believe,
has become a rail transportation leader in North America.
The Company has reduced its debt balance by approximately $33 million during the
second quarter of 2002 and by $92 million during the course of the last twelve
months, resulting in a debt balance below $600 million. In June 2002, we issued
$200 million of seven-year 7 1/2% senior notes. This successful debt offering
provides stability for our current and future capital structure. The ability to
reduce our debt structure and secure a favorable note offering in a weak economy
demonstrates our commitment to achieving and maintaining an efficient capital
structure.
On July 14, 2002, we implemented our Management Control System ("MCS") on KCSR.
This state-of-the-art transportation computer system will allow management to
more effectively control and schedule the operations of the railroad and provide
customers with an effective tracking mechanism. While we are experiencing the
normal start-up growing pains, we are excited to have MCS in place and look
forward to the efficiencies and cost savings it is expected to provide.
As we face the future, we must increase our revenue base and continue to control
expenses. Even in these uncertain economic times, we believe that opportunities
exist to grow revenue. We will continue to implement targeted rate increases
when possible and increase traffic volumes with new as well as existing
customers. And when the economy does show consistent growth, we believe KCS is
well positioned to turn future revenue growth into increased profitability. We
appreciate the confidence that our shareholders have placed in us during these
times of economic volatility and we are as committed as ever to rewarding that
confidence through continued growth and by maximizing the potential of our NAFTA
rail network."
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 SIX MONTHS
ENDED JUNE 30, ENDED JUNE 30,
------------------------- ----------------------
2002 2001 2002 2001
--------- --------- --------- ---------
REVENUES $ 137.9 $ 143.2 $ 280.4 $ 287.2
Costs and expenses 108.8 115.8 223.0 239.3
Depreciation and amortization 14.6 14.5 29.5 28.9
--------- --------- --------- ---------
OPERATING INCOME 14.5 12.9 27.9 19.0
Equity in net earnings (losses) of unconsolidated affiliates:
Grupo Transportacion Ferroviaria Mexicana, S.A. de C.V. (PRELIMINARY) 13.0 4.9 17.8 16.0
Other (1.3) 0.3 (1.2) 0.4
Gain on sale of Mexrail, Inc. - - 4.4 -
Interest expense (10.5) (14.5) (21.8) (29.7)
Other income 4.4 1.1 8.8 2.1
--------- --------- --------- ---------
INCOME BEFORE INCOME TAXES, EXTRAORDINARY ITEM AND
CUMULATIVE EFFECT OF ACCOUNTING CHANGE 20.1 4.7 35.9 7.8
Income tax provision (benefit) 2.9 - 7.0 (3.2)
--------- --------- --------- ---------
INCOME BEFORE EXTRAORDINARY ITEM AND CUMULATIVE EFFECT OF ACCOUNTING
CHANGE 17.2 4.7 28.9 11.0
Extraordinary item, net of income taxes (2.7) - (2.7) -
Cumulative effect of accounting change, net of income taxes - - - (0.4)
--------- --------- --------- ---------
NET INCOME $ 14.5 $ 4.7 $ 26.2 $ 10.6
========= ========= ========= =========
PER SHARE DATA:
Basic Weighted Average Common shares outstanding (IN THOUSANDS) 60,095 58,380 59,918 58,321
Basic Earnings (Loss) per Common share
Income before extraordinary item and cumulative effect of
accounting change $ 0.28 $ 0.08 $ 0.48 $ 0.19
Extraordinary item, net of income taxes (0.04) - (0.04) -
Cumulative effect of accounting change - - - (0.01)
--------- --------- --------- ---------
Net Income $ 0.24 $ 0.08 $ 0.44 $ 0.18
========= ========= ========= =========
Diluted Weighted Average Common shares outstanding (IN THOUSANDS) 62,327 60,916 62,066 60,849
Diluted Earnings (Loss) per Common share
Income before extraordinary item and cumulative effect of
accounting change $ 0.27 $ 0.08 $ 0.46 0.18
Extraordinary item, net of income taxes (0.04) - (0.04) -
Cumulative effect of accounting change - - - (0.01)
--------- --------- --------- ---------
Net Income $ 0.23 $ 0.08 $ 0.42 $ 0.17
========= ========= ========= =========
EXHIBIT 99.2
KANSAS CITY SOUTHERN RAILWAY
OPERATING STATEMENTS
DOLLARS IN MILLIONS
SECOND QUARTER SECOND QUARTER YEAR TO DATE YEAR TO DATE
2002 2001 JUNE 30, 2002 JUNE 30, 2001
------------------- ------------------- -------------------- -------------------
Revenues
Freight Revenue $ 89.8 $ 82.9 $ 176.7 $ 166.4
Intermodal and Automotive Revenue 15.1 18.0 29.3 36.6
Unit Coal Revenue 20.9 27.6 49.2 54.5
Haulage Revenue 3.4 3.3 6.5 6.3
Other Revenue 7.1 8.4 15.0 16.6
------------------- ------------------- -------------------- -------------------
Total Revenues 136.3 140.2 276.7 280.4
------------------- ------------------- -------------------- -------------------
Operating Expenses
Compensation 31.3 32.2 64.6 67.6
Fringe Benefits 14.1 14.1 28.9 26.4
Fuel 9.3 11.4 18.8 23.8
Material and Supplies 7.9 7.3 15.7 14.6
Car Hire 4.1 5.7 9.3 12.2
Purchased Services 11.3 12.5 23.1 23.5
Casualties & Insurance 6.5 7.4 14.0 21.8
Other 2.7 1.9 4.7 5.0
------------------- ------------------- -------------------- -------------------
Net Operating Expenses 87.2 92.5 179.1 194.9
------------------- ------------------- -------------------- -------------------
Fixed Expenses
Leases, Net 13.4 13.9 26.4 27.3
Depreciation 13.7 13.6 27.6 27.0
Taxes (Other Than Income) 3.7 3.6 7.3 6.2
------------------- ------------------- -------------------- -------------------
Total Fixed Expenses 30.8 31.1 61.3 60.5
------------------- ------------------- -------------------- -------------------
Total Expenses 118.0 123.6 240.4 255.4
------------------- ------------------- -------------------- -------------------
Operating Income $ 18.3 $ 16.6 $ 36.3 $ 25.0
=================== =================== ==================== ===================
KANSAS CITY SOUTHERN RAILWAY
CARLOADINGS BY COMMODITY - YEAR TO DATE JUNE 30, 2002
DOLLARS IN THOUSANDS
CARLOADINGS REVENUE
Year to Date % Year to Date %
------------------------------ ----------------------------
2002 2001 Change 2002 2001 Change
-------------- ------------- --------- ------------ ------------- -----------
COAL
103,095 92,314 11.7% Unit Coal $ 49,206 $ 54,515 (9.7)%
2,012 2,404 (16.3)% Other Coal 1,082 1,347 (19.7)%
-------------- ------------- ------------ -------------
105,107 94,718 11.0% Total 50,288 55,862 (10.0)%
------------- ------------- ------------ -------------
CHEMICAL & PETROLEUM PRODUCTS
3,213 3,591 (10.5)% Agri Chemicals 2,337 2,846 (17.9)%
6,828 5,661 20.6% Gases 6,707 5,165 29.9%
11,392 11,387 0.0% Organic 11,530 11,350 1.6%
10,236 9,661 6.0% Inorganic 10,865 9,949 9.2%
27,153 33,930 (20.0)% Petroleum 19,654 20,444 (3.9)%
14,879 13,639 9.1% Plastics 14,579 13,652 6.8%
-------------- ------------- ------------ -------------
73,701 77,869 (5.4)% Total 65,672 63,406 3.6%
-------------- ------------- ------------ -------------
AGRICULTURE AND MINERALS
24,265 24,496 (0.9)% Domestic Grain 17,167 16,449 4.4%
7,446 5,049 47.5% Export Grain 5,574 3,198 74.3%
13,855 13,209 4.9% Food Products 11,428 10,651 7.3%
11,047 11,585 (4.6)% Ores and Minerals 6,181 6,294 (1.8)%
7,801 7,556 3.2% Stone, Clay & Glass 6,034 5,576 8.2%
-------------- ------------- ------------ -------------
64,414 61,895 4.1% Total 46,384 42,168 10.0%
-------------- ------------- ------------ -------------
PAPER & FOREST PRODUCTS
42,629 41,031 3.9% Pulp/Paper 31,966 28,435 12.4%
2,926 3,420 (14.4)% Scrap Paper 1,730 1,772 (2.4)%
17,104 17,732 (3.5)% Pulpwood/Logchips 6,961 7,397 (5.9)%
13,766 12,824 7.3% Lumber/Plywood 12,606 11,071 13.9%
8,944 11,289 (20.8)% Metal/Scrap 7,542 8,730 (13.6)%
3,499 3,375 3.7% Military/Other Carloads 5,275 4,429 19.1%
-------------- ------------- ------------ -------------
88,868 89,671 (0.9)% Total 66,080 61,834 6.9%
-------------- ------------- ------------ -------------
INTERMODAL & AUTOMOTIVE
9,481 23,743 (60.1)% Automotive 6,328 14,699 (56.9)%
128,790 126,573 1.8% Intermodal 22,990 21,859 5.2%
-------------- ------------- ------------ -------------
138,271 150,316 (8.0)% Total 29,318 36,558 (19.8)%
-------------- ------------- ------------ -------------
470,361 474,469 (0.9)% TOTAL FOR BUSINESS UNITS 257,742 259,828 (0.8)%
18,128 17,204 5.4% HAULAGE 6,482 6,291 3.0%
(3,523) (4,997) 29.5% Adjustments (2,540) (2,352) (8.0)%
-------------- ------------- ------------ -------------
484,966 486,676 (0.4)% TOTAL $ 261,684 $ 263,767 (0.8)%
============== ============= ============ =============
KANSAS CITY SOUTHERN RAILWAY
CARLOADINGS BY COMMODITY - SECOND QUARTER 2002
DOLLARS IN THOUSANDS
CARLOADINGS REVENUE
Second Quarter % Second Quarter %
------------------------------ ----------------------------
2002 2001 Change 2002 2001 Change
-------------- ------------- --------- ------------ ------------- -----------
COAL
45,503 47,120 (3.4)% Unit Coal $ 20,925 $ 27,574 (24.1)%
1,131 1,151 (1.7)% Other Coal 623 672 (7.3)%
-------------- ------------- ------------ -------------
46,634 48,271 (3.4)% 21,548 28,246 (23.7)%
-------------- ------------- ------------ -------------
CHEMICAL & PETROLEUM PRODUCTS
1,392 1,722 (19.2)% Agri Chemicals 933 1,408 (33.7)%
3,588 2,866 25.2% Gases 3,588 2,563 40.0%
5,978 5,675 5.3% Organic 6,106 5,656 8.0%
5,372 4,869 10.3% Inorganic 5,707 5,062 12.7%
14,066 14,938 (5.8)% Petroleum 10,004 9,666 3.5%
7,425 6,644 11.8% Plastics 7,463 6,479 15.2%
-------------- ------------- ------------ -------------
3.0% Total
37,821 36,714 33,801 30,834 9.6%
-------------- ------------- ------------ -------------
AGRICULTURE AND MINERALS
12,141 12,435 (2.4)% Domestic Grain 8,779 8,233 6.6%
2,531 1,867 35.6% Export Grain 1,763 906 94.6%
6,572 6,940 (5.3)% Food Products 5,429 5,639 (3.7)%
5,991 5,970 0.4% Ores and Minerals 3,353 3,228 3.9%
4,139 3,833 8.0% Stone, Clay & Glass 3,222 2,853 12.9%
-------------- ------------- ------------ -------------
31,374 31,045 1.1% Total 22,546 20,859 8.1%
-------------- ------------- ------------ -------------
PAPER & FOREST PRODUCTS
22,060 20,450 7.9% Pulp/Paper 16,813 14,468 16.2%
1,383 1,772 (22.0)% Scrap Paper 833 922 (9.7)%
8,318 9,062 (8.2)% Pulpwood/Logs/Chips 3,262 3,768 (13.4)%
6,968 6,833 2.0% Lumber/Plywood 6,491 5,953 9.0%
4,695 5,208 (9.9)% Metal/Scrap 4,076 4,160 (2.0)%
1,611 1,918 (16.0)% Military/Other carloads 2,668 2,499 6.8%
-------------- ------------- ------------ -------------
45,035 45,243 (0.5)% Total 34,143 31,770 7.5%
-------------- ------------- ------------ -------------
INTERMODAL & AUTOMOTIVE
3,710 12,198 (69.6)% Automotive 2,823 7,583 (62.8)%
67,574 61,294 10.2% Intermodal 12,196 10,395 17.3%
-------------- ------------- ------------ -------------
71,284 73,492 (3.0)% Total 15,019 17,978 (16.5)%
-------------- ------------- ------------ -------------
232,148 234,765 (1.1)% TOTAL FOR BUSINESS UNITS 127,057 129,687 (2.0)%
9,852 8,589 14.7% HAULAGE 3,375 3,265 3.4%
(1,461) (2,833) 48.4% Adjustments (1,274) (1,169) (9.0)%
-------------- ------------- ------------ -------------
240,539 240,521 0.0% TOTAL $ 129,158 $ 131,783 (2.0)%
============== ============= ============ =============
KANSAS CITY SOUTHERN -----------------------
CONSOLIDATED BALANCE SHEETS PRELIMINARY
(DOLLARS IN MILLIONS) -----------------------
JUNE 30, 2002 DECEMBER 31, 2001
----------------------- -----------------------
(UNAUDITED)
ASSETS
Cash $ 23.5 $ 4.7
Accounts receivable 131.5 130.0
Inventories 30.6 27.9
Other current assets 36.1 71.8
----------------------- -----------------------
Total current assets 221.7 254.4
Investments held for operating purposes 394.7 386.8
Properties, net of depreciation 1,329.9 1,327.4
Other assets 33.2 42.3
----------------------- -----------------------
Total assets $ 1,979.5 $ 2,010.9
======================= =======================
LIABILITIES AND STOCKHOLDERS' EQUITY
Current portion of long-term debt $ 10.3 $ 46.7
Accounts payable 43.4 50.4
Accrued liabilities 161.9 160.4
----------------------- -----------------------
Total current liabilities 215.6 257.5
Long-term debt 584.7 611.7
Deferred income taxes 368.0 370.2
Other 98.5 91.2
Stockholders' equity 712.7 680.3
----------------------- -----------------------
Total liabilities and stockholders' equity $ 1,979.5 $ 2,010.9
======================= =======================