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ý
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ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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¨
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TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
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Delaware
(State or other jurisdiction of
incorporation or organization)
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44-0663509
(I.R.S. Employer
Identification No.)
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427 West 12th Street,
Kansas City, Missouri
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64105
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(Address of principal executive offices)
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(Zip Code)
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Title of Each Class
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Name of Each Exchange on Which Registered
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Preferred Stock, Par Value $25 Per Share, 4%, Noncumulative
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New York Stock Exchange
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Common Stock, $.01 Per Share Par Value
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New York Stock Exchange
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Large accelerated filer
ý
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Accelerated filer
o
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Non-accelerated filer
o
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Smaller reporting company
o
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(Do not check if a smaller reporting company)
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Page
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PART I
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Item 1.
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Item 1A.
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Item 1B.
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Item 2.
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Item 3.
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Item 4.
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PART II
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Item 5.
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Item 6.
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Item 7.
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Item 7A.
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Item 8.
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Item 9.
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Item 9A.
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Item 9B.
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PART III
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Item 10.
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Item 11.
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Item 12.
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Item 13.
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Item 14.
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PART IV
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Item 15.
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Item 16.
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Item 1.
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Business
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•
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KCSM Servicios, S.A. de C.V. (“KCSM Servicios”), a wholly-owned and consolidated subsidiary that provides employee services to KCSM;
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•
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Meridian Speedway, LLC (“MSLLC”), a
seventy percent-owned
consolidated affiliate that owns the former KCSR rail line between Meridian, Mississippi and Shreveport, Louisiana, which is the portion of the rail line between Dallas, Texas and Meridian known as the “Meridian Speedway.” Norfolk Southern Corporation, through its wholly-owned subsidiary, The Alabama Great Southern Railroad Company, owns the remaining
thirty percent
of MSLLC;
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•
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TFCM, S. de R.L. de C.V. (“TCM”), a
forty-five percent-owned
unconsolidated affiliate that operates a bulk liquid terminal in San Luis Potosí, Mexico;
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•
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Ferrocarril y Terminal del Valle de México, S.A. de C.V. (“FTVM”), a
twenty-five percent-owned
unconsolidated affiliate that provides railroad services as well as ancillary services in the greater Mexico City area; and
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•
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PTC-220, LLC (“PTC-220”), a
fourteen percent-owned
unconsolidated affiliate that holds the licenses to large blocks of radio spectrum and other assets for the deployment of Positive Train Control (“PTC”). See Government Regulation section for further information regarding PTC.
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2017 Revenues
Business Mix
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Chemical and petroleum.
This sector includes products such as plastics, other petroleum refined products and miscellaneous chemicals. KCS transports these products to markets in the midwest, southeast and northeast United States and throughout Mexico through interchanges with other rail carriers. The products within the chemicals and plastics channels are used in the automotive, housing and packaging industries as well as in general manufacturing. KCS hauls petroleum products across its network and as petroleum refineries have continued to increase their refining capacity, they have coordinated with KCS to develop additional long-term storage opportunities which complement a fluid freight railroad operation.
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•
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Conferring regularly with other railroads’ security personnel and with industry experts on security issues;
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•
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Routing shipments of certain chemicals, which might be toxic if inhaled, pursuant to federal regulations;
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•
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Initiating a series of over 20 voluntary action items agreed to between AAR and DHS as enhancing security in the rail industry;
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•
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Conducting constant and targeted security training as part of the scheduled training for operating employees and managers;
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•
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Developing smartphone applications to ensure immediate information, live video and pictures from security supervisors and protection assets pertaining to potential operational risks;
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•
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Developing a multi-layered security model using high-speed digital imaging, system velocity and covert and overt security filters to mitigate the risk of illicit activity;
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•
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Measuring key security metrics to ensure positive risk mitigation and product integrity trends;
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•
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Performing constant due diligence with the existing security model and by benchmarking rail security on a world-wide basis to monitor threat streams related to rail incidents;
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•
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Implementing a Tactical Intelligence Center by KCSM, which provides constant training with core members in new technology helping to prevent, detect, deter, deny and respond to potentially illicit activities; and
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•
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Deploying an array of non-intrusive technologies including, but not limited to, digital video surveillance and analytics as part of an intelligent video security solution, including a closed circuit television platform with geo-fencing for intrusion detection, to allow for remote viewing access to monitor ports of entry, intermodal and rail yards.
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Item 1A.
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Risk Factors
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Item 1B.
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Unresolved Staff Comments
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Item 2.
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Properties
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2017
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2016
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||||||||||||||
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Owned
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Leased
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Total
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Owned
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Leased
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Total
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Freight Cars:
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Box cars
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3,205
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1,212
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4,417
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3,212
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2,105
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5,317
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Hoppers (covered and open top)
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4,735
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2,107
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6,842
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4,333
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2,030
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6,363
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Gondolas
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2,619
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1,267
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3,886
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2,993
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1,295
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4,288
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Automotive
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2,731
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1,142
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3,873
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2,483
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768
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3,251
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Flat cars (intermodal and other)
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850
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98
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948
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851
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97
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948
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Tank cars
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4
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568
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572
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4
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645
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649
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Total
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14,144
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6,394
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20,538
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13,876
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6,940
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20,816
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Locomotives:
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Freight
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736
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146
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882
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736
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121
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857
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Switching
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187
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—
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187
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187
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—
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187
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Total
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923
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146
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1,069
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923
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121
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1,044
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Item 3.
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Legal Proceedings
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Item 4.
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Mine Safety Disclosures
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Item 5.
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Market for KCS’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
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Fourth
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Third
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Second
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First
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||||||||
2017
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Dividends per share:
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||||||||
Common stock
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$
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0.36
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$
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0.36
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$
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0.33
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$
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0.33
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$25 par preferred stock
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0.25
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0.25
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0.25
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0.25
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||||
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Stock price ranges:
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$25 par preferred:
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||||||||
— High
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$
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28.91
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$
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29.14
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$
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29.50
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$
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29.35
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— Low
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26.96
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27.35
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25.45
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26.75
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Common:
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||||||||
— High
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$
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114.85
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$
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109.13
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$
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105.15
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$
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90.82
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— Low
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99.70
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100.17
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84.92
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79.05
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||||||||
2016
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||||||||
Dividends per share:
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||||||||
Common stock
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$
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0.33
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$
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0.33
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$
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0.33
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$
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0.33
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$25 par preferred stock
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0.25
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0.25
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0.25
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0.25
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||||
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||||||||
Stock price ranges:
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||||||||
$25 par preferred:
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||||||||
— High
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$
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31.10
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$
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29.54
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$
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29.00
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$
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27.30
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— Low
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25.52
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26.40
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25.70
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25.31
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Common:
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||||||||
— High
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$
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96.83
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$
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100.69
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$
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98.99
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$
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88.84
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— Low
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79.30
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86.52
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83.00
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62.20
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2012
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2013
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2014
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2015
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2016
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2017
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||||||||||||
Kansas City Southern
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$
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100.00
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$
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149.50
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$
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148.83
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$
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92.38
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$
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106.56
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$
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133.99
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S&P 500
(1)
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100.00
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132.39
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150.51
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152.59
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170.84
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208.14
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||||||
Dow Jones U.S. Industrial Transportation
(2)
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100.00
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140.91
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171.45
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133.47
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172.86
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221.67
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(1)
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The S&P 500 is a registered trademark of the McGraw-Hill Companies, Inc. The S&P 500 Index reflects the weighted average market value for 500 companies whose shares are traded on the New York Stock Exchange, American Stock Exchange and the Nasdaq Stock Market.
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(2)
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The Dow Jones U.S. Industrial Transportation Index is a registered trademark of Dow Jones & Co., Inc., an independent company.
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Period
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(a) Total
Number
of Shares
(or Units)
Purchased
|
|
(b) Average
Price Paid
per Share (or Unit)
|
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(c) Total
Number of
Shares
(or Units)
Purchased
as Part of
Publicly
Announced
Plans or
Programs
|
|
(d) Maximum
Number (or
Approximate
Dollar Value)
of Shares (or Units)
that may yet be
purchased under
the Plans
or
Programs
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||||||
October 1-31, 2017
|
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254,792
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(i)
|
|
$
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101.10
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(i)
|
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254,792
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(i)
|
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$
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589,239,305
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November 1-30, 2017
|
|
299,724
|
|
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$
|
105.46
|
|
|
299,724
|
|
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$
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557,631,058
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December 1-31, 2017
|
|
114,676
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|
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$
|
111.86
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|
|
114,676
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|
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$
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544,803,013
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Total
|
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669,192
|
|
|
|
|
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669,192
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(i)
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In the third quarter of 2017, the Company paid $200.0 million under two ASR agreements and received an aggregate of initial delivery of 1,598,796 shares. One of the ASR agreements was settled in the third quarter of 2017, with the Company receiving 151,481 additional shares for a total of 1,750,277 and a value of $185.0 million. In October 2017, the second ASR agreement was settled with the Company receiving 151,492 additional shares and a value of $15.0 million, which is included in the number of shares and the average price paid per share in the table above. The average price paid per share upon completion of the ASR agreements was $105.17. See Note 13 to the consolidated financial statements included in Item 8.
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Item 6.
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Selected Financial Data
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2017
|
|
2016
|
|
2015
|
|
2014
|
|
2013
|
||||||||||
Earnings From Continuing Operations
|
|
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||||||||||
Revenues
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$
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2,582.9
|
|
|
$
|
2,334.2
|
|
|
$
|
2,418.8
|
|
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$
|
2,577.1
|
|
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$
|
2,369.3
|
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Operating expenses (i) (ii)
|
1,661.3
|
|
|
1,515.7
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|
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1,615.0
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|
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1,768.0
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1,630.7
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|||||
Operating income
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$
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921.6
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|
|
$
|
818.5
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$
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803.8
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$
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809.1
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$
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738.6
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Net income (iii) (iv)
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$
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963.9
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$
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479.9
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$
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485.3
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$
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504.3
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$
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353.3
|
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Earnings per common share:
|
|
|
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||||||||||
Basic
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$
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9.18
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$
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4.44
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$
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4.41
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$
|
4.56
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$
|
3.19
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Diluted
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9.16
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|
|
4.43
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|
|
4.40
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|
|
4.55
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|
|
3.18
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|
|||||
Financial Position
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||||||||||
Total assets
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$
|
9,198.7
|
|
|
$
|
8,817.5
|
|
|
$
|
8,341.0
|
|
|
$
|
7,976.4
|
|
|
$
|
7,283.7
|
|
Total long-term debt obligations,
including current portion and short-term borrowings
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2,619.4
|
|
|
2,478.2
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|
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2,401.1
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|
|
2,301.4
|
|
|
2,168.8
|
|
|||||
Total stockholders’ equity
|
4,548.9
|
|
|
4,089.9
|
|
|
3,914.3
|
|
|
3,755.5
|
|
|
3,370.6
|
|
|||||
Total equity
|
4,865.4
|
|
|
4,404.5
|
|
|
4,224.7
|
|
|
4,064.1
|
|
|
3,676.6
|
|
|||||
Other Data Per Common Share
|
|
|
|
|
|
|
|
|
|
||||||||||
Cash dividends declared per common share
|
$
|
1.38
|
|
|
$
|
1.32
|
|
|
$
|
1.32
|
|
|
$
|
1.12
|
|
|
$
|
0.86
|
|
(i)
|
During 2017 and 2016, the Company recognized a benefit of
$44.1 million
and $62.8 million, respectively, related to a credit available for the excise tax included in the price of fuel that is purchased and consumed in locomotives and certain work equipment in Mexico.
|
(ii)
|
During 2015 and 2014, the Company recognized pre-tax lease termination costs of $9.6 million and $38.3 million, respectively, within operating expenses due to the early termination of certain operating leases and the related purchase of equipment.
|
(iii)
|
During 2017, the Company recognized a $413.0 million net tax benefit as a result of the Tax Cuts and Jobs Act (the “Tax Reform Act”), which was signed into law December 22, 2017. Further information on the tax impacts of the Tax Reform Act is presented in Note 12 to the consolidated financial statements in Item 8.
|
(iv)
|
During 2015, 2014 and 2013, the Company recognized pre-tax debt retirement and exchange costs of $7.6 million, $6.6 million and $119.2 million, respectively, related to debt restructuring activities that occurred during the periods.
|
Item 7.
|
Management’s Discussion and Analysis of Financial Condition and Results of Operations
|
•
|
the outcome of claims and litigation, including those related to environmental contamination, personal injuries and property damage;
|
•
|
changes in legislation and regulations or revisions of controlling authority;
|
•
|
the adverse impact of any termination or revocation of Kansas City Southern de México, S.A. de C.V. (“KCSM”)’s concession by the Mexican government;
|
•
|
United States, Mexican and global economic, political and social conditions;
|
•
|
the effects of the North American Free Trade Agreement (“NAFTA”), on the level of trade among the United States, Mexico and Canada;
|
•
|
the level of trade between the United States and Asia or Mexico;
|
•
|
the effects of fluctuations in the peso-dollar exchange rate;
|
•
|
natural events such as severe weather, fire, floods, hurricanes, earthquakes or other disruptions to the Company’s operating systems, structures and equipment or the ability of customers to produce or deliver their products;
|
•
|
the effects of adverse general economic conditions affecting customer demand and the industries and geographic areas that produce and consume the commodities KCS carries;
|
•
|
the dependence on the stability, availability and security of the information technology systems to operate its business;
|
•
|
the effect of demand for KCS’s services exceeding network capacity or traffic congestion on operating efficiencies and service reliability;
|
•
|
uncertainties regarding the litigation KCS faces and any future claims and litigation;
|
•
|
the impact of competition, including competition from other rail carriers, trucking companies and maritime shippers in the United States and Mexico;
|
•
|
KCS’s reliance on agreements with other railroads and third parties to successfully implement its business strategy, operations and growth and expansion plans, including the strategy to convert customers from using trucking services to rail transportation services;
|
•
|
compliance with environmental regulations;
|
•
|
disruption in fuel supplies, changes in fuel prices and the Company’s ability to recapture its costs of fuel from customers;
|
•
|
material adverse changes in economic and industry conditions, including the availability of short and long-term financing, both within the United States and Mexico and globally;
|
•
|
market and regulatory responses to climate change;
|
•
|
changes in labor costs and labor difficulties, including strikes and work stoppages affecting either operations or customers’ abilities to deliver goods for shipment;
|
•
|
KCS’s reliance on certain key suppliers of core rail equipment;
|
•
|
availability of qualified personnel; and
|
•
|
acts of terrorism, war or other acts of violence or crime or risk of such activities.
|
•
|
The Kansas City Southern Railway Company (“KCSR”), a wholly-owned subsidiary;
|
•
|
KCSM, a wholly-owned subsidiary;
|
•
|
Mexrail, Inc. (“Mexrail”), a wholly-owned consolidated subsidiary; which, in turn, wholly owns The Texas Mexican Railway Company (“Tex-Mex”);
|
•
|
KCSM Servicios, S.A. de C.V. (“KCSM Servicios”), a wholly-owned subsidiary;
|
•
|
Meridian Speedway, LLC (“MSLLC”), a
seventy percent-owned
consolidated affiliate;
|
•
|
Panama Canal Railway Company (“PCRC”), a
fifty percent-owned
unconsolidated affiliate;
|
•
|
TFCM, S. de R.L. de C.V. (“TCM”), a
forty-five percent-owned
unconsolidated affiliate;
|
•
|
Ferrocarril y Terminal del Valle de México, S.A. de C.V. (“FTVM”), a
twenty-five percent-owned
unconsolidated affiliate; and
|
•
|
PTC-220, LLC (“PTC-220”), a
fourteen percent-owned
unconsolidated affiliate.
|
|
2017
|
|
2016
|
|
Change
|
||||||
Revenues
|
$
|
2,582.9
|
|
|
$
|
2,334.2
|
|
|
$
|
248.7
|
|
Operating expenses
|
1,661.3
|
|
|
1,515.7
|
|
|
145.6
|
|
|||
Operating income
|
921.6
|
|
|
818.5
|
|
|
103.1
|
|
|||
Equity in net earnings of affiliates
|
11.5
|
|
|
14.6
|
|
|
(3.1
|
)
|
|||
Interest expense
|
(100.2
|
)
|
|
(97.7
|
)
|
|
(2.5
|
)
|
|||
Foreign exchange gain (loss)
|
41.7
|
|
|
(72.0
|
)
|
|
113.7
|
|
|||
Other expense, net
|
(0.3
|
)
|
|
(0.7
|
)
|
|
0.4
|
|
|||
Income before income taxes
|
874.3
|
|
|
662.7
|
|
|
211.6
|
|
|||
Income tax expense (benefit)
|
(89.6
|
)
|
|
182.8
|
|
|
(272.4
|
)
|
|||
Net income
|
963.9
|
|
|
479.9
|
|
|
484.0
|
|
|||
Less: Net income attributable to noncontrolling interest
|
1.9
|
|
|
1.8
|
|
|
0.1
|
|
|||
Net income attributable to Kansas City Southern and subsidiaries
|
$
|
962.0
|
|
|
$
|
478.1
|
|
|
$
|
483.9
|
|
|
Revenues
|
|
Carloads and Units
|
|
Revenue per Carload/Unit
|
|||||||||||||||||||||||||
|
2017
|
|
2016
|
|
% Change
|
|
2017
|
|
2016
|
|
% Change
|
|
2017
|
|
2016
|
|
% Change
|
|||||||||||||
Chemical and petroleum
|
$
|
539.9
|
|
|
$
|
475.4
|
|
|
14
|
%
|
|
273.5
|
|
|
258.5
|
|
|
6
|
%
|
|
$
|
1,974
|
|
|
$
|
1,839
|
|
|
7
|
%
|
Industrial and consumer products
|
588.3
|
|
|
554.0
|
|
|
6
|
%
|
|
329.9
|
|
|
317.0
|
|
|
4
|
%
|
|
1,783
|
|
|
1,748
|
|
|
2
|
%
|
||||
Agriculture and minerals
|
477.4
|
|
|
461.0
|
|
|
4
|
%
|
|
244.3
|
|
|
251.4
|
|
|
(3
|
%)
|
|
1,954
|
|
|
1,834
|
|
|
7
|
%
|
||||
Energy
|
283.8
|
|
|
202.7
|
|
|
40
|
%
|
|
291.7
|
|
|
253.9
|
|
|
15
|
%
|
|
973
|
|
|
798
|
|
|
22
|
%
|
||||
Intermodal
|
363.8
|
|
|
357.6
|
|
|
2
|
%
|
|
975.1
|
|
|
952.8
|
|
|
2
|
%
|
|
373
|
|
|
375
|
|
|
(1
|
%)
|
||||
Automotive
|
230.8
|
|
|
189.9
|
|
|
22
|
%
|
|
155.5
|
|
|
133.3
|
|
|
17
|
%
|
|
1,484
|
|
|
1,425
|
|
|
4
|
%
|
||||
Carload revenues, carloads and units
|
2,484.0
|
|
|
2,240.6
|
|
|
11
|
%
|
|
2,270.0
|
|
|
2,166.9
|
|
|
5
|
%
|
|
$
|
1,094
|
|
|
$
|
1,034
|
|
|
6
|
%
|
||
Other revenue
|
98.9
|
|
|
93.6
|
|
|
6
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Total revenues (i)
|
$
|
2,582.9
|
|
|
$
|
2,334.2
|
|
|
11
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
(i) Included in revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Fuel surcharge
|
$
|
169.5
|
|
|
$
|
103.8
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Chemical and petroleum.
Reven
ues
increased $64.5 million for the year ended December 31, 2017, compared to 2016, due to a 7% increase in revenue per carload/unit and a 6% increase in carload/unit volumes. Revenue per carload/unit increased due to longer average length of haul and positive pricing impacts. Petroleum volumes increased due to refined product and liquefied petroleum gas shipments to Mexico.
|
|
Industrial and consumer products.
Revenues increased $34.3
million for the year ended December 31, 2017, compared to 2016, due to a 4% increase in carload/unit volumes and a 2% increase in revenue per carload/unit. Other carloads’ volumes increased due to strong military movements. Revenue per carload/unit increased due to higher fuel surcharge, metals and scrap longer average length of haul, and positive pricing impacts.
|
|
Agriculture and minerals.
Revenues increased $16.4 million for the year ended December 31, 2017 compared to 2016, due to a 7% increase in revenue per carload/unit, partially offset by a 3% decrease in carload/unit volumes. Revenue per carload/unit increased due to positive pricing impacts, longer average length of haul, and higher fuel surcharge. Food products volumes decreased due to change in market demand.
|
|
Energy.
Revenues increased $81.1 million for the year ended December 31, 2017, compared to 2016, due to a 22% increase in revenue per carload/unit and a 15% increase in carload/unit volumes. Revenues per carload/unit increased due to longer average length of haul, positive pricing impacts, mix, and higher fuel surcharge. Utility coal volumes increased due to higher natural gas prices and lower coal inventory levels. Additionally, frac sand volumes increased due to strong demand as a result of higher crude oil prices.
|
|
|
|
|
Change
|
|||||||||||
|
2017
|
|
2016
|
|
Dollars
|
|
Percent
|
|||||||
Compensation and benefits
|
$
|
493.8
|
|
|
$
|
462.4
|
|
|
$
|
31.4
|
|
|
7
|
%
|
Purchased services
|
193.7
|
|
|
208.5
|
|
|
(14.8
|
)
|
|
(7
|
%)
|
|||
Fuel
|
316.1
|
|
|
253.8
|
|
|
62.3
|
|
|
25
|
%
|
|||
Mexican fuel excise tax credit
|
(44.1
|
)
|
|
(62.8
|
)
|
|
18.7
|
|
|
(30
|
%)
|
|||
Equipment costs
|
129.2
|
|
|
120.0
|
|
|
9.2
|
|
|
8
|
%
|
|||
Depreciation and amortization
|
320.9
|
|
|
305.0
|
|
|
15.9
|
|
|
5
|
%
|
|||
Materials and other
|
251.7
|
|
|
228.8
|
|
|
22.9
|
|
|
10
|
%
|
|||
Total operating expenses
|
$
|
1,661.3
|
|
|
$
|
1,515.7
|
|
|
$
|
145.6
|
|
|
10
|
%
|
|
2016
|
|
2015
|
|
Change
|
||||||
Revenues
|
$
|
2,334.2
|
|
|
$
|
2,418.8
|
|
|
$
|
(84.6
|
)
|
Operating expenses
|
1,515.7
|
|
|
1,615.0
|
|
|
(99.3
|
)
|
|||
Operating income
|
818.5
|
|
|
803.8
|
|
|
14.7
|
|
|||
Equity in net earnings of affiliates
|
14.6
|
|
|
18.3
|
|
|
(3.7
|
)
|
|||
Interest expense
|
(97.7
|
)
|
|
(81.9
|
)
|
|
(15.8
|
)
|
|||
Debt retirement and exchange costs
|
—
|
|
|
(7.6
|
)
|
|
7.6
|
|
|||
Foreign exchange loss
|
(72.0
|
)
|
|
(56.6
|
)
|
|
(15.4
|
)
|
|||
Other expense, net
|
(0.7
|
)
|
|
(3.4
|
)
|
|
2.7
|
|
|||
Income before income taxes
|
662.7
|
|
|
672.6
|
|
|
(9.9
|
)
|
|||
Income tax expense
|
182.8
|
|
|
187.3
|
|
|
(4.5
|
)
|
|||
Net income
|
479.9
|
|
|
485.3
|
|
|
(5.4
|
)
|
|||
Less: Net income attributable to noncontrolling interest
|
1.8
|
|
|
1.8
|
|
|
—
|
|
|||
Net income attributable to Kansas City Southern and subsidiaries
|
$
|
478.1
|
|
|
$
|
483.5
|
|
|
$
|
(5.4
|
)
|
|
Revenues
|
|
Carloads and Units
|
|
Revenue per Carload/Unit
|
|||||||||||||||||||||||||
|
2016
|
|
2015
|
|
% Change
|
|
2016
|
|
2015
|
|
% Change
|
|
2016
|
|
2015
|
|
% Change
|
|||||||||||||
Chemical and petroleum
|
$
|
475.4
|
|
|
$
|
474.2
|
|
|
—
|
|
|
258.5
|
|
|
259.7
|
|
|
—
|
|
|
$
|
1,839
|
|
|
$
|
1,826
|
|
|
1
|
%
|
Industrial and consumer products
|
554.0
|
|
|
570.4
|
|
|
(3
|
%)
|
|
317.0
|
|
|
320.5
|
|
|
(1
|
%)
|
|
1,748
|
|
|
1,780
|
|
|
(2
|
%)
|
||||
Agriculture and minerals
|
461.0
|
|
|
429.3
|
|
|
7
|
%
|
|
251.4
|
|
|
238.8
|
|
|
5
|
%
|
|
1,834
|
|
|
1,798
|
|
|
2
|
%
|
||||
Energy
|
202.7
|
|
|
252.3
|
|
|
(20
|
%)
|
|
253.9
|
|
|
280.8
|
|
|
(10
|
%)
|
|
798
|
|
|
899
|
|
|
(11
|
%)
|
||||
Intermodal
|
357.6
|
|
|
381.5
|
|
|
(6
|
%)
|
|
952.8
|
|
|
990.3
|
|
|
(4
|
%)
|
|
375
|
|
|
385
|
|
|
(3
|
%)
|
||||
Automotive
|
189.9
|
|
|
218.7
|
|
|
(13
|
%)
|
|
133.3
|
|
|
126.5
|
|
|
5
|
%
|
|
1,425
|
|
|
1,729
|
|
|
(18
|
%)
|
||||
Carload revenues, carloads and units
|
2,240.6
|
|
|
2,326.4
|
|
|
(4
|
%)
|
|
2,166.9
|
|
|
2,216.6
|
|
|
(2
|
%)
|
|
$
|
1,034
|
|
|
$
|
1,050
|
|
|
(2
|
%)
|
||
Other revenue
|
93.6
|
|
|
92.4
|
|
|
1
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||
Total revenues (i)
|
$
|
2,334.2
|
|
|
$
|
2,418.8
|
|
|
(3
|
%)
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
(i) Included in revenues:
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Fuel surcharge
|
$
|
103.8
|
|
|
$
|
230.1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Chemical and petroleum.
Reven
ues increas
ed $1.2 million for the year ended December 31, 2016, compared to 2015, due to a 1% increase in revenue per carload/unit. Revenue per carload/unit increased due to
positive pricing impacts and mix, partially offset by lower fuel surcharge and the weakening of the Mexican peso against the U.S. dollar. Plastic volumes increased due to strong market demand and low commodity pricing environment and petroleum volumes increased as a result of several customers’ business expansion. These increases were partially offset by a decrease in chemical volumes due to oversupply caused by low natural gas prices that drove fertilizer prices down and a customer’s lost business.
|
|
Industrial and consumer products.
Revenues decreased $16.4 million for the year ended December 31, 2016, compared to 2015, due to a 2% decrease in revenue per carload/unit and a 1% decrease in carload/unit volumes. Revenue per carload/unit decreased due to the weakening of the Mexican peso against the U.S. dollar and lower fuel surcharge, partially offset by positive pricing impacts. Paper volumes decreased due to competitive trucking market, global softness in the market, and high inventory levels.
|
|
Agriculture and minerals.
Revenues increased $31.7 million for the year ended December 31, 2016 compared to 2015, due to a 5% increase in carload/unit volumes and a 2% increase in revenue per carload/unit. Grain and food product volumes increased due to improved cycle times. In addition, grain volumes increased due to additional equipment capacity, partially offset by a decrease in ores and minerals volumes due to weather related issues in the southeast region of the United States. Revenue per carload/unit increased due to longer average length of haul and mix, partially offset by lower fuel surcharge and the weakening of the Mexican peso against the U.S. dollar.
|
|
Energy.
Revenues decreased $49.6 million for the year ended December 31, 2016, compared to 2015, due to an 11% decrease in revenue per carload/unit and a 10% decrease in carload/unit volumes. Revenue per carload/unit decreased due to shorter average length of haul and lower fuel surcharge. Volumes decreased as low natural gas prices and high coal inventory levels reduced the demand for utility coal in 2016. In addition, crude oil volumes decreased as result of low crude oil spreads and increased pipeline capacity, and the decline in new crude drilling operations in the U.S. has reduced the demand for frac sand.
|
|
|
|
|
Change
|
|||||||||||
|
2016
|
|
2015
|
|
Dollars
|
|
Percent
|
|||||||
Compensation and benefits
|
$
|
462.4
|
|
|
$
|
442.2
|
|
|
$
|
20.2
|
|
|
5
|
%
|
Purchased services
|
208.5
|
|
|
223.0
|
|
|
(14.5
|
)
|
|
(7
|
%)
|
|||
Fuel
|
253.8
|
|
|
306.9
|
|
|
(53.1
|
)
|
|
(17
|
%)
|
|||
Mexican fuel excise tax credit
|
(62.8
|
)
|
|
—
|
|
|
(62.8
|
)
|
|
100
|
%
|
|||
Equipment costs
|
120.0
|
|
|
119.4
|
|
|
0.6
|
|
|
1
|
%
|
|||
Depreciation and amortization
|
305.0
|
|
|
284.6
|
|
|
20.4
|
|
|
7
|
%
|
|||
Materials and other
|
228.8
|
|
|
229.3
|
|
|
(0.5
|
)
|
|
—
|
|
|||
Lease termination costs
|
—
|
|
|
9.6
|
|
|
(9.6
|
)
|
|
(100
|
%)
|
|||
Total operating expenses
|
$
|
1,515.7
|
|
|
$
|
1,615.0
|
|
|
$
|
(99.3
|
)
|
|
(6
|
%)
|
|
2017
|
|
2016
|
|
2015
|
||||||
Cash flows provided by (used for):
|
|
|
|
|
|
||||||
Operating activities
|
$
|
1,028.4
|
|
|
$
|
919.0
|
|
|
$
|
909.2
|
|
Investing activities
|
(681.1
|
)
|
|
(628.2
|
)
|
|
(873.0
|
)
|
|||
Financing activities
|
(383.8
|
)
|
|
(256.8
|
)
|
|
(247.6
|
)
|
|||
Net increase (decrease) in cash and cash equivalents
|
(36.5
|
)
|
|
34.0
|
|
|
(211.4
|
)
|
|||
Cash and cash equivalents beginning of year
|
170.6
|
|
|
136.6
|
|
|
348.0
|
|
|||
Cash and cash equivalents end of year
|
$
|
134.1
|
|
|
$
|
170.6
|
|
|
$
|
136.6
|
|
|
Payments Due by Period
|
||||||||||||||||||
|
Total
|
|
Less Than
1 Year
|
|
1-3 Years
|
|
3-5 Years
|
|
More than
5 years
|
||||||||||
Long-term debt and short-term borrowings (including interest and capital lease obligations) (i)
|
$
|
4,083.4
|
|
|
$
|
474.5
|
|
|
$
|
491.1
|
|
|
$
|
182.5
|
|
|
$
|
2,935.3
|
|
Operating leases
|
281.7
|
|
|
60.9
|
|
|
93.9
|
|
|
49.7
|
|
|
77.2
|
|
|||||
Deemed mandatory repatriation tax (ii)
|
44.9
|
|
|
3.6
|
|
|
7.2
|
|
|
7.2
|
|
|
26.9
|
|
|||||
Capital expenditure obligations (iii)
|
400.3
|
|
|
149.8
|
|
|
250.5
|
|
|
—
|
|
|
—
|
|
|||||
Other contractual obligations (iv)
|
547.5
|
|
|
105.3
|
|
|
143.4
|
|
|
89.6
|
|
|
209.2
|
|
|||||
Total
|
$
|
5,357.8
|
|
|
$
|
794.1
|
|
|
$
|
986.1
|
|
|
$
|
329.0
|
|
|
$
|
3,248.6
|
|
(i)
|
For variable rate obligations, interest payments were calculated using the December 31, 2017 rate. For fixed rate obligations, interest payments were calculated based on the applicable rates and payment dates.
|
(ii)
|
U.S. federal income tax on deemed mandatory repatriation is payable over 8 years pursuant to the Tax Reform Act.
|
(iii)
|
Capital expenditure obligations include minimum capital expenditures under the KCSM Concession agreement and other regulatory requirements.
|
(iv)
|
Other contractual obligations include purchase commitments and certain maintenance agreements.
|
|
|
2017
|
|
2016
|
|
2015
|
||||||
Roadway capital program
|
|
$
|
269.3
|
|
|
$
|
271.8
|
|
|
$
|
294.0
|
|
Locomotives and freight cars
|
|
75.7
|
|
|
112.6
|
|
|
201.2
|
|
|||
Capacity
|
|
111.4
|
|
|
109.6
|
|
|
86.6
|
|
|||
Positive train control
|
|
51.7
|
|
|
49.6
|
|
|
34.0
|
|
|||
Information technology
|
|
33.7
|
|
|
29.3
|
|
|
21.9
|
|
|||
Other
|
|
17.7
|
|
|
11.1
|
|
|
11.0
|
|
|||
Total capital expenditures (accrual basis)
|
|
559.5
|
|
|
584.0
|
|
|
648.7
|
|
|||
Change in capital accruals
|
|
25.9
|
|
|
(20.4
|
)
|
|
39.3
|
|
|||
Total cash capital expenditures
|
|
$
|
585.4
|
|
|
$
|
563.6
|
|
|
$
|
688.0
|
|
|
|
|
|
|
|
|
||||||
Purchase or replacement of equipment under operating leases (accrual basis)
|
|
$
|
42.6
|
|
|
$
|
26.6
|
|
|
$
|
144.2
|
|
Change in capital accruals
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
Total cash purchase or replacement of equipment under operating leases
|
|
$
|
42.6
|
|
|
$
|
26.6
|
|
|
$
|
144.2
|
|
|
2017
|
|
2016
|
|
2015
|
|||
Track miles of rail installed
|
174
|
|
|
146
|
|
|
177
|
|
Cross ties installed (thousands)
|
699
|
|
|
711
|
|
|
829
|
|
•
|
Statistical analysis of historical patterns of use and retirements of each asset class;
|
•
|
Evaluation of any expected changes in current operations and the outlook for the continued use of the assets;
|
•
|
Evaluation of technological advances and changes to maintenance practices; and
|
•
|
Historical and expected salvage to be received upon retirement.
|
•
|
The Company’s executive management is dedicated to ensuring compliance with the various provisions of the Concession and to maintaining positive relationships with the SCT and other Mexican federal, state, and municipal governmental authorities;
|
•
|
During the time since the Concession was granted, the relationships between KCSM and the various Mexican governmental authorities have matured and the guidelines for operating under the Concession have become more defined with experience;
|
•
|
There are no known supportable sanctions or compliance issues that would cause the SCT to revoke the Concession or prevent KCSM from renewing the Concession; and
|
•
|
KCSM operations are an integral part of the KCS operations strategy, and related investment analyses and operational decisions assume that the Company’s cross border rail business operates into perpetuity, and do not assume that Mexico operations terminate at the end of the current Concession term.
|
Item 7A.
|
Quantitative and Qualitative Disclosures About Market Risk
|
|
Hypothetical Change in Exchange Rate
|
|
Amount of Gain (Loss)
|
|
Affected Line Item in the Consolidated Statements of Income
|
Net monetary assets denominated in Mexican pesos at December 31, 2017:
|
|
|
|
|
|
Ps.2,389.1 million
|
From Ps.19.7 to Ps.20.7
|
|
($5.8 million)
|
|
Foreign exchange gain (loss)
|
Ps.2,389.1 million
|
From Ps.19.7 to Ps.18.7
|
|
$6.5 million
|
|
Foreign exchange gain (loss)
|
Hypothetical Change in Exchange Rate
|
Increase (Decrease) in Effective Income Tax Rate
|
|
Amount of Expense (Benefit)
|
|
Affected Line Item in the Consolidated Statements of Income
|
From Ps.19.7 to Ps.20.7
|
(1.9%)
|
|
($16.6 million)
|
|
Income tax expense (benefit)
|
From Ps.19.7 to Ps.18.7
|
2.1%
|
|
$18.3 million
|
|
Income tax expense (benefit)
|
Item 8.
|
Financial Statements and Supplementary Data
|
|
Page
|
Financial Statement Schedules:
|
|
|
2017
|
|
2016
|
|
2015
|
||||||
|
(In millions, except share
and per share amounts)
|
||||||||||
Revenues
|
$
|
2,582.9
|
|
|
$
|
2,334.2
|
|
|
$
|
2,418.8
|
|
Operating expenses:
|
|
|
|
|
|
||||||
Compensation and benefits
|
493.8
|
|
|
462.4
|
|
|
442.2
|
|
|||
Purchased services
|
193.7
|
|
|
208.5
|
|
|
223.0
|
|
|||
Fuel
|
316.1
|
|
|
253.8
|
|
|
306.9
|
|
|||
Mexican fuel excise tax credit
|
(44.1
|
)
|
|
(62.8
|
)
|
|
—
|
|
|||
Equipment costs
|
129.2
|
|
|
120.0
|
|
|
119.4
|
|
|||
Depreciation and amortization
|
320.9
|
|
|
305.0
|
|
|
284.6
|
|
|||
Materials and other
|
251.7
|
|
|
228.8
|
|
|
229.3
|
|
|||
Lease termination costs
|
—
|
|
|
—
|
|
|
9.6
|
|
|||
Total operating expenses
|
1,661.3
|
|
|
1,515.7
|
|
|
1,615.0
|
|
|||
Operating income
|
921.6
|
|
|
818.5
|
|
|
803.8
|
|
|||
Equity in net earnings of affiliates
|
11.5
|
|
|
14.6
|
|
|
18.3
|
|
|||
Interest expense
|
(100.2
|
)
|
|
(97.7
|
)
|
|
(81.9
|
)
|
|||
Debt retirement and exchange costs
|
—
|
|
|
—
|
|
|
(7.6
|
)
|
|||
Foreign exchange gain (loss)
|
41.7
|
|
|
(72.0
|
)
|
|
(56.6
|
)
|
|||
Other expense, net
|
(0.3
|
)
|
|
(0.7
|
)
|
|
(3.4
|
)
|
|||
Income before income taxes
|
874.3
|
|
|
662.7
|
|
|
672.6
|
|
|||
Income tax expense (benefit)
|
(89.6
|
)
|
|
182.8
|
|
|
187.3
|
|
|||
Net income
|
963.9
|
|
|
479.9
|
|
|
485.3
|
|
|||
Less: Net income attributable to noncontrolling interest
|
1.9
|
|
|
1.8
|
|
|
1.8
|
|
|||
Net income attributable to Kansas City Southern and subsidiaries
|
962.0
|
|
|
478.1
|
|
|
483.5
|
|
|||
Preferred stock dividends
|
0.2
|
|
|
0.2
|
|
|
0.2
|
|
|||
Net income available to common stockholders
|
$
|
961.8
|
|
|
$
|
477.9
|
|
|
$
|
483.3
|
|
|
|
|
|
|
|
||||||
Earnings per share:
|
|
||||||||||
Basic earnings per share
|
$
|
9.18
|
|
|
$
|
4.44
|
|
|
$
|
4.41
|
|
Diluted earnings per share
|
$
|
9.16
|
|
|
$
|
4.43
|
|
|
$
|
4.40
|
|
|
|
|
|
|
|
||||||
Average shares outstanding
(in thousands):
|
|
|
|
|
|
||||||
Basic
|
104,728
|
|
|
107,560
|
|
|
109,709
|
|
|||
Potentially dilutive common shares
|
312
|
|
|
201
|
|
|
206
|
|
|||
Diluted
|
105,040
|
|
|
107,761
|
|
|
109,915
|
|
|
2017
|
|
2016
|
|
2015
|
||||||
|
(In millions)
|
||||||||||
Net income
|
$
|
963.9
|
|
|
$
|
479.9
|
|
|
$
|
485.3
|
|
Other comprehensive loss:
|
|
|
|
|
|
||||||
Unrealized loss on interest rate derivative instruments during the period, net of tax of $(2.2) million
|
(3.4
|
)
|
|
—
|
|
|
—
|
|
|||
Amortization of prior service credit, net of tax of less than $(0.1) million
|
—
|
|
|
—
|
|
|
(0.1
|
)
|
|||
Foreign currency translation adjustments, net of tax of $3.8 million, $(1.0) million and $(0.8) million
|
(3.3
|
)
|
|
(1.5
|
)
|
|
(1.4
|
)
|
|||
Other comprehensive loss
|
(6.7
|
)
|
|
(1.5
|
)
|
|
(1.5
|
)
|
|||
Comprehensive income
|
957.2
|
|
|
478.4
|
|
|
483.8
|
|
|||
Less: comprehensive income attributable to noncontrolling interest
|
1.9
|
|
|
1.8
|
|
|
1.8
|
|
|||
Comprehensive income attributable to Kansas City Southern and subsidiaries
|
$
|
955.3
|
|
|
$
|
476.6
|
|
|
$
|
482.0
|
|
|
2017
|
|
2016
|
||||
|
(In millions, except share
and per share amounts)
|
||||||
ASSETS
|
|
|
|
||||
Current assets:
|
|
|
|
||||
Cash and cash equivalents
|
$
|
134.1
|
|
|
$
|
170.6
|
|
Accounts receivable, net
|
237.8
|
|
|
191.0
|
|
||
Materials and supplies
|
150.8
|
|
|
152.6
|
|
||
Other current assets
|
157.4
|
|
|
133.8
|
|
||
Total current assets
|
680.1
|
|
|
648.0
|
|
||
Investments
|
44.6
|
|
|
32.9
|
|
||
Property and equipment (including concession assets), net
|
8,403.8
|
|
|
8,069.7
|
|
||
Other assets
|
70.2
|
|
|
66.9
|
|
||
Total assets
|
$
|
9,198.7
|
|
|
$
|
8,817.5
|
|
LIABILITIES AND EQUITY
|
|
|
|
||||
Current liabilities:
|
|
|
|
||||
Long-term debt due within one year
|
$
|
38.8
|
|
|
$
|
25.4
|
|
Short-term borrowings
|
345.1
|
|
|
181.3
|
|
||
Accounts payable and accrued liabilities
|
587.8
|
|
|
537.7
|
|
||
Total current liabilities
|
971.7
|
|
|
744.4
|
|
||
Long-term debt
|
2,235.5
|
|
|
2,271.5
|
|
||
Deferred income taxes
|
987.2
|
|
|
1,289.3
|
|
||
Other noncurrent liabilities and deferred credits
|
138.9
|
|
|
107.8
|
|
||
Total liabilities
|
4,333.3
|
|
|
4,413.0
|
|
||
Stockholders’ equity:
|
|
|
|
||||
$25 par, 4% noncumulative, preferred stock, 840,000 shares authorized, 649,736 shares issued, 242,170 shares outstanding
|
6.1
|
|
|
6.1
|
|
||
$.01 par, common stock, 400,000,000 shares authorized, 123,352,185 shares issued; 103,036,805 and 106,606,619 shares outstanding at December 31, 2017 and 2016, respectively
|
1.0
|
|
|
1.1
|
|
||
Additional paid-in capital
|
943.3
|
|
|
954.8
|
|
||
Retained earnings
|
3,611.4
|
|
|
3,134.1
|
|
||
Accumulated other comprehensive loss
|
(12.9
|
)
|
|
(6.2
|
)
|
||
Total stockholders’ equity
|
4,548.9
|
|
|
4,089.9
|
|
||
Noncontrolling interest
|
316.5
|
|
|
314.6
|
|
||
Total equity
|
4,865.4
|
|
|
4,404.5
|
|
||
Total liabilities and equity
|
$
|
9,198.7
|
|
|
$
|
8,817.5
|
|
|
2017
|
|
2016
|
|
2015
|
||||||
(In millions)
|
|||||||||||
Operating activities:
|
|
|
|
|
|
||||||
Net income
|
$
|
963.9
|
|
|
$
|
479.9
|
|
|
$
|
485.3
|
|
Adjustments to reconcile net income to net cash provided by operating activities:
|
|
|
|
|
|
||||||
Depreciation and amortization
|
320.9
|
|
|
305.0
|
|
|
284.6
|
|
|||
Deferred income taxes
|
(301.3
|
)
|
|
104.8
|
|
|
135.8
|
|
|||
Equity in net earnings of affiliates
|
(11.5
|
)
|
|
(14.6
|
)
|
|
(18.3
|
)
|
|||
Share-based compensation
|
18.2
|
|
|
19.2
|
|
|
11.4
|
|
|||
Distributions from unconsolidated affiliates
|
12.5
|
|
|
13.0
|
|
|
16.5
|
|
|||
Debt retirement and exchange costs
|
—
|
|
|
—
|
|
|
7.6
|
|
|||
Settlement of foreign currency derivative instruments
|
(10.8
|
)
|
|
(58.4
|
)
|
|
(5.5
|
)
|
|||
(Gain) loss on foreign currency derivative instruments
|
(38.2
|
)
|
|
53.5
|
|
|
47.2
|
|
|||
Mexican fuel excise tax credit
|
(44.1
|
)
|
|
(62.8
|
)
|
|
—
|
|
|||
Deemed mandatory repatriation tax
|
41.3
|
|
|
—
|
|
|
—
|
|
|||
Changes in working capital items:
|
|
|
|
|
|
||||||
Accounts receivable
|
(46.7
|
)
|
|
(18.3
|
)
|
|
12.0
|
|
|||
Materials and supplies
|
1.4
|
|
|
(14.2
|
)
|
|
(26.2
|
)
|
|||
Other current assets
|
(24.5
|
)
|
|
9.9
|
|
|
(10.1
|
)
|
|||
Accounts payable and accrued liabilities
|
160.4
|
|
|
101.8
|
|
|
(27.1
|
)
|
|||
Other, net
|
(13.1
|
)
|
|
0.2
|
|
|
(4.0
|
)
|
|||
Net cash provided by operating activities
|
1,028.4
|
|
|
919.0
|
|
|
909.2
|
|
|||
Investing activities:
|
|
|
|
|
|
||||||
Capital expenditures
|
(585.4
|
)
|
|
(563.6
|
)
|
|
(688.0
|
)
|
|||
Purchase or replacement of equipment under operating leases
|
(42.6
|
)
|
|
(26.6
|
)
|
|
(144.2
|
)
|
|||
Property investments in MSLLC
|
(26.0
|
)
|
|
(33.1
|
)
|
|
(17.4
|
)
|
|||
Investments in and advances to affiliates
|
(20.4
|
)
|
|
(0.9
|
)
|
|
(0.7
|
)
|
|||
Proceeds from disposal of property
|
8.8
|
|
|
5.0
|
|
|
4.6
|
|
|||
Other, net
|
(15.5
|
)
|
|
(9.0
|
)
|
|
(27.3
|
)
|
|||
Net cash used for investing activities
|
(681.1
|
)
|
|
(628.2
|
)
|
|
(873.0
|
)
|
|||
Financing activities:
|
|
|
|
|
|
||||||
Proceeds from short-term borrowings
|
12,102.6
|
|
|
8,698.7
|
|
|
10,866.2
|
|
|||
Repayment of short-term borrowings
|
(11,943.6
|
)
|
|
(8,597.9
|
)
|
|
(11,237.3
|
)
|
|||
Proceeds from issuance of long-term debt
|
—
|
|
|
248.7
|
|
|
623.7
|
|
|||
Repayment of long-term debt
|
(25.4
|
)
|
|
(276.4
|
)
|
|
(149.8
|
)
|
|||
Dividends paid
|
(142.5
|
)
|
|
(142.8
|
)
|
|
(140.1
|
)
|
|||
Shares repurchased
|
(375.6
|
)
|
|
(185.4
|
)
|
|
(194.2
|
)
|
|||
Debt costs
|
—
|
|
|
(2.6
|
)
|
|
(20.3
|
)
|
|||
Proceeds from employee stock plans
|
0.7
|
|
|
0.9
|
|
|
4.2
|
|
|||
Net cash used for financing activities
|
(383.8
|
)
|
|
(256.8
|
)
|
|
(247.6
|
)
|
|||
Cash and cash equivalents:
|
|
|
|
|
|
||||||
Net increase (decrease) during each year
|
(36.5
|
)
|
|
34.0
|
|
|
(211.4
|
)
|
|||
At beginning of year
|
170.6
|
|
|
136.6
|
|
|
348.0
|
|
|||
At end of year
|
$
|
134.1
|
|
|
$
|
170.6
|
|
|
$
|
136.6
|
|
Supplemental cash flow information
|
|
|
|
|
|
||||||
Non-cash investing and financing activities:
|
|
|
|
|
|
||||||
Capital expenditures and purchase or replacement of equipment under operating lease accrued but not yet paid at end of year
|
$
|
34.9
|
|
|
$
|
60.8
|
|
|
$
|
40.4
|
|
Other investing activities accrued but not yet paid at the end of the year
|
56.7
|
|
|
38.3
|
|
|
22.3
|
|
|||
Capital lease obligations incurred
|
0.1
|
|
|
2.4
|
|
|
4.7
|
|
|||
Non-cash asset acquisitions
|
0.1
|
|
|
4.8
|
|
|
7.6
|
|
|||
Dividends accrued but not yet paid at end of year
|
37.2
|
|
|
35.2
|
|
|
35.9
|
|
|||
Cash payments:
|
|
|
|
|
|
||||||
Interest paid, net of amounts capitalized
|
$
|
97.9
|
|
|
$
|
84.3
|
|
|
$
|
81.1
|
|
Income tax payments, net of refunds
|
51.1
|
|
|
40.5
|
|
|
40.3
|
|
|
$25 Par
Preferred
Stock
|
|
$.01 Par
Common
Stock
|
|
Additional Paid-in
Capital
|
|
Retained
Earnings
|
|
Accumulated
Other
Comprehensive
Loss
|
|
Non-
controlling
Interest
|
|
Total
|
||||||||||||||
|
|||||||||||||||||||||||||||
|
|
||||||||||||||||||||||||||
Balance at December 31, 2014
|
$
|
6.1
|
|
|
$
|
1.1
|
|
|
$
|
949.8
|
|
|
$
|
2,801.7
|
|
|
$
|
(3.2
|
)
|
|
$
|
308.6
|
|
|
$
|
4,064.1
|
|
Net income
|
|
|
|
|
|
|
483.5
|
|
|
|
|
1.8
|
|
|
485.3
|
|
|||||||||||
Other comprehensive loss
|
|
|
|
|
|
|
|
|
|
|
|
|
(1.5
|
)
|
|
|
|
|
(1.5
|
)
|
|||||||
Dividends on common stock ($1.32/share)
|
|
|
|
|
|
|
(144.8
|
)
|
|
|
|
|
|
(144.8
|
)
|
||||||||||||
Dividends on $25 par preferred stock ($1.00/share)
|
|
|
|
|
|
|
(0.2
|
)
|
|
|
|
|
|
(0.2
|
)
|
||||||||||||
Share repurchases
|
|
|
|
|
(18.7
|
)
|
|
(175.5
|
)
|
|
|
|
|
|
(194.2
|
)
|
|||||||||||
Options exercised and stock subscribed, net of shares withheld for employee taxes
|
|
|
|
|
4.7
|
|
|
|
|
|
|
|
|
4.7
|
|
||||||||||||
Excess tax benefit from share-based compensation
|
|
|
|
|
(0.1
|
)
|
|
|
|
|
|
|
|
(0.1
|
)
|
||||||||||||
Share-based compensation
|
|
|
|
|
11.4
|
|
|
|
|
|
|
|
|
11.4
|
|
||||||||||||
Balance at December 31, 2015
|
6.1
|
|
|
1.1
|
|
|
947.1
|
|
|
2,964.7
|
|
|
(4.7
|
)
|
|
310.4
|
|
|
4,224.7
|
|
|||||||
Net income
|
|
|
|
|
|
|
478.1
|
|
|
|
|
1.8
|
|
|
479.9
|
|
|||||||||||
Other comprehensive loss
|
|
|
|
|
|
|
|
|
|
|
|
|
(1.5
|
)
|
|
|
|
|
(1.5
|
)
|
|||||||
Contributions from noncontrolling interest
|
|
|
|
|
|
|
|
|
|
|
2.4
|
|
|
2.4
|
|
||||||||||||
Dividends on common stock ($1.32/share)
|
|
|
|
|
|
|
(141.9
|
)
|
|
|
|
|
|
(141.9
|
)
|
||||||||||||
Dividends on $25 par preferred stock ($1.00/share)
|
|
|
|
|
|
|
(0.2
|
)
|
|
|
|
|
|
(0.2
|
)
|
||||||||||||
Share repurchases
|
|
|
|
|
(18.8
|
)
|
|
(166.6
|
)
|
|
|
|
|
|
(185.4
|
)
|
|||||||||||
Options exercised and stock subscribed, net of shares withheld for employee taxes
|
|
|
|
|
1.6
|
|
|
|
|
|
|
|
|
1.6
|
|
||||||||||||
Excess tax benefit from share-based compensation
|
|
|
|
|
5.7
|
|
|
|
|
|
|
|
|
5.7
|
|
||||||||||||
Share-based compensation
|
|
|
|
|
19.2
|
|
|
|
|
|
|
|
|
19.2
|
|
||||||||||||
Balance at December 31, 2016
|
6.1
|
|
|
1.1
|
|
|
954.8
|
|
|
3,134.1
|
|
|
(6.2
|
)
|
|
314.6
|
|
|
4,404.5
|
|
|||||||
Cumulative-effect adjustment due to adoption of ASU 2016-09, Improvements to Employee Share-Based Payment Accounting
|
|
|
|
|
1.3
|
|
|
1.2
|
|
|
|
|
|
|
2.5
|
|
|||||||||||
Net income
|
|
|
|
|
|
|
962.0
|
|
|
|
|
1.9
|
|
|
963.9
|
|
|||||||||||
Other comprehensive loss
|
|
|
|
|
|
|
|
|
|
|
|
(6.7
|
)
|
|
|
|
|
(6.7
|
)
|
||||||||
Dividends on common stock ($1.38/share)
|
|
|
|
|
|
|
(144.2
|
)
|
|
|
|
|
|
(144.2
|
)
|
||||||||||||
Dividends on $25 par preferred stock ($1.00/share)
|
|
|
|
|
|
|
(0.2
|
)
|
|
|
|
|
|
(0.2
|
)
|
||||||||||||
Share repurchases
|
|
|
(0.1
|
)
|
|
(34.0
|
)
|
|
(341.5
|
)
|
|
|
|
|
|
(375.6
|
)
|
||||||||||
Options exercised and stock subscribed, net of shares withheld for employee taxes
|
|
|
|
|
3.0
|
|
|
|
|
|
|
|
|
3.0
|
|
||||||||||||
Share-based compensation
|
|
|
|
|
18.2
|
|
|
|
|
|
|
|
|
18.2
|
|
||||||||||||
Balance at December 31, 2017
|
$
|
6.1
|
|
|
$
|
1.0
|
|
|
$
|
943.3
|
|
|
$
|
3,611.4
|
|
|
$
|
(12.9
|
)
|
|
$
|
316.5
|
|
|
$
|
4,865.4
|
|
•
|
The Kansas City Southern Railway Company (“KCSR”), a wholly-owned consolidated subsidiary. KCSR is a U.S. Class I railroad that services the midwest and southeast regions of the United States;
|
•
|
Kansas City Southern de México, S.A. de C.V. (“KCSM”), a wholly-owned consolidated subsidiary which operates under the rights granted by the Concession acquired from the Mexican government in 1997 (the “Concession”) as described below;
|
•
|
Mexrail, Inc. (“Mexrail”), a wholly-owned consolidated subsidiary; which wholly owns The Texas Mexican Railway Company (“Tex-Mex”);
|
•
|
KCSM Servicios, S.A. de C.V. (“KCSM Servicios”), a wholly-owned consolidated subsidiary which provides employee services to KCSM; and
|
•
|
Meridian Speedway, LLC (“MSLLC”), a
seventy percent
-owned consolidated affiliate. MSLLC owns the former KCSR rail line between Meridian, Mississippi and Shreveport, Louisiana, which is the portion of the rail line between Dallas, Texas and Meridian known as the “Meridian Speedway”.
|
•
|
Panama Canal Railway Company (“PCRC”), a
fifty percent
-owned unconsolidated affiliate which provides ocean to ocean freight and passenger services along the Panama Canal;
|
•
|
TFCM, S. de R.L. de C.V. (“TCM”), a
forty-five percent-owned
unconsolidated affiliate that operates a bulk liquid terminal in San Luis Potosí, Mexico;
|
•
|
Ferrocarril y Terminal del Valle de México, S.A. de C.V. (“FTVM”), a
twenty-five percent
-owned unconsolidated affiliate that provides railroad services as well as ancillary services in the greater Mexico City area; and
|
•
|
PTC-220, LLC (“PTC-220”), a
fourteen percent
-owned unconsolidated affiliate that holds the licenses to large blocks of radio spectrum and other assets for the deployment of positive train control.
|
|
2017
|
|
2016
|
|
2015
|
||||||
Net income available to common stockholders for purposes of computing basic and diluted earnings per share
|
$
|
961.8
|
|
|
$
|
477.9
|
|
|
$
|
483.3
|
|
Weighted-average number of shares outstanding
(in thousands)
:
|
|
|
|
|
|
||||||
Basic shares
|
104,728
|
|
|
107,560
|
|
|
109,709
|
|
|||
Effect of dilution
|
312
|
|
|
201
|
|
|
206
|
|
|||
Diluted shares
|
105,040
|
|
|
107,761
|
|
|
109,915
|
|
|||
Earnings per share:
|
|
|
|
|
|
||||||
Basic earnings per share
|
$
|
9.18
|
|
|
$
|
4.44
|
|
|
$
|
4.41
|
|
Diluted earnings per share
|
$
|
9.16
|
|
|
$
|
4.43
|
|
|
$
|
4.40
|
|
Potentially dilutive shares excluded from the calculation (
in thousands
):
|
2017
|
|
2016
|
|
2015
|
|||
Stock options excluded as their inclusion would be anti-dilutive
|
150
|
|
|
185
|
|
|
84
|
|
As of December 31, 2017
|
Cost
|
|
Accumulated
Depreciation
|
|
Net Book
Value
|
|
Depreciation
Rates for 2017
|
|||||||
Land
|
$
|
218.6
|
|
|
$
|
—
|
|
|
$
|
218.6
|
|
|
N/A
|
|
Concession land rights
|
141.2
|
|
|
(26.5
|
)
|
|
114.7
|
|
|
1.0
|
%
|
|||
Rail and other track material
|
1,967.0
|
|
|
(425.9
|
)
|
|
1,541.1
|
|
|
2.7-3.0%
|
|
|||
Ties
|
1,779.6
|
|
|
(441.0
|
)
|
|
1,338.6
|
|
|
2.0-4.8%
|
|
|||
Grading
|
969.9
|
|
|
(162.1
|
)
|
|
807.8
|
|
|
0.9
|
%
|
|||
Bridges and tunnels
|
775.0
|
|
|
(144.9
|
)
|
|
630.1
|
|
|
1.1
|
%
|
|||
Ballast
|
795.2
|
|
|
(222.0
|
)
|
|
573.2
|
|
|
2.3-4.2%
|
|
|||
Other (a)
|
1,270.4
|
|
|
(363.3
|
)
|
|
907.1
|
|
|
3.2
|
%
|
|||
Total road property
|
7,557.1
|
|
|
(1,759.2
|
)
|
|
5,797.9
|
|
|
2.8
|
%
|
|||
Locomotives
|
1,527.9
|
|
|
(375.2
|
)
|
|
1,152.7
|
|
|
4.7
|
%
|
|||
Freight cars
|
937.9
|
|
|
(168.9
|
)
|
|
769.0
|
|
|
2.7
|
%
|
|||
Other equipment
|
69.1
|
|
|
(26.6
|
)
|
|
42.5
|
|
|
5.9
|
%
|
|||
Total equipment
|
2,534.9
|
|
|
(570.7
|
)
|
|
1,964.2
|
|
|
4.0
|
%
|
|||
Technology and other
|
229.1
|
|
|
(144.4
|
)
|
|
84.7
|
|
|
17.1
|
%
|
|||
Construction in progress
|
223.7
|
|
|
—
|
|
|
223.7
|
|
|
N/A
|
|
|||
Total property and equipment (including concession assets)
|
$
|
10,904.6
|
|
|
$
|
(2,500.8
|
)
|
|
$
|
8,403.8
|
|
|
N/A
|
|
(a)
|
Other includes signals, buildings and other road assets.
|
As of December 31, 2016
|
Cost
|
|
Accumulated
Depreciation
|
|
Net Book
Value
|
|
Depreciation
Rates for 2016
|
|||||||
Land
|
$
|
219.2
|
|
|
$
|
—
|
|
|
$
|
219.2
|
|
|
N/A
|
|
Concession land rights
|
141.2
|
|
|
(25.1
|
)
|
|
116.1
|
|
|
1.0
|
%
|
|||
Rail and other track material
|
1,925.4
|
|
|
(445.0
|
)
|
|
1,480.4
|
|
|
1.6-3.2%
|
|
|||
Ties
|
1,710.1
|
|
|
(423.8
|
)
|
|
1,286.3
|
|
|
2.0-5.0%
|
|
|||
Grading
|
910.7
|
|
|
(153.9
|
)
|
|
756.8
|
|
|
0.9
|
%
|
|||
Bridges and tunnels
|
739.4
|
|
|
(137.6
|
)
|
|
601.8
|
|
|
1.1
|
%
|
|||
Ballast
|
748.3
|
|
|
(215.1
|
)
|
|
533.2
|
|
|
2.5-4.7%
|
|
|||
Other (a)
|
1,152.1
|
|
|
(332.4
|
)
|
|
819.7
|
|
|
3.0
|
%
|
|||
Total road property
|
7,186.0
|
|
|
(1,707.8
|
)
|
|
5,478.2
|
|
|
2.8
|
%
|
|||
Locomotives
|
1,485.9
|
|
|
(356.9
|
)
|
|
1,129.0
|
|
|
4.5
|
%
|
|||
Freight cars
|
887.7
|
|
|
(152.5
|
)
|
|
735.2
|
|
|
3.5
|
%
|
|||
Other equipment
|
66.2
|
|
|
(23.6
|
)
|
|
42.6
|
|
|
6.4
|
%
|
|||
Total equipment
|
2,439.8
|
|
|
(533.0
|
)
|
|
1,906.8
|
|
|
4.2
|
%
|
|||
Technology and other
|
182.2
|
|
|
(126.2
|
)
|
|
56.0
|
|
|
17.4
|
%
|
|||
Construction in progress
|
293.4
|
|
|
—
|
|
|
293.4
|
|
|
N/A
|
|
|||
Total property and equipment (including
concession assets)
|
$
|
10,461.8
|
|
|
$
|
(2,392.1
|
)
|
|
$
|
8,069.7
|
|
|
N/A
|
|
(a)
|
Other includes signals, buildings and other road assets.
|
|
2017
|
|
2016
|
||||
Refundable taxes
|
$
|
81.6
|
|
|
$
|
64.0
|
|
Mexican fuel excise tax credit
|
35.1
|
|
|
49.2
|
|
||
Prepaid expenses
|
18.3
|
|
|
18.2
|
|
||
Other
|
22.4
|
|
|
2.4
|
|
||
Other current assets
|
$
|
157.4
|
|
|
$
|
133.8
|
|
|
2017
|
|
2016
|
||||
Accounts payable
|
$
|
225.1
|
|
|
$
|
247.8
|
|
Income and other taxes
|
111.8
|
|
|
36.0
|
|
||
Accrued wages and vacation
|
89.0
|
|
|
78.7
|
|
||
Derailments, personal injury and other claim provisions
|
48.0
|
|
|
39.2
|
|
||
Foreign currency derivative instruments
|
—
|
|
|
41.1
|
|
||
Dividends payable
|
37.2
|
|
|
35.2
|
|
||
Other
|
76.7
|
|
|
59.7
|
|
||
Accounts payable and accrued liabilities
|
$
|
587.8
|
|
|
$
|
537.7
|
|
Foreign currency forward contracts
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
|
Contracts to purchase Ps./pay USD
|
|
Offsetting contracts to sell Ps./receive USD
|
|
|
||||||||||||||||||||||||||||
|
Notional amount
|
|
Notional amount
|
|
Weighted-average exchange rate
(in Ps./USD)
|
|
Maturity date
|
|
Notional amount
|
|
Notional amount
|
|
Weighted-average exchange rate
(in Ps./USD)
|
|
Maturity date
|
|
Cash received/(paid) on settlement
|
||||||||||||||||
Contracts executed in 2016 and settled in 2017
|
$
|
340.0
|
|
|
Ps.
|
6,207.7
|
|
|
Ps.
|
18.3
|
|
|
1/17/2017
|
|
|
$
|
287.0
|
|
|
Ps.
|
6,207.7
|
|
|
Ps.
|
21.6
|
|
|
1/17/2017
|
|
$
|
(53.0
|
)
|
|
Contracts executed in 2016 and settled in 2016
|
$
|
60.0
|
|
|
Ps.
|
1,057.3
|
|
|
Ps.
|
17.6
|
|
|
4/29/2016
|
|
|
$
|
60.7
|
|
|
Ps.
|
1,057.3
|
|
|
Ps.
|
17.4
|
|
|
4/29/2016
|
|
$
|
0.7
|
|
|
Contracts executed in 2015 and settled in 2016
|
$
|
300.0
|
|
|
Ps.
|
4,480.4
|
|
|
Ps.
|
14.9
|
|
|
1/15/2016
|
|
|
$
|
251.0
|
|
|
Ps.
|
4,480.4
|
|
|
Ps.
|
17.9
|
|
|
1/15/2016
|
|
$
|
(49.0
|
)
|
|
Contracts executed in 2014 and settled in 2015
|
$
|
300.0
|
|
|
Ps.
|
4,364.7
|
|
|
Ps.
|
14.6
|
|
|
1/15/2015
|
|
|
$
|
298.8
|
|
|
Ps.
|
4,364.7
|
|
|
Ps.
|
14.6
|
|
|
1/15/2015
|
|
$
|
(1.2
|
)
|
|
Foreign currency zero-cost collar contracts
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
|
Notional amount
|
|
Maturity date
|
|
Weighted-average call rate outstanding options
(in Ps./USD)
|
|
Weighted-average put rate outstanding options
(in Ps./USD)
|
|
Cash received/(paid) on settlement
|
|
|
|
|
|
|
|
|
||||||||||||||||
Contracts executed in 2017 and outstanding at December 31, 2017
|
$
|
80.0
|
|
|
1/16/2018
|
|
|
Ps.
|
21.7
|
|
|
Ps.
|
24.8
|
|
|
—
|
|
|
|
|
|
|
|
|
|
||||||||
Contracts executed in 2017 and settled in 2017
|
$
|
450.0
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
$
|
42.2
|
|
|
|
|
|
|
|
|
|
|||||||||
Contracts executed in 2015 and settled in 2016
|
$
|
80.0
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
$
|
(10.1
|
)
|
|
|
|
|
|
|
|
|
|||||||||
Contracts executed in 2015 and settled in 2015
|
$
|
50.0
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
$
|
(4.3
|
)
|
|
|
|
|
|
|
|
|
|
Derivative Assets
|
||||||||
|
Balance Sheet Location
|
|
2017
|
|
2016
|
||||
Derivatives not designated as hedging instruments:
|
|
|
|
|
|
||||
Foreign currency zero-cost collar contracts
|
Other current assets
|
|
$
|
7.9
|
|
|
$
|
—
|
|
Total derivatives not designated as hedging instruments
|
|
|
7.9
|
|
|
—
|
|
||
Total derivative assets
|
|
|
$
|
7.9
|
|
|
$
|
—
|
|
|
Derivative Liabilities
|
||||||||
|
Balance Sheet Location
|
|
2017
|
|
2016
|
||||
Derivatives designated as hedging instruments:
|
|
|
|
|
|
||||
Treasury lock agreements
|
Other noncurrent liabilities and deferred credits
|
|
$
|
5.6
|
|
|
$
|
—
|
|
Total derivatives designated as hedging instruments
|
|
|
5.6
|
|
|
—
|
|
||
Derivatives not designated as hedging instruments:
|
|
|
|
|
|
||||
Foreign currency forward contracts
|
Accounts payable and accrued liabilities
|
|
—
|
|
|
41.1
|
|
||
Total derivatives not designated as hedging instruments
|
|
|
—
|
|
|
41.1
|
|
||
Total derivative liabilities
|
|
|
$
|
5.6
|
|
|
$
|
41.1
|
|
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
|
2017
|
|
2016
|
||||||||||||||||||||
|
Principal
|
|
Unamortized Discount and Debt Issuance Costs
|
|
Net
|
|
Principal
|
|
Unamortized Discount and Debt Issuance Costs
|
|
Net
|
||||||||||||
Revolving credit facilities, variable interest rate, due 2020
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
|
$
|
—
|
|
KCS 2.35% senior notes, due 2020
|
257.3
|
|
|
1.2
|
|
|
256.1
|
|
|
257.3
|
|
|
1.7
|
|
|
255.6
|
|
||||||
KCS 3.00% senior notes, due 2023
|
439.1
|
|
|
4.0
|
|
|
435.1
|
|
|
439.1
|
|
|
4.7
|
|
|
434.4
|
|
||||||
KCS 3.85% senior notes, due 2023
|
199.2
|
|
|
1.7
|
|
|
197.5
|
|
|
199.2
|
|
|
2.0
|
|
|
197.2
|
|
||||||
KCS 3.125% senior notes, due 2026
|
250.0
|
|
|
3.1
|
|
|
246.9
|
|
|
250.0
|
|
|
3.4
|
|
|
246.6
|
|
||||||
KCS 4.30% senior notes, due 2043
|
448.7
|
|
|
9.3
|
|
|
439.4
|
|
|
448.7
|
|
|
9.6
|
|
|
439.1
|
|
||||||
KCS 4.95% senior notes, due 2045
|
499.2
|
|
|
7.6
|
|
|
491.6
|
|
|
499.2
|
|
|
8.0
|
|
|
491.2
|
|
||||||
KCSR senior notes 3.85% to 4.95%, due through 2045
|
2.9
|
|
|
—
|
|
|
2.9
|
|
|
2.9
|
|
|
—
|
|
|
2.9
|
|
||||||
KCSM senior notes 2.35% to 3.00%, due through 2023
|
28.5
|
|
|
0.2
|
|
|
28.3
|
|
|
28.5
|
|
|
0.2
|
|
|
28.3
|
|
||||||
RRIF loans 2.96% to 4.29%, due serially through 2037
|
77.8
|
|
|
0.5
|
|
|
77.3
|
|
|
81.4
|
|
|
0.5
|
|
|
80.9
|
|
||||||
Financing agreements 5.737% to 9.310%, due serially through 2023
|
84.2
|
|
|
0.3
|
|
|
83.9
|
|
|
102.5
|
|
|
0.4
|
|
|
102.1
|
|
||||||
Capital lease obligations, due serially to 2024
|
15.0
|
|
|
—
|
|
|
15.0
|
|
|
18.3
|
|
|
—
|
|
|
18.3
|
|
||||||
Other debt obligations
|
0.3
|
|
|
—
|
|
|
0.3
|
|
|
0.3
|
|
|
—
|
|
|
0.3
|
|
||||||
Total
|
2,302.2
|
|
|
27.9
|
|
|
2,274.3
|
|
|
2,327.4
|
|
|
30.5
|
|
|
2,296.9
|
|
||||||
Less: Debt due within one year
|
38.8
|
|
|
—
|
|
|
38.8
|
|
|
25.4
|
|
|
—
|
|
|
25.4
|
|
||||||
Long-term debt
|
$
|
2,263.4
|
|
|
$
|
27.9
|
|
|
$
|
2,235.5
|
|
|
$
|
2,302.0
|
|
|
$
|
30.5
|
|
|
$
|
2,271.5
|
|
|
Long-
Term
Debt
|
|
Capital Leases
|
|
Total
Debt
|
|
|
|
|
||||||||||||||||||
Years
|
Minimum
Lease
Payments
|
|
Less
Interest
|
|
Net
Present
Value
|
|
Operating Leases
|
|
Total
|
||||||||||||||||||
2018
|
$
|
35.2
|
|
|
$
|
4.9
|
|
|
$
|
1.3
|
|
|
$
|
3.6
|
|
|
$
|
38.8
|
|
|
$
|
60.9
|
|
|
$
|
99.7
|
|
2019
|
15.5
|
|
|
3.6
|
|
|
0.9
|
|
|
2.7
|
|
|
18.2
|
|
|
52.1
|
|
|
70.3
|
|
|||||||
2020
|
299.0
|
|
|
2.7
|
|
|
0.8
|
|
|
1.9
|
|
|
300.9
|
|
|
41.8
|
|
|
342.7
|
|
|||||||
2021
|
12.3
|
|
|
2.7
|
|
|
0.6
|
|
|
2.1
|
|
|
14.4
|
|
|
28.2
|
|
|
42.6
|
|
|||||||
2022
|
12.4
|
|
|
2.7
|
|
|
0.4
|
|
|
2.3
|
|
|
14.7
|
|
|
21.5
|
|
|
36.2
|
|
|||||||
Thereafter
|
1,912.8
|
|
|
2.5
|
|
|
0.1
|
|
|
2.4
|
|
|
1,915.2
|
|
|
77.2
|
|
|
1,992.4
|
|
|||||||
Total
|
$
|
2,287.2
|
|
|
$
|
19.1
|
|
|
$
|
4.1
|
|
|
$
|
15.0
|
|
|
$
|
2,302.2
|
|
|
$
|
281.7
|
|
|
$
|
2,583.9
|
|
|
2017
|
|
2016
|
|
2015
|
||||||
Current:
|
|
|
|
|
|
||||||
Federal
|
$
|
47.3
|
|
|
$
|
1.0
|
|
|
$
|
—
|
|
State and local
|
0.6
|
|
|
0.6
|
|
|
0.3
|
|
|||
Foreign
|
163.8
|
|
|
76.4
|
|
|
51.2
|
|
|||
Total current
|
211.7
|
|
|
78.0
|
|
|
51.5
|
|
|||
Deferred:
|
|
|
|
|
|
||||||
Federal
|
(350.1
|
)
|
|
92.7
|
|
|
109.3
|
|
|||
State and local
|
11.9
|
|
|
13.1
|
|
|
15.5
|
|
|||
Foreign
|
36.9
|
|
|
(1.0
|
)
|
|
11.0
|
|
|||
Total deferred
|
(301.3
|
)
|
|
104.8
|
|
|
135.8
|
|
|||
Total income tax expense (benefit)
|
$
|
(89.6
|
)
|
|
$
|
182.8
|
|
|
$
|
187.3
|
|
|
2017
|
|
2016
|
|
2015
|
||||||
Income before income taxes:
|
|
|
|
|
|
||||||
U.S.
|
$
|
331.8
|
|
|
$
|
279.9
|
|
|
$
|
315.0
|
|
Foreign
|
542.5
|
|
|
382.8
|
|
|
357.6
|
|
|||
Total income before income taxes
|
$
|
874.3
|
|
|
$
|
662.7
|
|
|
$
|
672.6
|
|
|
2017
|
|
2016
|
||||
Assets:
|
|
|
|
||||
Tax credit and loss carryovers
|
$
|
26.9
|
|
|
$
|
70.7
|
|
Reserves not currently deductible for tax
|
54.1
|
|
|
106.4
|
|
||
Other
|
25.2
|
|
|
31.6
|
|
||
Gross deferred tax assets before valuation allowance
|
106.2
|
|
|
208.7
|
|
||
Valuation allowance
|
(2.1
|
)
|
|
(1.7
|
)
|
||
Net deferred tax assets
|
104.1
|
|
|
207.0
|
|
||
Liabilities:
|
|
|
|
||||
Property
|
(1,012.7
|
)
|
|
(1,389.0
|
)
|
||
Investments
|
(48.0
|
)
|
|
(73.8
|
)
|
||
Other
|
(30.6
|
)
|
|
(33.5
|
)
|
||
Gross deferred tax liabilities
|
(1,091.3
|
)
|
|
(1,496.3
|
)
|
||
Net deferred tax liability
|
$
|
(987.2
|
)
|
|
$
|
(1,289.3
|
)
|
|
2017
|
|
2016
|
|
2015
|
|||||||||||||||
|
Dollars
|
|
Percent
|
|
Dollars
|
|
Percent
|
|
Dollars
|
|
Percent
|
|||||||||
Income tax expense using the statutory rate in effect
|
$
|
306.0
|
|
|
35.0
|
%
|
|
$
|
231.9
|
|
|
35.0
|
%
|
|
$
|
235.4
|
|
|
35.0
|
%
|
Tax effect of:
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||
Difference between U.S. and foreign tax rate
|
(25.1
|
)
|
|
(2.9
|
%)
|
|
(17.4
|
)
|
|
(2.6
|
%)
|
|
(17.8
|
)
|
|
(2.6
|
%)
|
|||
Foreign exchange (i)
|
31.6
|
|
|
3.6
|
%
|
|
(45.0
|
)
|
|
(6.8
|
%)
|
|
(40.5
|
)
|
|
(6.1
|
%)
|
|||
State and local income tax provision, net
|
8.3
|
|
|
1.0
|
%
|
|
8.1
|
|
|
1.2
|
%
|
|
10.3
|
|
|
1.5
|
%
|
|||
Change in U.S. tax rate
|
(487.6
|
)
|
|
(55.8
|
%)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
Deemed mandatory repatriation
|
74.6
|
|
|
8.6
|
%
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||
Other, net
|
2.6
|
|
|
0.3
|
%
|
|
5.2
|
|
|
0.8
|
%
|
|
(0.1
|
)
|
|
—
|
|
|||
Income tax expense (benefit)
|
$
|
(89.6
|
)
|
|
(10.2
|
%)
|
|
$
|
182.8
|
|
|
27.6
|
%
|
|
$
|
187.3
|
|
|
27.8
|
%
|
(i)
|
Mexican income taxes are paid in Mexican pesos, and as a result, the effective income tax rate reflects fluctuations in the value of the Mexican peso against the U.S. dollar. The foreign exchange impact on income taxes includes the gain or loss from the revaluation of the Company’s net U.S. dollar-denominated monetary liabilities into Mexican pesos which is included in Mexican taxable income under Mexican tax law. As a result, a strengthening of the Mexican peso against the U.S. dollar for the reporting period will generally increase the Mexican cash tax obligation and the effective income tax rate, and a weakening of the Mexican peso against the U.S. dollar for the reporting period will generally decrease the Mexican cash tax obligation and the effective tax rate. To hedge its exposure to this cash tax risk, the Company enters into foreign currency derivative contracts, which are measured at fair value each period and any change in fair value is recognized in foreign exchange gain (loss) within the consolidated statements of income. Refer to Note
9
“Derivative Instruments” for further information.
|
|
2017
|
|
2016
|
||||
Balance at January 1,
|
$
|
3.8
|
|
|
$
|
1.7
|
|
Additions based on tax positions related to the current year
|
—
|
|
|
1.3
|
|
||
Additions for tax positions of prior years
|
—
|
|
|
2.5
|
|
||
Reductions for tax positions of prior years
|
(0.1
|
)
|
|
—
|
|
||
Reductions as a result of lapse of statute of limitations
|
(3.7
|
)
|
|
(1.7
|
)
|
||
Balance at December 31,
|
$
|
—
|
|
|
$
|
3.8
|
|
|
Shares Authorized
|
|
Shares Issued
|
||||||||
|
2017
|
|
2016
|
2017
|
|
2016
|
|||||
$25 par, 4% noncumulative, preferred stock
|
840,000
|
|
|
840,000
|
|
|
649,736
|
|
|
649,736
|
|
$1 par, preferred stock
|
2,000,000
|
|
|
2,000,000
|
|
|
—
|
|
|
—
|
|
$.01 par, common stock
|
400,000,000
|
|
|
400,000,000
|
|
|
123,352,185
|
|
|
123,352,185
|
|
|
2017
|
|
2016
|
||
$25 par, 4% noncumulative, preferred stock
|
242,170
|
|
|
242,170
|
|
$.01 par, common stock
|
103,036,805
|
|
|
106,606,619
|
|
|
2017
|
|
2016
|
|
2015
|
|||
Balance at beginning of year
|
16,745,566
|
|
|
14,891,041
|
|
|
12,959,855
|
|
Shares repurchased
|
3,759,678
|
|
|
2,127,612
|
|
|
2,133,984
|
|
Shares issued to fund stock option exercises
|
(9,110
|
)
|
|
(15,264
|
)
|
|
(89,035
|
)
|
Employee stock purchase plan shares issued
|
(76,401
|
)
|
|
(82,372
|
)
|
|
(52,736
|
)
|
Nonvested shares issued
|
(124,519
|
)
|
|
(179,309
|
)
|
|
(62,936
|
)
|
Nonvested shares forfeited
|
20,166
|
|
|
3,858
|
|
|
1,909
|
|
Balance at end of year
|
20,315,380
|
|
|
16,745,566
|
|
|
14,891,041
|
|
|
2017
|
|
2016
|
|
2015
|
||||||
Cash dividends declared per common share
|
$
|
1.38
|
|
|
$
|
1.32
|
|
|
$
|
1.32
|
|
|
2017
|
|
2016
|
|
2015
|
||||||
Expected dividend yield
|
1.52
|
%
|
|
1.60
|
%
|
|
0.94
|
%
|
|||
Expected volatility
|
30.74
|
%
|
|
32.29
|
%
|
|
37.11
|
%
|
|||
Risk-free interest rate
|
2.20
|
%
|
|
1.51
|
%
|
|
1.82
|
%
|
|||
Expected term
(years)
|
6.0
|
|
|
6.0
|
|
|
6.0
|
|
|||
Weighted-average grant date fair value of stock options granted
|
$
|
24.49
|
|
|
$
|
22.98
|
|
|
$
|
41.49
|
|
|
Number of
Shares
|
|
Weighted-
Average
Exercise
Price
Per Share
|
|
Weighted-
Average
Remaining
Contractual
Term
|
|
Aggregate
Intrinsic
Value
|
|||||
|
|
|
|
|
In years
|
|
In millions
|
|||||
Options outstanding at December 31, 2016
|
414,803
|
|
|
$
|
76.87
|
|
|
|
|
|
||
Granted
|
97,090
|
|
|
87.11
|
|
|
|
|
|
|||
Exercised
|
(9,110
|
)
|
|
80.32
|
|
|
|
|
|
|||
Forfeited or expired
|
(2,159
|
)
|
|
88.35
|
|
|
|
|
|
|||
Options outstanding at December 31, 2017
|
500,624
|
|
|
$
|
78.74
|
|
|
6.1
|
|
$
|
14.0
|
|
|
|
|
|
|
|
|
|
|||||
Exercisable at December 31, 2017
|
339,711
|
|
|
$
|
74.33
|
|
|
5.0
|
|
$
|
11.0
|
|
|
2017
|
|
2016
|
|
2015
|
||||||
Aggregate grant-date fair value of stock options vested
|
$
|
2.8
|
|
|
$
|
1.8
|
|
|
$
|
2.0
|
|
Intrinsic value of stock options exercised
|
0.2
|
|
|
0.6
|
|
|
6.1
|
|
|||
Cash received from option exercises
|
0.7
|
|
|
0.9
|
|
|
4.2
|
|
|||
Tax benefit from options exercised during the annual period
|
0.1
|
|
|
0.2
|
|
|
2.3
|
|
|
|
|
Nonvested Stock
|
||
Expected dividend yield
|
|
|
1.58
|
%
|
|
Expected volatility
|
|
|
31.68
|
%
|
|
Risk-free interest rate
|
|
|
0.53% - 1.89%
|
|
|
Expected term
(years)
|
|
|
1.9
|
|
|
Weighted-average grant date fair value
|
|
|
$
|
70.95
|
|
|
Number of
Shares
|
|
Weighted-
Average Grant
Date Fair
Value
|
|
Aggregate
Intrinsic
Value
|
|||||
|
|
|
|
|
In millions
|
|||||
Nonvested stock at December 31, 2016
|
238,010
|
|
|
$
|
91.55
|
|
|
|
||
Granted
|
121,307
|
|
|
93.29
|
|
|
|
|||
Vested
|
(62,472
|
)
|
|
87.51
|
|
|
|
|||
Forfeited
|
(20,166
|
)
|
|
90.83
|
|
|
|
|||
Nonvested stock at December 31, 2017
|
276,679
|
|
|
$
|
93.28
|
|
|
$
|
29.1
|
|
|
Target Number of Shares *
|
|
Weighted-Average Grant Date Fair Value
|
|||
Nonvested stock, at December 31, 2016
|
144,399
|
|
|
$
|
97.08
|
|
Granted
|
54,588
|
|
|
87.09
|
|
|
Vested
|
(36,323
|
)
|
|
94.23
|
|
|
Forfeited
|
(23,162
|
)
|
|
102.30
|
|
|
Nonvested stock, at December 31, 2017
|
139,502
|
|
|
$
|
93.05
|
|
|
Exercise Date
|
|
Received
from
Employees(i)
In millions
|
|||||||||
|
Date
Issued
|
|
Purchase
Price
|
|
Shares
Issued
|
|
||||||
|
|
|
|
|
|
|
|
|||||
July 2017 offering
|
January 4, 2018
|
|
$
|
89.18
|
|
|
30,595
|
|
|
$
|
2.7
|
|
January 2017 offering
|
July 5, 2017
|
|
68.70
|
|
|
40,293
|
|
|
2.8
|
|
||
July 2016 offering
|
January 12, 2017
|
|
72.12
|
|
|
36,108
|
|
|
2.6
|
|
||
January 2016 offering
|
July 11, 2016
|
|
62.66
|
|
|
41,895
|
|
|
2.6
|
|
||
July 2015 offering
|
January 8, 2016
|
|
63.47
|
|
|
40,477
|
|
|
2.6
|
|
||
January 2015 offering
|
July 6, 2015
|
|
77.52
|
|
|
35,097
|
|
|
2.7
|
|
(i)
|
Represents amounts received from employees through payroll deductions for share purchases under applicable offering.
|
|
Year Ended December 31,
|
||||||||||
|
2017
|
|
2016
|
|
2015
|
||||||
Expected dividend yield
|
1.47
|
%
|
|
1.65
|
%
|
|
1.20
|
%
|
|||
Expected volatility
|
17.09
|
%
|
|
23.84
|
%
|
|
17.00
|
%
|
|||
Risk-free interest rate
|
0.89
|
%
|
|
0.46
|
%
|
|
0.10
|
%
|
|||
Expected term
(years)
|
0.5
|
|
|
0.5
|
|
|
0.5
|
|
|||
Weighted-average grant date fair value
|
$
|
17.90
|
|
|
$
|
17.29
|
|
|
$
|
20.55
|
|
|
2017
|
|
2016
|
||||
Balance at beginning of year
|
$
|
23.8
|
|
|
$
|
23.9
|
|
Accruals
|
4.8
|
|
|
4.8
|
|
||
Changes in estimate
|
(3.6
|
)
|
|
(1.1
|
)
|
||
Payments
|
(5.7
|
)
|
|
(3.8
|
)
|
||
Balance at end of year
|
$
|
19.3
|
|
|
$
|
23.8
|
|
|
Fourth
|
|
Third
|
|
Second
|
|
First
|
||||||||
|
(In millions, except per share amounts)
|
||||||||||||||
2017
|
|
|
|
|
|
|
|
||||||||
Revenues
|
$
|
660.4
|
|
|
$
|
656.6
|
|
|
$
|
656.4
|
|
|
$
|
609.5
|
|
Operating income
|
237.8
|
(i)
|
|
233.8
|
(i)
|
|
239.3
|
(i)
|
|
210.7
|
(i)
|
||||
Net income
|
552.4
|
(iii)
|
|
129.9
|
|
|
134.7
|
|
|
146.9
|
|
||||
Net income attributable to Kansas City Southern and subsidiaries
|
551.7
|
|
|
129.3
|
|
|
134.4
|
|
|
146.6
|
|
||||
Per share data:
|
|
|
|
|
|
|
|
||||||||
Basic earnings per common share
|
$
|
5.35
|
|
|
$
|
1.24
|
|
|
$
|
1.27
|
|
|
$
|
1.38
|
|
Diluted earnings per common share
|
5.33
|
|
|
1.23
|
|
|
1.27
|
|
|
1.38
|
|
||||
|
|
|
|
|
|
|
|
||||||||
2016
|
|
|
|
|
|
|
|
||||||||
Revenues
|
$
|
598.5
|
|
|
$
|
604.5
|
|
|
$
|
568.5
|
|
|
$
|
562.7
|
|
Operating income
|
210.9
|
(ii)
|
|
199.8
|
(ii)
|
|
219.9
|
(ii)
|
|
187.9
|
|
||||
Net income
|
130.3
|
|
|
121.0
|
|
|
120.5
|
|
|
108.1
|
|
||||
Net income attributable to Kansas City Southern and subsidiaries
|
129.6
|
|
|
120.6
|
|
|
120.1
|
|
|
107.8
|
|
||||
Per share data:
|
|
|
|
|
|
|
|
||||||||
Basic earnings per common share
|
$
|
1.21
|
|
|
$
|
1.12
|
|
|
$
|
1.12
|
|
|
$
|
1.00
|
|
Diluted earnings per common share
|
1.21
|
|
|
1.12
|
|
|
1.11
|
|
|
0.99
|
|
(i)
|
During the first, second, third and fourth quarters of 2017, the Company recognized an
$11.7 million
,
$12.8 million
,
$11.1 million
and
$8.5 million
benefit, respectively, related to a credit available for the excise tax included in the price of fuel that is purchased and consumed in locomotives and certain work equipment in Mexico.
|
(ii)
|
During the second, third and fourth quarters of 2016, the Company recognized a
$34.0 million
,
$15.6 million
and
$13.2 million
benefit, respectively, related to a credit available for the excise tax included in the price of fuel that is purchased and consumed in locomotives and certain work equipment in Mexico.
|
(iii)
|
During the fourth quarter of 2017, the Company recognized a
$413.0 million
net tax benefit as a result of the Tax Reform Act, which was signed into law December 22, 2017.
|
|
December 31,
|
||||||
|
2017
|
|
2016
|
||||
Property and equipment (including concession assets), net
|
|
|
|
||||
U.S.
|
$
|
5,227.3
|
|
|
$
|
4,960.6
|
|
Mexico
|
3,176.5
|
|
|
3,109.1
|
|
||
Total property and equipment (including concession assets), net
|
$
|
8,403.8
|
|
|
$
|
8,069.7
|
|
|
2017
|
||||||||||||||||||
|
Parent
|
|
Guarantor
Subsidiaries
|
|
Non-Guarantor
Subsidiaries
|
|
Consolidating
Adjustments
|
|
Consolidated
KCS
|
||||||||||
Revenues
|
$
|
—
|
|
|
$
|
1,244.7
|
|
|
$
|
1,359.0
|
|
|
$
|
(20.8
|
)
|
|
$
|
2,582.9
|
|
Operating expenses
|
5.7
|
|
|
882.2
|
|
|
791.0
|
|
|
(17.6
|
)
|
|
1,661.3
|
|
|||||
Operating income (loss)
|
(5.7
|
)
|
|
362.5
|
|
|
568.0
|
|
|
(3.2
|
)
|
|
921.6
|
|
|||||
Equity in net earnings of affiliates
|
974.8
|
|
|
6.4
|
|
|
9.6
|
|
|
(979.3
|
)
|
|
11.5
|
|
|||||
Interest expense
|
(81.3
|
)
|
|
(72.2
|
)
|
|
(34.4
|
)
|
|
87.7
|
|
|
(100.2
|
)
|
|||||
Debt retirement and exchange costs
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Foreign exchange gain
|
—
|
|
|
—
|
|
|
41.7
|
|
|
—
|
|
|
41.7
|
|
|||||
Other income (expense), net
|
86.7
|
|
|
(0.6
|
)
|
|
1.2
|
|
|
(87.6
|
)
|
|
(0.3
|
)
|
|||||
Income before income taxes
|
974.5
|
|
|
296.1
|
|
|
586.1
|
|
|
(982.4
|
)
|
|
874.3
|
|
|||||
Income tax expense (benefit)
|
9.9
|
|
|
(353.1
|
)
|
|
254.2
|
|
|
(0.6
|
)
|
|
(89.6
|
)
|
|||||
Net income
|
964.6
|
|
|
649.2
|
|
|
331.9
|
|
|
(981.8
|
)
|
|
963.9
|
|
|||||
Less: Net income attributable to noncontrolling interest
|
—
|
|
|
—
|
|
|
1.9
|
|
|
—
|
|
|
1.9
|
|
|||||
Net income attributable to Kansas City Southern and subsidiaries
|
964.6
|
|
|
649.2
|
|
|
330.0
|
|
|
(981.8
|
)
|
|
962.0
|
|
|||||
Other comprehensive income (loss)
|
(6.7
|
)
|
|
—
|
|
|
0.5
|
|
|
(0.5
|
)
|
|
(6.7
|
)
|
|||||
Comprehensive income attributable to Kansas City Southern and subsidiaries
|
$
|
957.9
|
|
|
$
|
649.2
|
|
|
$
|
330.5
|
|
|
$
|
(982.3
|
)
|
|
$
|
955.3
|
|
|
2016
|
||||||||||||||||||
|
Parent
|
|
Guarantor
Subsidiaries
|
|
Non-Guarantor
Subsidiaries
|
|
Consolidating
Adjustments
|
|
Consolidated
KCS
|
||||||||||
Revenues
|
$
|
—
|
|
|
$
|
1,101.3
|
|
|
$
|
1,252.5
|
|
|
$
|
(19.6
|
)
|
|
$
|
2,334.2
|
|
Operating expenses
|
4.7
|
|
|
794.7
|
|
|
734.0
|
|
|
(17.7
|
)
|
|
1,515.7
|
|
|||||
Operating income (loss)
|
(4.7
|
)
|
|
306.6
|
|
|
518.5
|
|
|
(1.9
|
)
|
|
818.5
|
|
|||||
Equity in net earnings of affiliates
|
468.5
|
|
|
5.3
|
|
|
12.7
|
|
|
(471.9
|
)
|
|
14.6
|
|
|||||
Interest expense
|
(81.9
|
)
|
|
(83.0
|
)
|
|
(63.1
|
)
|
|
130.3
|
|
|
(97.7
|
)
|
|||||
Debt retirement and exchange costs
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|||||
Foreign exchange loss
|
—
|
|
|
—
|
|
|
(72.0
|
)
|
|
—
|
|
|
(72.0
|
)
|
|||||
Other income (expense), net
|
104.4
|
|
|
(0.2
|
)
|
|
24.1
|
|
|
(129.0
|
)
|
|
(0.7
|
)
|
|||||
Income before income taxes
|
486.3
|
|
|
228.7
|
|
|
420.2
|
|
|
(472.5
|
)
|
|
662.7
|
|
|||||
Income tax expense
|
7.1
|
|
|
87.4
|
|
|
89.2
|
|
|
(0.9
|
)
|
|
182.8
|
|
|||||
Net income
|
479.2
|
|
|
141.3
|
|
|
331.0
|
|
|
(471.6
|
)
|
|
479.9
|
|
|||||
Less: Net income attributable to noncontrolling interest
|
—
|
|
|
—
|
|
|
1.8
|
|
|
—
|
|
|
1.8
|
|
|||||
Net income attributable to Kansas City Southern and subsidiaries
|
479.2
|
|
|
141.3
|
|
|
329.2
|
|
|
(471.6
|
)
|
|
478.1
|
|
|||||
Other comprehensive loss
|
(1.5
|
)
|
|
—
|
|
|
(2.5
|
)
|
|
2.5
|
|
|
(1.5
|
)
|
|||||
Comprehensive income attributable to Kansas City Southern and subsidiaries
|
$
|
477.7
|
|
|
$
|
141.3
|
|
|
$
|
326.7
|
|
|
$
|
(469.1
|
)
|
|
$
|
476.6
|
|
|
2015
|
||||||||||||||||||
|
Parent
|
|
Guarantor
Subsidiaries
|
|
Non-Guarantor
Subsidiaries
|
|
Consolidating
Adjustments
|
|
Consolidated
KCS
|
||||||||||
Revenues
|
$
|
—
|
|
|
$
|
1,135.9
|
|
|
$
|
1,302.3
|
|
|
$
|
(19.4
|
)
|
|
$
|
2,418.8
|
|
Operating expenses
|
4.6
|
|
|
779.7
|
|
|
849.3
|
|
|
(18.6
|
)
|
|
1,615.0
|
|
|||||
Operating income (loss)
|
(4.6
|
)
|
|
356.2
|
|
|
453.0
|
|
|
(0.8
|
)
|
|
803.8
|
|
|||||
Equity in net earnings of affiliates
|
464.0
|
|
|
5.6
|
|
|
16.5
|
|
|
(467.8
|
)
|
|
18.3
|
|
|||||
Interest expense
|
(4.6
|
)
|
|
(84.9
|
)
|
|
(40.1
|
)
|
|
47.7
|
|
|
(81.9
|
)
|
|||||
Debt retirement and exchange costs
|
0.1
|
|
|
(5.2
|
)
|
|
(2.5
|
)
|
|
—
|
|
|
(7.6
|
)
|
|||||
Foreign exchange loss
|
—
|
|
|
—
|
|
|
(56.6
|
)
|
|
—
|
|
|
(56.6
|
)
|
|||||
Other income (expense), net
|
45.9
|
|
|
(3.1
|
)
|
|
1.4
|
|
|
(47.6
|
)
|
|
(3.4
|
)
|
|||||
Income before income taxes
|
500.8
|
|
|
268.6
|
|
|
371.7
|
|
|
(468.5
|
)
|
|
672.6
|
|
|||||
Income tax expense
|
16.5
|
|
|
98.3
|
|
|
72.5
|
|
|
—
|
|
|
187.3
|
|
|||||
Net income
|
484.3
|
|
|
170.3
|
|
|
299.2
|
|
|
(468.5
|
)
|
|
485.3
|
|
|||||
Less: Net income attributable to noncontrolling interest
|
—
|
|
|
—
|
|
|
1.8
|
|
|
—
|
|
|
1.8
|
|
|||||
Net income attributable to Kansas City Southern and subsidiaries
|
484.3
|
|
|
170.3
|
|
|
297.4
|
|
|
(468.5
|
)
|
|
483.5
|
|
|||||
Other comprehensive loss
|
(1.5
|
)
|
|
—
|
|
|
(2.2
|
)
|
|
2.2
|
|
|
(1.5
|
)
|
|||||
Comprehensive income attributable to Kansas City Southern and subsidiaries
|
$
|
482.8
|
|
|
$
|
170.3
|
|
|
$
|
295.2
|
|
|
$
|
(466.3
|
)
|
|
$
|
482.0
|
|
|
December 31, 2017
|
||||||||||||||||||
|
Parent
|
|
Guarantor
Subsidiaries
|
|
Non-Guarantor
Subsidiaries
|
|
Consolidating
Adjustments
|
|
Consolidated
KCS
|
||||||||||
Assets:
|
|
|
|
|
|
|
|
|
|
||||||||||
Current assets
|
$
|
292.0
|
|
|
$
|
222.9
|
|
|
$
|
475.5
|
|
|
$
|
(310.3
|
)
|
|
$
|
680.1
|
|
Investments
|
—
|
|
|
3.9
|
|
|
40.7
|
|
|
—
|
|
|
44.6
|
|
|||||
Investments in consolidated subsidiaries
|
4,462.4
|
|
|
184.2
|
|
|
—
|
|
|
(4,646.6
|
)
|
|
—
|
|
|||||
Property and equipment (including concession assets), net
|
—
|
|
|
4,454.8
|
|
|
3,954.9
|
|
|
(5.9
|
)
|
|
8,403.8
|
|
|||||
Other assets
|
2,159.6
|
|
|
46.8
|
|
|
252.5
|
|
|
(2,388.7
|
)
|
|
70.2
|
|
|||||
Total assets
|
$
|
6,914.0
|
|
|
$
|
4,912.6
|
|
|
$
|
4,723.6
|
|
|
$
|
(7,351.5
|
)
|
|
$
|
9,198.7
|
|
Liabilities and equity:
|
|
|
|
|
|
|
|
|
|
||||||||||
Current liabilities
|
$
|
277.9
|
|
|
$
|
673.6
|
|
|
$
|
332.0
|
|
|
$
|
(311.8
|
)
|
|
$
|
971.7
|
|
Long-term debt
|
2,066.8
|
|
|
1,517.2
|
|
|
1,040.3
|
|
|
(2,388.8
|
)
|
|
2,235.5
|
|
|||||
Deferred income taxes
|
(7.1
|
)
|
|
818.8
|
|
|
177.0
|
|
|
(1.5
|
)
|
|
987.2
|
|
|||||
Other liabilities
|
13.5
|
|
|
70.3
|
|
|
55.1
|
|
|
—
|
|
|
138.9
|
|
|||||
Stockholders’ equity
|
4,562.9
|
|
|
1,832.7
|
|
|
2,802.7
|
|
|
(4,649.4
|
)
|
|
4,548.9
|
|
|||||
Noncontrolling interest
|
—
|
|
|
—
|
|
|
316.5
|
|
|
—
|
|
|
316.5
|
|
|||||
Total liabilities and equity
|
$
|
6,914.0
|
|
|
$
|
4,912.6
|
|
|
$
|
4,723.6
|
|
|
$
|
(7,351.5
|
)
|
|
$
|
9,198.7
|
|
|
December 31, 2016
|
||||||||||||||||||
|
Parent
|
|
Guarantor
Subsidiaries
|
|
Non-Guarantor
Subsidiaries
|
|
Consolidating
Adjustments
|
|
Consolidated
KCS
|
||||||||||
Assets:
|
|
|
|
|
|
|
|
|
|
||||||||||
Current assets
|
$
|
18.3
|
|
|
$
|
275.4
|
|
|
$
|
389.6
|
|
|
$
|
(35.3
|
)
|
|
$
|
648.0
|
|
Investments
|
—
|
|
|
3.9
|
|
|
29.0
|
|
|
—
|
|
|
32.9
|
|
|||||
Investments in consolidated subsidiaries
|
3,497.7
|
|
|
179.1
|
|
|
—
|
|
|
(3,676.8
|
)
|
|
—
|
|
|||||
Property and equipment (including concession assets), net
|
—
|
|
|
4,203.6
|
|
|
3,868.8
|
|
|
(2.7
|
)
|
|
8,069.7
|
|
|||||
Other assets
|
2,767.9
|
|
|
43.0
|
|
|
252.6
|
|
|
(2,996.6
|
)
|
|
66.9
|
|
|||||
Total assets
|
$
|
6,283.9
|
|
|
$
|
4,705.0
|
|
|
$
|
4,540.0
|
|
|
$
|
(6,711.4
|
)
|
|
$
|
8,817.5
|
|
Liabilities and equity:
|
|
|
|
|
|
|
|
|
|
||||||||||
Current liabilities
|
$
|
87.3
|
|
|
$
|
432.8
|
|
|
$
|
261.0
|
|
|
$
|
(36.7
|
)
|
|
$
|
744.4
|
|
Long-term debt
|
2,064.3
|
|
|
1,928.9
|
|
|
1,274.9
|
|
|
(2,996.6
|
)
|
|
2,271.5
|
|
|||||
Deferred income taxes
|
26.9
|
|
|
1,075.3
|
|
|
188.0
|
|
|
(0.9
|
)
|
|
1,289.3
|
|
|||||
Other liabilities
|
4.0
|
|
|
86.3
|
|
|
17.5
|
|
|
—
|
|
|
107.8
|
|
|||||
Stockholders’ equity
|
4,101.4
|
|
|
1,181.7
|
|
|
2,484.0
|
|
|
(3,677.2
|
)
|
|
4,089.9
|
|
|||||
Noncontrolling interest
|
—
|
|
|
—
|
|
|
314.6
|
|
|
—
|
|
|
314.6
|
|
|||||
Total liabilities and equity
|
$
|
6,283.9
|
|
|
$
|
4,705.0
|
|
|
$
|
4,540.0
|
|
|
$
|
(6,711.4
|
)
|
|
$
|
8,817.5
|
|
|
2017
|
||||||||||||||||||
|
Parent
|
|
Guarantor
Subsidiaries
|
|
Non-Guarantor
Subsidiaries
|
|
Consolidating
Adjustments
|
|
Consolidated
KCS
|
||||||||||
Operating activities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Net cash provided
|
$
|
220.4
|
|
|
$
|
557.0
|
|
|
$
|
266.9
|
|
|
$
|
(15.9
|
)
|
|
$
|
1,028.4
|
|
Investing activities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Capital expenditures
|
—
|
|
|
(375.5
|
)
|
|
(209.9
|
)
|
|
—
|
|
|
(585.4
|
)
|
|||||
Purchase or replacement of equipment under operating leases
|
—
|
|
|
(42.6
|
)
|
|
—
|
|
|
—
|
|
|
(42.6
|
)
|
|||||
Property investments in MSLLC
|
—
|
|
|
—
|
|
|
(26.0
|
)
|
|
—
|
|
|
(26.0
|
)
|
|||||
Investments in and advances to affiliates
|
(0.6
|
)
|
|
(0.6
|
)
|
|
(20.4
|
)
|
|
1.2
|
|
|
(20.4
|
)
|
|||||
Proceeds from repayment of loans to affiliates
|
12,241.7
|
|
|
—
|
|
|
—
|
|
|
(12,241.7
|
)
|
|
—
|
|
|||||
Loans to affiliates
|
(12,102.6
|
)
|
|
—
|
|
|
—
|
|
|
12,102.6
|
|
|
—
|
|
|||||
Proceeds from disposal of property
|
—
|
|
|
6.0
|
|
|
2.8
|
|
|
—
|
|
|
8.8
|
|
|||||
Other investing activities
|
—
|
|
|
(17.2
|
)
|
|
(1.7
|
)
|
|
3.4
|
|
|
(15.5
|
)
|
|||||
Net cash provided (used)
|
138.5
|
|
|
(429.9
|
)
|
|
(255.2
|
)
|
|
(134.5
|
)
|
|
(681.1
|
)
|
|||||
Financing activities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Proceeds from short-term borrowings
|
12,102.6
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
12,102.6
|
|
|||||
Repayment of short-term borrowings
|
(11,943.6
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(11,943.6
|
)
|
|||||
Repayment of long-term debt
|
—
|
|
|
(3.6
|
)
|
|
(21.8
|
)
|
|
—
|
|
|
(25.4
|
)
|
|||||
Dividends paid
|
(142.5
|
)
|
|
—
|
|
|
(12.5
|
)
|
|
12.5
|
|
|
(142.5
|
)
|
|||||
Shares repurchased
|
(375.6
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(375.6
|
)
|
|||||
Proceeds from loans from affiliates
|
—
|
|
|
12,102.6
|
|
|
—
|
|
|
(12,102.6
|
)
|
|
—
|
|
|||||
Repayment of loans from affiliates
|
—
|
|
|
(12,241.7
|
)
|
|
—
|
|
|
12,241.7
|
|
|
—
|
|
|||||
Contributions from affiliates
|
—
|
|
|
0.6
|
|
|
0.6
|
|
|
(1.2
|
)
|
|
—
|
|
|||||
Other financing activities
|
0.7
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
0.7
|
|
|||||
Net cash used
|
(358.4
|
)
|
|
(142.1
|
)
|
|
(33.7
|
)
|
|
150.4
|
|
|
(383.8
|
)
|
|||||
Cash and cash equivalents:
|
|
|
|
|
|
|
|
|
|
||||||||||
Net increase (decrease)
|
0.5
|
|
|
(15.0
|
)
|
|
(22.0
|
)
|
|
—
|
|
|
(36.5
|
)
|
|||||
At beginning of year
|
0.2
|
|
|
32.6
|
|
|
137.8
|
|
|
—
|
|
|
170.6
|
|
|||||
At end of year
|
$
|
0.7
|
|
|
$
|
17.6
|
|
|
$
|
115.8
|
|
|
$
|
—
|
|
|
$
|
134.1
|
|
|
2016
|
||||||||||||||||||
|
Parent
|
|
Guarantor
Subsidiaries
|
|
Non-Guarantor
Subsidiaries
|
|
Consolidating
Adjustments
|
|
Consolidated
KCS
|
||||||||||
Operating activities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Net cash provided
|
$
|
434.1
|
|
|
$
|
236.0
|
|
|
$
|
482.7
|
|
|
$
|
(233.8
|
)
|
|
$
|
919.0
|
|
Investing activities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Capital expenditures
|
—
|
|
|
(372.8
|
)
|
|
(190.8
|
)
|
|
—
|
|
|
(563.6
|
)
|
|||||
Purchase or replacement of equipment under operating leases
|
—
|
|
|
(26.6
|
)
|
|
—
|
|
|
—
|
|
|
(26.6
|
)
|
|||||
Property investments in MSLLC
|
—
|
|
|
—
|
|
|
(33.1
|
)
|
|
—
|
|
|
(33.1
|
)
|
|||||
Investments in and advances to affiliates
|
(153.4
|
)
|
|
(6.5
|
)
|
|
(0.9
|
)
|
|
159.9
|
|
|
(0.9
|
)
|
|||||
Proceeds from repayment of loans to affiliates
|
9,067.7
|
|
|
—
|
|
|
—
|
|
|
(9,067.7
|
)
|
|
—
|
|
|||||
Loans to affiliates
|
(9,123.4
|
)
|
|
—
|
|
|
—
|
|
|
9,123.4
|
|
|
—
|
|
|||||
Proceeds from disposal of property
|
—
|
|
|
2.0
|
|
|
3.1
|
|
|
(0.1
|
)
|
|
5.0
|
|
|||||
Other investing activities
|
—
|
|
|
(14.9
|
)
|
|
3.9
|
|
|
2.0
|
|
|
(9.0
|
)
|
|||||
Net cash used
|
(209.1
|
)
|
|
(418.8
|
)
|
|
(217.8
|
)
|
|
217.5
|
|
|
(628.2
|
)
|
|||||
Financing activities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Proceeds from short-term borrowings
|
8,698.7
|
|
|
243.5
|
|
|
—
|
|
|
(243.5
|
)
|
|
8,698.7
|
|
|||||
Repayment of short-term borrowings
|
(8,597.9
|
)
|
|
(243.5
|
)
|
|
—
|
|
|
243.5
|
|
|
(8,597.9
|
)
|
|||||
Proceeds from issuance of long-term debt
|
248.7
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
248.7
|
|
|||||
Repayment of long-term debt
|
(244.8
|
)
|
|
(3.5
|
)
|
|
(28.1
|
)
|
|
—
|
|
|
(276.4
|
)
|
|||||
Dividends paid
|
(142.8
|
)
|
|
—
|
|
|
(230.2
|
)
|
|
230.2
|
|
|
(142.8
|
)
|
|||||
Shares repurchased
|
(185.4
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(185.4
|
)
|
|||||
Proceeds from loans from affiliates
|
—
|
|
|
8,879.9
|
|
|
—
|
|
|
(8,879.9
|
)
|
|
—
|
|
|||||
Repayment of loans from affiliates
|
—
|
|
|
(8,824.2
|
)
|
|
—
|
|
|
8,824.2
|
|
|
—
|
|
|||||
Contribution from affiliates
|
—
|
|
|
153.1
|
|
|
6.8
|
|
|
(159.9
|
)
|
|
—
|
|
|||||
Other financing activities
|
(1.5
|
)
|
|
(0.1
|
)
|
|
(1.8
|
)
|
|
1.7
|
|
|
(1.7
|
)
|
|||||
Net cash provided (used)
|
(225.0
|
)
|
|
205.2
|
|
|
(253.3
|
)
|
|
16.3
|
|
|
(256.8
|
)
|
|||||
Cash and cash equivalents:
|
|
|
|
|
|
|
|
|
|
||||||||||
Net increase
|
—
|
|
|
22.4
|
|
|
11.6
|
|
|
—
|
|
|
34.0
|
|
|||||
At beginning of year
|
0.2
|
|
|
10.2
|
|
|
126.2
|
|
|
—
|
|
|
136.6
|
|
|||||
At end of year
|
$
|
0.2
|
|
|
$
|
32.6
|
|
|
$
|
137.8
|
|
|
$
|
—
|
|
|
$
|
170.6
|
|
|
2015
|
||||||||||||||||||
|
Parent
|
|
Guarantor
Subsidiaries
|
|
Non-Guarantor
Subsidiaries
|
|
Consolidating
Adjustments
|
|
Consolidated
KCS
|
||||||||||
Operating activities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Net cash provided
|
$
|
45.2
|
|
|
$
|
356.6
|
|
|
$
|
526.0
|
|
|
$
|
(18.6
|
)
|
|
$
|
909.2
|
|
Investing activities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Capital expenditures
|
—
|
|
|
(382.8
|
)
|
|
(305.2
|
)
|
|
—
|
|
|
(688.0
|
)
|
|||||
Purchase or replacement of equipment under operating leases
|
—
|
|
|
(82.8
|
)
|
|
(61.4
|
)
|
|
—
|
|
|
(144.2
|
)
|
|||||
Property investments in MSLLC
|
—
|
|
|
—
|
|
|
(17.4
|
)
|
|
—
|
|
|
(17.4
|
)
|
|||||
Investments in and advances to affiliates
|
(0.7
|
)
|
|
(0.7
|
)
|
|
(0.7
|
)
|
|
1.4
|
|
|
(0.7
|
)
|
|||||
Proceeds from repayment of loans to affiliates
|
293.9
|
|
|
—
|
|
|
—
|
|
|
(293.9
|
)
|
|
—
|
|
|||||
Loans to affiliates
|
(80.0
|
)
|
|
—
|
|
|
—
|
|
|
80.0
|
|
|
—
|
|
|||||
Proceeds from disposal of property
|
—
|
|
|
1.3
|
|
|
3.6
|
|
|
(0.3
|
)
|
|
4.6
|
|
|||||
Other investing activities
|
(0.1
|
)
|
|
(32.0
|
)
|
|
3.6
|
|
|
1.2
|
|
|
(27.3
|
)
|
|||||
Net cash provided (used)
|
213.1
|
|
|
(497.0
|
)
|
|
(377.5
|
)
|
|
(211.6
|
)
|
|
(873.0
|
)
|
|||||
Financing activities:
|
|
|
|
|
|
|
|
|
|
||||||||||
Proceeds from short-term borrowings
|
80.0
|
|
|
10,786.2
|
|
|
—
|
|
|
—
|
|
|
10,866.2
|
|
|||||
Repayment of short-term borrowings
|
—
|
|
|
(10,937.3
|
)
|
|
(300.0
|
)
|
|
—
|
|
|
(11,237.3
|
)
|
|||||
Proceeds from issuance of long-term debt
|
—
|
|
|
663.7
|
|
|
40.0
|
|
|
(80.0
|
)
|
|
623.7
|
|
|||||
Repayment of long-term debt
|
—
|
|
|
(88.4
|
)
|
|
(61.4
|
)
|
|
—
|
|
|
(149.8
|
)
|
|||||
Dividends paid
|
(140.1
|
)
|
|
—
|
|
|
(17.8
|
)
|
|
17.8
|
|
|
(140.1
|
)
|
|||||
Shares repurchased
|
(194.2
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(194.2
|
)
|
|||||
Repayment of loans from affiliates
|
—
|
|
|
(293.9
|
)
|
|
—
|
|
|
293.9
|
|
|
—
|
|
|||||
Other financing activities
|
(4.0
|
)
|
|
(9.2
|
)
|
|
(1.4
|
)
|
|
(1.5
|
)
|
|
(16.1
|
)
|
|||||
Net cash provided (used)
|
(258.3
|
)
|
|
121.1
|
|
|
(340.6
|
)
|
|
230.2
|
|
|
(247.6
|
)
|
|||||
Cash and cash equivalents:
|
|
|
|
|
|
|
|
|
|
||||||||||
Net decrease
|
—
|
|
|
(19.3
|
)
|
|
(192.1
|
)
|
|
—
|
|
|
(211.4
|
)
|
|||||
At beginning of year
|
0.2
|
|
|
29.5
|
|
|
318.3
|
|
|
—
|
|
|
348.0
|
|
|||||
At end of year
|
$
|
0.2
|
|
|
$
|
10.2
|
|
|
$
|
126.2
|
|
|
$
|
—
|
|
|
$
|
136.6
|
|
|
2017
|
||||||||||||||||||||||
|
Parent
|
|
KCSR
|
|
Guarantor
Subsidiaries
|
|
Non-Guarantor
Subsidiaries
|
|
Consolidating
Adjustments
|
|
Consolidated
KCS
|
||||||||||||
Revenues
|
$
|
—
|
|
|
$
|
1,220.8
|
|
|
$
|
43.5
|
|
|
$
|
1,359.0
|
|
|
$
|
(40.4
|
)
|
|
$
|
2,582.9
|
|
Operating expenses
|
5.7
|
|
|
862.8
|
|
|
39.1
|
|
|
791.0
|
|
|
(37.3
|
)
|
|
1,661.3
|
|
||||||
Operating income (loss)
|
(5.7
|
)
|
|
358.0
|
|
|
4.4
|
|
|
568.0
|
|
|
(3.1
|
)
|
|
921.6
|
|
||||||
Equity in net earnings of affiliates
|
974.8
|
|
|
19.0
|
|
|
4.5
|
|
|
9.6
|
|
|
(996.4
|
)
|
|
11.5
|
|
||||||
Interest expense
|
(81.3
|
)
|
|
(72.2
|
)
|
|
—
|
|
|
(34.4
|
)
|
|
87.7
|
|
|
(100.2
|
)
|
||||||
Debt retirement and exchange costs
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Foreign exchange gain
|
—
|
|
|
—
|
|
|
—
|
|
|
41.7
|
|
|
—
|
|
|
41.7
|
|
||||||
Other income (expense), net
|
86.7
|
|
|
(0.6
|
)
|
|
—
|
|
|
1.2
|
|
|
(87.6
|
)
|
|
(0.3
|
)
|
||||||
Income before income taxes
|
974.5
|
|
|
304.2
|
|
|
8.9
|
|
|
586.1
|
|
|
(999.4
|
)
|
|
874.3
|
|
||||||
Income tax expense (benefit)
|
9.9
|
|
|
(310.6
|
)
|
|
(42.5
|
)
|
|
254.2
|
|
|
(0.6
|
)
|
|
(89.6
|
)
|
||||||
Net income
|
964.6
|
|
|
614.8
|
|
|
51.4
|
|
|
331.9
|
|
|
(998.8
|
)
|
|
963.9
|
|
||||||
Less: Net income attributable to noncontrolling interest
|
—
|
|
|
—
|
|
|
—
|
|
|
1.9
|
|
|
—
|
|
|
1.9
|
|
||||||
Net income attributable to Kansas City Southern and subsidiaries
|
964.6
|
|
|
614.8
|
|
|
51.4
|
|
|
330.0
|
|
|
(998.8
|
)
|
|
962.0
|
|
||||||
Other comprehensive income (loss)
|
(6.7
|
)
|
|
—
|
|
|
—
|
|
|
0.5
|
|
|
(0.5
|
)
|
|
(6.7
|
)
|
||||||
Comprehensive income attributable to Kansas City Southern and subsidiaries
|
$
|
957.9
|
|
|
$
|
614.8
|
|
|
$
|
51.4
|
|
|
$
|
330.5
|
|
|
$
|
(999.3
|
)
|
|
$
|
955.3
|
|
|
2016
|
||||||||||||||||||||||
|
Parent
|
|
KCSR
|
|
Guarantor
Subsidiaries
|
|
Non-Guarantor
Subsidiaries
|
|
Consolidating
Adjustments
|
|
Consolidated
KCS
|
||||||||||||
Revenues
|
$
|
—
|
|
|
$
|
1,077.3
|
|
|
$
|
43.7
|
|
|
$
|
1,252.5
|
|
|
$
|
(39.3
|
)
|
|
$
|
2,334.2
|
|
Operating expenses
|
4.7
|
|
|
776.3
|
|
|
38.1
|
|
|
734.0
|
|
|
(37.4
|
)
|
|
1,515.7
|
|
||||||
Operating income (loss)
|
(4.7
|
)
|
|
301.0
|
|
|
5.6
|
|
|
518.5
|
|
|
(1.9
|
)
|
|
818.5
|
|
||||||
Equity in net earnings (losses) of affiliates
|
468.5
|
|
|
(0.2
|
)
|
|
3.5
|
|
|
12.7
|
|
|
(469.9
|
)
|
|
14.6
|
|
||||||
Interest expense
|
(81.9
|
)
|
|
(83.0
|
)
|
|
—
|
|
|
(63.1
|
)
|
|
130.3
|
|
|
(97.7
|
)
|
||||||
Debt retirement and exchange costs
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
||||||
Foreign exchange loss
|
—
|
|
|
—
|
|
|
—
|
|
|
(72.0
|
)
|
|
—
|
|
|
(72.0
|
)
|
||||||
Other income (expense), net
|
104.4
|
|
|
(0.2
|
)
|
|
—
|
|
|
24.1
|
|
|
(129.0
|
)
|
|
(0.7
|
)
|
||||||
Income before income taxes
|
486.3
|
|
|
217.6
|
|
|
9.1
|
|
|
420.2
|
|
|
(470.5
|
)
|
|
662.7
|
|
||||||
Income tax expense
|
7.1
|
|
|
84.3
|
|
|
3.1
|
|
|
89.2
|
|
|
(0.9
|
)
|
|
182.8
|
|
||||||
Net income
|
479.2
|
|
|
133.3
|
|
|
6.0
|
|
|
331.0
|
|
|
(469.6
|
)
|
|
479.9
|
|
||||||
Less: Net income attributable to noncontrolling interest
|
—
|
|
|
—
|
|
|
—
|
|
|
1.8
|
|
|
—
|
|
|
1.8
|
|
||||||
Net income attributable to Kansas City Southern and subsidiaries
|
479.2
|
|
|
133.3
|
|
|
6.0
|
|
|
329.2
|
|
|
(469.6
|
)
|
|
478.1
|
|
||||||
Other comprehensive loss
|
(1.5
|
)
|
|
—
|
|
|
—
|
|
|
(2.5
|
)
|
|
2.5
|
|
|
(1.5
|
)
|
||||||
Comprehensive income attributable to Kansas City Southern and subsidiaries
|
$
|
477.7
|
|
|
$
|
133.3
|
|
|
$
|
6.0
|
|
|
$
|
326.7
|
|
|
$
|
(467.1
|
)
|
|
$
|
476.6
|
|
|
2015
|
||||||||||||||||||||||
|
Parent
|
|
KCSR
|
|
Guarantor
Subsidiaries
|
|
Non-Guarantor
Subsidiaries
|
|
Consolidating
Adjustments
|
|
Consolidated
KCS
|
||||||||||||
Revenues
|
$
|
—
|
|
|
$
|
1,112.5
|
|
|
$
|
42.1
|
|
|
$
|
1,302.3
|
|
|
$
|
(38.1
|
)
|
|
$
|
2,418.8
|
|
Operating expenses
|
4.6
|
|
|
760.4
|
|
|
38.0
|
|
|
849.3
|
|
|
(37.3
|
)
|
|
1,615.0
|
|
||||||
Operating income (loss)
|
(4.6
|
)
|
|
352.1
|
|
|
4.1
|
|
|
453.0
|
|
|
(0.8
|
)
|
|
803.8
|
|
||||||
Equity in net earnings (losses) of affiliates
|
464.0
|
|
|
(1.4
|
)
|
|
3.7
|
|
|
16.5
|
|
|
(464.5
|
)
|
|
18.3
|
|
||||||
Interest expense
|
(4.6
|
)
|
|
(84.8
|
)
|
|
(0.1
|
)
|
|
(40.1
|
)
|
|
47.7
|
|
|
(81.9
|
)
|
||||||
Debt retirement and exchange costs
|
0.1
|
|
|
(5.2
|
)
|
|
—
|
|
|
(2.5
|
)
|
|
—
|
|
|
(7.6
|
)
|
||||||
Foreign exchange loss
|
—
|
|
|
—
|
|
|
—
|
|
|
(56.6
|
)
|
|
—
|
|
|
(56.6
|
)
|
||||||
Other income (expense), net
|
45.9
|
|
|
(3.2
|
)
|
|
0.1
|
|
|
1.4
|
|
|
(47.6
|
)
|
|
(3.4
|
)
|
||||||
Income before income taxes
|
500.8
|
|
|
257.5
|
|
|
7.8
|
|
|
371.7
|
|
|
(465.2
|
)
|
|
672.6
|
|
||||||
Income tax expense
|
16.5
|
|
|
95.2
|
|
|
3.1
|
|
|
72.5
|
|
|
—
|
|
|
187.3
|
|
||||||
Net income
|
484.3
|
|
|
162.3
|
|
|
4.7
|
|
|
299.2
|
|
|
(465.2
|
)
|
|
485.3
|
|
||||||
Less: Net income attributable to noncontrolling interest
|
—
|
|
|
—
|
|
|
—
|
|
|
1.8
|
|
|
—
|
|
|
1.8
|
|
||||||
Net income attributable to Kansas City Southern and subsidiaries
|
484.3
|
|
|
162.3
|
|
|
4.7
|
|
|
297.4
|
|
|
(465.2
|
)
|
|
483.5
|
|
||||||
Other comprehensive loss
|
(1.5
|
)
|
|
—
|
|
|
—
|
|
|
(2.2
|
)
|
|
2.2
|
|
|
(1.5
|
)
|
||||||
Comprehensive income attributable to Kansas City Southern and subsidiaries
|
$
|
482.8
|
|
|
$
|
162.3
|
|
|
$
|
4.7
|
|
|
$
|
295.2
|
|
|
$
|
(463.0
|
)
|
|
$
|
482.0
|
|
|
December 31, 2017
|
||||||||||||||||||||||
|
Parent
|
|
KCSR
|
|
Guarantor
Subsidiaries
|
|
Non-Guarantor
Subsidiaries
|
|
Consolidating
Adjustments
|
|
Consolidated
KCS
|
||||||||||||
Assets:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Current assets
|
$
|
292.0
|
|
|
$
|
214.1
|
|
|
$
|
8.8
|
|
|
$
|
475.5
|
|
|
$
|
(310.3
|
)
|
|
$
|
680.1
|
|
Investments
|
—
|
|
|
3.9
|
|
|
—
|
|
|
40.7
|
|
|
—
|
|
|
44.6
|
|
||||||
Investments in consolidated subsidiaries
|
4,462.4
|
|
|
7.4
|
|
|
182.2
|
|
|
—
|
|
|
(4,652.0
|
)
|
|
—
|
|
||||||
Property and equipment (including concession assets), net
|
—
|
|
|
4,283.2
|
|
|
171.6
|
|
|
3,954.9
|
|
|
(5.9
|
)
|
|
8,403.8
|
|
||||||
Other assets
|
2,159.6
|
|
|
46.8
|
|
|
—
|
|
|
252.5
|
|
|
(2,388.7
|
)
|
|
70.2
|
|
||||||
Total assets
|
$
|
6,914.0
|
|
|
$
|
4,555.4
|
|
|
$
|
362.6
|
|
|
$
|
4,723.6
|
|
|
$
|
(7,356.9
|
)
|
|
$
|
9,198.7
|
|
Liabilities and equity:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Current liabilities
|
$
|
277.9
|
|
|
$
|
578.7
|
|
|
$
|
94.9
|
|
|
$
|
332.0
|
|
|
$
|
(311.8
|
)
|
|
$
|
971.7
|
|
Long-term debt
|
2,066.8
|
|
|
1,517.2
|
|
|
—
|
|
|
1,040.3
|
|
|
(2,388.8
|
)
|
|
2,235.5
|
|
||||||
Deferred income taxes
|
(7.1
|
)
|
|
734.8
|
|
|
84.0
|
|
|
177.0
|
|
|
(1.5
|
)
|
|
987.2
|
|
||||||
Other liabilities
|
13.5
|
|
|
70.0
|
|
|
0.3
|
|
|
55.1
|
|
|
—
|
|
|
138.9
|
|
||||||
Stockholders’ equity
|
4,562.9
|
|
|
1,654.7
|
|
|
183.4
|
|
|
2,802.7
|
|
|
(4,654.8
|
)
|
|
4,548.9
|
|
||||||
Noncontrolling interest
|
—
|
|
|
—
|
|
|
—
|
|
|
316.5
|
|
|
—
|
|
|
316.5
|
|
||||||
Total liabilities and equity
|
$
|
6,914.0
|
|
|
$
|
4,555.4
|
|
|
$
|
362.6
|
|
|
$
|
4,723.6
|
|
|
$
|
(7,356.9
|
)
|
|
$
|
9,198.7
|
|
|
December 31, 2016
|
||||||||||||||||||||||
|
Parent
|
|
KCSR
|
|
Guarantor
Subsidiaries
|
|
Non-Guarantor
Subsidiaries
|
|
Consolidating
Adjustments
|
|
Consolidated
KCS
|
||||||||||||
Assets:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Current assets
|
$
|
18.3
|
|
|
$
|
271.8
|
|
|
$
|
4.6
|
|
|
$
|
389.6
|
|
|
$
|
(36.3
|
)
|
|
$
|
648.0
|
|
Investments
|
—
|
|
|
3.9
|
|
|
—
|
|
|
29.0
|
|
|
—
|
|
|
32.9
|
|
||||||
Investments in consolidated subsidiaries
|
3,497.7
|
|
|
(9.8
|
)
|
|
177.1
|
|
|
—
|
|
|
(3,665.0
|
)
|
|
—
|
|
||||||
Property and equipment (including concession assets), net
|
—
|
|
|
4,024.5
|
|
|
179.1
|
|
|
3,868.8
|
|
|
(2.7
|
)
|
|
8,069.7
|
|
||||||
Other assets
|
2,767.9
|
|
|
43.0
|
|
|
—
|
|
|
252.6
|
|
|
(2,996.6
|
)
|
|
66.9
|
|
||||||
Total assets
|
$
|
6,283.9
|
|
|
$
|
4,333.4
|
|
|
$
|
360.8
|
|
|
$
|
4,540.0
|
|
|
$
|
(6,700.6
|
)
|
|
$
|
8,817.5
|
|
Liabilities and equity:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Current liabilities
|
$
|
87.3
|
|
|
$
|
342.1
|
|
|
$
|
91.7
|
|
|
$
|
261.0
|
|
|
$
|
(37.7
|
)
|
|
$
|
744.4
|
|
Long-term debt
|
2,064.3
|
|
|
1,928.8
|
|
|
0.1
|
|
|
1,274.9
|
|
|
(2,996.6
|
)
|
|
2,271.5
|
|
||||||
Deferred income taxes
|
26.9
|
|
|
937.7
|
|
|
137.6
|
|
|
188.0
|
|
|
(0.9
|
)
|
|
1,289.3
|
|
||||||
Other liabilities
|
4.0
|
|
|
86.2
|
|
|
0.1
|
|
|
17.5
|
|
|
—
|
|
|
107.8
|
|
||||||
Stockholders’ equity
|
4,101.4
|
|
|
1,038.6
|
|
|
131.3
|
|
|
2,484.0
|
|
|
(3,665.4
|
)
|
|
4,089.9
|
|
||||||
Noncontrolling interest
|
—
|
|
|
—
|
|
|
—
|
|
|
314.6
|
|
|
—
|
|
|
314.6
|
|
||||||
Total liabilities and equity
|
$
|
6,283.9
|
|
|
$
|
4,333.4
|
|
|
$
|
360.8
|
|
|
$
|
4,540.0
|
|
|
$
|
(6,700.6
|
)
|
|
$
|
8,817.5
|
|
|
2017
|
||||||||||||||||||||||
|
Parent
|
|
KCSR
|
|
Guarantor
Subsidiaries
|
|
Non-Guarantor
Subsidiaries
|
|
Consolidating
Adjustments
|
|
Consolidated
KCS
|
||||||||||||
Operating activities:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Net cash provided
|
$
|
220.4
|
|
|
$
|
556.6
|
|
|
$
|
0.4
|
|
|
$
|
266.9
|
|
|
$
|
(15.9
|
)
|
|
$
|
1,028.4
|
|
Investing activities:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Capital expenditures
|
—
|
|
|
(375.2
|
)
|
|
(0.3
|
)
|
|
(209.9
|
)
|
|
—
|
|
|
(585.4
|
)
|
||||||
Purchase or replacement of equipment under operating leases
|
—
|
|
|
(42.6
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(42.6
|
)
|
||||||
Property investments in MSLLC
|
—
|
|
|
—
|
|
|
—
|
|
|
(26.0
|
)
|
|
—
|
|
|
(26.0
|
)
|
||||||
Investments in and advances to affiliates
|
(0.6
|
)
|
|
—
|
|
|
(0.6
|
)
|
|
(20.4
|
)
|
|
1.2
|
|
|
(20.4
|
)
|
||||||
Proceeds from repayment of loans to affiliates
|
12,241.7
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(12,241.7
|
)
|
|
—
|
|
||||||
Loans to affiliates
|
(12,102.6
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
12,102.6
|
|
|
—
|
|
||||||
Proceeds from disposal of property
|
—
|
|
|
6.0
|
|
|
—
|
|
|
2.8
|
|
|
—
|
|
|
8.8
|
|
||||||
Other investing activities
|
—
|
|
|
(17.2
|
)
|
|
—
|
|
|
(1.7
|
)
|
|
3.4
|
|
|
(15.5
|
)
|
||||||
Net cash provided (used)
|
138.5
|
|
|
(429.0
|
)
|
|
(0.9
|
)
|
|
(255.2
|
)
|
|
(134.5
|
)
|
|
(681.1
|
)
|
||||||
Financing activities:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Proceeds from short-term borrowings
|
12,102.6
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
12,102.6
|
|
||||||
Repayment of short-term borrowings
|
(11,943.6
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(11,943.6
|
)
|
||||||
Repayment of long-term debt
|
—
|
|
|
(3.5
|
)
|
|
(0.1
|
)
|
|
(21.8
|
)
|
|
—
|
|
|
(25.4
|
)
|
||||||
Dividends paid
|
(142.5
|
)
|
|
—
|
|
|
—
|
|
|
(12.5
|
)
|
|
12.5
|
|
|
(142.5
|
)
|
||||||
Shares repurchased
|
(375.6
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(375.6
|
)
|
||||||
Proceeds from loans from affiliates
|
—
|
|
|
12,102.6
|
|
|
—
|
|
|
—
|
|
|
(12,102.6
|
)
|
|
—
|
|
||||||
Repayment of loans from affiliates
|
—
|
|
|
(12,241.7
|
)
|
|
—
|
|
|
—
|
|
|
12,241.7
|
|
|
—
|
|
||||||
Contributions from affiliates
|
—
|
|
|
—
|
|
|
0.6
|
|
|
0.6
|
|
|
(1.2
|
)
|
|
—
|
|
||||||
Other financing activities
|
0.7
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
0.7
|
|
||||||
Net cash provided (used)
|
(358.4
|
)
|
|
(142.6
|
)
|
|
0.5
|
|
|
(33.7
|
)
|
|
150.4
|
|
|
(383.8
|
)
|
||||||
Cash and cash equivalents:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Net increase (decrease)
|
0.5
|
|
|
(15.0
|
)
|
|
—
|
|
|
(22.0
|
)
|
|
—
|
|
|
(36.5
|
)
|
||||||
At beginning of year
|
0.2
|
|
|
32.6
|
|
|
—
|
|
|
137.8
|
|
|
—
|
|
|
170.6
|
|
||||||
At end of year
|
$
|
0.7
|
|
|
$
|
17.6
|
|
|
$
|
—
|
|
|
$
|
115.8
|
|
|
$
|
—
|
|
|
$
|
134.1
|
|
|
2016
|
||||||||||||||||||||||
|
Parent
|
|
KCSR
|
|
Guarantor
Subsidiaries
|
|
Non-Guarantor
Subsidiaries
|
|
Consolidating
Adjustments
|
|
Consolidated
KCS
|
||||||||||||
Operating activities:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Net cash provided
|
$
|
434.1
|
|
|
$
|
235.4
|
|
|
$
|
0.6
|
|
|
$
|
482.7
|
|
|
$
|
(233.8
|
)
|
|
$
|
919.0
|
|
Investing activities:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Capital expenditures
|
—
|
|
|
(372.2
|
)
|
|
(0.6
|
)
|
|
(190.8
|
)
|
|
—
|
|
|
(563.6
|
)
|
||||||
Purchase or replacement of equipment under operating leases
|
—
|
|
|
(26.6
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(26.6
|
)
|
||||||
Property investments in MSLLC
|
—
|
|
|
—
|
|
|
—
|
|
|
(33.1
|
)
|
|
—
|
|
|
(33.1
|
)
|
||||||
Investments in and advances to affiliates
|
(153.4
|
)
|
|
—
|
|
|
(6.5
|
)
|
|
(0.9
|
)
|
|
159.9
|
|
|
(0.9
|
)
|
||||||
Proceeds from repayment of loans to affiliates
|
9,067.7
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(9,067.7
|
)
|
|
—
|
|
||||||
Loans to affiliates
|
(9,123.4
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
9,123.4
|
|
|
—
|
|
||||||
Proceeds from disposal of property
|
—
|
|
|
2.0
|
|
|
—
|
|
|
3.1
|
|
|
(0.1
|
)
|
|
5.0
|
|
||||||
Other investing activities
|
—
|
|
|
(14.9
|
)
|
|
—
|
|
|
3.9
|
|
|
2.0
|
|
|
(9.0
|
)
|
||||||
Net cash used
|
(209.1
|
)
|
|
(411.7
|
)
|
|
(7.1
|
)
|
|
(217.8
|
)
|
|
217.5
|
|
|
(628.2
|
)
|
||||||
Financing activities:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Proceeds from short-term borrowings
|
8,698.7
|
|
|
243.5
|
|
|
—
|
|
|
—
|
|
|
(243.5
|
)
|
|
8,698.7
|
|
||||||
Repayment of short-term borrowings
|
(8,597.9
|
)
|
|
(243.5
|
)
|
|
—
|
|
|
—
|
|
|
243.5
|
|
|
(8,597.9
|
)
|
||||||
Proceeds from issuance of long-term debt
|
248.7
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
248.7
|
|
||||||
Repayment of long-term debt
|
(244.8
|
)
|
|
(3.4
|
)
|
|
(0.1
|
)
|
|
(28.1
|
)
|
|
—
|
|
|
(276.4
|
)
|
||||||
Dividends paid
|
(142.8
|
)
|
|
—
|
|
|
—
|
|
|
(230.2
|
)
|
|
230.2
|
|
|
(142.8
|
)
|
||||||
Shares repurchased
|
(185.4
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(185.4
|
)
|
||||||
Proceeds from loans from affiliates
|
—
|
|
|
8,879.9
|
|
|
—
|
|
|
—
|
|
|
(8,879.9
|
)
|
|
—
|
|
||||||
Repayment of loans from affiliates
|
—
|
|
|
(8,824.2
|
)
|
|
—
|
|
|
—
|
|
|
8,824.2
|
|
|
—
|
|
||||||
Contribution from affiliates
|
—
|
|
|
146.6
|
|
|
6.5
|
|
|
6.8
|
|
|
(159.9
|
)
|
|
—
|
|
||||||
Other financing activities
|
(1.5
|
)
|
|
(0.1
|
)
|
|
—
|
|
|
(1.8
|
)
|
|
1.7
|
|
|
(1.7
|
)
|
||||||
Net cash provided (used)
|
(225.0
|
)
|
|
198.8
|
|
|
6.4
|
|
|
(253.3
|
)
|
|
16.3
|
|
|
(256.8
|
)
|
||||||
Cash and cash equivalents:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Net increase (decrease)
|
—
|
|
|
22.5
|
|
|
(0.1
|
)
|
|
11.6
|
|
|
—
|
|
|
34.0
|
|
||||||
At beginning of year
|
0.2
|
|
|
10.1
|
|
|
0.1
|
|
|
126.2
|
|
|
—
|
|
|
136.6
|
|
||||||
At end of year
|
$
|
0.2
|
|
|
$
|
32.6
|
|
|
$
|
—
|
|
|
$
|
137.8
|
|
|
$
|
—
|
|
|
$
|
170.6
|
|
|
2015
|
||||||||||||||||||||||
|
Parent
|
|
KCSR
|
|
Guarantor
Subsidiaries
|
|
Non-Guarantor
Subsidiaries
|
|
Consolidating
Adjustments
|
|
Consolidated
KCS
|
||||||||||||
Operating activities:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Net cash provided
|
$
|
45.2
|
|
|
$
|
355.6
|
|
|
$
|
1.0
|
|
|
$
|
526.0
|
|
|
$
|
(18.6
|
)
|
|
$
|
909.2
|
|
Investing activities:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Capital expenditures
|
—
|
|
|
(381.5
|
)
|
|
(1.3
|
)
|
|
(305.2
|
)
|
|
—
|
|
|
(688.0
|
)
|
||||||
Purchase or replacement of equipment under operating leases
|
—
|
|
|
(82.8
|
)
|
|
—
|
|
|
(61.4
|
)
|
|
—
|
|
|
(144.2
|
)
|
||||||
Property investments in MSLLC
|
—
|
|
|
—
|
|
|
—
|
|
|
(17.4
|
)
|
|
—
|
|
|
(17.4
|
)
|
||||||
Investments in and advances to affiliates
|
(0.7
|
)
|
|
—
|
|
|
(0.7
|
)
|
|
(0.7
|
)
|
|
1.4
|
|
|
(0.7
|
)
|
||||||
Proceeds from repayment of loans to affiliates
|
293.9
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(293.9
|
)
|
|
—
|
|
||||||
Loans to affiliates
|
(80.0
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
80.0
|
|
|
—
|
|
||||||
Proceeds from disposal of property
|
—
|
|
|
1.3
|
|
|
—
|
|
|
3.6
|
|
|
(0.3
|
)
|
|
4.6
|
|
||||||
Other investing activities
|
(0.1
|
)
|
|
(32.0
|
)
|
|
—
|
|
|
3.6
|
|
|
1.2
|
|
|
(27.3
|
)
|
||||||
Net cash provided (used)
|
213.1
|
|
|
(495.0
|
)
|
|
(2.0
|
)
|
|
(377.5
|
)
|
|
(211.6
|
)
|
|
(873.0
|
)
|
||||||
Financing activities:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Proceeds from short-term borrowings
|
80.0
|
|
|
10,786.2
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
10,866.2
|
|
||||||
Repayment of short-term borrowings
|
—
|
|
|
(10,937.3
|
)
|
|
—
|
|
|
(300.0
|
)
|
|
—
|
|
|
(11,237.3
|
)
|
||||||
Proceeds from issuance of long-term debt
|
—
|
|
|
663.7
|
|
|
—
|
|
|
40.0
|
|
|
(80.0
|
)
|
|
623.7
|
|
||||||
Repayment of long-term debt
|
—
|
|
|
(88.3
|
)
|
|
(0.1
|
)
|
|
(61.4
|
)
|
|
—
|
|
|
(149.8
|
)
|
||||||
Dividends paid
|
(140.1
|
)
|
|
—
|
|
|
—
|
|
|
(17.8
|
)
|
|
17.8
|
|
|
(140.1
|
)
|
||||||
Shares repurchased
|
(194.2
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
|
—
|
|
|
(194.2
|
)
|
||||||
Repayment of loans from affiliates
|
—
|
|
|
(293.9
|
)
|
|
—
|
|
|
—
|
|
|
293.9
|
|
|
—
|
|
||||||
Other financing activities
|
(4.0
|
)
|
|
(9.9
|
)
|
|
0.7
|
|
|
(1.4
|
)
|
|
(1.5
|
)
|
|
(16.1
|
)
|
||||||
Net cash provided (used)
|
(258.3
|
)
|
|
120.5
|
|
|
0.6
|
|
|
(340.6
|
)
|
|
230.2
|
|
|
(247.6
|
)
|
||||||
Cash and cash equivalents:
|
|
|
|
|
|
|
|
|
|
|
|
||||||||||||
Net decrease
|
—
|
|
|
(18.9
|
)
|
|
(0.4
|
)
|
|
(192.1
|
)
|
|
—
|
|
|
(211.4
|
)
|
||||||
At beginning of year
|
0.2
|
|
|
29.0
|
|
|
0.5
|
|
|
318.3
|
|
|
—
|
|
|
348.0
|
|
||||||
At end of year
|
$
|
0.2
|
|
|
$
|
10.1
|
|
|
$
|
0.1
|
|
|
$
|
126.2
|
|
|
$
|
—
|
|
|
$
|
136.6
|
|
Item 9.
|
Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
|
Item 9A.
|
Controls and Procedures
|
Item 9B.
|
Other Information
|
Item 10.
|
Directors, Executive Officers and Corporate Governance
|
Item 11.
|
Executive Compensation
|
Item 12.
|
Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
|
Plan Category
|
Number of Securities
to Be Issued upon
Exercise of
Outstanding Options,
Warrants and Rights
|
|
Weighted-
Average Exercise
Price of
Outstanding
Options,
Warrants and
Rights
|
|
Number of Securities
Remaining Available for
Future Issuance under
Equity Compensation
Plans-Excluding
Securities Reflected in
the First Column (i)
|
||||
Equity compensation plans:
|
|
|
|
|
|
||||
Approved by security holders
|
678,415
|
|
|
$
|
82.22
|
|
|
7,242,526
|
|
Not approved by security holders
|
—
|
|
|
—
|
|
|
—
|
|
|
Total
|
678,415
|
|
|
$
|
82.22
|
|
|
7,242,526
|
|
(i)
|
Includes
3,547,724
shares available for issuance under the 2009 Employee Stock Purchase Plan and
3,694,802
shares available for issuance under the 2017 Plan in the form of Nonvested Shares, Bonus Shares, Performance Units or Performance Shares or issued upon the exercise of Options (including ISOs) or stock appreciation rights awarded under the 2017 Plan.
|
Item 13.
|
Certain Relationships and Related Transactions, and Director Independence
|
Item 14.
|
Principal Accountant Fees and Services
|
Exhibit
|
Description
|
3.1
|
|
|
|
3.1.1
|
|
|
|
3.2
|
|
|
|
4.1
|
As permitted by Item 601(b)(4)(iii)(A) of Regulation S-K, the Company has not filed with this Annual Report on Form 10-K certain instruments defining the rights of holders of long-term debt of the Company and its subsidiaries because the total amount of securities authorized under any of such instruments does not exceed 10% of the total assets of the Company and its subsidiaries on a consolidated basis. The Company agrees to furnish a copy of any such agreements to the Securities and Exchange Commission upon request.
|
|
|
4.2
|
|
|
|
4.2.1
|
|
|
|
4.2.2
|
|
|
|
4.3
|
|
|
|
4.3.1
|
|
|
|
4.3.2
|
|
|
|
4.3.3
|
|
|
|
4.3.4
|
Exhibit
|
Description
|
4.3.5
|
|
|
|
4.4
|
|
|
|
4.4.1
|
|
|
|
4.4.2
|
|
|
|
4.5
|
|
|
|
4.5.1
|
|
|
|
4.5.2
|
|
|
|
4.5.3
|
|
|
|
4.6
|
|
|
|
4.6.1
|
|
|
|
4.6.2
|
|
|
|
4.6.3
|
|
|
|
4.6.4
|
|
|
|
4.6.5
|
|
|
|
4.6.6
|
|
|
|
4.6.7
|
|
|
|
10.1
|
|
|
|
Exhibit
|
Description
|
10.2
|
|
|
|
10.3*
|
|
|
|
10.4*
|
|
|
|
10.5*
|
|
|
|
10.6*
|
|
|
|
10.7
|
|
|
|
10.7.1
|
|
|
|
10.7.2
|
|
|
|
10.7.3
|
|
|
|
10.8
|
|
|
|
10.9
|
|
|
|
10.10
|
|
|
|
10.10.1
|
|
|
|
10.10.2
|
Exhibit
|
Description
|
10.10.3
|
|
|
|
10.10.4
|
|
|
|
10.10.5
|
|
|
|
10.11
|
|
|
|
10.11.1
|
|
|
|
10.12
|
|
|
|
10.12.1
|
|
|
|
10.13*
|
|
|
|
10.13.1*
|
|
|
|
10.13.2*
|
|
|
|
10.13.3*
|
|
|
|
10.13.4*
|
|
|
|
10.13.5*
|
|
|
|
10.13.6*
|
Exhibit
|
Description
|
10.13.7*
|
|
|
|
10.13.8*
|
|
|
|
10.13.9*
|
|
|
|
10.14
|
|
|
|
10.14.1
|
|
|
|
10.15
|
|
|
|
10.16
|
|
|
|
10.17*
|
|
|
|
10.17.1*
|
|
|
|
10.18*
|
|
|
|
10.18.1*
|
|
|
|
10.19*
|
|
|
|
10.20*
|
|
|
|
10.21
|
|
|
|
10.22
|
Kansas City Southern
|
|
|
|
By:
|
/
S
/ P
ATRICK
J. O
TTENSMEYER
|
|
Patrick J. Ottensmeyer
President, Chief Executive Officer and Director
|
Signature
|
|
Title
|
|
|
|
/
S
/ P
ATRICK
J. O
TTENSMEYER
|
|
President, Chief Executive Officer and Director (Principal Executive Officer).
|
Patrick J. Ottensmeyer
|
|
|
|
|
|
/
S
/ M
ICHAEL
W. U
PCHURCH
|
|
Executive Vice President and
Chief Financial Officer (Principal Financial Officer).
|
Michael W. Upchurch
|
|
|
|
|
|
/s/ S
UZANNE
M. G
RAFTON
|
|
Vice President and Chief Accounting Officer
(Principal Accounting Officer).
|
Suzanne M. Grafton
|
|
|
|
|
|
/
S
/ R
OBERT
J. D
RUTEN
|
|
Chairman of the Board and Director.
|
Robert J. Druten
|
|
|
|
|
|
/s/ L
YDIA
I. B
EEBE
|
|
Director.
|
Lydia I. Beebe
|
|
|
|
|
|
/
S
/ L
U
M. C
ÓRDOVA
|
|
Director.
|
Lu M. Córdova
|
|
|
|
|
|
/
S
/ T
ERRENCE
P
.
D
UNN
|
|
Director.
|
Terrence P. Dunn
|
|
|
Signature
|
|
Title
|
|
|
|
/S/
A
NTONIO
O. G
ARZA
, J
R
.
|
|
Director.
|
Antonio O. Garza, Jr.
|
|
|
|
|
|
/S/
D
AVID
G
ARZA-
S
ANTOS
|
|
Director.
|
David Garza-Santos
|
|
|
|
|
|
/s/ J
ANET
H. K
ENNEDY
|
|
Director.
|
Janet H. Kennedy
|
|
|
|
|
|
/s/ M
ITCHELL
J. K
REBS
|
|
Director.
|
Mitchell J. Krebs
|
|
|
|
|
|
/s/ H
ENRY
J. M
AIER
|
|
Director.
|
Henry J. Maier
|
|
|
|
|
|
/S/
T
HOMAS
A. M
CDONNELL
|
|
Director.
|
Thomas A. McDonnell
|
|
|
|
|
|
/
S
/ R
ODNEY
E. S
LATER
|
|
Director.
|
Rodney E. Slater
|
|
|
(
a)
|
a majority of the members of the Board is replaced during any twelve (12) month period with directors whose appointment or election was not endorsed by a majority of the members of the Board in office immediately prior to the date of such appointment or election; or
|
(b)
|
any person (meaning for purposes of this definition, “person” as such term is used in Sections 13(d) and 14(d) of the Exchange Act to the extent consistent with and not in violation of Code Section 409A) or group (meaning for purposes of this definition, “group” as such term is used in Section 13(d)(3) or 14(d)(2) of the 1934 Act to the extent
|
(c)
|
any person or group has acquired ownership of stock of the Company that constitutes more than 50% of the total fair market value or total voting power of the outstanding stock of the Company; or
|
(d)
|
any person or group has acquired during a twelve (12) month period ending on the date of the most recent acquisition by such person or group, assets of the Company that have a total gross fair market value of more than 40% of the total gross fair market value of all of the assets of the Company immediately before such acquisition.
|
|
|||||||
Last Name
|
First Name
|
MI
|
|||||
|
|||||||
|
|||||||
Mailing Address
|
City
|
State
|
Zip Code
|
||||
|
|||||||
|
|
|
|||||
Telephone
|
|
Email Address
|
|||||
|
|||||||
|
|
☐
|
☐
|
☐
|
|
|
☐
|
☐
|
☐
|
☐
|
|
A.
|
Commencement of Distribution
|
|
☐
|
☐
|
|
|
|
|
☐
|
☐
|
☐
|
|
|
|
|
The earlier of:
|
|
[Insert Date]
or the date
|
|
|
|
I cease being a Director for any reason.
|
|||
|
B.
|
Form of Distribution
|
|
☐
|
☐
|
|
|
|
☐
|
☐
|
☐
|
☐
|
C.
|
Change in Control; Death
|
|
|||||||
Social Security Number
|
|
Last Name
|
First Name
|
MI
|
|||
|
|||||||
|
|||||||
Mailing Address
|
City
|
State
|
Zip Code
|
Telephone
|
|||
|
|
Signature
|
|
|
Date
|
|
|
Percent
Ownership
|
|
Jurisdiction of
Incorporation or
Organization
|
|
Arrendadora KCSM, S. de R.L. de C.V.
|
|
100
|
|
|
Mexico
|
Canama Transportation
|
|
100
|
|
|
Cayman Islands
|
Caymex Transportation, Inc.
|
|
100
|
|
|
Delaware
|
Ferrocarril y Terminal del Valle de México, S.A. de C.V. (1)
|
|
25
|
|
|
Mexico
|
Financiera Inspira, S.A.P.I., de C.V., SOFOM, E.N.R.
|
|
100
|
|
|
Mexico
|
Gateway Eastern Railway Company
|
|
100
|
|
|
Illinois
|
Highstar Harbor Holdings Mexico, S. de R.L. de C.V.
|
|
100
|
|
|
Mexico
|
Internacional Railway Support S.A. de C.V.
|
|
100
|
|
|
Mexico
|
Inversiones Internacionales en Ferrocarriles S. a r.l.
|
|
100
|
|
|
Luxembourg
|
Joplin Union Depot Co.(1)
|
|
33
|
|
|
Missouri
|
Kansas City Southern de México, S.A. de C.V.
|
|
100
|
|
|
Mexico
|
Kansas City Southern Holdings B.V.
|
|
100
|
|
|
Netherlands
|
Kansas City Southern Holdings C.V.
|
|
100
|
|
|
Netherlands
|
Kansas City Southern Holdings S.a.r.l.
|
|
100
|
|
|
Luxembourg
|
Kansas City Southern International Investments, S. de R.L. de C.V.
|
|
100
|
|
|
Mexico
|
Kansas City Southern International Ventures, S.A.
|
|
100
|
|
|
Mexico
|
Kansas City Terminal Railway Company (1)
|
|
17
|
|
|
Missouri
|
KCS Holdings I, Inc.
|
|
100
|
|
|
Delaware
|
KCS International Holdings, S.A.R.L.
|
|
100
|
|
|
Luxembourg
|
KCS Investment I, Ltd.
|
|
100
|
|
|
Delaware
|
KCS Spectrum, Inc.
|
|
100
|
|
|
Delaware
|
KCS Ventures I, Inc.
|
|
100
|
|
|
Delaware
|
KCSM B.V.
|
|
100
|
|
|
Netherlands
|
KCSM Holdings LLC
|
|
100
|
|
|
Delaware
|
KSU Holdings LLC
|
|
100
|
|
|
Delaware
|
KCSM Servicios, S.A. de C.V.
|
|
100
|
|
|
Mexico
|
KCSRC y Compania, S. de N.C. de C.V.
|
|
100
|
|
|
Mexico
|
Meridian Speedway, LLC
|
|
70
|
|
|
Delaware
|
Mexrail, Inc.
|
|
100
|
|
|
Delaware
|
MTC Puerta Mexico, S. de R.L. de C.V.
|
|
100
|
|
|
Mexico
|
MTC Puerta Mexico Logistics, S. de R.L. de C.V.
|
|
100
|
|
|
Mexico
|
Luxico International, S.A.R.L.
|
|
100
|
|
|
Luxembourg
|
NAFTA Rail, S. de R.L. de C.V.
|
|
100
|
|
|
Mexico
|
North American Freight Transportation Rail Company, S. de R.L. de C.V.
|
|
100
|
|
|
Mexico
|
Pabtex, Inc.
|
|
100
|
|
|
Delaware
|
Panama Canal Railway Company (1)
|
|
50
|
|
|
Cayman Islands
|
Panarail Tourism Company (1)
|
|
50
|
|
|
Cayman Islands
|
PTC-220, LLC (1)
|
|
14
|
|
|
Delaware
|
Servicios de Apoyo al Ferrocarril, S. de R.L. de C.V.
|
|
100
|
|
|
Mexico
|
Servicios Ferroviarious Europeos, S. de R.L.
|
|
100
|
|
|
Mexico
|
Servicios Puerta Mexico, S. de R.L. de C.V.
|
|
100
|
|
|
Mexico
|
Soporte Logistico Ferroviaria, S. de R.L. de C.V.
|
|
100
|
|
|
Mexico
|
Southern Capital Corporation, LLC (1)
|
|
50
|
|
|
Colorado
|
Southern Development Company
|
|
100
|
|
|
Missouri
|
Southern Industrial Services, Inc.
|
|
100
|
|
|
Delaware
|
TFCM, S. de R.L. de C.V. (1)
|
|
45
|
|
|
Mexico
|
The Kansas City Northern Railway Company
|
|
100
|
|
|
Delaware
|
The Kansas City Southern Railway Company
|
|
100
|
|
|
Missouri
|
The Texas Mexican Railway Company
|
|
100
|
|
|
Texas
|
TransFin Insurance, Ltd.
|
|
100
|
|
|
Missouri
|
Transportacion y Soluciones en Logistica Ferroviaria S. de R.L. de C.V.
|
|
100
|
|
|
Mexico
|
Trans-Serve, Inc. (d/b/a Superior Tie and Timber)
|
|
100
|
|
|
Delaware
|
Vamos a Mexico, S.A. de C.V.
|
|
100
|
|
|
Mexico
|
Veals, Inc.
|
|
100
|
|
|
Delaware
|
(1)
|
Unconsolidated Subsidiary
|
1.
|
I have reviewed this annual report on Form 10-K of Kansas City Southern (the “registrant”);
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
|
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(d)
|
Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
|
5.
|
The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
/s/ P
ATRICK
J. O
TTENSMEYER
|
Patrick J. Ottensmeyer
|
President and Chief Executive Officer
|
(Principal Executive Officer)
|
1.
|
I have reviewed this annual report on Form 10-K of Kansas City Southern (the “registrant”);
|
2.
|
Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
|
3.
|
Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
|
4.
|
The registrant's other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
|
(a)
|
Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
|
(b)
|
Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
|
(c)
|
Evaluated the effectiveness of the registrant's disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
|
(d)
|
Disclosed in this report any change in the registrant's internal control over financial reporting that occurred during the registrant's most recent fiscal quarter (the registrant's fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant's internal control over financial reporting; and
|
5.
|
The registrant's other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant's auditors and the audit committee of the registrant's board of directors (or persons performing the equivalent functions):
|
(a)
|
All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant's ability to record, process, summarize and report financial information; and
|
(b)
|
Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal control over financial reporting.
|
/s/ M
ICHAEL
W. U
PCHURCH
|
Michael W. Upchurch
|
Executive Vice President and Chief Financial Officer
|
(Principal Financial Officer)
|
(1)
|
The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
(2)
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
/s/ P
ATRICK
J. O
TTENSMEYER
|
Patrick J. Ottensmeyer
|
President and Chief Executive Officer
|
(Principal Executive Officer)
|
(1)
|
The Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
|
(2)
|
The information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
|
/s/ M
ICHAEL
W. U
PCHURCH
|
Michael W. Upchurch
|
Executive Vice President and Chief Financial Officer
|
(Principal Financial Officer)
|