KCS Files Form 10-K with SEC; Reports Final Earnings Results for 2002.Business Editors KANSAS CITY Kansas City, two adjacent cities of the same name, one (1990 pop. 149,767), seat of Wyandotte co., NE Kansas (inc. 1859), the other (1990 pop. 435,146), Clay, Jackson, and Platte counties, NW Mo. (inc. 1850). , Mo.--(BUSINESS WIRE)--March 28, 2003 Kansas City Southern (KCS KCS keratoconjunctivitis sicca. ) (NYSE NYSE See: New York Stock Exchange :KSU (Key Service Unit) The cabinet that contains the electronics for a key telephone system. See key telephone system. ) today filed its Annual Report on Form 10-K Form 10-K A report required by the SEC from exchange-listed companies that provides for annual disclosure of certain financial information. Form 10-K See 10-K. with the Securities and Exchange Commission (SEC), and released its final earning results for the year ended December December: see month. 31, 2002. On January January: see month. 30, 2003, KCS released its financial earnings results for 2002, which included estimated equity earnings from Grupo TFM TFM Traffic Flow Management TFM TeX Font Metrics TFM Transportacion Ferroviaria Mexicana TFM Trusted Facility Manual TFM Testicular Feminization TFM Total Facility Management TFM Tentative Final Monograph TFM Transaction Flow Manager TFM Thermally Fused Melamine . The 10-K filing today reflects an increase in net income to $57.2 million from $54.2 million reported earlier, and a corresponding increase in earnings per share of $.91 from $.87 for the year. The increase in earnings primarily resulted from additional U.S. GAAP GAAP See: Generally Accepted Accounting Principles GAAP See generally accepted accounting principles (GAAP). deferred tax adjustments at Grupo TFM. Attached to this release is KCS's revised Consolidated con·sol·i·date v. con·sol·i·dat·ed, con·sol·i·dat·ing, con·sol·i·dates v.tr. 1. To unite into one system or whole; combine: Statement of Income for 2002. Also attached are further details of Grupo TFM's U.S. GAAP earnings, and a reconciliation of these earnings to equity earnings reported by KCS. The Company believes the additional information provides the investor with a better understanding of the components of Grupo TFM's earnings and how they result in a net income contribution to KCS shareholders. KCS is comprised of, among others, The Kansas City Southern Railway The Kansas City Southern Railway (AAR reporting marks KCS) is a United States-based Class I railroad operating over 3,130 track miles in 12 central and southeastern states. Founded in 1887, the railroad provides the shortest route from Kansas City to the Gulf of Mexico. Company, and equity investments in Grupo TFM, Southern Capital Corporation, and Panama Canal Panama Canal, waterway across the Isthmus of Panama, connecting the Atlantic (by way of the Caribbean Sea) and Pacific oceans, built by the United States (1904–14) on territory leased from the republic of Panama. Railway Company. This press release includes statements concerning potential future events involving the Company, which could materially differ from the events that actually occur. Such differences could be caused by a number of factors including those identified in a Current Report on Form 8-K Form 8-K The form required by the SEC when a publicly held company incurs any event that might affect its financial situation or the share value of its stock. Form 8-K See 8-K. dated December 11, 2001, filed by the Company with the Securities and Exchange Commission (SEC) (Commission file no. 1-4717). The Company will not update any forward-looking statements forward-looking statement A projected financial statement based on management expectations. A forward-looking statement involves risks with regard to the accuracy of assumptions underlying the projections. in this press release to reflect future events or developments.
KANSAS CITY SOUTHERN
CONSOLIDATED STATEMENTS OF INCOME
(dollars in millions, except per share data)
Three Months Year Ended
Ended December 31, December 31,
----------------- ------------
2002 2001 2002 2001
----- ----- ----- -----
Revenues $144.2 $146.9 $566.2 $583.2
Costs and expenses 114.2 112.1 456.8 469.8
Depreciation and amortization 16.1 14.4 61.4 58.0
----- ----- ----- -----
Operating income 13.9 20.4 48.0 55.4
Equity in net earnings (losses)
of unconsolidated affiliates:
Grupo Transportacion Ferroviaria
Mexicana, S.A. de C.V. 18.2 5.0 45.8 28.5
Other (0.5) (1.2) (2.4) (1.4)
Gain on sale of Mexrail, Inc. - - 4.4 -
Interest expense (11.7) (9.9) (45.0) (52.8)
Debt retirement costs - - (4.3) -
Other income 2.3 1.2 17.6 4.2
----- ----- ----- -----
Income before income taxes and
cumulative effect of accounting
change 22.2 15.5 64.1 33.9
Income tax provision 1.8 4.4 6.9 2.8
----- ----- ----- -----
Income before cumulative effect of
accounting change 20.4 11.1 57.2 31.1
Cumulative effect of accounting
change, net of income taxes - - - (0.4)
----- ----- ----- -----
Net Income $20.4 $11.1 $57.2 $30.7
===== ===== ===== =====
Per Share Data:
--------------
Basic Weighted Average Common shares
outstanding (in thousands) 60,987 59,035 60,336 58,598
Basic Earnings (Loss) per Common share
Income before cumulative effect of
accounting change $0.33 $0.19 $0.94 $0.53
Cumulative effect of accounting
change - - - (0.01)
----- ----- ----- -----
Net Income $0.33 $0.19 $0.94 $0.52
===== ===== ===== =====
Diluted Weighted Average Common shares
outstanding (in thousands) 62,642 61,099 62,318 60,984
Diluted Earnings (Loss) per Common
share
Income before cumulative effect of
accounting change $0.32 $0.18 $0.91 $0.51
Cumulative effect of accounting
change - - - (0.01)
----- ----- ----- -----
Net Income $0.32 $0.18 $0.91 $0.50
===== ===== ===== =====
GRUPO TRANSPORTACION FERROVIARIA MEXICANA
CONSOLIDATED INCOME STATEMENT
U.S. GAAP BASIS
($ in Thousands)
Fourth Qtr Ended Year Ended
December 31, December 31,
------------------ ------------------
2001 2002 2001 2002
------------------ ------------------
OPERATING REVENUE $171,844 $179,738 $667,826 $712,140
OPERATING EXPENSES 134,684 137,275 457,732 535,994
------------------ ------------------
OPERATING PROFIT 37,160 42,463 210,094 176,146
INTEREST EXPENSE (19,371) (28,442) (82,569) (95,816)
EXCHANGE GAIN/(LOSS) 5,788 (3,014) 2,783 (17,411)
OTHER INCOME (EXPENSE) (8,061) (10,238) (22,631) (16,980)
------------------ ------------------
PRE TAX INCOME 15,516 769 107,677 45,939
INCOME TAX PROVISION (BENEFIT) (1,737) (47,068) 10,888 (91,505)
------------------ ------------------
INCOME BEFORE MINORITY INTEREST 17,253 47,837 96,789 137,444
MINORITY INTEREST (3,626) (8,689) (19,578) (27,260)
------------------ ------------------
NET INCOME $13,627 $39,148 $77,211 $110,184
================== ==================
U.S. GAAP OPERATING RATIO 78.38% 76.38% 68.54% 75.27%
================== ==================
KANSAS CITY SOUTHERN
EQUITY EARNINGS FROM GRUPO TFM
U.S. GAAP EARNINGS RECONCILIATION
($ in millions)
Fourth Quarter Ended Year Ended
December 31, December 31,
-------------------- ------------
2001 2002 2001 2002
Grupo TFM US GAAP:
Pretax Income $15.5 $0.8 $107.7 $45.9
Tax (Provision) Benefit 1.7 47.0 (10.9) 91.5
Minority Interest (3.6) (8.7) (19.6) (27.3)
---------------- ----------------
Grupo TFM US GAAP Earnings 13.6 39.1 77.2 110.1
KCS Ownership 36.9% 46.6% 36.9% (a)
---------------- ----------------
Reported Equity Earnings 5.0 18.2 28.5 45.8
Less: Pushdown Interest (3.6) (3.8) (16.9) (14.6)
---------------- ----------------
Net KCS Contribution $1.4 $14.4 $11.6 $31.2
================ ================
Fully Diluted EPS $0.02 $0.23 $0.19 $0.50
Diluted Shares 61,099 62,642 60,984 62,318
(a) Ownership increased to 46.6%, effective August 1, 2002
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