First Quarter 2018 Results
-
Record first quarter revenues of $639 million, an increase of 5% from
prior year on 1% volume growth
-
Record first quarter operating income of $219 million, 4% higher than
a year ago
-
Operating ratio of 65.8%, compared with 65.4% in first quarter 2017
-
Record first quarter diluted earnings per share of $1.40, an increase
of 1% over first quarter 2017; record first quarter adjusted diluted
earnings per share of $1.30, an increase of 11% over first quarter 2017
KANSAS CITY, Mo. -- (Business Wire)
Kansas City Southern (KCS) (NYSE:KSU) reported record first quarter 2018
revenues of $639 million, an increase of 5% from first quarter 2017.
Overall, carload volumes increased 1% compared to the prior year.
First quarter 2018 revenues increased in four commodity groups, led by a
17% increase in Automotive, a 10% increase in Chemicals and Petroleum
and a 9% increase in Intermodal. Revenue from Industrial and Consumer
was also positive with an increase of 4% compared to the first quarter
of 2017. These increases were partially offset by declines in Energy and
Agriculture and Minerals of 11% and 2%, respectively, compared to the
first quarter of 2017.
Operating expenses in the first quarter were $420 million, 5% higher
than 2017. Operating income was a first quarter record at $219 million,
an increase of 4% from the first quarter 2017. KCS reported a first
quarter operating ratio of 65.8%, a 0.4 point deterioration over first
quarter 2017.
Reported net income in the first quarter of 2018 was $145 million, or
$1.40 per diluted share, compared with $147 million, or $1.38 per
diluted share, in the first quarter of 2017. Excluding the impacts of
foreign exchange, adjusted diluted earnings per share was a first
quarter record of $1.30, compared to $1.17 in first quarter 2017.
“Despite congestion across the North American rail network, KCS grew
volumes in all commodity groups except Energy and Agriculture and
Minerals during the first quarter 2018,” stated Kansas City Southern’s
President and Chief Executive Officer Patrick J. Ottensmeyer.
“Furthermore, we maintain our outlook for mid-single digit volume growth
for full year 2018.”
GAAP Reconciliations |
($ in millions, except per share amounts)
|
|
Reconciliation of Diluted Earnings per Share to |
|
| |
|
| |
Adjusted Diluted Earnings per Share | | | Three Months Ended March 31, 2018 |
| | |
Income Before Income Taxes
|
|
|
Income Tax Expense
| | |
Net Income
|
|
|
Diluted Earnings per Share
|
As reported
| | |
$
|
221.7
| | | |
$
|
76.8
| | | |
$
|
144.9
| | | |
$
|
1.40
| |
Adjustments for:
| | | | | | | | | | | | |
Foreign exchange gain
| | |
(27.8
|
)
| | |
(8.3
|
)
| | |
(19.5
|
)
| | |
(0.19
|
)
|
Foreign exchange component of income taxes
| | |
—
|
| | |
(8.9
|
)
| | |
8.9
|
| | |
0.09
|
|
Adjusted
| | |
$
|
193.9
|
| | |
$
|
59.6
|
| | |
134.3
| | | | |
Less: Noncontrolling interest and preferred stock dividends
| | | | | | | | |
(0.5
|
)
| | | |
Adjusted net income available to common stockholders - see (a)
below
| | | | | | | | |
$
|
133.8
|
| | |
$
|
1.30
|
|
| | |
|
| | | Three Months Ended March 31, 2017 |
| | |
Income Before Income Taxes
| | |
Income Tax Expense
| | |
Net Income
| | |
Diluted Earnings per Share
|
As reported
| | |
$
|
237.9
| | | |
$
|
91.0
| | | |
$
|
146.9
| | | |
$
|
1.38
| |
Adjustments for:
| | | | | | | | | | | | |
Foreign exchange gain
| | |
(46.8
|
)
| | |
(14.1
|
)
| | |
(32.7
|
)
| | |
(0.31
|
)
|
Foreign exchange component of income taxes
| | |
—
|
| | |
(10.3
|
)
| | |
10.3
|
| | |
0.10
|
|
Adjusted
| | |
$
|
191.1
|
| | |
$
|
66.6
|
| | |
124.5
| | | | |
Less: Noncontrolling interest and preferred stock dividends
| | | | | | | | |
(0.4
|
)
| | | |
Adjusted net income available to common stockholders - see (a)
below
| | | | | | | | |
$
|
124.1
|
| | |
$
|
1.17
|
|
(a)
|
|
The Company believes adjusted diluted earnings per share is
meaningful as it allows investors to evaluate the Company’s
performance for different periods on a more comparable basis by
excluding the impact of changes in foreign currency exchange rates.
The income tax expense impacts related to these adjustments are
calculated at the applicable statutory tax rate.
|
| |
|
| |
|
Headquartered in Kansas City, Mo., Kansas City Southern (KCS) (NYSE:
KSU) is a transportation holding company that has railroad investments
in the U.S., Mexico and Panama. Its primary U.S. holding is The Kansas
City Southern Railway Company, serving the central and south central
U.S. Its international holdings include Kansas City Southern de Mexico,
S.A. de C.V., serving northeastern and central Mexico and the port
cities of Lázaro Cárdenas, Tampico and Veracruz, and a 50 percent
interest in Panama Canal Railway Company, providing ocean-to-ocean
freight and passenger service along the Panama Canal. KCS' North
American rail holdings and strategic alliances are primary components of
a railway network, linking the commercial and industrial centers of the
U.S., Mexico and Canada. More information about KCS can be found at www.kcsouthern.com.
This news release contains “forward-looking statements” within the
meaning of the securities laws concerning potential future events
involving KCS and its subsidiaries, which could materially differ from
the events that actually occur.Words such as “projects,”
“estimates,” “forecasts,” “believes,” “intends,” “expects,”
“anticipates,” and similar expressions are intended to identify many of
these forward-looking statements.Such forward-looking statements
are based upon information currently available to management and
management’s perception thereof as of the date hereof.Differences
that actually occur could be caused by a number of external factors over
which management has little or no control, including: competition and
consolidation within the transportation industry; the business
environment in industries that produce and use items shipped by rail;
loss of the rail concession of KCS’ subsidiary, Kansas City Southern de
México, S.A. de C.V.; the termination of, or failure to renew,
agreements with customers, other railroads and third parties; access to
capital; disruptions to KCS’ technology infrastructure, including its
computer systems; natural events such as severe weather, hurricanes and
floods; market and regulatory responses to climate change; legislative
and regulatory developments and disputes; rail accidents or other
incidents or accidents on KCS’ rail network or at KCS’ facilities or
customer facilities involving the release of hazardous materials,
including toxic inhalation hazards; fluctuation in prices or
availability of key materials, in particular diesel fuel; dependency on
certain key suppliers of core rail equipment; changes in securities and
capital markets; unavailability of qualified personnel; labor
difficulties, including strikes and work stoppages; acts of terrorism or
risk of terrorist activities; war or risk of war; domestic and
international economic, political and social conditions; the level of
trade between the United States and Asia or Mexico; fluctuations in the
peso-dollar exchange rate; increased demand and traffic congestion; the
outcome of claims and litigation involving KCS or its subsidiaries; and
other factors affecting the operation of the business.More
detailed information about factors that could affect future events may
be found in filings by KCS with the Securities and Exchange Commission,
including KCS’ Annual Report on Form 10-K for the year ended December
31, 2017 (File No. 1-4717) and subsequent reports.Forward-looking
statements are not, and should not be relied upon as, a guarantee of
future performance or results, nor will they necessarily prove to be
accurate indications of the times at or by which any such performance or
results will be achieved.As a result, actual outcomes and
results may differ materially from those expressed in forward-looking
statements.KCS is not obligated to update any forward-looking
statements to reflect future events or developments.
|
Kansas City Southern and Subsidiaries |
Consolidated Statements of Income |
(In millions, except share and per share amounts) |
(Unaudited) |
|
|
|
|
| Three Months Ended |
| | | | | March 31, |
| | | | | 2018 |
|
| 2017 |
Revenues
| | | | |
$
|
638.6
|
| | |
$
|
609.5
|
|
Operating expenses:
| | | | | | | | |
Compensation and benefits
| | | | |
121.6
| | | |
117.4
| |
Purchased services
| | | | |
47.1
| | | |
48.8
| |
Fuel
| | | | |
81.3
| | | |
75.4
| |
Mexican fuel excise tax credit
| | | | |
(9.2
|
)
| | |
(11.7
|
)
|
Equipment costs
| | | | |
32.2
| | | |
31.2
| |
Depreciation and amortization
| | | | |
83.3
| | | |
79.3
| |
Materials and other
| | | | |
63.6
|
| | |
58.4
|
|
Total operating expenses
| | | | |
419.9
|
| | |
398.8
|
|
Operating income
| | | | |
218.7
| | | |
210.7
| |
Equity in net earnings of affiliates
| | | | |
1.0
| | | |
4.0
| |
Interest expense
| | | | |
(25.5
|
)
| | |
(24.7
|
)
|
Foreign exchange gain
| | | | |
27.8
| | | |
46.8
| |
Other income (expense), net
| | | | |
(0.3
|
)
| | |
1.1
|
|
Income before income taxes
| | | | |
221.7
| | | |
237.9
| |
Income tax expense
| | | | |
76.8
|
| | |
91.0
|
|
Net income
| | | | |
144.9
| | | |
146.9
| |
Less: Net income attributable to noncontrolling interest
| | | | |
0.4
|
| | |
0.3
|
|
Net income attributable to Kansas City Southern and subsidiaries
| | | | |
144.5
| | | |
146.6
| |
Preferred stock dividends
| | | | |
0.1
|
| | |
0.1
|
|
Net income available to common stockholders
| | | | |
$
|
144.4
|
| | |
$
|
146.5
|
|
| | | | | | | |
|
Earnings per share:
| | | | | | | | |
Basic earnings per share
| | | | |
$
|
1.41
|
| | |
$
|
1.38
|
|
Diluted earnings per share
| | | | |
$
|
1.40
|
| | |
$
|
1.38
|
|
| | | | | | | |
|
Average shares outstanding (in thousands):
| | | | | | | | |
Basic
| | | | |
102,574
| | | |
106,111
| |
Potentially dilutive common shares
| | | | |
402
|
| | |
215
|
|
Diluted
| | | | |
102,976
|
| | |
106,326
|
|
| | | | | | | | | |
|
| | | | | | | | | |
|
Kansas City Southern and Subsidiaries |
Revenue & Carload/Units by Commodity - First Quarter 2018 and 2017 |
|
|
| |
| |
| |
| |
| |
| |
| |
| |
| |
| | | Revenues | | | | Carloads and Units | | | | Revenue per | | |
| | | (in millions) | | | | (in thousands) | | | | Carload/Unit | | |
| | |
Year to Date
| |
%
| |
Year to Date
| |
%
| |
Year to Date
| |
%
|
| | |
2018
| |
2017
| |
Change
| |
2018
| |
2017
| |
Change
| |
2018
| |
2017
| |
Change
|
| | | | | | | | | | | | | | | | | | |
|
Chemical & Petroleum | | | | | | | | | | | | | | | | | | | |
Chemicals
| | |
$
|
57.7
| | |
$
|
54.6
| | |
6
|
%
| |
26.7
| | |
27.5
| | |
(3
|
%)
| |
$
|
2,161
| | |
$
|
1,985
| | |
9
|
%
|
Petroleum
| | |
49.0
| | |
38.8
| | |
26
|
%
| |
24.0
| | |
21.0
| | |
14
|
%
| |
2,042
| | |
1,848
| | |
10
|
%
|
Plastics
| | |
33.0
|
| |
33.1
|
| |
—
|
| |
17.4
|
| |
18.2
|
| |
(4
|
%)
| |
1,897
|
| |
1,819
|
| |
4
|
%
|
Total
| | |
139.7
|
| |
126.5
|
| |
10
|
%
| |
68.1
|
| |
66.7
|
| |
2
|
%
| |
2,051
|
| |
1,897
|
| |
8
|
%
|
| | | | | | | | | | | | | | | | | | |
|
Industrial & Consumer Products | | | | | | | | | | | | | | | | | | | |
Forest Products
| | |
65.3
| | |
63.5
| | |
3
|
%
| |
29.6
| | |
29.6
| | |
—
| | |
2,206
| | |
2,145
| | |
3
|
%
|
Metals & Scrap
| | |
53.8
| | |
54.3
| | |
(1
|
%)
| |
29.7
| | |
30.4
| | |
(2
|
%)
| |
1,811
| | |
1,786
| | |
1
|
%
|
Other
| | |
27.2
|
| |
22.3
|
| |
22
|
%
| |
22.7
|
| |
20.8
|
| |
9
|
%
| |
1,198
|
| |
1,072
|
| |
12
|
%
|
Total
| | |
146.3
|
| |
140.1
|
| |
4
|
%
| |
82.0
|
| |
80.8
|
| |
1
|
%
| |
1,784
|
| |
1,734
|
| |
3
|
%
|
| | | | | | | | | | | | | | | | | | |
|
Agriculture & Minerals | | | | | | | | | | | | | | | | | | | |
Grain
| | |
65.2
| | |
66.2
| | |
(2
|
%)
| |
33.5
| | |
35.7
| | |
(6
|
%)
| |
1,946
| | |
1,854
| | |
5
|
%
|
Food Products
| | |
36.2
| | |
38.3
| | |
(5
|
%)
| |
14.9
| | |
16.3
| | |
(9
|
%)
| |
2,430
| | |
2,350
| | |
3
|
%
|
Ores & Minerals
| | |
4.9
| | |
4.3
| | |
14
|
%
| |
5.3
| | |
4.8
| | |
10
|
%
| |
925
| | |
896
| | |
3
|
%
|
Stone, Clay & Glass
| | |
7.1
|
| |
7.5
|
| |
(5
|
%)
| |
3.2
|
| |
3.3
|
| |
(3
|
%)
| |
2,219
|
| |
2,273
|
| |
(2
|
%)
|
Total
| | |
113.4
|
| |
116.3
|
| |
(2
|
%)
| |
56.9
|
| |
60.1
|
| |
(5
|
%)
| |
1,993
|
| |
1,935
|
| |
3
|
%
|
| | | | | | | | | | | | | | | | | | |
|
Energy | | | | | | | | | | | | | | | | | | | |
Utility Coal
| | |
29.3
| | |
42.8
| | |
(32
|
%)
| |
30.0
| | |
44.5
| | |
(33
|
%)
| |
977
| | |
962
| | |
2
|
%
|
Coal & Petroleum Coke
| | |
10.2
| | |
11.0
| | |
(7
|
%)
| |
13.4
| | |
16.3
| | |
(18
|
%)
| |
761
| | |
675
| | |
13
|
%
|
Frac Sand
| | |
11.1
| | |
10.7
| | |
4
|
%
| |
7.1
| | |
7.2
| | |
(1
|
%)
| |
1,563
| | |
1,486
| | |
5
|
%
|
Crude Oil
| | |
10.7
|
| |
4.5
|
| |
138
|
%
| |
7.0
|
| |
3.7
|
| |
89
|
%
| |
1,529
|
| |
1,216
|
| |
26
|
%
|
Total
| | |
61.3
|
| |
69.0
|
| |
(11
|
%)
| |
57.5
|
| |
71.7
|
| |
(20
|
%)
| |
1,066
|
| |
962
|
| |
11
|
%
|
| | | | | | | | | | | | | | | | | | |
|
Intermodal | | |
90.9
|
| |
83.5
|
| |
9
|
%
| |
243.0
|
| |
224.0
|
| |
8
|
%
| |
374
|
| |
373
|
| |
—
|
|
| | | | | | | | | | | | | | | | | | |
|
Automotive | | |
59.8
|
| |
51.3
|
| |
17
|
%
| |
39.8
|
| |
37.6
|
| |
6
|
%
| |
1,503
|
| |
1,364
|
| |
10
|
%
|
| | | | | | | | | | | | | | | | | | |
|
TOTAL FOR COMMODITY GROUPS | | |
611.4
| | |
586.7
| | |
4
|
%
| |
547.3
|
| |
540.9
|
| |
1
|
%
| |
$
|
1,117
|
| |
$
|
1,085
|
| |
3
|
%
|
| | | | | | | | | | | | | | | | | | |
|
Other Revenue | | |
27.2
|
| |
22.8
|
| |
19
|
%
| | | | | | | | | | | | |
| | | | | | | | | | | | | | | | | | |
|
TOTAL | | |
$
|
638.6
|
| |
$
|
609.5
|
| |
5
|
%
| | | | | | | | | | | | |
View source version on businesswire.com: https://www.businesswire.com/news/home/20180420005103/en/
Contacts:
Kansas City Southern
Ashley Thorne, 816-983-1530
athorne@kcsouthern.com
Source: Kansas City Southern
© 2024 Canjex Publishing Ltd. All rights reserved.