Document and Entity Information
Document and Entity Information - shares | 9 Months Ended | |
Sep. 30, 2022 | Oct. 25, 2022 | |
Cover [Abstract] | ||
Amendment Flag | false | |
Document Fiscal Year Focus | 2022 | |
Document Fiscal Period Focus | Q3 | |
Entity Central Index Key | 0000054480 | |
Current Fiscal Year End Date | --12-31 | |
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Sep. 30, 2022 | |
Document Transition Report | false | |
Entity File Number | 1-4717 | |
Entity Registrant Name | KANSAS CITY SOUTHERN | |
Entity Incorporation, State or Country Code | DE | |
Entity Tax Identification Number | 87-3883291 | |
Entity Address, Address Line One | 427 West 12th Street | |
Entity Address, City or Town | Kansas City | |
Entity Address, State or Province | MO | |
Entity Address, Postal Zip Code | 64105 | |
City Area Code | 816 | |
Local Phone Number | 983.1303 | |
Entity Current Reporting Status | No | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Non-accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding | 100 |
Consolidated Statements of Oper
Consolidated Statements of Operations - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Income Statement [Abstract] | ||||
Revenues | $ 882.2 | $ 744 | $ 2,505.9 | $ 2,199.5 |
Operating expenses: | ||||
Compensation and benefits | 154.4 | 133.3 | 423.8 | 391.2 |
Purchased services | 57.8 | 51.4 | 163.6 | 161 |
Fuel | 121 | 78 | 341.1 | 227.9 |
Equipment costs | 25.5 | 19.6 | 67.2 | 64.8 |
Depreciation and amortization | 98.2 | 90.5 | 292.1 | 273.7 |
Materials and other | 88.8 | 82.8 | 252.4 | 231.1 |
Merger costs, net | 11.5 | 36.5 | 36.8 | 776.6 |
Total operating expenses | 557.2 | 492.1 | 1,577 | 2,126.3 |
Operating income | 325 | 251.9 | 928.9 | 73.2 |
Equity in net earnings (losses) of affiliates | (0.1) | 3.8 | 7.9 | 13.2 |
Interest expense | (38.9) | (39) | (118) | (117.1) |
Foreign exchange loss | (12.3) | (0.5) | (18) | (1) |
Other income, net | 0.2 | 0.5 | 0.3 | 0.7 |
Income (loss) before income taxes | 273.9 | 216.7 | 801.1 | (31) |
Income tax expense | 72.2 | 60.2 | 217.3 | 37.1 |
Net income (loss) | 201.7 | 156.5 | 583.8 | (68.1) |
Less: Net income attributable to noncontrolling interest | 0.4 | 0.3 | 1 | 1.2 |
Net income (loss) attributable to Kansas City Southern and subsidiaries | 201.3 | 156.2 | 582.8 | (69.3) |
Preferred stock dividends | 0 | 0.1 | 0 | 0.2 |
Net income (loss) available to common stockholder(s) | $ 201.3 | $ 156.1 | $ 582.8 | $ (69.5) |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income (Loss) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Statement of Comprehensive Income [Abstract] | ||||
Net income (loss) | $ 201.7 | $ 156.5 | $ 583.8 | $ (68.1) |
Other comprehensive income (loss): | ||||
Unrealized gain (loss) on interest rate derivative instruments, net of tax of $9.9 million, $(0.4) million, $36.7 million and $11.6 million, respectively | 37.5 | (1.7) | 138.1 | 43.5 |
Reclassification adjustment from cash flow hedges included in net income, net of tax of $0.2 million, $0.1 million, $0.4 million and $0.3 million, respectively | 0.5 | 0.5 | 1.5 | 1.5 |
Foreign currency translation adjustments | (0.2) | (0.2) | 0.1 | (0.1) |
Other comprehensive income (loss) | 37.8 | (1.4) | 139.7 | 44.9 |
Comprehensive income (loss) | 239.5 | 155.1 | 723.5 | (23.2) |
Less: Comprehensive income attributable to noncontrolling interest | 0.4 | 0.3 | 1 | 1.2 |
Comprehensive income (loss) attributable to Kansas City Southern and subsidiaries | $ 239.1 | $ 154.8 | $ 722.5 | $ (24.4) |
Consolidated Statements of Co_2
Consolidated Statements of Comprehensive Income (Loss) (Parentheticals) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Statement of Comprehensive Income [Abstract] | ||||
Tax effect on unrealized gain (loss) on interest rate derivative instruments | $ 9.9 | $ (0.4) | $ 36.7 | $ 11.6 |
Tax effect on reclassification adjustment from cash flow hedges included in net income | $ 0.2 | $ 0.1 | $ 0.4 | $ 0.3 |
Consolidated Balance Sheets
Consolidated Balance Sheets - USD ($) $ in Millions | Sep. 30, 2022 | Dec. 31, 2021 |
Current assets: | ||
Cash and cash equivalents | $ 163.8 | $ 339.3 |
Accounts receivable, net | 600.9 | 271 |
Materials and supplies | 169 | 131 |
Other current assets | 359.5 | 142.1 |
Total current assets | 1,293.2 | 883.4 |
Operating lease right-of-use assets | 86.4 | 69.6 |
Investments | 58.9 | 48.3 |
Property and equipment (including concession assets), net | 9,317.9 | 9,209.3 |
Other assets | 110.9 | 217.5 |
Total assets | 10,867.3 | 10,428.1 |
Current liabilities: | ||
Long-term debt due within one year | 455.2 | 8.8 |
Accounts payable and accrued liabilities | 600.1 | 479.7 |
Total current liabilities | 1,055.3 | 488.5 |
Long-term operating lease liabilities | 60.6 | 46.4 |
Long-term debt | 3,326.4 | 3,768.8 |
Deferred income taxes | 1,292.2 | 1,213.7 |
Other noncurrent liabilities and deferred credits | 140.5 | 178.1 |
Total liabilities | 5,875 | 5,695.5 |
Stockholder equity: | ||
$.01 par, common stock, 100 shares authorized; 100 shares issued; 100 shares outstanding at September 30, 2022 and December 31, 2021 | 0 | 0 |
Additional paid-in capital | 860.6 | 860.6 |
Retained earnings | 3,642.2 | 3,524.4 |
Accumulated other comprehensive income | 159.1 | 19.4 |
Total stockholder equity | 4,661.9 | 4,404.4 |
Noncontrolling interest | 330.4 | 328.2 |
Total equity | 4,992.3 | 4,732.6 |
Total liabilities and equity | $ 10,867.3 | $ 10,428.1 |
Consolidated Balance Sheets (Pa
Consolidated Balance Sheets (Parenthetical) - $ / shares | Sep. 30, 2022 | Dec. 31, 2021 |
Stockholder equity: | ||
Common Stock, Par Value | $ 0.01 | $ 0.01 |
Common Stock, Shares Authorized | 100 | 100 |
Common Stock, Shares Issued | 100 | 100 |
Common Stock, Shares Outstanding | 100 | 100 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | 12 Months Ended | |||||
Sep. 30, 2022 | Mar. 31, 2022 | Dec. 31, 2021 | Sep. 30, 2021 | Mar. 31, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Dec. 31, 2021 | |
Operating activities: | ||||||||
Net income (loss) | $ 201.7 | $ 188 | $ 595.1 | $ 156.5 | $ 153.4 | $ 583.8 | $ (68.1) | |
Adjustments to reconcile net income (loss) to net cash provided by operating activities: | ||||||||
Depreciation and amortization | 98.2 | 90.5 | 292.1 | 273.7 | ||||
Deferred income taxes | 41.4 | (129.5) | ||||||
Equity in net earnings of affiliates | 0.1 | (3.8) | (7.9) | (13.2) | ||||
Share-based compensation | 0 | 20.5 | ||||||
(Gain) loss on foreign currency derivative instruments | 18.9 | (0.8) | ||||||
Foreign exchange (gain) loss | (0.9) | 1.8 | ||||||
Merger costs, net | 11.5 | 36.5 | 36.8 | 776.6 | ||||
Distributions from affiliates | 2 | 2.5 | ||||||
Settlement of foreign currency derivative instruments | (2.2) | (1.9) | ||||||
Cash payments for merger costs | (32.3) | (2,125.7) | ||||||
Reimbursement of merger termination fee | 0 | 2,100 | ||||||
Refundable Mexican value added tax payments | 0 | (41.9) | ||||||
Changes in working capital items: | ||||||||
Accounts receivable | (333.1) | (25.9) | ||||||
Materials and supplies | (40) | 2.2 | ||||||
Other current assets | 75.7 | 9.2 | ||||||
Accounts payable and accrued liabilities | 82.3 | 39.5 | ||||||
Other, net | (3.7) | 11.1 | ||||||
Net cash provided by operating activities | 712.9 | 830.1 | ||||||
Investing activities: | ||||||||
Capital expenditures | (381.2) | (377.7) | ||||||
Property investments in MSLLC | (25.1) | (22.3) | ||||||
Investments in and advances to affiliates | (8.3) | (7.8) | ||||||
Proceeds from disposal of property | 4.5 | 5.5 | ||||||
Other, net | (3.3) | (5) | ||||||
Net cash used for investing activities | (413.4) | (407.3) | ||||||
Financing activities: | ||||||||
Repayment of long-term debt | (7.7) | (5.7) | ||||||
Dividends paid | (200) | (265) | (465) | (138.4) | ||||
Proceeds from employee stock plans | 0 | 4.2 | ||||||
Net cash used for financing activities | (472.7) | (139.9) | ||||||
Effect of exchange rate changes on cash | (2.3) | (1.1) | ||||||
Cash and cash equivalents: | ||||||||
Net increase (decrease) during each period | (175.5) | 281.8 | ||||||
At beginning of year | $ 339.3 | 470 | $ 188.2 | 339.3 | 188.2 | $ 188.2 | ||
At end of period | $ 163.8 | $ 339.3 | $ 470 | $ 163.8 | $ 470 | $ 339.3 |
Consolidated Statements of Chan
Consolidated Statements of Changes in Equity - USD ($) $ in Millions | Total | $25 Par Preferred Stock [Member] | $25 Par Preferred Stock [Member] | $.01 Par Common Stock [Member] | Additional Paid-in Capital [Member] | Retained Earnings [Member] | Retained Earnings [Member] $25 Par Preferred Stock [Member] | Accumulated Other Comprehensive Income [Member] | Non-controlling Interest [Member] |
Balance at Dec. 31, 2020 | $ 4,383.6 | $ 5.4 | $ 0.9 | $ 830.9 | $ 3,219.6 | $ 0.4 | $ 326.4 | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||
Net income (loss) | 153.4 | 153 | 0.4 | ||||||
Other comprehensive income (loss) | 79.4 | 79.4 | |||||||
Dividends on common stock | (49.1) | 0 | (49.1) | ||||||
Dividends on preferred stock | $ 0 | $ 0 | |||||||
Share repurchases | (75) | 0 | 0 | (2.1) | (72.9) | ||||
Settlement of forward contract for accelerated share repurchases | 75 | 75 | |||||||
Options exercised and stock subscribed, net of shares withheld for employee taxes | (3) | 0 | (3) | ||||||
Share-based compensation | 8.2 | 8.2 | |||||||
Balance at Mar. 31, 2021 | 4,572.5 | 5.4 | 0.9 | 909 | 3,250.6 | 79.8 | 326.8 | ||
Balance at Dec. 31, 2020 | 4,383.6 | 5.4 | 0.9 | 830.9 | 3,219.6 | 0.4 | 326.4 | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||
Net income (loss) | (68.1) | ||||||||
Other comprehensive income (loss) | 44.9 | ||||||||
Dividend to Canadian Pacific | (138.4) | ||||||||
Balance at Sep. 30, 2021 | 4,232.8 | 5.4 | 0.9 | 923.7 | 2,929.9 | 45.3 | 327.6 | ||
Balance at Mar. 31, 2021 | 4,572.5 | 5.4 | 0.9 | 909 | 3,250.6 | 79.8 | 326.8 | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||
Net income (loss) | (378) | (378.5) | 0.5 | ||||||
Other comprehensive income (loss) | (33.1) | (33.1) | |||||||
Dividends on common stock | (49.1) | 0 | (49.1) | ||||||
Dividends on preferred stock | (0.1) | (0.1) | |||||||
Options exercised and stock subscribed, net of shares withheld for employee taxes | (2) | 0 | (2) | ||||||
Share-based compensation | 6.2 | 6.2 | |||||||
Balance at Jun. 30, 2021 | 4,116.4 | 5.4 | 0.9 | 913.2 | 2,822.9 | 46.7 | 327.3 | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||
Net income (loss) | 156.5 | 156.2 | 0.3 | ||||||
Other comprehensive income (loss) | (1.4) | (1.4) | |||||||
Dividends on common stock | (49.1) | 0 | (49.1) | ||||||
Dividends on preferred stock | $ (0.1) | $ (0.1) | |||||||
Options exercised and stock subscribed, net of shares withheld for employee taxes | 4.4 | 0 | 4.4 | ||||||
Share-based compensation | 6.1 | 6.1 | |||||||
Balance at Sep. 30, 2021 | 4,232.8 | 5.4 | 0.9 | 923.7 | 2,929.9 | 45.3 | 327.6 | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||
Net income (loss) | 595.1 | 594.5 | 0.6 | ||||||
Other comprehensive income (loss) | (25.9) | (25.9) | |||||||
Options exercised and stock subscribed, net of shares withheld for employee taxes | 0.4 | 0 | 0.4 | ||||||
Share-based compensation | 59.9 | 59.9 | |||||||
Replacement of equity share awards with liability awards | (54.5) | (54.5) | |||||||
Cash settlement of stock options | (75.2) | (75.2) | |||||||
Recapitalization of stock | 0 | (5.4) | (0.9) | 6.3 | |||||
Balance at Dec. 31, 2021 | 4,732.6 | 0 | 0 | 860.6 | 3,524.4 | 19.4 | 328.2 | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||
Net income (loss) | 188 | 187.4 | 0.6 | ||||||
Other comprehensive income (loss) | 48.1 | 48.1 | |||||||
Dividend to Canadian Pacific | (265) | (265) | |||||||
Balance at Mar. 31, 2022 | 4,703.7 | 0 | 0 | 860.6 | 3,446.8 | 67.5 | 328.8 | ||
Balance at Dec. 31, 2021 | 4,732.6 | 0 | 0 | 860.6 | 3,524.4 | 19.4 | 328.2 | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||
Net income (loss) | 583.8 | ||||||||
Other comprehensive income (loss) | 139.7 | ||||||||
Dividend to Canadian Pacific | (465) | ||||||||
Balance at Sep. 30, 2022 | 4,992.3 | 0 | 0 | 860.6 | 3,642.2 | 159.1 | 330.4 | ||
Balance at Mar. 31, 2022 | 4,703.7 | 0 | 0 | 860.6 | 3,446.8 | 67.5 | 328.8 | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||
Net income (loss) | 194.1 | 194.1 | 0 | ||||||
Other comprehensive income (loss) | 53.8 | 53.8 | |||||||
Contribution from noncontrolling interest | 1.2 | 1.2 | |||||||
Balance at Jun. 30, 2022 | 4,952.8 | 0 | 0 | 860.6 | 3,640.9 | 121.3 | 330 | ||
Increase (Decrease) in Stockholders' Equity [Roll Forward] | |||||||||
Net income (loss) | 201.7 | 201.3 | 0.4 | ||||||
Other comprehensive income (loss) | 37.8 | 37.8 | |||||||
Dividend to Canadian Pacific | (200) | (200) | |||||||
Balance at Sep. 30, 2022 | $ 4,992.3 | $ 0 | $ 0 | $ 860.6 | $ 3,642.2 | $ 159.1 | $ 330.4 |
Consolidated Statements of Ch_2
Consolidated Statements of Changes in Equity (Parenthetical) - $ / shares | 3 Months Ended | ||
Sep. 30, 2021 | Jun. 30, 2021 | Mar. 31, 2021 | |
Common Stock, Dividends Per Share | $ 0.54 | $ 0.54 | $ 0.54 |
$25 Par Preferred Stock [Member] | |||
Preferred Stock, Par Value | 25 | 25 | 25 |
Preferred Stock, Dividends Per Share | $ 0.25 | $ 0.25 | $ 0.25 |
Basis of Presentation
Basis of Presentation | 9 Months Ended |
Sep. 30, 2022 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation In the opinion of the management of KCS, the accompanying unaudited consolidated financial statements contain all adjustments (consisting of normal and recurring adjustments) necessary to reflect a fair statement of the results for interim periods in accordance with U.S. generally accepted accounting principles (“U.S. GAAP”). Pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”), certain information and note disclosures normally included in financial statements prepared in accordance with U.S. GAAP have been condensed or omitted. These consolidated financial statements should be read in conjunction with the consolidated financial statements and accompanying notes included in the Company’s Annual Report on Form 10-K for the year ended December 31, 2021. The results of operations for the three and nine months ended September 30, 2022, are not necessarily indicative of the results to be expected for the full year ending December 31, 2022. On September 15, 2021, KCS and Canadian Pacific Railway Limited (“CP”), a Canadian corporation, entered into a merger agreement (the “Merger Agreement”) and on December 14, 2021, CP acquired the outstanding common and preferred stock of KCS. Therefore, earnings per share data is not presented as the Company does not have any outstanding or issued publicly traded stock. The merger is further discussed in Note 2, Merger Agreement. In November 2021, the Financial Accounting Standards Board (“FASB”) issued Accounting Standard Update (“ASU”) 2021-10, Government Assistance (Topic 832), Disclosures by Business Entities about Government Assistance. The standard is intended to increase transparency of government assistance by requiring disclosures of the following: (1) the types of assistance, (2) an entity’s accounting for the assistance, and (3) the effect of the assistance on the entity’s financial statements. This ASU was effective for the Company on January 1, 2022 and the Company adopted the ASU prospectively. See Note 4, Property and Equipment for the newly required disclosure. |
Merger Agreement
Merger Agreement | 9 Months Ended |
Sep. 30, 2022 | |
Business Combinations [Abstract] | |
Merger Agreement | Merger Agreement On December 14, 2021, CP acquired the outstanding common and preferred stock of KCS. Each share of common stock, par value $0.01 per share, of KCS that was outstanding immediately prior to the merger was converted into the right to receive (1) 2.884 common shares of CP and (2) $90 in cash (together, the “Merger Consideration”), and each share of preferred stock, par value $25 per share, that was outstanding immediately prior to the merger was converted into the right to receive $37.50 in cash. The Merger Consideration value received by KCS stockholders was $301.20 per KCS common share. The merger transaction was completed through a series of mergers as outlined in the Merger Agreement. These mergers ultimately resulted in KCS being merged with and into Cygnus Merger Sub 1 Corporation (“Surviving Merger Sub”), a wholly owned subsidiary of CP, with Surviving Merger Sub continuing as the surviving entity. Pursuant to the Merger Agreement, Surviving Merger Sub was renamed “Kansas City Southern” and as successor company of KCS, continued to own the assets of KCS. Immediately following the consummation of the mergers, CP caused the contribution, directly and indirectly, of all of the outstanding shares of capital stock of Surviving Merger Sub, as successor to KCS, to be deposited into an independent, irrevocable voting trust (the “Voting Trust”) under a voting trust agreement (the “Voting Trust Agreement”) approved by the U.S. Surface Transportation Board (“STB”), pending receipt of the final and non-appealable approval or exemption by the STB pursuant to 49 U.S.C. § 11323 et seq., of the transactions contemplated by the Merger Agreement (“STB Final Approval”). The Voting Trust prevents CP, or any affiliate of CP, from controlling or having the power to control KCS prior to STB Final Approval. Following receipt of STB Final Approval, the Voting Trust will be terminated and CP will acquire control over KCS’s railroad operations. On December 14, 2021, the merger of KCS and Surviving Merger Sub was accounted for as a recapitalization of KCS’s equity. Upon STB Final Approval, the transaction will be accounted for as a business combination using the acquisition method of accounting. Pursuant to the Merger Agreement, KCS paid a cash dividend in the first and third quarters of 2022 of $265.0 million and $200.0 million, respectively, to a wholly-owned subsidiary of CP. Periodic cash distributions may be made to a wholly-owned subsidiary of CP based upon cash generated, the timing of capital expenditures and working capital needs of the Company. For the three and nine months ended September 30, 2022, KCS reported $11.5 million and $36.8 million, respectively, of merger-related costs, which primarily related to incentive compensation costs. During the three and nine months ended September 30, 2021, the Company recognized merger-related costs of $36.5 million and $776.6 million, respectively. For the three months ended September 30, 2021, the merger costs primarily related to compensation and benefits costs and legal fees. For the nine months ended |
Revenue
Revenue | 9 Months Ended |
Sep. 30, 2022 | |
Revenue from Contract with Customer [Abstract] | |
Revenue | Revenue Disaggregation of Revenue The following table presents revenues disaggregated by the major commodity groups as well as the product types included within the major commodity groups (in millions) . The Company believes disaggregation by product type best depicts how cash flows are affected by economic factors. See Note 10 for revenues by geographical area. Three Months Ended Nine Months Ended September 30, September 30, 2022 2021 2022 2021 Chemical & Petroleum Chemicals $ 76.3 $ 71.0 $ 220.9 $ 196.4 Petroleum 85.4 93.7 245.8 361.8 Plastics 42.9 39.4 125.6 109.7 Total 204.6 204.1 592.3 667.9 Industrial & Consumer Products Forest Products 79.2 71.6 221.5 191.9 Metals & Scrap 70.2 54.1 191.5 151.4 Other 39.0 33.3 110.6 94.3 Total 188.4 159.0 523.6 437.6 Agriculture & Minerals Grain 99.9 87.0 316.7 250.6 Food Products 46.9 35.4 130.2 109.0 Ores & Minerals 9.6 7.5 25.3 18.8 Stone, Clay & Glass 11.2 9.9 31.3 25.7 Total 167.6 139.8 503.5 404.1 Energy Utility Coal 45.2 45.8 123.3 108.7 Coal & Petroleum Coke 12.3 12.8 37.3 35.2 Frac Sand 4.6 4.0 14.4 11.6 Crude Oil 20.8 12.0 51.4 31.1 Total 82.9 74.6 226.4 186.6 Intermodal 121.9 86.9 335.3 259.3 Automotive 70.1 40.1 190.8 133.6 Total Freight Revenues 835.5 704.5 2,371.9 2,089.1 Other Revenue 46.7 39.5 134.0 110.4 Total Revenues $ 882.2 $ 744.0 $ 2,505.9 $ 2,199.5 Contract Balances The amount of revenue recognized in the third quarter of 2022 from performance obligations partially satisfied in previous periods was $28.9 million. The performance obligations that were unsatisfied or partially satisfied as of September 30, 2022 were $21.8 million, which represents in-transit shipments that are fully satisfied the following month. A receivable is any unconditional right to consideration, and is recognized as shipments have been completed and the relating performance obligation has been fully satisfied. At September 30, 2022 and December 31, 2021, the accounts receivable, net balance was $600.9 million and $271.0 million, respectively. Contract assets represent a conditional right to consideration in exchange for goods or services. The Company did not have any contract assets at September 30, 2022 and December 31, 2021. Contract liabilities represent consideration received in advance from customers, and are recognized as revenue over time as the relating performance obligation is satisfied. The amount of revenue recognized in the third quarter of 2022 that was included in the opening contract liability balance was $8.0 million. The Company has recognized contract liabilities within the accounts payable and accrued liabilities and other long-term liabilities financial statement captions on the consolidated balance sheets. The following tables summarize the changes in contract liabilities (in millions) : Contract liabilities Three Months Ended Nine Months Ended September 30, September 30, 2022 2021 2022 2021 Beginning balance $ 49.4 $ 19.7 $ 68.4 $ 29.9 Revenue recognized that was included in the contract liability balance at the beginning of the period (8.0) (9.6) (30.1) (25.3) Increases due to consideration received, excluding amounts recognized as revenue during the period 4.7 2.4 7.8 7.9 Ending balance $ 46.1 $ 12.5 $ 46.1 $ 12.5 |
Property and Equipment (includi
Property and Equipment (including Concession Assets) | 9 Months Ended |
Sep. 30, 2022 | |
Property, Plant and Equipment [Abstract] | |
Property and Equipment (including Concession Assets) | Property and Equipment (including Concession Assets) Property and equipment, including concession assets, and related accumulated depreciation and amortization are summarized below (in millions) : September 30, December 31, Land $ 244.7 $ 243.0 Concession land rights 141.1 141.1 Road property 8,630.7 8,430.6 Equipment 2,868.0 2,842.4 Technology and other 433.4 372.6 Construction in progress 393.0 335.8 Total property 12,710.9 12,365.5 Accumulated depreciation and amortization 3,393.0 3,156.2 Property and equipment (including concession assets), net $ 9,317.9 $ 9,209.3 Concession assets, net of accumulated amortization of $775.5 million and $744.8 million, totaled $2,475.3 million and $2,459.3 million at September 30, 2022 and December 31, 2021, respectively. The Company has historically received assistance from governmental entities, typically in the form of cash, for purposes of making improvements to its rail network as part of public safety and/or economic revitalization initiatives. The governmental entity generally specifies how the monetary assistance is to be spent, and may include limited conditions requiring the Company to return the assistance. The Company accounts for this assistance received as reductions to property and equipment in the period in which the improvement is made, with the assistance being amortized as an offset to depreciation expense over the life of the improvement. As of September 30, 2022 and December 31, 2021, the total governmental assistance received, net of accumulated amortization, was $35.5 million and $37.3 million, respectively. For the three and nine months ended September 30, 2022, governmental assistance amortization was $0.7 million and $1.9 million, respectively. |
Fair Value Measurements
Fair Value Measurements | 9 Months Ended |
Sep. 30, 2022 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurements | Fair Value Measurements The Company’s derivative financial instruments are measured at fair value on a recurring basis and consist of foreign currency forward contracts and treasury lock agreements, which are classified as Level 2 valuations. The Company determines the fair value of its derivative financial instrument positions based upon pricing models using inputs observed from actively quoted markets and also takes into consideration the contract terms as well as other inputs, including market currency exchange rates and in the case of option contracts, volatility, the risk-free interest rate and the time to expiration. The Company’s short-term financial instruments include cash and cash equivalents, accounts receivable, accounts payable and short-term borrowings. The carrying value of the short-term financial instruments approximates their fair value. The fair value of the Company’s debt is estimated using quoted market prices when available. When quoted market prices are not available, fair value is estimated based on current market interest rates for debt with similar maturities and credit quality. The carrying value of the Company’s debt was $3,781.6 million and $3,777.6 million at September 30, 2022 and December 31, 2021, respectively. If the Company’s debt were measured at fair value, the fair value measurements of the individual debt instruments would have been classified as Level 2 in the fair value hierarchy. The fair value of the Company’s financial instruments is presented in the following table (in millions) : September 30, 2022 December 31, 2021 Level 2 Level 2 Assets Treasury lock agreements $ 232.2 $ 57.4 Liabilities Debt instruments 3,235.8 4,311.1 Foreign currency derivative instruments 18.5 1.8 |
Derivative Instruments
Derivative Instruments | 9 Months Ended |
Sep. 30, 2022 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative Instruments | Derivative Instruments The Company enters into derivative transactions in certain situations based on management’s assessment of current market conditions and perceived risks. Management intends to respond to evolving business and market conditions and in doing so, may enter into such transactions as deemed appropriate. Credit Risk. As a result of the use of derivative instruments, the Company is exposed to counterparty credit risk. The Company manages this risk by limiting its counterparties to large financial institutions which meet the Company’s credit rating standards and have an established banking relationship with the Company. As of September 30, 2022, the Company did not expect any losses as a result of default of its counterparties. Interest Rate Derivative Instruments . In 2020, the Company executed six 30-year treasury lock agreements with an aggregate notional value of $650.0 million and a weighted average interest rate of 1.58%. The purpose of the treasury locks is to hedge the U.S. Treasury benchmark interest rate associated with future interest payments related to the anticipated refinancing of the $444.7 million principal amount of 3.00% senior notes due May 15, 2023 (the “3.00% Senior Notes”) and the $200.0 million principal amount of 3.85% senior notes due November 15, 2023 (the “3.85% Senior Notes”). The Company has designated the treasury locks as cash flow hedges and recorded unrealized gains and losses in accumulated other comprehensive income (loss). For the nine months ended September 30, 2022, the total unrealized gain of $232.2 million recognized in accumulated other comprehensive income increased by $174.8 million compared to December 31, 2021, reflecting a change in the value of the treasury locks as U.S. treasury rates rose. Upon settlement, the unrealized gain or loss in accumulated other comprehensive income (loss) will be amortized to interest expense over the life of the future underlying debt issuance. Foreign Currency Derivative Instruments. The Company’s Mexican subsidiaries have net U.S. dollar-denominated monetary liabilities which, for Mexican income tax purposes, are subject to periodic revaluation based on changes in the value of the Mexican peso against the U.S dollar. This revaluation creates fluctuations in the Company’s Mexican income tax expense in the consolidated statements of operations and the amount of income taxes paid in Mexico. The Company also has net monetary assets denominated in Mexican pesos that are subject to periodic re-measurement and settlement that create fluctuations in foreign currency gains and losses in the consolidated statements of operations. The Company hedges its net exposure to foreign currency fluctuations in earnings by entering into foreign currency forward contracts. The foreign currency forward contracts involve the Company’s agreement to buy or sell pesos at an agreed-upon exchange rate on a future date. Below is a summary of the Company’s 2022 and 2021 foreign currency derivative contracts (amounts in millions, except Ps./USD) : Foreign currency forward contracts Contracts to sell Ps./receive USD Offsetting contracts to purchase Ps./pay USD Notional amount Notional amount Weighted-average exchange rate (in Ps./USD) Notional amount Notional amount Weighted-average exchange rate (in Ps./USD) Cash received/(paid) on settlement Contracts executed in 2022 and outstanding $ 460.0 Ps. 9,797.1 Ps. 21.3 — — — — Contracts executed in 2022 and settled in 2022 $ 50.0 Ps. 1,105.3 Ps. 22.1 $ 50.5 Ps. 1,105.3 Ps. 21.9 $ (0.5) Contracts executed in 2021 and settled in 2022 $ 270.0 Ps. 5,583.3 Ps. 20.7 $ 271.7 Ps. 5,583.3 Ps. 20.6 $ (1.7) Contracts to purchase Ps./pay USD Offsetting contracts to sell Ps./receive USD Notional amount Notional amount Weighted-average exchange rate (in Ps./USD) Notional amount Notional amount Weighted-average exchange rate (in Ps./USD) Cash received/(paid) on settlement Contracts executed in 2021 and settled in 2021 (i) $ 100.0 Ps. 1,993.5 Ps. 19.9 $ 98.1 Ps. 1,993.5 Ps. 20.3 $ (1.9) (i) During the nine months ended September 2021, the Company settled $100.0 million of these forward contracts, resulting in cash paid of $1.9 million. The Company has not designated any of the foreign currency derivative contracts as hedging instruments for accounting purposes. The Company measures the foreign currency derivative contracts at fair value each period and recognizes any change in fair value in foreign exchange gain (loss) within the consolidated statements of operations. The cash flows associated with these instruments is classified as an operating activity within the consolidated statements of cash flows. Offsetting. The Company’s treasury lock agreements and foreign currency forward contracts are executed with counterparties in the U.S. and are governed by International Swaps and Derivatives Association agreements that include standard netting arrangements. Asset and liability positions from contracts with the same counterparty are net settled upon maturity/expiration and presented on a net basis in the consolidated balance sheets prior to settlement. The following tables present the fair value of derivative instruments included in the Consolidated Balance Sheets ( in millions ): Derivative Assets Balance Sheet Location September 30, December 31, 2021 Derivatives designated as hedging instruments: Treasury lock agreements Other current assets $ 232.2 $ — Other assets — 57.4 Total derivatives designated as hedging instruments 232.2 57.4 Total derivative assets $ 232.2 $ 57.4 Derivative Liabilities Balance Sheet Location September 30, December 31, 2021 Derivatives not designated as hedging instruments: Foreign currency forward contracts Accounts payable and accrued liabilities $ 18.5 $ 1.8 Total derivatives not designated as hedging instruments 18.5 1.8 Total derivative liabilities $ 18.5 $ 1.8 The following table summarizes the gross and net fair value of derivative liabilities (in millions) : As of September 30, 2022 Gross Liabilities Gross Assets Net Amounts Presented in the Consolidated Balance Sheets Derivatives subject to a master netting arrangement or similar agreement $ 18.5 $ — $ 18.5 As of December 31, 2021 Derivatives subject to a master netting arrangement or similar agreement $ 2.8 $ (1.0) $ 1.8 The following table presents the effects of derivative instruments on the Consolidated Statements of Operations and Consolidated Statements of Comprehensive Income (Loss) for the three months ended September 30 (in millions) : Derivatives in Cash Flow Hedging Relationships Amount of Gain/(Loss) Recognized in OCI on Derivative Location of Gain/(Loss) Reclassified from AOCI into Income Amount of Gain/(Loss) Reclassified from AOCI into Income 2022 2021 2022 2021 Treasury lock agreements $ 47.4 $ (2.1) Interest expense $ (0.7) $ (0.6) Total $ 47.4 $ (2.1) $ (0.7) $ (0.6) Derivatives Not Designated as Hedging Instruments Location of Gain/(Loss) Recognized in Income on Derivative Amount of Gain/(Loss) Recognized in Income on Derivative 2022 2021 Foreign currency forward contracts Foreign exchange loss $ (8.1) $ 4.9 Total $ (8.1) $ 4.9 The following table presents the effects of derivative instruments on the Consolidated Statements of Operations and Consolidated Statements of Comprehensive Income (Loss) for the nine months ended September 30 (in millions) : Derivatives in Cash Flow Hedging Relationships Amount of Gain/(Loss) Recognized in OCI on Derivative Location of Gain/(Loss) Reclassified from AOCI into Income Amount of Gain/(Loss) Reclassified from AOCI into Income 2022 2021 2022 2021 Treasury lock agreements $ 174.8 $ 55.1 Interest expense $ (1.9) $ (1.8) Total $ 174.8 $ 55.1 $ (1.9) $ (1.8) Derivatives Not Designated as Hedging Instruments Location of Gain/(Loss) Recognized in Income on Derivative Amount of Gain/(Loss) Recognized in Income on Derivative 2022 2021 Foreign currency forward contracts Foreign exchange loss $ (18.9) $ 0.8 Total $ (18.9) $ 0.8 |
Short-Term Borrowings
Short-Term Borrowings | 9 Months Ended |
Sep. 30, 2022 | |
Debt Disclosure [Abstract] | |
Short-Term Borrowings | Short-Term Borrowings Commercial Paper. The Company’s commercial paper program generally serves as the primary means of short-term funding. As of September 30, 2022 and December 31, 2021, KCS had no commercial paper outstanding. For the nine months ended September 30, 2022 and 2021, any commercial paper borrowings were outstanding for less than 90 days and the related activity is presented on a net basis in the consolidated statements of cash flows. |
Refundable Mexican Value Added
Refundable Mexican Value Added Tax | 9 Months Ended |
Sep. 30, 2022 | |
Accounts Receivable Additional Disclosures [Abstract] | |
Refundable Mexican Value Added Tax | Refundable Mexican Value Added Tax Kansas City Southern de México, S.A. de C.V. (“KCSM”) is not required to charge its customers value added tax (“VAT”) on international import or export transportation services, which prior to 2022 resulted in KCSM paying more VAT on its expenses than it collected from customers. These excess VAT payments are refundable by the Mexican government. Prior to 2019, Mexican companies could offset their monthly refundable VAT balance with other tax obligations. In January 2019, Mexico tax reform eliminated the ability to offset other tax obligations with refundable VAT. Over 2019 through 2021, KCSM generated a refundable VAT balance and filed refund claims with the Servicio de Administración Tributaria (the “SAT”), which have not been refunded. In November 2021, changes to the VAT law were announced and became effective beginning January 1, 2022. These changes reduced the recoverability of VAT paid by KCSM on its expenditures that support international import transportation service revenues that are not subject to a VAT charge. VAT that is unrecoverable from the Mexican government results in incremental VAT expense for KCSM. Beginning in 2022, KCSM changed certain service offerings to either require VAT to be charged to customers on revenue, or impose a rate increase to offset the incremental VAT expense. These measures implemented by KCSM increased the VAT to be collected from customers and payable to the Mexican government. |
Commitments and Contingencies
Commitments and Contingencies | 9 Months Ended |
Sep. 30, 2022 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Concession Duty. Under KCSM’s 50-year railroad concession from the Mexican government (the “Concession”), which could expire in 2047 unless extended, KCSM pays annual concession duty expense of 1.25% of gross revenues. For the three and nine months ended September 30, 2022, the concession duty expense, which is recorded within materials and other in operating expenses, was $5.5 million and $16.0 million, respectively, compared to $4.7 million and $14.1 million, for the same periods in 2021. Litigation. Occasionally, the Company is a party to various legal proceedings, regulatory examinations, investigations, administrative actions, and other legal matters, arising for the most part in the ordinary course of business, incidental to its operations. Included in these proceedings are various tort claims brought by current and former employees for job-related injuries and by third parties for injuries related to railroad operations. KCS aggressively defends these matters and has established liability provisions that management believes are adequate to cover expected costs. The outcome of litigation and other legal matters is always uncertain. KCS believes it has valid defenses to the legal matters currently pending against it, is defending itself vigorously, and has recorded accruals determined in accordance with U.S. GAAP, where appropriate. In making a determination regarding accruals, using available information, KCS evaluates the likelihood of an unfavorable outcome in legal or regulatory proceedings to which it is a party to and records a loss contingency when it is probable a liability has been incurred and the amount of the loss can be reasonably estimated. These subjective determinations are based on the status of such legal or regulatory proceedings, the merits of KCS’s defenses and consultation with legal counsel. Actual outcomes of these legal and regulatory proceedings may materially differ from the current estimates. It is possible that resolution of one or more of the legal matters currently pending or threatened could result in losses material to KCS’s consolidated results of operations, liquidity or financial condition. Environmental Liabilities. The Company’s U.S. operations are subject to extensive federal, state and local environmental laws and regulations. The major U.S. environmental laws to which the Company is subject include, among others, the federal Comprehensive Environmental Response, Compensation and Liability Act (“CERCLA,” also known as the Superfund law), the Toxic Substances Control Act, the Clean Water Act, and the Hazardous Materials Transportation Act. CERCLA can impose joint and several liabilities for cleanup and investigation costs, without regard to fault or legality of the original conduct, on current and predecessor owners and operators of a site, as well as those who generate, or arrange for the disposal of hazardous substances. The Company does not believe that compliance with the requirements imposed by the environmental legislation will impair its competitive capability or result in any material additional capital expenditures, operating or maintenance costs. The Company is, however, subject to environmental remediation costs as described in the following paragraphs. The Company’s Mexico operations are subject to Mexican federal and state laws and regulations relating to the protection of the environment through the establishment of standards for water discharge, water supply, emissions, noise pollution, hazardous substances and transportation and handling of hazardous and solid waste. The Mexican government may bring administrative and criminal proceedings, impose economic sanctions against companies that violate environmental laws, and temporarily or even permanently close non-complying facilities. The risk of incurring environmental liability is inherent in the railroad industry. As part of serving the petroleum and chemicals industry, the Company transports hazardous materials and has a professional team available to respond to and handle environmental issues that might occur in the transport of such materials. The Company performs ongoing reviews and evaluations of the various environmental programs and issues within the Company’s operations, and, as necessary, takes actions intended to limit the Company’s exposure to potential liability. Although these costs cannot be predicted with certainty, management believes that the ultimate outcome of identified matters will not have a material adverse effect on the Company’s consolidated financial statements. Personal Injury. The Company’s personal injury liability is based on semi-annual actuarial studies performed on an undiscounted basis by an independent third party actuarial firm and reviewed by management. This liability is based on personal injury claims filed and an estimate of claims incurred but not yet reported. Actual results may vary from estimates due to the number, type and severity of the injury, costs of medical treatments and uncertainties in litigation. Adjustments to the liability are reflected within operating expenses in the period in which changes to estimates are known. Personal injury claims in excess of self-insurance levels are insured up to certain coverage amounts, depending on the type of claim and year of occurrence. The personal injury liability as of September 30, 2022, is based on an updated actuarial study of personal injury claims through April 30, 2022, and review of the last five months’ experience. Although these estimates cannot be predicted with certainty, management believes that the ultimate outcome will not have a material adverse effect on the Company’s consolidated financial statements. Tax Contingencies . Tax returns filed in the U.S. for periods after 2015 and in Mexico for periods after 2012 remain open to examination by the taxing authority. The Internal Revenue Service (“IRS”) has completed its examination of the 2017 deemed mandatory repatriation tax included in the 2017 U.S. federal tax return and the 2016 U.S. federal tax return with no material impact to the consolidated financial statements. The Servicio de Administración Tributaria (the “SAT”), the Mexican equivalent of the IRS, has initiated examinations of the KCSM 2013 through 2020 Mexico tax returns and the Financiera Inspira, S.A. de C.V. SOFOM, E.N.R. 2016 and 2017 Mexico tax returns. The Company does not expect that these examinations will have a material impact on the consolidated financial statements. During 2017, the Company received audit assessments from the SAT for the KCSM 2009 and 2010 Mexico tax returns. The Company commenced administrative actions with the SAT and the audit assessments were subsequently nullified. In the third quarter of 2018, the SAT issued new assessments and the Company filed administrative appeals with the SAT. During the first quarter of 2022, the Company received an audit assessment from the SAT for the KCSM 2013 Mexico tax return and filed an administrative appeal of the assessment in the second quarter of 2022. On April 13, 2022, the SAT used an electronic tax mailbox to deliver an audit assessment on the 2014 KCSM tax returns, which as of September 30, 2022 was Ps.5.7 billion (approximately $280.0 million USD) of tax, interest, penalties and inflation (the “2014 Audit Assessment”). In 2014, KCSM filed an amparo lawsuit with the district court, objecting to the SAT’s electronic accounting requirements, including the SAT’s use of the electronic tax mailbox, and KCSM was granted a permanent injunction in 2015 preventing the SAT from delivering any notification of assessments using the electronic tax mailbox. The permanent injunction remained in effect through the date the SAT issued the 2014 Audit Assessment. The Company became aware of the 2014 Audit Assessment on June 30, 2022 and based on the permanent injunction on the electronic accounting requirements, the Company believed it had thirty business days from that date to file an appeal. On July 7, 2022, the Company filed an administrative appeal of the 2014 Audit Assessment with the SAT. During the third quarter of 2022, the SAT dismissed the administrative appeal of the 2014 Audit Assessment on the basis it wasn’t filed timely. The Company plans to challenge in Mexican court the SAT's use of the electronic mailbox and the dismissal of the administrative appeal of the 2014 Audit Assessment. The Company believes that it has strong legal arguments in its favor and it is more likely than not that the administrative appeal of the 2014 Audit Assessment was timely filed. The 2014 Audit Assessment includes tax positions where KCSM has prior favorable court decisions or strong legal arguments in its favor. Management believes it is more likely than not it will prevail in any challenge of the 2014 Audit Assessment. Historically, the Company has not been required to pay to settle previous SAT audit assessments or has settled SAT audit assessments for an immaterial amount. On July 1, 2022, the SAT froze KCSM’s Mexico bank accounts without any request for payment of the 2014 Audit Assessment or notification of the freeze. The Company filed an amparo lawsuit challenging the legality of the bank account freeze. The district court issued a permanent injunction requiring the SAT to remove the freeze subject to KCSM posting a performance bond or other collateral upon the SAT demonstrating a tax obligation exists. In August 2022, KCSM posted a performance bond in the amount of Ps.5.6 billion (approximately $278.0 million USD) and the bank account freeze was removed. The freeze and cost of obtaining the performance bond did not have a significant impact on KCSM’s cash flows or operations. The provision of the performance bond is not an agreement or concession with regard to the 2014 Audit Assessment and in no way impacts KCSM’s ability to further defend its tax position. The Company believes that it has strong legal arguments in its favor and it is more likely than not that it will prevail in any challenge of the assessments. U.S. Collective Bargaining. KCSR participates in industry-wide multi-employer bargaining as a member of the National Carriers’ Conference Committee (“NCCC”), as well as local bargaining for agreements that are limited to KCSR's property. Approximately 72% of KCSR employees are covered by collective bargaining agreements. For the 2016 bargaining round, 5-year agreements were reached voluntarily or through the arbitration process during 2017 and 2018 covering all of the participating unions. The terms of these agreements remain in effect until new agreements are reached in the 2020 national bargaining round. In November 2019, KCSR and its unions commenced negotiations in connection with the 2020 collective bargaining round. On July 15, 2022, President Biden signed an executive order creating a Presidential Emergency Board (“PEB”) to assist the railroads and its unions in ongoing national labor negotiations. The PEB reviewed the parties’ proposals, held hearings and issued non-binding settlement recommendations to the President. Under the terms of the PEB, the parties had until September 16, 2022 to reach a voluntary settlement based on those recommendations. On September 15, 2022, the NCCC and unions reached a tentative agreement resulting in the Company recognizing estimated retroactive union wages and bonuses of approximately $9.0 million in compensation and benefits on the consolidated statements of operations. The union ratification began in mid-September and is expected to be complete by mid-November. As of October 26, 2022, six of the twelve railroad unions have ratified their respective tentative agreements; however, the third largest union rejected the tentative agreement. The NCCC and this union agreed to continue negotiations through November 19, 2022, before the union seeks other self-help remedies, including strikes or work stoppages. Under the Railway Labor Act, Congress can impose a resolution based upon the PEB recommendations or order trains to operate as usual while the two sides continue to negotiate and ultimately reach a new agreement. A strike or work stoppage could result in a significant disruption of the Company’s operations and have significant financial impacts, such as lower revenues and higher operating costs. Contractual Agreements. In the normal course of business, the Company enters into various contractual agreements related to commercial arrangements and the use of other railroads’ or governmental entities’ infrastructure needed for the operations of the business. The Company is involved or may become involved in certain disputes involving transportation rates, product loss or damage, charges, and interpretations related to these agreements. While the outcome of these matters cannot be predicted with certainty, the Company believes that, when resolved, these disputes will not have a material effect on its consolidated financial statements. On July 14, 2022, KCSM reached an agreement with the Mexican Ministry of Infrastructure, Communications and Transportation (“SICT”) to fund a new investment in the Celaya-NBA Line Railway Bypass and related infrastructure in an amount not to exceed Ps.4.0 billion (approximately $200.0 million USD). In exchange for the investment, the SICT agreed to amend KCSM’s Concession Title effective July 14, 2022, to extend the exclusivity rights granted to KCSM for an additional period of 10 years. Under this amendment, KCSM’s exclusivity will now expire in 2037. Credit Risk. The Company continually monitors risks related to economic changes and certain customer receivables concentrations. Significant changes in customer concentration or payment terms, deterioration of customer creditworthiness, bankruptcy, insolvency or liquidation of a customer, or weakening in economic trends could have a significant impact on the collectability of the Company’s receivables and its operating results. If the financial condition of the Company’s customers were to deteriorate and result in an impairment of their ability to make payments, additional allowances may be required. The Company has recorded provisions for credit losses based on its best estimate at September 30, 2022. Panama Canal Railway Company (“PCRC”) Guarantees and Indemnities. At September 30, 2022, the Company had issued and outstanding $5.7 million under a standby letter of credit to fulfill its obligation to fund fifty percent of the debt service reserve and liquidity reserve established by PCRC in connection with the issuance of the 7.0% Senior Secured Notes due November 1, 2026 (the “PCRC Notes”). Additionally, KCS has pledged its shares of PCRC as security for the PCRC Notes. |
Geographic Information
Geographic Information | 9 Months Ended |
Sep. 30, 2022 | |
Segment Reporting [Abstract] | |
Geographic Information | Geographic Information The Company strategically manages its rail operations as one reportable business segment over a single coordinated rail network that extends from the midwest and southeast portions of the United States south into Mexico and connects with other Class I railroads. Financial information reported at this level, such as revenues, operating income and cash flows from operations, is used by corporate management, including the Company’s chief operating decision-maker, in evaluating overall financial and operational performance, market strategies, as well as the decisions to allocate capital resources. The Company’s chief operating decision-maker is the chief executive officer. The following tables provide information by geographic area (in millions) : Three Months Ended Nine Months Ended September 30, September 30, Revenues 2022 2021 2022 2021 U.S. $ 476.0 $ 409.5 $ 1,351.6 $ 1,160.5 Mexico 406.2 334.5 1,154.3 1,039.0 Total revenues $ 882.2 $ 744.0 $ 2,505.9 $ 2,199.5 Property and equipment (including concession assets), net September 30, December 31, U.S. $ 5,849.2 $ 5,744.4 Mexico 3,468.7 3,464.9 Total property and equipment (including concession assets), net $ 9,317.9 $ 9,209.3 |
Subsequent Event
Subsequent Event | 9 Months Ended |
Sep. 30, 2022 | |
Subsequent Events [Abstract] | |
Subsequent Event | Subsequent Event On October 26, 2022, the Company’s Board of Directors declared a cash dividend of up to $225.0 million, to be paid to a wholly-owned subsidiary of CP on October 31, 2022. |
Revenue (Tables)
Revenue (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Revenue from Contract with Customer [Abstract] | |
Schedule of Disaggregation of Revenue | The following table presents revenues disaggregated by the major commodity groups as well as the product types included within the major commodity groups (in millions) . The Company believes disaggregation by product type best depicts how cash flows are affected by economic factors. See Note 10 for revenues by geographical area. Three Months Ended Nine Months Ended September 30, September 30, 2022 2021 2022 2021 Chemical & Petroleum Chemicals $ 76.3 $ 71.0 $ 220.9 $ 196.4 Petroleum 85.4 93.7 245.8 361.8 Plastics 42.9 39.4 125.6 109.7 Total 204.6 204.1 592.3 667.9 Industrial & Consumer Products Forest Products 79.2 71.6 221.5 191.9 Metals & Scrap 70.2 54.1 191.5 151.4 Other 39.0 33.3 110.6 94.3 Total 188.4 159.0 523.6 437.6 Agriculture & Minerals Grain 99.9 87.0 316.7 250.6 Food Products 46.9 35.4 130.2 109.0 Ores & Minerals 9.6 7.5 25.3 18.8 Stone, Clay & Glass 11.2 9.9 31.3 25.7 Total 167.6 139.8 503.5 404.1 Energy Utility Coal 45.2 45.8 123.3 108.7 Coal & Petroleum Coke 12.3 12.8 37.3 35.2 Frac Sand 4.6 4.0 14.4 11.6 Crude Oil 20.8 12.0 51.4 31.1 Total 82.9 74.6 226.4 186.6 Intermodal 121.9 86.9 335.3 259.3 Automotive 70.1 40.1 190.8 133.6 Total Freight Revenues 835.5 704.5 2,371.9 2,089.1 Other Revenue 46.7 39.5 134.0 110.4 Total Revenues $ 882.2 $ 744.0 $ 2,505.9 $ 2,199.5 |
Schedule of Changes in Contract Liabilities | The following tables summarize the changes in contract liabilities (in millions) : Contract liabilities Three Months Ended Nine Months Ended September 30, September 30, 2022 2021 2022 2021 Beginning balance $ 49.4 $ 19.7 $ 68.4 $ 29.9 Revenue recognized that was included in the contract liability balance at the beginning of the period (8.0) (9.6) (30.1) (25.3) Increases due to consideration received, excluding amounts recognized as revenue during the period 4.7 2.4 7.8 7.9 Ending balance $ 46.1 $ 12.5 $ 46.1 $ 12.5 |
Property and Equipment (inclu_2
Property and Equipment (including Concession Assets) (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Property, Plant and Equipment [Abstract] | |
Property, Plant and Equipment by Type | Property and equipment, including concession assets, and related accumulated depreciation and amortization are summarized below (in millions) : September 30, December 31, Land $ 244.7 $ 243.0 Concession land rights 141.1 141.1 Road property 8,630.7 8,430.6 Equipment 2,868.0 2,842.4 Technology and other 433.4 372.6 Construction in progress 393.0 335.8 Total property 12,710.9 12,365.5 Accumulated depreciation and amortization 3,393.0 3,156.2 Property and equipment (including concession assets), net $ 9,317.9 $ 9,209.3 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Fair Value Disclosures [Abstract] | |
Schedule of Fair Value of the Company's Financial Instruments | The fair value of the Company’s financial instruments is presented in the following table (in millions) : September 30, 2022 December 31, 2021 Level 2 Level 2 Assets Treasury lock agreements $ 232.2 $ 57.4 Liabilities Debt instruments 3,235.8 4,311.1 Foreign currency derivative instruments 18.5 1.8 |
Derivative Instruments (Tables)
Derivative Instruments (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of Foreign Currency Derivative Instruments | Below is a summary of the Company’s 2022 and 2021 foreign currency derivative contracts (amounts in millions, except Ps./USD) : Foreign currency forward contracts Contracts to sell Ps./receive USD Offsetting contracts to purchase Ps./pay USD Notional amount Notional amount Weighted-average exchange rate (in Ps./USD) Notional amount Notional amount Weighted-average exchange rate (in Ps./USD) Cash received/(paid) on settlement Contracts executed in 2022 and outstanding $ 460.0 Ps. 9,797.1 Ps. 21.3 — — — — Contracts executed in 2022 and settled in 2022 $ 50.0 Ps. 1,105.3 Ps. 22.1 $ 50.5 Ps. 1,105.3 Ps. 21.9 $ (0.5) Contracts executed in 2021 and settled in 2022 $ 270.0 Ps. 5,583.3 Ps. 20.7 $ 271.7 Ps. 5,583.3 Ps. 20.6 $ (1.7) Contracts to purchase Ps./pay USD Offsetting contracts to sell Ps./receive USD Notional amount Notional amount Weighted-average exchange rate (in Ps./USD) Notional amount Notional amount Weighted-average exchange rate (in Ps./USD) Cash received/(paid) on settlement Contracts executed in 2021 and settled in 2021 (i) $ 100.0 Ps. 1,993.5 Ps. 19.9 $ 98.1 Ps. 1,993.5 Ps. 20.3 $ (1.9) (i) During the nine months ended September 2021, the Company settled $100.0 million of these forward contracts, resulting in cash paid of $1.9 million. |
Schedule of Derivative Instruments in Consolidated Balance Sheets, Fair Value | The following tables present the fair value of derivative instruments included in the Consolidated Balance Sheets ( in millions ): Derivative Assets Balance Sheet Location September 30, December 31, 2021 Derivatives designated as hedging instruments: Treasury lock agreements Other current assets $ 232.2 $ — Other assets — 57.4 Total derivatives designated as hedging instruments 232.2 57.4 Total derivative assets $ 232.2 $ 57.4 Derivative Liabilities Balance Sheet Location September 30, December 31, 2021 Derivatives not designated as hedging instruments: Foreign currency forward contracts Accounts payable and accrued liabilities $ 18.5 $ 1.8 Total derivatives not designated as hedging instruments 18.5 1.8 Total derivative liabilities $ 18.5 $ 1.8 |
Schedule of Offsetting of Derivative Liabilities | The following table summarizes the gross and net fair value of derivative liabilities (in millions) : As of September 30, 2022 Gross Liabilities Gross Assets Net Amounts Presented in the Consolidated Balance Sheets Derivatives subject to a master netting arrangement or similar agreement $ 18.5 $ — $ 18.5 As of December 31, 2021 Derivatives subject to a master netting arrangement or similar agreement $ 2.8 $ (1.0) $ 1.8 |
Schedule of Derivative Instruments, Gain (Loss) in Consolidated Statements of Operations and Consolidated Statements of Comprehensive Income (Loss) | The following table presents the effects of derivative instruments on the Consolidated Statements of Operations and Consolidated Statements of Comprehensive Income (Loss) for the three months ended September 30 (in millions) : Derivatives in Cash Flow Hedging Relationships Amount of Gain/(Loss) Recognized in OCI on Derivative Location of Gain/(Loss) Reclassified from AOCI into Income Amount of Gain/(Loss) Reclassified from AOCI into Income 2022 2021 2022 2021 Treasury lock agreements $ 47.4 $ (2.1) Interest expense $ (0.7) $ (0.6) Total $ 47.4 $ (2.1) $ (0.7) $ (0.6) Derivatives Not Designated as Hedging Instruments Location of Gain/(Loss) Recognized in Income on Derivative Amount of Gain/(Loss) Recognized in Income on Derivative 2022 2021 Foreign currency forward contracts Foreign exchange loss $ (8.1) $ 4.9 Total $ (8.1) $ 4.9 The following table presents the effects of derivative instruments on the Consolidated Statements of Operations and Consolidated Statements of Comprehensive Income (Loss) for the nine months ended September 30 (in millions) : Derivatives in Cash Flow Hedging Relationships Amount of Gain/(Loss) Recognized in OCI on Derivative Location of Gain/(Loss) Reclassified from AOCI into Income Amount of Gain/(Loss) Reclassified from AOCI into Income 2022 2021 2022 2021 Treasury lock agreements $ 174.8 $ 55.1 Interest expense $ (1.9) $ (1.8) Total $ 174.8 $ 55.1 $ (1.9) $ (1.8) Derivatives Not Designated as Hedging Instruments Location of Gain/(Loss) Recognized in Income on Derivative Amount of Gain/(Loss) Recognized in Income on Derivative 2022 2021 Foreign currency forward contracts Foreign exchange loss $ (18.9) $ 0.8 Total $ (18.9) $ 0.8 |
Geographic Information (Tables)
Geographic Information (Tables) | 9 Months Ended |
Sep. 30, 2022 | |
Segment Reporting [Abstract] | |
Schedule of Revenue from External Customers and Long-Lived Assets, by Geographical Areas | The following tables provide information by geographic area (in millions) : Three Months Ended Nine Months Ended September 30, September 30, Revenues 2022 2021 2022 2021 U.S. $ 476.0 $ 409.5 $ 1,351.6 $ 1,160.5 Mexico 406.2 334.5 1,154.3 1,039.0 Total revenues $ 882.2 $ 744.0 $ 2,505.9 $ 2,199.5 Property and equipment (including concession assets), net September 30, December 31, U.S. $ 5,849.2 $ 5,744.4 Mexico 3,468.7 3,464.9 Total property and equipment (including concession assets), net $ 9,317.9 $ 9,209.3 |
Merger Agreement (Details)
Merger Agreement (Details) - USD ($) | 3 Months Ended | 9 Months Ended | 12 Months Ended | ||||
Dec. 14, 2021 | Sep. 30, 2022 | Mar. 31, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | Dec. 31, 2021 | |
Merger Agreement [Line Items] | |||||||
Common stock, par value | $ 0.01 | $ 0.01 | $ 0.01 | $ 0.01 | |||
Preferred stock, par value | $ 25 | ||||||
Cash dividend | $ 200,000,000 | $ 265,000,000 | $ 465,000,000 | $ 138,400,000 | |||
Merger costs, net | $ 11,500,000 | $ 36,500,000 | 36,800,000 | 776,600,000 | |||
Cash payments for merger costs | 32,300,000 | 2,125,700,000 | |||||
Reimbursement of merger termination fee | $ 0 | 2,100,000,000 | |||||
Merger Costs, Net [Member] | Merger Termination Fee [Member] | |||||||
Merger Agreement [Line Items] | |||||||
Cash payments for merger costs | $ 1,400,000,000 | ||||||
Reimbursement of merger termination fee | $ 1,400,000,000 | ||||||
Canadian Pacific Railway Limited (CP) | |||||||
Merger Agreement [Line Items] | |||||||
Common shares received in exchange for each common share of the Company. | 2.884 | ||||||
Cash received, in addition to shares, in exchange for each common share of the Company | $ 90 | ||||||
Cash received in exchange for each preferred share of the Company | 37.50 | ||||||
Merger cash and stock transaction, value per common share | $ 301.20 | ||||||
Canadian National Railway Company (CN) | |||||||
Merger Agreement [Line Items] | |||||||
Termination fee that the Company was required to pay to terminate its merger agreement. | $ 700,000,000 |
Revenue Disaggregation of Reven
Revenue Disaggregation of Revenue (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Disaggregation of Revenue [Line Items] | ||||
Revenues | $ 882.2 | $ 744 | $ 2,505.9 | $ 2,199.5 |
Freight Revenues [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 835.5 | 704.5 | 2,371.9 | 2,089.1 |
Chemical and Petroleum [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 204.6 | 204.1 | 592.3 | 667.9 |
Chemicals [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 76.3 | 71 | 220.9 | 196.4 |
Petroleum [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 85.4 | 93.7 | 245.8 | 361.8 |
Plastics [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 42.9 | 39.4 | 125.6 | 109.7 |
Industrial and Consumer Products [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 188.4 | 159 | 523.6 | 437.6 |
Forest Products [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 79.2 | 71.6 | 221.5 | 191.9 |
Metals and Scrap [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 70.2 | 54.1 | 191.5 | 151.4 |
Other Industrial and Consumer Products [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 39 | 33.3 | 110.6 | 94.3 |
Agriculture and Minerals [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 167.6 | 139.8 | 503.5 | 404.1 |
Grain [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 99.9 | 87 | 316.7 | 250.6 |
Food Products [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 46.9 | 35.4 | 130.2 | 109 |
Ores and Minerals [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 9.6 | 7.5 | 25.3 | 18.8 |
Stone, Clay and Glass [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 11.2 | 9.9 | 31.3 | 25.7 |
Energy [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 82.9 | 74.6 | 226.4 | 186.6 |
Utility Coal [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 45.2 | 45.8 | 123.3 | 108.7 |
Coal and Petroleum Coke [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 12.3 | 12.8 | 37.3 | 35.2 |
Frac Sand [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 4.6 | 4 | 14.4 | 11.6 |
Crude Oil [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 20.8 | 12 | 51.4 | 31.1 |
Intermodal [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 121.9 | 86.9 | 335.3 | 259.3 |
Automotive [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | 70.1 | 40.1 | 190.8 | 133.6 |
Other Revenue [Member] | ||||
Disaggregation of Revenue [Line Items] | ||||
Revenues | $ 46.7 | $ 39.5 | $ 134 | $ 110.4 |
Revenue Narrative (Details)
Revenue Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | |
Sep. 30, 2022 | Dec. 31, 2021 | |
Revenue from Contract with Customer [Abstract] | ||
Amount of revenue recognized from performance obligations partially satisfied in previous periods | $ 28.9 | |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | ||
Accounts receivable, net | 600.9 | $ 271 |
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction, Start Date [Axis]: 2022-10-01 | ||
Revenue, Remaining Performance Obligation, Expected Timing of Satisfaction [Line Items] | ||
Performance obligations that were unsatisfied or partially satisfied | $ 21.8 | |
Performance obligations that were unsatisfied or partially satisfied, expected timing of satisfaction | 1 month |
Revenue Changes in Contract Lia
Revenue Changes in Contract Liabilities (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Contract Liabilities [Roll Forward] | ||||
Beginning balance | $ 49.4 | $ 19.7 | $ 68.4 | $ 29.9 |
Revenue recognized that was included in the contract liability balance at the beginning of the period | (8) | (9.6) | (30.1) | (25.3) |
Increases due to consideration received, excluding amounts recognized as revenue during the period | 4.7 | 2.4 | 7.8 | 7.9 |
Ending balance | $ 46.1 | $ 12.5 | $ 46.1 | $ 12.5 |
Property and Equipment (Inclu_3
Property and Equipment (Including Concession Assets) (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | |
Sep. 30, 2022 | Sep. 30, 2022 | Dec. 31, 2021 | |
Property, Plant and Equipment [Line Items] | |||
Property and equipment (including concession assets), gross | $ 12,710.9 | $ 12,710.9 | $ 12,365.5 |
Accumulated depreciation and amortization | 3,393 | 3,393 | 3,156.2 |
Property and equipment (including concession assets), net | 9,317.9 | 9,317.9 | 9,209.3 |
Accumulated amortization | 775.5 | 775.5 | 744.8 |
Concession assets, net of accumulated amortization | 2,475.3 | 2,475.3 | 2,459.3 |
Cumulative government assistance, net | 35.5 | 35.5 | 37.3 |
Government assistance amortization | 0.7 | 1.9 | |
Land [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment (including concession assets), gross | 244.7 | 244.7 | 243 |
Concession land rights [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment (including concession assets), gross | 141.1 | 141.1 | 141.1 |
Road property [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment (including concession assets), gross | 8,630.7 | 8,630.7 | 8,430.6 |
Equipment [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment (including concession assets), gross | 2,868 | 2,868 | 2,842.4 |
Technology and other [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment (including concession assets), gross | 433.4 | 433.4 | 372.6 |
Construction in progress [Member] | |||
Property, Plant and Equipment [Line Items] | |||
Property and equipment (including concession assets), gross | $ 393 | $ 393 | $ 335.8 |
Fair Value Measurements (Detail
Fair Value Measurements (Details) - USD ($) $ in Millions | Sep. 30, 2022 | Dec. 31, 2021 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Carrying value of Company's debt | $ 3,781.6 | $ 3,777.6 |
Fair Value, Inputs, Level 2 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair value of debt instruments | 3,235.8 | 4,311.1 |
Treasury Lock Agreements [Member] | Fair Value, Recurring [Member] | Fair Value, Inputs, Level 2 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair value of treasury lock agreements, assets | 232.2 | 57.4 |
Foreign Currency Derivative Instruments [Member] | Fair Value, Recurring [Member] | Fair Value, Inputs, Level 2 [Member] | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Fair value of foreign currency derivative instruments, liabilities | $ 18.5 | $ 1.8 |
Derivative Instruments Interest
Derivative Instruments Interest Rate Derivative Instruments (Details) $ in Millions | 9 Months Ended | 12 Months Ended |
Sep. 30, 2022 USD ($) | Dec. 31, 2020 USD ($) Treasury_Lock_Agreements | |
Derivative [Line Items] | ||
Term of future forecasted debt issuance | 30 years | |
Senior Notes [Member] | 3.00% Senior Notes due May 15, 2023 [Member] | ||
Derivative [Line Items] | ||
Senior notes anticipated to be refinanced | $ 444.7 | |
Senior notes, stated interest rate | 3% | |
Senior notes, maturity date | May 15, 2023 | |
Senior Notes [Member] | 3.85% Senior Notes due November 15, 2023 [Member] | ||
Derivative [Line Items] | ||
Senior notes anticipated to be refinanced | $ 200 | |
Senior notes, stated interest rate | 3.85% | |
Senior notes, maturity date | Nov. 15, 2023 | |
Treasury Lock Agreements [Member] | Designated as Hedging Instrument [Member] | Cash Flow Hedging [Member] | ||
Derivative [Line Items] | ||
Number of treasury lock agreements executed | Treasury_Lock_Agreements | 6 | |
Aggregate notional value of treasury lock agreements | $ 650 | |
Weighted average interest rate of treasury lock agreements | 1.58% |
Derivative Instruments Summary
Derivative Instruments Summary of Foreign Currency Derivative Contracts (Details) $ in Millions, $ in Millions | 9 Months Ended | 12 Months Ended | ||||||
Sep. 30, 2022 USD ($) $ / $ | Sep. 30, 2021 USD ($) | Dec. 31, 2021 USD ($) $ / $ | Sep. 30, 2022 MXN ($) $ / $ | Dec. 31, 2021 MXN ($) $ / $ | ||||
Derivative [Line Items] | ||||||||
Cash received/(paid) on settlement of foreign currency forward contracts | $ | $ (2.2) | $ (1.9) | ||||||
Not Designated as Hedging Instrument [Member] | Foreign Currency Forward Contracts [Member] | Initial Contracts to Sell Ps./Receive USD [Member] | Contracts Executed in 2022 and Outstanding [Member] | ||||||||
Derivative [Line Items] | ||||||||
Notional amount of foreign currency forward contracts | $ 460 | $ 9,797.1 | ||||||
Weighted-average exchange rate of foreign currency forward contracts | 21.3 | 21.3 | ||||||
Not Designated as Hedging Instrument [Member] | Foreign Currency Forward Contracts [Member] | Initial Contracts to Sell Ps./Receive USD [Member] | Contracts Executed in 2022 and Settled in 2022 [Member] | ||||||||
Derivative [Line Items] | ||||||||
Notional amount of foreign currency forward contracts | $ 50 | $ 1,105.3 | ||||||
Weighted-average exchange rate of foreign currency forward contracts | 22.1 | 22.1 | ||||||
Not Designated as Hedging Instrument [Member] | Foreign Currency Forward Contracts [Member] | Initial Contracts to Sell Ps./Receive USD [Member] | Contracts Executed in 2022 and Settled in 2022 [Member] | Foreign Exchange Loss [Member] | ||||||||
Derivative [Line Items] | ||||||||
Cash received/(paid) on settlement of foreign currency forward contracts | $ | $ (0.5) | |||||||
Not Designated as Hedging Instrument [Member] | Foreign Currency Forward Contracts [Member] | Initial Contracts to Sell Ps./Receive USD [Member] | Contracts Executed in 2021 and Settled in 2022 [Member] | ||||||||
Derivative [Line Items] | ||||||||
Notional amount of foreign currency forward contracts | $ 270 | $ 5,583.3 | ||||||
Weighted-average exchange rate of foreign currency forward contracts | 20.7 | 20.7 | ||||||
Not Designated as Hedging Instrument [Member] | Foreign Currency Forward Contracts [Member] | Initial Contracts to Sell Ps./Receive USD [Member] | Contracts Executed in 2021 and Settled in 2022 [Member] | Foreign Exchange Loss [Member] | ||||||||
Derivative [Line Items] | ||||||||
Cash received/(paid) on settlement of foreign currency forward contracts | $ | (1.7) | |||||||
Not Designated as Hedging Instrument [Member] | Foreign Currency Forward Contracts [Member] | Offsetting Contracts to Purchase Ps./Pay USD [Member] | Contracts Executed in 2022 and Settled in 2022 [Member] | ||||||||
Derivative [Line Items] | ||||||||
Notional amount of foreign currency forward contracts | $ 50.5 | $ 1,105.3 | ||||||
Weighted-average exchange rate of foreign currency forward contracts | 21.9 | 21.9 | ||||||
Not Designated as Hedging Instrument [Member] | Foreign Currency Forward Contracts [Member] | Offsetting Contracts to Purchase Ps./Pay USD [Member] | Contracts Executed in 2021 and Settled in 2022 [Member] | ||||||||
Derivative [Line Items] | ||||||||
Notional amount of foreign currency forward contracts | $ 271.7 | $ 5,583.3 | ||||||
Weighted-average exchange rate of foreign currency forward contracts | 20.6 | 20.6 | ||||||
Not Designated as Hedging Instrument [Member] | Foreign Currency Forward Contracts [Member] | Initial Contracts to Purchase Ps./Pay USD [Member] | Contracts Executed in 2021 and Settled in 2021 [Member] | ||||||||
Derivative [Line Items] | ||||||||
Notional amount of foreign currency forward contracts | 100 | $ 100 | [1] | $ 1,993.5 | [1] | |||
Weighted-average exchange rate of foreign currency forward contracts | [1] | 19.9 | 19.9 | |||||
Not Designated as Hedging Instrument [Member] | Foreign Currency Forward Contracts [Member] | Initial Contracts to Purchase Ps./Pay USD [Member] | Contracts Executed in 2021 and Settled in 2021 [Member] | Foreign Exchange Loss [Member] | ||||||||
Derivative [Line Items] | ||||||||
Cash received/(paid) on settlement of foreign currency forward contracts | $ | $ (1.9) | $ (1.9) | [1] | |||||
Not Designated as Hedging Instrument [Member] | Foreign Currency Forward Contracts [Member] | Offsetting Contracts to Sell Ps./Receive USD [Member] | Contracts Executed in 2021 and Settled in 2021 [Member] | ||||||||
Derivative [Line Items] | ||||||||
Notional amount of foreign currency forward contracts | [1] | $ 98.1 | $ 1,993.5 | |||||
Weighted-average exchange rate of foreign currency forward contracts | [1] | 20.3 | 20.3 | |||||
[1](i) During the nine months ended September 2021, the Company settled $100.0 million of these forward contracts, resulting in cash paid of $1.9 million. |
Derivative Instruments Fair Val
Derivative Instruments Fair Value of Derivative Instruments (Details) - USD ($) $ in Millions | Sep. 30, 2022 | Dec. 31, 2021 |
Derivatives, Fair Value [Line Items] | ||
Derivative assets, fair value | $ 232.2 | $ 57.4 |
Derivative liabilities, fair value | $ 18.5 | $ 1.8 |
Derivative Liability, Statement of Financial Position [Extensible Enumeration] | Accounts payable and accrued liabilities | Accounts payable and accrued liabilities |
Designated as Hedging Instrument [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Derivative assets, fair value | $ 232.2 | $ 57.4 |
Designated as Hedging Instrument [Member] | Treasury Lock Agreements [Member] | Other Current Assets [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Derivative assets, fair value | 232.2 | 0 |
Designated as Hedging Instrument [Member] | Treasury Lock Agreements [Member] | Other Assets [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Derivative assets, fair value | 0 | 57.4 |
Not Designated as Hedging Instrument [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Derivative liabilities, fair value | 18.5 | 1.8 |
Not Designated as Hedging Instrument [Member] | Foreign Currency Forward Contracts [Member] | ||
Derivatives, Fair Value [Line Items] | ||
Derivative liabilities, fair value | $ 18.5 | $ 1.8 |
Derivative Instruments Offsetti
Derivative Instruments Offsetting of Derivative Liabilities (Details) - USD ($) $ in Millions | Sep. 30, 2022 | Dec. 31, 2021 |
Offsetting of Derivative Liabilities [Abstract] | ||
Gross derivative liabilities, fair value | $ 18.5 | $ 2.8 |
Gross offsetting derivative assets, fair value | 0 | (1) |
Net derivative liabilities presented in the consolidated balance sheets, fair value | $ 18.5 | $ 1.8 |
Derivative Instruments Derivati
Derivative Instruments Derivative Instruments Affecting the Consolidated Statements of Operations and Consolidated Statements of Comprehensive Income (Loss) (Details) - USD ($) $ in Millions | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Sep. 30, 2022 | Sep. 30, 2021 | |
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Derivative, Gain (Loss), Statement of Income or Comprehensive Income [Extensible Enumeration] | Foreign exchange loss | Foreign exchange loss | Foreign exchange loss | Foreign exchange loss |
Designated as Hedging Instrument [Member] | Cash Flow Hedging [Member] | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Amount of Gain/(Loss) Recognized in OCI on Derivative | $ 47.4 | $ (2.1) | $ 174.8 | $ 55.1 |
Amount of Gain/(Loss) Reclassified from AOCI into Income | (0.7) | (0.6) | (1.9) | (1.8) |
Designated as Hedging Instrument [Member] | Cash Flow Hedging [Member] | Treasury Lock Agreements [Member] | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Amount of Gain/(Loss) Recognized in OCI on Derivative | 47.4 | (2.1) | 174.8 | 55.1 |
Designated as Hedging Instrument [Member] | Cash Flow Hedging [Member] | Treasury Lock Agreements [Member] | Interest Expense [Member] | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Amount of Gain/(Loss) Reclassified from AOCI into Income | (0.7) | (0.6) | (1.9) | (1.8) |
Not Designated as Hedging Instrument [Member] | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Amount of Gain/(Loss) Recognized in Income on Derivative | (8.1) | 4.9 | (18.9) | 0.8 |
Not Designated as Hedging Instrument [Member] | Foreign Currency Forward Contracts [Member] | ||||
Derivative Instruments, Gain (Loss) [Line Items] | ||||
Amount of Gain/(Loss) Recognized in Income on Derivative | $ (8.1) | $ 4.9 | $ (18.9) | $ 0.8 |
Short-Term Borrowings (Details)
Short-Term Borrowings (Details) - KCS [Member] - Commercial Paper [Member] - USD ($) $ in Millions | 9 Months Ended | ||
Sep. 30, 2022 | Sep. 30, 2021 | Dec. 31, 2021 | |
Short-Term Borrowings [Line Items] | |||
Amount of commercial paper outstanding | $ 0 | $ 0 | |
Maximum [Member] | |||
Short-Term Borrowings [Line Items] | |||
Commercial paper, days outstanding | 90 days | 90 days |
Refundable Mexican Value Adde_2
Refundable Mexican Value Added Tax (Details) - KCSM [Member] - USD ($) $ in Millions | Sep. 30, 2022 | Dec. 31, 2021 |
Refundable Mexican Value Added Tax [Line Items] | ||
Refundable Mexican value added tax | $ 98.6 | $ 152.2 |
Short-Term Asset [Member] | ||
Refundable Mexican Value Added Tax [Line Items] | ||
Refundable Mexican value added tax | $ 81 | $ 78 |
Commitments and Contingencies (
Commitments and Contingencies (Narrative) (Details) $ in Millions, $ in Billions | 3 Months Ended | 9 Months Ended | ||||||||
Sep. 15, 2022 USD ($) | Jul. 14, 2022 USD ($) | Jul. 14, 2022 MXN ($) | Sep. 30, 2022 USD ($) | Sep. 30, 2021 USD ($) | Sep. 30, 2022 USD ($) | Sep. 30, 2021 USD ($) | Sep. 30, 2022 MXN ($) | Aug. 31, 2022 USD ($) | Aug. 31, 2022 MXN ($) | |
Financial Guarantee [Member] | ||||||||||
Loss Contingencies [Line Items] | ||||||||||
Letter of credit outstanding, amount | $ 5.7 | $ 5.7 | ||||||||
Percent guarantee of unconsolidated affiliate debt | 50% | 50% | 50% | |||||||
KCSM [Member] | ||||||||||
Loss Contingencies [Line Items] | ||||||||||
Total period of time for payments due under railroad Concession to Mexican government | 50 years | |||||||||
Percentage of gross revenue payable under railroad Concession to Mexican government | 1.25% | |||||||||
Performance bond posted | $ 278 | $ 5.6 | ||||||||
Property investment for exclusivity extension under railroad Concession to Mexican government | $ 200 | $ 4 | ||||||||
Contract extension for exclusivity under railroad Concession to Mexican government | 10 years | 10 years | ||||||||
KCSM [Member] | Mexican Tax Authority [Member] | Servicio de Administración Tributaria (SAT) [Member] | Tax Year 2014 [Member] | ||||||||||
Loss Contingencies [Line Items] | ||||||||||
Audit assessment issued by the Mexican tax authority | $ 280 | $ 280 | $ 5.7 | |||||||
KCSM [Member] | Materials and Other Expense [Member] | ||||||||||
Loss Contingencies [Line Items] | ||||||||||
Concession duty expense | $ 5.5 | $ 4.7 | $ 16 | $ 14.1 | ||||||
KCSR [Member] | 2016 Bargaining Round [Member] | ||||||||||
Loss Contingencies [Line Items] | ||||||||||
Duration of collective bargaining agreements reached | 5 years | |||||||||
KCSR [Member] | Unionized Employees Concentration Risk [Member] | Number of Employees, Total [Member] | ||||||||||
Loss Contingencies [Line Items] | ||||||||||
Percentage of employees covered by collective bargaining or labor agreements | 72% | |||||||||
KCSR [Member] | Compensation and Benefits [Member] | 2020 Bargaining Round [Member] | ||||||||||
Loss Contingencies [Line Items] | ||||||||||
Amount of estimated retroactive union wages and bonuses recognized | $ 9 | |||||||||
Panama Canal Railway Company [Member] | Financial Guarantee [Member] | 7.0% Senior Secured Notes due November 1, 2026 [Member] | ||||||||||
Loss Contingencies [Line Items] | ||||||||||
Debt instrument, stated interest rate | 7% | 7% | 7% | |||||||
Debt instrument, maturity date | Nov. 01, 2026 |
Geographic Information (Informa
Geographic Information (Information by Geographic Area) (Details) $ in Millions | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2022 USD ($) | Sep. 30, 2021 USD ($) | Sep. 30, 2022 USD ($) Segments | Sep. 30, 2021 USD ($) | Dec. 31, 2021 USD ($) | |
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||
Number of reportable business segments of the Company | Segments | 1 | ||||
Revenues | $ 882.2 | $ 744 | $ 2,505.9 | $ 2,199.5 | |
Property and equipment (including concession assets), net | 9,317.9 | 9,317.9 | $ 9,209.3 | ||
UNITED STATES | |||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||
Revenues | 476 | 409.5 | 1,351.6 | 1,160.5 | |
Property and equipment (including concession assets), net | 5,849.2 | 5,849.2 | 5,744.4 | ||
MEXICO | |||||
Revenues from External Customers and Long-Lived Assets [Line Items] | |||||
Revenues | 406.2 | $ 334.5 | 1,154.3 | $ 1,039 | |
Property and equipment (including concession assets), net | $ 3,468.7 | $ 3,468.7 | $ 3,464.9 |
Subsequent Event (Details)
Subsequent Event (Details) $ in Millions | Oct. 26, 2022 USD ($) |
Subsequent Event [Member] | Maximum [Member] | |
Subsequent Event [Line Items] | |
Cash dividend declared | $ 225 |