| Document and Company Information (USD $) | |||
| In Billions, except Share data | 6 Months Ended
Jun. 30, 2009 | Jul. 23, 2009
| Jun. 30, 2008
|
| Document and Company Information [Abstract] | |||
| Entity Registrant Name | KANSAS CITY SOUTHERN | ||
| Entity Central Index Key | 0000054480 | ||
| Document Type | 10-Q | ||
| Document Period End Date | 2009-06-30 | ||
| Amendment Flag | false | ||
| Amendment Description | N/A | ||
| Current Fiscal Year End Date | --12-31 | ||
| Entity Well-known Seasoned Issuer | Yes | ||
| Entity Voluntary Filers | No | ||
| Entity Current Reporting Status | Yes | ||
| Entity Filer Category | Large Accelerated Filer | ||
| Entity Public Float | 3.55 | ||
| Entity Common Stock, Shares Outstanding (actual number) | 94,873,924 |
| Consolidated Statements of Operations (USD $) | ||||
| In Millions, except Share data in Thousands | 3 Months Ended
Jun. 30, 2009 | 3 Months Ended
Jun. 30, 2008 | 6 Months Ended
Jun. 30, 2009 | 6 Months Ended
Jun. 30, 2008 |
| Revenues | 341.3 | 486.2 | 687.3 | 936.8 |
| Operating expenses: | ||||
| Compensation and benefits | 79.1 | 96.4 | 157.1 | 198.2 |
| Purchased services | 46 | 53.5 | 90.5 | 104.7 |
| Fuel | 40.2 | 91.1 | 83.5 | 168.9 |
| Equipment costs | 41.2 | 46.4 | 80.3 | 90.8 |
| Depreciation and amortization | 47.6 | 40.2 | 94.7 | 80.5 |
| Casualties and insurance | 7.7 | 18.6 | 20.2 | 37.2 |
| Materials and other | 36.1 | 35.4 | 69.1 | 68.5 |
| Total operating expenses | 297.9 | 381.6 | 595.4 | 748.8 |
| Operating income | 43.4 | 104.6 | 91.9 | 188 |
| Equity in net earnings of unconsolidated affiliates | 2 | 4.7 | 3 | 8.8 |
| Interest expense | -45.4 | -27.7 | -87.2 | -67.2 |
| Debt retirement costs | 0 | -5.6 | -5.9 | -5.6 |
| Foreign exchange gain | 6 | 5.7 | 0.9 | 8.2 |
| Other income | 2.9 | 0.2 | 4.4 | 3.2 |
| Income before income taxes and noncontrolling interest | 8.9 | 81.9 | 7.1 | 135.4 |
| Income tax expense | 1.6 | 26.4 | 2 | 42.1 |
| Net income | 7.3 | 55.5 | 5.1 | 93.3 |
| Noncontrolling interest | 0.5 | 0.1 | 0.4 | 0.2 |
| Net income attributable to Kansas City Southern and subsidiaries | 6.8 | 55.4 | 4.7 | 93.1 |
| Preferred stock dividends | 0.1 | 4.9 | 5.5 | 9.7 |
| Net income (loss) available to common shareholders | 6.7 | 50.5 | -0.8 | 83.4 |
| Earnings (loss) per share: | ||||
| Basic earnings (loss) per share | 0.07 | 0.64 | -0.01 | 1.07 |
| Diluted earnings (loss) per share | 0.07 | 0.56 | -0.01 | 0.94 |
| Average shares outstanding (in thousands): | ||||
| Basic | 91,955 | 79,272 | 91,425 | 77,896 |
| Potentially dilutive common shares | 7,453 | 19,874 | 0 | 20,804 |
| Diluted | 99,408 | 99,146 | 91,425 | 98,700 |
| Consolidated Balance Sheets (USD $) | ||
| In Millions | Jun. 30, 2009
| Dec. 31, 2008
|
| Current assets: | ||
| Cash and cash equivalents | 62.3 | 229.9 |
| Accounts receivable, net | 163.8 | 163.8 |
| Restricted funds | 45 | 34 |
| Materials and supplies | 114.3 | 96.3 |
| Deferred income taxes | 102.4 | 62.8 |
| Other current assets | 45 | 98.8 |
| Total current assets | 532.8 | 685.6 |
| Investments | 51.3 | 60.5 |
| Property and equipment, net of accumulated depreciation of $876.2 million and $914.2 million at June 30, 2009 and December 31, 2008, respectively | 3544.4 | 3416.3 |
| Concession assets, net of accumulated amortization of $210.9 million and $186.5 million at June 30, 2009 and December 31, 2008, respectively | 1153.3 | 1182.1 |
| Deferred income taxes | 10.9 | 36.4 |
| Other assets | 73.8 | 58.3 |
| Total assets | 5366.5 | 5439.2 |
| Current liabilities: | ||
| Debt due within one year | 21.6 | 637.4 |
| Accounts payable and accrued liabilities | 364.1 | 455.4 |
| Total current liabilities | 385.7 | 1092.8 |
| Long-term debt | 2013.1 | 1448.7 |
| Deferred income taxes | 500.4 | 492.4 |
| Other noncurrent liabilities and deferred credits | 213.5 | 220.1 |
| Total liabilities | 3112.7 | 3,254 |
| Stockholders' equity: | ||
| $.01 par, common stock, 400,000,000 shares authorized; 109,457,760 and 106,252,860 shares issued at June 30, 2009 and December 31, 2008, respectively; 94,873,978 and 91,463,762 shares outstanding at June 30, 2009 and December 31, 2008, respectively | 0.9 | 0.9 |
| Paid-in capital | 630.1 | 572.3 |
| Retained earnings | 1336.8 | 1337.6 |
| Accumulated other comprehensive loss | (4) | -5.6 |
| Total stockholders' equity | 1970.1 | 1911.5 |
| Noncontrolling interest | 283.7 | 273.7 |
| Total equity | 2253.8 | 2185.2 |
| Total liabilities and equity | 5366.5 | 5439.2 |
| $25 par, 4% noncumulative, preferred stock, 840,000 shares authorized, 649,736 shares issued, 242,170 shares outstanding | ||
| Stockholders' equity: | ||
| Preferred Stock | 6.1 | 6.1 |
| Series D - cumulative convertible perpetual preferred stock, $1 par, 5.125%, 210,000 shares authorized and issued, 209,995 shares outstanding with a liquidation preference of $1,000 per share | ||
| Stockholders' equity: | ||
| Preferred Stock | 0.2 | 0.2 |
| Consolidated Balance Sheets (Parenthetical) Information (USD $) | ||
| In Millions, except Share data | Jun. 30, 2009
| Dec. 31, 2008
|
| Accumulated depreciation on property and equipment | 876.2 | 914.2 |
| Accumulated amortization on Concession assets | 210.9 | 186.5 |
| Common stock, par value | 0.01 | 0.01 |
| Common stock, shares authorized (actual number) | 400,000,000 | 400,000,000 |
| Common stock, shares issued (actual number) | 109,457,760 | 106,252,860 |
| Common stock, shares outstanding (actual number) | 94,873,978 | 91,463,762 |
| $25 par, 4% noncumulative, preferred stock, 840,000 shares authorized, 649,736 shares issued, 242,170 shares outstanding | ||
| Preferred stock, par value | 25 | 25 |
| Preferred stock, shares authorized (actual number) | 840,000 | 840,000 |
| Preferred stock, shares issued (actual number) | 649,736 | 649,736 |
| Preferred stock, shares outstanding (actual number) | 242,170 | 242,170 |
| Preferred stock dividend rate | 4% | 4% |
| Series D - cumulative convertible perpetual preferred stock, $1 par, 5.125%, 210,000 shares authorized and issued, 209,995 shares outstanding with a liquidation preference of $1,000 per share | ||
| Preferred stock, par value | 1 | 1 |
| Preferred stock, shares authorized (actual number) | 210,000 | 210,000 |
| Preferred stock, shares issued (actual number) | 210,000 | 210,000 |
| Preferred stock, shares outstanding (actual number) | 209,995 | 209,995 |
| Cumulative perpetual preferred stock liquidation preference | 1,000 | 1,000 |
| Preferred stock dividend rate | 5.125% | 5.125% |
| Consolidated Statements of Cash Flows (USD $) | ||
| In Millions | 6 Months Ended
Jun. 30, 2009 | 6 Months Ended
Jun. 30, 2008 |
| Operating activities: | ||
| Net income | 5.1 | 93.3 |
| Adjustments to reconcile net income to net cash provided by operating activities: | ||
| Depreciation and amortization | 94.7 | 80.5 |
| Deferred income taxes | 1.5 | 41.3 |
| Equity in undistributed earnings of unconsolidated affiliates | (3) | -8.8 |
| Share-based compensation | 4.9 | 3.2 |
| Other deferred compensation | -1.6 | 8.1 |
| Distributions from unconsolidated affiliates | 0 | 12.7 |
| Loss (gain) on sale of assets | -3.6 | 0.7 |
| Debt retirement costs | 5.9 | 5.6 |
| Changes in working capital items: | ||
| Accounts receivable | 0 | 1.4 |
| Materials and supplies | (18) | -14.4 |
| Other current assets | 53.8 | -45.2 |
| Accounts payable and accrued liabilities | -91.3 | -7.1 |
| Other, net | -9.3 | -5.9 |
| Net cash provided by operating activities | 39.1 | 165.4 |
| Investing activities: | ||
| Capital expenditures | -179.8 | -292.5 |
| Proceeds from disposal of property | 7.9 | 6.8 |
| Contribution from NS for MSLLC | 0 | 15 |
| Property investments in MSLLC | -12.3 | -16.9 |
| Other, net | 0.5 | -7.8 |
| Net cash used for investing activities | -183.7 | -295.4 |
| Financing activities: | ||
| Proceeds from issuance of long-term debt | 189.8 | 357.8 |
| Repayment of long-term debt | -250.1 | -234.4 |
| Debt costs | -9.3 | -10.9 |
| Proceeds from common stock issuance | 51.3 | 0 |
| Proceeds from stock plans | 0.8 | 1.1 |
| Preferred stock dividends paid | -5.5 | -9.7 |
| Net cash provided by (used for) financing activities | (23) | 103.9 |
| Cash and cash equivalents: | ||
| Net decrease during each period | -167.6 | -26.1 |
| At beginning of year | 229.9 | 55.5 |
| At end of period | 62.3 | 29.4 |
| Accounting Policies and Interim Financial Statements | |
| 6 Months Ended
Jun. 30, 2009 USD / shares | |
| Accounting Policies and Interim Financial Statements [Abstract] | |
| Accounting Policies and Interim Financial Statements | 1. Accounting Policies and Interim Financial Statements. In the opinion of the management of KCS, the accompanying unaudited consolidated financial statements contain all adjustments necessary for a fair presentation of the results for interim periods. All adjustments made were of a normal and recurring nature. Certain information and footnote disclosure 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 financial statements and accompanying notes included in the Companys Annual Report on Form10-K for the year ended December31, 2008. The results of operations for the three and six months ended June30, 2009 are not necessarily indicative of the results to be expected for the full year ending December31, 2009. Certain prior year amounts have been reclassified to conform to the current year presentation. |
| Recent Accounting Pronouncements | |
| 6 Months Ended
Jun. 30, 2009 USD / shares | |
| Recent Accounting Pronouncements [Abstract] | |
| Recent Accounting Pronouncements | 2. Recent Accounting Pronouncements. Effective January1, 2009, the Company adopted Financial Accounting Standards Board (the FASB) Statement of Financial Accounting Standards No.160, Noncontrolling Interests in Consolidated Financial Statements an amendment of ARB No.51 (SFAS160) on a prospective basis, except for the presentation and disclosure requirements, which apply retrospectively. As a result of the adoption, the Company reported noncontrolling interests as a separate component of equity in the consolidated balance sheets and the net income or loss attributable to noncontrolling interests is separately identified in the consolidated statements of operations. Prior period amounts have been reclassified to conform to the current period presentation as required by SFAS160. These reclassifications did not have any impact on the Companys previously reported results of operations. In April of 2009, the FASB issued FASB Staff Position FAS107-1 and APB 28-1, Interim Disclosures about Fair Value of Financial Instruments, which amends FASB Statement No.107, Disclosures about Fair Value of Financial Instruments, to require disclosures about fair value of financial instruments for interim reporting periods of publicly traded companies as well as in annual financial statements. This statement also amends APB Opinion No.28, Interim Financial Reporting, to require those disclosures in summarized financial information at interim reporting periods. The Company has disclosed the fair value of financial instruments in Note4. In May of 2009, the FASB issued Statement of Financial Accounting Standards No.165, Subsequent Events (SFAS165) which established accounting and disclosure requirements for subsequent events. SFAS165 details the period after the balance sheet date during which the Company should evaluate events or transactions that occur for potential recognition or disclosure in the financial statements, the circumstances under which the Company should recognize events or transactions occurring after the balance sheet date in its financial statements and the required disclosures for such events. The Company adopted this statement prospectively for the period ended June30, 2009 and has evaluated subsequent events through July30, 2009, the filing date of this report, and no events or transactions require additional recognition or disclosure. In June of 2009, the FASB issued Statement of Financial Accounting Standards No.167, Amendments to FASB Interpretation No.46(R) (SFAS167). SFAS167 addresses the elimination of FIN46(R)s exceptions to consolidating qualifying special-purpose entities (the QSPE) which means more entities will be subject to consolidation assessments and reassessments. The statement requires ongoing reassessment of whether a company is the primary beneficiary of a variable interest entity (VIE) and clarifies characteristics that identify a VIE. In addition, SFAS167 requires additional disclosures about a companys involvement with a VIE and any significant changes in risk exposure due to that involvement. This statement is effective for the Company beginning on January1, 2010. The Company is currentl |
| Earnings (Loss) Per Share Data | |
| 6 Months Ended
Jun. 30, 2009 USD / shares | |
| Earnings (Loss) Per Share Data [Abstract] | |
| Earnings (Loss) Per Share Data | 3. Earnings (Loss) Per Share Data. Basic earnings (loss) per common share is computed by dividing income (loss) available to common stockholders by the weighted average number of common shares outstanding for the period. Restricted stock granted to employees and officers is included in weighted average shares for purposes of computing basic earnings (loss) per common share as it is earned. Diluted earnings (loss) per share adjusts basic earnings (loss) per common share for the effects of potentially dilutive common shares, if the effect is not antidilutive. Potentially dilutive common shares include the dilutive effects of shares issuable upon the conversion of preferred stock to common stock and shares issuable under the Stock Option and Performance Award Plan. The following table reconciles the weighted average shares used for the basic earnings (loss) per share computation to the shares used for the diluted earnings (loss) per share computation (in thousands): Three Months Six Months Ended June30, Ended June30, 2009 2008 2009 2008 Basic shares 91,955 79,272 91,425 77,896 Effect of dilution 7,453 19,874 20,804 Diluted shares 99,408 99,146 91,425 98,700 For the three months ended June30, 2009 and 2008, approximately 72,000 and 11,000 stock options, respectively, were excluded from the computation of diluted shares because the impact would have been anti-dilutive as the options price was higher than the average market price. For the six months ended June30, 2009, the assumed conversion of preferred stock to 7,000,000shares of common stock and approximately545,000 stock options were excluded from the computation of diluted shares because the impact would have been anti-dilutive due to the loss reported in the period. For the six months ended June30, 2008, approximately 38,000 stock options were excluded from the computation of diluted shares because the impact would have been anti-dilutive as the options price was higher than the average market price. The following table reconciles net income (loss) available to common stockholders for purposes of basic earnings (loss) per share to net income (loss) available to common stockholders for purposes of diluted earnings (loss) per share (in millions): Three Months Six Months Ended June30, Ended June30, 2009 2008 2009 2008 Net income (loss) available to common stockholders for purposes of computing basic earnings (loss) per share $ 6.7 $ 50.5 $ (0.8 ) $ 83.4 Effect of dividends on conversion of convertible preferred stock 4.8 9.6 Net income (loss) available to common stockholders for purposes of computing diluted earnings (loss) per |
| Fair Value Measurements | |
| 6 Months Ended
Jun. 30, 2009 USD / shares | |
| Fair Value Measurements [Abstract] | |
| Fair Value Measurements | 4. Fair Value Measurements. The Companys short term financial instruments include cash and cash equivalents, accounts receivable, and accounts payable. The carrying value of the short term financial instruments approximates the fair value due to their short term nature. These financial instruments have no stated maturities or the financial instruments have short term maturities that approximate market. The fair value of the Companys 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. The fair value of the Companys debt was $1,887.7million and $1,911.5million at June30, 2009 and December31, 2008, respectively. The financial statement carrying value was $2,034.7million and $2,086.1million at June30, 2009 and December31, 2008, respectively. Statement of Financial Accounting Standards No.157, Fair Value Measurements (SFAS157), defines fair value, establishes a framework for measuring fair value and enhances disclosures regarding fair value measurements. KCS adopted SFAS157 prospectively for financial assets and liabilities recognized at fair value on a recurring basis on January1, 2008. Effective January1, 2009, KCS adopted SFAS157 prospectively for non-financial assets and liabilities recognized at fair value on a nonrecurring basis. These assets and liabilities are measured at fair value on an ongoing basis but are subject to fair value only in certain circumstances. SFAS157 requires all assets and liabilities recognized at fair value to be classified into a three-level hierarchy. In general, fair values determined by Level1 inputs utilize quoted prices (unadjusted) in active markets for identical assets or liabilities that the Company has the ability to access. Level2 inputs include quoted prices for similar assets and liabilities in active markets, and inputs other than quoted prices that are observable for the asset or liability. Level3 inputs are unobservable inputs for the asset or liability, and include situations where there is little, if any, market activity for the asset or liability. In certain cases, the inputs used to measure fair value may fall into different levels of the fair value hierarchy. In such cases, the level in the fair value hierarchy within which the fair value measurement in its entirety falls has been determined based on the lowest level input that is significant to the fair value measurement in its entirety. The Companys assessment of the significance of a particular input to the fair value in its entirety requires judgment and considers factors specific to the asset or liability. Assets and liabilities measured at fair value on a recurring basis (in millions): Fair Value Measurements Net Assets (Liabilities) Level 1 Level 2 Level 3 at Fair Value June30, 2009 Derivative financial instruments $ $ (4.8 ) $ $ (4.8 ) Net |
| Derivative Instruments | |
| 6 Months Ended
Jun. 30, 2009 USD / shares | |
| Derivative Instruments [Abstract] | |
| Derivative Instruments | 5. Derivative Instruments. The Company does not engage in the trading of derivative financial instruments except where the Companys objective is to manage the variability of forecasted interest payments attributable to changes in interest rates or fuel price risk. In general, the Company enters into derivative transactions in limited situations based on managements assessment of current market conditions and perceived risks. Interest Rate Swaps.During 2008, the Company entered into five forward starting interest rate swaps, which have been designated as cash flow hedges under the Statement of Financial Accounting Standards No.133, Accounting for Derivative Instruments and Hedging Activities (SFAS133). The forward starting interest rate swaps effectively convert interest payments from variable rates to fixed rates. The swaps are highly effective as defined by SFAS133 and as a result there will be deminimus earnings impact associated with ineffectiveness of these hedges. The hedging instruments have an aggregate notional amount of $250.0million at an average fixed rate of 2.71%, with forward starting settlements indexed to the three-month LIBOR occurring every quarter, expiring September 2010 through March 2011. Fuel Derivative Transactions.In January 2009, the Company entered into fuel swap agreements, which had been designated as cash flow hedges under SFAS133. The effective portion of the gain or loss on the derivative instruments was reported as a component of other comprehensive income (loss) and reclassified into earnings in the same period or periods during which the hedged transaction affected earnings. Gains and losses on the derivative representing either hedge ineffectiveness or hedge components excluded from the assessment of the effectiveness were recognized in current earnings. During the second quarter of 2009, it became probable that the hedged transactions would not occur as forecasted. Therefore, the hedging relationship was dedesignated on May31, 2009 and hedge accounting was discontinued. Changes in the fair value of the derivative instrument after dedesignation are recorded in earnings. As of June30, 2009, $1.1million gain is remaining in accumulated other comprehensive income and will be reclassified into earnings as the fuel swap agreements settle through the remainder of the year. As of June30, 2009, the Company has outstanding fuel swap agreements for 7.6million gallons of diesel fuel purchases ratably through the end of 2009 at an average swap price of $1.77 per gallon. The following table presents the fair value of derivative instruments included in the consolidated balance sheet as of June30, 2009 (in millions): Asset Derivatives Liability Derivatives Balance Sheet Fair Balance Sheet Fair Location Value Location Value Derivatives designated as hedging instruments under SFAS133: Other non-current liabilities Interest rate contracts Other assets $ deferred credits $ 5.6 |
| Foreign Currency Balances | |
| 6 Months Ended
Jun. 30, 2009 USD / shares | |
| Foreign Currency Balances [Abstarct] | |
| Foreign Currency Balances | 6. Foreign Currency Balances. At June30, 2009, KCSM had financial assets and financial liabilities denominated in Mexican pesos of Ps.1,350.7million and Ps.721.5million, respectively. At December31, 2008, KCSM had financial assets and financial liabilities denominated in Mexican pesos of Ps.1,377.4million and Ps.649.3million, respectively. At June30, 2009 and at December31, 2008, the exchange rate was Ps.13.2 and Ps.13.5, per U.S.dollar, respectively. Gains and losses resulting from the remeasurement of financial assets and liabilities is included in the foreign exchange gain on the statement of operations. |
| ATM Equity Offering | |
| 6 Months Ended
Jun. 30, 2009 USD / shares | |
| T M Equity Offering [Abstract] | |
| ATM Equity Offering | 7. ATM Equity Offering. On April27, 2009, the Company entered into an ATM Equity Offeringsm Sales Agreement with BankofAmerica Merrill Lynch, Pierce, Fenner Smith, Incorporated pursuant to which they will act as the Companys sales agent with respect to an offering and sale, at any time and from time to time, of the Companys common stock, with an aggregate sales price of up to $75.0million. During the three months ended June30, 2009, the Company received proceeds of $51.3million (net of commission of $1.0million and fees and other expenses of $0.2million) from the issuance of 3,204,900 common shares, at a weighted average sales price of $16.38, under the ATM Equity Offering. |
| Equity | |
| 6 Months Ended
Jun. 30, 2009 USD / shares | |
| Equity Disclosure [Abstract] | |
| Equity | 8. Equity The following tables summarizes the changes in stockholders equity (in millions): Three Months Ended June30, 2009 Three Months Ended June30, 2008 Kansas City Kansas City Southern Southern Stockholders Noncontrolling Stockholders Noncontrolling Equity Interest Total Equity Equity Interest Total Equity Beginning balance $ 1,906.4 $ 273.6 $ 2,180.0 $ 1,765.6 $ 240.9 $ 2,006.5 Comprehensive income: Net income 6.8 0.5 7.3 55.4 0.1 55.5 Unrealized gain on cash flow hedges, net of tax of $0.8million and $0.9million 1.2 1.2 1.3 1.3 Reclassification adjustment from cash flow hedges included in net income, net of tax of $0.2million 0.7 0.7 Cumulative translation adjustment FTVM, net of tax of $0.3million 0.6 0.6 Comprehensive income 9.3 0.5 9.8 56.7 0.1 56.8 Contribution from noncontrolling interests 9.6 9.6 20.9 20.9 Common stock issued 51.3 51.3 Dividends on $25par preferred stock (0.1 ) (0.1 ) (0.1 ) (0.1 ) Dividends on seriesC cumulative preferred stock (2.1 ) (2.1 ) Dividends on seriesD cumulative preferred stock (2.7 ) (2.7 ) Options exercised and stock subscribed 0.4 0.4 (0.4 ) (0.4 ) Tax benefit from share-based compensation 1.9 1.9 Share-based compensation 2.8 2.8 0.1 0.1 Ending balance $ 1,970.1 $ 283.7 $ 2,253.8 $ 1,819.0 $ 261.9 $ 2,080.9 Six Months Ended June30, 2009 Six Months Ended June30, 2008 Kansas City Kansas City Southern Southern Stockholders Noncontrolling Stockholders Noncontrolling Equity Interest Total Equity |
| Commitments and Contingencies | |
| 6 Months Ended
Jun. 30, 2009 USD / shares | |
| Commitments and Contingencies [Abstract] | |
| Commitments and Contingencies | 9. Commitments and Contingencies. Concession Duty.Under KCSMs railroad concession from the Mexican government (the Concession), the Mexican government has the right to receive a payment from the Company equivalent to 0.5% of the gross revenue during the first 15years of the Concession period and 1.25% of the gross revenue during the remaining years of the Concession period. For the three and six months ended June30, 2009, the concession duty expense, which is recorded within operating expenses, amounted to $0.7million and $1.5million, compared to $1.2million and $2.3million for the same periods in 2008. Litigation.The Company is a party to various legal proceedings and administrative actions, all of which, except as set forth below, are of an ordinary, routine nature and 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 reserves, which management believes are adequate to cover expected costs. Although it is not possible to predict the outcome of any legal proceeding, in the opinion of management, other than those proceedings described in detail below, such proceedings and actions should not, individually, or in the aggregate, have a material adverse effect on the Companys financial condition and liquidity. However, a material adverse outcome in one or more of these proceedings could have a material adverse impact on the operating results of a particular quarter or fiscal year. Environmental Liabilities.The Companys 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 Federal Water Pollution Control 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 below. The Companys 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 and impose economic sanctions against comp |
| Geographic Information | |
| 6 Months Ended
Jun. 30, 2009 USD / shares | |
| Geographic Information [Abstract] | |
| Geographic Information | 10. Geographic Information. The Company strategically manages its rail operations as one reportable business segment over a coordinated rail network that extends from the midwest and southeast portions of the United States south into Mexico and connects with other ClassI railroads. Financial information reported at this level, such as revenues, operating income and cash flows from operations, is used by corporate management, including the Companys chief operating decision-maker, in evaluating overall financial and operational performance, market strategies, as well as the decisions to allocate capital resources. The following tables (in millions) provide information by geographic area pursuant to Statement of Financial Accounting Standards No.131, Disclosures about Segments of an Enterprise and Related Information (SFAS131): Three Months Six Months Ended June30, Ended June30, Revenues 2009 2008 2009 2008 U.S. $ 198.4 $ 265.2 $ 407.1 $ 509.8 Mexico 142.9 221.0 280.2 427.0 Total revenues $ 341.3 $ 486.2 $ 687.3 $ 936.8 June30, December31, Long-lived Assets 2009 2008 U.S. $ 2,458.4 $ 2,342.1 Mexico 2,239.3 2,256.3 Total long-lived assets $ 4,697.7 $ 4,598.4 |
| Condensed Consolidating Financial Information | |
| 6 Months Ended
Jun. 30, 2009 USD / shares | |
| Condensed Consolidating Financial Information [Abstract] | |
| Condensed Consolidating Financial Information | 11. Condensed Consolidating Financial Information. KCSR has outstanding $275.0million of 8.0%Senior Notes due 2015 and $190.0million of 13.0%Senior Notes due 2013, which are unsecured obligations of KCSR and are also jointly and severally and fully and unconditionally guaranteed on an unsecured senior basis by KCS and certain wholly-owned domestic subsidiaries. As a result, the following accompanying condensed consolidating financial information (inmillions) has been prepared and presented pursuant to SEC RegulationS-X Rule3-10 Financial statements of guarantors and issuers of guaranteed securities registered or being registered. This condensed information is not intended to present the financial position, results of operations and cash flows of the individual companies or groups of companies in accordance with U.S.GAAP. The 8.0%Senior Notes were registered by means of an amendment to KCS shelf registration statement filed and declared effective by the SEC on May23, 2008. The 13.0%Senior Notes were registered under KCS shelf registration statement filed and declared effective by the SEC on November21, 2008. CONDENSED CONSOLIDATING STATEMENTS OF OPERATIONS Three Months Ended June30, 2009 Guarantor Non-Guarantor Consolidating Consolidated Parent KCSR Subsidiaries Subsidiaries Adjustments KCS Revenues $ $ 174.7 $ 3.3 $ 171.2 $ (7.9 ) $ 341.3 Operating expenses 1.2 138.4 5.6 161.3 (8.6 ) 297.9 Operating income (loss) (1.2 ) 36.3 (2.3 ) 9.9 0.7 43.4 Equity in net earnings (losses) of unconsolidated affiliates (0.2 ) (15.4 ) 17.6 2.0 Interest income (expense) 0.6 (15.0 ) (32.0 ) 1.0 (45.4 ) Debt retirement costs Foreign exchange gain 6.0 6.0 Other income 0.2 3.7 0.7 (1.7 ) 2.9 Income (loss) before income taxes and noncontrolling interest (0.6 ) 25.0 (2.3 ) (30.8 ) 17.6 8.9 Income tax expense (benefit) (7.3 ) 10.3 (0.8 ) (0.6 ) 1.6 Net income (loss) 6.7 14.7 (1.5 ) (30.2 ) 17.6 7.3 Noncontrolling interest 0.5 0.5 Net income (loss) attributable to Kansas City Sout |
