SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of Report (Date of earliest event reported):
October 25, 2000
KANSAS CITY SOUTHERN INDUSTRIES, INC.
(Exact name of company as specified in its charter)
DELAWARE 1-4717 44-0663509
(State or other jurisdiction (Commission file (IRS Employer
of incorporation) number) Identification Number)
114 West 11th Street, Kansas City, Missouri 64105
(Address of principal executive offices) (Zip Code)
Company's telephone number, including area code:
(816) 983 - 1303
Not Applicable
(Former name or former address if changed since last report)
<PAGE>
Item 9. Regulation FD Disclosure
Following the close of the New York Stock Exchange on October 25, 2000, Kansas
City Southern Industries, Inc. ("KCSI" or "Company") issued a press release
announcing its third quarter and year to date 2000 operating results. On October
26, 2000, the Company held its third quarter presentation, which was available
to shareholders and other interested parties via telephone or the KCSI web site
at http://www.kcsi.com. Interested parties may hear a replay of our third
quarter presentation by calling 1-888-203-1112, code 485612. The replay will be
available for one week following the presentation. The slides presented at the
presentation are available at http://www.kcsi.com by selecting the analyst
presentation option under the "For Investor - KSU Stock" section of our web
site. The press release, included as Exhibit 99.1 hereto, and certain other
information distributed at the presentation, included as exhibit 99.2 hereto,
are being furnished under Item 9 of this Current Report on Form 8-K pursuant to
Regulation FD. The information in this report (including the exhibits) is
furnished pursuant to Item 9 and shall not be deemed to be filed.
Item 7. Financial Statements and Exhibits
(c) Exhibits
Exhibit No. Document
(99) Additional Exhibits
99.1 Press Release issued by
Kansas City Southern
Industries, Inc. dated
October 25, 2000 entitled,
"Kansas City Southern
Industries Reports Improved
Third Quarter and Year to
Date Income from Continuing
Operations", is attached
hereto as Exhibit 99.1
99.2 The following schedules are
attached hereto as Exhibit
99.2 - Combined Kansas City
Southern Railway and
Gateway Western Operating
Statements, Combined Kansas
City Southern
Railway/Gateway Western
Carloadings by Commodity
and Kansas City Southern
Industries, Inc.
Preliminary Consolidated
Balance Sheets
<PAGE>
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the Company
has duly caused this Report to be signed on its behalf by the undersigned
hereunto duly authorized.
Kansas City Southern Industries, Inc.
Date: October 31, 2000 By: /s/ Louis G. Van Horn
Louis G. Van Horn
Vice President and Controller
(Principal Accounting Officer)
<PAGE>
EXHIBIT 99.1
Release No:2000-08 Date: October 25, 2000
Kansas City Southern Media Contact: William Galligan
Industries, Inc. 816-983-1551
114 West 11th Street
Kansas City, MO 64105
NYSE Symbol: KSU
Kansas City Southern Industries Reports Improved Third
Quarter and Year to Date Income From Continuing Operations
Spin-off of Stilwell Financial Inc.
On July 12, 2000, Kansas City Southern Industries, Inc. ("KCSI" or "Company")
completed its spin-off of Stilwell Financial Inc. ("Stilwell") through a special
dividend of Stilwell common stock distributed to KCSI common stockholders of
record on June 28, 2000 ("Spin-off"). The Spin-off occurred after the close of
business of the New York Stock Exchange on July 12, 2000, and each KCSI
stockholder received two shares of the common stock of Stilwell for every one
share of KCSI common stock owned on the record date. The Internal Revenue
Service has ruled that the Spin-off will not be taxable for Federal income tax
purposes to KCSI or KCSI stockholders. Also on July 12, 2000, KCSI completed a
reverse stock split whereby every two shares of KCSI common stock was converted
into one share of KCSI common stock. KCSI common stockholders had previously
approved this reverse stock split. The results of operations discussed herein
provide information only related to the continuing operations of KCSI, exclusive
of the discontinued operations of Stilwell.
Earnings Analysis and Commentary
KCSI reported third quarter 2000 income from continuing operations of $5.2
million (9 cents per diluted share) compared to $4.6 million (8 cents per
diluted share) in the third quarter of 1999. This $0.6 million (13%) improvement
resulted primarily from an increase in U.S. operating income of $4.1 million
(28%) and a decrease in the income tax provision of $1.2 million partially
offset by a $1.2 million decrease in equity earnings related to Grupo
Transportacion Ferroviaria Mexicana, S.A. de C.V. ("Grupo TFM") and an increase
in interest expense of $3.6 million. KCSI's consolidated third quarter 2000
revenue decline of $5.0 million was more than offset by a $9.1 million reduction
in operating expenses, resulting in improved operating income.
For the nine months ended September 30, 2000, income from continuing operations
increased $7.0 million (40%) to $24.4 million, or 42 cents per diluted share,
from $17.4 million, or 30 cents per diluted share, for the nine months ended
September 30, 1999. A $14.0 million increase in equity earnings from Grupo TFM
and a $6.1 million decrease in the income tax provision for the nine months
ended September 30, 2000 were partially offset by a decline in U.S. operating
income of $3.6 million and an increase in interest expense of $10.9 million.
Consolidated revenues declined 2.7% while consolidated operating expenses
declined 2.2% for the nine months ended September 30, 2000 compared with the
same 1999 nine-month period.
During the third quarter of 2000, the Company refinanced $200 million of bank
debt due January 11, 2001 with a $200 million offering of 8-year senior
unsecured notes. In connection with this refinancing, KCSI recorded
extraordinary debt retirement costs of approximately $1.1 million (net of income
taxes). Additionally, during the third quarter of 2000, Grupo TFM refinanced
$300 million of bank debt with a U.S. Commercial Paper program. KCSI recorded
its proportionate share of extraordinary debt retirement costs of $1.7 million
(net of income taxes) related to this refinancing by Grupo TFM. Total third
quarter 2000 extraordinary charges of $2.8 million, or 5 cents per diluted
share, reduced income from continuing operations from $5.2 million to $2.4
million, or 4 cents per diluted share.
In anticipation of the Spin-off, the Company re-capitalized its debt structure
during January 2000 whereby KCSI retired approximately $398 million in long-term
indebtedness prior to their scheduled maturities. Accordingly, KCSI recorded
extraordinary debt retirement costs of approximately $5.9 million (net of income
taxes), or 10 cents per diluted share, in first quarter 2000. Total
extraordinary items for the nine months ended September 30, 2000 totaled $8.7
million (net of income taxes) or 15 cents per diluted share. Income from
continuing operations adjusted for these extraordinary items was $15.7 million,
or 27 cents per diluted share for the nine months ended September 30, 2000.
<PAGE>
Diluted Earnings per Share and Common Shares Comparison
<TABLE>
Third Quarter Year to Date
<S> <C> <C> <C> <C>
2000 1999 2000 1999
Income from continuing operations:
U.S. operations $ 0.13 $ 0.07 $ 0.36 $ 0.37
Grupo TFM and associated interest (0.04) 0.01 0.06 (0.07)
-------- ------- -------- -------
Income from continuing operations 0.09 0.08 0.42 0.30
Extraordinary debt retirement costs (0.05) - (0.15) -
-------- ------- -------- -------
Total diluted earnings per
share from continuing operations,
adjusted for the extraordinary items $ 0.04 $ 0.08 $ 0.27 $0.30
-------- ------- -------- -------
Weighted Average Diluted
Common Shares Outstanding 59,100 57,047 58,185 56,989
(thousands) (1)
</TABLE>
(1) KCSI stockholders previously approved a reverse split of KCSI Common stock
that became effective upon completion of the Spin-off. As discussed above, the
Spin-off occurred on July 12, 2000 and, accordingly, at the close of the New
York Stock Exchange on July 12, 2000, each two shares of KCSI Common stock was
converted to one share of KCSI Common stock. All periods presented have been
restated to reflect this reverse split.
Third Quarter
Following the Spin-off of Stilwell from the Company on July 12, 2000, KCSI is
comprised of, among others, The Kansas City Southern Railway Company ("KCSR"),
Gateway Western Railway Company ("Gateway Western") and equity investments in
Grupo TFM and Mexrail, Inc. KCSI reported income from continuing operations of
$5.2 million for the three months ended September 30, 2000 compared to $4.6
million in the same 1999 period.
KCSI's consolidated third quarter 2000 revenues totaled $144.1 million versus
$149.1 million in third quarter 1999. This $5.0 million decrease resulted
primarily from lower combined KCSR/Gateway Western revenues of approximately
$4.4 million. Growth in paper and forest product and automotive revenues, as
well as improved revenues per carload in most lines of business were offset by
declines in unit coal and chemical and petroleum revenues. Lower unit coal
revenues resulted from a reduction in tons delivered and changes in the length
of haul. Miscellaneous chemical revenues were lower due to demand driven traffic
declines while soda ash revenues declined because of a new export terminal on
the origin railroad, which led to substantial volume reductions. Automotive
revenues improved during the third quarter of 2000 as a result of traffic growth
arising from continued marketing efforts and the initiation of automotive
transload services at the Kansas City International Freight Gateway at the
former Richards-Gebaur Airbase.
KCSI's consolidated operating costs and expenses decreased $9.1 million (6.8%)
in the third quarter of 2000 compared to the third quarter of 1999. In spite of
diesel fuel costs, which rose approximately 42% in the third quarter of 2000
compared to the same period in 1999, third quarter 2000 operating costs declined
primarily due to operational efficiencies at KCSR and Gateway Western. These
operational improvements led to a quarter over quarter decrease in salaries and
wages, car hire, purchased services, and casualties and insurance expenses. In
addition to higher fuel costs, these declines were partially offset by higher
lease expense associated with 50 new locomotives leased in fourth quarter 1999.
The combined KCSR/Gateway Western operating ratio for third quarter 2000 was
87.0% compared to 87.8% in the same 1999 period.
Excluding the impact of the extraordinary item discussed above, equity earnings
related to the Company's investment in Grupo TFM declined $1.2 million quarter
to quarter. Grupo TFM revenues improved 25% to $165.2 million for the third
quarter of 2000 from $132.1 million for the third quarter of 1999. These higher
revenues were partially offset by an approximate 21% increase in operating
expenses arising primarily from higher fuel costs (87%) and higher car hire
costs (123%) due to increased traffic volumes and congestion related issues at
the U.S. - Mexican border. Despite the impact of these higher operating costs,
operating income rose approximately 39% quarter to quarter resulting in an
operating ratio of 76.9% in the third quarter of 2000 versus 79.1% in the third
quarter of 1999. However, Grupo TFM's third quarter 2000 results were impacted
by an increase in other expenses related primarily to losses on the sale of
certain property and inventory. Additionally, third quarter 1999 results
included a $10.7 million deferred tax benefit (calculated under U.S. generally
accepted accounting principles - "U.S. GAAP") caused by a weakening peso. For
the third quarter of 2000, the deferred tax benefit under U.S. GAAP was $0.1
million (excluding the impact of the extraordinary item). The Company reports
its equity in Grupo TFM under U.S. GAAP while Grupo TFM reports under
International Accounting Standards.
KCSI interest expense in the third quarter of 2000 increased 24% from the prior
year quarter due to higher interest rates and amortization of debt issuance
costs associated with the January 2000 debt re-capitalization.
Year to Date
The Company's income from continuing operations for the nine
months ended September 30, 2000 totaled $24.4 million versus $17.4 million in
the same 1999 period (a 40% improvement). KCSI's consolidated revenues
declined approximately 2.7%, while operating expenses declined 2.2% period to
period.
Year to date combined KCSR/Gateway Western revenues decreased $7.2 million
primarily as a result of declines in coal, export grain and chemical/petroleum
revenues. Similar to third quarter, these declines were partially offset by
increases in paper/forest and intermodal/automotive revenues. Combined
KCSR/Gateway Western operating costs decreased approximately $1.6 million period
to period primarily as a result of improvements in salaries/wages, car hire and
materials/supplies expenses partially offset by higher fuel costs and lease
expense (as discussed above). The combined KCSR/Gateway Western operating ratio
was 86.0% for the nine months ended September 30, 2000 compared to 84.9% for the
nine months ended September 30, 1999.
Excluding the impact of the Grupo TFM extraordinary item discussed above, equity
earnings from Grupo TFM improved $14.0 million for the nine months ended
September 30, 2000 compared to the nine months ended September 30, 1999. Grupo
TFM's revenues increased 24% period to period, while operating income increased
nearly 45% resulting in an operating ratio of 72.4% for the nine months ended
September 30, 2000 compared to 76.4% for the same prior period. Under U.S. GAAP,
the deferred tax benefit for Grupo TFM was $18.9 million (excluding the impact
of the extraordinary item) for the nine months ended September 30, 2000 compared
to a deferred tax benefit of $5.0 million for the same period in 1999.
Business Outlook
Michael R. Haverty, KCSI President and Chief Executive Officer, said, "We are
pleased with the ongoing results of our investment in Grupo TFM as well as with
KCSR's success in maintaining an effective operating cost structure. We
continue, however, to feel the impact of competitive revenue pressures and high
interest costs.
Grupo TFM's incredible growth story continues as year to date revenues and
operating profit have increased nearly 24% and 45%, respectively. Our equity
earnings from Grupo TFM for the nine months ended September 30, 2000 have
increased $14 million, or almost 300%, compared with the same 1999 period and
have been the primary contributor to our income from continuing operations
during 2000. KCSI management believes that Grupo TFM has merely scratched the
surface of its potential as a leader in NAFTA traffic in the North American
marketplace.
Over the course of 2000, we have significantly improved the efficiency and cost
structure of our U.S. railroad operations. Although there is not much we can do
to impact the price of diesel fuel, we believe we have done an outstanding job
of improving our fuel efficiency through the lease of 50 new fuel-efficient
locomotives in late 1999 as well as an aggressive fuel conservation program
initiated in mid-1999. Additionally, we continue to see decreases in the number
of foreign owned cars on-line resulting in lower car hire payments to other
railroads and have reduced our salaries and wages through the reduction of the
amount of overtime hours worked and the number of relief crews used as well as a
reduction in total employee count.
Domestically, however, we continue to be affected by highly competitive revenue
pressures and higher interest costs. To combat these issues, our primary focus
is to increase revenues and reduce debt. Through our strategic alliances,
marketing agreements, the new International Freight Gateway at the former
Richards-Gebaur Airbase, and access to six additional chemical customers in the
Geismar, Louisiana industrial area, we have the opportunity to improve our
revenue base. We have also developed a plan to reduce debt through the sale of
non-core assets, reduced capital spending and improved cash flow from
operations.
KCSI management is committed to maximizing the potential of the NAFTA franchise
and is continuously seeking opportunities to enhance shareholder value."
This press release includes statements concerning potential future events
involving the Company, which could materially differ from the events that
actually occur. The differences could be caused by a number of factors including
those factors identified in KCSI's December 31, 1999 Form 10-K, the Current
Report on Form 8-K/A dated June 3, 1997, each filed by the Company with the
Securities and Exchange Commission (Commission file no. 1-4717). The Company
will not update any forward-looking statements in this press release to reflect
future events or developments.
(Financial Information Attached)
<PAGE>
KANSAS CITY SOUTHERN INDUSTRIES, INC. and SUBSIDIARY
COMPANIES
(excludes Stilwell Financial Inc.)
CONSOLIDATED CONDENSED STATEMENTS OF INCOME
(dollars in millions, except per share data)
(Unaudited)
<TABLE>
<S> <C>
Three Months Ended Nine Months Ended
September 30, September 30,
----------------- ----------------
</TABLE>
<TABLE>
<S> <C> <C> <C> <C>
2000 1999 2000 1999
------- ------- ------- -------
Revenues $ 144.1 $149.1 $437.4 $449.7
Costs and expenses 111.6 120.2 339.9 348.0
Depreciation and amortization 13.8 14.3 42.4 43.0
------- ------- ------- -------
Operating income 18.7 14.6 55.1 58.7
Equity in net earnings of unconsolidated affiliates:
Grupo Transportacion Ferroviaria
Mexicana, S.A. de C.V. 2.6 3.8 18.8 4.8
Other 1.5 1.3 3.3 3.5
Interest expense (18.3) (14.7) (54.2) (43.3)
Other, net 1.2 1.3 4.8 3.2
------- ------- ------- -------
Pretax income 5.7 6.3 27.8 26.9
Income tax provision 0.5 1.7 3.4 9.5
------- ------- ------- -------
Income from continuing operations 5.2 4.6 24.4 17.4
Extraordinary items, net of tax:
Debt retirement costs - KCSR/KCSI (1.1) - (7.0) -
Debt retirement costs - TFM (1.7) - (1.7) -
------- ------- ------- -------
Income from continuing operations,
net of extraordinary items $2.4 $4.6 $15.7 $17.4
------- ------- ------- -------
Per Share Data:
--------------------------------------------------------------------------
Basic Earnings per Common Share
from continuing operations $0.09 $0.08 $0.43 $0.31
Basic Earnings per Common Share -
extraordinary items (0.05) - (0.15) -
------- ------- ------- -------
Basic Earnings per Common Share,
net of the extraordinary items $0.04 $0.08 $0.28 $0.31
------- ------- ------- -------
Weighted Average Common shares
outstanding (in thousands) 57,478 55,242 56,353 55,102
------- ------- ------- -------
--------------------------------------------------------------------------
Diluted Earnings per Common Share
from continuing operations $0.09 $0.08 $0.42 $0.30
Diluted Earnings per Common Share -
extraordinary items (0.05) - (0.15) -
------- ------- ------- -------
Diluted Earnings per Common Share,
net of extraordinary items $0.04 $0.08 $0.27 $0.30
------- ------- ------- -------
Diluted Common shares outstanding
(in thousands) 59,100 57,047 58,185 56,989
------- ------- ------- -------
--------------------------------------------------------------------------
</TABLE>
<PAGE>
EXHIBIT 99.2
Combined KCSR and Gateway Western
Operating Statements
Dollars in Millions
<TABLE>
<S> <C> <C> <C> <C>
Third Third Nine Months Nine Months
Quarter Quarter
2000 1999 2000 1999
------------- ------------- ------------- -------------
Revenues
Freight Revenue $87.4 $88.3 $265.3 $268.4
Intermodal and
Automotive Revenue 15.9 15.7 47.0 43.0
Unit Coal Revenue 26.7 30.0 81.4 85.7
Other Revenue 12.5 12.9 37.1 41.0
------------- ------------- ------------- -------------
Total Revenues 142.5 146.9 430.8 438.1
------------- ------------- ------------- -------------
Operating Expenses
Salaries & Wages 35.0 36.8 103.6 107.6
Fringe Benefits 13.8 13.7 41.3 39.9
Fuel 12.2 8.6 35.3 24.4
Material and Supplies 7.5 8.7 23.6 26.5
Car Hire 4.1 5.8 11.1 16.4
Purchased Services 11.1 12.7 35.9 35.8
Casualties & Insurance 7.6 8.9 20.3 21.3
Other 2.1 4.1 7.0 11.9
------------- ------------- ------------- -------------
Net Operating Expenses 93.4 99.3 278.1 283.8
------------- ------------- ------------- -------------
Fixed Expenses
Leases, Net 13.9 12.9 42.5 38.3
Depreciation 13.0 13.1 39.4 39.5
Taxes (Other Than Income) 3.7 3.8 11.2 11.2
------------- ------------- ------------- -------------
Total Fixed Expenses 30.6 29.8 93.1 89.0
------------- ------------- ------------- -------------
Total Expenses 124.0 129.1 371.2 372.8
------------- ------------- ------------- -------------
Operating Income 18.5 17.8 59.6 65.3
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Combined Kansas City Southern Railway/Gateway Western
Carloadings By Commodity - Year to Date September 30, 2000
Dollars in Thousands
Carloadings Revenue
Year to Date % Year to Date %
---------------------- --------------------
<S> <C> <C> <C> <C> <C> <C>
2000 1999 Change 2000 1999 Change
----------- --------- -------- --------- --------- -------
Coal
141,498 148,041 (4.4)% Unit Coal 81,406 85,660 (5.0)%
2,302 2,822 (18.4)% Other Coal 865 853 1.4%
----------- --------- --------- ---------
143,800 150,863 (4.7)% 82,271 86,513 (4.9)%
</TABLE>
<TABLE>
<CAPTION>
Chemical & Petroleum Products
<S> <C> <C> <C> <C> <C> <C>
19,810 19,739 0.4% Plastics 18,180 18,333 (0.8)%
51,950 54,540 (4.7)% Misc. Chemicals 50,024 50,572 (1.1)%
1,377 4,068 (66.2)% Soda Ash 1,535 4,771 (67.8)%
25,684 26,963 (4.7)% Petro Products 18,863 19,083 (1.2)%
18,696 20,957 (10.8)% Petro Coke 7,734 7,990 (3.2)%
----------- --------- --------- ---------
117,517 126,267 (6.9)% Total 96,336 100,749 (4.4)%
----------- --------- --------- ---------
</TABLE>
<TABLE>
<CAPTION>
Agriculture and
Minerals
<S> <C> <C> <C> <C> <C> <C>
38,208 37,579 1.7% Domestic Grain 28,067 27,215 3.1%
8,386 11,229 (25.3)% Export Grain 5,931 9,050 (34.5)%
22,264 24,667 (9.7)% Food Products 17,786 17,580 1.2%
20,018 19,258 3.9% Ores and Minerals 10,107 9,999 1.1%
12,925 13,635 (5.2)% Stone, Clay & Glass 9,529 9,589 (0.6)%
19,519 17,904 9.0% Metal/Scrap 14,913 11,923 25.1%
5,960 9,356 (36.3)% Military/Other Carloads 6,196 8,116 (23.7)%
----------- --------- --------- ---------
127,280 133,628 (4.8)% Total 92,529 93,472 (1.0)%
----------- --------- --------- ---------
</TABLE>
<TABLE>
<CAPTION>
Paper & Forest Products
<S> <C> <C> <C> <C> <C> <C>
68,974 69,459 (0.7)% Pulp/Paper 48,104 46,358 3.8%
5,243 5,660 (7.4)% Scrap Paper 2,857 2,859 (0.1)%
26,038 29,950 (13.1)% Pulpwood/Logchips 10,336 11,360 (9.0)%
21,688 21,004 3.3% Lumber/Plywood 19,137 17,856 7.2%
----------- --------- --------- ---------
121,943 126,073 (3.3)% Total 80,434 78,433 2.6%
----------- --------- --------- ---------
</TABLE>
<TABLE>
<CAPTION>
Intermodal & Automotive
<S> <C> <C> <C> <C> <C> <C>
14,987 6,141 144.0% Automotive 9,392 4,632 102.8%
179,678 165,749 8.4% Intermodal 37,617 38,384 (2.0)%
----------- --------- --------- ---------
194,665 171,890 13.2% Total 47,009 43,016 9.3%
----------- --------- --------- ---------
705,205 708,721 (0.5)% TOTAL FOR BUSINESS UNITS 398,579 402,183 (0.9)%
26,288 33,157 20.7)% Haulage 8,290 12,933 (35.9)%
(5,840) (5,781) 1.0% Adjustments (4,902) (5,137) (4.6)%
----------- --------- --------- ---------
725,653 736,097 (1.4)% TOTAL 401,967 409,979 (2.0)%
=========== ========= ========= =========
</TABLE>
<PAGE>
Combined Kansas City Southern Railway/Gateway Western
Carloadings By Commodity - Third Quarter 2000
Dollars in Thousands
Carloadings Revenue
Third Quarter % Third Quarter %
---------------------- --------------------
<TABLE>
<S> <C> <C> <C> <C> <C> <C>
2000 1999 Change 2000 1999 Change
----------- --------- -------- --------- --------- -------
Coal
48,522 51,656 (6.1)% Unit Coal 26,689 29,994 (11.0)%
734 750 (2.1)% Other Coal 335 231 45.0%
----------- --------- --------- ---------
49,256 52,406 (6.0)% 27,024 30,225 (10.6)%
</TABLE>
<TABLE>
<CAPTION>
Chemical & Petroleum Products
<S> <C> <C> <C> <C> <C> <C>
6,822 6,355 7.3% Plastics 6,413 5,759 11.4%
16,924 18,606 (9.0)% Misc. Chemicals 16,155 17,043 (5.2)%
444 1,321 (66.4)% Soda Ash 473 1,610 (70.6)%
8,454 8,858 (4.6)% Petro Products 6,282 6,232 0.8%
6,697 6,529 2.6% Petro Coke 2,497 2,737 (8.8)%
----------- --------- --------- ---------
39,341 41,669 (5.6)% Total 31,820 33,381 (4.7)%
----------- --------- --------- ---------
</TABLE>
<TABLE>
<CAPTION>
Agriculture and
Minerals
<S> <C> <C> <C> <C> <C> <C>
11,417 10,584 7.9% Domestic Grain 8,179 6,745 21.3%
3,419 4,276 (20.0)% Export Grain 2,638 3,481 (24.2)%
7,719 7,697 0.3% Food Products 6,060 5,447 11.3%
6,841 6,617 3.4% Ores and Minerals 3,344 3,380 (1.1)%
4,069 4,608 (11.7)% Stone, Clay & Glass 2,960 3,222 (8.1)%
5,612 6,955 (19.3)% Metal/Scrap 4,292 4,694 (8.6)%
2,050 3,351 (38.8)% Military/Other carloads 2,554 3,151 (18.9)%
----------- --------- --------- ---------
41,127 44,088 (6.7)% Total 30,027 30,120 (0.3)%
----------- --------- --------- ---------
</TABLE>
<TABLE>
<CAPTION> Paper & Forest Products
<S> <C> <C> <C> <C> <C> <C>
22,855 23,198 (1.5)% Pulp/Paper 16,581 15,558 6.6%
1,839 1,901 (3.3)% Scrap Paper 1,028 973 5.7%
7,984 10,437 (23.5)% Pulpwood/Logs/Chips 3,102 3,955 (21.6)%
6,996 6,986 0.1% Lumber/Plywood 6,158 6,000 2.6%
----------- --------- --------- ---------
39,674 42,522 (6.7)% Total 26,869 26,486 1.4%
----------- --------- --------- ---------
</TABLE>
<TABLE>
<CAPTION>
Intermodal & Automotive
<S> <C> <C> <C> <C> <C> <C>
4,969 2,726 82.3% Automotive 3,297 1,979 66.6%
68,414 61,598 11.1% Intermodal 12,612 13,685 (7.8)%
----------- --------- --------- ---------
73,383 64,324 14.1% Total 15,909 15,664 1.6%
----------- --------- --------- ---------
242,781 245,009 (0.9)% TOTAL FOR BUSINESS UNITS 131,649 135,876 (3.1)%
7,966 8,660 (8.0)% Haulage 2,577 3,966 (35.0)%
(2,240) (2,114) 6.0% Adjustments (1,714) (1,909) (10.2)%
----------- --------- --------- ---------
248,507 251,555 (1.2)% TOTAL 132,512 137,933 (3.9)%
=========== ========= ========= =========
</TABLE>
<PAGE>
Kansas City Southern Industries, Inc.
-------------------
Consolidated Balance Sheets PRELIMINARY
-------------------
Unaudited
(Dollars in Millions)
<TABLE>
<CAPTION>
September 30, 2000 December 31, 1999
<S> <C> <C>
Assets
Cash $ 30.2 $ 11.9
Accounts receivable 119.8 132.2
Inventories 34.2 40.6
Other current assets 20.8 23.8
------------------- -------------------
Total current assets 205.0 208.5
Investments held for operating purposes 361.1 337.1
Properties, net of depreciation 1,311.3 1,277.4
Other assets 42.6 34.4
------------------- -------------------
Total assets $ 1,920.0 $ 1,857.4
=================== ===================
Liabilities and Stockholders' Equity
Current portion of long-term debt $ 13.7 $ 10.9
Accounts payable 36.3 74.8
Accrued liabilit 151.1 168.5
------------------- -------------------
Total current liabilities 201.1 254.2
Long-term debt 671.7 750.0
Deferred income taxes 321.8 297.4
Other 83.3 87.3
Stockholders' equity 642.1 468.5
------------------- -------------------
Total liabilities and $ 1,920.0 $ 1,857.4
stockholders' equity =================== ===================
</TABLE>
