(Source: Kansas City Southern press release, January 5, 2016)
KANSAS CITY, Mo. — According to Merriam-Webster, resilience is defined as an ability to recover from or adjust easily to misfortune or change. In 2015, KCS demonstrated resilience in every aspect of its operations, finances and marketing.
To weather 2015’s unexpected economic conditions, KCS engaged in strategic initiatives to manage costs, undertake planned maintenance, improve our infrastructure and expand our capacity. KCS’ resilience ensured that, regardless of economic conditions, the company is on a strong financial and operational footing and is well-positioned for future growth. By maintaining this approach to managing our business, we believe we are creating value for each of our stakeholder groups – from shareholders, to customers, to you, our valued employees.
As we look ahead to 2016, we see many of the same challenges that we faced throughout 2015. We expect continued volatility in oil and natural gas pricing, which means our energy business, just like our peers’ businesses, will again be difficult to predict. The strong U.S. dollar will make American exports more expensive and less attractive to other global producers, which may impact many of the products we move, such as steel and paper. Beyond these key indicators, there are various other factors that signal softness in the global industrial economy, but we must focus on making the best of market dynamics at hand.
For these reasons, among others, we are cautious about our outlook for 2016. Despite these challenges, we will proceed with many of the planned strategic capital expenditures that will drive our longer term growth in areas such as plastics, automotive and intermodal. However, we will need to be extremely thoughtful about the cost side of our business and must ensure we are using our financial and human resources assets wisely. As such, we will remain flexible and respond quickly to evolving circumstances in order to protect our profitability in the short term.
That said, we operate in an industry that must consider both the long and short term timeframes and we can say with confidence that our long term future is bright. Just as in the past, we will get through this period of economic uncertainty and will make the appropriate strategic capital investments that will facilitate industry-leading growth when macro-economic dynamics shift in our favor. For the foreseeable future, however, we will need to continue to be nimble and resilient. KCS demonstrated its resiliency in 2015 and we should all be proud of our meaningful accomplishments. We will operate with this hallmark mentality through 2016 and we should be excited by the future prospects for our great company.
This state of the railroad report provides an overview of KCS’ primary accomplishments in 2015 and the progress planned for 2016.
Please click the link above to read the entire report.