(Source: Kansas City Southern press release, January 22, 2016)
KANSAS CITY, Mo. — Kansas City Southern (KCS) reported fourth quarter 2015 revenues of $598 million. Overall, carload volumes were 2% lower than in fourth quarter 2014. Excluding the estimated impacts of Mexican peso depreciation and lower U.S. fuel prices, revenue was flat compared to the fourth quarter of 2014.
Fourth quarter highlights:
• Revenue of $598 million, a decrease of 7% from fourth quarter 2014.
• Operating income of $219 million, 2% higher than a year ago.
• Operating ratio of 63.4%, compared with 66.7% in fourth quarter 2014.
• Diluted earnings per share of $1.28. Adjusted diluted earnings per share of $1.23 for fourth quarter 2015, a 3% decrease compared to fourth quarter 2014.
Operating expenses in the fourth quarter were $379 million, 12% lower than 2014. Excluding the estimated impacts of Mexican peso depreciation and lower U.S. fuel prices, operating expenses decreased 3% compared to the fourth quarter of 2014.
Operating income for the fourth quarter of 2015 was $219 million compared with $214 million a year ago, a 2% increase. KCS reported a fourth quarter 2015 operating ratio of 63.4%, a 3.3 point improvement from fourth quarter 2014. Reported net income in the fourth quarter of 2015 totaled $140 million, or $1.28 per diluted share, compared with $142 million, or $1.28 per diluted share, in the fourth quarter of 2014. Excluding debt retirement and exchange costs, and the impacts of foreign exchange rate fluctuations, adjusted diluted earnings per share for fourth quarter 2015 was $1.23 compared to $1.27 in 2014.
For the full year of 2015, revenue was $2.4 billion, down 6% from 2014. Carloads for 2015 were 2.2 million, a decrease of 3% from the prior year. After adjusting for lease termination costs, full-year operating income was $813 million. Full-year 2015 adjusted operating income decreased 4% from the prior year’s adjusted operating income. The Company’s 2015 adjusted operating ratio was 66.4% compared with the adjusted operating ratio of 67.1% in 2014, a 0.7 point improvement.
Reported net income in 2015 totaled $485 million, or $4.40 per diluted share, compared with $504 million, or $4.55 per diluted share, in 2014. Excluding lease termination, debt retirement and exchange costs, and the impacts of foreign exchange rate fluctuations, adjusted diluted earnings per share for 2015 was $4.49 compared to $4.82 in 2014.
“KCS’ ability to react to a rapidly changing market and operational conditions was clearly evidenced during the fourth quarter in which not only did the Company have to contend with an unsettled economy but also with a hurricane in Mexico and floods in a key section of its U.S. rail network,” stated Chief Executive Officer David L. Starling. “Despite these challenges, KCS attained a fourth quarter 2015 operating ratio of 63.4%, a 3.3 point improvement from the prior year. System velocity and system dwell metrics also improved, returning KCS to the top tier of Class I railroads in these categories.
“Though our industry still must contend with economic uncertainty in 2016, the progress we have made during 2015 gives us confidence that KCS is positioned to maximize its near-term and longer-term business opportunities.”