(The Kansas City Star posted the following article by Randolph Heaster on its website on May 14.)
KANSAS CITY — Kansas City Southern replaced its chief financial officer Friday as part of a shake-up of its finance department.
Ronald G. Russ, Kansas City Southern’s chief financial officer since 2002, was replaced by Patrick J. Ottensmeyer.
Ottensmeyer, who also will hold the title of executive vice president, most recently served as CFO of Intranasal Therapeutics, a specialty pharmaceutical company in Lexington, Ky.
Also departing Kansas City Southern effective immediately was vice president and treasurer James S. Brook.
Kansas City Southern declined to elaborate on the departures of Russ and Brook.
Russ was part of the senior executive team that spoke to investment analysts earlier this month about the company’s first-quarter results. He also attended the company’s annual shareholder meeting last week.
During the analyst conference call, Kansas City Southern’s chairman and chief executive, Michael R. Haverty, discussed the imminent hiring of a new sales and marketing executive. On Thursday, Kansas City Southern announced that Daniel W. Avramovich will join the company Monday as executive vice president of sales and marketing.
However, Haverty made no mention during the call of any imminent changes in the finance department.
Earlier this year, Kansas City Southern sought an extension with the Securities and Exchange Commission to file its 2005 financial report, citing delays in integrating its Mexican subsidiary’s financial statements into the overall report. The company then missed filing by the March 31 extension, prompting credit rating agencies to review the company’s debt.
On April 5, Moody’s Investors Service said it was reviewing about $1.9 billion of Kansas City Southern’s debt. The agency said the review would focus on “whether the inability to produce financial statements on a timely basis indicates a broader material weakness in financial reporting and/or in control procedures.”
Kansas City Southern filed its 2005 financial report on April 7.
The announcement was made after the close of markets. Shares of the rail company closed Friday at $26.52, down 38 cents.
Previously the top financial officer at Wisconsin Central Transportation Corp., Russ joined Kansas City Southern in July 2002 as CFO and senior vice president. In January 2003, he was named executive vice president and CFO.
Brook joined Kansas City Southern in August 2004. Earlier, he spent five years as Aquila Inc.’s vice president of international regulation.
Kansas City Southern said Ottensmeyer brings more than 25 years of financial experience to the company. Before Intranasal Therapeutics, he was vice president of finance and treasurer for BNSF Railway. He also was a vice president for Bank of America.
“Pat understands the rail industry and brings a broad set of financial and leadership skills to our company,” Haverty said in a statement.
Other changes within the finance department announced Friday:
— Susan B. Wollenberg has been promoted to vice president of financial planning and administration. Wollenberg joined the company in early April and will also serve as interim chief accounting officer. Wollenberg is a former CFO for E.W. Blanch Holdings, a Dallas-based risk management and distribution company, and held various financial posts at GE Capital Services.
— Julio Quintero has been named controller of Kansas City Southern de Mexico and will be based in Monterrey, Mexico. Quintero will spend the first six months of the job at the Kansas City headquarters to ensure that standardized accounting procedures are followed in both countries. Quintero previously was with Wyeth Pharmaceuticals as controller for Mexico and Central America.
— T. Nicholas Nocita has been promoted to assistant vice president for international internal audit and financial compliance. Previously, Nocita was general director of financial compliance. A Kansas City Southern employee since 1998, he retains responsibility for Sarbanes-Oxley accounting compliance in the U.S. and Mexico.