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):
SEPTEMBER 20, 2002
KANSAS CITY SOUTHERN
(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)
427 WEST 12TH 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)
ITEM 7. FINANCIAL STATEMENTS AND EXHIBITS
(c) Exhibits
EXHIBIT NO. DOCUMENT
(99) Additional Exhibits
99.1 Press Release issued by Kansas City Southern dated September
20, 2002 entitled, "Kansas City Southern's Third Quarter
Earnings will be Impacted by Implementation of New
Transportation Management System" is attached hereto as
Exhibit 99.1
ITEM 9. REGULATION FD DISCLOSURE
Kansas City Southern ("KCS" or "Company") is furnishing under Item 9 of this
Current Report on Form 8-K the information included as Exhibit 99.1 to this
report. Exhibit 99.1 is the KCS news release, dated September 20, 2002,
announcing that third quarter earnings will be lower than current consensus
estimates, principally due to higher operating costs caused by congestion
directly related to the implementation of a new computer system, as well as
temporary diversion of some traffic.
KCS also announced that its third quarter earnings would be released on October
31, 2002, prior to the opening of the New York Stock Exchange. KCS will hold a
conference call on October 31, 2002 at 10:00 a.m. Eastern to discuss third
quarter financial and operations performance. Details of the conference call
will be forthcoming.
The information included in this Current Report on Form 8-K, including Exhibit
99.1, is furnished pursuant to Item 9 and shall not be deemed to be "filed" for
the purposes of Section 18 of the Securities Exchange Act of 1934 or otherwise
subject to the liabilities of that Section.
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
Date: September 25, 2002 By: /S/ LOUIS G. VAN HORN
-----------------------------------
Louis G. Van Horn
Vice President and Comptroller
(Principal Accounting Officer)
EXHIBIT 99.1
KANSAS CITY SOUTHERN PRESS RELEASE
427 WEST 12TH STREET, KANSAS CITY, MISSOURI 64105 NYSE SYMBOL: KSU
Date: September 20, 2002
Media Contact: William H. Galligan Phone: 816/983-1551
william.h.galligan@kcsr.com Fax: 816/983-1590
KANSAS CITY SOUTHERN'S THIRD QUARTER EARNINGS WILL BE IMPACTED BY
IMPLEMENTATION OF NEW TRANSPORTATION MANAGEMENT SYSTEM.
Kansas City Southern (KCS) today announced that its third quarter earnings
will be lower than current consensus estimates. Earnings for the quarter
will be principally impacted by higher operating costs caused by congestion
directly related to the implementation of a new computer operating system
as well as temporary diversion of some traffic.
On July 14, 2002, KCS initiated a switch-over from its legacy system
operating platform to a state-of-the-art Management Control System (MCS).
Despite months of planning and extensive training, office and field
personnel responsible for switching services and train operations
experienced initial difficulties implementing the new system. As a result,
KCS experienced considerable congestion throughout its U.S. rail network
with higher-than-normal freight car volumes in its major terminals. This
condition persisted from late July through August. Despite significant
improvement during the first three weeks of September, yard congestion and
less efficient train movements will result in higher car hire, salary,
overtime, and equipment expenses for the quarter. There has been some
short-term diversion of traffic as a result of the MCS related congestion.
While there will be some residual effects over the next month, it is
anticipated that fourth quarter expenses will be closer to normal levels.
Chairman, Chief Executive Officer & President Michael R. Haverty stated,
"While we are disappointed with the higher-than-normal third quarter
expenses, the implementation of MCS at this critical time is absolutely
necessary. The new operating system will result in vastly improved train
scheduling, terminal operations, provide more sophisticated data for
marketing and planning purposes, and allow us to more efficiently
interchange with other rail carriers. Our customers, though regrettably
inconvenienced during the third quarter, are already beginning to voice
their support for the new system and have indicated they do not see any
long-term diversion of shipments as a result. Finally, we anticipate that
when fully implemented, MCS will directly result in improved customer
service and system-wide cost savings opportunities."
The MCS system has been designed to support all aspects of train
operations, including planning, scheduling, operations reporting, and rail
asset utilization. It also fully integrates automated equipment
identification for shipment status updates, real time reporting, waybill
entry and modification, and corporate master file editing.
KCS's third quarter ends September 30, 2002. The Company will release third
quarter earnings immediately prior to the opening of the New York Stock
Exchange on October 31st. KCS management will discuss third quarter
financial and operational performance during a conference call on October
31 at 10:00 a.m. Eastern. Details as to phone-in numbers will be
forthcoming.
KCS is a transportation holding company with railroad investments in the
United States, Mexico, and Panama. Its primary holding is Kansas City
Southern Railway. Headquartered in Kansas City, Missouri, KCS serves
customers in the central and south central regions of the U.S. KCS's rail
holdings and investments are primary components of a NAFTA Railway system
that links the commercial and industrial centers of the United States,
Canada, and Mexico.
THIS PRESS RELEASE INCLUDES STATEMENTS CONCERNING POTENTIAL FUTURE EVENTS
INVOLVING THE COMPANY, WHICH COULD MATERIALLY DIFFER FROM THE EVENTS THAT
ACTUALLY OCCUR. THE DIFFERENCE COULD BE CAUSED BY A NUMBER OF FACTORS
INCLUDING THOSE FACTORS IDENTIFIED IN THE COMPANY'S DECEMBER 31, 2001, FORM
10-K AND THE CURRENT REPORT ON FORM 8-K DATED DECEMBER 11, 2001, EACH FILED
BY THE COMPANY WITH THE SECURITIES AND EXCHANGE COMMISSION (SEC)
(COMMISSION FILE NO. 1-4717). THE COMPANY WILL NOT UPDATE ANY
FORWARD-LOOKING STATEMENTS IN THIS PRESS RELEASE TO REFLECT FUTURE EVENTS
OR DEVELOPMENTS.