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Rail News Home Kansas City Southern

9/26/2002



Rail News: Kansas City Southern

KCS forms committee to nominate board members; braces for lower-than-expected quarterly earnings


Kansas City Southern Sept. 25 announced that its board recently formed a nominating committee (comprising independent directors) to identify and nominate potential candidates to fill board vacancies. The railroad currently has no vacant board positions.

KCS also adopted other measures designed to bring the Class I into compliance with the New York Stock Exchange's (NYSE) proposed corporate governance rules.

"KCS supports NYSE's initiatives, which are designed to promote transparency and accountability," said Mike Haverty, KCS chairman, president and chief executive officer, in a prepared statement.

Meanwhile, the railroad earlier announced that its third-quarter earnings would be lower than current estimates because of higher operating costs tied to traffic congestion created when the Class I in July implemented Management Control System (a new computer operating system).

Despite months of planning and extensive training, office and field personnel responsible for switching and operating trains experienced initial difficulties implementing the system, KCS said.

"While we are disappointed with the higher-than-normal third-quarter expenses, the implementation of MCS at this critical time is absolutely necessary," said Haverty. "The new operating system will result in vastly improved train scheduling and terminal operations, provide more sophisticated data for marketing and planning purposes, and allow us to more efficiently interchange with other rail carriers."

KCS officials expect congestion to ease in October and fourth-quarter earnings to be closer to estimates.


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