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Kansas City Southern Message Board

  • blackcombgrouse blackcombgrouse Aug 1, 2013 1:09 PM Flag

    Scam accounting

    Q2 earnings was the worst I have seen for any stock in recent memory
    They masked the huge debt restructuring charge and claimed in bold print they had beat by 1c
    Under GAAP accounting the EPS was only 14c per share whor a miss of 81c which is why Yahoo has now made the trailing PE even higher at over 40 .
    If that was not bad enough their cash position fell to just $30M or 27c per share while their free cash flow plumetted from $76.8M in Q1 to just $13.5M in Q2 .
    So how did their debt restructuring improve their debt ?
    I do not think that increasing their debt to $1.765B from $1.547B is muh of an improvement .
    All of this Growth potential that is trumpeted by some analysts resulted from just 3% growth in carloads .
    What a crock . this link shows what real analysts think of this overhyped , overpriced stock .

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    • blackcombgrouse,

      It is unfortunate that you have difficulty reading financial statements.

      The SEC filings by KSU on April 24, 2013 indicate that KCSR received $450M of 30 yr notes at 4.30%.
      KCSM received $275m of 2020 notes at 2.35% & $450m of 2023 notes at 3.0%.

      Sounds like good ongoing rates to me.

      During Q2, 2013 KCS repaid $1203m of debt and assumed a total of $1403m. Charges included in the $1403m of debt were $155.1m for acquisition of equipment currently under operating leases (I recall this was discussed during presentations in late 1012) & $111.4m in costs associated with the early repayment of the LTD ($1203) that was refinanced at much lower interest rates.

      $155.1 +$111.4 = $266.5m - ($1403 - $1203) = $66.5m of net LTD improvement which was pulled from Current assets.

      To me, it appears to be a management team that is making very competent financial decisions.


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