Kansas City Southern Announces Dividend Increase and New Share Repurchase Program
August 15 2017 - 4:55PM
Business Wire
Kansas City Southern (KCS) (NYSE: KSU) announced that its Board
of Directors approved at its meeting today two actions to return
capital to KCS’s shareholders as part of KCS’s capital allocation
plan:
1. An increase in the quarterly
dividend on KCS’s common stock from $0.33 to $0.36 per share. The
board declared a common stock dividend at this increased amount
payable on October 4, 2017, to stockholders of record at the close
of business on September 11, 2017. 2. A new $800 million share
repurchase program, which replaces the Company’s previous $500
million program announced in 2015 and completed in the second
quarter of 2017. The new authorization includes: (a) a $200 million
Accelerated Share Repurchase program, which will be launched
immediately and is expected to be completed by early in the fourth
quarter of 2017; and (b) a $600 million open market purchase
program expiring June 30, 2020.
“Our announcement today reflects our optimism with regard to
KCS’s long-term business prospects,” said Pat Ottensmeyer, CEO and
President. “We seek to maintain a strong balance sheet and preserve
financial flexibility by funding these actions with cash on hand
and future cash flow from operations, continuing our emphasis on
balancing the needs of our fixed income and equity investors.”
Approximately 1.6 million of the shares to be repurchased under
the Accelerated Share Repurchase program will be received by KCS on
August 16, 2017. The total number of shares ultimately repurchased
under the program will be determined upon final settlement and will
be based on the volume-weighted average price of KCS’s common stock
during the applicable valuation period, less a discount.
Also at today’s meeting, the directors declared a regular
dividend of $0.25 per share on the outstanding KCS 4%
Non-Cumulative Preferred stock. This dividend is payable on October
3, 2017, to stockholders of record at the close of business on
September 11, 2017.
Headquartered in Kansas City, Mo., KCS is a transportation
holding company that has railroad investments in the U.S., Mexico
and Panama. Its primary U.S. holding is The Kansas City Southern
Railway Company, serving the central and south central U.S. Its
international holdings include Kansas City Southern de Mexico, S.A.
de C.V., serving northeastern and central Mexico and the port
cities of Lázaro Cárdenas, Tampico and Veracruz, and a 50 percent
interest in Panama Canal Railway Company, providing ocean-to-ocean
freight and passenger service along the Panama Canal. KCS' North
American rail holdings and strategic alliances are primary
components of a railway network, linking the commercial and
industrial centers of the U.S., Mexico and Canada.
This release contains “forward-looking statements” within the
meaning of the securities laws concerning potential future events
involving KCS and its subsidiaries, which could materially differ
from the events that actually occur. Words such as “projects,”
“estimates,” “forecasts,” “believes,” “intends,” “expects,”
“anticipates,” and similar expressions are intended to identify
many of these forward-looking statements. Such forward-looking
statements are based upon information currently available to
management and management’s perception thereof as of the date
hereof. Differences that actually occur could be caused by a number
of external factors over which management has little or no control,
including: competition and consolidation within the transportation
industry; the business environment in industries that produce and
use items shipped by rail; loss of the rail concession of KCS’
subsidiary, Kansas City Southern de México, S.A. de C.V.; the
termination of, or failure to renew, agreements with customers,
other railroads and third parties; access to capital; disruptions
to KCS’ technology infrastructure, including its computer systems;
natural events such as severe weather, hurricanes and floods;
market and regulatory responses to climate change; legislative and
regulatory developments and disputes; rail accidents or other
incidents or accidents on KCS’ rail network or at KCS’ facilities
or customer facilities involving the release of hazardous
materials, including toxic inhalation hazards; fluctuation in
prices or availability of key materials, in particular diesel fuel;
dependency on certain key suppliers of core rail equipment; changes
in securities and capital markets; availability of qualified
personnel; labor difficulties, including strikes and work
stoppages; acts of terrorism or risk of terrorist activities; war
or risk of war; domestic and international economic, political and
social conditions; the level of trade between the United States and
Asia or Mexico; fluctuations in the peso-dollar exchange rate;
increased demand and traffic congestion; the outcome of claims and
litigation involving KCS or its subsidiaries; and other factors
affecting the operation of the business. More detailed information
about factors that could affect future events may be found in
filings by KCS with the Securities and Exchange Commission,
including KCS’ Annual Report on Form 10-K for the year ended
December 31, 2016 (File No. 1-4717) and subsequent reports.
Forward-looking statements are not, and should not be relied upon
as, a guarantee of future performance or results, nor will they
necessarily prove to be accurate indications of the times at or by
which any such performance or results will be achieved. As a
result, actual outcomes and results may differ materially from
those expressed in forward-looking statements. KCS is not obligated
to update any forward-looking statements to reflect future events
or developments.
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Kansas City SouthernAshley Thorne,
816-983-1530athorne@kcsouthern.com
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