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Kansas City Southern responds to CP proxy statement

Rail News Home Kansas City Southern 8/2/2021 Rail News: Kansas City Southern
image Kansas City Southern today responded to Canadian Pacific's filing last week of a preliminary proxy statement seeking votes against the CN-KCS merger proposal. In a prepared statement, KCS officials said that CP's filing "is part of an effort to defeat a transaction that offers KCS shareholders $50 per share more than CP was willing to offer." In May, CP decided not to take advantage of its five-business-day match right, per the terms of its initial merger contract, to compete with CN’s superior proposal. Since that time, CP has consistently criticized the CN-KCS combination, KCS officials said. KCS officials also noted that, even though CP claims in its latest filing that its "ready to re-engage with KCS," CP has not made a new proposal. "Nor did it commit to making one in the future," they said, adding that there can be no assurances that CP will make an offer or proposal to KCS. KCS continues to recommend that its shareholders vote in favor of the CN combination. KCS's full statement is available here.

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KCS posts revenue gain, net loss in Q2

Kansas City Southern posted second-quarter 2021 revenue of $749.5 million, a 37% increase from the same period a year ago. Overall, carload volumes were up 31% compared to the prior year.

KCS attributed the revenue increase primarily to higher volumes, a higher fuel surcharge and the strengthening of the Mexican peso against the U.S. dollar.

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KCS sets stockholder meeting date for CN merger vote

Rail News Home Kansas City Southern 7/8/2021 Rail News: Kansas City Southern
image Kansas City Southern has scheduled for Aug. 19 a virtual special meeting of stockholders to vote on the proposed merger with CN. All stockholders of record of KCS common stock and 4% non-cumulative preferred stock as of the close of business on July 1, 2021, will be entitled to vote their shares at the special meeting, KCS and CN officials said in a press release. As previously announced on May 21, under the terms of the agreement KCS stockholders will receive $200 in cash and 1.129 shares of CN common stock for each KCS common share, with KCS stockholders expected to own approximately 12.65% of the combined company. KCS' preferred stockholders will receive $37.50 in cash for each preferred share. Additional information regarding the combination can be found in the definitive proxy statement that has been filed with the U.S. Securities and Exchange Commission. The KCS board unanimously recommends that stockholders vote for the merger agreement with CN and the other proposals outlined in the definitive proxy statement. CN will acquire KCS shares and place them into a voting trust if such trust is approved by the Surface Transportation Board (STB). KCS stockholders would receive the merger consideration immediately upon the closing into CN’s voting trust, which is expected to be in the second half of 2021, the companies said. Following that step, the STB and other regulatory authorities would complete their review of CN's control of KCS. Upon approval, the completion of the transaction to take the KCS shares out of the voting trust is expected to take place in the second half of 2022, they said. CN's prospectus and KCS' definitive proxy materials can be found on the SEC's website. The proxy materials are being mailed to all stockholders eligible to vote at the special meeting. Meanwhile, Canadian Pacific issued a statement in response to CN's recent filing with the STB replying to the many comments opposing CN's proposed voting trust. "CN's reply doubles down on arguments for a voting trust that CP has already shown do not meet the board's public interest test and sweeps under the rug the many public interest costs associated with CN's proposed use of a trust," CP officials said in their statement, which can be read here.

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KCS lists 2020 sustainability achievements in new report

Rail News Home Kansas City Southern 7/2/2021 Rail News: Kansas City Southern
image Kansas City Southern yesterday released its 2020 sustainability report titled "For the Long Haul: Delivering Prosperity, Valuing People, Protecting the Planet." Available in the corporate responsibility section of kcsouthern.com, the report shows KCS in 2020: • improved its U.S. and Mexico consolidated frequency rate of reportable workplace injuries and illnesses by 27%;
• committed to do its part in the fight against climate change and partnered with the Science Based Target Initiative to set an ambitious carbon-reduction target. KCS has committed to reducing its scope 1 and 2 greenhouse gas emissions per million gross ton-miles at least 42% by 2034, from a 2019 base year;
• avoided the use of 21.2 million gallons of diesel fuel; this is an additional nearly 7 million gallons avoided compared to 2019 due to the implementation of fuel-efficient technologies; and
• held 24 diversity, equity and inclusion roundtable sessions across the United States and Mexico with its President and Chief Executive Officer Patrick Ottensmeyer and more than 200 participants. The forum provided employees a space to share their views on workplace equity, inclusion and opportunities for KCS improvements. The report follows the Global Reporting Initiative's latest standards for disclosing governance, economic, social and environmental topics and is in alignment with the Sustainability Accounting Standards Board and Task Force on Climate-related Financial Disclosures frameworks. The frameworks provide for the disclosure of measurable data and specific information related to sustainability, KCS officials said in a press release.

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Midstream Texas Operating to build transload facility on KCS line

Rail News Home Kansas City Southern 6/30/2021 Rail News: Kansas City Southern
image Kansas City Southern and Midstream Texas Operating LLC (MTO) today announced a long-term commercial agreement to provide truck-to-rail transloading services for petroleum and petrochemical shipments moving from Corpus Christi, Texas, into Mexico. Operations are expected to begin in the fourth quarter. On property leased from KCS, MTO will construct a transload facility — including siding tracks and facilities for loading and staging of 200 rail cars per month — under the project's initial phase. The facility will be "strategically close to supply locations and to the border for expedient access to end markets," said Ginger Adamiak, KCS vice president of energy and chemical products, in a press release. "This service expansion offers our customers proven transportation to an attractive market. We are delighted to link with MTO's Ingleside terminal to offer seamless marine, truck and rail movements," added David Vattimo, MTO's chief executive officer.

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