54480--2/27/2007--KANSAS_CITY

related topics

{cost, regulation, environmental}

{operation, international, foreign}

{operation, natural, condition}

{condition, economic, financial}

{competitive, industry, competition}

{loss, insurance, financial}

{cost, operation, labor}

{provision, law, control}

{debt, indebtedness, cash}

{stock, price, share}

{financial, litigation, operation}

{personnel, key, retain}

{product, candidate, development}

Sales of substantial amounts of KCS common stock in the public market could adversely affect the prevailing market price of the common stock. KCS has provisions in its charter, bylaws and Rights Agreement that could deter, delay or prevent a third party from acquiring KCS and that could deprive an investor of an opportunity to obtain a takeover premium for shares of KCS common stock. Risks Related to KCS Business KCS competes against other railroads and other transportation providers. KCS business strategy, operations and growth rely significantly on agreements with other railroads and third parties. The Company is highly leveraged and has significant debt service obligations. KCS leverage could adversely affect its ability to fulfill obligations under various debt instruments and operate its business. KCS business is capital intensive. KCS business may be adversely affected by changes in general economic, weather or other conditions. KCS business is subject to regulation by international, federal, state and local regulatory agencies. KCS failure to comply with these regulations could have a material adverse effect on its operations. The Company s business is subject to environmental, health and safety laws and regulations that could require KCS to incur material costs or liabilities relating to environmental, health or safety compliance or remediation. KCS business is vulnerable to rising fuel costs and disruptions in fuel supplies. Any significant increase in the cost of fuel, or severe disruption of fuel supplies, would have a material adverse effect on KCS business, results of operations and financial condition. The loss of key personnel could negatively affect business. A majority of KCS employees belong to labor unions. Strikes or work stoppages could adversely affect operations. KCS faces possible catastrophic loss and liability, and its insurance may not be sufficient to cover its damages or damages to others. KCS business may be affected by future acts of terrorism or war. KCSM s Mexican Concession is subject to revocation or termination in certain circumstances. The Company s ownership of KCSM and operations in Mexico subject it to economic and political risks. Downturns in the United States economy or in trade between the United States and Mexico and fluctuations in the peso-dollar exchange rate would likely have adverse effects on KCS business and results of operations. KCSM has identified possible discrepancies in data provided by its prior information system. Mexico may experience high levels of inflation in the future which could adversely affect KCS results of operations.

Full 10-K form ▸

54480--2/27/2007--KANSAS_CITY_SOUTHERN