EX-12.1 4 a2017s-3exhibit121.htm EXHIBIT 12.1 Exhibit


 
 
 
 
 
 
 
 
 
 
 
Exhibit 12.1
Kansas City Southern
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Computation of Ratio of Earnings to Fixed Charges
 
 
 
 
Dollars in millions
 
Nine Months Ended
 
Years Ended December 31,
 
September 30,
 
 
 
 
2016 (i)
 
2015 (iii)
 
2014 (iii)
 
2013
 
2012 (iv)
 
2017 (i)
 
2016 (i)
Earnings:
 
 
 
 
 
 
 
 
 
 
 
 
 
Pretax income from continuing operations, excluding equity in earnings of unconsolidated affiliates (ii)
$
648.1

 
$
654.3

 
$
692.0

 
$
532.8

 
$
597.1

 
$
671.4

 
$
486.6

Interest expense
97.7

 
81.9

 
72.8

 
80.6

 
100.4

 
74.9

 
73.2

Portion of rents representative of an appropriate interest factor
20.3

 
21.3

 
25.4

 
35.5

 
36.2

 
14.3

 
14.8

Distributed income of equity investments
13.0

 
16.5

 
25.5

 
12.5

 
19.8

 
5.0

 
5.0

  Pretax income as adjusted
 
$
779.1

 
$
774.0

 
$
815.7

 
$
661.4

 
$
753.5

 
$
765.6

 
$
579.6

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Fixed Charges:
 
 
 
 
 
 
 
 
 
 
 
 
 
Interest expense
$
97.7

 
$
81.9

 
$
72.8

 
$
80.6

 
$
100.4

 
$
74.9

 
$
73.2

Capitalized interest
0.5

 
0.7

 
0.9

 
1.1

 
0.9

 
0.2

 
0.4

Portion of rents representative of an appropriate interest factor
20.3

 
21.3

 
25.4

 
35.5

 
36.2

 
14.3

 
14.8

  Fixed charges before preference dividends
118.5

 
103.9

 
99.1

 
117.2

 
137.5

 
$
89.4

 
$
88.4

Preference security dividend as defined by Item 503(d)(B) of Regulation S-K
0.3

 
0.3

 
0.3

 
0.3

 
0.3

 
0.3

 
0.3

  Total fixed charges
 
$
118.8

 
$
104.2

 
$
99.4

 
$
117.5

 
$
137.8

 
$
89.7

 
$
88.7

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Ratio of earnings to fixed charges and preference dividends
6.6

 
7.4

 
8.2

 
5.6

 
5.5

 
8.5

 
6.5

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Ratio of earnings to fixed charges
6.6

 
7.4

 
8.2

 
5.6

 
5.5

 
8.6

 
6.6

 
 
 
 
 
 
 
 
 
 
 
 
 
 
Note: Excludes amortization of capitalized interest due to immateriality.
 
 
 
 
 
 
 
(i) During 2016, the Company recognized a $62.8 million benefit related to a credit available for the excise tax included in the price of fuel that is purchased and consumed in locomotives and certain work equipment in Mexico. During the nine months ended September 30, 2017 and 2016, the Company recognized a benefit of $35.6 million and $49.6 million, respectively.
(ii) During 2015, 2014, 2013 and 2012, the Company recognized pre-tax debt retirement and exchange costs of $7.6 million, $6.6 million, $119.2 million and $20.1 million, respectively, related to debt restructuring activities that occurred during the periods.
(iii) During 2015 and 2014, the Company recognized pre-tax lease termination costs of $9.6 million and $38.3 million, respectively, due to the early termination of certain operating leases and the related purchase of equipment.
(iv) During 2012, the Company recognized a pre-tax gain of $43.0 million within operating expenses for the elimination of deferred statutory profit sharing liability, net as a result of the organizational restructuring during the period.