Kansas City Southern, a Delaware corporation, is a holding company with domestic
and international rail operations in North America that are strategically focused
on the growing north/south freight corridor connecting key commercial and industrial
markets in the central United States with major industrial cities in Mexico.
KCS controls and owns all of the stock of The Kansas City Southern Railway
Company (“KCSR”), a U.S. Class I railroad founded in 1887. KCSR
serves a ten-state region in the midwest and southeast regions of the United
States and has the shortest north/south rail route between Kansas City, Missouri
and several key ports along the Gulf of Mexico in Alabama, Louisiana, Mississippi
and Texas.
KCS controls and owns all of the stock of The Kansas City Southern Railway
Company (“KCSR”), a U.S. Class I railroad founded in 1887. KCSR
serves a ten-state region in the midwest and southeast regions of the United
States and has the shortest north/south rail route between Kansas City, Missouri
and several key ports along the Gulf of Mexico in Alabama, Louisiana, Mississippi
and Texas.
KCS controls and owns all of the stock of Kansas City Southern de México,
S.A. de C.V. (“KCSM”). Through its 50-year concession from the Mexican
government (the “Concession”), which could expire in 2047 unless
extended, KCSM operates a key commercial corridor of the Mexican railroad system
and has as its core route the most strategic portion of the shortest, most direct
rail passageway between Mexico City and Laredo, Texas. KCSM serves most of Mexico’s
principal industrial cities and three of its major seaports. Laredo is a principal
international gateway through which more than half of all rail and truck traffic
between the United States and Mexico crosses the border. KCSM’s rail lines
provide exclusive rail access to the United States and Mexico border crossing
at Nuevo Laredo, Tamaulipas, the largest rail freight interchange point between
the United States and Mexico. Under the Concession, KCSM has the right to control
and operate the southern half of the rail bridge at Laredo, Texas, which spans
the Rio Grande River between the United States and Mexico. The Company also
controls the northern half of this bridge through its ownership of Mexrail,
Inc. (“Mexrail”).
KCSM provides exclusive rail access to the Port of Lazaro Cardenas on the Pacific
Ocean. The Mexican government is developing the port at Lazaro Cardenas principally
to serve Mexican markets and as an alternative to the U.S. west coast ports
for Asian and South American traffic bound for North America.
The Company wholly owns Mexrail which, in turn, wholly owns The Texas Mexican
Railway Company (“Tex-Mex”). Tex-Mex owns a 157-mile rail line extending
from Laredo, Texas to the port city of Corpus Christi, Texas, which connects
the operations of KCSR with KCSM. Through its ownership of Mexrail, the Company
owns the northern half of the rail bridge at Laredo, Texas.
The KCS coordinated rail network (KCSR, KCSM and Tex-Mex) comprises approximately
6,500 route miles extending from the midwest and southeast portions of the United
States south into Mexico and connects with all other Class I railroads, providing
shippers with an effective alternative to other railroad routes and giving direct
access to Mexico and the southeast and southwest United States through alternate
interchange hubs.
Panama Canal Railway Company (“PCRC”), an unconsolidated joint
venture company owned equally by KCS and Mi-Jack Products, Inc. (“Mi-Jack”),
was awarded a concession from the Republic of Panama to reconstruct and operate
the Panama Canal Railway, a 47-mile railroad located adjacent to the Panama
Canal that provides international container shipping companies with a railway
transportation alternative to the Panama Canal. The Concession was awarded in
1998 for an initial term of 25 years with an automatic renewal for an additional
25 year term. The Panama Canal Railway is a north-south railroad traversing
the Isthmus of Panama between the Atlantic and Pacific Oceans.
Other subsidiaries and affiliates of KCS include the following:
Meridian Speedway, LLC (“MSLLC”), a seventy percent-owned consolidated
affiliate that owns the former KCSR rail line between Meridian, Mississippi
and Shreveport, Louisiana, which is the portion of the rail line between Dallas,
Texas and Meridian known as the “Meridian Speedway.” Norfolk Southern
Corporation, through its wholly-owned subsidiary, The Alabama Great Southern
Railroad Company, owns the remaining thirty percent of MSLLC.
KCSM Servicios, S.A. de C.V. (“KCSM Servicios”), a wholly-owned
and consolidated affiliate that provides employee services to KCSM;
Southern Capital Corporation, LLC (“Southern Capital”), a fifty
percent-owned unconsolidated affiliate that owned and leased locomotives and
other equipment;
Ferrocarril y Terminal del Valle de México, S.A. de C.V. (“FTVM”),
a twenty-five percent-owned unconsolidated affiliate that provides railroad
services as well as ancillary services in the greater Mexico City area; and
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