Kansas City Southern (NYSE:KSU) Q2 2016 Earnings Conference Call - Preliminary Transcript
Jul 19, 2016 • 08:45 am ET
Michael W. Upchurch
finally on Slide 20, our capital structure priorities continue to focus on investing in the business to generate the best growth in the health sector. In fact, despite the downturn in the industrial economy in the last 18 months, we have grown volume 17% since 2007, while the rest of the class one industry is declining 10% on an aggregate basis. We will continue to focus on reinvesting our cash flow back into growing our business for long run. Projected capital expenditures for the year continued to be in the range of $580 million to $590 million.
In May of 2015, our Board of Directors authorised a $500 million share repurchase programme. And about halfway through the life of the programme, we have repurchased 51% of are asking shares, and an average of $88.46. We will continue to monitor economic and business conditions to determine future levels of share repurchases. And finally, during the quarter we pre funded our $250 million floating rate notes during October 2016 at 3.125 for a 10 year term.
And with that, I'll turn the call back over to Pat.
Patrick J. Ottensmeyer
Thanks, Mike. Before I open the call up for questions, I'd like to do two things in my closing comments. First, like offer a quick overall assessment of the quarter and the current outlook. And second, I want to make a few comments about the management transition that has been underway here at KCS for the last year or so. Regarding the second quarter performance assessment, so we feel very good about our performance for the quarter. And more importantly, we feel good about the overall outlook for the rest of the year.
As Brian discussed, our business science has shown sequential growth of the last three months, and the short term outlook for the vast majority of our business is either neutral or positive. We're also very pleased to have demonstrated solid cost control, despite unusually high detour expenses, and demonstrate operating ratio improvements, even excluding the excise tax credit in the absence of volume growth.
Regarding the management transition, I'm sure that you've all noticed that Dave Starling is not on the call with us today. And you may also recall that I became President and CEO effective July 1, 2016. Dave will continue on as an advisor to me until the end of this year, and then we'll continue on as a member of our Board of Directors until May of next year. It would be hard for me to overstate the remarkable accomplishments and progress that he has made undertake eight years as President and six years of CEO and very grateful that Dave has agreed to continue on in this advisory capacity, and can use this household to assure that this transition continues to be as smooth as it possibly can.
I'm very fortunate that I become CEO at a time when this company has never been in better physical and financial conditions than it is right now. Over the