KCS settles hurricane insurance claim

When Hurricane Alex made landfall in central Mexico on June 30, 2010, Kansas City Southern de Mexico experienced severe flooding and loss of revenue. Parent Kansas City Southern announced Wednesday that it has settled its insurance claim for lost profits, property damages, and related expenses for $66 million, before the related self-insured retention of $10 million.

“Still to settle is KCS’s general liability claim related to third-party damages,” said the railroad company. “Settlement on this claim is expected to occur during the third quarter of 2011. As a result of the settled claim, KCS will record in the third quarter of 2011 a $19.8 million pre-tax gain.

“It is expected that the final cumulative earnings per share impact of Hurricane Alex will be a loss of approximately ($0.05), which is consistent with guidance the company has provided since its third quarter of 2010 earnings conference call,” KCS said.