FILED PURSUANT TO RULE 424(B)(3)
REGISTRATION NO. 333-107573
PROSPECTUS SUPPLEMENT NO. 1 DATED AUGUST 25, 2004
TO PROSPECTUS DATED JUNE 3, 2004
400,000 SHARES OF
KANSAS CITY SOUTHERN
4.25% REDEEMABLE CUMULATIVE CONVERTIBLE PERPETUAL PREFERRED STOCK, SERIES C
(LIQUIDATION PREFERENCE $500 PER SHARE)
AND
13,389,120 SHARES OF COMMON STOCK (PAR VALUE $0.01 PER SHARE)
ISSUABLE UPON CONVERSION OF THE
REDEEMABLE CUMULATIVE CONVERTIBLE PERPETUAL PREFERRED STOCK, SERIES C
This prospectus supplement relates to the accompanying prospectus dated
June 3, 2004 relating to the offer and sale from time to time of up to 400,000
shares of 4.25% Redeemable Cumulative Convertible Perpetual Preferred Stock,
Series C, referred to as the Series C Preferred Stock, of Kansas City Southern
and the shares of common stock of Kansas City Southern issuable upon conversion
of the Series C Preferred Stock. The "Selling Securityholders" section of the
accompanying prospectus is hereby supplemented to include the information
provided below in the table appearing in the "Selling Securityholders" section
of this prospectus supplement with respect to amendments to the information
previously listed in the accompanying prospectus and, as indicated, supercedes
the information previously included in the table appearing in the "Selling
Securityholders" section of the accompanying prospectus, or any other amendments
or supplements thereto.
This prospectus supplement should be read in conjunction with, and may not
be delivered or utilized without, the accompanying prospectus dated June 3, 2004
and all other amendments or supplements thereto. The terms of the Series C
Preferred Stock are set forth in the accompanying prospectus dated June 3, 2004.
Selling securityholders listed in the "Selling Securityholders" section of
this prospectus supplement and any other amendments or supplements thereto may
offer and sell the Series C Preferred Stock and the shares of common stock
issuable upon conversion of the Series C Preferred Stock pursuant to this
prospectus supplement, the accompanying prospectus, and any other amendments or
supplements thereto. Our registration of the Series C Preferred Stock and the
shares of common stock issuable upon conversion of the Series C Preferred Stock
does not necessarily mean that the selling securityholders will sell all or any
of the Series C Preferred Stock or the shares of common stock.
SELLING SECURITYHOLDERS
The Series C Preferred Stock, and any shares of our common stock issued
upon conversion of the Series C Preferred Stock, are being offered by the
selling securityholders listed in the table below. We issued and sold the Series
C Preferred Stock in a private placement to the initial purchasers, Morgan
Stanley & Co. Incorporated and Deutsche Bank Securities Inc. The selling
securityholders purchased their Series C Preferred Stock from the initial
purchasers or from subsequent holders in transactions exempt from registration
under the Securities Act.
This prospectus covers sales, by the named selling securityholders, of
Series C Preferred Stock and shares of common stock issued upon any conversion
of the Series C Preferred Stock by the selling securityholder. This prospectus
will not cover subsequent sales of our common stock received upon conversion of
Series C Preferred Stock purchased from a selling securityholder named in this
prospectus.
No offer or sale under this prospectus may be made by a securityholder
unless that holder is listed in the table below, in a supplement to this
prospectus or in an amendment to the related registration statement that has
become effective. We will supplement or amend this prospectus to include
additional selling securityholders upon request and upon provision of all
required information to us, subject to the terms of the Registration Rights
Agreement, dated as of May 5, 2003 between KCS and the initial purchasers.
The following table sets forth certain information, as of August 24, 2004
about the amount of Series C Preferred Stock beneficially owned by each selling
security holder and the number of shares of common stock issuable upon
conversion of the Series C Preferred Stock that may be offered from time to time
pursuant to this prospectus.
The percentage of Series C Preferred Stock outstanding beneficially owned
by each selling security holder is based on 400,000 shares of Series C Preferred
Stock outstanding. The number of shares of common stock owned prior to the
offering does not include shares of common stock issuable upon conversion of the
Series C Preferred Stock. The number of shares of common stock shown in the
table below assumes conversion of all shares of Series C Preferred Stock held by
such holder at the initial conversion rate of 33.4728 shares of common stock per
share of Series C Preferred Stock. This conversion rate is subject to adjustment
as described under "Description of the Series C Preferred Stock--Adjustments to
the Conversion Rate." Accordingly, the number of shares of common stock issuable
upon conversion of the Series C Preferred Stock may increase or decrease from
time to time. Under the certificate of designations for the Series C Preferred
Stock, fractional shares will not be issued upon conversion of the Series C
Preferred Stock. Cash will be paid instead of fractional shares, if any.
The following table has been prepared based upon the information furnished
to us by the selling security holders. The selling security holders identified
below may have sold, transferred or otherwise disposed of some or all of their
Series C Preferred Stock since the date on which the information in the
following table is presented in transactions exempt from or not subject to the
registration requirements of the Securities Act of 1933. Information concerning
the selling security holders may change from time to time and, if necessary, we
will supplement this prospectus accordingly. We cannot give an estimate as to
the amount of Series C Preferred Stock or common stock issuable upon conversion
thereof that will be held by the selling security holders upon the termination
of this offering because the selling security holders may offer some or all of
their Series C Preferred Stock or common stock pursuant to the offering
contemplated by this prospectus. See "Plan of Distribution."
Except as otherwise disclosed in footnotes to the table below, to our
knowledge, other than their ownership of the securities described below, none of
the selling security holders has, or has had within the past three years, any
position, office or other material relationship with us or any of our
predecessors or affiliates.
NUMBER OF
SHARES OF
SERIES C
PREFERRED NUMBER OF NUMBER OF
STOCK PERCENTAGE OF SHARES OF SHARES OF
BENEFICIALLY SERIES C COMMON STOCK COMMON
OWNED PREFERRED OWNED STOCK THAT PERCENTAGE OF
THAT MAY STOCK PRIOR TO THE MAY BE COMMON STOCK
NAME BE SOLD OUTSTANDING OFFERING(1) SOLD(2) OUTSTANDING(3)
---- ------------ ------------- ------------ ---------- --------------
Alexandra Global Master Fund LTD 1,500 * 0 50,209 *
Allstate Insurance Company 2,000 * 16,300 66,945 *
Bank Austria Cayman Islands, LTD 2,000 * 0 66,945 *
BNP Paribas Equity Strategies, SNC 2,065 * 19,211 69,121 *
BP Amoco PLC Master Trust 2,026 * 0 67,815 *
Clinton Multistrategy Master Fund,
Ltd. 375 * 0 12,552 *
CNH CA Master Account, L.P. 250 * 0 8,368 *
Context Convertible Arbitrage Fund,
L.P. 8,350 2.09% 0 279,497 *
CooperNeff Convertible Strategies
(Cayman) Master Fund, L.P. 2,160 * 0 72,301 *
DBAG London 5,000 1.25% 0 167,364 *
Equitec Group LLC 2,500 * 0 83,682 *
Guggenheim Portfolio Co. XV, LLC 1,500 * 0 50,209 *
Hotel Union & Hotel Industry of
Hawaii Pension Plan 732 * 0 24,502 *
KD Convertible Arbitrage Fund L.P. 9,485 2.37% 0 317,489 *
Lyxor/Convertible Arbitrage Fund, Ltd. 140 * 0 4,686 *
Lyxor Master Fund Ref.: Silverado 1,750 * 0 58,577 *
McMahan Securities Co. L.P. 350 * 0 11,715 *
Morgan Stanley & Co. Incorporated(4) 39,489 9.87% 70,922 1,321,807 2.17%
Newport Alternative Income Fund 411 * 0 13,757 *
OIP Limited 360 * 0 12,050 *
Pacific Life Insurance Company 250 * 0 8,368 *
Putnam Convertible Income - Growth
Trust 13,000 3.25% 0 435,146 *
RCG Latitude Master Fund, LTD 4,250 1.06% 0 142,259 *
RCG Multi Strategy Master Fund, LTD 3,000 * 0 100,418 *
Ramius Master Fund, LTD 5,750 1.44% 0 192,468 *
Silverado Arbitrage Trading, LTD 1,300 * 0 43,514 *
Silverback Master, LTD 30,000 7.50% 0 1,004,184 1.58%
Silvercreek II Limited 1,569 * 0 52,518 *
Silvercreek Limited Partnership 3,160 * 0 105,774 *
Singlehedge U.S. Convertible
Arbitrage Fund 340 * 0 11,380 *
Sphinx Convertible Arb Fund SPC 711 * 0 23,799 *
SSI Blended Market Neutral L.P. 1,025 * 0 34,309 *
SSI Hedged Convertible Market Neutral
L.P. 1,117 * 0 37,389 *
Sturgeon Limited 295 * 0 9,874 *
TQA Master Plus Fund, Ltd. 5,000 1.25% 0 167,364 *
UBS AG London Branch 12,500 3.13% 0 418,410 *
UBS O'Connor LLC F/B/O O'Connor
Global Convertible Portfolio 500 * 0 16,736 *
Viacom Inc. Pension Plan Master Trust 66 * 0 2,209 *
Xavex Convertible Arbitrage #5 1,000 * 0 33,472 *
Institutional Benchmarks Master Fund
Ltd. (formerly Zurich Institutional
Benchmarks Master Fund Ltd.) 2,844 * 0 95,196 *
All other beneficial owners(5)(6) 32,750 8.19% 0 1,096,234 1.72%
TOTAL(7) 202,870 50.72% 106,433 6,790,627 9.91%
* Less than one percent.
(1) Does not include shares of common stock issuable upon conversion of the
Series C Preferred Stock.
(2) Consists of shares of common stock issuable upon conversion of the Series C
Preferred Stock, assuming a conversion rate of 33.4728 shares of common
stock for each share of Series C Preferred Stock and a cash payment in lieu
of any fractional share interest. The conversion rate is subject to
adjustment as described under "Description of the Series C Preferred
Stock--Adjustments to the Conversion Rate." Accordingly, the number of
shares of common stock issuable upon conversion of the Series C Preferred
Stock may increase or decrease from time to time. Numbers have been rounded
down to whole numbers due to fact that fractional shares will not be issued
upon conversion of the Series C Preferred Stock. The "total" for number of
shares of common stock that may be sold is based on the conversion rate
applied to the total shares of Series C Preferred Stock remaining unsold
under the registration statement.
(3) Calculated based on Rule 13d-3(d)(1) under the Securities Exchange Act of
1934, as amended, using 62,674,383 shares of common stock outstanding on
July 31, 2004. In calculating this amount, we treated as outstanding the
number of shares of common stock issuable upon conversion of the Series C
Preferred Stock by the applicable holder. However, we did not assume the
conversion of any other holder's Series C Preferred Stock.
(4) Morgan Stanley Senior Funding, Inc. was a lender under KCS's credit
facility. In addition, during the past three years, Morgan Stanley & Co.
Incorporated and/or its affiliates have performed financial advisory and
investment banking services for KCS. Morgan Stanley & Co., Incorporated was
an initial purchaser of 80% of the Series C Preferred Stock in the private
placement of these securities.
(5) We will identify additional selling security holders, if any, by
post-effective amendment before they offer or sell their securities.
(6) Assumes that the unnamed holders of Series C Preferred Stock or any future
transferees, pledgees or donees of or from any such unnamed holder do not
beneficially own any common stock other than the common stock issuable upon
conversion of the Series C Preferred Stock at the initial conversion rate.
(7) Does not include 197,130 shares of Series C Preferred Stock sold by selling
securityholders which shares are convertible into 6,598,474 shares of KCS
common stock, assuming a conversion rate of 33.4728 shares of common stock
for each share of Series C Preferred Stock and a cash payment in lieu of
any fractional share interest.