Kansas City Southern (NYSE: KSU):

Third Quarter Highlights

• Revenues of $444.1 million, a 6.8% increase over 2006
• Record operating income of $98.2 million, a 27% increase
• Operating ratio of 77.9%, a 3.5 point improvement
• Diluted earnings per share of $0.48, a 50% increase

Kansas City Southern (KCS) (NYSE: KSU) recorded third quarter 2007 revenues of $444.1 million, a 6.8% increase over third quarter 2006. Revenue gains were primarily attributable to volume growth in select commodity areas and a continued favorable pricing environment.

For the third quarter, revenues for the Automotive group increased 21.8% on volume growth of 16.6%. Coal revenues remained strong, increasing 16.9% for the quarter with volumes growing by 4.8%. Chemical & Petroleum products revenues experienced 12.7% growth with volume increasing by 5.3%. Agriculture & Minerals revenues increased by 7.0% while posting a 2.2% decrease in volumes. Despite the impact of a depressed U.S. new home building market on building materials, Paper & Forest Products posted a revenue gain of 1.0%, though overall volumes were 12.1% lower. Intermodal revenues, including haulage, were flat quarter-over-quarter, with volumes 6.5% lower. Excluding the loss of certain haulage business, intermodal revenues increased by 12.5% and volumes grew by 17.6%. Overall volumes fell by 2.8%; however, excluding the haulage traffic, volumes would have been 3.0% higher than last year.

Third quarter 2007 operating expenses totaled $345.9 million, increasing 2.2% from 2006. Operating income grew 27.0% from $77.3 million to $98.2 million. The third quarter operating ratio improved to 77.9% from 81.4% for the same prior year period, a 3.5 point improvement.

Net income available to common shareholders in the third quarter 2007 increased by 58% to $41.8 million, or $0.48 per diluted share, compared with $26.4 million, or $0.32 per diluted share in the third quarter 2006.

Comments from the Chairman

KCS Chairman and Chief Executive Officer Michael R. Haverty said, “Within the context of a slower than expected economy, we are encouraged by the overall improvement in KCS’s operating performance. The Company posted solid, double-digit revenue growth in three of its commodity groups, and only haulage revenues declined as a result of the loss of certain business over the Meridian Speedway.

“While operating expenses were in-line with our expectations, KCS management remains committed to taking additional costs out of our network. Having attained an operating ratio of 77.9% for the quarter and the Company is focused on achieving the revenue growth and expense controls necessary to meet our target of an operating ratio below 80% for the year.

“Construction of Phase I of the Port of Lazaro Cardenas is complete, which brings the capacity to over 500,000 TEUs. Even prior to the expansion, third quarter revenue growth from Lazaro Cardenas was approximately 23%. The opening of Phase I will offer KCS customers new service options and will result in increased intermodal and carload traffic out of the port to both inter-Mexico and cross-border destinations.

“Finally, at the end of the quarter, KCS and its former Mexican partner, Grupo TMM, S.A. (TMM) entered into an agreement that resolved all remaining claims and disputes over liabilities established in 2005 as part of the acquisition of Grupo TFM, now Kansas City Southern de Mexico (KCSM). The settlement was favorable for KCS and its shareholders as it finalizes KCS’ relationship with TMM and eliminates any future payouts to TMM and potential dilution of KCS shares.”

Headquartered in Kansas City, Mo., KCS is a transportation holding company that has railroad investments in the U.S., Mexico and Panama. Its primary U.S. holding includes The Kansas City Southern Railway Company, serving the central and south central U.S. Its international holdings include Kansas City Southern de Mexico, S.A. de C.V., serving northeastern and central Mexico and the port cities of Lázaro Cárdenas, Tampico and Veracruz, and a 50 percent interest in Panama Canal Railway Company, providing ocean-to-ocean freight and passenger service along the Panama Canal. KCS' North American rail holdings and strategic alliances are primary components of a NAFTA Railway system, linking the commercial and industrial centers of the U.S., Canada and Mexico.

This press release includes statements concerning potential future events involving the Company, which could materially differ from the events that actually occur. The differences could be caused by a number of factors including those factors identified in the "Risk Factors" and the "Cautionary Information" sections of the Company's Form 10-K for the year ended December 31, 2006, filed by the Company with the Securities and Exchange Commission (SEC) (Commission file no. 1-4717). The Company will not update any forward-looking statements in this press release to reflect future events or developments.

Contacts:

Kansas City Southern
William H. Galligan, 816-983-1551
bgalligan@kcsouthern.com