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Kansas City Southern

First Quarter 2009

Earnings Presentation

April 30, 2009

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This presentation includes statements concerning potential

future events involving the Company which could materially

differ from events that actually occur. The differences could

be caused by a number of factors, including those factors

identified in the “Risk Factors” section of the Company’s

Form 10-K for the year ended December 31, 2008 filed by

the Company with the SEC (File No. 1-4717). The

Company will not update any forward-looking statements in

this presentation to reflect future events or developments.

All reconciliations to GAAP can be found on the KCS

website, kcsouthern.com/investors.

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Today’s Presenters

EVP & CFOMike Upchurch

EVP Sales & Marketing

Pat Ottensmeyer

President & COODave Starling

Chairman & CEOMike Haverty

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First Quarter Highlights

• Economy is the central factor impacting results

• KCS responds to the economic environment– Operating expenses reduced 19%; excluding

depreciation reduced 23%

– Liquidity position improved as a result of refinancing near term maturities

– No significant debt maturities until 2011

• Core pricing levels increased

• Victoria-Rosenberg nearing completion

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Financial Results

81.5%

+9.6%Over 1Q ‘07

$0.39

1Q 08

86.0%

(23.2%)Over 1Q ’08

($0.08)

1Q 09

Operating Ratio

Revenue Change

Earnings (Loss) per Share

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Dave StarlingPresident & COO

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Operating Highlights

• Cost controls are a priority

• Over 50% of costs are variable over the short- to mid-term

• Despite cuts, operating performance has been excellent

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Expense Controls Continue

• Operating expenses down 19%

– Excluding depreciation, expenses down 23%

– Trains consolidated; crew starts and dead heads reduced

– Returning leased equipment

– Stored locomotives• Focus on fuel efficiency

• Storing higher cost locomotives

• Reduction in maintenance costs

– Optimization of local service frequency

• Capital expenditures to moderate– Capital budget frontloaded due to Victoria-Rosenberg

– Second half of year drastically reduced capex

– Capital 2009 budget below $300 million versus capex in 2008 of $577 million

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82.4%

81.5%

86.0%

1Q 2007 1Q 2008 1Q 2009

Operating RatioFirst Quarter Comparison

10

21

11

30

2007 2008 2009

5,2145,480

6,250

2007 2008 2009

40

65

90

2007 2008 2009

20.8

18.7

15.7

2007 2008 2009

System Metrics

22.7

25.0

28.1

2 00 7 20 08 20 09

1.41

1.10

0.74

2007 2008 2009

12% improvement

38% improvement

14% improvement

16% improvement

33% improvement

Velocity (mph) Dwell On-Time Origination %

Gross Tons per Train Reportable Train Accidents Reportable Injury Rates

48% improvement

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Pat OttensmeyerEVP Sales & Marketing

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Revenue Summary

• Revenue declined 23.2% to $346 million

• Volumes were down across all commodities except coal and U.S. intermodal

– U.S. carloads decreased 7.2%

– Mexico carloads decreased 25.6%

• Core pricing increased compared to 1Q 2008

– Fuel, mix, and currency drove revenue per unit lower

– Same linehaul move increased by 5.3%

– Linehaul rate per mile increased by 6.9%

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1Q Revenue Detail

(23%)$450.6$346.0Total Revenue

(2%)20.119.7Other Revenue

(24%)430.5326.3Total Freight Revenue

(57%)28.312.3Automotive

(15%)35.830.6Intermodal

1%47.047.3Coal

108.8

123.9

$86.7

1Q 08

(24%)

(34%)

(18%)

% Change

82.6

82.0

$71.5

1Q 09

Agriculture & Minerals

Industrial & Consumer

Chemical & Petroleum

$ in millions

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1Q 2008

Volume

Fuel

Price

Exchange Rate

Other Revenue

1Q 2009

Quarterly Revenue Decreased by 23%$ in millions

$451 -18.8%

-3.9%

+4.9%

-5.3%-0.1%

$346

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Linehaul Rate per Loaded Car/Unit Mile *

Agriculture &Mineral

Coal Industrial &Consumer

Chemical &Petroleum

Intermodal Automotive

Q1 2008 Q1 2009

* Linehaul revenue excludes fuel surcharge and foreign exchange

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Consolidated Revenue Decreased by 23%

Carloads

-15.1%

452,273

384,048

1Q 2008 1Q 2009

Revenue per Unit

-10.7%$952

$850

1Q 2008 1Q 2009

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Agriculture & Minerals RevenueDecreased by 24%

• Crossborder volumes negatively impacted by exchange rate, large Mexican harvest, and low vessel rates

• RPU decrease driven by shorter length of haul and lower fuel surcharge

• We expect current conditions to continue through 2009

Revenue per Unit

-12.3%

$1,515

$1,329

1Q 2008 1Q 2009

Carloads

-13.4%71,800

62,168

1Q 2008 1Q 2009

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Sorghum Replaces Corn in Poultry Industry in Mexico

1,289 Miles

150 Miles

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Coal Revenue Increased by 1%

• Coal revenues increase on higher volumes of unit train utility coal

• Petroleum coke shipments declined due to weakness in steel and cement production

• RPU decline driven by fuel and mix

• By volume, 30% of utility coal contracts will be repriced in 2010

• Revenue and carloads still expect to exceed 2008 levels

Revenue per Unit

-2.4%

$646

$631

1Q 2008 1Q 2009

Carloads

+3.1%

72,771

75,017

1Q 2008 1Q 2009

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Industrial & Consumer Revenue Decreased by 34%

• Paper, cement, and steel demand was weak due to the global economic downturn

• Lumber and appliances continue to be depressed due to U.S. housing market

• No signs of improvement until at least second half of 2009

• All paper mills on KCS are up and running. One steel plant idled indefinitely

Revenue per Unit

-5.1%

$1,307

$1,241

1Q 2008 1Q 2009

Carloads

-30.3%94,778

66,088

1Q 2008 1Q 2009

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Chemical & Petroleum RevenueDecreased by 18%

• Demand for petroleum products was weak due to lower industrial activity

• Plastics demand soft due to weakness in housing and auto sectors

• RPU lower due to fuel and length of haul

• All chemical refineries on KCS system are up and running

Revenue per Unit

-8.4%

$1,406

$1,289

1Q 2008 1Q 2009

Carloads

-10.0%

61,645

55,485

1Q 2008 1Q 2009

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Automotive Revenue Decreased by 57%

• North American auto sales decreased 38.4% versus 2008

• U.S. auto inventories continue above target levels but improved during the quarter

• All KCS-served plants are operating, however at reduced levels

Revenue per Unit

+10.9%

$1,040

$1,153

1Q 2008 1Q 2009

Carloads

-60.8%27,212

10,665

1Q 2008 1Q 2009

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Intermodal Revenue Decreased by 15%

• Reduced automotive part shipments to Mexico and trans-Pacific traffic negatively impacted intermodal volumes

• Introduced new intermodal service from KC to various Mexican destinations

• Cross-border truckload conversion will be a priority for second half 2009 with opening of Rosenberg (Houston) terminal

Revenue per Unit

-7.5%

$289

$267

1Q 2008 1Q 2009

Units

-7.6%124,067

114,625

1Q 2008 1Q 2009

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Market Outlook

• Core pricing remains positive

• Economic outlook continues to be negative through 2009

• Volumes expected to be below 2008 levels until at least 4Q

• Revenues will continue to be negatively impacted by foreign exchange and fuel

• Areas of relative strength– U.S. Coal– U.S. and cross-border intermodal

• New business opportunities continue to develop and will drive long term growth

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Mike UpchurchExecutive VP & CFO

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Financial Highlights

• Significant cost reductions achieved through productivity improvements

• Liquidity at March 31 remains consistent with historical trends

• Capital expenditures are expected to be under $300 million for the year to achieve free cash flow targets

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Consolidated Income Statement

39.541.8Interest Expense

53.4(1.7)Pre-Tax Income (Loss)

$0.39$(0.08)EPS Diluted

$37.7$(2.1)Net Income (Loss)

4.85.4Preferred Dividends

$32.9$(7.5)

Net Income (Loss) Available to Common

-5.9Debt Retirement Costs

97,48490,743Share Count (in thousands)

15.70.4Income Tax Expense

7.02.6

Equity Earnings & Other Income

2.5(5.1)Currency Gain/(Loss)

83.448.5Operating Income

367.2297.5Operating Expense

$450.6$346.0Total Revenue

1Q 20081Q 2009in millions

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Earnings (Loss) per Share Reconciliation

(0.04)Effective Tax Rate Impact

(0.06)Preferred Dividends

($0.08)1Q 2009 EPS

(0.01)Other Non-Operating

(0.02)Equity in Earnings

(0.02)Interest Expense

(0.04)Debt Retirement Costs

(0.05)Foreign Exchange

(0.23)Change in Operating Income

$0.391Q 2008 EPS

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$101.8

$77.8

$51.2

$44.4

$40.3

$18.6

$33.1

$43.3

$39.1

$47.1

$12.5

$33.0

$78.0

$44.5

Compensation &Benefits

Fuel

Purchased Services

Equipment

Depreciation

Casualties & Insurance

Materials & Other

1Q 2008 1Q 2009

First Quarter Operating Expenses Decline 19%

$ in millions

1Q 20081Q 2008 $367.2 mm$367.2 mm

1Q 20091Q 2009 $297.5 mm$297.5 mm

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Productivity Driving Expenses Lower

(33%)Short Term Variable Costs

Fuel

Car Hire

Operations Labor

Purchased Services

(19%)Total Operating Expenses

17%Depreciation & Amortization

(9%)Fixed & Indirect Costs

Locomotive & Freight Car Leases

Casualties & Insurance

Facilities/Telecom/Utilities/Software

(13%)Long Term Variable Costs

Materials & Other

Management Labor

Fringe Benefits

Change Year over Year

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Productivity Improvements Drive Majority of Expense Reduction

$ in millions

$7$4

$(9)

$(17)

$(55)

$298

$367

1Q 2008

Labor Rates

Depreciation

Fuel Price FX

Productivity & Volume

1Q 2009

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Free Cash Flow

$(41.1)$(54.5)Free cash flow after dividends paid

(4.9)

(62.4)

(92.5)

$118.7

1Q 2008

(2.8)Preferred dividends paid

(15.6)Other investing activities

(99.9)Cash used for capital expenditures

$63.8Net cash provided by operating activities

1Q 2009

• 1Q capital expenditures include Victoria-Rosenberg expansion

• Capital expenditures expected to be under $300 million for the year

• Continue to target neutral to slightly positive free cash flow for the year

$ in millions

* All reconciliations to GAAP can be found on the KCS website in the Investors section.

*

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Liquidity SummaryUnrestricted cash plus unused bank credit commitments

$142

$172

$203

$110

$149

$122

$228

$183

$143$144$125

$44$36

1Q 2006 2Q 2006 3Q 2006 4Q 2006 1Q 2007 2Q 2007 3Q 2007 4Q 2007 1Q 2008 2Q 2008 3Q 2008 4Q 2008 1Q 2009

$ in millions

Amounts not available for general corporate purposes have been excluded for consistency

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Major Debt Maturities

$0

$100

$200

$300

$400

$500

$600

$700

$800

2009 2010 2011 2012 2013 2014 2015 2016

13.0%

9.375%

7.375%

7.625%

12.5%8.0%

$ in millions

KCS debt KCSM debt

Term Loan

Revolver

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Mike Haverty

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Panama Canal Railway Total Containers

0

10,000

20,000

30,000

40,000

50,000

60,000

70,000

80,000

Q1 2004 Q1 2005 Q1 2006 Q1 2007 Q1 2008 Q1 2009

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Summary & Outlook

• A challenging quarter due to economy

• Cost savings and operational efficiencies position KCS well for extended growth when economy rebounds

• Victoria-Rosenberg to open in July

• Long-term growth will be driven by new business opportunities once the economy recovers

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www.kcsouthern.com