Kansas City Southern (KSU) 8-K Results of Operations and Financial Condition

Exhibit 99.1

Date: February 3, 2009

Media Contact:	William H. Galligan	Phone: 816/983-1551
	bgalligan@kcsouthern.com

Revenue Growth of 6.3% and Operating Ratio of 78.9% Highlight
Kansas City Southern’s Full-Year 2008 Earnings; Fourth Quarter
Earnings Impacted by Economy

Full-Year 2008

• Record annual revenues of $1.85 billion, a 6.3% increase

• Record operating income of $390.2 million, a 7.7% increase

• Operating ratio of 78.9%, compares favorably with 79.2% in 2007

• Record diluted EPS of $1.86, an 18.5% improvement

Fourth Quarter 2008 Results

• Revenues of $423.8 million, a 7.9% decrease from prior year

• Operating income of $91.2 million, a 16.1% decrease

• Operating ratio of 78.5%, compared with 76.4% in 2007

• Diluted EPS of $0.40, compared with $0.56 in 2007

Kansas City, MO. Kansas City Southern (KCS) (NYSE:KSU) reported fourth quarter 2008 revenues of $423.8 million, a 7.9% decrease over the corresponding 2007 period. The revenue decline was primarily the result of volume decreases in the quarter resulting from weakening economies in the U.S. and Mexico which was illustrated by the most significant downturn in the more economically sensitive commodities.

Operating expenses for the fourth quarter 2008 were $332.6 million, a decrease of 5.4% quarter over quarter. Fuel expense for the quarter was down 13.7% as the price of fuel dropped during the quarter. Compensation and benefits were also down 14.3% due to lower incentive compensation expense as well as operations being scaled back due to volume declines. Operating income for the fourth quarter was $91.2 million compared with $108.7 million last year, a 16.1% decrease. The fourth quarter 2008 operating ratio was 78.5% compared with 76.4% a year ago.

Net income available to common shareholders in the fourth quarter totaled $36.4 million, or $0.40 per diluted share, compared with $49.9 million, or $0.56 per diluted share in fourth quarter 2007, a 28.6% decrease in diluted earnings per share. During the fourth quarter, the company recorded a $21.7 million pre-tax foreign exchange loss as a result of the strengthening U.S. dollar against the Mexican peso. Also included in the fourth quarter is a $2.7 million income tax benefit resulting from economic conditions in Mexico.

Revenues for full year 2008 were $1.85 billion, a 6.3% increase over 2007. Revenues were led by agriculture & minerals, up 12.7%, spurred by a combination of long haul traffic from the upper Midwest to Mexico and strong pricing. Chemical & petroleum experienced a revenue increase of 8.6% for the year on strong pricing and substantial volume gains through three quarters. Coal revenues were up 5.5% and industrial & consumer revenues were up 1.5% both on strong pricing. Intermodal & automotive had mixed results with intermodal revenues up 12.2% year over year while automotive was down 4.8%.

For the year, operating expenses increased 5.9% as fuel expense was up nearly 20%. The operating ratio for the year was 78.9%, a slight improvement over the 79.2% recorded in 2007. Earnings per diluted share were $1.86, an 18.5% improvement over the prior year in spite of recording the foreign exchange loss for the fourth quarter.

Comments from the Chairman

“KCS reported record revenues, operating income, and diluted earnings per share for full year 2008 despite depressed fourth quarter revenues resulting from the most severe economic conditions in recent history,” stated KCS Chairman and Chief Executive Officer Michael R. Haverty. “As soon as traffic volumes began to fall in the wake of two September hurricanes, KCS management reshaped its transportation service plan and took out costs throughout the entire company. As a result, despite volumes that weakened throughout the quarter, KCS achieved a fourth quarter operating ratio of 78.5%. For the full-year 2008, KCS’ operating ratio was 78.9%, a 0.3 point improvement over 2007, and despite declining in the fourth quarter, 2008 annual revenues increased 6.3%.

“Because of the unsettled states of the U.S. and global economies, it would not be constructive to attempt to provide 2009 volume or revenue guidance at this time. However, through maintaining stringent control of operating and capital expenditures, KCS management is committed to operating the company in a manner which will allow it to be free cash flow positive in 2009.

“Looking beyond the present economic challenges, KCS remains a growth company. All the ingredients for the company’s long-term success are still in place. We have the management and employees, infrastructure and business opportunities in both the U.S. and Mexico to deliver exceptional value to all our stakeholders.”

Headquartered in Kansas City, Mo., Kansas City Southern is a transportation holding company that has railroad investments in the U.S., Mexico and Panama. Its primary U.S. holding is 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. Kansas City Southern’s 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., Mexico and Canada.

This press release may include statements concerning potential future events involving KCS and its subsidiaries, 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 KCS’ Form 10-K for the most recently ended fiscal year, filed by KCS with the Securities and Exchange Commission (SEC) (Commission file no. 1-04717). KCS will not update any forward-looking statements in this press release to reflect future events or developments.

Kansas City Southern
Income Statement
(In millions, except share and per share amounts)
(Unaudited)

	Three Months						Twelve Months
	Ended December 31,						Ended December 31,
	2008			2007			2008			2007
Revenues	$	423.8		$	460.3		$	1,852.1		$	1,742.8
Operating expenses:
Compensation and benefits		78.0			91.0			374.6			394.1
Purchased services		53.3			47.0			198.9			184.7
Fuel		65.6			76.0			324.8			270.8
Equipment costs		43.7			45.3			182.5			182.4
Depreciation and amortization		45.6			42.4			170.1			160.2
Casualties and insurance		12.7			18.2			74.7			71.0
Materials and other		33.7			31.7			136.3			117.2
Total operating expenses		332.6			351.6			1,461.9			1,380.4
Operating income		91.2			108.7			390.2			362.4
Equity in net earnings of unconsolidated affiliates		4.2			4.2			18.0			11.4
Interest expense		(36.2	)		(38.4	)		(138.9	)		(156.7	)
Debt retirement costs		—			—			(5.6	)		(6.9	)
Foreign exchange gain (loss)		(21.7	)		0.7			(21.0	)		(0.9	)
Other income (expense)		(1.0	)		6.1			6.0			12.0
Income before income taxes and minority interest		36.5			81.3			248.7			221.3
Income tax expense (benefit)		(2.7	)		26.5			64.5			67.1
Income before minority interest		39.2			54.8			184.2			154.2
Minority interest		—			0.1			0.3			0.4
Net income		39.2			54.7			183.9			153.8
Preferred stock dividends		2.8			4.8			15.2			19.8
Net income available to common shareholders	$	36.4		$	49.9		$	168.7		$	134.0
Earnings per share:
Basic earnings per share	$	0.40		$	0.66		$	2.02		$	1.77
Diluted earnings per share	$	0.40		$	0.56		$	1.86		$	1.57
Average shares outstanding (in thousands):
Basic		90,506			75,948			83,674			75,832
Potential dilutive common shares		7,634			21,785			14,928			21,784
Diluted		98,140			97,733			98,602			97,616

Kansas City Southern
Revenue & Carloadings By Commodity — Fourth Quarter 2008
(Dollars in Millions)

Carloadings							Revenue
Fourth Quarter				%			Fourth Quarter				%
2008		2007		Change			2008		2007		Change
						Coal
	67,431		66,395	1.6	%	Unit Coal	$	42.1	$	40.0	5.3	%
	12,072		15,271	(20.9	%)	Other Coal		9.2		11.8	(22.0	%)
	79,503		81,666	(2.6	%)	Total		51.3		51.8	(1.0	%)
						Industrial & Consumer Products
	33,696		43,980	(23.4	%)	Forest Products		51.0		59.8	(14.7	%)
	20,406		26,879	(24.1	%)	Metal/Scrap		31.1		42.3	(26.5	%)
	22,870		25,859	(11.6	%)	Other		24.1		28.3	(14.8	%)
	76,972		96,718	(20.4	%)	Total		106.2		130.4	(18.6	%)
						Chemical & Petroleum Products
	4,615		3,690	25.1	%	Agri Chemicals		5.7		5.0	14.0	%
	22,802		26,611	(14.3	%)	Other Chemicals		33.5		37.4	(10.4	%)
	13,744		16,229	(15.3	%)	Petroleum		19.3		23.1	(16.5	%)
	13,084		11,923	9.7	%	Plastics		16.4		17.5	(6.3	%)
	54,245		58,453	(7.2	%)	Total		74.9		83.0	(9.8	%)
						Agriculture & Minerals
	38,499		43,413	(11.3	%)	Grain		65.9		67.2	(1.9	%)
	15,099		14,151	6.7	%	Food Products		26.7		22.0	21.4	%
	15,740		13,233	18.9	%	Ores & Minerals		14.2		12.2	16.4	%
	3,766		4,377	(14.0	%)	Stone, Clay & Glass		5.9		6.0	(1.7	%)
	73,104		75,174	(2.8	%)	Total		112.7		107.4	4.9	%
						Intermodal & Automotive
	132,542		141,036	(6.0	%)	Intermodal		41.2		39.4	4.6	%
	25,275		28,951	(12.7	%)	Automotive		20.1		29.1	(30.9	%)
	157,817		169,987	(7.2	%)	Total		61.3		68.5	(10.5	%)
	441,641		481,998	(8.4	%)	TOTAL FOR BUSINESS UNITS		406.4		441.1	(7.9	%)
						Other Revenue		17.4		19.2	(9.4	%)
	441,641		481,998	(8.4	%)	TOTAL	$	423.8	$	460.3	(7.9	%)

Kansas City Southern
Revenue & Carloadings By Commodity — Year to Date December 31, 2008
(Dollars in Millions)

Carloadings							Revenue
Year to Date				%			Year to Date				%
2008		2007		Change			2008		2007		Change
						Coal
	249,599		259,366	(3.8	%)	Unit Coal	$	163.4	$	152.1	7.4	%
	51,686		54,807	(5.7	%)	Other Coal		40.3		40.9	(1.5	%)
	301,285		314,173	(4.1	%)	Total		203.7		193.0	5.5	%
						Industrial & Consumer Products
	157,950		182,659	(13.5	%)	Forest Products		234.0		240.5	(2.7	%)
	108,390		101,758	6.5	%	Metal/Scrap		166.3		140.7	18.2	%
	101,246		109,385	(7.4	%)	Other		108.3		119.9	(9.7	%)
	367,586		393,802	(6.7	%)	Total		508.6		501.1	1.5	%
						Chemical & Petroleum Products
	18,390		14,152	29.9	%	Agri Chemicals		24.4		17.9	36.3	%
	101,468		103,486	(2.0	%)	Other Chemicals		151.3		140.4	7.8	%
	61,552		65,234	(5.6	%)	Petroleum		92.7		86.8	6.8	%
	58,814		45,382	29.6	%	Plastics		79.4		75.3	5.4	%
	240,224		228,254	5.2	%	Total		347.8		320.4	8.6	%
						Agriculture & Minerals
	157,150		165,135	(4.8	%)	Grain		267.8		235.8	13.6	%
	59,622		61,859	(3.6	%)	Food Products		101.5		96.6	5.1	%
	58,686		54,609	7.5	%	Ores & Minerals		58.7		48.0	22.3	%
	17,814		16,298	9.3	%	Stone, Clay & Glass		27.0		23.3	15.9	%
	293,272		297,901	(1.6	%)	Total		455.0		403.7	12.7	%
						Intermodal & Automotive
	520,934		526,370	(1.0	%)	Intermodal		160.6		143.1	12.2	%
	101,622		108,402	(6.3	%)	Automotive		105.6		110.9	(4.8	%)
	622,556		634,772	(1.9	%)	Total		266.2		254.0	4.8	%
	1,824,923		1,868,902	(2.4	%)	TOTAL FOR BUSINESS UNITS		1,781.3		1,672.2	6.5	%
						Other Revenue		70.8		70.6	0.3	%
	1,824,923		1,868,902	(2.4	%)	TOTAL	$	1,852.1	$	1,742.8	6.3	%