Kansas City Southern (KSU) 8-K Kansas City Southern Reports Third Quarter Earnings per Share of $0.48 in spite of Hurricane Impacted Revenues

Exhibit 99.1

Date: October 26, 2010

Media Contact:             William H. Galligan, (816) 983-1551

bgalligan@kcsouthern.com

Kansas City Southern Reports Third Quarter Earnings per Share of $0.48 in spite of Hurricane Impacted Revenues

Third Quarter 2010 Results

• Reported $438.3 million in revenues, an increase of 13.5% over third quarter 2009 despite an estimated $33 million revenue loss due to Hurricane Alex

• Reported operating ratio of 73.5%, a 4.8 point improvement from third quarter 2009

• Adjusted diluted earnings per share of $0.49 excluding a $0.01 loss for debt retirement costs in the quarter, an 81% increase over the prior year’s results

Kansas City, MO. Kansas City Southern (KCS) (NYSE:KSU) reported third quarter 2010 revenues of $438.3 million. Revenues were reduced by widespread flooding and resultant damage to Kansas City Southern de Mexico’s (KCSM) track and bridge infrastructure caused by Hurricane Alex during the month of July. Based on the initial insurance claim, the impact of the hurricane on volumes was approximately 27,000 carloads resulting in $33 million of lost revenues. Several commodity groups experienced some impact from the hurricane to varying degrees.

On a reported basis, automotive revenues were up 64% over third quarter 2009 as auto production has rebounded from the lows experienced in 2009. Coal revenues increased 29% from a year ago on improved contract pricing. Intermodal revenues were also up 25% as volumes continued to grow as KCS entered new markets. Other period-over-period revenue improvements were 20% for Industrial & Consumer Products and 4% for Agriculture & Minerals. Chemical & Petroleum revenues were down 2% in comparison to a strong third quarter in 2009.

Reported operating income for the third quarter was $116.0 million representing a 38% increase from a year ago. The Company reported a third quarter 2010 operating ratio of 73.5% compared with 78.3% in third quarter of 2009. Operating expenses in the third quarter increased 7% from a year ago to $322.3 million. The additional costs incurred during the quarter for hurricane damage repair and clean up were offset by the related expected insurance recovery for these costs. The operating ratio would have been approximately 150 basis points better excluding the lost revenue impact from the hurricane and a $6 million gain related to post-employment benefits.

The Company has produced positive free cash flow of $126.0 million year to date, including $56.6 million in the third quarter despite the negative impacts of the hurricane causing lost revenues and incremental expenses.

Reported net income available to common stockholders in the third quarter totaled $50.2 million, or $0.48 per diluted share, compared to $25.4 million, or $0.27 per diluted share in third quarter 2009. The Company estimates that the effects of Hurricane Alex on the third quarter were approximately $0.14 loss per diluted share. The impact of the gain for post-employment benefits was $0.04 per diluted share. KCS estimates a cumulative $0.09 per diluted share gain in future quarters as insurance recoveries are received and insurance claims related to the hurricane are settled, resulting in a cumulative impact of $0.05 loss per diluted share. The Company expects insurance recoveries to begin in the fourth quarter and anticipates final settlement of the claims in 2011.

“Considering the impact of Hurricane Alex on our Mexican and cross-border traffic in July, KCS’s third quarter financial results are impressive,” stated president and chief executive officer David L. Starling. “Given the extent of the damage, we recovered quickly from the nearly three and a half week service outage. The operating ratio for the third quarter would have been lower than that of the second quarter if not for the negative impacts of the hurricane. Traffic volumes returned to projected levels by the end of the third quarter and continue to be good in October. As we have previously stated, we believe that KCS’s second half 2010 revenue growth, adjusting for the impact of Hurricane Alex, should be approximately 20 percent. The projected revenue increase combined with the continued operational improvements and cost controls poise KCS for a strong finish to 2010.”

Executive Chairman Michael R. Haverty pointed to the Company’s greatly improved financial position. “KCS continues to produce strong cash flows. The Company repurchased the remaining $63.7 million of its 9³/₈% notes due 2012 bringing the total amount of debt reduction in 2010 to $332 million. Including its revolver availability, KCS ended the quarter with liquidity of $289 million, the highest level in more than 10 years.”

GAAP RECONCILIATIONS

($ in millions, except per share amounts)

Reconciliation of Diluted Earnings per Share to     Adjusted Diluted Earnings per Share:	Three Months Ended September 30,
	2010		2009
Diluted earnings per share	$	0.48	$	0.27
Adjustment for debt retirement costs		0.01		—
Adjusted diluted earnings per share (a)	$	0.49	$	0.27

Reconciliation of Free Cash Flow to Net     Decreases in Cash and Cash Equivalents:	Three Months Ended September 30, 2010		Nine Months Ended September 30, 2010
Net cash provided by operating activities	$	139.6	$	359.9
Net cash used for investing activities		(80.3)		(225.7)
Preferred stock dividends paid		(2.7)		(8.2)
Free cash flow - see (b) below		56.6		126.0
Proceeds from issuance of long-term debt		5.0		300.7
Repayment of long-term debt		(73.0)		(662.0)
Other financing activities		(4.1)		186.6
GAAP net decreases in cash and cash equivalents	$	(15.5)	$	(48.7)

(a)   The Company believes adjusted diluted earnings per share is meaningful as it allows investors to evaluate the Company’s performance for different periods on a more comparable basis by excluding items that do not relate to the ongoing operations of the Company.

(b)   The Company believes this measure provides the amount of liquidity generated by operations that can be used for the combination or any one of the following: debt reduction, capital investment and other investments.

CHANGE IN ACCOUNTING PRINCIPLE

Certain prior year amounts have been adjusted for the retrospective change in accounting principle for rail grinding costs.

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’s 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

Statements of Income

(In millions, except share and per share amounts)

(Unaudited)

	Three Months						Nine Months
	Ended September 30,						Ended September 30,
	2010			2009			2010			2009
Revenues	$	438.3		$	386.1		$	1,336.2		$	1,073.4
Operating expenses:
Compensation and benefits		87.3			83.4			271.7			240.4
Purchased services		48.0			37.1			140.9			129.3
Fuel		61.8			49.7			191.7			133.2
Equipment costs		37.5			41.8			117.5			122.1
Depreciation and amortization		46.1			44.6			138.8			138.9
Casualties and insurance		9.1			12.0			21.2			32.2
Materials and other		32.5			33.6			103.0			102.7
Total operating expenses		322.3			302.2			984.8			898.8
Operating income		116.0			83.9			351.4			174.6
Equity in net earnings of unconsolidated affiliates		5.2			1.9			16.2			4.9
Interest expense		(36.2	)		(41.2	)		(122.5	)		(128.4	)
Debt retirement costs		(1.9	)		—			(49.3	)		(5.9	)
Foreign exchange gain (loss)		2.0			(1.5	)		3.2			(0.6	)
Other income, net		2.4			0.3			3.9			4.7
Income before income taxes and noncontrolling interest		87.5			43.4			202.9			49.3
Income tax expense		34.7			14.8			78.5			16.4
Net income		52.8			28.6			124.4			32.9
Noncontrolling interest		(0.1	)		0.4			(1.2	)		0.8
Net income attributable to Kansas City Southern and subsidiaries		52.9			28.2			125.6			32.1
Preferred stock dividends		2.7			2.8			8.2			8.3
Net income available to common stockholders	$	50.2		$	25.4		$	117.4		$	23.8
Earnings per share:
Basic earnings per share	$	0.49		$	0.27		$	1.18		$	0.26
Diluted earnings per share	$	0.48		$	0.27		$	1.17		$	0.26
Average shares outstanding (in thousands):
Basic		102,082			94,683			99,337			92,462
Potentially dilutive common shares		7,428			560			7,485			496
Diluted		109,510			95,243			106,822			92,958

Kansas City Southern

Revenues & Carloads/Units By Commodity – Third Quarter 2010 and 2009

	Revenues						Carloads and Units						Revenue per
	(in millions)						(in thousands)						Carload/Unit
	Third Quarter				%		Third Quarter				%		Third Quarter				%
	2010		2009		Change		2010		2009		Change		2010		2009		Change
Chemical & Petroleum
Agri Chemicals	$	5.2	$	5.9		(12%)		3.3		4.6		(28%)	$	1,576	$	1,283		23%
Other Chemicals		37.2		38.8		(4%)		25.2		25.5		(1%)		1,476		1,522		(3%)
Petroleum		24.5		22.3		10%		17.3		18.3		(5%)		1,416		1,219		16%
Plastics		19.9		21.6		(8%)		15.0		16.3		(8%)		1,327		1,325		—
Total		86.8		88.6		(2%)		60.8		64.7		(6%)		1,428		1,369		4%
Industrial & Consumer Products
Forest Products		50.2		44.4		13%		32.2		30.2		7%		1,559		1,470		6%
Metals & Scrap		37.6		22.9		64%		24.8		15.9		56%		1,516		1,440		5%
Other		16.1		19.1		(16%)		18.0		20.5		(12%)		894		932		(4%)
Total		103.9		86.4		20%		75.0		66.6		13%		1,385		1,297		7%
Agriculture & Minerals
Grain		49.9		49.9		—		31.2		31.0		1%		1,599		1,610		(1%)
Food Products		30.1		27.4		10%		16.4		14.8		11%		1,835		1,851		(1%)
Ores & Minerals		12.2		11.1		10%		11.7		11.0		6%		1,043		1,009		3%
Stone, Clay & Glass		5.0		5.4		(7%)		2.9		3.9		(26%)		1,724		1,385		24%
Total		97.2		93.8		4%		62.2		60.7		2%		1,563		1,545		1%
Coal
Unit Coal		55.7		42.8		30%		64.1		71.2		(10%)		869		601		45%
Other Coal		7.9		6.4		23%		10.1		9.5		6%		782		674		16%
Total		63.6		49.2		29%		74.2		80.7		(8%)		857		610		40%
Intermodal		47.7		38.3		25%		170.3		135.8		25%		280		282		(1%)
Automotive		23.3		14.2		64%		16.5		14.0		18%		1,412		1,014		39%
TOTAL FOR COMMODITY GROUPS		422.5		370.5		14%		459.0		422.5		9%	$	920	$	877		5%
Other Revenue		15.8		15.6		1%
TOTAL	$	438.3	$	386.1		14%

Kansas City Southern

Revenues & Carloads/Units By Commodity – Year to Date September 30, 2010 and 2009

	Revenues						Carloads and Units						Revenue per
	(in millions)						(in thousands)						Carload/Unit
	Year to Date				%		Year to Date				%		Year to Date				%
	2010		2009		Change		2010		2009		Change		2010		2009		Change
Chemical & Petroleum
Agri Chemicals	$	17.4	$	16.3		7%		11.1		12.9		(14%)	$	1,568	$	1,264		24%
Other Chemicals		114.2		104.2		10%		75.5		69.9		8%		1,513		1,491		1%
Petroleum		75.6		60.7		25%		55.0		49.9		10%		1,375		1,216		13%
Plastics		62.6		58.1		8%		45.9		46.2		(1%)		1,364		1,258		8%
Total		269.8		239.3		13%		187.5		178.9		5%		1,439		1,338		8%
Industrial & Consumer Products
Forest Products		148.4		124.0		20%		95.8		87.9		9%		1,549		1,411		10%
Metals & Scrap		115.0		70.5		63%		76.7		51.2		50%		1,499		1,377		9%
Other		49.5		57.2		(13%)		54.2		58.4		(7%)		913		979		(7%)
Total		312.9		251.7		24%		226.7		197.5		15%		1,380		1,274		8%
Agriculture & Minerals
Grain		164.9		139.9		18%		102.5		95.8		7%		1,609		1,460		10%
Food Products		98.7		72.5		36%		52.5		42.2		24%		1,880		1,718		9%
Ores & Minerals		39.7		30.4		31%		36.1		33.6		7%		1,100		905		22%
Stone, Clay & Glass		15.8		15.0		5%		9.8		10.6		(8%)		1,612		1,415		14%
Total		319.1		257.8		24%		200.9		182.2		10%		1,588		1,415		12%
Coal
Unit Coal		152.6		118.6		29%		180.6		196.9		(8%)		845		602		40%
Other Coal		23.3		20.7		13%		30.7		29.7		3%		759		697		9%
Total		175.9		139.3		26%		211.3		226.6		(7%)		832		615		35%
Intermodal		139.9		101.1		38%		492.4		366.7		34%		284		276		3%
Automotive		69.3		32.7		112%		51.8		32.5		59%		1,338		1,006		33%
TOTAL FOR COMMODITY GROUPS		1,286.9		1,021.9		26%		1,370.6		1,184.4		16%	$	939	$	863		9%
Other Revenue		49.3		51.5		(4%)
TOTAL	$	1,336.2	$	1,073.4		24%