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Safe Harbor Statement This presentation contains “forward-looking statements” within the meaning of the securities laws concerning potential future events involving KCS and its subsidiaries, which could materially differ from the events that actually occur. Words such as “projects,” “estimates,” “forecasts,” “believes,” “intends,” “expects,” “anticipates,” and similar expressions are intended to identify many of these forward-looking statements. Such forward-looking statements are based upon information currently available to management and management’s perception thereof as of the date of this presentation. Differences that actually occur could be caused by a number of external factors over which management has little or no control, including: competition and consolidation within the transportation industry; the business environment in industries that produce and use items shipped by rail; loss of the rail concession of KCS’ subsidiary, Kansas City Southern de México, S.A. de C.V.; the termination of, or failure to renew, agreements with customers, other railroads and third parties; interest rates; access to capital; disruptions to KCS’ technology infrastructure, including its computer systems; natural events such as severe weather, hurricanes and floods; market and regulatory responses to climate change; credit risk of customers and counterparties and their failure to meet their financial obligations; legislative and regulatory developments and disputes; rail accidents or other incidents or accidents on KCS’ rail network or at KCS’ facilities or customer facilities involving the release of hazardous materials, including toxic inhalation hazards; fluctuation in prices or availability of key materials, in particular diesel fuel; dependency on certain key suppliers of core rail equipment; changes in securities and capital markets; loss of key personnel; labor difficulties, including strikes and work stoppages; insufficiency of insurance to cover lost revenue, profits or other damages; acts of terrorism or risk of terrorist activities; war or risk of war; domestic and international economic conditions; political and economic conditions in Mexico and the level of trade between the United States and Mexico; the outcome of claims and litigation involving KCS or its subsidiaries; and other factors affecting the operation of the business. More detailed information about factors that could affect future events may be found in filings by KCS with the Securities and Exchange Commission, including KCS’ Annual Report on Form 10-K for the year ended December 31, 2013 (File No. 1-4717) and subsequent reports. Forward-looking statements are not, and should not be relied upon as, a guarantee of future performance or results, nor will they necessarily prove to be accurate indications of the times at or by which any such performance or results will be achieved. As a result, actual outcomes and results may differ materially from those expressed in forward-looking statements. KCS is not obligated to 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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U.S. Elections - Why we are optimistic?

Economic Growth Policies o  Lower business tax rates o  Repatriation of corporate profits

o  Encourage domestic oil and gas production

o  Relieve pending regulations impacting coal and increasing use of clean coal

o  Implement a national infrastructure program

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Rail Industry Regulatory Relief o  Appointees likely to be more

pro-growth/pro-job creation o  Pending STB proceedings may

be reconsidered o  Pending FRA proceedings on

crew size and ECP braking might be reconsidered

o  Shift of focus toward needed

capacity, growth, cooperation, and productivity

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NAFTA is good for U.S. and Job Creation Job Creation o  NAFTA supports approximately 14 million U.S.

jobs. 5 million supported by increase in trade generated by NAFTA

o  NAFTA export-driven jobs pay wages that are typically 18% higher

o  Exports tied to more high skill / high wage workers

o  Net increase in jobs post-NAFTA implementation

o  U.S. private sector employment has risen by 30% since 1993

o  U.S. real manufacturing output has risen by approximately 80% over the past 25 years; U.S. remains the world’s largest manufacturer

o  Approx. 40% of U.S. imports from Mexico originate with American companies, and support U.S. jobs (Product Design, R&D, etc.)

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Agriculture o  U.S. Agriculture exports to Mexico &

Canada grew 330% since 1993, to $39 billion

o  Exports to Mexico alone have grown by 390%

o  Mexico is the #1 market for U.S. corn, soybean meal, & poultry; #2 market for U.S. pork

Automotive Industry o  Trade agreements caused automakers to

invest ~$52 billion in U.S.-based production facilities

o  Ford has invested $12 billion in the U.S. since 2011 (5x Mexico investment)

o  Detroit Three have invested $30+ billion in U.S. facilities since bankruptcy (3x Mexico investment)

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President-elect Donald Trump will begin a process of reshaping America's trade policy (from memo drafted by transition team)

Approach to considering NAFTA Options o  Anticipates reforming NAFTA and begins

a study on what the ramifications of withdrawing from the agreement would be and what would be required to do so.

o  Would notify Mexico and Canada that

the US intends to propose some amendments to the agreement.

o  Notes that there could be negative

consequences of withdrawing from NAFTA.

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Ability to withdraw from NAFTA o  Article 2205 allows any participating

country to withdraw from NAFTA, given a 180-day notice to the other two countries

o  Ability to withdraw from the agreement with one country only is not possible

Ability to change trade & tariff levels ‘..that Congress shall have the power to regulate commerce with foreign nations..’ Article I, Section 8 of the U.S. Constitution.

o  Initial withdrawal does not, by itself, raise tariff levels

o  Not clear that the President could unilaterally set permanent, across the board tariffs without Congressional involvement

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NAFTA Exports from NARS Regions 2016 YTD Exports to Canada & Mexico

Source: BTS Transborder Data, YTD Jan-Jun

$1.08 BILLION

$6.13 BILLION

$23.43 BILLION

$1.35 BILLION

$1.08 BILLION

$1.11 BILLION

$1.24 BILLION

Northeast $26.5 billion Midwest

$71.0 billion

Northwest $17.5 billion

Southwest $77.8 billion

Southeast $38.7 billion

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KCS/KCSM Border Security – A Virtual Wall §  Enables virtual walls

allowing for secure trade and filtering

§  Improved targeting allowing more volume & velocity

§  Increases throughput with existing infrastructure

§  High speed x-ray scanning on both sides of the border o  Radiation scanning

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The Economy:

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“If I were stuck on a desert island and allowed only one number to know how the economy was doing…”

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YTD 2016 Year over Year – 1/1 to 10/29

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*Other includes Waste, Nonferrous Scrap, and Other Carloads which includes Military and Appliances. Source: AAR Weekly Railroad Traffic, All North American Railroads

…it would be rail car loadings.” Warren Buffett

-6.1%

8.9%

-4.9%

2.7%

-8.7%

-2.9%

-4.1%

-23.0%

-7.0%

1.1%

Grand Total

Other

Nonmetallic Minerals

Motor Vehicles & Parts

Metallic Ores & Minerals

Intermodal Units

Forest Products

Coal

Chemicals & Petroleum

Agricultural & Food Products

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§  Consumer spending still good §  Housing still strong §  Automotive flattening §  But:

•  business inventories still high •  dollar still too strong •  manufacturing has turned weaker •  overall US GDP might struggle to hit 2%

Fall 2016: “Tepid” seems to Fit

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Lack of Force or Enthusiasm

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Growing the KCS Franchise

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§  Founded in 1887

§  More than 6,500 track miles

§  Seamless cross-border network

§  Service to 12 Gulf ports and 1 Pacific Ocean port

§  Service to 140 transload centers and 11 Intermodal Ramps

§  181 interchange points with other railroads, including all U.S. and Mexico Class 1 railroads

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Focus on 4 Key KCS Growth Drivers

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§  Automotive – parts and finished vehicles •  Production

•  Imports – Lazaro Cardenas and Veracruz

§  Intermodal •  Sole rail provider at Port of Lazaro Cardenas

•  Most efficient gateway at Laredo

•  Significant Market Share Opportunity

§  Plastics & Chemical – uniquely positioned to support industry investment in the Gulf

§  Mexico Energy Reform – will include refined products, LPG’s, pipe, frac sand and crude

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In progress

Currently not served by KCS

Mexico Automotive Market: KCS Well Positioned

Lazaro Cardenas

KCS serves 11 of the 12 automotive manufacturers

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Mexico’s Auto Production Growth (units in millions),

Source: Autocast, October 25, 2016

Automotive Outlook

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KCS INTERMODAL NETWORK Intermodal Interchange Point

Container Ports

KCS Intermodal Facility

NS Intermodal Facility

CN Intermodal Facility

CSXT Intermodal Facility

UP Intermodal Facility

FEC Intermodal Facility

KCS Shared Intermodal Facility

Ports

Kansas City, MO

Wylie, TX

Kendleton, TX

Laredo, TX

Jackson, MS

Lázaro Cárdenas, MH

Altamira, TM

Veracruz, VZ

Salinas Victoria, NL

San Luis Potosi, SL

Toluca, EM

Dallas, TX

Marion, OH

Atlanta, GA

Croxton, NJ

Miami, FL

Charlotte, NC

Jacksonville, FL

Norfolk, VA

Baltimore, MD

Chicago, IL

Detroit, MI

Memphis, TN

Syracuse, NY

Little Ferry, NJ

East St Louis, IL

Bethlehem, PA

Shreveport, LA

Brampton, ON

Montreal, QC

Mexico City, DF

Worchester, MA

Rutherford, PA

Greencastle, PA

Savannah, GA

Charleston, SC

Tampico, TM

Los Angeles, CA

Meridian, MS

Elizabeth, NJ

Introducing…

A new joint direct intermodal rail

service connecting key U.S. cities with

the industrial heartland of Mexico.

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Lázaro Cárdenas Development Plans

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§  Petrochemical growth in US Gulf Coast §  KCS has made significant investments in the Gulf area to

support this growth and is well positioned to move exports

Plastics

18 *Not all plants shown are KCS served

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Lake Charles / SASOL Development §  Two SIT (Storage In Transit) yards being built out:

1)  Specific use for Sasol 2)  Use designated for other plastics/resins growth

§  Expansion of classification yard at Mossville for internal use (Lake Charles area) – doubling existing capacity

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To Asia

To South America

Plastics move in covered hoppers from

Gulf Coast producers to México.

Plastics are packaged and/or transloaded into

40’ containers.

40’ containers are exported through Lazaro Cardenas to

international markets.

Export Plastic Pipeline

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§  Growth in Central Mexico has increased demand; created a shortage of fuel

§  Free market pricing set to be initiated (Jan 1, 2018) §  KCS is well positioned to participate in energy movements §  Multiple terminals currently being discussed

Mexico Energy Reform

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Gaps exist in the pipeline network due to Mexico topography (mountain ranges) KCS network can bridge gap in key areas

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Refined Products Fluid Terminal –  Gasoline, diesel, ethanol, biofuels –  74 acres of land

Phase 1 –  Land, truck, transload equipment, roads –  Direct rail to truck transload

Phase 2 –  Storage tanks and rail unloading system

SLP Fluids Terminal Project Highlights Partnership between KCSM, Watco and WTC

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KCS Mexico Energy Symposium Houston, TX 11/9/16

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•  155 Attendees

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San Luis Potosi KCS is well positioned to support Automotive & Refined Product growth §  Capital Spend: SLP Support Yard & Multiple Terminal Support

Tracks

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Sanchez Yard will result in increased security and cross-border fluidity & overall network efficiencies 2015 2017 Year End

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Celaya Bypass

§  City of Celaya located South of San Luis Potosi §  Project announced by Mexican government in 2009 to re-

route all KCSM & FXE traffic in order to ease congestion §  Benefits: Increased fluidity, safety, & capacity

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§  Best-positioned growth story in the industry with unique U.S.-Mexico cross-border network and the most profitable rail franchise in Mexico

§  Three pronged growth strategy: –  Cross-border –  Intra – US –  Intra - Mexico

§  Well-diversified customer base and commodity mix §  Excellent strategic positioning with multiple growth drivers §  Track record of strong financial and operating

performance §  Solid balance sheet with a commitment to maintaining

investment grade credit rating

Kansas City Southern Solid Investment Thesis

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