SECURITIES AND EXCHANGE COMMISSION

                             WASHINGTON, D.C. 20549

                                    FORM 8-K

                                 CURRENT REPORT

                     Pursuant to Section 13 or 15(d) of the

                         Securities Exchange Act of 1934

                Date of Report (Date of earliest event reported):
                                December 11, 2001


                      KANSAS CITY SOUTHERN INDUSTRIES, INC.
                      -------------------------------------
               (Exact name of company as specified in its charter)

       DELAWARE                    1-4717                  44-0663509
---------------------         ---------------         -------------------
(State or other jurisdiction  (Commission file            (IRS Employer
     of incorporation)           number)              Identification Number)


                114 West 11th Street, Kansas City, Missouri 64105
                -------------------------------------------------
               (Address of principal executive offices) (Zip Code)

                Company's telephone number, including area code:

                                 (816) 983-1303

                                 Not Applicable

          (Former name or former address if changed since last report)



<PAGE>


Item 5.           Other Events

Provisions  included in the  Private  Securities  Litigation  Reform Act of 1995
provide a "safe  harbor" for  forward-looking  statements.  Kansas City Southern
Industries,  Inc.  (the  "Company")  filed a  Current  Report  on Form 8-K dated
November 12, 1996 (File No.  1-4717) and an amendment,  Form 8-K/A dated June 3,
1997  (File  No.  1-4717),   which  listed  cautionary  statements   identifying
significant  factors that could cause the Company's actual operating  results to
materially differ from those projected in any  forward-looking  statements.  The
cautionary  statements  included in Exhibit 99.1 to this Current  Report on Form
8-K are intended to supersede  those included in the  previously  filed Form 8-K
dated  November 12, 1996 and its amendment on Form 8-K/A dated June 3, 1997. The
cautionary  statements  included as Exhibit 99.1 to this Current  Report on Form
8-K  reflect  the  Company's   operations,   which  are   principally   in  rail
transportation  subsequent  to the spin-off of Stilwell  Financial  Inc. in July
2000. These cautionary  statements identify significant factors that could cause
the Company's actual operating results to materially differ from those projected
in any  forward-looking  statements,  whether  oral or  written,  made by, or on
behalf of, the Company.

Item 7.           Financial Statements and Exhibits

(c)   Exhibits

      Exhibit No.       Document

      (99)              Additional Exhibits

      99.1              Cautionary statements for purposes of the "safe harbor"
                        provisions of the Private Securities Litigation Reform
                        Act of 1995 are attached hereto as Exhibit 99.1


SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the Company
has duly  caused  this  Report  to be signed  on its  behalf by the  undersigned
hereunto duly authorized.

                                          Kansas City Southern Industries, Inc.


Date: December 11, 2001                   By:      /s/ Louis G. Van Horn
                                             ---------------------------------
                                                    Louis G. Van Horn
                                             Vice President and Comptroller
                                             (Principal Accounting Officer)



<PAGE>



EXHIBIT 99.1

CAUTIONARY STATEMENTS WITH RESPECT TO THE "SAFE HARBOR" PROVISIONS OF THE
PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995

The Private  Securities  Litigation  Reform Act of 1995 provides a "safe harbor"
for   forward-looking   statements  when  such  statements  are  accompanied  by
meaningful  cautionary  statements.  The  management  of  Kansas  City  Southern
Industries,  Inc.  ("Company" or "KCSI") may occasionally  make  forward-looking
statements and estimates  (such as forecasts and  projections)  of the Company's
future  performance or statements of management's  plans and  objectives.  These
forward-looking statements may be contained in, among other things, filings with
the Securities  and Exchange  Commission and press releases made by the Company,
or may be made orally by the  officers  of the  Company.  Actual  results of the
Company's  operations  could  materially  differ  from  those  indicated  in the
forward-looking  statements.  Therefore,  no  assurances  can be given  that the
estimates  or comments  indicated  in such  forward-looking  statements  will be
realized.  Significant  factors that could cause the Company's actual results to
differ from those indicated in the forward-looking  statements include,  but are
not  limited  to,  the  factors   delineated  below.   Persons  evaluating  such
forward-looking  comments should carefully consider the following  factors,  and
any  amendments  or  supplements  hereto,  in addition to the other  information
contained in the Company's public documents.

Effective  October  1,  2001  the  Gateway  Western  Railway  Company  ("Gateway
Western") was merged into The Kansas City  Southern  Railway  Company  ("KCSR").
Discussions  of  KCSR  in the  following  should  include  consideration  of the
operations and operating results of Gateway Western.

Economy  and  weather - We may be  adversely  affected  by  changes  in  general
economic, weather or other conditions

Our operations may be adversely  affected by changes in the economic  conditions
of the industries and geographic areas that produce and consume the freight that
is  transported  by our primary  subsidiary,  The Kansas City  Southern  Railway
Company ("KCSR"). The relative strength or weakness of the United States economy
as well as  various  international  and  regional  economies  also  affects  the
businesses included in our operations.  Our foreign  unconsolidated  affiliates,
Grupo Transportacion  Ferroviaria Mexicana, S.A. de C.V. ("Grupo TFM"- a Mexican
equity  investment)  and  Panama  Canal  Railway  Company  ("PCRC"  - an  equity
investment  with  operations  in  Panama)  and PCRC's  consolidated  subsidiary,
Panarail Tourism Company ("PTC") are more directly  affected by their respective
local economy. Historically, a stronger economy has resulted in improved results
for our rail transportation operations. Conversely, when the economy has slowed,
results have been less  favorable.  Our  revenues may be affected by  prevailing
economic  conditions and, if an economic slowdown or recession occurs in our key
markets, the volume of rail shipments is likely to be reduced. Additionally, our
operations may be affected by adverse weather conditions.  A weak harvest in the
midwest,  for  example,  may  substantially  reduce  the volume of  business  we
traditionally handle for our agricultural products customers. Additionally, many
of the goods and commodities we carry experience cyclical demand. Our results of
operations  can be  expected  to reflect  this  cyclical  demand  because of the
significant fixed costs inherent in railroad operations. Our operations may also
be affected by natural  disasters or terrorist acts.  Significant  reductions in
our volume of rail shipments due to economic,  weather or other conditions could
have a material adverse effect on our business,  financial condition and results
of operations.
<PAGE>

Execution of Business  Strategy--Our  operating results and financial  condition
will depend on  execution of our  business  strategy.  If we fail to execute our
business strategy, it may negatively impact our financial condition

Our operating  results and financial  condition  will depend in large measure on
our ability to successfully execute our business strategy. Our business strategy
includes  capitalizing on North America Free Trade Agreement  ("NAFTA") trade to
generate traffic and increase revenues,  exploiting our domestic  opportunities,
establishing  new and  expanding  existing  strategic  alliances  and  marketing
agreements,  and providing superior customer service.  Successful implementation
of this strategy depends on many factors,  including factors beyond our control.
There can be no assurance  that we will be able to  implement  our strategy on a
timely basis or at all or that, if  implemented,  such strategy will achieve the
desired results.

Significant  Competition--We compete against other railroads, truck carriers and
other  modes of  transportation.  If we are unable to compete  successfully,  it
could have a material  adverse effect on our business,  financial  condition and
results of operations

Our rail  operations  compete  against other  railroads,  many of which are much
larger and have  significantly  greater  financial and other  resources than us.
Since 1994, there has been significant  consolidation among major North American
rail carriers.  As a result of this consolidation,  the railroad industry is now
dominated by a few "mega-carriers." We believe that our revenues were negatively
affected  by the  merger of  Burlington  Northern,  Inc.  and  Santa Fe  Pacific
Corporation  (collectively  "BNSF") in 1995 and the merger of the Union  Pacific
Railroad  Company  ("UP") and the Southern  Pacific Rail  Corporation  ("SP") in
1996,  which both led to diversions of rail traffic away from our lines. We also
regard the larger western railroads (BNSF and UP), in particular, as significant
competitors  to our  operations  and  prospects  because  of  their  substantial
resources.

Truck carriers have eroded the railroad industry's share of total transportation
revenues.  Changing  regulations,  subsidized highway  improvement  programs and
favorable labor regulations have improved the competitive  position of trucks in
the United  States as an  alternative  mode of surface  transportation  for many
commodities.  In the United States, the trucking industry generally is more cost
and  transit-time  competitive than railroads for short-haul  distances.  We are
also  subject to  competition  from  barge  lines and other  maritime  shipping.
Mississippi and Missouri River barge traffic,  among others,  compete with us in
the  transportation  of bulk  commodities  such as grains,  steel and  petroleum
products.

Increased  competition  has  resulted  in downward  pressure  on freight  rates.
Competition with other railroads and other modes of  transportation is generally
based on the rates charged,  the quality and reliability of the service provided
and the quality of the carrier's equipment for certain  commodities.  Continuing
competitive pressures and declining margins could have a material adverse effect
on our business, financial condition and results of operations.

Dependence on Joint Venture Partners and Third  Parties--Our  business strategy,
operations and growth rely  significantly  on joint ventures and other strategic
alliances

Operation of our integrated  rail network and our plans for growth and expansion
rely  significantly  on  joint  ventures  and  other  strategic  alliances.  Two
strategically  significant railroad companies, The Texas Mexican Railway Company
("Tex Mex") and TFM,  S.A. de C.V.  ("TFM"),  are  companies  in which we hold a
minority interest through Mexrail, Inc. ("Mexrail") and Grupo TFM, respectively.
As a  minority  shareholder,  we are
<PAGE>

not in a position  to control  operations,  strategies  or  financial  decisions
without  the  concurrence  of  Transportacion  Maritima  Mexicana,  S.A. de C.V.
("TMM"),  the largest shareholder in each of Mexrail and Grupo TFM. In addition,
conflicts may arise between our business objectives and those of TMM. Resolution
of any such  conflicts  in our favor may be difficult  or  impossible  given our
minority ownership position. We do maintain  supermajority rights, which provide
us with the ability to block certain  actions  proposed by TMM at Grupo TFM. Our
interests in these companies are subject to restrictions on disposition.

Our operations  are also  dependent on  interchange,  trackage  rights,  haulage
rights and  marketing  agreements  with other  railroads  and third parties that
enable  us to  exchange  traffic  and  utilize  trackage  we do not  own.  These
agreements extend our network and provide strategically  important rail links to
Mexico,  the northern  midwest United States and Canada.  Our ability to provide
comprehensive  rail  service  to our  customers  depends  in large part upon our
ability to maintain these agreements with other railroads and third parties. The
termination of these agreements  could adversely affect our business,  financial
condition  and  results  of  operations.  There can be no  assurance  that these
agreements  will be renewed after their  expiration and the failure to renew any
of them could adversely affect our business,  financial condition and results of
operations.  In addition, we are dependent in part upon the financial health and
efficient performance of other railroads. For example, much of Tex Mex's traffic
moves over the UP's lines via trackage rights, and a significant  portion of our
grain  shipments  originate  with I&M Rail Link,  LLC pursuant to our  marketing
agreement  with it.  BNSF is our  largest  partner  in the  interchange  of rail
traffic.  There  can be no  assurance  that we will not be  materially  affected
adversely by operational or financial difficulties of other railroads.

Dependence on Key Personnel--Our  success will depend upon our ability to retain
and attract qualified management personnel

Our  operations  and  the  continued  execution  of our  business  strategy  are
dependent  upon  the  continued   employment  of  our  senior  management  team.
Recruiting,   motivating   and   retaining   qualified   management   personnel,
particularly  those with  expertise in the railroad  industry,  are vital to our
operations and ultimate success. There is substantial  competition for qualified
management  personnel  and  there  can be no  assurance  that we will be able to
attract or retain qualified personnel.  The loss of key personnel or the failure
to hire qualified  personnel could materially  adversely affect our business and
financial results.

Risks of Investments in Mexico--Our Mexican investment subjects us to political
and economic risks

We have  invested  approximately  $300 million in Grupo TFM. Our  investment  in
Mexico involves a number of risks. The Mexican government exercises  significant
influence  over the Mexican  economy and its  actions  could have a  significant
impact on TFM. Our Mexican investment may also be adversely affected by currency
fluctuations,   price  instability,   inflation,  interest  rates,  regulations,
taxation,  cultural  differences,  social instability,  labor disputes and other
political,  social and economic  developments in or affecting Mexico.  Moreover,
TFM's  commercial   success  is  heavily  dependent  on  expected  increases  in
U.S.-Mexico trade and will be strongly influenced by the effect of NAFTA on such
trade.  Downturns in either of the U.S. or Mexican economies or in trade between
the United States and Mexico would be likely to adversely impact TFM's business,
financial  condition and results of operations.  There can be no assurances that
the various risks  associated  with operating in Mexico can be  effectively  and
economically mitigated by TFM. Additionally, no assurances can be given that the
value of these investments will not become impaired.

TFM  holds  the  concession  to  operate  Mexico's  Northeast  Rail  Lines  (the
"Concession")  for  50  years,  beginning  in  1997,  and,  subject  to  certain
conditions, has a 50-year extension option. The Concession is
<PAGE>

subject to certain mandatory trackage rights and is only exclusive for 30 years.
Additionally, the Mexican government may revoke exclusivity after 20 years if it
determines  that  there  is  insufficient  competition  and  may  terminate  the
Concession  as a result of certain  conditions  or events,  including  (1) TFM's
failure to meet its  operating  and  financial  obligations  with  regard to the
Concession  under applicable  Mexican law, (2) a statutory  appropriation by the
Mexican  government  for  reasons  of public  interest  and (3)  liquidation  or
bankruptcy of TFM.  TFM's assets and its rights under the Concession may also be
seized temporarily by the Mexican  government.  Revocation or termination of the
Concession would materially adversely affect TFM's operations and its ability to
make  payments  on its debt.  Further,  even  though  TFM would be  entitled  to
compensation  for a  statutory  appropriation  or  temporary  seizure,  any such
compensation  might be  insufficient  to  cover  TFM's  losses.  The loss of the
Concession would materially adversely impact TFM's business, financial condition
and results of operations which, in turn, would materially  adversely impact the
value of and return on our investment in Grupo TFM and our ability to market our
U.S. operations on the basis of our access to Mexican locations.

Currently, Grupo TFM is limited in the amount of dividends it may pay because of
bond  covenants.  An  absence  of  dividends  from  Grupo TFM will,  or  limited
dividends may,  negatively impact our ability to obtain a current cash return on
our investment in Grupo TFM.

Risks of Investment in Panama-Our Panamanian investments subject us to political
and economic risk

We have entered into a joint venture with Mi-Jack Products,  Inc. ("Mi-Jack" - a
private  U.S.  company  located in  Illinois),  through  which we own 50% of the
common stock of the Panama Canal Railway  Company,  which owns all of the common
stock of Panarail Tourism Company. We have invested  approximately $12.5 million
in the PCRC and  approximately  $1  million  in PTC.  PCRC  operates  a railroad
between Panama City and Colon, Panama, while PTC operates a tourist and commuter
railway  service  in  conjunction  with  and over the  lines  of the  PCRC.  Our
investments  in PCRC and PTC have risks  associated  with  operating  in Panama,
including,  among  others,  cultural  differences,  varying  labor and operating
practices,  political  risk and  differences  between  the U.S.  and  Panamanian
economies.  There can be no assurances that the risks  associated with operating
in  Panama  can be  effectively  and  economically  mitigated  by  PCRC  or PTC.
Additionally,  no assurances  can be given that the value of our  investments in
PCRC and PTC will not become  impaired.  Further,  we are, under certain limited
conditions,  a guarantor for up to $15 million of cash  deficiencies  associated
with PCRC and, if PCRC terminates the concession contract without the consent of
the  International  Finance  Corporation,  a  guarantor  for  up to  50%  of the
outstanding senior loans of PCRC. The senior loans had an outstanding balance of
approximately $45 million at September 30, 2001.

Additional Capital Investment in TFM--We may be required to make additional
investments in TFM

On or after October 31, 2003, the Mexican  government has the option to sell its
20%  interest  in TFM (1)  through a public  offering or (2) to Grupo TFM at the
initial share price paid by Grupo TFM plus interest computed at the Mexican Base
Rate (the Unidades de Inversion  ("UDI")  published by Banco de Mexico).  In the
event that Grupo TFM does not purchase the Mexican  government's 20% interest in
TFM, the Mexican  government  may require TMM and us, or either TMM or us alone,
to purchase its  interest.  We and TMM have cross  indemnities  in the event the
Mexican government  requires only one of us to purchase its interest.  The cross
indemnities  allow the party  required  to  purchase  the  Mexican  government's
interest to require the other  party to  purchase  its pro rata  portion of such
interest.  However,  if we were  required to purchase  the Mexican  government's
interest   in  TFM  and  TMM   could   not  meet  its   obligations   under  the
cross-indemnity,  then we would be obligated to pay the total purchase price for
the Mexican government's interest. If we and
<PAGE>

TMM,  or either us or TMM alone,  had been  required  to  purchase  the  Mexican
government's  20% interest in TFM as of September 30, 2001,  the total  purchase
price would have been approximately $496 million.

Fuel Costs and  Shortages--We  are  vulnerable  to  increases  in fuel costs and
decreases in fuel  supplies.  Any  significant  increase in the cost of fuel, or
severe disruption of fuel supplies,  could have a material adverse effect on our
business, results of operations and financial condition

We  incur  substantial  fuel  costs  in  our  railroad  operations.  During  the
three-year period ended December 31, 2000,  locomotive fuel expenses represented
an average of 7.9% of KCSR's total operating  costs.  Fuel costs are affected by
traffic  levels,  efficiency of operations and equipment,  and petroleum  market
conditions.  The supply and cost of fuel is subject to market  conditions and is
influenced by numerous  factors beyond our control,  including  general economic
conditions,  world markets, government programs and regulations and competition.
Fuel prices  increased  significantly in 2000 and represented 9.7% of total KCSR
operating costs in 2000 and approximately 9.3% of total KCSR operating costs for
the nine months ending September 30, 2001. We attempt to minimize the effects of
fuel price fluctuations through forward purchase contracts, but cannot guarantee
that those  arrangements  will be beneficial to us. Any significant  increase in
the cost of fuel could have a material  adverse effect on our business,  results
of operations and financial condition.  Our operations,  as well as those of our
competitors,  could also be affected by any  limitation in the fuel supply or by
any imposition of mandatory allocation or rationing regulations. In the event of
a severe disruption of fuel supplies resulting from supply shortages,  political
unrest, war or otherwise,  the operations of rail and truck carriers,  including
us, could be adversely affected.

Concentration of Client Base--One of our coal customers accounts for
approximately 12%-13% of KCSR's total revenues

Southwestern  Electric  Power  Company  ("SWEPCO"),  our largest coal  customer,
accounted  for  approximately  64% of our coal  revenues and 12% of KCSR's total
revenues for the year ending December 31, 2000 and  approximately  13% of KCSR's
total revenues for the nine months ended  September 30, 2001. The loss of all or
a significant  part of SWEPCO's  business or a service  outage at one or more of
SWEPCO's  facilities could materially  adversely effect our financial  condition
and results of operations.

Labor  Relations;  Reliance on  Unionized  Labor--We  are  subject to  extensive
railroad industry regulation and rely upon unionized labor

Labor  relations  in  the  U.S.  railroad  industry  are  subject  to  extensive
governmental  regulation under the Railway Labor Act ("RLA").  Railroad industry
personnel  are covered by the  Railroad  Retirement  Act ("RRA")  instead of the
Social Security Act and by the Federal Employers'  Liability Act ("FELA") rather
than state workers'  compensation  systems.  These federal labor regulations are
often more burdensome and expensive than regulations  governing other industries
and may place us at a competitive disadvantage relative to other industries that
are not subject to these regulations.

Approximately 84% of the employees of KCSR are covered under various  collective
bargaining agreements.  Periodically,  the collective bargaining agreements with
the various unions become eligible for  renegotiation.  In 1996,  national labor
contracts  governing  KCSR  were  negotiated  with all  major  railroad  unions,
including  the  United  Transportation  Union,  the  Brotherhood  of  Locomotive
Engineers,   the   Transportation   Communications   International   Union,  the
Brotherhood of Maintenance of Way Employees and the
<PAGE>

International  Association  of  Machinists  and Aerospace  Workers.  A new labor
contract  was reached  with the  Brotherhood  of  Maintenance  of Way  Employees
effective May 31, 2001. Formal  negotiations to enter into new agreements are in
progress with the remaining  unions and the 1996 labor  contracts will remain in
effect until new  agreements  are reached.  Unions  representing  certain former
Gateway  Western  employees are operating under 1994 contracts and are currently
in negotiations to extend these  contracts.  We have reached new agreements with
all but one union representing former employees of MidSouth  Corporation,  which
was  merged  into KCSR on  January  1,  1994.  Discussions  with this  union are
ongoing.

We may be subject to work  stoppages in the future as a result of labor disputes
and may be subject to terms and conditions in amended or future labor agreements
that  could  have a  material  adverse  affect  on our  results  of  operations,
financial  position  and cash  flows.  Moreover,  because  such  agreements  are
generally negotiated on an industry-wide  basis,  determination of the terms and
conditions  of future labor  agreements  could be beyond our control.  Railroads
continue to be restricted by certain  remaining  restrictive  work rules and are
thus prevented from achieving optimum  productivity with existing technology and
systems.

Regulation - We are subject to regulation by federal, state and local regulatory
agencies.   Our  failure  to  comply  with  various  federal,  state  and  local
regulations  could have a material  adverse  effect on our  business,  financial
conditions and results of operations

In addition to safety,  health and other  regulations,  generally  our U.S. rail
subsidiaries,  like other rail common carriers, are subject to regulation by the
Surface   Transportation  Board,  the  Federal  Railroad   Administration,   the
Occupational   Safety   and  Health   Administration,   state   departments   of
transportation  and  other  state  and  local  regulatory  agencies.  Government
regulation  of  the  railroad  industry  is a  significant  determinant  of  the
competitiveness and profitability of railroads.  While deregulation of rates and
services in the United States has  substantially  increased the  flexibility  of
railroads to respond to market  forces,  the  deregulated  environment  has also
resulted in highly  competitive rates.  Material  noncompliance by us with these
various regulatory requirements or changes in regulation of the industry through
legislative,  administrative,  judicial  or other  action  could have a material
adverse effect on our business,  financial  condition and results of operations,
including   limitations  on  our  operating  activities  until  compliance  with
applicable requirements is completed.

Environmental  -  Environmental  liabilities  could require us to incur material
costs  and  temporarily  suspend  any  operations  that  are  found  to  violate
environmental laws

Our operations are subject to extensive federal,  state and local  environmental
laws and  regulations  concerning,  among other  things,  emissions  to the air,
discharges to waters,  waste  management,  hazardous  substance  transportation,
handling and storage,  decommissioning of underground storage tanks and soil and
groundwater contamination. Those laws and regulations can (1) impose substantial
fines and criminal sanctions for violations, (2) require us to upgrade equipment
or make  operational  changes  to limit  pollution  emissions  or  decrease  the
likelihood  of  accidental  hazardous  substance  releases,  or (3)  temporarily
prohibit us from conducting  operations if those operations  violate  applicable
requirements.   We  incur,   and  expect  to  continue  to  incur,   significant
environmental  compliance costs,  including,  in particular,  costs necessary to
maintain  compliance  with  requirements  governing  our chemical and  hazardous
material  shipping   operations,   our  refueling   operations  and  our  repair
facilities.

Many of our current and former  properties  are or have been used for industrial
purposes, including, for example, hazardous material storage, waste disposal and
treatment,   foundry  operations,  drum  reconditioning  services  and  chemical
treatment  of wood  products.  Accordingly,  we also are subject to  potentially
material
<PAGE>

liabilities   relating  to  the   investigation   and  cleanup  of  contaminated
properties,  and to claims  alleging  personal  injury or property damage as the
result of exposures to, or releases of, hazardous  substances.  Such liabilities
could relate to properties that we owned or operated in the past, as well as any
of our  currently  owned or operated  properties.  Such  liabilities  also could
relate  to  third-party  sites to which we or our  predecessors  sent  waste for
treatment or disposal,  or which otherwise were affected by our operations.  For
example,  we are  conducting  investigation  and cleanup  activities  at several
properties which we own or which we or our predecessors owned or operated in the
past. We also are investigating and remediating  several  third-party sites that
were affected by spills from our rail car operations and have been identified as
a potentially  responsible party at several third-party  disposal sites to which
we sent waste and other  materials in the past. In addition,  we are a defendant
in a class action lawsuit alleging  personal injuries and property damage from a
chemical rail car explosion in 1995.

Although we have recorded  liabilities for estimated  environmental  remediation
and other  environmental  costs, actual expenditures or liabilities could exceed
estimated  amounts and could have a material  adverse effect on our consolidated
results of operations or financial position. New laws and regulations,  stricter
enforcement of existing requirements,  new spills, releases or violations or the
discovery of previously unknown contamination could require us to incur costs or
become  the basis for new or  increased  liabilities  that could have a material
adverse effect on our business, results of operations or financial condition.

Possible Catastrophic Loss and Liability;  Service Interruption--We may suffer a
catastrophe, collision, property loss or service interruption

The operation of any railroad  carries with it an inherent risk of  catastrophe,
collision  and  property  loss.  In the  course  of  train  operations,  service
interruptions,  derailments,  spills,  explosions,  leaks,  other  environmental
events,  cargo loss or damage and business  interruption  resulting from adverse
weather  conditions  or  natural  phenomena  could  result in loss of  revenues,
increased liabilities or increased costs. Significant  environmental mishaps can
cause serious bodily injury,  death and extensive property damage,  particularly
when such accidents  occur in heavily  populated  areas.  We maintain  insurance
(including   self-insurance)   consistent   with   industry   practice   against
accident-related risks involved in the operation of our business. However, there
can be no assurance that such insurance would be sufficient to cover the cost of
damages suffered by us or damages to others or that such insurance will continue
to be  available at  commercially  reasonable  rates.  Moreover,  our  insurance
coverage for events  occurring  prior to 1996 did not extend to punitive  damage
awards,   which  are  increasingly  being  levied  in  civil  cases  related  to
environmental accidents. Further, there can be no assurance that any accident or
natural disaster would not cause a significant interruption in our operations or
materially  adversely  affect our business,  financial  condition and results of
operations.

Impact of Utility Deregulation on Coal Shipments--Utility  industry deregulation
may reduce our coal freight revenues or margins

Historically,  coal has been an important  commodity handled by us. In 2000 coal
revenues  comprised  approximately 20% of KCSR's total carload revenues,  all of
which  result from  deliveries  to utility  customers.  The utility  industry is
undergoing a process of deregulation which will likely cause utilities to become
more   competitive   and  thus  more   aggressive  in   negotiating   with  coal
transportation companies to reduce costs. This could create downward pressure on
utility   coal   transportation   rates  and  increase   service   requirements.
Additionally,  there can be no assurance  that  negotiated  coal  transportation
rates  will  remain at  current  levels in the  future.  Continuing  competitive
pressures,  lower coal  transportation  rates and declining margins could have a
material  adverse  effect on our  business,  financial  condition and results of
operations.

<PAGE>

Utilities  will also have greater  flexibility  in selling  electricity  to, and
buying  electricity  from,  other regional  markets.  This could have a material
adverse  effect  on our  utility  customers  if such  customers  are not able to
compete  effectively  with new utility  companies  that enter  their  respective
markets.  As a result,  the pattern of coal shipments in a particular market may
shift to an alternative utility company that does not use us to deliver its coal
requirements.  While  we are  working  to  help  our  utility  customers  remain
competitive  in  this  evolving  environment,  changes  in the  pattern  of coal
movements  could  have a  material  adverse  impact on our  business,  financial
condition and results of operations.

Substantial  Leverage--Our  substantial  leverage  could  adversely  affect  our
ability to fulfill  our  obligations  under our  various  debt  instruments  and
operate our business

We are highly leveraged and will have significant debt service  obligations.  As
of  September  30,  2001,  we had total  debt of  approximately  $684.8  million
(excluding unused commitments) and total  stockholders'  equity of approximately
$665.0  million,  giving us a total  debt to equity  ratio of 1.03 to 1.00.  Our
interest expense for the nine months ended September 30, 2001 was $42.9 million.
In  addition,  we may  incur  additional  debt  from  time to  time  to  finance
acquisitions, investments or capital expenditures or for other purposes, subject
to the restrictions contained in our various credit agreements.

    Our high level of debt  could have  important  consequences,  including  the
following:

    o we may have difficulty borrowing money in the future for working capital,
      capital expenditures or other purposes;

    o we will  need to use a large  portion  of the  money  earned by us and our
      subsidiaries to pay principal and interest on our debt,  which will reduce
      the amount of money  available to us to finance our  operations  and other
      business activities;

    o some of our debt has a variable  rate of interest,  which exposes us to
      the risk of increased interest rates;

    o we  have  a  much  higher  level  of  debt  than  some  of  our
      competitors, which may put us at a competitive disadvantage;

    o our debt level  makes us more  vulnerable  to general  economic downturns
      and adverse industry conditions;

    o our debt level could reduce our  flexibility in planning for, or
      responding  to,  changing  business  and  economic  conditions, including
      increased competition in the railroad industry;

    o our level of debt may prevent us from raising the funds necessary to
      repurchase all of certain senior notes that could be tendered to us upo
      the occurrence of a change of control,  which would  constitute an event
      of default; and

    o our failure to comply with the  financial and other restrictive covenants
      in our debt instruments,  which, among other things,  require us to
      maintain specified financial ratios and limit our ability to incur debt
      and sell assets, could result in an event of default that, if not cured or
      waived, could have a material adverse effect on our business or prospects.
<PAGE>

Ability to Service  Debt--Servicing  our debt requires a  significant  amount of
cash,  and our  ability to  generate  cash  depends on many  factors  beyond our
control

We expect to obtain the money to make  payments on and to refinance our debt and
to fund  working  capital,  capital  expenditures  and other  general  corporate
requirements in part from our operations and the operations of our subsidiaries.
Our  ability  to  generate  cash is  subject  to  general  economic,  financial,
competitive,  legislative,  regulatory  and other  factors  that are  beyond our
control.  We cannot be certain  that the cash earned by us and our  subsidiaries
will be  sufficient  to allow us to pay  principal  and interest on our debt and
meet our other  obligations or to fund our other  liquidity  needs. If we do not
have enough cash we may be required to take actions such as reducing or delaying
capital expenditures,  selling assets,  restructuring or refinancing all or part
of our existing debt or seeking additional equity capital.  We cannot assure you
that any of these remedies can be effected on commercially  reasonable  terms or
at all.  In  addition,  the terms of  existing  or future  debt  agreements  may
restrict us from adopting any of these alternatives.

Additional Borrowing Capacity--Despite our substantial leverage, we will be able
to  incur  more  debt,  which  may  intensify  the  risks  associated  with  our
substantial leverage, including our ability to service our debt

Our existing credit agreements and certain of our other debt instruments  permit
us, subject to certain  conditions,  to incur a significant amount of additional
debt.  In addition,  as of  September  30,  2001,  we had $65 million  remaining
available under our revolving credit facility.  If we incur additional debt, the
risks associated with our substantial leverage, including our ability to service
our debt, could intensify.

Restrictive Covenants in our Debt  Instruments--Restrictions  imposed by certain
of our debt  instruments  may limit our ability to finance future  operations or
capital needs or engage in other business activities that may be in our interest

Certain of our debt  instruments  impose,  and the terms of any future  debt may
impose,  operating and other restrictions on us. These restrictions  affect, and
in many respects limit or prohibit, among other things, our ability to:

    o   incur additional debt;

    o   pay dividends or make distributions;

    o   repurchase equity interests;

    o   redeem subordinated debt;

    o   make other restricted payments, including, without imitation,
        investments;

    o   sell or otherwise dispose of assets, including capital stock of
        subsidiaries;

    o   create liens;

    o   enter into agreements that restrict dividends from subsidiaries;

<PAGE>


    o   merge or consolidate; and

    o   enter into transactions with affiliates.

In  addition,  certain  of our term  debt  instruments  include  other  and more
restrictive  covenants that prohibit us from prepaying our other debt while debt
under  these  term debt  instruments  is  outstanding.  There  are also  certain
financial  and  operating  results that we must  achieve as well as  maintaining
compliance  with specified  financial  ratios.  Our ability to comply with these
ratios may be affected by events beyond our control.

These  restrictions  could (i) limit our  ability to plan for or react to market
conditions  or meet  capital  needs or  otherwise  restrict  our  activities  or
business plans and (ii) adversely  affect our ability to finance our operations,
acquisitions,  investments or other capital needs or to engage in other business
activities that would be in our interest.  A breach of any of these  restrictive
covenants or our  inability to comply with the required  financial  ratios could
result in default under certain of these debt instruments and cause acceleration
of principal and interest  payments and allow  termination of further  financing
commitments.  If we are unable to repay the  borrowings  when due,  the  lenders
under  these  debt  instruments  would  have the right to  proceed  against  the
collateral granted to them to secure the debt. There can be no assurance that we
would be able to secure the necessary funds to meet the acceleration  provisions
in an event of default.

Minority Purchase  Agreements--In the event of a change in ownership of KCSI, we
may be required to purchase stock of Janus Capital Corporation,  a subsidiary of
Stilwell,  from certain minority stockholders of Janus Capital Corporation.  The
amounts to purchase this stock could be material

We would be required  under certain  agreements  with minority  stockholders  of
Janus  Capital  Corporation  ("Janus") to purchase  their shares of Janus common
stock  in the  event of a  Change  in  Ownership  of KCSI  (as  defined  in such
agreements).  Stilwell Financial Inc. ("Stilwell" - a former subsidiary of KCSI)
has  agreed  to assume  any and all  liabilities  arising  from  these  minority
stockholder agreements;  however if Stilwell were unable to meet its obligations
with  respect to these  agreements,  KCSI would be required  to  purchase  these
shares of Janus common stock. KCSI believes,  based on discussions with Stilwell
management,  that Stilwell has adequate  financial  resources  available to fund
these obligations.  If we were required to purchase those shares of Janus common
stock  under these  minority  stockholder  agreements,  it could have a material
adverse effect on our business,  financial condition,  results of operations and
cash flows.

Spin-off Tax Ruling--If  KCSI is required to recognize gain on its  distribution
of Stilwell common stock,  it could have a negative  impact on KCSI's  financial
condition and deter potential combinations that could benefit KCSI

On July 9, 1999, KCSI received a tax ruling from the IRS to the effect that, for
United States federal income tax purposes,  the spin-off of Stilwell,  which was
completed on July 12, 2000,  qualifies as a tax-free  distribution under Section
355 of the Internal Revenue Code of 1986, as amended (the "Code"). Additionally,
in February 2000,  KCSI received a favorable  supplementary  tax ruling from the
IRS to the effect that the  assumption of $125 million of KCSI  indebtedness  by
Stilwell would have no effect on the previously issued tax ruling. However, KCSI
may  nevertheless be required to recognize gain on its  distribution of Stilwell
common stock to KCSI  stockholders  if such  distribution  is part of a plan (or
series of related  transactions)  pursuant to which one or more persons  acquire
directly or  indirectly  a 50% or greater  equity  interest in KCSI or Stilwell.
Moreover,  if one or more persons  acquire such a 50% equity interest during the
four-year  period
<PAGE>

that  begins two years  before  the  distribution  and ends two years  after the
distribution,  then the  acquisition  may be treated as  pursuant to such a plan
unless it is  established  that the  distribution  and the  acquisition  are not
pursuant  to a plan or series of related  transactions.  On August 2, 2001,  the
Treasury   Department  issued  Regulations   providing  guidance  on  whether  a
distribution  and  acquisition  are  pursuant  to a plan or a series of  related
transactions.  The potential negative impact on KCSI's financial condition if it
is required to recognize gain on its  distribution  of Stilwell common stock may
deter potential combinations that could benefit KCSI.

Antitakeover  Considerations--We  have provisions in our charter and bylaws that
could  deter,  delay or prevent a third party from  acquiring us and which could
deprive our  stockholders  of an  opportunity  to obtain a takeover  premium for
their shares of common stock

We have  provisions  in our  charter  and  bylaws  that  may  delay  or  prevent
unsolicited  takeover bids from third parties.  These provisions may deprive our
stockholders of an opportunity to sell their shares at a premium over prevailing
market prices.  For example,  our  certificate of  incorporation  provides for a
classified  board of  directors.  It further  provides that a vote of 70% of the
shares  entitled to vote in the  election of  directors is required to amend our
certificate  of  incorporation  to increase the number of directors to more than
eighteen, abolish cumulative voting for directors and abolish the classification
of the  board.  The same vote  requirement  is  imposed  by our  certificate  of
incorporation on certain transactions involving mergers,  consolidations,  sales
or leases of assets with or to certain owners of more than 5% of our outstanding
stock  entitled to vote in the election of directors.  Our bylaws provide that a
stockholder  must  provide  us with  advance  written  notice  of its  intent to
nominate a director or raise a matter at an annual meeting. In addition, we have
adopted a stockholders'  rights plan which, under certain  circumstances,  would
significantly  impair  the  ability of third  parties  to acquire  control of us
without prior approval of our board of directors.

Miscellaneous

In addition to the factors  discussed  above,  there may be other  factors  that
could cause  actual  results to differ  materially  from those  indicated in the
forward-looking comments. Other factors include, but are not limited to, changes
in management strategies,  objectives and business approaches;  changes in lines
of business;  material  litigation  involving us; and changes in the  political,
regulatory or economic  environments  in the United States,  Mexico,  Panama and
other countries where we or our unconsolidated  affiliates  currently operate or
may operate in the future.
[{"type": "8-K", "sequence": "1", "filename": "safeharbor8k.txt", "description": "SAFE HARBOR", "secsgml_size_bytes": 46528}]
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SECURITIES AND EXCHANGE COMMISSION

                             WASHINGTON, D.C. 20549

                                    FORM 8-K

                                 CURRENT REPORT

                     Pursuant to Section 13 or 15(d) of the

                         Securities Exchange Act of 1934

                Date of Report (Date of earliest event reported):
                                December 11, 2001

                      KANSAS CITY SOUTHERN INDUSTRIES, INC.
                      -------------------------------------
               (Exact name of company as specified in its charter)

       DELAWARE                    1-4717                  44-0663509
---------------------         ---------------         -------------------
(State or other jurisdiction  (Commission file            (IRS Employer
     of incorporation)           number)              Identification Number)

                114 West 11th Street, Kansas City, Missouri 64105
                -------------------------------------------------
               (Address of principal executive offices) (Zip Code)

                Company's telephone number, including area code:

                                 (816) 983-1303

                                 Not Applicable

          (Former name or former address if changed since last report)
Item 5.           Other Events

Provisions  included in the  Private  Securities  Litigation  Reform Act of 1995
provide a "safe  harbor" for  forward-looking  statements.  Kansas City Southern
Industries,  Inc.  (the  "Company")  filed a  Current  Report  on Form 8-K dated
November 12, 1996 (File No.  1-4717) and an amendment,  Form 8-K/A dated June 3,
1997  (File  No.  1-4717),   which  listed  cautionary  statements   identifying
significant  factors that could cause the Company's actual operating  results to
materially differ from those projected in any  forward-looking  statements.  The
cautionary  statements  included in Exhibit 99.1 to this Current  Report on Form
8-K are intended to supersede  those included in the  previously  filed Form 8-K
dated  November 12, 1996 and its amendment on Form 8-K/A dated June 3, 1997. The
cautionary  statements  included as Exhibit 99.1 to this Current  Report on Form
8-K  reflect  the  Company's   operations,   which  are   principally   in  rail
transportation  subsequent  to the spin-off of Stilwell  Financial  Inc. in July
2000. These cautionary  statements identify significant factors that could cause
the Company's actual operating results to materially differ from those projected
in any  forward-looking  statements,  whether  oral or  written,  made by, or on
behalf of, the Company.

Item 7.           Financial Statements and Exhibits

(c)   Exhibits

      Exhibit No.       Document

      (99)              Additional Exhibits

      99.1              Cautionary statements for purposes of the "safe harbor"
                        provisions of the Private Securities Litigation Reform
                        Act of 1995 are attached hereto as Exhibit 99.1

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the Company
has duly  caused  this  Report  to be signed  on its  behalf by the  undersigned
hereunto duly authorized.

                                          Kansas City Southern Industries, Inc.

Date: December 11, 2001                   By:      /s/ Louis G. Van Horn
                                             ---------------------------------
                                                    Louis G. Van Horn
                                             Vice President and Comptroller
                                             (Principal Accounting Officer)
EXHIBIT 99.1

CAUTIONARY STATEMENTS WITH RESPECT TO THE "SAFE HARBOR" PROVISIONS OF THE
PRIVATE SECURITIES LITIGATION REFORM ACT OF 1995

The Private  Securities  Litigation  Reform Act of 1995 provides a "safe harbor"
for   forward-looking   statements  when  such  statements  are  accompanied  by
meaningful  cautionary  statements.  The  management  of  Kansas  City  Southern
Industries,  Inc.  ("Company" or "KCSI") may occasionally  make  forward-looking
statements and estimates  (such as forecasts and  projections)  of the Company's
future  performance or statements of management's  plans and  objectives.  These
forward-looking statements may be contained in, among other things, filings with
the Securities  and Exchange  Commission and press releases made by the Company,
or may be made orally by the  officers  of the  Company.  Actual  results of the
Company's  operations  could  materially  differ  from  those  indicated  in the
forward-looking  statements.  Therefore,  no  assurances  can be given  that the
estimates  or comments  indicated  in such  forward-looking  statements  will be
realized.  Significant  factors that could cause the Company's actual results to
differ from those indicated in the forward-looking  statements include,  but are
not  limited  to,  the  factors   delineated  below.   Persons  evaluating  such
forward-looking  comments should carefully consider the following  factors,  and
any  amendments  or  supplements  hereto,  in addition to the other  information
contained in the Company's public documents.

Effective  October  1,  2001  the  Gateway  Western  Railway  Company  ("Gateway
Western") was merged into The Kansas City  Southern  Railway  Company  ("KCSR").
Discussions  of  KCSR  in the  following  should  include  consideration  of the
operations and operating results of Gateway Western.

Economy  and  weather - We may be  adversely  affected  by  changes  in  general
economic, weather or other conditions

Our operations may be adversely  affected by changes in the economic  conditions
of the industries and geographic areas that produce and consume the freight that
is  transported  by our primary  subsidiary,  The Kansas City  Southern  Railway
Company ("KCSR"). The relative strength or weakness of the United States economy
as well as  various  international  and  regional  economies  also  affects  the
businesses included in our operations.  Our foreign  unconsolidated  affiliates,
Grupo Transportacion  Ferroviaria Mexicana, S.A. de C.V. ("Grupo TFM"- a Mexican
equity  investment)  and  Panama  Canal  Railway  Company  ("PCRC"  - an  equity
investment  with  operations  in  Panama)  and PCRC's  consolidated  subsidiary,
Panarail Tourism Company ("PTC") are more directly  affected by their respective
local economy. Historically, a stronger economy has resulted in improved results
for our rail transportation operations. Conversely, when the economy has slowed,
results have been less  favorable.  Our  revenues may be affected by  prevailing
economic  conditions and, if an economic slowdown or recession occurs in our key
markets, the volume of rail shipments is likely to be reduced. Additionally, our
operations may be affected by adverse weather conditions.  A weak harvest in the
midwest,  for  example,  may  substantially  reduce  the volume of  business  we
traditionally handle for our agricultural products customers. Additionally, many
of the goods and commodities we carry experience cyclical demand. Our results of
operations  can be  expected  to reflect  this  cyclical  demand  because of the
significant fixed costs inherent in railroad operations. Our operations may also
be affected by natural  disasters or terrorist acts.  Significant  reductions in
our volume of rail shipments due to economic,  weather or other conditions could
have a material adverse effect on our business,  financial condition and results
of operations.
Execution of Business  Strategy--Our  operating results and financial  condition
will depend on  execution of our  business  strategy.  If we fail to execute our
business strategy, it may negatively impact our financial condition

Our operating  results and financial  condition  will depend in large measure on
our ability to successfully execute our business strategy. Our business strategy
includes  capitalizing on North America Free Trade Agreement  ("NAFTA") trade to
generate traffic and increase revenues,  exploiting our domestic  opportunities,
establishing  new and  expanding  existing  strategic  alliances  and  marketing
agreements,  and providing superior customer service.  Successful implementation
of this strategy depends on many factors,  including factors beyond our control.
There can be no assurance  that we will be able to  implement  our strategy on a
timely basis or at all or that, if  implemented,  such strategy will achieve the
desired results.

Significant  Competition--We compete against other railroads, truck carriers and
other  modes of  transportation.  If we are unable to compete  successfully,  it
could have a material  adverse effect on our business,  financial  condition and
results of operations

Our rail  operations  compete  against other  railroads,  many of which are much
larger and have  significantly  greater  financial and other  resources than us.
Since 1994, there has been significant  consolidation among major North American
rail carriers.  As a result of this consolidation,  the railroad industry is now
dominated by a few "mega-carriers." We believe that our revenues were negatively
affected  by the  merger of  Burlington  Northern,  Inc.  and  Santa Fe  Pacific
Corporation  (collectively  "BNSF") in 1995 and the merger of the Union  Pacific
Railroad  Company  ("UP") and the Southern  Pacific Rail  Corporation  ("SP") in
1996,  which both led to diversions of rail traffic away from our lines. We also
regard the larger western railroads (BNSF and UP), in particular, as significant
competitors  to our  operations  and  prospects  because  of  their  substantial
resources.

Truck carriers have eroded the railroad industry's share of total transportation
revenues.  Changing  regulations,  subsidized highway  improvement  programs and
favorable labor regulations have improved the competitive  position of trucks in
the United  States as an  alternative  mode of surface  transportation  for many
commodities.  In the United States, the trucking industry generally is more cost
and  transit-time  competitive than railroads for short-haul  distances.  We are
also  subject to  competition  from  barge  lines and other  maritime  shipping.
Mississippi and Missouri River barge traffic,  among others,  compete with us in
the  transportation  of bulk  commodities  such as grains,  steel and  petroleum
products.

Increased  competition  has  resulted  in downward  pressure  on freight  rates.
Competition with other railroads and other modes of  transportation is generally
based on the rates charged,  the quality and reliability of the service provided
and the quality of the carrier's equipment for certain  commodities.  Continuing
competitive pressures and declining margins could have a material adverse effect
on our business, financial condition and results of operations.

Dependence on Joint Venture Partners and Third  Parties--Our  business strategy,
operations and growth rely  significantly  on joint ventures and other strategic
alliances

Operation of our integrated  rail network and our plans for growth and expansion
rely  significantly  on  joint  ventures  and  other  strategic  alliances.  Two
strategically  significant railroad companies, The Texas Mexican Railway Company
("Tex Mex") and TFM,  S.A. de C.V.  ("TFM"),  are  companies  in which we hold a
minority interest through Mexrail, Inc. ("Mexrail") and Grupo TFM, respectively.
As a  minority  shareholder,  we are
not in a position  to control  operations,  strategies  or  financial  decisions
without  the  concurrence  of  Transportacion  Maritima  Mexicana,  S.A. de C.V.
("TMM"),  the largest shareholder in each of Mexrail and Grupo TFM. In addition,
conflicts may arise between our business objectives and those of TMM. Resolution
of any such  conflicts  in our favor may be difficult  or  impossible  given our
minority ownership position. We do maintain  supermajority rights, which provide
us with the ability to block certain  actions  proposed by TMM at Grupo TFM. Our
interests in these companies are subject to restrictions on disposition.

Our operations  are also  dependent on  interchange,  trackage  rights,  haulage
rights and  marketing  agreements  with other  railroads  and third parties that
enable  us to  exchange  traffic  and  utilize  trackage  we do not  own.  These
agreements extend our network and provide strategically  important rail links to
Mexico,  the northern  midwest United States and Canada.  Our ability to provide
comprehensive  rail  service  to our  customers  depends  in large part upon our
ability to maintain these agreements with other railroads and third parties. The
termination of these agreements  could adversely affect our business,  financial
condition  and  results  of  operations.  There can be no  assurance  that these
agreements  will be renewed after their  expiration and the failure to renew any
of them could adversely affect our business,  financial condition and results of
operations.  In addition, we are dependent in part upon the financial health and
efficient performance of other railroads. For example, much of Tex Mex's traffic
moves over the UP's lines via trackage rights, and a significant  portion of our
grain  shipments  originate  with I&M Rail Link,  LLC pursuant to our  marketing
agreement  with it.  BNSF is our  largest  partner  in the  interchange  of rail
traffic.  There  can be no  assurance  that we will not be  materially  affected
adversely by operational or financial difficulties of other railroads.

Dependence on Key Personnel--Our  success will depend upon our ability to retain
and attract qualified management personnel

Our  operations  and  the  continued  execution  of our  business  strategy  are
dependent  upon  the  continued   employment  of  our  senior  management  team.
Recruiting,   motivating   and   retaining   qualified   management   personnel,
particularly  those with  expertise in the railroad  industry,  are vital to our
operations and ultimate success. There is substantial  competition for qualified
management  personnel  and  there  can be no  assurance  that we will be able to
attract or retain qualified personnel.  The loss of key personnel or the failure
to hire qualified  personnel could materially  adversely affect our business and
financial results.

Risks of Investments in Mexico--Our Mexican investment subjects us to political
and economic risks

We have  invested  approximately  $300 million in Grupo TFM. Our  investment  in
Mexico involves a number of risks. The Mexican government exercises  significant
influence  over the Mexican  economy and its  actions  could have a  significant
impact on TFM. Our Mexican investment may also be adversely affected by currency
fluctuations,   price  instability,   inflation,  interest  rates,  regulations,
taxation,  cultural  differences,  social instability,  labor disputes and other
political,  social and economic  developments in or affecting Mexico.  Moreover,
TFM's  commercial   success  is  heavily  dependent  on  expected  increases  in
U.S.-Mexico trade and will be strongly influenced by the effect of NAFTA on such
trade.  Downturns in either of the U.S. or Mexican economies or in trade between
the United States and Mexico would be likely to adversely impact TFM's business,
financial  condition and results of operations.  There can be no assurances that
the various risks  associated  with operating in Mexico can be  effectively  and
economically mitigated by TFM. Additionally, no assurances can be given that the
value of these investments will not become impaired.

TFM  holds  the  concession  to  operate  Mexico's  Northeast  Rail  Lines  (the
"Concession")  for  50  years,  beginning  in  1997,  and,  subject  to  certain
conditions, has a 50-year extension option. The Concession is
subject to certain mandatory trackage rights and is only exclusive for 30 years.
Additionally, the Mexican government may revoke exclusivity after 20 years if it
determines  that  there  is  insufficient  competition  and  may  terminate  the
Concession  as a result of certain  conditions  or events,  including  (1) TFM's
failure to meet its  operating  and  financial  obligations  with  regard to the
Concession  under applicable  Mexican law, (2) a statutory  appropriation by the
Mexican  government  for  reasons  of public  interest  and (3)  liquidation  or
bankruptcy of TFM.  TFM's assets and its rights under the Concession may also be
seized temporarily by the Mexican  government.  Revocation or termination of the
Concession would materially adversely affect TFM's operations and its ability to
make  payments  on its debt.  Further,  even  though  TFM would be  entitled  to
compensation  for a  statutory  appropriation  or  temporary  seizure,  any such
compensation  might be  insufficient  to  cover  TFM's  losses.  The loss of the
Concession would materially adversely impact TFM's business, financial condition
and results of operations which, in turn, would materially  adversely impact the
value of and return on our investment in Grupo TFM and our ability to market our
U.S. operations on the basis of our access to Mexican locations.

Currently, Grupo TFM is limited in the amount of dividends it may pay because of
bond  covenants.  An  absence  of  dividends  from  Grupo TFM will,  or  limited
dividends may,  negatively impact our ability to obtain a current cash return on
our investment in Grupo TFM.

Risks of Investment in Panama-Our Panamanian investments subject us to political
and economic risk

We have entered into a joint venture with Mi-Jack Products,  Inc. ("Mi-Jack" - a
private  U.S.  company  located in  Illinois),  through  which we own 50% of the
common stock of the Panama Canal Railway  Company,  which owns all of the common
stock of Panarail Tourism Company. We have invested  approximately $12.5 million
in the PCRC and  approximately  $1  million  in PTC.  PCRC  operates  a railroad
between Panama City and Colon, Panama, while PTC operates a tourist and commuter
railway  service  in  conjunction  with  and over the  lines  of the  PCRC.  Our
investments  in PCRC and PTC have risks  associated  with  operating  in Panama,
including,  among  others,  cultural  differences,  varying  labor and operating
practices,  political  risk and  differences  between  the U.S.  and  Panamanian
economies.  There can be no assurances that the risks  associated with operating
in  Panama  can be  effectively  and  economically  mitigated  by  PCRC  or PTC.
Additionally,  no assurances  can be given that the value of our  investments in
PCRC and PTC will not become  impaired.  Further,  we are, under certain limited
conditions,  a guarantor for up to $15 million of cash  deficiencies  associated
with PCRC and, if PCRC terminates the concession contract without the consent of
the  International  Finance  Corporation,  a  guarantor  for  up to  50%  of the
outstanding senior loans of PCRC. The senior loans had an outstanding balance of
approximately $45 million at September 30, 2001.

Additional Capital Investment in TFM--We may be required to make additional
investments in TFM

On or after October 31, 2003, the Mexican  government has the option to sell its
20%  interest  in TFM (1)  through a public  offering or (2) to Grupo TFM at the
initial share price paid by Grupo TFM plus interest computed at the Mexican Base
Rate (the Unidades de Inversion  ("UDI")  published by Banco de Mexico).  In the
event that Grupo TFM does not purchase the Mexican  government's 20% interest in
TFM, the Mexican  government  may require TMM and us, or either TMM or us alone,
to purchase its  interest.  We and TMM have cross  indemnities  in the event the
Mexican government  requires only one of us to purchase its interest.  The cross
indemnities  allow the party  required  to  purchase  the  Mexican  government's
interest to require the other  party to  purchase  its pro rata  portion of such
interest.  However,  if we were  required to purchase  the Mexican  government's
interest   in  TFM  and  TMM   could   not  meet  its   obligations   under  the
cross-indemnity,  then we would be obligated to pay the total purchase price for
the Mexican government's interest. If we and
TMM,  or either us or TMM alone,  had been  required  to  purchase  the  Mexican
government's  20% interest in TFM as of September 30, 2001,  the total  purchase
price would have been approximately $496 million.

Fuel Costs and  Shortages--We  are  vulnerable  to  increases  in fuel costs and
decreases in fuel  supplies.  Any  significant  increase in the cost of fuel, or
severe disruption of fuel supplies,  could have a material adverse effect on our
business, results of operations and financial condition

We  incur  substantial  fuel  costs  in  our  railroad  operations.  During  the
three-year period ended December 31, 2000,  locomotive fuel expenses represented
an average of 7.9% of KCSR's total operating  costs.  Fuel costs are affected by
traffic  levels,  efficiency of operations and equipment,  and petroleum  market
conditions.  The supply and cost of fuel is subject to market  conditions and is
influenced by numerous  factors beyond our control,  including  general economic
conditions,  world markets, government programs and regulations and competition.
Fuel prices  increased  significantly in 2000 and represented 9.7% of total KCSR
operating costs in 2000 and approximately 9.3% of total KCSR operating costs for
the nine months ending September 30, 2001. We attempt to minimize the effects of
fuel price fluctuations through forward purchase contracts, but cannot guarantee
that those  arrangements  will be beneficial to us. Any significant  increase in
the cost of fuel could have a material  adverse effect on our business,  results
of operations and financial condition.  Our operations,  as well as those of our
competitors,  could also be affected by any  limitation in the fuel supply or by
any imposition of mandatory allocation or rationing regulations. In the event of
a severe disruption of fuel supplies resulting from supply shortages,  political
unrest, war or otherwise,  the operations of rail and truck carriers,  including
us, could be adversely affected.

Concentration of Client Base--One of our coal customers accounts for
approximately 12%-13% of KCSR's total revenues

Southwestern  Electric  Power  Company  ("SWEPCO"),  our largest coal  customer,
accounted  for  approximately  64% of our coal  revenues and 12% of KCSR's total
revenues for the year ending December 31, 2000 and  approximately  13% of KCSR's
total revenues for the nine months ended  September 30, 2001. The loss of all or
a significant  part of SWEPCO's  business or a service  outage at one or more of
SWEPCO's  facilities could materially  adversely effect our financial  condition
and results of operations.

Labor  Relations;  Reliance on  Unionized  Labor--We  are  subject to  extensive
railroad industry regulation and rely upon unionized labor

Labor  relations  in  the  U.S.  railroad  industry  are  subject  to  extensive
governmental  regulation under the Railway Labor Act ("RLA").  Railroad industry
personnel  are covered by the  Railroad  Retirement  Act ("RRA")  instead of the
Social Security Act and by the Federal Employers'  Liability Act ("FELA") rather
than state workers'  compensation  systems.  These federal labor regulations are
often more burdensome and expensive than regulations  governing other industries
and may place us at a competitive disadvantage relative to other industries that
are not subject to these regulations.

Approximately 84% of the employees of KCSR are covered under various  collective
bargaining agreements.  Periodically,  the collective bargaining agreements with
the various unions become eligible for  renegotiation.  In 1996,  national labor
contracts  governing  KCSR  were  negotiated  with all  major  railroad  unions,
including  the  United  Transportation  Union,  the  Brotherhood  of  Locomotive
Engineers,   the   Transportation   Communications   International   Union,  the
Brotherhood of Maintenance of Way Employees and the
International  Association  of  Machinists  and Aerospace  Workers.  A new labor
contract  was reached  with the  Brotherhood  of  Maintenance  of Way  Employees
effective May 31, 2001. Formal  negotiations to enter into new agreements are in
progress with the remaining  unions and the 1996 labor  contracts will remain in
effect until new  agreements  are reached.  Unions  representing  certain former
Gateway  Western  employees are operating under 1994 contracts and are currently
in negotiations to extend these  contracts.  We have reached new agreements with
all but one union representing former employees of MidSouth  Corporation,  which
was  merged  into KCSR on  January  1,  1994.  Discussions  with this  union are
ongoing.

We may be subject to work  stoppages in the future as a result of labor disputes
and may be subject to terms and conditions in amended or future labor agreements
that  could  have a  material  adverse  affect  on our  results  of  operations,
financial  position  and cash  flows.  Moreover,  because  such  agreements  are
generally negotiated on an industry-wide  basis,  determination of the terms and
conditions  of future labor  agreements  could be beyond our control.  Railroads
continue to be restricted by certain  remaining  restrictive  work rules and are
thus prevented from achieving optimum  productivity with existing technology and
systems.

Regulation - We are subject to regulation by federal, state and local regulatory
agencies.   Our  failure  to  comply  with  various  federal,  state  and  local
regulations  could have a material  adverse  effect on our  business,  financial
conditions and results of operations

In addition to safety,  health and other  regulations,  generally  our U.S. rail
subsidiaries,  like other rail common carriers, are subject to regulation by the
Surface   Transportation  Board,  the  Federal  Railroad   Administration,   the
Occupational   Safety   and  Health   Administration,   state   departments   of
transportation  and  other  state  and  local  regulatory  agencies.  Government
regulation  of  the  railroad  industry  is a  significant  determinant  of  the
competitiveness and profitability of railroads.  While deregulation of rates and
services in the United States has  substantially  increased the  flexibility  of
railroads to respond to market  forces,  the  deregulated  environment  has also
resulted in highly  competitive rates.  Material  noncompliance by us with these
various regulatory requirements or changes in regulation of the industry through
legislative,  administrative,  judicial  or other  action  could have a material
adverse effect on our business,  financial  condition and results of operations,
including   limitations  on  our  operating  activities  until  compliance  with
applicable requirements is completed.

Environmental  -  Environmental  liabilities  could require us to incur material
costs  and  temporarily  suspend  any  operations  that  are  found  to  violate
environmental laws

Our operations are subject to extensive federal,  state and local  environmental
laws and  regulations  concerning,  among other  things,  emissions  to the air,
discharges to waters,  waste  management,  hazardous  substance  transportation,
handling and storage,  decommissioning of underground storage tanks and soil and
groundwater contamination. Those laws and regulations can (1) impose substantial
fines and criminal sanctions for violations, (2) require us to upgrade equipment
or make  operational  changes  to limit  pollution  emissions  or  decrease  the
likelihood  of  accidental  hazardous  substance  releases,  or (3)  temporarily
prohibit us from conducting  operations if those operations  violate  applicable
requirements.   We  incur,   and  expect  to  continue  to  incur,   significant
environmental  compliance costs,  including,  in particular,  costs necessary to
maintain  compliance  with  requirements  governing  our chemical and  hazardous
material  shipping   operations,   our  refueling   operations  and  our  repair
facilities.

Many of our current and former  properties  are or have been used for industrial
purposes, including, for example, hazardous material storage, waste disposal and
treatment,   foundry  operations,  drum  reconditioning  services  and  chemical
treatment  of wood  products.  Accordingly,  we also are subject to  potentially
material
liabilities   relating  to  the   investigation   and  cleanup  of  contaminated
properties,  and to claims  alleging  personal  injury or property damage as the
result of exposures to, or releases of, hazardous  substances.  Such liabilities
could relate to properties that we owned or operated in the past, as well as any
of our  currently  owned or operated  properties.  Such  liabilities  also could
relate  to  third-party  sites to which we or our  predecessors  sent  waste for
treatment or disposal,  or which otherwise were affected by our operations.  For
example,  we are  conducting  investigation  and cleanup  activities  at several
properties which we own or which we or our predecessors owned or operated in the
past. We also are investigating and remediating  several  third-party sites that
were affected by spills from our rail car operations and have been identified as
a potentially  responsible party at several third-party  disposal sites to which
we sent waste and other  materials in the past. In addition,  we are a defendant
in a class action lawsuit alleging  personal injuries and property damage from a
chemical rail car explosion in 1995.

Although we have recorded  liabilities for estimated  environmental  remediation
and other  environmental  costs, actual expenditures or liabilities could exceed
estimated  amounts and could have a material  adverse effect on our consolidated
results of operations or financial position. New laws and regulations,  stricter
enforcement of existing requirements,  new spills, releases or violations or the
discovery of previously unknown contamination could require us to incur costs or
become  the basis for new or  increased  liabilities  that could have a material
adverse effect on our business, results of operations or financial condition.

Possible Catastrophic Loss and Liability;  Service Interruption--We may suffer a
catastrophe, collision, property loss or service interruption

The operation of any railroad  carries with it an inherent risk of  catastrophe,
collision  and  property  loss.  In the  course  of  train  operations,  service
interruptions,  derailments,  spills,  explosions,  leaks,  other  environmental
events,  cargo loss or damage and business  interruption  resulting from adverse
weather  conditions  or  natural  phenomena  could  result in loss of  revenues,
increased liabilities or increased costs. Significant  environmental mishaps can
cause serious bodily injury,  death and extensive property damage,  particularly
when such accidents  occur in heavily  populated  areas.  We maintain  insurance
(including   self-insurance)   consistent   with   industry   practice   against
accident-related risks involved in the operation of our business. However, there
can be no assurance that such insurance would be sufficient to cover the cost of
damages suffered by us or damages to others or that such insurance will continue
to be  available at  commercially  reasonable  rates.  Moreover,  our  insurance
coverage for events  occurring  prior to 1996 did not extend to punitive  damage
awards,   which  are  increasingly  being  levied  in  civil  cases  related  to
environmental accidents. Further, there can be no assurance that any accident or
natural disaster would not cause a significant interruption in our operations or
materially  adversely  affect our business,  financial  condition and results of
operations.

Impact of Utility Deregulation on Coal Shipments--Utility  industry deregulation
may reduce our coal freight revenues or margins

Historically,  coal has been an important  commodity handled by us. In 2000 coal
revenues  comprised  approximately 20% of KCSR's total carload revenues,  all of
which  result from  deliveries  to utility  customers.  The utility  industry is
undergoing a process of deregulation which will likely cause utilities to become
more   competitive   and  thus  more   aggressive  in   negotiating   with  coal
transportation companies to reduce costs. This could create downward pressure on
utility   coal   transportation   rates  and  increase   service   requirements.
Additionally,  there can be no assurance  that  negotiated  coal  transportation
rates  will  remain at  current  levels in the  future.  Continuing  competitive
pressures,  lower coal  transportation  rates and declining margins could have a
material  adverse  effect on our  business,  financial  condition and results of
operations.
Utilities  will also have greater  flexibility  in selling  electricity  to, and
buying  electricity  from,  other regional  markets.  This could have a material
adverse  effect  on our  utility  customers  if such  customers  are not able to
compete  effectively  with new utility  companies  that enter  their  respective
markets.  As a result,  the pattern of coal shipments in a particular market may
shift to an alternative utility company that does not use us to deliver its coal
requirements.  While  we are  working  to  help  our  utility  customers  remain
competitive  in  this  evolving  environment,  changes  in the  pattern  of coal
movements  could  have a  material  adverse  impact on our  business,  financial
condition and results of operations.

Substantial  Leverage--Our  substantial  leverage  could  adversely  affect  our
ability to fulfill  our  obligations  under our  various  debt  instruments  and
operate our business

We are highly leveraged and will have significant debt service  obligations.  As
of  September  30,  2001,  we had total  debt of  approximately  $684.8  million
(excluding unused commitments) and total  stockholders'  equity of approximately
$665.0  million,  giving us a total  debt to equity  ratio of 1.03 to 1.00.  Our
interest expense for the nine months ended September 30, 2001 was $42.9 million.
In  addition,  we may  incur  additional  debt  from  time to  time  to  finance
acquisitions, investments or capital expenditures or for other purposes, subject
to the restrictions contained in our various credit agreements.

    Our high level of debt  could have  important  consequences,  including  the
following:

    o we may have difficulty borrowing money in the future for working capital,
      capital expenditures or other purposes;

    o we will  need to use a large  portion  of the  money  earned by us and our
      subsidiaries to pay principal and interest on our debt,  which will reduce
      the amount of money  available to us to finance our  operations  and other
      business activities;

    o some of our debt has a variable  rate of interest,  which exposes us to
      the risk of increased interest rates;

    o we  have  a  much  higher  level  of  debt  than  some  of  our
      competitors, which may put us at a competitive disadvantage;

    o our debt level  makes us more  vulnerable  to general  economic downturns
      and adverse industry conditions;

    o our debt level could reduce our  flexibility in planning for, or
      responding  to,  changing  business  and  economic  conditions, including
      increased competition in the railroad industry;

    o our level of debt may prevent us from raising the funds necessary to
      repurchase all of certain senior notes that could be tendered to us upo
      the occurrence of a change of control,  which would  constitute an event
      of default; and

    o our failure to comply with the  financial and other restrictive covenants
      in our debt instruments,  which, among other things,  require us to
      maintain specified financial ratios and limit our ability to incur debt
      and sell assets, could result in an event of default that, if not cured or
      waived, could have a material adverse effect on our business or prospects.
Ability to Service  Debt--Servicing  our debt requires a  significant  amount of
cash,  and our  ability to  generate  cash  depends on many  factors  beyond our
control

We expect to obtain the money to make  payments on and to refinance our debt and
to fund  working  capital,  capital  expenditures  and other  general  corporate
requirements in part from our operations and the operations of our subsidiaries.
Our  ability  to  generate  cash is  subject  to  general  economic,  financial,
competitive,  legislative,  regulatory  and other  factors  that are  beyond our
control.  We cannot be certain  that the cash earned by us and our  subsidiaries
will be  sufficient  to allow us to pay  principal  and interest on our debt and
meet our other  obligations or to fund our other  liquidity  needs. If we do not
have enough cash we may be required to take actions such as reducing or delaying
capital expenditures,  selling assets,  restructuring or refinancing all or part
of our existing debt or seeking additional equity capital.  We cannot assure you
that any of these remedies can be effected on commercially  reasonable  terms or
at all.  In  addition,  the terms of  existing  or future  debt  agreements  may
restrict us from adopting any of these alternatives.

Additional Borrowing Capacity--Despite our substantial leverage, we will be able
to  incur  more  debt,  which  may  intensify  the  risks  associated  with  our
substantial leverage, including our ability to service our debt

Our existing credit agreements and certain of our other debt instruments  permit
us, subject to certain  conditions,  to incur a significant amount of additional
debt.  In addition,  as of  September  30,  2001,  we had $65 million  remaining
available under our revolving credit facility.  If we incur additional debt, the
risks associated with our substantial leverage, including our ability to service
our debt, could intensify.

Restrictive Covenants in our Debt  Instruments--Restrictions  imposed by certain
of our debt  instruments  may limit our ability to finance future  operations or
capital needs or engage in other business activities that may be in our interest

Certain of our debt  instruments  impose,  and the terms of any future  debt may
impose,  operating and other restrictions on us. These restrictions  affect, and
in many respects limit or prohibit, among other things, our ability to:

    o   incur additional debt;

    o   pay dividends or make distributions;

    o   repurchase equity interests;

    o   redeem subordinated debt;

    o   make other restricted payments, including, without imitation,
        investments;

    o   sell or otherwise dispose of assets, including capital stock of
        subsidiaries;

    o   create liens;

    o   enter into agreements that restrict dividends from subsidiaries;
o   merge or consolidate; and

    o   enter into transactions with affiliates.

In  addition,  certain  of our term  debt  instruments  include  other  and more
restrictive  covenants that prohibit us from prepaying our other debt while debt
under  these  term debt  instruments  is  outstanding.  There  are also  certain
financial  and  operating  results that we must  achieve as well as  maintaining
compliance  with specified  financial  ratios.  Our ability to comply with these
ratios may be affected by events beyond our control.

These  restrictions  could (i) limit our  ability to plan for or react to market
conditions  or meet  capital  needs or  otherwise  restrict  our  activities  or
business plans and (ii) adversely  affect our ability to finance our operations,
acquisitions,  investments or other capital needs or to engage in other business
activities that would be in our interest.  A breach of any of these  restrictive
covenants or our  inability to comply with the required  financial  ratios could
result in default under certain of these debt instruments and cause acceleration
of principal and interest  payments and allow  termination of further  financing
commitments.  If we are unable to repay the  borrowings  when due,  the  lenders
under  these  debt  instruments  would  have the right to  proceed  against  the
collateral granted to them to secure the debt. There can be no assurance that we
would be able to secure the necessary funds to meet the acceleration  provisions
in an event of default.

Minority Purchase  Agreements--In the event of a change in ownership of KCSI, we
may be required to purchase stock of Janus Capital Corporation,  a subsidiary of
Stilwell,  from certain minority stockholders of Janus Capital Corporation.  The
amounts to purchase this stock could be material

We would be required  under certain  agreements  with minority  stockholders  of
Janus  Capital  Corporation  ("Janus") to purchase  their shares of Janus common
stock  in the  event of a  Change  in  Ownership  of KCSI  (as  defined  in such
agreements).  Stilwell Financial Inc. ("Stilwell" - a former subsidiary of KCSI)
has  agreed  to assume  any and all  liabilities  arising  from  these  minority
stockholder agreements;  however if Stilwell were unable to meet its obligations
with  respect to these  agreements,  KCSI would be required  to  purchase  these
shares of Janus common stock. KCSI believes,  based on discussions with Stilwell
management,  that Stilwell has adequate  financial  resources  available to fund
these obligations.  If we were required to purchase those shares of Janus common
stock  under these  minority  stockholder  agreements,  it could have a material
adverse effect on our business,  financial condition,  results of operations and
cash flows.

Spin-off Tax Ruling--If  KCSI is required to recognize gain on its  distribution
of Stilwell common stock,  it could have a negative  impact on KCSI's  financial
condition and deter potential combinations that could benefit KCSI

On July 9, 1999, KCSI received a tax ruling from the IRS to the effect that, for
United States federal income tax purposes,  the spin-off of Stilwell,  which was
completed on July 12, 2000,  qualifies as a tax-free  distribution under Section
355 of the Internal Revenue Code of 1986, as amended (the "Code"). Additionally,
in February 2000,  KCSI received a favorable  supplementary  tax ruling from the
IRS to the effect that the  assumption of $125 million of KCSI  indebtedness  by
Stilwell would have no effect on the previously issued tax ruling. However, KCSI
may  nevertheless be required to recognize gain on its  distribution of Stilwell
common stock to KCSI  stockholders  if such  distribution  is part of a plan (or
series of related  transactions)  pursuant to which one or more persons  acquire
directly or  indirectly  a 50% or greater  equity  interest in KCSI or Stilwell.
Moreover,  if one or more persons  acquire such a 50% equity interest during the
four-year  period
that  begins two years  before  the  distribution  and ends two years  after the
distribution,  then the  acquisition  may be treated as  pursuant to such a plan
unless it is  established  that the  distribution  and the  acquisition  are not
pursuant  to a plan or series of related  transactions.  On August 2, 2001,  the
Treasury   Department  issued  Regulations   providing  guidance  on  whether  a
distribution  and  acquisition  are  pursuant  to a plan or a series of  related
transactions.  The potential negative impact on KCSI's financial condition if it
is required to recognize gain on its  distribution  of Stilwell common stock may
deter potential combinations that could benefit KCSI.

Antitakeover  Considerations--We  have provisions in our charter and bylaws that
could  deter,  delay or prevent a third party from  acquiring us and which could
deprive our  stockholders  of an  opportunity  to obtain a takeover  premium for
their shares of common stock

We have  provisions  in our  charter  and  bylaws  that  may  delay  or  prevent
unsolicited  takeover bids from third parties.  These provisions may deprive our
stockholders of an opportunity to sell their shares at a premium over prevailing
market prices.  For example,  our  certificate of  incorporation  provides for a
classified  board of  directors.  It further  provides that a vote of 70% of the
shares  entitled to vote in the  election of  directors is required to amend our
certificate  of  incorporation  to increase the number of directors to more than
eighteen, abolish cumulative voting for directors and abolish the classification
of the  board.  The same vote  requirement  is  imposed  by our  certificate  of
incorporation on certain transactions involving mergers,  consolidations,  sales
or leases of assets with or to certain owners of more than 5% of our outstanding
stock  entitled to vote in the election of directors.  Our bylaws provide that a
stockholder  must  provide  us with  advance  written  notice  of its  intent to
nominate a director or raise a matter at an annual meeting. In addition, we have
adopted a stockholders'  rights plan which, under certain  circumstances,  would
significantly  impair  the  ability of third  parties  to acquire  control of us
without prior approval of our board of directors.

Miscellaneous

In addition to the factors  discussed  above,  there may be other  factors  that
could cause  actual  results to differ  materially  from those  indicated in the
forward-looking comments. Other factors include, but are not limited to, changes
in management strategies,  objectives and business approaches;  changes in lines
of business;  material  litigation  involving us; and changes in the  political,
regulatory or economic  environments  in the United States,  Mexico,  Panama and
other countries where we or our unconsolidated  affiliates  currently operate or
may operate in the future.