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):
                                  July 25, 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 7.   Financial Statements and Exhibits

(c)       Exhibits

          Exhibit No.                     Document
          (99)                            Additional Exhibits

          99.1                            Press Release issued by
                                          Kansas City Southern
                                          Industries, Inc. dated July
                                          25, 2001 entitled, "Kansas
                                          City Southern Industries
                                          Reports Second Quarter
                                          Operating Results", is
                                          attached hereto as Exhibit
                                          99.1


          99.2                            The following schedules are
                                          attached hereto as Exhibit
                                          99.2 - Combined Kansas City
                                          Southern Railway and Gateway
                                          Western Operating
                                          Statements, Combined Kansas
                                          City Southern
                                          Railway/Gateway Western
                                          Carloadings by Commodity and
                                          Kansas City Southern
                                          Industries, Inc. Preliminary
                                          Consolidated Balance Sheets



Item 9.   Regulation FD Disclosure

Kansas City Southern Industries, Inc. ("KCSI" or "Company") is
furnishing under Item 9 of this Current Report on Form 8-K the
information included as Exhibit 99.1 and Exhibit 99.2 of this
report.  Exhibit 99.1 is the Company's press release, dated July 25,
2001, announcing KCSI's second quarter and year to date 2001
operating results.  Included in Exhibit 99.2 are schedules regarding
certain financial information discussed at the Company's second
quarter 2001 meeting and conference call.

The information included in this Current Report on Form 8-K,
including Exhibit 99.1 and Exhibit 99.2, is furnished pursuant to
Item 9 and shall not be deemed to be "filed" for the purposes of
Section 18 of the Securities Exchange Act of 1934 or otherwise
subject to the liabilities of that Section.

<PAGE>

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: July 30, 2001                   By: /s/  Louis G. Van Horn
                                         ------------------------
                                           Louis G. Van Horn
                                    Vice President and Comptroller
                                    (Principal Accounting Officer)


<PAGE>


EXHIBIT 99.1

                                                   Date: July 25, 2001

Kansas City Southern                Media Contact: William Galligan 816-983-1551
Industries, Inc.                    email:         william.h.galligan@kcsr.com
114 West 11th Street
Kansas City, MO 64105

NYSE Symbol: KSU

      Kansas City Southern Industries Reports Second Quarter Operating Results

Earnings Analysis & Commentary

Kansas City Southern  Industries,  Inc. ("KCSI",  "the Company") reported income
from continuing  operations of $4.7 million  (8(cent) per diluted share) for the
second  quarter of 2001  compared to income from  continuing  operations of $8.8
million  (15(cent) per diluted share) for the second quarter of 2000.  This $4.1
million quarter to quarter decline resulted from declines in domestic  operating
income and equity earnings from Grupo Transportacion  Ferroviaria Mexicana, S.A.
de C.V. ("Grupo TFM") of $5.5 million and $3.1 million, respectively,  partially
offset by a $3.9 million  decrease in interest expense and lower income taxes of
$1.3 million.  KCSI's  consolidated  second quarter 2001 revenues  declined $1.2
million and operating  expenses rose $4.3 million compared to the second quarter
of 2000.

For the six months ended June 30, 2001,  income from  continuing  operations was
$11.0 million  (18(cent) per diluted share) compared to $19.2 million  (33(cent)
per diluted  share) for the six months  ended June 30,  2000.  This $8.2 million
period to period  decline  was  primarily  due to a $17.4  million  decrease  in
domestic  operating  income,  a $1.6  million  decline in equity  earnings  from
unconsolidated  affiliates and a $1.5 million decrease in other, net,  partially
offset by a decrease in interest  expense of $6.2 million and lower income taxes
of $6.1 million for the current  six-month  period.  For the first six months of
2001,  KCSI's  consolidated  revenues  declined  2% and  consolidated  operating
expenses were 4% higher compared with the same 2001 period. Equity earnings from
Grupo TFM remained relatively flat period to period. Our equity earnings for the
six months ended June 30, 2001 reflect the Company's  proportionate  share ($9.1
million)  of the income  recorded  by Grupo TFM  relating  to the  reversion  of
certain concession assets to the Mexican government.

DILUTED EARNINGS PER SHARE AND COMMON SHARES COMPARISONS (1)
<TABLE>
<S>                                                       <C>      <C>          <C>     <C>
                                                         Second Quarter        Year to Date
                                                         --------------        ------------
                                                          2001     2000        2001     2000
                                                          ----     ----        ----     ----
  Income from continuing operations:

    U.S. operations                                     $ 0.07   $ 0.11      $ 0.07   $ 0.23
    Grupo TFM and associated interest                     0.01     0.04        0.11     0.10
                                                       -------- --------    -------  -------
    Income (loss) from continuing operations              0.08     0.15        0.18     0.33

  Extraordinary debt retirement costs, net of income tax   -        -           -      (0.10)
  Cumulative effect of accounting change,
     net of income tax                                     -        -         (0.01)     -
                                                       --------  -------    ------- --------
        Total diluted earnings (loss) per share from
         continuing operations, adjusted for
         extraordinary item and cumulative effect
         of accounting change                           $ 0.08   $ 0.15      $ 0.17   $ 0.23
                                                       ======== ========     ======  =======

  Common Shares Outstanding (thousands):

    Weighted Average Diluted                            60,916   57,614      60,849   57,539
    Actual                                              58,455   55,750      58,455   55,750
</TABLE>

(1)Earnings per share and common  share  information  for each period  presented
   reflect a  one-for-two  reverse stock split that occurred on July 12, 2000 in
   conjunction  with the  spin-off of Stilwell  Financial  Inc.,  the  Company's
   formerly owned financial services segment.
<PAGE>

Second Quarter

KCSI is comprised of, among others,  The Kansas City  Southern  Railway  Company
("KCSR"),  Gateway  Western  Railway  Company  ("Gateway  Western")  and  equity
investments in Grupo TFM, Mexrail, Inc. and the Panama Canal Railway Company.

KCSI reported $4.7 million of income from continuing  operations for the quarter
ended June 30,  2001  compared  to income  from  continuing  operations  of $8.8
million for the comparable prior year quarter.

KCSI's consolidated second quarter 2001 revenues totaled $143.2 million compared
to $144.4  million in the  second  quarter of 2000.  This $1.2  million  decline
resulted from lower KCSR/Gateway  Western revenues of approximately $1.8 million
partially  offset  by  slightly  higher  revenues  from  certain  other  smaller
subsidiaries.  Second  quarter  2001  revenue  growth  occurred in coal (8%) and
automotive  (172%)  compared  to the second  quarter  of 2000.  Paper and forest
product and chemical and petroleum  product revenues  declined  approximately 5%
and 6%,  respectively,  quarter to quarter.  Weakness in these sectors  resulted
primarily from lower industry production reflecting the continuing impact of the
slowdown in the U.S. economy.  Agriculture and mineral product revenues declined
approximately  10%  quarter  to  quarter  due  mostly  to lower  domestic  grain
shipments and shorter hauls.  A general  decline in the production of poultry in
the United  States has  decreased  demand for grain  deliveries  to our  chicken
producing  customers.  Additionally,  flooding in Iowa and Minnesota  during the
second  quarter  forced a temporary  shift in the  origination  of some domestic
grain shipments to Illinois and Indiana, which resulted in significantly shorter
hauls for KCSR.

KCSI's  consolidated  costs and expenses increased $4.3 million (3.4%) to $130.3
million in the second  quarter of 2001 compared to $126.0  million in the second
quarter of 2000,  resulting from higher  KCSR/Gateway  Western  expenses of $3.0
million and higher  expenses at certain other smaller  subsidiaries.  Quarter to
quarter  increases  in fringe  benefit  costs ($1.0  million) and car hire costs
($1.5  million)  were the  primary  causes for the higher  KCSR/Gateway  Western
expenses.  Smaller  increases  for  fuel,  purchased  services,  casualties  and
insurance and other employee expenses were mostly offset by declines in salaries
and wages expense and materials  and supplies  expense.  Despite a lower overall
employee  count  quarter to quarter,  second  quarter 2001 fringe  benefit costs
increased as a result of higher health  insurance  costs,  which have risen over
15% compared to the second quarter of 2000.  Contributing to the increase in car
hire  expense was a higher  number of freight  cars from other  railroads on the
Company's  rail line  coupled  with a lower  number of KCSR freight cars offline
being used by other  railroads.  Also  contributing  to the increase in car hire
expense was the larger number of auto rack cars being used to serve the increase
in automotive  traffic.  As operations  became more fluid in the second quarter,
car hire costs showed improvement, declining approximately 12.6% compared to the
first quarter of 2001. Despite a 2% decline in usage, fuel costs increased 4% in
the second  quarter of 2001 compared to the second  quarter of 2000, due to a 6%
increase in the average price per gallon.  The Company's  consolidated  expenses
for the second  quarter also include an approximate  $0.9 million  non-recurring
gain on the sale of certain real estate and an approximate  $1.1 million expense
related to the settlement of litigation at another subsidiary.  The KCSR/Gateway
Western  operating  ratio was 88.1% for the second  quarter of 2001  compared to
84.9% for the second quarter of 2000 and 94.0% for the first quarter of 2001.

Equity earnings from the Company's  investment in Grupo TFM was $4.9 million for
the second  quarter of 2001 compared to $8.0 million for the same quarter in the
prior year.  Grupo TFM revenues  improved  5.3% to $171.9  million in the second
quarter of 2001 compared to $163.3 million in the second quarter of 2000.  These
higher  revenues  were offset by an  approximate  16.8%  increase  in  operating
expenses related  primarily to salaries and wages,  fringe  benefits,  fuel, car
hire and lease costs. These higher expenses led to a decline in operating income
of approximately 19% quarter to quarter. TFM's operating ratio was 74.6% for the
second  quarter  of 2001  compared  to 67.7%  for the  second  quarter  of 2000.
Additionally,  second quarter 2001 results  include a $2.9 million  deferred tax
provision (calculated under U.S. generally accepted accounting principles -"U.S.
GAAP")  compared to a deferred tax benefit of $3.2 million in the second quarter
of 2000. The Company reports its equity in Grupo TFM under U.S. GAAP while Grupo
TFM reports under International Accounting Standards.
<PAGE>

KCSI's  consolidated second quarter 2001 interest expense decreased $3.9 million
(21.2%)  from the prior year  quarter  primarily  as a result of lower  interest
rates on our variable rate debt (variable rate debt approximates $419 million at
June 30, 2001) and lower amortization related to debt issue costs.

YEAR TO DATE

KCSI's income from continuing  operations for the six months ended June 30, 2001
totaled $11.0 million versus $19.2 million in the same 2000 period.

KCSI's  consolidated  year to date 2001 revenues totaled $287.2 million compared
to $293.3 million in the same 2000 period.  This $6.1 million  decline  resulted
from lower KCSR/Gateway Western revenues of approximately $8.0 million partially
offset by higher revenues from certain other smaller subsidiaries.  Year to date
2001 revenue  growth  occurred  for certain  commodities,  including  coal (1%),
automotive (159%),  plastics (17%) and military/other revenues (40%) compared to
the same 2000 period;  however, these improvements were offset by lower revenues
for most other  commodity  groups  resulting  from  demand  driven  declines  as
discussed above. Year to date 2001 revenues for chemical and petroleum products,
agriculture  and mineral  products and paper and forest  products have decreased
approximately  2%, 12%, and 7%,  respectively,  compared to the six months ended
June 30, 2000.

KCSI's  consolidated costs and expenses increased $11.3 million (4.4%) to $268.2
million in the first half of 2001  compared to $256.9  million in the first half
of 2000, resulting from higher KCSR/Gateway Western expenses of $8.9 million and
higher  expenses  at  certain  other  smaller  subsidiaries.   The  increase  in
KCSR/Gateway  Western expenses was attributable to higher costs for casualty and
insurance,  car hire and fuel. For the six months ended June 30, 2001,  casualty
and insurance costs rose approximately $9.1 million, the majority of which ($8.5
million)  related to  several  significant  first  quarter  derailments  and the
settlement of personal injury claims.  These first quarter 2001  derailments and
the ongoing  economic  weakness in the United States resulted in some congestion
during  the first  three  months of 2001.  The  effects of this  congestion  and
certain other factors as discussed above  contributed to an increase in car hire
expense of approximately $5.3 million period to period. For the six months ended
June 30, 2001, fuel usage decreased  approximately  7% compared to the same 2000
period;  however,  fuel  expense  increased 3% due to an increase in the average
price per gallon of nearly 11%. These  increases were partially  offset by lower
year to date  costs for  salaries  and wages,  fringe  benefits,  materials  and
supplies, purchased services and operating leases.

Equity  earnings from Grupo TFM for the six months ended June 30, 2001 was $16.0
million compared to $16.2 million for the six months ended June 30, 2000. During
the first  quarter of 2001,  TFM recorded  approximately  $60 million of pre-tax
income  relating to the  reversion of certain  concession  assets to the Mexican
government.  The  Company's  year to date 2001  equity  earnings  from Grupo TFM
reflect our  proportionate  share of this income of approximately  $9.1 million.
Grupo TFM  revenues  increased  5.8% to $327.9  million for the six months ended
June 30, 2001 from $310.0 million for the six months ended June 30, 2000.  These
higher  revenues  were offset by an  approximate  16.6%  increase  in  operating
expenses (exclusive of the income related to the reversion of certain concession
assets)  resulting  in a 19.5%  decline in ongoing  operating  income  period to
period.  Under U.S.  GAAP,  the deferred tax provision was $24.6 million for the
six months  ended June 30,  2001  compared  to a deferred  tax  benefit of $18.8
million for the six months ended June 30, 2000.

Similar to the second  quarter of 2001, the Company's  interest  expense for the
six months ended June 30, 2001 declined $6.2 million  compared to the six months
ended June 30, 2000 due to lower borrowing rates.

Effective  January  1,  2001 the  Company  implemented  Statement  of  Financial
Accounting Standard No. 133,  Accounting for Derivative  Instruments and Hedging
Activities  ("FAS 133").  As a result of this change in the method of accounting
for derivative financial  instruments,  the Company recorded an after-tax charge
to  earnings  of $0.4  million  in the first  quarter  of 2001.  This  charge is
presented as a cumulative  effect of an  accounting  change in the  accompanying
consolidated  condensed  statements  of income for the six months ended June 30,
2001. In the first  quarter of 2000,  the Company  completed a debt  refinancing
whereby it retired  approximately  $400 million of its debt securities  prior to
maturity.   Accordingly,   the  Company   recorded  debt  retirement   costs  of
approximately  $5.9 million  (after-tax)  in the first quarter of 2000.  This is
presented as an extraordinary  item in the accompanying  consolidated  condensed
statements of income for the six months ended June 30, 2000.
<PAGE>

BUSINESS OUTLOOK

Michael R. Haverty, KCSI Chairman,  President and Chief Executive Officer, said,
"Although our revenue base has not  rebounded as quickly as we had planned,  our
cost structure is beginning to realize some of the benefits we expected from the
cost reduction strategy implemented at the end of the first quarter.

Our  freight  revenues  have  continued  to suffer the  effects of the  economic
slowdown,  particularly  in the paper and forest  products and certain  chemical
markets,  which have typically shown a strong  correlation  with the strength of
the economy. We expect these trends to improve when economic conditions improve.
Our agriculture and mineral  revenues have also suffered due mostly to declining
demand  for  domestic  grain for the  poultry  industry.  Despite  a slow  first
quarter, coal revenues for the first half of 2001 increased about 1% compared to
the  first  half of 2000 and 8.5%  quarter  to  quarter.  Additionally,  we have
expanded  our  service  to the  automotive  industry  as  evidenced  by the 159%
increase in related  revenue  for the first six months of this year  compared to
the first six months of last year.

Despite higher  casualty and car hire costs for the first half of 2001, our cost
structure is improving.  The operating  ratio for  KCSR/Gateway  Western for the
second  quarter  of 2001 was 88.1%  compared  to 94.0% for the first  quarter of
2001. Our  consolidated  expenses have declined from $137.9 million in the first
quarter of 2001 to $130.3 million in the second quarter.

Equity earnings from Grupo TFM continue to comprise a significant portion of our
earnings.  Despite a downturn in the U.S and Mexican economy, Grupo TFM has been
able to increase its  revenues by nearly 6% compared to 2000 and has  maintained
an operating  ratio below 80%. We believe this is a  significant  accomplishment
given  the  existing  operating  environment  and is one of the  reasons  we are
excited about the prospects of purchasing an additional  ownership percentage in
Grupo TFM. We and our partner,  Transportacion  Maritima Mexicana, S.A. de C.V.,
have  already  announced  our  intention  to exercise  our call and cause TFM to
purchase  the  24.6%  interest  in Grupo  TFM  currently  owned  by the  Mexican
government. We believe this is an opportunity to add value to a key component of
our NAFTA franchise.

During the middle part of June 2001,  the Surface  Transportation  Board ("STB")
issued its new rules governing  mergers involving two or more Class I railroads.
The STB  recognized  that,  because of KCSR's  size,  a merger  between KCSR and
another  Class I carrier  would not raise the same risks and  concerns  as other
potential  mergers  and thus,  waived  application  of the new rules to a merger
involving KCSR. We believe the STB was prudent in its decision with respect to a
potential merger involving KCSR.

During  the second  half of 2001,  we will  place our focus on these  goals:  1)
increasing domestic revenues; 2) improving the profitability of U.S. operations;
3) reducing our corporate  debt  structure.  We continue to believe in the NAFTA
vision and are committed to achieving our ultimate goal of building  shareholder
value."

This press  release  includes  statements  concerning  potential  future  events
involving  the  Company,  which  could  materially  differ  from the events that
actually occur. The differences could be caused by a number of factors including
those factors  identified in KCSI's  December 31, 2000 Form 10-K and the Current
Report on Form  8-K/A  dated June 3, 1997,  each filed by the  Company  with the
Securities  and Exchange  Commission  ("SEC")  (Commission  file no. 1-4717) and
those  factors  identified  in the  "Risk  Factors"  section  of  the  Company's
Registration  Statement on Form S-4, as amended and declared  effective on March
15, 2001, which is on file with the SEC (File No. 333-54262),  and those factors
identified in the "Risk Factors" section of the Company's Registration Statement
on Form S-3, as amended and declared effective on June 5, 2001, which is on file
with  the  SEC  (File  No.   333-61006).   The  Company   will  not  update  any
forward-looking  statements  in this press  release to reflect  future events or
developments.

                        (Financial Information Attached)
<PAGE>

     KANSAS CITY SOUTHERN INDUSTRIES, INC. and SUBSIDIARY COMPANIES
               CONSOLIDATED CONDENSED STATEMENTS OF INCOME
                  (excludes Stilwell Financial Inc.)
              (dollars in millions, except per share data)

                                   (Unaudited)
<TABLE>

<S>                                         <C>    <C>      <C>     <C>

                                           Three Months      Six Months
                                           Ended June 30,   Ended June 30,
                                           --------------   --------------
                                            2001    2000     2001    2000
                                           ------  ------   -----   ------
   Revenues                               $143.2  $144.4   $287.2  $293.3

   Costs and expenses                      115.8   111.7    239.3   228.3
   Depreciation and amortization            14.5    14.3     28.9    28.6
                                           ------  ------   -----   ------
   Operating income                         12.9    18.4     19.0    36.4

   Equity in net earnings of unconsolidated affiliates:
      Grupo Transportacion Ferroviaria
       Mexicana, S.A. de C.V.                4.9     8.0     16.0    16.2
       Other                                 0.3     1.2      0.4     1.8
   Interest expense                        (14.5)  (18.4)   (29.7)  (35.9)
   Other, net                                1.1     0.9      2.1     3.6
                                           ------  ------   -----  ------

   Income from continuing operations
    before income taxes, extraordinary
    item and cumulative effect of
    accounting change                        4.7    10.1      7.8    22.1

   Income tax provision (benefit)              -     1.3     (3.2)    2.9
                                           ------  ------    -----  ------
   Income from continuing operations
    before extraordinary item and
    cumulative effect of accounting change   4.7     8.8     11.0    19.2

   Extraordinary item, net of income taxes:
     Debt retirement costs                     -     -       -       (5.9)
   Cumulative effect of accounting
     change, net of income taxes               -     -       (0.4)     -
                                           ====== ======   ======  ======
   Income from continuing operations,
     net of extraordinary item and
     cumulative effect of accounting
     change                                  4.7     8.8     10.6    13.3
                                           ------  ------   -----   ------
   Per Share Data:

   Basic Weighted Average Common shares
    outstanding (in thousands)              58,380  55,724  58,321  55,624

   Basic Earnings (Loss) per
   Common share from continuing
   operations                               $ 0.08  $ 0.16   $0.19   $0.34

   Extraordinary item                           -       -       -    (0.10)
   Cumulative effect of
    accounting change                           -       -    (0.01)     -
                                            ------  ------   ------  ------

   Basic Earnings per Common
    share, net of extraordinary
    item and cumulative effect of
    accounting change                        $0.08   $0.16   $0.18   $0.24
                                            ------  ------   -----  ------


   Diluted Weighted Average Common shares
    outstanding (in thousands)              60,916  57,614  60,849  57,539

   Diluted Earnings (Loss) per Common
    share from continuing operations         $0.08   $0.15   $0.18   $0.33

   Extraordinary item                           -       -       -    (0.10)
   Cumulative effect of
     accounting change                          -       -    (0.01)     -
                                            ------  ------   -----   ------

   Diluted Earnings per Common share,
    net of extraordinary item and
    cumulative effect of
    accounting change                       $ 0.08  $ 0.15  $ 0.17   $ 0.23
                                            ------  ------  ------   ------
</TABLE>

<PAGE>
      KANSAS CITY SOUTHERN INDUSTRIES, INC. and SUBSIDIARY COMPANIES
               CONSOLIDATED CONDENSED STATEMENTS OF INCOME
               (dollars in millions, except per share data)
                                  (Unaudited)
<TABLE>
<S>                                         <C>     <C>       <C>    <C>

                                           Three Months      Six Months
                                           Ended June 30,   Ended June 30,
                                           --------------   --------------
                                            2001    2000     2001    2000
                                           ------  ------   -----   ------

   Revenues                               $143.2  $144.4   $287.2  $293.3

   Costs and expenses                      115.8   111.7    239.3   228.3
   Depreciation and amortization            14.5    14.3     28.9    28.6
                                           ------  ------   -----   ------
   Operating income                         12.9    18.4     19.0    36.4

   Equity in net earnings of unconsolidated affiliates:
     Grupo Transportacion Ferroviaria
     Mexicana, S.A. de C.V.                  4.9     8.0     16.0    16.2
     Other                                   0.3     1.2      0.4     1.8
   Interest expense                        (14.5)  (18.4)   (29.7)  (35.9)
   Other, net                                1.1     0.9      2.1     3.6
                                           ------  ------   -----   ------
   Income from continuing operations
    before income taxes,  extraordinary
    item and cumulative effect of
    accounting change                        4.7    10.1      7.8    22.1

   Income tax provision (benefit)              -     1.3     (3.2)    2.9
                                           ------  ------    -----  ------
   Income from continuing operations
    before extraordinary item and
    cumulative effect of accounting change   4.7     8.8     11.0    19.2

   Income from discontinued operations
    (1)  (net of income taxes)                 -   151.7        -   340.4
                                           ------  ------   -----   ------

   Income before extraordinary item and
    cumulative effect of accounting change   4.7   160.5     11.0   359.6

   Extraordinary item, net of income taxes:
      Debt retirement costs                    -       -       -     (5.9)
   Cumulative effect of accounting
    change, net of income taxes                -       -     (0.4)      -
                                           ------  ------   -----   ------
  Net income                               $ 4.7   $160.5   $10.6   $353.7
                                           ======  ======   ======  ======

 Per Share Data:

   Basic Weighted Average Common shares
    outstanding (in thousands)             58,380  55,724   58,321  55,624
   Basic Earnings per Common share
      Continuing operations                 $0.08   $0.16    $0.19   $0.34
      Discontinued operations                   -    2.72       -     6.12
                                            ------  ------   -----   ------
   Basic Earnings (Loss) per Common share
    before extraordinary  item and
    cumulative effect of accounting change   0.08    2.88     0.19    6.46

   Extraordinary item                          -       -        -    (0.10)
   Cumulative effect of accounting change      -       -     (0.01)      -
                                            ------  ------   ------ ------
   Basic Earnings per Common share          $ 0.08  $ 2.88   $ 0.18 $ 6.36
                                            ======  ======   ====== ======

   Diluted Weighted Average Common shares
    outstanding (in thousands)              60,916  57,614   60,849 57,539

   Diluted Earnings per Common share
    Continuing operations                   $ 0.08  $ 0.15   $ 0.18 $ 0.33
    Discontinued operations                     -     2.59       -    5.82
                                            ------  ------    ----- ------

   Diluted Earnings (Loss) per Common share
    before extraordinary item  and
    cumulative effect of accounting change   0.08    2.74    0.18     6.15

   Extraordinary item                          -       -       -     (0.10)
   Cumulative effect of accounting change      -       -    (0.01)      -
                                            ------  ------   -----   ------

   Diluted Earnings per Common share        $0.08   $2.74   $0.17   $ 6.05
                                            ======  ======  ======  ======
</TABLE>

   (1) - Stilwell Financial Inc., the Company's formerly
   owned financial services segment
<PAGE>

EXHIBIT 99.2

Combined KCSR and Gateway Western
Operating Statements
Dollars in Millions
<TABLE>
<S>                         <C>             <C>             <C>         <C>
                       Second Quarter Second Quarter  Six Months    Six Months
                           2001           2000            2001         2000
                       -----------    -----------     -----------  -----------
Revenues

    Freight Revenue     $    82.9      $    88.8       $   166.4    $   178.4
    Intermodal and
     Automotive Revenue      18.0           15.5            36.6         30.7
    Unit Coal Revenue        27.6           25.7            54.5         54.7
    Haulage Revenue           3.3            2.7             6.3          6.1
    Other Revenue             8.4            9.3            16.6         18.5
                       -----------    -----------     -----------  -----------
      Total Revenues        140.2          142.0           280.4        288.4
                       -----------    -----------     -----------  -----------

Operating Expenses

    Salaries & Wages         32.2           33.2            67.6         68.6
    Fringe Benefits          14.1           13.1            26.4         27.5
    Fuel                     11.4           11.0            23.8         23.1
    Material and Supplies     7.3            7.9            14.6         16.1
    Car Hire                  5.7            4.2            12.2          6.9
    Purchased Services       12.5           12.0            23.5         24.9
    Casualties & Insurance    7.4            6.7            21.8         12.7
    Other                     1.9            1.4             5.0          4.1
                       -----------    -----------     -----------  -----------
      Net Operating
        Expenses             92.5           89.5           194.9        183.9
                       -----------    -----------     -----------  -----------

Fixed Expenses

    Leases, Net              13.9           14.2            27.3         28.6
    Depreciation             13.6           13.2            27.0         26.4
    Taxes (Other Than
     Income)                  3.6            3.7             6.2          7.6
                       -----------    -----------     -----------  -----------
      Total Fixed
        Expenses             31.1           31.1            60.5         62.6
                       -----------    -----------     -----------  -----------
    Total Expenses          123.6          120.6           255.4        246.5
                       -----------    -----------     -----------  -----------

Operating Income             16.6           21.4            25.0         41.9


</TABLE>
<PAGE>
Combined Kansas City Southern Railway/Gateway Western
Carloadings By Commodity - Year to Date June 30, 2001
Dollars in Thousands
<TABLE>
<S>         <C>       <C>           <C>              <C>      <C>      <C>

         Carloadings                                        Revenue

       Year to Date                                       Year to Date
-------------------     %                           ------------------    %
  2001      2000     Change                          2001      2000    Change
---------  --------  ------                        --------  --------  -------
                                Coal
  92,314    92,976     (0.7)%    Unit Coal         $54,515   $54,717    (0.4)%
   2,404     1,568     53.3%     Other Coal          1,347       532   153.2%
---------  --------                                --------  --------
  94,718    94,544      0.2%           Total        55,862    55,249     1.1%


                                Chemical & Petroleum Products

   3,591     4,708   (23.7)%     Agri Chemicals      2,846     3,321   (14.3)%
   5,661     7,074   (20.0)%     Gases               5,165     6,451   (19.9)%
  11,387    13,297   (14.4)%     Organic            11,350    12,601    (9.9)%
   9,661     8,705    11.0%      Inorganic           9,949    10,184    (2.3)%
  33,185    31,404     5.7%      Petroleum          19,806    19,937    (0.7)%
  13,503    12,988     4.0%      Plastics           13,652    11,671    17.0%
---------  --------                                --------  --------
  76,988    78,176    (1.5)%           Total        62,768    64,165    (2.2)%
---------  --------                                --------  --------

                                Agriculture and  Minerals

  24,496    26,791    (8.6)%     Domestic Grain     16,449    19,692   (16.5)%
   5,049     4,967     1.7%      Export Grain        3,198     3,289    (2.8)%
  13,209    14,545    (9.2)%     Food Products      10,651    11,626    (8.4)%
  11,585    13,177   (12.1)%     Ores and Minerals   6,294     6,737    (6.6)%
   7,556     8,856   (14.7)%     Stone, Clay & Glass 5,576     6,553   (14.9)%
---------  --------                                --------  --------
  61,895    68,336    (9.4)%           Total        42,168    47,897   (12.0)%
---------  --------                                --------  --------

                                Paper & Forest Products

  41,031    46,119   (11.0)%     Pulp/Paper         28,435    31,500    (9.7)%
   3,420     3,404     0.5%      Scrap Paper         1,772     1,820    (2.6)%
  17,732    18,054    (1.8)%     Pulpwood/Logchips   7,397     7,234     2.3%
  12,824    14,692   (12.7)%     Lumber/Plywood     11,071    12,947   (14.5)%
  11,289    13,907   (18.8)%     Metal/Scrap         8,730    10,359   (15.7)%
                                 Military/Other
   4,256     3,910     8.8%       Carloads           5,067     3,632    39.5%
---------  --------                                --------  --------
  90,552   100,086    (9.5)%           Total        62,472    67,492    (7.4)%

---------  --------                                --------  --------

                                Intermodal & Automotive

  23,743    10,018   137.0%      Automotive         14,699     5,667   159.4%
 126,573   111,264    13.8%      Intermodal         21,859    25,005   (12.6)%
---------  --------                                --------  --------
 150,316   121,282    23.9%            Total        36,558    30,672    19.2%
---------  --------                                --------  --------

                                TOTAL FOR BUSINESS
 474,469   462,424     2.6%      UNITS             259,828   265,475    (2.1)%

  17,204    22,646   (24.0)%    Haulage              6,291     6,117     2.8%

  (4,997)   (3,600)   38.8%     Adjustments         (2,352)   (1,733)   35.7%
---------  --------                                --------  --------

 486,676   481,470     1.1%           TOTAL       $263,767  $269,859    (2.3)%
=========  ========                                ========  ========

</TABLE>
<PAGE>
Combined Kansas City Southern Railway/Gateway Western
Carloadings By Commodity - Second Quarter 2001
Dollars in Thousands
<TABLE>
<S>         <C>       <C>           <C>              <C>      <C>      <C>

      Carloadings                                           Revenue

   Second   Quarter                                      Second Quarter
-------------------     %                           --------------------  %
  2001      2000     Change                          2001      2000    Change
---------  --------  ------                        --------  --------  -------

                              Coal
  47,120    45,716    3.1%       Unit Coal          27,574    25,745     7.1%
   1,151       864   33.2%       Other Coal            672       297   126.3%
---------  --------                                --------  --------
  48,271    46,580    3.6%                          28,246    26,042     8.5%

                              Chemical & Petroleum Products

   1,722     2,301  (25.2)%     Agri Chemicals       1,408     1,632   (13.7)%
   2,866     3,513  (18.4)%     Gases                2,563     3,211   (20.2)%
   5,675     6,492  (12.6)%     Organic              5,656     6,208    (8.9)%
   4,869     4,305   13.1%      Inorganic            5,062     5,064    (0.0)%
  14,613    14,763   (1.0)%     Petroleum            9,336     9,901    (5.7)%
   6,508     7,001   (7.0)%     Plastics             6,479     6,316     2.6%
---------  --------                                --------  --------
  36,253    38,375   (5.5)%            Total        30,504    32,332    (5.7)%
---------  --------                                --------  --------

                              Agriculture and Minerals

  12,435    13,076   (4.9)%      Domestic Grain      8,233     9,791   (15.9)%
   1,867     1,779    4.9%       Export Grain          906       952    (4.8)%
   6,940     7,209   (3.7)%      Food Products       5,639     5,802    (2.8)%
   5,970     6,681  (10.6)%      Ores and Minerals   3,228     3,397    (5.0)%
   3,833     4,504  (14.9)%      Stone, Clay & Glass 2,853     3,335   (14.5)%
---------  --------                                --------  --------
  31,045    33,249   (6.6)%            Total        20,859    23,277   (10.4)%
---------  --------                                --------  --------

                               Paper & Forest  Products

  20,450    23,165  (11.7)%      Pulp/Paper         14,468    16,120   (10.2)%
   1,772     1,701    4.2%       Scrap Paper           922       926    (0.4)%
   9,062     8,821    2.7%       Pulpwood/Logs/Chips 3,768     3,550     6.1%
   6,833     7,470   (8.5)%      Lumber/Plywood      5,953     6,705   (11.2)%
   5,208     6,946  (25.0)%      Metal/Scrap         4,160     4,973   (16.3)%
                                 Military/Other
   2,379     1,602   48.5%         carloads          2,829     1,494    89.4%
---------  --------                                --------  --------
  45,704    49,705   (8.0)%            Total        32,100    33,768    (4.9)%
---------  --------                                --------  --------

                                Intermodal & Automotive

  12,198     4,826  152.8%      Automotive           7,583     2,791   171.7%
  61,294    58,718    4.4%      Intermodal          10,395    12,742   (18.4)%
---------  --------                                --------  --------
  73,492    63,544   15.7%             Total        17,978    15,533    15.7%
---------  --------                                --------  --------

                              TOTAL FOR BUSINESS
                                      UNITS        129,687   130,952    (1.0)%
 234,765   231,453    1.4%
   8,589    12,040  (28.7)%   Haulage                3,265     2,657    22.9%

  (2,833)   (1,730)   63.8%   Adjustments           (1,169)     (872)   34.1%
---------  --------                                --------  --------

 240,521   241,763   (0.5)%          TOTAL         131,783   132,737    (0.7)%
=========  ========                                ========  ========
</TABLE>
<PAGE>

Kansas City Southern Industries, Inc.

Consolidated Balance Sheets                                     Preliminary
Unaudited
(Dollars in Millions)
<TABLE>
<S>                                               <C>              <C>
                                         June 30, 2001     December 31, 2000

Assets
  Cash                                       $    18.6             $    21.5
  Accounts receivable                            136.3                 135.0
  Inventories                                     29.7                  34.0
  Other current assets                            21.6                  25.9
                                         --------------        --------------
     Total current assets                        206.2                 216.4

  Investments held for operating
   purposes                                      375.3                 358.2
  Properties, net of depreciation              1,322.8               1,327.8
  Other assets                                    41.9                  42.1
                                         --------------        --------------

      Total assets                           $ 1,946.2             $ 1,944.5
                                         ==============        ==============

Liabilities and Stockholders' Equity

  Current portion of long-term debt          $    40.3             $    36.2
  Accounts payable                                46.0                  52.9
  Accrued liabilities                            142.7                 159.9
                                         --------------        --------------
     Total current liabilities                   229.0                 249.0

  Long-term debt                                 646.2                 638.4
  Deferred income taxes                          343.0                 332.2
  Other                                           72.7                  81.5
  Stockholders' equity                           655.3                 643.4
                                         --------------        --------------

    Total liabilities and stockholders'
     equity                                  $ 1,946.2             $ 1,944.5
                                         ==============        ==============



</TABLE>
<PAGE>
[{"type": "8-K", "sequence": "1", "filename": "secondq8kearnings.txt", "secsgml_size_bytes": 45521}]
{"company-data": {"conformed-name": "KANSAS CITY SOUTHERN INDUSTRIES INC", "cik": "0000054480", "assigned-sic": "4011", "irs-number": "440663509", "state-of-incorporation": "DE", "fiscal-year-end": "1231"}, "filing-values": {"form-type": "8-K", "act": "34", "file-number": "001-04717", "film-number": "1693113"}, "business-address": {"street1": "114 W 11TH ST", "city": "KANSAS CITY", "state": "MO", "zip": "64105", "phone": "8169831303"}, "mail-address": {"street1": "114 WEST 11TH STREET", "city": "KANSAS CITY", "state": "MO", "zip": "64105"}}
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):
                                  July 25, 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 7.   Financial Statements and Exhibits

(c)       Exhibits

          Exhibit No.                     Document
          (99)                            Additional Exhibits

          99.1                            Press Release issued by
                                          Kansas City Southern
                                          Industries, Inc. dated July
                                          25, 2001 entitled, "Kansas
                                          City Southern Industries
                                          Reports Second Quarter
                                          Operating Results", is
                                          attached hereto as Exhibit
                                          99.1

          99.2                            The following schedules are
                                          attached hereto as Exhibit
                                          99.2 - Combined Kansas City
                                          Southern Railway and Gateway
                                          Western Operating
                                          Statements, Combined Kansas
                                          City Southern
                                          Railway/Gateway Western
                                          Carloadings by Commodity and
                                          Kansas City Southern
                                          Industries, Inc. Preliminary
                                          Consolidated Balance Sheets

Item 9.   Regulation FD Disclosure

Kansas City Southern Industries, Inc. ("KCSI" or "Company") is
furnishing under Item 9 of this Current Report on Form 8-K the
information included as Exhibit 99.1 and Exhibit 99.2 of this
report.  Exhibit 99.1 is the Company's press release, dated July 25,
2001, announcing KCSI's second quarter and year to date 2001
operating results.  Included in Exhibit 99.2 are schedules regarding
certain financial information discussed at the Company's second
quarter 2001 meeting and conference call.

The information included in this Current Report on Form 8-K,
including Exhibit 99.1 and Exhibit 99.2, is furnished pursuant to
Item 9 and shall not be deemed to be "filed" for the purposes of
Section 18 of the Securities Exchange Act of 1934 or otherwise
subject to the liabilities of that Section.
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: July 30, 2001                   By: /s/  Louis G. Van Horn
                                         ------------------------
                                           Louis G. Van Horn
                                    Vice President and Comptroller
                                    (Principal Accounting Officer)
EXHIBIT 99.1

                                                   Date: July 25, 2001

Kansas City Southern                Media Contact: William Galligan 816-983-1551
Industries, Inc.                    email:         william.h.galligan@kcsr.com
114 West 11th Street
Kansas City, MO 64105

NYSE Symbol: KSU

      Kansas City Southern Industries Reports Second Quarter Operating Results

Earnings Analysis & Commentary

Kansas City Southern  Industries,  Inc. ("KCSI",  "the Company") reported income
from continuing  operations of $4.7 million  (8(cent) per diluted share) for the
second  quarter of 2001  compared to income from  continuing  operations of $8.8
million  (15(cent) per diluted share) for the second quarter of 2000.  This $4.1
million quarter to quarter decline resulted from declines in domestic  operating
income and equity earnings from Grupo Transportacion  Ferroviaria Mexicana, S.A.
de C.V. ("Grupo TFM") of $5.5 million and $3.1 million, respectively,  partially
offset by a $3.9 million  decrease in interest expense and lower income taxes of
$1.3 million.  KCSI's  consolidated  second quarter 2001 revenues  declined $1.2
million and operating  expenses rose $4.3 million compared to the second quarter
of 2000.

For the six months ended June 30, 2001,  income from  continuing  operations was
$11.0 million  (18(cent) per diluted share) compared to $19.2 million  (33(cent)
per diluted  share) for the six months  ended June 30,  2000.  This $8.2 million
period to period  decline  was  primarily  due to a $17.4  million  decrease  in
domestic  operating  income,  a $1.6  million  decline in equity  earnings  from
unconsolidated  affiliates and a $1.5 million decrease in other, net,  partially
offset by a decrease in interest  expense of $6.2 million and lower income taxes
of $6.1 million for the current  six-month  period.  For the first six months of
2001,  KCSI's  consolidated  revenues  declined  2% and  consolidated  operating
expenses were 4% higher compared with the same 2001 period. Equity earnings from
Grupo TFM remained relatively flat period to period. Our equity earnings for the
six months ended June 30, 2001 reflect the Company's  proportionate  share ($9.1
million)  of the income  recorded  by Grupo TFM  relating  to the  reversion  of
certain concession assets to the Mexican government.

DILUTED EARNINGS PER SHARE AND COMMON SHARES COMPARISONS (1)
Second Quarter        Year to Date
                                                         --------------        ------------
                                                          2001     2000        2001     2000
                                                          ----     ----        ----     ----
  Income from continuing operations:

    U.S. operations                                     $ 0.07   $ 0.11      $ 0.07   $ 0.23
    Grupo TFM and associated interest                     0.01     0.04        0.11     0.10
                                                       -------- --------    -------  -------
    Income (loss) from continuing operations              0.08     0.15        0.18     0.33

  Extraordinary debt retirement costs, net of income tax   -        -           -      (0.10)
  Cumulative effect of accounting change,
     net of income tax                                     -        -         (0.01)     -
                                                       --------  -------    ------- --------
        Total diluted earnings (loss) per share from
         continuing operations, adjusted for
         extraordinary item and cumulative effect
         of accounting change                           $ 0.08   $ 0.15      $ 0.17   $ 0.23
                                                       ======== ========     ======  =======

  Common Shares Outstanding (thousands):

    Weighted Average Diluted                            60,916   57,614      60,849   57,539
    Actual                                              58,455   55,750      58,455   55,750
(1)Earnings per share and common  share  information  for each period  presented
   reflect a  one-for-two  reverse stock split that occurred on July 12, 2000 in
   conjunction  with the  spin-off of Stilwell  Financial  Inc.,  the  Company's
   formerly owned financial services segment.
Second Quarter

KCSI is comprised of, among others,  The Kansas City  Southern  Railway  Company
("KCSR"),  Gateway  Western  Railway  Company  ("Gateway  Western")  and  equity
investments in Grupo TFM, Mexrail, Inc. and the Panama Canal Railway Company.

KCSI reported $4.7 million of income from continuing  operations for the quarter
ended June 30,  2001  compared  to income  from  continuing  operations  of $8.8
million for the comparable prior year quarter.

KCSI's consolidated second quarter 2001 revenues totaled $143.2 million compared
to $144.4  million in the  second  quarter of 2000.  This $1.2  million  decline
resulted from lower KCSR/Gateway  Western revenues of approximately $1.8 million
partially  offset  by  slightly  higher  revenues  from  certain  other  smaller
subsidiaries.  Second  quarter  2001  revenue  growth  occurred in coal (8%) and
automotive  (172%)  compared  to the second  quarter  of 2000.  Paper and forest
product and chemical and petroleum  product revenues  declined  approximately 5%
and 6%,  respectively,  quarter to quarter.  Weakness in these sectors  resulted
primarily from lower industry production reflecting the continuing impact of the
slowdown in the U.S. economy.  Agriculture and mineral product revenues declined
approximately  10%  quarter  to  quarter  due  mostly  to lower  domestic  grain
shipments and shorter hauls.  A general  decline in the production of poultry in
the United  States has  decreased  demand for grain  deliveries  to our  chicken
producing  customers.  Additionally,  flooding in Iowa and Minnesota  during the
second  quarter  forced a temporary  shift in the  origination  of some domestic
grain shipments to Illinois and Indiana, which resulted in significantly shorter
hauls for KCSR.

KCSI's  consolidated  costs and expenses increased $4.3 million (3.4%) to $130.3
million in the second  quarter of 2001 compared to $126.0  million in the second
quarter of 2000,  resulting from higher  KCSR/Gateway  Western  expenses of $3.0
million and higher  expenses at certain other smaller  subsidiaries.  Quarter to
quarter  increases  in fringe  benefit  costs ($1.0  million) and car hire costs
($1.5  million)  were the  primary  causes for the higher  KCSR/Gateway  Western
expenses.  Smaller  increases  for  fuel,  purchased  services,  casualties  and
insurance and other employee expenses were mostly offset by declines in salaries
and wages expense and materials  and supplies  expense.  Despite a lower overall
employee  count  quarter to quarter,  second  quarter 2001 fringe  benefit costs
increased as a result of higher health  insurance  costs,  which have risen over
15% compared to the second quarter of 2000.  Contributing to the increase in car
hire  expense was a higher  number of freight  cars from other  railroads on the
Company's  rail line  coupled  with a lower  number of KCSR freight cars offline
being used by other  railroads.  Also  contributing  to the increase in car hire
expense was the larger number of auto rack cars being used to serve the increase
in automotive  traffic.  As operations  became more fluid in the second quarter,
car hire costs showed improvement, declining approximately 12.6% compared to the
first quarter of 2001. Despite a 2% decline in usage, fuel costs increased 4% in
the second  quarter of 2001 compared to the second  quarter of 2000, due to a 6%
increase in the average price per gallon.  The Company's  consolidated  expenses
for the second  quarter also include an approximate  $0.9 million  non-recurring
gain on the sale of certain real estate and an approximate  $1.1 million expense
related to the settlement of litigation at another subsidiary.  The KCSR/Gateway
Western  operating  ratio was 88.1% for the second  quarter of 2001  compared to
84.9% for the second quarter of 2000 and 94.0% for the first quarter of 2001.

Equity earnings from the Company's  investment in Grupo TFM was $4.9 million for
the second  quarter of 2001 compared to $8.0 million for the same quarter in the
prior year.  Grupo TFM revenues  improved  5.3% to $171.9  million in the second
quarter of 2001 compared to $163.3 million in the second quarter of 2000.  These
higher  revenues  were offset by an  approximate  16.8%  increase  in  operating
expenses related  primarily to salaries and wages,  fringe  benefits,  fuel, car
hire and lease costs. These higher expenses led to a decline in operating income
of approximately 19% quarter to quarter. TFM's operating ratio was 74.6% for the
second  quarter  of 2001  compared  to 67.7%  for the  second  quarter  of 2000.
Additionally,  second quarter 2001 results  include a $2.9 million  deferred tax
provision (calculated under U.S. generally accepted accounting principles -"U.S.
GAAP")  compared to a deferred tax benefit of $3.2 million in the second quarter
of 2000. The Company reports its equity in Grupo TFM under U.S. GAAP while Grupo
TFM reports under International Accounting Standards.
KCSI's  consolidated second quarter 2001 interest expense decreased $3.9 million
(21.2%)  from the prior year  quarter  primarily  as a result of lower  interest
rates on our variable rate debt (variable rate debt approximates $419 million at
June 30, 2001) and lower amortization related to debt issue costs.

YEAR TO DATE

KCSI's income from continuing  operations for the six months ended June 30, 2001
totaled $11.0 million versus $19.2 million in the same 2000 period.

KCSI's  consolidated  year to date 2001 revenues totaled $287.2 million compared
to $293.3 million in the same 2000 period.  This $6.1 million  decline  resulted
from lower KCSR/Gateway Western revenues of approximately $8.0 million partially
offset by higher revenues from certain other smaller subsidiaries.  Year to date
2001 revenue  growth  occurred  for certain  commodities,  including  coal (1%),
automotive (159%),  plastics (17%) and military/other revenues (40%) compared to
the same 2000 period;  however, these improvements were offset by lower revenues
for most other  commodity  groups  resulting  from  demand  driven  declines  as
discussed above. Year to date 2001 revenues for chemical and petroleum products,
agriculture  and mineral  products and paper and forest  products have decreased
approximately  2%, 12%, and 7%,  respectively,  compared to the six months ended
June 30, 2000.

KCSI's  consolidated costs and expenses increased $11.3 million (4.4%) to $268.2
million in the first half of 2001  compared to $256.9  million in the first half
of 2000, resulting from higher KCSR/Gateway Western expenses of $8.9 million and
higher  expenses  at  certain  other  smaller  subsidiaries.   The  increase  in
KCSR/Gateway  Western expenses was attributable to higher costs for casualty and
insurance,  car hire and fuel. For the six months ended June 30, 2001,  casualty
and insurance costs rose approximately $9.1 million, the majority of which ($8.5
million)  related to  several  significant  first  quarter  derailments  and the
settlement of personal injury claims.  These first quarter 2001  derailments and
the ongoing  economic  weakness in the United States resulted in some congestion
during  the first  three  months of 2001.  The  effects of this  congestion  and
certain other factors as discussed above  contributed to an increase in car hire
expense of approximately $5.3 million period to period. For the six months ended
June 30, 2001, fuel usage decreased  approximately  7% compared to the same 2000
period;  however,  fuel  expense  increased 3% due to an increase in the average
price per gallon of nearly 11%. These  increases were partially  offset by lower
year to date  costs for  salaries  and wages,  fringe  benefits,  materials  and
supplies, purchased services and operating leases.

Equity  earnings from Grupo TFM for the six months ended June 30, 2001 was $16.0
million compared to $16.2 million for the six months ended June 30, 2000. During
the first  quarter of 2001,  TFM recorded  approximately  $60 million of pre-tax
income  relating to the  reversion of certain  concession  assets to the Mexican
government.  The  Company's  year to date 2001  equity  earnings  from Grupo TFM
reflect our  proportionate  share of this income of approximately  $9.1 million.
Grupo TFM  revenues  increased  5.8% to $327.9  million for the six months ended
June 30, 2001 from $310.0 million for the six months ended June 30, 2000.  These
higher  revenues  were offset by an  approximate  16.6%  increase  in  operating
expenses (exclusive of the income related to the reversion of certain concession
assets)  resulting  in a 19.5%  decline in ongoing  operating  income  period to
period.  Under U.S.  GAAP,  the deferred tax provision was $24.6 million for the
six months  ended June 30,  2001  compared  to a deferred  tax  benefit of $18.8
million for the six months ended June 30, 2000.

Similar to the second  quarter of 2001, the Company's  interest  expense for the
six months ended June 30, 2001 declined $6.2 million  compared to the six months
ended June 30, 2000 due to lower borrowing rates.

Effective  January  1,  2001 the  Company  implemented  Statement  of  Financial
Accounting Standard No. 133,  Accounting for Derivative  Instruments and Hedging
Activities  ("FAS 133").  As a result of this change in the method of accounting
for derivative financial  instruments,  the Company recorded an after-tax charge
to  earnings  of $0.4  million  in the first  quarter  of 2001.  This  charge is
presented as a cumulative  effect of an  accounting  change in the  accompanying
consolidated  condensed  statements  of income for the six months ended June 30,
2001. In the first  quarter of 2000,  the Company  completed a debt  refinancing
whereby it retired  approximately  $400 million of its debt securities  prior to
maturity.   Accordingly,   the  Company   recorded  debt  retirement   costs  of
approximately  $5.9 million  (after-tax)  in the first quarter of 2000.  This is
presented as an extraordinary  item in the accompanying  consolidated  condensed
statements of income for the six months ended June 30, 2000.
BUSINESS OUTLOOK

Michael R. Haverty, KCSI Chairman,  President and Chief Executive Officer, said,
"Although our revenue base has not  rebounded as quickly as we had planned,  our
cost structure is beginning to realize some of the benefits we expected from the
cost reduction strategy implemented at the end of the first quarter.

Our  freight  revenues  have  continued  to suffer the  effects of the  economic
slowdown,  particularly  in the paper and forest  products and certain  chemical
markets,  which have typically shown a strong  correlation  with the strength of
the economy. We expect these trends to improve when economic conditions improve.
Our agriculture and mineral  revenues have also suffered due mostly to declining
demand  for  domestic  grain for the  poultry  industry.  Despite  a slow  first
quarter, coal revenues for the first half of 2001 increased about 1% compared to
the  first  half of 2000 and 8.5%  quarter  to  quarter.  Additionally,  we have
expanded  our  service  to the  automotive  industry  as  evidenced  by the 159%
increase in related  revenue  for the first six months of this year  compared to
the first six months of last year.

Despite higher  casualty and car hire costs for the first half of 2001, our cost
structure is improving.  The operating  ratio for  KCSR/Gateway  Western for the
second  quarter  of 2001 was 88.1%  compared  to 94.0% for the first  quarter of
2001. Our  consolidated  expenses have declined from $137.9 million in the first
quarter of 2001 to $130.3 million in the second quarter.

Equity earnings from Grupo TFM continue to comprise a significant portion of our
earnings.  Despite a downturn in the U.S and Mexican economy, Grupo TFM has been
able to increase its  revenues by nearly 6% compared to 2000 and has  maintained
an operating  ratio below 80%. We believe this is a  significant  accomplishment
given  the  existing  operating  environment  and is one of the  reasons  we are
excited about the prospects of purchasing an additional  ownership percentage in
Grupo TFM. We and our partner,  Transportacion  Maritima Mexicana, S.A. de C.V.,
have  already  announced  our  intention  to exercise  our call and cause TFM to
purchase  the  24.6%  interest  in Grupo  TFM  currently  owned  by the  Mexican
government. We believe this is an opportunity to add value to a key component of
our NAFTA franchise.

During the middle part of June 2001,  the Surface  Transportation  Board ("STB")
issued its new rules governing  mergers involving two or more Class I railroads.
The STB  recognized  that,  because of KCSR's  size,  a merger  between KCSR and
another  Class I carrier  would not raise the same risks and  concerns  as other
potential  mergers  and thus,  waived  application  of the new rules to a merger
involving KCSR. We believe the STB was prudent in its decision with respect to a
potential merger involving KCSR.

During  the second  half of 2001,  we will  place our focus on these  goals:  1)
increasing domestic revenues; 2) improving the profitability of U.S. operations;
3) reducing our corporate  debt  structure.  We continue to believe in the NAFTA
vision and are committed to achieving our ultimate goal of building  shareholder
value."

This press  release  includes  statements  concerning  potential  future  events
involving  the  Company,  which  could  materially  differ  from the events that
actually occur. The differences could be caused by a number of factors including
those factors  identified in KCSI's  December 31, 2000 Form 10-K and the Current
Report on Form  8-K/A  dated June 3, 1997,  each filed by the  Company  with the
Securities  and Exchange  Commission  ("SEC")  (Commission  file no. 1-4717) and
those  factors  identified  in the  "Risk  Factors"  section  of  the  Company's
Registration  Statement on Form S-4, as amended and declared  effective on March
15, 2001, which is on file with the SEC (File No. 333-54262),  and those factors
identified in the "Risk Factors" section of the Company's Registration Statement
on Form S-3, as amended and declared effective on June 5, 2001, which is on file
with  the  SEC  (File  No.   333-61006).   The  Company   will  not  update  any
forward-looking  statements  in this press  release to reflect  future events or
developments.

                        (Financial Information Attached)
KANSAS CITY SOUTHERN INDUSTRIES, INC. and SUBSIDIARY COMPANIES
               CONSOLIDATED CONDENSED STATEMENTS OF INCOME
                  (excludes Stilwell Financial Inc.)
              (dollars in millions, except per share data)

                                   (Unaudited)
Three Months      Six Months
                                           Ended June 30,   Ended June 30,
                                           --------------   --------------
                                            2001    2000     2001    2000
                                           ------  ------   -----   ------
   Revenues                               $143.2  $144.4   $287.2  $293.3

   Costs and expenses                      115.8   111.7    239.3   228.3
   Depreciation and amortization            14.5    14.3     28.9    28.6
                                           ------  ------   -----   ------
   Operating income                         12.9    18.4     19.0    36.4

   Equity in net earnings of unconsolidated affiliates:
      Grupo Transportacion Ferroviaria
       Mexicana, S.A. de C.V.                4.9     8.0     16.0    16.2
       Other                                 0.3     1.2      0.4     1.8
   Interest expense                        (14.5)  (18.4)   (29.7)  (35.9)
   Other, net                                1.1     0.9      2.1     3.6
                                           ------  ------   -----  ------

   Income from continuing operations
    before income taxes, extraordinary
    item and cumulative effect of
    accounting change                        4.7    10.1      7.8    22.1

   Income tax provision (benefit)              -     1.3     (3.2)    2.9
                                           ------  ------    -----  ------
   Income from continuing operations
    before extraordinary item and
    cumulative effect of accounting change   4.7     8.8     11.0    19.2

   Extraordinary item, net of income taxes:
     Debt retirement costs                     -     -       -       (5.9)
   Cumulative effect of accounting
     change, net of income taxes               -     -       (0.4)     -
                                           ====== ======   ======  ======
   Income from continuing operations,
     net of extraordinary item and
     cumulative effect of accounting
     change                                  4.7     8.8     10.6    13.3
                                           ------  ------   -----   ------
   Per Share Data:

   Basic Weighted Average Common shares
    outstanding (in thousands)              58,380  55,724  58,321  55,624

   Basic Earnings (Loss) per
   Common share from continuing
   operations                               $ 0.08  $ 0.16   $0.19   $0.34

   Extraordinary item                           -       -       -    (0.10)
   Cumulative effect of
    accounting change                           -       -    (0.01)     -
                                            ------  ------   ------  ------

   Basic Earnings per Common
    share, net of extraordinary
    item and cumulative effect of
    accounting change                        $0.08   $0.16   $0.18   $0.24
                                            ------  ------   -----  ------

   Diluted Weighted Average Common shares
    outstanding (in thousands)              60,916  57,614  60,849  57,539

   Diluted Earnings (Loss) per Common
    share from continuing operations         $0.08   $0.15   $0.18   $0.33

   Extraordinary item                           -       -       -    (0.10)
   Cumulative effect of
     accounting change                          -       -    (0.01)     -
                                            ------  ------   -----   ------

   Diluted Earnings per Common share,
    net of extraordinary item and
    cumulative effect of
    accounting change                       $ 0.08  $ 0.15  $ 0.17   $ 0.23
                                            ------  ------  ------   ------
KANSAS CITY SOUTHERN INDUSTRIES, INC. and SUBSIDIARY COMPANIES
               CONSOLIDATED CONDENSED STATEMENTS OF INCOME
               (dollars in millions, except per share data)
                                  (Unaudited)
Three Months      Six Months
                                           Ended June 30,   Ended June 30,
                                           --------------   --------------
                                            2001    2000     2001    2000
                                           ------  ------   -----   ------

   Revenues                               $143.2  $144.4   $287.2  $293.3

   Costs and expenses                      115.8   111.7    239.3   228.3
   Depreciation and amortization            14.5    14.3     28.9    28.6
                                           ------  ------   -----   ------
   Operating income                         12.9    18.4     19.0    36.4

   Equity in net earnings of unconsolidated affiliates:
     Grupo Transportacion Ferroviaria
     Mexicana, S.A. de C.V.                  4.9     8.0     16.0    16.2
     Other                                   0.3     1.2      0.4     1.8
   Interest expense                        (14.5)  (18.4)   (29.7)  (35.9)
   Other, net                                1.1     0.9      2.1     3.6
                                           ------  ------   -----   ------
   Income from continuing operations
    before income taxes,  extraordinary
    item and cumulative effect of
    accounting change                        4.7    10.1      7.8    22.1

   Income tax provision (benefit)              -     1.3     (3.2)    2.9
                                           ------  ------    -----  ------
   Income from continuing operations
    before extraordinary item and
    cumulative effect of accounting change   4.7     8.8     11.0    19.2

   Income from discontinued operations
    (1)  (net of income taxes)                 -   151.7        -   340.4
                                           ------  ------   -----   ------

   Income before extraordinary item and
    cumulative effect of accounting change   4.7   160.5     11.0   359.6

   Extraordinary item, net of income taxes:
      Debt retirement costs                    -       -       -     (5.9)
   Cumulative effect of accounting
    change, net of income taxes                -       -     (0.4)      -
                                           ------  ------   -----   ------
  Net income                               $ 4.7   $160.5   $10.6   $353.7
                                           ======  ======   ======  ======

 Per Share Data:

   Basic Weighted Average Common shares
    outstanding (in thousands)             58,380  55,724   58,321  55,624
   Basic Earnings per Common share
      Continuing operations                 $0.08   $0.16    $0.19   $0.34
      Discontinued operations                   -    2.72       -     6.12
                                            ------  ------   -----   ------
   Basic Earnings (Loss) per Common share
    before extraordinary  item and
    cumulative effect of accounting change   0.08    2.88     0.19    6.46

   Extraordinary item                          -       -        -    (0.10)
   Cumulative effect of accounting change      -       -     (0.01)      -
                                            ------  ------   ------ ------
   Basic Earnings per Common share          $ 0.08  $ 2.88   $ 0.18 $ 6.36
                                            ======  ======   ====== ======

   Diluted Weighted Average Common shares
    outstanding (in thousands)              60,916  57,614   60,849 57,539

   Diluted Earnings per Common share
    Continuing operations                   $ 0.08  $ 0.15   $ 0.18 $ 0.33
    Discontinued operations                     -     2.59       -    5.82
                                            ------  ------    ----- ------

   Diluted Earnings (Loss) per Common share
    before extraordinary item  and
    cumulative effect of accounting change   0.08    2.74    0.18     6.15

   Extraordinary item                          -       -       -     (0.10)
   Cumulative effect of accounting change      -       -    (0.01)      -
                                            ------  ------   -----   ------

   Diluted Earnings per Common share        $0.08   $2.74   $0.17   $ 6.05
                                            ======  ======  ======  ======
(1) - Stilwell Financial Inc., the Company's formerly
   owned financial services segment
EXHIBIT 99.2

Combined KCSR and Gateway Western
Operating Statements
Dollars in Millions
Second Quarter Second Quarter  Six Months    Six Months
                           2001           2000            2001         2000
                       -----------    -----------     -----------  -----------
Revenues

    Freight Revenue     $    82.9      $    88.8       $   166.4    $   178.4
    Intermodal and
     Automotive Revenue      18.0           15.5            36.6         30.7
    Unit Coal Revenue        27.6           25.7            54.5         54.7
    Haulage Revenue           3.3            2.7             6.3          6.1
    Other Revenue             8.4            9.3            16.6         18.5
                       -----------    -----------     -----------  -----------
      Total Revenues        140.2          142.0           280.4        288.4
                       -----------    -----------     -----------  -----------

Operating Expenses

    Salaries & Wages         32.2           33.2            67.6         68.6
    Fringe Benefits          14.1           13.1            26.4         27.5
    Fuel                     11.4           11.0            23.8         23.1
    Material and Supplies     7.3            7.9            14.6         16.1
    Car Hire                  5.7            4.2            12.2          6.9
    Purchased Services       12.5           12.0            23.5         24.9
    Casualties & Insurance    7.4            6.7            21.8         12.7
    Other                     1.9            1.4             5.0          4.1
                       -----------    -----------     -----------  -----------
      Net Operating
        Expenses             92.5           89.5           194.9        183.9
                       -----------    -----------     -----------  -----------

Fixed Expenses

    Leases, Net              13.9           14.2            27.3         28.6
    Depreciation             13.6           13.2            27.0         26.4
    Taxes (Other Than
     Income)                  3.6            3.7             6.2          7.6
                       -----------    -----------     -----------  -----------
      Total Fixed
        Expenses             31.1           31.1            60.5         62.6
                       -----------    -----------     -----------  -----------
    Total Expenses          123.6          120.6           255.4        246.5
                       -----------    -----------     -----------  -----------

Operating Income             16.6           21.4            25.0         41.9
Combined Kansas City Southern Railway/Gateway Western
Carloadings By Commodity - Year to Date June 30, 2001
Dollars in Thousands
Carloadings                                        Revenue

       Year to Date                                       Year to Date
-------------------     %                           ------------------    %
  2001      2000     Change                          2001      2000    Change
---------  --------  ------                        --------  --------  -------
                                Coal
  92,314    92,976     (0.7)%    Unit Coal         $54,515   $54,717    (0.4)%
   2,404     1,568     53.3%     Other Coal          1,347       532   153.2%
---------  --------                                --------  --------
  94,718    94,544      0.2%           Total        55,862    55,249     1.1%

                                Chemical & Petroleum Products

   3,591     4,708   (23.7)%     Agri Chemicals      2,846     3,321   (14.3)%
   5,661     7,074   (20.0)%     Gases               5,165     6,451   (19.9)%
  11,387    13,297   (14.4)%     Organic            11,350    12,601    (9.9)%
   9,661     8,705    11.0%      Inorganic           9,949    10,184    (2.3)%
  33,185    31,404     5.7%      Petroleum          19,806    19,937    (0.7)%
  13,503    12,988     4.0%      Plastics           13,652    11,671    17.0%
---------  --------                                --------  --------
  76,988    78,176    (1.5)%           Total        62,768    64,165    (2.2)%
---------  --------                                --------  --------

                                Agriculture and  Minerals

  24,496    26,791    (8.6)%     Domestic Grain     16,449    19,692   (16.5)%
   5,049     4,967     1.7%      Export Grain        3,198     3,289    (2.8)%
  13,209    14,545    (9.2)%     Food Products      10,651    11,626    (8.4)%
  11,585    13,177   (12.1)%     Ores and Minerals   6,294     6,737    (6.6)%
   7,556     8,856   (14.7)%     Stone, Clay & Glass 5,576     6,553   (14.9)%
---------  --------                                --------  --------
  61,895    68,336    (9.4)%           Total        42,168    47,897   (12.0)%
---------  --------                                --------  --------

                                Paper & Forest Products

  41,031    46,119   (11.0)%     Pulp/Paper         28,435    31,500    (9.7)%
   3,420     3,404     0.5%      Scrap Paper         1,772     1,820    (2.6)%
  17,732    18,054    (1.8)%     Pulpwood/Logchips   7,397     7,234     2.3%
  12,824    14,692   (12.7)%     Lumber/Plywood     11,071    12,947   (14.5)%
  11,289    13,907   (18.8)%     Metal/Scrap         8,730    10,359   (15.7)%
                                 Military/Other
   4,256     3,910     8.8%       Carloads           5,067     3,632    39.5%
---------  --------                                --------  --------
  90,552   100,086    (9.5)%           Total        62,472    67,492    (7.4)%

---------  --------                                --------  --------

                                Intermodal & Automotive

  23,743    10,018   137.0%      Automotive         14,699     5,667   159.4%
 126,573   111,264    13.8%      Intermodal         21,859    25,005   (12.6)%
---------  --------                                --------  --------
 150,316   121,282    23.9%            Total        36,558    30,672    19.2%
---------  --------                                --------  --------

                                TOTAL FOR BUSINESS
 474,469   462,424     2.6%      UNITS             259,828   265,475    (2.1)%

  17,204    22,646   (24.0)%    Haulage              6,291     6,117     2.8%

  (4,997)   (3,600)   38.8%     Adjustments         (2,352)   (1,733)   35.7%
---------  --------                                --------  --------

 486,676   481,470     1.1%           TOTAL       $263,767  $269,859    (2.3)%
=========  ========                                ========  ========
Combined Kansas City Southern Railway/Gateway Western
Carloadings By Commodity - Second Quarter 2001
Dollars in Thousands
Carloadings                                           Revenue

   Second   Quarter                                      Second Quarter
-------------------     %                           --------------------  %
  2001      2000     Change                          2001      2000    Change
---------  --------  ------                        --------  --------  -------

                              Coal
  47,120    45,716    3.1%       Unit Coal          27,574    25,745     7.1%
   1,151       864   33.2%       Other Coal            672       297   126.3%
---------  --------                                --------  --------
  48,271    46,580    3.6%                          28,246    26,042     8.5%

                              Chemical & Petroleum Products

   1,722     2,301  (25.2)%     Agri Chemicals       1,408     1,632   (13.7)%
   2,866     3,513  (18.4)%     Gases                2,563     3,211   (20.2)%
   5,675     6,492  (12.6)%     Organic              5,656     6,208    (8.9)%
   4,869     4,305   13.1%      Inorganic            5,062     5,064    (0.0)%
  14,613    14,763   (1.0)%     Petroleum            9,336     9,901    (5.7)%
   6,508     7,001   (7.0)%     Plastics             6,479     6,316     2.6%
---------  --------                                --------  --------
  36,253    38,375   (5.5)%            Total        30,504    32,332    (5.7)%
---------  --------                                --------  --------

                              Agriculture and Minerals

  12,435    13,076   (4.9)%      Domestic Grain      8,233     9,791   (15.9)%
   1,867     1,779    4.9%       Export Grain          906       952    (4.8)%
   6,940     7,209   (3.7)%      Food Products       5,639     5,802    (2.8)%
   5,970     6,681  (10.6)%      Ores and Minerals   3,228     3,397    (5.0)%
   3,833     4,504  (14.9)%      Stone, Clay & Glass 2,853     3,335   (14.5)%
---------  --------                                --------  --------
  31,045    33,249   (6.6)%            Total        20,859    23,277   (10.4)%
---------  --------                                --------  --------

                               Paper & Forest  Products

  20,450    23,165  (11.7)%      Pulp/Paper         14,468    16,120   (10.2)%
   1,772     1,701    4.2%       Scrap Paper           922       926    (0.4)%
   9,062     8,821    2.7%       Pulpwood/Logs/Chips 3,768     3,550     6.1%
   6,833     7,470   (8.5)%      Lumber/Plywood      5,953     6,705   (11.2)%
   5,208     6,946  (25.0)%      Metal/Scrap         4,160     4,973   (16.3)%
                                 Military/Other
   2,379     1,602   48.5%         carloads          2,829     1,494    89.4%
---------  --------                                --------  --------
  45,704    49,705   (8.0)%            Total        32,100    33,768    (4.9)%
---------  --------                                --------  --------

                                Intermodal & Automotive

  12,198     4,826  152.8%      Automotive           7,583     2,791   171.7%
  61,294    58,718    4.4%      Intermodal          10,395    12,742   (18.4)%
---------  --------                                --------  --------
  73,492    63,544   15.7%             Total        17,978    15,533    15.7%
---------  --------                                --------  --------

                              TOTAL FOR BUSINESS
                                      UNITS        129,687   130,952    (1.0)%
 234,765   231,453    1.4%
   8,589    12,040  (28.7)%   Haulage                3,265     2,657    22.9%

  (2,833)   (1,730)   63.8%   Adjustments           (1,169)     (872)   34.1%
---------  --------                                --------  --------

 240,521   241,763   (0.5)%          TOTAL         131,783   132,737    (0.7)%
=========  ========                                ========  ========
Kansas City Southern Industries, Inc.

Consolidated Balance Sheets                                     Preliminary
Unaudited
(Dollars in Millions)
June 30, 2001     December 31, 2000

Assets
  Cash                                       $    18.6             $    21.5
  Accounts receivable                            136.3                 135.0
  Inventories                                     29.7                  34.0
  Other current assets                            21.6                  25.9
                                         --------------        --------------
     Total current assets                        206.2                 216.4

  Investments held for operating
   purposes                                      375.3                 358.2
  Properties, net of depreciation              1,322.8               1,327.8
  Other assets                                    41.9                  42.1
                                         --------------        --------------

      Total assets                           $ 1,946.2             $ 1,944.5
                                         ==============        ==============

Liabilities and Stockholders' Equity

  Current portion of long-term debt          $    40.3             $    36.2
  Accounts payable                                46.0                  52.9
  Accrued liabilities                            142.7                 159.9
                                         --------------        --------------
     Total current liabilities                   229.0                 249.0

  Long-term debt                                 646.2                 638.4
  Deferred income taxes                          343.0                 332.2
  Other                                           72.7                  81.5
  Stockholders' equity                           655.3                 643.4
                                         --------------        --------------

    Total liabilities and stockholders'
     equity                                  $ 1,946.2             $ 1,944.5
                                         ==============        ==============