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, 2002


                              KANSAS CITY SOUTHERN
                              --------------------
               (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)


                427 WEST 12TH 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  dated
                            July  25, 2002 entitled, "Kansas  City  Southern
                            Reports  Substantial  Improvement in Second Quarter
                            and Year to Date 2002 Earnings", is attached hereto
                            as Exhibit 99.1

           99.2             The following schedules are attached hereto as
                            Exhibit 99.2 - Kansas City Southern Railway
                            Operating Statements, Kansas City Southern
                            Railway Carloadings by Commodity, Kansas City
                            Southern Consolidated Balance Sheets

ITEM 9.  REGULATION FD DISCLOSURE

Kansas City Southern  ("KCS" 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,
2002,  announcing KCS's second quarter and year to date 2002 operating  results.
Included in Exhibit 99.2 are schedules  regarding certain financial  information
discussed at the Company's second quarter 2002 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

Date: July 30, 2002                     By:       /S/  LOUIS G. VAN HORN
                                         ---------------------------------------
                                                     Louis G. Van Horn
                                              Vice President and Comptroller
                                              (Principal Accounting Officer)




<PAGE>

EXHIBIT 99.1

KANSAS CITY SOUTHERN                                               PRESS RELEASE
427 WEST 12TH STREET, KANSAS CITY, MISSOURI 64105               NYSE SYMBOL: KSU

Date:                  July 25, 2002

Media Contact:         William H. Galligan               Phone:     816/983-1551
                       william.h.galligan@kcsr.com       Fax:       816/983-1590

KANSAS CITY SOUTHERN REPORTS SUBSTANTIAL  IMPROVEMENT IN SECOND QUARTER AND YEAR
TO DATE 2002 EARNINGS

EARNINGS ANALYSIS & COMMENTARY

Kansas  City  Southern  ("KCS" or the  "Company")  reported  net income of $14.5
million  (23(cent) per diluted share) for the second quarter of 2002,  more than
triple the $4.7  million  (8(cent)  per diluted  share)  reported for the second
quarter of 2001. This $9.8 million quarter to quarter  increase  resulted from a
$6.9 million decline in consolidated operating expenses, a $4.0 million decrease
in interest expense, a $3.3 million increase in other income and an $8.1 million
increase in equity in earnings from Grupo Transportacion  Ferroviaria  Mexicana,
S.A.  de C.V.  ("Grupo  TFM").  These  factors,  which led to an increase in net
income,  were reduced by a $5.3 million decline in consolidated  revenue, a $1.6
million  decrease  in equity in  earnings  (losses)  from  other  unconsolidated
affiliates and a $2.9 million  increase in the income tax provision.  Net income
for the second quarter of 2002 also includes extraordinary debt retirement costs
of $2.7 million (after-tax) associated with the early retirement of term debt in
June 2002.

For the six months ended June 30, 2002,  net income was $26.2 million  (42(cent)
per diluted  share)  compared to $10.6 million  (17(cent) per diluted share) for
the six months ended June 30, 2001. This $15.6 million period to period increase
was due to an $8.9 million increase in domestic operating income, a $1.8 million
increase  in equity in  earnings  from  Grupo  TFM,  a $7.9  million  decline in
interest  expense,  a $6.7  million  increase in other income and a $4.4 million
gain realized on the sale of Mexrail,  Inc.  ("Mexrail")  to KCS's  affiliate in
Mexico,  TFM, S.A. de C.V. ("TFM").  These items were partially offset by a $1.6
million  decline  in equity  in  earnings  (losses)  from  other  unconsolidated
affiliates   and  a  $10.2  million   increase  in  the  income  tax  provision.
Additionally,  net  income  for  the  first  six  months  of 2002  includes  the
extraordinary debt retirement costs discussed above.  Equity in 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. Net income for year to date
2001 includes a $0.4 million charge relating to the  implementation of Statement
of Financial Accounting Standard No. 133, Accounting for Derivative  Instruments
and Hedging  Activities  ("SFAS 133").  This charge is presented as a cumulative
effect of an accounting change for year to date 2001.
<PAGE>

Diluted earnings per share information is as follows:
<TABLE>
<S>                                                                   <C>           <C>              <C>              <C>

                                                                      SECOND QUARTER                      YEAR TO DATE
                                                                ---------------------------       -----------------------------
                                                                   2002            2001              2002              2001
                                                                -----------     -----------       -----------       -----------

  U.S. operations                                               $    0.13       $    0.07         $    0.31         $    0.07
  Grupo TFM and PCRC (includes allocated interest)                   0.14            0.01              0.15              0.11
                                                                ----------      -----------       -----------       -----------
INCOME BEFORE EXTRAORDINARY ITEM AND CUMULATIVE EFFECT
 OF ACCOUNTING CHANGE                                                0.27            0.08              0.46              0.18
Extraordinary debt retirement costs, net of income taxes            (0.04)             -              (0.04)               -
Cumulative effect of accounting change,
   net of income taxes                                                 -               -                 -              (0.01)
                                                                ----------      -----------       -----------       -----------
      Diluted earnings per share - Net income                   $    0.23       $    0.08         $    0.42         $    0.17
                                                                -----------     -----------       -----------       -----------
</TABLE>

SECOND QUARTER

Operating  income for the quarter ended June 30, 2002  increased $1.6 million to
$14.5 million compared to $12.9 million for the second quarter of 2001 as a $6.9
million decline in operating expenses more than offset a $5.3 million decline in
revenue quarter to quarter. Revenue from the Company's principal subsidiary, The
Kansas City Southern  Railway Company  ("KCSR")  declined $3.9 million  compared
with the prior year quarter due to lower coal and automotive revenue,  partially
offset by an  increase in  chemical  and  petroleum  products,  agriculture  and
minerals, paper and forest products and intermodal revenue. Revenue improvements
for these commodity  groups were driven  primarily by rate increases,  increased
length of haul and traffic  volume gains for certain  commodities.  Coal revenue
declined  primarily as a result of a rate reduction at a major  customer,  which
took  effect  on  January  1,  2002,  as well as  lower  volume  related  to the
expiration of another coal customer's contract. Automotive revenue was lower due
to the loss of Ford business, which occurred in the second half of 2001. Revenue
from other subsidiaries decreased  approximately $1.4 million quarter to quarter
due to demand driven volume declines. Second quarter 2002 costs and expenses for
KCSR were $5.6 million lower compared to the prior year quarter resulting mostly
from declines in costs for compensation,  fuel, car hire, purchased services and
casualties.  These factors  resulted in a lower operating ratio for KCSR,  which
improved to 86.5% for the quarter  ended June 30, 2002 compared to 88.1% for the
same period in 2001.

The Company's  equity in earnings from Grupo TFM  increased  approximately  $8.1
million  quarter to quarter.  Exclusive of the results from  Mexrail,  which was
consolidated  into Grupo TFM effective April 1, 2002,  second quarter 2002 Grupo
TFM revenues  improved 1% compared to the second  quarter of 2001 and  operating
expenses were 8% lower (under accounting  principles  generally  accepted in the
United States of America - "U.S.  GAAP").  Second quarter 2002 results for Grupo
TFM include a $27.8 million  deferred tax benefit  (calculated  under U.S. GAAP)
compared  to a deferred  tax  expense of $2.9  million in the second  quarter of
2001.  This variance was caused by a weakening of the peso exchange rate as well
as tax benefits derived from the impact of Mexican inflation. The fluctuation in
the peso exchange rate also  contributed  to an $18.4 million  exchange loss for
the second  quarter of 2002  compared to an exchange gain of $1.1 million in the
second quarter of 2001.  The Company  reports its equity in Grupo TFM under U.S.
GAAP while Grupo TFM reports under International Accounting Standards ("IAS").

KCS's  consolidated  second quarter 2002 interest expense decreased $4.0 million
(28%) from the prior year quarter as a result of lower  interest rates and lower
overall debt  balances.  Other items  affecting  the  Company's  second  quarter
results  include a gain of  approximately  $3.5  million  on the sale of certain
non-operating  property at a smaller  subsidiary,  which is  reflected  as other
income.

During the second quarter, the Company refinanced  approximately $200 million of
term  debt and other  secured  indebtedness  using  proceeds  received  from the
private  placement  of $200  million of 7 1/2%  senior  notes due June 15,  2009
("Note  Offering").  In conjunction with the Note Offering,  the Company amended
and restated its credit agreement.  KCS reported an extraordinary charge of $2.7
million (after-tax) related to this refinancing transaction.
<PAGE>

YEAR TO DATE

For the first six months of 2002,  KCS's operating income rose $8.9 million as a
result of lower operating  expenses,  which declined $15.7 million (6%) compared
to the first six months of 2001, partially offset by a $6.8 million (2%) decline
in  consolidated  revenue  period to period.  KCSR's  year to date 2002  revenue
dropped  $3.7  million  compared  to year to date  2001.  Similar  to the second
quarter, this decline resulted primarily from lower coal and automotive revenue,
partially  offset  by  higher  revenue  for  chemical  and  petroleum  products,
agriculture  and minerals,  paper and forest  products and intermodal  business.
Revenue from other subsidiaries  decreased  approximately $3.1 million period to
period due to demand driven volume declines.  KCSR's year to date 2002 costs and
expenses were $15.0 million  lower  compared to the prior year period  resulting
mostly from declines in costs for  compensation,  fuel, car hire and casualties,
partially  offset by higher fringe benefit  costs.  KCSR's  operating  ratio was
86.9% for the first six months of 2002  compared to 91.1% for the same period in
2001.

The Company's  equity in earnings from Grupo TFM  increased  approximately  $1.8
million period to period.  In 2001,  however,  equity in earnings  reflected 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.  Exclusive  of this 2001  income,  KCS's year to date 2002 equity in
earnings  from Grupo TFM increased  $10.9  million  compared to same period last
year.  Exclusive of Mexrail's results for year to date 2002, Grupo TFM's revenue
improved  nearly 1% compared to year to date 2001 and operating  expenses (under
U.S. GAAP) were 5% lower (exclusive of the 2001 reversion  income).  For the six
months ended June 30, 2002, Grupo TFM's results include a $31.3 million deferred
tax benefit  (calculated  under U.S. GAAP) compared to a deferred tax expense of
$24.6  million in the same period in 2001.  This  variance was caused by several
factors, including a deferred tax expense recorded in 2001 related to the income
from the line reversion, the weakening of the peso exchange rate, as well as tax
benefits  derived from the impact of Mexican  inflation in 2002. The fluctuation
in the peso exchange rate also  contributed to a $17.6 million exchange loss for
year to date 2002  compared  to an  exchange  gain of $4.2  million for the same
period in 2001.

KCS's  consolidated  year to date interest expense  decreased $7.9 million (27%)
from the same prior year  period as a result of lower  interest  rates and lower
overall debt balances.  Other items affecting the Company's year to date results
include  a  gain  of   approximately   $6.8  million  on  the  sale  of  certain
non-operating  property  at a smaller  subsidiary,  which is  reported  as other
income,  and a gain on the sale of Mexrail of  approximately  $4.4 million.  The
gain  from  the  sale  of  Mexrail  is  presented  as a  separate  item  in  the
accompanying financial statements.

BUSINESS ANALYSIS AND OUTLOOK FROM THE CHAIRMAN

Michael R. Haverty, KCS's Chairman,  President and Chief Executive Officer said,
"we have been able to improve our bottom line in 2002 and pay down debt  despite
the  continued  economic  distress  in North  America and its impact on revenue.
Efforts to maintain our cost structure have proven effective as operating income
for both second  quarter and year to date 2002 has  increased  compared to those
same periods in 2001, despite revenue declines in both periods.  Revenue for the
second quarter and year to date,  while improved for certain  commodity  groups,
was below our expectations. The cause of the revenue declines, as pointed out in
recent  periods,  was  primarily  due to lower coal revenue  arising from a rate
reduction  at one coal  customer  and the loss of  business  from  another  coal
customer.  Also  contributing  to the revenue decline was the loss of automotive
traffic with Ford.  Revenue gains  experienced  in other  commodity  groups were
obtained mostly through  targeted rate increases,  favorable  changes in traffic
patterns and certain traffic volume improvements.

During  2002,  Grupo TFM has been the most  profitable  part of our business and
provided  a  significant  contribution  to our net  income.  Grupo  TFM  revenue
continues  to grow,  while TFM  management  has been able to maintain  effective
control  over its costs.  This is a  tremendous  accomplishment  in such a tough
economic environment and shows the strong leadership of the Grupo TFM management
team.  We,  along  with our  partner,  Grupo  TMM,  are in the  final  stages of
completing the purchase of the Mexican government's 24.6% ownership in Grupo TFM
through  TFM.  Our call  option  expires  on July 31,  2002 and we  expect  this
transaction  to be  completed  on or prior to that date.  We are
<PAGE>

excited about increasing our ownership position in Grupo TFM, which, we believe,
has become a rail transportation leader in North America.

The Company has reduced its debt balance by approximately $33 million during the
second  quarter of 2002 and by $92 million  during the course of the last twelve
months,  resulting in a debt balance below $600 million. In June 2002, we issued
$200 million of seven-year 7 1/2% senior notes.  This  successful  debt offering
provides stability for our current and future capital structure.  The ability to
reduce our debt structure and secure a favorable note offering in a weak economy
demonstrates  our commitment to achieving and  maintaining an efficient  capital
structure.

On July 14, 2002, we implemented our Management  Control System ("MCS") on KCSR.
This  state-of-the-art  transportation  computer system will allow management to
more effectively control and schedule the operations of the railroad and provide
customers with an effective  tracking  mechanism.  While we are experiencing the
normal  start-up  growing  pains,  we are  excited to have MCS in place and look
forward to the efficiencies and cost savings it is expected to provide.

As we face the future, we must increase our revenue base and continue to control
expenses.  Even in these uncertain economic times, we believe that opportunities
exist to grow  revenue.  We will continue to implement  targeted rate  increases
when  possible  and  increase  traffic  volumes  with  new as well  as  existing
customers.  And when the economy does show consistent  growth, we believe KCS is
well positioned to turn future revenue growth into increased  profitability.  We
appreciate the confidence that our  shareholders  have placed in us during these
times of economic  volatility  and we are as committed as ever to rewarding that
confidence through continued growth and by maximizing the potential of our NAFTA
rail network."

KCS IS COMPRISED OF, AMONG  OTHERS,  THE KANSAS CITY  SOUTHERN  RAILWAY  COMPANY
("KCSR")  AND EQUITY  INVESTMENTS  IN GRUPO TFM,  SOUTHERN  CAPITAL  CORPORATION
("SOUTHERN CAPITAL") AND PANAMA CANAL RAILWAY COMPANY ("PCRC").

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  COMPANY'S  DECEMBER  31,  2001 FORM 10-K AND THE
CURRENT  REPORT ON FORM 8-K DATED  DECEMBER 11, 2001,  EACH FILED BY THE COMPANY
WITH  THE  SECURITIES  AND  EXCHANGE  COMMISSION  ("SEC")  (COMMISSION  FILE NO.
1-4717).  THE COMPANY  WILL NOT UPDATE ANY  FORWARD-LOOKING  STATEMENTS  IN THIS
PRESS RELEASE TO REFLECT FUTURE EVENTS OR DEVELOPMENTS.

                        (FINANCIAL INFORMATION ATTACHED)
<PAGE>
<TABLE>
<CAPTION>

                                             KANSAS CITY SOUTHERN
                                  CONDENSED CONSOLIDATED STATEMENTS OF INCOME
                                 (DOLLARS IN MILLIONS, EXCEPT PER SHARE DATA)
                                                  (UNAUDITED)
                  <S>                                                               <C>          <C>             <C>        <C>

                                                                                   THREE MONTHS                   SIX MONTHS
                                                                                  ENDED JUNE 30,                ENDED JUNE 30,
                                                                             -------------------------       ----------------------
                                                                               2002            2001            2002          2001
                                                                             ---------       ---------       ---------    ---------
     REVENUES                                                                $  137.9        $  143.2        $  280.4     $  287.2
     Costs and expenses                                                         108.8           115.8           223.0        239.3
     Depreciation and amortization                                               14.6            14.5            29.5         28.9
                                                                             ---------       ---------       ---------    ---------
     OPERATING INCOME                                                            14.5            12.9            27.9         19.0

     Equity in net earnings (losses) of unconsolidated affiliates:
     Grupo Transportacion Ferroviaria Mexicana, S.A. de C.V. (PRELIMINARY)       13.0             4.9            17.8         16.0
     Other                                                                       (1.3)            0.3            (1.2)         0.4
     Gain on sale of Mexrail, Inc.                                                  -               -             4.4            -
     Interest expense                                                           (10.5)          (14.5)          (21.8)       (29.7)
     Other income                                                                 4.4             1.1             8.8          2.1
                                                                             ---------       ---------       ---------    ---------

     INCOME BEFORE INCOME TAXES, EXTRAORDINARY ITEM AND
         CUMULATIVE EFFECT OF ACCOUNTING CHANGE                                  20.1             4.7            35.9          7.8
     Income tax provision (benefit)                                               2.9               -             7.0         (3.2)
                                                                             ---------       ---------       ---------    ---------
     INCOME BEFORE EXTRAORDINARY ITEM AND CUMULATIVE EFFECT OF ACCOUNTING
     CHANGE                                                                      17.2             4.7            28.9         11.0
     Extraordinary item, net of income taxes                                     (2.7)              -            (2.7)           -
     Cumulative effect of accounting change, net of income taxes                    -               -               -         (0.4)
                                                                             ---------       ---------       ---------    ---------
     NET INCOME                                                              $   14.5        $    4.7        $   26.2     $   10.6
                                                                             =========       =========       =========    =========

     PER SHARE DATA:

     Basic Weighted Average Common shares outstanding (IN THOUSANDS)            60,095          58,380          59,918      58,321


     Basic Earnings (Loss) per Common share
            Income before extraordinary item and cumulative effect of
              accounting change                                              $    0.28        $   0.08       $    0.48    $   0.19
            Extraordinary item, net of income taxes                              (0.04)             -            (0.04)         -
            Cumulative effect of accounting change                                  -               -               -        (0.01)
                                                                             ---------       ---------       ---------    ---------
         Net Income                                                          $    0.24        $   0.08       $    0.44    $   0.18
                                                                             =========       =========       =========    =========



     Diluted Weighted Average Common shares outstanding (IN THOUSANDS)          62,327          60,916          62,066      60,849


     Diluted Earnings (Loss) per Common share

            Income before extraordinary item and cumulative effect of
             accounting change                                               $    0.27       $    0.08       $    0.46        0.18
            Extraordinary item, net of income taxes                              (0.04)             -            (0.04)         -
            Cumulative effect of accounting change                                  -               -               -        (0.01)
                                                                             ---------       ---------       ---------    ---------
     Net Income                                                              $    0.23       $    0.08       $    0.42    $   0.17
                                                                             =========       =========       =========    =========

</TABLE>

<PAGE>

EXHIBIT 99.2

KANSAS CITY SOUTHERN RAILWAY
OPERATING STATEMENTS
DOLLARS IN MILLIONS
<TABLE>
           <S>                                  <C>                  <C>                        <C>                   <C>

                                        SECOND QUARTER         SECOND QUARTER              YEAR TO DATE          YEAR TO DATE
                                             2002                   2001                   JUNE 30, 2002         JUNE 30, 2001
                                      -------------------    -------------------        --------------------   -------------------
Revenues

    Freight Revenue                        $        89.8          $        82.9               $       176.7         $       166.4
    Intermodal and Automotive Revenue               15.1                   18.0                        29.3                  36.6
    Unit Coal Revenue                               20.9                   27.6                        49.2                  54.5
    Haulage Revenue                                  3.4                    3.3                         6.5                   6.3
    Other Revenue                                    7.1                    8.4                        15.0                  16.6
                                      -------------------    -------------------        --------------------   -------------------
      Total Revenues                               136.3                  140.2                       276.7                 280.4
                                      -------------------    -------------------        --------------------   -------------------

Operating Expenses
    Compensation                                    31.3                   32.2                        64.6                  67.6
    Fringe Benefits                                 14.1                   14.1                        28.9                  26.4
    Fuel                                             9.3                   11.4                        18.8                  23.8
    Material and Supplies                            7.9                    7.3                        15.7                  14.6
    Car Hire                                         4.1                    5.7                         9.3                  12.2
    Purchased Services                              11.3                   12.5                        23.1                  23.5
    Casualties & Insurance                           6.5                    7.4                        14.0                  21.8
    Other                                            2.7                    1.9                         4.7                   5.0
                                      -------------------    -------------------        --------------------   -------------------
      Net Operating Expenses                        87.2                   92.5                       179.1                 194.9
                                      -------------------    -------------------        --------------------   -------------------

Fixed Expenses
    Leases, Net                                     13.4                   13.9                        26.4                  27.3
    Depreciation                                    13.7                   13.6                        27.6                  27.0
    Taxes (Other Than Income)                        3.7                    3.6                         7.3                   6.2
                                      -------------------    -------------------        --------------------   -------------------
      Total Fixed Expenses                          30.8                   31.1                        61.3                  60.5
                                      -------------------    -------------------        --------------------   -------------------
    Total Expenses                                 118.0                  123.6                       240.4                 255.4
                                      -------------------    -------------------        --------------------   -------------------
Operating Income                           $        18.3          $        16.6               $        36.3         $        25.0
                                      ===================    ===================        ====================   ===================


</TABLE>
<PAGE>
KANSAS CITY SOUTHERN RAILWAY
CARLOADINGS BY COMMODITY - YEAR TO DATE JUNE 30, 2002
DOLLARS IN THOUSANDS
<TABLE>
<S>                     <C>          <C>                  <C>                         <C>            <C>             <C>

              CARLOADINGS                                                                     REVENUE

         Year to Date               %                                                   Year to Date                %
------------------------------                                                   ----------------------------
    2002             2001         Change                                            2002            2001          Change
--------------   -------------   ---------                                       ------------   -------------   -----------

                                                COAL

      103,095          92,314      11.7%         Unit Coal                        $   49,206       $  54,515         (9.7)%
        2,012           2,404     (16.3)%        Other Coal                            1,082           1,347        (19.7)%
--------------   -------------                                                   ------------   -------------
      105,107          94,718      11.0%                     Total                    50,288          55,862        (10.0)%
-------------    -------------                                                   ------------   -------------

                                               CHEMICAL & PETROLEUM PRODUCTS

        3,213           3,591     (10.5)%         Agri Chemicals                       2,337           2,846        (17.9)%
        6,828           5,661      20.6%          Gases                                6,707           5,165         29.9%
       11,392          11,387       0.0%          Organic                             11,530          11,350          1.6%
       10,236           9,661       6.0%          Inorganic                           10,865           9,949          9.2%
       27,153          33,930     (20.0)%         Petroleum                           19,654          20,444         (3.9)%
       14,879          13,639       9.1%          Plastics                            14,579          13,652          6.8%
--------------   -------------                                                   ------------   -------------
       73,701          77,869      (5.4)%                    Total                    65,672          63,406          3.6%
--------------   -------------                                                   ------------   -------------

                                               AGRICULTURE AND MINERALS


       24,265          24,496      (0.9)%         Domestic Grain                      17,167          16,449          4.4%
        7,446           5,049      47.5%          Export Grain                         5,574           3,198         74.3%
       13,855          13,209       4.9%          Food Products                       11,428          10,651          7.3%
       11,047          11,585      (4.6)%         Ores and Minerals                    6,181           6,294         (1.8)%
        7,801           7,556       3.2%          Stone, Clay & Glass                  6,034           5,576          8.2%
--------------   -------------                                                   ------------   -------------
       64,414          61,895       4.1%                     Total                    46,384          42,168         10.0%
--------------   -------------                                                   ------------   -------------

                                               PAPER & FOREST PRODUCTS

       42,629          41,031       3.9%          Pulp/Paper                          31,966          28,435         12.4%
        2,926           3,420     (14.4)%         Scrap Paper                          1,730           1,772         (2.4)%
       17,104          17,732      (3.5)%         Pulpwood/Logchips                    6,961           7,397         (5.9)%
       13,766          12,824       7.3%          Lumber/Plywood                      12,606          11,071         13.9%
        8,944          11,289     (20.8)%         Metal/Scrap                          7,542           8,730        (13.6)%
        3,499           3,375       3.7%          Military/Other Carloads              5,275           4,429         19.1%
--------------   -------------                                                   ------------   -------------
       88,868          89,671      (0.9)%                    Total                    66,080          61,834          6.9%
--------------   -------------                                                   ------------   -------------

                                               INTERMODAL & AUTOMOTIVE

        9,481          23,743     (60.1)%         Automotive                           6,328          14,699        (56.9)%
      128,790         126,573       1.8%          Intermodal                          22,990          21,859          5.2%
--------------   -------------                                                   ------------   -------------
      138,271         150,316      (8.0)%                    Total                    29,318          36,558        (19.8)%
--------------   -------------                                                   ------------   -------------

      470,361         474,469      (0.9)%      TOTAL FOR BUSINESS UNITS              257,742         259,828         (0.8)%

       18,128          17,204       5.4%       HAULAGE                                 6,482           6,291          3.0%

       (3,523)         (4,997)     29.5%       Adjustments                            (2,540)         (2,352)        (8.0)%
--------------   -------------                                                   ------------   -------------

      484,966         486,676      (0.4)%                    TOTAL                $  261,684       $ 263,767         (0.8)%
==============   =============                                                   ============   =============
</TABLE>

<PAGE>

 KANSAS CITY SOUTHERN RAILWAY
 CARLOADINGS BY COMMODITY - SECOND QUARTER 2002
 DOLLARS IN THOUSANDS
<TABLE>
<S>                     <C>          <C>                  <C>                         <C>            <C>             <C>
              CARLOADINGS                                                                     REVENUE

       Second Quarter               %                                                   Second Quarter              %
------------------------------                                                   ----------------------------
    2002             2001         Change                                            2002            2001          Change
--------------   -------------   ---------                                       ------------   -------------   -----------

                                                COAL
       45,503          47,120       (3.4)%        Unit Coal                        $  20,925       $  27,574       (24.1)%
        1,131           1,151       (1.7)%        Other Coal                             623             672        (7.3)%
--------------   -------------                                                   ------------   -------------
       46,634          48,271       (3.4)%                                            21,548          28,246       (23.7)%
--------------   -------------                                                   ------------   -------------

                                               CHEMICAL & PETROLEUM PRODUCTS
        1,392           1,722      (19.2)%        Agri Chemicals                         933           1,408       (33.7)%
        3,588           2,866       25.2%         Gases                                3,588           2,563        40.0%
        5,978           5,675        5.3%         Organic                              6,106           5,656         8.0%
        5,372           4,869       10.3%         Inorganic                            5,707           5,062        12.7%
       14,066          14,938       (5.8)%        Petroleum                           10,004           9,666         3.5%
        7,425           6,644       11.8%         Plastics                             7,463           6,479        15.2%
--------------   -------------                                                   ------------   -------------
                                     3.0%                     Total
       37,821          36,714                                                         33,801          30,834         9.6%
--------------   -------------                                                   ------------   -------------

                                               AGRICULTURE AND MINERALS
       12,141          12,435       (2.4)%        Domestic Grain                       8,779           8,233         6.6%
        2,531           1,867       35.6%         Export Grain                         1,763             906        94.6%
        6,572           6,940       (5.3)%        Food Products                        5,429           5,639        (3.7)%
        5,991           5,970        0.4%         Ores and Minerals                    3,353           3,228         3.9%
        4,139           3,833        8.0%         Stone, Clay & Glass                  3,222           2,853        12.9%
--------------   -------------                                                   ------------   -------------
       31,374          31,045        1.1%                     Total                   22,546          20,859         8.1%
--------------   -------------                                                   ------------   -------------

                                               PAPER & FOREST PRODUCTS
       22,060          20,450        7.9%         Pulp/Paper                          16,813          14,468        16.2%
        1,383           1,772      (22.0)%        Scrap Paper                            833             922        (9.7)%
        8,318           9,062       (8.2)%        Pulpwood/Logs/Chips                  3,262           3,768       (13.4)%
        6,968           6,833        2.0%         Lumber/Plywood                       6,491           5,953         9.0%
        4,695           5,208       (9.9)%        Metal/Scrap                          4,076           4,160        (2.0)%
        1,611           1,918      (16.0)%        Military/Other carloads              2,668           2,499         6.8%
--------------   -------------                                                    ------------   -------------
       45,035          45,243       (0.5)%                    Total                   34,143          31,770         7.5%
--------------   -------------                                                   ------------   -------------

                                               INTERMODAL & AUTOMOTIVE
        3,710          12,198      (69.6)%        Automotive                           2,823           7,583       (62.8)%
       67,574          61,294       10.2%         Intermodal                          12,196          10,395        17.3%
--------------   -------------                                                   ------------   -------------
       71,284          73,492       (3.0)%                    Total                   15,019          17,978       (16.5)%
--------------   -------------                                                   ------------   -------------


      232,148         234,765       (1.1)%     TOTAL FOR BUSINESS UNITS              127,057         129,687        (2.0)%

        9,852           8,589       14.7%      HAULAGE                                 3,375           3,265         3.4%

       (1,461)         (2,833)      48.4%      Adjustments                            (1,274)         (1,169)       (9.0)%
--------------   -------------                                                   ------------   -------------

      240,539         240,521        0.0%                     TOTAL                $ 129,158       $ 131,783        (2.0)%
==============   =============                                                   ============   =============

</TABLE>

<PAGE>
<TABLE>
<CAPTION>

KANSAS CITY SOUTHERN                                                                                   -----------------------
CONSOLIDATED BALANCE SHEETS                                                                               PRELIMINARY
(DOLLARS IN MILLIONS)                                                                                  -----------------------


  <S>                                                                      <C>                                     <C>
                                                                      JUNE 30, 2002                       DECEMBER 31, 2001
                                                                 -----------------------               -----------------------
                                                                       (UNAUDITED)
ASSETS

  Cash                                                                      $       23.5                          $        4.7
  Accounts receivable                                                              131.5                                 130.0
  Inventories                                                                       30.6                                  27.9
  Other current assets                                                              36.1                                  71.8
                                                                  -----------------------               -----------------------
     Total current assets                                                          221.7                                 254.4

  Investments held for operating purposes                                          394.7                                 386.8
  Properties, net of depreciation                                                1,329.9                               1,327.4
  Other assets                                                                      33.2                                  42.3
                                                                  -----------------------               -----------------------

     Total assets                                                           $    1,979.5                          $    2,010.9
                                                                  =======================               =======================

LIABILITIES AND STOCKHOLDERS' EQUITY

  Current portion of long-term debt                                         $       10.3                          $       46.7
  Accounts payable                                                                  43.4                                  50.4
  Accrued liabilities                                                              161.9                                 160.4
                                                                  -----------------------               -----------------------
     Total current liabilities                                                     215.6                                 257.5

  Long-term debt                                                                   584.7                                 611.7
  Deferred income taxes                                                            368.0                                 370.2
  Other                                                                             98.5                                  91.2
  Stockholders' equity                                                             712.7                                 680.3
                                                                  -----------------------               -----------------------

    Total liabilities and stockholders' equity                              $    1,979.5                          $    2,010.9
                                                                  =======================               =======================



</TABLE>
[{"type": "8-K", "sequence": "1", "filename": "secondq02earn8k.txt", "secsgml_size_bytes": 47172}]
{"company-data": {"conformed-name": "KANSAS CITY SOUTHERN", "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": "02714813"}, "business-address": {"street1": "427 WEST 12TH STREET", "city": "KANSAS CITY", "state": "MO", "zip": "64105", "phone": "8169831303"}, "mail-address": {"street1": "427 WEST 12TH STREET", "city": "KANSAS CITY", "state": "MO", "zip": "64105"}, "former-company": {"former-conformed-name": "KANSAS CITY SOUTHERN INDUSTRIES INC", "date-changed": "19920703"}}
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, 2002

                              KANSAS CITY SOUTHERN
                              --------------------
               (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)

                427 WEST 12TH 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  dated
                            July  25, 2002 entitled, "Kansas  City  Southern
                            Reports  Substantial  Improvement in Second Quarter
                            and Year to Date 2002 Earnings", is attached hereto
                            as Exhibit 99.1

           99.2             The following schedules are attached hereto as
                            Exhibit 99.2 - Kansas City Southern Railway
                            Operating Statements, Kansas City Southern
                            Railway Carloadings by Commodity, Kansas City
                            Southern Consolidated Balance Sheets

ITEM 9.  REGULATION FD DISCLOSURE

Kansas City Southern  ("KCS" 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,
2002,  announcing KCS's second quarter and year to date 2002 operating  results.
Included in Exhibit 99.2 are schedules  regarding certain financial  information
discussed at the Company's second quarter 2002 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

Date: July 30, 2002                     By:       /S/  LOUIS G. VAN HORN
                                         ---------------------------------------
                                                     Louis G. Van Horn
                                              Vice President and Comptroller
                                              (Principal Accounting Officer)
EXHIBIT 99.1

KANSAS CITY SOUTHERN                                               PRESS RELEASE
427 WEST 12TH STREET, KANSAS CITY, MISSOURI 64105               NYSE SYMBOL: KSU

Date:                  July 25, 2002

Media Contact:         William H. Galligan               Phone:     816/983-1551
                       william.h.galligan@kcsr.com       Fax:       816/983-1590

KANSAS CITY SOUTHERN REPORTS SUBSTANTIAL  IMPROVEMENT IN SECOND QUARTER AND YEAR
TO DATE 2002 EARNINGS

EARNINGS ANALYSIS & COMMENTARY

Kansas  City  Southern  ("KCS" or the  "Company")  reported  net income of $14.5
million  (23(cent) per diluted share) for the second quarter of 2002,  more than
triple the $4.7  million  (8(cent)  per diluted  share)  reported for the second
quarter of 2001. This $9.8 million quarter to quarter  increase  resulted from a
$6.9 million decline in consolidated operating expenses, a $4.0 million decrease
in interest expense, a $3.3 million increase in other income and an $8.1 million
increase in equity in earnings from Grupo Transportacion  Ferroviaria  Mexicana,
S.A.  de C.V.  ("Grupo  TFM").  These  factors,  which led to an increase in net
income,  were reduced by a $5.3 million decline in consolidated  revenue, a $1.6
million  decrease  in equity in  earnings  (losses)  from  other  unconsolidated
affiliates and a $2.9 million  increase in the income tax provision.  Net income
for the second quarter of 2002 also includes extraordinary debt retirement costs
of $2.7 million (after-tax) associated with the early retirement of term debt in
June 2002.

For the six months ended June 30, 2002,  net income was $26.2 million  (42(cent)
per diluted  share)  compared to $10.6 million  (17(cent) per diluted share) for
the six months ended June 30, 2001. This $15.6 million period to period increase
was due to an $8.9 million increase in domestic operating income, a $1.8 million
increase  in equity in  earnings  from  Grupo  TFM,  a $7.9  million  decline in
interest  expense,  a $6.7  million  increase in other income and a $4.4 million
gain realized on the sale of Mexrail,  Inc.  ("Mexrail")  to KCS's  affiliate in
Mexico,  TFM, S.A. de C.V. ("TFM").  These items were partially offset by a $1.6
million  decline  in equity  in  earnings  (losses)  from  other  unconsolidated
affiliates   and  a  $10.2  million   increase  in  the  income  tax  provision.
Additionally,  net  income  for  the  first  six  months  of 2002  includes  the
extraordinary debt retirement costs discussed above.  Equity in 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. Net income for year to date
2001 includes a $0.4 million charge relating to the  implementation of Statement
of Financial Accounting Standard No. 133, Accounting for Derivative  Instruments
and Hedging  Activities  ("SFAS 133").  This charge is presented as a cumulative
effect of an accounting change for year to date 2001.
Diluted earnings per share information is as follows:
SECOND QUARTER                      YEAR TO DATE
                                                                ---------------------------       -----------------------------
                                                                   2002            2001              2002              2001
                                                                -----------     -----------       -----------       -----------

  U.S. operations                                               $    0.13       $    0.07         $    0.31         $    0.07
  Grupo TFM and PCRC (includes allocated interest)                   0.14            0.01              0.15              0.11
                                                                ----------      -----------       -----------       -----------
INCOME BEFORE EXTRAORDINARY ITEM AND CUMULATIVE EFFECT
 OF ACCOUNTING CHANGE                                                0.27            0.08              0.46              0.18
Extraordinary debt retirement costs, net of income taxes            (0.04)             -              (0.04)               -
Cumulative effect of accounting change,
   net of income taxes                                                 -               -                 -              (0.01)
                                                                ----------      -----------       -----------       -----------
      Diluted earnings per share - Net income                   $    0.23       $    0.08         $    0.42         $    0.17
                                                                -----------     -----------       -----------       -----------
SECOND QUARTER

Operating  income for the quarter ended June 30, 2002  increased $1.6 million to
$14.5 million compared to $12.9 million for the second quarter of 2001 as a $6.9
million decline in operating expenses more than offset a $5.3 million decline in
revenue quarter to quarter. Revenue from the Company's principal subsidiary, The
Kansas City Southern  Railway Company  ("KCSR")  declined $3.9 million  compared
with the prior year quarter due to lower coal and automotive revenue,  partially
offset by an  increase in  chemical  and  petroleum  products,  agriculture  and
minerals, paper and forest products and intermodal revenue. Revenue improvements
for these commodity  groups were driven  primarily by rate increases,  increased
length of haul and traffic  volume gains for certain  commodities.  Coal revenue
declined  primarily as a result of a rate reduction at a major  customer,  which
took  effect  on  January  1,  2002,  as well as  lower  volume  related  to the
expiration of another coal customer's contract. Automotive revenue was lower due
to the loss of Ford business, which occurred in the second half of 2001. Revenue
from other subsidiaries decreased  approximately $1.4 million quarter to quarter
due to demand driven volume declines. Second quarter 2002 costs and expenses for
KCSR were $5.6 million lower compared to the prior year quarter resulting mostly
from declines in costs for compensation,  fuel, car hire, purchased services and
casualties.  These factors  resulted in a lower operating ratio for KCSR,  which
improved to 86.5% for the quarter  ended June 30, 2002 compared to 88.1% for the
same period in 2001.

The Company's  equity in earnings from Grupo TFM  increased  approximately  $8.1
million  quarter to quarter.  Exclusive of the results from  Mexrail,  which was
consolidated  into Grupo TFM effective April 1, 2002,  second quarter 2002 Grupo
TFM revenues  improved 1% compared to the second  quarter of 2001 and  operating
expenses were 8% lower (under accounting  principles  generally  accepted in the
United States of America - "U.S.  GAAP").  Second quarter 2002 results for Grupo
TFM include a $27.8 million  deferred tax benefit  (calculated  under U.S. GAAP)
compared  to a deferred  tax  expense of $2.9  million in the second  quarter of
2001.  This variance was caused by a weakening of the peso exchange rate as well
as tax benefits derived from the impact of Mexican inflation. The fluctuation in
the peso exchange rate also  contributed  to an $18.4 million  exchange loss for
the second  quarter of 2002  compared to an exchange gain of $1.1 million in the
second quarter of 2001.  The Company  reports its equity in Grupo TFM under U.S.
GAAP while Grupo TFM reports under International Accounting Standards ("IAS").

KCS's  consolidated  second quarter 2002 interest expense decreased $4.0 million
(28%) from the prior year quarter as a result of lower  interest rates and lower
overall debt  balances.  Other items  affecting  the  Company's  second  quarter
results  include a gain of  approximately  $3.5  million  on the sale of certain
non-operating  property at a smaller  subsidiary,  which is  reflected  as other
income.

During the second quarter, the Company refinanced  approximately $200 million of
term  debt and other  secured  indebtedness  using  proceeds  received  from the
private  placement  of $200  million of 7 1/2%  senior  notes due June 15,  2009
("Note  Offering").  In conjunction with the Note Offering,  the Company amended
and restated its credit agreement.  KCS reported an extraordinary charge of $2.7
million (after-tax) related to this refinancing transaction.
YEAR TO DATE

For the first six months of 2002,  KCS's operating income rose $8.9 million as a
result of lower operating  expenses,  which declined $15.7 million (6%) compared
to the first six months of 2001, partially offset by a $6.8 million (2%) decline
in  consolidated  revenue  period to period.  KCSR's  year to date 2002  revenue
dropped  $3.7  million  compared  to year to date  2001.  Similar  to the second
quarter, this decline resulted primarily from lower coal and automotive revenue,
partially  offset  by  higher  revenue  for  chemical  and  petroleum  products,
agriculture  and minerals,  paper and forest  products and intermodal  business.
Revenue from other subsidiaries  decreased  approximately $3.1 million period to
period due to demand driven volume declines.  KCSR's year to date 2002 costs and
expenses were $15.0 million  lower  compared to the prior year period  resulting
mostly from declines in costs for  compensation,  fuel, car hire and casualties,
partially  offset by higher fringe benefit  costs.  KCSR's  operating  ratio was
86.9% for the first six months of 2002  compared to 91.1% for the same period in
2001.

The Company's  equity in earnings from Grupo TFM  increased  approximately  $1.8
million period to period.  In 2001,  however,  equity in earnings  reflected 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.  Exclusive  of this 2001  income,  KCS's year to date 2002 equity in
earnings  from Grupo TFM increased  $10.9  million  compared to same period last
year.  Exclusive of Mexrail's results for year to date 2002, Grupo TFM's revenue
improved  nearly 1% compared to year to date 2001 and operating  expenses (under
U.S. GAAP) were 5% lower (exclusive of the 2001 reversion  income).  For the six
months ended June 30, 2002, Grupo TFM's results include a $31.3 million deferred
tax benefit  (calculated  under U.S. GAAP) compared to a deferred tax expense of
$24.6  million in the same period in 2001.  This  variance was caused by several
factors, including a deferred tax expense recorded in 2001 related to the income
from the line reversion, the weakening of the peso exchange rate, as well as tax
benefits  derived from the impact of Mexican  inflation in 2002. The fluctuation
in the peso exchange rate also  contributed to a $17.6 million exchange loss for
year to date 2002  compared  to an  exchange  gain of $4.2  million for the same
period in 2001.

KCS's  consolidated  year to date interest expense  decreased $7.9 million (27%)
from the same prior year  period as a result of lower  interest  rates and lower
overall debt balances.  Other items affecting the Company's year to date results
include  a  gain  of   approximately   $6.8  million  on  the  sale  of  certain
non-operating  property  at a smaller  subsidiary,  which is  reported  as other
income,  and a gain on the sale of Mexrail of  approximately  $4.4 million.  The
gain  from  the  sale  of  Mexrail  is  presented  as a  separate  item  in  the
accompanying financial statements.

BUSINESS ANALYSIS AND OUTLOOK FROM THE CHAIRMAN

Michael R. Haverty, KCS's Chairman,  President and Chief Executive Officer said,
"we have been able to improve our bottom line in 2002 and pay down debt  despite
the  continued  economic  distress  in North  America and its impact on revenue.
Efforts to maintain our cost structure have proven effective as operating income
for both second  quarter and year to date 2002 has  increased  compared to those
same periods in 2001, despite revenue declines in both periods.  Revenue for the
second quarter and year to date,  while improved for certain  commodity  groups,
was below our expectations. The cause of the revenue declines, as pointed out in
recent  periods,  was  primarily  due to lower coal revenue  arising from a rate
reduction  at one coal  customer  and the loss of  business  from  another  coal
customer.  Also  contributing  to the revenue decline was the loss of automotive
traffic with Ford.  Revenue gains  experienced  in other  commodity  groups were
obtained mostly through  targeted rate increases,  favorable  changes in traffic
patterns and certain traffic volume improvements.

During  2002,  Grupo TFM has been the most  profitable  part of our business and
provided  a  significant  contribution  to our net  income.  Grupo  TFM  revenue
continues  to grow,  while TFM  management  has been able to maintain  effective
control  over its costs.  This is a  tremendous  accomplishment  in such a tough
economic environment and shows the strong leadership of the Grupo TFM management
team.  We,  along  with our  partner,  Grupo  TMM,  are in the  final  stages of
completing the purchase of the Mexican government's 24.6% ownership in Grupo TFM
through  TFM.  Our call  option  expires  on July 31,  2002 and we  expect  this
transaction  to be  completed  on or prior to that date.  We are
excited about increasing our ownership position in Grupo TFM, which, we believe,
has become a rail transportation leader in North America.

The Company has reduced its debt balance by approximately $33 million during the
second  quarter of 2002 and by $92 million  during the course of the last twelve
months,  resulting in a debt balance below $600 million. In June 2002, we issued
$200 million of seven-year 7 1/2% senior notes.  This  successful  debt offering
provides stability for our current and future capital structure.  The ability to
reduce our debt structure and secure a favorable note offering in a weak economy
demonstrates  our commitment to achieving and  maintaining an efficient  capital
structure.

On July 14, 2002, we implemented our Management  Control System ("MCS") on KCSR.
This  state-of-the-art  transportation  computer system will allow management to
more effectively control and schedule the operations of the railroad and provide
customers with an effective  tracking  mechanism.  While we are experiencing the
normal  start-up  growing  pains,  we are  excited to have MCS in place and look
forward to the efficiencies and cost savings it is expected to provide.

As we face the future, we must increase our revenue base and continue to control
expenses.  Even in these uncertain economic times, we believe that opportunities
exist to grow  revenue.  We will continue to implement  targeted rate  increases
when  possible  and  increase  traffic  volumes  with  new as well  as  existing
customers.  And when the economy does show consistent  growth, we believe KCS is
well positioned to turn future revenue growth into increased  profitability.  We
appreciate the confidence that our  shareholders  have placed in us during these
times of economic  volatility  and we are as committed as ever to rewarding that
confidence through continued growth and by maximizing the potential of our NAFTA
rail network."

KCS IS COMPRISED OF, AMONG  OTHERS,  THE KANSAS CITY  SOUTHERN  RAILWAY  COMPANY
("KCSR")  AND EQUITY  INVESTMENTS  IN GRUPO TFM,  SOUTHERN  CAPITAL  CORPORATION
("SOUTHERN CAPITAL") AND PANAMA CANAL RAILWAY COMPANY ("PCRC").

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  COMPANY'S  DECEMBER  31,  2001 FORM 10-K AND THE
CURRENT  REPORT ON FORM 8-K DATED  DECEMBER 11, 2001,  EACH FILED BY THE COMPANY
WITH  THE  SECURITIES  AND  EXCHANGE  COMMISSION  ("SEC")  (COMMISSION  FILE NO.
1-4717).  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
                                  CONDENSED CONSOLIDATED STATEMENTS OF INCOME
                                 (DOLLARS IN MILLIONS, EXCEPT PER SHARE DATA)
                                                  (UNAUDITED)
THREE MONTHS                   SIX MONTHS
                                                                                  ENDED JUNE 30,                ENDED JUNE 30,
                                                                             -------------------------       ----------------------
                                                                               2002            2001            2002          2001
                                                                             ---------       ---------       ---------    ---------
     REVENUES                                                                $  137.9        $  143.2        $  280.4     $  287.2
     Costs and expenses                                                         108.8           115.8           223.0        239.3
     Depreciation and amortization                                               14.6            14.5            29.5         28.9
                                                                             ---------       ---------       ---------    ---------
     OPERATING INCOME                                                            14.5            12.9            27.9         19.0

     Equity in net earnings (losses) of unconsolidated affiliates:
     Grupo Transportacion Ferroviaria Mexicana, S.A. de C.V. (PRELIMINARY)       13.0             4.9            17.8         16.0
     Other                                                                       (1.3)            0.3            (1.2)         0.4
     Gain on sale of Mexrail, Inc.                                                  -               -             4.4            -
     Interest expense                                                           (10.5)          (14.5)          (21.8)       (29.7)
     Other income                                                                 4.4             1.1             8.8          2.1
                                                                             ---------       ---------       ---------    ---------

     INCOME BEFORE INCOME TAXES, EXTRAORDINARY ITEM AND
         CUMULATIVE EFFECT OF ACCOUNTING CHANGE                                  20.1             4.7            35.9          7.8
     Income tax provision (benefit)                                               2.9               -             7.0         (3.2)
                                                                             ---------       ---------       ---------    ---------
     INCOME BEFORE EXTRAORDINARY ITEM AND CUMULATIVE EFFECT OF ACCOUNTING
     CHANGE                                                                      17.2             4.7            28.9         11.0
     Extraordinary item, net of income taxes                                     (2.7)              -            (2.7)           -
     Cumulative effect of accounting change, net of income taxes                    -               -               -         (0.4)
                                                                             ---------       ---------       ---------    ---------
     NET INCOME                                                              $   14.5        $    4.7        $   26.2     $   10.6
                                                                             =========       =========       =========    =========

     PER SHARE DATA:

     Basic Weighted Average Common shares outstanding (IN THOUSANDS)            60,095          58,380          59,918      58,321

     Basic Earnings (Loss) per Common share
            Income before extraordinary item and cumulative effect of
              accounting change                                              $    0.28        $   0.08       $    0.48    $   0.19
            Extraordinary item, net of income taxes                              (0.04)             -            (0.04)         -
            Cumulative effect of accounting change                                  -               -               -        (0.01)
                                                                             ---------       ---------       ---------    ---------
         Net Income                                                          $    0.24        $   0.08       $    0.44    $   0.18
                                                                             =========       =========       =========    =========

     Diluted Weighted Average Common shares outstanding (IN THOUSANDS)          62,327          60,916          62,066      60,849

     Diluted Earnings (Loss) per Common share

            Income before extraordinary item and cumulative effect of
             accounting change                                               $    0.27       $    0.08       $    0.46        0.18
            Extraordinary item, net of income taxes                              (0.04)             -            (0.04)         -
            Cumulative effect of accounting change                                  -               -               -        (0.01)
                                                                             ---------       ---------       ---------    ---------
     Net Income                                                              $    0.23       $    0.08       $    0.42    $   0.17
                                                                             =========       =========       =========    =========
EXHIBIT 99.2

KANSAS CITY SOUTHERN RAILWAY
OPERATING STATEMENTS
DOLLARS IN MILLIONS
SECOND QUARTER         SECOND QUARTER              YEAR TO DATE          YEAR TO DATE
                                             2002                   2001                   JUNE 30, 2002         JUNE 30, 2001
                                      -------------------    -------------------        --------------------   -------------------
Revenues

    Freight Revenue                        $        89.8          $        82.9               $       176.7         $       166.4
    Intermodal and Automotive Revenue               15.1                   18.0                        29.3                  36.6
    Unit Coal Revenue                               20.9                   27.6                        49.2                  54.5
    Haulage Revenue                                  3.4                    3.3                         6.5                   6.3
    Other Revenue                                    7.1                    8.4                        15.0                  16.6
                                      -------------------    -------------------        --------------------   -------------------
      Total Revenues                               136.3                  140.2                       276.7                 280.4
                                      -------------------    -------------------        --------------------   -------------------

Operating Expenses
    Compensation                                    31.3                   32.2                        64.6                  67.6
    Fringe Benefits                                 14.1                   14.1                        28.9                  26.4
    Fuel                                             9.3                   11.4                        18.8                  23.8
    Material and Supplies                            7.9                    7.3                        15.7                  14.6
    Car Hire                                         4.1                    5.7                         9.3                  12.2
    Purchased Services                              11.3                   12.5                        23.1                  23.5
    Casualties & Insurance                           6.5                    7.4                        14.0                  21.8
    Other                                            2.7                    1.9                         4.7                   5.0
                                      -------------------    -------------------        --------------------   -------------------
      Net Operating Expenses                        87.2                   92.5                       179.1                 194.9
                                      -------------------    -------------------        --------------------   -------------------

Fixed Expenses
    Leases, Net                                     13.4                   13.9                        26.4                  27.3
    Depreciation                                    13.7                   13.6                        27.6                  27.0
    Taxes (Other Than Income)                        3.7                    3.6                         7.3                   6.2
                                      -------------------    -------------------        --------------------   -------------------
      Total Fixed Expenses                          30.8                   31.1                        61.3                  60.5
                                      -------------------    -------------------        --------------------   -------------------
    Total Expenses                                 118.0                  123.6                       240.4                 255.4
                                      -------------------    -------------------        --------------------   -------------------
Operating Income                           $        18.3          $        16.6               $        36.3         $        25.0
                                      ===================    ===================        ====================   ===================
KANSAS CITY SOUTHERN RAILWAY
CARLOADINGS BY COMMODITY - YEAR TO DATE JUNE 30, 2002
DOLLARS IN THOUSANDS
CARLOADINGS                                                                     REVENUE

         Year to Date               %                                                   Year to Date                %
------------------------------                                                   ----------------------------
    2002             2001         Change                                            2002            2001          Change
--------------   -------------   ---------                                       ------------   -------------   -----------

                                                COAL

      103,095          92,314      11.7%         Unit Coal                        $   49,206       $  54,515         (9.7)%
        2,012           2,404     (16.3)%        Other Coal                            1,082           1,347        (19.7)%
--------------   -------------                                                   ------------   -------------
      105,107          94,718      11.0%                     Total                    50,288          55,862        (10.0)%
-------------    -------------                                                   ------------   -------------

                                               CHEMICAL & PETROLEUM PRODUCTS

        3,213           3,591     (10.5)%         Agri Chemicals                       2,337           2,846        (17.9)%
        6,828           5,661      20.6%          Gases                                6,707           5,165         29.9%
       11,392          11,387       0.0%          Organic                             11,530          11,350          1.6%
       10,236           9,661       6.0%          Inorganic                           10,865           9,949          9.2%
       27,153          33,930     (20.0)%         Petroleum                           19,654          20,444         (3.9)%
       14,879          13,639       9.1%          Plastics                            14,579          13,652          6.8%
--------------   -------------                                                   ------------   -------------
       73,701          77,869      (5.4)%                    Total                    65,672          63,406          3.6%
--------------   -------------                                                   ------------   -------------

                                               AGRICULTURE AND MINERALS

       24,265          24,496      (0.9)%         Domestic Grain                      17,167          16,449          4.4%
        7,446           5,049      47.5%          Export Grain                         5,574           3,198         74.3%
       13,855          13,209       4.9%          Food Products                       11,428          10,651          7.3%
       11,047          11,585      (4.6)%         Ores and Minerals                    6,181           6,294         (1.8)%
        7,801           7,556       3.2%          Stone, Clay & Glass                  6,034           5,576          8.2%
--------------   -------------                                                   ------------   -------------
       64,414          61,895       4.1%                     Total                    46,384          42,168         10.0%
--------------   -------------                                                   ------------   -------------

                                               PAPER & FOREST PRODUCTS

       42,629          41,031       3.9%          Pulp/Paper                          31,966          28,435         12.4%
        2,926           3,420     (14.4)%         Scrap Paper                          1,730           1,772         (2.4)%
       17,104          17,732      (3.5)%         Pulpwood/Logchips                    6,961           7,397         (5.9)%
       13,766          12,824       7.3%          Lumber/Plywood                      12,606          11,071         13.9%
        8,944          11,289     (20.8)%         Metal/Scrap                          7,542           8,730        (13.6)%
        3,499           3,375       3.7%          Military/Other Carloads              5,275           4,429         19.1%
--------------   -------------                                                   ------------   -------------
       88,868          89,671      (0.9)%                    Total                    66,080          61,834          6.9%
--------------   -------------                                                   ------------   -------------

                                               INTERMODAL & AUTOMOTIVE

        9,481          23,743     (60.1)%         Automotive                           6,328          14,699        (56.9)%
      128,790         126,573       1.8%          Intermodal                          22,990          21,859          5.2%
--------------   -------------                                                   ------------   -------------
      138,271         150,316      (8.0)%                    Total                    29,318          36,558        (19.8)%
--------------   -------------                                                   ------------   -------------

      470,361         474,469      (0.9)%      TOTAL FOR BUSINESS UNITS              257,742         259,828         (0.8)%

       18,128          17,204       5.4%       HAULAGE                                 6,482           6,291          3.0%

       (3,523)         (4,997)     29.5%       Adjustments                            (2,540)         (2,352)        (8.0)%
--------------   -------------                                                   ------------   -------------

      484,966         486,676      (0.4)%                    TOTAL                $  261,684       $ 263,767         (0.8)%
==============   =============                                                   ============   =============
KANSAS CITY SOUTHERN RAILWAY
 CARLOADINGS BY COMMODITY - SECOND QUARTER 2002
 DOLLARS IN THOUSANDS
CARLOADINGS                                                                     REVENUE

       Second Quarter               %                                                   Second Quarter              %
------------------------------                                                   ----------------------------
    2002             2001         Change                                            2002            2001          Change
--------------   -------------   ---------                                       ------------   -------------   -----------

                                                COAL
       45,503          47,120       (3.4)%        Unit Coal                        $  20,925       $  27,574       (24.1)%
        1,131           1,151       (1.7)%        Other Coal                             623             672        (7.3)%
--------------   -------------                                                   ------------   -------------
       46,634          48,271       (3.4)%                                            21,548          28,246       (23.7)%
--------------   -------------                                                   ------------   -------------

                                               CHEMICAL & PETROLEUM PRODUCTS
        1,392           1,722      (19.2)%        Agri Chemicals                         933           1,408       (33.7)%
        3,588           2,866       25.2%         Gases                                3,588           2,563        40.0%
        5,978           5,675        5.3%         Organic                              6,106           5,656         8.0%
        5,372           4,869       10.3%         Inorganic                            5,707           5,062        12.7%
       14,066          14,938       (5.8)%        Petroleum                           10,004           9,666         3.5%
        7,425           6,644       11.8%         Plastics                             7,463           6,479        15.2%
--------------   -------------                                                   ------------   -------------
                                     3.0%                     Total
       37,821          36,714                                                         33,801          30,834         9.6%
--------------   -------------                                                   ------------   -------------

                                               AGRICULTURE AND MINERALS
       12,141          12,435       (2.4)%        Domestic Grain                       8,779           8,233         6.6%
        2,531           1,867       35.6%         Export Grain                         1,763             906        94.6%
        6,572           6,940       (5.3)%        Food Products                        5,429           5,639        (3.7)%
        5,991           5,970        0.4%         Ores and Minerals                    3,353           3,228         3.9%
        4,139           3,833        8.0%         Stone, Clay & Glass                  3,222           2,853        12.9%
--------------   -------------                                                   ------------   -------------
       31,374          31,045        1.1%                     Total                   22,546          20,859         8.1%
--------------   -------------                                                   ------------   -------------

                                               PAPER & FOREST PRODUCTS
       22,060          20,450        7.9%         Pulp/Paper                          16,813          14,468        16.2%
        1,383           1,772      (22.0)%        Scrap Paper                            833             922        (9.7)%
        8,318           9,062       (8.2)%        Pulpwood/Logs/Chips                  3,262           3,768       (13.4)%
        6,968           6,833        2.0%         Lumber/Plywood                       6,491           5,953         9.0%
        4,695           5,208       (9.9)%        Metal/Scrap                          4,076           4,160        (2.0)%
        1,611           1,918      (16.0)%        Military/Other carloads              2,668           2,499         6.8%
--------------   -------------                                                    ------------   -------------
       45,035          45,243       (0.5)%                    Total                   34,143          31,770         7.5%
--------------   -------------                                                   ------------   -------------

                                               INTERMODAL & AUTOMOTIVE
        3,710          12,198      (69.6)%        Automotive                           2,823           7,583       (62.8)%
       67,574          61,294       10.2%         Intermodal                          12,196          10,395        17.3%
--------------   -------------                                                   ------------   -------------
       71,284          73,492       (3.0)%                    Total                   15,019          17,978       (16.5)%
--------------   -------------                                                   ------------   -------------

      232,148         234,765       (1.1)%     TOTAL FOR BUSINESS UNITS              127,057         129,687        (2.0)%

        9,852           8,589       14.7%      HAULAGE                                 3,375           3,265         3.4%

       (1,461)         (2,833)      48.4%      Adjustments                            (1,274)         (1,169)       (9.0)%
--------------   -------------                                                   ------------   -------------

      240,539         240,521        0.0%                     TOTAL                $ 129,158       $ 131,783        (2.0)%
==============   =============                                                   ============   =============
KANSAS CITY SOUTHERN                                                                                   -----------------------
CONSOLIDATED BALANCE SHEETS                                                                               PRELIMINARY
(DOLLARS IN MILLIONS)                                                                                  -----------------------
JUNE 30, 2002                       DECEMBER 31, 2001
                                                                 -----------------------               -----------------------
                                                                       (UNAUDITED)
ASSETS

  Cash                                                                      $       23.5                          $        4.7
  Accounts receivable                                                              131.5                                 130.0
  Inventories                                                                       30.6                                  27.9
  Other current assets                                                              36.1                                  71.8
                                                                  -----------------------               -----------------------
     Total current assets                                                          221.7                                 254.4

  Investments held for operating purposes                                          394.7                                 386.8
  Properties, net of depreciation                                                1,329.9                               1,327.4
  Other assets                                                                      33.2                                  42.3
                                                                  -----------------------               -----------------------

     Total assets                                                           $    1,979.5                          $    2,010.9
                                                                  =======================               =======================

LIABILITIES AND STOCKHOLDERS' EQUITY

  Current portion of long-term debt                                         $       10.3                          $       46.7
  Accounts payable                                                                  43.4                                  50.4
  Accrued liabilities                                                              161.9                                 160.4
                                                                  -----------------------               -----------------------
     Total current liabilities                                                     215.6                                 257.5

  Long-term debt                                                                   584.7                                 611.7
  Deferred income taxes                                                            368.0                                 370.2
  Other                                                                             98.5                                  91.2
  Stockholders' equity                                                             712.7                                 680.3
                                                                  -----------------------               -----------------------

    Total liabilities and stockholders' equity                              $    1,979.5                          $    2,010.9
                                                                  =======================               =======================