Kansas City Southern Railway - Subsidiaries

Subsidiaries

KCSI owns four subsidiary railroads: the Kansas City Southern Railway, Kansas City Southern de México, the Texas Mexican Railway, and the Panama Canal Railway.

• Kansas City Southern Railway (KCSR) operates 3,226 track miles in a ten-state region of the United States, with major hubs including Kansas City, MO, Shreveport, LA, New Orleans, LA, and Dallas, TX. Among the Class I railroads, KCSR has the shortest route between Kansas City, the second largest rail hub in the country, and the Gulf of Mexico.

• Kansas City Southern de México (KCSM), formerly Transportación Ferroviaria Mexicana (TFM), is the name of a company dedicated to freight transportation using rail in the North Eastern part of Mexico. KCSM is indirectly owned and operated by Kansas City Southern Industries via NAFTA Rail, S.A. de C.V. KCSM owns its own fleet and the rights to operate and maintain a rail system through a concession from the Mexican government. KCSM's rail system consists of 2,645 track miles in a 17 state region (including the federal district), which serves northeastern and central Mexico and the port cities of Lázaro Cárdenas and Tampico, among others. KCSM provides KCS with key routes for handling goods imported into North America. It also has a Pacific coast route to the recently developed deepwater container port of Lázaro Cárdenas.

• The Texas Mexican Railway Company (TexMex) is wholly owned by KCS. TexMex consists of a 157-mile (253 km) railway that connects Corpus Christi, TX to Laredo, TX. TexMex also owns 400 miles (640 km) of Union Pacific trackage rights that spans from Beaumont, TX to Robstown, TX. With its trackage rights and physical railway, the Texas Mexican Railway connects KCSM and KCSR at Laredo, TX and Beaumont, TX. TexMex also owns the extremely important Texas-Mexican Railway International Bridge. It is the only rail bridge that connects the United States with Mexico through Laredo, and 40% of all rail traffic that travels to Mexico, crosses over this bridge. Without TexMex, it would be nearly impossible for KCSR and KCSM to act as a single company under Kansas City Southern.

• The Panama Canal Railway Company (PCRC) is jointly owned by KCS and Panama Holdings, LLC of Hazel Crest, Illinois. PCRC provides ocean-to-ocean transshipment service between the Atlantic and Pacific oceans. The 47.6-mile (76.6 km) railroad serves as an efficient intermodal line for world commerce and complements the existing transportation infrastructure provided by the Canal, the Colón Free Trade Zone and the Pacific and Atlantic ports. PCRC's wholly owned subsidiary, Panarail Tourism, offers luxury passenger service for business commuters, tourists and private charters.

• NAFTA Rail, S.A. de C.V. is the holding company for KCSM because at the time KCS purchased KCSM, the Mexican government would not allow a foreign entity to directly own a Mexican railroad. KCS created this Mexican corporation as a holding company for KCS' ownership in KCSM. NAFTA Rail is wholly owned by Caymex Transportation, Inc., which is owned by KCS.

• Gateway Eastern Railway Company (GWER) is a wholly owned subsidiary of KCS. GWER provides rail service over approximately 17 miles (27 km) of track in the East St. Louis, Illinois area.

• Meridian Speedway, LLC (MSLLC) is a majority owned, consolidated subsidiary that owns the former KCSR rail line between Meridian, Mississippi and Shreveport, Louisiana, which is a portion of the KCSR rail route between Dallas, Texas and Meridian and is known as the “Meridian Speedway.” Norfolk Southern Corporation (NS), through its wholly owned subsidiary, the Alabama Great Southern Railroad, owns a minority interest in MSLLC.

• Southern Capital, Development, and Industrial Services Companies: The Southern Capital company consists of bulk storage facilities complete with ocean terminals (Pabtex) along with a tie and timber plant (Trans-Serve, Inc., also known as Superior Tie and Timber). The Southern Development Company is a holding company that owns various properties. The Southern Capital Corporation, LLC is a leasing company owned jointly by KCSR and GATX Capital Corporation of San Francisco, California, Southern Capital Corporation has the rail assets that once belonged to Carland and KCSR, as well as the loan portfolio once owned by Southern Leasing Corporation.

• Other Minor Subsidiaries: KCS also owns a handful of non-core businesses. These minor subsidiaries, holding companies or minority investments (investments in which KCS has less than 50 percent ownership), have few employees and serve to support the rail operation. These include Canama Transportation, Caymex Transportation, Inc., Rosenberg Regional LLC, Joplin Union Depot, Kansas City Terminal Railway, Port Arthur Bulk Marine Terminal Co. and Veals, Inc.