$86.8 Billion Growth in Assets Under Management During Fourth Quarter Drives Income Surge for Kansas City Southern Industries.

Business Editors

KANSAS CITY, Mo.--(BUSINESS WIRE)--Jan. 31, 2000

Kansas City Southern Industries, Inc. (&uot;KCSI&uot; or &uot;Company&uot;) reported record quarterly ongoing earnings for the fourteenth consecutive quarter. Spurred by an $86.8 billion increase in assets under management and effective cost management, the Company's Financial Services segment (Stilwell Financial, Inc. - &uot;Stilwell&uot;) posted an 117% improvement in earnings quarter to quarter. KCSI's Transportation segment, while reporting lower earnings due to operating margin pressures, experienced an improvement in rail operations as congestion issues eased toward the end of the year.

KCSI reported an 87% earnings increase in fourth-quarter 1999 compared to fourth-quarter 1998, exclusive of one-time items in both years. Ongoing fourth-quarter 1999 earnings of $99.5 million (86(cent) per diluted share) exceeded comparable 1998 earnings of $53.3 million (46(cent) per diluted share). This explosive growth was fueled by Stilwell, which experienced a 116% increase in average assets under management quarter to quarter.

The Company's ongoing earnings for the full year 1999 of $331.5 million were its highest ever and exceeded 1998 by more than 60%. Ongoing earnings per diluted share for 1999 were $2.86 compared to $1.81 per diluted share in 1998. Each of the significant Stilwell entities reported revenue improvements year to year. The Transportation segment reported a slight decrease in revenues (approximately 2%).

Stilwell is continuing its discussions with the Securities and Exchange Commission with respect to the possible deconsolidation of Janus and its reclassification as an equity investment for financial reporting purposes. If reclassification is required, the financial statements of KCSI and Stilwell would be restated, but any restatement would not materially impact Stilwell's or KCSI's net income or earnings per share.

Fourth-quarter and year-ended December 31, 1999, earnings include $7.9 million (after-tax) of unusual one-time costs recorded by the Transportation segment, reflecting, among others, amounts for facility and project closures, employee separations, spin-off related costs, labor and personal injury related issues. Fourth-quarter and full-year 1998 earnings included a one-time $23.2 million (after-tax $0.21 per diluted share) non-cash charge resulting from the merger of a wholly owned subsidiary of DST Systems, Inc. (&uot;DST&uot;) - a 32% equity investment of the Company - with USCS International, Inc. (&uot;USCS&uot;). DST accounted for the merger under the pooling of interests method. 1998 earnings also included second-quarter one-time after-tax gains of $4.4 million associated with the sale of the Janus Capital Corporation (&uot;Janus&uot;) equity investment in IDEX Capital (&uot;IDEX&uot;) and $1.8 million in connection with the sale of a branch line owned by The Kansas City Southern Railway Company (&uot;KCSR&uot;).

DILUTED EARNINGS PER SHARE AND COMMON SHARES COMPARISONS

                                    Fourth Quarter  Year Ended Dec. 31
                                     1999    1998      1999    1998
                                     ----    ----      ----    ----
Transportation:
 U.S. Ongoing Operations            $0.07   $0.09     $0.26   $0.45
 Grupo TFM and associated
  interest, exclusive of
  Deferred Taxes                    (0.02)  (0.03)    (0.07)  (0.24)
 Grupo TFM Deferred Taxes           (0.04)   0.01     (0.03)   0.11
                                    -----   -----     -----   -----
 Ongoing Operations                  0.01    0.07      0.16    0.32
 Non-recurring unusual costs        (0.07)     --     (0.07)     --
 Gain on sale of branch line           --      --        --    0.02
                                    -----   -----     -----   -----
  Total Transportation              (0.06)   0.07      0.09    0.34
                                    -----   -----     -----   -----

Financial Services:
 Ongoing Operations                  0.85    0.39      2.70    1.49
 Effects of DST merger                 --   (0.21)       --   (0.21)
 Gain on Janus sale of IDEX            --      --        --    0.04
                                    -----   -----     -----   -----
  Total Financial Services           0.85    0.18      2.70    1.32
                                    -----   -----     -----   -----

Total Earnings Per Share:
 Ongoing Operations                  0.86    0.46      2.86    1.81
 Non-recurring unusual costs        (0.07)     --     (0.07)     --
 Effects of DST merger                 --   (0.21)       --   (0.21)
 Gains on sale of assets               --      --        --    0.06
                                    -----   -----     -----   -----
  Total Company                     $0.79   $0.25     $2.79   $1.66
                                    -----   -----     -----   -----

Weighted Average Diluted
 Common Shares
 Outstanding (thousands)          114,285 113,358   114,050 113,059

FINANCIAL SERVICES (STILWELL FINANCIAL, INC.)

Fourth Quarter:

The Financial Services segment includes Janus (approximately 82% owned), Berger LLC (&uot;Berger&uot;, approximately 97% owned), Nelson Money Managers PLC (&uot;Nelson&uot;, 80% owned) and an approximate 32% equity investment in DST. Effective July 1, 1999, the Company's investments in these entities were conveyed to Stilwell, a wholly owned subsidiary of the Company.

Stilwell reported fourth-quarter 1999 earnings of $98.8 million versus $45.5 million in fourth-quarter 1998, exclusive of the one-time 1998 costs discussed above. This 117% growth in earnings resulted from revenue increases of 118%, 57% and 25% at Janus, Berger and Nelson, respectively.

Assets under management increased $86.8 billion, or 51%, during fourth-quarter 1999, surpassing $257 billion as of December 31, 1999. Net asset sales totaled $22.3 billion for the quarter versus $3.6 billion in the comparable prior year period and $7.9 billion in third- quarter 1999. Market appreciation of assets under management also improved quarter to quarter, with fourth-quarter 1999 appreciation of $64.5 billion, more than three times the appreciation recorded in the comparable 1998 period. Total shareowner accounts at Janus, Berger and Nelson increased by more than 320,000 during fourth-quarter 1999, exceeding 4.3 million as of year-end 1999. This growth in assets under management and shareowner accounts resulted in the revenue growth experienced by the various Stilwell subsidiaries.

Both Janus and Berger reported improved operating margins in fourth-quarter 1999 versus comparable 1998. While these improvements were largely due to higher revenues, both companies were successful in ongoing efforts to develop an effective cost structure for the level of revenues. Higher costs in fourth-quarter 1999 versus 1998 included salaries and wages (largely due to investment performance-based incentive compensation), alliance distribution costs (as the percentage of assets through these distribution arrangements grow) and marketing. Nelson continued to expand its revenue base through the use of its proprietary investment services in broader markets, as well through brand-awareness and marketing programs initiated in third-quarter 1999.

Fourth-quarter 1999 equity earnings from DST were $12.0 million, 52% higher than the $7.9 million in fourth-quarter 1998 (exclusive of USCS earnings and merger costs). This improvement was largely attributable to higher earnings in DST's financial services segment (due to an increased number of mutual fund shareowner accounts processed, improved margins and from required capitalization of internal use software development costs in 1999) and output solutions segment (from increases in images produced and statements mailed).

Year Ended December 31, 1999:

For the year ended December 31, 1999, Stilwell reported earnings of $313.4 million, an increase of $142.6 million (83%) over 1998, exclusive of the one-time 1998 items.

Net asset sales of $57.0 billion and appreciation of $87.3 billion resulted in an impressive 128% jump in assets under management during 1999. Average assets under management for the year ended December 31, 1999, were 86% higher than 1998.

Janus was successful in maintaining very competitive operating margins, with little change from 1998. Berger's margins slipped from 1998; however, this decline was primarily due to higher salaries and wages costs in second and third quarter associated with the management realignment and change in corporate structure, as well as a reduction in the management fees for various Berger Funds. Without these reorganization costs, Berger's margins improved approximately four percentage points year to year. Similar expense trends occurred throughout 1999 as described in the fourth-quarter discussion above.

Equity earnings from DST totaled $44.4 million for 1999 versus ongoing equity earnings of $30.6 million in 1998. Improvements in revenues, operating margins and DST's equity earnings of unconsolidated affiliates drove this increase year to year. Consolidated DST revenues increased due to a higher number of U.S. mutual fund shareowner accounts processed (totaling 56.4 million at December 31, 1999 versus, 49.8 million at December 31, 1998), images produced and statements mailed.

TRANSPORTATION (Kansas City Southern Lines, Inc.)

Fourth Quarter:

The Transportation segment reported earnings of $0.7 million for the three months ended December 31, 1999, exclusive of the one-time costs discussed above, compared to $7.8 million in the same 1998 period. The Transportation segment includes, among others, KCSR, Gateway Western Railway Company (&uot;Gateway Western&uot;) and equity investments in Grupo Transportacion Ferroviaria Mexicana, S.A. de C.V. (&uot;Grupo TFM&uot;) and Mexrail, Inc.

Transportation revenues in the fourth quarter totaled $151.7 million versus $151.1 million in 1998. KCSR carloadings were up 3.6% quarter to quarter, but revenues declined slightly, reflecting changes in the mix of commodities traffic. Higher coal (5%) and intermodal/automotive revenues (19%) were offset by volume-driven revenue declines in the chemical and agriculture products sectors. Gateway Western, as well as other smaller Transportation companies, experienced volume-driven increases in revenues quarter to quarter.

Fourth-quarter 1999 Transportation operating expenses were approximately 5% higher than the same period in 1998, exclusive of 1999 one-time charges. While KCSR system congestion eased during the fourth quarter, residual effects from previous months resulted in a 3% increase in KCSR operating expenses quarter to quarter; however, operating expenses declined slightly compared to third-quarter 1999. Slight increases in fourth-quarter 1999 expenses were evident in most KCSR cost components. Other Transportation entities experienced an approximate $2.9 million increase in operating expenses quarter to quarter, primarily related to Gateway Western and spin-off related costs. KCSR's fourth-quarter 1999 operating ratio was 86.7% (exclusive of one-time costs) compared to 83.4% in fourth-quarter 1998.

Equity earnings from Grupo TFM declined $3.5 million quarter to quarter. However, excluding the effects of deferred taxes, which are significantly impacted by fluctuations in the relative value of the Mexican peso, Grupo TFM's fourth-quarter 1999 contribution to Transportation earnings (including the effects of associated KCSI interest expense) increased by $0.8 million over comparable 1998. Grupo TFM's fourth-quarter 1999 revenues increased 31% over comparable 1998 and its operating ratio improved to 77.1% versus 81.3% in fourth- quarter 1998.

Because the Company is required to report its equity in Grupo TFM under U.S. generally accepted accounting principles -- Grupo TFM reports under International Accounting Standards -- fluctuations in deferred taxes occur based on translation requirements and differences in accounting standards. The Company's proportionate share of the Grupo TFM deferred tax expense during fourth-quarter 1999 was $5.2 million higher than comparable 1998.

Year Ended December 31, 1999:

Transportation ongoing earnings for the year ended December 31, 1999, totaled $18.1 million versus $36.2 million in the same 1998 period (exclusive of one-time items in each year as discussed above). Transportation revenues declined 2%, while ongoing operating expenses increased approximately 5%.

KCSR revenues decreased primarily due to volume declines in the chemical/petroleum and paper products sectors. These declines were partially offset by continued improvement in intermodal/automotive revenues, which grew more than 19%. Lower revenues in 1999, together with an increase in costs, resulted in an operating ratio (exclusive of one-time unusual costs) of 84.8% compared to 79.9% in 1998. Higher congestion-related costs in car hire, salaries and wages and purchased services were partially offset by lower casualties costs. Other Transportation businesses reported lower revenues (primarily at Gateway Western) and higher expenses.

The Transportation segment reported equity earnings from Grupo TFM (exclusive of KCSI interest expense associated with Grupo TFM) of $1.5 million versus equity losses of $3.2 million in 1998. Exclusive of deferred tax effects, the Grupo TFM contribution to Transportation earnings (including the effects of associated KCSI interest expense) increased $19.4 million over 1998, indicative of substantially improved operations and continued growth. This increase was partially offset by a $16.0 million increase in the Company's proportionate share of Grupo TFM's deferred tax expense in 1999 versus 1998.

BUSINESS OUTLOOK

Landon H. Rowland, KCSI Chairman, President and Chief Executive Officer, said: &uot;Fourth-quarter earnings continued the record-setting trends since 1997 and helped fuel the Company's highest annual earnings ever.

&uot;Dramatic increases in fourth-quarter and full-year 1999 assets under management versus 1998 resulted in earnings improvements of 117% and 83%, respectively. Net asset sales in fourth-quarter 1999 alone nearly doubled the total net sales for full-year 1998. The $86.8 billion increase in assets under management during the fourth quarter exceeded the total assets managed as of December 31, 1997.

&uot;Janus and Berger, each reporting exceptional investment performance over the last two years, have effectively established positive and identifiable brand names, as has DST with its consistently strong customer service. Nelson, in the initial stages of expansion, is striving to build and enhance its name awareness. These entities, individually and together, are winning franchises with opportunities for growth and success - opportunities that reflect the efforts of each company's entrepreneurial management and strategic direction.

&uot;Fourth-quarter 1999 results round out a challenging year of transition for the Transportation segment. The Company's equity investment in Grupo TFM finished the year with an operating ratio of 77% and revenues in excess of $500 million, both substantial improvements over 1998. Domestically, lingering congestion issues for much of the year pressured margins and resulted in lower earnings compared to 1998. While management believes that congestion has eased considerably in late 1999 and in January 2000, efforts continue to ensure these operational issues are resolved and to improve KCSR and Gateway earnings. The promise of the NAFTA railroad is being realized and, as we enter 2000, the opportunities for all partners and customers involved are unprecedented.&uot;

This press release includes statements concerning potential future events involving the Company, which could materially differ from the events that actually occur. The differences could be caused by a number of factors including those factors identified in KCSI's December 31, 1998, Form 10-K and the Current Report on Form 8-K/A dated June 3, 1997, each filed by the Company with the Securities and Exchange Commission (Commission file no. 1-4717). The Company will not update any forward-looking statements in this press release to reflect future events or developments.

Stilwell is continuing its discussions with the Securities and Exchange Commission with respect to the possible deconsolidation of Janus and its reclassification as an equity investment for financial reporting purposes. If reclassification is required, the financial statements of KCSI and Stilwell would be restated, but any restatement would not materially impact Stilwell's or KCSI's net income or earnings per share. Relevant announcements will be made upon resolution of this matter.