8-K

 

UNITED STATES
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): March 13, 2006

Kansas City Southern
__________________________________________
(Exact name of registrant as specified in its charter)

Delaware	1-4717	44-0663509
_____________________ (State or other jurisdiction	_____________ (Commission	______________ (I.R.S. Employer
of incorporation)	File Number)	Identification No.)
427 West 12th Street, Kansas City, Missouri		64105
_________________________________ (Address of principal executive offices)		___________ (Zip Code)

Registrant’s telephone number, including area code: 816-983-1303

Not Applicable
______________________________________________
Former name or former address, if changed since last report

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

[  ]  Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
[  ]  Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
[  ]  Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
[  ]  Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Item 8.01 Other Events.

Kansas City Southern ("KCS" or the "Company") is furnishing under Item 8.01 of this Current Report on Form 8-K the information included as Exhibit 99.1 to this report. Exhibit 99.1 is the KCS press release dated March 13, 2006, announcing the payment of certain contingent payments by KCS to Grupo TMM, S.A. and Jose F. Serrano International Business, S.A. de C.V.

Item 9.01 Financial Statements and Exhibits.

Press Release issued by Kansas City Southern, dated March 13, 2006, entitled "KCS Announces Contingent Payments to Grupo TMM and Serrano International Business" is attached hereto as Exhibit 99.1.

SIGNATURES

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

	Kansas City Southern
March 14, 2006	By:	/s/ James S. Brook
		Name: James S. Brook
		Title: Vice President and Comptroller (Principal Accounting Officer)

Exhibit Index

Exhibit No.	Description
99.1	Press Release issued by Kansas City Southern dated March 13, 2006, entitled "KCS Announces Contingent Payments to Grupo TMM and Serrano International Business" is attached hereto as Exhibit 99.1.

EX-99.1

Media Contact: William H. Galligan, 816-983-1551, william.h.galligan@kcsr.com

KCS Announces Contingent Payments to Grupo TMM and
Serrano International Business

Kansas City, MO, March 13, 2006. Kansas City Southern (“KCS”) (NYSE: KSU) announced that in accordance with the terms of the Amended and Restated Acquisition Agreement between KCS, Grupo TMM, S.A. (Grupo TMM) and certain of their subsidiaries dated December 15, 2004 (the “Acquisition Agreement”), KCS paid to Grupo TMM today the contingent payment due upon final resolution of Kansas City Southern de México, S.A. de C.V.’s (“KCSM”; formerly known as TFM, S.A. de C.V.) value added tax refund claim and the dispute with the Mexican government over the purchase of the Government’s remaining ownership of KCSM (the “VAT Claim and Put”). In accordance with the terms of the Acquisition Agreement, the September 12, 2005 settlement between the Mexican government, KCS, KCSM and Grupo TMM of the VAT Claim and Put is deemed to be final if no appeal or other claim is brought within 180 days following the settlement date. As no such claim or appeal has been brought, the final resolution of the VAT Claim and Put occurred today, and KCS accordingly paid Grupo TMM $35 million in cash and issued to Grupo TMM shares valued at $35 million. KCS also deposited into escrow a note payable to Grupo TMM in the amount of $40 million (the “Note”). The Note is subject to reduction in accordance with the terms of the Acquisition Agreement and an Escrow Agreement, and the remainder of the Note shall be converted into KCS shares or cash, at KCS’ discretion, on or before April 1, 2010.

Under the terms of the Consulting Agreement between KCS and José F. Serrano International Business, S.A. de C.V. (“Serrano International Business”), KCS also made a contingent payment based on the final resolution of the VAT Claim and Put today to Serrano International Business in the amount of $9 million.

Headquartered in Kansas City, Mo., KCS is a transportation holding company that has railroad investments in the U.S., Mexico and Panama. Its primary U.S. holding includes KCSR, serving the central and south central U.S. Its international holdings include Kansas City Southern de Mexico, serving northeastern and central Mexico and the port cities of Lázaro Cárdenas, Tampico and Veracruz, and a 50 percent interest in Panama Canal Railway Company, providing ocean-to-ocean freight and passenger service along the Panama Canal. KCS’ North American rail holdings and strategic alliances are primary components of a NAFTA Railway system, linking the commercial and industrial centers of the U.S., Canada and Mexico.

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