Greetings, and welcome to the Kansas City Southern third quarter earnings call. At this time all participants are in a listen only mode. A brief question-and-answer session will follow the formal presentation. If anyone should require operator assistance during the conference please press *0 on your telephone keypad As a reminder, this conference is being recorded. This presentation includes statements concerning potential future events involving the company which could materially differ from events that actually occur. The differences could be caused by a number of factors including those factors identified in the risk factors section of the company’s Form 10-K for the year ended December 31, 2007 filed with the SEC. The company will not update any forward looking statements in the presentation to request future events or developments. All reconciliations to GAAP can be found on the KCS website, www.kcsouthern.com. It is now my please to turn the call over to your host, Michael Haverty, Chairman and CE) for Kansas City Southern. Mr. Haverty, you ma begin.

Thank you, and welcome to Kansas City Southern’s third quarter 2008 earnings presentation. Those that are following on the website, if you will turn to today’s presenters, you will see that accompanying me in this presentation are Dave Starling, President and Chief Operating Officer of the company, Pat Ottensmeyer in his new roll as EVP Sales and Marketing, and also Mike Upchurch in his new roll as EVP and CFO. The next slide shows the chart of third quarter highlights earnings per share, $0.52 versus $0.48 a year ago, up $0.04, 7.7%., revenue growth 10.7%, operating ratio 77.4%. Next slide continues with some comments on the third quarter highlights. We had a strong performance despite a pretty severe disruption during September with two hurricanes, and our loadings prior to shutting down in anticipation of Gustav, we were actually up, our loadings were up 1.5%, so we were having a very strong quarter until we began to shut down for Gustav. As a result of Gustav, followed by Ike, even though they were not as bad as Katrina and Rita that we saw in August of 2005, it still affected our loadings, particularly chemicals and petroleum products, and also grain. We did not suffer significant infrastructure damage, but our major challenges were customers that lost service, and we lost some service our self from a standpoint of electrical power and therefore we had to shut down and our customers had to shut down. The good news is that the business is coming back is not anything that is permanent. In fact, it did impact our EPS when you look at the revenue losses and expenses about $0.07 a share for the quarter. We still continue to see business strength despite the troubled economy, revenue growth, has been double digit and we’ve…

Thank you Mike, we turn to page eight, talk about the operating ration. The operating ratio continued to improve, came in at 77.4 for the third quarter, a half point improvement over last year. We expected to continue to deliver operating ratio reductions through our focused initiatives and productivity improvements going forward as well. In the third quarter, we experienced, as Mike spoke, the two hurricanes in our service territory. They did impact our revenue to the extent of a little more than one full point on the operating ratio. One additional thing to mention here is that fuel costs are still a factor, even with some recent improvements in price. If fuel had been held up to 2007 levels, the operating ratio was almost another half point lower. Turning to page nine, operating ratio trend, we have another look at the continuing improvement of the operating ratio within the confines of the seasonality of the industry. Year to date in 2008, our operating ratio is 79.1%, which compares to 80.2 reported for the first nine months of 2007. The key to these trends is to remind you that in the fourth quarter we expect to have a tough comparison. Recalled in 2007, the company recorded a one time favorable compensation expense related to Mexican statutory profit sharing resulting from various tax initiatives, some of which were related to tax planning strategies and anticipation of the new tax legislation, which was enacted in the fourth quarter of 2007. That being said, we still expect to have solid operating performance for the rest of the year. Third quarter operating expenses show compensation and benefit expenses decreased $12.5 million in the quarter, compared to last year. Lower incentive compensation accrual mitigated the impact of a new collective bargaining agreement, which too effect…

Thank you Dave, and good afternoon everyone. I’m going to start my comments on slide 15, which shows some high level revenue summary. As you know our quarterly revenues were 491.5 million, which was a record for any quarter. Year over year, our revenues were up 10.7%, and up a little over 1% from the second quarter of 2008 in spite of the hurricane disruption that you’ve heard about already. Revenues increased in all segments except for automotive. Our pricing environment continues to be good, our RPU for the quarter was up 11.5, including fuel. I’ll get into more details on that in a minute. Except for automotive, our volume growth was positive in July and August, up until the time the hurricane disruption started. The last bullet point here, fuel surcharge revenue was higher, however, our overall increase was less than the other North American Class I Rails. I’d like to elaborate a bit on this point to illustrate the magnitude of Mexican fuel, and impact it has on our overall revenue growth. In the US, our fuel surcharge revenue increased by about 124% year over year, in Mexico that increase was only 26%. If our fuel surcharge revenue had been at about the same level as a percentage of revenue in Mexico, as it was in the US, our total revenues would have been about $25 million higher for the quarter, and our revenue growth would have been closer to 16%, rather than the 10.7% that we recorded for the quarter. Moving on to slide 16, it shows the factors contributing to our change in revenue for the quarter, and what this shows is that price and fuel were the primary factors driving our growth. Revenue lost due to declining volume was about six million, or 1.3% lower…

Thank you Pat. First of all, I would like to say I'm looking forward to getting to know the analysts and investors who call our KCS beginning next week on a trip I'm making to New York. And we're fortunate to work with a talented finance organization that will certainly help make the transition from Pat to me as seamlessly as possible and I'm eager to help KCS continue to deliver our five year strategic and operational goals. Let's turn to page 30 and look at record operating income of $111 million dollars which was up 13% versus the prior year. Dave and Pat have already given you a good idea of the drivers behind our revenues, expenses and operation ratio of 77.4 in the quarter. That will reflect a little bit further on the remaining PNL. Reflecting the stronger dollar in relation to the Peso, we did record a currency loss of $7.5 million in the quarter or about five cents per diluted share. As of September 30, the balance sheet reflected net monitory assets of about 1.2 billion pesos. On a year to day basis, the net currency loss is less than a million. However, continued weakness of the Peso could certainly have a greater unfavorable foreign exchange impact in the fourth quarter. Our equity and earnings continued to improve during the quarter. Our Panama Company PCRC more than doubled netting time over the last year and is certainly the most significant contributor to our equity and earnings. Despite incurring higher debt levels than a year ago, interest expense has declined mainly due to lower rates from recent refinancing that we completed. And finally, income tax expense increased as a result of higher pretax income and higher effective tax rates for the quarter. Our effective rate increased to…

Ok. Thank you Mike and if you look at slide number 40 is the Panama Canal the way Mike talked about that a little bit in his presentation this is just a graph here that shows how were doing, our projection of the number of units to be handled in Panama was 362 thousand this year through 9 months [inaudible]. The run rates around 33 to 35 thousand so we're going to be pretty close to that. I think the important thing here is to look this operating ratio at 43.2%. That is probably going to go down to the 30's here as we put more cars on our trains and we become more efficient down there. I showed this slide, not that this is a big part of our company necessarily, but it is an important part of our equity earnings and it also is a company that is run by someone that's now president and chief operating officer of our company. A lot of people questioned how would the company do and it's done very, very well and we expect them to do a lot of the same things here that he was able to do in Panama. Slide 41, the summary and the outlook despite a challenging economy even in this quarter here we expect that we will still have double digit revenues throughout the fourth quarter. As I said, through three quarters we're at 11.4% so we expect to be double digits. That for the year and that is what we had said we would do under our five year plan. In fact this is the second year that we have executed on our five year plan and not particularly strong economy. But again because of some of our growth opportunities we've been able to do…

Thank you. We'll now begin the question answer session. If you would like to ask a question, please press star one on your telephone keypad. A confirmation sound will indicate your line is in question queue. If you would like to remove your question from the queue, or if you are on speaker phone, it may be necessary to pick up the handset before pressing the star key. One moment please while we poll for questions. As a reminder it is star one to ask a question. The first question is coming from the line of Jason Paddle of Salmon Rose. Please proceed with your question.

A couple of quick questions on the intermobile side. You've picked up a couple callings that are from Lazarow. Are these still intra-Mexico moves, or are we seeing cross-border business?

Hi Jason this is Pat. These are still intra Mexico moves.

Now do you think that the cross border business might be pushed back or pushed out a little bit further given the economic softness and as people maybe people don't exactly need another option port because there's ample capacity on the current, on the Long Beach corridor?

It's a little bit too early to tell Jason. I mean we go back to our projections, even some time ago we did not expect the cross border growth to occur initially. I think what we said fairly consistently is that the initial growth that led to our Lazslo-Cardinence was expected to be largely if not almost exclusively intra Mexico. So we didn't really plan on it this year or even to a large extent next year certainly as we said a couple of times we're keeping our fingers on the pulse on the economy trying to understand what the new normal is all about. But as we build the facilities, as we build our network, we still think that in the out years that those cross border opportunities will be there. The other thing that I mentioned in my market update slide where we do see more immediate opportunity is in the truck market, the cross border market unrelated to the international business. When we get the Rosenberg facility and make some of the completes on the capital investments that are currently underway, we are obviously going to go after that business very aggressively.

Thanks for you answer Pat. Can you talk a little bit about how we started off the quarter here at intermobile? It seems a little bit of weakness. Is there anything surrounding that?

The weakness is primarily the automotive and we do a lot of parts intermobile in Mexico and so you've got a little bit of a blend coming there. If you look at our overall intermobile business in Mexico, you've got strong growth related to international in Lasarow, you've got weakness in the auto sector and then domestically we've also had a little bit of weakness in the early part of the fourth quarter off the meridian speedways and traffic that was rerouted there because of the mid-west flooding which subsequently then moved off.

Also if I can jump the question real quick and we can hand it off to somebody else. I think you said 45 to 50% of on-line business is booked now. When we enter '09 what is that percentage going to be up to? Is it going to be closer to 60-75, or are we going to still be close to about 50.

I think it's going to be close to 50. The bulk of the Mexico business reprices in the first quarter typically. And we feel pretty good about some pricing opportunities there so the fact that that isn't locked in doesn't really change our overall view for pricing levels for 2009.

Ok, fair enough. Thanks for the time as always guys.

Thank you. Our next question will be coming from the line of Chris Weatherview of Maryland. Please go ahead with your question.

Great, good afternoon guys. I guess I could just stay on pricing for a minute. The share pricing you talked about in the slide about five two in quarter was a little bit light relative to where it was last quarter. I was just wondering if you could walk us through kind of what the takes where on that line?

I think year over year Chris was in Cole where we had in the prior year we had some fuel, some contractors did not have full fuel. I'm struggling to think of more specific answers as to where that came from quarter to quarter.

OK. So that was more of a comp issue than anything else?

We did have some shorter haul revenue too on the chemical side.

The chemical business included the Exxon business that we have talked about in the past which lower RPU, very profitable business but that affected the pricing level.

OK. Well you did say the mix was positive in the quarter right? The mix was about 40… of tailwind there?

The reality is most of that increase is actually other revenue, not necessarily mix. And I’m thinking the other factor here, Chris, is that the mention of the Hurricane losses. We lost some of the higher rated business because of the Hurricane service destruction. Also, Intermobile Traffic was repriced later in the 2Q this year in Mexico - or 3Q, I’m sorry.

Ok. So you might see some of that benefit as we move into the next Quarter, or the 4th Quarter. I just want to make sure I understand. You touched on the coal, You said the coal yield could be down in the 4th quarter, is that correct?

Because of fuel.

Ok. Ok. So all in yield could decline year over year?

For the 4th Quarter. It all depends on fuel prices obviously. Say they continue to fall; we’re going to pay lower fuel surcharge revenue.

Ok. I guess just on Lazrow, I know you mentioned it and it looked very good in the quarter. How were Lazrow specific volumes looking in October? I know you mentioned that continued, I am curious to see if that will continue at such a robust rate. Are you seeing any impact of the flow of the economy at Lazarow specifically?

No we are not. In fact as I mentioned in my comments, we are seeing accelerated growth into the 4th Quarter and beyond because of the additional activity.

Ok. Do you think that’s more share gains, or is it probably not so much organic growth, right? Can you tell where that’s coming from?

Well, some of it is the shipping companies, it’s the new calls that occur to Lazrow in August, they were share gains. They were coming from other ports in Mexico. It’s also just a function of import growth in Mexico.

Just two more quick ones. I guess on the expense side, I think you mentioned on the casualties line that about 3.5 million was the increase from the Hurricane. I guess that’s still about a million or so step up sequentially, it seems like we are running at $19 or 20 million dollar run rate. Is that a fair assumption, thoughgoing forward, it seems that is a good run rate to use.

We also had some derailments, particularly in Mexico that were the higher cost than the our historical average that costs the increase in casualties.

Ok. Just on the debt side, you guys weighted out pretty clearly that they billed as we think out and assuming you can get past this maturity that’s coming up, it may be a little bit more expensive but probably can do it, when you think about 2011, 2012, it seems that then have a pretty sizeable maturities coming out of those two years. Once you get past this big CapEx, are you guys aggressively attacking that or what are your thoughts about that?

Clearly, our long range plan would suggest significant increases in cash flow that was lost to begin paying some of that debt down and we’re still very committed to that plan as of right now.

Ok. Great. Well, thanks very much for the time. I appreciate it.

Thank you. Our next question is coming from David Feinberg from Goldman Sachs. Please ask your question.

Good morning. Some questions on Lazrow to start. Any update from your end on the concession for the second quarter operator there? I think we were originally expecting someone to be announced by the end of September.

We still expect the bid packages to go out before the end of the year. And we would expect the whole process in terms of the bids coming back and the selection of the concession winner in the first half of next year.

And when would be as soon as you might see the benefit of increased capabilities before assuming a mid '09 winner?

Probably PART ELEVEN

The end of 2010 and certainly the beginning of 2011. The other thing that prompted my memory here is there is another concession that is in the process of being bid at Lazwow which relates to an automobile import transload facility that probably will be going out sooner and can may be awarded more quickly than the containers from concession. We are expecting that any day there could potentially being producing revenues sooner than the containers from home. So things are still happening and that is the good news. What is happening is that the economy from what we’re seeing, there really isn’t any change of course in terms of the development or growth that is occurring at Lazrow-Cardinence.

The second question relates to Mexico. Any thoughts or comments on the concession or update on the potential for a new port on the west coast to Mexico?

The port has been delayed until the first quarter of 2009. That’s the latest information we have.

And is that something that you would at all be interested in?

We are not interested in that it doesn't fit with our system. we have a great opportunity… that we are going to develop and we are going to continue to develop the route between Lazrow and the US and we would not go off there.

Just one question on foreign exchange for financials. I understand that the translation impact that’s going through your income statement as you are adjusting the balances on the balance sheet. But my understanding is that you actually in terms of peso denominated expenses versus revenue you have a higher percentage of your expenses denominated in Pesos compared to revenue. The thought process is that a strength in US dollar would actually be a benefit property margin or operating ratio. Am I thinking about it the right way?

I think it’s actually closer to 50-50 which creates the a natural hedge for us.from a true cash perspective.

OK. So net-net effects has no impact in terms of cash flow but it does have an impact on the…

Yes. It’s minimal. It has a minimal cash impact but a balance sheet Impact.

Last question. Any early indication in terms of the interest rate you might get on the notes that come due in first half of '09?

No. We are not going to try to predict the credit market. We would like to think that between now and the time that we actually have to refinance that things will return to a little bit more normal levels.

It’s worth a shot. Hang in there.

Thank you. Our next question is coming from the line of Edward Wolfe from Wolfe Research. Please state your question.

Thanks. Just a follow-up on the currency question. The 5.2-

Hello?

Can you hear me now?

Yes. We can hear you.

Good morning or good afternoon. On the currency question that you just asked. Just a little bit of a follow-up; the 5.2 % of pure pricing, was there any fx impact on that or benefit in that?

I’m sorry. Would you repeat that question?

Sure. The 5.2 % of pricing that you discussed in the quarter year-over-year, realizing the fx impact was more balance sheet than income statement, is there any impact that's depressing or helping that 5.2%? I’m guessing it’s depressing it a little bit.

I don’t think it’s having a significant impact.

So they only impact on that that you saw then is the ramp up of the Exxon contract?

On the reduced pricing?

Yes, on the 5.0

No, it was a combination of factors. It was pricing, it was the slow-down in the higher rated commodities. Like the ag and chemicals that occurred in the 4th Quarter, or the end of the 3rd Quarter.

Again, the 5.2 % was outside of mix No?

It’s not a pure mix that the fact that those shipments that were delayed had an impact on our pricing improvement in the Quarter.

Ok. The senior notes that come next June, as I understand it, there are $415 million or so of floating rate term loan revolver that’s due in March.

That is correct.

How do we think about that timing-wise? Do you try to pay down the $200 million before March?

Our current plan is to try and to get that down before mid-March. Again, it’s subject to whether or not we can get an upgrade with S&P. Obviously, in the environment we are operating today that may not happen but we are certainly optimistic but we will try to refinance that $200 million and then the floating rate would automatically reduce by 2011 and 2013.

If you can’t do that, then how do you renew the floating rates?

Well, we are pretty confident that we are going to be able to renew that.

The bridge that you talked about that Rosenberg inquired to the size of that, can you talk about the timing of that?

I probably don’t want to talk about the size of it because we really want to reevaluate the market conditions but it’s reasonable to think that we’ll try and do something before the end of the year.

Before the end of 2008?

Correct.

Ok. And when does the…come through?

Really, it’s a completion of the project. Probably closer to the end of 2009. We would actually put the application in at the conclusion of the project but financing wouldn't be made available because of the government process we have to go through until the end of 2009.

Sure. Ok. Earlier you spoke about half of the Mexican business of pricing of 2009. The 4-6% pricing that you talked about that you expect to be in that realm for the 4th Quarter of 2008, and that’s kind of a long-term goal. Did you expect the Mexican side of that to be within that range? The low end? The high end? Relative to the US business, how do you expect Mexican pricing?

I think it’s going to be low within the range.

So in the average?

I think in the middle of the range, based on what we believe right now.

Why not cut some heads now? The sense I got Mike from your words now were that you were going to see where we are in 2009 but yet volumes were down in third quarter and since the Hurricane you’re down and that it feels like directionally the world is not getting any better. Why not be more proactive with your whole process?

We're still a growth company. We had Ike and Gustav that set us back about a month but the volumes still look good in October and November. So coming up, we still have our metrics in place. We’re continuing to lower the cost and as you saw, our head-count is already flat. We’re going to be very cautious on our capital going into the next 30-60 days as Mike said, we’ll have a Plan A and a Plan B and a Plan C if we need it. We know that there are some full costs but we don’t want to send a message out to our customers, to you and to our employees that we’re not still in a growth cycle.

If you wanted to reduce say 2% of that hedge, how many quarters does that make?

I don't want to speculate on that, but it could be down very quick. As I said, the team has been meeting and they are looking at things like, do we have to lay locomotives up, put them into storage, take them out, which ones we are going to take out. So they are really doing this planning. Don't get the impression that everyone is sitting around and waiting for things to go bad and we’re going to react but they are already meeting and planning and we’re ready to do something as quickly as needed to be done.

Last one. What’s your confidence level at this point in making up chemical and Ag volumes that were lost in the Hurricane and besides for make-up, what percentage are you back to where you were in terms of are there any customers that aren't even up and running at this point

I think there are, based on the conversations from yesterday - there are two, one in Beaumont, one in Baton Rouge, and its not that they are not coming back up, they're coming back more slowly and January was the branch because of the economy but Pat will talk about that.

We’ve seen good recovery in terms of businesses getting back and in terms of export grains, the volumes we’re recovering - if we look throughout October, we’re very encouraged that a lot of that business will be made up and obviously we still have November and December and the economy is still a question mark so it’s harder to really be specific about exactly how much of that we’re going to get back but based on what we’ve seen so far, particularly in those two areas, plastics and chemicals and export grains, it’s very encouraging what we’re seeing now in October.

So you would think that total chemical and ag volumes both will be better in 4th Quarter than in 3rd Quarter? Yes.

Ok. Thanks so much for your time today.

Thank you. Our next question is coming from the line of Randy Cousins from….Capital Markets. Please state your question.

Good afternoon. I was wondering if you could comment on some of the networks -obviously you’ve got the new locomotives. Have you gotten the entire fuel benefit into the numbers yet? I guess the other thing I would ask about is the new power - you’ve talked in the past about increasing… and reducing trains’ cars. Can you tell us what’s in front of us in terms of …. That new locomotive……

Thanks Randy. We have not retired all of the older locomotives yet. We are now going through that process. As we retire disposed of, sell scrap, whatever, we do see some more opportunities on the fuel savings, even on the maintenance cost side. We are already consolidating more trains than we had previously - due to having better horsepower. The other thing we’re doing is in Mexico, we’re continuing to lengthen the sidings, we've always had an issue south of Moralio to Lazlow-Cardinence. We put in three new sidings this year - I’m sorry, two sidings this year - there are three more on the budget for next year that allows us to run longer trains that out of Lazrow. So we are continuing to stick with our five year capacity plan. Scott with his team is continuing to focus on the metrics very process-oriented, so we still see improvement there. We’ve got a couple of projects down in New Orleans where we think we can pull quite a bit of cost out of the system by moving some cargo around. So we got a lot of these initiatives still on the table and we see the operating ratio continuing to improve.

If we’re thinking about cost per GTM could you disclose your GTM numbers and x out fuel because that's something you can’t control. Should we see cost per GTM come down over the next 12 months or as move forward, or is it a case of stabilization, or how should we think about unit of cost?

Well I think you’re going to see the unit cost continue to come down. I don’t think, as I said earlier, that all of the initiatives that Scott has teed up today some, of them are require a little bit of capital here and there for yards. We want to change some double tracks down in Mexico that will improve our velocity. We’re getting some of our slow orders up as have in the past that will again always increase velocity. We hit an all time record on recruise this last month, in fact this month we’re down to 25 which is something we have never done. In the same time frame last year we were over three hundred, so there’s more to come, we certainly had the group focused as Pat stated earlier. With Pat coming into the group we have a more brisk yield management. We have an opportunity on our trains with cargo and we’re trying to push more revenue into our existing system.

But you are also consolidating the trains right now.

Right….. The gross ton miles per gallon. I think Dave mentioned earlier that it was an 8.1% improvement, but it’s the best that I’ve ever seen since I’ve been here, so we are getting better locomotive utilization and I think in fact that at one time here, not that long ago, within the last year and a half or so, we were in the low eighties and now we’re in the mid nineties on locomotive utilization.

We’re 96% on this quarter, new territory for us.

Congratulations. Pat, I wondered if you can speak to the sensitivity of your Mexican customer base at a US GDP industrial production so, just to keep it simple, let’s assume we have a 3% drop in US industrial production, how do you see that impacting your Mexican business? Is Mexico decoupled from the US or is it hyper-sensitive to what happens to the US economy?

I don’t think its either one of those extremes. What we have seen up until very recently is that the Mexican economy and things in Mexico were behaving differently; I wouldn’t go so far as to say that they are decoupled, but it was behaving differently than what we were seeing in the US. For example, when the economy was growing faster than in the US, import traffic into the ports, albeit the coal import traffic coming into Mexico is much lower than it is coming into the west coast of the US, but unlike what we were seeing at LA/Longbeach, where import traffic was down 9 or 10%, Mexican import traffic was actually up. Clearly with our present CapEx that’s going to maybe cause us to look and behave differently. We’re already seeing it, we look and behave differently than some of the US railroads. So, again, its still falls into the category of waiting to see what the new “normal” looks like, but we, up until very recently have seen strengths in certain segments of the business in Mexico that was different than what the railroads were seeing in the US. Now, I mentioned in my comments, and you didn’t see this in the third quarter results, but we are starting to see one of our large steel customers in Mexico has curtailed production, and so our volumes in the early part of October were down, and we are seeing some slowness in cement, which is clearly related to construction and some of that was cement that was being exported into the US.

So, it works, it would be safe to state that your Mexican customer base is not hypersensitive to the US. In other words, if the US goes down, the Mexican customers are not going to go down hard, can we say that?

I think for us that’s true, but then the other thing you need to understand and be reminded of is just that all of the new business that we’ve talked about, the bubble map, all of the new business, the new industrial growth that is scheduled to take place in our line and so far we have not seen any significant delays or plans to cancel or do anything different. You asked the question about the connection and the correlation of the two economies in general, and I guess I would also want to remind you that in our case, given the specifics of where our network goes, some of the industrial markets that we serve and some of the growth plans that our customers have for those areas, we still see good growth opportunities.

Final question. You know, obviously you need to access capital emergence, who knows what they’re going to look like six months from now, or actually, next week. I wonder, when you talk about your CapEx, I wonder if you could carve it up for us into layers and say, “this is the stuff that we absolutely have to do, this is the stuff we sure would like to do, and this is the stuff that if we have to push it another year, so be it, we’ll push it another year.” How should we think about the layers within your CapEx budget?

Well, we start this today, Victoria Rosenburg is going to be finished, and so we’ve got to get that line ready, we're looking for that in the second quarter. However, if you look Mexico, Capital Budget, somewhere around $335 million of the US will be $200 billion plus, we already identified these large piece of both of those that we could carve out that are part of our 5 year plan for expansion. Again, we don’t want to do that but that’s what we have to do to keep companies fluid and keep our profitability up, so we're going to do that. We’re not going to have maintenance, that's a false economy, but we certainly have a lot of projects to add to our expansion.

What is sustenance CapEx for KSU?

What is what?

Sustenance, CapEx, baseline maintenance that you have to spend every year?

It will be about 120 this year.

ok. Thank you.

Thank you. Our final question is coming from the line of Brad Kern Please proceed with your question.

I want to clarify a statement there, the 120 that I quoted was just the US.

I think just a comment the last couple of years we’ve obviously been investing in our CapEx its been maybe closer to 30% levels. As I indicated earlier in 2010 we expect that it will come down to more normalized industry levels in the high teens. That may give you a little bit of guidance going forward. I think the question was what of that was for maintenance. Usually its about half, in the case of us now acquiring more locomotives and so on that same range.

Mr. Kern you’re on the line for questions.

Can you hear me now? Hello?

My question is, are all the locomotives secured or are they still [inaudible] Yes, we’re complete with that program.

Ok. Thank you.

Thank you. There are no further questions at this time. Mr. Haverty, we’ll go back over to you for closing comments.

Ok. I just want to thank everyone for phoning in and participating in this and we still think we’re on track. We’re going to watch what happens with the economy, we'll be ready to react. We think things would have been much better in the 3rd quarter without the hurricanes, but we have no control over that, but that business will come back and we look forward to a strong 4th quarter and we will see what happens in 2009. Thank you very much for joining us.

Ladies and gentlemen, this concludes today’s teleconference. You may disconnect your lines at this time. Thank you for your participation.