©2013 Kansas City Southern

Mexico-USChamber of Commerce

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©2013 Kansas City Southern 2

January 2004 January 2005 January 2006 January 2007 January 2008 January 2009 January 2010 January 2011 January 2012 January 2013$0

$5

$10

$15

$20

$25

$30

$35

$40

$45

$50

80

85

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95

100

105

Total Trade with Mexico ($ billions) US Industrial Production Index (adjusted)

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U.S. – Mexico cross-border trade exceeds pre-recession levels

Source: Board of Governors of the Federal Reserve System and US Census Bureau

©2013 Kansas City Southern 3

Foreign Direct Investment (FDI) in Mexico

Foreign Direct Investment (FDI) for 2012 reached $15.4 bn

2013 FDI for the 1st half of 2013 reached $10.2 bn

Manufacturing sector is key in 2013 with 83.4% investments

From 1999 to 2013 FDI accounts $335 bn

2012 FDI Projects of More Than $50 USD Million

Elaboration by KCS Market Research based on Promexico data. Tourism and Financial services are not shown on the map

©2013 Kansas City Southern

Mexico Automotive Renaissance

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KCS currently has access to nine automotive plants in Mexico:

Chrysler Fiat (Toluca)Chrysler (Encantada)Ford (Cuautitlán)GM (San Luis Potosí)GM (Rojas)GM (Silao)Nissan (Aguascalientes)Nissan (Cuernavaca)VW (Puebla)

Additional plant openings in 2013-15:Honda (Celaya)Mazda (Salamanca) Nissan (Aguascalientes)

• Audi (near Puebla)

©2013 Kansas City Southern

Cross Border Shipments by Truck 2012

3.1 million truckloads originate or terminate in KCS’ Target Market

50 percent of loads move to/from locations deep into Mexico

KCS operates the Laredo rail bridge on both sides of border

The current KCS intermodal cross border market share represents about 2 percent of available market.

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SOURCE: KCS Market Research derived from BTS Data

©2013 Kansas City Southern 6

Mexico’s Natural Gas Potential

©2013 Kansas City Southern 7

Driving Success Integration of Cross Border

Logistics and Trade

©2013 Kansas City Southern 8

Fix the Cross-border Truck Process

©2013 Kansas City Southern 9

Enforce Trucking Regulation in Mexico

©2013 Kansas City Southern 10

Automate the Customs Process

©2013 Kansas City Southern 11

Impact of the Manual Customs Process

Initial Finding: 37% of Northbound Intermodal shipments ramp same-day

©2013 Kansas City Southern 12

Value of Re-engineering the Process

©2013 Kansas City Southern 13

©2013 Kansas City Southern 14

Redefine Commercial Terms of Sale

©2013 Kansas City Southern

Identify and Centralize Extra Services

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©2013 Kansas City Southern 16

Establish Proper Customs Broker Alignment

©2013 Kansas City Southern

Create Visibility to Border & Customs Costs

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Bridge Dray Move

Brokerage Commission

Fees and Admin

©2013 Kansas City Southern 18

©2013 Kansas City Southern