BNSF SERVICE UPDATE MATT JONES REGIONAL DIRECTOR PUBLIC AFFAIRS - PowerPoint PPT Presentation

BNSF SERVICE UPDATE MATT JONES REGIONAL DIRECTOR PUBLIC AFFAIRS 12/04/2014 1

BNSF Saf BNSF Safety ety Results esults EMPLOYEE RAIL EQUIPMENT REPORTABLE PERSONAL INJURY INCIDENTS REPORTABLE DERAILMENT PER 200,000 EMPLOYEE HOURS INCIDENTS PER MILLION TRAIN MILES 1.77 2.72 1.30 2.64 1.11 1.10 2.19 2.07 0.99 1.92 2010 2011 2012 2013 1H14 2010 2011 2012 2013 1H14 PUBLIC CROSSING ACCIDENTS PER MILLION TRAIN MILES 1.76 1.65 1.69 1.58 1.56 2010 2011 2012 2013 1H14 Source: FRA Safety Data, through June 30, 2014

BN BNSF SF Ov Over erview view 32,500 route miles in 28 states and two Canadian provinces. • 32,500 route miles in 28 states and two Canadian provinces • 43,000 employees • Over 7,000 locomotives • Over 100,000 freight cars owned or leased • 13,000 bridges and 89 tunnels • 1,600 freight trains per day 12/9/2014 3

BNSF BNSF Volume olume – YTD YTD 2014 2014 Total units and % change from YTD 2013 In Thousands Ag 712 +0.6% Coal 1,678 +0.7% Consumer Products 3,759 +0.6% Industrial Products 1,479 +5.4% Total BNSF Volume 7,628 +1.5% YTD 2014 through Sept. 30, 2014 4

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BNSF in BNSF in Mon Monta tana na For more than a century, BNSF Railway has played an important role in Montana’s economy • BNSF employs more than 2,200 in MT and has plans to hire 450 new employees in 2014 • BNSF has invested more than $470 million in MT for capacity expansion and maintenance (2010-2013) • New or expanded BNSF served facilities represent investments worth more than $200 million creating more than 250 jobs in MT (2011-2013) 6

BNSF BNSF 20 2013 13 Volume olume – Mon Monta tana na In all, BNSF moves nearly 2 million Products Shipped from Montana carloads of freight in Montana annually 342,973 Total Carloads 342,743 Carloads Products Shipped to Montana 33,936 Carloads Consumer Products Coal Industrial Products Agricultural Products 7

Experiencing Volume Growth Experiencing Volume Growth

BNSF BNSF Weekl eekly y Volumes olumes Cont Continue inue to to Gr Grow 235 230 225 Fourteen 220 ---- 2014 ---- 215 times this 210 ---- 2013 ---- year, BNSF 205 200 ---- 2012 ---- handled over 195 190 200,000 185 180 units/week 175 170 165 160 155 150 145 140 135 130 125 120 1 3 5 7 9 1113151719212325272931333537394143 2 4 6 8 1012141618202224262830323436384042 1 3 5 7 9 1113151719212325272931333537394143 Week

Ec Econom onomic ic De Developm elopment an ent and Rail Gr Rail Growth wth in the Nor in the North Dak th Dakota ota Region gion 2010 through Aug. 31, 2014 Forecast Sept. 1 – Dec. 31, 2014 North Dakota Unparalleled Traffic into 114% 191% Increase in Growth North Dakota rail traffic out of North since 2009 Dakota since 2009 increased ND 2009-2014 Jan. – Sept. Actuals

More Growth, More Challenges Historic volumes affect all shipments. COAL AG IP CP

Coal Coal Tons ons Deliv Deliver ered ed Year ear-to to-Da Date te BNSF CUMULATIVE COAL DELIVERIES BY MONTH 250 2012 2013 2014 200 Tons (in millions) 150 77% 87% 100 Decrease in U.S. Past Dues 50 Since March 2014 High 0 Jan Feb Mar Apr May Jun Jul Aug Sep Oct As of Oct. 31, 2014

Coal Coal Ne Netw twor ork k Plannin Planning g Pr Proces ocess • Coal movement is part of the Customer review and escalation: network planning process. • Criticality of plant to reliability • Contractual obligations • Coal tons delivered is a function of set productivity, which is a function • Operating parameters of network productivity. An increased number of sets results in velocity declines and less coal delivered. Critical customers under watch: • Under or at 10-day stockpile

Ag Ag Volum olume e to/f to/from om Nor orth th Da Dakota ota, , Sou South Dak th Dakota ota, , Ag Volume Ag V olume to/f to/from om Nor North th Dak Dakota ota, , Montana and Minnesota Montana and Minnesota So South uth Dak Dakota ota, , Mon Montan tana an a and d Mi Minn nneso esota ta 2014 YTD is on pace for record volume. 450,000 400,000 350,000 300,000 250,000 200,000 2006 2007 2008 2009 2010 2011 2012 2013 2014 Source: BNSF internal data YTD through October for origins/destinations to/from North Dakota, South Dakota, Montana and Minnesota and excludes intrastate and interstate volume within above mentioned states. 14

Secondar Secondary y Mar Market et Shutt Shuttle le Freight eight Value alue October October 2014 2014 12/9/2014 15

Industrial Pr Industrial Products oducts Volumes olumes Gr Growing wing 2014 IP VOLUME, % CHANGE VS. 2013 Chemicals & • Up nearly 6% YTD Chemicals Plastics & Plastics 0.0% 0.0% • Driven by energy-related commodities, crude oil Petroleum Building Petroleum Products and frac sand Building Products Products +12.1% Products +3.3% +11.8% +3.7% • Cements and aggregates up 7% due to heavy construction Food & Construction Beverage -3.0% Products Construction +4.4% Products +3.4% Source: BNSF internal data year-to-date through Oct. 30, 2014

Incr Increas easing ing BNS BNSF F Volumes olumes Acr Acros oss s Commodit Commodities ies Im Impacts pacts Ser Service vice Acr Across oss Commo Commodities dities GROWTH YEAR TO DATE OVER 2013 SLOWER TRAIN VELOCITY YEAR OVER IN COAL, AG AND CRUDE SHIPMENTS YEAR HAS BEEN FELT ACROSS COMMODITIES 64,756 Coal Ag Crude 24,128 -15% 4,522 -20% -22% Coal Ag Crude Miles Per Day Change for Coal and Crude Measured in Units Handled (YTD October 2014 vs. YTD October 2013) Shuttle Trips Per Month Change for Agriculture (YTD October 2014 vs. YTD October 2013) Source: BNSF internal data year-to-date through Oct. 31, 2014

Moving Forward for Tomorrow Moving Forward for Tomorrow

BNSF BNSF is is In Investing esting in in Gr Growth wth $ Billions $5.5 $4.0 $3.8 $3.6 $3.6 $3.4 $3.4 $3.3 $3.1 $2.7 $2.6 $2.3 $2.1 $1.9 $2.0

Expanding Infr Expanding Infrastr astructur ucture Glasgow Sub Lakeside Sub 55 new miles of double 17 new miles of double track, track, additional 8 miles in Nov. 1 new siding Devils Lake Sub 6 CTC islands Forsyth Sub 2 new sidings, 4 siding extensions Dickinson Sub Hillsboro Sub 1 new siding, 2 new sidings, 3 siding extensions 2 siding extensions

2014 Montana Ca 2014 Montana Capital pital Plan Plan Expansion projects include: • Extending track lengths at train yards in Glendive and Forsyth, Mont. • Constructing a siding between Marsh and Terry, Mont. • Extending train sidings at Beaver Hill, Blatchford, Hodges, Hysham and Rosebud, Mont. • Upgrading to CTC and extending a train siding at Terry, Mont. Maintenance projects include: • Surfacing and undercutting of more than 900 miles of track. • Replacing about 60 miles of rail. • Replacing more than 145,000 ties 21 12/9/2014

2014 2014 Long Long-Ter erm m Act Actions ions to A to Add d Ca Capacity pacity (YTD (YTD) 3,500 >2,500 600 $2,500 $1,050 Yearly Goals: 85% +100% 96% 87% 72% 2,958 2,601 574* $2,181 $760 Actuals: TY&E Engineering & Locomotives Maintenance Capital Expansion Capital Hiring Mech Hiring Delivered (Millions) (Millions) As of Oct. 31, 2014. *Includes long-term leases and acquisitions

Ser Service vice Design: Design: Maximizing Maximizing Ef Efficienc ficiency y and and Velocity elocity Example: PNW Triangle Problem: Track capacity issues on the Fallbridge subdivision and increased traffic Solution: New operation route Result: Additional capacity provided; 12% increase in total trains operated YTD 2014 vs. YTD 2013 As of Sept. 8, 2014

BNSF BNSF Perf erfor ormance mance TERMINAL DWELL IS STEADILY DECLINING WHILE TRAIN SPEED REMAINS CONSTANT WITH INCREASING VOLUMES 115 110 105 100 95 90 2/7/2014 2/14/2014 2/21/2014 2/28/2014 3/7/2014 3/14/2014 3/21/2014 3/28/2014 4/4/2014 4/11/2014 4/18/2014 4/25/2014 5/2/2014 5/9/2014 5/16/2014 5/23/2014 5/30/2014 6/6/2014 6/13/2014 6/20/2014 6/27/2014 7/4/2014 7/11/2014 7/18/2014 7/25/2014 8/1/2014 8/8/2014 8/15/2014 8/22/2014 8/29/2014 Q BNSF Weekly Volume (Units) Train Speed (MPH) Dwell (Hours) Source: AAR Train Speed and Dwell; CS54 units as of week ending Aug. 29, 2014. Indexed to Feb. 7, 2014.

Continu Continuing to ing to In Invest in est in Our Railr Our Railroa oad in d in 20 2015 15 Moving Forward Service Challenges for Tomorrow $ 6B Total Planned Capital Expansion Projects Expenditures for $ 1.5B 2015 $ 2.9B $ 500M Renewal of Assets and Maintenance Expansion in the Northern Region 12/9/2014

BNSF BNSF Economic Economic De Development elopment • Help customers and communities establish new rail-served facilities • Three-phase process that involves coordinated efforts with you and our Economic Development team • BNSF team will help guide you through step-by-step • Phase I - Gather information • Phase II - Develop infrastructure and operating plan • Phase III - Construction and send/receive your first shipments More information is available at http://www.bnsf.com/customers/support-services/new-or-expanded- customer-sites 26

Bison Bison Rail Rail – Poplar oplar, , MT MT BNSF Mainline to North A&S Track 1704 BNSF Track 1702 BNSF Siding A&S Track 1703 27