Where s the Freight? Michael Young North American Sales & Marketing Manager 22 Sept 16. Trackmobile LLC For NEARS Use Only

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1 Where s the Freight? Michael Young North American Sales & Marketing Manager 22 Sept 16 Trackmobile LLC For NEARS Use Only

2 In Case You Haven t Heard of Us Invented mobile railcar mover in 1948, and have since built over 10,000 The market leader with roughly 70% market share in the U.S. Specifically designed to have a lower operational cost and higher reliability than locomotives (or any other mobile railcar mover) Supported by a distributor network with over 110 facilities, and over 350 trained technicians Regardless of where the freight went, saving money is a good thing Trackmobile LLC For NEARS Use Only 2

3 In Case You Haven t Heard of Us Invented mobile railcar mover in 1948, and have since built over 10,000 The market leader with roughly 70% market share in the U.S. Specifically designed to have a lower operational cost and higher reliability than locomotives (or any other mobile railcar mover) Supported by a distributor network with over 110 facilities, and over 350 trained technicians Regardless of where the freight went, saving money is a good thing Trackmobile LLC For NEARS Use Only 3

4 In Case You Haven t Heard of Us Invented mobile railcar mover in 1948, and have since built over 10,000 The market leader with roughly 70% market share in the U.S. Specifically designed to have a lower operational cost and higher reliability than locomotives (or any other mobile railcar mover) Supported by a distributor network with over 110 facilities, and over 350 trained technicians Regardless of where the freight went, saving money is a good thing Trackmobile LLC For NEARS Use Only 4

5 A Word About Economics When a management with a reputation for brilliance tackles a business with a reputation for bad economics, it is the reputation of the business that remains intact. - Warren Buffet Trackmobile, LLC For NEARS Use Only Trackmobile LLC For NEARS Use Only

6 AAR Traffic Shows Few Winners Petroleum & Petroleum Products 4% Motor Vehicles & Parts 7% US Rail Traffic YTD Nonmetallic Minerals 13% Other 4% Chemicals 12% Coal 29% Other Petroleum & Petroleum Products Nonmetallic Minerals Motor Vehicles & Parts Metallic Ores and Minerals Grain Forrest Prod. Farm Products excl. Grain & Food Traffic vs. Prior Year Metallic Ores and Minerals 9% Grain 9% Forrest Prod. 7% Farm Products excl. Grain & Food 6% Coal Chemicals -30.0% -20.0% -10.0% 0.0% 10.0% 20.0% 30.0% The largest traffic types (i.e. Coal, Minerals, etc.) are all down significantly over last year at this time Whatever traffic that is up over last year is a relatively small share of our overall traffic volume (i.e. ~12%) Source: AAR.org, as of 10 Sept 2016 Trackmobile LLC For NEARS Use Only 6

7 Chemicals Have Been Slowing All Year, but Still Growing Mildly Source: US Federal Reserve Trackmobile LLC For NEARS Use Only 7

8 Grain Moves Counter-Cyclically, So Not a Good Future Indicator Source: US Federal Reserve Trackmobile LLC For NEARS Use Only 8

9 Food Production Index has Poor Correlation to Carloads, and Isn t Used Source: US Federal Reserve Trackmobile LLC For NEARS Use Only 9

10 Non-Metallic Mining Still Growing Strongly Source: US Federal Reserve Trackmobile LLC For NEARS Use Only 10

11 Metallic Mining Finally Recovering Source: US Federal Reserve Trackmobile LLC For NEARS Use Only 11

12 Vehicle Production Growing Steadily, But Slowing into 2017 Source: Ward s Auto Trackmobile LLC For NEARS Use Only 12

13 Manufacturing Showing a Cautionary Note, but Increasing Since Mid-2015 Source: US Federal Reserve Trackmobile LLC For NEARS Use Only 13

14 Metals Have Been Down for a While, but Recovering All This Year Source: US Census Bureau Trackmobile LLC For NEARS Use Only 14

15 B2B CAPEX Spending Has Been Decreasing Since 2015, but Expected to Recover Source: US Census Bureau Trackmobile LLC For NEARS Use Only 15

16 US Industrial Production is Highly Correlated, & Expected to Increase Q Source: US Federal Reserve Trackmobile LLC For NEARS Use Only 16

17 Surface Trade (Truck + Rail + Pipeline) is Slowing, but Still Growing Nicely Source: US Bureau of Transportation Statistics Trackmobile LLC For NEARS Use Only 17

18 With Many Commodities Recovering, US Freight Carloads Poised for Recovery Note that the 3/12 index almost always leads the 12/12 index in major shifts 3/12 has been increasing since mid-2016, which has stabilized the 12/12 As the 3/12 continues to rebound, overall annual traffic should rebound too Note: the 3/12 represents the year-over-year percent change of a three-month moving total over a twelvemonth moving total. Source: US Bureau of Transportation Statistics Trackmobile LLC For NEARS Use Only 18

19 So Where s the Freight? Weak Commodities, Stronger Trucking & Pipelines Many market segments have decreased rail traffic, and weak growth Some key indexes are increasing (Chemical, Non-Metallic Mining, Vehicles, and Manufacturing), so things will get better However there is a significant drag slowing down what might otherwise be an easy recovery Continued decreases in Metallic Mining, Metals, B2B CAPEX investment Still, quarterly freight carloads should indicate a general increase in volume soon Regardless of when the recovery takes place, saving money is alwaysa good idea Contact Trackmobile to see how we can help your cost of moving railcars Trackmobile LLC For NEARS Use Only 19

20 Any Questions? Michael Young Trackmobile LLC For NEARS Use Only