IMPROVING OUR NETWORK PERFORMANCE BNSF Service Update 1
Service Challenges Taking Action Progress
Service Challenges Service Challenges
Increasing Volumes Support Continued BNSF Growth 11,000 2006 Units = 10,637 2014 Units = 10,275 800,000 10,500 700,000 Thousands 10,000 9,500 9,000 8,500 8,000 600,000 500,000 400,000 300,000 200,000 100,000 Millions 7,500 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 0 Units RTMs 4
Product Mix Has Changed BNSF TOTAL UNITS 2014 (in thousands) & PERCENT CHANGE FROM 2009 INDUSTRIAL PRODUCTS CONSUMER (2009-2013) PRODUCTS Agricultural Products 974 +3% Coal 2,270-5% Industrial Products 1,991 +70% Consumer Products 5,040 +29% +70% +29% 2009 2010 2011 2012 2013 2014 2009 2010 2011 2012 2013 2014 Other IP Automotive Building Products International Intermodal Construction Products Petroleum Products Domestic Intermodal Source: BNSF internal data 5
Unprecedented Growth in the Northern Region Facilities Completed or Expanded 2010 through Dec. 31, 2014 Traffic into the region since 2009 increased31% Increase in rail traffic out of the 69%region since 2009 Source: BNSF internal data through Dec. 31, 2014 for origins/destinations to/from MT, ND, SD, and MN; excludes potential double-counts on intra-region O/D pairs. 6
Taking Action Taking Action 7
BNSF Investing to Meet Capacity Demands $ Billions Replacement Capital Other Locomotive Expansion PTC Equipment $5.5 $6B $2.6 $3.1 $3.8 $3.4 $3.4 $3.3 $3.6 $2.7 $3.6 $4.0 $2.3 $1.9 $2.1 $2.0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015P 8
BNSF Investments Completed in 2014 CAPACITY $3,643M Maintenance Capital: $2,615M Expansion Capital: $1,028M RECORD $5.5B INVESTED LOCOMOTIVES 612 *includes long-term leases and acquisitions RAILCARS 7,500 * PEOPLE +7,000 DOUBLE TRACK 82 MILES 9 * Includes acquired and renewed
Expanded Capacity Projects in the Northern Region Lakeside Sub 17 new miles of double track in service, 1 new siding Glasgow Sub 55 new miles of double track in service Devils Lake Sub 6 CTC islands Hillsboro Sub 2 new sidings, 2 siding extensions Forsyth Sub 2 new siding, 4 siding extensions Fallbridge Sub 2 new sidings Dickinson Sub 1 new siding, 3 siding extensions Jamestown Sub 1 new siding, CTC signaling* * Projects Underway 10
Record Investment Continues in 2015 to Meet Capacity Demands BNSF s 2015 Capital Commitment $6B 4% 23% 48% 25% Core Network and Related Assets Expansion and Efficiency $2.9 billion Core Network & Related Assets $1.4 billion Loco, Freight Car, & Other Equip $1.5 billion Expansion & Efficiency $200 million PTC Locomotive, Freight Car, and Other Equip PTC 11 11
BNSF s 2015 Capacity Projects
Continuing to Expand in the North Region
Progress Progress 14
With Added Capacity Comes Improved Performance Percent BNSF Train Speeds (Indexed Miles per Hour to June 2014*) Difference from June 2014-4 Week MAVG 12 11 10 9 8 7 6 5 4 3 2 1 0-1 * - 4-week average of 5/31/14 through 6/27/14 Source: AAR through January 9th, 2015 15
More Locomotives Increases Ability to Meet Demand for Power 180 160 140 Total Trains Holding for Power 120 100 80 60 40 20 0 Source: BNSF Internal Data 16
Continuous Improvement in Safety and Reliability Through Maintenance 25 BNSF S RAIL-RELATED DERAILMENTS ARE AT ALL-TIME BEST LEVELS 0.12 DETECTION* OF RAIL AND WELD DEFECTS CONTINUE TO DECLINE 20 0.1 0.08 15 0.06 10 0.04 5 0.02 0 2008 2009 2010 2011 2012 2013 2014 Rail Joint Other Per MTM 0 2008 2009 2010 2011 2012 2013 2014 *Includes Detected and Service Failed: Detail Fracture, Engine Burn Fracture, Transverse Fissure, Compound Fissure, Horizontal Split Head, Vertical Split Head, Crushed Head, Shelled/Spalled/Corrugated, Worn Rail, Piped Rail, Split Web, Broken Base, Welded Engine Burn Fracture, Boutet Weld, Orgotherm Weld, Boutet Wide-Gap, Orgotherm Wide-Gap, Thermite Weld, Pressure Gas Weld, Pressure Electric Weld & Ordinary Break. 17
Summary by Business Unit Improved service across the entire network. AG COAL CP IP 18
Shuttle Fleet Productivity is Becoming More Productive PNW SHUTTLE TPMs RECOVERED FROM A LOW OF 1.9 IN DEC 2013 TO A HIGH OF 2.5 IN DEC 2014 2.80 2013 2.92 Avg 2014 2.25 Avg 2015 2.45 Avg 2.60 2.40 2.20 2.00 1.80 1.60 DEC JAN FEB MAR APR MAY JUN JUL AUG SEP OCT NOV DEC JAN Source: BNSF internal data. 19
Record Ag Volumes Handled From Northern-Tier States 550,000 VOLUMES TO/FROM ND/SD/MT/MN 500,000 450,000 400,000 350,000 300,000 250,000 200,000 2010 2011 2012 2013 2014 Source: BNSF internal data for origins/destinations to/from North Dakota, South Dakota, Montana and Minnesota, excluding intrastate and interstate volume within above mentioned states. 20
Ag Velocity Improving 200 AG FLEET MILES PER DAY INCREASED 41% FROM JUNE 2014 TO JANUARY 2015 190 180 170 160 150 140 130 120 110 JUN JUL AUG SEP OCT NOV DEC JAN YR 13-14 YR 14-15 Source: BNSF internal data 21
Coal Performance AVERAGE DAILY LOADED TONS 830,000 810,000 790,000 770,000 750,000 730,000 710,000 690,000 670,000 650,000 Jan-14 Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Jan-15 Source: BNSF internal data 22
Coal Velocity Has Improved BNSF WEEKLY AVERAGE COAL TRAIN SPEED IN MILES PER HOUR 20 19 18 17 16 15 14 Jun Jul Aug Sep Oct Nov Dec Jan BNSF Coal Train Speed (MPH) Source: AAR data through Jan. 30, 2015 23
Coal Stockpiles 40 30 20 10 0-10 -20-30 -40 49 5/9/2014 CRITICAL COAL STOCKPILE CUSTOMERS NET INVENTORY DAYS GAIN / LOSS 190 207 167 150 106 112118 105102 110 113 130130 135 140 123 131131 146 135 143 83 254 235 314 323338 289 Alliance Bridger Glendive Net Days Gain / Loss 432433437 409 414414428435 390 357 370 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 9/5/2014 9/12/2014 9/19/2014 9/26/2014 10/3/2014 10/10/2014 10/17/2014 10/24/2014 10/31/2014 11/7/2014 11/14/2014 11/21/2014 11/28/2014 12/5/2014 12/12/2014 12/19/2014 12/26/2014 1/2/2015 1/9/2015 1/16/2015 1/23/2015 1/30/2015 2/6/2015 500 450 400 350 300 250 200 150 100 50 0 Source: BNSF internal data through Feb. 6, 2015. Watch List customers are defined as under 20 days of stockpile as self-reported. 24
BNSF Intermodal Performance Improving ALL INTERMODAL BNSF WEEKLY OTP & AVG TRANSIT DAYS 5 Avg. Transit Days OTP % 100% Average Transit Days 4.8 4.6 4.4 4.2 4 3.8 3.6 4.2 4.7 4.5 4.5 4.4 4.4 4.24.24.24.2 4.1 4 4.1 4.3 4.1 4.6 4.5 4.5 4.5 4.5 4.4 4.4 4.4 4.3 4.3 4.3 4.2 4 3.9 4 4.1 3.7 3.63.63.6 90% 80% 70% 60% 50% 40% 30% 3.4 20% 3.2 10% 3 6/1/2014 6/8/2014 6/15/2014 6/22/2014 6/29/2014 7/6/2014 7/13/2014 7/20/2014 7/27/14 8/3/14 8/10/14 8/17/14 8/24/14 8/31/14 9/7/14 9/14/14 9/21/14 9/28/14 10/5/14 10/12/14 10/19/14 10/26/14 11/2/14 11/9/14 11/16/14 11/23/14 11/30/14 12/7/14 12/14/14 12/21/14 12/28/14 1/4/15 1/11/15 1/18/15 1/25/15 0% Source: ROG Interactive, OTP includes grace, Loads only 25
Intermodal Velocity Has Improved BNSF WEEKLY AVERAGE INTERMODAL TRAIN SPEED IN MILES PER HOUR 36 35 34 33 32 31 30 29 28 Jun Jul Aug Sep Oct Nov Dec Jan Source: AAR data through Jan. 30, 2015 26
Terminal Dwell Has Decreased BNSF WEEKLY AVERAGE TERMINAL DWELL (HOURS) 31 30 29 28 27 26 25 Jun Jul Aug Sep Oct Nov Dec Jan BNSF Terminal Dwell (All types) Source: AAR data through Jan. 30, 2015 27
Industrial Products Velocity Has Improved 23 BNSF MANIFEST AVERAGE TRAIN SPEED IN MILES PER HOUR 22 21 20 19 18 17 Jun Jul Aug Sep Oct Nov Dec Jan BNSF Manifest Train Speed (MPH) Source: AAR data through Jan. 30, 2015 28
Service Expectations Looking Forward North Region Improved performance compared to 2014, particularly Fargo west to the Pacific Northwest ports Gradual velocity improvement along key route between Twin Cities and Chicago; additional improvement as new capacity installed towards end of 4th quarter Central Region Improved reliability and consistency compared to 2014 Additional capacity to address congestion and improve the throughput into/out of Denver South Region Improved performance and compared to 2014 Expansion projects targeting last remaining bottlenecks on Southern Transcon; only seven miles of single track will remain on the Southern Transcon going into 2016 29
After safety, nothing is more important than improving service and velocity on our network. Your business is important to BNSF. We re growing to serve you now and in the future.
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