1 Industrial Products SCORT Conference Monday, September 23, 2013 Columbus, OH Jim Wilson Marketing Director – Metals & Construction

Industrial Products Who we are… One of Seven Class 1 Railroads in the United States Employ ~31,000 People Operations in 22 States + District of Columbia –Primarily Eastern United States –20,000+ miles of rail operations –36,000+ miles of track Own or Lease 4,074 Locomotives and 86,290 Freight Cars $11.0B in Revenue (2012) 7.1M Rail Shipments (includes Trailers & Containers) 2

Industrial Products What I’ll cover… Railroads Involvement in the Emerging Energy Market –Focus on Marcellus & Utica Shale Why Rail Makes Sense NS’s Observations of the Shale Plays What NS is Doing to Keep Pace 3

Industrial Products Shale Plays in the United States

Industrial Products Marcellus/Utica Inputs – StateNew Wells Rail CarsTruck Equivalents PA1,26454,352217,408 OH34814,96459,856 WV33914,57758,308 Total1,95183,893335,572 Shale Wells - Raw Material Opportunities CommodityUnits/WellCarloadsRail Opportunity Fresh Water5 million Gallons1670 Brine Water1 Million Gallons330 Sand3,500 Tons35 Drill Cuttings1,100 Tons111 Pipe15,000 Feet55 Other (barites, crane mats, cement, stone, fuel) N/A82 TotalN/A Rail Cars per Well, but Increasing

Industrial Products Utica Output Growth – Potential by NGL Production YE 2012 ~ 57Mb/d 1.2% of U.S. Production By YE 2017, Production to Reach 480 Mb/d Source: Bentek 40% Ethane 60% Other NGL’s 288 Mb/d Production 150,000 Annual Carload Rail Equivalent

Industrial Products The Railroads’ Involvement In 2012, 83,000+ Rail Shipments of Inbound Products –At 7% annual growth = 115,000+ Rail Shipments by 2017 By 2017, Potential of 150,000 Rail Shipments of Outbound Products Overall, Potential of 265,000 Rail Shipments Annually by 2017 –1 Rail Car = 4 Truck Loads 7

Industrial Products Why Rail Is Important 1,000,000+ Trucks Off The Road –Alleviates Highway Congestion –Minimizes Wear & Tear on Highway Infrastructure –Reduces Carbon Emissions –Rail Infrastructure is Already Present for Traffic Growth to Meet the Needs of the Country Shipments By Rail Safer Than Highway 8

Industrial Products 9 Railroad Investments Drives Safety From 1980 through 2012, US freight railroads reinvested $525 billion back into their networks -More than 40% of every revenue dollar * Capital Spending + maintenance expenses on infrastructure and equipment ** Total train accidents per million train-miles Source: AAR, FRA

Industrial Products 10 HazMat Incidents By Year & Mode Data Source: US Dept. of Transportation Railroads now have 5% of the hazmat incidents that trucks have, despite roughly equal hazmat ton-mileage

All Private Industry Injuries and Illnesses Per 200,000 Employee Hours RRs Mining Barges Farming Construction Manufacturing Grocery Stores Trucking Air Transportation Source: BLS Rail Industry Comparisons

Industrial Products NS’s Observations Inbound: Supply Chain Evolution –Rail-to-Truck Transloading –Vertical & Horizontal Storage –Unit Train Operations Outbound: Still in Infancy –Fractionation Plants Being Constructed –Gathering Systems Still Being Built –Future will be Same as Inbound Supply Chain Evolution 12

Industrial Products NS’s Observations Utica Shale – Little to No Information –Well Results Reported Only Every April –2012 Only Had 50+ Wells Reported Rig Counts No Longer Germaine –Multi-Well Pad Drilling –Improved Drilling Technology Focus on Cost Control 13

Industrial Products What NS is Doing Focused Sales & Marketing Efforts Vigorous Industrial Development Coordination with Outside Entities –ORDC –Short Lines & Regional Railroads Continued Infrastructure Investment Equipment Acquisition & Refurbishment Route/System Optimization 14

Industrial Products 15 Thank You