1. The Railroad Industry Local Operations And Future Challenges

2. January 23, 2009 2 September 14-16, 2008 Tomorrow Challenges On The Horizon For The Railroad Industry

3. January 23, 2009 3 September 14-16, 2008 Tomorrow Railroad Challenges  RSSM  Demographics Of Assets  Deregulation – Regulation  PTC  Business Levels

4. January 23, 2009 4 September 14-16, 2008 Tomorrow Railroad Challenges Rail Sensitive – Security Material Chain of Custody Over 350 STCC Numbers Face To Face COC Requirements Repository For COC Documentation Designated Secure Interchange Locations Security Checklists For Alert Levels AAR Database For Rail Carriers AAR, FRA, TSA, ASLRRA Interface

5. January 23, 2009 5 September 14-16, 2008 Tomorrow Railroad Challenges Resource Demographics Median Age47 Retirements – 201280K

6. September 14-16, 2008 Tomorrow Railroad Challenges “Working On The Railroad” Age on Birthday Total In 2006NumberPercent Under 20 762 100 20 to 2932,797 100 30 to 3957,793 100 40 to 4963,565 100 50 to 5996,175 100 60 to 6916,637 100 70 and older 326 100 Median Age = 47 Total RR Employees 268,055 Less Than 10 Years118,67544% More Than 25 Years 91,38934%

7. September 14-16, 2008 Tomorrow Railroad Challenges North American Freight Car Fleet By Car Type Car Fleet Demographics

8. September 14-16, 2008 Tomorrow Railroad Challenges North American Freight Car Fleet Average Age In Years Car Fleet Demographics

9. September 14-16, 2008 Tomorrow Railroad Challenges New Builds: The Winners Car Fleet Demographics

10. September 14-16, 2008 Tomorrow Railroad Challenges New Builds: The Losers Car Fleet Demographics

11. January 23, 2009 11 September 14-16, 2008 Tomorrow Railroad Challenges Deregulation/Regulation October 18, 1980 A rail carrier could establish any rate for rail service unless the ICC (STB) were to determine that there was no effective competition for rail services. Rail shippers and rail carriers would be allow to establish contacts not subject to ICC review. Carriers ability to restructure redundant and light density lines. Carriers could raise capital and increase market share.

12. Performance of Class I Railroads 1964-2007 Railroad Challenges

13. January 23, 2009 13

14. January 23, 2009 14 September 14-16, 2008 Tomorrow Railroad Challenges Positive Train Control (PTC) What is Positive Train Control? Positive Train Control (PTC) systems are integrated command, control, communications, and information systems for controlling train movements with safety, security, precision, and efficiency. PTC systems will improve railroad safety by significantly reducing the probability of collisions between trains, casualties to roadway workers and damage to their equipment, and over speed accidents.

15. January 23, 2009 15 September 14-16, 2008 Tomorrow Railroad Challenges Positive Train Control (PTC) What is Positive Train Control? Prevent train collisions and over speed accidents by requiring automatic control systems to override mistakes made by human operators.

16. January 23, 2009 16 September 14-16, 2008 Tomorrow Railroad Challenges Positive Train Control (PTC) The President has signed the “Rail Safety Improvement Act of 2008” requiring certain freight and passenger railroads, by 2015, to implement PTC on their main lines (defined as 5 MGT traffic annually).

17. January 23, 2009 17 September 14-16, 2008 Tomorrow Railroad Challenges Positive Train Control (PTC) Current Concerns December 2015 Mandate No Single Source Technology No Industry Standard Amtrak – Commuter - Shortline Routes Clear Defined Definition – Routes Workforce Education and Training

18. January 23, 2009 18 September 14-16, 2008 Tomorrow Railroad Challenges Positive Train Control (PTC) HELP Coming From: FRA, ASLRRA, Class 1’s In Concert TTCI (Transportation Technology Center, Inc – 50 Miles Of Test Track) AAR Define Track/Car Standards AAR Facilitates PTC Standards HELP WANTED!

19. January 23, 2009 19 September 14-16, 2008 Tomorrow Railroad Challenges Business Levels Ethanol Production HR 2950, Renewable Fuels Requires 36B by 2022 2008 Production about 8B Gal 190 Ethanol Production Plants Operating 18 New Ethanol Plants Under Construction Transportation – Rail 75%; Truck; 20%; Barge 5% 46% of U.S. Gasoline is an Ethanol Blend

20. January 23, 2009 20 September 14-16, 2008 Tomorrow Railroad Challenges Business Levels Marketing Trends Grain/DDG’s Coal Chemicals Steel - Products Forest Products Automotive Economics Foreign Trade Global U. S. $$$ Wait And See The Hill

21. BargeTruck Railroad Comparison of Fuel Efficiency Using Ton-Miles Per Gallon of Fuel Fuel Cost – Poses a Challenge, but Creates a Bigger Opportunity 576413 155

22. 80% of the US Population Lives?

23. Major US Ports

24. Market Share Barriers International Markets