The University of Nevada Brazilian Petroleum Logistics Course May 28, 2010

1. The University of Nevada Brazilian Petroleum Logistics Course May 28, 2010

2. Agenda Industry Overview BNSF Overview Why Rail? Why BNSF?

3. Rail Industry Overview

4. Industry OverviewAmerica’s Railroad Industry Railroads remain the backbone of America’s freight transportation network • U.S. railroads operate over 140,000 miles of track and earn an aggregate freight revenue of nearly $57 billion • In the United States, railroads account for more than 40%* of all freight (more than trucks, boats, barges or planes) *Measured in Ton Miles • 70% of all autos produced in America move by rail • 30% of all U.S. grain moves by rail • 65% of the coal is moved by rail which in turn produces half of America’s electricity • U.S. Railroads move enough: • Wheat to provide every person with a loaf of bread 6 days/week • Concrete to build 45 miles of new highway every day North American railroads form the world’s most efficient and lowest-cost freight network Source: American Association of Railroads (AAR)

5. Industry OverviewA key link in the U.S. Supply Chain 71% of America's GDP is driven by the consumer Seamless network of manufacturers, retailers, distributors, transporters, storage facilities and suppliers Rail delivers everything Americans consume everyday: • Cars and Combines • Clothes and Shoes • Stereos and TVs • Food and Water • Lumber and Steel • Energy and Fuel • … many others, such as bread and cereal

6. Industry OverviewTypes of Railroads Class I • Annual revenues in excess of $340M • Operations range from 3,200 to 32,000 miles • Typically concentrate on long-haul, high-density intercity traffic lanes • Seven Class I railroads in North America Regional • Operate at least 350 miles of track • Earn $40 million or more in revenues • 33 Regional railroads Local Linehaul • Operate less than 350 miles of track • Generate less than $40M in operating revenues • 324 local linehaul railroads

7. Industry OverviewNorth America Rail Network • Over 160,000 miles of track • Over 165,000 railroad employees • Over 500 shortline railroads • BNSF operates more than 32,000 miles of track BNSF CN CP CSX NS UP FXE

8. Industry OverviewTransportation Industry Challenges Fuel Efficiency Environmental Solutions Challenges Highway Congestion Rail Capacity Driver Shortage

9. Industry OverviewGoverning Bodies of The Rail Industry • Association of American Railroads (AAR) • Department of Transportation (DOT) • Federal Railroad Administration (FRA) • The Surface Transportation Board (STB) • U.S. Customs • Various State and Municipal Agencies • Dept. of Homeland Security

10. BNSF Overview

11. BNSF OverviewAbout Us A Berkshire Hathaway Company Unlike other forms of freight transportation, our trains operate on an infrastructure built and financed almost entirely by the railroad Every day, we deliver trainloads of consumer goods, agricultural products, industrial products, and coal to customers acrossour 32,000-mile rail network 10

12. BNSF OverviewOur Ancestry Some Predecessors of Burlington Northern Santa Fe • Great NorthernGN • Northern PacificNP • Chicago, Burlington and QuincyCB&Q • Spokane, Portland and SeattleSP&S • St. Louis-San Francisco (Frisco)SLSF • Fort Worth-DenverFWD • Colorado SouthernCS • Atchison Topeka and Santa FeATSF

13. BNSF OverviewOur Vision Our vision is to realize the tremendous potential of BNSF Railway by providing transportation services that consistently meet our customers' expectations.

14. BNSF OverviewBNSF Network Route Miles: 32,000 Number of Employees: 40,000 Locomotives: Approx. 6,400 Average Freight Cars on System: 200,000

15. BNSF OverviewBNSF: Size and Scope • 32,000 route miles in 28 states and two provinces • Approximately 6,400 locomotives and 200,000 freight cars • Employs approximately 40,000 people • Operates an average of 1,400 freight trains per day • Moves one fourth of the nation’s rail freight • Serves all major ports on the West Coast and Gulf of Mexico • If stacked end-to-end, all the intermodal loads shipped with BNSF in one year would reach from Los Angeles to Shanghai 6 times. • Leads rail industry in technological innovation • Has one of the largest computer systems in the world to manage our network operations 24 hours a day

16. BNSF Volume – 1st Quarter 2010 Total units and % change from 2009 Thousands Ag 269 +18.5% Consumer Products 955 -2.2% Coal 569 -9.3% Industrial Products 306 +2.7% 2010 Q1 Total BNSF Volume 2,099 -1.4%

17. BNSF Overview$30 Billion Invested in the Last 12 Years* Significant Investments In Infrastructure Alone Are Not Enough *1998-2009

18. BNSF OverviewBusiness Unit Breakdown INDUSTRIAL PRODUCTS CONSUMER PRODUCTS COAL AGRICULTURE

19. BNSF OverviewIndustrial Products Breakdown Building Materials Plastics Chemicals & Waste Minerals Lumber Wallboard Bricks Roofing Materials PVC Polypropylene Polystyrene Polyethylene Acids Intermediates Caustic Soda Municipal Waste Aggregates Cement Clay Sand Food & Beverage Machinery Metals Petroleum Products Beer & Wine Canned Goods Frozen Fish / Meat Vegetables Construction Equipment Farm Equipment Transformers Generators Pipe Sheet Structural Scrap Diesel Fuel Biodiesel Asphalt Alcohols & Solvents

20. BNSF OverviewCarload Solutions – Direct Rail Direct Rail - Primary access to the BNSF Network directly to/from a customer facility Carload Service – Rail transportation for single or multiple carloads • Direct connection into supply chain • Excellent for multi-truck quantities of commodities such as canned goods, steel, lumber, paper, etc. (3+ truckloads per car) Unit Train Service – Trainload movements of freight from same origin and destination carrying a single commodity • Most efficient service • Achieves optimal network velocity

21. BNSF OverviewCarload Solutions - Transload Transload – Access to the BNSF carload network at the most advantageous points through premium providers Advantages • Rail accessibility without a large capital investment • Access to numerous value-added services Value – Added Services • Cross docking • Storage and forward storing • Load consolidation • Inventory management To learn more: http://www.bnsf.com/markets/extensions/transload/index.html

22. BNSF OverviewConsumer Products Breakdown Domestic and International Intermodal Automotive Clothes Shoes Personal Accessories Beauty Products Furniture Electronics Groceries Home Décor Items Sporting Goods Office Products Seasonal Products Paper ProductsToysBicyclesHousehold AppliancesPet ProductsBooksSchool Supplies Vehicles Parts

23. BNSF OverviewIntermodal Services Expedited Trailer Service Domestic Only • Fastest intermodal service in the industry • Averages 700+ miles per day* • Ideal for time-sensitive freight Premium Container Service International and Domestic • Sustainable solution to price sensitive shippers • Averages 400-500+ miles per day* • Competitive daily schedules *Measurement derived from cutoff at origin to availability at destination Service schedules can be found at http://www.bnsf.com/bnsf.was6/siisweb/cntrl

24. BNSF OverviewAg Breakdown Other Grain Products Grain Bulk Foods Wheat Barley Corn Soybeans Milo Sweeteners Syrups Animal Products Starch Oils Feeds Flour Specialty Grains Oilseeds & Meals Malt Ethanol Fertilizer

25. BNSF OverviewCoal Breakdown Coal Low Sulfur Coal (Powder River Basin)

26. Why Rail?

27. Why Rail?Key Benefits • Fuel Efficiency – On average, railroads are three or more times more fuel efficient than trucks. • Highway Gridlock Reduction – A typical train takesthe freight equivalent of several hundred trucks off our highways. • Cost Efficiency – In general, shippers pay less for shipping freight via rail, rather than other forms of land transportation. • Environmental Friendliness – The EPA estimates that for every ton-mile, locomotives emit roughly one-third the amount of nitrogen oxides and particulates. Source: AAR

28. Rail is 2-8 times more fuel efficient than trucks 2.3x 4.3x 5.5x 8.2x *Based on a 1,500 mile truck haul

29. Railroads can help reduce highway congestion BNSF is the largest intermodal carrier in the world Each year, BNSF moves about 4.6 million containers and trailers One BNSF intermodal train removes more than 280 long-haul trucks from our nation’s highways

30. Why Rail?Best Value for Your Shipping Dollar Dollar-for-dollar, shippers receive the best value by usingrail service: • Market pricing allows for better predictability and planning • Real savings on transportation costs vs. truck • Direct rail service allows movement of any size shipment

31. Rail emits a fraction of total U.S. green house gas (GHG) emissions Rail = 2.6% of GHGs Trucks = 21% of GHGs • In 2008, BNSF moved 4.7 million containers and trailers, reducing GHG emissions by more than 7 million metric tons • Rail industry moved 11.5 million containers and trailers, reducing GHG emissions by more than 17.2 million metric tons

32. Why BNSF?

33. Why BNSF?Our Network BNSF provides the industry’s broadest network to get your shipments where they need to go – safely and efficiently. • Access to 13 of 19 major U.S. Megapolitan markets • Alliances with other carriers, enabling coast-to-coast service • “Off-road” access into capacity-constrained markets, helping to alleviate highway congestion • Transload options that allow customers to use our carload service via a network of top-quality trucking, warehousing, distribution and other service providers

34. Why BNSF?BNSF Carload Equipment – Industry’s Best BNSF’s equipment is among the best in the industry. We possess the newest fleet of equipment with: • Great efficiency • High available capacity • Strong reliability • Broad availability

35. Why BNSF? Powerful Fleet of Road Locomotives Year-End Fleet Inventory 5,189 5,175 5,087 5,050 4,812 4,510 4,243 3,851 34

36. Why BNSF? Achievements and Awards Wal-Mart Stores, Inc. Rail Carrier of the Year 1998 - 2004 Only rail carrier that has received this recognition Target Vice President’s Award 2002 Only rail carrier that has received this recognition Landstar Logistics Railroad Carrier of the Year 2004 United Parcel Service Perfect Peak 1995, 1997-1999, 2002-2004, 2007 FedEx Ground Quality Supplier 2002 FedEx Supply Chain Rail Carrier of the Year 2002, 2003, 2005 Only rail carrier that has received this recognition Evergreen America Railroad Company of the Year 2003 Owens Corning Intermodal Carrier of the Year 2006, 2007, 2008 American Honda Motor Company Premier Partner 1998 – 2004 Team Performance 2007, 2008 Logistics Management Quest for Quality Rail/Intermodal Service Providers 2006 GLOVIS America (Hyundai/KIA) Outstanding Rail Service Award 2003, 2005 Toyota Logistics Services Railroad Customer Service Award 2003, 2004 Excellence in Quality Performance 2005, 2006 Best Buy Quality Partnership Award 2004 The Home Depot Rail Partner of the Year 2004 Only rail carrier that has received this recognition Rail Carrier of the Year 2006 Platinum Partner Award 2008

37. Why BNSF?Commitment to Safety and Security Security Procedures Safety Procedures BNSF Train Movement • Certified member of C-TPAT • Tightened access to facilities/structures, including surveillance cameras and identification procedures • Action Plans in place including notice of alert level, training, and trespasser abatement • Safe freight handling with seal and carriage bolts placed on all in-gated containers and trailers • 24-hour resource operations call center • Design and detection of infrastructure and rolling stock • Load and Ride Solutions helps blocking and bracing • Electronic Train Management System Employee • “Safe production” • Critical Path briefings – Transportation • Five Critical Decisions – Engineering • Employee participation • Fatigue countermeasures • Technical training Rail Industry • Six task forces created relating to rail security • Contingency planning based on vulnerability, risk assessments and threat analysis • Active relationship with national intelligence community

38. BNSF Network Operations Center, Fort Worth, TX

39. Thank you for your time. Q&A