D R A F T 1 Coal Comparisons Third Quarter 2012 vs. 2011 FREIGHT RAIL SYSTEM 1 • Dates back to late 1820’s • Today, more than 560 freight railroads operate in the U.S. • 140,000 mile system • Seven largest (Class I) railroads account for 67% of total mileage • Almost entirely privately owned and operated Source: Association of American Railroads
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D R A F T 1 Coal Comparisons Third Quarter 2012 vs. 2011 F REIGHT R AIL S YSTEM 1 Dates back to late 1820’s Today, more than 560 freight railroads operate.
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D R A
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Coal ComparisonsThird Quarter 2012 vs. 2011
FREIGHT RAIL SYSTEM
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• Dates back to late 1820’s• Today, more than 560
freight railroads operate in the U.S.
• 140,000 mile system• Seven largest (Class I)
railroads account for 67% of total mileage
• Almost entirely privately owned and operated
• Funded by private capitalSource: Association of American Railroads
GENERAL CHARACTERISTICS OF U.S. FREIGHT RAILROADS
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• Vast majority privately-owned, tax-paying firms
• Same company usually owns the track and operates trains over it
• No automatic access to another’s tracks
• Little government funding• Don’t carry passengers• Regulation not as onerous as
it once was, but still substantial (FRA for safety; STB for rates, service, etc.)
Source: Association of American Railroads
ENVIRONMENTAL STEWARD
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• Moves a ton of freight 469 miles per gallon.
• One train = hundreds of trucks.
• 4 times more fuel efficient than trucks.
• Reduces greenhouse gases by 75% compared with trucks.
• Diverting 10% of long-distance truck traffic to rail would be like taking 2 million cars off the road or planting 280 million trees.
Source: Association of American Railroads
HIGHWAY CONGESTION
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Forecasted Daily Freight Truck Volume
2012 2035
Source: U.S. DOT
KEY FACTORS FAVORABLE TO RAIL
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• Highway congestion• Fuel efficiency• Driver availability and turnover, and aging
truck fleet• Increasing cost structure for trucking• Focus on sustainability
NORFOLK SOUTHERN SYSTEM MAP
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Coal ComparisonsThird Quarter 2012 vs. 2011
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• Class I railroad
• Safest railroad in North America• Winner of the E.H. Harriman Memorial
Gold Medal Award for 23 consecutive years
• Originator of more finished vehicles shipments than any other North American railroad
• Largest Intermodal franchise in the eastern U.S.
• Largest metals franchise of any Class I railroad