Raising the Level of Your Supply Chain

Performance

Pat KinneGENERAL DIRECTOR INTERNATIONAL

MARKETING

BNSF Railway Intermodal

2

Read GDP GrowthThe U.S. economy in Q1 grew at 1.2% q/q, the weakest growth in 3 years. Slowdown tied to temporary factors likely to give way to a rebound in coming months.

2.1% 1.2%-0.3% -2.8% 2.5% 1.6% 2.2% 1.7% -1.2% 4.0% 5.0% 2.3% 2.0% 2.6% 2.0% 0.9% 0.8% 1.4% 3.5%

-8-7-6-5-4-3-2-101234567

2008 2009 2010 2011 2012 2013 1Q2014

2Q2014

3Q2014

4Q2014

1Q2015

2Q2015

3Q2015

4Q2015

1Q2016

2Q2016

3Q2016

4Q2016

1Q2017

Fixed Investment Government ExpendituresImports ExportsInventories Consumption

Net GDP

Source: U.S. Dept. of Commerce, Bureau of Economic Analysis, May 26, 2017

120.3

117.9

2030405060708090

100110120130140150160

Jan-

97Ju

l-97

Jan-

98Ju

l-98

Jan-

99Ju

l-99

Jan-

00Ju

l-00

Jan-

01Ju

l-01

Jan-

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Jan-

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Jan-

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Jan-

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Jan-

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l-06

Jan-

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l-07

Jan-

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l-08

Jan-

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l-09

Jan-

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l-10

Jan-

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l-11

Jan-

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CONSUMER CONFIDENCEMay 2017

(Conference Board)Recession

3

Consumer SectorConsumer confidence jumped to highest level in 16 years in March, declining some in April/May, but still relatively high

(The Conference Board Total Index, 1985 SA =100)

Source: Conference Board, May 30, 2017

Recession

Agricultural SectorBNSF saw record volumes in 2016

75,00085,00095,000

105,000115,000125,000135,000145,000155,000165,000175,000

Q10

8Q

208

Q30

8Q

408

Q10

9Q

209

Q30

9Q

409

Q11

0Q

210

Q31

0Q

410

Q11

1Q

211

Q31

1Q

411

Q11

2Q

212

Q31

2Q

412

Q11

3Q

213

Q31

3Q

413

Q11

4Q

214

Q31

4Q

414

Q11

5Q

215

Q31

5Q

415

Q11

6Q

216

Q31

6Q

416

Q11

7

ALL TIME RECORD

170KBNSF RAILWAY GRAIN SHIPMENTS

(Units, Thru Q1 2017)

Source: AAR

5

Big Picture U.S. Class Is

Intermodal/Automotive

53%Industrial Products

25%

Coal 14%

Agricultural Products

8%

2016 UNITS HANDLED BY U.S. CLASS I RAILROADS

Source: AAR CS-54 data

4,945

3,863 3,683

2,758

455

BNSF NS UP CSXT KCS

2016 INTERMODAL VOLUMES HANDLED BY U.S. CLASS I RAILROADS (THOUSANDS)

Source: AAR

6

• Population Growth = Increased Demand

• Compensation Challenges

• Stresses of Job• Burden of Meeting

Increasing Regulations

Current Motor Carrier Climate: Driver Shortages

Source: FTR; Copyright 2017 by FTR (www.FTRintel.com)

-350,000

-300,000

-250,000

-200,000

-150,000

-100,000

-50,000

0

2011

.Q4

2012

.Q2

2012

.Q4

2013

.Q2

2011

3.Q

4

2014

.Q2

2014

.Q2

2015

.Q2

2015

.Q4

2016

.Q2

2016

.Q4

2017

.Q2

2017

.Q4

2018

.Q2

2018

.Q4

DRIVER SHORTAGE (-)/ SURPLUS (+)2011.Q4 TO 2018.Q4 – CURRENT QUARTER: 2015.Q4

Driver Shortage/Surplus Forecast#Of Drivers

-Surplus-

-Shortage-

-169,498

7

Current Motor Carrier Climate:Highway Congestion

Sources: MAP – FHWA Freight Analysis Framework, version 3.4, October 2013 and INRIX

2011 2040 Projections

By 2030, traffic congestion will rob the U.S. economy of $186B

8

Big Picture Import Volume

2016 IMPORT VOLUME

12%

9%

5%

11%

4%3%

2002-2008 2009-2014 2015-2020P

AVERAGE Y/Y GROWTH IN OCEAN CONTAINER SUPPLY AND DEMAND

Supply

Demand

9

Current Ocean Carrier Climate: Vessel Supply Outpacing Global Container Demand

Sources: Maersk, Danish Shipping Finance, BCG, Alphaliner

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The Intermodal Leader

• Length of Network: 32,500 miles• U.S. States in Network: 28• Canadian Provinces in Network: 3• Ports Served: 40• Intermodal Hubs: 25• Length of Track at Intermodal Hubs: 250 miles• Service Schedules: 450+

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The Fastest Intermodal Service in the Industry

*Source: AAR data through April 30, 2017

BNSF INTERMODAL VELOCITY VS. OTHER U.S. CLASS I RAILROADS

BNSF is 12% faster (MPH) than other U.S. Class I weighted average

25

27

29

31

33

35

37

39

17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45 46 47 48 49 50 51 52 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17

MPH

Week

BNSF Average U.S. Class I Railroad Weighted Avgerage

2016 2017

12

International Intermodal Service

Shanghai

Source: ProLogis

Seattle/Tacoma

Oakland

LA/Long Beach Dallas/Fort Worth Savannah

Charleston

Norfolk

New YorkChicago

25

2613

Vancouver

Atlanta

25

Toronto

MemphisKansas City

12

New OrleansHouston

Denver

Transit continues to favor West Coast ports.

Port of Entry

BNSF Intermodal Facility

Consumer Market (250 miles)

Ocean Transit Days

Rail Transit Days (5 days or less)

Rail Transit Days (8 days)

Ocean Transit Days (East Coast)

Ocean Transit Days (West Coast)

0

200,000

400,000

600,000

800,000

1,000,000

1,200,000

1,400,000

2008 2009 2010 2011 2012 2013 2014 2015 2016

US CONTAINERIZED AG EXPORTS

West Coast East Coast Gulf Coast

13

U.S. West Coast Advantage Remains

Source: PIERS DATA

14

BNSF’s Match-to-Market Program

15

BNSF’s Empty Repositioning Programs

Empty Surplus

Empty Surplus

Empty Surplus

Empty Surplus

Exports

Export Location

Empty Surplus

$1.9 $2.1 $2.0$2.6

$3.1$3.8

$3.4 $3.4 $3.3$2.7

$3.6 $3.6$4.0

$5.5$5.8

$3.9$3.4

2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017P

Replacement Capital Expansion PTC Locomotive Equipment

16

Investing to Serve Our Customers

CAPITAL SPENDING OVER THE YEARSIn Billions

17

Southern Transcon Projects

Clovis SubDOUBLE-TRACK

Pecos River Bridge

DOUBLE-TRACKSibley Bridge

DOUBLE-TRACK

Panhandle SubDOUBLE-TRACK

18

Enhancing Capacity: Northern CorridorCapital Expansion and Maintenance Investment

Capital Investment 2013-2016

$5B+1,000 miles of CTC

+135 miles of double-track

16 new sidings added

16 sidings extended

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Innovating the Process to Provide Connectivity

ISP / ETN / RAILPASS CONNECT TO IMPROVE YOUR EXPERIENCE

Accurate ETAs

Run Time Tables (BASE)

Manage Exceptions

Communication

ISPBCO Connectivity Future EnhancementsETA / ETNBNSF RailPass BNSF RailPass

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