Kevin Kaufman

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Kevin Kaufman INDIANA LOGISTICS SUMMIT November
14, 2006
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Agenda

• BNSF Ag overview
• Projected rail growth
• Rail capacity
• Industry challenges
• Summary

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Agricultural ProductsJanuary-September 2006
Volume
Units and Change from 2005
Bulk Foods 4.4
Wheat -3.6
Fertilizer -4.4
73,660
149,042
74,533
Soybeans -0.7
37,166
168,160
197,109
Other 5.4
26,357
Corn 24.6
Ethanol 12.9
Total Agricultural Products 726,027 44,376 or
6.5
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2006 Ag Volume Growth
Rolling 4-week average
Units
Volume Growth
YTD Chg Last 4 WK Chg
BNSF 6.6 7.1
UP 2.2 -1.1
1
39
Week
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Ag Growth
BNSFs Mid and Short-Term Leased Fleet
BNSF Ag Carloads 2002-2008

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US Rail Ethanol Growth
Year Production (gallons) Growth (gallons) Ethanol Railcar Equivalents if 100 Rail DDG Railcar Equivalents if 100 Rail Corn railcar Equivalents if 20 Rail Potential Total Additional Railcars
2006 4,900,000,000          
2007 7,500,000,000 2,600,000,000 88,435 88,488 48,148 225,071
2008 9,300,000,000 1,800,000,000 61,224 61,216 33,333 155,773
2009 10,000,000,000 700,000,000 23,810 23,824 12,963 60,597
2010 10,500,000,000 500,000,000 17,007 17,017 9,259 43,283
Source Potential aggressive growth scenario
based on various public forecasts.
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We Are Prepared for Growth

• Maintain strong infrastructure
• Capital investment for expansion
• Main lines
• Equipment
• Economic Development
• Velocity
• Unit train programs - shuttles

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Capital Commitments
BNSF Capital Commitments vs. ROIC
Millions
Millions
Strategic Focus
10.1
9.7
9.5
9.4
ROIC
8.8
7.9
2,600
2,520
7.2
2,265
2,258
6.6
6.6
2,179
1,988
1,763
1,726
1,608
1,505
Note See BNSF web site/Investor Relations for a
reconciliation to GAAP
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Ag Velocity Has Increased
Unit Capacity
Fleet Size
BNSF average quarterly grain car velocity during
first three quarters of year.
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Ag Capacity Has Improved With Shuttles
Unit Capacity
Fleet Size
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But is the Ethanol Industry?

• Developing ethanol markets
• Where?
• Infrastructure? Who?
• How large? When?
• Rail fleet utilization
• Scale efficiencySupply chain alignment
• Plant infrastructure design
• Investment ITC
• DDG
• Product quality, consistency, flowability
• Market?

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Summary

• Rail transportation capacity is not a barrier
  today
• Continued return-justified investment is
  essential
• ITC
• INDUSTRY infrastructure is inadequate and not
  supply chain aligned
• Markets are not developed
• Stakeholder communication is essential
• Market evolution
• Collaboration
• Transportation design