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Central Indiana Central Indiana Intermodal ServiceIntermodal Service

Growth and Network Expansion Opportunities for BNSF

February 12, 2008

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Indiana’s Intermodal Team

Here to make the case for run-through service to CSX Avon

State:• IEDC• Ports of Indiana• INDOT

Regional• Indy Partnership• Conexus Indiana

Industry:• Browning Investments• Duke Realty Corporation• TJX Corporation

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Goal: Enhance Accessto Global Markets

Indiana recognizes:

• Intermodal connections are keyto global competitiveness

• Intermodal logistics parks arethe trade hubs of the future

• West Coast connection critical to Indiana

• BNSF is the premier intermodal carrier and the preferred service provider

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Value Proposition for BNSFOpportunity for growth

Run-through service from LA/LB portsto CSX Avon Yard benefits BNSF:

– Significant growth of headhaul & backhaul volume– Minimal CAPEX and operating risk– “Plug and play” logistics park located in a premier

distribution location– Complements existing network & Chicago ramps

Avon provides strategic advantage for BNSF

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Proposed Service Solution

Run-through service to Avon from LA – Connect to CSX in St. Louis– Possible mix with domestic (Clovis)– 5-day a week frequency in both directions

Key Assumptions:– Economics work for carriers & shippers– CSX agrees to trackage & terminal deals– Operational issues are manageable

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Growth Drivers for BNSF

Central Indiana: Best location to serve greatest number of consumers, producers & exporters

– Median center of U.S. population– Same-day delivery to over 50% of U.S. population– Heart of manufacturing, agriculture, hardwood production– 15% of U.S. freight by value touches Indiana

• 12% by tonnage

– Indiana ranks 2nd in pass-thru tonnage, 5th overall – Least congested infrastructure

• 5.3% peak congestion vs. 15.3% national average• “Major Moves” fully funds 10-year transportation plan

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Indiana: The OptimalDistribution Location

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Median Center of U.S. Population

Distribution Growth Forecast

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Distribution Growth Forecast

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Indiana: Export &Manufacturing Powerhouse

• Exports totaled $22.6 billion in 2006

• 1st in automotive manufacturing growth

• 3rd in car/truck production by 2011

• 1st in manufacturing output per capita

• 1st in value-added manufacturing

• Honda building newest assembly plant in Greensburg, IN.

• Only state with 2 Toyota production sites

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Indiana’s Manufacturing & Logistics Economy

Source: PCRD using CEW data provided by the Indiana Business Research Center (IBRC)

Indiana: Epicenterof U.S. Manufacturing

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Indiana: Automotive Centerof North America

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• Car/truck assembly plants within650 milesof Indianapolis

• 84% ofNorth Americanauto production

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Manufacturing Locations

Map ID Name

1 Royale Coach

2 General Motors

3 Delphi

4 Isg Burns Harbor

5 Accuride

6 Evansville Bowing Association

7 GE

8 General Motors (Indianapolis)

9 Rolls-Royce Corporation

10 Autom0tive Components Holdings

11 Hewlett-Packard

12 Eli Lilly

13 Wabash National Parts

14 General Motors (Roanoke)

15 Nappanee Wood Products

16 Zimmer Holdings

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Distribution Center Locations

Map ID Name

1 Wabash National Parts

2 AT&T

3 Peyton’s Northern Distribution Center

4 Monaco Coach

5 Jayco

6 Coachmen Recreational Vehicle

7 Jasper Engine & Transmission Exchange

8 Otis Elevator

9 Phillips Products

10 Incom Distributor Supply

11 Pearson Education

12 Whirlpool

Recent Large BusinessInvestments in Indiana

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Company Industry County New Jobs Investment

Honda Mfg. - Auto Decatur 2,067 $550,000,000

Medco Life Sciences Boone 1,306 $165,000,000

WellPoint Insurance - Distribution Marion 1,200 $12,000,000

American Commercial Lines Mfg. - Barges Clark 1,157 $17,500,000

Toyota Motor North America, Inc. Mfg. - Auto Tippecanoe 1,000 $200,000,000

Really Cool Foods Mfg. - Food Wayne 1,000 $100,000,000

Advance Stores Company (Distribution Center) Mfg. - Auto Jasper 636 $48,400,000

Wal-Mart Stores (Distribution Center) Dist. - Log. Grant 600 $60,000,000

O'Reilly Auto Parts (Distribution Center) Dist. - Log. Hendricks 581 $46,900,000

Dollar General Corp. (Distribution Center) Dist. - Log. Grant 500 $68,000,000

Cummins Mfg. - Auto Bartholomew 458 $250,000,000

Intermodal FreightFlow Study

Browning-Duke commissioned studyto estimate baseline internationalintermodal flows to Central Indiana• Conservative methodology combined best available data sources (Customs/US Census,Reebie Transearch)

Findings:• 80% of Central Indiana’s containerized imports move through West Coast ports (predominantly LA/LB)• 150K-200K annual inbound (drayage) loads• Estimated value $5.5 billion

– Likely a low figure based on pro-rata share of U.S. imports• Tremendous backhaul growth opportunities• 300K-400K annual two-way lift potential• Volume easily supports 5-day/week service

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CSX Avon Yard

Located in heart of state’s largestdistribution submarket

– IM ramp can handle 100K annual lifts today• Current volume is approx. 30K lifts

– Expansion to 300K lifts with modest CAPEX

– Adjacent to AllPoints Midwest 930-acre (expandable)world class logistics park

• 12 million sq. ft of DC/light industrial space

– Hendricks County has absorbed DC space faster than Alliance; 25M feet in 15 years

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Hendricks County, INWorld-Class Trade Infrastructure

CSX Yard

AllPoints Midwest

Indiana Proposal

• “Take or Pay Train” arrangement- Minimize risk to BNSF

• Conexus Indiana will organize Shippers Alliance & market service

• Improvements to CSX Avon facility- Developers, local governments already

jointly planning improvements with CSX

• State/Ports of Indiana support- Potential Incentives, Financing, Foreign-Trade Zone

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Going Forward

• BNSF reaction• Commitment to evaluate concept• Plans for future dialogue• How do we move forward?

Proposed Next Step:• BNSF invited to Indiana for meetings

with key leaders and tour of region

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