Deborah H. Butler

Executive Vice President Planning &

Chief Information Officer

Goldman Sachs Industrials Conference 2014

November 13, 2014

890.6 909.5

2013 2014

Units (000)

Current Railway Volume Fourth Quarter through Week 45 (November 8, 2014)

Total Volume: 909,549 units, up 2%

13%

11%

6%

(2%)

(5%)

(8%)

(10%)

Change in Units

4QTD 2014 vs. 2013

Paper

Automotive

Agriculture

Coal

Chemicals

MetCon

Intermodal

SERVICE RECOVERY

TODAY’S TOPICS

BUSINESS OUTLOOK

INVESTING FOR GROWTH-

INFRASTRUCTURE

PRODUCTIVITY/

TECHNOLOGY

COMPOSITE SERVICE PERFORMANCE

60%

65%

70%

75%

80%

85%

90%

2009 2010 2011 2012 2013 9 Mos2014

3rd Qtr2014

81.0%

76.7% 75.9%

83.1% 83.3%

72.2%

68.6%

NETWORK FLUIDITY

16

18

20

22

24

26

28

2009 2010 2011 2012 2013 9 Mos2014

3rd Qtr2014

23.1

21.5 21.2

23.9 23.9

21.7 20.9

Miles

per

Hour

16

18

20

22

24

26

28

2009 2010 2011 2012 2013 9 Mos2014

3rd Qtr2014

22.4

24.4 24.5

21.6 21.6

25.8 24.7

Avera

ge H

ours

TRAIN SPEED

TERMINAL DWELL

STAFF

Transfers

Vacation By Backs

Deferred Retirements

New Hiring

SERVICE IMPROVEMENT

CREWS

Transfers

Vacation Buy

Backs

Deferred

Retirements

New Hiring

INFRA-

STRUCTURE

Bellevue Expansion

Englewood Flyover

51st Street Yard

Connection

Goshen Connection

Conway Receiving

Yard

POWER

EMD SD70ACe

Order: 50 new

November &

December

SD90MAC

Order: 100

Started

September

OPERATING EFFICIENCIES

NETWORK

3Q Volume

+8%

POWER

3Q Units/Loco

+1%

3Q Fuel/GTM

(4%)

CREWS

3Q Crew Starts

+2%

3Q T&E OT

+32%

SERVICE RECOVERY

TODAY’S TOPICS

BUSINESS OUTLOOK

INVESTING FOR GROWTH-

INFRASTRUCTURE

TECHNOLOGY/

PRODUCTIVITY

BUSINESS OUTLOOK

COAL

• Weather and gas

prices decreases

utility coal demand

• Strong global market

competition

• Increased industrial

coal shipments

INTERMODAL

• Highway conversion

opportunities

• Continued growth in

Crescent Corridor

• International

shipping growth

MERCHANDISE

• Projected increases

in crude oil

• Automotive growth

• Corn and soybean

export potential

• Improved outlook

for lumber and wood

products

SERVICE RECOVERY

TODAY’S TOPICS

BUSINESS OUTLOOK

INVESTING FOR GROWTH-

INFRASTRUCTURE

TECHNOLOGY/

PRODUCTIVITY

ENGLEWOOD FLYOVER

INFRASTRUCTURE IMPROVEMENTS

BELLEVUE YESTERDAY

BELLEVUE TODAY

PROJECT HIGHLIGHTS – BELLEVUE, OH

38 new tracks

38.5 mi of new rail

145 mi of new C&S cable

$160 m NS investment in

freight rail capacity

OLD HANDLING – PHI to CHI

CONWAY

ELKHART BRC

PAVONIA

NEW HANDLING – PHI to CHI

PAVONIA

BELLEVUE

PHI

ANTICIPATED BENEFITS – BELLEVUE, OH

Fewer car

handlings

Frees space at

other terminals

Fewer car miles

2X overall yard

capacity

Chicago bypass route

SERVICE RECOVERY

TODAY’S TOPICS

BUSINESS OUTLOOK

INVESTING FOR GROWTH-

INFRASTRUCTURE

TECHNOLOGY/

PRODUCTIVITY

TECHNOLOGY DRIVERS

LOCOMOTIVES

FREIGHT CARS

TERMINAL & YARD OPERATIONS

NETWORK

LOCOMOTIVES LEADER

LOCOMOTIVES

Locomotive Engineer Assist Display / Event Recorder

LEADER complements a

locomotive engineer’s

skills by providing a

comprehensive view

of a train’s behavior

with real-time

prompts to optimize

train movement.

LOCOMOTIVES

Locomotive Engineer Assist Display / Event Recorder

FREIGHT CARS ABC

STEP 4: ITERATE AND RANK ALTERNATIVES FREIGHT CARS

Algorithmic Blocking & Classification

ABC identifies the

classification codes

and generates the

shortest shipment

route.

Route is based on

minimum miles and

handling across the

network.

TERMINAL & YARD NGauge OPERATIONS

NGauge focuses on improving the processes

and performance at all our yards.

Departments involved:

• Transportation

• Mechanical

• Engineering

TERMINAL & YARD OPERATIONS

NGauge

NETWORK UTCS

UTCS is a traffic

control system

that safely and

efficiently

coordinates train

movements and

maintenance

activities.

NETWORK

Unified Train Control System