Pipeline Development and Expansion Conference. Crude-by-Rail A Short Line Railroad s Perspective 9/20/12

Transcription

1 Pipeline Development and Expansion Conference Crude-by-Rail A Short Line Railroad s Perspective 9/20/12 Gary Lewis - RailAmerica SVP & Chief Commercial Officer

2 Today s Agenda: TITLE TITLE TITLETITLE TITLE TITLETITLE TITLE TITLE RailAmerica Overview Short Line Railroads vs. Class I s Crude By Rail Infrastructure Development Capital / Speed to Market RailAmerica / Genesee & Wyoming Looking Forward 1

3 TITLE TITLE TITLETITLE TITLE TITLETITLE TITLE TITLE RailAmerica is one of the largest owner and operators of Short Line Railroads in North America. 45 railroads with ~7,500 track miles and 1,807 customers Over $500 million in 2011 revenues Geographic and commodity diversification Atlas Railroad Construction: A leading provider of railroad engineering and construction services TransRail North America: (70% Interest) Transloading services company Specializing in bulk material handling An experienced management team: Railroad management Bulk terminal management 2

4 TITLE TITLE TITLETITLE TITLE TITLETITLE TITLE TITLE Our North American footprint provides access to many major markets. Geographical Diversification 45 Railroads in 28 U.S. States and 3 Canadian Provinces PQ ON CBNS CORP CFNR CA SJVR OR VCRR WA PSAP CSCD SDIY ARZC AZ CO KYLE KS TX OK KRRR OTVR MN TNER DGNO MNA BXN MO AR Lake Superior TPW IL MS MI GEXR MQT MS SOR HESR MMRR GR CERA CFER IN ISRR AL EARY TNHR AGR Lake Huron OVR OH IORY CIND COEH WGCR CPDR MSTR PA SC VA NC NY WCOR NCVA CA SCRF CSO NECR CT Headquarters Jacksonville, FL NH VT MA RI NS Legend: RA Railroad RA Railroad with River/Port Access RSS PCN FL 3

5 TITLE TITLE TITLETITLE TITLE TITLETITLE TITLE TITLE RailAmerica handles a diverse mix of commodities. Commodity Diversification by Carloads 2011 Freight Carloads by Commodity (Total: 839,960) Forest Products, 6% Motor Vehicles, 2% Other, 4% Petroleum, 4% Coal, 18% Food Or Kindred Products, 7% Waste & Scrap Materials, 7% Agricultural Products, 15% Pulp, Paper & Allied Products, 8% Metallic Ores And Metals, 8% Non-Metallic Minerals And Products, 10% Chemicals, 11% 4

6 TITLE TITLE TITLETITLE TITLE TITLETITLE TITLE TITLE RailAmerica offers many advantages to current and prospective customers. Multiple Pipeline Crossings Customized Service Offerings Strategic Access to Major Markets & Connectivity to Multiple Class I Railroads Infrastructure Investments / Improvements Access to Federal, State, or Local grants 5

7 Today s Agenda: TITLE TITLE TITLETITLE TITLE TITLETITLE TITLE TITLE RailAmerica Overview Short Line Railroads vs. Class I s Crude By Rail Infrastructure Development Capital / Speed to Market RailAmerica / Genesee & Wyoming Looking Forward 6

8 TITLE In many TITLE ways, TITLETITLE Short Line TITLE Railroads TITLETITLE are TITLE different TITLE from our Class I Partners. Short Line Railroads: Typically provide the service to the customer for either the first or last mile or both. Short Line railroads are categorized as roads with directionally less than $400M in annual operating revenues and Class I s > $400M. More than 550 of these smaller freight railroads exist today. Most rely on partnerships with Class I s to sustain / grow traffic as the majority of traffic is interline (involving more than one rail carrier). 7

9 TITLE TITLE TITLETITLE TITLE TITLETITLE TITLE TITLE In addition to the ~550 Short Line freight railroads in the United States, there are seven Class I Railroads. Class I Railroads: 8

10 Today s Agenda: TITLE TITLE TITLETITLE TITLE TITLETITLE TITLE TITLE RailAmerica Overview Short Line Railroads vs. Class I s Crude By Rail Infrastructure Development Capital / Speed to Market RailAmerica / Genesee & Wyoming Looking Forward 9

11 TITLE TITLE TITLETITLE TITLE TITLETITLE TITLE TITLE Crude by Rail can compliment your existing distribution network. Due to capacity constraints on existing pipelines and the lack of existing infrastructure, rail transportation presents an attractive alternative. As pipeline capacity and infrastructure increase, rail will still have a strong market presence due to: - Speed to market - Flexible service offerings - Minimal capital commitment - Ability to reach new markets 10

12 TITLE TITLE TITLETITLE TITLE TITLETITLE TITLE TITLE Rail provides incremental capacity, flexibility, and market reach. Crude By Rail Example: Crude can be transported in unit trains and off-loaded for final delivery to the refineries by multiple modal options. Common Off- Loading Options Rail-to-Truck Common Final Delivery Options Truck Oil Shale Rail Unit-Train Transportation Pipeline Injection Pipeline Refinery Storage Tanks Vessel Rail Direct Option 11

13 Today s Agenda: TITLE TITLE TITLETITLE TITLE TITLETITLE TITLE TITLE RailAmerica Overview Short Line Railroads vs. Class I s Crude By Rail Infrastructure Development Capital / Speed to Market RailAmerica / Genesee & Wyoming Looking Forward 12

14 TITLE The Alabama TITLE TITLETITLE and Gulf Coast TITLE Railway TITLETITLE (AGR) is TITLE a RailAmerica TITLE Short Line which connects with 5 Class I Railroads: KCS, CSX, NS, CN and BNSF. Connectivity to multiple Class I s is the key to providing flexibility and options within the supply chain. 13

15 TITLE TITLE TITLETITLE TITLE TITLETITLE TITLE TITLE In addition to the ~550 Short Line freight railroads in the United States, there are seven Class I Railroads. Class I Railroads: 14

16 TITLE Connectivity TITLE TITLETITLE with 5 Class TITLE I roads TITLETITLE translates TITLE into TITLE the ability to accept delivery from almost any North American crude-oil source. 15

17 In TITLE this example, TITLE TITLETITLE the AGR provides TITLE TITLETITLE Genesis Energy TITLE with TITLE the ability to receive unit trains of crude oil from various shale regions in the US and Canada. - Genesis recently completed a new unloading terminal in Walnut Hill, FL. - Crude will be off loaded into fixed storage and injected into it s pipeline. Walnut Hill, FL Rail Unloading Terminal 16 Genesis Energy Pipeline

18 Our network of Short Line Railroads intersect with various pipelines across North America. Tremendous Opportunities Exist: Oil, Gas and Products Pipelines - Pipeline Injection - Increased Capacity - Bypass Bottlenecks - Access New Markets - Improved Asset Utilization 17

19 Today s Agenda: TITLE TITLE TITLETITLE TITLE TITLETITLE TITLE TITLE RailAmerica Overview Short Line Railroads vs. Class I s Crude By Rail Infrastructure Development Capital / Speed to Market RailAmerica / Genesee & Wyoming Looking Forward 18

20 TITLE TITLE TITLETITLE TITLE TITLETITLE TITLE TITLE With G&W s recent announcement to acquire RailAmerica, the combined North American footprint will include 108 railroads. 19

21 TITLE TITLE TITLETITLE TITLE TITLETITLE TITLE TITLE The combined operations / market coverage will create tremendous opportunities for customers. 20

22 TITLE TITLE TITLETITLE TITLE TITLETITLE TITLE TITLE A Short Line Rail partner can create new cost effective distribution options. A strategic Short Line Rail partner can assist in: - Attracting new customers - Penetrating new markets - Developing new solutions for the market - Differentiating your services Thank You for Your Time! 21