1. 1 PTC Update ACACSO May 2011 PTC Update ACACSO May 2011

2. 22 Oct 16, 2008 - Railroad Safety Improvement Act signed into law July 21, 2009 – FRA Published Notice of Proposed Rule Making (NPRM) Jan 15, 2010 – FRA Published Final Rule Apr 16, 2010 - Deadline for Railroads to Submit PTC Implementation Plans to FRA Dec 31, 2015 - Deadline for PTC Implementation Congress mandated PTC implementation by the end of 2015 FRA is drafting two new NPRMs to address railroad’s concerns

3. 33 PTC legislation requires specific functionality PTC gauges upcoming signals, authorities, switches, operating conditions, locomotive position & speed PTC designed to warn engineer of need for action If the engineer fails to act, PTC system will engage locomotive brakes and bring train to full stop Prevent movement through misaligned switches Protect track workers Prevent train to train collisions Prevent overspeed derailments If railroaders do their jobs correctly, PTC should never engage the brakes

4. 4 PTC is required on the following: All roads providing or hosting intercity or commuter passenger service Class I roads — Track with one or more PIH (poisonous inhalant) cars annually and — traffic greater than 5 million gross tons annually Class II and III roads — Must be equipped:  If there is passenger service on the route  in other special circumstances as described in the regulation The final footprint will be determined by the new FRA rules

5. Regulation requires the submission of three plans PTC Development Plan — Describes the PTC technology to be implemented PTC Implementation Plan — Describes when and where the PTC system will be implemented — How interoperability with class I’s, commuters, and short lines will be achieved PTC Safety Plan required for PTC System Certification — Describes how the safety of the system will be ensured — Contents include:  Railroad Training Plan  Operations and Maintenance Manual  Configuration and Revision Control Measures  Initial Implementation Procedures  Post Implementation Testing and Monitoring Procedures 5

6. 66 PTC System Overview Initialization Track Database Speed Restrictions Work Zones Train Consist Movement Authorities Braking Curve Warning Curve Predictive Braking Speed Restrictions Switches Work Zones Signals

7. 77 Interoperability Locomotive fleet age and mix Wayside plant age and mix Equipping switches in un-signaled territories Scale of changes and increase in workload Compressed timeline Unproven technology Heavy reliance on suppliers Huge capital requirements Why is PTC so challenging?

8. 88 Class I Railroads Passenger Railroads Class Is agreed to develop standard platform PTC must be able to recognize and stop foreign locomotives PTC legislation requires industry interoperability

9. 99 Wayside installs must be tailored to existing plant...

10. 10... which varies from location to location...

11. 11... including some very old equipment

12. 12 PTC technology is still in development Onboard and office system software is still being delivered to railroad test labs — Final software will not be delivered until Sept 2011 The 220 MHz radio (required for interoperability) is still being specified — Production radios will not be available until after Jan 2012 Final wayside interface units have not been received from all suppliers — Wayside installations will start in Q2 2011

13. 13 Delays in software delivery are compressing an already short cutover schedule 13

14. 14 FRA places the cost benefit ratio for PTC at 22:1 PTC will prevent a small percentage of train accidents PTC will not prevent: — Track failure related accidents — Equipment failure related accidents — Grade crossing accidents “FRA recognizes that the likelihood of business benefits is uncertain and that the cost-to-benefit comparison of this rule, excluding any business benefits, is not favorable” – PTC Regulatory Impact Analysis

15. 15 Interoperability across the United States Magnitude of wayside installations Short timeline with mandatory completion in 2015 Technology still under development Huge capital requirements PTC is challenging...

16. 16 Questions ?