AAR Overview Presentation to Association of Car Accounting

AAR Overview Presentation to: Association of Car Accounting and Car Services Officers May 8, 2008 Chicago, IL

About the AAR u Master Car Builders Assoc. formed 1867 u u u The goal was to standardize freight cars Soon after many railroad associations were formed In 1933 the Rail Transportation Act was passed to deal with depression-era problems affecting railroads President Franklin D. Roosevelt recommended railroads unify into one organization. AAR formed on October 12, 1934

AAR’s Mission & Vision u Mission u u To add value to the North American railroad industry by fostering improved safety, security, service, efficiency and profitability through leadership and coordination on industry issues. Vision u To be recognized by industry leaders and valued by public policy decision makers as the definitive voice of the North American rail industry.

AAR Full Members

AAR Special Members

AAR Affiliate RR Members u u u Transtar Inc. u ISG - Cleveland Works Railway Company u Lake Superior & Ishpeming Railroad Co. u Metro-North Railroad u MG Rail, Inc. u Morristown & Erie Railway, Inc. u u u New Orleans & Gulf Coast Railway New York City Transit Northern Plains Railway Republic N&T Railroad, Inc. Roberval and Saguenay Railway Company Sidney and Lowe Railroad, LLC

AAR Associate (Gold) Members u Alstom Transport u American Railcar Industries, Inc. u Amsted Rail Group u GE Transportation u Chicago Freight Car Leasing Co. u The Greenbrier Companies u CIT Rail Resources u HDR Engineering u Diamond Rail Lease Corporation u HNTB Corporation u First Union Rail Corporation u u Freight. Car America, Inc. u GATX Rail u General Electric Railcar Services Corp. Lockheed Martin Maritime Systems & Sensors u MPL Technology u New York Air Brake Corporation

AAR Associate (Gold) Members (Cont. ) u Pacer Stacktrain u The Timken Company u Parsons Brinckerhoff u Trans. Ed, Inc. u Progress Rail Services u Tran. Systems Corporation u Rail CRC u Trinity. Rail u Reidler Decal Corporation u TTX Corporation u RESCAR Companies u Union Switch & Signal u Southern Company Generation u Union Tank Car Company u Standard Car Truck Company u Wabtec Corporation u Standard Steel, LLC

AAR Associate (Silver) Members u AIG Rail Services, Inc. u All Capital (US), LLC u American Railcar Leasing u u GLNX Corporation u u Herzog Contracting Corp. u u u Holland Company JK-CO LLC Specialty Car Repair Kennedy / Jenks Consultants u Plasser American / Franz Plasser Procor Limited Rail. Power Hybrid Technologies Corp. u Road & Rail Services, Inc. u Salco Products, Inc. u Saskatchewan Grain Car Corporation

AAR Associate (Silver) Members (Cont. ) u u Savage Transportation Management (Formerly CANAC) Science Applications International Corporation (SAIC) u Shaw Environmental Inc. u Strato Inc. u Sunrise Manufacturing Inc. u Trans. Core u TRC Companies, Inc. u URS Corp. u ZTR Control Systems

AAR Associate Program The AAR Associate Program is for every business that depends on America’s freight rail system to be the best in the world. “Railroads and suppliers alike have benefited from AAR’s vital role propagating the use of technology. AAR also enables the rail industry to speak with one strong voice on major legislative issues that dramatically impact our business. ” Robert P. Haag, President, Wabtec Railway Electronics “Associate membership in the AAR has been very beneficial in providing our staff a communications link with key railroad officials and AAR staff. , plus timely news reports about important railroad legislation and events affecting the industry. ” Thomas P. Smithberger, Senior VP National Director of Railroads, HDR, Inc.

AAR Associate Program u Gold Members u u Can participate in up to three concentration areas: u Technical Services u Environmental, Hazmat and Tank Car u Car Service/Car Hire u Damage Prevention and Freight Claims u Policy and Communications Invitation to meet with AAR Board of Directors during its annual meeting u Link to your company via AAR’s we page u Member rates on publications

AAR Associate Program u Silver Members u u Can participate in one concentration area: u Technical Services u Environmental, Hazmat and Tank Car u Car Service/Car Hire u Damage Prevention and Freight Claims u Policy and Communications Member rates on publications Invitation to AAR annual meeting (sans reception with AAR Board of Directors) Listing on AAR’s web page

AAR Structure Six Functional Areas: u Safety and Operation u Administration and Finance u Government Affairs u Policy and Economics u Communications u Law Two subsidiaries and one affiliated organization: Information technology Research and development World-class policy research organization

TTCI and TTC: Two Different Things TTCI: The Company TTC: The Facility

Transportation Technology Center, Inc. u Roy Allen, President u TTCI Board Oversees Activities u 238 Employees at TTCI u Revenues u Domestic and international commercial work (59%) u AAR for SRI and Task Orders (29%) u Government (12%)

Transportation Technology Center, Inc. u Activities u Strategic Research Initiatives u u Research initiatives, including vehicle track systems, engineering research, heavy axle load research, mechanical research, technology scanning Task Orders for Safety and Operations u Technical standards, mechanical inspections, hazardous materials, tank car and spent nuclear fuel cask, communications, railway electronics, car repair billing, AAR scales, locomotive emissions, bolsters, security

Railinc u Allen West, President u Railinc Board Oversees Activities u Approximately 148 Employees at Railinc u Railinc provides transportation utility serving the needs of customers across North America and beyond

Railinc u Activities u u Maintains UMLER data base; IRF Files; industry’s legacy files; supports world’s largest electronic data interchange networks (5. 8 million messages are transmitted each day); damage prevention/freight claims Operates steelroads. com, the railroad industry’s common web site where rail customers can track information, order equipment, discover shipping options and find pricing information

Railroad Research Foundation The Railroad Research Foundation (RRF) is a world-class policy and research organization devoted to fostering in the public interest a safe, secure, technologically advanced and productive marketplace driven railroad industry. RRF undertakes research and education activities in the public interest and for the public good.

Railroad Research Foundation u u u The RRF’s funding comes from federally funded cooperative agreements. These cooperative agreements are used for the purpose intended and will fall within the scope of the RRF’s activities as defined under its charter and tax exempt purpose. The RRF, by virtue of its close relationship with the AAR, benefits from the AAR Committees, which is comprised of individuals from its member railroads, the supplier community, sponsoring Federal agencies and other interested industry parties, to provide general direction to the RRF on projects funded through government cooperative agreements.

Some RRF’s Federally Funded Projects u Freight Rail Security Project u Railroad Wireless Communications and Train Control u Positive Train Control (PTC) u Countermeasure to Reduce Suicides on Railway Rights of Way

The AAR Interacts With: - United States Congress - Surface Transportation Board - Federal Railroad Administration - Department of Homeland Security - Department of Defense - Department of Justice - National Transportation Safety Board - Department of Energy - Federal Highway Administration - Nuclear Regulatory Commission - Environmental Protection Agency - Federal Communication Commission - Federal Motor Carrier Safety Administration - Research Special Programs Administration

Committee Structure AAR Board of Directors Safety and Operations Management Committee (SOMC) Network Efficiency Management Committee (NEMC) Policy and Advocacy Management Committee (PAMC) Railinc Board of Directors TTCI Board of Directors

Policy and Advocacy Mgmt Committee (PAMC) u u u Reports directly to AAR Board Consists of legal and policy representatives from AAR Member Roads Issues u Reject proposed currently unnamed and other proposals to re-regulate U. S. Freight Railroads u Investment Tax Credit (S. 1125) u Clear Skies Initiative u Truck Size and Weight

PAMC Subordinate Committees - Antitrust Working Committee - Border Policy Committee - Chief Legal Officers - Communications Committee - Economic Regulation Working Committee - Environmental Working Committee - Safety Regulation Working Committee - Spectrum Legal Working Committee - Tax Policy Working Committee - Tort Matters Working Committee - Truck Size and Weight Committee - Washington Representatives

Network Efficiency Management Committee (NEMC) u To develop and implement strategies that integrate industry and individual railroad business processes into quality services that deliver continuous improvements in customer satisfaction. u Consists of chief marketing officers from AAR Member Roads u Current Priorities u Customer Satisfaction u Equipment Asset Management u Interline Service Management u Interline Revenue Backshop Improvements u Trans Border Initiatives

NEMC Subordinate Committees u Customer Service Standing Committee u u Interline Revenue Management u u Manage data quality and promote business processes to permit accurate communication of price, billing, collection and settlement information Transborder Working Committee u u Addresses customer and customer support issues from an industry perspective Expedite movement of import/export traffic through the promotion of uniform process definitions and simplification of reporting requirements Electronic Commerce Working Committee u Facilitate the exchange of information among customers, transportation providers and partners using the best available technology

NEMC Subordinate Committees (Cont. ) u EDI Working Committee u u Provides an Information technology interface to the “user” community Equipment Assets Management Working Committee u Responsible for maximizing inter-railroad car utilization

Safety and Operations Management Committee (SOMC) u Provides overall authority for industry standards (interchange, safety, environmental, hazmat and communications and signal) and develops strategy and provides direction for new initiatives. u Consists of chief operating officers from AAR Member Roads u Current Priorities u Interline Service Management u Interoperable Communications Strategy u Chicago Project u North American Joint PTC Project u Reducing stress and service state of the industry

SOMC Subordinate Committees u Technical Services Working Committee Responsible for matters relating to the physical assets of the railroad industry. u Open Top Loading Rules Committee u Quality Assurance Committee u Arbitration & Rules Committee u Equipment Engineering Committee u Wheels, Axles, Bearings & Lubrication Committee u Braking Systems u Specially Equipped Freight Car Committee u Car Repair Billing Committee u Locomotive Committee u Damage Prevention & Freight Claims

SOMC Subordinate Committees (Cont. ) u Risk Management Working Committee Develop and guide industry efforts to reduce environmental and safety risks of rail transportation. The following committees report to Risk Management: u Hazardous Materials Committee u Non-Accident Release Reduction Task Force u Environmental Affairs Committee u Tank Car Committee u Nuclear Waste Transportation Task Force u Grade Crossing & Trespass Prevention Committee u Committee on Locomotive Emissions & Energy u Railroad Geographic Information Systems Committee

Conclusion u Thank you u Questions? Jeff Usher 202 -639 -2370 jusher@aar. org