Innovation and Improvement at

Aurizon ARA Heavy Haul Rail event – Perth, Australia

22 June 2015

Mike Franczak – EVP Operations, Aurizon

2

CANADA…

3

…AUSTRALIA

4

AURIZON AT A GLANCE

~580 active

locomotives

~7,000 employees

~13,500 active wagons

~280M tonnes

~15,400 route kilometres

~9,570 route miles

~115bn gross tonne kilometres

~210 tonnes of Coal

~26 tonnes of Iron Ore

(Indicative as at YE15)

~$4B AUD

revenue

~$3.1B USD

5

…moving from

substandard to

world class

Aurizon’s journey

to ZEROHARM…

LTIFR (Lost time injury frequency rate)

TRIFR (Total recordable injury frequency rate)

Lost

tim

e in

jurie

s p

er

mill

ion

pers

on

-hours

work

ed

Incid

ents

per

mill

ion

pers

on-h

ours

work

ed

Total Train Accidents

To

tal num

ber

of

train

accid

ents

per

bnG

TK

0

1

2

3

FY13 FY12 FY14 FY15 YTD

0

5

10

15

FY15 YTD FY13 FY12 FY14

0

1

2

3

FY13 FY15 YTD FY14 FY12

6

90

75

0

80

85

FY13

77.7

IPO/FY11 FY15

79.8

83.4

FY14 FY12

88.0

OPERATING RATIO

0

1

2

3

4

5

6

$2.54

FY12 FY13 IPO/FY11

$3.40

$4.17

FY14 FY15

$5.04

8.808.00

6.70

4.40

0

2

4

6

8

10

12

FY13 FY15 FY12 IPO/FY11 FY14

SHARE PRICE

ROIC

Operating ratio is 1 – EBIT margin. Operating ratio calculated using underlying revenue which excludes interest income & significant items

AURIZON HAS IMPROVED ITS PERFORMANCE SINCE IPO…

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… DRIVEN BY IMPROVEMENTS IN KEY OPERATING METRICS

(Actuals as at H1 FY15, H2 FY15 is indicative only)

Loco Productivity (NTK / active loco) Fuel (litres / dGTK) Labour Productivity (NTK / FTE)

3.45

3.40

3.35

3.30

3.25

3.20

0.00

13.5

13.0

12.5

12.0

11.5

0.0

14.0

9.5

10.5

9.0

8.5

8.0

10.0

0.0

H1 FY14 H2 FY14 H1 FY15 H2 FY15 H1 FY14 H2 FY14 H1 FY15 H2 FY15 H1 FY14 H2 FY14 H1 FY15 H2 FY15

8,200

8,000

7,800

7,600

200

0

26.5

26.0

25.5

25.0

0.0

27.5

27.0

Coal Payload (avg tonnes / train) CQ Coal Turnaround time (hrs)

H1 FY14 H2 FY14 H1 FY15 H2 FY15 H1 FY14 H2 FY14 H1 FY15 H2 FY15

8

THINKING DIFFERENTLY UNDERPINS OUR INNOVATION AND

EFFICIENCY JOURNEY

APPLYING

PROCESS

RE-

ENGINEERING

IMPLEMENTING

NEW SYSTEMS

AND

TECHNOLOGY

IMPLEMENTING

A NEW

ORGANISATIONAL

STRUCTURE

DELIVERING AN

INTEGRATED

OPERATING

PLAN

MEASURING

PERFORMANCE

AND KEY

METRICS

FINALISING

EA

NEGOTIATIONS

IMPROVING

SUPPLY CHAIN

COORDINATION

LEVERAGING

GROWTH

OPPORTUNITIES

TAKING A

NATIONAL

APPROACH TO

ASSET

MANAGEMENT

9

MAINTENANCE DRONES

ROLLINGSTOCK MAINTENANCE

FREIGHT MANAGEMENT TRANSFORMATION (FMT)

INNOVATION

IS DRIVING

CONTINUOUS

IMPROVEMENT

10

DRONE

• Unmanned aerial vehicles (UAVs)

monitor network infrastructure and

overhead electrical equipment

• Provide asset condition

information for ~2,600km of track,

of which ~80% is electrified

• Deliver high definition images with

infra-red capability to detect faulty

connections and ‘hot spots’

NETWORK MAINTENANCE DRONES

• Improvements in safety and track

time demand

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WAYSIDE CONDITION MONITORING

WORK ORDER

CREATION

Automates rollingstock

inspection…

Maintenance activities

conducted “on train”

ON TRAIN REPAIR

WAYSIDE

CONDITION

MONITORING

Brakeview

CSCview Wheelview

MORE EFFICIENT, FASTER, SAFER,

PREDICTIVE, CONDITION-BASED

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FREIGHT MANAGEMENT TRANSFORMATION

• Replacing 18 legacy systems with a

single integrated platform for both

transportation and lead to cash

applications

• Standardising

business processes

across the company

• Introducing a streamlined order-to-

execution process across

the enterprise Current state

Future state

13

OPERATIONAL

EXCELLENCE

AT AURIZON

We create value through

collaboration and

innovation.

Our hallmarks are clear

accountability,

continuous improvement

and disciplined execution.