A Note from Watco Chief Executive Officer Dan Smith

Watco Team:

As I look back on 2021, I want to thank all of you for your hard work. The year was filled with challenges for sure. But ultimately, it was a time of enormous success. Because of you, 2021 was another year of record performance for Watco.

As we head into 2022, our focus is to Run the Play. Run the Play means to do everything the right and safe way, every time, as we’ve been trained. We need to be consistent and unwavering when it comes to doing things the Watco way. This is especially important at this time of growth when we have so many new team members joining us.

There are plenty of reasons why I have a very positive outlook about the year ahead.

This month, we’re holding our first classes in our newly expanded Safe Performance Center (formerly the STAT Center) in Alabama. We’re delivering the same solid safety training we always have – just with much more room to conduct it in, plus upgraded technology.

We expect to close soon on our purchase of 900 miles of CN track and other assets in Wisconsin, Michigan, and Ontario, Canada.

We’ll put close to $100 million back into our core assets, reinvesting in track, equipment, dock improvements, and more.

We’re improving our information technology systems and investing in other strategic projects through multiple grants and investments totaling $30 million.

We anticipate investing over $300 million in continued growth and acquisition opportunities.

Given the record-level of funding available as a result of the recently passed infrastructure bill, we’ll continue to be aggressive in seeking federal grants to drive efficiency and resiliency in our railroads.

We’re highlighting Watco’s commitment to sustainable practices by releasing a comprehensive report that will be issued in 2022.

This is just a snapshot of how we’ll Run the Play this year. The prospects are bright, and I hope you’re as excited as I am about getting 2022 under way.

Let’s make it our best year yet.