An overview of fuel price risk management: what it is, how it works, how it is applied, and the results of its application. Jeff LeMunyon will address fuel price risk management policy, strategy, philosophy, tools and how value is added by applying a systematic approach to fuel price risk management in a public transit setting.

1. Creating Value Through Fuel Price Risk Management 2009 NYPTA Fall Conference Linwood Capital, LLC 4316 Eton Place Edina, Minnesota 55424 Telephone: 952.285.1134 Facsimile: 952.285.1135 E-mail: [email_address] Website: www.linwoodcapital.com

6. Energy Price Risk Management No Hedging Wide Range of Expected Cost Maximum Risk Exposure High Budget Risk Forecasted prices assume heating oil futures prices and heating oil implied option volatility on 8/31/09 Forecasted prices assume that costs will be equivalent to HO futures + 14.12 cents per gallon Upper and lower limits represent plus and minus one standard deviation of expected price movement as implied by heating oil options pricing

7. Energy Price Risk Management Hedging Narrower Range of Expected Cost Managed Risk Exposure More Certain Future Costs Forecasted prices assume heating oil futures prices and heating oil implied option volatility on 8/31/09 Forecasted prices assume that costs will be equivalent to HO futures + 14.12 cents per gallon Upper and lower limits represent plus and minus one standard deviation of expected price movement as implied by heating oil options pricing

12. Example Forward Pricing Performance Assuming 24 month forward pricing window and 100% hedged