J.P. Morgan Aviation, Transportation & Industrials Conference

Transcription

1 J.P. Morgan Aviation, Transportation & Industrials Conference March 14, ALAN H. SHAW Executive Vice President and Chief Marketing Officer 1

2 Forward-Looking Statements Certain statements in this presentation are forward-looking statements within the meaning of the safe harbor provision of the Private Securities Litigation Reform Act of 1995, as amended. In some cases, forward-looking statements may be identified by the use of words like believe, expect, anticipate, estimate, plan, consider, project, and similar references to the future. Forward-looking statements are made as of the date they were first issued and reflect the good-faith evaluation of Norfolk Southern Corporation s (NYSE: NSC) ( Norfolk Southern or the Company ) management of information currently available. These forward-looking statements are subject to a number of risks and uncertainties, many of which are beyond the Company s control. These and other important factors, including those discussed under Risk Factors in the Company s Form 10-K for the year ended December 31,, as well as the Company s other public filings with the SEC, may cause our actual results, performance or achievement to differ materially from those expressed or implied by these forward-looking statements. Forwardlooking statements are not, and should not be relied upon as, a guarantee of future performance or results, nor will they necessarily prove to be accurate indications of the times at or by which any such performance or results will be achieved. As a result, actual outcomes and results may differ materially from those expressed in forward-looking statements. We undertake no obligation to update or revise forward-looking statements, whether as a result of new information, the occurrence of certain events or otherwise, unless otherwise required by applicable securities law. 2

3 Balanced Strategy For Shareholder Return CAPITALIZE ON SOUND STRUCTURE OF OUR FRANCHISE APPROACH THE MARKET WITH A FOCUS ON THE CUSTOMER GROW WITH EVOLVING ECONOMIC CONDITIONS REWARD OUR INVESTORS, TODAY AND IN THE FUTURE 3

4 Structurally Positioned to Benefit from Economic Environment Network alignment and market approach generate long-term growth Approximately 19,500 route miles 250+ short line connections Operating in 22 states Network reaches >50% of US economic activity 65% of freight >500 miles touches our footprint Direct access to 43 ports 4

5 Balanced Strategy For Shareholder Return CAPITALIZE ON SOUND STRUCTURE OF OUR FRANCHISE APPROACH THE MARKET WITH A FOCUS ON THE CUSTOMER Differentiated service product that the market values Long-standing customer relationships Making it easier to do business with Norfolk Southern GROW WITH EVOLVING ECONOMIC CONDITIONS REWARD OUR INVESTORS, TODAY AND IN THE FUTURE 5

6 Balanced Strategy For Shareholder Return CAPITALIZE ON SOUND STRUCTURE OF OUR FRANCHISE APPROACH THE MARKET WITH A FOCUS ON THE CUSTOMER GROW WITH EVOLVING ECONOMIC CONDITIONS Align with today s market and anticipate market change Improve our ability to compete with truck Lean into price Focus on industrial development Balance growth opportunities with capacity and productivity REWARD OUR INVESTORS, TODAY AND IN THE FUTURE 6

7 Economic Conditions Support Growth ISM PMI manufacturing industry contribution index Highest Level in 14 years February % 12% Dry Van Contract Rates exc. Fuel year-over-year percent change Up 12.4% in vs. +0.5% in 5% Consumer Spending quarter-over-quarter CAGR Up 2.7% in vs. +2.7% 4% 8% 55 4% 50 expansion contraction 0% 3% (4%) 2Q 4Q 2Q 4Q 2% 2Q 4Q 2Q 4Q 7 Source: Institute for Supply Chain Management; FTR; BEA; Moody s Analytics

8 Weekly Volume (in thousands) Year-Over-Year Volume Growth AAR 1 st QTD vs. Weekly Volume Trend AAR carloads through week 10 (ended March 10, ) Intermodal 52,857 7% Chemicals 1,012 1% (951) (2%) (1,188) (1%) Paper Agriculture Up 1.9% in vs (6,061) (7%) Automotive (6,660) (5%) MetCon (12,292) (6%) Coal Week

9 First Quarter Outlook VOLUME AND REVENUE Merchandise impacted by network velocity Intermodal strength continues Export Coal remains robust RPU affected by strength in Intermodal and declines in Merchandise OPERATING EXPENSES Lower velocity is expected to increase expenses approximately $50 million 9

10 Balanced Strategy For Shareholder Return CAPITALIZE ON SOUND STRUCTURE OF OUR FRANCHISE APPROACH THE MARKET WITH A FOCUS ON THE CUSTOMER GROW WITH EVOLVING ECONOMIC CONDITIONS REWARD OUR INVESTORS, TODAY AND IN THE FUTURE Investing in the efficiency and long-term growth of our franchise Distributing meaningful dividends Continuing share repurchases 10

11 Thank You 11