Bank of America Merrill Lynch Global Transportation Conference May 16, 2013 John P. Rathbone Executive Vice President Finance and Chief Financial Officer 1
Norfolk Southern Update System Overview Technology / Productivity First Quarter Results Second Quarter Update Business Outlook Capital Structure 2
Norfolk Southern System 3
A Network of Port Access Detroit Erie Chicago Ashtabula NY / NJ Toledo Cleveland Burns Harbor Philadelphia Pittsburgh Camden / South Jersey Naples Cincinnati Wilmington Baltimore Portsmouth, OH Granite City, IL Jeffersonville, IN Norfolk Louisville Portsmouth Memphis Morehead City NS Railway & Ports served by NS Charleston Savannah Seaports Brunswick Mobile River Ports St. Bernard Jacksonville New Orleans Lake Ports Braithwaite 4
Lamberts Point, VA Coal Terminal 5
Wheelersburg, OH Coal Terminal 6
Coal Network 7
Dynamics of Coal Market 2012 Volumes Western 26.3 M Tons 18% Northern Appalachia 41.1 M Tons 27% Illinois Basin 20.4 M Tons Central 14% Appalachia 57.6 M Tons Southern 39% Appalachia 3.3 M Tons Norfolk Southern 2% Railway and its Railroad Operating Subsidiaries - - - NS Trackage and Haulage Rights Excludes coke, iron ore & outbound Wheelersburg 8
Utility Coal Plant Scherer - Georgia 9
Intermodal Corridors Harrisburg 10
Rossville Intermodal Facility
McCalla Intermodal Facility
Greencastle Intermodal Facility • 2 Pad Tracks – 3850’ EA • 2 Yard Tracks – 3950’ EA • 816 Trailer Spaces
Intermodal Network Harrisburg Chicago 90% of total NS Intermodal volume touches the Golden Triangle Atlanta 14
Merchandise Network 15
Merchandise Network Major Rail Classification Yards Elkhart, IN Bellevue, OH Allentown, PA Enola, PA Conway, PA Knoxville, TN Chattanooga, TN Linwood, NC Sheffield, AL Birmingham, AL Macon, GA 16
Merchandise Network TBT Facilities 17
Merchandise Network TBT Facilities 18
Merchandise Network Automotive Facilities Ayer Buffalo Albany Detroit Toledo Cleveland NY/NJ Chicago Harrisburg Philadelphia Ft. Wayne Pittsburgh Columbus Baltimore Cincinnati Kansas City St Louis Norfolk Louisville Lexington Chattanooga Memphis Charlotte Atlanta Dallas Birmingham Charleston NS Automotive Network Meridian Savannah NS Automotive Network and Haulage New Orleans Jacksonville 26 Assembly Plants Assembly Plants on Short Line Titusville connecting with NS 19 Miami
Our Manufacturing Network Continues to Expand Major Auto Projects 20
Merchandise Network Unit Grain Train NS Unit Grain Train Network 75-Car Unit Train Receivers Shreveport 75-Car Unit Train Loaders 21
Marcellus & Utica Shale Deposits 22
Crude Oil to East Coast, Gulf Coast and Midwest Refineries Alberta Chicago Bakken • Efficient and direct routing to East Coast, Gulf Coast and Midwest refineries • Unit train staging & delivery 23
Norfolk Southern Update System Overview Technology / Productivity First Quarter Results Second Quarter Update Business Outlook Capital Structure 24
UTCS – Movement Planner Unified Train Control System Improved locomotive utilization Improved schedule adherence Increased capacity Disaster recovery capability Improved network Velocity; 2-4 MPH Estimate completion by end of 2014 25
LEADER Calculates optimal “Golden Run” for every train start Locomotive engineer coaching Significant fuel savings Estimate completion by end of 2015 26
Bellevue Yard Expansion Elkhart, IN Bellevue, OH Allentown, PA Enola, PA Conway, PA Knoxville, TN Chattanooga, TN Linwood, NC Sheffield, AL Birmingham, AL Macon, GA 27
Bellevue Yard Expansion
Bellevue Yard Expansion Current Handling – Philadelphia Area to UP Handling & Dwell Locations: Pavonia Conway Elkhart Chicago 29
Bellevue Yard Expansion Handling after expansion – Philadelphia Area to UP Handling & Dwell Locations: Pavonia Bellevue 30
Bellevue Yard Expansion Current Handling – Southeast to UP Handling & Dwell Locations: Chattanooga Elkhart Chicago 31
Bellevue Yard Expansion Handling after expansion – Southeast to UP Handling & Dwell Locations: Chattanooga Bellevue 32
Roanoke Hump Closure Columbus Philadelphia Roanoke Norfolk Atlanta Charleston 33
Norfolk Southern Update System Overview Technology / Productivity First Quarter Results Second Quarter Update Business Outlook Capital Structure 34
Railway Operating Revenue First Quarter 2013 vs. 2012 Components of Revenue Change $ in Millions $2,789 ($85) $85 $2,738 Revenue ($51) $2.7 Billion, down (2%) RPU 1Q 2012 Mix/Price Fuel Volume 1Q 2013 $1,535, down (5%) 1Q 2013 Revenue $ in Millions & y-o-y Percent Change Coal $635 Volume (17%) Merchandise $1,530 Intermodal 1,783,600 units, up 3% +2% $573 +9% 35
Railway Volume First Quarter 2013 vs. 2012 1Q 2013 Volume (000’s) Total volume up 3% & y-o-y Percent Change Coal down (4%) (9%) decline in Utility 1,783.6 1,730.8 2,000 21% rise in Export (14%) decline in Domestic Met (4%) Coal 1,500 Intermodal up 9% 7% gain in Domestic and 13% increase in International Intermodal +9% 1,000 Merchandise down (0.5%) Decline in MetCon and 500 Agriculture more than offset Merchandise (0.5%) strength in Chemicals and Automotive 0 1Q 2012 1Q 2013 36
Coal Market First Quarter 2013 vs. 2012 Percent of Total 1Q 2013 Volume Revenue: $635 Million, down (17%) Dom Ind RPU: $1,850, down (13%) Met 5% Export 12% 22% Utility 61% Units Drivers (000’s) Utility 250 Overall weak demand, Utility South down (16%) and a (3%) decline in Utility North 207.6 Weak demand results 200 Export in overall volume Increases in thermal coal and improving decline of (4%) 150 metallurgical volumes through Baltimore and Lamberts Point 100 Domestic Met 77.2 Impact of RG Steel comp and weaker 41.8 50 steel production 16.6 Industrial 0 General market declines and use of Utility Export Dom Met Ind higher efficiency equipment (9%) 21% (14%) (10%) 37
Intermodal Market First Quarter 2013 vs. 2012 Percent of Total 1Q 2013 Volume Revenue: $573 Million, up 9% Int’l RPU: $669, down (0.3%) 33% Domestic 67% Units Drivers (000’s) Domestic 600 570.2 Strong growth in Domestic Opening of new Crescent and International leads to 500 Corridor lanes and continued 9% overall volume gain highway conversions 400 286.2 300 International 200 Organic growth across existing 100 accounts 0 Domestic International 7% 13% 38
Merchandise Market First Quarter 2013 vs. 2012 Percent of Total 1Q 2013 Volume Revenue: $1.5 Billion, up 2% Paper MetCon RPU: $2,619, up 3% 13% Auto 27% 17% Ag Chem 25% 18% Units Drivers (000’s) MetCon Weaker steel volumes due to RG Steel comp 200 and decline in domestic raw steel production Strong gains in 154.8 Chemicals Agriculture 147.9 150 Decline in corn volumes to processors and impact of ethanol plant closures 106.0 98.7 Chemicals 100 76.6 Growth in crude by rail business Automotive 50 New business from existing customers Paper 0 Rebound in housing related commodities, MetCon Ag Chem Auto Paper offset weaker volumes of graphic paper (6%) (3%) 10% 2% -- 39
Operating Results First Quarter ($ Millions) (Unfavorable) 2013 2012 $ % Railway operating revenues $ 2,738 $ 2,789 $ (51) (2%) Railway operating expenses 2,047 2,044 (3) -- Income from railway operations $ 691 $ 745 $ (54) (7%) Railway operating ratio 74.8 73.3 (1.5) (2%) 40
Railway Operating Expenses First Quarter ($ Millions) $2 $3 $12 $16 $6 $2,047 $2,044 2012 Fuel Depreciation Purchased Materials Compensation 2013 Services & Rents & Other & Benefits Net Increase $3 / -% 41
Net Income and Diluted Earnings per Share First Quarter ($ Millions except per share) Net Income Diluted Earnings per Share Change vs. Prior Period: + 10% Change vs. Prior Period: + 15% - 5% * - 1% * $450 $1.41 $410 $390 $1.23 $1.22 2012 2013 2013* 2012 2013 2013* * Excluding Michigan land sale gain - please see reconciliation to GAAP posted on our web site. 42
Operating Efficiencies First Quarter 2013 vs. 2012 Crew Starts Improved 5 % Train & Engine Service Overtime Improved 9 % Re-Crews Improved 5 % Equipment Rents (Velocity Driven) Improved 4 % Carloads/Units per Locomotive Improved 6 % Gross Ton Miles/Gallon Improved 2 % 43
Norfolk Southern Update System Overview Technology / Productivity First Quarter Results Second Quarter Update Business Outlook Capital Structure 44
Current Railway Volume Second Quarter through Week 19 (May 11, 2013) 851,400 units, up 2% Change in Units Units (000) 2QTD13 vs. 2012 851.4 836.5 Chemicals 12% 12% Automotive Intermodal 5% 0% Paper (3%) Coal (4%) Agriculture (8%) MetCon 2012 2013 45
Recommend
More recommend
