Dahlman Rose & Company Global Transportation Conference - - PowerPoint PPT Presentation

Dahlman Rose & Company Global Transportation Conference

September 7, 2011 Donald W. Seale Executive Vice President & Chief Marketing Officer

1

Agenda

• Summary of current business results
• Operating metrics/productivity update
• NS market drivers and outlook

Franchise Growth

2

• 6%

Strong Financial & Operating Results

1st Half Comparisons

$851 $1,288 $1,475

1H09 1H10 1H11

77.6% 72.4% 73.1%

1H09 1H10 1H11

Income from Railway Operations

Significant Gains over Two Years (vs. 1st Half 2009)

Net Income Diluted Earnings per Share Operating Ratio $ Mill. $ Mill. +108% +117% +73%

$424 $649 $882

1H09 1H10 1H11

$1.13 $1.72 $2.45

1H09 1H10 1H11

3

Franchise Growth

Solid Revenue Gains

1st Half Results

• $5.5 Billion in 1st Half 2011, up 18%

29% 19% 15% 15% 11% 7% 7% Coal Intermodal Automotive MetCon Agriculture Chemicals Paper Change in Revenue 1H 2011 vs 1H 2010 $3,800 $4,668 $5,486 1H09 1H10 1H11 23% 18%

4

• 11% Increase in RPU
• 6% Increase in Volume

Revenue $ Mill. Franchise Growth

$1,325 $1,413 $1,568 1H09 1H10 1H11

Improvement in RPU

1st Half Results

• $1,568 RPU in 1st Half 2011, up 11%

21% 13% 13% 12% 10% 8% 1%

Coal Chemicals Agriculture MetCon Paper Intermodal Automotive

Change in RPU 1H 2011 vs 1H 2010 7% 11%

5

RPU Franchise Growth

Solid Volume Gains

1st Half Results

• 3.5 Million Units in 1st Half 2011, up 6%

14% 10% 7% 3%

• 2%
• 3%
• 6%

Chemicals Paper Agriculture MetCon Coal Intermodal Automotive Change in Units 1H 2011 vs 1H 2010 2,868 3,303 3,498 1H09 1H10 1H11 15% 6%

6

Units (000) Franchise Growth

NS Railway Volume

Third Quarter-to-Date, 2011 vs. 2010

Source: AAR carloadings (which are reported weekly and may not equal NS’ reported volume)

87,750 58,518 108,439 49,203 43,920 496,543 245,867

Agriculture Chemicals MetCon Paper Automotive Intermodal Coal

(4%) (11%) 7% (4%) 8% 7% 3%

• 1,090,240 Units 3QTD (through 8/27/11)
• Up 40,140 Units or 4% vs. 2010

Units by Business Group and % Chg. 3QTD 2011 vs. 2010

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Franchise Growth

0.89 0.77 0.0 0.2 0.4 0.6 0.8 1.0 1.2 1.4 1.6 1.8 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 thru July

Injury Ratio per 200,000 Employee Hours

2010: NS Record Year

Leading Industry in Safety

NS Earns 22nd Consecutive Harriman Gold Medal in 2010

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Operational Excellence

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NS Train Speed

Year-to-Date through August 26, 2011

20.0 20.5 21.0 21.5 22.0

NS Train Speed (miles per hour)

Source: As reported publicly to the AAR

Operational Excellence

10

NS Terminal Dwell

Year-to-Date through August 26, 2011

Source: As reported publicly to the AAR

20 25 30 35

NS Terminal Dwell (hours)

Operational Excellence

Railroad Productivity Metrics

1st Half 2011 vs. 2010

11

2%

• 3%
• 0.3%

7% 5% 6% Carload Volume Crew Starts Railroad Employees GTMs per Employee GTMs per Gallon GTMs per Train Hour Operational Excellence

Business Outlook

• Improving volumes through project growth in crude oil and waste

products, and long-term improved feedstock prices Chemicals

• Increased domestic steel production, favorable seasonal paving

and construction, and new business gains Metals and Construction

• Increasing demand for U.S. agricultural products

Agriculture

• Continued European, Asian and South American demand

Export Coal

• Increased domestic steel production – low domestic met

stockpiles Domestic Metallurgical Coal

• Falling stockpiles and new business offsetting gas

displacement/lower industrial electric demand, record cooling days Utility Coal

• New business, improved auto production for 2nd half

Automotive

• Highway conversions

Domestic and Premium Intermodal

• Import growth and continued strength of exports

International Intermodal

• Improving rental construction market, more favorable paper

demand Paper and Forest Products

12

Franchise Growth

Long Term Revenue & Volume Growth

New Business Development Corridor Strategy Yield Management Profitability Improvement Improve Customer Satisfaction Operational Excellence

Long-Term Business Focus and Strategy

13

Franchise Growth