First rst Q Quar uarter 201 2011 R Res esults Norfolk Southern - - PowerPoint PPT Presentation

First rst Q Quar uarter 201 2011 R Res esults

Norfolk Southern Corporation

First Quarter 2011 Results First Quarter 2011 Results First Quarter 2011 Results First Quarter 2011 Results

Donald W. Seale Executive Vice President Executive Vice President and Chief Marketing Officer

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Ground Breaking Date Completion Date Annual Volume Capability (Lifts) Mechanicville, NY July 2010 Spring 2012 70,000 Memphis, TN January 2011 Fall 2012 200,000 Memphis, TN January 2011 Fall 2012 200,000 Greencastle, PA June 2011 Fall 2012 85,000 Birmingham, AL June 2011 Fall 2012 100,000 Charlotte, NC Summer 2011 Summer 2013 200,000

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First Quarter 2011 Results

Mark Manion Executive Vice President And Chief Operating Officer

Quarterly Safety Performance

By Quarters 2010 - 2011

(Injury Ratio per 200,000 Employee-Hours) 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr 1.10 0.89 0.85 0.68 0.77

2010 2011

• 30%

Composite Service Performance

By Quarters 2010 - 2011

1st Qtr 2nd Qtr 3rd Qtr 4th Qtr 75.84% 76.57% 77.95% 76.39% 72.04%

2010 2011

• 5%

Train Speed

By Month 2010 - 2011

20 21 22 23 Jan Feb Mar Apr* May Jun Jul Aug Sep Oct Nov Dec Miles per Hour

2010 2011

* April 2011 data through April 22

Terminal Dwell

By Month 2010 - 2011

22 23 24 25 26 27 28 Jan Feb Mar Apr* May Jun Jul Aug Sep Oct Nov Dec Average Hours

2010 2011

* April 2011 data through April 22

T&E Employment Count

Total Qualified T&E Employees plus Trainees

10,000 10,500 11,000 11,500 12,000 12,500 13,000 Jan-10 Feb-10 Mar-10 Apr-10 May-10 Jun-10 Jul-10 Aug-10 Sep-10 Oct-10 Nov-10 Dec-10 Jan-11 Feb-11 Mar-11 Apr-11 May-11 Jun-11 Jul-11 Aug-11 Sep-11 Oct-11 Nov-11 Dec-11

Qualified Employees Trainees

Productivity Scorecard

1st Quarter - 2011 vs. 2010

Carload Volume Crew Starts Railroad Employees GTMs per Employee GTMs per Gallon GTMs per Train Hour +8% +5% +7% +2%

• 2%

+3%

Fi First st Qua uarter ter 20 2011 11 Re Resul ults ts

James A. Squires Executive Vice President Finance and Chief Financial Officer

Operating Results

First Quarter 2011 vs. 2010 ($ Millions)

First Qtr First Qtr Favorable (Unfavorable) 2011 2010 $ % Railway operating revenues $ 2,620 $ 2,238 $ 382 17%

Operating Results

First Quarter 2011 vs. 2010 ($ Millions)

First Qtr First Qtr Favorable (Unfavorable) 2011 2010 $ % Railway operating revenues $ 2,620 $ 2,238 $ 382 17% Railway operating expenses 2,020 1,683 (337) (20%) Income from railway operations $ 600 $ 555 $ 45 8% Railway operating ratio (OR) 77.1 75.2 (1.9) (3%) *OR excl. arbitration 74.9 75.2 0.3

• -%

*OR excl. arbitration and fuel lag 73.8 75.0 1.2 2%

*Please see reconciliation to GAAP posted on our web site.

Railway Operating Expense Analysis

First Quarter 2011 vs. 2010 ($ Millions)

Total Increase $337 Million / 20%

+ $7 + $81 + $135 Depreciation + $48 + $66 Materials and other Purchased services and rents Compensation and benefits Fuel

Fuel Expense Analysis

First Quarter 2011 vs. 2010 ($ Millions)

First Qtr 2010 First Qtr 2011 Increased Consumption Higher Prices $389 + $31 + $104 $254

6

Locomotive Diesel Fuel Average Prices

2009-2011

$1.39 $1.55 $1.85 $1.98 $2.13 $2.24 $2.19 $2.46 $2.88 $0.00 $1.00 $2.00 $3.00

Diesel Fuel Price Analysis

First Quarter 2011 vs. 2010 ($ per gallon)

Other WTI $0.64 First Qtr 2011 First Qtr 2010 WTI $2.24 WTI $1.87 $0.26 $2.88 $2.13

Railway Operating Expense Analysis

First Quarter 2011 vs. 2010 ($ Millions)

Total Increase $337 Million / 20%

+ $7 + $81 + $135 Depreciation + $48 + $66 Materials and other Purchased services and rents Compensation and benefits Fuel

Railway Operating Expense Analysis

First Quarter 2011 vs. 2010 ($ Millions)

Total Increase $337 Million / 20%

+ $7 + $81 + $135 Depreciation + $48 + $66 Materials and other Purchased services and rents Compensation and benefits Fuel

Compensation and Benefits Analysis

First Quarter 2011 vs. 2010 ($ Millions) (Increase)

Volume-related payroll $ (20) Payroll taxes (12) Medical benefits (11) Incentive and stock-based compensation (5) Pensions (4) Wage rates (3) Other (11) Total increase $ (66)

Railway Operating Expense Analysis

First Quarter 2011 vs. 2010 ($ Millions)

Total Increase $337 Million / 20%

+ $7 + $81 + $135 Depreciation + $48 + $66 Materials and other Purchased services and rents Compensation and benefits Fuel

Other Income - Net

First Quarter 2011 vs. 2010 ($ Millions)

First Qtr First Qtr Favorable 2011 2010 $ % Coal royalties $ 19 $ 15 $ 4 27% Interest on uncertain tax positions 2 (1) 3

• -%

All other 6 6

• -%

Other income - net $ 27 $ 20 $ 7 35% Interest expense on debt $ 112 $ 119 $ 7 6%

Income Before Income Taxes

First Quarter ($ Millions)

Change vs. Prior Period: + 13% $456 $515

2010 2011

Income Taxes

First Quarter ($ Millions)

Change vs. Prior Period: -5% $199 $190

2010 2011

Net Income and Diluted Earnings per Share

First Quarter ($ Millions except per share)

Net Income Diluted Earnings per Share

$257 $325 $0.90 $0.68 Change vs. Prior Period: + 26% Change vs. Prior Period: + 32%

2010 2011 2010 2011

Cash Flows

First Quarter 2011 vs. 2010 ($ Millions)

2011 2010 Increase (Decrease) Cash from operating activities $ 652 $ 758 $ (106) Capital expenditures (423) (256) 167 *Free cash flow $ 229 $ 502 $ (273) Share repurchases $ 343 $

• $

343 Dividends $ 142 $ 126 $ 16 Cash and cash equivalents at March 31 $ 236 $ 1,161 $ (925)

*Please see reconciliation to GAAP posted on our web site.