Second Quarter 2012 Results Donald W. Seale Executive Vice - - PowerPoint PPT Presentation

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Second Quarter 2012 Results

Donald W. Seale Executive Vice President and Chief Marketing Officer

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Revenue $2.9 Billion, up $8 Million RPU $1,597, down ($7) per unit Volume 1,799,300 units, up 12,400 loads

2Q 2011 Volume RPU 2Q 2012

$2,866 $2,874 $20 ($12) 2Q 2012 Revenue $ in Millions & y-o-y Percent Change Components of Revenue Growth $ in Millions

Railway Operating Revenue

Second Quarter 2012 vs. 2011

Merchandise $1,556 +9% Coal $755 (15%) Intermodal $563 +4%

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Second Quarter RPU

• vs. 2011

Abs.

• vs. 2011

% Chg. Agriculture $2,464 $4

• MetCon

$2,047 $201 11% Paper $2,593 $173 7% Chemicals $3,844 $117 3% Automotive $2,431 $97 4% Merchandise $2,576 $115 5% Intermodal $671 ($3)

• Coal

$2,126 ($91) (4%) Total $1,597 ($7)

• Revenue Per Unit

Second Quarter 2012 vs. 2011

2Q 2012 Volume (000’s) & y-o-y Percent Change

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500 1,000 1,500 2,000 2Q 2011 2Q 2012 Coal Merchandise Intermodal +4% +5% (12%) 1,786.9 1,799.3

Coal down (12%)

(21%) decline in Utility 6% gain in Export 2% gain in Domestic Met

Intermodal up 5%

10% gain in Domestic more than

• ffsets (1%) decline in

International

Merchandise up 4%

Gains in Automotive, MetCon and Chemicals more than offset decline in Paper

Total volume up 1%

Railway Volume

Second Quarter 2012 vs. 2011

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Revenue $755 Million, down (15%) RPU $2,126, down (4%) Volume 354,800 units, down (12%) Crew Starts Reduced by (14%)

Coal Comparisons

Second Quarter 2012 vs. 2011

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Utility 204.0 (21%) Export 80.0 +6% Met 53.1 +2% Industrial 17.7 (4%)

Utility

Continued competition from natural gas and reduced electric demand from mild temperatures

Export

Lamberts Point down (6%) Baltimore up 27% New export steam coal

Domestic Met

Strong demand for automotive steel offset by reduced volumes due to plant closure Volume of 354,800 units, down (12%)

2Q 2012 Volume (000’s) & y-o-y Percent Change

Coal Market

Second Quarter 2012 vs. 2011

Coal Market

28% 29% 23% 15% 5% Utility North Utility South Export Domestic Met Industrial

Relative Length of Haul in Coal Market Segments

% of 2Q Volume

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Revenue $563 Million, up 4% RPU $671, down ($3) per unit Volume 840,400 units, up 5%

Intermodal Comparisons

Second Quarter 2012 vs. 2011

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Domestic

Continued highway conversions Tightening truck capacity

Premium

Increased volumes with key accounts

International

Negative comp partially offset by

• ther gains across International

customer base

Triple Crown

Modest retail decline

Volume of 840,400 units, up 5% 2Q 2012 Volume (000’s) & y-o-y Percent Change

Domestic 427.4 +10% International 273.5 (1%) Premium 64.5 +3% Triple Crown 75.0 (1%)

Intermodal Market

Second Quarter 2012 vs. 2011

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Intermodal Market

Improved Efficiency

25 50 75 100 2Q 2011 2Q 2012 77% Percent of Containers

• n Stack Cars

87% +5% (3%) Volume Crew Starts Intermodal Efficiency 2Q 2012 vs. 2011

Corridor 2Q 2012

• vs. 2011

1H 2012

• vs. 2011

Pan Am Southern 3% 9% Crescent Corridor 22% 22% Heartland Corridor 27% 23% Meridian Speedway 14% 12%

Intermodal Corridors

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Revenue $1.6 Billion, up 9% RPU $2,576, up 5% Volume 604,100 units, up 4% Crew Starts Up 2%

Merchandise Comparisons

Second Quarter 2012 vs. 2011

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Automotive

Increased light vehicle production and project gains

MetCon

Increased domestic steel production and strong demand in materials for natural gas drilling

Chemicals

Growth in crude oil and plastics

Agriculture

Fewer corn shipments offset by increased feed

Paper

Declines in waste, pulp and graphic paper partially offset by gains in lumber

Volume of 604,100 units, up 4%

2Q 2012 Volume (000’s) & y-o-y Percent Change

Agriculture 150.1

• MetCon

180.2 +4% Chemicals 98.5 +3% Paper 76.9 (3%) Automotive 98.4 +16%

Merchandise Market

Second Quarter 2012 vs. 2011

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Coal Utility coal impacted by high stockpiles and competition from natural gas Moderating strength, but continued growth in the domestic metallurgical market to support steel production Weaker demand in European market for both met and steam coal Continued opportunities in Asian market Intermodal Increasing opportunities for highway conversion - tightening truck capacity July 1 opening of new Memphis terminal Growth with NS international shipping partners Expansion in premium market segment Merchandise Project growth in crude oil and demand for plastics Moderate growth in materials for natural gas drilling operations Solid automotive/steel production and new business development projects Weather related concerns with the U.S. corn crop

Business Outlook

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Thank You