Stifel Nicolaus Transportation Conference February 15, 2011 Wick Moorman Chairman, President & CEO Norfolk Southern Corporation
“ Everybody talks about the weather, but nobody does anything about it.” -- Charles Dudley Warner Editorial, Hartford Courant [Aug. 24, 1897] 2
Railway Volume First Quarter through Week 6 2011 vs. 2010 1QTD 2011 vs. 2010 Units Abs. % Chg. Agriculture 72,187 (1,571) (2%) Chemicals 44,029 (997) (2%) MetCon 62,598 4,109 7% Paper 37,504 1,122 3% Automotive 32,464 2,650 9% Merchandise 248,782 5,223 2% Intermodal 338,427 29,228 9% Coal 187,622 26,531 16% Total 774,831 60,982 9% Source: AAR carloadings, which are reported weekly and may not equal NS' reported volumes.
Outlook – Business Portfolio General Merchandise Chemicals • Manufacturing recovery • Build out of ethanol network and export grain Agriculture growth • New business, improved auto production and Automotive sales Steel • Recovery in global steel production • Uncertainty in housing, but improving paper Forest Products markets
NS Manufacturing Network Flows Volumes 2010 vs. 2009 Metals/Construction 25% Chemicals 18% Agriculture 11% Paper 7% Maps use variable scales Automotive 0%
Outlook – Business Portfolio Intermodal Domestic Intermodal • Truckload conversions International Intermodal • Improving imports/exports Premium • New business opportunity
U.S. Demographics Within our service territory: 74% of the 2009 US population 58% of total energy consumption in U.S. 63% of U.S. manufacturing One study suggests that at least 30 million truck shipments over 550 miles touch our service territory
Truck Volume in 2007
Projected Truck Volume in 2040
NS Corridor Strategy Mechanicville Ayer Detroit Bethlehem Chicago NY/NJ Greencastle Philadelphia Columbus Cincinnati Lynchburg Pritchard Roanoke Norfolk Charlotte Memphis Corinth Corridor Volume 2010 vs. Increases 2009 Atlanta Birmingham Premier Route 18% Shreveport Meridian PanAm Southern 32% Jacksonville Crescent Corridor 31% New Orleans Meridian 36% Speedway Titusville 146% Titusville
Outlook – Business Portfolio Coal • Falling stockpiles and increased electricity Utility Coal generation Export Coal • Improving exports Domestic Met Coal • Recovery in global steel production
2009-2010 NS Origin Coal Volume Powder River Basin (Tons) 2009-30.1 M 2010-32.8 M Northern Appalachia 2009-41.3 M 2010-45.3 M Illinois 2009-10.8 M 2010-11.1 M Central Appalachia 2009-62.3 M 2010-64.8 M Notes: Excludes coke and iron ore volume.
Lamberts Point Coal Docks
Meeting The Challenge • Employees • Equipment: – Locomotives and Freight Cars • Locomotive and Freight Car Maintenance 15
Outlook – Business Portfolio Chemicals • Manufacturing recovery • Build out of ethanol network and export grain Agriculture growth • Truckload conversions Domestic Intermodal International Intermodal & • Improving imports/exports Export Coal Domestic Met Coal & Steel • Recovery in global steel production • Falling stockpiles and increased electricity Utility Coal generation • New business, improved auto production and Automotive sales • Uncertainty in housing, but improving paper Forest Products markets
One line, infinite possibilities 17
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