Fourth Quarter 2010 Results Donald W. Seale Executive Vice President and Chief Marketing Officer
Railway Operating Revenue Fourth Quarter 2010 vs. 2009 4Q 2010 Revenue in $ Millions & Year-over-Year % Change Coal $685 +18% Intermodal $471 +16% Merchandise $1,236 +10% $2.4 Billion in Railway Operating Revenue Increase of $286 Million, or 14% Revenue Per Unit up 4% Volume up 9% Components of Revenue Growth In $ Millions 4Q 2009 4Q 2010 Revenue in $ Millions $2,106 $190 $96 $2,392 $2,106 $2,238 $2,430 $2,456 $2,392 4Q 2009 Volume Rev/Unit 4Q 2010 4Q 2009 1Q 2010 2Q 2010 3Q 2010 4Q 2010
Railway Operating Revenue 2010 vs. 2009 2010 Revenue in $ Millions & Year-over-Year % Change Coal $2,719 +20% Intermodal $1,796 +17% Merchandise $5,001 +20% $9.5 Billion in Railway Operating Revenue Increase of $1.5 Billion, or 19% Second highest revenue year Revenue Per Unit up 5% Volume up 14% Components of Revenue Growth In $ Millions 2006 2010 Revenue in $ Millions $7,969 $1,079 $468 $9,516 $9,407 $9,432 $10,661 $9,516 $7,969 2009 Volume Rev/Unit 2010 2006 2007 2008 2009 2010
Revenue Per Unit 2010 vs. 2009 4Q 2010 RPU Vs. 4Q 2009 Vs. 2009 2010 RPU Abs. % Chg. Abs. % Chg. Agriculture $2,150 $103 5% $2,113 $16 1% Chemicals $3,251 $100 3% $3,207 $146 5% MetCon $1,620 $153 10% $1,612 $134 9% Paper $2,214 $104 5% $2,171 ($1) (0%) Automotive $2,186 $350 19% $2,232 $411 23% Merchandise $2,215 $150 7% $2,193 $114 5% Intermodal $624 $17 3% $614 $9 1% Coal $1,732 $98 6% $1,747 $151 9% Total $1,400 $57 4% $1,407 $69 5%
Railway Volume 2010 Volume vs. 2009 4Q 2010 Volume (000) & y-o-y Percent Change Coal 395.3 +12% Intermodal 755.0 +13% Merchandise 558.5 +3% Fourth quarter volume of 1,708,800 Increase of 141,600 units, or 9% Record Agriculture volume 52-week high loadings for Agriculture, Coal & Intermodal 2010 volume of 6,764,100 2010 Volume (000) & y-o-y Percent Change Increase of 806,800 units, or 14% Coal 1,556.7 +10% Intermodal 2,927.1 +16% Merchandise 2,280.3 +14% Record Agriculture volume Strong project growth Corridor initiatives Conversions from the highway Economic recovery
Coal Comparisons Fourth Quarter 2010 vs. 2009 4Q 2010 Volume (000) & y-o-y Percent Change Total Coal revenue of $685 million, up $105 million, or 18% Industrial 18.0 (4%) Metallurgical 52.7 +36% Export 49.3 (18%) Utility 275.3 +16% Total Coal volume of 395,300 carloads, up 40,800 or 12% Utility volume increased due to stockpile rebuilding Metallurgical volume was up due to new business & increased steel production Export volume was impacted by strong 4Q 2009 comparisons 18% Year-over-Year Change 12% 6% Revenue Volume Rev/Car
Metallurgical Markets & Domestic Steel Production First Quarter 2007 Fourth Quarter 2010 NS Metallurgical Market Carloads 40,000 Domestic Steel Production - Tons 30,000,000 35,000 30,000 25,000 +36% 25,000,000 20,000,000 20,000 15,000,000 15,000 10,000 5,000 10,000,000 5,000,000 0 0 NS Domestic Met Carloads Domestic Steel Production Source: World Steel Association Crude Steel Production Statistics, Note: Domestic Steel Production includes Oct. and Nov. Data, and is forecasted for 4Q
Utility Coal Volume & Coal Stockpiles 2007-2010 Utility Carloads (000) & Coal Stocks (MMT) % Change in GWh vs. Previous Year 140 15% 120 100 80 Lamberts Point 60 40 20 10% 5% 0% (5%) (10%) 0 (15%) Utility Carloads (Thousands) Utility Stockpiles (MMT) Southeast Electricity Generation (GWh) Sources: EVA, EEI, Enerfax Daily
Export Coal Volume & World Steel Production First Quarter 2007 Fourth Quarter 2010 NS Export Carloads 70,000 World Steel Production - Tons 450,000,000 60,000 50,000 40,000 30,000 20,000 10,000 0 (18%) 400,000,000 350,000,000 300,000,000 250,000,000 200,000,000 150,000,000 100,000,000 50,000,000 0 Source: World Steel Association Crude Steel Production Statistics NS Export Carloads Note: World Steel Production includes Oct. and Nov. Data, and is forecasted for 4Q World Steel Production
Intermodal Comparisons Fourth Quarter 2010 vs. 2009 4Q 2010 Volume (000) & y-o-y Percent Change Total Intermodal revenue of $471 million, up $64 million or 16% Triple Crown 74.8 +4% Premium 70.3 +14% Domestic 351.5 +22% International 258.4 +4% Total Intermodal volume of 755,000 units up 84,200 or 13% Domestic volume up 22%, led by highway conversions International volume up 4%, driven by improving global demand Premium volume up 14%, driven by gains in parcel and LTL markets 16% Year-over-Year Change 13% 3% Revenue Volume Rev/Unit
NS Corridor Strategy Mechanicville Ayer Detroit Chicago Bethlehem NY/NJ Columbus Greencastle Philadelphia Cincinnati Pritchard Roanoke Lynchburg Norfolk Shreveport Memphis Corinth Birmingham Atlanta Charlotte Corridor Volume Increases 4Q 2010 vs. 2009 2010 vs. 2009 Premier Route 13% 18% Meridian PanAm Southern 21% 32% New Orleans Jacksonville Titusville Crescent Corridor 33% 31% Meridian Speedway 27% 36% Titusville 78% 146%
Merchandise Comparisons Fourth Quarter 2010 vs. 2009 4Q 2010 Volume (000) & y-o-y Percent Change Total Merchandise revenue of $1.2 billion, up $117 million, or 10% Automotive 73.5 (20%) Agriculture 162.0 +4% MetCon 147.3 Paper 79.1 +1% Chemicals 96.6 +9% +16% Total Merchandise volume of 558,500 carloads up 16,600, or 3% MetCon volume growth driven by new business & 11% increase in domestic steel production 10% Year-over-Year Change 3% 7% Revenue Volume Rev/Unit
9,000 7,500 Marcellus Shale Volume Growth 6,000 4,500 3,000 1,500 0 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 07 07 07 07 08 08 08 08 09 09 09 09 10 10 10 10
ThyssenKrupp, Calvert, AL Pictures of the first 7 shipments from ThyssenKrupp on October 18, 2010 4.3 million metric tons of carbon steel coil product annually Second 72-inch cold rolling mill to come online fall 2011
Merchandise Comparisons Fourth Quarter 2010 vs. 2009 4Q 2010 Volume (000) & y-o-y Percent Change Total Merchandise revenue of $1.2 billion, up $117 million, or 10% Automotive 73.5 (20%) Agriculture 162.0 +4% Paper 79.1 +1% Chemicals 96.6 +9% MetCon 147.3 +16% Total Merchandise volume of 558,500 carloads up 16,600, or 3% MetCon volume growth driven by new business & 11% increase in domestic steel production Record Agriculture volume led by fertilizer and corn 10% Year-over-Year Change 3% 7% Revenue Volume Rev/Unit
Merchandise Comparisons Fourth Quarter 2010 vs. 2009 4Q 2010 Volume (000) & y-o-y Percent Change Automotive 73.5 (20%) Agriculture 162.0 +4% MetCon 147.3 Paper 79.1 +1% Chemicals 96.6 +9% +16% Total Merchandise revenue of $1.2 billion, up $117 million, or 10% Total Merchandise volume of 558,500 carloads up 16,600, or 3% MetCon volume growth driven by new business & 11% increase in domestic steel production Record Agriculture volume led by fertilizer and corn Chemicals growth led by gains in petroleum, plastics and industrial intermediates Paper volume led by newsprint, pulpboard & lumber Automotive comparisons impacted by network redesign and quality holds Year-over-Year Change 10% 3% 7% Revenue Volume Rev/Unit
Outlook Business Portfolio Chemicals Agriculture Domestic Intermodal International Intermodal & Export Coal Domestic Met Coal & Steel Utility Coal Automotive Manufacturing recovery Build out of ethanol network and export grain growth Highway conversions Improving imports/exports Recovery in global steel production Falling stockpiles and increased electricity generation New business, improved auto production and sales Forest Products Uncertainty in housing, but improving paper markets
Long-Term Business Focus & Strategy Corridor Strategy Yield Management Profitability Improvement New Business Development Long Term Revenue & Volume Growth Improve Customer Satisfaction