Stifel Nicolaus Transportation Conference February 14, 2012 James A. Squires Executive Vice President Finance and Chief Financial Officer
Norfolk Southern System
Norfolk Southern Update Recent Results 4 th Qtr Highlights 4 th Qtr Revenues Full Year Summary Current Status 1 st Qtr-to-date Volumes 1 st Qtr-to-date Service Performance Business Outlook 2012 Capital Budget Shareholder Returns
Fourth Quarter Financial Highlights ($ in millions, except per share) 4Q11 vs. 4Q10 Change Revenues $405 17% Income From Ops $158 25% Net Income $78 19% Earnings per Share $0.33 30%
Railway Volume Fourth Quarter Automotive 21% 1,807 MetCon 12% 1,709 6% Intermodal 11% Coal 3% 1,567 9% Paper Agriculture Chemicals -6% -7% -10% 4Q09 4Q10 4Q11 Change in Units 4Q11 vs. 4Q10 Units (000)
Coal Market Fourth Quarter 2011 vs. 2010 Volume of 405,800 units, up 3% Export Strong global demand for steel Lamberts Point up 37% Baltimore up 6% Utility Reduced electric demand from mild temperatures & competition from gas Domestic Met Greater coking availability and continued domestic demand for steel Industrial New business 4Q 2011 Volume (000 s) & y-o-y Percent Change Industrial 19.4 +8% Met 57.1 +8% Export 62.7 +27% Utility 266.6 (3%) 6
Revenue Per Unit Fourth Quarter Coal 21% $1,548 MetCon 17% Chemicals 14% $1,400 11% Agriculture Paper 12% 10% $1,343 4% Automotive 10% Intermodal 6% Change in RPU 4Q11 vs. 4Q10 4Q09 4Q10 4Q11 RPU
Total Railway Revenues Fourth Quarter Automotive MetCon 34% 31% $2,106 $2,392 17% $2,797 Coal Intermodal 24% 18% 14% Agriculture Paper Chemicals 4% 4% 3% 4Q09 4Q10 4Q11 Change in Revenue 4Q11 vs. 4Q10 Revenue in $ Mill.
Composite Service Performance By Quarters 2010-2011 2010 2011 75.8% 72.2% 76.6% 76.6% 77.9% 78.2% 76.4% 76.3% 1st Qtr 2nd Qtr 3rd Qtr 4th Qtr
Productivity Scorecard 4 th Quarter - 2011 vs. 2010 Volume +6% Crew Starts +5% Railroad Employees +5% GTMs per Employee +1% GTMs per Gallon +2% GTMs per Train Hour +2%
Financial Summary Change vs. Prior Year ($ in millions, except per share) 2011 vs. 2010 Revenues $1,656 17% Income From Ops $537 20% Net Income $420 28% Earnings per Share $1.45 36%
Current Railway Volume First Quarter through Week 6 (February 11, 2012) Change in Units QTD12 vs. QTD11 Units (000) Quarter-to-date Automotive MetCon 13% 25% 775 778 --% Intermodal 4% -2% -3% Agriculture Chemicals 714 9% -6% Paper -11% Coal 2010 2011 2012
Source: NOAA Average heating degree days within NS region in January. Heating Degree Days in NS Region January 2012 vs. January 2011 2,000 Heating Degree Days January 1,500 1,000 (25%) 500 0 2011 2012
Train Speed 2011 through February 3, 2012 25.0 24.0 23.0 22.0 21.0 20.0 19.0 18.0 NS Train Speed (miles per hour) Better Source: As reported publicly to the AAR
Train Speed 2011 through February 3, 2012 25.0 24.0 23.0 22.0 21.0 20.0 19.0 18.0 NS Train Speed (miles per hour) Better Source: As reported publicly to the AAR
Train Speed 2011 through February 3, 2012 25.0 24.0 23.0 22.0 21.0 20.0 19.0 18.0 NS Train Speed (miles per hour) Better Source: As reported publicly to the AAR
Terminal Dwell 2011 through February 3, 2012 33.0 31.0 29.0 27.0 25.0 23.0 21.0 19.0 17.0 NS Terminal Dwell (hours) Better Source: As reported publicly to the AAR
2012 Business Outlook Merchandise Project growth in crude oil and waste products Growth in ethanol to terminals Increasing demand for materials in natural gas drilling operations Stronger domestic steel and automotive production
2012 Business Outlook Merchandise Project growth in crude oil and waste products Growth in ethanol to terminals Increasing demand for materials in natural gas drilling operations Stronger domestic steel and automotive production Intermodal Increasing opportunities for highway conversion Tightening truck capacity
2012 Business Outlook Merchandise Project growth in crude oil and waste products Growth in ethanol to terminals Increasing demand for materials in natural gas drilling operations Stronger domestic steel and automotive production Intermodal Increasing opportunities for highway conversion Tightening truck capacity Coal Impact of mild winter and competition from natural gas New opportunities for Illinois Basin coal Export driven by port capacity improvements, new coal production and new steam coal opportunities
2012 Capital Improvement Budget Replacement/Core vs. Growth vs. PTC Total Spending = $2.4 billion Strengthen the franchise 23% Renew the coal fleet Grow Intermodal network 10% 67% Invest in business growth Replacement/Core Growth/Productivity Positive Train Control
Annual Dividend Per Share $1.66 Compound annual growth rate of 23% for 2002 through 2011 $0.96 $1.22 $1.36 $1.40 $0.68 $0.26 $0.30 $0.36 $0.48 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 +15% +20% +33% +42% +41% +27% +11% +3% +19%
Balanced Cash Flow Utilization 2006 through 2011 $8.9 Billion* $9.0 Billion $6.2 Billion $2.7 Billion Dividends Share Repurchases Capital Expenditures * See reconciliation to GAAP of Total Shareholder Distributions posted on our website, www.nscorp.com.
Thank You