Slide 1: Forward-Looking Statements
1 Forward-Looking Statements This information and other statements by the company may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act with respect to, among other items: projections and estimates of earnings, revenues, margins, volumes, rates, co
Slide 2: Executive Summary
Executive Summary Michael Ward Chairman, President and Chief Executive Officer Second quarter performance . . . Volume 1,656K Revenue $3,069M Operating Income $963M Operating Ratio 68.6% EPS $0.52 Earnings Per Share Revenue growth — Solid pricing and volume growth $0.52 offset the impact of negati
Slide 3: Sales and Marketing Review: Macro-environment remains conducive for growth
Sales and Marketing Review Clarence Gooden Executive Vice President Sales and Marketing Macro-environment remains conducive for growth ISM Manufacturing Gross Domestic Product Purchasing Managers Index 2.4% 2.2% 2.3% 60 1.8% 55 1.5% 50 45 40 Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun 2012 Q1 20
Slide 4: Revenue up slightly year-over-year; Pricing solid across nearly all markets
Revenue up slightly year-over-year Revenue $3,069M Volume 1,656K RPU $1,853 Second Quarter Revenue Dollars in Millions $26 ($1) $3,069 $32 $3,012 Q2 2012 Rate/Mix Volume Fuel Recovery Q2 2013 7 Pricing solid across nearly all markets Revenue $3,069M Volume 1,656K RPU $1,853 Same Store Sales Inflat
Slide 5: Volume increases 1% for the second quarter; Coal revenue decreases 6%
Volume increases 1% for the second quarter Revenue $3,069M Volume 1,656K RPU $1,853 Year-Over-Year Change in Volume 5% 4% 5% 2% 0% (23%) Intermodal Industrial Construction Agricultural Domestic Export Sector Sector Sector Coal Coal 9 Coal revenue decreases 6% Revenue $770M Volume 310K RPU $2,484 Sec
Slide 6: Merchandise revenue increases 4%; Intermodal revenue increases 4%
Merchandise revenue increases 4% Revenue $1,782M Volume 702K RPU $2,538 Second Quarter Second Quarter Year-Over-Year Change — Increased shipments of crude oil drives industrial growth Revenue 4% — Agricultural sector flat as fertilizer Volume 3% growth offset lower grain volume RPU 1% — Increase i
Slide 7: Third quarter outlook is neutral to slightly favorable
Third quarter outlook is neutral to slightly favorable Outlook Markets Drivers Agriculture Products Higher anticipated crop yields to support volume growth Automotive Increase in light vehicle production Chemicals Supported by continued growth in oil and gas markets Favorable 72% of volume Int
Slide 8: Second quarter safety performance; On-time performance at record levels
Second quarter safety performance FRA Personal Injury Rate FRA Train Accident Rate 1.16 2.83 0.90 0.93 2.28 1.95 1.81 0.65 Q2 2010 Q2 2011 Q2 2012 Q2 2013 Q2 2010 Q2 2011 Q2 2012 Q2 2013 15 On-time performance remains at record levels On-time Originations On-time Arrivals 91% 82% 89% 78% 71% 78% 68%
Slide 9: System performance continues strong momentum; Resource management drives efficiency
System performance continues strong momentum Terminal Dwell (hours) Velocity (mph) 26.0 23.0 22.4 23.7 23.2 20.9 21.9 19.8 Q2 2010 Q2 2011 Q2 2012 Q2 2013 Q2 2010 Q2 2011 Q2 2012 Q2 2013 17 Resource management focus drives efficiency Second Quarter Year-Over-Year Change in Volume and Resources Carlo
Slide 10: Operations wrap-up . . .; Financial Review
Operations wrap-up . . . Safety Remain focused on continuous safety improvement Service Service measures sustained at record levels Efficiency Well on pace to exceed $150 million in savings Solutions Solving problems for customers, addressing nation’s freight needs, delivering shareholder va
Slide 11: Second quarter earnings summary . . .; Fuel lag headwind
Second quarter earnings summary . . . Second Quarter Results Dollars in millions, except EPS 2013 2012 Variance Revenue $ 3,069 $ 3,012 2% Expense 2,106 2,069 (2%) Operating Income $ 963 $ 943 2% Interest Expense (140) (139) Other Income (net) 9 5 Income Taxes (297) (297) Net Earnings $ 535 $ 512 4%
Slide 12: Total expense increases 2% overall; Labor and Fringe expense increases 4%
Total expense increases 2% overall Second Quarter 2013 Operating Expenses and Year-Over-Year Percentage Change Labor and Fringe $ 777 4% Material, Supplies, and Other 560 2% Fuel 397 (3%) Depreciation 276 5% Equipment Rent 96 (6%) Total Expenses $ 2,106 2% 23 Labor and Fringe expense increases 4% Em
Slide 13: MS&O expense increases 2%; Fuel expense decreases 3%
MS&O expense increases 2% MS&O Expense Second Quarter Dollars in Millions MS&O Analysis in Millions $560 $550 2012 MS&O Expense $ 550 $539 $525 $507 Variance Real Estate Gains 16 Inflation (10) Train Accidents and Other (16) Subtotal (10) Q2 Q3 Q4 Q1 Q2 2013 MS&O Expense $ 560 2012 2012 2012 2013 20
Slide 14: Financial wrap-up . . .; Concluding Remarks
Financial wrap-up . . . Earnings strong despite continued coal transition — Certain items help produce record quarter and record first half Second half earnings per share still faces key hurdles — Coal remains challenged and certain first half items will not continue 2013 EPS expected to be ro
Slide 15: Relentless pursuit of excellence . . .
Relentless pursuit of excellence . . . 29 30