Norfolk Southern Corporation · NYSE:NSC
Norfolk Southern — Q1 2025 Earnings Presentation
24 slides from Norfolk Southern's earnings presentation, Apr 23, 2025
Slide 1: Q1 2025 Earnings Call
Q1 2025 EARNINGS CALL April 23, 2025
Slide 2: Forward-Looking Statements / Non-GAAP Measures
FORWARD-LOOKING STATEMENTS / NON-GAAP MEASURES This presentation and the related materials contain "forward-looking statements" within the meaning of the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995, as amended. These statements relate to future events or future p
Slide 3: Opening Remarks
01 OPENING REMARKS Mark George President & Chief Executive Officer
Slide 4: Operations Overview
02 OPERATIONS OVERVIEW John Orr Executive Vice President & Chief Operating Officer
Slide 5: Heartland Corridor Storm Challenge
HEARTLAND CORRIDOR Storm Challenge 52 Hours OH Portsmouth WVRoanoke 48 Hours KY Bluefield VA 37 locations required repairs between washouts, scour, fill instability, culvert repair, surface issues, rockslides, etc. of various magnitudes 5
Slide 6: Safety Update
SAFETY UPDATE Investment in Safety continues to drive results while building long-term culture change FRA Personal Injury Index FRA Accident Rate FRA Mainline Accident Rate 4.53 1.16 3.95 1.09 0.93 1.04 Better Better Better 3.01 0.62 0.88 0.54 0.35 2.27 2022 2023 2024 Q1 2025 2022 2023 2024 Q1 2025
Slide 7: Network Update
NETWORK UPDATE NETWORK HEALTH ASSET EFFICIENCY CUSTOMER FACING AAR Terminal Dwell (Hours) Car Miles per Day Intermodal Svc Composite 91% 23.7 118 89% 117 22.9 116 87% 86% 22.5 22.5 85% 22.1 Better Better Better 113 107 Q1 Q2 Q3 Q4 Q1 Q1 Q2 Q3 Q4 Q1 Q1 Q2 Q3 Q4 Q1 2024 2024 2024 2024 2025 2024 2024 2
Slide 8: PSR 2.0 Transformation
PSR 2.0 Safety, Service, and Cost TRANSFORMATION Thoroughbred Academy • Generational Railroaders • Enterprise Safety Culture Zero-Based Operating Plan • Service Standards & Reliability Delivering Financial Commitment • Cost Structure Cost Takeout Fuel On Track ~$550M In-Flight • Four Consecutive Qua
Slide 9: Market Overview
03 MARKET OVERVIEW Ed Elkins Executive Vice President & Chief Commercial Officer
Slide 10: 1st Quarter 2025 Results
1ST QUARTER 2025 RESULTS Q1 2025 vs. Q1 2024 / Revenue change $ in millions / favorable / unfavorable Q1 2024 Q1 2025 39 out of 40 Merchandise Intermodal Coal Fuel Total consecutive quarters of y-o-y Volume 552,200 (2%) 1,022,900 3% 164,700 (1%) 1,739,800 1% RPU (less fuel) (1) Revenue $1,863M – $76
Slide 11: Market Outlook
Merchandise • Vehicle Production • Manufacturing Activity • Chemicals (Non-Energy) Intermodal MARKET • East Coast Share Normalization OUTLOOK • Import Demand • Truck Capacity Coal • Seaborne Prices • Export Demand • Utility Demand Sentiment versus prior expectation 11
Slide 12: Industrial Development Driving Long Term Growth
INDUSTRIAL DEVELOPMENT DRIVING LONG TERM GROWTH • NS’s Industrial Development pipeline sits at a historic high • 517 projects • 25% increase in activity relative to Q1 2024 • 116 announced projects • 150K new annualized carloads • Full ramp up over 3 years • NS remains cautiously optimistic on conti
Slide 13: Financial Results
04 FINANCIAL RESULTS Jason Zampi Executive Vice President & Chief Financial Officer
Slide 14: Reconciliation of First Quarter 2025 Non-GAAP Measures
RECONCILIATION OF FIRST QUARTER 2025 NON-GAAP MEASURES $ in millions, except per share Non-GAAP adjustment Increase / (Decrease) E. Ohio GAAP Adjusted (1) Incident Q1’25 net recovery Q1’25 Revenues $2,993 – $2,993 Operating expenses $1,847 $185 $2,032 Operating ratio 61.7% 620 bps 67.9% Operating in
Slide 15: Adjusted Results
ADJUSTED (1) RESULTS First quarter versus prior year and prior quarter favorable / unfavorable $ millions, except per share Adjusted (1) Q1’25 vs. Q1’24 Q1’25 vs. Q4’24 Q1’25 Q1’24 Q4’24 Variances Variances Revenues $2,993 $3,004 $3,024 ($11) (--%) ($31) (1%) Operating expenses $2,032 $2,100 $1,962
Slide 16: Adjusted Operating Expenses
ADJUSTED (1) OPERATING EXPENSES First quarter 2025 vs. 2024 favorable / unfavorable $ millions $2,100 $3 $9 ↑3% $2,032 $40 ↑–% ↓14% $30 $10 ↓6% ↓5% Price $28 Purch. Svcs. $25 Land sales $23 Productivity $55 $68 ↓3% Efficiency $12 Rents $15 Materials $4 Benefits $12 Storm ($10) Storm ($10) Storm ($15
Slide 17: Adjusted Financial Results
ADJUSTED (1) FINANCIAL RESULTS First quarter 2025 vs. 2024 favorable / unfavorable $ millions, except per share Revenue Operating Operating Operating Net Earnings $11 Expense Ratio Income Income Per Share –% $68 $3,004 $2,993 3% 200 $2,100 $2,032 69.9% bps $0.20 8% 67.9% $57 $2.69 6% $44 $2.49 8% $9
Slide 18: Closing Remarks
05 CLOSING REMARKS Mark George President & Chief Executive Officer
Slide 19: 2025 Guidance
2025 GUIDANCE • Building on operational momentum across the network • >$150M of year-over-year productivity savings in 2025 • 3% revenue growth Increased macro uncertainty • 150 bps of year-over-year Operating Ratio improvement • Focused on narrowing the OR gap to peers • Improving cash flow and sha
Slide 20: Thank You
Thank You www.NorfolkSouthern.com
Slide 21: Appendix
APPENDIX 21
Slide 22: First Quarter 2024 Results
FIRST QUARTER 2024 RESULTS $ in millions, except EPS Non-GAAP adjustments Increase / (Decrease) E. Ohio Restructuring Favorable GAAP Advisory Deferred Tax Adjusted Incident and Other Q1’24 Costs Adjustment Q1’24 Costs Charges Revenues $3,004 – – – – $3,004 Operating expenses $2,791 ($592) ($99) – –
Slide 23: Fourth Quarter 2024 Results
FOURTH QUARTER 2024 RESULTS $ in millions, except EPS Non-GAAP adjustments Increase / (Decrease) Gains on Restructuring GAAP E. Ohio and Other Shareholder Adjusted (1) Railway Line Advisory Costs Q4’24 Incident Q4’24 Transactions Charges Revenues $3,024 – – – – $3,024 Operating expenses $1,893 $43 $
Slide 24: Network Metrics (Definitions)
NETWORK METRICS (DEFINITIONS) • Terminal Dwell: The average time a car resides at the specified terminal location expressed in hours. The measurement begins with a customer release, received interchange, or train arrival event and ends with a customer placement (actual or constructive), delivered or