Norfolk Southern Corporation · NYSE:NSC
Norfolk Southern — Q1 2023 Earnings Presentation
21 slides from Norfolk Southern's earnings presentation, Apr 26, 2023
Slide 1: Q1 2023 Earnings Call
Q1 2023 Earnings Call April 26, 2023
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 provision of the Private Securities Litigation Reform Act of 1995, as amended. These statements relate to future events or future perfor
Slide 3: CEO Remarks
01 CEO Remarks Alan Shaw President & Chief Executive Officer CUSTOMER-CENTRIC, OPERATIONS-DRIVEN 3
Slide 4: Safely Deliver Reliable and Resilient Service; Propel Growth; Drive Productivity
Safely Deliver Reliable and Resilient Service Propel Smart and Sustainable Growth Drive Continuous Productivity Improvement CUSTOMER-CENTRIC, OPERATIONS-DRIVEN 4
Slide 5: Financial Overview
02 Financial Overview Mark George Executive Vice President & Chief Financial Officer CUSTOMER-CENTRIC, OPERATIONS-DRIVEN 5
Slide 6: Key Financial Data
Key Financial Data Q1 2023 and comparison to Q1 2022 favorable / unfavorable $ millions except per share First Quarter Operating Operating Operating Net Earnings Revenue Expense Ratio Income Income per Share Q1 2023 GAAP $3,132 $2,421 77.3% $711 $466 $2.04 Eastern Ohio incident/response - ($387) 12.
Slide 7: Operating Expense Components
Operating Expense Components Adjusted Q1 2023(1) vs. Q1 2022 favorable / unfavorable $ millions $2,034 $19 $14 $41 ↑6% ↑5% $204 $1,830 ↑24% 11% $59 $71 ↑14% ↑11% Wage infl. ($49) Purch svcs ($50) Materials ($29) Road study ($8) Price ($14) EE levels ($36) Rents ($9) Other ($7) Stock comp $12 Claims
Slide 8: Financial Results
Financial Results Q1 2023 vs. Q1 2022 favorable / unfavorable $ millions except per share GAAP Adjusted Adjusted Variance vs ‘22 2022 2023 2023(1) $ % Income from railway operations $1,085 $711 $1,098 $13 1% Other income – net (5) 56 56 61 NM Interest expense on debt 168 175 175 7 4% Income before i
Slide 9: Free Cash Flow & Shareholder Distributions
Free Cash Flow & Shareholder Distributions First Three Months / $ millions $897 $470 $1,173 $428 $600 $745 Share $163 repurchases $297 $307 Dividends Cash from Property Free cash operations additions flow $140M 2022 2023 $179M $39M 2023 Free Cash Flow(1) Shareholder Distributions (1) Please see reco
Slide 10: Operations Overview
03 Operations Overview Paul Duncan Executive Vice President & Chief Operating Officer CUSTOMER-CENTRIC, OPERATIONS-DRIVEN 10
Slide 11: Everything Starts with Safety
Everything Starts with Safety Developing Our Craft Training Our Enhancing Our Employees Community Partners Culture Comprehensive behavior-based technical Through our Operations Awareness & All field supervisors have or will attend training starts at our world-class training Response Program, over 50
Slide 12: Safety Update
Safety Update FRA Personal Injury Index FRA Accident Rate FRA Mainline Accident Rate 1.52 4.20 1.26 3.99 1.01 Better Better Better 0.89 3.77 3.66 0.99 0.93 0.85 0.81 2020 2021 2022 Q1 2020 2021 2022 Q1 2020 2021 2022 Q1 2023* 2023* 2023* FRA Personal Injury Index calculates the number of FRA Train A
Slide 13: Service Update
Service Update 29.0 22.0 26.7 27.2 20.7 20.4 25.9 25.8 19.5 25.2 Better Better 19.1 23.8 18.2 17.5 Q1 Q2 Q3 Q4 Jan Feb Mar Q1 Q2 Q3 Q4 Jan Feb Mar 2022 2022 2022 2022 '23 '23 '23 2022 2022 2022 2022 '23 '23 '23 Train Speed (mph) Terminal Dwell (hours) CUSTOMER-CENTRIC, OPERATIONS-DRIVEN 13
Slide 14: Robust Hiring Pipeline in 2023
Robust Hiring Pipeline in 2023 Conductor Trainees Qualified T&E 932 937 • Redeploying crews to 922 925 7,564 challenged portions of the network 7,398 636 • Focused on crew bases below 7,218 minimum staffing levels based on anticipated demand 6,937 6,987 • Equipping our workforce to provide robust se
Slide 15: Productivity Update
Productivity Update Locomotives Workforce Fuel Efficiency Miles per Day GTMs per T&E Hour Worked Gallons per kGTM 10% 205 1% 22,118 1.16 10% 1.15 187 Better Better Better 20,001 Q1 Q1 Q1 Q1 Q1 Q1 2022 2023 2022 2023 2022 2023 CUSTOMER-CENTRIC, OPERATIONS-DRIVEN 15
Slide 16: Market Overview
04 Market Overview Ed Elkins Executive Vice President & Chief Marketing Officer CUSTOMER-CENTRIC, OPERATIONS-DRIVEN 16
Slide 17: Merchandise and Coal Strength Offsets Intermodal Weakness
Merchandise and Coal Strength Offsets Intermodal Weakness Q1 2023 vs. Q1 2022 / Revenue change $ millions / favorable / unfavorable $206 $51 $3,132 $2,915 ($40) Q1 2022 Q1 2023 Merchandise Intermodal Coal Total Revenue $1,878M 12% $814M (5%) $440M 13% $3,132M 7% Volume 565,300 5% 916,800 (4%) 173,80
Slide 18: Market Outlook
Merchandise • US Light Vehicle Production • Steel Demand • Pipeline Capacity Intermodal Market Outlook • Inventories / American Consumer • Truck Capacity • Inland Point Intermodal Demand Coal • Coal Production • Natural Gas Prices • Stockpiles CUSTOMER-CENTRIC, OPERATIONS-DRIVEN 18
Slide 19: Norfolk Southern to Serve Scout Motors' New EV Plant in SC
Norfolk Southern to Serve Scout Motors’ New EV Plant in SC CUSTOMER-CENTRIC, OPERATIONS-DRIVEN 19
Slide 20: Commitment to East Palestine
FROM THE BEGINNING, WE HAVE BEEN GUIDED BY ONE PRINCIPLE: WE ARE GOING TO DO WHATEVER IT TAKES TO MAKE IT RIGHT FOR EAST PALESTINE AND THE SURROUNDING AREAS.
Slide 21: Thank You
Thank You www.norfolksouthern.com