Norfolk Southern Corporation · NYSE:NSC
Norfolk Southern — Q3 2024 Earnings Presentation
21 slides from Norfolk Southern's earnings presentation, Oct 22, 2024
Slide 1: Q3 2024 Earnings Call
Q3 2024 EARNINGS CALL October 22, 2024
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: Safety Update
SAFETY UPDATE Sustained positive performance has significantly reduced mainline accident rate. Focus remains on leading causes of injuries. FRA Personal Injury Index FRA Accident Rate FRA Mainline Accident Rate 1.28 4.53 1.20 4.06 1.10 3.73 1.04 Better Better Better 3.26 0.93 0.83 0.59 0.34 2021 202
Slide 6: Network Update
NETWORK UPDATE Network Health Asset Efficiency Customer Facing Terminal Dwell (hours) Car Miles per Day Intermodal Svc Composite 114 91% 110 89% 24.6 23.9 104 86% Better Better 23.2 Better 23.0 101 101 22.5 82% 78% Q3 Q4 Q1 Q2 Q3 Q3 Q4 Q1 Q2 Q3 Q3 Q4 Q1 Q2 Q3 2023 2023 2024 2024 2024 2023 2023 2024
Slide 7: Update: Closing the Margin Gap
ACCELERATING URGENT, SUSTAINABLE COST CONTROL Q2 Q3 Active Locomotives Reduced 300+ 500+ YTD YTD Cars On Line Reduced 7,000+ 8,000+ YTD YTD UPDATE: CLOSING Cost Structure Improvement OPEX(1) per GTM 6% vs Q1 9% vs Q1 THE MARGIN GAP Fuel Efficiency Improvement Gallons per kGTM 4% y/y 5% y/y Annualize
Slide 8: Hurricane Helene Recovery Efforts
HURRICANE HELENE RECOVERY EFFORTS • Most significant weather system to impact NS network since Hurricane Katrina • 35 miles of track damage • 54 slide fences damaged • 5 bridges damaged • 150k tons of ballast • Over 15,000 downed trees cleared • 1000+ locations with commercial power out • All core r
Slide 9: Market Overview
03 MARKET OVERVIEW Ed Elkins Executive Vice President & Chief Marketing Officer
Slide 10: 3rd Quarter 2024 Results
3RD QUARTER 2024 RESULTS Q3 2024 vs. Q3 2023 / Revenue change $ millions / favorable / unfavorable Q3 2023 Q3 2024 Merchandise Intermodal Coal Total Revenue $1,861M 3% $763M 4% $427M (2%) $3,051M 3% Volume 563,900 2% 1,052,200 9% 185,300 11% 1,801,400 7% RPU $3,299 2% $726 (5%) $2,306 (11%) $1,694 (
Slide 11: Q4 Market Outlook
Merchandise • Vehicle Production • Agriculture Markets Q4 MARKET • Steel Demand OUTLOOK Intermodal • Import/Export Demand • Truck Capacity • Premium Market Coal • Seaborne Coal Prices • Export Demand • Utility Coal Demand Sentiment versus prior expectation A BETTER WAY 11
Slide 12: Q3 Financial Results
04 Q3 FINANCIAL RESULTS Jason Zampi Executive Vice President, Chief Financial Officer & Treasurer
Slide 13: Third Quarter Results
THIRD QUARTER RESULTS $ in millions, except EPS Non-GAAP adjustments Increase / (Decrease) GAAP Gains on Restructuring Adjusted E. Ohio Railway Line and Other Incident Q3’24 Sales Charges Q3’24 Revenues $3,051 - - - $3,051 Operating expenses $1,455 $159 $380 ($60) $1,934 Operating ratio 47.7% 520 bp
Slide 14: Third Quarter Adjusted Results
THIRD QUARTER ADJUSTED RESULTS (1) $ in millions, except EPS favorable / unfavorable Adjusted (1) Y-o-Y Q3-Q2 Q3’24 Q3’23 Q2’24 Variances Variances Revenues $3,051 $2,971 $3,044 $80 3% $7 -% Operating expenses $1,934 $2,052 $1,981 ($118) (6%) ($47) (2%) Operating ratio 63.4% 69.1% 65.1% 570 bps 170
Slide 15: Sequential Operating Revenues
SEQUENTIAL OPERATING REVENUES Q3 2024 vs. Q2 2024 $ millions favorable / unfavorable ↑5% ↑8% $27 $30 $3,051 $3,044 $29 ↓2% $21 ↓8% $7 -% +14% Vol. +5% Vol. -2% Vol. +3% Vol. -5% RPU --% RPU +1% RPU -2% RPU Q2 2024 Coal Intermodal Merchandise Fuel Surcharge Q3 2024 (ex fuel) (ex fuel) (ex fuel) Reven
Slide 16: Sequential Operating Expenses
SEQUENTIAL OPERATING EXPENSES Adjusted Q3 2024(1) vs. Adjusted Q2 2024(1) $ millions favorable / unfavorable $1,981 ↑11% ↑1% $19 $1,934 $41 $4 $47 ↓16% $19 $10 ↓2% ↓4% ↓1% Recoveries $20 Purch Svcs $14 Inc. Comp $17 Claims $16 Price $18 Rents $5 ↓Employees $13 Materials $4 Wage Infl. $24 Other $1 (1
Slide 17: Closing Remarks
05 CLOSING REMARKS Mark George President & Chief Executive Officer
Slide 18: Thank You
Thank You www.norfolksouthern.com
Slide 19: Appendix
APPENDIX A BETTER WAY 19
Slide 20: Reconciliation of Q3 2023 Non-GAAP Measures
RECONCILIATION OF Q3 2023 NON-GAAP MEASURES $ in millions, except EPS Non-GAAP adjustment Increase / (Decrease) GAAP E. Ohio Adjusted (1) Incident Q3’23 Costs Q3’23 Revenues $2,971 - $2,971 Operating expenses $2,215 ($163) $2,052 Operating ratio 74.6% (550) bps 69.1% Operating income $756 $163 $919
Slide 21: Reconciliation of Q2 2024 Non-GAAP Measures
RECONCILIATION OF Q2 2024 NON-GAAP MEASURES $ in millions, except EPS Non-GAAP adjustments Increase / (Decrease) GAAP E. Ohio Restructuring Shareholder Adjusted (1) Incident and Other Advisory Q2’24 Costs Charges Costs Q2’24 Revenues $3,044 - - - $3,044 Operating expenses $1,913 $65 $3 - $1,981 Oper