Wells Fargo Securities 2012 Industrial and Construction Conference
May 8, 2012
Deb ButlerExecutive Vice President
Planning and CIO
Agenda
First Quarter Recap
Improvements in Operating Metrics
Looking Ahead
Revenue$2.8 Billion, up 6%
RPU$1,611, up 5%
Volume1,730,800 units, up 1%
1Q 2011 RPU Volume 1Q 2012
$2,620$2,789$139 $30
1Q 2012 Revenue $ in Millions & y-o-y Percent Change
Components of Revenue Growth $ in Millions
First Quarter Results: Operating RevenueFirst Quarter 2012 vs. 2011
Merchandise$1,496+13%
Coal$766(6%)
Intermodal$527+9%
Current Railway VolumeSecond Quarter through Week 18 (May 5, 2012)
670
688
698
2010 2011 2012
Units (000) Quarter-to-date
Change in UnitsQTD12 vs. QTD11
3%
1%
12%
7%
5%
5%
1%
-2%
-11%
Automotive
Intermodal
Agriculture
Chemicals
Paper
Coal
MetCon
First Quarter Results: Operating Expenses First Quarter 2012 vs. 2011 ($ Millions)
Net Increase $24 Million / 1%
- $42
+ $21+ $24
Depreciation
+ $8+ $13
Materials and other
Purchased services and rents
Compensation and benefits
Fuel
First Quarter Results($ Millions except per share)
Net Income Diluted Earnings per Share
$325
$410
$1.23
$0.90
Change vs. Prior Period: + 26% Change vs. Prior Period: + 37%
2011 2012 2011 2012
Agenda
First Quarter Recap
Improvements in Operating Metrics
Looking Ahead
Improving Overall ServiceComposite Service Performance By Quarters 2011 - 2012
1st Qtr 2nd Qtr 3rd Qtr 4th Qtr
72.2
%
76.6
%
78.2
%
76.3
%
82.8
%
20112012
Increasing VelocityBy Quarter 2011 - 2012
16
17
18
19
20
21
22
23
1st Qtr 2nd Qtr 3rd Qtr 4th Qtr
20.9
21.1
21.4
21.4
23.4
Mile
s pe
r Hou
r
20112012
Better
Train Speed2011 through April 27, 2012
18.0
19.0
20.0
21.0
22.0
23.0
24.0
25.0
NS Train Speed (miles per hour) Better
Source: As reported publicly to the AAR
20
21
22
23
24
25
26
27
28
1st Qtr 2nd Qtr 3rd Qtr 4th Qtr
26.2
23.9
23.6
24.5
21.8
Aver
age
Hou
rs
20112012
Keeping Cars MovingTerminal Dwell By Quarter 2011 - 2012
Better
Terminal Dwell2011 through April 27, 2012
17.019.021.023.025.027.029.031.033.0
NS Terminal Dwell (hours) Better
Source: As reported publicly to the AAR
Improving Productivity 1st Quarter - 2012 vs. 2011
Train & Engine Service Overtime Reduced 15%
Re-Crews Reduced 35%
Equipment Rents (Velocity Driven) Reduced 9%
Locomotives In Service Reduced 3%
Fuel Consumption Reduced 2%
Gross Ton Miles per Gallon Improved 1%
Gross Ton Miles per Train Hour Improved 4%
UTCS – Movement PlannerUnified Train Control System
Improved locomotive utilization
Improved schedule adherence
Increased capacity
Disaster recovery capability
Improved Network Velocity; 2-4 MPH
Estimate completion by end of 2013
Remote Intelligent Terminal (RIT)
Real Time Inventory Reporting
Improved Workforce Productivity
Improved Asset Utilization
Estimate completion by end of 2012
LEADER
• Next Phases • In Service
Agenda
First Quarter Recap
Improvements in Operating Metrics
Looking Ahead
CoalImpact of mild temperatures and competition from natural gasContinued strength within the domestic metallurgical market due to robust domestic demand for steel Weaker demand in European market, partially offset by new steam coal opportunities Improving world met coal prices and tighter supply
IntermodalIncreasing opportunities for highway conversion amidst tightening truck capacity Favorable international trade patternsGrowth in premium
MerchandiseProject growth in crude oil and waste products
Growth in ethanol to terminals
Increasing demand for materials in natural gas drilling operations
Stronger steel/automotive production and new business gains
Business Outlook
Future Track Drivers
Safety
Service Improvement
Revenue Growth
Fuel Efficiency
Workforce Productivity
Asset Utilization
Thank you
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