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1
2015 Citi Industrials Conference
Marta R. Stewart
Executive Vice President Finance
And Chief Financial Officer
*NI and EPS exclude 2013 Michigan land sale gain - please see reconciliation to GAAP posted on our web site., www.nscorp.com
Revenue $11,624 3%
Income From Ops $3,575 10%
Operating Ratio 69.2 3%
Net Income* $2,000 8%
Earnings per Share* $6.39 9%
Record Financial Results 2014 vs. 2013 % ($ in millions, except per share)
2014 was a record year.
2
Revenue $5,280 (8)%
Income From Ops $1,420 (16)%
Operating Ratio 73.1 (4)%
Net Income $743 (20)%
Earnings per Share $2.41 (19)%
2015 Financial Results – First Six Months 2015 vs. 2014 % (Decrease) ($ in millions, except per share)
Reduced coal and fuel revenues impacted results.
3
Revenue 1Q10 – 2Q15
19
219
419
619
819
1,019
1,219
1,419
1,619
1,8191
Q1
0
2Q
10
3Q
10
4Q
10
1Q
11
2Q
11
3Q
11
4Q
11
1Q
12
2Q
12
3Q
12
4Q
12
1Q
13
2Q
13
3Q
13
4Q
13
1Q
14
2Q
14
3Q
14
4Q
14
1Q
15
2Q
15
Rev
en
ue
Coal Merchandise Intermdal
2014 vs. 2013 up 3%
Six Months 2015 vs. 2014 down (8)%.
4
$274
$306 $321
$353
$295
$358 $368
$308
$163
$119
$0
$50
$100
$150
$200
$250
$300
$350
$400
1Q13 2Q13 3Q13 4Q13 1Q14 2Q14 3Q14 4Q14 1Q15 2Q15
Revenue ($M)
5
Decline in fuel surcharges should start to level out after 2015.
Fuel Surcharge Revenue Headwinds
Current Railway Volume Third Quarter through Week 36 (September 12, 2015)
Agriculture
Automotive
Chemicals
Paper
Intermodal
MetCon
Coal
1,528.1 1,473.4
2014 2015
Units (000) Change in Units
3QTD 2015 vs. 2014
(4%)
6
4,832 / 4%
2,321 / 3%
1,103 / 1%
(1,143) / (2%)
(5,378) / (1%)
(12,705) / (8%)
(43,719) / (17%)
Better( )
16
18
20
22
24
26
01/0
4/1
4
01/2
5/1
4
02/1
5/1
4
03/0
8/1
4
03/2
9/1
4
04/1
9/1
4
05/1
0/1
4
05/3
1/1
4
06/2
1/1
4
07/1
2/1
4
08/0
2/1
4
08/2
3/1
4
09/1
3/1
4
10/0
4/1
4
10/2
5/1
4
11/1
5/1
4
12/0
6/1
4
12/2
7/1
4
01/1
7/1
5
02/0
7/1
5
02/2
8/1
5
03/2
1/1
5
04/1
1/1
5
05/0
2/1
5
05/2
3/1
5
06/1
3/1
5
07/0
4/1
5
07/2
5/1
5
08/1
5/1
5
09/0
5/1
5
Speed (mph)
Train Speed recovers as resources come into fruition.
Train Speed 2014 – 3rd QTR-to-Date 2015
7
Better( )
15
20
25
30
35
01/0
4/1
4
03/0
4/1
4
05/0
4/1
4
07/0
4/1
4
09/0
4/1
4
11/0
4/1
4
01/0
4/1
5
03/0
4/1
5
05/0
4/1
5
07/0
4/1
5
09/0
4/1
5
Dwell (Hrs)
Dwell has also benefited from additional resources.
Terminal Dwell 2014 – 3rd QTR-to-Date 2015
8
Crews
‒ Increased T&E employees
‒ Now hiring for attrition
‒ Addressing geographic needs
o Temporary transfers
o Furloughs
Capital
‒ Moorman Yard
‒ 51st Street Yard – Chicago
‒ Indiana connection track
‒ Locomotives
Resources for Improved Service
9
Cash Deployment 2015
Capital Plan
$2.3 Billion
69%
21%
10%
} Renewal
Growth
PTC
Quarterly Dividend/Share
$0.59 4%
Share Repurchases
$1.2 Billion
D&H Strategic Investment
$0.2 Billion
Reinvesting in franchise, returning funds to shareholders, strategic investment.
10
Dividends and Share Repurchases 2006 through First Half 2015
Dividends
ShareRepurchases $9.2 Billion
$5.0 Billion
* See reconciliation of Total Shareholder Distributions to GAAP posted on our website, www.nscorp.com.
15% CAGR
147.2M shares
avg. ~ $62/share
11
Thank You
12