Norfolk Southern Corporation (NYSE:NSC) Q1 2023 Earnings Conference Call April 26, 2023 8:45 AM ET Company Participants Luke Nichols - Senior Director of Investor Relations Alan Shaw - President & Chief Executive Officer Mark George - Executive Vice President & Chief Financial Officer Paul Duncan - Executive Vice President & Chief Operating Officer Claude Elkins - Executive Vice President & Chief Marketing Officer Conference Call Participants Ken Hoexter - Bank of America Chris Wetherbee - Citigroup Scott G ...

Financial Performance - First quarter 2023 income from railway operations was $711 million, down 34% from $1,085 million in 2022, with net income also decreasing by 34% to $466 million[85]. - The railway operating ratio increased to 77.3% in Q1 2023, compared to 62.8% in Q1 2022, reflecting a 23% rise[85]. - Total railway operating revenues for Q1 2023 were $3,132 million, a 7% increase from $2,915 million in Q1 2022, driven by higher average revenue per unit[90]. - Adjusted net income for Q1 2023, excluding the incident costs, was $759 million, an 8% increase from $703 million in Q1 2022[88]. - The average revenue per unit increased by 8% to $1,891 in Q1 2023, compared to $1,758 in Q1 2022[90]. Revenue Breakdown - Coal revenues rose by 13% to $440 million in Q1 2023, driven by increased export volumes and higher average revenue per unit[90]. - Intermodal revenues decreased by 5% to $814 million, with a 4% decline in total intermodal units transported[90]. Expenses and Costs - Expenses related to the Eastern Ohio incident amounted to $387 million, significantly impacting net income and diluted earnings per share[82]. - Compensation and benefits expenses increased by 11% to $690 million, attributed to a rise in average rail headcount by over 1,400 employees[103]. - Purchased services increased by 14% to $399 million in Q1 2023 from $349 million in Q1 2022, while equipment rents rose by 10% to $97 million from $88 million[105]. - Fuel expenses increased by 5% due to higher locomotive fuel prices, with consumption remaining flat compared to the previous year[106]. - Materials expenses surged by 47% to $91 million in Q1 2023 from $62 million in Q1 2022, contributing to a total increase in materials and other expenses of 24% to $212 million[108]. - The company recorded $387 million in costs related to environmental matters and legal proceedings during the first quarter[109]. Cash Flow and Financing - Cash provided by operating activities was $1.2 billion for Q1 2023, up from $1.0 billion in Q1 2022, despite negative working capital of $702 million[112]. - Cash used in investing activities increased to $391 million in Q1 2023 from $335 million in the same period last year, primarily due to higher property additions[113]. - Cash used in financing activities was $686 million in Q1 2023, compared to cash provided of $73 million in Q1 2022, reflecting higher debt repayments[114]. Debt and Capitalization - The debt-to-total capitalization ratio was 54.1% at March 31, 2023, slightly down from 54.4% at December 31, 2022[117]. - The company issued $500 million of 4.45% senior notes due 2033 in February 2023[116]. Taxation - The effective tax rate for Q1 2023 was 21.3%, down from 22.9% in the same period last year, reflecting the recognition of certain business tax credits[111]. Future Outlook - Future revenue growth is expected to face challenges due to economic uncertainty, including lower fuel prices and declining coal pricing[94].

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-K ☒ ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 for the fiscal year ended December 31, 2022 ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 for the transition period from ___________ to___________ Commission File Number 1-8339 NORFOLK SOUTHERN CORPORATION (Exact name of registrant as specified in its charter) Virginia 52-1188014 (State or other j ...

Financial Data and Key Metrics Changes - For the full year 2022, the company reported record revenues of $12.7 billion, a 14% increase compared to 2021, driven by higher fuel surcharge revenue and price gains, despite a 3% decline in total volume [28][42] - Earnings per share (EPS) for 2022 was $13.88, an increase of $1.77 or 15% relative to 2021 [28] - Operating expenses in the fourth quarter increased by $333 million or 19% year-on-year, primarily due to elevated fuel prices and significant adverse accrual adjustments [45] Business Line Data and Key Metrics Changes - Intermodal revenue per unit and revenue per unit, excluding fuel, increased year-over-year due to higher fuel revenue and price gains [10] - Merchandise revenue increased 12% year-over-year to $1.9 billion, with revenue per unit, excluding fuel, reaching record levels [153] - Coal revenue for the quarter increased by 28%, driven by price gains, volume growth, and higher revenue from fuel surcharge [22] Market Data and Key Metrics Changes - The company anticipates that macroeconomic conditions will pressure various markets, particularly manufacturing, which is expected to contract in 2023 [23] - The international business is expected to benefit from lower ocean rates and improved supply chain fluidity, prompting a return of customers to Inland Point Intermodal [24] - Coal volumes increased by 8% in the quarter, supported by higher demand driven by geopolitical factors, although there were declines in coke shipments due to facility closures [154] Company Strategy and Development Direction - The company aims to deliver long-term shareholder value through top-tier revenue and earnings growth, competitive margins, and balanced capital deployment [5] - A focus on improving service levels and operational efficiency is central to the company's strategy, with a commitment to continuous improvement and customer-centric operations [8][134] - The company is investing in modernizing locomotives and enhancing infrastructure to support growth and improve service reliability [140][152] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the company's ability to absorb volume pressure and recapture market share due to improving service levels [29] - The outlook for 2023 reflects uncertainty in the macro landscape, with expectations for revenue to be flat compared to 2022 performance [29] - Management highlighted the importance of focusing on controllable factors to execute the strategic plan effectively amid economic challenges [44] Other Important Information - The company finalized national contracts with unions, recognizing the hard work of frontline employees with historic wage increases [4] - Capital expenditures for 2023 are expected to be approximately $2.1 billion, consistent with a balanced and disciplined spending plan [161] - The company returned over $4 billion to shareholders in 2022, with a 14% increase in dividend distributions [160] Q&A Session All Questions and Answers Question: Can you offer more detail on yields and revenue per car in intermodal and coal? - Management indicated that they are seeing some positive developments in the intermodal space, but there are challenges due to market pricing dynamics [30][66] Question: What is the outlook for operating income and operating ratio (OR) improvement in 2023? - Management expects flattish revenue and operating income, with potential for OR improvement in the back half of the year as service-related costs unwind [34][52] Question: How do you see the impact of inflation and service-related costs on operating expenses? - Management acknowledged significant inflationary pressures but indicated that improved service levels should help mitigate some of these costs over time [56][66] Question: What is the current state of labor relations and how might it affect future operations? - Management noted that discussions with labor unions are ongoing, focusing on quality of life and operational flexibility, which are expected to enhance employee engagement [106][75] Question: How does the company plan to address potential excess headcount if volumes come in weaker than expected? - Management stated that they are prepared to handle fluctuations in volume and will focus on training and flexibility to manage workforce needs [107][126]

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 FORM 10-Q ☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarterly period ended SEPTEMBER 30, 2022 ☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from ___________ to___________ Commission File Number: 1-8339 NORFOLK SOUTHERN CORPORATION (Exact name of registrant as specified in its charter) Virginia 52-1188014 (State ...

Norfolk Southern Corp (NYSE:NSC) Q3 2022 Earnings Conference Call October 26, 2022 8:45 AM ET Company Participants Luke Nichols - IR Alan Shaw - President, CEO & Director Cynthia Sanborn - EVP & COO Claude Elkins - EVP & CMO Mark George - EVP, Finance & CFO Conference Call Participants Justin Long - Stephens Christian Wetherbee - Citigroup Scott Group - Wolfe Research Ariel Rosa - Cr??dit Suisse Brandon Oglenski - Barclays Bank Thomas Wadewitz - UBS Jonathan Chappell - Evercore ISI Cherilyn Radbourne - TD S ...

Q3 2022 Earnings Call October 26, 2022 Forward-Looking Statements / Non-GAAP Measures This presentation contains 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 performance of Norfolk Southern Corporation (NYSE: NSC) ("Norfolk Southern," "NS," the "Company," "we," "our," or "us"), including but not limited to statements regarding future financial performance and ...

| --- | --- | --- | --- | --- | --- | |-----------------------------------------------|-------|-------|-------|-------|-------| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | Cowen Conference | | | | | | | Norfolk Southern Update | | | | | | | | | | | | | | September 7, 2022 | | | | | | | Alan Shaw President & Chief Executive Officer | | | | | | | Ed Elkins | | | | | | | EVP & Chief Marketing Officer | | | | | | | Mark George EVP & Chief Financial Officer | | | | | | Forward-Looking ...

Q2 2022 Earnings Call July 27, 2022 Forward-Looking Statements / Non-GAAP Measures This presentation contains 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 performance of Norfolk Southern Corporation (NYSE: NSC) ("Norfolk Southern," "NS," the "Company," "we," "our," or "us"), including but not limited to statements regarding future financial performance and ant ...

Financial Data and Key Metrics Changes - The company achieved record revenue of $3.3 billion, a 16% increase year-over-year, driven by a 20% increase in revenue per unit despite a 3% decline in volume [31][8] - Earnings per share (EPS) improved by 5% to $3.45, marking a second-quarter record [9][31] - Operating ratio increased by 260 basis points compared to the previous year, primarily due to higher fuel prices and the absence of a significant property sale from the prior year [9][45] Business Line Data and Key Metrics Changes - Merchandise revenue and revenue per unit reached record levels, with notable growth in grain shipments due to rising export demand, despite slight volume declines in steel and construction-related shipments [32] - Intermodal revenue, revenue per unit, and revenue per unit excluding fuel all saw double-digit increases, driven by higher fuel surcharge and storage fees [33] - Coal revenue experienced the strongest growth, with total revenue and revenue per unit increasing over 30% year-over-year, propelled by price gains in export coal markets [35] Market Data and Key Metrics Changes - International intermodal shipments declined year-over-year due to a shift in customer base away from Inland Point Intermodal (IPI) amid ongoing supply chain challenges, although domestic shipments showed modest improvement [34] - The company anticipates strong demand through the end of 2022, with GDP growth forecasted above 1% despite recession risks [36] Company Strategy and Development Direction - The company is focused on restoring service levels and implementing the new TOP|SPG operating plan, which aims to enhance service, productivity, and growth [10][21] - The strategy includes increasing crew productivity, enhancing fuel efficiency, and adjusting operations to align resources with demand [14][18] - The company aims to leverage its robust network and strong customer relationships to capitalize on growth opportunities in eCommerce and logistics [59][60] Management's Comments on Operating Environment and Future Outlook - Management expressed cautious optimism about demand remaining strong, with expectations for volume strength in the second half of the year, particularly in the automotive sector [36][39] - The company is aware of macroeconomic uncertainties but sees opportunities for volume growth in various markets [43] - Management emphasized the importance of improving service levels to drive volume recovery and enhance productivity [64][78] Other Important Information - The company generated nearly $1.2 billion in free cash flow through six months, with a focus on capital expenditures trending higher due to inflation [53] - Shareholder distributions increased, with a 19% rise in dividend payments and continued strong share repurchase activity [54] Q&A Session Summary Question: What are the critical factors for improving service and volumes in the second half? - Management highlighted ramping up headcount, a robust pipeline of conductor trainees, and the implementation of the new operating plan as critical factors for service improvement [63][64] Question: Is the improvement in first/last mile compliance sufficient for volume recovery? - Management acknowledged the improvement but emphasized the need to reach higher service levels to sustainably bring back volume [67][68] Question: What is the outlook for operating ratio and volume assumptions? - Management indicated expectations for flat volume for the year, with a gradual ramp-up supported by improving service [78][80] Question: What is the expectation for coal revenue per unit (RPU)? - Management expects a sequential decline in coal RPU, which will impact overall RPU, but strong price opportunities remain in other markets [95][96] Question: How is the company addressing equipment and chassis availability? - Management reported a good supply of chassis and ongoing improvements in equipment availability, with expectations for significant improvements in the fourth quarter [110][111]