Norfolk Southern (NSC) investor relations material

Network performance and operational resilience

• Severe winter storms in late January and early February caused increased dwell times, reduced train speeds, and lower service metrics, but the network rebounded quickly, with March volumes exceeding expectations.

• Incremental costs from storm recovery, including contractor cleanup, added approximately $0.04–$0.05 per share in expenses.

• Utility coal and industrial products showed strong volume growth, while intermodal volumes declined about 6% due to weak international imports.

• Delays in coal plant closures and potential recommissioning have supported coal volumes, with regulatory and market factors contributing.

• Partnerships, such as with Warrior Met Coal and CMA CGM, have driven new business wins against truck and barge competition.

Strategic initiatives and organizational changes

• A new commercial structure with specialized, incentivized sales roles has been implemented to drive top-line growth and improve customer engagement.

• Service reliability and operational strength have enhanced customer trust, with operations leaders directly involved in client discussions.

• Headcount is planned to remain flat to slightly down, focusing on attrition replacement and productivity gains, especially in the T&E and salaried workforce.

• Maintaining a robust trainee pipeline is emphasized to ensure resilience and readiness for volume increases.

Merger outlook and industry transformation

• Integration planning with Union Pacific is progressing well, with cultural alignment and benchmarking of best practices underway.

• The merger aims to overcome artificial barriers in the U.S. rail network, enabling single-line service across the Mississippi and unlocking truckload conversion opportunities.

• All U.S. ports are expected to benefit from improved access and optionality, potentially recapturing freight currently routed through Canadian ports.