Norfolk Southern (NSC) Stephens 26th Annual Investment Conference | NASH2024 summary

Leadership and organizational priorities

• New CFO and executive team are focused on delivering results and maintaining strong team cohesion during a period of significant transition.

• Team morale and retention remain high, with a culture of challenging past biases and embracing change.

• Leadership is committed to hitting financial targets and leveraging new talent to drive momentum.

Market trends and operational performance

• Volumes are stable despite headwinds in automotive and steel, with efforts to recapture lost share and generate new revenue streams.

• Domestic intermodal volumes are at their highest since 2020, supported by successful bid seasons and improved service quality.

• Coal pricing and demand remain challenging, with a focus on export opportunities and stable contract floors.

• Customers are beginning to reward improved service with increased business, and operational agility is enabling the capture of spot market opportunities.

Financial outlook and cost management

• Operating ratio is expected to see seasonal upticks, but confidence remains in second-half guidance and operational improvements.

• Asset efficiency has improved, with 500 locomotives and 8,000 rail cars stored, allowing for volume growth without additional resources.

• $250 million in cost savings targeted for 2024, with $150 million expected in 2025, driven by labor productivity, fuel efficiency, and reduced purchased services.

• CapEx will decrease in 2025 due to operational improvements, with hurricane recovery costs estimated at $50–$100 million.

• Share repurchases are planned to resume in 2025 as balance sheet repair progresses, supported by insurance recoveries and asset sales.