First Quarter 2012 Results · 2020-07-17 · First Quarter 2012 vs. 2011 ($ Millions) First Qtr...

transcript

First Quarter 2012 Results

Donald W. SealeExecutive Vice Presidentand Chief Marketing Officer

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

Railway Operating RevenueFirst Quarter 2012 vs. 2011

Merchandise$1,496+13%

Coal$766(6%)

Intermodal$527+9%

First Quarter RPU

vs. 2011 Abs.

vs. 2011% Chg.

Agriculture $2,429 $172 8%

MetCon $2,068 $258 14%

Paper $2,552 $249 11%

Chemicals $3,772 $240 7%

Automotive $2,345 $87 4%

Merchandise $2,549 $185 8%

Intermodal $671 $22 3%

Coal $2,134 $125 6%

Total $1,611 $80 5%

Revenue Per UnitFirst Quarter 2012 vs. 2011

1Q 2012 Volume (000’s) & y-o-y Percent Change

1Q 2011 1Q 2012

Merchandise

Intermodal

1,711.2 1,730.8Coal volume down (12%)

(17%) decline in Utility 19% gain in Domestic Met(10%) decline in Export

Intermodal volume up 5% 13% gain in Domestic more than offsets (3%) decline in International

Merchandise up 5% Automotive and MetCon gains more than offset declines in Agriculture and Paper

+19,600 units, or 1%

Railway Volume First Quarter 2012 vs. 2011

Revenue$766 Million, down (6%)

RPU$2,134, up 6%

Volume359,000 units, down (12%)

Crews and Locomotives Down in line with volume decline

Coal ComparisonsFirst Quarter 2012 vs. 2011

Utility228.3(17%)

Export63.7

Met48.7

Industrial18.3 +3%

Utility Reduced electric demand from mild temperatures & competition from gas

Domestic Met Continued domestic demand for steel and greater coking availability during the quarter

ExportLamberts Point down (9%) Baltimore down (15%)New export steam coal

Industrial New business

Volume of 359,000 units, down (12%) 1Q 2012 Volume (000’s) & y-o-y Percent Change

Coal MarketFirst Quarter 2012 vs. 2011

Jan-12 Feb-12 Mar-12

Heating Degree Days by Month

ActualLast yearNormal

Source: NOAA: Average heating degree days within NS region

Utility CoalHeating Degree Days in NS Region First Quarter 2012 vs. 2011

1Q 2012 Heating Degree Days down (27%) vs. 2011

Utility228.3(17%)

Export63.7

Met48.7

Industrial18.3 +3%

Utility Reduced electric demand from mild temperatures & competition from gas

Domestic Met Continued domestic demand for steel and greater coking availability during the quarter

ExportLamberts Point down (9%) Baltimore down (15%)New export steam coal

Industrial New business

Volume of 359,000 units, down (12%) 1Q 2012 Volume (000’s) & y-o-y Percent Change

Coal MarketFirst Quarter 2012 vs. 2011

Coal Market

Utility Utility North Utility South Export Domestic Met

Relative Length of Haul in Coal Market Segments

Revenue$527 Million, up 9%

RPU $671, up 3%

Volume785,000 units, up 5%

Intermodal ComparisonsFirst Quarter 2012 vs. 2011

Domestic Continued highway conversionsTightening truck capacity

International Negative comp partially offset by favorable imports and exports

Triple CrownIncreased demand for truckload services

Volume of 785,000 units, up 5% 1Q 2012 Volume (000’s) & y-o-y Percent Change

Domestic390.6+13%

International252.7(3%)

Premium64.4

Triple Crown77.3 4%

Intermodal MarketFirst Quarter 2012 vs. 2011

Intermodal MarketImproved Efficiency

Volume

Crew Starts

1Q 2011 1Q 2012

Percent of Domestic Containers on Stack Cars

Revenue$1.5 Billion, up 13%

RPU$2,549, up 8%

Volume586,800 units, up 5%

Merchandise ComparisonsFirst Quarter 2012 vs. 2011

Automotive Increased light vehicle production and new business

MetCon Increased domestic steel production and strong demand in materials for natural gas drilling

ChemicalsGrowth in plastics and crude oil offset declines in rock salt

Agriculture Negative fertilizer comp effect partially offset by increased ethanol

Paper Weaker volumes for newsprint, pulp and pulpboard with gains in lumber

Volume of 586,800 units, up 5% 1Q 2012 Volume (000’s) & y-o-y Percent Change

Agriculture152.3(2%)

MetCon165.5+12%

Chemicals96.0

Paper76.7(4%)

Automotive96.3

Merchandise MarketFirst Quarter 2012 vs. 2011

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

Mark Manion

Executive Vice President

and Chief Operating Officer

Safety Performance By Quarters 2011 - 2012 (Injury Ratio per 200,000 Employee-Hours)

1st Qtr 2nd Qtr 3rd Qtr 4th Qtr

Composite Service Performance By Quarters 2011 - 2012

Train Speed By Quarter 2011 - 2012

Miles p

2012Better

Terminal Dwell By Quarter 2011 - 2012

Better

Productivity Improvements 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%

James A. Squires

Executive Vice President Finance

and Chief Financial Officer

Operating ResultsFirst Quarter 2012 vs. 2011 ($ Millions)

First Qtr First Qtr Favorable

2012 2011 $ %

Railway operating revenues $ 2,789 $ 2,620 $ 169 6%

Operating ResultsFirst Quarter 2012 vs. 2011 ($ Millions)

First Qtr First Qtr

Favorable

(Unfavorable)

2012 2011 $ %

Railway operating revenues $ 2,789 $ 2,620 $ 169 6%

Railway operating expenses 2,044 2,020 (24) (1%)

Income from railway operations $ 745 $ 600 $ 145 24%

Railway operating ratio (OR) 73.3 77.1 3.8 5%

*OR excluding 1Q 2011 arbitration 73.3 74.9 1.6 2%

*Please see reconciliation to GAAP posted on our web site.

Railway Operating Expense AnalysisFirst Quarter 2012 vs. 2011 ($ Millions)

Net Increase $24 Million / 1%

+ $21+ $24

Depreciation

+ $8+ $13

Materials and other

Purchased services and rents

Compensation and benefits

Fuel Expense AnalysisFirst Quarter 2012 vs. 2011 ($ Millions)

First Qtr

Decreased

Consumption

Higher

Prices

$413- $13+ $37

+ $21+ $24

Depreciation

+ $8+ $13

Materials and other

Compensation and Benefits AnalysisFirst Quarter 2012 vs. 2011 ($ Millions)

Increase/

(Decrease)

Pay rates $ 11

Employee health and welfare 6

Payroll taxes 6

Employee activity levels 5

Stock-based compensation (8)

Other 1

Net increase $ 21

+ $21+ $24

Depreciation

+ $8+ $13

Materials and other

Depreciation Purchased services and rents

+ $21+ $24

* - $58

*Unfavorable arbitration ruling - please see

reconciliation to GAAP posted on our web site.

Other Income - NetFirst Quarter 2012 vs. 2011 ($ Millions)

First Qtr First Qtr

Favorable

(Unfavorable)

2012 2011 $ %

Interest on tax deficiencies $ (1) $ 2 $ (3) --

Corporate-owned life insurance 3 1 2 --

All other 27 24 3 13%

Other income - net $ 29 $ 27 $ 2 7%

Interest expense on debt $ 120 $ 112 $ (8) (7%)

Income TaxesFirst Quarter ($ Millions)

Change vs.

Prior Period: + 28%

2011 2012

Net Income and Diluted Earnings per ShareFirst Quarter ($ Millions except per share)

Net Income Diluted Earnings per Share

Change vs. Prior Period: + 26% Change vs. Prior Period: + 37%

2011 2012 2011 2012

Cash Flows and Related BalancesFirst Quarter 2012 vs. 2011 ($ Millions)

2012 2011

Source

Cash from operating activities $ 1,035 $ 652 $ 383

Property additions (461) (423) (38)

*Free cash flow $ 574 $ 229 $ 345

Share repurchases $ 400 $ 343 $ (57)

Dividends $ 155 $ 142 $ (13)

Cash and cash equivalents at March 31 $ 829 $ 236 $ 593

*Please see reconciliation to GAAP posted on our web site.

First Quarter 2012 Results · 2020-07-17 · First Quarter 2012 vs. 2011 ($ Millions) First Qtr...

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