2014 Investor and Financial Analyst Conference Book
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AGENDA NS Routes NS Trackage or Haulage MONDAY, SEPTEMBER 22 BELLEVUE 6:00 p.m. Reception – Courtyard (1st floor) 7:00 p.m. Dinner – Rockefeller Room (2nd floor) Wick Moorman, Chairman & CEO Welcoming Remarks TUESDAY, SEPTEMBER 23 6:45 – 7:45 a.m. Breakfast Buffet, Rockefeller Room (2nd floor) 7:45 a.m. Management Presentations, Grand Ballroom (1st floor) Jim Squires, President Introductory Remarks and Overview of Morning Presentations 11:00 a.m. Bus Departures to Rockport Yard for Train Trip 11:30 a.m. Train Trip to Bellevue Yard 12:45 p.m. Arrival at Bellevue Yard Lunch and Afternoon Presentations, Building E5, Conference Room Tour of Bellevue Yard 3:15 p.m. Bus Departures to Airport/Hotel NORFOLK SOUTHERN |2014 Investor and Financial Analyst Conference NORFOLK SOUTHERN | 2014 Investor and Financial Analyst Conference 1 SAFETY THE TRAIN Safety is our top priority at Norfolk Southern. A safety briefing will be provided at the start of the trip to familiarize you with the emergency procedures and precautions on the train. Our train is powered by three F-series locomotives. These round-nosed locomotives from an earlier era have generated widespread interest among employees, rail fans, and photographers. GETTING ON AND OFF THE TRAIN The F-locomotives were built in the early 1950s by the Electro-Motive Division of General Motors. Please board and detrain only at the designated doors, the They are numbered in the same 4200 series as the F-units once operated by Norfolk Southern locations of which will be announced in advance. A staff predecessor Southern Railway. The livery features a modern interpretation of the “tuxedo” paint member will be at the bottom of the steps to assist you. scheme reminiscent of the first F-unit built in 1939 for Southern Railway. WHILE ON BOARD Today’s F-units were purchased from Kansas City Southern in 2005 and upgraded with new Be prepared for unexpected stops and starts. When standing, braking systems, modern safety equipment, increased horsepower, and ditch lights at Juniata keep a firm handhold. When walking between cars, always use Locomotive Shop in Altoona, Pa. Hundreds of employees had a hand in making the units efficient, caution as the cars may shift due to the train’s motion. Please powerful, smooth-running locomotives that should provide good service for years to come. be careful with hot drinks, as they could spill, and be aware of pinch points at foot level between the cars. TRAIN CONSIST (FOR DESCRIPTIONS AND PHOTOS OF THE RAIL CARS, SEE PAGE 22.) Pennsylvania NS #39 STEPS NS #7 F Unit Locomotive F Unit Locomotive F Unit Locomotive Power Car Office Car Carolina Michigan Georgia Indiana Ohio NS #2 NS #4 NS #13 STEPS NS #12 NS #20 Office Car Office Car Sleeper Car Sleeper Car Office Car West Virginia Kentucky Delaware New York Buena Vista STEPS STEPS STEPS NS #21 STEPS NS #19 NS #24 NS #26 NS #23 Office Car Dining-Lounge Car Dome Car Rolling Classroom Theater Car 2 NORFOLK SOUTHERN | 2014 Investor and Financial Analyst Conference NORFOLK SOUTHERN | 2014 Investor and Financial Analyst Conference 3 CLEVELAND, OHIO Located at the confluence of Norfolk Southern’s busiest mainline routes from New York and Pennsylvania to Chicago, Cleveland relies on railroads to transport its coal, coke, steel, auto parts, chemicals, salt, stone and finished products. The 345 employees at NS’ Rockport Yard handle an average of 30 trains daily for customers such as ArcelorMittal Steel, which recently opened a second blast furnace in Cleveland — significantly increasing production and rail shipments. Mechanical employees at the yard perform car and locomotive repairs, and the car shop at Macedonia, Ohio, gives new life to old rail cars by replacing bulkheads and doors, fixing upwards of 1,200 cars annually. An NS intermodal terminal at Maple Heights handles consumer goods, including electronics, apparel, and auto parts, handling a record 118,000 containers in 2013. Our Route Today On today’s trip we’ll travel along our Chicago Line, the highest density segment on the Norfolk Southern network. Some 100 trains a day operate across this high-speed double-track route carrying intermodal, metals, automobiles, grain, lumber, coal, chemicals — just about every commodity that we transport. Departure point for the 53-mile trip is Rockport Yard in Cleveland. We will travel west to Vermilion, Ohio, where the landscape begins to change from industrial to rural as we change tracks to the Cleveland District towards Bellevue. At Bellevue, we’ll tour what will soon be the largest and most modern classification yard on the NS system. Major improvements under way here have widespread implications for NS’ operational efficiency and An eastbound coal train leaves Cleveland at sunset. customer service. 4 NORFOLK SOUTHERN | 2014 Investor and Financial Analyst Conference NORFOLK SOUTHERN | 2014 Investor and Financial Analyst Conference 5 At that time, NS set aside enough property to double the size of the BELLEVUE, OHIO hump yard if business demanded it. More than 45 years later, that time arrived. In 2012, in response to steady increases in fracking, steelmaking, automotive production, and other merchandise freight Bellevue was founded in 1815 shipments, NS began construction of an additional 38 classification and has been a railroading tracks as part of a $160 million multi-year expansion center since 1882, when the and modernization project. New York, Chicago & St. Louis Railroad built its main line Today, 100 trains, carrying through town. This is the railroad vehicles and parts, agricultural that quickly became known as products, and consumer goods, Three of the Nickel Plate Railroad’s Berkshire steam locomotives “The Nickel Plate Road,” as the originate, terminate, and transit moved freight and passengers through Bellevue at speeds up to quality of its construction was 70 mph during the 1940s and 1950s. through Bellevue on a typical high, and the entire enterprise day. “The biggest challenge initially had been funded with “The star of our destiny seems In 1966, NW completed its $13.5 during the construction has been cash rather than financed brightly in the ascendant,” million electronic classification to maintain operations, through banks and brokers. reported the Bellevue Local yard at Bellevue, designed to but the employees here are Incredibly, the new line was 600 News. “Fortune seems to anchor the northern part of its second to none, and they were miles long (including sidings) be pouring her favors onto newly expanded system from up to challenge,” said Bellevue and had been built in 600 days. the lap of Bellevue with a astride the carrier’s Buffalo- Terminal Superintendent generous hand.” to-Chicago mainline. Looking Will Washington. Bellevue was selected as a decades ahead, NS offered a center for the Nickel Plate’s Nickel Plate joined the Norfolk portent of the yard’s growing The yard is base for some car switching, locomotive & Western Railway system significance when it reported, 700 NS employees in the maintenance (in both the (a Norfolk Southern predecessor) “All realize that Bellevue is… transportation, mechanical steam and diesel eras), in 1964, as the modern era of a key to superior service for and engineering departments. track maintenance, and railroad mergers was getting shippers throughout the nation.” Bellevue Locomotive Shop can transportation offices. under way. house 14 locomotives under roof and services and repairs an average 320 units each month. Bellevue Car Shop helps Bellevue is… a key to superior service keep NS’ rail car fleet running, repairing an average 150 cars a for shippers throughout the nation. month and handling preventive maintenance on boxcars for the A 1967 aerial view of Bellevue Yard shows the newly constructed auto industry. classification yard on the left, with space reserved for future growth on the right. 6 NORFOLK SOUTHERN | 2014 Investor and Financial Analyst Conference NORFOLK SOUTHERN | 2014 Investor and Financial Analyst Conference 7 BELLEVUE BUILDING FOR GROWTH Covering 620 acres and stretching more than 5.5 miles long, Norfolk Southern’s Bellevue Yard will be the largest and most modern classification facility on the NS system and one of the biggest in the United States. The $160 million project to increase capacity at the terminal included construction of 38 new tracks, at left. The expansion, which nearly doubles Bellevue’s yard capability, also is expected to increase operating efficiency across the entire NS network. 8 NORFOLK SOUTHERN | 2014 Investor and Financial Analyst Conference NORFOLK SOUTHERN | 2014 Investor and Financial Analyst Conference 9 THE BELLEVUE EXPANSION WILL HELP IMPROVE OPERATING EFFICIENCY, SERVICE RIGHT ASSET, RIGHT PLACE, RIGHT TIME RELIABILITY, ASSET UTILIZATION, AND STRENGTHEN NORFOLK SOUTHERN’S ENTIRE 22-STATE RAIL NETWORK. NEW YORK DETROIT METRO AREA CHICAGO BELLEVUE PHILADELPHIA KANSAS CITY ST. LOUIS NORFOLK MEMPHIS ATLANTA BIRMINGHAM Norfolk Southern is making infrastructure investments to ensure “Bellevue is geographically that we have the right asset, in the right place, at the right time to and operationally located respond to today’s business opportunities while also preparing for at the right spot to tomorrow’s growth. leverage our existing infrastructure to position With our investment in new capacity at Bellevue, we can build us for business growth.” trains for direct delivery to western gateways and distant points Jim Squires on our system without making stops at additional rail yards for NS President switching. Reduced car handlings are expected to cut transit times and drive operating efficiencies across the entire NS network. 10 NORFOLK SOUTHERN | 2014 Investor and Financial Analyst Conference NORFOLK SOUTHERN | 2014 Investor and Financial Analyst Conference 11 ANTICIPATED BENEFITS OPERATING EFFICIENCY » Pre-blocking cars at Bellevue for longer hauls and direct interchanges with western carriers will reduce switching at other terminals. CUSTOMER SERVICE » Customers should see improvements of 1 to 2.3 days in transit times.