Norfolk Southern Corporation

Greetings, and welcome to the Norfolk Southern Corporation's second quarter of 2020 earnings call. At this time, all participants are in a listen-only mode. The brief question and answer session will follow the formal presentation. If anyone should require operator assistance during the conference, please press star zero on your telephone keypad. As a reminder, this conference is being recorded. It is now my pleasure to introduce Pete Charbel, Director of Investor Relations. Thank you, Mr. Charbel. You may now begin.

Thank you, and good morning, everyone. Please note that during today's call, we may make certain forward-looking statements, which are subject to risks and uncertainties and may differ materially from actual results. Please refer to our annual and quarterly reports filed with the SEC for a full discussion of those risks and uncertainties we view as most important. Our presentation slides are available at NorfolkSouthern.com in the investor section, along with our non-GAAP reconciliation. Additionally, a transcript and downloads will be posted after the call. It is now my pleasure to introduce Norfolk Southern's Chairman, President, and CEO, Jim Squires.

Good morning, everyone, and welcome to Norfolk Southern's second quarter 2020 earnings call. Joining me today are Alan Shaw, Chief Marketing Officer, Mark George, Chief Financial Officer, and Mike Wheeler, Chief Operating Officer. As we announced earlier this week, Mike will retire from Norfolk Southern on October 1st after a 35-year career of distinguished achievement. He will be greatly missed, and we wish him well. When we began the search for our next Chief Operating Officer, we looked for an experienced executive who could lead our day-to-day operations and build on our successful implementation of precision scheduled railroading. We are proud to welcome Cindy Sanborn, one of our industry's leading operations experts, to the Norfolk Southern team. We look forward to Cindy joining the company on September 1st. With that, let's proceed to a review of our second quarter performance. Amid the global pandemic and ensuing economic disruption in the markets and communities we serve, the men and women of Norfolk Southern demonstrated their resilience in the second quarter. Our customers in virtually every segment shipped significantly lower volumes, with many changing their shipping patterns as they worked to keep the supply lines open. The automotive industry was particularly volatile, experiencing a rapid and almost total shutdown, and then a subsequent restart and push to restock inventory, all within the same quarter. Norfolk Southern's business reflected that disruption. Revenues decreased 29%. leading to a decline of 43% in earnings per share. Our team rose to the challenge. We quickly adjusted network plans and resources in the short term while advancing our long-term strategy to deliver shareholder value with several important achievements. First, Norfolk Southern employees are serving our customers and our country with excellence during a pandemic. The successful implementation of our top 21 strategic plan and precision scheduled railroading combined with the hard work and commitment of our employees is producing results. We achieved record train performance, train speed, terminal dwell, and shipment consistency. Many other service metrics were near all-time best levels. Second, we managed our operations efficiently as shipping volumes bottomed out while ensuring we have strong operating leverage as business recovers. Year over year in the second quarter, our force levels declined by 20%. That's nearly 5,000 positions, while train size increased and fuel efficiency improved. These achievements enabled an operating expense reduction of 21% against a 26% decline in volume. We are a fast, fluid railroad ready to take advantage when volumes return. Third, and perhaps most important, we kept our eye on our strategic objectives by attacking structural costs. We reduced our hump yard footprint in the quarter by idling two additional humps, bringing the total to four that have been idled over the past year. These actions create direct cost savings over the coming quarters and demonstrate our success improving our top 21 train plan to be nimble and adaptive to changing freight demand with fewer more efficient major terminals. Throughout all of this, we are taking comprehensive steps to protect the health and well-being of our people. All employees who can work remotely continue to do so. For employees whose responsibilities require them to work on site, we are following CDC guidelines. I opened by lauding our team's resilience. While each one of these actions and achievements on its own has merit, when taken together and in the face of the unique disruptions of the second quarter, they demonstrate the determination of this team to forge ahead and take on any challenges necessary to create value for our shareholders. I'll now turn the call over to Alan and the team to provide further details and commentary. Alan?