Norfolk Southern Corporation

Second quarter 2023 earnings call. At this time, all participants are in a listen-only mode. A 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's now my pleasure to introduce Luke Nichols, Senior Director of Investor Relations. Thank you, sir. You may begin.

Thank you, and good morning, everyone. Please note that during today's call, we will make certain forward-looking statements within the meaning of the safe harbor provision of the Private Securities Litigation Reform Act of 1995. These statements relate to future events or future performance of Norfolk Southern Corporation, 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 nscorp.com in the investor section, along with the reconciliation of any non-GAAP measures used today to the comparable GAAP measures. Turning to slide three, it's now my pleasure to introduce Norfolk Southern's President and Chief Executive Officer, Alan Shaw.

Good morning, and welcome to our discussion of second quarter earnings. Here with me today are Mark George, our Chief Financial Officer, Paul Duncan, our Chief Operating Officer, and Ed Elkins, our Chief Marketing Officer. I would like to begin by thanking all of my colleagues at Norfolk Southern for their tremendous work this quarter. As you will hear this morning, we are delivering on our commitment to recover service quickly. We are delivering on our commitment to make a safe railroad even safer. We are delivering on our commitment to address quality of life issues for our hard-working craft railroaders. And we continue to deliver on our commitment to make things right for the people of East Palestine and the surrounding communities. We have a vision for a better way forward for Norfolk Southern. Last December, we outlined a groundbreaking strategy that balances service, productivity, and growth. It is designed to create long-term value for our customers, employees, shareholders, and the communities we serve. Our commitment to that strategy was tested on February 3rd with the derailment in East Palestine. Adversity reveals character and tests resolve. I'm proud of the way our team rose to the challenge. Our response in East Palestine has been fully aligned with our better way forward. Making decisions in the best long-term interests of the community and surrounding areas has achieved significant progress. Our financial results were challenged this quarter, as we noted in May that they would be. They reflect the decisive actions we have taken to advance our strategy and keep our promises in East Palestine. With every step forward, we are doing exactly what we said we would do when we announced our strategy last December. We are investing in the long-term success of our company. With our strategy as our roadmap, we made significant progress in the second quarter, building the foundation for long-term value creation. This morning, I'll share a few notable examples of our progress. I'll start with service. In the first quarter, we expressed confidence that our service challenges were a temporary disruption due to deliberate management actions in response to the derailment, and that our recovery plan would show results quickly. We delivered. As Paul will describe shortly, service is now at levels comparable to our best performance in 2019. When we announced our strategy last year, I indicated that we will continue to make disciplined investments in our business through economic cycles. As Mark will describe, we are doing exactly what we said we would do. We continue to expand the ranks of our frontline craft railroaders, and we are investing in locomotives, intermodal infrastructure, new sidings, technology, and other assets that will drive service, productivity, and growth. We are looking beyond this cycle to be ready to serve our customers and support their growth during the recovery and into the future. Another important way we moved our strategy forward in the second quarter was through our continuing progress, engaging more effectively with our frontline railroaders. This is one of my top priorities as CEO, and it is a reason I spend so much time in the field. I learn from every conversation with my craft colleagues. After the conclusion of our national labor negotiations last year, I promised to work with union leadership at the local level to address quality of life issues. We kept that commitment, and I'm especially proud Norfolk Southern was the first Class 1 railroad to provide paid sick leave for all of our craft employees. We are building on that momentum. It was an extraordinary moment to co-author an open letter with the leaders of 12 railroad unions committing to collaborate on safety, and then a few days later to share a stage with many of those same leaders in an all-employee town hall meeting to talk about safety and our strategy. Our people are excited to be part of a vision that focuses on growth. Our actions this quarter to advance our strategy extend well beyond operations. They run throughout our company. In marketing, we reorganize the team to align with our strategy, positioning us to maintain the deep customer relationships that characterize Norfolk Southern. while simultaneously pursuing growth in high-value markets that make sense for our network. As part of that change, we made the innovative move this quarter to create the industry's first Vice President of First Mile, Last Mile, building an entrepreneurial spirit and growth mindset into our organizational structure. Continuous productivity improvement through cost management and smart revenue growth is a core element of our strategy. In the second quarter, we created a new performance excellence team within operations, charged with building additional rigor and discipline into our processes. This work is foundational to our strategy. Standardizing our processes supports a high degree of plan compliance, which in turn gives us greater flexibility to innovate and test targeted improvements that enhance consistent and reliable service and provide productivity opportunities. thus unlocking growth potential. Additionally, we continue to make progress this quarter, strengthening our safety culture, implementing best practices, and accelerating technology improvements. We look beyond the rail industry for a partner that would challenge and inspire us. We chose Atkins Nuclear Solutions, which brings experience from the nuclear navy, the gold standard of operational excellence and industrial safety. Then we reached out to the leaders of the national unions representing our frontline craft railroaders and asked them to work with us to enhance rail safety. Our work is producing results. As Paul will describe in more detail, our safety metrics demonstrate significant improvement. As a result of these initiatives and more, Norfolk Southern today is a railroad poised for long-term value creation. We are implementing our innovative strategic plan and coiling to serve our customers and capture growth when demand inevitably returns. And now, I'll turn it over to Mark for a detailed look at our second quarter results.