财务与运营概览报告

Q4 2024 Financial and Operations Review INTRODUCTION Oliver Wyman’s quarterly North American Freight Rail Performance reportcompiles and analyzes publicly available data from the seven largest NorthAmerican railroads: •BNSF Railway (BNSF)•Canadian National Railway (CN)•Canadian Pacific Kansas City Railway (CPKC)•CSX Transportation (CSX)•Ferromex (FXE)•Norfolk Southern Railway (NS)•Union Pacific Railroad (UP) Data sources include the US Surface Transportation Board (STB), the Associationof American Railroads (AAR), the Federal Railroad Administration (FRA), industryfinancial reports, and public company information All dollar figures are US dollars. Financial figures for CN, CPKC, and FXE areconverted to US dollars using the exchange rate at the end of the latest quarter Freight revenue and operating expense per RTM for Q4 2024 compared to Q4 202317Total employees for Q4 2024 compared to Q4 202318Total employment count and RTMs Q4 2017 to Q4 202419RTMs per employee for Q4 2024 compared to Q4 202320Operating income for Q4 2024 compared to Q4 2023 and peak quarter21Operating income two-year trend with CQGR for Q4 2022 to Q4 202422Year-to-date capital expenditures for Q4 2024 compared to Q4 202323Year-to-date free cash flow for Q4 2024 compared to Q4 202324Return on invested capital for Q4 2024 compared to Q4 202325Railroad stock price performance three-year index26Average dwell time and velocity for Q4 2024 compared to Q4 202327FRA reportable employee and equipment incidents Q4 2024 compared to Q4 202328 ACROSS THE INDUSTRY, RAILROADS GENERALLY SAW FLAT OR DECLINING REVENUESCOMPARED TO A YEAR AGO, WITH ONLY CPKC AND FXE GROWING Total revenue:$ millions © Oliver Wyman THIS INDUSTRY TREND OF FLAT OR DECLINING REVENUES HAS BEEN CONSISTENT OVER THEPAST TWO YEARS © Oliver Wyman THE US RAILROADS AND FXE INCREASED THEIR UNIT VOLUMESWork stoppages at western Canadian ports shifted intermodal volumes from CN and CPKC to UP and BNSF © Oliver Wyman US CARRIERS SAW VOLUMES INCREASE, WHILE CN AND CPKC GREW REVENUE YIELDUS carriers grew intermodal and shorter-haul export coal business © Oliver Wyman US VOLUME GROWTH WAS DRIVEN BY INTERMODALCarload traffic was muted, with only NS seeing any increase year-over-year © Oliver Wyman EXCLUDING COAL, CARLOADS WERE UP FOR FOUR OF THE SEVEN CARRIERSBoth eastern carriers managed to increase merchandise volumes, while coal was weak across the industry © Oliver Wyman REVENUE TON-MILES WERE A MIXED BAGCPKC, NS, and FXE saw increases, while CN and the western US carriers experienced declines © Oliver Wyman REVENUE PER RTM WAS FLAT OR DOWN ACROSS THE INDUSTRYNS, CSX, and BNSF saw a decline; FXE was a notable improvement © Oliver Wyman MOST RAILROADS WERE ABLE TO REDUCE THEIR ADJUSTED OPERATING RATIOCN and FXE, however, saw large jumps in OR © Oliver Wyman TRENDS ARE SIMILAR FOR UNADJUSTED OPERATING RATIOS, EVEN AS MOST CARRIERSMADE ADJUSTMENTS THAT LOWERED OR © Oliver Wyman IS COST CUTTING RUNNING OUT OF STEAM IN BRINGING DOWN OPERATING RATIOS?Only CPKC, BNSF, and UP have been able to bring down their OR since Q4 2022, though these reductions are minimal © Oliver Wyman UNION PACIFIC REDUCED ITS OPERATING RATIO THE MOST DURING 2024UP is the first railroad to get its full-year OR below 60% post-pandemic © Oliver Wyman INCREASED OPERATING EXPENSES ARE LARGELY RESPONSIBLE FOR OPERATING RATIOINCREASES AT CN, CSX, AND BNSF © Oliver Wyman UNION PACIFIC DROVE DOWN OPERATING RATIO DESPITE INCREASING EMPLOYMENTCN and BNSF experienced the opposite dynamic, while NS had the largest relative decrease in employees © Oliver Wyman OVER THE PAST SIX YEARS, CN INCREASED EMPLOYMENT WHILE RTMS HAVE BEEN STABLEUP, BNSF, and NS have tightened the screws on employment © Oliver Wyman MOST RAILROADS HAVE IMPROVED EMPLOYEE PRODUCTIVITY SINCE Q4 2023 © Oliver Wyman CPKC AND UP HIT THEIR HIGHEST OPERATING INCOME LEVELS IN FOUR YEARSNS saw a jump in operating income, in part due to gains from line sales and East Palestine recoveries © Oliver Wyman CANADIAN AND EASTERN CARRIERS’ OPERATING INCOMES HAVE CONVERGED © Oliver Wyman WESTERN RAILROADS HAVE BEEN SCALING BACK CAPITAL EXPENDITURESAll other carriers have increased capex, even accounting for NS’s CSR acquisition © Oliver Wyman RETURN ON INVESTED CAPITAL HAS REMAINED FAIRLY STABLE AT MOST RAILROADS © Oliver Wyman CASH FLOW IS A MIXED BAG; BNSF, CPKC, AND UP SAW DOUBLE-DIGIT INCREASESAdjusting for the CSR acquisition, NS free cash flow would have seen significant growth © Oliver Wyman SINCE THE END OF 2021, ALL RAILROADS ARE AT OR BELOW THEIR 2021 STOCK PRICE, WHILETHE S&P HAS SEEN SIGNIFICANT GROWTH NS WAS THE ONLY CARRIER THAT IMPROVED ON BOTH DWELL AND VELOCITYCSX worsened on each metric while all others had mixed performance © Oliver Wyman CPKC, NS, AND UP ALL IMPROVED THEIR SAFETY METRICS YEAR-OVER-YEAR © Oliver Wyman FOR MORE INFORMATION, PLEASE CONTACT Yury Gorbunov Jason Kuehn Eric Heller Vice Preside