Dear Shareholders,
The priority for your management team in 2022 was to improve service. To achieve that goal, we implemented our new TOP|SPG operating plan, with safety at its core; launched recruiting and training initiatives that achieved industry-leading success hiring conductors in a historically tight job market, and strengthened our leadership team and culture.
Our efforts took hold in the fourth quarter, and we ended 2022 delivering our best service in more than two years. Our customers noticed the difference. Volumes in December were at 52-week highs, outperforming typical seasonality.
Overcoming headwinds associated with a slower network in the first three quarters, your company achieved strong financial results in a challenging year. Total revenue grew by 14 percent to reach a company-record $12.7 billion. We achieved company-record operating income and our second-best annual operating ratio.
We returned more than $4 billion to shareholders in 2022, with more than 12.6 million shares repurchased. Earnings per share grew 15 percent for the year, dividend distributions increased 14 percent, and we raised our dividend 9 percent in the first quarter of 2023.
We entered 2023 with tremendous momentum, ready to execute on the pioneering new strategy we announced at our Investor Day in December.
Creating Long-Term Shareholder Value
Our strategy is to create long-term shareholder value through a balanced approach of:
- Reliable and resilient service,
- Continuous productivity improvement, and
- Smart and sustainable growth.
These are not competing priorities — they are complementary in a carefully blended balance.
The resulting value proposition is simple and powerful: Norfolk Southern is uniquely positioned to deliver long-term shareholder value through top-tier revenue and earnings growth, industry-competitive margins, and balanced capital deployment.
We will look to compete in the $860 billion U.S. truck and logistics market by being a customer-centric, operations-driven service organization. Customer-centric means we will deliver a service product the market values. Operations-driven means we will make reliable and resilient service an enduring competitive strength.
With the right strategy, the right team, and a franchise built for growth, Norfolk Southern intends to lead the industry in service and growth.
As I near the end of my first year as President and CEO of Norfolk Southern, I would like to thank our outstanding Board of Directors for their thoughtful guidance, especially our Independent Chair Amy Miles for her leadership and partnership.
I would also like to recognize all the members of the Thoroughbred team, including our dedicated craft railroaders, who deliver every day for our company, our customers, and the U.S. economy.
This is an exciting and important time for our company. We thank you for your confidence and support as we launch a new way forward for our industry.
With the right strategy, the right team, and a franchise built for growth, Norfolk Southern intends to lead the industry in service and growth.
Sincerely,
Alan H. Shaw
President & Chief Executive Officer
Read the original letter here.
