Norfolk Southern Corporation Wednesday sent a letter to shareholders in connection with its Annual Meeting of Shareholders on May 9, 2024. In the letter the company highlighted:
• Norfolk Southern's balanced strategy is delivering superior long-term upside for shareholders.
• Norfolk Southern is an industry leader in safety and achieved a 38% reduction in its mainline accident rate in 2023, and the fewest mainline accidents since 1999.
• Norfolk Southern is on a clear and achievable path to close the margin gap with peers by achieving a sub-60% operating ratio in 3-4 years5, while remaining well-positioned to deliver top-tier earnings and EPS growth over the long-term.
• The company is actively executing on a detailed plan to unlock 400 basis points of margin improvement from productivity savings and upcycle improvement over the next three years.
• The plan is expected to deliver 100-150 basis points of operating ratio improvement year-over-year, with line of sight to 400-450 basis points of improvement in the second half of 2024, compared to the prior year period.
• Norfolk Southern has the right management team to deliver a safer, more profitable railroad.
• CEO Alan Shaw is a decisive, crisis-tested leader who delivered record annual railway operating revenue in his first year as CEO, all while positioning the company to become the gold standard of safety and deliver reliable service.
• COO John Orr is a renowned expert best equipped to execute our PSR operating plan, and is already driving improvements to rapidly accelerate our productivity while maintaining network stability.
• The Norfolk Southern board has superior skillsets to provide independent oversight.
• The board has undergone a thoughtful refreshment process and is comprised of highly engaged industry leaders with the necessary skills to oversee the company's strategy, drive sustainable value, and hold management accountable.
• The board has been an agent of change to advance the company's success, and has added the right experts to Norfolk Southern's leadership team, enhanced corporate governance practices to better align with shareholders' interests, and guided transformational initiatives that continue to improve safety and operational performance.
• Ancora's candidates and reckless plan would unnecessarily put Norfolk Southern at risk and destroy long-term value.
• Ancora is attempting to replace Norfolk Southern's qualified director candidates with inferior nominees with little to no board and safety experience.
• Ancora's CEO candidate has no CEO or railroad experience and its COO candidate has a reputation for extreme cost-cutting measures resulting in the deterioration of service quality, safety, and performance.
• Achieving Ancora's near-term targets would require ~2,900 employee furloughs, putting service and safety at substantial risk, sparking backlash from regulators, and jeopardizing long-term shareholder value.
• Multiple independent third parties have recognized that Ancora's near-term targets are highly unrealistic and its management candidates would reverse Norfolk Southern's progress and undermine customer relationships.
