NORFOLK, Va., April 26, 2017 /PRNewswire/ -- Norfolk Southern
Corporation (NYSE: NSC) today reported first-quarter financial
results.
First-quarter net income was $433
million, up 12 percent year-over-year, a result of a 7
percent rise in income from railway operations, as well as a lower
effective income tax rate. Diluted earnings per share were
$1.48, up 15 percent year-over-year
and a first-quarter record.
"Norfolk Southern's record results for the first quarter
demonstrate the efficacy of our strategic plan, under which we are
enhancing our service quality and network performance while driving
significant efficiency improvements," said James A. Squires, Norfolk Southern chairman,
president and CEO. "Our focus on providing a superior service
product has positioned us for growth and, coupled with our cost
discipline, has contributed to a solid start to the year. Our
strategy provides a strong foundation for growth at low incremental
costs, a powerful formula for enhanced shareholder value."
First-quarter summary
Railway operating revenues of $2.6
billion increased 6 percent compared with first-quarter
2016, as overall volumes were 5 percent higher, reflecting growth
within our major commodity categories of coal, intermodal, and
merchandise.
Railway operating expenses increased $105
million, or 6 percent, to $1.8
billion as targeted expense reductions and efficiencies were
offset by inflation, particularly within fuel expenses, which were
higher by $64 million.
Income from railway operations was a first-quarter record
$773 million, up 7 percent
year-over-year.
The railway operating ratio, or operating expenses as a
percentage of revenues, was 70.0 percent, a first-quarter
record.
About Norfolk Southern
Norfolk Southern Corporation (NYSE: NSC) is one of the
nation's premier transportation companies. Its Norfolk Southern
Railway Company subsidiary operates approximately 19,500 route
miles in 22 states and the District
of Columbia, serves every major container port in the
eastern United States, and
provides efficient connections to other rail carriers. Norfolk
Southern operates the most extensive intermodal network in the East
and is a major transporter of coal, automotive, and industrial
products.
http://www.norfolksouthern.com
Norfolk Southern
Corporation and Subsidiaries
Consolidated
Statements of Income
(Unaudited)
|
|
|
|
First
Quarter
|
|
2017
|
|
2016
|
|
($ in millions,
except per share
amounts)
|
|
|
|
|
|
Railway operating
revenues
|
|
|
|
|
Merchandise
|
$
|
1,584
|
|
$
|
1,549
|
Intermodal
|
|
571
|
|
|
522
|
Coal
|
|
420
|
|
|
349
|
Total railway
operating revenues
|
|
2,575
|
|
|
2,420
|
|
|
|
|
|
Railway operating
expenses
|
|
|
|
|
Compensation and
benefits
|
|
743
|
|
|
723
|
Purchased services
and rents
|
|
377
|
|
|
379
|
Fuel
|
|
213
|
|
|
149
|
Depreciation
|
|
259
|
|
|
252
|
Materials and
other
|
|
210
|
|
|
194
|
|
|
|
|
|
Total railway
operating expenses
|
|
1,802
|
|
|
1,697
|
|
|
|
|
|
Income from
railway operations
|
|
773
|
|
|
723
|
|
|
|
|
|
Other income –
net
|
|
24
|
|
|
16
|
Interest expense on
debt
|
|
142
|
|
|
139
|
|
|
|
|
|
Income before income
taxes
|
|
655
|
|
|
600
|
|
|
|
|
|
Provision for income
taxes
|
|
|
|
|
Current
|
|
166
|
|
|
169
|
Deferred
|
|
56
|
|
|
44
|
Total income
taxes
|
|
222
|
|
|
213
|
|
|
|
|
|
Net
income
|
$
|
433
|
|
$
|
387
|
|
|
|
|
|
Earnings per
share
|
|
|
|
|
Basic
|
$
|
1.49
|
|
$
|
1.30
|
Diluted
|
|
1.48
|
|
|
1.29
|
|
|
|
|
|
Weighted average
shares outstanding
|
|
|
|
|
Basic
|
|
290.3
|
|
|
297.2
|
Diluted
|
|
292.8
|
|
|
298.9
|
|
|
|
|
|
|
See accompanying
notes to consolidated financial statements.
|
Norfolk Southern
Corporation and Subsidiaries
Consolidated
Statements of Comprehensive Income
(Unaudited)
|
|
|
|
First
Quarter
|
|
2017
|
|
2016
|
|
($ in
millions)
|
|
|
|
|
Net
income
|
$
|
433
|
|
$
|
387
|
Other comprehensive
income, before tax:
|
|
|
|
Reclassification
adjustments for costs included in net income
|
7
|
|
7
|
Other comprehensive
loss of equity investees
|
(2)
|
|
(1)
|
|
|
|
|
Other comprehensive
income, before tax
|
5
|
|
6
|
Income tax expense
related to reclassification adjustments
|
|
|
|
for costs included in
net income
|
(3)
|
|
(3)
|
|
|
|
|
Other comprehensive
income, net of tax
|
2
|
|
3
|
|
|
|
|
Total
comprehensive income
|
$
|
435
|
|
$
|
390
|
|
|
|
|
|
|
See accompanying
notes to consolidated financial statements.
|
Norfolk Southern
Corporation and Subsidiaries
Consolidated
Balance Sheets
(Unaudited)
|
|
|
|
|
|
March
31,
|
|
December
31,
|
|
2017
|
|
2016
|
|
($ in
millions)
|
Assets
|
|
|
|
|
Current
assets:
|
|
|
|
|
Cash and cash
equivalents
|
$
|
955
|
|
$
|
956
|
Accounts receivable –
net
|
|
998
|
|
|
945
|
Materials and
supplies
|
|
281
|
|
|
257
|
Other current
assets
|
|
93
|
|
|
133
|
Total current
assets
|
|
2,327
|
|
|
2,291
|
|
|
|
|
|
Investments
|
|
2,809
|
|
|
2,777
|
Properties less
accumulated depreciation of $11,872 and
|
|
|
|
|
$11,737,
respectively
|
|
29,927
|
|
|
29,751
|
Other
assets
|
|
82
|
|
|
73
|
|
|
|
|
|
Total
assets
|
$
|
35,145
|
|
$
|
34,892
|
|
|
|
|
|
Liabilities and
stockholders' equity
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
Accounts
payable
|
$
|
1,211
|
|
$
|
1,215
|
Short-term
debt
|
|
—
|
|
|
100
|
Income and other
taxes
|
|
379
|
|
|
245
|
Other current
liabilities
|
|
303
|
|
|
229
|
Current maturities of
long-term debt
|
|
550
|
|
|
550
|
Total current
liabilities
|
|
2,443
|
|
|
2,339
|
|
|
|
|
|
Long-term
debt
|
|
9,569
|
|
|
9,562
|
Other
liabilities
|
|
1,407
|
|
|
1,442
|
Deferred income
taxes
|
|
9,199
|
|
|
9,140
|
|
|
|
|
|
Total
liabilities
|
|
22,618
|
|
|
22,483
|
|
|
|
|
|
Stockholders'
equity:
|
|
|
|
|
Common stock $1.00
per share par value, 1,350,000,000 shares
|
|
|
|
|
authorized;
outstanding 289,782,660 and 290,417,610 shares,
|
|
|
|
|
respectively, net of
treasury shares
|
|
291
|
|
|
292
|
Additional paid-in
capital
|
|
2,228
|
|
|
2,179
|
Accumulated other
comprehensive loss
|
|
(485)
|
|
|
(487)
|
Retained
income
|
|
10,493
|
|
|
10,425
|
|
|
|
|
|
Total
stockholders' equity
|
|
12,527
|
|
|
12,409
|
|
|
|
|
|
Total liabilities
and stockholders' equity
|
$
|
35,145
|
|
$
|
34,892
|
|
See accompanying
notes to consolidated financial statements.
|
Norfolk Southern
Corporation and Subsidiaries
Consolidated
Statements of Cash Flows
(Unaudited)
|
|
|
|
First
Quarter
|
|
2017
|
|
2016
|
|
($ in
millions)
|
Cash flows from
operating activities
|
|
|
|
|
Net income
|
$
|
433
|
|
$
|
387
|
Reconciliation of net
income to net cash provided by operating activities:
|
|
|
|
|
Depreciation
|
|
260
|
|
|
253
|
Deferred income
taxes
|
|
56
|
|
|
44
|
Gains and losses on
properties
|
|
(9)
|
|
|
(2)
|
Changes in assets and
liabilities affecting operations:
|
|
|
|
|
Accounts
receivable
|
|
(53)
|
|
|
(15)
|
Materials and
supplies
|
|
(24)
|
|
|
(44)
|
Other current
assets
|
|
31
|
|
|
84
|
Current liabilities
other than debt
|
|
188
|
|
|
200
|
Other –
net
|
|
(36)
|
|
|
(28)
|
|
|
|
|
|
Net cash provided by
operating activities
|
|
846
|
|
|
879
|
|
|
|
|
|
Cash flows from
investing activities
|
|
|
|
|
Property
additions
|
|
(438)
|
|
|
(398)
|
Property sales and
other transactions
|
|
35
|
|
|
12
|
Investment
purchases
|
|
(2)
|
|
|
(23)
|
Investment sales and
other transactions
|
|
1
|
|
|
1
|
|
|
|
|
|
Net cash used in
investing activities
|
|
(404)
|
|
|
(408)
|
|
|
|
|
|
Cash flows from
financing activities
|
|
|
|
|
Dividends
|
|
(177)
|
|
|
(176)
|
Common stock
transactions
|
|
34
|
|
|
(7)
|
Purchase and
retirement of common stock
|
|
(200)
|
|
|
(200)
|
Debt
repayments
|
|
(100)
|
|
|
(600)
|
|
|
|
|
|
Net cash used in
financing activities
|
|
(443)
|
|
|
(983)
|
|
|
|
|
|
Net decrease in cash
and cash equivalents
|
|
(1)
|
|
|
(512)
|
|
|
|
|
|
Cash and cash
equivalents
|
|
|
|
|
At beginning of
year
|
|
956
|
|
|
1,101
|
|
|
|
|
|
At end of
period
|
$
|
955
|
|
$
|
589
|
|
|
|
|
|
Supplemental
disclosures of cash flow information
|
|
|
|
|
Cash paid during the
period for:
|
|
|
|
|
Interest (net of
amounts capitalized)
|
$
|
70
|
|
$
|
70
|
Income taxes (net of
refunds)
|
|
12
|
|
|
2
|
|
See accompanying
notes to consolidated financial statements.
|
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS:
- Stock Repurchase Program
We repurchased and retired
1.7 million and 2.6 million shares of common stock under our stock
repurchase program in the first quarters of 2017 and 2016,
respectively, at a cost of $200
million in each period. Since the beginning of 2006,
we have repurchased and retired 162.0 million shares at a total
cost of $10.5 billion.
To view the original version on PR Newswire,
visit:http://www.prnewswire.com/news-releases/norfolk-southern-reports-record-first-quarter-2017-results-300445668.html
SOURCE Norfolk Southern Corporation