NORFOLK, Va., July 26, 2017 /PRNewswire/ -- Norfolk Southern
Corporation (NYSE: NSC) today reported second-quarter financial
results.
Second-quarter net income was $497
million, up 23 percent year-over-year, driven by a 15
percent increase in income from railway operations, and a record
operating ratio. Diluted earnings per share were $1.71, up 26 percent year-over-year.
"Norfolk Southern's strong financial results and all-time record
operating ratio reflect the power of our team, successful execution
of our dynamic plan, and focus on operating even more efficiently
while providing high quality service to customers," said
James A. Squires, Norfolk Southern
chairman, president and CEO. "We remain committed to our core
pillars of safety, service, stewardship and growth as we continue
to enhance operations across the organization. We are confident in
our ability to reach our goals and deliver sustainable shareholder
value in the near and long terms. As a result of our achievements
to date and the confidence we have in our outlook, we are
increasing this year's share repurchase guidance by 25% to
$1 billion."
Second-quarter summary
- Railway operating revenues of $2.6
billion increased 7 percent compared with second-quarter
2016, as overall volumes were 6 percent higher, reflecting growth
within our major commodity categories of coal and intermodal.
- Railway operating expenses increased $65
million, or 4 percent, to $1.7
billion as targeted expense reductions helped offset volume
and inflation-related expenses.
- Income from railway operations was $888
million, up 15 percent year-over-year, and the operating
ratio, or operating expenses as a percentage of revenues, was 66.3
percent, an all-time record.
About Norfolk Southern
Norfolk Southern Corporation (NYSE: NSC) is one of
the nation's premier transportation companies. Its Norfolk Southern
Railway Company subsidiary operates approximately 19,500 route
miles in 22 states and the District
of Columbia, serves every major container port in the
eastern United States, and
provides efficient connections to other rail carriers. Norfolk
Southern operates the most extensive intermodal network in the East
and is a major transporter of coal, automotive, and industrial
products.
http://www.norfolksouthern.com
Norfolk Southern
Corporation and Subsidiaries Consolidated Statements of
Income (Unaudited)
|
|
|
Second
Quarter
|
|
First Six
Months
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
|
($ in millions,
except per share amounts)
|
|
|
|
|
|
|
|
|
|
|
|
|
Railway operating
revenues
|
|
|
|
|
|
|
|
|
|
|
|
Merchandise
|
$
|
1,597
|
|
|
|
$
|
1,577
|
|
|
|
$
|
3,181
|
|
|
|
$
|
3,126
|
|
|
Intermodal
|
|
593
|
|
|
|
|
538
|
|
|
|
|
1,164
|
|
|
|
|
1,060
|
|
|
Coal
|
|
447
|
|
|
|
|
339
|
|
|
|
|
867
|
|
|
|
|
688
|
|
|
Total railway
operating revenues
|
|
2,637
|
|
|
|
|
2,454
|
|
|
|
|
5,212
|
|
|
|
|
4,874
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Railway operating
expenses
|
|
|
|
|
|
|
|
|
|
|
|
Compensation and
benefits
|
|
703
|
|
|
|
|
667
|
|
|
|
|
1,446
|
|
|
|
|
1,390
|
|
|
Purchased services
and rents
|
|
392
|
|
|
|
|
384
|
|
|
|
|
769
|
|
|
|
|
763
|
|
|
Fuel
|
|
190
|
|
|
|
|
174
|
|
|
|
|
403
|
|
|
|
|
323
|
|
|
Depreciation
|
|
264
|
|
|
|
|
257
|
|
|
|
|
523
|
|
|
|
|
509
|
|
|
Materials and
other
|
|
200
|
|
|
|
|
202
|
|
|
|
|
410
|
|
|
|
|
396
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total railway
operating expenses
|
|
1,749
|
|
|
|
|
1,684
|
|
|
|
|
3,551
|
|
|
|
|
3,381
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from
railway operations
|
|
888
|
|
|
|
|
770
|
|
|
|
|
1,661
|
|
|
|
|
1,493
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other income –
net
|
|
32
|
|
|
|
|
4
|
|
|
|
|
56
|
|
|
|
|
20
|
|
|
Interest expense on
debt
|
|
140
|
|
|
|
|
138
|
|
|
|
|
282
|
|
|
|
|
277
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income before income
taxes
|
|
780
|
|
|
|
|
636
|
|
|
|
|
1,435
|
|
|
|
|
1,236
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Provision for income
taxes
|
|
|
|
|
|
|
|
|
|
|
|
Current
|
|
225
|
|
|
|
|
174
|
|
|
|
|
391
|
|
|
|
|
343
|
|
|
Deferred
|
|
58
|
|
|
|
|
57
|
|
|
|
|
114
|
|
|
|
|
101
|
|
|
Total income
taxes
|
|
283
|
|
|
|
|
231
|
|
|
|
|
505
|
|
|
|
|
444
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
income
|
$
|
497
|
|
|
|
$
|
405
|
|
|
|
$
|
930
|
|
|
|
$
|
792
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per
share
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
$
|
1.72
|
|
|
|
$
|
1.37
|
|
|
|
$
|
3.20
|
|
|
|
$
|
2.67
|
|
|
Diluted
|
|
1.71
|
|
|
|
|
1.36
|
|
|
|
|
3.18
|
|
|
|
|
2.65
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average
shares outstanding
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
289.0
|
|
|
|
294.7
|
|
|
|
289.6
|
|
|
|
296.0
|
|
Diluted
|
|
291.2
|
|
|
|
296.6
|
|
|
|
292.0
|
|
|
|
297.7
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
See accompanying
notes to consolidated financial statements.
|
Norfolk Southern
Corporation and Subsidiaries Consolidated Statements of
Comprehensive Income (Unaudited)
|
|
|
Second
Quarter
|
|
First Six
Months
|
|
2017
|
|
2016
|
|
2017
|
|
2016
|
|
($ in
millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
Net
income
|
$
|
497
|
|
|
|
$
|
405
|
|
|
|
$
|
930
|
|
|
|
$
|
792
|
|
|
Other comprehensive
income, before tax:
|
|
|
|
|
|
|
|
|
|
|
|
Reclassification
adjustments for costs
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
included in net
income
|
|
7
|
|
|
|
|
6
|
|
|
|
|
14
|
|
|
|
|
13
|
|
|
Other comprehensive
income (loss) of
|
|
|
|
|
|
|
|
|
|
|
|
equity
investees
|
|
1
|
|
|
|
|
1
|
|
|
|
|
(1)
|
|
|
|
|
—
|
|
|
Other comprehensive
income, before tax
|
|
8
|
|
|
|
|
7
|
|
|
|
|
13
|
|
|
|
|
13
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income tax expense
related to reclassification
|
|
|
|
|
|
|
|
|
|
|
|
adjustments for costs
included in net income
|
|
(3)
|
|
|
|
|
(2)
|
|
|
|
|
(6)
|
|
|
|
|
(5)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other comprehensive
income, net of tax
|
|
5
|
|
|
|
|
5
|
|
|
|
|
7
|
|
|
|
|
8
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total
comprehensive income
|
$
|
502
|
|
|
|
$
|
410
|
|
|
|
$
|
937
|
|
|
|
$
|
800
|
|
|
|
|
See accompanying
notes to consolidated financial statements.
|
Norfolk Southern
Corporation and Subsidiaries Consolidated Balance
Sheets (Unaudited)
|
|
|
June
30,
|
|
December
31,
|
|
2017
|
|
2016
|
|
($ in
millions)
|
Assets
|
|
|
|
|
|
|
|
Current
assets:
|
|
|
|
|
|
|
|
Cash and cash
equivalents
|
$
|
|
642
|
|
|
|
$
|
|
956
|
|
|
Accounts receivable –
net
|
|
|
926
|
|
|
|
|
|
945
|
|
|
Materials and
supplies
|
|
|
289
|
|
|
|
|
|
257
|
|
|
Other current
assets
|
|
|
79
|
|
|
|
|
|
133
|
|
|
Total current
assets
|
|
|
1,936
|
|
|
|
|
|
2,291
|
|
|
|
|
|
|
|
|
|
|
Investments
|
|
|
2,848
|
|
|
|
|
|
2,777
|
|
|
Properties less
accumulated depreciation of $11,984 and
|
|
|
|
|
|
|
|
$11,737,
respectively
|
|
|
30,033
|
|
|
|
|
|
29,751
|
|
|
Other
assets
|
|
|
105
|
|
|
|
|
|
73
|
|
|
|
|
|
|
|
|
|
|
Total
assets
|
$
|
|
34,922
|
|
|
|
$
|
|
34,892
|
|
|
|
|
|
|
|
|
|
|
Liabilities and
stockholders' equity
|
|
|
|
|
|
|
|
Current
liabilities:
|
|
|
|
|
|
|
|
Accounts
payable
|
$
|
|
1,223
|
|
|
|
$
|
|
1,215
|
|
|
Short-term
debt
|
|
|
—
|
|
|
|
|
|
100
|
|
|
Income and other
taxes
|
|
|
268
|
|
|
|
|
|
245
|
|
|
Other current
liabilities
|
|
|
252
|
|
|
|
|
|
229
|
|
|
Current maturities of
long-term debt
|
|
|
600
|
|
|
|
|
|
550
|
|
|
Total current
liabilities
|
|
|
2,343
|
|
|
|
|
|
2,339
|
|
|
|
|
|
|
|
|
|
|
Long-term
debt
|
|
|
9,273
|
|
|
|
|
|
9,562
|
|
|
Other
liabilities
|
|
|
1,385
|
|
|
|
|
|
1,442
|
|
|
Deferred income
taxes
|
|
|
9,259
|
|
|
|
|
|
9,140
|
|
|
|
|
|
|
|
|
|
|
Total
liabilities
|
|
|
22,260
|
|
|
|
|
|
22,483
|
|
|
|
|
|
|
|
|
|
|
Stockholders'
equity:
|
|
|
|
|
|
|
|
Common stock $1.00
per share par value, 1,350,000,000 shares
|
|
|
|
|
|
|
|
authorized;
outstanding 288,181,852 and 290,417,610 shares,
|
|
|
|
|
|
|
|
respectively,
net of treasury shares
|
|
|
290
|
|
|
|
|
|
292
|
|
|
Additional paid-in
capital
|
|
|
2,228
|
|
|
|
|
|
2,179
|
|
|
Accumulated other
comprehensive loss
|
|
|
(480)
|
|
|
|
|
|
(487)
|
|
|
Retained
income
|
|
|
10,624
|
|
|
|
|
|
10,425
|
|
|
|
|
|
|
|
|
|
|
Total
stockholders' equity
|
|
|
12,662
|
|
|
|
|
|
12,409
|
|
|
|
|
|
|
|
|
|
|
Total liabilities
and stockholders' equity
|
$
|
|
34,922
|
|
|
|
$
|
|
34,892
|
|
|
|
|
See accompanying
notes to consolidated financial statements.
|
Norfolk Southern
Corporation and Subsidiaries Consolidated Statements of
Cash Flows (Unaudited)
|
|
|
First Six
Months
|
|
2017
|
|
2016
|
|
($ in
millions)
|
Cash flows from
operating activities
|
|
|
|
|
|
Net income
|
$
|
930
|
|
|
|
$
|
792
|
|
|
Reconciliation of net
income to net cash provided by operating activities:
|
|
|
|
|
|
Depreciation
|
|
525
|
|
|
|
|
511
|
|
|
Deferred income
taxes
|
|
114
|
|
|
|
|
101
|
|
|
Gains and losses on
properties
|
|
(20)
|
|
|
|
|
(7)
|
|
|
Changes in assets and
liabilities affecting operations:
|
|
|
|
|
|
Accounts
receivable
|
|
(12)
|
|
|
|
|
(17)
|
|
|
Materials and
supplies
|
|
(32)
|
|
|
|
|
(35)
|
|
|
Other current
assets
|
|
48
|
|
|
|
|
103
|
|
|
Current liabilities
other than debt
|
|
93
|
|
|
|
|
25
|
|
|
Other –
net
|
|
(70)
|
|
|
|
|
(41)
|
|
|
|
|
|
|
|
|
Net cash provided by
operating activities
|
|
1,576
|
|
|
|
|
1,432
|
|
|
|
|
|
|
|
|
Cash flows from
investing activities
|
|
|
|
|
|
Property
additions
|
|
(883)
|
|
|
|
|
(932)
|
|
|
Property sales and
other transactions
|
|
60
|
|
|
|
|
40
|
|
|
Investment
purchases
|
|
(4)
|
|
|
|
|
(23)
|
|
|
Investment sales and
other transactions
|
|
3
|
|
|
|
|
3
|
|
|
|
|
|
|
|
|
Net cash used in
investing activities
|
|
(824)
|
|
|
|
|
(912)
|
|
|
|
|
|
|
|
|
Cash flows from
financing activities
|
|
|
|
|
|
Dividends
|
|
(354)
|
|
|
|
|
(350)
|
|
|
Common stock
transactions
|
|
42
|
|
|
|
|
1
|
|
|
Purchase and
retirement of common stock
|
|
(402)
|
|
|
|
|
(400)
|
|
|
Proceeds from
borrowings – net
|
|
298
|
|
|
|
|
594
|
|
|
Debt
repayments
|
|
(650)
|
|
|
|
|
(600)
|
|
|
|
|
|
|
|
|
Net cash used in
financing activities
|
|
(1,066)
|
|
|
|
|
(755)
|
|
|
|
|
|
|
|
|
Net decrease in cash
and cash equivalents
|
|
(314)
|
|
|
|
|
(235)
|
|
|
|
|
|
|
|
|
Cash and cash
equivalents
|
|
|
|
|
|
At beginning of
year
|
|
956
|
|
|
|
|
1,101
|
|
|
|
|
|
|
|
|
At end of
period
|
$
|
642
|
|
|
|
$
|
866
|
|
|
|
|
|
|
|
|
Supplemental
disclosures of cash flow information
|
|
|
|
|
|
Cash paid during the
period for:
|
|
|
|
|
|
Interest (net of
amounts capitalized)
|
$
|
270
|
|
|
|
$
|
260
|
|
|
Income taxes (net of
refunds)
|
|
341
|
|
|
|
|
251
|
|
|
|
|
See accompanying
notes to consolidated financial statements.
|
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS:
- Stock Repurchase Program
We repurchased and retired
3.4 million and 5.0 million shares of common stock under our stock
repurchase program in the first six months of 2017 and 2016,
respectively, at a cost of $402
million and $400 million,
respectively. Since the beginning of 2006, we have
repurchased and retired 163.7 million shares at a total cost of
$10.7 billion.
View original
content:http://www.prnewswire.com/news-releases/norfolk-southern-reports-second-quarter-2017-results-300494133.html
SOURCE Norfolk Southern Corporation