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NORFOLK, Va., April 24, 2012 /PRNewswire/ -- For the first quarter of 2012, Norfolk Southern Corporation (NYSE: NSC) reported net income of $410 million ($1.23 per diluted share), 26 percent higher than $325 million ($0.90 per diluted share) for the first quarter of 2011. First-quarter 2011 results included a $58 million non-cash charge that reduced net income by $36 million, or $0.10 per diluted share.
"I am pleased to report another record-breaking quarter for Norfolk Southern during which we achieved first-quarter highs in revenues, operating income, net income, and earnings per share," said CEO Wick Moorman. "The benefits of our steady focus on service and operating efficiency are reflected in our results, and we continue to position our franchise for sustained growth through strategic investments in infrastructure."
Compared with the first quarter of 2011, in the first quarter of 2012: Railway operating revenues improved 6 percent to $2.8 billion, primarily as the result of a 5 percent increase in revenue per unit; general merchandise revenues improved 13 percent to $1.5 billion; coal revenues declined 6 percent to $766 million; and intermodal revenues improved 9 percent to $527 million.
Railway operating expenses for the quarter were $2 billion, up 1 percent compared with first-quarter 2011. The increase was largely due to higher fuel prices, compensation costs, and materials expenses, offset in part by the absence of last year's non-cash charge.
Income from railway operations for the first quarter increased 24 percent to $745 million compared with the same period of 2011.
The first-quarter railway operating ratio improved 5 percent to 73.3 percent compared with first-quarter 2011, and equaled our first-quarter record.
Norfolk Southern Corporation (NYSE: NSC) is one of the nation's premier transportation companies. Its Norfolk Southern Railway subsidiary operates approximately 20,000 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 and industrial products.
Norfolk Southern Corporation and Subsidiaries
Consolidated Statements of Income
(Unaudited)
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Three Months Ended |
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March 31, |
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2012 |
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2011 |
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(in millions, except per share amounts) |
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Railway operating revenues: |
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|
|
|
|
|
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Coal |
|
$ 766 |
|
|
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$ 816 |
|
General merchandise |
|
1,496 |
|
|
|
1,319 |
|
Intermodal |
|
527 |
|
|
|
485 |
|
Total railway operating revenues |
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2,789 |
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|
|
2,620 |
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|
|
|
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|
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Railway operating expenses: |
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|
|
|
|
|
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Compensation and benefits |
|
786 |
|
|
|
765 |
|
Purchased services and rents |
|
391 |
|
|
|
383 |
|
Fuel |
|
413 |
|
|
|
389 |
|
Depreciation |
|
224 |
|
|
|
211 |
|
Materials and other (note 1) |
|
230 |
|
|
|
272 |
|
Total railway operating expenses |
|
2,044 |
|
|
|
2,020 |
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|
|
|
|
|
|
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Income from railway operations |
|
745 |
|
|
|
600 |
|
|
|
|
|
|
|
|
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Other income - net |
|
29 |
|
|
|
27 |
|
Interest expense on debt |
|
120 |
|
|
|
112 |
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|
|
|
|
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Income before income taxes |
|
654 |
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|
515 |
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Provision for income taxes: |
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|
|
|
|
|
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Current |
|
156 |
|
|
|
78 |
|
Deferred |
|
88 |
|
|
|
112 |
|
Total income taxes |
|
244 |
|
|
|
190 |
|
|
|
|
|
|
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Net income |
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$ 410 |
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$ 325 |
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Earnings per share (note 2): |
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Basic |
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$ 1.24 |
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$ 0.91 |
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Diluted |
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1.23 |
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0.90 |
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Weighted average shares outstanding (note 3): |
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|
|
|
|
|
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Basic |
|
328.3 |
|
|
|
355.2 |
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Diluted |
|
332.9 |
|
|
|
360.5 |
|
See accompanying notes.
Norfolk Southern Corporation and Subsidiaries
Consolidated Statements of Comprehensive Income
(Unaudited)
|
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Three Months Ended |
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March 31, |
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2012 |
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2011 |
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($ in millions) |
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Net income |
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$ 410 |
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$ 325 |
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Other comprehensive income, before tax: |
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|
|
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Pension and other postretirement benefits |
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32 |
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28 |
|
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Other comprehensive loss of equity investees |
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(4) |
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- |
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Other comprehensive income, before tax |
|
28 |
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28 |
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Income tax expense related to items of other comprehensive income |
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(12) |
|
(9) |
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Other comprehensive income, net of tax |
|
16 |
|
19 |
|
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Total comprehensive income |
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$ 426 |
|
$ 344 |
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See accompanying notes.
Norfolk Southern Corporation and Subsidiaries
Consolidated Balance Sheets
(Unaudited)
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March 31, |
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December 31, |
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2012 |
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2011 |
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($ in millions) |
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Assets |
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Current assets: |
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Cash and cash equivalents |
|
$ 829 |
|
$ 276 |
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Short-term investments |
|
2 |
|
25 |
|||
Accounts receivable - net |
|
1,056 |
|
1,022 |
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Materials and supplies |
|
228 |
|
209 |
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Deferred income taxes |
|
146 |
|
143 |
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Other current assets |
|
71 |
|
76 |
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Total current assets |
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2,332 |
|
1,751 |
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Investments |
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2,263 |
|
2,234 |
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Properties less accumulated depreciation of $9,596 and $9,464, respectively |
|
24,703 |
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24,469 |
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|
|
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Other assets |
|
77 |
|
84 |
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Total assets |
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$ 29,375 |
|
$ 28,538 |
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Liabilities and stockholders' equity |
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Current liabilities: |
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Accounts payable |
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$ 1,243 |
|
$ 1,092 |
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Short-term debt |
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- |
|
100 |
|||
Income and other taxes |
|
320 |
|
207 |
|||
Other current liabilities |
|
337 |
|
252 |
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Current maturities of long-term debt |
|
32 |
|
50 |
|||
Total current liabilities |
|
1,932 |
|
1,701 |
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Long-term debt |
|
7,985 |
|
7,390 |
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Other liabilities |
|
2,053 |
|
2,050 |
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Deferred income taxes |
|
7,590 |
|
7,486 |
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Total liabilities |
|
19,560 |
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18,627 |
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Stockholders' equity: |
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Common stock $1.00 per share par value, 1,350,000,000 shares |
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authorized; outstanding 325,763,164 and 330,386,089 shares, |
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respectively, net of treasury shares |
|
327 |
|
332 |
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Additional paid-in capital |
|
1,917 |
|
1,912 |
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Accumulated other comprehensive loss |
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(1,010) |
|
(1,026) |
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Retained income |
|
8,581 |
|
8,693 |
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Total stockholders' equity |
|
9,815 |
|
9,911 |
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Total liabilities and stockholders' equity |
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$ 29,375 |
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$ 28,538 |
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See accompanying notes.
Norfolk Southern Corporation and Subsidiaries
Consolidated Statements of Cash Flows
(Unaudited)
|
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Three Months Ended |
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|
|
March 31, |
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|
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2012 |
|
2011 |
|
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($ in millions) |
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Cash flows from operating activities: |
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Net income |
|
$ 410 |
|
$ 325 |
|
Reconciliation of net income to net cash provided |
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|
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by operating activities: |
|
|
|
|
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Depreciation |
|
226 |
|
213 |
|
Deferred income taxes |
|
88 |
|
112 |
|
Gains and losses on properties |
|
(1) |
|
- |
|
Changes in assets and liabilities affecting operations: |
|
|
|
|
|
Accounts receivable |
|
(34) |
|
(127) |
|
Materials and supplies |
|
(19) |
|
(21) |
|
Other current assets |
|
5 |
|
19 |
|
Current liabilities other than debt |
|
316 |
|
27 |
|
Other - net |
|
44 |
|
104 |
|
Net cash provided by operating activities |
|
1,035 |
|
652 |
|
|
|
|
|
|
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Cash flows from investing activities: |
|
|
|
|
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Property additions |
|
(461) |
|
(423) |
|
Property sales and other transactions |
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2 |
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(10) |
|
Investments, including short-term |
|
(4) |
|
(4) |
|
Investment sales and other transactions |
|
27 |
|
55 |
|
Net cash used in investing activities |
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(436) |
|
(382) |
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Cash flows from financing activities: |
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Dividends |
|
(155) |
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(142) |
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Common stock issued - net |
|
31 |
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32 |
|
Purchase and retirement of common stock (note 3) |
|
(400) |
|
(343) |
|
Proceeds from borrowings - net |
|
696 |
|
- |
|
Debt repayments |
|
(218) |
|
(408) |
|
Net cash used in financing activities |
|
(46) |
|
(861) |
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|
|
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Net increase (decrease) in cash and cash equivalents |
|
553 |
|
(591) |
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Cash and cash equivalents: |
|
|
|
|
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At beginning of year |
|
276 |
|
827 |
|
|
|
|
|
|
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At end of period |
|
$ 829 |
|
$ 236 |
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Supplemental disclosure of cash flow information |
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Cash paid during the period for: |
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|
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Interest (net of amounts capitalized) |
|
$ 60 |
|
$ 72 |
|
Income taxes (net of refunds) |
|
2 |
|
3 |
|
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See accompanying notes.
NOTES:
1. |
Materials and Other |
|
During the first quarter of 2011, NS received an unfavorable ruling for an arbitration claim with an insurance carrier, and was denied recovery of the contested portion ($43 million) of the claim. As a result, NS recorded a $43 million charge for the receivables associated with the contested portion of the claim and a $15 million charge for other receivables affected by the ruling for which recovery was no longer probable. |
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2. |
Earnings Per Share |
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For basic earnings per share, income available to common stockholders reflects reductions for the effect of dividend equivalent payments made to holders of stock options and restricted stock units as follows: for the first quarter, $3 million in 2012 and $2 million in 2011. |
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For diluted earnings per share, income available to common stockholders reflects reductions for the effect of dividend equivalent payments made to holders of stock options and restricted stock units as follows: for the first quarter, $2 million in 2012 and 2011. |
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3. |
Stock Repurchase Program |
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NS repurchased and retired 5.7 million shares of Common Stock in the first quarter of 2012, at a cost of $400 million and 5.3 million shares at a cost of $343 million for the same period of 2011. The timing and volume of purchases is guided by management's assessment of market conditions and other pertinent factors. Any near-term share repurchases are expected to be made with internally generated cash, cash on hand, or proceeds from borrowings. Since the beginning of 2006, NS has repurchased and retired 115.3 million shares at a total cost of $6.6 billion. |
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SOURCE Norfolk Southern Corporation