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Norfolk Southern reports record first-quarter 2017 results
Achieved first-quarter record operating ratio, income from operations, and earnings per share

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:

  1. 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

For further information: Media Inquiries: Susan Terpay, 757-823-5204 (susan.terpay@nscorp.com); Investor Inquiries: Katie Cook, 757-629-2861 (katie.cook@nscorp.com)