NORFOLK SOUTHERN CORPORATION 
By NORFOLK, Va., April 23, 2014 /PRNewswire/ -- Norfolk Southern (NYSE: NSC) reported first-quarter net income of $368 million, or $1.17 per diluted share, compared with $450 million, or $1.41 per diluted share, earned in the same period of 2013. First-quarter 2013 net income included a $60 million, or $0.19 per diluted share, gain from a land sale.
First-Quarter 2014 Results
-- Railway operating revenues totaled $2.7 billion.
-- Income from railway operations was $667 million.
-- Net income totaled $368 million.
-- Diluted earnings per share of $1.17.
-- The railway operating ratio was 75.2 percent.
"Following the extreme winter weather across the U.S. rail network which impacted first-quarter results, we are seeing a rebound in shipments across all of our business," said Norfolk Southern CEO Wick Moorman. "Our people responded admirably to meet the challenges of the harsh conditions, and we remain focused on delivering superior service to our customers."
Railway operating revenues were $2.7 billion, 2 percent lower compared with first-quarter 2013, and shipment volumes decreased 1 percent.
First-Quarter Revenue by Commodity
-- Chemicals, up 12 percent.
-- Intermodal, up 4 percent.
-- Agriculture, even.
-- Metals/Construction, down 1 percent.
-- Paper/Forest, down 3 percent.
-- Automotive, down 7 percent
-- Coal, down 15 percent.
For the first quarter, general merchandise revenues were $1.6 billion, 1 percent higher than the same period last year, despite overall volume declining 1 percent. Increased crude and liquefied petroleum gas shipments were offset by declines in automotive, metals/construction, and paper/forest shipments.
Intermodal revenues improved 4 percent, to $596 million, compared with first-quarter 2013. Growth primarily in domestic business pushed traffic volume up 3 percent in the quarter compared with the same period of 2013.
First-quarter coal revenues were $541 million, 15 percent lower compared with the same quarter of 2013, the result of a 13 percent volume decrease due primarily to lower utility and export shipments.
Railway operating expenses for the first quarter were $2 billion, 1 percent lower than in the same period of 2013.
Income from railway operations was $667 million, 3 percent lower compared with first-quarter 2013.
The quarterly railway operating ratio, or operating expenses as a percentage of revenue, was 75.2 percent versus 74.8 percent in the same period of 2013.
Norfolk Southern Corporation (NYSE: NSC) is one of the nation's premier transportation companies. Its Norfolk Southern Railway Company subsidiary operates approximately 20,000 route miles in 22 states and the District of Columbia, serves every major container port in the eastern United States, and provides efficient connections to other rail carriers. Norfolk Southern operates the most extensive intermodal network in the East and is a major transporter of coal, automotive, and industrial products.
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Norfolk Southern Corporation and Subsidiaries
Consolidated Statements of Income
(Unaudited)
First Quarter
2014 2013
---- ----
($ in millions, except per
share
amounts)
Railway operating revenues
Coal $541 $635
General merchandise 1,552 1,530
Intermodal 596 573
--- ---
Total railway operating revenues 2,689 2,738
----- -----
Railway operating expenses
Compensation and benefits 740 780
Purchased services and rents 392 393
Fuel 432 429
Depreciation 237 227
Materials and other 221 218
--- ---
Total railway operating expenses 2,022 2,047
----- -----
Income from railway operations 667 691
Other income - net (note 1) 26 135
Interest expense on debt 139 129
--- ---
Income before income taxes 554 697
Provision for income taxes
Current 194 173
Deferred (8) 74
--- ---
Total income taxes 186 247
--- ---
Net income $368 $450
==== ====
Earnings per share (note 1)
Basic $1.18 $1.43
Diluted 1.17 1.41
Weighted average shares outstanding (note 2)
Basic 309.5 314.5
Diluted 312.6 318.1
See accompanying notes to consolidated financial statements.
Norfolk Southern Corporation and Subsidiaries
Consolidated Statements of Comprehensive Income
(Unaudited)
First Quarter
2014 2013
---- ----
($ in millions)
Net income $368 $450
Other comprehensive income, before tax:
Pension and other postretirement benefits 299 36
Other comprehensive income of equity investees 3 1
--- ---
Other comprehensive income, before tax 302 37
Income tax expense related to items of other
comprehensive income (114) (14)
---- ---
Other comprehensive income, net of tax 188 23
--- ---
Total comprehensive income $556 $473
==== ====
See accompanying notes to consolidated financial statements.
Norfolk Southern Corporation and Subsidiaries
Consolidated Balance Sheets
(Unaudited)
March 31, December 31,
2014 2013
---- ----
($ in millions)
Assets
Current assets:
Cash and cash equivalents $ 1,522 $ 1,443
Short-term investments 10 118
Accounts receivable - net 1,109 1,024
Materials and supplies 240 223
Deferred income taxes 179 180
Other current assets 70 87
--- ---
Total current assets 3,130 3,075
Investments 2,466 2,439
Properties less accumulated depreciation of
$10,512 and $10,387,
respectively 26,768 26,645
Other assets 336 324
--- ---
Total assets $ 32,700 $ 32,483
=== ====== === ======
Liabilities and stockholders' equity
Current liabilities:
Accounts payable $ 1,194 $ 1,265
Short-term debt - 100
Income and other taxes 323 225
Other current liabilities 359 270
Current maturities of long-term debt 445 445
--- ---
Total current liabilities 2,321 2,305
Long-term debt 8,909 8,903
Other liabilities 1,130 1,444
Deferred income taxes 8,647 8,542
----- -----
Total liabilities 21,007 21,194
Stockholders' equity:
Common stock $1.00 per share par value,
1,350,000,000 shares
authorized; outstanding 309,646,086 and
308,878,402 shares,
respectively, net of treasury shares 311 310
Additional paid-in capital 2,085 2,021
Accumulated other comprehensive loss (193) (381)
Retained income 9,490 9,339
----- -----
Total stockholders' equity 11,693 11,289
------ ------
Total liabilities and stockholders'
equity $ 32,700 $ 32,483
=== ====== === ======
See accompanying notes to consolidated financial statements.
Norfolk Southern Corporation and Subsidiaries
Consolidated Statements of Cash Flows
(Unaudited)
First Quarter
2014 2013
---- ----
($ in millions)
Cash flows from operating activities
Net income $368 $450
Reconciliation of net income to net
cash provided by operating
activities:
Depreciation 238 228
Deferred income taxes (8) 74
Gains and losses on properties and
investments (note 1) (2) (99)
Changes in assets and liabilities
affecting operations:
Accounts receivable (85) (49)
Materials and supplies (17) (30)
Other current assets 17 17
Current liabilities other than debt 86 96
Other - net (9) 36
--- ---
Net cash provided by operating
activities 588 723
Cash flows from investing activities
Property additions (381) (379)
Property sales and other
transactions 22 19
Investments, including short-term (3) (5)
Investment sales and other
transactions 108 (1)
--- ---
Net cash used in investing
activities (254) (366)
Cash flows from financing activities
Dividends (167) (157)
Common stock issued - net 62 55
Purchase and retirement of common
stock (note 2) (50) (33)
Debt repayments (100) (203)
---- ----
Net cash used in financing
activities (255) (338)
---- ----
Net increase in cash and cash
equivalents 79 19
Cash and cash equivalents
At beginning of period 1,443 653
----- ---
At end of period $1,522 $672
====== ====
Supplemental disclosures of cash
flow information
Cash paid during the period for:
Interest (net of amounts
capitalized) $75 $62
Income taxes (net of refunds) 60 23
See accompanying notes to consolidated financial statements.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS:
1. Other Income - Net In first quarter 2013, we recognized a $97
million gain on a land sale, which increased net income by $60 million or
$0.19 per share.
2. Stock Repurchase Program In each of the first quarters of
2014 and 2013, we repurchased 0.5 million shares of common stock,
totaling $50 million and $33 million, respectively. We have remaining
authorization from our Board of Directors to repurchase up to 37.7
million shares through December 31, 2017. The timing and volume of
purchases is guided by our 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, we have repurchased and retired
137.3 million shares at a total cost of $8.2 billion.
SOURCE Norfolk Southern Corporation
