News Releases
Norfolk Southern reports first-quarter 2015 results

NORFOLK, Va., April 29, 2015 /PRNewswire/ -- Norfolk Southern Corporation (NYSE: NSC) today reported financial results for first-quarter 2015. Net income for the quarter was $310 million, 16 percent lower compared with $368 million during the same period of 2014. Diluted earnings per share were $1.00 compared with $1.17 per diluted share earned in the first quarter last year.

"Our first quarter results reflected continued weakness in our coal markets along with a slowdown in network velocity in part caused by severe winter weather which impacted both our expenses and our volumes," said CEO Wick Moorman. "Looking ahead, while the market uncertainties remain, the resources that we are deploying are driving improved network performance, and we expect our service levels will be significantly higher in the second half."

FIRST-QUARTER 2015 RESULTS

  • Railway operating revenues totaled $2.6 billion.
  • Income from railway operations was $606 million.
  • Net income totaled $310 million.
  • Diluted earnings per share were $1.00.
  • The railway operating ratio was 76.4 percent.

FIRST-QUARTER SUMMARY

  • Railway operating revenues were $2.6 billion, 5 percent lower compared with first-quarter 2014, due to lower fuel surcharge revenue in each of NS' three commodity groups, lower coal volumes and lower average revenue per unit related to the mix of business. Total volume increased 2 percent, or about 40,000 units, reflecting gains in intermodal and merchandise traffic.
  • General merchandise revenues were $1.5 billion, 2 percent lower than the same period last year. Volume grew by 3 percent, led by increases in chemicals and automotive shipments. The five general merchandise commodity groups reported mixed revenue results on a year-over-year basis:
    • Chemicals: $432 million, down 2 percent
    • Agriculture: $374 million, up 4 percent
    • Metals/Construction: $310 million, down 6 percent
    • Automotive: $219 million, down 4 percent
    • Paper/Forest: $185 million, down 3 percent
  • Intermodal revenues were $592 million, 1 percent lower compared with first-quarter 2014. Growth in international and domestic business pushed traffic volume up 5 percent in the quarter compared with the same period of 2014.
  • Coal revenues were $455 million, 16 percent lower compared with the first quarter of 2014. A weak global export market and fewer shipments of coal to utilities combined to decrease volume by 7 percent.
  • Railway operating expenses declined 3 percent to $2.0 billion, primarily due to lower fuel costs, compared with the same period of 2014.
  • Income from railway operations was $606 million, 9 percent lower compared with first-quarter 2014.
  • The operating ratio, or operating expenses as a percentage of revenue, was 76.4 percent, compared with 75.2 percent in the same quarter in 2014.

About Norfolk Southern

Norfolk Southern Corporation 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, automotive, and industrial products.


 

Norfolk Southern Corporation and Subsidiaries

Consolidated Statements of Income

(Unaudited)



First Quarter


2015


2014


($ in millions, except per share amounts)







Railway operating revenues






Coal

$

455



$

541


General merchandise


1,520




1,552


Intermodal


592




596


Total railway operating revenues


2,567




2,689








Railway operating expenses






Compensation and benefits


783




740


Purchased services and rents


423




392


Fuel


264




432


Depreciation


245




237


Materials and other


246




221








Total railway operating expenses


1,961




2,022








Income from railway operations


606




667








Other income – net


21




26


Interest expense on debt


132




139








Income before income taxes


495




554








Provision for income taxes






Current


173




194


Deferred


12




(8)


Total income taxes


185




186








Net income

$

310



$

368








Earnings per share






Basic

$

1.01



$

1.18

Diluted


1.00




1.17







Weighted average shares outstanding (note 1)






Basic


306.8



309.5

Diluted


309.6



312.6

 

See accompanying notes to consolidated financial statements.



 

Norfolk Southern Corporation and Subsidiaries

Consolidated Statements of Comprehensive Income

(Unaudited)



First Quarter


2015


2014


($ in millions)







Net income

$

310



$

368


Other comprehensive income, before tax:






Pension and other postretirement benefits


10




299


Other comprehensive income (loss) of equity investees


(4)




3








Other comprehensive income, before tax


6




302


Income tax expense related to items of other






comprehensive income


(3)




(114)








Other comprehensive income, net of tax


3




188








Total comprehensive income

$

313



$

556


See accompanying notes to consolidated financial statements.



 

Norfolk Southern Corporation and Subsidiaries

Consolidated Balance Sheets

(Unaudited)



March 31,


December 31,


2015


2014


($ in millions)

Assets








Current assets:








Cash and cash equivalents

$


524



$


973


Accounts receivable – net



1,032





1,055


Materials and supplies



268





236


Deferred income taxes



118





167


Other current assets



173





347


Total current assets



2,115





2,778










Investments



2,701





2,679


Properties less accumulated depreciation of $11,020 and








$10,814, respectively



27,829





27,694


Other assets



130





90










Total assets

$


32,775



$


33,241










Liabilities and stockholders' equity








Current liabilities:








Accounts payable

$


1,094



$


1,233


Short-term debt



—





100


Income and other taxes



210





217


Other current liabilities



298





228


Current maturities of long-term debt



501





2


Total current liabilities



2,103





1,780










Long-term debt



8,429





8,924


Other liabilities



1,302





1,312


Deferred income taxes



8,783





8,817










Total liabilities



20,617





20,833










Stockholders' equity:








Common stock $1.00 per share par value, 1,350,000,000 shares








  authorized; outstanding 304,849,454 and 308,240,130 shares,








respectively, net of treasury shares



306





310


Additional paid-in capital



2,160





2,148


Accumulated other comprehensive loss



(395)





(398)


Retained income



10,087





10,348










Total stockholders' equity



12,158





12,408










Total liabilities and stockholders' equity

$


32,775



$


33,241


See accompanying notes to consolidated financial statements.



 

Norfolk Southern Corporation and Subsidiaries

Consolidated Statements of Cash Flows

(Unaudited)



First Quarter


2015


2014


($ in millions)

Cash flows from operating activities






Net income

$

310



$

368


Reconciliation of net income to net cash provided by operating activities:






Depreciation


246




238


Deferred income taxes


12




(8)


Gains and losses on properties and investments


(5)




(2)


Changes in assets and liabilities affecting operations:






Accounts receivable


23




(85)


Materials and supplies


(32)




(17)


Other current assets


176




17


Current liabilities other than debt


(97)




86


Other – net


(28)




(9)








Net cash provided by operating activities


605




588








Cash flows from investing activities






Property additions


(392)




(381)


Property sales and other transactions


16




22


Investments, including short-term


(3)




(3)


Investment sales and other transactions


1




108








Net cash used in investing activities


(378)




(254)








Cash flows from financing activities






Dividends


(181)




(167)


Common stock issued


21




62


Purchase and retirement of common stock (note 1)


(415)




(50)


Debt repayments


(101)




(100)








Net cash used in financing activities


(676)




(255)








Net increase (decrease) in cash and cash equivalents


(449)




79








Cash and cash equivalents






At beginning of year


973




1,443








At end of period

$

524



$

1,522








Supplemental disclosures of cash flow information






Cash paid during the period for:






Interest (net of amounts capitalized)

$

71



$

75


Income taxes (net of refunds)


12




60


See accompanying notes to consolidated financial statements.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS:

  1. Stock Repurchase Program

    We repurchased 3.9 million and 0.5 million shares of common stock in the first quarters of 2015 and 2014, respectively, at a cost of $415 million and $50 million, respectively. We have remaining authorization from our Board of Directors to repurchase up to 31.3 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 143.7 million shares at a total cost of $8.8 billion.

 

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SOURCE Norfolk Southern Corporation

For further information: Media Inquiries: Frank Brown, 757-629-2710 (fsbrown@nscorp.com), or Investor Inquiries: Katie Cook, 757-629-2861 (InvestorRelations@nscorp.com)