News Releases
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)