NORFOLK, Va., July 23, 2013 /PRNewswire/ --
- Railway operating revenues were $2.8 billion.
- Income from railway operations was $836 million.
- Net income was $465 million.
- Diluted earnings per share were $1.46.
- Railway operating ratio was 70.2 percent.
For the second quarter of 2013, Norfolk Southern (NYSE: NSC) reported net income of $465 million, 11 percent lower than $524 million for second-quarter 2012. Diluted earnings per share were $1.46, down 9 percent compared with $1.60 per diluted share in the same period last year.
"In the second quarter, Norfolk Southern delivered solid results, supported by growth in our chemicals, intermodal, and automotive businesses, despite continuing weakness in the coal markets," said CEO Wick Moorman. "We continue to focus on service efficiency and velocity, which is enabling us to control operating expenses and deliver superior performance to our customers."
Railway operating revenues were $2.8 billion, 3 percent lower compared with second-quarter 2012, with shipment volumes increasing 2 percent. Second-quarter 2013 fuel surcharge revenues were $306 million, or $59 million less than the same period last year.
General merchandise revenues were $1.6 billion, 2 percent higher compared with the second quarter of 2012, driven by increased chemical and automotive shipments.
Coal revenues were $626 million, 17 percent lower compared with the same quarter last year, due to lower average revenue per unit and a 4 percent decline in volumes, the result of a combination of reduced global demand for U.S. coal and competition from natural gas.
Intermodal revenues increased 4 percent to $588 million compared with the same period of 2012. Volumes increased 5 percent due to continued domestic and international growth.
Railway operating expenses were $2.0 billion, 1 percent higher compared with second-quarter 2012.
Income from railway operations for the second quarter was $836 million, 10 percent lower compared with the same period last year.
The second-quarter railway operating ratio was 70.2 percent, 4 percent higher compared with 2012.
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.
|
Norfolk Southern Corporation and Subsidiaries
Consolidated Statements of Income
(Unaudited)
|
|
|
Second Quarter
|
|
First Six Months
|
|
2013
|
|
2012
|
|
2013
|
|
2012
|
|
(in millions, except per share amounts)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Railway operating revenues
|
|
|
|
|
|
|
|
|
|
|
|
|
Coal
|
$
|
626
|
|
$
|
755
|
|
$
|
1,261
|
|
$
|
1,521
|
|
General merchandise
|
|
1,588
|
|
|
1,556
|
|
|
3,118
|
|
|
3,052
|
|
Intermodal
|
|
588
|
|
|
563
|
|
|
1,161
|
|
|
1,090
|
|
Total railway operating revenues
|
|
2,802
|
|
|
2,874
|
|
|
5,540
|
|
|
5,663
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Railway operating expenses
|
|
|
|
|
|
|
|
|
|
|
|
|
Compensation and benefits
|
|
726
|
|
|
724
|
|
|
1,506
|
|
|
1,510
|
|
Purchased services and rents
|
|
410
|
|
|
392
|
|
|
803
|
|
|
783
|
|
Fuel
|
|
391
|
|
|
390
|
|
|
820
|
|
|
803
|
|
Depreciation
|
|
226
|
|
|
229
|
|
|
453
|
|
|
453
|
|
Materials and other
|
|
213
|
|
|
205
|
|
|
431
|
|
|
435
|
|
Total railway operating expenses
|
|
1,966
|
|
|
1,940
|
|
|
4,013
|
|
|
3,984
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income from railway operations
|
|
836
|
|
|
934
|
|
|
1,527
|
|
|
1,679
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Other income – net (note 1)
|
|
29
|
|
|
31
|
|
|
164
|
|
|
60
|
|
Interest expense on debt
|
|
128
|
|
|
122
|
|
|
257
|
|
|
242
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Income before income taxes
|
|
737
|
|
|
843
|
|
|
1,434
|
|
|
1,497
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Provision for income taxes
|
|
|
|
|
|
|
|
|
|
|
|
|
Current
|
|
203
|
|
|
269
|
|
|
376
|
|
|
425
|
|
Deferred
|
|
69
|
|
|
50
|
|
|
143
|
|
|
138
|
|
Total income taxes
|
|
272
|
|
|
319
|
|
|
519
|
|
|
563
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
$
|
465
|
|
$
|
524
|
|
$
|
915
|
|
$
|
934
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Earnings per share (notes 1 & 2)
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
$
|
1.47
|
|
$
|
1.62
|
|
$
|
2.90
|
|
$
|
2.86
|
|
Diluted
|
|
1.46
|
|
|
1.60
|
|
|
2.87
|
|
|
2.82
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Weighted average shares outstanding (note 3)
|
|
|
|
|
|
|
|
|
|
|
|
|
Basic
|
|
314.1
|
|
|
322.7
|
|
|
314.3
|
|
|
325.5
|
|
Diluted
|
|
317.8
|
|
|
327.5
|
|
|
317.9
|
|
|
330.2
|
|
|
See accompanying notes to consolidated financial statements.
|
|
Norfolk Southern Corporation and Subsidiaries
Consolidated Statements of Comprehensive Income
(Unaudited)
|
|
|
Second Quarter
|
|
First Six Months
|
|
2013
|
|
2012
|
|
2013
|
|
2012
|
|
($ in millions)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Net income
|
$
|
465
|
|
$
|
524
|
|
$
|
915
|
|
$
|
934
|
|
Other comprehensive income, before tax:
|
|
|
|
|
|
|
|
|
|
|
|
|
Pension and other postretirement benefits
|
|
36
|
|
|
32
|
|
|
72
|
|
|
64
|
|
Other comprehensive income (loss) of equity investees
|
|
1
|
|
|
-
|
|
|
2
|
|
|
(4)
|
|
Other comprehensive income, before tax
|
|
37
|
|
|
32
|
|
|
74
|
|
|
60
|
|
Income tax expense related to items of other
|
|
|
|
|
|
|
|
|
|
|
|
|
comprehensive income
|
|
(14)
|
|
|
(13)
|
|
|
(28)
|
|
|
(25)
|
|
Other comprehensive income, net of tax
|
|
23
|
|
|
19
|
|
|
46
|
|
|
35
|
|
|
|
|
|
|
|
|
|
|
|
|
|
Total comprehensive income
|
$
|
488
|
|
$
|
543
|
|
$
|
961
|
|
$
|
969
|
|
|
See accompanying notes to consolidated financial statements.
|
|
Norfolk Southern Corporation and Subsidiaries
Consolidated Balance Sheets
(Unaudited)
|
|
|
June 30,
|
|
December 31,
|
|
2013
|
|
2012
|
|
($ in millions)
|
|
Assets
|
|
|
|
|
|
|
|
|
Current assets:
|
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
$
|
587
|
|
|
$
|
653
|
|
Short-term investments
|
|
|
-
|
|
|
|
15
|
|
Accounts receivable - net
|
|
|
1,072
|
|
|
|
1,109
|
|
Materials and supplies
|
|
|
228
|
|
|
|
216
|
|
Deferred income taxes
|
|
|
137
|
|
|
|
167
|
|
Other current assets
|
|
|
54
|
|
|
|
82
|
|
Total current assets
|
|
|
2,078
|
|
|
|
2,242
|
|
|
|
|
|
|
|
|
|
Investments
|
|
|
2,366
|
|
|
|
2,300
|
|
Properties less accumulated depreciation of $10,152 and
|
|
|
|
|
|
|
|
|
$9,922, respectively
|
|
|
26,098
|
|
|
|
25,736
|
|
Other assets
|
|
|
63
|
|
|
|
64
|
|
|
|
|
|
|
|
|
|
Total assets
|
|
$
|
30,605
|
|
|
$
|
30,342
|
|
|
|
|
|
|
|
|
|
Liabilities and stockholders' equity
|
|
|
|
|
|
|
|
|
Current liabilities:
|
|
|
|
|
|
|
|
|
Accounts payable
|
|
$
|
1,180
|
|
|
$
|
1,362
|
|
Short-term debt
|
|
|
-
|
|
|
|
200
|
|
Income and other taxes
|
|
|
284
|
|
|
|
206
|
|
Other current liabilities
|
|
|
304
|
|
|
|
263
|
|
Current maturities of long-term debt
|
|
|
47
|
|
|
|
50
|
|
Total current liabilities
|
|
|
1,815
|
|
|
|
2,081
|
|
|
|
|
|
|
|
|
|
Long-term debt
|
|
|
8,430
|
|
|
|
8,432
|
|
Other liabilities
|
|
|
2,198
|
|
|
|
2,237
|
|
Deferred income taxes
|
|
|
7,974
|
|
|
|
7,832
|
|
Total liabilities
|
|
|
20,417
|
|
|
|
20,582
|
|
|
|
|
|
|
|
|
|
Stockholders' equity:
|
|
|
|
|
|
|
|
|
Common stock $1.00 per share par value, 1,350,000,000 shares
|
|
|
|
|
|
|
|
|
authorized; outstanding 311,952,780 and 314,034,174 shares,
|
|
|
|
|
|
|
|
|
respectively, net of treasury shares
|
|
|
313
|
|
|
|
315
|
|
Additional paid-in capital
|
|
|
1,984
|
|
|
|
1,911
|
|
Accumulated other comprehensive loss
|
|
|
(1,063)
|
|
|
|
(1,109)
|
|
Retained income
|
|
|
8,954
|
|
|
|
8,643
|
|
|
|
|
|
|
|
|
|
Total stockholders' equity
|
|
|
10,188
|
|
|
|
9,760
|
|
|
|
|
|
|
|
|
|
Total liabilities and stockholders' equity
|
|
$
|
30,605
|
|
|
$
|
30,342
|
|
|
See accompanying notes to consolidated financial statements.
|
|
Norfolk Southern Corporation and Subsidiaries
Consolidated Statements of Cash Flows
(Unaudited)
|
|
|
First Six Months
|
|
2013
|
|
2012
|
|
($ in millions)
|
|
Cash flows from operating activities
|
|
|
|
|
|
|
Net income
|
$
|
915
|
|
$
|
934
|
|
Reconciliation of net income to net cash provided by operating activities:
|
|
|
|
|
|
|
Depreciation
|
|
456
|
|
|
456
|
|
Deferred income taxes
|
|
143
|
|
|
138
|
|
Gains on properties (note 1)
|
|
(99)
|
|
|
(2)
|
|
Changes in assets and liabilities affecting operations:
|
|
|
|
|
|
|
Accounts receivable
|
|
37
|
|
|
(64)
|
|
Materials and supplies
|
|
(12)
|
|
|
(33)
|
|
Other current assets
|
|
28
|
|
|
23
|
|
Current liabilities other than debt
|
|
6
|
|
|
162
|
|
Other – net
|
|
32
|
|
|
49
|
|
Net cash provided by operating activities
|
|
1,506
|
|
|
1,663
|
|
|
|
|
|
|
|
Cash flows from investing activities
|
|
|
|
|
|
|
Property additions
|
|
(884)
|
|
|
(968)
|
|
Property sales and other transactions
|
|
68
|
|
|
15
|
|
Investments, including short-term
|
|
(7)
|
|
|
(12)
|
|
Investment sales and other transactions
|
|
16
|
|
|
33
|
|
Net cash used in investing activities
|
|
(807)
|
|
|
(932)
|
|
|
|
|
|
|
|
Cash flows from financing activities
|
|
|
|
|
|
|
Dividends
|
|
(315)
|
|
|
(308)
|
|
Common stock issued – net
|
|
80
|
|
|
47
|
|
Purchase and retirement of common stock (note 3)
|
|
(314)
|
|
|
(850)
|
|
Proceeds from borrowings – net
|
|
-
|
|
|
696
|
|
Debt repayments
|
|
(216)
|
|
|
(236)
|
|
Net cash used in financing activities
|
|
(765)
|
|
|
(651)
|
|
|
|
|
|
|
|
Net increase (decrease) in cash and cash equivalents
|
|
(66)
|
|
|
80
|
|
|
|
|
|
|
|
Cash and cash equivalents
|
|
|
|
|
|
|
At beginning of period
|
|
653
|
|
|
276
|
|
|
|
|
|
|
|
At end of period
|
$
|
587
|
|
$
|
356
|
|
|
|
|
|
|
|
Supplemental disclosures of cash flow information
|
|
|
|
|
|
|
Cash paid during the period for:
|
|
|
|
|
|
|
Interest (net of amounts capitalized)
|
$
|
244
|
|
$
|
232
|
|
Income taxes (net of refunds)
|
|
238
|
|
|
264
|
|
|
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. EARNINGS PER SHARE
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 second quarter, $1 million in 2013 and $2 million in 2012; and for the first six months, $3 million in 2013 and $4 million in 2012.
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 second quarter, $1 million in 2013 and less than $1 million in 2012; and for the first six months, $2 million in both 2013 and 2012.
3. STOCK REPURCHASE PROGRAM
We repurchased and retired 4.2 million shares of common stock in the first six months of 2013, at a cost of $314 million, and 12.3 million shares at a cost of $850 million for the same period of 2012. On August 1, 2012, our Board of Directors authorized the repurchase of up to an additional 50 million shares of common stock 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 132.6 million shares at a total cost of $7.8 billion.
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SOURCE Norfolk Southern Corporation