Norfolk Southern reports first-quarter 2013 results

NORFOLK, Va., April 23, 2013 /PRNewswire/ -- 

For 2013 vs. 2012:

  • Railway operating revenues were $2.7 billion.
  • Income from railway operations was $691 million.
  • Net income was $450 million, or $1.41 per diluted share.
  • Net income included $60 million, or $0.19 per diluted share from a property sale.
  • The first-quarter railway operating ratio was 74.8 percent.

For the first quarter of 2013, Norfolk Southern Corporation (NYSE: NSC) reported net income of $450 million, or $1.41 per diluted share, 10 percent higher than $410 million, or $1.23 per diluted share, for the first quarter of 2012.

First-quarter results included a gain from the sale of land to the Michigan Department of Transportation, which increased net income by $60 million, or $0.19 per diluted share.

"We're pleased with Norfolk Southern's first-quarter results, which illustrate our diverse customer base, superior operating performance, productivity initiatives, and expense controls," said CEO Wick Moorman. "We are working to ensure that our rail franchise continues to thrive regardless of how our business mix changes."

Railway operating revenues were $2.7 billion, 2 percent lower compared with first-quarter 2012, but shipment volumes increased 3 percent.

General merchandise revenues were $1.5 billion, 2 percent higher compared with first-quarter 2012, driven by increased shipments of chemicals and automobiles.

First-quarter coal revenues were $635 million, down 17 percent compared with the same quarter last year, due to lower average revenue per unit and a 4 percent decline in volume, the result of mild winter weather and low natural gas prices.

Intermodal revenues climbed 9 percent to $573 million as volumes increased by 9 percent compared with first-quarter 2012. 

Railway operating expenses for the quarter were $2.0 billion, about even compared with first-quarter 2012.

Income from railway operations for the first quarter was $691 million, 7 percent lower compared with the same period of 2012.

The railway operating ratio was 74.8 percent compared with 73.3 percent for first-quarter 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.

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Norfolk Southern Corporation and Subsidiaries
Consolidated Statements of Income
(Unaudited)




First Quarter


2013


2012


($ in millions, except per share amounts)







Railway operating revenues






Coal

$

635


$

766

General merchandise


1,530



1,496

Intermodal


573



527

Total railway operating revenues


2,738



2,789







Railway operating expenses






Compensation and benefits


780



786

Purchased services and rents


393



391

Fuel


429



413

Depreciation


227



224

Materials and other


218



230

Total railway operating expenses


2,047



2,044







Income from railway operations


691



745







Other income – net (note 1)


135



29

Interest expense on debt


129



120







Income before income taxes


697



654







Provision for income taxes






Current


173



156

Deferred


74



88

 Total income taxes


247



244







Net income

$

450


$

410







Earnings per share (notes 1 & 2)






Basic

$

1.43


$

1.24

Diluted


1.41



1.23







Weighted average shares outstanding (note 3)






Basic


314.5



328.3

Diluted


318.1



332.9







See accompanying notes to consolidated financial statements.

 

Norfolk Southern Corporation and Subsidiaries
Consolidated Statements of Comprehensive Income
(Unaudited)




First Quarter


2013


2012


($ in millions)







Net income

$

450


$

410

Other comprehensive income, before tax:






Pension and other postretirement benefits


36



32

Other comprehensive income (loss) of equity investees


1



(4)

Other comprehensive income, before tax


37



28

Income tax expense related to items of other   






comprehensive income


(14)



(12)

Other comprehensive income, net of tax


23



16







Total comprehensive income

$

473


$

426







See accompanying notes to consolidated financial statements.

 

Norfolk Southern Corporation and Subsidiaries
Consolidated Balance Sheets
(Unaudited)






March 31,


December 31,


2013


2012


($ in millions)

Assets








Current assets:








Cash and cash equivalents

$


672


$


653

Short-term investments



15




15

Accounts receivable – net



1,158




1,109

Materials and supplies



246




216

Deferred income taxes



167




167

Other current assets



65




82

Total current assets



2,323




2,242









Investments



2,341




2,300

Properties less accumulated depreciation of $10,042 and $9,922,








respectively



25,870




25,736

Other assets



65




64









Total assets

$


30,599


$


30,342









Liabilities and stockholders' equity








Current liabilities:








Accounts payable

$


1,188


$


1,362

Short-term debt



-




200

Income and other taxes



319




206

Other current liabilities



350




263

Current maturities of long-term debt



47




50

Total current liabilities



1,904




2,081









Long-term debt



8,438




8,432

Other liabilities



2,226




2,237

Deferred income taxes



7,921




7,832

          Total liabilities



20,489




20,582









Stockholders' equity:








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








authorized; outstanding 315,088,379 and 314,034,174 shares,








respectively, net of treasury shares



316




315

Additional paid-in capital



1,976




1,911

Accumulated other comprehensive loss



(1,086)




(1,109)

Retained income



8,904




8,643









Total stockholders' equity



10,110




9,760









Total liabilities and stockholders' equity

$


30,599


$


30,342









See accompanying notes to consolidated financial statements.

 

Norfolk Southern Corporation and Subsidiaries
Consolidated Statements of Cash Flows
(Unaudited)




First Quarter


2013


2012


($ in millions)

Cash flows from operating activities






Net income

$

450


$

410

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






Depreciation


228



226

Deferred income taxes


74



88

Gains and losses on properties and investments (note 1)


(99)



(1)

Changes in assets and liabilities affecting operations:






Accounts receivable


(49)



(34)

Materials and supplies


(30)



(19)

Other current assets


17



5

Current liabilities other than debt


96



316

Other – net


36



44

Net cash provided by operating activities


723



1,035







Cash flows from investing activities






Property additions


(379)



(461)

Property sales and other transactions


19



2

Investments, including short-term


(5)



(4)

Investment sales and other transactions


(1)



27

Net cash used in investing activities


(366)



(436)







Cash flows from financing activities






Dividends


(157)



(155)

Common stock issued – net


55



31

Purchase and retirement of common stock (note 3)


(33)



(400)

Proceeds from borrowings – net


-



696

Debt repayments


(203)



(218)

Net cash used in financing activities


(338)



(46)







Net increase in cash and cash equivalents


19



553







Cash and cash equivalents






At beginning of period


653



276







At end of period

$

672


$

829







Supplemental disclosures of cash flow information






Cash paid during the period for:






Interest (net of amounts capitalized)

$

62


$

60

Income taxes (net of refunds)


23



2







See accompanying notes to consolidated financial statements.

 

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS:

  1. OTHER INCOME – NET
    First quarter 2013 results include a $97 million land sale gain, 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 first quarter, $2 million in 2013 and $3 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 first quarter, $1 million in 2013 and $2 million in 2012.
  3. STOCK REPURCHASE PROGRAM   
    We repurchased and retired 0.5 million shares of common stock in the first quarter of 2013, at a cost of $33 million, and 5.7 million shares at a cost of $400 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 128.9 million shares at a total cost of $7.5 billion.

 

SOURCE Norfolk Southern Corporation



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