Norfolk Southern reports first-quarter 2014 results
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 |
|||||
| 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:
- 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. - 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
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