Norfolk Southern reports record first-quarter 2017 results

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

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.