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 amounts) 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:
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. 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