Norfolk Southern reports fourth-quarter 2012 and full-year results

      Norfolk Southern reports fourth-quarter 2012 and full-year results

PR Newswire

NORFOLK, Va., Jan. 22, 2013

NORFOLK, Va., Jan. 22, 2013 /PRNewswire/ --

For fourth-quarter 2012:

  oRailway operating revenues were $2.7 billion.
  oIncome from railway operations was $714 million.
  oNet income totaled $413 million.
  oDiluted earnings per share were $1.30.
  oThe railway operating ratio was 73.4 percent.

For 2012:

  oRailway operating revenues were $11 billion.
  oIncome from railway operations was $3.1 billion.
  oNet income was $1.7 billion.
  oDiluted earnings per share were $5.37.
  oThe railway operating ratio was 71.7 percent.

Norfolk Southern Corporation (NYSE: NSC) today reported fourth-quarter 2012
net income of $413 million, or $1.30 per diluted share, compared with $480
million, or $1.42 per diluted share, earned in the fourth quarter of 2011. 
Net income for 2012 was $1.7 billion, or $5.37 per diluted share, compared
with $1.9 billion, or $5.45 per diluted share, earned in 2011.

"While the fourth quarter reflected declines in coal shipments, we also saw
steady intermodal volume gains coupled with improved volumes in our chemicals,
auto, and housing sectors," said Norfolk Southern CEO Wick Moorman. "We remain
focused on controlling costs and improving productivity while continuing to
provide high service levels for our customers. In 2013, we plan to invest $2
billion in capital improvements to further our strong safety performance,
improve operational efficiency and service, and support future growth."

Fourth-quarter railway operating revenues were $2.7 billion, down 4 percent
compared with the same period of 2011. For 2012, railway operating revenues
were $11 billion, 1 percent lower than 2011.

General merchandise revenues were $1.4 billion, 4 percent higher compared with
fourth-quarter 2011 results. For 2012, general merchandise revenues increased
to $5.9 billion, 6 percent higher compared with 2011. Traffic volume increased
1 percent in the quarter and 2 percent for the year compared with the same
periods of 2011.

Coal revenues were $657 million, 23 percent lower compared with fourth-quarter
2011, and $2.9 billion for 2012, 17 percent lower than 2011. Coal traffic
volume declined 13 percent both in the quarter and for 2012 compared with the
same periods of 2011.

Intermodal revenues increased to $584 million, 5 percent higher compared with
fourth-quarter 2011. For the full year, intermodal revenues reached $2.2
billion, up 5 percent compared with 2011. Traffic volume increased 4 percent
in the quarter and 5 percent for 2012 compared with the same periods of 2011.

Fourth-quarter railway operating expenses were $2 billion, 1 percent lower
compared with the same period a year earlier. For 2012, railway operating
expenses were $7.9 billion, also down 1 percent compared with 2011.

Income from railway operations was $714 million, 11 percent lower compared
with fourth-quarter 2011, and $3.1 billion for 2012, 3 percent lower compared
with 2011.

The railway operating ratio increased 3 percent to 73.4 percent during the
fourth quarter and rose 1 percent to 71.7 percent for 2012 compared with the
same periods of 2011.

Norfolk Southern Corporation is one of the nation's premier transportation
companies. Its Norfolk Southern Railway 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)
                                       Three Months Ended   Years Ended
                                       December 31,         December 31,
                                       2012        2011     2012      2011
                                       (in millions, except per share amounts)
Railway operating revenues:
Coal                                   $   657     $ 850    $ 2,879   $ 3,458
General merchandise                        1,443     1,393    5,920     5,584
Intermodal                                 584       554      2,241     2,130
 Total railway operating revenues       2,684     2,797    11,040    11,172
Railway operating expenses:
Compensation and benefits                  726       734      2,960     2,974
Purchased services and rents               418       419      1,604     1,610
Fuel                                       395       403      1,577     1,589
Depreciation                               233       221      916       862
Materials and other (note 1)               198       220      859       924
Total railway operating expenses           1,970     1,997    7,916     7,959
Income from railway operations             714       800      3,124     3,213
Other income – net                         36        39       129       160
Interest expense on debt                   129       116      495       455
Income before income taxes                 621       723      2,758     2,918
Provision for income taxes:
Current                                    121       130      643       475
Deferred                                   87        113      366       527
 Total income taxes (note 2)            208       243      1,009     1,002
Net income                             $   413     $ 480    $ 1,749   $ 1,916
Earnings per share (note 3):
Basic                                  $   1.31    $ 1.44   $ 5.42    $ 5.52
Diluted                                    1.30      1.42     5.37      5.45
Weighted average shares outstanding
(note 4):
Basic                                      314.8     332.8    320.9     345.5
Diluted                                    318.6     338.6    325.2     351.3





Norfolk Southern Corporation and Subsidiaries
Consolidated Statements of Comprehensive Income
(Unaudited)
                                          Three Months Ended  Years Ended
                                          December 31,        December 31,
                                          2012       2011     2012     2011
                                          ($ in millions)
Net income                                $  413     $ 480    $ 1,749  $ 1,916
Other comprehensive loss, before tax:
Pension and other postretirement benefits    (211)     (410)    (114)    (325)
Other comprehensive loss of equity           (9)       (21)     (13)     (21)
investees
Other comprehensive loss, before tax         (220)     (431)    (127)    (346)
Income tax benefit related to items of
other
comprehensive loss                           82        158      44       125
Other comprehensive loss, net of tax         (138)     (273)    (83)     (221)
Total comprehensive income                $  275     $ 207    $ 1,666  $ 1,695



Norfolk Southern Corporation and Subsidiaries
Consolidated Balance Sheets
(Unaudited)
                                                    December 31,  December 31,
                                                    2012          2011
                                                    ($ in millions)
Assets
Current assets:
Cash and cash equivalents                             $  653        $  276
Short-term investments                                   15            25
Accounts receivable - net                                1,109         1,022
Materials and supplies                                   216           209
Deferred income taxes                                    167           143
Other current assets                                     82            76
Total current assets                                     2,242         1,751
Investments                                              2,300         2,234
Properties less accumulated depreciation of $9,922
and
$9,464, respectively                                     25,736        24,469
Other assets                                             64            84
Total assets                                          $  30,342     $  28,538
Liabilities and stockholders' equity
Current liabilities:
Accounts payable                                      $  1,362      $  1,092
Short-term debt                                          200           100
Income and other taxes                                   206           207
Other current liabilities                                263           252
Current maturities of long-term debt                     50            50
Total current liabilities                                2,081         1,701
Long-term debt                                           8,432         7,390
Other liabilities                                        2,237         2,050
Deferred income taxes                                    7,832         7,486
Total liabilities                                        20,582        18,627
Stockholders' equity:
Common Stock $1.00 per share par value,
1,350,000,000 shares
authorized; outstanding 314,034,174 and 330,386,089
shares,
respectively, net of treasury shares                     315           332
Additional paid-in capital                               1,911         1,912
Accumulated other comprehensive loss                     (1,109)       (1,026)
Retained income                                          8,643         8,693
Total stockholders' equity                               9,760         9,911
Total liabilities and stockholders' equity            $  30,342     $  28,538



Norfolk Southern Corporation and Subsidiaries
Consolidated Statements of Cash Flows
(Unaudited)
                                                          Years Ended
                                                          December 31,
                                                          2012       2011
                                                          ($ in millions)
Cash flows from operating activities:
Net income                                                $ 1,749    $ 1,916
Reconciliation of net income to net cash provided by
operating activities:
Depreciation                                                922        869
Deferred income taxes                                       366        527
Gains and losses on properties and investments              (6)        (32)
Changes in assets and liabilities affecting operations:
Accounts receivable                                         (64)       (215)
Materials and supplies                                      (7)        (40)
Other current assets                                        (6)        14
Current liabilities other than debt                         82         68
Other – net                                                 29         120
Net cash provided by operating activities                   3,065      3,227
Cash flows from investing activities:
Property additions                                          (2,241)    (2,160)
Property sales and other transactions                       192        84
Investments, including short-term                           (23)       (135)
Investment sales and other transactions                     78         439
Net cash used in investing activities                       (1,994)    (1,772)
Cash flows from financing activities:
Dividends                                                   (624)      (576)
Common Stock issued – net                                   89         120
Purchase and retirement of Common Stock (note 4)            (1,288)    (2,051)
Proceeds from borrowings – net                              1,491      1,101
Debt repayments                                             (362)      (600)
Net cash used in financing activities                       (694)      (2,006)
Net increase (decrease) in cash and cash equivalents        377        (551)
Cash and cash equivalents:
At beginning of year                                        276        827
At end of year                                            $ 653      $ 276
Supplemental disclosures of cash flow information:
Cash paid during the year for:
Interest (net of amounts capitalized)                     $ 473      $ 435
Income taxes (net of refunds)                               618        289



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS:

1.MATERIALS AND OTHER
     During the first quarter of 2011, we received an unfavorable ruling
    for an arbitration claim with an insurance carrier, and were denied
    recovery of the contested portion of the claim. As a result, we recorded
    a $43 million charge for the receivables associated with the contested
    portion of the claim and a $15 million charge for other receivables
    affected by the ruling for which recovery was no longer probable.
2.INCOME TAXES
     During the second quarter of 2011, the Internal Revenue Service (IRS)
    completed its examination of our 2008 tax return and review of certain
    claims for refund for prior years that resulted in a decrease in income
    tax expense of $40 million. During the second and fourth quarters of
    2011, enacted state tax law changes resulted in a decrease to deferred
    income tax expense of $19 million and $11 million, respectively.
3.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
    fourth quarter, $2 million in 2012 and $3 million in 2011; and for the
    year, $9 million in both 2012 and 2011.
     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 andrestricted stock units as
    follows: for the fourth quarter, $1 million in 2012 and less than $1
    million in 2011; and for the year, $4 million in 2012 and $2 million in
    2011.
4.STOCK REPURCHASE PROGRAM
    We repurchased and retired 18.8 million shares of Common Stock in
    2012, at a cost of $1.3 billion, and 30.2 million shares at a cost of $2.1
    billion for the same period of 2011. 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
    128.4 million shares at a total cost of $7.5 billion.

SOURCE Norfolk Southern Corporation

Website: http://www.nscorp.com
Contact: Norfolk Southern contacts: (Media) Frank Brown, +1-757-629-2710,
fsbrown@nscorp.com; (Investors) Michael Hostutler, +1-757-629-2861,
michael.hostutler@nscorp.com
 
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