NORFOLK SOUTHERN CORP - FORM 8-K - EX-99.2 - 2Q 2015 FINANCIAL STATEMENTS

Attached files

file	filename
8-K - 8-K - NORFOLK SOUTHERN CORP	ns8k-072715.htm
EX-99.1 - PRESSRELEASE - NORFOLK SOUTHERN CORP	ns2q2015pr.htm

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



	Second Quarter				First Six Months
	2015		2014		2015		2014
	($ in millions, except per share amounts)

Railway operating revenues
Coal	$	453	$	672	$	908	$	1,213
General merchandise		1,627		1,720		3,147		3,272
Intermodal		633		650		1,225		1,246
Total railway operating revenues		2,713		3,042		5,280		5,731

Railway operating expenses
Compensation and benefits		724		715		1,507		1,455
Purchased services and rents		438		414		861		806
Fuel		255		408		519		840
Depreciation		247		238		492		475
Materials and other		235		248		481		469

Total railway operating expenses		1,899		2,023		3,860		4,045

Income from railway operations		814		1,019		1,420		1,686

Other income – net		19		18		40		44
Interest expense on debt		134		139		266		278

Income before income taxes		699		898		1,194		1,452

Provision for income taxes
Current		243		311		416		505
Deferred		23		25		35		17
Total income taxes		266		336		451		522

Net income	$	433	$	562	$	743	$	930

Earnings per share
Basic	$	1.43	$	1.81	$	2.43	$	2.99
Diluted		1.41		1.79		2.41		2.97

Weighted average shares outstanding (note 1)
Basic		302.9		309.5		304.8		309.5
Diluted		305.5		312.8		307.5		312.7

See accompanying notes to consolidated financial statements.

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



	Second Quarter						First Six Months
	2015			2014			2015			2014
	($ in millions)

Net income	$	433		$	562		$	743		$	930
Other comprehensive income, before tax:
Pension and other postretirement benefits		11			7			21			306
Other comprehensive income (loss) of
equity investees		—			7			(4	)		10

Other comprehensive income, before tax		11			14			17			316
Income tax expense related to items of other
comprehensive income		(5	)		(4	)		(8	)		(118	)

Other comprehensive income, net of tax		6			10			9			198

Total comprehensive income	$	439		$	572		$	752		$	1,128

See accompanying notes to consolidated financial statements.

Norfolk Southern Corporation and Subsidiaries
Consolidated Balance Sheets
(Unaudited)



	June 30,			December 31,
	2015			2014
	($ in millions)
Assets
Current assets:
Cash and cash equivalents	$	889		$	973
Accounts receivable – net		1,055			1,055
Materials and supplies		277			236
Deferred income taxes		125			167
Other current assets		67			347
Total current assets		2,413			2,778

Investments		2,724			2,679
Properties less accumulated depreciation of $11,188 and
$10,814, respectively		28,075			27,694
Other assets (note 2)		98			49

Total assets	$	33,310		$	33,200

Liabilities and stockholders’ equity
Current liabilities:
Accounts payable	$	1,144		$	1,233
Short-term debt		—			100
Income and other taxes		295			217
Other current liabilities		264			228
Current maturities of long-term debt		500			2
Total current liabilities		2,203			1,780

Long-term debt (note 2)		8,890			8,883
Other liabilities		1,322			1,312
Deferred income taxes		8,818			8,817

Total liabilities		21,233			20,792

Stockholders’ equity:
Common stock $1.00 per share par value, 1,350,000,000 shares
authorized; outstanding 301,386,849 and 308,240,130 shares,
respectively, net of treasury shares		303			310
Additional paid-in capital		2,146			2,148
Accumulated other comprehensive loss		(389	)		(398	)
Retained income		10,017			10,348

Total stockholders’ equity		12,077			12,408

Total liabilities and stockholders’ equity	$	33,310		$	33,200

See accompanying notes to consolidated financial statements.

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



	First Six Months
	2015			2014
	($ in millions)
Cash flows from operating activities
Net income	$	743		$	930
Reconciliation of net income to net cash provided by operating activities:
Depreciation		494			478
Deferred income taxes		35			17
Gains and losses on properties and investments		(18	)		(3	)
Changes in assets and liabilities affecting operations:
Accounts receivable		—			(98	)
Materials and supplies		(41	)		(28	)
Other current assets		282			30
Current liabilities other than debt		(1	)		144
Other – net		(21	)		(33	)

Net cash provided by operating activities		1,473			1,437

Cash flows from investing activities
Property additions		(886	)		(809	)
Property sales and other transactions		32			44
Investments, including short-term		(3	)		(3	)
Investment sales and other transactions		5			121

Net cash used in investing activities		(852	)		(647	)

Cash flows from financing activities
Dividends		(360	)		(335	)
Common stock issued		28			82
Purchase and retirement of common stock (note 1)		(765	)		(100	)
Proceeds from borrowings – net		494			—
Debt repayments		(102	)		(213	)

Net cash used in financing activities		(705	)		(566	)

Net increase (decrease) in cash and cash equivalents		(84	)		224

Cash and cash equivalents
At beginning of year		973			1,443

At end of period	$	889		$	1,667

Supplemental disclosures of cash flow information
Cash paid during the period for:
Interest (net of amounts capitalized)	$	249		$	255
Income taxes (net of refunds)		55			313

See accompanying notes to consolidated financial statements.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS:

1. Stock Repurchase Program

We repurchased 7.4 million and 1.0 million shares of common stock in the first six months of 2015 and 2014, respectively, at a cost of $765 million and $100 million, respectively. We have remaining authorization from our Board of Directors to repurchase up to 27.8 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 147.2 million shares at a total cost of $9.2 billion.

2. New Accounting Pronouncement

In April 2015, the Financial Accounting Standards Board issued Accounting Standards Update (ASU) No. 2015-03, "Interest - Imputation of Interest (Subtopic 835-30): Simplifying the Presentation of Debt Issuance Costs." This update requires that debt issuance costs be presented in the balance sheet as a reduction from the related debt liability rather than as an asset, consistent with debt discounts. The recognition and measurement guidance for debt issuance costs are not affected by the amendments in this update. We early adopted the provisions of this ASU during the second quarter of 2015 and applied it retrospectively. The adoption of ASU 2015-03 resulted in the presentation of $43 million of debt issuance costs as a reduction of "Long-term debt" at June 30, 2015. We retrospectively adjusted the December 31, 2014 consolidated balance sheet and related disclosures to reflect the reclassification of $41 million of debt issuance costs from "Other assets" to "Long-term debt." There was no other impact on our consolidated financial statements from the adoption of ASU 2015-03.

Attached files

Stock widget

Investing forum

NORFOLK SOUTHERN CORP Reports