Attached files
| file | filename |
|---|---|
| EX-99.1 - PRESS RELEASE - NORFOLK SOUTHERN CORP | nspr-072518.htm |
| 8-K - 8-K - NORFOLK SOUTHERN CORP | ns8k-072518.htm |
Norfolk Southern Corporation and Subsidiaries
Consolidated Statements of Income
(Unaudited)
Second Quarter | First Six Months | ||||||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||||||
($ in millions, except per share amounts) | |||||||||||||||||||
Railway operating revenues | |||||||||||||||||||
Merchandise | $ | 1,718 | $ | 1,597 | $ | 3,323 | $ | 3,181 | |||||||||||
Intermodal | 714 | 593 | 1,392 | 1,164 | |||||||||||||||
Coal | 466 | 447 | 900 | 867 | |||||||||||||||
Total railway operating revenues | 2,898 | 2,637 | 5,615 | 5,212 | |||||||||||||||
Railway operating expenses | |||||||||||||||||||
Compensation and benefits | 706 | 719 | 1,443 | 1,478 | |||||||||||||||
Purchased services and rents | 430 | 392 | 831 | 769 | |||||||||||||||
Fuel | 272 | 190 | 538 | 403 | |||||||||||||||
Depreciation | 273 | 264 | 545 | 523 | |||||||||||||||
Materials and other | 191 | 200 | 397 | 410 | |||||||||||||||
Total railway operating expenses | 1,872 | 1,765 | 3,754 | 3,583 | |||||||||||||||
Income from railway operations | 1,026 | 872 | 1,861 | 1,629 | |||||||||||||||
Other income – net | 29 | 48 | 37 | 88 | |||||||||||||||
Interest expense on debt | 131 | 140 | 267 | 282 | |||||||||||||||
Income before income taxes | 924 | 780 | 1,631 | 1,435 | |||||||||||||||
Income taxes | |||||||||||||||||||
Current | 170 | 225 | 280 | 391 | |||||||||||||||
Deferred | 44 | 58 | 89 | 114 | |||||||||||||||
Total income taxes | 214 | 283 | 369 | 505 | |||||||||||||||
Net income | $ | 710 | $ | 497 | $ | 1,262 | $ | 930 | |||||||||||
Earnings per share - diluted | $ | 2.50 | $ | 1.71 | $ | 4.43 | $ | 3.18 | |||||||||||
Weighted average shares outstanding - diluted | 283.7 | 291.2 | 284.8 | 292.0 | |||||||||||||||
See accompanying notes to consolidated financial statements.
Norfolk Southern Corporation and Subsidiaries
Consolidated Statements of Comprehensive Income
(Unaudited)
Second Quarter | First Six Months | ||||||||||||||||||
2018 | 2017 | 2018 | 2017 | ||||||||||||||||
($ in millions) | |||||||||||||||||||
Net income | $ | 710 | $ | 497 | $ | 1,262 | $ | 930 | |||||||||||
Other comprehensive income, before tax: | |||||||||||||||||||
Pension and other postretirement benefit | 8 | 7 | 1 | 14 | |||||||||||||||
Other comprehensive income (loss) of | |||||||||||||||||||
equity investees | 1 | 1 | 2 | (1 | ) | ||||||||||||||
Other comprehensive income, before tax | 9 | 8 | 3 | 13 | |||||||||||||||
Income tax expense related to items of | |||||||||||||||||||
other comprehensive income | (2 | ) | (3 | ) | — | (6 | ) | ||||||||||||
Other comprehensive income, net of tax | 7 | 5 | 3 | 7 | |||||||||||||||
Total comprehensive income | $ | 717 | $ | 502 | $ | 1,265 | $ | 937 | |||||||||||
See accompanying notes to consolidated financial statements.
Norfolk Southern Corporation and Subsidiaries
Consolidated Balance Sheets
(Unaudited)
June 30, | December 31, | ||||||||||
2018 | 2017 | ||||||||||
($ in millions) | |||||||||||
Assets | |||||||||||
Current assets: | |||||||||||
Cash and cash equivalents | $ | 430 | $ | 690 | |||||||
Accounts receivable – net | 1,035 | 955 | |||||||||
Materials and supplies | 260 | 222 | |||||||||
Other current assets | 179 | 282 | |||||||||
Total current assets | 1,904 | 2,149 | |||||||||
Investments | 3,058 | 2,981 | |||||||||
Properties less accumulated depreciation of $12,175 and | |||||||||||
$11,909, respectively | 30,540 | 30,330 | |||||||||
Other assets | 286 | 251 | |||||||||
Total assets | $ | 35,788 | $ | 35,711 | |||||||
Liabilities and stockholders’ equity | |||||||||||
Current liabilities: | |||||||||||
Accounts payable | $ | 1,323 | $ | 1,401 | |||||||
Short-term debt | — | 100 | |||||||||
Income and other taxes | 269 | 211 | |||||||||
Other current liabilities | 260 | 233 | |||||||||
Current maturities of long-term debt | 500 | 600 | |||||||||
Total current liabilities | 2,352 | 2,545 | |||||||||
Long-term debt | 9,146 | 9,136 | |||||||||
Other liabilities | 1,317 | 1,347 | |||||||||
Deferred income taxes | 6,414 | 6,324 | |||||||||
Total liabilities | 19,229 | 19,352 | |||||||||
Stockholders’ equity: | |||||||||||
Common stock $1.00 per share par value, 1,350,000,000 shares | |||||||||||
authorized; outstanding 280,029,764 and 284,157,187 shares, | |||||||||||
respectively, net of treasury shares | 281 | 285 | |||||||||
Additional paid-in capital | 2,263 | 2,254 | |||||||||
Accumulated other comprehensive loss | (441 | ) | (356 | ) | |||||||
Retained income | 14,456 | 14,176 | |||||||||
Total stockholders’ equity | 16,559 | 16,359 | |||||||||
Total liabilities and stockholders’ equity | $ | 35,788 | $ | 35,711 | |||||||
See accompanying notes to consolidated financial statements.
Norfolk Southern Corporation and Subsidiaries
Consolidated Statements of Cash Flows
(Unaudited)
First Six Months | |||||||||
2018 | 2017 | ||||||||
($ in millions) | |||||||||
Cash flows from operating activities | |||||||||
Net income | $ | 1,262 | $ | 930 | |||||
Reconciliation of net income to net cash provided by operating activities: | |||||||||
Depreciation | 546 | 525 | |||||||
Deferred income taxes | 89 | 114 | |||||||
Gains and losses on properties | (14 | ) | (20 | ) | |||||
Changes in assets and liabilities affecting operations: | |||||||||
Accounts receivable | (92 | ) | (12 | ) | |||||
Materials and supplies | (38 | ) | (32 | ) | |||||
Other current assets | 19 | 48 | |||||||
Current liabilities other than debt | 134 | 93 | |||||||
Other – net | (80 | ) | (70 | ) | |||||
Net cash provided by operating activities | 1,826 | 1,576 | |||||||
Cash flows from investing activities | |||||||||
Property additions | (836 | ) | (883 | ) | |||||
Property sales and other transactions | 48 | 60 | |||||||
Investment purchases | (4 | ) | (4 | ) | |||||
Investment sales and other transactions | 6 | 3 | |||||||
Net cash used in investing activities | (786 | ) | (824 | ) | |||||
Cash flows from financing activities | |||||||||
Dividends | (408 | ) | (354 | ) | |||||
Common stock transactions | 15 | 42 | |||||||
Purchase and retirement of common stock | (700 | ) | (402 | ) | |||||
Proceeds from borrowings – net of issuance costs | 543 | 298 | |||||||
Debt repayments | (750 | ) | (650 | ) | |||||
Net cash used in financing activities | (1,300 | ) | (1,066 | ) | |||||
Net decrease in cash and cash equivalents | (260 | ) | (314 | ) | |||||
Cash and cash equivalents | |||||||||
At beginning of year | 690 | 956 | |||||||
At end of period | $ | 430 | $ | 642 | |||||
Supplemental disclosures of cash flow information | |||||||||
Cash paid during the period for: | |||||||||
Interest (net of amounts capitalized) | $ | 246 | $ | 270 | |||||
Income taxes (net of refunds) | 126 | 341 | |||||||
See accompanying notes to consolidated financial statements.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS:
1. Pension and Other Postretirement Benefits
We adopted Financial Accounting Standards Board (FASB) Accounting Standards Update (ASU) 2017-07 on January 1, 2018. The retrospective application resulted in the reclassification of $16 million and $32 million of pension and other postretirement benefits from the “Compensation and benefits” line item within “Railway operating expenses” to “Other income - net” on the Consolidated Statements of Income for the second quarter and first six months of 2017, respectively.
2. Stock Repurchase Program
We repurchased and retired 4.8 million and 3.4 million shares of common stock under our stock repurchase program in the first six months of 2018 and 2017, respectively, at a cost of $700 million and $402 million, respectively. Since the beginning of 2006, we have repurchased and retired 173.3 million shares at a total cost of $12.0 billion.
3. Reclassification of Stranded Tax Effects
In February 2018, the FASB issued ASU 2018-02, “Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income.” This update is intended to reclassify the stranded tax effects resulting from the Tax Cuts and Jobs Act that was enacted on December 22, 2017 from accumulated other comprehensive income to retained earnings. In the first quarter of 2018, we adopted the provisions of ASU 2018-02 resulting in an increase to “Accumulated other comprehensive loss” of $88 million and a corresponding increase to “Retained income,” with no impact on “Total stockholders’ equity.”