Actionable news
0
All posts from Actionable news
Actionable news in NSC: NORFOLK SOUTHERN Corp,

Norfolk Southern reports third-quarter 2017 results

Third-quarter net income was $506 million, up 10 percent year-over-year, driven by an 11 percent increase in income from railway operations – yielding a record quarterly operating ratio of 65.9 percent. Diluted earnings per share were $1.75, up 13 percent year-over-year.

"Norfolk Southern continues to deliver strong financial results through execution of our strategic plan. We are unwavering in our commitment to improve productivity as demonstrated by seven consecutive quarters of year-over-year improvement in our operating ratio," said James A. Squires, Norfolk Southern chairman, president and CEO. "Our balanced approach focuses on increasing efficiency and delivering a strong customer service product, giving us the ability to achieve our goals and deliver sustainable shareholder value."

For the first nine months of 2017, net income was $1.4 billion, up 15 percent compared with the same period of 2016. Record diluted earnings per share of $4.93 were 17 percent higher. The strong results reflected 11 percent growth in income from railway operations and a record nine-month operating ratio of 67.4 percent.

Third-quarter summary

  • Railway operating revenues of $2.7 billion increased 6 percent compared with third-quarter 2016, as overall volumes were 4 percent higher, reflecting growth within our major commodity categories of coal and intermodal.
  • Railway operating expenses increased $55 million, or 3 percent, compared with third-quarter 2016, to $1.8 billion as targeted expense reductions and gains from the disposition of operating property helped offset volume and inflation-related expenses and higher incentive compensation.
  • Income from railway operations was $911 million, up 11 percent year-over-year, and the operating ratio, or operating expenses as a percentage of revenues, was 65.9 percent, an all-time quarterly record.

About Norfolk Southern
Norfolk Southern Corporation (NYSE: NSC) is one of the nation's premier transportation companies. Its Norfolk Southern Railway Company subsidiary operates approximately 19,500 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.

Norfolk Southern Corporation and Subsidiaries

Consolidated Statements of Income

(Unaudited)



Third Quarter


First Nine Months


2017


2016


2017


2016


($ in millions, except per share amounts)













Railway operating revenues












Merchandise

$

1,600




$

1,552




$

4,781




$

4,678



Intermodal


621





575





1,785





1,635



Coal


449





397





1,316





1,085



Total railway operating revenues


2,670





2,524





7,882





7,398















Railway operating expenses












Compensation and benefits


755





691





2,201





2,081



Purchased services and rents


377





386





1,146





1,149



Fuel


198





181





601





504



Depreciation


265





258





788





767



Materials and other


164





188





574





584















Total railway operating expenses


1,759





1,704





5,310





5,085















Income from railway operations


911





820





2,572





2,313















Other income – net


23





29





79





49



Interest expense on debt


134





144





416





421















Income before income taxes


800





705





2,235





1,941















Provision for income taxes












Current


189





169





580





512



Deferred


105





76





219





177



Total income taxes


294





245





799





689















Net income

$

506




$

460




$

1,436




$

1,252















Earnings per share












Basic

$

1.76




$

1.56




$

4.96




$

4.23



Diluted


1.75





1.55





4.93





4.21















Weighted average shares outstanding












Basic


287.1





292.7





288.8





294.9



Diluted


289.5





294.7





291.2





296.7



See accompanying notes to consolidated financial statements.

Norfolk Southern Corporation and Subsidiaries

Consolidated Statements of Comprehensive Income

(Unaudited)



Third Quarter


First Nine Months


2017


2016


2017


2016


($ in millions)













Net income

$

506




$

460




$

1,436




$

1,252



Other comprehensive income, before tax:












Reclassification adjustments for costs
















included in net income


7





7





21





20



Other comprehensive loss of












equity investees










(1)







Other comprehensive income, before tax


7





7





20





20



















Income tax expense related to reclassification












adjustments for costs included in net income


(2)





(3)





(8)





(8)















Other comprehensive income, net of tax


5





4





12





12















Total comprehensive income

$

511




$

464




$

1,448




$

1,264



See accompanying notes to consolidated financial statements.

Norfolk Southern Corporation and Subsidiaries

Consolidated Balance Sheets

(Unaudited)



September 30,


December 31,


2017


2016


($ in millions)

Assets








Current assets:








Cash and cash equivalents

$


724




$


956



Accounts receivable – net



973






945



Materials and supplies



245






257



Other current assets



57






133



Total current assets



1,999






2,291











Investments



2,888






2,777



Properties less accumulated depreciation of $11,987 and








$11,737, respectively



30,163






29,751



Other assets



103






73











Total assets

$


35,153




$


34,892











Liabilities and stockholders' equity








Current liabilities:








Accounts payable

$


1,287




$


1,215



Short-term debt








100



Income and other taxes



206






245



Other current liabilities



320






229



Current maturities of long-term debt



600






550



Total current liabilities



2,413






2,339











Long-term debt



9,280






9,562



Other liabilities



1,366






1,442



Deferred income taxes



9,367






9,140



Total liabilities



22,426






22,483











Stockholders' equity:








Common stock $1.00 per share par value, 1,350,000,000 shares








authorized; outstanding 286,148,766 and 290,417,610 shares,








respectively, net of treasury shares



288






292



Additional paid-in capital



2,249






2,179



Accumulated other comprehensive loss



(475)






(487)



Retained income



10,665






10,425











Total stockholders' equity



12,727






12,409











Total liabilities and stockholders' equity

$


35,153




$


34,892



See accompanying notes to consolidated financial statements.

Norfolk Southern Corporation and Subsidiaries

Consolidated Statements of Cash Flows

(Unaudited)



First Nine Months


2017


2016


($ in millions)

Cash flows from operating activities






Net income

$

1,436




$

1,252



Reconciliation of net income to net cash provided by operating activities:






Depreciation


791





770



Deferred income taxes


219





177



Gains and losses on properties


(62)





(38)



Changes in assets and liabilities affecting operations:






Accounts receivable


(59)





8



Materials and supplies


12





(30)



Other current assets


68





130



Current liabilities other than debt


165





149



Other – net


(105)





(106)









Net cash provided by operating activities


2,465





2,312









Cash flows from investing activities






Property additions


(1,315)





(1,304)



Property sales and other transactions


137





87



Investment purchases


(4)





(119)



Investment sales and other transactions


8





6









Net cash used in investing activities


(1,174)





(1,330)









Cash flows from financing activities






Dividends


(529)





(523)



Common stock transactions


75





33



Purchase and retirement of common stock


(712)





(603)



Proceeds from borrowings – net


293





594



Debt repayments


(650)





(600)









Net cash used in financing activities


(1,523)





(1,099)









Net decrease in cash and cash equivalents


(232)





(117)









Cash and cash equivalents






At beginning of year


956





1,101









At end of period

$

724




$

984









Supplemental disclosures of cash flow information






Cash paid during the period for:






Interest (net of amounts capitalized)

$

345




$

337



Income taxes (net of refunds)


594





409



See accompanying notes to consolidated financial statements.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS:

1. Stock Repurchase Program
We repurchased and retired 6.0 million and 7.2 million shares of common stock under our stock repurchase program in the first nine months of 2017 and 2016, respectively, at a cost of $712 million and $603 million, respectively. Since the beginning of 2006, we have repurchased and retired 166.3 million shares at a total cost of $11.0 billion.

SOURCE Norfolk Southern Corporation


More