Close

Form 8-K NORFOLK SOUTHERN CORP For: Apr 21

FREE Breaking News Alerts from StreetInsider.com!

E-mail Address

StreetInsider.com Top Tickers, 4/25/2024

1. META
2. CMG
3. LRCX
4. IBM
5. SPY
6. HCP
7. BA
8. SNAP
9. TMUS
10. BSX


April 21, 2016 4:20 PM EDT


UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
________________________________
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported):
April 21, 2016 (April 21, 2016)
________________________________
    
NORFOLK SOUTHERN CORPORATION
(Exact name of registrant as specified in its charter)
________________________________

Virginia
1-8339
52-1188014
(State or Other Jurisdiction
of Incorporation)
(Commission File Number)
(IRS Employer
Identification Number)
 
 
 
Three Commercial Place
 
757-629-2680
Norfolk, Virginia 
23510-9241
 
(Registrant's telephone number, including area code)
(Address of principal executive offices)
 
 

No Change
(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

[ ]    Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

[ ]    Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

[ ]    Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act
        (17 CFR 240.14d-2(b))

[ ]    Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act
        (17 CFR 240.13e-4(c))





Item 2.02.    Results of Operations and Financial Condition
Item 7.01.    Regulation FD Disclosure

On April 21, 2016, the Registrant issued a Press Release, attached hereto as Exhibit 99.1, reporting first quarter results for 2016 and posted its Quarterly Financial Review – First Quarter 2016 on its website, www.nscorp.com, in the “Investors” section, under “Financial Reports.” The accompanying unaudited financial information and summary of certain notes to the consolidated financial statements should be read in conjunction with: (a) the consolidated financial statements and notes included in the Registrant's latest Annual Report on Form 10-K and in subsequent Quarterly Reports on Form 10-Q; and (b) any Current Reports on Form 8-K.  


Item 9.01.    Financial Statements and Exhibits.
 
(d) Exhibits
 
The following exhibit is filed as part of this Current Report on Form 8-K:
 
Exhibit Number
Description
99.1
Press Release dated April 21, 2016


Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

SIGNATURES
NORFOLK SOUTHERN CORPORATION
(Registrant)


/s/ Denise W. Hutson        
Name:  Denise W. Hutson
Title:    Corporate Secretary
Date:  April 21, 2016
 


EXHIBIT INDEX
Exhibit Number
Description
99.1
Press Release dated April 21, 2016





FOR IMMEDIATE RELEASE

Norfolk Southern reports strong first-quarter 2016 results
Achieves record quarterly operating ratio and double-digit improvements in operating income, net income, and earnings per share

FIRST-QUARTER 2016 RESULTS

•
Railway operating revenues totaled $2.4 billion, down 6 percent year-over-year.
•
Railway operating expenses were $1.7 billion, down 13 percent year-over-year on the 2 percent reduction in traffic volumes.
•
Income from railway operations was $723 million, up 19 percent year-over-year.
•
Net income was $387 million, up 25 percent year-over-year.
•
Diluted earnings per share were $1.29, up 29 percent year-over-year.
•
Railway operating ratio was 70.1 percent, an improvement of 8 percent over the prior year and a Norfolk Southern first-quarter record.

NORFOLK, Va., April 21, 2016 – Norfolk Southern Corporation (NYSE: NSC) today reported financial results for first-quarter 2016. Net income for the quarter was $387 million, 25 percent higher compared with $310 million during the same period of 2015. Diluted earnings per share were $1.29, up 29 percent compared with $1.00 diluted earnings per share in the first quarter last year.

“Our strong first-quarter results demonstrate the significant progress we are making in line with our strategic plan,” said Chairman, President, and CEO James A. Squires. “Since I became CEO in June, our team has been committed to streamlining operations, reducing expenses and maintaining superior customer service levels. Our focus on strengthening Norfolk Southern is yielding results, and the company is now on track to achieve productivity savings of about $200 million and an operating ratio below 70 in 2016. We are confident the continued execution of our strategic plan will deliver superior shareholder value by best positioning Norfolk Southern to succeed while ensuring the company is prepared to capture revenue and volume growth opportunities in 2016 and beyond.”

As previously announced, Norfolk Southern is implementing a strategic plan to reduce costs, drive profitability, and enhance value for all Norfolk Southern shareholders. Through this plan, the company expects to achieve annual productivity savings of more than $650 million by 2020 and an operating ratio below 65 percent by 2020.

FIRST-QUARTER SUMMARY

•
Railway operating revenues were $2.4 billion, 6 percent lower compared with the first quarter of 2015. Volume declined 2 percent, the result of lower coal volumes. Average


revenue per unit decreased 3 percent as the effects of higher rates were more than offset by a $114 million, or 70 percent, decline in fuel surcharge revenues.  
▪
Merchandise revenues were $1.5 billion, 2 percent higher than the same period last year. Led by an 18 percent increase in automotive traffic, volume grew in all business groups except chemicals, which was impacted by fewer crude oil shipments due to low oil prices. The five merchandise commodity groups reported the following year-over-year revenue results:

•Chemicals: $419 million, down 3 percent
•Agriculture: $386 million, up 3 percent
•Metals/Construction: $300 million, down 3 percent
•Automotive: $254 million, up 16 percent
•Paper/Forest: $190 million, up 3 percent

▪
Intermodal revenues were $522 million, down 12 percent compared with first quarter 2015. Volume was even for the quarter as growth in international volumes was offset by lower domestic volumes due to the restructuring of the company’s Triple Crown Services subsidiary.
▪
Coal revenues were $349 million, 23 percent lower compared with first quarter of 2015. Mild winter temperatures, low natural gas prices, and a weak global export market combined to decrease volume by 23 percent year-over-year.
▪
Railway operating expenses decreased $264 million, or 13 percent, to $1.7 billion compared with same period of 2015, due to lower fuel costs and targeted expense reduction initiatives.
▪
Income from railway operations was $723 million, 19 percent higher compared with the same period in 2015.
▪
The operating ratio, or operating expenses as a percentage of revenues, was 70.1 percent, a first-quarter record, and an 8 percent improvement compared with first-quarter 2015.

About Norfolk Southern
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.

Media Inquiries:
Frank Brown, 757-629-2710 ([email protected])

Investor Inquiries:
Katie Cook, 757-629-2861 ([email protected])

http://www.norfolksouthern.com

###



Norfolk Southern Corporation and Subsidiaries
Consolidated Statements of Income
(Unaudited)
 
First Quarter
 
2016
 
2015
 
($ in millions, except per share amounts)
 
 
 
 
 
 
Railway operating revenues
 
 
 
 
 
Merchandise
$
1,549

 
$
1,520

Intermodal
 
522

 
 
592

Coal
 
349

 
 
455

Total railway operating revenues
 
2,420

 
 
2,567

 
 
 
 
 
 
Railway operating expenses
 
 
 
 
 
Compensation and benefits
 
723

 
 
783

Purchased services and rents
 
379

 
 
423

Fuel
 
149

 
 
264

Depreciation
 
252

 
 
245

Materials and other
 
194

 
 
246

 
 
 
 
 
 
Total railway operating expenses
 
1,697

 
 
1,961

 
 
 
 
 
 
Income from railway operations
 
723

 
 
606

 
 
 
 
 
 
Other income – net
 
16

 
 
21

Interest expense on debt
 
139

 
 
132

 
 
 
 
 
 
Income before income taxes
 
600

 
 
495

 
 
 
 
 
 
Provision for income taxes
 
 
 
 
 
Current
 
169

 
 
173

Deferred
 
44

 
 
12

Total income taxes
 
213

 
 
185

 
 
 
 
 
 
Net income
$
387

 
$
310

 
 
 
 
 
 
Earnings per share
 
 
 
 
 
Basic
$
1.30

 
$
1.01

Diluted
 
1.29

 
 
1.00

 
 
 
 
 
 
Weighted average shares outstanding (note 1)
 
 
 
 
 
Basic
 
297.2

 
 
306.8

Diluted
 
298.9

 
 
309.6






See accompanying notes to consolidated financial statements.



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

 
First Quarter
 
2016
 
2015
 
($ in millions)
 
 
 
 
 
 
Net income
$
387

 
$
310

Other comprehensive income, before tax:
 
 

 
 
 

Pension and other postretirement benefits
 
7

 
 
10

Other comprehensive loss of equity investees
 
(1
)
 
 
(4
)
 
 
 
 
 
 
Other comprehensive income, before tax
 
6

 
 
6

Income tax expense related to items of other
 
 

 
 
 

comprehensive income
 
(3
)
 
 
(3
)
 
 
 
 
 
 
Other comprehensive income, net of tax
 
3

 
 
3

 
 
 
 
 
 
Total comprehensive income
$
390

 
$
313


























See accompanying notes to consolidated financial statements.




Norfolk Southern Corporation and Subsidiaries
Consolidated Balance Sheets
(Unaudited)
 
March 31,
 
December 31,
 
2016
 
2015
 
($ in millions)
Assets
 
 
 
 
 
 
 
Current assets:
 
 
 
 
 
 
 
Cash and cash equivalents
$
 
589

 
$
 
1,101

Accounts receivable – net
 
 
961

 
 
 
946

Materials and supplies
 
 
315

 
 
 
271

Other current assets
 
 
101

 
 
 
194

Total current assets (note 2)
 
 
1,966

 
 
 
2,512

 
 
 
 
 
 
 
 
Investments
 
 
2,617

 
 
 
2,572

Properties less accumulated depreciation of $11,520 and
 
 
 
 
 
 
 

$11,478, respectively
 
 
29,135

 
 
 
28,992

Other assets
 
 
67

 
 
 
63

 
 
 
 
 
 
 
 
Total assets
$
 
33,785

 
$
 
34,139

 
 
 
 
 
 
 
 
Liabilities and stockholders’ equity
 
 
 

 
 
 
 

Current liabilities:
 
 
 

 
 
 
 

Accounts payable
$
 
1,119

 
$
 
1,091

Short-term debt
 
 
100

 
 
 
200

Income and other taxes
 
 
299

 
 
 
203

Other current liabilities
 
 
313

 
 
 
237

Current maturities of long-term debt
 
 
—

 
 
 
500

Total current liabilities
 
 
1,831

 
 
 
2,231

 
 
 
 
 
 
 
 
Long-term debt
 
 
9,398

 
 
 
9,393

Other liabilities
 
 
1,344

 
 
 
1,385

Deferred income taxes (note 2)
 
 
8,989

 
 
 
8,942

 
 
 
 
 
 
 
 
Total liabilities
 
 
21,562

 
 
 
21,951

 
 
 
 
 
 
 
 
Stockholders’ equity:
 
 
 
 
 
 
 
Common stock $1.00 per share par value, 1,350,000,000 shares
 
 
 
 
 
 
 
  authorized; outstanding 295,737,821 and 297,795,016 shares,
 
 
 
 
 
 
 
respectively, net of treasury shares
 
 
297

 
 
 
299

Additional paid-in capital
 
 
2,147

 
 
 
2,143

Accumulated other comprehensive loss
 
 
(442
)
 
 
 
(445
)
Retained income
 
 
10,221

 
 
 
10,191

 
 
 
 
 
 
 
 
Total stockholders’ equity
 
 
12,223

 
 
 
12,188

 
 
 
 
 
 
 
 
Total liabilities and stockholders’ equity
$
 
33,785

 
$
 
34,139


See accompanying notes to consolidated financial statements.



Norfolk Southern Corporation and Subsidiaries
Consolidated Statements of Cash Flows
(Unaudited)
 
First Quarter
 
2016
 
2015
 
($ in millions)
Cash flows from operating activities
 
 
 
 
 
Net income
$
387

 
$
310

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

 
 
 

Depreciation
 
253

 
 
246

Deferred income taxes
 
44

 
 
12

Gains and losses on properties
 
(2
)
 
 
(5
)
Changes in assets and liabilities affecting operations:
 
 

 
 
 

Accounts receivable
 
(15
)
 
 
23

Materials and supplies
 
(44
)
 
 
(32
)
Other current assets
 
84

 
 
176

Current liabilities other than debt (note 3)
 
200

 
 
(71
)
Other – net
 
(28
)
 
 
(28
)
 
 
 
 
 
 
Net cash provided by operating activities
 
879

 
 
631

 
 
 
 
 
 
Cash flows from investing activities
 
 

 
 
 

Property additions
 
(398
)
 
 
(392
)
Property sales and other transactions
 
12

 
 
16

Investment purchases
 
(23
)
 
 
(3
)
Investment sales and other transactions
 
1

 
 
1

 
 
 
 
 
 
Net cash used in investing activities
 
(408
)
 
 
(378
)
 
 
 
 
 
 
Cash flows from financing activities
 
 

 
 
 

Dividends
 
(176
)
 
 
(181
)
Common stock transactions (note 3)
 
(7
)
 
 
(5
)
Purchase and retirement of common stock (note 1)
 
(200
)
 
 
(415
)
Debt repayments
 
(600
)
 
 
(101
)
 
 
 
 
 
 
Net cash used in financing activities
 
(983
)
 
 
(702
)
 
 
 
 
 
 
Net decrease in cash and cash equivalents
 
(512
)
 
 
(449
)
 
 
 
 
 
 
Cash and cash equivalents
 
 
 
 
 

At beginning of year
 
1,101

 
 
973

 
 
 
 
 
 
At end of period
$
589

 
$
524

 
 
 
 
 
 
Supplemental disclosures of cash flow information
 
 

 
 
 

Cash paid during the period for:
 
 

 
 
 

Interest (net of amounts capitalized)
$
70

 
$
71

Income taxes (net of refunds)
 
2

 
 
12



See accompanying notes to consolidated financial statements.



NOTES TO CONSOLIDATED FINANCIAL STATEMENTS:

1.     Stock Repurchase Program
We repurchased 2.6 million and 3.9 million shares of common stock in the first quarters of 2016 and 2015, respectively, at a cost of $200 million and $415 million, respectively. We have remaining authorization from our Board of Directors to repurchase up to 21.3 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 153.7 million shares at a total cost of $9.7 billion.

2.     New Accounting Pronouncement
In November 2015, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) No. 2015-17, "Balance Sheet Classification of Deferred Taxes." This update requires that deferred tax liabilities and assets be classified as noncurrent on the balance sheet rather than as separate current and noncurrent amounts. We adopted the provisions of this ASU during the first quarter of 2016 and applied it retrospectively. The adoption of ASU 2015-17 resulted in the presentation of $86 million of current deferred income tax assets as a reduction of "Deferred income taxes" in the long-term liabilities section of the Consolidated Balance Sheet at March 31, 2016. We retrospectively presented the December 31, 2015 Consolidated Balance Sheet and related disclosures to reflect the reclassification of $121 million of deferred income tax assets from "Deferred income taxes" in the current assets section of the balance sheet to "Deferred income taxes" in the long-term liabilities section of the balance sheet. There was no other impact on our consolidated financial statements or related disclosures from the adoption of ASU 2015-17.

3.    Stock-Based Compensation
In March 2016, the FASB issued ASU No. 2016-09, "Improvements to Employee Share-Based Payment Accounting." We adopted the provisions of this ASU during the first quarter of 2016. This update principally affects the recognition of excess tax benefits and deficiencies and the cash flow classification of share-based compensation-related transactions. The classification requirements on the Consolidated Statements of Cash Flows for the adoption of ASU 2016-09 resulted in a $21 million increase in "Current liabilities other than debt" within the operating activities section and a corresponding decrease in "Common stock transactions" within the financing activities section for the first quarter of 2016. We retrospectively presented the Consolidated Statements of Cash Flows for the first quarter of 2015 to reflect a $26 million increase in "Current liabilities other than debt" within the operating activities section and a corresponding decrease in "Common stock transactions" within the financing activities section. ASU 2016-09 did not have a material effect on our consolidated financial statements or related disclosures.



Serious News for Serious Traders! Try StreetInsider.com Premium Free!

You May Also Be Interested In





Related Categories

SEC Filings