Form 8-K NORFOLK SOUTHERN CORP For: Jan 26

January 26, 2015 8:02 AM

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):

January 26, 2015 (January 26, 2015)

________________________________

��

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 January 26, 2015, the Registrant issued a Press Release, attached hereto as Exhibit�99, reporting financial results for fourth quarter and full-year 2014 and posted its Quarterly Financial Review Fourth Quarter 2014 on its website, www.nscorp.com, in the Investor Relations section, under Financial Reports and Proxy Statements. 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 furnished as part of this Current Report on Form 8-K:



Exhibit Number	Description
99	Press Release dated January 26, 2015.

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:��January 26, 2015

�

�� EXHIBIT INDEX



Exhibit Number	Description
99	Press Release dated January 26, 2015.

FOR IMMEDIATE RELEASE:

Norfolk Southern reports fourth-quarter and full-year 2014 results

NORFOLK, Va., January 26, 2015 -- Norfolk Southern Corporation (NYSE: NSC) today reported financial results for fourth-quarter and full-year 2014.

Net income for the quarter was $511 million, or $1.64 per diluted share, compared with $513 million, or $1.64 per diluted share, earned in fourth-quarter 2013. For the year, net income increased to a record $2.0 billion, 5 percent higher compared with $1.9 billion for 2013. Diluted earnings per share for 2014 were a record $6.39, up 6 percent compared with $6.04 per diluted share for 2013.

FOURTH-QUARTER 2014 RESULTS

�Railway operating revenues totaled $2.9 billion.

�Income from railway operations was $891 million.

�Net income totaled $511 million.

�Diluted earnings per share were $1.64.

�The railway operating ratio was 69.0 percent.

2014 RESULTS SET RECORDS

�Railway operating revenues reached $11.6 billion.

�Income from railway operations was $3.6 billion.

�Net income totaled $2.0 billion.

�Diluted earnings per share were $6.39.

�The railway operating ratio was 69.2 percent.

Norfolk Southern delivered another solid quarter of financial performance, capping a record-setting year during which our company achieved its best results for revenues, operating income, net income, earnings per share, and operating ratio, said CEO Wick Moorman. For 2015, we plan to invest $2.4 billion in capital investments to maintain the safety and quality of our rail network, enhance service, improve operational efficiency, and support growth opportunities.

FOURTH-QUARTER SUMMARY


"	Operating revenues were $2.9 billion, about even compared with fourth-quarter 2013, with gains in merchandise and intermodal revenues offsetting weaker coal revenues. Total volume was up 4 percent, or about 66,000 units, due to gains in intermodal and merchandise traffic.

-- MORE

- 2 -


"	General merchandise revenues were $1.7 billion, 3 percent higher than the same period last year. Volume grew by 5 percent, led by increases in shipments of chemicals and metals and construction. The five commodity groups reported mixed revenue results on a year-over-year basis:


�	Chemicals: $477 million, up 11 percent


�	Agriculture: $387 million, down 2 percent


�	Metals/Construction: $366 million, up 5 percent


�	Automotive: $253 million, even


�	Paper/Forest: $195 million, down 3 percent


"	Intermodal revenues increased to $649 million, 5 percent higher compared with fourth-quarter 2013. Growth in international and domestic business pushed traffic volume up 6 percent in the quarter compared with the same period of 2013.


"	Coal revenues were $543 million, 15 percent lower compared with the fourth quarter of 2013. A weak global export market and fewer shipments of coal to utilities combined to decrease volume by 6 percent.


"	Railway operating expenses were $2.0 billion, down 1 percent compared with the same period of 2013.


"	Income from railway operations was $891 million, a fourth-quarter record and 1 percent higher compared with fourth-quarter 2013.


"	The operating ratio, or operating expenses as a percentage of revenue, improved 1 percent to 69.0 percent, compared with the same quarter in 2013.

2014 SUMMARY


"	Railway operating revenues reached a record $11.6 billion, 3 percent higher compared with 2013, driven by a 5 percent increase in traffic volume.


"	General merchandise revenues rose 6 percent to $6.7 billion, and traffic volume increased 5 percent compared with the prior year.


"	Intermodal revenues increased to $2.6 billion, up 7 percent compared with 2013. Traffic volume was 8 percent higher for 2014 compared with 2013.


"	Coal revenues were $2.4 billion, down 6 percent, due to a 5 percent decline in traffic volume compared with 2013.


"	Railway operating expenses were $8 billion, up 1 percent compared with 2013.


"	Income from railway operations was a record $3.6 billion, 10 percent higher compared with 2013.


"	The operating ratio for the year was a record 69.2 percent, a 3 percent improvement compared with 71.0 percent in 2013.

��

-- MORE

- 3 -

Norfolk Southern Corporation is one of the nations 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)



�	Fourth Quarter					�	Years ended December 31,
�	2014		�	2013		�	2014		�	2013
�	(in millions, except per share amounts)
�	�	�	�	�	�	�	�	�	�	�	�
Railway operating revenues	�	�	�	�	�	�	�	�	�	�	�
Coal	$	543	�	$	641	�	$	2,382	�	$	2,543
General merchandise	�	1,678	�	�	1,622	�	�	6,680	�	�	6,318
Intermodal	�	649	�	�	618	�	�	2,562	�	�	2,384
Total railway operating revenues	�	2,870	�	�	2,881	�	�	11,624	�	�	11,245
�	�	�	�	�	�	�	�	�	�	�	�
Railway operating expenses	�	�	�	�	�	�	�	�	�	�	�
Compensation and benefits	�	714	�	�	761	�	�	2,897	�	�	3,002
Purchased services and rents	�	452	�	�	406	�	�	1,687	�	�	1,629
Fuel	�	347	�	�	403	�	�	1,574	�	�	1,613
Depreciation	�	240	�	�	233	�	�	951	�	�	916
Materials and other	�	226	�	�	197	�	�	940	�	�	828
Total railway operating expenses	�	1,979	�	�	2,000	�	�	8,049	�	�	7,988
�	�	�	�	�	�	�	�	�	�	�	�
Income from railway operations	�	891	�	�	881	�	�	3,575	�	�	3,257
�	�	�	�	�	�	�	�	�	�	�	�
Other income net (note 1)	�	28	�	�	39	�	�	104	�	�	233
Interest expense on debt	�	129	�	�	137	�	�	545	�	�	525
�	�	�	�	�	�	�	�	�	�	�	�
Income before income taxes	�	790	�	�	783	�	�	3,134	�	�	2,965
�	�	�	�	�	�	�	�	�	�	�	�
Provision for income taxes	�	�	�	�	�	�	�	�	�	�	�
Current	�	6	�	�	223	�	�	840	�	�	793
Deferred	�	273	�	�	47	�	�	294	�	�	262
Total income taxes	�	279	�	�	270	�	�	1,134	�	�	1,055
�	�	�	�	�	�	�	�	�	�	�	�
Net income	$	511	�	$	513	�	$	2,000	�	$	1,910
�	�	�	�	�	�	�	�	�	�	�	�
Earnings per share (note 1)	�	�	�	�	�	�	�	�	�	�	�
Basic	$	1.65	�	$	1.66	�	$	6.44	�	$	6.10
Diluted	�	1.64	�	�	1.64	�	�	6.39	�	�	6.04
�	�	�	�	�	�	�	�	�	�	�	�
Weighted average shares outstanding�(note 2)	�	�	�	�	�	�	�	�	�	�	�
Basic	�	309.0	�	�	308.7	�	�	309.4	�	�	311.9
Diluted	�	312.0	�	�	312.3	�	�	312.5	�	�	315.5

See accompanying notes to consolidated financial statements.

Norfolk Southern Corporation and Subsidiaries

Consolidated Statements of Comprehensive Income

(Unaudited)



�	Fourth Quarter					�	Years ended December 31,
�	2014		�	2013		�	2014		�	2013
�	($ in millions)
�	�	�	�	�	�	�	�	�	�	�	�
Net income	$	511	�	$	513	�	$	2,000	�	$	1,910
Other comprehensive income (loss), before tax:	�	�	�	�	�	�	�	�	�	�	�
Pension and other postretirement benefits	�	(329)	�	�	1,012	�	�	(15)	�	�	1,122
Other comprehensive income (loss) of equity investees	�	(18)	�	�	40	�	�	(8)	�	�	42
Other comprehensive income (loss), before tax	�	(347)	�	�	1,052	�	�	(23)	�	�	1,164
Income tax benefit (expense) related to items of other	�	�	�	�	�	�	�	�	�	�	�
comprehensive income (loss)	�	127	�	�	(393)	�	�	6	�	�	(436)
Other comprehensive income (loss), net of tax	�	(220)	�	�	659	�	�	(17)	�	�	728
�	�	�	�	�	�	�	�	�	�	�	�
Total comprehensive income	$	291	�	$	1,172	�	$	1,983	�	$	2,638

See accompanying notes to consolidated financial statements.

Norfolk Southern Corporation and Subsidiaries

Consolidated Balance Sheets

(Unaudited)



�	December 31,			�	December 31,
�	2014			�	2013
�	($ in millions)
Assets	�	�	�	�	�	�	�
Current assets:	�	�	�	�	�	�	�
Cash and cash equivalents	�	$	973	�	�	$	1,443
Short-term investments	�	�	-	�	�	�	118
Accounts receivable - net	�	�	1,055	�	�	�	1,024
Materials and supplies	�	�	236	�	�	�	223
Deferred income taxes	�	�	167	�	�	�	180
Other current assets	�	�	347	�	�	�	87
Total current assets	�	�	2,778	�	�	�	3,075
�	�	�	�	�	�	�	�
Investments	�	�	2,679	�	�	�	2,439
Properties less accumulated depreciation of $10,814 and	�	�	�	�	�	�	�
$10,387, respectively	�	�	27,694	�	�	�	26,645
Other assets	�	�	90	�	�	�	324
�	�	�	�	�	�	�	�
Total assets	�	$	33,241	�	�	$	32,483
�	�	�	�	�	�	�	�
Liabilities and stockholders equity	�	�	�	�	�	�	�
Current liabilities:	�	�	�	�	�	�	�
Accounts payable	�	$	1,233	�	�	$	1,265
Short-term debt	�	�	100	�	�	�	100
Income and other taxes	�	�	217	�	�	�	225
Other current liabilities	�	�	228	�	�	�	270
Current maturities of long-term debt	�	�	2	�	�	�	445
Total current liabilities	�	�	1,780	�	�	�	2,305
�	�	�	�	�	�	�	�
Long-term debt	�	�	8,924	�	�	�	8,903
Other liabilities	�	�	1,312	�	�	�	1,444
Deferred income taxes	�	�	8,817	�	�	�	8,542
Total liabilities	�	�	20,833	�	�	�	21,194
�	�	�	�	�	�	�	�
Stockholders equity:	�	�	�	�	�	�	�
Common stock $1.00 per share par value, 1,350,000,000 shares	�	�	�	�	�	�	�
authorized; outstanding 308,240,130 and 308,878,402 shares,	�	�	�	�	�	�	�
respectively, net of treasury shares	�	�	310	�	�	�	310
Additional paid-in capital	�	�	2,148	�	�	�	2,021
Accumulated other comprehensive loss	�	�	(398)	�	�	�	(381)
Retained income	�	�	10,348	�	�	�	9,339
�	�	�	�	�	�	�	�
Total stockholders equity	�	�	12,408	�	�	�	11,289
�	�	�	�	�	�	�	�
Total liabilities and stockholders equity	�	$	33,241	�	�	$	32,483

See accompanying notes to consolidated financial statements.

Norfolk Southern Corporation and Subsidiaries

Consolidated Statements of Cash Flows

(Unaudited)



�	Years ended December 31,
�	2014		�	2013
�	($ in millions)
Cash flows from operating activities	�	�	�	�	�
Net income	$	2,000	�	$	1,910
Reconciliation of net income to net cash provided by operating activities:	�	�	�	�	�
Depreciation	�	956	�	�	922
Deferred income taxes	�	294	�	�	262
Gains and losses on properties and investments (note 1)	�	(13)	�	�	(104)
Changes in assets and liabilities affecting operations:	�	�	�	�	�
Accounts receivable	�	(31)	�	�	85
Materials and supplies	�	(13)	�	�	(7)
Other current assets	�	(260)	�	�	(5)
Current liabilities other than debt	�	53	�	�	5
Other net	�	(134)	�	�	10
Net cash provided by operating activities	�	2,852	�	�	3,078
�	�	�	�	�	�
Cash flows from investing activities	�	�	�	�	�
Property additions	�	(2,118)	�	�	(1,971)
Property sales and other transactions	�	114	�	�	144
Investments, including short-term	�	(104)	�	�	(130)
Investment sales and other transactions	�	106	�	�	63
Net cash used in investing activities	�	(2,002)	�	�	(1,894)
�	�	�	�	�	�
Cash flows from financing activities	�	�	�	�	�
Dividends	�	(687)	�	�	(637)
Common stock issued net	�	130	�	�	131
Purchase and retirement of common stock (note 2)	�	(318)	�	�	(627)
Proceeds from borrowings net	�	200	�	�	989
Debt repayments	�	(645)	�	�	(250)
Net cash used in financing activities	�	(1,320)	�	�	(394)
�	�	�	�	�	�
Net increase (decrease) in cash and cash equivalents	�	(470)	�	�	790
�	�	�	�	�	�
Cash and cash equivalents	�	�	�	�	�
At beginning of year	�	1,443	�	�	653
�	�	�	�	�	�
At end of year	$	973	�	$	1,443
�	�	�	�	�	�
Supplemental disclosures of cash flow information	�	�	�	�	�
Cash paid during the year for:	�	�	�	�	�
Interest (net of amounts capitalized)	$	522	�	$	492
Income taxes (net of refunds)	�	1,102	�	�	735

See accompanying notes to consolidated financial statements.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS:


1.	Other Income Net

In first quarter 2013, we recognized a $97 million gain on a land sale, which increased net income by $60�million or $0.19 per share.


2.	Stock Repurchase Program

We repurchased 3.1 million shares of common stock in 2014, totaling $318 million, and 8.3 million shares at a cost of $627 million for 2013. We have remaining authorization from our Board of Directors to repurchase up to 35.2 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 139.8 million shares at a total cost of $8.4 billion.

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Form 8-K NORFOLK SOUTHERN CORP For: Jan 26

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