Form 8-K NORFOLK SOUTHERN CORP For: Apr 26
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
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported):
April 26, 2017 (April 26, 2017)
________________________________
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)
(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))
(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))
(17 CFR 240.13e-4(c))
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter). Emerging growth company [ ]
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. [ ]
Item 2.02. Results of Operations and Financial Condition
Item 7.01. Regulation FD Disclosure
On April 26, 2017, the Registrant issued a Press Release, attached hereto as Exhibit 99.1, reporting first quarter results for 2017. Quarterly financial data is attached hereto as Exhibit 99.2. These documents are available on the Registrant’s website, www.nscorp.com, in the “Invest in NS” 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 exhibits are filed as part of this Current Report on Form 8-K:
Exhibit Number | Description |
99.1 | Press Release dated April 26, 2017 |
99.2 | 2017 Q1 Financial Data |
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
Title: Corporate Secretary
Date: April 26, 2017
EXHIBIT INDEX
FOR IMMEDIATE RELEASE
Norfolk Southern reports record first-quarter 2017 results
Achieved first-quarter record operating ratio, income from operations, and earnings per share
NORFOLK, Va., April 26, 2017 – Norfolk Southern Corporation (NYSE: NSC) today reported first-quarter financial results.
First-quarter net income was $433 million, up 12 percent year-over-year, a result of a 7 percent rise in income from railway operations, as well as a lower effective income tax rate. Diluted earnings per share were $1.48, up 15 percent year-over-year and a first-quarter record.
“Norfolk Southern’s record results for the first quarter demonstrate the efficacy of our strategic plan, under which we are enhancing our service quality and network performance while driving significant efficiency improvements,” said James A. Squires, Norfolk Southern chairman, president and CEO. “Our focus on providing a superior service product has positioned us for growth and, coupled with our cost discipline, has contributed to a solid start to the year. Our strategy provides a strong foundation for growth at low incremental costs, a powerful formula for enhanced shareholder value.”
First-quarter summary
Railway operating revenues of $2.6 billion increased 6 percent compared with first-quarter 2016, as overall volumes were 5 percent higher, reflecting growth within our major commodity categories of coal, intermodal, and merchandise.
Railway operating expenses increased $105 million, or 6 percent, to $1.8 billion as targeted expense reductions and efficiencies were offset by inflation, particularly within fuel expenses, which were higher by $64 million.
Income from railway operations was a first-quarter record $773 million, up 7 percent year-over-year.
The railway operating ratio, or operating expenses as a percentage of revenues, was 70.0 percent, a first-quarter record.
About Norfolk Southern
Norfolk Southern Corporation (NYSE: NSC) is one of the nation’s premier transportation companies. Its Norfolk Southern Railway Company subsidiary operates approximately 19,500 route miles in 22 states and the District of Columbia, serves every major container port in the eastern United States, and provides efficient connections to other rail carriers. Norfolk Southern operates the most extensive intermodal network in the East and is a major transporter of coal, automotive, and industrial products.
Media Inquiries:
Susan Terpay, 757-823-5204 ([email protected])
Investor Inquiries:
Katie Cook, 757-629-2861 ([email protected])
http://www.norfolksouthern.com
Norfolk Southern Corporation and Subsidiaries
Consolidated Statements of Income
(Unaudited)
First Quarter | |||||||||
2017 | 2016 | ||||||||
($ in millions, except per share amounts) | |||||||||
Railway operating revenues | |||||||||
Merchandise | $ | 1,584 | $ | 1,549 | |||||
Intermodal | 571 | 522 | |||||||
Coal | 420 | 349 | |||||||
Total railway operating revenues | 2,575 | 2,420 | |||||||
Railway operating expenses | |||||||||
Compensation and benefits | 743 | 723 | |||||||
Purchased services and rents | 377 | 379 | |||||||
Fuel | 213 | 149 | |||||||
Depreciation | 259 | 252 | |||||||
Materials and other | 210 | 194 | |||||||
Total railway operating expenses | 1,802 | 1,697 | |||||||
Income from railway operations | 773 | 723 | |||||||
Other income – net | 24 | 16 | |||||||
Interest expense on debt | 142 | 139 | |||||||
Income before income taxes | 655 | 600 | |||||||
Provision for income taxes | |||||||||
Current | 166 | 169 | |||||||
Deferred | 56 | 44 | |||||||
Total income taxes | 222 | 213 | |||||||
Net income | $ | 433 | $ | 387 | |||||
Earnings per share | |||||||||
Basic | $ | 1.49 | $ | 1.30 | |||||
Diluted | 1.48 | 1.29 | |||||||
Weighted average shares outstanding | |||||||||
Basic | 290.3 | 297.2 | |||||||
Diluted | 292.8 | 298.9 | |||||||
See accompanying notes to consolidated financial statements.
Norfolk Southern Corporation and Subsidiaries
Consolidated Statements of Comprehensive Income
(Unaudited)
First Quarter | |||||||
2017 | 2016 | ||||||
($ in millions) | |||||||
Net income | $ | 433 | $ | 387 | |||
Other comprehensive income, before tax: | |||||||
Reclassification adjustments for costs included in net income | 7 | 7 | |||||
Other comprehensive loss of equity investees | (2 | ) | (1 | ) | |||
Other comprehensive income, before tax | 5 | 6 | |||||
Income tax expense related to reclassification adjustments | |||||||
for costs included in net income | (3 | ) | (3 | ) | |||
Other comprehensive income, net of tax | 2 | 3 | |||||
Total comprehensive income | $ | 435 | $ | 390 | |||
See accompanying notes to consolidated financial statements.
Norfolk Southern Corporation and Subsidiaries
Consolidated Balance Sheets
(Unaudited)
March 31, | December 31, | ||||||||||
2017 | 2016 | ||||||||||
($ in millions) | |||||||||||
Assets | |||||||||||
Current assets: | |||||||||||
Cash and cash equivalents | $ | 955 | $ | 956 | |||||||
Accounts receivable – net | 998 | 945 | |||||||||
Materials and supplies | 281 | 257 | |||||||||
Other current assets | 93 | 133 | |||||||||
Total current assets | 2,327 | 2,291 | |||||||||
Investments | 2,809 | 2,777 | |||||||||
Properties less accumulated depreciation of $11,872 and | |||||||||||
$11,737, respectively | 29,927 | 29,751 | |||||||||
Other assets | 82 | 73 | |||||||||
Total assets | $ | 35,145 | $ | 34,892 | |||||||
Liabilities and stockholders’ equity | |||||||||||
Current liabilities: | |||||||||||
Accounts payable | $ | 1,211 | $ | 1,215 | |||||||
Short-term debt | — | 100 | |||||||||
Income and other taxes | 379 | 245 | |||||||||
Other current liabilities | 303 | 229 | |||||||||
Current maturities of long-term debt | 550 | 550 | |||||||||
Total current liabilities | 2,443 | 2,339 | |||||||||
Long-term debt | 9,569 | 9,562 | |||||||||
Other liabilities | 1,407 | 1,442 | |||||||||
Deferred income taxes | 9,199 | 9,140 | |||||||||
Total liabilities | 22,618 | 22,483 | |||||||||
Stockholders’ equity: | |||||||||||
Common stock $1.00 per share par value, 1,350,000,000 shares | |||||||||||
authorized; outstanding 289,782,660 and 290,417,610 shares, | |||||||||||
respectively, net of treasury shares | 291 | 292 | |||||||||
Additional paid-in capital | 2,228 | 2,179 | |||||||||
Accumulated other comprehensive loss | (485 | ) | (487 | ) | |||||||
Retained income | 10,493 | 10,425 | |||||||||
Total stockholders’ equity | 12,527 | 12,409 | |||||||||
Total liabilities and stockholders’ equity | $ | 35,145 | $ | 34,892 | |||||||
See accompanying notes to consolidated financial statements.
Norfolk Southern Corporation and Subsidiaries
Consolidated Statements of Cash Flows
(Unaudited)
First Quarter | |||||||||
2017 | 2016 | ||||||||
($ in millions) | |||||||||
Cash flows from operating activities | |||||||||
Net income | $ | 433 | $ | 387 | |||||
Reconciliation of net income to net cash provided by operating activities: | |||||||||
Depreciation | 260 | 253 | |||||||
Deferred income taxes | 56 | 44 | |||||||
Gains and losses on properties | (9 | ) | (2 | ) | |||||
Changes in assets and liabilities affecting operations: | |||||||||
Accounts receivable | (53 | ) | (15 | ) | |||||
Materials and supplies | (24 | ) | (44 | ) | |||||
Other current assets | 31 | 84 | |||||||
Current liabilities other than debt | 188 | 200 | |||||||
Other – net | (36 | ) | (28 | ) | |||||
Net cash provided by operating activities | 846 | 879 | |||||||
Cash flows from investing activities | |||||||||
Property additions | (438 | ) | (398 | ) | |||||
Property sales and other transactions | 35 | 12 | |||||||
Investment purchases | (2 | ) | (23 | ) | |||||
Investment sales and other transactions | 1 | 1 | |||||||
Net cash used in investing activities | (404 | ) | (408 | ) | |||||
Cash flows from financing activities | |||||||||
Dividends | (177 | ) | (176 | ) | |||||
Common stock transactions | 34 | (7 | ) | ||||||
Purchase and retirement of common stock | (200 | ) | (200 | ) | |||||
Debt repayments | (100 | ) | (600 | ) | |||||
Net cash used in financing activities | (443 | ) | (983 | ) | |||||
Net decrease in cash and cash equivalents | (1 | ) | (512 | ) | |||||
Cash and cash equivalents | |||||||||
At beginning of year | 956 | 1,101 | |||||||
At end of period | $ | 955 | $ | 589 | |||||
Supplemental disclosures of cash flow information | |||||||||
Cash paid during the period for: | |||||||||
Interest (net of amounts capitalized) | $ | 70 | $ | 70 | |||||
Income taxes (net of refunds) | 12 | 2 | |||||||
See accompanying notes to consolidated financial statements.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS:
1. Stock Repurchase Program
We repurchased and retired 1.7 million and 2.6 million shares of common stock under our stock repurchase program in the first quarters of 2017 and 2016, respectively, at a cost of $200 million in each period. Since the beginning of 2006, we have repurchased and retired 162.0 million shares at a total cost of $10.5 billion.