NORFOLK SOUTHERN CORP - FORM 8-K - EX-99 - April 24, 2012

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

 

Three Months Ended

March 31,

2012

2011

(in millions, except per share amounts)

Railway operating revenues:       

   Coal

$         766

$         816

   General merchandise

1,496

1,319

   Intermodal

           527

485

      Total railway operating revenues

2,789

2,620

Railway operating expenses:

   Compensation and benefits

786

765

   Purchased services and rents

391

383

   Fuel

413

389

   Depreciation

224

211

   Materials and other (note 1)

230

272

      Total railway operating expenses

 

2,044

 

 

 

2,020

 

         Income from railway operations

745

600

Other income - net

29

27

Interest expense on debt

120

112

         Income before income taxes

654

515

Provision for income taxes:

   Current

156

78

   Deferred

88

112

      Total income taxes

244

190

     Net income

$         410

 

 

$         325

 

Earnings per share (note 2):

   Basic

$        1.24

$        0.91

   Diluted

1.23

0.90

Weighted average shares outstanding (note 3): 

   Basic

328.3

355.2

   Diluted

332.9

360.5

 

 

 

 

 

See accompanying notes.

 

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

        Three Months Ended

                 March 31,

 

 

 

 

 

 

 

 

 

2012                         2011

 

                                                                                                                                    ($ in millions)

 

 

 

 

Net income

$       410 

$        325 

 

Other comprehensive income, before tax:

 

 

   Pension and other postretirement benefits

           32 

            28

 

   Other comprehensive loss of equity investees

           (4)

              -

 

Other comprehensive income, before tax

 

         28

           28

Income tax expense related to items of other comprehensive income

         (12)

             (9)

 

Other comprehensive income, net of tax

          16

             19

 

     Total comprehensive income

$       426

$          344

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

See accompanying notes.

 

 

Norfolk Southern Corporation and Subsidiaries
Consolidated Balance Sheets
(Unaudited)

March 31,

December 31,

 

 

2012

 

2011

($ in millions)

Assets

Current assets:

   Cash and cash equivalents

$       829 

$       276 

   Short-term investments

2 

25 

   Accounts receivable - net

1,056 

1,022 

   Materials and supplies

228 

209 

   Deferred income taxes

146 

143 

   Other current assets

71 

76 

      Total current assets

2,332 

1,751 

Investments

2,263 

2,234 

Properties less accumulated depreciation of $9,596 and $9,464,

respectively

 

24,703 

 

24,469 

Other assets

77 

84 

      Total assets

$  29,375 

$  28,538 

Liabilities and stockholders' equity

Current liabilities:

   Accounts payable

$    1,243 

$    1,092 

   Short-term debt

- 

100 

   Income and other taxes

320 

207 

   Other current liabilities

337 

252 

   Current maturities of long-term debt

32 

50 

      Total current liabilities

1,932 

1,701 

Long-term debt

7,985 

7,390 

Other liabilities

2,053 

2,050 

Deferred income taxes

7,590 

7,486 

       Total liabilities

 

19,560 

 

18,627 

Stockholders' equity:

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

      authorized; outstanding 325,763,164 and 330,386,089 shares,

      respectively, net of treasury shares

327 

332 

   Additional paid-in capital

1,917 

1,912 

   Accumulated other comprehensive loss

(1,010)

(1,026)

   Retained income

8,581 

8,693 

      Total stockholders' equity

 

9,815 

 

9,911 

      Total liabilities and stockholders' equity

 

$   29,375 

 

$    28,538 

See accompanying notes.

Norfolk Southern Corporation and Subsidiaries
Consolidated Statements of Cash Flows
(Unaudited)

Three Months Ended

 

March 31,

2012

2011

($ in millions)

Cash flows from operating activities:

   Net income

$         410 

$         325 

   Reconciliation of net income to net cash provided

      by operating activities:

         Depreciation

226 

213 

         Deferred income taxes

88 

112 

         Gains and losses on properties

(1)

-  

         Changes in assets and liabilities affecting operations:

            Accounts receivable

(34)

(127)

            Materials and supplies

(19)

(21)

            Other current assets

5 

19 

            Current liabilities other than debt

316 

27 

         Other - net

44 

104 

            Net cash provided by operating activities

1,035 

652 

Cash flows from investing activities:

   Property additions

(461)

(423)

   Property sales and other transactions

2 

(10)

   Investments, including short-term

(4)

(4)

   Investment sales and other transactions

27 

55 

            Net cash used in investing activities

(436)

(382)

Cash flows from financing activities:

   Dividends

(155)

(142)

   Common stock issued - net

31 

32 

   Purchase and retirement of common stock (note 3)

(400)

(343)

   Proceeds from borrowings - net

            696

-  

   Debt repayments

(218)

(408)

            Net cash used in financing activities

(46)

(861)

            Net increase (decrease) in cash and cash equivalents

            553

(591)

Cash and cash equivalents:

  At beginning of year

            276

827 

  At end of period

$          829

$         236 

Supplemental disclosure of cash flow information

  Cash paid during the period for:

      Interest (net of amounts capitalized)

$           60 

$           72 

      Income taxes (net of refunds)

2 

3 

 

See accompanying notes.

 

 NOTES:

1.   MATERIALS AND OTHER

During the first quarter of 2011, NS received an unfavorable ruling for an arbitration claim with an insurance carrier, and was denied recovery of the contested portion ($43 million) of the claim.  As a result, NS recorded a $43 million charge for the receivables associated with the contested portion of the claim and a $15 million charge for other receivables affected by the ruling for which recovery was no longer probable. 

2.   EARNINGS PER SHARE  

For basic earnings per share, income available to common stockholders reflects reductions for the effect of dividend equivalent payments made to holders of stock options and restricted stock units as follows:  for the first quarter, $3 million in 2012 and $2 million in 2011.  For diluted earnings per share, income available to common stockholders reflects reductions for the effect of dividend equivalent payments made to holders of stock options and restricted stock units as follows:  for the first quarter, $2 million in 2012 and 2011.

3.   STOCK REPURCHASE PROGRAM   

NS repurchased and retired 5.7 million shares of Common Stock in the first quarter of 2012 at a cost of $400 million and 5.3 million shares at a cost of $343 million for the same period of 2011.  The timing and volume of purchases is guided by management's 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, NS has repurchased and retired 115.3 million shares at a total cost of $6.6 billion.

 

 

 

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