NORFOLK SOUTHERN CORP - FORM 8-K - EX-99.2 - 1Q 2015 FINANCIAL STATEMENTS

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8-K - 1Q 2015 FINANCIALS 8-K - NORFOLK SOUTHERN CORP	ns8k-042915.htm
EX-99.1 - 1Q 2015 FINANCIALS PRESS RELEASE - NORFOLK SOUTHERN CORP	pr042915.htm

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



	First Quarter
	2015		2014
	($ in millions, except per share amounts)

Railway operating revenues
Coal	$	455	$	541
General merchandise		1,520		1,552
Intermodal		592		596
Total railway operating revenues		2,567		2,689

Railway operating expenses
Compensation and benefits		783		740
Purchased services and rents		423		392
Fuel		264		432
Depreciation		245		237
Materials and other		246		221

Total railway operating expenses		1,961		2,022

Income from railway operations		606		667

Other income – net		21		26
Interest expense on debt		132		139

Income before income taxes		495		554

Provision for income taxes
Current		173		194
Deferred		12		(8	)
Total income taxes		185		186

Net income	$	310	$	368

Earnings per share
Basic	$	1.01	$	1.18
Diluted		1.00		1.17

Weighted average shares outstanding (note 1)
Basic		306.8		309.5
Diluted		309.6		312.6

See accompanying notes to consolidated financial statements.

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



	First Quarter
	2015			2014
	($ in millions)

Net income	$	310		$	368
Other comprehensive income, before tax:
Pension and other postretirement benefits		10			299
Other comprehensive income (loss) of equity investees		(4	)		3

Other comprehensive income, before tax		6			302
Income tax expense related to items of other
comprehensive income		(3	)		(114	)

Other comprehensive income, net of tax		3			188

Total comprehensive income	$	313		$	556

See accompanying notes to consolidated financial statements.

Norfolk Southern Corporation and Subsidiaries
Consolidated Balance Sheets
(Unaudited)



	March 31,			December 31,
	2015			2014
	($ in millions)
Assets
Current assets:
Cash and cash equivalents	$	524		$	973
Accounts receivable – net		1,032			1,055
Materials and supplies		268			236
Deferred income taxes		118			167
Other current assets		173			347
Total current assets		2,115			2,778

Investments		2,701			2,679
Properties less accumulated depreciation of $11,020 and
$10,814, respectively		27,829			27,694
Other assets		130			90

Total assets	$	32,775		$	33,241

Liabilities and stockholders’ equity
Current liabilities:
Accounts payable	$	1,094		$	1,233
Short-term debt		—			100
Income and other taxes		210			217
Other current liabilities		298			228
Current maturities of long-term debt		501			2
Total current liabilities		2,103			1,780

Long-term debt		8,429			8,924
Other liabilities		1,302			1,312
Deferred income taxes		8,783			8,817

Total liabilities		20,617			20,833

Stockholders’ equity:
Common stock $1.00 per share par value, 1,350,000,000 shares
authorized; outstanding 304,849,454 and 308,240,130 shares,
respectively, net of treasury shares		306			310
Additional paid-in capital		2,160			2,148
Accumulated other comprehensive loss		(395	)		(398	)
Retained income		10,087			10,348

Total stockholders’ equity		12,158			12,408

Total liabilities and stockholders’ equity	$	32,775		$	33,241

See accompanying notes to consolidated financial statements.

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



	First Quarter
	2015			2014
	($ in millions)
Cash flows from operating activities
Net income	$	310		$	368
Reconciliation of net income to net cash provided by operating activities:
Depreciation		246			238
Deferred income taxes		12			(8	)
Gains and losses on properties and investments		(5	)		(2	)
Changes in assets and liabilities affecting operations:
Accounts receivable		23			(85	)
Materials and supplies		(32	)		(17	)
Other current assets		176			17
Current liabilities other than debt		(97	)		86
Other – net		(28	)		(9	)

Net cash provided by operating activities		605			588

Cash flows from investing activities
Property additions		(392	)		(381	)
Property sales and other transactions		16			22
Investments, including short-term		(3	)		(3	)
Investment sales and other transactions		1			108

Net cash used in investing activities		(378	)		(254	)

Cash flows from financing activities
Dividends		(181	)		(167	)
Common stock issued		21			62
Purchase and retirement of common stock (note 1)		(415	)		(50	)
Debt repayments		(101	)		(100	)

Net cash used in financing activities		(676	)		(255	)

Net increase (decrease) in cash and cash equivalents		(449	)		79

Cash and cash equivalents
At beginning of year		973			1,443

At end of period	$	524		$	1,522

Supplemental disclosures of cash flow information
Cash paid during the period for:
Interest (net of amounts capitalized)	$	71		$	75
Income taxes (net of refunds)		12			60

See accompanying notes to consolidated financial statements.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS:

1. Stock Repurchase Program

We repurchased 3.9 million and 0.5 million shares of common stock in the first quarters of 2015 and 2014, respectively, at a cost of $415 million and $50 million, respectively. We have remaining authorization from our Board of Directors to repurchase up to 31.3 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 143.7 million shares at a total cost of $8.8 billion.

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