Attached files
| file | filename |
|---|---|
| EX-99.3 - EXHIBIT 99.3 - NORFOLK SOUTHERN CORP | nspr-012418xdiv1.htm |
| EX-99.1 - EXHIBIT 99.1 - NORFOLK SOUTHERN CORP | nspr-0124181.htm |
| 8-K - 8-K - NORFOLK SOUTHERN CORP | ns8k-0124182.htm |
Norfolk Southern Corporation and Subsidiaries
Consolidated Statements of Income
(Unaudited)
Fourth Quarter | Years Ended December 31, | ||||||||||||||||||
2017 | 2016 | 2017 | 2016 | ||||||||||||||||
($ in millions, except per share amounts) | |||||||||||||||||||
Railway operating revenues | |||||||||||||||||||
Merchandise | $ | 1,576 | $ | 1,504 | $ | 6,357 | $ | 6,182 | |||||||||||
Intermodal | 667 | 583 | 2,452 | 2,218 | |||||||||||||||
Coal | 426 | 403 | 1,742 | 1,488 | |||||||||||||||
Total railway operating revenues | 2,669 | 2,490 | 10,551 | 9,888 | |||||||||||||||
Railway operating expenses | |||||||||||||||||||
Compensation and benefits | 714 | 662 | 2,915 | 2,743 | |||||||||||||||
Purchased services and rents | 268 | 399 | 1,414 | 1,548 | |||||||||||||||
Fuel | 239 | 194 | 840 | 698 | |||||||||||||||
Depreciation | 267 | 259 | 1,055 | 1,026 | |||||||||||||||
Materials and other | 167 | 215 | 741 | 799 | |||||||||||||||
Total railway operating expenses | 1,655 | 1,729 | 6,965 | 6,814 | |||||||||||||||
Income from railway operations | 1,014 | 761 | 3,586 | 3,074 | |||||||||||||||
Other income – net | 13 | 22 | 92 | 71 | |||||||||||||||
Interest expense on debt | 134 | 142 | 550 | 563 | |||||||||||||||
Income before income taxes | 893 | 641 | 3,128 | 2,582 | |||||||||||||||
Income taxes | |||||||||||||||||||
Current | 3 | 175 | 583 | 687 | |||||||||||||||
Deferred | (3,078 | ) | 50 | (2,859 | ) | 227 | |||||||||||||
Total income taxes | (3,075 | ) | 225 | (2,276 | ) | 914 | |||||||||||||
Net income | $ | 3,968 | $ | 416 | $ | 5,404 | $ | 1,668 | |||||||||||
Earnings per share | |||||||||||||||||||
Basic | $ | 13.91 | $ | 1.43 | $ | 18.76 | $ | 5.66 | |||||||||||
Diluted | 13.79 | 1.42 | 18.61 | 5.62 | |||||||||||||||
Weighted average shares outstanding | |||||||||||||||||||
Basic | 285.1 | 291.2 | 287.9 | 293.9 | |||||||||||||||
Diluted | 287.8 | 293.7 | 290.3 | 296.0 | |||||||||||||||
See accompanying notes to consolidated financial statements.
Norfolk Southern Corporation and Subsidiaries
Consolidated Statements of Comprehensive Income
(Unaudited)
Fourth Quarter | Years Ended December 31, | ||||||||||||||||||
2017 | 2016 | 2017 | 2016 | ||||||||||||||||
($ in millions) | |||||||||||||||||||
Net income | $ | 3,968 | $ | 416 | $ | 5,404 | $ | 1,668 | |||||||||||
Other comprehensive income (loss), before tax: | |||||||||||||||||||
Pension and other postretirement benefits | 134 | (94 | ) | 155 | (74 | ) | |||||||||||||
Other comprehensive income of | |||||||||||||||||||
equity investees | 20 | 5 | 19 | 5 | |||||||||||||||
Other comprehensive income (loss), before tax | 154 | (89 | ) | 174 | (69 | ) | |||||||||||||
Income tax benefit (expense) related to items of | |||||||||||||||||||
other comprehensive income (loss) | (35 | ) | 35 | (43 | ) | 27 | |||||||||||||
Other comprehensive income (loss), net of tax | 119 | (54 | ) | 131 | (42 | ) | |||||||||||||
Total comprehensive income | $ | 4,087 | $ | 362 | $ | 5,535 | $ | 1,626 | |||||||||||
See accompanying notes to consolidated financial statements.
Norfolk Southern Corporation and Subsidiaries
Consolidated Balance Sheets
(Unaudited)
At December 31, | |||||||||||
2017 | 2016 | ||||||||||
($ in millions) | |||||||||||
Assets | |||||||||||
Current assets: | |||||||||||
Cash and cash equivalents | $ | 690 | $ | 956 | |||||||
Accounts receivable – net | 955 | 945 | |||||||||
Materials and supplies | 222 | 257 | |||||||||
Other current assets | 282 | 133 | |||||||||
Total current assets | 2,149 | 2,291 | |||||||||
Investments | 2,981 | 2,777 | |||||||||
Properties less accumulated depreciation of $11,909 and | |||||||||||
$11,737, respectively | 30,330 | 29,751 | |||||||||
Other assets | 251 | 73 | |||||||||
Total assets | $ | 35,711 | $ | 34,892 | |||||||
Liabilities and stockholders’ equity | |||||||||||
Current liabilities: | |||||||||||
Accounts payable | $ | 1,401 | $ | 1,215 | |||||||
Short-term debt | 100 | 100 | |||||||||
Income and other taxes | 211 | 245 | |||||||||
Other current liabilities | 233 | 229 | |||||||||
Current maturities of long-term debt | 600 | 550 | |||||||||
Total current liabilities | 2,545 | 2,339 | |||||||||
Long-term debt | 9,136 | 9,562 | |||||||||
Other liabilities | 1,347 | 1,442 | |||||||||
Deferred income taxes | 6,324 | 9,140 | |||||||||
Total liabilities | 19,352 | 22,483 | |||||||||
Stockholders’ equity: | |||||||||||
Common stock $1.00 per share par value, 1,350,000,000 shares | |||||||||||
authorized; outstanding 284,157,187 and 290,417,610 shares, | |||||||||||
respectively, net of treasury shares | 285 | 292 | |||||||||
Additional paid-in capital | 2,254 | 2,179 | |||||||||
Accumulated other comprehensive loss | (356 | ) | (487 | ) | |||||||
Retained income | 14,176 | 10,425 | |||||||||
Total stockholders’ equity | 16,359 | 12,409 | |||||||||
Total liabilities and stockholders’ equity | $ | 35,711 | $ | 34,892 | |||||||
See accompanying notes to consolidated financial statements.
Norfolk Southern Corporation and Subsidiaries
Consolidated Statements of Cash Flows
(Unaudited)
Years Ended December 31, | |||||||||
2017 | 2016 | ||||||||
($ in millions) | |||||||||
Cash flows from operating activities | |||||||||
Net income | $ | 5,404 | $ | 1,668 | |||||
Reconciliation of net income to net cash provided by operating activities: | |||||||||
Depreciation | 1,059 | 1,030 | |||||||
Deferred income taxes | (2,859 | ) | 227 | ||||||
Gains and losses on properties | (92 | ) | (46 | ) | |||||
Changes in assets and liabilities affecting operations: | |||||||||
Accounts receivable | (41 | ) | 23 | ||||||
Materials and supplies | 35 | 42 | |||||||
Other current assets | (71 | ) | 82 | ||||||
Current liabilities other than debt | 135 | 158 | |||||||
Other – net | (317 | ) | (150 | ) | |||||
Net cash provided by operating activities | 3,253 | 3,034 | |||||||
Cash flows from investing activities | |||||||||
Property additions | (1,723 | ) | (1,887 | ) | |||||
Property sales and other transactions | 202 | 130 | |||||||
Investment purchases | (7 | ) | (123 | ) | |||||
Investment sales and other transactions | 47 | 48 | |||||||
Net cash used in investing activities | (1,481 | ) | (1,832 | ) | |||||
Cash flows from financing activities | |||||||||
Dividends | (703 | ) | (695 | ) | |||||
Common stock transactions | 89 | 57 | |||||||
Purchase and retirement of common stock | (1,012 | ) | (803 | ) | |||||
Proceeds from borrowings – net of issuance costs | 290 | 694 | |||||||
Debt repayments | (702 | ) | (600 | ) | |||||
Net cash used in financing activities | (2,038 | ) | (1,347 | ) | |||||
Net decrease in cash and cash equivalents | (266 | ) | (145 | ) | |||||
Cash and cash equivalents | |||||||||
At beginning of year | 956 | 1,101 | |||||||
At end of year | $ | 690 | $ | 956 | |||||
Supplemental disclosures of cash flow information | |||||||||
Cash paid during the period for: | |||||||||
Interest (net of amounts capitalized) | $ | 528 | $ | 543 | |||||
Income taxes (net of refunds) | 705 | 593 | |||||||
See accompanying notes to consolidated financial statements.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS:
1. Tax Reform
As a result of the enactment of tax reform, “Purchased services and rents” includes a $151 million benefit and “Total income taxes” includes a $3,331 million benefit which added $3,482 million to “Net income.” This increased “Earnings per share - basic” by $12.21 and $12.10 in the fourth quarter and for the year 2017, respectively, and “Earnings per share - diluted” by $12.10 and $12.00 in the fourth quarter 2017 and for the year 2017, respectively.
2. Stock Repurchase Program
We repurchased and retired 8.2 million and 9.2 million shares of common stock under our stock repurchase program in 2017 and 2016, respectively, at a cost of $1.0 billion and $803 million, respectively. Since the beginning of 2006, we have repurchased and retired 168.5 million shares at a total cost of $11.3 billion.