Investor Alert

New York Markets Close in:

press release

July 29, 2020, 8:00 a.m. EDT

Norfolk Southern reports second-quarter 2020 results

NORFOLK, Va., July 29, 2020 /PRNewswire/ -- Norfolk Southern Corporation /zigman2/quotes/200877725/composite NSC +0.03% today reported second-quarter financial results.

Second-quarter net income was $392 million, diluted earnings per share were $1.53, and the operating ratio was 70.7 percent.

"In a period when working safely and delivering for our customers was abruptly redefined, our employees responded by protecting each other and innovating to serve rapidly evolving freight demand. Underscoring our commitment to shareholder value, we forged ahead with our ongoing transformation by further reducing our hump yard footprint, achieving fuel efficiency gains, and increasing train size. These are astounding achievements while managing the unprecedented economic disruption and public health crisis," said James A. Squires, Norfolk Southern chairman, president and CEO. "We are mobilized and driven to meet the challenges and opportunities that lie ahead, and we will continue to create collaborative change and relentlessly pursue increased productivity as a leading supply chain partner throughout the economic recovery and beyond."   

Second-quarter summary

  • Railway operating revenues of $2.1 billion decreased 29 percent compared with second-quarter 2019, driven by a 26 percent decline in total volume.

  • Railway operating expenses of $1.5 billion decreased 21 percent compared with second-quarter 2019, driven by lower fuel, compensation and benefits, and purchased services expenses.

  • Income from railway operations was $610 million and the operating ratio was 70.7 percent.

About Norfolk Southern Norfolk Southern Corporation /zigman2/quotes/200877725/composite NSC +0.03% 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 is a major transporter of industrial products, including chemicals, agriculture, and metals and construction materials. In addition, the railroad operates the most extensive intermodal network in the East and is a principal carrier of coal, automobiles, and automotive parts.

Forward-looking statements This news release contains forward-looking statements that may be identified by the use of words like "believe," "expect," "anticipate," "estimate," "plan," "consider," "project," and similar references to the future. Forward-looking statements reflect our good-faith evaluation of information currently available. These forward-looking statements are subject to a number of risks and uncertainties, and our actual results may differ materially from those projected. Please refer to our annual and quarterly reports filed with the SEC for a full discussion of those risks and uncertainties we view as most important. Additional risks include the impact of the COVID-19 pandemic on us, our customers, our supply chain, and our operations. Forward-looking statements are not, and should not be relied upon as, a guarantee of future performance or results, nor will they necessarily prove to be accurate indications of the times at or by which any such performance or results will be achieved. As a result, actual outcomes and results may differ materially from those expressed in forward-looking statements. We undertake no obligation to update or revise forward-looking statements.

http://www.norfolksouthern.com   

 

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





Second Quarter
First Six Months

2020
2019
2020
2019

(in millions, except per share amounts)








Railway operating revenues






Merchandise $ 1,307
$ 1,756
$ 2,979
$ 3,442
Intermodal 569
701
1,224
1,420
Coal 209
468
507
903
Total railway operating revenues 2,085
2,925
4,710
5,765








Railway operating expenses






Compensation and benefits 586
712
1,208
1,439
Purchased services and rents 372
418
775
842
Fuel 84
254
273
504
Depreciation 282
284
574
567
Materials and other 151
192
317
382
Loss on asset disposal

385

Total railway operating expenses 1,475
1,860
3,532
3,734








Income from railway operations 610
1,065
1,178
2,031








Other income – net 49
22
71
66
Interest expense on debt 156
153
310
302








Income before income taxes 503
934
939
1,795








Income taxes






Current 66
136
110
263
Deferred 45
76
56
133
Total income taxes 111
212
166
396








Net income $ 392
$ 722
$ 773
$ 1,399








Earnings per share – diluted $ 1.53
$ 2.70
$ 3.00
$ 5.21








Weighted average shares outstanding – diluted 256.7
267.1
257.7
268.3








See accompanying notes to consolidated financial statements

 

Norfolk Southern Corporation and Subsidiaries
Consolidated Balance Sheets
(Unaudited)





June 30,
December 31,

2020
2019

($ in millions)
Assets


Current assets:


Cash and cash equivalents $ 1,143
$ 580
Accounts receivable – net 822
920
Materials and supplies 257
244
Other current assets 128
337
Total current assets 2,350
2,081




Investments 3,590
3,428
Properties less accumulated depreciation of $11,823


and $11,982, respectively 31,217
31,614
Other assets 805
800




Total assets $ 37,962
$ 37,923




Liabilities and stockholders' equity


Current liabilities:


Accounts payable $ 1,268
$ 1,428
Income and other taxes 239
229
Other current liabilities 343
327
Current maturities of long-term debt 85
316
Total current liabilities 1,935
2,300




Long-term debt 12,612
11,880
Other liabilities 1,680
1,744
Deferred income taxes 6,874
6,815




Total liabilities 23,101
22,739




Stockholders' equity:


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


  authorized; outstanding 255,109,247 and 257,904,956 shares,


  respectively, net of treasury shares 256
259
Additional paid-in capital 2,217
2,209
Accumulated other comprehensive loss (475)
(491)
Retained income 12,863
13,207




Total stockholders' equity 14,861
15,184




Total liabilities and stockholders' equity $ 37,962
$ 37,923








See accompanying notes to consolidated financial statements

 

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



First Six Months

2020
2019

($ in millions)
Cash flows from operating activities


Net income $ 773
$ 1,399
Reconciliation of net income to net cash provided by operating activities:


Depreciation 574
567
Deferred income taxes 56
133
Gains and losses on properties (11)
(7)
Loss on asset disposal 385
Changes in assets and liabilities affecting operations:


Accounts receivable 98
(30)
Materials and supplies (13)
(49)
Other current assets 30
55
Current liabilities other than debt
(30)
Other – net (134)
(86)




Net cash provided by operating activities 1,758
1,952




Cash flows from investing activities


Property additions (735)
(979)
Property sales and other transactions 258
214
Investment purchases (5)
(12)
Investment sales and other transactions (58)
(75)




Net cash used in investing activities (540)
(852)




Cash flows from financing activities


Dividends (482)
(458)
Common stock transactions 26
18
Purchase and retirement of common stock (669)
(1,050)
Proceeds from borrowings 784
1,054
Debt repayments (314)
(750)




Net cash used in financing activities (655)
(1,186)




Net increase (decrease) in cash, cash equivalents, and restrictedcash 563
(86)




Cash, cash equivalents, and restricted cash


At beginning of year 580
446




At end of period $ 1,143
$ 360




Supplemental disclosures of cash flow information


Cash paid during the period for:


Interest (net of amounts capitalized) $ 287
$ 271
Income taxes (net of refunds) 1
215






See accompanying notes to consolidated financial statements




 

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS:

1.  Stock Repurchase Program We repurchased and retired 3.9 million and 5.7 million shares of common stock under our stock repurchase program during the first six months of 2020 and 2019, respectively, at a cost of $669 million and $1.1 billion, respectively. 

2.  Loss on Asset Disposal In the first quarter of 2020, we committed to a plan to dispose of certain locomotives deemed excess and no longer needed for railroad operations.  Specifically, during the first six months of 2020, the Company recorded a charge related to the loss on the sale of approximately 450 locomotives disposed of in the first six months, and a write-down of approximately 250 additional locomotives that we are actively marketing to sell.   Accordingly, a $385 million loss was recorded to adjust their carrying amount to their estimated fair value. The loss on asset disposal reduced "Earnings per share – diluted" for the first six months by $1.11.

3.  Restricted Cash The "Cash, cash equivalents, and restricted cash" line item on the Consolidated Statements of Cash Flows  includes restricted cash of $88 million in 2019, reflecting deposits held by a third-party bond agent as collateral for certain debt obligations which matured on October 1, 2019. 

Cision
View original content to download multimedia: http://www.prnewswire.com/news-releases/norfolk-southern-reports-second-quarter-2020-results-301101876.html

SOURCE Norfolk Southern Corporation

COMTEX_368590793/2454/2020-07-29T08:00:15

Is there a problem with this press release? Contact the source provider Comtex at editorial@comtex.com. You can also contact MarketWatch Customer Service via our Customer Center.

Copyright (C) 2020 PR Newswire. All rights reserved

/zigman2/quotes/200877725/composite
US : U.S.: NYSE
$ 214.05
+0.06 +0.03%
Volume: 386,671
Oct. 1, 2020 11:36a
P/E Ratio
26.67
Dividend Yield
1.76%
Market Cap
$54.59 billion
Rev. per Employee
N/A
loading...
/zigman2/quotes/200877725/composite
US : U.S.: NYSE
$ 214.05
+0.06 +0.03%
Volume: 386,671
Oct. 1, 2020 11:36a
P/E Ratio
26.67
Dividend Yield
1.76%
Market Cap
$54.59 billion
Rev. per Employee
N/A
loading...

Comtex
Link to MarketWatch's Slice.