For third-quarter 2008 vs. third-quarter 2007:
- Railway operating revenues increased 23 percent to a record $2.9 billion.
- Income from operations increased 31 percent to a record $894 million. -
Net income increased 35 percent to a record $520 million. - Diluted
earnings per share rose 41 percent to a record $1.37. - The railway
operating ratio improved by 2 percentage points to a record 69.1 percent.
NORFOLK, Va., Oct. 21 /PRNewswire-FirstCall/ -- Norfolk Southern
Corporation (NYSE: NSC) reported third-quarter 2008 net income of $520
million, or $1.37 per diluted share, compared with $386 million, or $0.97
per diluted share, for the same period of 2007. Third-quarter income from
railway operations increased 31 percent to a record $894 million.
"Our third quarter performance again demonstrates the strength of our
diversified traffic base. We are also continuing to provide the
high-quality service our customers require in this difficult economic
environment," said Norfolk Southern CEO Wick Moorman.
Third-quarter railway operating revenues were $2.9 billion, up 23
percent compared with the same period a year earlier. Continued weakness in
the automotive and housing-related industries, mostly offset by strength in
coal shipments, contributed to a one percent reduction in traffic volume
compared with the third quarter of 2007.
General merchandise revenues were $1.5 billion, an increase of 13
percent compared with the same period last year, despite a 6 percent
decline in volume.
Coal revenues climbed 52 percent to $876 million in the quarter
compared with the same period of 2007. Traffic volume increased by 23,548
carloads, or 6 percent, and set a record for the number of tons shipped in
a quarter.
Despite flat volumes, intermodal revenues were $560 million, up 16
percent compared with the same period of 2007.
Railway operating expenses were $2.0 billion for the quarter, a 20
percent increase compared with the third quarter of 2007.
The railway operating ratio for the quarter improved by 2 percentage
points to a record 69.1 percent, compared with 71.1 percent in 2007.
Norfolk Southern Corporation is one of the nation's premier
transportation companies. Its Norfolk Southern Railway subsidiary operates
approximately 21,000 route miles in 22 states and the District of Columbia,
serving every major container port in the eastern United States and
providing superior connections to western rail carriers. Norfolk Southern
operates the most extensive intermodal network in the East and is North
America's largest rail carrier of metals and automotive products.
Norfolk Southern Corporation and Subsidiaries
Consolidated Statements of Income
(Unaudited)
($ millions except per share)
Three Months Ended Sept. 30,
2008 2007
Railway operating revenues:
Coal (note 1) $876 $578
General merchandise 1,458 1,291
Intermodal 560 484
Total railway operating revenues 2,894 2,353
Railway operating expenses:
Compensation and benefits (note 2) 708 619
Purchased services and rents 419 391
Fuel 474 289
Depreciation 201 194
Materials and other 198 179
Total railway operating expenses 2,000 1,672
Income from railway operations 894 681
Other income - net 39 31
Interest expense on debt 111 107
Income before income taxes 822 605
Provision for income taxes:
Current 184 178
Deferred 118 41
Total income taxes 302 219
Net income $520 $386
Earnings per share:
Basic $1.39 $0.99
Diluted $1.37 $0.97
Weighted average shares outstanding
(millions) (note 3):
Basic 372.5 389.0
Diluted 380.5 397.4
Norfolk Southern Corporation and Subsidiaries
Consolidated Statements of Income
(Unaudited)
($ millions except per share)
Nine Months Ended Sept 30,
2008 2007
Railway operating revenues:
Coal (note 1) $2,313 $1,714
General merchandise 4,268 3,839
Intermodal 1,578 1,425
Total railway operating revenues 8,159 6,978
Railway operating expenses:
Compensation and benefits (note 2) 2,075 1,929
Purchased services and rents 1,194 1,155
Fuel 1,369 816
Depreciation 598 578
Materials and other 652 601
Total railway operating expenses 5,888 5,079
Income from railway operations 2,271 1,899
Other income - net 92 59
Interest expense on debt 332 333
Income before income taxes 2,031 1,625
Provision for income taxes:
Current 586 541
Deferred 181 19
Total income taxes 767 560
Net income $1,264 $1,065
Earnings per share:
Basic $3.37 $2.71
Diluted $3.30 $2.66
Weighted average shares outstanding
(millions) (note 3):
Basic 374.4 392.3
Diluted 382.6 400.5
Norfolk Southern Corporation and Subsidiaries
Consolidated Balance Sheets
(Unaudited)
($ millions)
Sept. 30, Dec. 31,
2008 2007
Assets
Current assets:
Cash, cash equivalents and short-term
investments $557 $206
Accounts receivable - net 1,076 942
Materials and supplies 210 176
Deferred income taxes 172 190
Other current assets 67 161
Total current assets 2,082 1,675
Investments 1,827 1,974
Properties less accumulated depreciation 22,032 21,583
Other assets 776 912
Total assets $26,717 $26,144
Liabilities and stockholders' equity
Current liabilities:
Accounts payable $1,225 $1,139
Income and other taxes 297 203
Other current liabilities 293 237
Current maturities of long-term debt 488 369
Total current liabilities 2,303 1,948
Long-term debt 5,983 5,999
Other liabilities 1,783 2,039
Deferred income taxes 6,602 6,431
Total liabilities 16,671 16,417
Stockholders' equity:
Common stock $1.00 per share par value,
1,350,000,000 shares authorized;
outstanding 370,279,291 and 379,297,891 shares,
respectively, net of treasury shares 371 380
Additional paid-in capital 1,689 1,466
Accumulated other comprehensive loss (389) (399)
Retained income 8,375 8,280
Total stockholders' equity 10,046 9,727
Total liabilities and stockholders' equity $26,717 $26,144
Norfolk Southern Corporation and Subsidiaries
Consolidated Statements of Cash Flows
(Unaudited)
($ millions)
Nine Months Ended Sept. 30,
2008 2007
Cash flows from operating activities:
Net income $1,264 $1,065
Reconciliation of net income to net cash
provided by operating activities:
Depreciation 606 587
Deferred income taxes 181 19
Gains on properties and investments (24) (36)
Changes in assets and liabilities affecting
operations:
Accounts receivable 63 (21)
Materials and supplies (34) (22)
Other current assets 93 80
Current liabilities other than debt (80) 67
Other - net 6 72
Net cash provided by operating activities 2,075 1,811
Cash flows from investing activities:
Property additions (1,104) (895)
Property sales and other transactions 74 105
Investments, including short-term (34) (568)
Investment sales and other transactions 254 758
Net cash used in investing activities (810) (600)
Cash flows from financing activities:
Dividends (338) (276)
Common stock issued - net 224 166
Purchase and retirement of common stock (note 3) (899) (769)
Proceeds from borrowings 1,225 --
Debt repayments (1,126) (454)
Net cash used in financing activities (914) (1,333)
Net increase (decrease) in cash and
cash equivalents 351 (122)
Cash and cash equivalents:
At beginning of year 206 527
At end of period 557 405
Short-term investments at end of period -- 13
Cash, cash equivalents and short-term
investments at end of period $557 $418
Supplemental disclosures of cash flow
information
Cash paid during the period for:
Interest (net of amounts capitalized) $254 $279
Income taxes (net of refunds) $401 $386
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS:
1. COAL REVENUES
Third quarter 2008 includes $22 million related to a coal customer's
2008 contracted volume shortfall and a nonrecurring effect related to
the implementation of NS' new coal billing system.
2. LABOR AGREEMENT
Third quarter 2008 includes $28 million for lump-sum payments
(including payroll taxes) due under a new labor agreement with the
Brotherhood of Locomotive Engineers and Trainmen (BLET).
3. STOCK REPURCHASE PROGRAM
In March 2007, NS' Board of Directors amended the stock repurchase
program that was authorized in November 2005 so as to increase the
number of shares of NS common stock that may be repurchased from
50 million to 75 million. In addition, the term of the program was
shortened from December 31, 2015 to December 31, 2010. During the
first nine months of 2008, NS purchased and retired 15.2 million
shares of common stock at a cost of $899 million. Since inception of
the stock repurchase program in 2006, NS has repurchased and retired
60.5 million shares at a total cost of $3.1 billion.
SOURCE Norfolk Southern Corporation
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CONTACT:
Media, Frank Brown, +1-757-629-2710,
fsbrown@nscorp.com, or Investors, Leanne Marilley,
+1-757-629-2861, leanne.marilley@nscorp.com, both of Norfolk
Southern Corporation
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