NORFOLK, Va., Jan. 27 /PRNewswire-FirstCall/ -- For fourth-quarter
2009: -- Railway operating revenues were $2.1 billion. -- Income
from railway operations was $549 million. -- Net income was $307
million. -- Diluted earnings per share were $0.82. -- The railway
operating ratio was 73.9 percent. For 2009: -- Railway operating
revenues were $8.0 billion. -- Income from railway operations was
$2.0 billion. -- Net income was $1.0 billion. -- Diluted earnings
per share were $2.76. -- The railway operating ratio was 75.4
percent. Norfolk Southern Corporation (NYSE:NSC) today reported
fourth-quarter 2009 net income of $307 million, or $0.82 per
diluted share, compared with $452 million, or $1.21 per diluted
share, for the same quarter of 2008. Net income for 2009 was $1.0
billion, or $2.76 per diluted share, compared with $1.7 billion, or
$4.52 per diluted share, for 2008. "Our fourth-quarter results
demonstrate a continuation of the momentum we have generated since
the second quarter of 2009," said CEO Wick Moorman. "The results
reflect a high level of performance throughout Norfolk Southern,
and showcase the strength and flexibility of our franchise, our
industry-leading safety and service performance, and continuing
strong cost discipline." "We expect to build upon the sequential
volume gains we experienced in the third and fourth quarters driven
by anticipated improvement in economic conditions combined with
project growth. We plan to invest about $1.4 billion, slightly
higher than our 2009 capital spending, in our rail network in 2010,
including leveraging technology to improve operational efficiency
and service, and support the business growth we expect in future
years." Fourth-quarter railway operating revenues were $2.1
billion, down 16 percent compared with the same period a year
earlier. For 2009, railway operating revenues were $8.0 billion,
down 25 percent compared with 2008. General merchandise revenues
were $1.1 billion, down 9 percent compared with fourth-quarter
2008. For 2009, general merchandise revenues were $4.2 billion,
down 24 percent compared with 2008. General merchandise traffic
volume declined 2 percent in the quarter and 21 percent for the
year compared with the same periods of 2008. Coal revenues in the
fourth quarter were $580 million, down 27 percent compared with the
same period last year. For 2009, coal revenues were $2.3 billion,
27 percent lower compared with 2008. Coal traffic volume declined
19 percent in the quarter and 20 percent for the year compared with
the same periods of 2008. Intermodal revenues were $407 million,
down 15 percent compared with fourth-quarter 2008. For the full
year, intermodal revenues were $1.5 billion, down 26 percent
compared with 2008. Intermodal traffic volume was down 9 percent in
the quarter and 16 percent for 2009 compared with the same periods
of 2008. Railway operating expenses were $1.6 billion for the
quarter, 8 percent lower compared with fourth-quarter 2008. For
2009, railway operating expenses declined 21 percent to $6.0
billion, compared with 2008, primarily due to lower fuel costs.
Income from railway operations for the fourth quarter was $549
million, down 32 percent, compared with fourth-quarter 2008 and
$2.0 billion for the year, 36 percent lower, compared with 2008.
The fourth-quarter operating ratio was 73.9 percent compared with
67.5 percent in the same period last year. For the year, the
operating ratio was 75.4 percent vs. 71.1 percent for 2008. Norfolk
Southern Corporation is one of the nation's premier transportation
companies. Its Norfolk Southern Railway subsidiary operates
approximately 21,000 route miles in 22 states and the District of
Columbia, serves every major container port in the eastern United
States, and provides efficient connections to other rail carriers.
Norfolk Southern operates the most extensive intermodal network in
the East and is a major transporter of coal and industrial
products. NORFOLK SOUTHERN CORPORATION AND SUBSIDIARIES
Consolidated Statements of Income (Unaudited) Three Months Years
Ended Ended December 31, December 31, ------------ ------------
2009 2008 2009 2008 ---- ---- ---- ---- ($ in millions, except per
share amounts) Railway operating revenues: Coal (note 1) $580 $798
$2,264 $3,111 General merchandise 1,119 1,224 4,175 5,492
Intermodal 407 480 1,530 2,058 --- --- ----- ----- Total railway
operating revenues 2,106 2,502 7,969 10,661 ----- ----- -----
------ Railway operating expenses: Compensation and benefits (note
2) 613 609 2,401 2,684 Purchased services and rents 362 405 1,403
1,599 Fuel 221 269 725 1,638 Depreciation 213 206 837 804 Materials
and other (note 3) 148 200 641 852 --- --- --- --- Total railway
operating expenses 1,557 1,689 6,007 7,577 ----- ----- ----- -----
Income from railway operations 549 813 1,962 3,084 Other income -
net 37 18 127 110 Interest expense on debt 119 112 467 444 --- ---
--- --- Income before income taxes 467 719 1,622 2,750 Provision
for income taxes: Current (5) 158 250 744 Deferred 165 109 338 290
--- --- --- --- Total income taxes 160 267 588 1,034 --- --- ---
----- Net income $307 $452 $1,034 $1,716 ==== ==== ====== ======
Earnings per share (note 4): Basic $0.83 $1.23 $2.79 $4.58 Diluted
$0.82 $1.21 $2.76 $4.52 Weighted average shares outstanding
(millions) (notes 4 & 5): Basic 367.9 365.8 367.1 372.3 Diluted
373.3 372.4 372.1 380.0 See accompanying notes to consolidated
financial statements. Norfolk Southern Corporation and Subsidiaries
Consolidated Balance Sheets (Unaudited) As of December 31, 2009
2008 ---- ---- ($ in millions) Assets Current assets: Cash and cash
equivalents $996 $618 Short-term investments 90 - Accounts
receivable - net 766 870 Materials and supplies 164 194 Deferred
income taxes 142 149 Other current assets 88 168 --- --- Total
current assets 2,246 1,999 Investments 2,164 1,779 Properties less
accumulated depreciation 22,643 22,247 Other assets 316 272 --- ---
Total assets $27,369 $26,297 ======= ======= Liabilities and
stockholders' equity Current liabilities: Accounts payable $974
$1,140 Short-term debt 100 Income and other taxes 109 261 Other
current liabilities 232 220 Current maturities of long-term debt
374 484 --- --- Total current liabilities 1,789 2,105 Long-term
debt 6,679 6,183 Other liabilities 1,801 2,030 Deferred income
taxes 6,747 6,372 ----- ----- Total liabilities 17,016 16,690
Stockholders' equity: Common stock $1.00 per share par value,
1,350,000,000 shares authorized; outstanding 369,019,990 and
366,233,106 shares, respectively, net of treasury shares 370 368
Additional paid-in capital 1,809 1,680 Accumulated other
comprehensive loss (853) (942) Retained income 9,027 8,501 -----
----- Total stockholders' equity 10,353 9,607 ------ ----- Total
liabilities and stockholders' equity $27,369 $26,297 =======
======= See accompanying notes to consolidated financial
statements. Norfolk Southern Corporation and Subsidiaries
Consolidated Statements of Cash Flows (Unaudited) Years Ended
December 31, 2009 2008 ---- ---- ($ in millions) Cash flows from
operating activities: Net income $1,034 $1,716 Reconciliation of
net income to net cash provided by operating activities:
Depreciation 845 815 Deferred income taxes 338 290 Gains and losses
on properties (18) (29) Changes in assets and liabilities affecting
operations: Accounts receivable 63 269 Materials and supplies 30
(18) Other current assets 72 (8) Current liabilities other than
debt (365) (262) Other - net (139) (58) ---- --- Net cash provided
by operating activities 1,860 2,715 Cash flows from investing
activities: Property additions (1,299) (1,558) Property sales and
other transactions 84 109 Investments, including short-term (266)
(86) Investment sales and other transactions 30 307 --- --- Net
cash used in investing activities (1,451) (1,228) Cash flows from
financing activities: Dividends (500) (456) Common stock issued -
net 66 229 Purchase and retirement of common stock (note 5) -
(1,128) Proceeds from borrowings - net 1,090 1,425 Debt repayments
(687) (1,145) ---- Net cash used in financing activities (31)
(1,075) --- ------ Net increase in cash and cash equivalents 378
412 Cash and cash equivalents: At beginning of year 618 206 --- ---
At end of year $996 $618 ==== ==== Supplemental disclosure of cash
flow information Cash paid during the year for: Interest (net of
amounts capitalized) $458 $421 Income taxes (net of refunds) $381
$615 See accompanying notes to consolidated financial statements.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS: 1. Coal Revenues 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 export coal billing system. 2. Labor
Agreement 2008 includes $31 million for lump-sum payments
(including payroll taxes) due under a new labor agreement with the
Brotherhood of Locomotive Engineers and Trainmen (BLET). 3.
Materials and Other 2009 includes a $21 million favorable
adjustment related to settlement of a multi-year state tax dispute.
4. Earnings Per Share In the first quarter of 2009, NS adopted the
provisions of the Financial Accounting Standards Board Staff
Position (FSP) EITF No. 03-6-1, "Determining Whether Instruments
Granted in Share-Based Payment Transactions are Participating
Securities" (Accounting Standards Codification (ASC) 260-10), which
requires the treatment of unvested stock options receiving dividend
equivalents as participating securities in computing earnings per
share under the two-class method. NS has retrospectively applied
the provisions of this FSP. Accordingly, for basic earnings per
share, income available to common stockholders for the fourth
quarter 2009 and 2008 reflects a $2 million reduction, and for the
years 2009 and 2008 an $8 million and $9 million reduction,
respectively, from net income for the effect of dividend equivalent
payments made to holders of stock options. In addition, for the
fourth quarter and year 2009, diluted earnings per share was
calculated under the more dilutive two-class method (as compared to
the treasury stock method) and income available to common
stockholders reflects a $2 million and $8 million reduction,
respectively, from net income for dividend equivalent payments. 5.
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 2009, NS did not repurchase any
shares of common stock. Since inception of the stock repurchase
program in 2006, NS has repurchased and retired 64.7 million shares
at a total cost of $3.3 billion. DATASOURCE: Norfolk Southern
Corporation CONTACT: Media, Frank Brown, +1-757-629-2710, , or
Investors, Leanne Marilley, +1-757-629-2861, , both of Norfolk
Southern Web Site: http://www.nscorp.com/
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