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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
________________________________
FORM 8-K
________________________________
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported): October 26, 2022 (October 26, 2022)
________________________________
NORFOLK SOUTHERN CORPORATION
(Exact name of registrant as specified in its charter)
______________________________________
| Virginia | 1-8339 | 52-1188014 |
| (State or other jurisdiction of incorporation) | (Commission File Number) | (IRS Employer Identification Number) |
| 650 West Peachtree Street NW | |
|
Atlanta, Georgia 30308-1925 |
(855) 667-3655 |
| (Address of principal executive offices, including zip code) | (Registrant’s telephone number, including area code) |
No Change
(Former name or former address, if changed since last report)
Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:
☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)
☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)
☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))
Securities registered pursuant to Section 12(b) of the Act:
|
Title of each class |
Trading Symbol |
Name of each exchange on which registered |
||
| Norfolk Southern Corporation Common Stock (Par Value $1.00) |
NSC | New York Stock Exchange |
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).
Emerging growth company ☐
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Item 2.02. Results of Operations and Financial Condition
Item 7.01. Regulation FD Disclosure
On October 26, 2022, the Registrant issued a Press Release, attached hereto as Exhibit 99.1, reporting third-quarter results for 2022. Attached hereto, as Exhibit 99.2, is the Quarterly Financial Data for the third quarter of 2022. This document is available on the Registrant’s website, www.norfolksouthern.com, in the “Invest in NS” section, under “Financial Reports.” This unaudited financial information and summary of certain notes to the consolidated financial statements should be read in conjunction with: (a) the consolidated financial statements and notes included in the Registrant's latest Annual Report on Form 10-K and in subsequent Quarterly Reports on Form 10-Q; and (b) any Current Reports on Form 8-K.
Item 9.01. Financial Statements and Exhibits.
(d) Exhibits
The following exhibits are filed as part of this Current Report on Form 8-K:
| Exhibit Number | Description | |
| 99.1 | Press Release dated October 26, 2022 | |
| 99.2 | 2022 Q3 Financial Data | |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) |
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized.
| SIGNATURES | ||
| NORFOLK SOUTHERN CORPORATION | ||
| (Registrant) | ||
| /s/ Denise W. Hutson | ||
| Name: Denise W. Hutson | ||
| Title: Corporate Secretary | ||
Date: October 26, 2022
Exhibit 99.1
FOR IMMEDIATE RELEASE
Norfolk
Southern reports third quarter 2022 financial results
Posts quarterly financial records, improved service for customers
ATLANTA, October 26, 2022– Norfolk Southern Corporation (NYSE: NSC) today announced third quarter 2022 financial results which included records for railway operating revenues, income from railway operations, net income, and diluted earnings per share.
Third quarter railway operating revenue was $3.3 billion, income from railway operations was $1.3 billion, net income was $958 million, and diluted earnings per share was $4.10.
“In the third quarter, the Norfolk Southern team achieved record financial results and improved service levels for our customers through our robust hiring initiatives and the launch and execution of our new operating plan – TOP|SPG,” said Norfolk Southern President and Chief Executive Officer Alan H. Shaw. “Our entire team is aligned to building on this operational momentum, while ensuring customers remain at the center of our approach, all to deliver value to our shareholders.”
Third Quarter Summary
| · | Railway operating revenues of $3.3 billion were an all-time quarterly record, up 17%, or $491 million, compared with third quarter 2021, driven by a 20% increase in revenue per unit due to higher fuel surcharges and pricing. | |
| · | Railway operating expenses were $2.1 billion, an increase of 21%, or $355 million, compared with the same period last year due to higher fuel prices, increased labor costs, and other elevated expenses resulting from inflation and slower network velocity. | |
| o | Incremental labor costs of $117 million associated with the terms of the tentative labor agreements were recorded in the quarter, including $88 million in costs pertaining to prior periods. | |
| · | Income from railway operations was a record of $1.3 billion, up 12%, or $136 million, and the railway operating ratio was 62.0%, up 180 basis points, year-over-year. | |
| o | Income from railway operations and the operating ratio were adversely impacted by $88 million and 270 basis points, respectively, compared to the same period prior year due to the wage accruals for prior periods. | |
| · | Diluted earnings per share were $4.10, up 34%, or $1.04, compared to the same period last year. | |
| o | Diluted earnings per share included a $0.28 impact from the wage accruals pertaining to a prior period and a $0.58 benefit from a state tax law change. | |
###
About Norfolk Southern
Since 1827, Norfolk Southern Corporation (NYSE: NSC) and its predecessor companies have safely moved the goods and materials that drive the U.S. economy. Today, it operates a customer-centric and operations-driven freight transportation network. Committed to furthering sustainability, Norfolk Southern helps its customers avoid 15 million tons of yearly carbon emissions by shipping via rail. Its dedicated team members deliver more than 7 million carloads annually, from agriculture to consumer goods, and is the largest rail shipper of auto products and metals in North America. Norfolk Southern also has the most extensive intermodal network in the eastern U.S., serving a majority of the country’s population and manufacturing base, with connections to every major container port on the Atlantic coast as well as the Gulf of Mexico and Great Lakes. Learn more by visiting www.NorfolkSouthern.com.
Media Inquiries:
Media Relations, 404-420-4444
Investor Inquiries:
Luke Nichols, 470-867-4807
Exhibit 99.2
Norfolk Southern Corporation and Subsidiaries
Consolidated Statements of Income
(Unaudited)
| Third Quarter | First Nine Months | |||||||||||||||
| 2022 | 2021 | 2022 | 2021 | |||||||||||||
| (in millions, except per share amounts) | ||||||||||||||||
| Railway operating revenues | ||||||||||||||||
| Merchandise | $ | 1,930 | $ | 1,710 | $ | 5,455 | $ | 4,998 | ||||||||
| Intermodal | 942 | 812 | 2,768 | 2,332 | ||||||||||||
| Coal | 471 | 330 | 1,285 | 960 | ||||||||||||
| Total railway operating revenues | 3,343 | 2,852 | 9,508 | 8,290 | ||||||||||||
| Railway operating expenses | ||||||||||||||||
| Compensation and benefits | 735 | 609 | 1,968 | 1,844 | ||||||||||||
| Purchased services and rents | 484 | 432 | 1,402 | 1,254 | ||||||||||||
| Fuel | 383 | 208 | 1,092 | 573 | ||||||||||||
| Depreciation | 306 | 297 | 912 | 883 | ||||||||||||
| Materials and other | 163 | 170 | 506 | 418 | ||||||||||||
| Total railway operating expenses | 2,071 | 1,716 | 5,880 | 4,972 | ||||||||||||
| Income from railway operations | 1,272 | 1,136 | 3,628 | 3,318 | ||||||||||||
| Other income (expense) – net | (2 | ) | 14 | (21 | ) | 56 | ||||||||||
| Interest expense on debt | 177 | 164 | 515 | 481 | ||||||||||||
| Income before income taxes | 1,093 | 986 | 3,092 | 2,893 | ||||||||||||
| Income tax expense (benefit) | ||||||||||||||||
| Current | 223 | 182 | 589 | 490 | ||||||||||||
| Deferred | (88 | ) | 51 | 23 | 158 | |||||||||||
| Total income tax expense (benefit) | 135 | 233 | 612 | 648 | ||||||||||||
| Net income | $ | 958 | $ | 753 | $ | 2,480 | $ | 2,245 | ||||||||
| Earnings per share – diluted | $ | 4.10 | $ | 3.06 | $ | 10.45 | $ | 8.99 | ||||||||
| Weighted average shares outstanding – diluted | 234.0 | 246.4 | 237.2 | 249.7 | ||||||||||||
See accompanying notes to consolidated financial statements.
Norfolk Southern Corporation and Subsidiaries
Consolidated Balance Sheets
(Unaudited)
| September 30, | December 31, | |||||||
| 2022 | 2021 | |||||||
| ($ in millions) | ||||||||
| Assets | ||||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ | 1,214 | $ | 839 | ||||
| Accounts receivable – net | 1,151 | 976 | ||||||
| Materials and supplies | 276 | 218 | ||||||
| Other current assets | 74 | 134 | ||||||
| Total current assets | 2,715 | 2,167 | ||||||
| Investments | 3,686 | 3,707 | ||||||
| Properties less accumulated depreciation of $12,445 and $12,031, respectively | 31,838 | 31,653 | ||||||
| Other assets | 1,067 | 966 | ||||||
| Total assets | $ | 39,306 | $ | 38,493 | ||||
| Liabilities and stockholders’ equity | ||||||||
| Current liabilities: | ||||||||
| Accounts payable | $ | 1,486 | $ | 1,351 | ||||
| Income and other taxes | 299 | 305 | ||||||
| Other current liabilities | 408 | 312 | ||||||
| Current maturities of long-term debt | 605 | 553 | ||||||
| Total current liabilities | 2,798 | 2,521 | ||||||
| Long-term debt | 14,463 | 13,287 | ||||||
| Other liabilities | 1,828 | 1,879 | ||||||
| Deferred income taxes | 7,193 | 7,165 | ||||||
| Total liabilities | 26,282 | 24,852 | ||||||
| Stockholders’ equity: | ||||||||
| Common stock $1.00 per share par value, 1,350,000,000 shares authorized; outstanding 231,514,213 and 240,162,790 shares, respectively, net of treasury shares | 233 | 242 | ||||||
| Additional paid-in capital | 2,181 | 2,215 | ||||||
| Accumulated other comprehensive loss | (377 | ) | (402 | ) | ||||
| Retained income | 10,987 | 11,586 | ||||||
| Total stockholders’ equity | 13,024 | 13,641 | ||||||
| Total liabilities and stockholders’ equity | $ | 39,306 | $ | 38,493 | ||||
See accompanying notes to consolidated financial statements.
Norfolk Southern Corporation and Subsidiaries
Consolidated Statements of Cash Flows
(Unaudited)
| First Nine Months | ||||||||
| 2022 | 2021 | |||||||
| ($ in millions) | ||||||||
| Cash flows from operating activities | ||||||||
| Net income | $ | 2,480 | $ | 2,245 | ||||
| Reconciliation of net income to net cash provided by operating activities: | ||||||||
| Depreciation | 912 | 883 | ||||||
| Deferred income taxes | 23 | 158 | ||||||
| Gains and losses on properties | (54 | ) | (80 | ) | ||||
| Changes in assets and liabilities affecting operations: | ||||||||
| Accounts receivable | (174 | ) | (102 | ) | ||||
| Materials and supplies | (58 | ) | (14 | ) | ||||
| Other current assets | 57 | 57 | ||||||
| Current liabilities other than debt | 273 | 294 | ||||||
| Other – net | (35 | ) | (128 | ) | ||||
| Net cash provided by operating activities | 3,424 | 3,313 | ||||||
| Cash flows from investing activities | ||||||||
| Property additions | (1,282 | ) | (1,025 | ) | ||||
| Property sales and other transactions | 193 | 135 | ||||||
| Investment purchases | (8 | ) | (5 | ) | ||||
| Investment sales and other transactions | 37 | 48 | ||||||
| Net cash used in investing activities | (1,060 | ) | (847 | ) | ||||
| Cash flows from financing activities | ||||||||
| Dividends | (881 | ) | (764 | ) | ||||
| Common stock transactions | (5 | ) | 8 | |||||
| Purchase and retirement of common stock | (2,284 | ) | (2,460 | ) | ||||
| Proceeds from borrowings | 1,732 | 1,676 | ||||||
| Debt repayments | (551 | ) | (576 | ) | ||||
| Net cash used in financing activities | (1,989 | ) | (2,116 | ) | ||||
| Net increase in cash and cash equivalents | 375 | 350 | ||||||
| Cash and cash equivalents | ||||||||
| At beginning of year | 839 | 1,115 | ||||||
| At end of period | $ | 1,214 | $ | 1,465 | ||||
| Supplemental disclosures of cash flow information | ||||||||
| Cash paid during the period for: | ||||||||
| Interest (net of amounts capitalized) | $ | 425 | $ | 391 | ||||
| Income taxes (net of refunds) | 578 | 468 | ||||||
See accompanying notes to consolidated financial statements.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. Stock Repurchase Program
We repurchased and retired 9.2 million and 9.4 million shares of common stock under our stock repurchase program at a cost of $2.3 billion and $2.5 billion during the first nine months of 2022 and 2021, respectively.