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):
January 25, 2023 (January 24, 2023)
________________________________
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 January 25, 2023, the Registrant issued a Press Release, attached hereto as Exhibit 99.1, reporting fourth-quarter and full year results for 2022. Attached hereto, as Exhibit 99.2, is the Quarterly Financial Data for the fourth quarter of 2022. This information 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 5.02. Departure of Directors or Principal Officers; Election of Directors; Appointment of Principal Officers
On January 24, 2023, James A. Squires, a member of the Board of Directors and former Chief Executive Officer of the Registrant, notified the Board that he will not stand for re-election to the Board at the Registrant’s 2023 annual meeting of shareholders. Mr. Squires’ term on the Board will expire at the Registrant’s 2023 annual meeting of shareholders. Mr. Squires’ decision is not due to any disagreement with the Registrant on any matter relating to our operations, policies, or practices.
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 January 25, 2023 | |
99.2 | 2022 Q4 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: January 25, 2023
FOR IMMEDIATE RELEASE
Norfolk Southern reports Q4 and full-year 2022 results
Company reports record railway operating revenue, income from railway operations
ATLANTA, January 25, 2023 – Norfolk Southern Corporation (NYSE: NSC) today announced fourth quarter and full-year 2022 financial results. The company marked fourth quarter and annual records for railway operating revenue and income from railway operations.
Fourth quarter railway operating revenue was $3.2 billion, up 13%, and income from railway operations was $1.2 billion, up 5%.
“In the fourth quarter and throughout 2022, Norfolk Southern made significant progress in our financial performance, service improvement, and engagement with our craft team members,” said Norfolk Southern President and Chief Executive Officer Alan H. Shaw. “Our team delivered double-digit percentage growth in revenue as well as earnings per share and achieved record revenue and operating income for the year. We also outlined a bold new strategic plan to create long-term shareholder value and a pathway for future growth for Norfolk Southern.”
Fourth Quarter Summary
· | Railway operating revenues of $3.2 billion were a fourth quarter record, up 13%, or $385 million, compared with fourth quarter 2021, driven by a 15% increase in revenue per unit. |
· | Railway operating expenses were $2.1 billion, an increase of 19% compared with the same period last year due to higher fuel prices, increased claims costs, and higher compensation and benefits. |
· | Income from railway operations was a fourth quarter record of $1.2 billion, up 5%, or $52 million, year-over-year. |
· | Diluted earnings per share were $3.42, up 10%, or $0.30 compared with fourth quarter 2021. |
Norfolk Southern Corporation | 1 |
2022 Summary
· | Railway operating revenues were a record $12.7 billion in 2022, up 14%, or $1.6 billion, compared with 2021, driven by an 18% increase revenue per unit. |
· | Railway operating expenses were $7.9 billion, an increase of 19% compared with the same period last year, driven by higher fuel prices, inflation, network congestion, and higher compensation and benefits. |
· | Income from railway operations was $4.8 billion, up 8%, or $362 million, year-over-year, an annual record. |
· | Diluted earnings per share were $13.88, up 15%, or $1.77 compared with 2021. |
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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
Norfolk Southern Corporation | 2 |
Norfolk Southern Corporation and Subsidiaries
Consolidated Statements of Income
(Unaudited)
Fourth Quarter | Years Ended December 31, |
|||||||||||||||
2022 | 2021 | 2022 | 2021 | |||||||||||||
(in millions, except per share amounts) | ||||||||||||||||
Railway operating revenues | ||||||||||||||||
Merchandise | $ | 1,876 | $ | 1,671 | $ | 7,331 | $ | 6,669 | ||||||||
Intermodal | 913 | 831 | 3,681 | 3,163 | ||||||||||||
Coal | 448 | 350 | 1,733 | 1,310 | ||||||||||||
Total railway operating revenues | 3,237 | 2,852 | 12,745 | 11,142 | ||||||||||||
Railway operating expenses | ||||||||||||||||
Compensation and benefits | 653 | 598 | 2,621 | 2,442 | ||||||||||||
Purchased services and rents | 520 | 472 | 1,922 | 1,726 | ||||||||||||
Fuel | 367 | 226 | 1,459 | 799 | ||||||||||||
Depreciation | 309 | 298 | 1,221 | 1,181 | ||||||||||||
Materials and other | 207 | 129 | 713 | 547 | ||||||||||||
Total railway operating expenses | 2,056 | 1,723 | 7,936 | 6,695 | ||||||||||||
Income from railway operations | 1,181 | 1,129 | 4,809 | 4,447 | ||||||||||||
Other income – net | 34 | 21 | 13 | 77 | ||||||||||||
Interest expense on debt | 177 | 165 | 692 | 646 | ||||||||||||
Income before income taxes | 1,038 | 985 | 4,130 | 3,878 | ||||||||||||
Income taxes | ||||||||||||||||
Current | 188 | 199 | 777 | 689 | ||||||||||||
Deferred | 60 | 26 | 83 | 184 | ||||||||||||
Total income taxes | 248 | 225 | 860 | 873 | ||||||||||||
Net income | $ | 790 | $ | 760 | $ | 3,270 | $ | 3,005 | ||||||||
Earnings per share – diluted | $ | 3.42 | $ | 3.12 | $ | 13.88 | $ | 12.11 | ||||||||
Weighted average shares outstanding – diluted | 230.7 | 243.5 | 235.6 | 248.1 |
See accompanying notes to consolidated financial statements.
Norfolk Southern Corporation and Subsidiaries
Consolidated Balance Sheets
(Unaudited)
At December 31, | ||||||||
2022 | 2021 | |||||||
($ in millions) | ||||||||
Assets | ||||||||
Current assets: | ||||||||
Cash and cash equivalents | $ | 456 | $ | 839 | ||||
Accounts receivable – net | 1,148 | 976 | ||||||
Materials and supplies | 253 | 218 | ||||||
Other current assets | 150 | 134 | ||||||
Total current assets | 2,007 | 2,167 | ||||||
Investments | 3,694 | 3,707 | ||||||
Properties less accumulated depreciation of $12,592 and $12,031, respectively | 32,156 | 31,653 | ||||||
Other assets | 1,028 | 966 | ||||||
Total assets | $ | 38,885 | $ | 38,493 | ||||
Liabilities and stockholders’ equity | ||||||||
Current liabilities: | ||||||||
Accounts payable | $ | 1,293 | $ | 1,351 | ||||
Short-term debt | 100 | — | ||||||
Income and other taxes | 312 | 305 | ||||||
Other current liabilities | 341 | 312 | ||||||
Current maturities of long-term debt | 603 | 553 | ||||||
Total current liabilities | 2,649 | 2,521 | ||||||
Long-term debt | 14,479 | 13,287 | ||||||
Other liabilities | 1,759 | 1,879 | ||||||
Deferred income taxes | 7,265 | 7,165 | ||||||
Total liabilities | 26,152 | 24,852 | ||||||
Stockholders’ equity: | ||||||||
Common stock $1.00 per share par value, 1,350,000,000 shares authorized; outstanding 228,076,415 and 240,162,790 shares, respectively, net of treasury shares | 230 | 242 | ||||||
Additional paid-in capital | 2,157 | 2,215 | ||||||
Accumulated other comprehensive loss | (351 | ) | (402 | ) | ||||
Retained income | 10,697 | 11,586 | ||||||
Total stockholders’ equity | 12,733 | 13,641 | ||||||
Total liabilities and stockholders’ equity | $ | 38,885 | $ | 38,493 |
See accompanying notes to consolidated financial statements.
Norfolk Southern Corporation and Subsidiaries
Consolidated Statements of Cash Flows
(Unaudited)
Years Ended December 31, | ||||||||
2022 | 2021 | |||||||
($ in millions) | ||||||||
Cash flows from operating activities | ||||||||
Net income | $ | 3,270 | $ | 3,005 | ||||
Reconciliation of net income to net cash provided by operating activities: | ||||||||
Depreciation | 1,221 | 1,181 | ||||||
Deferred income taxes | 83 | 184 | ||||||
Gains and losses on properties | (82 | ) | (86 | ) | ||||
Changes in assets and liabilities affecting operations: | ||||||||
Accounts receivable | (171 | ) | (133 | ) | ||||
Materials and supplies | (35 | ) | 3 | |||||
Other current assets | (18 | ) | (6 | ) | ||||
Current liabilities other than debt | 23 | 283 | ||||||
Other – net | (69 | ) | (176 | ) | ||||
Net cash provided by operating activities | 4,222 | 4,255 | ||||||
Cash flows from investing activities | ||||||||
Property additions | (1,948 | ) | (1,470 | ) | ||||
Property sales and other transactions | 263 | 159 | ||||||
Investment purchases | (12 | ) | (10 | ) | ||||
Investment sales and other transactions | 94 | 99 | ||||||
Net cash used in investing activities | (1,603 | ) | (1,222 | ) | ||||
Cash flows from financing activities | ||||||||
Dividends | (1,167 | ) | (1,028 | ) | ||||
Common stock transactions | (4 | ) | 17 | |||||
Purchase and retirement of common stock | (3,110 | ) | (3,390 | ) | ||||
Proceeds from borrowings | 1,832 | 1,676 | ||||||
Debt repayments | (553 | ) | (584 | ) | ||||
Net cash used in financing activities | (3,002 | ) | (3,309 | ) | ||||
Net decrease in cash and cash equivalents | (383 | ) | (276 | ) | ||||
Cash and cash equivalents | ||||||||
At beginning of year | 839 | 1,115 | ||||||
At end of year | $ | 456 | $ | 839 | ||||
Supplemental disclosures of cash flow information | ||||||||
Cash paid during the year for: | ||||||||
Interest (net of amounts capitalized) | $ | 619 | $ | 579 | ||||
Income taxes (net of refunds) | 750 | 654 |
See accompanying notes to consolidated financial statements.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS:
1. Stock Repurchase Program
We repurchased and retired 12.6 million and 12.7 million shares of common stock under our stock repurchase programs in 2022 and 2021, respectively, at a cost of $3.1 billion and $3.4 billion, respectively.