NSC 8-K
Norfolk Southern Corp (NSC)
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
________________________________
FORM
________________________________
CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934
Date of Report (Date of earliest event reported):
July 28,
2021 (
________________________________
(Exact name of registrant as specified in its charter)
______________________________________
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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:
Securities registered pursuant to Section 12(b) of the Act:
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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 July 28, 2021, the Registrant issued a Press Release, attached hereto as Exhibit 99.1, reporting second quarter results for 2021. Attached hereto, as Exhibit 99.2, is the Quarterly Financial Data for the second quarter of 2021. 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 July 28, 2021 | |
| 99.2 | 2021 Q2 Financial Data | |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document) |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
| NORFOLK SOUTHERN CORPORATION | ||
| (Registrant) | ||
| /s/ Denise W. Hutson | ||
| Name: Denise W. Hutson | ||
| Title: Corporate Secretary | ||
Date: July 28, 2021
Exhibit 99.1
Norfolk Southern Corporation, Three Commercial Place, Norfolk, Va. 23510-2191
FOR IMMEDIATE RELEASE
Norfolk Southern reports second-quarter 2021 results
Railroad achieves record low operating ratio
NORFOLK, Va., July 28, 2021 – Norfolk Southern Corporation (NYSE: NSC) today reported second-quarter 2021 financial results, which included second-quarter records for net income and diluted earnings per share, and all-time quarterly records for operating ratio and income from railway operations.
Second-quarter net income was $819 million, diluted earnings per share were $3.28, and the operating ratio improved to 58.3%.
“Our team met the challenge for the second quarter head-on, delivering another solid performance of sequential operating ratio improvement, driving meaningful productivity into our business as revenue and volume rebounded from last year, up 34% and 25%, respectively,” said James A. Squires, Norfolk Southern chairman, president and CEO. “Leveraging the strong and diverse book of business we have developed, we will build upon our success in the creation of long-term, sustainable value for our customers and shareholders.”
Second-quarter summary
| · | Railway operating revenues of $2.8 billion increased 34%, or $714 million, compared with second-quarter 2020, driven by a 25% increase in volume and a 7% increase in revenue per unit. |
| · | Railway operating expenses were $1.6 billion, an increase of 11%, or $157 million, compared with the same period last year. |
| · | Income from railway operations was an all-time quarterly record of $1.2 billion, an increase of 91%, or $557 million, year-over-year. |
| · | Railway operating ratio was 58.3%, an all-time record. |
About Norfolk Southern
Norfolk Southern Corporation (NYSE: NSC) is one of the nation’s premier transportation companies, moving the goods and materials that drive the U.S. economy. Norfolk Southern connects customers to markets and communities to economic opportunity, with safe, reliable, and cost-effective shipping solutions. The company’s service area includes 22 states and the District of Columbia, every major container port in the eastern United States, and a majority of the U.S. population and manufacturing base.
Media Inquiries:
Media Relations, 404-420-4444 ([email protected])
Investor Inquiries:
Meghan Achimasi, 470-867-4807 ([email protected])
http://www.norfolksouthern.com
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. 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.
Exhibit 99.2
Norfolk Southern Corporation and Subsidiaries
Consolidated Statements of Income
(Unaudited)
| Second Quarter | First Six Months | |||||||||||||||
| 2021 | 2020 | 2021 | 2020 | |||||||||||||
| (in millions, except per share amounts) | ||||||||||||||||
| Railway operating revenues | ||||||||||||||||
| Merchandise | $ | 1,680 | $ | 1,307 | $ | 3,288 | $ | 2,979 | ||||||||
| Intermodal | 801 | 569 | 1,520 | 1,224 | ||||||||||||
| Coal | 318 | 209 | 630 | 507 | ||||||||||||
| Total railway operating revenues | 2,799 | 2,085 | 5,438 | 4,710 | ||||||||||||
| Railway operating expenses | ||||||||||||||||
| Compensation and benefits | 624 | 586 | 1,235 | 1,208 | ||||||||||||
| Purchased services and rents | 429 | 372 | 822 | 775 | ||||||||||||
| Fuel | 188 | 84 | 365 | 273 | ||||||||||||
| Depreciation | 294 | 282 | 586 | 574 | ||||||||||||
| Materials and other | 97 | 151 | 248 | 317 | ||||||||||||
| Loss on asset disposal | — | — | — | 385 | ||||||||||||
| Total railway operating expenses | 1,632 | 1,475 | 3,256 | 3,532 | ||||||||||||
| Income from railway operations | 1,167 | 610 | 2,182 | 1,178 | ||||||||||||
| Other income – net | 35 | 49 | 42 | 71 | ||||||||||||
| Interest expense on debt | 161 | 156 | 317 | 310 | ||||||||||||
| Income before income taxes | 1,041 | 503 | 1,907 | 939 | ||||||||||||
| Income taxes | ||||||||||||||||
| Current | 167 | 66 | 308 | 110 | ||||||||||||
| Deferred | 55 | 45 | 107 | 56 | ||||||||||||
| Total income taxes | 222 | 111 | 415 | 166 | ||||||||||||
| Net income | $ | 819 | $ | 392 | $ | 1,492 | $ | 773 | ||||||||
| Earnings per share – diluted | $ | 3.28 | $ | 1.53 | $ | 5.94 | $ | 3.00 | ||||||||
| Weighted average shares outstanding – diluted | 250.0 | 256.7 | 251.3 | 257.7 | ||||||||||||
See accompanying notes to consolidated financial statements.
Norfolk Southern Corporation and Subsidiaries
Consolidated Balance Sheets
(Unaudited)
| June 30, | December 31, | |||||||
| 2021 | 2020 | |||||||
| ($ in millions) | ||||||||
| Assets | ||||||||
| Current assets: | ||||||||
| Cash and cash equivalents | $ | 1,670 | $ | 1,115 | ||||
| Accounts receivable – net | 941 | 848 | ||||||
| Materials and supplies | 246 | 221 | ||||||
| Other current assets | 155 | 134 | ||||||
| Total current assets | 3,012 | 2,318 | ||||||
| Investments | 3,658 | 3,590 | ||||||
| Properties less accumulated depreciation of $11,777 and $11,985, respectively | 31,355 | 31,345 | ||||||
| Other assets | 729 | 709 | ||||||
| Total assets | $ | 38,754 | $ | 37,962 | ||||
| Liabilities and stockholders’ equity | ||||||||
| Current liabilities: | ||||||||
| Accounts payable | $ | 1,116 | $ | 1,016 | ||||
| Income and other taxes | 302 | 263 | ||||||
| Other current liabilities | 330 | 302 | ||||||
| Current maturities of long-term debt | 1,048 | 579 | ||||||
| Total current liabilities | 2,796 | 2,160 | ||||||
| Long-term debt | 12,669 | 12,102 | ||||||
| Other liabilities | 1,937 | 1,987 | ||||||
| Deferred income taxes | 7,035 | 6,922 | ||||||
| Total liabilities | 24,437 | 23,171 | ||||||
| Stockholders’ equity: | ||||||||
| Common stock $1.00 per share par value, 1,350,000,000 shares authorized; outstanding 246,972,217 and 252,095,082 shares, respectively, net of treasury shares | 248 | 254 | ||||||
| Additional paid-in capital | 2,240 | 2,248 | ||||||
| Accumulated other comprehensive loss | (578 | ) | (594 | ) | ||||
| Retained income | 12,407 | 12,883 | ||||||
| Total stockholders’ equity | 14,317 | 14,791 | ||||||
| Total liabilities and stockholders’ equity | $ | 38,754 | $ | 37,962 | ||||
See accompanying notes to consolidated financial statements.
Norfolk Southern Corporation and Subsidiaries
Consolidated Statements of Cash Flows
(Unaudited)
| First Six Months | ||||||||
| 2021 | 2020 | |||||||
| ($ in millions) | ||||||||
| Cash flows from operating activities | ||||||||
| Net income | $ | 1,492 | $ | 773 | ||||
| Reconciliation of net income to net cash provided by operating activities: | ||||||||
| Depreciation | 586 | 574 | ||||||
| Deferred income taxes | 107 | 56 | ||||||
| Gains and losses on properties | (75 | ) | (11 | ) | ||||
| Loss on asset disposal | — | 385 | ||||||
| Changes in assets and liabilities affecting operations: | ||||||||
| Accounts receivable | (96 | ) | 98 | |||||
| Materials and supplies | (25 | ) | (13 | ) | ||||
| Other current assets | 30 | 30 | ||||||
| Current liabilities other than debt | 170 | — | ||||||
| Other – net | (92 | ) | (134 | ) | ||||
| Net cash provided by operating activities | 2,097 | 1,758 | ||||||
| Cash flows from investing activities | ||||||||
| Property additions | (627 | ) | (735 | ) | ||||
| Property sales and other transactions | 66 | 258 | ||||||
| Investment purchases | (5 | ) | (5 | ) | ||||
| Investment sales and other transactions | 37 | (58 | ) | |||||
| Net cash used in investing activities | (529 | ) | (540 | ) | ||||
| Cash flows from financing activities | ||||||||
| Dividends | (496 | ) | (482 | ) | ||||
| Common stock transactions | 6 | 26 | ||||||
| Purchase and retirement of common stock | (1,525 | ) | (669 | ) | ||||
| Proceeds from borrowings | 1,087 | 784 | ||||||
| Debt repayments | (85 | ) | (314 | ) | ||||
| Net cash used in financing activities | (1,013 | ) | (655 | ) | ||||
| Net increase in cash and cash equivalents | 555 | 563 | ||||||
| Cash and cash equivalents | ||||||||
| At beginning of year | 1,115 | 580 | ||||||
| At end of period | $ | 1,670 | $ | 1,143 | ||||
| Supplemental disclosures of cash flow information | ||||||||
| Cash paid during the period for: | ||||||||
| Interest (net of amounts capitalized) | $ | 281 | $ | 287 | ||||
| Income taxes (net of refunds) | 249 | 1 | ||||||
See accompanying notes to consolidated financial statements.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. Loss on Asset Disposal
In 2020, we sold 703 locomotives deemed excess and no longer needed for railroad operations. We evaluated these locomotive retirements and concluded they were abnormal. Accordingly, we recorded a $385 million loss to adjust their carrying amount to their estimated fair value, which resulted in a $97 million tax benefit.
2. Stock Repurchase Program
We repurchased and retired 5.7 million and 3.9 million shares of common stock under our stock repurchase program during the first six months of 2021 and 2020, respectively, at a cost of $1.5 billion and $669 million, respectively.