Norfolk Southern Corporation and Subsidiaries
Consolidated Statements of Income
(Unaudited)
See accompanying notes.
Norfolk Southern Corporation and Subsidiaries
Consolidated Statements of Comprehensive Income
(Unaudited)
See accompanying notes.
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Norfolk Southern Corporation and Subsidiaries
Consolidated Balance Sheets
(Unaudited)
See accompanying notes.
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Norfolk Southern Corporation and Subsidiaries
Consolidated Statements of Cash Flows
(Unaudited)
See accompanying notes.
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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS:
1. MATERIALS AND OTHER
During the first quarter of 2011, we received an unfavorable ruling for an arbitration claim with an insurance carrier, and were denied recovery of the contested portion of the claim. As a result, we recorded a $43 million charge for the receivables associated with the contested portion of the claim and a $15 million charge for other receivables affected by the ruling for which recovery was no longer probable.
2. INCOME TAXES
During the second quarter of 2011, the Internal Revenue Service (IRS) completed its examination of our 2008 tax return and review of certain claims for refund for prior years that resulted in a decrease in income tax expense of $40 million. During the second and fourth quarters of 2011, enacted state tax law changes resulted in a decrease to deferred income tax expense of $19 million and $11 million, respectively.
3. EARNINGS PER SHARE
For basic earnings per share, income available to common stockholders reflects reductions for the effect of dividend equivalent payments made to holders of stock options and restricted stock units as follows: for the fourth quarter, $2 million in 2012 and $3 million in 2011; and for the year, $9 million in both 2012 and 2011.
For diluted earnings per share, income available to common stockholders reflects reductions for the effect of dividend equivalent payments made to holders of stock options and restricted stock units as follows: for the fourth quarter, $1 million in 2012 and less than $1 million in 2011; and for the year, $4 million in 2012 and $2 million in 2011.
4. STOCK REPURCHASE PROGRAM
We repurchased and retired 18.8 million shares of Common Stock in 2012, at a cost of $1.3 billion, and 30.2 million shares at a cost of $2.1 billion for the same period of 2011. On August 1, 2012, our Board of Directors authorized the repurchase of up to an additional 50 million shares of Common Stock through December 31, 2017. The timing and volume of purchases is guided by our assessment of market conditions and other pertinent factors. Any near-term share repurchases are expected to be made with internally generated cash, cash on hand, or proceeds from borrowings. Since the beginning of 2006, we have repurchased and retired 128.4 million shares at a total cost of $7.5 billion.
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