Norfolk Southern (NSC) 8-K Norfolk Southern reports first-quarter 2021 results

Norfolk Southern Corporation and Subsidiaries

Consolidated Statements of Income

(Unaudited)

	First Quarter
	2021		2020
	(in millions, except per share amounts)
Railway operating revenues
Merchandise	$	1,608	$	1,672
Intermodal		719		655
Coal		312		298
Total railway operating revenues		2,639		2,625
Railway operating expenses
Compensation and benefits		611		622
Purchased services and rents		393		403
Fuel		177		189
Depreciation		292		292
Materials and other		151		166
Loss on asset disposal		—		385
Total railway operating expenses		1,624		2,057
Income from railway operations		1,015		568
Other income – net		7		22
Interest expense on debt		156		154
Income before income taxes		866		436
Income taxes
Current		141		44
Deferred		52		11
Total income taxes		193		55
Net income	$	673	$	381
Earnings per share – diluted	$	2.66	$	1.47
Weighted average shares outstanding – diluted		252.6		258.7

See accompanying notes to consolidated financial statements 

Norfolk Southern Corporation and Subsidiaries

Consolidated Balance Sheets

(Unaudited)

	March 31,			December 31,
	2021			2020
	($ in millions)
Assets
Current assets:
Cash and cash equivalents	$	998		$	1,115
Accounts receivable – net		944			848
Materials and supplies		241			221
Other current assets		120			134
Total current assets		2,303			2,318
Investments		3,604			3,590
Properties less accumulated depreciation of $11,672 and $11,985, respectively		31,312			31,345
Other assets		718			709
Total assets	$	37,937		$	37,962
Liabilities and stockholders’ equity
Current liabilities:
Accounts payable	$	1,043		$	1,016
Income and other taxes		361			263
Other current liabilities		344			302
Current maturities of long-term debt		501			579
Total current liabilities		2,249			2,160
Long-term debt		12,116			12,102
Other liabilities		1,952			1,987
Deferred income taxes		6,977			6,922
Total liabilities		23,294			23,171
Stockholders’ equity:
Common stock $1.00 per share par value, 1,350,000,000 shares authorized; outstanding 250,241,009 and 252,095,082 shares, respectively, net of treasury shares		251			254
Additional paid-in capital		2,241			2,248
Accumulated other comprehensive loss		(586	)		(594	)
Retained income		12,737			12,883
Total stockholders’ equity		14,643			14,791
Total liabilities and stockholders’ equity	$	37,937		$	37,962

See accompanying notes to consolidated financial statements 

Norfolk Southern Corporation and Subsidiaries

Consolidated Statements of Cash Flows

(Unaudited)

	First Three Months
	2021			2020
	($ in millions)
Cash flows from operating activities
Net income	$	673		$	381
Reconciliation of net income to net cash provided by operating activities:
Depreciation		292			292
Deferred income taxes		52			11
Gains and losses on properties		(8	)		(8	)
Loss on asset disposal		—			385
Changes in assets and liabilities affecting operations:
Accounts receivable		(95	)		32
Materials and supplies		(20	)		(21	)
Other current assets		9			(33	)
Current liabilities other than debt		158			(40	)
Other – net		(46	)		(44	)
Net cash provided by operating activities		1,015			955
Cash flows from investing activities
Property additions		(265	)		(366	)
Property sales and other transactions		37			158
Investment sales and other transactions		26			(25	)
Net cash used in investing activities		(202	)		(233	)
Cash flows from financing activities
Dividends		(249	)		(242	)
Common stock transactions		(6	)		14
Purchase and retirement of common stock		(591	)		(466	)
Debt repayments		(84	)		—
Net cash used in financing activities		(930	)		(694	)
Net increase (decrease) in cash and cash equivalents		(117	)		28
Cash and cash equivalents
At beginning of year		1,115			580
At end of period	$	998		$	608
Supplemental disclosures of cash flow information
Cash paid during the period for:
Interest (net of amounts capitalized)	$	110		$	121
Income taxes (net of refunds)		27			16

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 2.3 million and 2.6 million shares of common stock under our stock repurchase program during the first three months of 2021 and 2020, respectively, at a cost of $591 million and $466 million, respectively.