FOR IMMEDIATE RELEASE
April 23, 1997
NORFOLK SOUTHERN POSTS RECORD OPERATING REVENUES
AND STRONG FIRST-QUARTER EARNINGS
NEW YORK, N.Y. Norfolk Southern Corporation's first-quarter net
income was $177.5 million before, and $127.8 million after, a
one-time charge of $77.2 million ($49.7 million after tax) to
write off the costs of establishing and maintaining a $13 billion
credit facility related to its tender offer for all shares of
Conrail. Earnings per share were $1.42 before, and $1.02 after,
the charge. Following NS' agreement with CSX Corporation
concerning the joint acquisition of Conrail, NS has terminated
all but $1.65 billion of that credit facility. Excluding the
one-time charge, net income and earnings per share both set
first-quarter records.
Railway operating revenues for the first quarter were $1.05
billion, up 3 percent from 1996 and an all-time record for any
quarter. Motor carrier operating revenues also increased by 3
percent to $203.7 million. Total transportation operating
revenues set a first-quarter record of $1.25 billion, up 3
percent from 1996.
"Our solid first-quarter performance in the midst of our
intensive effort to achieve balanced rail restructuring in the
East is especially gratifying," said David R. Goode, chairman,
president and chief executive officer. "Traffic and revenue
gains were broad-based, with increases in every industry group
except agriculture. Aside from unusual items, this was the
seventeenth consecutive quarter of year-to-year improvement in
earnings per share."
First-quarter railway operating expenses of $764.5 million
were 1 percent higher than 1996. Motor carrier operating
expenses of $199.6 million were about even. Total transportation
operating expenses of $964.1 million were up 1 percent.
Income from operations of $285.6 million, up 9 percent, and
railway operating income of $281.5 million, up 7 percent, both
were first-quarter records.
Norfolk Southern also set a new first-quarter record railway
operating ratio of 73.1 compared to 74.2 last year. The railway
operating ratio is the percentage of revenues that go into
operating the railroad.
# # #
Media Contact: Robert Fort, Norfolk, 757/629-2710
World Wide Web site http://www.nscorp.com
[Qualified by reference to Exhibit 99.2]
Norfolk Southern Corporation and Subsidiaries
Financial Highlights First Quarter 1997 (See Note A)
(Unaudited)
($ millions except per share amounts)
Percent
First Quarter Change
--------------------- Favorable
1997 1996 (Unfavorable)
--------- --------- -------------
Total Transportation
Operating Revenues $1,249.7 $1,215.0 3%
Total Transportation
Operating Expenses 964.1 954.0 (1%)
Income from Operations 285.6 261.0 9%
Nonoperating Income (Expense)
(Note B) (9.9) 5.8 --
Net Income (Note B) $ 177.5 $ 168.1 6%
Earnings per Share (Note B) $ 1.42 $ 1.31 8%
Railway Operating Ratio (%) 73.1 74.2
Notes:
(A) NS wishes to furnish financial information comparable with
that reported in other periods and to highlight the
information on which the accompanying press release draws.
Accordingly, as more particularly detailed in any notes
hereto, and in the accompanying press release, these
Financial Highlights may not reflect the effects of
certain unusual or infrequent transactions, or changes
in accounting, that significantly affect net income and
earnings per share as reported in the financial statements.
Financial Highlights are provided solely to complement the
content of the accompanying press release.
(B) Nonoperating income (expense) excludes a one-time charge
of $77.2 million, $49.7 million after-tax, or $0.40 per
share, for costs incurred to establish and maintain a
$13 billion credit facility to acquire all of Conrail.
As a result of the agreement with CSX concerning the
division of Conrail, all but $1.65 billion of that
facility has been terminated. Including the credit
facility charge, net income was $127.8 million, 24 percent
below 1996, and earnings per share were $1.02, 22 percent
below 1996.