01—Abstract
Summary
Summary of the 10-K filed February 15, 2008. Cited figures are marked; the original filing is the authoritative source.
Norfolk Southern Corporation (NSC) reported revenues of $9.4 billiona for the fiscal year ended December 31, 2007.
Despite a slight decrease in traffic volumes due to economic softness, the company managed to maintain its revenue levels through improved average revenue per unit. Operating expenses remained stable, resulting in a slightly improved operating ratio of 72.6%. The company generated strong operating cash flow, which, along with a reduction in cash and short-term investments, funded significant capital expenditures, share repurchases totaling $1.2 billionb, and increased dividend payouts.
Looking ahead to 2008, Norfolk Southern anticipates continued revenue growth driven by higher pricing and a modest increase in traffic volume, contingent on economic improvement. The company plans to continue investing in its infrastructure, with a capital expenditure budget of $1.43 billionc, focusing on rail, track upgrades, and equipment modernization. Shareholder returns were also a focus, with the company continuing its share repurchase program and returning capital through dividends.
02—Key points
Key Highlights
- In 2007, Norfolk Southern reported railway operating revenues of $9.4 billion, matching the previous year's performance despite a slight decline in traffic volume.
- The company maintained a solid operating ratio of 72.6%, showing a slight improvement from 72.8% in 2006.
- Cash flow from operating activities exceeded $2 billion for the third consecutive year, demonstrating strong operational cash generation.
- Norfolk Southern repurchased approximately 23.6 million shares of common stock for $1.2 billion in 2007, continuing its commitment to returning capital to shareholders.
- Capital expenditures for 2007 totaled $1.34 billion, with a planned increase to $1.43 billion for 2008, signaling continued investment in infrastructure and equipment.
- The company's revenue from coal, its largest commodity group, represented 25% of total railway operating revenues in 2007.
03—One dollar
04—Financials
Financial Highlights
Figures from 10-KFY2007filed February 15, 2008Financial Statements
| Revenue | $9.43B |
| Operating Expenses | $6.85B |
| Operating Income | $2.58B |
| Interest Expense | $441.00M |
| Net Income | $1.46B |
| EPS (Basic) | $3.73 |
| EPS (Diluted) | $3.68 |
05—Questions
Frequently Asked Questions
What was Norfolk Southern's total revenue for the fiscal year ended December 31, 2007?
Norfolk Southern reported total railway operating revenues of $9.4 billion for the fiscal year ended December 31, 2007.
How did the company manage its operating expenses in 2007?
Railway operating expenses remained approximately even in 2007 compared to 2006, decreasing slightly by $3 million. This was primarily due to lower volume-related expenses which offset higher fuel expenses. The operating ratio improved slightly to 72.6%.
What is the company's outlook for 2008 regarding revenue and capital expenditures?
Looking ahead, Norfolk Southern expects revenues to continue to grow, reflecting higher average revenue per unit and modestly higher traffic volume, particularly in the latter half of 2008, assuming economic improvement. The company has budgeted $1.43 billion for capital expenditures in 2008, focusing on infrastructure, rail, track upgrades, and equipment.
How has Norfolk Southern been returning capital to shareholders?
In 2007, Norfolk Southern repurchased approximately 23.6 million shares of common stock for $1.2 billion under its share repurchase program. Additionally, dividends per share increased from $0.68 in 2006 to $0.96 in 2007, reflecting a commitment to shareholder returns.
06—Continue