01—Abstract
Summary
Summary of the 10-K filed February 18, 2009. Cited figures are marked; the original filing is the authoritative source.
Norfolk Southern Corporation (NSC) reported a strong financial performance in 2008, with net income increasing by 17% to $1.7 billiona, driven by a 19% rise in income from railway operations.
This was achieved through higher average revenue per unit, including fuel surcharges, which more than offset increased operating expenses and a slight decrease in traffic volume. Operating revenues grew by 13% to $10.7 billionb, while operating expenses rose by 11%, leading to an improved operating ratio of 71.1%. The company generated substantial cash flow from operations, exceeding $2.7 billion for the fourth consecutive year, which was used to fund capital expenditures, share repurchases, and dividends.
Looking ahead to 2009, NSC anticipates a revenue decline due to the weak economy impacting traffic volume and a reduction in fuel surcharge revenue from lower fuel prices. The company plans to focus on service improvements, maintain its market-based pricing strategy, and reduce volume-related costs. NSC continued its share repurchase program, retiring 19.4 million shares for $1.1 billionc in 2008, demonstrating a commitment to returning capital to shareholders.
02—Key points
Key Highlights
- Net income increased by 17% to $1.7 billion in 2008.
- Railway operating revenues grew by 13% to $10.7 billion.
- Operating expenses increased by 11%, but the operating ratio improved to 71.1% from 72.6% in the prior year.
- Cash provided by operating activities exceeded $2.7 billion for the fourth consecutive year.
- The company repurchased 19.4 million shares for $1.1 billion under its share repurchase program.
- Anticipates revenue decline in 2009 due to economic weakness and lower fuel surcharges.
- Capital expenditures for 2009 are budgeted at $1.41 billion.
03—One dollar
04—Financials
Financial Highlights
Figures from 10-KFY2008filed February 18, 2009Financial Statements
FY2008 against FY2007
| Line item | FY2008FY2007 | Change |
|---|---|---|
| Revenue | $10.66B$9.43B | +13.0% |
| Operating Expenses | $7.58B$6.85B | +10.7% |
| Operating Income | $3.08B$2.58B | +19.3% |
| Interest Expense | $444.00M$441.00M | +0.7% |
| Net Income | $1.72B$1.46B | +17.2% |
| EPS (Basic) | $4.58$3.73 | +22.8% |
| EPS (Diluted) | $4.52$3.68 | +22.8% |
| Shares Outstanding (Basic) | 372.30M— | — |
| Shares Outstanding (Diluted) | 380.00M— | — |
05—Questions
Frequently Asked Questions
What was Norfolk Southern's net income and revenue for 2008?
In 2008, Norfolk Southern reported a net income of $1.7 billion, a 17% increase compared to the previous year. Railway operating revenues also saw an increase of 13%, reaching $10.7 billion.
How did the company manage its operating expenses and what was its operating ratio?
Operating expenses increased by 11% to $7.6 billion in 2008. Despite this increase, the company improved its operating ratio to 71.1% from 72.6% in 2007, indicating improved efficiency in converting revenue to profit.
What is the company's outlook for 2009?
Norfolk Southern anticipates a decline in revenues for 2009, primarily due to the weak economic conditions affecting traffic volumes and a decrease in fuel surcharge revenue resulting from lower fuel prices. The company plans to focus on cost management and service improvements.
What actions did the company take regarding shareholder returns in 2008?
In 2008, Norfolk Southern continued its share repurchase program, buying back 19.4 million shares for $1.1 billion. The company also increased its dividend payments, demonstrating a commitment to returning value to shareholders.
06—Continue