10-KPeriod: FY2008

NORFOLK SOUTHERN CORP Annual Report, Year Ended Dec 31, 2008

Filed February 18, 2009For Securities:NSC

Summary

Norfolk Southern Corporation (NSC) reported a strong financial performance in 2008, with net income increasing by 17% to $1.7 billion, 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 billion, 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 billion in 2008, demonstrating a commitment to returning capital to shareholders.

Financial Highlights

48 data points
Beta

Revenue

$10.66B

Net Income

$1.72B

16.1% Net Margin

EPS (Diluted)

$4.52

Total Assets

$26.30B

Cash & Equivalents

$618.00M

Free Cash Flow

$1.16B

Financial Statements
Beta
Revenue$10.66B
Operating Expenses$7.58B
Operating Income$3.08B
Interest Expense$444.00M
Net Income$1.72B
EPS (Basic)$4.58
EPS (Diluted)$4.52
Shares Outstanding (Basic)372.30M
Shares Outstanding (Diluted)380.00M

Key Highlights

  • 1Net income increased by 17% to $1.7 billion in 2008.
  • 2Railway operating revenues grew by 13% to $10.7 billion.
  • 3Operating expenses increased by 11%, but the operating ratio improved to 71.1% from 72.6% in the prior year.
  • 4Cash provided by operating activities exceeded $2.7 billion for the fourth consecutive year.
  • 5The company repurchased 19.4 million shares for $1.1 billion under its share repurchase program.
  • 6Anticipates revenue decline in 2009 due to economic weakness and lower fuel surcharges.
  • 7Capital expenditures for 2009 are budgeted at $1.41 billion.

Frequently Asked Questions

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.

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.

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.

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.