10-KPeriod: FY2013

NORFOLK SOUTHERN CORP Annual Report, Year Ended Dec 31, 2013

Filed February 14, 2014For Securities:NSC

Summary

Norfolk Southern Corporation (NSC) reported solid financial performance in its 2013 10-K filing. The company generated substantial railway operating revenues, driven by diverse commodity groups including coal, general merchandise, and intermodal services. Despite facing challenges such as varying commodity demand and competition, NSC demonstrated operational efficiency, reflected in its operating ratio. Key financial highlights include continued investment in property additions to enhance network capacity and service. The company also actively engaged in returning value to shareholders through share repurchases and dividends. NSC maintained a strong liquidity position and a manageable debt-to-capitalization ratio, positioning it for continued operations and future growth. Investors should note the company's focus on safety, cost control, and market-based pricing strategies.

Financial Highlights

47 data points
Beta

Revenue

$11.24B

Net Income

$1.91B

17.0% Net Margin

EPS (Diluted)

$6.04

Total Assets

$32.48B

Cash & Equivalents

$1.44B

Free Cash Flow

$1.11B

Financial Statements
Beta
Revenue$11.24B
Operating Expenses$7.99B
Operating Income$3.26B
Interest Expense$525.00M
Net Income$1.91B
EPS (Basic)$6.10
EPS (Diluted)$6.04

Key Highlights

  • 1In 2013, Norfolk Southern reported $11.2 billion in railway operating revenues.
  • 2The company operates approximately 20,000 miles of railroad across 22 states and the District of Columbia.
  • 3Coal remains the largest commodity group by revenue, accounting for 23% of total railway operating revenues in 2013.
  • 4General merchandise and intermodal services followed, comprising 56% and 21% of revenues respectively.
  • 5NSC invested $1.97 billion in property additions in 2013 to maintain and improve its infrastructure.
  • 6The company repurchased 8.3 million shares of common stock in 2013 for $627 million.
  • 7Net income increased by 9% to $1.91 billion in 2013 compared to 2012.

Frequently Asked Questions

Norfolk Southern's primary sources of revenue are derived from the transportation of various commodities, categorized into three major market groups: Coal, General Merchandise, and Intermodal. In 2013, Coal represented 23% of total railway operating revenues, General Merchandise accounted for 56%, and Intermodal services comprised 21%.

Norfolk Southern is making significant investments in its infrastructure to enhance capacity and improve transit times. In 2013, the company reported $1.97 billion in property additions, which included investments in road and other property as well as equipment. Ongoing initiatives like the Crescent Corridor and Heartland Corridor aim to create high-capacity intermodal routes.

Norfolk Southern faces several key risks, including significant governmental legislation and regulation (potential for increased economic regulation), safety and security regulations (mandated implementation of positive train control), environmental laws and regulations, the inherent risks of transporting hazardous materials, potential impacts from terrorism or war, general economic conditions affecting commodity producers and consumers, competition from other transportation modes, disruptions in technology, labor agreements and potential strikes, and severe weather events.

In 2013, Norfolk Southern's railway operating expenses increased by 1% to $8.0 billion, driven by higher wage rates and volume-related expenses. However, these increases were partially offset by cost savings resulting from network efficiencies. The company also saw a decrease in casualty and other claims expenses due to improved historical trend rates.