01—Abstract
Summary
Summary of the 10-K filed February 14, 2014. Cited figures are marked; the original filing is the authoritative source.
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.
02—Key points
Key Highlights
- In 2013, Norfolk Southern reported $11.2 billion in railway operating revenues.
- The company operates approximately 20,000 miles of railroad across 22 states and the District of Columbia.
- Coal remains the largest commodity group by revenue, accounting for 23% of total railway operating revenues in 2013.
- General merchandise and intermodal services followed, comprising 56% and 21% of revenues respectively.
- NSC invested $1.97 billion in property additions in 2013 to maintain and improve its infrastructure.
- The company repurchased 8.3 million shares of common stock in 2013 for $627 million.
- Net income increased by 9% to $1.91 billion in 2013 compared to 2012.
03—One dollar
04—Financials
Financial Highlights
Figures from 10-KFY2013filed February 14, 2014Financial Statements
FY2013 against FY2012
| Line item | FY2013FY2012 | Change |
|---|---|---|
| Revenue | $11.24B$11.04B | +1.9% |
| Operating Expenses | $7.99B$7.92B | +0.9% |
| Operating Income | $3.26B$3.12B | +4.3% |
| Interest Expense | $525.00M$495.00M | +6.1% |
| Net Income | $1.91B$1.75B | +9.2% |
| EPS (Basic) | $6.10$5.42 | +12.5% |
| EPS (Diluted) | $6.04$5.37 | +12.5% |
05—Questions
Frequently Asked Questions
What are Norfolk Southern's primary sources of revenue?
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%.
How is Norfolk Southern investing in its infrastructure?
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.
What are the main risks facing Norfolk Southern according to the filing?
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.
How did Norfolk Southern manage its expenses in 2013?
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.
06—Continue