Summary
Norfolk Southern Corporation (NSC) filed its 2016 10-K on February 6, 2017, providing a comprehensive overview of its operations and financial performance for the year ending December 30, 2016. The report highlights NSC's position as a leading transportation company with a vast freight railroad network spanning approximately 19,500 miles across 22 states. The company's primary business involves the rail transportation of a diverse range of goods, including raw materials, intermediate products, and finished goods, serving major industrial and consumer markets primarily in the eastern half of the United States. Financially, 2016 presented a mixed operational landscape for NSC. While railway operating revenues saw a decrease compared to prior years, the company achieved a record-low railway operating ratio of 68.9% due to disciplined cost control and productivity savings. This operational efficiency allowed for improved service levels and asset utilization, despite broader economic challenges. The report details revenue streams from merchandise, intermodal, and coal, with merchandise accounting for the largest portion. The company's strategic plan continues to focus on efficiency gains, service quality, and increased returns on capital, with projections for revenue growth in 2017 driven by expected volume increases in coal and intermodal markets.
Financial Highlights
49 data points| Revenue | $9.89B |
| Operating Expenses | $6.88B |
| Operating Income | $3.01B |
| Interest Expense | $563.00M |
| Net Income | $1.67B |
| EPS (Basic) | $5.66 |
| EPS (Diluted) | $5.62 |
| Shares Outstanding (Basic) | 293.90M |
| Shares Outstanding (Diluted) | 296.00M |
Key Highlights
- 1Norfolk Southern operated approximately 19,500 miles of railroad track across 22 states, serving a significant portion of the eastern United States.
- 2Total railway operating revenues for 2016 were $9.9 billion, a decrease from $10.5 billion in 2015 and $11.6 billion in 2014, primarily driven by lower volume and reduced fuel surcharges.
- 3The company achieved a record-low railway operating ratio of 68.9% in 2016, down from 72.6% in 2015, reflecting strong cost control and productivity savings.
- 4Merchandise revenue was the largest contributor, accounting for 63% of total railway operating revenues, followed by Intermodal (22%) and Coal (15%).
- 5Capital expenditures for property additions were $1.9 billion in 2016, with a budgeted $1.9 billion for 2017, focused on infrastructure, equipment, and technology.
- 6The company continued to invest in Positive Train Control (PTC) systems, budgeting $240 million for implementation in 2017.
- 7Approximately 80% of railroad employees are covered by collective bargaining agreements, with national negotiations ongoing with various labor unions.