Summary
Norfolk Southern Corporation (NSC) announced on April 16, 2020, a significant non-cash charge of $385 million in the first quarter of 2020. This charge is primarily due to the disposal of approximately 300 locomotives and the classification of an additional 400 locomotives as held for sale. The company attributes this to the increased efficiency and excess capacity realized from the implementation of its Precision Scheduled Railroading (PSR) initiative in 2019. This non-cash charge is expected to reduce first quarter diluted earnings per share by $1.11. Investors should note that Norfolk Southern plans to provide further details on this charge during its first quarter earnings call on April 29, 2020. The company will present its financial results on both a GAAP and a non-GAAP basis, excluding this charge, and will also provide an update on the impact of the COVID-19 pandemic.
Key Highlights
- 1Norfolk Southern is taking a $385 million non-cash charge in Q1 2020 related to locomotive disposals and assets held for sale.
- 2The charge impacts approximately 300 disposed locomotives and 400 designated as held for sale.
- 3This action is a direct result of efficiency gains from the Precision Scheduled Railroading (PSR) initiative, leading to excess network capacity.
- 4The charge is estimated to reduce Q1 2020 diluted earnings per share (EPS) by $1.11.
- 5More details on the charge will be provided during the Q1 earnings call on April 29, 2020.
- 6The company will report Q1 results on both GAAP and adjusted (non-GAAP) bases, excluding the charge.