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Published: 2021-01-27 08:05:44 ET
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EX-99.2 3 e21030_ex99-2.htm

 

Norfolk Southern Corporation and Subsidiaries

Consolidated Statements of Income

(Unaudited)

 

   Fourth Quarter   Years Ended December 31, 
   2020   2019   2020   2019 
   (in millions, except per share amounts) 
                 
Railway operating revenues                    
Merchandise  $1,553   $1,630   $6,088   $6,803 
Intermodal   730    697    2,654    2,824 
Coal   290    363    1,047    1,669 
Total railway operating revenues   2,573    2,690    9,789    11,296 
                     
Railway operating expenses                    
Compensation and benefits   587    630    2,373    2,751 
Purchased services and rents   426    460    1,687    1,725 
Fuel   136    223    535    953 
Depreciation   287    285    1,154    1,138 
Materials and other   153    130    653    740 
Loss on asset disposal   —    —    385    — 
Total railway operating expenses   1,589    1,728    6,787    7,307 
                     
Income from railway operations   984    962    3,002    3,989 
                     
Other income – net   43    18    153    106 
Interest expense on debt   160    152    625    604 
                     
Income before income taxes   867    828    2,530    3,491 
                     
Income taxes                    
Current   132    57    375    439 
Deferred   64    105    142    330 
Total income taxes   196    162    517    769 
                     
Net income  $671   $666   $2,013   $2,722 
                     
Earnings per share – diluted  $2.64   $2.55   $7.84   $10.25 
                     
Weighted average shares outstanding – diluted   254.7    261.6    256.6    265.6 

 

See accompanying notes to consolidated financial statements

 
 

Norfolk Southern Corporation and Subsidiaries

Consolidated Balance Sheets

(Unaudited)

 

   At December 31, 
   2020   2019 
   ($ in millions) 
Assets          
Current assets:          
Cash and cash equivalents  $1,115   $580 
Accounts receivable – net   848    920 
Materials and supplies   221    244 
Other current assets   134    337 
Total current assets   2,318    2,081 
           
Investments   3,590    3,428 
Properties less accumulated depreciation of $11,985 and $11,982, respectively   31,345    31,614 
Other assets   709    800 
           
Total assets  $37,962   $37,923 
           
Liabilities and stockholders’ equity          
Current liabilities:          
Accounts payable  $1,016   $1,428 
Income and other taxes   263    229 
Other current liabilities   302    327 
Current maturities of long-term debt   579    316 
Total current liabilities   2,160    2,300 
           
Long-term debt   12,102    11,880 
Other liabilities   1,987    1,744 
Deferred income taxes   6,922    6,815 
           
Total liabilities   23,171    22,739 
           
Stockholders’ equity:          
Common stock $1.00 per share par value, 1,350,000,000 shares authorized; outstanding 252,095,082 and 257,904,956 shares, respectively, net of treasury shares   254    259 
Additional paid-in capital   2,248    2,209 
Accumulated other comprehensive loss   (594)   (491)
Retained income   12,883    13,207 
           
Total stockholders’ equity   14,791    15,184 
           
Total liabilities and stockholders’ equity  $37,962   $37,923 

 

See accompanying notes to consolidated financial statements

 
 

Norfolk Southern Corporation and Subsidiaries

Consolidated Statements of Cash Flows

(Unaudited)

 

   Years Ended December 31, 
   2020   2019 
   ($ in millions) 
Cash flows from operating activities          
Net income  $2,013   $2,722 
Reconciliation of net income to net cash provided by operating activities:          
Depreciation   1,154    1,139 
Deferred income taxes   142    330 
Gains and losses on properties   (39)   (42)
Loss on asset disposal   385    — 
Impairment of investment   99    — 
Changes in assets and liabilities affecting operations:          
Accounts receivable   71    87 
Materials and supplies   23    (37)
Other current assets   3    (4)
Current liabilities other than debt   34    (185)
Other – net   (248)   (118)
Net cash provided by operating activities   3,637    3,892 
           
Cash flows from investing activities          
Property additions   (1,494)   (2,019)
Property sales and other transactions   333    377 
Investment purchases   (13)   (18)
Investment sales and other transactions   (1)   (104)
Net cash used in investing activities   (1,175)   (1,764)
           
Cash flows from financing activities          
Dividends   (960)   (949)
Common stock transactions   69    27 
Purchase and retirement of common stock   (1,439)   (2,099)
Proceeds from borrowings – net of issuance costs   784    2,192 
Debt repayments   (381)   (1,188)
Other   —    23 
Net cash used in financing activities   (1,927)   (1,994)
Net increase in cash, cash equivalents, and restricted cash   535    134 
           
Cash, cash equivalents, and restricted cash          
At beginning of year   580    446 
At end of year  $1,115   $580 
           
Supplemental disclosures of cash flow information          
Cash paid during the year for:          
Interest (net of amounts capitalized)  $577   $555 
Income taxes (net of refunds)   311    543 

 

See accompanying notes to consolidated financial statements

 
 

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS:

 

1. Impairment of Investment

In 2020, we recorded an other-than-temporary impairment of $99 million related to the carrying value of an equity method investment. This non-cash impairment charge is recorded in “Purchased services and rents” on the Consolidated Statement of Income and had a $74 million impact on net income.

 

2. Loss on Asset Disposal

In 2020, we sold 703 locomotives deemed excess and no longer needed for railroad operations. Accordingly, we recorded a $385 million loss to adjust their carrying amount to their estimated fair value.

 

3. Stock Repurchase Program

We repurchased and retired 7.4 million and 11.3 million shares of common stock under our stock repurchase programs in 2020 and 2019, respectively, at a cost of $1.4 billion and $2.1 billion, respectively. 

 

4. Restricted Cash

The “Cash, cash equivalents, and restricted cash” line item on the Consolidated Statement of Cash Flows at January 1, 2019 includes restricted cash of $88 million, which reflects deposits held by a third-party bond agent as collateral for certain debt obligations which matured on October 1, 2019.