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Published: 2023-04-26 00:00:00 ET
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EX-99.2 3 e23230_ex99-2.htm

Exhibit 99.2

 

Norfolk Southern Corporation and Subsidiaries

Consolidated Statements of Income

(Unaudited)

 

   First Quarter 
   2023   2022 
   (in millions, except per share amounts) 
         
Railway operating revenues          
Merchandise  $1,878   $1,672 
Intermodal   814    854 
Coal   440    389 
Total railway operating revenues   3,132    2,915 
           
Railway operating expenses          
Compensation and benefits   690    619 
Purchased services and rents   496    437 
Fuel   315    301 
Depreciation   321    302 
Materials and other   212    171 
Eastern Ohio incident   387    — 
Total railway operating expenses   2,421    1,830 
           
Income from railway operations   711    1,085 
           
Other income (expense) – net   56    (5)
Interest expense on debt   175    168 
           
Income before income taxes   592    912 
           
Income tax expense (benefit)          
Current   141    161 
Deferred   (15)   48 
Total income tax expense   126    209 
           
Net income  $466   $703 
           
Earnings per share – diluted  $2.04   $2.93 
           
Weighted average shares outstanding – diluted   228.3    240.2 

 

See accompanying notes to consolidated financial statements.

 
 

Norfolk Southern Corporation and Subsidiaries

Consolidated Balance Sheets

(Unaudited)

 

   March 31,   December 31, 
   2023   2022 
   ($ in millions) 
Assets          
Current assets:          
Cash and cash equivalents  $552   $456 
Accounts receivable – net   1,170    1,148 
Materials and supplies   262    253 
Other current assets   138    150 
Total current assets   2,122    2,007 
           
Investments   3,738    3,694 
Properties less accumulated depreciation of $12,810 and $12,592, respectively   32,240    32,156 
Other assets   1,069    1,028 
           
Total assets  $39,169   $38,885 
           
Liabilities and stockholders’ equity          
Current liabilities:          
Accounts payable  $1,315   $1,293 
Short-term debt   —    100 
Income and other taxes   438    312 
Other current liabilities   668    341 
Current maturities of long-term debt   403    603 
Total current liabilities   2,824    2,649 
           
Long-term debt   14,585    14,479 
Other liabilities   1,785    1,759 
Deferred income taxes   7,248    7,265 
           
Total liabilities   26,442    26,152 
           
Stockholders’ equity:          
Common stock $1.00 per share par value, 1,350,000,000 shares authorized; outstanding 227,639,602 and 228,076,415 shares, respectively, net of treasury shares   229    230 
Additional paid-in capital   2,155    2,157 
Accumulated other comprehensive loss   (355)   (351)
Retained income   10,698    10,697 
           
Total stockholders’ equity   12,727    12,733 
           
Total liabilities and stockholders’ equity  $39,169   $38,885 

 

See accompanying notes to consolidated financial statements.

 
 

Norfolk Southern Corporation and Subsidiaries

Consolidated Statements of Cash Flows

(Unaudited)

 

   First Three Months 
   2023   2022 
   ($ in millions) 
Cash flows from operating activities          
Net income  $466   $703 
Reconciliation of net income to net cash provided by operating activities:          
Depreciation   321    302 
Deferred income taxes   (15)   48 
Gains and losses on properties   (4)   (6)
Changes in assets and liabilities affecting operations:          
Accounts receivable   (22)   (94)
Materials and supplies   (9)   (46)
Other current assets   12    21 
Current liabilities other than debt   480    83 
Other – net   (56)   (17)
           
Net cash provided by operating activities   1,173    994 
           
Cash flows from investing activities          
Property additions   (428)   (389)
Property sales and other transactions   20    36 
Investment purchases   —    (1)
Investment sales and other transactions   17    19 
           
Net cash used in investing activities   (391)   (335)
           
Cash flows from financing activities          
Dividends   (307)   (297)
Common stock transactions   (10)   (18)
Purchase and retirement of common stock   (163)   (600)
Proceeds from borrowings   594    989 
Debt repayments   (800)   (1)
           
Net cash provided by (used in) financing activities   (686)   73 
           
Net increase in cash and cash equivalents   96    732 
           
Cash and cash equivalents          
At beginning of year   456    839 
At end of period  $552   $1,571 
           
Supplemental disclosures of cash flow information          
Cash paid during the period for:          
Interest (net of amounts capitalized)  $129   $114 
Income taxes (net of refunds)   (1)   9 

 

See accompanying notes to consolidated financial statements.

 
 

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

 

1.Eastern Ohio incident

On February 3, 2023, a train operated by Norfolk Southern derailed in East Palestine, Ohio. During the first quarter, we recognized $387 million of expense for costs primarily associated with environmental matters and legal proceedings resulting from the incident. While certain costs recorded in the first quarter may be recoverable under our insurance policies in effect at the date of the incident, no estimate of potential recoveries has yet been recorded.

 

2.Stock Repurchase Program

We repurchased and retired 0.6 million and 2.2 million shares of common stock under our stock repurchase programs in the first three months of 2023 and 2022, at a cost of $163 million and $600 million.