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Published: 2023-10-25 08:06:07 ET
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EX-99.2 3 e23426_ex99-2.htm

Exhibit 99.2

 

Norfolk Southern Corporation and Subsidiaries

Consolidated Statements of Income

(Unaudited)

   Third Quarter   First Nine Months 
   2023   2022   2023   2022 
   (in millions, except per share amounts) 
                 
Railway operating revenues                    
Merchandise  $1,800   $1,930   $5,504   $5,455 
Intermodal   737    942    2,296    2,768 
Coal   434    471    1,283    1,285 
Total railway operating revenues   2,971    3,343    9,083    9,508 
                     
Railway operating expenses                    
Compensation and benefits   715    735    2,098    1,968 
Purchased services and rents   517    484    1,519    1,402 
Fuel   289    383    867    1,092 
Depreciation   326    306    968    912 
Materials and other   205    163    622    506 
Eastern Ohio incident   163    —    966    — 
Total railway operating expenses   2,215    2,071    7,040    5,880 
                     
Income from railway operations   756    1,272    2,043    3,628 
                     
Other income (expense) – net   40    (2)   153    (21)
Interest expense on debt   182    177    527    515 
                     
Income before income taxes   614    1,093    1,669    3,092 
                     
Income tax expense (benefit)                    
Current   154    223    422    589 
Deferred   (18)   (88)   (53)   23 
Total income tax expense   136    135    369    612 
                     
Net income  $478   $958   $1,300   $2,480 
                     
Earnings per share – diluted  $2.10   $4.10   $5.70   $10.45 
                     
Weighted average shares outstanding – diluted   227.0    234.0    227.8    237.2 

 

See accompanying notes to consolidated financial statements.

 
 

Norfolk Southern Corporation and Subsidiaries

Consolidated Balance Sheets

(Unaudited)

   September 30,   December 31, 
   2023   2022 
   ($ in millions) 
Assets          
Current assets:          
Cash and cash equivalents  $1,506   $456 
Accounts receivable – net   1,210    1,148 
Materials and supplies   303    253 
Other current assets   123    150 
Total current assets   3,142    2,007 
           
Investments   3,824    3,694 
Properties less accumulated depreciation of $13,162 and $12,592, respectively   32,668    32,156 
Other assets   1,105    1,028 
           
Total assets  $40,739   $38,885 
           
Liabilities and stockholders’ equity          
Current liabilities:          
Accounts payable  $1,499   $1,293 
Short-term debt   —    100 
Income and other taxes   213    312 
Other current liabilities   797    341 
Current maturities of long-term debt   405    603 
Total current liabilities   2,914    2,649 
           
Long-term debt   16,179    14,479 
Other liabilities   1,824    1,759 
Deferred income taxes   7,207    7,265 
           
Total liabilities   28,124    26,152 
           
Stockholders’ equity:          
          
          
Common stock $1.00 per share par value, 1,350,000,000 shares authorized; outstanding 226,136,334 and 228,076,415 shares, respectively, net of treasury shares   227    230 
Additional paid-in capital   2,163    2,157 
Accumulated other comprehensive loss   (364)   (351)
Retained income   10,589    10,697 
           
Total stockholders’ equity   12,615    12,733 
           
Total liabilities and stockholders’ equity  $40,739   $38,885 

 

See accompanying notes to consolidated financial statements.

 
 

Norfolk Southern Corporation and Subsidiaries

Consolidated Statements of Cash Flows

(Unaudited)

   First Nine Months 
   2023   2022 
   ($ in millions) 
Cash flows from operating activities          
Net income  $1,300   $2,480 
Reconciliation of net income to net cash provided by operating activities:          
Depreciation   968    912 
Deferred income taxes   (53)   23 
Gains and losses on properties   (34)   (54)
Changes in assets and liabilities affecting operations:          
Accounts receivable   (65)   (174)
Materials and supplies   (50)   (58)
Other current assets   37    57 
Current liabilities other than debt   538    273 
Other – net   (135)   (35)
           
Net cash provided by operating activities   2,506    3,424 
           
Cash flows from investing activities          
Property additions   (1,496)   (1,282)
Property sales and other transactions   62    193 
Investment purchases   (120)   (8)
Investment sales and other transactions   160    37 
           
Net cash used in investing activities   (1,394)   (1,060)
           
Cash flows from financing activities          
Dividends   (920)   (881)
Common stock transactions   (9)   (5)
Purchase and retirement of common stock   (503)   (2,284)
Proceeds from borrowings   2,303    1,732 
Debt repayments   (933)   (551)
           
Net cash used in financing activities   (62)   (1,989)
           
Net increase in cash and cash equivalents   1,050    375 
           
Cash and cash equivalents          
At beginning of year   456    839 
           
At end of period  $1,506   $1,214 
           
Supplemental disclosures of cash flow information          
Cash paid during the period for:          
Interest (net of amounts capitalized)  $451   $425 
Income taxes (net of refunds)   521    578 

 

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 nine months of 2023, we recognized $966 million of expense for costs primarily associated with environmental matters and legal proceedings resulting from the incident ($163 million of which was recognized in the third quarter). These amounts are net of $25 million in insurance recoveries recorded during the third quarter related to the incident. Any additional amounts recoverable under our insurance policies or from third parties will be reflected in future periods in which recovery is considered probable. No amounts have been recorded related to potential third-party recoveries, which may reduce amounts payable by our insurers under applicable insurance coverage.

2. Stock Repurchase Program

We repurchased and retired 2.2 million and 9.2 million shares of common stock under our stock repurchase programs in the first nine months of 2023 and 2022, respectively, at a cost of $508 million and $2.3 billion, inclusive of excise taxes.