8-K

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

________________________________

FORM 8-K

CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported):

October 23, 2019 (October 23, 2019)

________________________________

NORFOLK SOUTHERN CORPORATION

(Exact name of registrant as specified in its charter)

______________________________________

Virginia		1-8339	52-1188014
(State or other jurisdiction of incorporation)		(Commission File Number)	(IRS Employer Identification No.)
Three Commercial Place			757-629-2680
Norfolk,	Virginia		(Registrant's telephone number, including area code)
23510-2191
(Address of principal executive offices, including zip code)

No Change
(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

☐    Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐    Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐    Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐    Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

Securities registered pursuant to Section 12(b) of the Act:

Title of each class	Trading Symbol	Name of each exchange on which registered
Norfolk Southern Corporation Common Stock (Par Value $1.00)	NSC	New York Stock Exchange

Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act.  ☐

Item 2.02.   Results of Operations and Financial Condition

Item 7.01.   Regulation FD Disclosure.

On October 23, 2019, the Registrant issued a Press Release, attached hereto as Exhibit 99.1, reporting third quarter results for 2019. Quarterly financial data is attached hereto as Exhibit 99.2. These documents are available on the Registrant’s website, www.norfolksouthern.com, in the “Invest in NS” section, under “Financial Reports.”

The accompanying unaudited financial information and summary of certain notes to the consolidated financial statements should be read in conjunction with: (a) the consolidated financial statements and notes included in the Registrant's latest Annual Report on Form 10-K and in subsequent Quarterly Reports on Form 10-Q; and (b) any Current Reports on Form 8-K.

Item 9.01.    Financial Statements and Exhibits.

(d) Exhibits

Exhibit Number	Description
99.1	Press Release dated October 23, 2019
99.2	2019 3Q Financial Data
104	Cover Page Interactive Data File (embedded within the Inline XBRL document).

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

SIGNATURES

NORFOLK SOUTHERN CORPORATION

(Registrant)

/s/ Denise W. Hutson

Name:  Denise W. Hutson

Title:  Corporate Secretary

Date:  October 23, 2019

EX-99.1

 

FOR IMMEDIATE RELEASE

Norfolk Southern reports third-quarter 2019 results

Achieves record third-quarter operating ratio

NORFOLK, Va., October 23, 2019 – Norfolk Southern Corporation (NYSE: NSC) today reported third-quarter financial results.

Third-quarter net income was $657 million and diluted earnings per share were $2.49. The operating ratio for the quarter was 64.9%, a third-quarter record for NS. These results include a $32 million write-off of a receivable resulting from a legal dispute, which unfavorably impacted the operating ratio by 110 basis points and earnings per share by $0.09.

“Our team achieved a record third-quarter operating ratio while successfully rolling out the first phase of our TOP21 operating plan, followed by the swift transition to the plan’s second phase. These efforts produced an 11% reduction in crew starts and recrews compared to the third-quarter last year, robustly outpacing the 6% volume decline while maintaining resilient service that supported an 11^th consecutive quarter of year-over-year revenue per unit growth,” said James A. Squires, Norfolk Southern chairman, president and CEO. “Initiatives to reimagine mechanical operations while maintaining a more efficient fleet of locomotives and railcars also progressed, as these and other efforts delivered significant cost savings this quarter. Looking ahead, additional productivity will be generated as we advance to the third phase of TOP21 and execute initiatives surrounding fuel efficiency, distributed power, intermodal operations, and our mechanical network, just to name a few. Norfolk Southern remains fully dedicated to our strategic plan for the creation of shareholder value through sweeping productivity improvements while maintaining a superior service product for our customers.”

Third-quarter summary and highlights

· Railway operating revenues of $2.8 billion decreased 4 percent compared with third-quarter 2018, as a 2 percent increase in average revenue per unit partially offset a 6 percent decline in total volume.

· Railway operating expenses were $1.8 billion, a decrease of $82 million compared with the same period last year. Lower compensation and benefits, equipment rents, and fuel prices were partially offset by a $32 million write-off of a receivable resulting from a legal dispute and increased depreciation expense.

· Income from railway operations was $1.0 billion, a decrease of $24 million year-over-year. The railway operating ratio was a third-quarter record 64.9 percent, despite the unfavorable impact of 110 basis points related to a legal dispute.

· Increased quarterly dividend by 9 percent from $0.86 to $0.94 per share.

About Norfolk Southern

About Norfolk Southern

Norfolk Southern Corporation (NYSE: NSC) is one of the nation’s premier transportation companies. Its Norfolk Southern Railway Company subsidiary operates approximately 19,500 route miles in 22 states and the District of Columbia, serves every major container port in the eastern United States, and provides efficient connections to other rail carriers. Norfolk Southern is a major transporter of industrial products, including chemicals, agriculture, and metals and construction materials. In addition, the railroad operates the most extensive intermodal network in the East and is a principal carrier of coal, automobiles, and automotive parts.

Forward-looking statements

This news release contains forward-looking statements that may be identified by the use of words like “believe,” “expect,” “anticipate,” “estimate,” “plan,” “consider,” “project,” and similar references to the future. Forward-looking statements reflect our good-faith evaluation of information currently available. These forward-looking statements are subject to a number of risks and uncertainties, and our actual results may differ materially from those projected. Please refer to our annual and quarterly reports filed with the SEC for a full discussion of those risks and uncertainties we view as most important. Forward-looking statements are not, and should not be relied upon as, a guarantee of future performance or results, nor will they necessarily prove to be accurate indications of the times at or by which any such performance or results will be achieved. As a result, actual outcomes and results may differ materially from those expressed in forward-looking statements. We undertake no obligation to update or revise forward-looking statements.

Media Inquiries:

Media Relations, 404-420-4444 (media.relations@nscorp.com)

Investor Inquiries:

Pete Sharbel, 470-867-4807 (peter.sharbel@nscorp.com)

http://www.norfolksouthern.com

###

EX-99.2

Norfolk Southern Corporation and Subsidiaries

Consolidated Statements of Income

(Unaudited)

	Third Quarter				First Nine Months
	2019		2018		2019		2018
	(in millions, except per share amounts)
Railway operating revenues
Merchandise	$	1,731	$	1,737	$	5,173	$	5,060
Intermodal		707		746		2,127		2,138
Coal		403		464		1,306		1,364
Total railway operating revenues		2,841		2,947		8,606		8,562
Railway operating expenses
Compensation and benefits		682		725		2,121		2,168
Purchased services and rents		423		450		1,265		1,281
Fuel		226		274		730		812
Depreciation		286		276		853		821
Materials and other		228		202		610		599
Total railway operating expenses		1,845		1,927		5,579		5,681
Income from railway operations		996		1,020		3,027		2,881
Other income – net		22		30		88		67
Interest expense on debt		150		142		452		409
Income before income taxes		868		908		2,663		2,539
Income taxes
Current		119		157		382		437
Deferred		92		49		225		138
Total income taxes		211		206		607		575
Net income	$	657	$	702	$	2,056	$	1,964
Earnings per share - diluted	$	2.49	$	2.52	$	7.70	$	6.95
Weighted average shares outstanding - diluted		264.3		278.2		266.9		282.6

See accompanying notes to consolidated financial statements.

Norfolk Southern Corporation and Subsidiaries

Consolidated Balance Sheets

(Unaudited)

	September 30,			December 31,
	2019			2018
	($ in millions)
Assets
Current assets:
Cash and cash equivalents	$	452		$	358
Accounts receivable – net		973			1,009
Materials and supplies		266			207
Other current assets		325			288
Total current assets		2,016			1,862
Investments		3,376			3,109
Properties less accumulated depreciation of $12,381 and $12,374, respectively		31,394			31,091
Other assets		714			177
Total assets	$	37,500		$	36,239
Liabilities and stockholders’ equity
Current liabilities:
Accounts payable	$	1,407		$	1,505
Short-term debt		350			—
Income and other taxes		202			255
Other current liabilities		401			246
Current maturities of long-term debt		401			585
Total current liabilities		2,761			2,591
Long-term debt		11,085			10,560
Other liabilities		1,727			1,266
Deferred income taxes		6,689			6,460
Total liabilities		22,262			20,877
Stockholders’ equity:
Common stock $1.00 per share par value, 1,350,000,000 shares authorized; outstanding 260,746,663 and 268,098,472 shares, respectively, net of treasury shares		262			269
Additional paid-in capital		2,219			2,216
Accumulated other comprehensive loss		(553	)		(563	)
Retained income		13,310			13,440
Total stockholders’ equity		15,238			15,362
Total liabilities and stockholders’ equity	$	37,500		$	36,239

See accompanying notes to consolidated financial statements.

Norfolk Southern Corporation and Subsidiaries

Consolidated Statements of Cash Flows

(Unaudited)

	First Nine Months
	2019			2018
	($ in millions)
Cash flows from operating activities
Net income	$	2,056		$	1,964
Reconciliation of net income to net cash provided by operating activities:
Depreciation		854			822
Deferred income taxes		225			138
Gains and losses on properties		(4	)		(26	)
Changes in assets and liabilities affecting operations:
Accounts receivable		34			(102	)
Materials and supplies		(59	)		(45	)
Other current assets		40			45
Current liabilities other than debt		(72	)		173
Other – net		(77	)		(85	)
Net cash provided by operating activities		2,997			2,884
Cash flows from investing activities
Property additions		(1,494	)		(1,326	)
Property sales and other transactions		282			93
Investment purchases		(12	)		(4	)
Investment sales and other transactions		(99	)		96
Net cash used in investing activities		(1,323	)		(1,141	)
Cash flows from financing activities
Dividends		(705	)		(627	)
Common stock transactions		21			38
Purchase and retirement of common stock		(1,550	)		(2,300	)
Proceeds from borrowings – net of issuance costs		1,404			2,023
Debt repayments		(750	)		(750	)
Net cash used in financing activities		(1,580	)		(1,616	)
Net increase in cash, cash equivalents, and restricted cash		94			127
Cash, cash equivalents, and restricted cash
At beginning of year		446			690
At end of period	$	540		$	817
Supplemental disclosures of cash flow information
Cash paid during the period for:
Interest (net of amounts capitalized)	$	392		$	327
Income taxes (net of refunds)		404			314

See accompanying notes to consolidated financial statements.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS:

 1. Stock Repurchase Program

We repurchased and retired 8.4 million shares of common stock under our stock repurchase program during the first nine months of 2019, at a cost of $1.6 billion. During the first nine months of 2018, we repurchased and retired 12.8 million shares (5.7 million under an accelerated share repurchase program and 7.1 million shares under our ongoing program) at a cost of $2.1 billion. Since the beginning of 2006, we have repurchased and retired 194.0 million shares at a total cost of $15.7 billion.

2. Leases

On January 1, 2019, we adopted Financial Accounting Standards Board Accounting Standards Update 2016-02, “Leases (Topic 842)” which requires lessees to recognize right-of-use (ROU) assets and lease liabilities on the balance sheet for leases greater than twelve months. As a result of the adoption, the Consolidated Balance Sheet at September 30, 2019 includes the recognition of ROU assets of $561 million included in “Other assets,” current lease liabilities of $97 million included in “Other current liabilities,” and non-current lease liabilities of $464 million included in “Other liabilities.”

3. Restricted Cash

The “Cash, cash equivalents, and restricted cash” line item on the Consolidated Statements of Cash Flows includes restricted cash of $88 million at both September 30, 2019 and December 31, 2018, reflecting deposits held by a third-party bond agent as collateral for certain debt obligations maturing in October 2019. The restricted cash balance is included as part of “Other current assets” on the Consolidated Balance Sheets in both periods.

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Cover	Oct. 23, 2019
Cover [Abstract]
Document Type	8-K
Amendment Flag	false
Document Period End Date	Oct. 23, 2019
Entity File Number	1-8339
Entity Registrant Name	NORFOLK SOUTHERN CORPORATION
Entity Central Index Key	0000702165
Entity Tax Identification Number	52-1188014
Entity Incorporation, State or Country Code	VA
Entity Address, Address Line One	Three Commercial Place
Entity Address, City or Town	Norfolk
Entity Address, State or Province	VA
Entity Address, Postal Zip Code	23510-2191
City Area Code	757
Local Phone Number	629-2680
Written Communications	false
Soliciting Material	false
Pre-commencement Tender Offer	false
Pre-commencement Issuer Tender Offer	false
Title of 12(b) Security	Norfolk Southern Corporation Common Stock (Par Value $1.00)
Trading Symbol	NSC
Security Exchange Name	NYSE
Entity Emerging Growth Company	false