Tuesday, April 01, 2014

NS 2013 Annual Report highlights “a big year”

Written by  William C. Vantuono, Editor-in-Chief
Norfolk Southern CEO Wick Moorman Norfolk Southern CEO Wick Moorman
2013 was “a big year” for Norfolk Southern, CEO Wick Moorman says in the company’s 2013 Annual Report. “I am confident in the future of Norfolk Southern and the rail industry and in our ability to help move the nation’s economy forward.”

Describing 2013 as a breakthrough year, Moorman says, “We achieved record performance levels as our investments in network capacity, technology, and new talent delivered the safe, efficient, and dependable service our transportation customers deserve. We set new precedents for railway operating revenues and income from railway operations and achieved new landmarks for net income, earnings per share, and operating ratio. [We are] revitalizing our existing network not only to change with the times but to lead with innovation and determination.”

Moorman credits NS employees with the company’s success: “Their talents, ingenuity, and hard work brought us to new heights today and will take us even further in the years ahead.” In 2013, “we came in at a record $11.2 billion in revenues,” he says. “That’s our third consecutive year at $11 billion-plus revenues. Net income in 2013 was up 9%t, and earnings per share were up 12%, both setting records. We delivered on our commitment to holding expenses to a 1% increase, contributing to a record-best operating ratio of 71%—a tribute to our measurable productivity and efficiency enhancements. We also continued our tradition of a solid dividend policy, raising the dividend on the company’s common stock by 5% along with $627 million in share repurchases.”

Capital investment and industrial development initiatives continued on a strong pace in 2013. Says Moorman: “We invested $2 billion in capital improvements in 2013. We opened new Crescent Corridor intermodal facilities at Greencastle, Pa., and Charlotte, N.C., an inland port facility at Greer, S.C., and new bulk transfer facilities at Knoxville, Tenn., and Columbia, S.C. All of these projects were designed with one underlying commitment in mind: to provide service excellence for our customers for the long term. In line with our standard of excellence, we helped with the location of 67 new industries and the expansion of 25 existing industries on our lines in 2013. Together, our work represents a customer investment of $2.3 billion, will lead to an expected creation of 3,100 new jobs, and will bring more than 136,000 carloads of new rail traffic annually.”

Commenting on NS’s efforts to deal with softness in coal traffic, Moorman notes that the company “ is reinventing our markets and adapting to changes in our coal traffic. We’re developing emerging energy markets and revitalizing our existing network to change not with the times, but lead with innovation and determination ahead of them, while remaining strongly committed to the coal business.”

“The best is still to come,” Moorman notes. “I couldn’t foresee that a sluggish economic first half of the year would turn around significantly in the second half, but that’s what happened. Our fourth quarter set records in railway operating income, net income, and earnings per share not only for a breakthrough year, but in Norfolk Southern history.”

Norfolk Southern’s 2013 Annual Report can be downloaded from the company’s website by clicking on this link.