financial performance

A solid business year in 2012

After experiencing our best-ever economic performance in 2011, Norfolk Southern in 2012 had what our CEO describes as the railroad’s second best-ever year: We recorded our second best revenue, operating income, net income, and earnings per share.

For the second consecutive year, our railway operating revenues exceeded $11 billion, bolstered by a 6 percent increase in merchandise revenues and a 5 percent increase in intermodal revenues.

We moved a record 3.1 million units of conventional intermodal freight, which includes domestic, international, and premium traffic. Overall intermodal volume was up 5 percent, driven by an 11 percent increase in domestic volume. Intermodal traffic in 2012 accounted for 47 percent of the railroad’s freight by volume and generated 20 percent of total railway operating revenues, second only to coal.

In our merchandise markets, total volume rose 2 percent in 2012, buoyed by higher railcar loadings in the chemical, automotive, and forest product sectors. Our chemical business benefited from the growing U.S. production of gas and oil, including our first full year of rail shipments of crude oil to East Coast refineries. Our rise in automobile traffic reflected increasing vehicle sales, while improvements in the housing industry spurred traffic in forest products — both good signs for the U.S. economy.

Our coal business, hampered by low natural gas prices and mild weather, dragged on our revenues and volumes in 2012. Coal revenues were down 17 percent – or more than $500 million – and coal volume declined 13 percent versus 2011. For the year, coal generated 26 percent of our total railway operating revenues, a drop from 31 percent in 2011. Given the double-digit drop in coal revenues, the fact that total railway operating revenues were down by only 1 percent in 2012 is a positive reflection of our balanced business portfolio.

Because of a renewed emphasis on productivity, operating efficiencies, and effective cost controls, we reduced railway operating expenses by 1 percent for the year. Even with the losses in coal revenue, our operating ratio increased by less than 1 percent in 2012, to 71.7 from 71.2 in 2011. We achieved a record low operating ratio of 71.1 percent in 2008.

We remained at the forefront of job creation and economic development across our network in 2012. We helped to locate 64 new industries and 30 industry expansions along our railroad, representing $2.1 billion in customer investment and the potential for more than 6,100 new jobs and 141,000 carloads of new business. We hired more than 2,300 new employees during the year, bringing good-paying jobs to the communities we serve.

Financial Highlights
2009 2010 2011 2012
Average No. of Employees 28,593 28,559 30,329 30,943
Railway Operating Revenues ($ billions) 8.0 9.5 11.2 11.0
Income from Railway Operations ($ billions) 2.0 2.7 3.2 3.1
Net Income ($ billions) 1.0 1.5 1.9 1.7
Total Assets ($ billions) 27.4 28.2 28.5 30.3
Total Debt ($ billions) 7.2 7.0 7.5 8.7
Stockholders’ Equity
($ billions)
10.4 10.7 9.9 9.8
Total Debt to Total Capitalization Ratio 40.9% 39.7% 43.2% 47.1%
Stockholders’ Equity Per
Share ($)
28.06 29.85 30.00 31.08

GRI indicators

These indicators from the 2013 report are addressed on this page

EC1 EC8
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sustainability in action:

Creative thinking reduces energy use – and costs

Through our InnovatioNS program, Norfolk Southern encourages employees to look for ways to make their work safer, more efficient, and more cost effective. Brian Thomas’ ingenuity has saved the company money and contributed to its sustainability efforts. read more >

sustainability in action:

Committed to a greener workplace

Employees at Norfolk Southern have embraced the railroad’s sustainability efforts. At many locations across the system, employees such as Emily Hunter have taken the initiative to launch recycling and other green initiatives. read more >

sustainability in action:

A Norfolk Southern ‘River Star’

Ray Jones, a 32-year railroader, is committed to helping Norfolk Southern meet its pledge to be a good corporate neighbor and environmental steward. read more >

Creative thinking reduces energy use – and costs

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Committed to a greener workplace

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A Norfolk Southern ‘River Star’

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See all of our sustainability in action case studies

sustainability in action:

Keeping locomotives moving down the track

Norfolk Southern is continually looking for ways to increase the efficiency and productivity of operations. Devina Miller has played a key role in a Mechanical Department initiative dubbed Mission Critical. read more >

Keeping locomotives moving down the track

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See all of our sustainability in action case studies

sustainability in action:

A little effort, a lot of food for those in need

To strengthen the communities our railroad serves, Norfolk Southern promotes and supports employee volunteerism. Many employees, like Amanda Carpenter, volunteer their time, treasure, and talents to build community connections. read more >

sustainability in action:

Building community partnerships

Norfolk Southern strives to be a good corporate citizen. The railroad routinely partners with local, state, and federal government officials on projects that benefit communities and the country. Employees such as Ed Sites and David Dize are the ones who make these partnerships work. read more >

sustainability in action:

In pursuit of a dream

Norfolk Southern ensures that employees have ample opportunities to develop their skills and advance their careers. Jerome Perry is taking advantage of an NS program to further his education. read more >

sustainability in action:

Where good health meets good deeds

As part of its employee wellness program, dubbed WellNS, Norfolk Southern in 2011 introduced Power Train, an initiative that combines physical fitness and charitable giving. Misty Braden organized a Power Train team in Knoxville to help fund breast cancer research after a colleague was diagnosed with the disease. read more >

sustainability in action:

Partnering for safety

Safely operating our railroad is Norfolk Southern’s No. 1 priority. In addition to efforts to keep our employees safe on the job, we partner with communities in various ways to promote public safety. Employees Richard Vaughan and Greg Valentine demonstrate that commitment. read more >

A little effort, a lot of food for those in need

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Building community partnerships

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In pursuit of a dream

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Where good health meets good deeds

>

Partnering for safety

>

See all of our sustainability in action case studies