With track and facilities spread across 22 states, Norfolk Southern operates a capital-intensive business. In 2013, the company’s $1.97 billion capital expenditure program consumed nearly 18 percent of railway operating revenues.
Strategic Capital Projects Sustain and Grow Business
The company must make significant investments to provide safe, efficient, and reliable service, to continue to grow business, and to return value to shareholders. To achieve those goals, the company’s annual capital expenditure budget has four focus areas:
- Asset renewal, such as rail, locomotives, and railcars
- Service reliability
- Operational efficiency and productivity
- Targeted market growth
In 2013, the largest capital effort focused on roadway replacement projects and core business needs. Roadway projects primarily involved replacement of rail, crossties, and track ballast. During the year, the company installed 549 track miles of new rail, surfaced 5,476 miles of track, and installed 2.5 million new crossties.
Core business components included investments in locomotives, the railroad’s workhorses. The company purchased 50 new AC-powered locomotives and continued investing in our locomotive rebuild program at the Juniata and Roanoke locomotive shops. A key goal is to improve fuel efficiency and reduce emissions of the locomotive fleet.
Expenditures to facilitate growth and improve operating efficiencies included targeted investments in terminal and yard improvements, technology, and service equipment and facilities. The company invested $57 million to continue installing LEADER fuel-efficiency hardware and software in road locomotives. Investments in yards and other facilities included improvements that will double rail volume capacity at the Bellevue, Ohio, hump yard. In addition, funds went for facility improvements at the Juniata Locomotive Shop, our largest shop; opening two new bulk transfer facilities; and purchasing new multilevel automobile racks to serve auto customers.
A significant portion of the capital budget supported continued implementation of Positive Train Control. PTC, a congressionally mandated program, is a multiyear, industry wide initiative. PTC is designed to improve rail safety on freight lines that also carry passenger rail trains and that move products the federal government regulates as hazardous materials, such as certain chemical products.
Another capital category, labeled “other projects,” included vehicle replacements and communications and signals projects.
2013 capital expenditures by category
Total: $1.97 billion
|Facilities & Terminals:||$273 million||13.8%|
|Freight Cars:||$206 million||10.4%|
|Positive Train Control:||$163 million||8.2%|
|Other Projects:||$144 million||7.3%|