PAGE 1
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
------------------------
FORM 10-Q
(X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the quarterly period ended JUNE 30, 1995
( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the transition period from to
-------- --------
Commission file number 1-8339
NORFOLK SOUTHERN CORPORATION
---------------------------------------------------------------------------
(Exact name of registrant as specified in its charter)
Virginia 52-1188014
----------------------------------------- --------------------------------
(State or other jurisdiction of (IRS Employer Identification No.)
incorporation or organization)
Three Commercial Place
Norfolk, Virginia 23510-2191
----------------------------------------- --------------------------------
(Address of principal executive offices) Zip Code
Registrant's telephone number, including area code (804) 629-2680
-----------------------
No Change
---------------------------------------------------------------------------
(Former name, former address and former fiscal year,
if changed since last report.)
Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act
of 1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days. (X) Yes ( ) No
The number of shares outstanding of each of the registrant's classes of
Common Stock, as of the last practicable date:
Class Outstanding as of July 31, 1995
----- --------------------------------
Common Stock (par value $1.00) 131,026,404 shares (excluding
7,252,634 shares held by
registrant's consolidated
subsidiaries)
<PAGE> PAGE 2
NORFOLK SOUTHERN CORPORATION AND SUBSIDIARIES (NS)
INDEX
Page
----
Part I. Financial Information:
Item 1. Consolidated Statements of Income
Three Months and Six Months Ended
June 30, 1995 and 1994 3
Consolidated Balance Sheets
June 30, 1995, and December 31, 1994 4
Consolidated Statements of Cash Flows
Six Months Ended June 30, 1995 and 1994 5
Notes to Consolidated Financial Statements 6-7
Item 2. Management's Discussion and Analysis of
Financial Condition and Results of Operations 8-12
PartII. Other Information:
Item 4. Submission of Matters to a Vote of
Security Holders 13
Item 6. Exhibits and Reports on Form 8-K 14
Signatures 15
Index to Exhibits 16
<PAGE> PAGE 3
<TABLE>
PART I. FINANCIAL INFORMATION
------------------------------
NORFOLK SOUTHERN CORPORATION AND SUBSIDIARIES
Consolidated Statements of Income
(In millions of dollars except per share amounts)
(Unaudited)
<CAPTION>
Three Months Ended Six Months Ended
June 30, June 30,
1995 1994 1995 1994
------- ------- ------- -------
<S> <C> <C> <C> <C>
TRANSPORTATION OPERATING REVENUES:
Railway:
Coal $ 311.3 $ 322.5 $ 611.6 $ 627.4
Merchandise 677.2 648.6 1,347.4 1,258.0
Other 27.9 26.7 56.6 54.7
-------- -------- -------- --------
Total railway 1,016.4 997.8 2,015.6 1,940.1
Motor carrier 173.8 163.6 313.3 298.1
-------- -------- -------- --------
Total operating revenues 1,190.2 1,161.4 2,328.9 2,238.2
-------- -------- -------- --------
TRANSPORTATION OPERATING EXPENSES:
Railway:
Compensation and benefits 356.6 341.7 731.9 693.1
Materials, services and rents 162.7 165.3 325.8 326.3
Depreciation 96.7 95.0 191.1 188.3
Diesel fuel 47.0 46.7 95.7 92.4
Casualties and other claims 28.8 37.5 61.0 66.6
Other 40.9 39.0 76.4 76.5
-------- -------- -------- --------
Total railway 732.7 725.2 1,481.9 1,443.2
Motor carrier 167.4 157.9 307.8 294.4
-------- -------- -------- --------
Total operating expenses 900.1 883.1 1,789.7 1,737.6
-------- -------- -------- --------
Income from operations 290.1 278.3 539.2 500.6
Other income (expense):
Interest income 8.6 5.6 14.8 11.3
Interest expense on debt (28.6) (24.0) (56.9) (47.7)
Other - net 21.0 18.6 70.5 39.6
-------- -------- -------- --------
Total other income 1.0 0.2 28.4 3.2
-------- -------- -------- --------
Income before income taxes 291.1 278.5 567.6 503.8
Provision for income taxes 109.9 100.0 215.7 180.4
-------- -------- -------- --------
NET INCOME $ 181.2 $ 178.5 $ 351.9 $ 323.4
======== ======== ======== ========
Per share amounts (Note 5):
Net income $ 1.38 $ 1.30 $ 2.67 $ 2.35
Dividends 0.52 0.48 1.04 0.96
See accompanying notes to consolidated financial statements.
</TABLE>
<PAGE> PAGE 4
<TABLE>
NORFOLK SOUTHERN CORPORATION AND SUBSIDIARIES
Consolidated Balance Sheets
(In millions of dollars)
(Unaudited)
<CAPTION>
June 30, December 31,
1995 1994
------------ ------------
<S> <C> <C>
ASSETS
Current assets:
Cash and cash equivalents $ 104.0 $ 57.0
Short-term investments 219.5 249.7
Accounts receivable - net 735.6 726.6
Materials and supplies 69.7 61.9
Deferred income taxes 135.6 137.0
Other current assets 87.8 105.3
--------- ---------
Total current assets 1,352.2 1,337.5
Investments 216.2 172.8
Properties less accumulated depreciation 9,192.9 8,987.1
Other assets 68.1 90.4
--------- ---------
TOTAL ASSETS $10,829.4 $10,587.8
========= =========
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Short-term debt $ 41.1 $ 44.9
Accounts payable 696.1 704.1
Income and other taxes 210.1 168.5
Other current liabilities 164.8 142.3
Current maturities of long-term debt (Note 3) 63.9 72.0
--------- ---------
Total current liabilities 1,176.0 1,131.8
Long-term debt (Note 3) 1,612.6 1,547.8
Other liabilities 975.2 961.9
Minority interests 51.8 53.5
Deferred income taxes 2,244.2 2,208.0
--------- ---------
TOTAL LIABILITIES 6,059.8 5,903.0
--------- ---------
Stockholders' equity:
Common stock $1.00 per share par value 138.4 140.4
Other capital 418.2 410.4
Retained income 4,233.6 4,154.6
Less treasury stock at cost, 7,252,634 shares (20.6) (20.6)
--------- ---------
TOTAL STOCKHOLDERS' EQUITY 4,769.6 4,684.8
--------- ---------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY $10,829.4 $10,587.8
========= =========
See accompanying notes to consolidated financial statements.
</TABLE>
<PAGE> PAGE 5
<TABLE>
NORFOLK SOUTHERN CORPORATION AND SUBSIDIARIES
Consolidated Statements of Cash Flows
(In millions of dollars)
(Unaudited)
<CAPTION>
Six Months Ended
June 30,
1995 1994
-------- --------
<S> <C> <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
Net income $ 351.9 $ 323.4
Reconciliation of net income to net cash
provided by operating activities:
Special charge payments (7.0) (28.0)
Depreciation 203.6 203.0
Deferred income taxes 35.2 18.9
Nonoperating gains and losses on properties
and investments (49.0) (9.7)
Changes in assets and liabilities affecting
operations:
Accounts receivable (3.9) (25.2)
Materials and supplies (7.8) (2.9)
Other current assets 17.5 2.7
Current liabilities other than debt 70.4 63.2
Other - net 12.8 (0.5)
-------- --------
Net cash provided by operating activities 623.7 544.9
CASH FLOWS FROM INVESTING ACTIVITIES:
Property additions (Note 3) (332.7) (314.8)
Property sales and other transactions 53.6 59.3
Investments and loans (39.6) (33.8)
Investment sales and other transactions 24.2 260.3
Short-term investments - net 33.4 (1.8)
-------- --------
Net cash used for investing activities (261.1) (30.8)
CASH FLOWS FROM FINANCING ACTIVITIES:
Dividends (137.7) (132.4)
Common stock issued - net 4.7 8.1
Purchase and retirement of common stock (153.7) (124.6)
Proceeds from long-term borrowings (Note 3) 7.6 --
Debt repayments (36.5) (39.1)
-------- --------
Net cash used for financing activities (315.6) (288.0)
-------- --------
Net increase in cash and cash equivalents 47.0 226.1
CASH AND CASH EQUIVALENTS:*
At beginning of year 57.0 80.5
-------- --------
At end of period $ 104.0 $ 306.6
======== ========
---------------------------------------------------------------------------
SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
Cash paid during the period for:
Interest (net of amounts capitalized) $ 56.6 $ 47.1
Income taxes $ 127.5 $ 109.3
* Cash equivalents are highly liquid investments purchased three months or
less from maturity.
See accompanying notes to consolidated financial statements.
</TABLE>
<PAGE> PAGE 6
NORFOLK SOUTHERN CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. In the opinion of Management, the accompanying unaudited interim
financial statements contain all adjustments (consisting of normal
recurring accruals) necessary to present fairly the financial
position as of June 30, 1995, and the results of operations and cash
flows for the six months ended June 30, 1995, and 1994.
While Management believes that the disclosures presented are adequate
to make the information not misleading, these consolidated financial
statements should be read in conjunction with the financial
statements and notes included in the Corporation's latest Annual
Report on Form 10-K.
2. Contingencies
There have been no significant changes since year end 1994 in the
matters as discussed in NOTE 17, CONTINGENCIES, appearing in the
NS Annual Report on Form 10-K for 1994, Notes to Consolidated
Financial Statements, beginning on page 72.
3. Capital Leases
During the first quarter of 1995, an NS rail subsidiary entered into
capital leases covering 114 new locomotives having a total cost of
$134.9 million. The related capital lease obligations totaling
$104.5 million were reflected in the Consolidated Balance Sheet as
debt and, because they were non-cash transactions, were excluded from
the Consolidated Statement of Cash Flows. The lease obligations
carry stated interest rates between 8.23 percent and 8.60 percent but
were converted to variable rate obligations using interest rate swap
agreements. The interest rates on these obligations are based on the
six-month London Interbank Offered Rate, plus 35 basis points, and
will be reset every six months with realized gains or losses
accounted for as an adjustment of interest expense over the terms of
the leases.
4. Stock Purchase Programs
Since 1987, the Board of Directors has authorized the purchase and
retirement of up to 65 million shares of NS common stock. Purchases
under the programs have been made with a combination of internally
generated cash and through the issuance of debt. Since the first
purchases in December 1987 through June 30, 1995, NS has purchased
and retired 61,431,800 shares of its common stock under these
programs at a cost of approximately $2.7 billion. Future purchases
are dependent on market conditions, the economy, cash needs and
alternative investment opportunities.
<PAGE> PAGE 7
NORFOLK SOUTHERN CORPORATION AND SUBSIDIARIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
5. Earnings Per Share
<TABLE>
"Earnings per share" is computed by dividing net income by the
weighted average number of common shares outstanding as follows:
<CAPTION>
Three Months Ended Six Months Ended
June 30, June 30,
1995 1994 1995 1994
---- ---- ---- ----
(In thousands)
<S> <C> <C> <C> <C>
Average number of
shares outstanding 131,525 137,165 132,009 137,662
</TABLE>
Recent decreases in the average number of outstanding shares of NS
common stock are the result of the stock purchase program described
in Note 4.
<PAGE> PAGE 8
NORFOLK SOUTHERN CORPORATION AND SUBSIDIARIES
Management's Discussion and Analysis of Financial Condition
and Results of Operations
RESULTS OF OPERATIONS
Net Income
----------
"Net income" increased $2.7 million, or 2 percent, in the second quarter
of 1995, compared with the second quarter of 1994. This was NS' best
second-quarter net income and reflects improved income from operations,
which was up $11.8 million, or 4 percent.
Net income for the six months ended June 30, 1995, was up $28.5 million,
or 9 percent, over the comparable period last year. Increased operating
profitability and nonoperating income, principally due to the first-
quarter gain on the partial redemption of a partnership interest, were
responsible for the improvement.
<TABLE>
Railway Operating Revenues
--------------------------
"Railway operating revenues" increased $18.6 million, or 2 percent, in the
second quarter and $75.5 million, or 4 percent, for the six months ended
June 30, 1995, compared with the same periods last year. The increases in
operating revenues were due to:
<CAPTION>
Second Quarter First Six Months
1995 vs. 1994 1995 vs. 1994
Increase (Decrease) Increase (Decrease)
------------------ ------------------
(In millions of dollars)
<S> <C> <C>
Traffic volume (carloads) $ 19.3 $ 106.3
Revenue per unit/mix (1.9) (32.7)
Other 1.2 1.9
------- -------
$ 18.6 $ 75.5
======= =======
</TABLE>
<PAGE> PAGE 9
NORFOLK SOUTHERN CORPORATION AND SUBSIDIARIES
Management's Discussion and Analysis of Financial Condition
and Results of Operations
<TABLE>
The principal revenue commodity groups and changes from the prior year
were as follows:
<CAPTION>
Second Quarter First Six Months
1995 vs. 1994 1995 vs. 1994
Increase (Decrease) Increase (Decrease)
------------------ ------------------
(In millions of dollars)
<S> <C> <C>
Coal $ (11.2) $ (15.8)
Merchandise:
Intermodal 12.8 30.3
Automotive 9.0 20.9
Paper/forest 4.4 11.8
Metals/construction 2.5 14.5
Agriculture 2.4 5.7
Chemicals (2.5) 6.2
Other, principally switching
and demurrage 1.2 1.9
------- -------
$ 18.6 $ 75.5
======= =======
</TABLE>
Coal
----
Most of the decline in coal revenues compared with last year was
attributable to lower domestic utility coal shipments. High stockpiles
at coal-fired generating plants, a result of unseasonably mild weather
through June, and an increase in nuclear power generation combined to
lower demand for utility coal. The unfavorable comparison was also
partly a result of relatively strong demand last year, as utilities were
rebuilding depleted stockpiles during the first half of 1994. On the
positive side, coal shipments began to recover somewhat during the second
quarter, as the effects of the continuing economic recovery in Europe
translated into a modest increase in demand for export coal.
Looking ahead, the export market for coal shipped over NS' lines appears
to have firmed, and the slow growth which began in the second quarter is
expected to continue into the second half of the year. Limited
improvement is anticipated in domestic utility shipments, however, as
high stockpiles and greater nuclear power generation are expected to
continue to hold down short-term demand.
<PAGE> PAGE 10
NORFOLK SOUTHERN CORPORATION AND SUBSIDIARIES
Management's Discussion and Analysis of Financial Condition
and Results of Operations
Merchandise
-----------
All merchandise commodity groups (except chemicals in the second quarter)
produced higher revenues compared with last year. The largest increases
were in the intermodal group, with revenue gains of $12.8 million, or
12 percent, for the second quarter, and $30.3 million, or 15 percent, for
the first six months. Within the intermodal group, container traffic
continued to post strong growth in the second quarter; however, a
softening economy and the effects of last year's strike by truckers
reduced the growth in trailer traffic volume, compared with second
quarter 1994. NS' intermodal traffic business is expected to continue
ahead of last year's pace, although a slowing economy may limit the
overall gains in the second half of the year.
The automotive group also produced strong results for both the quarter
and the first six months, with revenues climbing $9.0 million, or
8 percent, and $20.9 million, or 10 percent, respectively, over last
year. NS' automotive traffic in 1995 has benefited from both an improved
economy and increased market share. Looking ahead, however, growth in
automotive volume and revenues is expected to slow somewhat in the second
half of the year, as automakers reduce production due to sales declines
and planned retooling downtime. Metals/construction revenues rose
$2.5 million, or 3 percent, in the second quarter, and $14.5 million, or
9 percent, for the first six months, compared with the prior year.
Paper/forest revenues were up $4.4 million, or 3 percent, for the
quarter, and $11.8 million, or 5 percent, for the first six months. The
improvements were primarily due to higher average revenues per shipment,
as second-quarter traffic volume in the metals/construction group
declined 2 percent, and was flat for the paper/forest group. Agriculture
revenues were up $2.4 million and $5.7 million, or 3 percent, for the
second quarter and year-to-date, respectively. The gains were largely
due to traffic carried over from last year's record corn and soybean
harvests. Chemicals was the only merchandise commodity with lower
results in the second quarter, down $2.5 million, or 2 percent, compared
with 1994, a result of heavy rains in the Midwest, which caused a decline
in fertilizer shipments. However, for the first half, chemical revenues
were up $6.2 million, or 2 percent, compared with last year. The outlook
for the remainder of the year is for modest growth in NS' chemicals
traffic, however, as overall demand is expected to track the domestic
economy.
Railway Operating Expenses
--------------------------
"Railway operating expenses" increased $7.5 million, or 1 percent, in the
second quarter of 1995, and $38.7 million, or 3 percent, for the first
half, compared with the same periods last year. During the second quarter
of 1995, NS recorded a $7 million charge for the costs related to the
closing of two car repair shops. These costs are reflected in
"Compensation and benefits" ($2.8 million), for separations and transfers;
in "Materials, services and rents" ($0.5 million); and in "Other" expense
($3.7 million), for relocation costs.
<PAGE> PAGE 11
NORFOLK SOUTHERN CORPORATION AND SUBSIDIARIES
Management's Discussion and Analysis of Financial Condition
and Results of Operations
The largest expense increase for the quarter was in "Compensation and
benefits" which was up $14.9 million, or 4 percent. The main factors
contributing to this increase were: (1) higher wage rates, including a
4 percent increase, effective July 1, 1994, for agreement employees;
(2) higher health care costs for agreement employees due to the absorption
last year of the cash surplus in a multi-railroad insurance fund;
(3) increased accruals for stock-based compensation, a result of the rise
in the price of NS stock; and (4) voluntary separation charges related to
the shop closings. Partially offsetting these increases was a one-time
recovery of railroad retirement supplemental annuity taxes totaling
$5.3 million, resulting from a settlement between the major railroads and
the Internal Revenue Service. Smaller increases in second-quarter
expenses were recorded in "Other" expense, which was up $1.9 million, or
5 percent, due to the charges related to shop closings, and "Depreciation,"
up $1.7 million, or 2 percent. These increases were offset partially by a
reduction in "Casualties and claims" expense, which declined $8.7 million,
or 23 percent, due to a combination of: (1) the effect of last year's
$5 million accrual for environmental clean-up costs associated with a tank
car leak; and (2) favorable experience in settling personal injury claims.
The increase in year-to-date "Railway operating expenses" was also
primarily due to higher compensation and benefits costs which were up
$38.8 million, or 6 percent, for the same reasons mentioned in the second-
quarter discussion. Other year-to-date increases were in "Depreciation,"
up $2.8 million, or 1 percent, and "Diesel fuel," up $3.3 million, or
4 percent, due to moderate increases in both consumption and price per
gallon. The principal decrease in year-to-date railway operating expenses
was in "Casualties and other claims" which declined $5.6 million, or
8 percent, again as a result of costs related to last year's tank car
spill and this year's more favorable personal injury claims experience.
Motor Carrier Operating Revenues
--------------------------------
"Motor carrier operating revenues" increased $10.2 million, or 6 percent,
for the second quarter and $15.2 million, or 5 percent, for the first six
months, compared with the same periods last year. Most of the increase
was in the High Value Products Division where all business units reported
increased revenues primarily as a result of the recovering economy and
increased sales efforts in the blanketwrap (specialized handling of
uncartoned freight) unit and at the distribution centers.
Motor Carrier Operating Expenses
--------------------------------
"Motor carrier operating expenses" rose $9.5 million, or 6 percent, for
the second quarter and $13.4 million, or 5 percent, for the first six
months, compared with the same periods last year. These increases were
principally volume related.
<PAGE> PAGE 12
NORFOLK SOUTHERN CORPORATION AND SUBSIDIARIES
Management's Discussion and Analysis of Financial Condition
and Results of Operations
Other Income (Expense)
----------------------
"Other income (expense)" was up $0.8 million over the second quarter of
1994 and $25.2 million for the first six months, compared with the same
periods last year. The year-to-date increase was largely attributable to
a $30.5 million ($18.8 million after-tax) gain resulting from the partial
redemption of a real estate partnership interest. "Interest income" was
up $3.0 million, or 54 percent, and $3.5 million, or 31 percent, for the
second quarter and year-to-date, primarily due to higher interest rates.
"Interest expense on debt" increased $4.6 million and $9.2 million, or
19 percent, for the second quarter and year-to-date, respectively, mainly
due to higher rates on commercial paper debt.
Income Taxes
------------
The "Provision for income taxes" in the second quarter of 1995 totaled
$109.9 million, for an effective rate of 37.8 percent, compared with an
effective rate of 35.9 percent last year. The lower rate in 1994 resulted
from a favorable adjustment to the valuation allowance for a deferred tax
asset. For the first six months of 1995, income taxes were $215.7 million
for an effective tax rate of 38.0 percent, compared with an effective tax
rate of 35.8 percent in 1994. The lower effective rate in the first half
of 1994 was due primarily to adjustments in federal income tax reserves
related to prior years and to the adjustment to the valuation allowance.
<TABLE>
FINANCIAL CONDITION AND LIQUIDITY
<CAPTION>
June 30, 1995 December 31, 1994
------------- -----------------
(Dollars in millions)
<S> <C> <C>
Cash and short-term investments $323.5 $306.7
Working capital $176.2 $205.7
Current ratio 1.1 1.2
Debt to total capitalization 26.5% 26.2%
</TABLE>
CASH FLOWS FROM OPERATING ACTIVITIES are NS' principal source of
liquidity and were sufficient to cover cash outflows for dividends, debt
repayments and capital spending (see Consolidated Statements of Cash
Flows on page 5). The increase in cash provided by operating activities
compared with the first six months of 1994 was primarily due to higher
income from operations and lower special charge payments.
CASH FLOWS FROM INVESTING ACTIVITIES were affected principally by
capital spending for property additions, which in the first half of 1995
included approximately $30 million related to locomotives under capital
leases (see Note 3). "Property sales and other transactions" primarily
reflects proceeds from dispositions of nonoperating property.
"Investments and loans" consists primarily of premium payments related
to corporate-owned life insurance (COLI), while "Investment sales and
other transactions" principally reflects borrowing on COLI.
CASH FLOWS FROM FINANCING ACTIVITIES primarily reflect uses of cash with
the largest amount having been spent on the stock purchase program (see
Note 4). "Proceeds from long-term borrowings" represents amounts
received in connection with capital lease transactions entered into
during the first quarter (see Note 3).
<PAGE> PAGE 13
PART II - OTHER INFORMATION
----------------------------
NORFOLK SOUTHERN CORPORATION AND SUBSIDIARIES
Item 4. Submission of Matters to a Vote of Security Holders
---------------------------------------------------
Registrant's annual meeting of stockholders was held on May 11,
1995, at which meeting four directors were elected to the class whose term
will expire in 1998; the Norfolk Southern Corporation Long-Term Incentive
Plan, as amended, was approved; the Norfolk Southern Corporation Executive
Management Incentive Plan was approved; and the appointment of independent
public accountants was ratified.
The four nominees for directors, who were uncontested, were elected
by the following vote:
Three-Year Term
--------------------------------------------------------------------
FOR AUTHORITY WITHHELD
--- ------------------
L. E. Coleman 107,640,451 votes 571,744 votes
T. Marshall Hahn, Jr. 107,610,279 votes 601,916 votes
Landon Hilliard 107,668,079 votes 544,116 votes
Jane Margaret O'Brien 107,554,497 votes 657,698 votes
The Norfolk Southern Corporation Long-Term Incentive Plan, as
amended, was approved by the following vote:
FOR: 88,225,758 shares AGAINST: 18,971,114 shares
ABSTAINED: 1,015,323 shares
The Norfolk Southern Corporation Executive Management Incentive Plan
was approved by the following vote:
FOR: 103,284,056 shares AGAINST: 3,804,966 shares
ABSTAINED: 1,123,173 shares
The appointment of KPMG Peat Marwick, LLP, independent public
accountants, was ratified by the following vote:
FOR: 107,296,304 shares AGAINST: 507,911 shares
ABSTAINED: 407,980 shares
<PAGE> PAGE 14
NORFOLK SOUTHERN CORPORATION AND SUBSIDIARIES
Item 6. Exhibits and Reports on Form 8-K
--------------------------------
(a) Exhibits
Computation of Per Share Earnings
Financial Data Schedule
(b) Reports on Form 8-K
No reports on Form 8-K were filed for the three months
ended June 30, 1995.
<PAGE> PAGE 15
SIGNATURES
----------
Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by
the undersigned thereunto duly authorized.
NORFOLK SOUTHERN CORPORATION
-----------------------------------------
(Registrant)
Date: August 9, 1995 /s/ Dezora M. Martin
------------------- -----------------------------------------
Dezora M. Martin
Corporate Secretary (Signature)
Date: August 9, 1995 /s/ John P. Rathbone
------------------- -----------------------------------------
John P. Rathbone
Vice President and Controller
(Principal Accounting Officer) (Signature)
<PAGE> PAGE 16
NORFOLK SOUTHERN CORPORATION AND SUBSIDIARIES
INDEX TO EXHIBITS
-----------------
Electronic
Submission
Exhibit
Number Description Page Number
----------- ----------------------------------------- -----------
11 Statement re Computation of Per Share
Earnings 17-18
27 Financial Data Schedule (This exhibit is
required to be submitted electronically
pursuant to the rules and regulations of
the Securities and Exchange Commission
and shall not be deemed filed for
purposes of Section 11 of the Securities
Act of 1933 or Section 18 of the
Securities Exchange Act of 1934). 19
<PAGE> PAGE 17
<TABLE>
EXHIBIT 11 Page 1 of 2
NORFOLK SOUTHERN CORPORATION AND SUBSIDIARIES
COMPUTATION OF PER SHARE EARNINGS
(In millions except per share amounts)
<CAPTION>
Three Months Ended Six Months Ended
June 30 June 30
1995 1994 1995 1994
-------- -------- -------- --------
<S> <C> <C> <C> <C>
Computation for Statements of Income
------------------------------------
Net income per statements of income $ 181.2 $ 178.5 $ 351.9 $ 323.4
------- ------- ------- -------
Weighted average number of shares
outstanding 131.5 137.2 132.0 137.7
------- ------- ------- -------
Primary earnings per share $ 1.38 $ 1.30 $ 2.67 $ 2.35
======= ======= ======= =======
Additional Primary Computation
------------------------------
Net income per statements of income $ 181.2 $ 178.5 $ 351.9 $ 323.4
------- ------- ------- -------
Adjustment to weighted average
number of shares outstanding:
Weighted average number of
shares outstanding per
primary computation above 131.5 137.2 132.0 137.7
Dilutive effect of outstanding
options, stock appreciation
rights (SARs) and performance
share units (PSUs) (as
determined by the application
of the treasury stock
method) (1) 1.2 1.1 1.2 1.2
------- ------- ------- -------
Weighted average number of
shares outstanding,
as adjusted 132.7 138.3 133.2 138.9
======= ======= ======= =======
Primary earnings per share,
as adjusted (2):
Net income $ 1.37 $ 1.29 $ 2.64 $ 2.33
======= ======= ======= =======
(1) See Note 12 of Notes to Consolidated Financial Statements in Norfolk
Southern's 1994 Annual Report on Form 10-K for a description of the
Long-Term Incentive Plan.
(2) These calculations are submitted in accordance with Regulation S-K
item 601(b)(11) although not required by footnote 2 to paragraph 14 of
APB Opinion No. 15 because they result in dilution of less than
3 percent.
</TABLE>
<PAGE> PAGE 18
<TABLE>
EXHIBIT 11 Page 2 of 2
NORFOLK SOUTHERN CORPORATION AND SUBSIDIARIES
COMPUTATION OF PER SHARE EARNINGS
(In millions except per share amounts)
<CAPTION>
Three Months Ended Six Months Ended
June 30 June 30
1995 1994 1995 1994
-------- -------- -------- --------
<S> <C> <C> <C> <C>
Fully Diluted Computation
-------------------------
Net income per statements of income $ 181.2 $ 178.5 $ 351.9 $ 323.4
Adjustment to increase earnings
to requisite level to earn
maximum PSUs, net of tax effect 13.1 27.0 25.4 48.8
------- ------- ------- -------
Net income, as adjusted $ 194.3 $ 205.5 $ 377.3 $ 372.2
======= ======= ======= =======
Adjustment to weighted average
number of shares outstanding,
as adjusted for additional
primary calculation:
Weighted average number of
shares outstanding, as
adjusted per additional
primary computation on page 1 132.7 138.3 133.2 138.9
Additional dilutive effect of
outstanding options and SARs
(as determined by the
application of the treasury
stock method using period
end market price) 0.1 -- 0.1 --
Additional shares issuable at
maximum level for PSUs 0.1 0.1 0.1 0.1
------- ------- ------- -------
Weighted average number of
shares, as adjusted 132.9 138.4 133.4 139.0
======= ======= ======= =======
Fully diluted earnings
per share (3): $ 1.46 $ 1.48 $ 2.83 $ 2.68
======= ======= ======= =======
(3) These calculations are submitted in accordance with Regulation S-K
item 601(b)(11) although they are contrary to paragraph 40 of
APB Opinion No. 15 because they produce an anti-dilutive result.
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 5
<MULTIPLIER> 1,000,000
<S> <C>
<PERIOD-TYPE> 6-MOS
<FISCAL-YEAR-END> DEC-31-1995
<PERIOD-END> JUN-30-1995
<CASH> $ 104
<SECURITIES> 220
<RECEIVABLES> 743
<ALLOWANCES> 7
<INVENTORY> 70
<CURRENT-ASSETS> 1,352
<PP&E> 13,491
<DEPRECIATION> 4,298
<TOTAL-ASSETS> 10,829
<CURRENT-LIABILITIES> 1,176
<BONDS> 1,613
<COMMON> 138
0
0
<OTHER-SE> 418
<TOTAL-LIABILITY-AND-EQUITY> 10,829
<SALES> 0
<TOTAL-REVENUES> 2,329
<CGS> 0
<TOTAL-COSTS> 1,790
<OTHER-EXPENSES> (86)
<LOSS-PROVISION> 0
<INTEREST-EXPENSE> 57
<INCOME-PRETAX> 568
<INCOME-TAX> 216
<INCOME-CONTINUING> 352
<DISCONTINUED> 0
<EXTRAORDINARY> 0
<CHANGES> 0
<NET-INCOME> 352
<EPS-PRIMARY> 2.67
<EPS-DILUTED> 0
</TABLE>
