Norfolk Southern reports fourth-quarter and full-year 2020 results
January 27, 2021 at 08:00 AM EST
NORFOLK, Va., Jan. 27, 2021 /PRNewswire/ -- Norfolk Southern Corporation (NYSE: NSC) today reported fourth-quarter and full-year 2020 financial results.
Fourth-quarter net income was $671 million, diluted earnings per share were $2.64, and the operating ratio improved to an all-time quarterly record of 61.8%. Full-year net income was $2.0 billion, diluted earnings per share were $7.84 and the operating ratio was 69.3%. During the first quarter of 2020, Norfolk Southern reported a $385 million non-cash locomotive rationalization charge, and in the third quarter of 2020 reported a $99 million non-cash investment impairment charge. Excluding these non-cash charges, adjusted full-year net income was $2.4 billion, adjusted diluted earnings per share were $9.25, and the adjusted operating ratio improved to 64.4% versus the record of 64.7% set in 2019.
"During a year of unprecedented market disruption and uncertainty, the Norfolk Southern team delivered record productivity levels while providing safe and reliable freight solutions for our customers," said James A. Squires, Norfolk Southern chairman, president and CEO. "As we take stock of what we achieved in 2020 while managing both the pandemic and energy market challenges, including the successful idling of four additional hump operations while driving productivity to record levels, we see much more opportunity ahead. We have set the stage to drive further efficiency and profitable growth in 2021 through our precision scheduled railroading operating plan, which will deliver long-term value for both our shareholders and customers."
About Norfolk Southern
Non-GAAP Financial Measures
Reconciliation of Non-GAAP Financial Measures
Information included within this filing includes non-GAAP financial measures, as defined by SEC Regulation G. Non-GAAP financial measures should be considered in addition to, not as a substitute for, the financial measures reported in accordance with U.S. generally accepted accounting principles (GAAP).
GAAP financial results are adjusted to exclude the effects of a non-cash charge in the first quarter of 2020 related to the sale of 703 locomotives. The introduction of precision scheduled railroading in 2019 continues to provide significant benefits to the network operations and resulted in excess capacity resulting in the sale of these locomotives. GAAP financial results are also adjusted to exclude the effects of an impairment charge in the third quarter of 2020 related to an equity method investment. The income tax effects on the non-GAAP adjustments were calculated based on the applicable tax rates to which the non-GAAP adjustments relate.
Norfolk Southern believes that these non-GAAP financial measures provide valuable information regarding its earnings and business trends by excluding specific items that it believes are not indicative of the ongoing operating results of its business, providing a useful way for investors to make a comparison of our performance over time and against other companies in our industry by excluding the effects of the locomotive and impairment charges. These non-GAAP financial measures are being provided as supplemental information to Norfolk Southern's GAAP financial measures, and Norfolk Southern believes these measures provide investors with additional meaningful financial information regarding our operational performance. Norfolk Southern also uses these non-GAAP measures as supplemental measures to evaluate its business and performance.
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SOURCE Norfolk Southern Corporation