In a separate press release issued today, Norfolk Southern provided additional detail regarding its strategic plan to streamline operations and drive profitability and growth. The plan includes cost reductions across the organization and improved operational efficiencies. As a result of this plan, the Company expects to achieve annual productivity savings of more than $650 million by 2020, with approximately $130 million to be realized in 2016. Through the initiatives announced today, Norfolk Southern is confident in its ability to achieve an operating ratio below 65 percent by 2020.
§ General merchandise revenues were $1.5 billion, 9 percent lower than the same period last year. Volume declined 4 percent, as a 9 percent gain in automotive traffic was more than offset by decreases in the other four commodity groups.
§ Intermodal revenues declined to $563 million, 13 percent below fourth-quarter 2014. The Triple Crown restructuring and fewer domestic shipments combined to reduce traffic volume by 5 percent.
§ Coal revenues were $433 million, 20 percent lower compared with fourth quarter of 2014. A weak global export market, record high temperatures in the East, and low natural gas prices combined to decrease volume by 18 percent.
§ Railway operating expenses decreased $103 million, or 5 percent, to $1.9 billion compared with same period of 2014, notwithstanding $49 million of expenses related to the Triple Crown restructuring and Roanoke office closure.
§ Income from railway operations was $642 million, 28 percent lower compared with fourth-quarter 2014.
About Norfolk Southern
Norfolk Southern Corporation (NYSE: NSC) is one of the nation’s premier transportation companies. Its Norfolk Southern Railway Company subsidiary operates approximately 20,000 route miles in 22 states and the District of Columbia, serves every major container port in the eastern United States, and provides efficient connections to other rail carriers. Norfolk Southern operates the most extensive intermodal network in the East and is a major transporter of coal, automotive, and industrial products.
Certain statements in this press release are “forward-looking statements” within the meaning of the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995, as amended. These statements relate to future events or the Company’s future financial performance and involve known and unknown risks, uncertainties, and other factors that may cause the actual results, levels of activity, performance, or achievements of the Company or its industry to be materially different from those expressed or implied by any forward-looking statements. In some cases, forward-looking statements can be identified by terminology such as “may,” “will,” “could,” “would,” “should,” “expect,” “plan,” “anticipate,” “intend,” “believe,” “estimate,” “project,” “consider,” “predict,” “potential,” or other comparable terminology. The Company has based these forward-looking statements on management’s current expectations, assumptions, estimates, beliefs, and projections. While the Company believes these expectations, assumptions, estimates, and projections are reasonable, such forward-looking statements are only predictions and involve known and unknown risks and uncertainties, many of which involve factors or circumstances that are beyond the Company’s control. These and other important factors, including those discussed under “Risk Factors” in the Company’s Form 10-K for the year ended Dec. 31, 2014, as well as the Company’s subsequent filings with the Securities and Exchange Commission, may cause actual results, performance, or achievements to differ materially from those expressed or implied by these forward-looking statements. The forward-looking statements in this press release are made only as of the date they were first issued, and unless otherwise required by applicable securities laws, the Company disclaims any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise. Copies of Norfolk Southern Corporation’s press releases and additional information about the Company are available at www.norfolksouthern.com, or you can contact the Norfolk Southern Corporation Investor Relations Department by calling 757-629-2861.