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Norfolk Southern’s 2016 Annual Report highlights commitments met to lower costs, increase profitability, improve service, and enhance shareholder value

Norfolk, Va. - Mar 22, 2017


Norfolk Southern today posted its 2016 Annual Report online, highlighting success at achieving first-year goals in the railroad’s five-year strategic plan to streamline operations, drive profitability and growth, and enhance shareholder value.

In the report, titled “Delivering On Our Commitments,” CEO Jim Squires tells shareholders that the company finished the year “a stronger, faster, lower-cost, and more profitable railroad.” Through the continued successful execution of its strategic plan, Norfolk Southern met or exceeded the company’s targets to lower operating costs and increase profitability while improving customer service, “putting us well on our way to achieving our 2020 goals,” Squires said.

For the year, the company:

  • Achieved an all-time best operating ratio of 68.9 percent;
  • Reduced expenses in all areas of operations to generate savings of $250 million, surpassing a targeted $130 million;
  • Increased income from railway operations and net income by 7 percent each, driven by an 11 percent decrease in operating costs;
  • Produced year-over-year earnings per share growth of 10 percent; and
  • Rationalized 1,000 miles of secondary rail lines.

While exercising disciplined cost control, the company invested in strategic capital projects “to ensure safe and efficient operations and promote growth,” Squires noted. In addition, efforts to improve locomotive fuel-efficiency, reliability, and emissions reduction continued as a cornerstone of the company’s sustainability and business strategy, he said.

Amid shifting markets and industry dynamics, Squires said, the company is “more focused than ever on services that will help convert freight from highway to rail.” To drive growth, the company is working on customer-service initiatives that range from modernizing its e-commerce platforms to developing shared performance indicators to measure service.

Squires notes that the railroad’s management team began a structured dialogue with key customers and is using their input to improve operating efficiencies and deliver a superior service product.

“We are changing the way we do business in order to meet and exceed our customers’ expectations and to drive superior value creation for shareholders,” Squires said.

The report, in PDF format, can be downloaded from the corporate website.

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 19,500 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.

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