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| Norfolk Southern Corporation | Volume 4, Issue 6, June 2004 |
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L to R: Steve Tobias; Allan Rutter, FRA; Sen. George Allen of Virginia.; and David Goode |
Norfolk Southern employees earned an unprecedented 15th consecutive E.H. Harriman Gold Medal for employee safety. The award recognizes NS for achieving the lowest employee injury ratio among the nation’s major railroads in 2003. NS finished the year with an injury frequency rate of 1.36 per 200,000 employee hours worked.
“On behalf of 28,000 Norfolk Southern people, I accept the Gold Award for 2003 with utmost appreciation and admiration for their accomplishment in earning it for a 15th consecutive year,” said David Goode, NS chairman, president and chief executive officer. “That’s an amazing performance by our people.
“We have said many times that we don’t really compete when it comes to safety,” Goode said. “We’re all working for the same thing – that is, the opportunity to go home at the end of the day injury-free. Striving individually for safety, we collectively demonstrate continuous improvement for our industry. That benefits all of us.”
U.S. Sen. George Allen of Virginia provided the keynote address and praised NS for its commitment to safety and to the community. He said the company “cares about the communities it serves and the people who live there.” He also cited NS’ successful efforts in economic development.
NS took top honors for the year in Group A, comprised of line-haul railroads whose employees worked 15 million employee-hours or more during the award year. In this category, the silver award went to the Burlington Northern and Santa Fe Railway, while Union Pacific took the bronze.
Conrail was named winner of the silver medal for the second straight year in the switching and terminal railroad group.
The annual rail employee safety awards were founded in 1913 by the late Mary W. Harriman in memory of her husband, Edward H. Harriman, who was a pioneer in American railroading. For many years, the program was sponsored by two sons, E. Roland and W. Averell Harriman, now both deceased. The awards are administered under the auspices of the E.H. Harriman Memorial Awards Institute, with support from the Mary W. Harriman Foundation.
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Thirty NS employees joined David Goode at the Harriman Awards. They were: 1. Gerhard Thelen, 2. Chuck Wehrmeister, 3. Jim Hixon, 4. John Samuels, 5. Steve Tobias, 6. Mark Manion, 7. Eddie Belcher, 8. Gary Woods, 9. David Goode, 10. Andy Corcoran, 11. Tony Brooks, 12. Saundra Hunt, 13. Bruce Williams, 14. Barry Wells, 15. Dan Quam, 16. Bruce McGregor, 17. George Mooneyhan, 18. Michael Patrick, 19. Marilyn Bryant, 20. Stephen Thomas, 21. Art Blizzard, 22. Haskel Stanback, 23. Dennis Mitchell, 24. Billy Aaron, 25. Debbie Butler, 26. Tony Waller, 27. John Bernheiser, 28. George Fath, 29. David Poff, 30. Charles Reeves, 31. Mike Sledd |
For the first quarter of 2004, Norfolk Southern reported record revenues of $1.7 billion, up 8 percent compared with the same period last year, and record first-quarter income from railway operations of $346 million, up 50 percent, compared with the same period last year.
First-quarter income from continuing operations before accounting changes was $158 million, or $0.40 per share, compared with last year’s $85 million, or $0.22 per share.
Reported net income for the first quarter 2003 was $209 million, or $0.54 per share, which included a $114 million, or $0.29 per share, gain due to a required industrywide accounting change to account for the cost of removing railroad crossties, and a gain of $10 million, or $0.03 per share, from discontinued motor carrier operations.
Excluding those items, net income in the first quarter increased by $73 million, or 86 percent, over the same period last year. Revenues increased $132 million, or 8 percent, over the same quarter in 2003. Carloads rose 7 percent for the same period.
“I am very pleased to report that Norfolk Southern set a number of financial and operational records this quarter,” said David Goode, chairman, president and chief executive officer. “We recorded the highest railway operating revenues in our history, and we posted our best-ever income from railway operations. We produced the best first-quarter operating ratio since the Conrail integration in what is traditionally the most challenging quarter.
“Our network velocity reached an all-time high as our average train speed exceeded our goal and was among the best in the industry,” Goode said. “We improved our terminal dwell time performance over year-earlier levels. And finally, our network fluidity continued to improve as we handled 109,000 more carloads in the quarter but our cars on line remained constant.”
NS reported its best operating ratio – the standard measure of railroad efficiency – since the integration of its portion of the Conrail system in 1999. For the quarter, the railway operating ratio was 79.6 percent, compared with 85.2 percent a year earlier.
General merchandise revenues for the first quarter reached a record $967 million, an increase of 5 percent over the same period last year. All merchandise markets reported revenue gains, compared with the same period a year earlier, led by metals and construction, which reported an increase of 10 percent. Increased steel shipments from nearly all of the mills served by Norfolk Southern helped grow this category. Chemicals set a record, with revenues increasing 6 percent over the same period in 2003, driven by increased shipments of petroleum and industrial intermediate products. Led by shipments of ethanol and fertilizer, agricultural products set first-quarter records for both volume and revenue.
Coal revenues were up in the first quarter, increasing 12 percent to $398 million in the first quarter of 2004 compared with the same period last year. The export coal sector benefited as a result of weakness of the dollar and higher ocean-going bulk rates. In the utility sector, carloadings were up 3 percent in the first quarter compared with the same period in 2003.
Intermodal revenues climbed 13 percent to $328 million in the first quarter 2004 compared with the same period last year. Increased demand for consumer products and traffic growth from new truck-competitive transcontinental services, as well as reliable, consistent service performance, helped drive the growth.
First-quarter railway operating expenses were up only $17 million, or 1 percent, over the same period in 2003.
“Norfolk Southern’s exceptional first-quarter performance has provided a solid platform from which to build through the remainder of the year and reflects the strength of our higher-value transportation products and operating efficiency,” Goode said.
“Looking ahead, we remain optimistic about the health of the industrial economy,” said Goode
Improved service and operating performance are driving opportunities for business growth and enhanced value at Norfolk Southern, David Goode, chairman, president and chief executive officer, told the company’s shareholders at their 22nd annual meeting, held May 13 in St. Louis.
“We are seeing a resurgence of Thoroughbred performance at a time when markets are creating growth opportunities for us,” Goode said. The combination “is good for business, it’s good for earnings, and it’s good for shareholders,” he said. “Our strong and improving service gives us an advantage and an increasingly valuable product going forward.”
In official business, stockholders re-elected four directors: Alston D. Correll, chairman, chief executive officer and president of Georgia-Pacific Corporation; Landon Hilliard, a partner in Brown Brothers Harriman & Co., a private bank in New York; Burton M. Joyce, chairman of the board of directors of IPSCO; and Jane Margaret O’Brien, president of St. Mary’s College of Maryland. Stockholders also ratified the appointment of KPMG LLP as auditors.
Norfolk Southern’s Exhibit Car is traveling the company’s rail network from Alabama to Ontario in 2004, making stops in 18 communities where it will be open to the public.
The car will appear for community events in 11 states and the Canadian province. It also will be in a special five-city whistle-stop train operated by NS to promote safe transportation of hazardous materials.
The Exhibit Car is a rebuilt passenger rail car with displays depicting the history and modern operation of the Norfolk Southern transportation system. A locomotive simulator, the car’s most popular display, puts guests in the engineer’s seat in control of throttle, brake and horn. Some 1.5 million people in more than 350 communities have viewed the traveling showcase since 1971. The car began its 2004 tour with stops at Opelika, Ala., Strasburg, Va., and Valdese and Spencer, N.C.
Here is the schedule through the end of the year.
Norfolk Southern provides the Exhibit Car at no cost for community events throughout its rail transportation network.
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Don Cregger, center, receives congratulations from David Goode, left, and Sen. Charles Grassley of Iowa. |
Norfolk Southern’s 2003 Thoroughbred Award was presented to Don Cregger, manager project engineering, research and tests, at ceremonies in Washington, D.C. The award recognizes outstanding, highly visible employee contributions that have long-term significant impact on NS’ success.
Cregger played a key role in developing and deploying SoyTrak, a soybean-based rail lubricant. He worked with the University of Northern Iowa’s agricultural-based industrial lubricants program to help determine the critical qualities necessary for a lubricant to effectively reduce rail wear.
Seven other NS employees were nominated for the prestigious award and were honored at the luncheon. David Goode, NS chairman, president and chief executive officer, presented the awards.
“Each of our nominees represents the best in our company,” Goode said. “They suggested how to make our company more successful, and they also acted on their suggestions. That’s the kind of performance we need to be competitive and be the Thoroughbred of Transportation.”
Sen. George Allen of Virginia extended his congratulations in a letter saying, “It is people like you, with your hard work, your determined spirit and your entrepreneurial attitude, who have made our nation the leader in technology and innovation.”
“It’s appropriate that we’re in Washington today to honor Don Cregger and all our Thoroughbred Award nominees, because the result of Don’s work is the product of a public-private partnership,” said John Samuels, senior vice president operations planning and support. “Don’s work with the university’s research team brought a product that not only reduces rail wear by 20 percent, it’s also biodegradable and is produced from soybeans grown in Iowa.”
Terry Kidd, electronic engineer, Unified Train Control Systems, communications and signals, was nominated for his work in improving dispatching in Fort Wayne, Ind. Brian Gwin and Rob Helmick, product managers in the automotive group, were nominated for their work in reducing transit time of auto parts to Mexico for General Motors. MODALGISTICS® was represented by Robyn Louderback, product manager, and John Reilly, account manager, for their work in winning new business that was previously trucked. Brad Yeatts, product manager merchandise, was nominated for his success in streamlining and improving the short line payment process. Chris Buttermore, general foreman, mechanical, was nominated for his work in assuring safe transport of nuclear waste.
Other guests attending the ceremony included Sen. John Warner and Rep. Robert Goodlatte of Virginia; and Sen. Charles Grassley, and Reps. Leonard Boswell and Tom Latham of Iowa.