Railroad News

Norfolk Southern Corp. yesterday unveiled its annual report online, noting "early accomplishments" of the Class I's recently announced five-year strategic plan to drive growth, streamline operations and improve profit.

In his first annual report letter to shareholders since he became chief executive officer in 2015, President and CEO James Squires wrote that the railroad "has taken decisive and deliberate action to capitalize on significant growth opportunities within our unique network."

Norfolk Southern Corp. will hold its annual meeting May 12, the Class I announced today in a notice filed with the U.S. Securities and Exchange Commission and in a letter addressed to NS employees.

At the meeting, NS shareholders will get the opportunity to vote whether they want the company to engage in merger discussions with rival Canadian Pacific.

Norfolk Southern Corp.'s board has elected Amy Miles to serve as chairwoman of the board's audit committee, effective at the corporation's 2016 annual meeting.

Miles will succeed Karen Horn, who is retiring from the board. She has served as an NS director since 2014 and will continue to serve as a member of the board’s finance and risk management committee, according to an NS press release.

Norfolk Southern Corp. has named Ann Adams vice president human resources as of April 1.

Adams will succeed Juan Cunningham, who retired earlier this year, according to an NS press release.

Norfolk Southern Corp. will spend $8.2 million to expand its corporate headquarters in Norfolk, Va., as part of a plan to consolidate its corporate offices in Norfolk and Atlanta and close its Roanoke, Va., office building, Virginia Gov. Terry McAuliffe announced late last week.

With the expansion of the NS headquarters, the Class I will add 165 employees to the Norfolk facility, according to a press release issued by McAuliffe's office.

Norfolk Southern Corp. announced yesterday that it would consolidate from three operating regions into two segments as part of a previously announced five-year strategic plan to cut $650 million from annual expenses by 2020.

The consolidation, which will take effect March 15, will make the Class I a faster and more profitable railroad, said Executive Vice President and Chief Operating Officer Mike Wheeler in a press release.

Norfolk Southern Corp. assisted 93 facilities in locating or expanding business along its rail lines in 2015, resulting in an investment of $4.2 billion by NS customers, the Class I announced yesterday.

The customers' investments are expected to generate more than 85,000 carloads of new rail traffic annually, NS officials said in a press release.

NS posted net income of $361 million, or $1.20 per diluted share, for Q4 2015, down nearly 30 percent when compared with $511 million, or $1.64 per diluted share in fourth-quarter 2014. Analysts expected NS to earn $1.23 per share for Q4 2015.

Railway operating revenue for the quarter totaled $2.5 billion, down 12 percent compared with the year-ago quarter. Income from railway operations fell 28 percent to $642 million compared with Q4 2015.

Effective Feb. 1, Norfolk Southern Corp. will consolidate its Virginia and Pocahontas divisions to form a new Pocahontas Division, with its headquarters in Roanoke, Va., the Class I announced yesterday.

The consolidation is part of the company's efforts to improve operating efficiency and support long-term growth, according to an NS press release.

Industry organizations that represent major customers of Norfolk Southern Corp. have asked the Surface Transportation Board to reject Canadian Pacific's hostile takeover bid, according to the Reuters news agency.

Reuters reviewed copies of the letters, which have not been made public. Sent last month, the letters revealed customers' concerns over CP's cost-cutting plans, the impact on service and the potential for higher prices for customers, the news agency reported.

[Editor's note: This story has been updated to include CP's response, which was issued this afternoon.]

Norfolk Southern Corp.'s board has unanimously rejected Canadian Pacific's latest merger proposal, NS officials announced today.

The Andersons Inc. announced yesterday that it will begin an expansion of its ethanol facility in Albion, Mich.

The expansion project will double the facility's capacity, Anderson officials said in a press release. The facility is served by Norfolk Southern Railway.

Norfolk Southern Corp.'s board will consult with its financial, legal and regulatory advisers to "carefully consider" Canadian Pacific's latest takeover offer, NS officials announced yesterday.

The only difference in CP's latest proposal from the last offer is the inclusion of a contingent value right (CVR), NS officials said in a press release. Yesterday's proposal did not change terms of CP's Dec. 7th offer, which the NS board rejected unanimously, and did not address "substantial regulatory risks and uncertainties inherent in the proposed combination," the release stated.

Norfolk Southern Corp. sent a letter today to Canadian Pacific Chief Executive Officer E. Hunter Harrison informing him that the NS board rejects CP's updated buyout offer.

The letter, which NS filed as an 8-K statement, makes official the comments NS officials made in a press release last week after CP updated its original merger proposal. 

Note: This sidebar in the December issue was written prior to NS' rejection of CP's initital buyout offer, CP's second offer, NS' subsequent rebuff of that proposal and several other maneuvers. Follow this link to read the latest on the proposed CP-NS merger.

Norfolk Southern Corp. and Canadian Pacific were business partners that executed the D&H line sale, and now they might become permanent partners.

By This email address is being protected from spambots. You need JavaScript enabled to view it., Managing Editor

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