advertisement

---

Norfolk Southern Corp.'s voluntary separation program helped trim the Class I's workforce by more than 500 last fall, but the program also reduced the railroad's fourth-quarter and annual earnings.

On Jan. 28, NS reported quarterly net income of $52 million, which was impacted by a $66 million after-tax charge for the program and $53 million after-tax charge for depreciating telecommunications assets. Excluding those charges, the railroad's fourth-quarter net income would have been $171 million compared with $129 million during the same 2002 period.

NS posted record fourth-quarter revenue of $1.68 billion — driven by general merchandise and intermodal revenue of $956 million and $335 million, respectively — which rose 6 percent compared with fourth-quarter 2002.

However, quarterly operating expenses of $1.5 billion increased 12 percent, primarily because of a $107 million voluntary separation program charge, and NS' quarterly operating ratio rose 4.8 points to 86.6. Without the program's impact, the railroad's fourth-quarter ratio would have been 80.3.

"We are pleased with fourth-quarter results, which were substantially better than a year ago, demonstrating success at growing our revenue base and improving productivity," said NS Chairman, President and Chief Executive Officer David Goode in a prepared statement.

For all of 2003, NS earned net income of $535 million and record revenue of $6.5 billion compared with $460 million and $6.3 billion, respectively, in 2002.

The railroad's annual operating expenses of $5.4 billion increased 6 percent and annual operating ratio of 83.5 worsened 2.0 points compared with 2002. Excluding the voluntary separation program's costs, NS' annual operating ratio would have been 81.9.