Norfolk Southern (NSC) 10-K risk factor changes: FY2023 vs FY2022

Item 7 “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and Item 8 “Financial Statements and Supplementary Data.” [added: We have experienced a number of the risks described below over the past year in connection with the Incident and the Incident Proceedings (defined below).]

Governmental legislation, regulation, and Executive Orders over commercial, operational, tax, safety, security, or cybersecurity matters could negatively affect us, our customers, the rail industry or the markets we serve. Congress can enact laws, agencies can promulgate regulations, and Executive Orders can be issued that increase or alter regulation [added: in a way] that negatively affects us, our customers, the rail industry or the markets we serve.

In addition, such outbreaks could affect our operations and business continuity if a significant number of our essential employees, overall or in a key location, are [removed: quarantined] [added: unable to work] from contraction of or exposure to the disease or if governmental orders prevent our employees or critical suppliers from working.

A significant cybersecurity incident or other disruption to our technology infrastructure could disrupt our business operations. [removed: We] [added: To conduct business, we extensively] rely on information [removed: technology,] and [added: operational technology systems, and] improvements in [removed: that technology,] [added: those technologies,] in all aspects of our business.

[removed: If we experience] [added: Regardless of the cause,] significant disruption or failure of one or more of information [added: or operational] technology systems operated by us or under control of third parties, including computer hardware, software, [added: cloud services] and communications equipment, [removed: we could experience] [added: can result in us experiencing] a service interruption, data breach, or other operational difficulties.

While we have previously experienced [added: technology outages and] cybersecurity events that have [removed: had minimal impact,] [added: impacted our systems and service,] future events may result in more significant impacts to our operations, reputation or [removed: results of operations.][added: financial results.]

These potentially impactful [added: future] events could include [added: service disruptions,] unauthorized access to our systems, viruses, ransomware, and/or compromise, acquisition, or destruction of our data.

We also could be impacted by cybersecurity events targeting third parties that we rely on for business operations, including third party vendors that have access to our systems or data and third parties [added: who provide services and are] in our supply chain.

In addition, our failure to comply with [added: or adhere to] privacy-related or data protection laws and regulations could result in government investigations and proceedings against us, or litigation, resulting in adverse reputational impacts, penalties, and legal liability.

As a common carrier by rail, we must offer to transport hazardous materials, [removed: regardless of risk.] [added: which exposes us to significant costs and claims.] Transportation of certain hazardous materials [removed: could create catastrophic] [added: or third party-owned equipment (typically used to transport such materials) creates risks of significant] losses in terms of personal injury and property (including environmental) damage and compromise critical parts of our rail network.

The costs of a catastrophic rail accident involving hazardous materials [added: or third party-owned equipment] could exceed our insurance coverage.

We have obtained insurance for potential losses for third-party liability and first-party property damages (see Note 17 [added: in Item 8 “Notes] to [removed: the] Consolidated Financial [removed: Statements);] [added: Statements”);] however, insurance is available from a limited number of insurers and may not continue to be available or, if available, may not be obtainable on terms acceptable to us.

Deterioration in the supply chain or [removed: operations of or] service provided by connecting carriers, or in our relationship with those connecting carriers, could result in our inability to meet our customers’ demands or require us to use alternate train [removed: routes, which could result in significant additional costs and network inefficiencies.]

Additionally, any significant consolidations, mergers or operational changes among other railroads may [removed: significantly redefine] [added: alter] our market access and reach.

Although we currently maintain insurance coverage for third-party liability arising out of war and acts of terrorism, we maintain only limited insurance coverage for first-party property damage and damage to property in our care, [added: custody, or control caused by certain acts of terrorism.]

We may be negatively affected by supply constraints resulting from disruptions in the fuel markets or the nature of some of our supplier markets. We consumed approximately [removed: 376] [added: 377] million gallons of diesel fuel in [removed: 2022.][added: 2023.]

[removed: Although we recently] [added: We] entered into updated labor agreements with these labor [removed: unions,] [added: unions in December 2022 and] future national labor agreements, or renegotiation of labor agreements or provisions of labor agreements, could significantly increase our costs for health care, wages, and other benefits.

The risks described below should be read in conjunction with the information regarding the Incident and Incident Proceedings provided in Note 17 in Item 8 “Notes to Consolidated Financial Statements.”

INCIDENT RISKS

As defined and as further described in Note 17 in Item 8 “Notes to Consolidated Financial Statements”, there was an Incident that occurred in the first quarter that consisted of a February 3, 2023 train derailment in East Palestine, Ohio that included 11 non-Company-owned tank cars containing hazardous materials, fires associated with the derailment that threatened certain of the tank cars, and a controlled vent and burn procedure conducted on February 6, 2023 on five of the derailed tank cars, all of which contained vinyl chloride.

As a result of the Incident, we have become subject to numerous legal, regulatory, legislative and other proceedings related thereto, including but not limited to, the National Transportation Safety Board (NTSB) Investigation, the FRA Incident Investigation, the FRA Safety Assessment, the U.S. Department of Justice (DOJ) Complaint, the Ohio Complaint, the Incident Lawsuits, the Shareholder Matters, and the Incident Inquiries and Investigations, (each as defined in Note 17 in Item 8 “Notes to Consolidated Financial Statements”), in addition to other proceedings, actions, or potential changes in response to the Incident, including but not limited to those related to, among other items, train size, train length, train composition, or crew size (collectively, the “Incident Proceedings”).

Set forth below are additional risks pertaining to an investment in the Company that are related to the Incident and the Incident Proceedings.

The costs, liabilities, fines, penalties, and/or financial impact resulting from or related to the Incident or the Incident Proceedings have been significant to date, may exceed expected or accrued amounts, and have and can be expected to continue to negatively affect our financial results. We have incurred and will continue to remain subject to incurring significant costs, liabilities, fines, and penalties related to the Incident and the Incident Proceedings, including amounts that may have a material adverse effect on our financial position, results of operations, or liquidity.

In addition, while we have accrued estimates of probable and reasonably estimable liabilities with respect to the Incident and the Incident Proceedings (several of which are in early stages), we cannot predict the final outcome or estimate the reasonably possible range of loss with certainty and such estimates may change over time due to a variety of factors, including but not limited to those set forth in Note 17 in Item 8 “Notes to Consolidated Financial Statements” or other unfavorable or unexpected developments or outcomes which could result in our current estimates being insufficient.

These estimated amounts also do not include any estimate of loss for specific items for which we believe a loss is either not probable or not reasonably estimable for the reasons set forth in Note 17 in Item 8 “Notes to Consolidated Financial Statements.” As a result, our currently accrued amounts of estimated liabilities may be insufficient, and any additional, new or updated accruals could have a material adverse effect on our results of operations or financial position.

New or additional governmental regulation and/or operational changes resulting from or related to the Incident or the Incident Proceedings may negatively impact us, our customers, the rail industry, or the markets we serve. The legislative, regulatory, operational or other actions taken, protocols adopted (including by us), or changes resulting from the Incident or any of the Incident Proceedings may, either individually or in the aggregate, have a material adverse effect on us, our customers, the rail industry, or the markets we serve.

We also face risks from requirements that may be imposed by the government in resolution of government actions, including, for example, restrictions on our methods of operations.

Our inability to comply with the requirements of any new or additional laws, regulations or operating protocols resulting from or related to the Incident or the Incident Proceedings may have a material adverse effect on our financial position, results of operations, liquidity, or operations.

We are addressing multiple governmental actions as a result of the Incident, as noted in “Incident Risks” above.

As noted in “Incident Risks” above, in connection with the Incident, we are experiencing negative impacts related to environmental matters, including extensive cleanup costs and litigation related to alleged environmental impacts of the Incident.

The threat landscape is vast and includes hobbyists, cybercriminals, nation-states and state-sponsored activities.

Attacks from these entities include, but is not limited to, denial of service, unauthorized access, theft of money, and data and extortion.

System upgrades, redundancy and other continuity measures may be ineffective or inadequate, and our business continuity and disaster recovery planning may not be sufficient for all eventualities.

Such failures or disruptions can adversely impact our business by, among other things, preventing intercompany communications and disrupting operations that may result in direct or indirect monetary losses, damage to equipment or property, or loss of confidence in corporate competency.

These events could have a materially adverse effect on our business, reputation, results of operations and financial condition.

Although we maintain comprehensive security programs designed to protect our information technology systems, including our risk-based approach to cybersecurity, our reliance on the Framework for Improving Critical Infrastructure Cybersecurity drafted by the U.S Department of Commerce's National Institute of Standards and Technology (NIST CSF) and our layered defense system, we are continually targeted by threat actors attempting to access our networks and we may be unable to detect or prevent a breach of our systems or disruption to our service in the future.

Any future legislation preventing the transportation of hazardous materials through specific cities could have negative impacts including increased network congestion and operating costs, reduced operating efficiency, and increased risk of an accident involving hazardous materials.

With regard to the risks arising from the transportation of hazardous materials, the Incident and the Incident Proceedings have given rise to significant costs to us and impacts on our rail network, as noted in “Incident Risks” above.

With respect to third party-owned equipment, the primary risk arises from the potential for a latent defect we are unable to identify despite robust safety inspection protocols.

routes, which could result in significant additional costs and network inefficiencies.

K15

We are incurring significant expenditures as a result of claims and lawsuits arising from the Incident and the related Incident Proceedings, as described in “Incident Risks” above.

K16

Although we maintain comprehensive security programs designed to protect our information technology systems, we are continually targeted by threat actors attempting to access our networks.

custody, or control caused by certain acts of terrorism.

| | | | [added: 2023] | | | | | | [added: 2022] | | | | | | [added: 2021] | | | | | | [removed: 2022] [added: vs. 2022] | | | | | | [removed: 2021] [added: vs. 2021] | | | | | |

| | | | [removed: 2022] [added: 2023] | | | | | | [removed: 2021] [added: 2022] | | | | | | [removed: 2020] [added: 2021] | | | | | | vs. [removed: 2021] [added: 2022] | | | | | | vs. [removed: 2020] [added: 2021] | | | | | |

| Income from railway operations | | | $ | [removed: 4,809] [added: 2,851] | | | | | $ | [removed: 4,447] [added: 4,809] | | | | | $ | [removed: 3,002] [added: 4,447] | | | | | [removed: 8] [added: (41] | | [removed: %] [added: %)] | | | | [removed: 48] [added: 8] | | % | | | |

| Net income | | | $ | [removed: 3,270] [added: 1,827] | | | | | $ | [removed: 3,005] [added: 3,270] | | | | | $ | [removed: 2,013] [added: 3,005] | | | | | [removed: 9] [added: (44] | | [removed: %] [added: %)] | | | | [removed: 49] [added: 9] | | % | | | |

| Diluted earnings per share | | | $ | [removed: 13.88] [added: 8.02] | | | | | $ | [removed: 12.11] [added: 13.88] | | | | | $ | [removed: 7.84] [added: 12.11] | | | | | [removed: 15] [added: (42] | | [removed: %] [added: %)] | | | | [removed: 54] [added: 15] | | % | | | |

| Railway operating ratio (percent) | | | [removed: 62.3] [added: 76.5] | | | | | | [removed: 60.1] [added: 62.3] | | | | | | [removed: 69.3] [added: 60.1] | | | | | | [removed: 4] [added: 23] | | % | | | | [removed: (13] [added: 4] | | [removed: %)] [added: %] | | | |

Additionally, net income [removed: includes] [added: included] a $136 million deferred tax benefit resulting from a [added: state] corporate income tax rate [removed: change in the Commonwealth of Pennsylvania,] [added: change,] which increased diluted earnings per share by $0.58.

Railway operating ratio (a measure of the amount of operating revenues consumed by operating expenses) [removed: increased] [added: deteriorated] to [removed: 62.3] [added: 76.5] percent.

[removed: Revenue growth] [added: The increase in revenues in 2023] was driven by increased [added: volume and higher] average revenue per [removed: unit and higher volumes, the result of improved customer demand.][added: unit, driven by favorable price.]

[removed: Our railway] [added: Railway] operating ratio [removed: decreased] [added: deteriorated] to [removed: 60.1] [added: 62.3] percent.

The following [removed: tables adjust] [added: table adjusts] our [removed: 2020] [added: 2023] U.S. Generally Accepted Accounting Principles (GAAP) financial results to exclude the effects of the [removed: loss on asset disposal and investment impairment.][added: Incident.]

The income tax effects [removed: on these] [added: of this] non-GAAP [removed: adjustments] [added: adjustment] were calculated based on the applicable tax rates to which the non-GAAP [removed: adjustments relate.][added: adjustment related.]

We use these non-GAAP financial measures internally and believe this information provides useful supplemental information to investors to facilitate making period-to-period comparisons by excluding the [removed: 2020 charges.][added: 2023 costs arising from the Incident.]

| | | | Non-GAAP Reconciliation for [removed: 2020] [added: 2023] | | | | | | | | | | | | | | | | | | | | | [added: | | |]

| | | | *($ in millions, except per share amounts)* | | | | | | | | | | | | | | | | | | | | | [added: | | |]

| Income from railway operations | | | $ | [removed: 3,002] [added: 2,851] | | | | | [added: | | |] $ | [removed: 385] [added: 1,116] | | | | | [removed: $] | [removed: 99] | | | | | $ | [removed: 3,486] [added: 3,967] | |

In the table below, references to [removed: 2020] [added: 2023] results and related comparisons use the adjusted, non-GAAP results from the [added: reconciliation in the] table above.

| | | | [added: Adjusted] | | | | | | | | | | | | [removed: Adjusted] | | | | | | [removed: 2022] [added: (non-GAAP)] | | | | | | [removed: vs. Adjusted] [added: 2022] | | |

| | | | [removed: 2022] [added: (non-GAAP)] | | | | | | [removed: 2021] [added: 2022] | | | | | | [removed: (non-GAAP)] [added: 2021] | | | | | | [removed: 2021] [added: 2022] | | | | | | [removed: (non-GAAP)] [added: 2021] | | |

| Income from railway operations | | | $ | [removed: 4,809] [added: 3,967] | | | | | $ | [removed: 4,447] [added: 4,809] | | | | | $ | [removed: 3,486] [added: 4,447] | | | | | [removed: 8] [added: (18] | | [removed: %] [added: %)] | | | | [removed: 28] [added: 8] | | % |

| Net income | | | $ | [removed: 3,270] [added: 2,673] | | | | | $ | [removed: 3,005] [added: 3,270] | | | | | $ | [removed: 2,375] [added: 3,005] | | | | | [removed: 9] [added: (18] | | [removed: %] [added: %)] | | | | [removed: 27] [added: 9] | | % |

| Diluted earnings per share | | | $ | [removed: 13.88] [added: 11.74] | | | | | $ | [removed: 12.11] [added: 13.88] | | | | | $ | [removed: 9.25] [added: 12.11] | | | | | [removed: 15] [added: (15] | | [removed: %] [added: %)] | | | | [removed: 31] [added: 15] | | % |

| Railway operating ratio (percent) | | | [removed: 62.3] [added: 67.4] | | | | | | [removed: 60.1] [added: 62.3] | | | | | | [removed: 64.4] [added: 60.1] | | | | | | [removed: 4] [added: 8] | | % | | | | [removed: (7] [added: 4] | | [removed: %)] [added: %] |

| | | | Revenues | | | | | | | | | | | | | | | | | | [removed: 2022] [added: 2023] | | | | | | [removed: 2021] [added: 2022] | | | | | |

| Agriculture, forest and consumer products | | | $ | [removed: 2,493] [added: 2,530] | | | | | $ | [removed: 2,251] [added: 2,493] | | | | | $ | [removed: 2,116] [added: 2,251] | | | | | [removed: 11] [added: 1] | | % | | | | [removed: 6] [added: 11] | | % | | | |

| Chemicals | | | [removed: 2,148] [added: 2,054] | | | | | | [removed: 1,951] [added: 2,148] | | | | | | [removed: 1,809] [added: 1,951] | | | | | | [removed: 10] [added: (4] | | [removed: %] [added: %)] | | | | [removed: 8] [added: 10] | | % | | | |

| Metals and construction | | | [removed: 1,652] [added: 1,634] | | | | | | [removed: 1,562] [added: 1,652] | | | | | | [removed: 1,333] [added: 1,562] | | | | | | [removed: 6] [added: (1] | | [removed: %] [added: %)] | | | | [removed: 17] [added: 6] | | % | | | |

| Automotive | | | [removed: 1,038] [added: 1,135] | | | | | | [removed: 905] [added: 1,038] | | | | | | [removed: 830] [added: 905] | | | | | | [removed: 15] [added: 9] | | % | | | | [removed: 9] [added: 15] | | % | | | |

| Merchandise | | | [removed: 7,331] [added: 7,353] | | | | | | [removed: 6,669] [added: 7,331] | | | | | | [removed: 6,088] [added: 6,669] | | | | | | [removed: 10] [added: —] | | % | | | | 10 | | % | | | |

| Intermodal | | | [removed: 3,681] [added: 3,090] | | | | | | [removed: 3,163] [added: 3,681] | | | | | | [removed: 2,654] [added: 3,163] | | | | | | [removed: 16] [added: (16] | | [removed: %] [added: %)] | | | | [removed: 19] [added: 16] | | % | | | |

| Coal | | | [removed: 1,733] [added: 1,713] | | | | | | [removed: 1,310] [added: 1,733] | | | | | | [removed: 1,047] [added: 1,310] | | | | | | [removed: 32] [added: (1] | | [removed: %] [added: %)] | | | | [removed: 25] [added: 32] | | % | | | |

| Total | | | $ | [removed: 12,745] [added: 12,156] | | | | | $ | [removed: 11,142] [added: 12,745] | | | | | $ | [removed: 9,789] [added: 11,142] | | | | | [removed: 14] [added: (5] | | [removed: %] [added: %)] | | | | 14 | | % | | | |

| | | | Units | | | | | | | | | | | | | | | | | | [removed: 2022] [added: 2023] | | | | | | [removed: 2021] [added: 2022] | | | | | |

| Agriculture, forest and consumer products | | | [removed: 723.0] [added: 734.3] | | | | | | [removed: 725.5] [added: 723.0] | | | | | | [removed: 704.4] [added: 725.5] | | | | | | [removed: —] [added: 2] | | % | | | | [removed: 3] [added: —] | | % | | | |

| Chemicals | | | [removed: 540.1] [added: 515.0] | | | | | | [removed: 529.7] [added: 540.1] | | | | | | [removed: 482.0] [added: 529.7] | | | | | | [removed: 2] [added: (5] | | [removed: %] [added: %)] | | | | [removed: 10] [added: 2] | | % | | | |

| Metals and construction | | | [removed: 634.6] [added: 634.1] | | | | | | [removed: 669.0] [added: 634.6] | | | | | | [removed: 601.2] [added: 669.0] | | | | | | [removed: (5] [added: —] | | [removed: %)] [added: %] | | | | [removed: 11] [added: (5] | | [removed: %] [added: %)] | | | |

| Automotive | | | [removed: 339.1] [added: 361.5] | | | | | | [removed: 345.4] [added: 339.1] | | | | | | [removed: 329.7] [added: 345.4] | | | | | | [removed: (2] [added: 7] | | [removed: %)] [added: %] | | | | [removed: 5] [added: (2] | | [removed: %] [added: %)] | | | |

| Merchandise | | | [removed: 2,236.8] [added: 2,244.9] | | | | | | [removed: 2,269.6] [added: 2,236.8] | | | | | | [removed: 2,117.3] [added: 2,269.6] | | | | | | [removed: (1] [added: —] | | [removed: %)] [added: %] | | | | [removed: 7] [added: (1] | | [removed: %] [added: %)] | | | |

| Intermodal | | | [removed: 3,913.1] [added: 3,822.4] | | | | | | [removed: 4,104.1] [added: 3,913.1] | | | | | | [removed: 3,992.1] [added: 4,104.1] | | | | | | [removed: (5] [added: (2] | | %) | | | | [removed: 3] [added: (5] | | [removed: %] [added: %)] | | | |

| Coal | | | [removed: 684.6] [added: 677.1] | | | | | | [removed: 658.0] [added: 684.6] | | | | | | [removed: 574.1] [added: 658.0] | | | | | | [removed: 4] [added: (1] | | [removed: %] [added: %)] | | | | [removed: 15] [added: 4] | | % | | | |

Refer to Item 8 “Notes to Consolidated Financial Statements” for all “Note” references.

Our 2023 financial results were impacted by a February 2023 derailment in Eastern Ohio.

The derailment of 38 railcars resulted in the release of certain chemicals that were being transported for our customers.

Following the Incident (as defined and as further described in Note 17) and throughout the remainder of the year, we have worked to clean the derailment site safely and thoroughly and to monitor for any impact on public health and the environment.

As a result of the Incident, we incurred $1.1 billion of expenses primarily related to our environmental cleanup and remediation efforts at and around the site, related legal proceedings, and other Incident-related costs.

As a result, income from railway operations, net income, and diluted earnings per share declined compared to 2022, most significantly as a result of the direct costs from the Incident.

Our financial results were further impacted by lower revenues and higher non-Incident-related operating expenses.

| | | | | | | | | | | | | | | | | | | | | | 2023 | | | | | | 2022 | | | | | |

Income from railway operations, net income and diluted earnings per share declined in 2023 compared to 2022, driven by expenses incurred with our response efforts to the Incident (Note 17), lower railway operating revenues, and higher non-Incident-related railway operating expenses.

Railway operating revenues declined 5% due to lower average revenue per unit, the result of lower fuel surcharge revenue and decreased intermodal storage service revenues partially offset by favorable pricing and mix.

Additionally, lower volumes contributed to the decline in revenues.

Expenses associated with the Incident for the year were $1.1 billion.

In addition to costs resulting from the Incident, railway operating expenses increased due to inflationary pressures, investments in operational resiliency, and higher service-related costs, offset partially by lower fuel prices.

The decline in net income and diluted earnings per share also reflects the absence of a prior year $136 million deferred tax benefit, a result of an enactment of a change in the corporate income tax rate in the Commonwealth of Pennsylvania in 2022.

| | | | | | | | | | | | | | | | | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| | | | Reported (GAAP) | | | | | | | | | Eastern Ohio Incident | | | | | | | | | | | | Adjusted (non-GAAP) | | |

| | | | | | | | | | | | | | | | | | | | | | | | | | | |

| | | | | | | | | | | | | | | | | | | | | | | | | | | |

| | | | | | | | | | | | | | | | | | | | | | | | | | | |

| Income taxes | | | $ | 493 | | | | | | | | $ | 270 | | | | | | | | | | | $ | 763 | |

| Net income | | | $ | 1,827 | | | | | | | | $ | 846 | | | | | | | | | | | $ | 2,673 | |

| Diluted earnings per share | | | $ | 8.02 | | | | | | | | $ | 3.72 | | | | | | | | | | | $ | 11.74 | |

| Railway operating ratio (percent) | | | 76.5 | | | | | | | | | (9.1) | | | | | | | | | | | | 67.4 | | |

| | | | | | | | | | | | | | | | | | | | | | | | | | | |

| | | | | | | | | | | | | | | | | | | | | | Adjusted | | | | | | | | |

| | | | | | | | | | | | | | | | | | | | | | 2023 | | | | | | | | |

| | | | 2023 | | | | | | | | | | | | | | | | | | vs. | | | | | | vs. | | |

On a non-GAAP basis excluding the impact of direct costs resulting from the Incident, income from railway operations decreased in 2023 due to lower railway operating revenues and higher railway operating expenses.

Railway operating revenues declined due to decreased fuel surcharge revenue, decreased intermodal storage revenues, and lower volume, partially offset by increased pricing and favorable mix compared to the prior year.

Railway operating expenses increased due to inflationary pressures, investments in operational resiliency, and higher service-related costs, partially offset by lower fuel prices.

| | | | 2023 | | | | | | 2022 | | | | | | 2021 | | | | | | vs. 2022 | | | | | | vs. 2021 | | | | | |

| | | | 2023 vs. 2022 | | | | | | | | | | | | | | | | | | 2022 vs. 2021 | | | | | | | | | | | | | | |

For 2024, we expect that revenue will increase modestly driven by higher volumes.

In 2023, revenues were slightly higher as pricing and volume gains were nearly offset by lower fuel surcharge revenue and unfavorable mix.

Increased volumes in automotive and agriculture, forest and consumer shipments were partially offset by decreased chemicals shipments.

In 2023, the rise was the result of increased volume.

Increases in ethanol and fertilizer shipments more than offset declines in shipments of wood chips and graphic paper.

Increased market demand led to volume gains in ethanol and fertilizer.

Volume declines in wood chips were due to customer mill closures, while lower market demand led to the decline in graphic paper.

In 2022, revenue growth led to year-over-year improvements in income from operations, net income and diluted earnings per share.

Throughout the year, we focused on efforts to increase our network fluidity and improve service for our customers.

These efforts included the hiring of new conductors in a tight labor market and evolving our operating plan, which collectively drove improvements in our network performance as we concluded the year and is providing strong momentum going into 2023.

Additionally, new labor agreements were secured by December 2022 which provided retroactive pay and other benefits for our craft employees.

As we head into 2023, we are focused on providing reliable and resilient service and delivering smart sustainable revenue growth that will deliver long-term value to our customers and shareholders.

Income from railway operations increased in 2021 compared to 2020, the result of a 14% increase in railway operating revenues and a 1% reduction in railway operating expenses.

The decline in railway

K19

operating expenses was largely due to the absence of two charges, as 2020 results were adversely impacted by a $385 million loss on asset disposal related to locomotives and a $99 million impairment charge related to an equity method investment.

For more information on these charges, see Notes 7 and 6, respectively.

Higher fuel costs, purchased services, and compensation and benefits expense mostly offset the reduction associated with these charges.

Additionally, gains on the sale of operating properties increased compared to 2020.

The 48% increase in income from railway operations drove comparable increases in net income and diluted earnings per share.

| | | | | | | | | | | | | | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| | | | Reported (GAAP) | | | | | | Loss on Asset Disposal | | | | | | Investment Impairment | | | | | | Adjusted (non-GAAP) | | |

| Railway operating expenses | | | $ | 6,787 | | | | | $ | (385) | | | | | $ | (99) | | | | | $ | 6,303 | |

| Income before income taxes | | | $ | 2,530 | | | | | $ | 385 | | | | | $ | 99 | | | | | $ | 3,014 | |

| Income taxes | | | $ | 517 | | | | | $ | 97 | | | | | $ | 25 | | | | | $ | 639 | |

| Net income | | | $ | 2,013 | | | | | $ | 288 | | | | | $ | 74 | | | | | $ | 2,375 | |

| Diluted earnings per share | | | $ | 7.84 | | | | | $ | 1.12 | | | | | $ | 0.29 | | | | | $ | 9.25 | |

| Railway operating ratio (percent) | | | 69.3 | | | | | | (3.9) | | | | | | (1.0) | | | | | | 64.4 | | |

| | | | | | | | | | | | | | | | | | | | | | | | | | | | 2021 | | |

| | | | | | | | | | | | | | | | 2020 | | | | | | vs. | | | | | | 2020 | | |

| Railway operating expenses | | | $ | 7,936 | | | | | $ | 6,695 | | | | | $ | 6,303 | | | | | 19 | | % | | | | 6 | | % |

| Income before income taxes | | | $ | 4,130 | | | | | $ | 3,878 | | | | | $ | 3,014 | | | | | 6 | | % | | | | 29 | | % |

| Income taxes | | | $ | 860 | | | | | $ | 873 | | | | | $ | 639 | | | | | (1 | | %) | | | | 37 | | % |

K20

K21

For 2023, we expect that revenue growth will be a challenge, as there is substantial economic uncertainty.

Additionally, we expect revenue headwinds resulting from lower fuel prices, softening coal pricing, and declining storage service charges.

In this difficult environment, we will continue to fight to increase revenue by recapturing truck-competitive freight and achieving pricing gains.

Volumes increased in all merchandise commodity groups, reflecting economic recovery following the onset of the COVID-19 pandemic.

In 2021, higher revenues were the result of higher volume across almost all markets, as the economy improved from the early months of the pandemic in 2020, and increased average revenue per unit, the result of pricing gains and higher fuel surcharge revenue.

Gains in ethanol, pulpboard, beverages, lumber and wood, and woodchips more than offset declines in soybeans and pulp.

K22

The increase in volume was due to economic and production recovery since the beginning of the pandemic, despite ongoing challenges in the energy markets.

The markets with the largest gains were solid waste, industrial chemicals, sand, natural gas liquids, and plastics.

Volume increased across almost all markets due to economic improvement since the beginning of the pandemic.

The commodities serving the metal production industry, including coil steel, scrap metal, and iron and steel, experienced the largest gains.

K38

K32

RAILROAD OPERATIONS – At December 31, [removed: 2022,] [added: 2023,] we operated approximately 19,100 route miles in 22 states and the District of Columbia.

[removed: ][added: ]

| | | | Mileage Operated at December 31, [removed: 2022] [added: 2023] | | | | | | | | | | | | | | | | | | | | | | | | | | |

We operate freight service over lines with significant ongoing Amtrak and commuter passenger operations and conduct freight operations over trackage owned or leased by Amtrak, New Jersey Transit, Southeastern Pennsylvania Transportation Authority, Metro-North Commuter Railroad Company, [removed: Maryland Department of Transportation,] and Michigan Department of Transportation.

| | | | [removed: 2022] [added: 2023] | | | | | | [removed: 2021] [added: 2022] | | | | | | [removed: 2020] [added: 2021] | | | | | | [removed: 2019] [added: 2020] | | | | | | [removed: 2018] [added: 2019] | | | | | |

| Revenue ton miles (billions) | | | [removed: 179] [added: 176] | | | | | | [removed: 178] [added: 179] | | | | | | [removed: 164] [added: 178] | | | | | | [removed: 194] [added: 164] | | | | | | [removed: 207] [added: 194] | | | | | |

| Revenue per thousand revenue ton miles | | | $ | [removed: 71.35] [added: 69.05] | | | | | $ | [removed: 62.56] [added: 71.35] | | | | | $ | [removed: 59.67] [added: 62.56] | | | | | $ | [removed: 58.21] [added: 59.67] | | | | | $ | [removed: 55.25] [added: 58.21] | | | | |

| Revenue ton miles (thousands) per railroad employee | | | [removed: 9,513] [added: 8,719] | | | | | | [removed: 9,694] [added: 9,513] | | | | | | [removed: 8,191] [added: 9,694] | | | | | | [removed: 7,939] [added: 8,191] | | | | | | [removed: 7,822] [added: 7,939] | | | | | |

| operating revenues (railway operating ratio) | | | [removed: 62.3%] [added: 76.5%] | | | | | | [removed: 60.1%] [added: 62.3%] | | | | | | [removed: 69.3%] [added: 60.1%] | | | | | | [removed: 64.7%] [added: 69.3%] | | | | | | [removed: 65.4%] [added: 64.7%] | | | | | |

RAILWAY OPERATING REVENUES – Total railway operating revenues were [removed: $12.7] [added: $12.2] billion in [removed: 2022.][added: 2023.]

In [removed: 2022,] [added: 2023,] we handled 2.2 million merchandise carloads, which accounted for [removed: 57%] [added: 61%] of our total railway operating revenues.

In [removed: 2022,] [added: 2023,] we handled [removed: 3.9] [added: 3.8] million intermodal units, which accounted for [removed: 29%] [added: 25%] of our total railway operating revenues.

COAL – Coal revenues accounted for 14% of our total railway operating revenues in [removed: 2022.][added: 2023.]

We handled [removed: 77] [added: 76] million tons, or 0.7 million carloads, most of which originated on our lines from major eastern coal basins, with the balance from major western coal basins received via the Memphis and Chicago gateways.

Our railroad infrastructure makes us capital intensive with net properties of approximately [removed: $32] [added: $33] billion on a historical cost basis.

| | | | [removed: 2022] [added: 2023] | | | | | | [removed: 2021] [added: 2022] | | | | | | [removed: 2020] [added: 2021] | | | | | | [removed: 2019] [added: 2020] | | | | | | [removed: 2018] [added: 2019] | | |

| Road and other property | | | $ | [removed: 1,345] [added: 1,547] | | | | | $ | [removed: 1,041] [added: 1,345] | | | | | $ | [removed: 1,046] [added: 1,041] | | | | | $ | [removed: 1,371] [added: 1,046] | | | | | $ | [removed: 1,276] [added: 1,371] | |

| Equipment | | | [removed: 603] [added: 802] | | | | | | [removed: 429] [added: 603] | | | | | | [removed: 448] [added: 429] | | | | | | [removed: 648] [added: 448] | | | | | | [removed: 675] [added: 648] | | |

| Total | | | $ | [removed: 1,948] [added: 2,349] | | | | | $ | [removed: 1,470] [added: 1,948] | | | | | $ | [removed: 1,494] [added: 1,470] | | | | | $ | [removed: 2,019] [added: 1,494] | | | | | $ | [removed: 1,951] [added: 2,019] | |

Our capital spending and replacement programs are and have been designed to [removed: assure the] [added: support our] ability to provide safe, efficient, and reliable rail transportation services.

[removed: Equipment –] At December 31, [removed: 2022,] [added: 2023,] we owned or leased the following [removed: units of] [added: revenue generating] equipment:

The following table indicates the number and year built for locomotives and freight cars owned at December 31, [removed: 2022:][added: 2023:]

| | | | [removed: 2022] [added: 2023] | | | | | | [removed: 2021] [added: 2022] | | | | | | [removed: 2020] [added: 2021] | | | | | | [removed: 2019] [added: 2020] | | | | | | [removed: 2018] [added: 2019] | | | | | | [removed: 2013- 2017] [added: 2014- 2018] | | | | | | [removed: 2008- 2012] [added: 2009- 2013] | | | | | | [removed: 2007] [added: 2008] & Before | | | | | | Total | | |

| % of fleet | | | — | | % | | | | — | | % | | | | — | | % | | | | [removed: 1] [added: —] | | % | | | | 1 | | % | | | | [removed: 8] [added: 7] | | % | | | | 7 | | % | | | | [removed: 83] [added: 85] | | % | | | | 100 | | % |

| % of fleet | | | [removed: 1] [added: 3] | | % | | | | [removed: —] [added: 1] | | % | | | | — | | % | | | | — | | % | | | | — | | % | | | | 12 | | % | | | | [removed: 24] [added: 18] | | % | | | | [removed: 63] [added: 66] | | % | | | | 100 | | % |

The following table shows the average age of our owned locomotive and freight car fleets at December 31, [removed: 2022] [added: 2023] and information regarding [removed: 2022] [added: 2023] retirements:

| | | | Locomotives | | | | | | [added: | | |] Freight Cars | | | [added: | | |]

| Average age – in service | | | [removed: 27.6] [added: 28.5 | | |] years | | | | | | [removed: 25.9] [added: 25.4 | | |] years | | |

| Retirements | | | [removed: 22] [added: 2 | | |] units | | | | | | [removed: 1,209] [added: 1,744 | | |] units | | |

| Average age – retired | | | [removed: 25.2] [added: 23.0 | | |] years | | | | | | [removed: 45.5] [added: 40.8 | | |] years | | |

Track Maintenance – Of the [removed: 35,100] [added: 35,000] total miles of track on which we operate, we are responsible for maintaining 28,400 miles, with the remainder being operated under trackage rights from other parties responsible for maintenance.

Approximately [removed: 40%] [added: 39%] of our lines, excluding rail operated pursuant to trackage rights, carried 20 million or more gross tons per track mile during [removed: 2022.][added: 2023.]

| Track miles of rail installed | | | [removed: 541] [added: 584] | | | | | | [removed: 458] [added: 541] | | | | | | [removed: 418] [added: 458] | | | | | | [removed: 449] [added: 418] | | | | | | [removed: 416] [added: 449] | | |

| Miles of track surfaced | | | [removed: 4,155] [added: 4,013] | | | | | | [removed: 4,225] [added: 4,155] | | | | | | [removed: 4,785] [added: 4,225] | | | | | | [removed: 5,012] [added: 4,785] | | | | | | [removed: 4,594] [added: 5,012] | | |

| Crossties installed (millions) | | | [removed: 2.2] [added: 2.1] | | | | | | [removed: 2.0] [added: 2.2] | | | | | | [removed: 1.8] [added: 2.0] | | | | | | [removed: 2.4] [added: 1.8] | | | | | | [removed: 2.2] [added: 2.4] | | |

[removed: Traffic Control – Of the 16,200 route miles we dispatch, 11,300 miles are signalized, including] [added: This includes] 8,500 miles [removed: of] [added: governed by] centralized traffic control (CTC) and 2,800 miles [removed: of] [added: utilizing] automatic block signals.

[removed: Of] [added: Within] the 8,500 miles of CTC, 7,600 miles are controlled by data radio [added: systems] originating [removed: at] [added: from] 355 base station radio sites.

[removed: To date,] [added: With the exception of our response to the Eastern Ohio Incident (the “Incident” as defined in Note 17)] such compliance has not had a material effect on our financial position, results of operations, liquidity, or competitive position.

[removed: See] [added: For further information on the Incident and environmental matters, see] Note 17 [added: in Item 8 “Notes] to [removed: the] Consolidated Financial [removed: Statements.][added: Statements.”]

Workforce – We employed an average of [removed: 18,900] [added: 20,300] employees during [removed: 2022,] [added: 2023,] and [removed: 19,300] [added: 20,700] employees at the end of [removed: 2022.][added: 2023.]

| Owned | | | 14,312 | | | | | | 2,676 | | | | | | 1,953 | | | | | | 8,142 | | | | | | 27,083 | | |

| Total | | | 19,137 | | | | | | 4,565 | | | | | | 2,359 | | | | | | 8,983 | | | | | | 35,044 | | |

In 2022, we entered into an asset purchase and sale agreement with the Board of Trustees of the Cincinnati Southern Railway (CSR) to purchase 337 miles of railway line that extends from Cincinnati, Ohio to Chattanooga, Tennessee that we currently operate under a lease.

The transaction is scheduled to close on March 15, 2024.

See further discussion in Item 7 “Management's Discussion and Analysis of Financial Condition and Results of Operations” and Item 8 “Notes to Consolidated Financial Statements.”

Equipment – Our equipment includes owned and leased locomotives and railcars; maintenance of way equipment and machinery; other equipment and tools used in our shops, offices and facilities; and vehicles and other equipment used for maintenance, transportation, and other activities.

Our equipment includes both owned equipment acquired by us, and equipment held under lease arrangements.

| Multiple purpose | | | 3,162 | | | | | | 30 | | | | | | 3,192 | | | | | | 12,471,795 | | |

| Total locomotives | | | 3,306 | | | | | | 30 | | | | | | 3,336 | | | | | | 12,476,195 | | |

| Gondola | | | 18,011 | | | | | | 3,741 | | | | | | 21,752 | | | | | | 2,443,624 | | |

| Hopper | | | 7,672 | | | | | | — | | | | | | 7,672 | | | | | | 876,433 | | |

| Covered hopper | | | 5,384 | | | | | | — | | | | | | 5,384 | | | | | | 598,451 | | |

| Box | | | 2,189 | | | | | | 610 | | | | | | 2,799 | | | | | | 257,694 | | |

| Flat | | | 1,213 | | | | | | 676 | | | | | | 1,889 | | | | | | 135,106 | | |

| Other | | | 1,086 | | | | | | — | | | | | | 1,086 | | | | | | 46,815 | | |

| Total freight cars | | | 35,555 | | | | | | 5,027 | | | | | | 40,582 | | | | | | 4,358,123 | | |

| Intermodal equipment: | | | | | | | | | | | | | | | | | | | | | | | |

| Chassis | | | 38,397 | | | | | | 1,063 | | | | | | 39,460 | | | | | | | | |

| Containers | | | 17,662 | | | | | | — | | | | | | 17,662 | | | | | | | | |

| Roadrailers | | | 1,110 | | | | | | — | | | | | | 1,110 | | | | | | | | |

| | | | | | | | | | | | | | | | | | | | | | | | |

| | | | | | | | | | | | | | | | | | | | | | | | |

| | | | | | | | | | | | | | | | | | | | | | | | |

| Total intermodal equipment | | | 57,169 | | | | | | 1,063 | | | | | | 58,232 | | | | | | | | |

| No. of units | | | — | | | | | | — | | | | | | 1 | | | | | | 10 | | | | | | 36 | | | | | | 225 | | | | | | 242 | | | | | | 2,792 | | | | | | 3,306 | | |

| No. of units | | | 1,043 | | | | | | 236 | | | | | | — | | | | | | — | | | | | | 198 | | | | | | 4,195 | | | | | | 6,401 | | | | | | 23,482 | | | | | | 35,555 | | |

| | | | | | | | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| | | | 2023 | | | | | | 2022 | | | | | | 2021 | | | | | | 2020 | | | | | | 2019 | | |

Traffic Control – Of the 16,200 route miles we dispatch, 11,300 miles incorporate signalization.

Diversity, Equity, and Inclusion – As a leading transportation service company, we recognize that success in the global marketplace relies on the recruitment and retention of top-tier talent, as well as leveraging the expertise and experiences of individuals from all backgrounds.

Our Inclusion Leadership Council, comprised of senior leaders from all departments, our seven employee resource groups, and the Diversity, Equity, and Inclusion strategy team, collaborate closely to implement the plan, articulate measurable goals, and hold ourselves accountable.

| Owned | | | 14,312 | | | | | | 2,676 | | | | | | 1,957 | | | | | | 8,158 | | | | | | 27,103 | | |

| Total | | | 19,137 | | | | | | 4,565 | | | | | | 2,363 | | | | | | 8,999 | | | | | | 35,064 | | |

| Multiple purpose | | | 3,046 | | | | | | — | | | | | | 3,046 | | | | | | 11,845,600 | | |

| Total locomotives | | | 3,190 | | | | | | — | | | | | | 3,190 | | | | | | 11,850,000 | | |

| Gondola | | | 17,391 | | | | | | 2,836 | | | | | | 20,227 | | | | | | 2,265,085 | | |

| Hopper | | | 7,818 | | | | | | — | | | | | | 7,818 | | | | | | 892,800 | | |

| Covered hopper | | | 5,571 | | | | | | — | | | | | | 5,571 | | | | | | 619,424 | | |

| Box | | | 2,530 | | | | | | 703 | | | | | | 3,233 | | | | | | 295,536 | | |

| Flat | | | 1,390 | | | | | | 676 | | | | | | 2,066 | | | | | | 152,719 | | |

| Other | | | 1,555 | | | | | | — | | | | | | 1,555 | | | | | | 69,649 | | |

| Total freight cars | | | 36,255 | | | | | | 4,215 | | | | | | 40,470 | | | | | | 4,295,213 | | |

| Other: | | | | | | | | | | | | | | | | | | | | | | | |

| Chassis | | | 35,393 | | | | | | 1,100 | | | | | | 36,493 | | | | | | | | |

| Containers | | | 18,047 | | | | | | — | | | | | | 18,047 | | | | | | | | |

| Work equipment | | | 5,408 | | | | | | 243 | | | | | | 5,651 | | | | | | | | |

| Vehicles | | | 2,976 | | | | | | 14 | | | | | | 2,990 | | | | | | | | |

| Miscellaneous | | | 2,243 | | | | | | — | | | | | | 2,243 | | | | | | | | |

| Total other | | | 64,067 | | | | | | 1,357 | | | | | | 65,424 | | | | | | | | |

| No. of units | | | — | | | | | | 1 | | | | | | 10 | | | | | | 36 | | | | | | 15 | | | | | | 260 | | | | | | 231 | | | | | | 2,637 | | | | | | 3,190 | | |

| No. of units | | | 236 | | | | | | — | | | | | | — | | | | | | 200 | | | | | | — | | | | | | 4,202 | | | | | | 8,843 | | | | | | 22,774 | | | | | | 36,255 | | |

| | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

We measure

Diversity, Equity, and Inclusion – As a leading transportation service company, we understand that competing in the global marketplace requires recruiting the most qualified, talented, and diverse people.

While our current workforce reflects a broad range of backgrounds and experiences, we continue to focus on building an even more diverse workforce, using technology-driven outreach and multiple recruiting relationships to maintain a robust pipeline of diverse talent.

To underscore our commitment to cultivating a workplace experience where the unique experiences, perspectives, and contributions of all our people are valued, our CEO recently signed the CEO Action for Diversity & Inclusion pledge, which outlines specific actions to create a welcoming environment for discussions and ideas about diversity and inclusion.

To advance that commitment, senior leaders from across the company serve on an Inclusion Leadership Council, which partners with the Diversity, Equity, and Inclusion Strategy team in implementing our enterprise inclusion strategy, articulating measurable goals, and holding ourselves accountable.

Approximately 90%

For information on our legal proceedings, see Note 17 “Commitments and Contingencies” in [removed: the] [added: Item 8 “Notes to] Consolidated Financial [removed: Statements.][added: Statements.”]

for the fiscal year ended December 31, [removed: 2022][added: 2023]

[removed: ][added: ]

The aggregate market value of the voting common equity held by non-affiliates at June 30, [removed: 2022] [added: 2023] was [removed: $53,336,433,209] [added: $51,455,298,277] (based on the closing price as quoted on the New York Stock Exchange on June 30, [removed: 2022).][added: 2023).]

The number of shares outstanding of each of the registrant’s classes of common stock, at January 31, [removed: 2023: 227,782,202] [added: 2024: 225,881,508] (excluding 20,320,777 shares held by the registrant’s consolidated subsidiaries).

| [Part [removed: I.](#if5919fb7593645d283f9ced7c9a90d12_10)] [added: I.](#icc5aa50a10bd4feaa9e3410850067afd_10)] | | | [Items 1 and [removed: 2.](#if5919fb7593645d283f9ced7c9a90d12_13)] [added: 2.](#icc5aa50a10bd4feaa9e3410850067afd_13)] | | | [Business and [removed: Properties](#if5919fb7593645d283f9ced7c9a90d12_13)] [added: Properties](#icc5aa50a10bd4feaa9e3410850067afd_13)] | | | [removed: [K](#if5919fb7593645d283f9ced7c9a90d12_13)[3](#if5919fb7593645d283f9ced7c9a90d12_13)] [added: [K](#icc5aa50a10bd4feaa9e3410850067afd_13)[3](#icc5aa50a10bd4feaa9e3410850067afd_13)] | | |

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| | | | [Item [removed: 3.](#if5919fb7593645d283f9ced7c9a90d12_61)] [added: 3.](#icc5aa50a10bd4feaa9e3410850067afd_61)] | | | [Legal [removed: Proceedings](#if5919fb7593645d283f9ced7c9a90d12_61)] [added: Proceedings](#icc5aa50a10bd4feaa9e3410850067afd_61)] | | | [removed: [K](#if5919fb7593645d283f9ced7c9a90d12_61)[16](#if5919fb7593645d283f9ced7c9a90d12_61)] [added: [K](#icc5aa50a10bd4feaa9e3410850067afd_61)[20](#icc5aa50a10bd4feaa9e3410850067afd_61)] | | |

| | | | [Item [removed: 4.](#if5919fb7593645d283f9ced7c9a90d12_64)] [added: 4.](#icc5aa50a10bd4feaa9e3410850067afd_64)] | | | [Mine Safety [removed: Disclosures](#if5919fb7593645d283f9ced7c9a90d12_64)] [added: Disclosures](#icc5aa50a10bd4feaa9e3410850067afd_64)] | | | [removed: [K](#if5919fb7593645d283f9ced7c9a90d12_64)[16](#if5919fb7593645d283f9ced7c9a90d12_64)] [added: [K](#icc5aa50a10bd4feaa9e3410850067afd_64)[20](#icc5aa50a10bd4feaa9e3410850067afd_64)] | | |

| | | | | | | [Information About Our Executive [removed: Officers](#if5919fb7593645d283f9ced7c9a90d12_67)] [added: Officers](#icc5aa50a10bd4feaa9e3410850067afd_67)] | | | [removed: [K](#if5919fb7593645d283f9ced7c9a90d12_67)[17](#if5919fb7593645d283f9ced7c9a90d12_67)] [added: [K](#icc5aa50a10bd4feaa9e3410850067afd_67)[21](#icc5aa50a10bd4feaa9e3410850067afd_67)] | | |

| [Part [removed: II.](#if5919fb7593645d283f9ced7c9a90d12_70)] [added: II.](#icc5aa50a10bd4feaa9e3410850067afd_70)] | | | [Item [removed: 5.](#if5919fb7593645d283f9ced7c9a90d12_73)] [added: 5.](#icc5aa50a10bd4feaa9e3410850067afd_73)] | | | [Market for Registrant’s Common Equity, Related Stockholder Matters [removed: and](#if5919fb7593645d283f9ced7c9a90d12_73)] [added: and](#icc5aa50a10bd4feaa9e3410850067afd_73)] | | | | | |

| | | | | | | [Issuer Purchases of Equity [removed: Securities](#if5919fb7593645d283f9ced7c9a90d12_73)] [added: Securities](#icc5aa50a10bd4feaa9e3410850067afd_73)] | | | [removed: [K](#if5919fb7593645d283f9ced7c9a90d12_73)[18](#if5919fb7593645d283f9ced7c9a90d12_73)] [added: [K](#icc5aa50a10bd4feaa9e3410850067afd_73)[22](#icc5aa50a10bd4feaa9e3410850067afd_73)] | | |

| | | | [Item [removed: 7.](#if5919fb7593645d283f9ced7c9a90d12_82)] [added: 7.](#icc5aa50a10bd4feaa9e3410850067afd_82)] | | | [Management’s Discussion and Analysis of Financial Condition [removed: and](#if5919fb7593645d283f9ced7c9a90d12_82)] [added: and](#icc5aa50a10bd4feaa9e3410850067afd_82)] | | | | | |

| | | | | | | [Results of [removed: Operations](#if5919fb7593645d283f9ced7c9a90d12_82)] [added: Operations](#icc5aa50a10bd4feaa9e3410850067afd_82)] | | | [removed: [K](#if5919fb7593645d283f9ced7c9a90d12_82)[19](#if5919fb7593645d283f9ced7c9a90d12_82)] [added: [K](#icc5aa50a10bd4feaa9e3410850067afd_82)[23](#icc5aa50a10bd4feaa9e3410850067afd_82)] | | |

| | | | [Item [removed: 7A.](#if5919fb7593645d283f9ced7c9a90d12_118)] [added: 7A.](#icc5aa50a10bd4feaa9e3410850067afd_118)] | | | [Quantitative and Qualitative Disclosures About Market [removed: Risk](#if5919fb7593645d283f9ced7c9a90d12_118)] [added: Risk](#icc5aa50a10bd4feaa9e3410850067afd_118)] | | | [removed: [K](#if5919fb7593645d283f9ced7c9a90d12_118)[32](#if5919fb7593645d283f9ced7c9a90d12_118)] [added: [K](#icc5aa50a10bd4feaa9e3410850067afd_118)[38](#icc5aa50a10bd4feaa9e3410850067afd_118)] | | |

| | | | [Item [removed: 8.](#if5919fb7593645d283f9ced7c9a90d12_121)] [added: 8.](#icc5aa50a10bd4feaa9e3410850067afd_121)] | | | [Financial Statements and Supplementary [removed: Data](#if5919fb7593645d283f9ced7c9a90d12_121)] [added: Data](#icc5aa50a10bd4feaa9e3410850067afd_121)] | | | [removed: [K](#if5919fb7593645d283f9ced7c9a90d12_121)[33](#if5919fb7593645d283f9ced7c9a90d12_121)] [added: [K](#icc5aa50a10bd4feaa9e3410850067afd_121)[39](#icc5aa50a10bd4feaa9e3410850067afd_121)] | | |

| | | | [Item [removed: 9.](#if5919fb7593645d283f9ced7c9a90d12_208)] [added: 9.](#icc5aa50a10bd4feaa9e3410850067afd_208)] | | | [Changes in and Disagreements with Accountants on Accounting [removed: and](#if5919fb7593645d283f9ced7c9a90d12_208)] [added: and](#icc5aa50a10bd4feaa9e3410850067afd_208)] | | | | | |

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| | | | [Item [removed: 9A.](#if5919fb7593645d283f9ced7c9a90d12_211)] [added: 9A.](#icc5aa50a10bd4feaa9e3410850067afd_211)] | | | [Controls and [removed: Procedures](#if5919fb7593645d283f9ced7c9a90d12_211)] [added: Procedures](#icc5aa50a10bd4feaa9e3410850067afd_211)] | | | [removed: [K](#if5919fb7593645d283f9ced7c9a90d12_211)[77](#if5919fb7593645d283f9ced7c9a90d12_211)] [added: [K](#icc5aa50a10bd4feaa9e3410850067afd_211)[86](#icc5aa50a10bd4feaa9e3410850067afd_211)] | | |

| | | | [Item [removed: 9B.](#if5919fb7593645d283f9ced7c9a90d12_214)] [added: 9B.](#icc5aa50a10bd4feaa9e3410850067afd_214)] | | | [Other [removed: Information](#if5919fb7593645d283f9ced7c9a90d12_214)] [added: Information](#icc5aa50a10bd4feaa9e3410850067afd_214)] | | | [removed: [K](#if5919fb7593645d283f9ced7c9a90d12_214)[77](#if5919fb7593645d283f9ced7c9a90d12_214)] [added: [K](#icc5aa50a10bd4feaa9e3410850067afd_214)[87](#icc5aa50a10bd4feaa9e3410850067afd_214)] | | |

| | | | [Item [removed: 9C.](#if5919fb7593645d283f9ced7c9a90d12_217)] [added: 9C.](#icc5aa50a10bd4feaa9e3410850067afd_217)] | | | [Disclosure Regarding Foreign Jurisdictions that Prevent [removed: Inspections](#if5919fb7593645d283f9ced7c9a90d12_217)] [added: Inspections](#icc5aa50a10bd4feaa9e3410850067afd_217)] | | | [removed: [K](#if5919fb7593645d283f9ced7c9a90d12_217)[77](#if5919fb7593645d283f9ced7c9a90d12_217)] [added: [K](#icc5aa50a10bd4feaa9e3410850067afd_217)[87](#icc5aa50a10bd4feaa9e3410850067afd_217)] | | |

| [Part [removed: III.](#if5919fb7593645d283f9ced7c9a90d12_220)] [added: III.](#icc5aa50a10bd4feaa9e3410850067afd_220)] | | | [Item [removed: 10.](#if5919fb7593645d283f9ced7c9a90d12_223)] [added: 10.](#icc5aa50a10bd4feaa9e3410850067afd_223)] | | | [Directors, Executive Officers and Corporate [removed: Governance](#if5919fb7593645d283f9ced7c9a90d12_223)] [added: Governance](#icc5aa50a10bd4feaa9e3410850067afd_223)] | | | [removed: [K](#if5919fb7593645d283f9ced7c9a90d12_223)[78](#if5919fb7593645d283f9ced7c9a90d12_223)] [added: [K](#icc5aa50a10bd4feaa9e3410850067afd_223)[88](#icc5aa50a10bd4feaa9e3410850067afd_223)] | | |

| | | | [Item [removed: 11.](#if5919fb7593645d283f9ced7c9a90d12_226)] [added: 11.](#icc5aa50a10bd4feaa9e3410850067afd_226)] | | | [Executive [removed: Compensation](#if5919fb7593645d283f9ced7c9a90d12_226)] [added: Compensation](#icc5aa50a10bd4feaa9e3410850067afd_226)] | | | [removed: [K](#if5919fb7593645d283f9ced7c9a90d12_226)[78](#if5919fb7593645d283f9ced7c9a90d12_226)] [added: [K](#icc5aa50a10bd4feaa9e3410850067afd_226)[88](#icc5aa50a10bd4feaa9e3410850067afd_226)] | | |

| | | | [Item [removed: 12.](#if5919fb7593645d283f9ced7c9a90d12_229)] [added: 12.](#icc5aa50a10bd4feaa9e3410850067afd_229)] | | | [Security Ownership of Certain Beneficial Owners and [removed: Management](#if5919fb7593645d283f9ced7c9a90d12_229)] [added: Management](#icc5aa50a10bd4feaa9e3410850067afd_229)] | | | | | |

| | | | | | | [and Related Stockholder [removed: Matters](#if5919fb7593645d283f9ced7c9a90d12_229)] [added: Matters](#icc5aa50a10bd4feaa9e3410850067afd_229)] | | | [removed: [K](#if5919fb7593645d283f9ced7c9a90d12_229)[79](#if5919fb7593645d283f9ced7c9a90d12_229)] [added: [K](#icc5aa50a10bd4feaa9e3410850067afd_229)[89](#icc5aa50a10bd4feaa9e3410850067afd_229)] | | |

| | | | [Item [removed: 13.](#if5919fb7593645d283f9ced7c9a90d12_232)] [added: 13.](#icc5aa50a10bd4feaa9e3410850067afd_232)] | | | [Certain Relationships and Related Transactions, and Director [removed: Independence](#if5919fb7593645d283f9ced7c9a90d12_232)] [added: Independence](#icc5aa50a10bd4feaa9e3410850067afd_232)] | | | [removed: [K](#if5919fb7593645d283f9ced7c9a90d12_232)[81](#if5919fb7593645d283f9ced7c9a90d12_232)] [added: [K](#icc5aa50a10bd4feaa9e3410850067afd_232)[91](#icc5aa50a10bd4feaa9e3410850067afd_232)] | | |

| | | | [Item [removed: 14.](#if5919fb7593645d283f9ced7c9a90d12_235)] [added: 14.](#icc5aa50a10bd4feaa9e3410850067afd_235)] | | | [Principal Accountant Fees and [removed: Services](#if5919fb7593645d283f9ced7c9a90d12_235)] [added: Services](#icc5aa50a10bd4feaa9e3410850067afd_235)] | | | [removed: [K](#if5919fb7593645d283f9ced7c9a90d12_235)[81](#if5919fb7593645d283f9ced7c9a90d12_235)] [added: [K](#icc5aa50a10bd4feaa9e3410850067afd_235)[91](#icc5aa50a10bd4feaa9e3410850067afd_235)] | | |

| [Part [removed: IV.](#if5919fb7593645d283f9ced7c9a90d12_238)] [added: IV.](#icc5aa50a10bd4feaa9e3410850067afd_238)] | | | [Item [removed: 15.](#if5919fb7593645d283f9ced7c9a90d12_241)] [added: 15.](#icc5aa50a10bd4feaa9e3410850067afd_241)] | | | [Exhibits and Financial Statement [removed: Schedule](#if5919fb7593645d283f9ced7c9a90d12_241)] [added: Schedules](#icc5aa50a10bd4feaa9e3410850067afd_241)] | | | [removed: [K](#if5919fb7593645d283f9ced7c9a90d12_241)[82](#if5919fb7593645d283f9ced7c9a90d12_241)] [added: [K](#icc5aa50a10bd4feaa9e3410850067afd_241)[92](#icc5aa50a10bd4feaa9e3410850067afd_241)] | | |

| | | | [Item [removed: 16.](#if5919fb7593645d283f9ced7c9a90d12_244)] [added: 16.](#icc5aa50a10bd4feaa9e3410850067afd_244)] | | | [Form 10-K [removed: Summary](#if5919fb7593645d283f9ced7c9a90d12_244)] [added: Summary](#icc5aa50a10bd4feaa9e3410850067afd_244)] | | | [removed: K[90](#if5919fb7593645d283f9ced7c9a90d12_244)] [added: K[101](#icc5aa50a10bd4feaa9e3410850067afd_244)] | | |

| | | | | | | [Power of [removed: Attorney](#if5919fb7593645d283f9ced7c9a90d12_247)] [added: Attorney](#icc5aa50a10bd4feaa9e3410850067afd_247)] | | | [removed: [K](#if5919fb7593645d283f9ced7c9a90d12_247)[91](#if5919fb7593645d283f9ced7c9a90d12_247)] [added: [K](#icc5aa50a10bd4feaa9e3410850067afd_247)[102](#icc5aa50a10bd4feaa9e3410850067afd_247)] | | |

| | | | | | | [removed: [Signatures](#if5919fb7593645d283f9ced7c9a90d12_250)] [added: [Signatures](#icc5aa50a10bd4feaa9e3410850067afd_250)] | | | [removed: [K](#if5919fb7593645d283f9ced7c9a90d12_250)[91](#if5919fb7593645d283f9ced7c9a90d12_250)] [added: [K](#icc5aa50a10bd4feaa9e3410850067afd_250)[102](#icc5aa50a10bd4feaa9e3410850067afd_250)] | | |

| | | | [Item 1C.](#icc5aa50a10bd4feaa9e3410850067afd_2397) | | | [Cybersecurity](#icc5aa50a10bd4feaa9e3410850067afd_2397) | | | [K17](#icc5aa50a10bd4feaa9e3410850067afd_2397) | | |

| | | | [Item 6.](#icc5aa50a10bd4feaa9e3410850067afd_2425) | | | [\[Reserved\]](#icc5aa50a10bd4feaa9e3410850067afd_2425) | | | [K22](#icc5aa50a10bd4feaa9e3410850067afd_2425) | | |

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CYBERSECURITY RISK MANAGEMENT AND STRATEGY

Process

We use a multi-layered defensive cybersecurity strategy based on the cyber security framework drafted by the NIST.

The NIST CSF is a voluntary framework of best practices to identify, protect, detect, respond to, and recover from cybersecurity matters.

Based on the NIST CSF, our processes to identify, assess, and manage material risks from cybersecurity threats includes the following:

Identify

We identify risks from cybersecurity threats by first developing and maintaining an understanding of those assets essential to our operation and reputation, as well as assets that could provide value to threat actors.

Any cyber act is considered a potential risk if a threat actor can use it to reduce the value of an asset, reduce our ability to utilize or otherwise access the value of an asset, or surreptitiously gain or increase their access to an asset or its value.

Assess

We assess risks from cybersecurity threats by evaluating exposure of our assets to identified cyber risks, as well as potential impacts to our operations or reputation from our inability to access or utilize an asset or realize its value, or a threat actor’s ability to gain access to an asset or its value.

We further evaluate the potential materiality of these risks based on the potential impact to our operations or reputation.

Manage

We mitigate risks from cybersecurity threats by applying multiple layers of defense to ensure we have the continued ability to access or utilize an asset or its value, and deny threat actors the ability to gain or increase their access to an asset or its value.

We prioritize defensive mechanisms, including administrative,

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procedural, and technical controls, according to their relative cost and reduction in risk based on the NIST CSF.

We further monitor, test, assess, and update these processes, including working with government agencies and peers to implement practices to guard against an evolving threat environment and to ensure we remain compliant with relevant regulatory requirements.

Integration into our Risk Management Framework

Our processes to assess, identify, and manage cybersecurity risks are expressly incorporated into our enterprise risk management (ERM) framework, which includes technology as one of the five primary risk categories addressed by the ERM framework, with cybersecurity risks being one of the three subcategories within the technology risk category.

As a result, our ERM leadership team works with the Chief Information Officer (CIO) and Chief Information Security Officer (CISO) to define the top areas of risk in both the technology and cybersecurity areas, with such risks incorporated into our ERM framework and mapped to the NIST CSF.

Our internal ERM leadership also meets on a quarterly basis with our technology risk working group, comprised of leaders across the information technology, information security and law departments, to monitor developments in the threat landscape so that key cybersecurity threats impacting the Company continue to be identified and prioritized.

Third-Party Engagement

We employ multiple service providers from time to time to perform periodic reviews and evaluations of our cybersecurity framework, the results of which are provided to and reviewed with management, with appropriate reporting to the Finance and Risk Management Committee (F&RM Committee) of the Board.

These reviews encompass a broad range of areas, including information technology system resilience, cybersecurity risk assessments, information security program assessments, external threat environment reviews, internal cybersecurity policy compliance, and near-term incident response to identify or disconfirm potential involvement of a threat actor.

Oversight of Third-Party Providers

Within our purchasing and third-party vendor management programs, we require all vendors who handle our data as well as vendors who provide technology and data services – including hardware, software, staffing, and support – to maintain certain security protections including, but not limited to, compliance with applicable data protection laws, and implementation of administrative, physical and technical safeguards to protect our data, including how our data is stored, accessed and transmitted.

In addition, all providers within these service categories must sign our data security attachment that articulates the specific security standards, cybersecurity insurance, and mandatory incident reporting protocols applicable to the underlying provision of services.

Risks

Please see Item 1A.

Risk Factors – Operational Risks – “A significant cybersecurity incident or other disruption to our technology infrastructure could disrupt our business operations” for our disclosures regarding the most pertinent risks we may experience from cybersecurity threats.

As noted therein, regardless of the cause, a significant disruption or failure of one or more information or operational technology systems operated by us or under control of third parties can result in service disruptions, unauthorized access to our systems, viruses, ransomware, and/or compromise, acquisition, or destruction of our data.

Such a direct or indirect cybersecurity incident could interrupt our service, cause safety failures or operational difficulties, decrease revenues, increase operating costs, impact our efficiency, damage our corporate reputation, and/or expose us to litigation, government action, increased regulation, penalties, fines or judgments, any or all

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which may ultimately have a materially adverse effect on our results of operations, financial condition, reputation, and business (including our strategy of operating a resilient freight railroad).

While we have previously experienced technology outages and cybersecurity events that have impacted our systems and service, future events may result in more significant impacts to our operations, reputation or financial results.

As a result of these prior events, and given the potential risks that a technology outage or cybersecurity event would result in a materially adverse effect on our results of operations, financial condition, reputation, or business, we have conducted and will continue conducting, internal and third-party assessments of information technology and cybersecurity vulnerabilities, information technology resiliency, and our related processes and procedures, so that we can continue to identify and address key cybersecurity risks.

CYBERSECURITY GOVERNANCE

Board Oversight

The Norfolk Southern Board, through the F&RM Committee, has direct oversight of cybersecurity risks.

The F&RM Committee receives periodic reports from the CIO and CISO regarding the primary technology risks impacting the company, including risks impacting our information and operational systems, service resiliency, cybersecurity risks, and the related threat environment.

Our executive officers generally are elected and designated annually by the Board [removed: of Directors (Board)] at its first meeting held after the annual meeting of stockholders, and they hold office until their successors are elected.

The following table sets forth certain information, at February 1, [removed: 2023,] [added: 2024,] relating to our officers.

| Alan H. Shaw, [removed: 55,] [added: 56,] President and Chief Executive Officer | | | Present position since May 1, 2022. Served as President from December 1, 2021 to May 1, 2022. Served as Executive Vice President and Chief Marketing Officer from May 16, 2015 to December 1, 2021. | | |

| Ann A. Adams, [removed: 52,] [added: 53,] Executive Vice President and Chief Transformation Officer | | | Present position since April 1, 2019. Served as Vice President Human Resources from April 1, 2016 to April 1, 2019. | | |

| Paul B. Duncan, [removed: 43,] [added: 44,] Executive Vice President and Chief Operating Officer | | | Present position since January 1, 2023. Served as Senior Vice President Transportation [removed: &] [added: and] Network Operations from September 1, 2022 to January 1, 2023. Served as Vice President Network Planning [removed: &] [added: and] Operations from March 1, 2022 to September 1, 2022. Prior to joining Norfolk Southern, served as Vice President of Service Design and Performance for BNSF Railway from October 1, 2018 to March 1, [removed: 2022 and as Assistant Vice President for Capacity Planning from June 1, 2015 to October 1, 2018.] [added: 2022.] | | |

| Claude E. Elkins, Jr., [removed: 57,] [added: 58,] Executive Vice President and Chief Marketing Officer | | | Present position since December 1, 2021. Served as Vice President Industrial Products from April 1, 2018 to December 1, 2021. [removed: Served as Group Vice President Chemicals from March 1, 2016 to April 1, 2018.] | | |

| Mark R. George, [removed: 55,] [added: 56,] Executive Vice President and Chief Financial Officer | | | Present position since November 1, 2019. Prior to joining Norfolk Southern, served as Vice President, Finance and Chief Financial Officer at segments of United Technologies Corporation. The positions were Vice President Finance, Strategy, IT and Chief Financial Officer at Otis Elevator Company from October 2015 to May 2019, and Vice President Finance and Chief Financial Officer at Carrier Corporation from June 2019 until joining Norfolk Southern. | | |

| Nabanita C. Nag, [removed: 47,] [added: 48,] Executive Vice President and Chief Legal Officer | | | Present position since July 1, 2022. Served as Senior Vice President [removed: &] [added: and] Chief Legal Officer from March 1, 2022 to July 1, 2022. Served as General Counsel - Corporate from August 31, 2020 to March 1, 2022. Prior to joining Norfolk Southern, served as Vice President [removed: &] [added: and] Corporate Counsel in the Financial Management Law Group at Prudential Financial from March 3, 2014 to August 1, 2020. | | |

| Claiborne L. Moore, [removed: 43,] [added: 44,] Vice President and Controller | | | Present position since March 1, 2022. Served as Assistant Vice President Corporate Accounting from March 15, 2019 to March 1, 2022. Served as Director Investor Relations from July 1, 2017 to March 15, 2019. | | |

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Common Stock is owned by [removed: 19,796] [added: 18,962] stockholders of record as of December 31, [removed: 2022,] [added: 2023,] and is traded on the New York Stock Exchange under the symbol “NSC.”

| Period | | | | | | Total Number of Shares (or Units) Purchased(1) | | | | | | Average Price Paid per Share (or Unit) | | | | | | Total Number of Shares (or Units) Purchased as Part of [added: the] Publicly Announced Plans or Programs(2) | | | | | | [removed: Maximum Number (or Approximate] [added: Approximate] Dollar [removed: Value)] [added: Value] of Shares [removed: (or Units) that] [added: that] may yet be Purchased [removed: under the Plans] [added: under the Publicly Announced Plans] or Programs(2) | | |

(1)Of this amount, [removed: 174] [added: 4,104] represent shares tendered by employees in connection with the exercise of stock options under the stockholder-approved Long-Term Incentive Plan (LTIP).

| October 1-31, 2023 | | | | | | 270,465 | | | | | | $ | 197.70 | | | | | 269,938 | | | | | | $ | 6,933,309,430 | |

| November 1-30, 2023 | | | | | | 159,957 | | | | | | 202.48 | | | | | | 156,646 | | | | | | 6,901,566,364 | | |

| December 1-31, 2023 | | | | | | 145,664 | | | | | | 229.80 | | | | | | 145,398 | | | | | | 6,868,152,575 | | |

| Total | | | | | | 576,086 | | | | | | | | | | | | 571,982 | | | | | | | | |

As of December 31, 2023, $6.9 billion remains authorized for repurchase, until such amount is exhausted.

| October 1-31, 2022 | | | | | | 1,027,142 | | | | | | $ | 217.12 | | | | | 1,027,142 | | | | | | $ | 8,092,825,748 | |

| November 1-30, 2022 | | | | | | 1,023,706 | | | | | | 243.00 | | | | | | 1,023,706 | | | | | | 7,844,066,906 | | |

| December 1-31, 2022 | | | | | | 1,422,612 | | | | | | 249.05 | | | | | | 1,422,438 | | | | | | 7,489,805,905 | | |

| Total | | | | | | 3,473,460 | | | | | | | | | | | | 3,473,286 | | | | | | | | |

As of December 31, 2022, $7.5 billion remains authorized for repurchase.

Our previous share repurchase program terminated on March 31, 2022.

K18

K22

| [Report of [removed: Management](#if5919fb7593645d283f9ced7c9a90d12_127)] [added: Management](#icc5aa50a10bd4feaa9e3410850067afd_127)] | | | [removed: [K](#if5919fb7593645d283f9ced7c9a90d12_127)[34](#if5919fb7593645d283f9ced7c9a90d12_127)] [added: [K](#icc5aa50a10bd4feaa9e3410850067afd_127)[40](#icc5aa50a10bd4feaa9e3410850067afd_127)] | | |

| [removed: [Reports] [added: [Report] of Independent Registered Public Accounting [removed: Firm](#if5919fb7593645d283f9ced7c9a90d12_130)] [added: Firm](#icc5aa50a10bd4feaa9e3410850067afd_130)] | | | [removed: [K](#if5919fb7593645d283f9ced7c9a90d12_130)[35](#if5919fb7593645d283f9ced7c9a90d12_130)] [added: [K](#icc5aa50a10bd4feaa9e3410850067afd_130)[41](#icc5aa50a10bd4feaa9e3410850067afd_130)] | | |

| [Consolidated Statements of [removed: Income](#if5919fb7593645d283f9ced7c9a90d12_136)] [added: Comprehensive Income](#icc5aa50a10bd4feaa9e3410850067afd_139)] [Years ended December [removed: 31,] [added: 31,](#icc5aa50a10bd4feaa9e3410850067afd_139) [](#icc5aa50a10bd4feaa9e3410850067afd_139)[2023,] 2022, [removed: 2021,] and [removed: 2020](#if5919fb7593645d283f9ced7c9a90d12_136)] [added: 2021](#icc5aa50a10bd4feaa9e3410850067afd_136)] | | | [removed: [K](#if5919fb7593645d283f9ced7c9a90d12_136)[39](#if5919fb7593645d283f9ced7c9a90d12_136)] [added: [K](#icc5aa50a10bd4feaa9e3410850067afd_139)[46](#icc5aa50a10bd4feaa9e3410850067afd_139)] | | |

| [Consolidated Statements of [removed: Comprehensive Income](#if5919fb7593645d283f9ced7c9a90d12_139)] [added: Income](#icc5aa50a10bd4feaa9e3410850067afd_136)] [Years ended December 31, [removed: 2022, 2021,] [added: 202](#icc5aa50a10bd4feaa9e3410850067afd_136)[3](#icc5aa50a10bd4feaa9e3410850067afd_136)[, 202](#icc5aa50a10bd4feaa9e3410850067afd_136)[2](#icc5aa50a10bd4feaa9e3410850067afd_136)[,] and [removed: 2020](#if5919fb7593645d283f9ced7c9a90d12_139)] [added: 202](#icc5aa50a10bd4feaa9e3410850067afd_136)[1](#icc5aa50a10bd4feaa9e3410850067afd_136)] | | | [removed: [K](#if5919fb7593645d283f9ced7c9a90d12_139)[40](#if5919fb7593645d283f9ced7c9a90d12_139)] [added: [K](#icc5aa50a10bd4feaa9e3410850067afd_136)[45](#icc5aa50a10bd4feaa9e3410850067afd_136)] | | |

| [Consolidated Balance [removed: Sheets](#if5919fb7593645d283f9ced7c9a90d12_142)] [added: Sheets](#icc5aa50a10bd4feaa9e3410850067afd_142)] [At December 31, [removed: 2022] [added: 2023] and [removed: 2021](#if5919fb7593645d283f9ced7c9a90d12_142)] [added: 2022](#icc5aa50a10bd4feaa9e3410850067afd_142)] | | | [removed: [K](#if5919fb7593645d283f9ced7c9a90d12_142)[41](#if5919fb7593645d283f9ced7c9a90d12_142)] [added: [K](#icc5aa50a10bd4feaa9e3410850067afd_142)[47](#icc5aa50a10bd4feaa9e3410850067afd_142)] | | |

| [Consolidated Statements of Cash [removed: Flows](#if5919fb7593645d283f9ced7c9a90d12_145)] [added: Flows](#icc5aa50a10bd4feaa9e3410850067afd_145)] [Years ended December [removed: 31,] [added: 31,](#icc5aa50a10bd4feaa9e3410850067afd_145) [2023,] 2022, [removed: 2021,] and [removed: 2020](#if5919fb7593645d283f9ced7c9a90d12_145)] [added: 2021](#icc5aa50a10bd4feaa9e3410850067afd_136)] | | | [removed: [K](#if5919fb7593645d283f9ced7c9a90d12_145)[42](#if5919fb7593645d283f9ced7c9a90d12_145)] [added: [K](#icc5aa50a10bd4feaa9e3410850067afd_145)[48](#icc5aa50a10bd4feaa9e3410850067afd_145)] | | |

| [Consolidated Statements of Changes in Stockholders’ [removed: Equity](#if5919fb7593645d283f9ced7c9a90d12_148)] [added: Equity](#icc5aa50a10bd4feaa9e3410850067afd_148)] [Years ended December [removed: 31,] [added: 31,](#icc5aa50a10bd4feaa9e3410850067afd_148) [2023,] 2022, [removed: 2021,] and [removed: 2020](#if5919fb7593645d283f9ced7c9a90d12_148)] [added: 2021](#icc5aa50a10bd4feaa9e3410850067afd_136)] | | | [removed: [K](#if5919fb7593645d283f9ced7c9a90d12_148)[43](#if5919fb7593645d283f9ced7c9a90d12_148)] [added: [K](#icc5aa50a10bd4feaa9e3410850067afd_148)[49](#icc5aa50a10bd4feaa9e3410850067afd_148)] | | |

| [Notes to Consolidated Financial [removed: Statements](#if5919fb7593645d283f9ced7c9a90d12_151)] [added: Statements](#icc5aa50a10bd4feaa9e3410850067afd_151)] | | | [removed: [K](#if5919fb7593645d283f9ced7c9a90d12_151)[44](#if5919fb7593645d283f9ced7c9a90d12_151)] [added: [K](#icc5aa50a10bd4feaa9e3410850067afd_151)[50](#icc5aa50a10bd4feaa9e3410850067afd_151)] | | |

| [Index to Financial Statement [removed: Schedule in] [added: Schedule](#icc5aa50a10bd4feaa9e3410850067afd_241)[s](#icc5aa50a10bd4feaa9e3410850067afd_241) [in] Item [removed: 15](#if5919fb7593645d283f9ced7c9a90d12_241)] [added: 15](#icc5aa50a10bd4feaa9e3410850067afd_241)] | | | [removed: [K](#if5919fb7593645d283f9ced7c9a90d12_241)[82](#if5919fb7593645d283f9ced7c9a90d12_241)] [added: [K](#icc5aa50a10bd4feaa9e3410850067afd_241)[92](#icc5aa50a10bd4feaa9e3410850067afd_241)] | | |

In order to ensure that Norfolk Southern’s internal control over financial reporting is effective, management regularly assesses such controls and did so most recently as of December 31, [removed: 2022.][added: 2023.]

Based on this assessment, management has concluded that we maintained effective internal control over financial reporting as of December 31, [removed: 2022.][added: 2023.]

KPMG LLP, independent registered public accounting firm, has audited our financial statements and issued an [removed: attestation report] [added: opinion] on our internal control over financial reporting as of December 31, [removed: 2022.][added: 2023.]

[removed: *Opinion] [added: *Opinions] on [added: the Consolidated Financial Statements and] Internal Control Over Financial Reporting*

We [added: also] have audited [removed: Norfolk Southern Corporation and subsidiaries’ (the Company)] [added: the Company’s] internal control over financial reporting as of December 31, [removed: 2022,] [added: 2023,] based on criteria established in *Internal Control – Integrated Framework (2013)* issued by the Committee of Sponsoring Organizations of the Treadway Commission.

[removed: In] [added: Also in] our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, [removed: 2022,] [added: 2023] based on criteria established in *Internal Control – Integrated Framework (2013)* issued by the Committee of Sponsoring Organizations of the Treadway Commission.

We [removed: also] have [removed: audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB),] [added: audited] the [added: accompanying] consolidated balance sheets of [removed: the Company] [added: Norfolk Southern Corporation and subsidiaries (the Company)] as of December 31, [removed: 2022] [added: 2023] and [removed: 2021,] [added: 2022,] the related consolidated statements of income, comprehensive income, cash flows, and changes in stockholders’ equity for each of the years in the three-year period ended December 31, [removed: 2022,] [added: 2023,] and the related notes and financial statement schedule of valuation and qualifying accounts as listed in Item 15(A)2 (collectively, the consolidated financial [removed: statements), and our report dated February 3, 2023 expressed an unqualified opinion on those consolidated financial statements.][added: statements).]

*Basis for [removed: Opinion*][added: Opinions*]

The Company’s management is responsible for [added: these consolidated financial statements, for] maintaining effective internal control over financial [removed: reporting] [added: reporting,] and for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying Management's Annual Report on Internal Control Over Financial Reporting.

Our responsibility is to express an opinion on the Company’s [added: consolidated financial statements and an opinion on the Company’s] internal control over financial reporting based on our [removed: audit.][added: audits.]

We are a public accounting firm registered with the [removed: PCAOB] [added: Public Company Accounting Oversight Board (United States) (PCAOB)] and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

Those standards require that we plan and perform the [removed: audit] [added: audits] to obtain reasonable assurance about whether [added: the consolidated financial statements are free of material misstatement, whether due to error or fraud, and whether] effective internal control over financial reporting was maintained in all material respects.

Our [removed: audit] [added: audits] also included performing such other procedures as we considered necessary in the circumstances.

We believe that our [removed: audit provides] [added: audits provide] a reasonable basis for our [removed: opinion.][added: opinions.]

In our opinion, the consolidated financial statements [added: referred to above] present fairly, in all material respects, the financial position of the Company as of December 31, [removed: 2022] [added: 2023] and [removed: 2021,] [added: 2022,] and the results of its operations and its cash flows for each of the years in the [removed: three‑year] [added: three-year] period ended December 31, [removed: 2022,] [added: 2023,] in conformity with U.S. generally accepted accounting principles.

Our audits [added: of the consolidated financial statements] included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks.

*Critical Audit [removed: Matter*][added: Matters*]

The critical audit [removed: matter] [added: matters] communicated below [removed: is a matter] [added: are matters] arising from the current period audit of the consolidated financial statements that [removed: was] [added: were] communicated or required to be communicated to the audit committee and that: (1) [removed: relates] [added: relate] to accounts or disclosures that are material to the consolidated financial statements and (2) involved our especially challenging, subjective, or complex judgments.

The communication of [removed: a] critical audit [removed: matter] [added: matters] does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit [removed: matter] [added: matters] below, providing [removed: a] separate [removed: opinion] [added: opinions] on the critical audit [removed: matter] [added: matters] or on the accounts or disclosures to which [removed: it relates.][added: they relate.]

The Company has recorded [removed: $32,156] [added: $33,326] million in net book value of properties at December 31, [removed: 2022] [added: 2023] and has recorded [removed: $1,948] [added: $2,349] million in property additions for the year ended December 31, [removed: 2022.][added: 2023.]

The following are the primary procedures [added: that] we performed to address this critical audit matter.

For a sample of property [removed: addition] [added: additions] expenditures, we inquired and inspected support to evaluate that the expenditure extended an asset’s useful life or increased its utility.

| | | | [removed: 2022] [added: 2023] | | | | | | [removed: 2021] [added: 2022] | | | | | | [removed: 2020] [added: 2021] | | |

| Railway operating revenues | | | $ | [removed: 12,745] [added: 12,156] | | | | | $ | [removed: 11,142] [added: 12,745] | | | | | $ | [removed: 9,789] [added: 11,142] | |

| Compensation and benefits | | | [removed: 2,621] [added: 2,819] | | | | | | [removed: 2,442] [added: 2,621] | | | | | | [removed: 2,373] [added: 2,442] | | |

| Purchased services and rents | | | [removed: 1,922] [added: 2,070] | | | | | | [removed: 1,726] [added: 1,922] | | | | | | [removed: 1,687] [added: 1,726] | | |

| Fuel | | | [removed: 1,459] [added: 1,170] | | | | | | [removed: 799] [added: 1,459] | | | | | | [removed: 535] [added: 799] | | |

| Depreciation | | | [removed: 1,221] [added: 1,298] | | | | | | [removed: 1,181] [added: 1,221] | | | | | | [removed: 1,154] [added: 1,181] | | |

| Materials and other | | | [removed: 713] [added: 832] | | | | | | [removed: 547] [added: 713] | | | | | | [removed: 653] [added: 547] | | |

| Total railway operating expenses | | | [removed: 7,936] [added: 9,305] | | | | | | [removed: 6,695] [added: 7,936] | | | | | | [removed: 6,787] [added: 6,695] | | |

| Income from railway operations | | | [removed: 4,809] [added: 2,851] | | | | | | [removed: 4,447] [added: 4,809] | | | | | | [removed: 3,002] [added: 4,447] | | |

The following are the primary procedures we performed to address the critical audit matter.

*Eastern Ohio Incident*

As discussed in Note 17 to the consolidated financial statements, the Company has recognized $464 million of liabilities attributable to the Eastern Ohio Incident (the Incident) as of December 31, 2023.

For the year-ended December 31, 2023, the Company has recognized $1,116 million of expenses for costs directly attributable to the Incident, which is presented net of $101 million in insurance recoveries in the Consolidated Statements of Income.

As of December 31, 2023, the Company recognized probable and reasonably estimable liabilities for environmental matters and legal proceedings and claims (non-environmental).

The Company also disclosed certain legal proceedings and claims (non-environmental) where a loss is reasonably possible, but not probable, or is probable but not reasonably estimable, for which no accrual was established.

In addition, as a result of the Incident, the Company disclosed that it is subject to inquiries and investigations by various government authorities and regulatory agencies.

We identified the evaluation of the recognition and measurement of liabilities for environmental matters, legal proceedings and claims (non-environmental) and inquiries and investigations arising from the Incident and the sufficiency of the related disclosures as a critical audit matter.

A high degree of subjective auditor judgment was required to evaluate certain judgments and assumptions made by management when assessing the likelihood and magnitude of losses incurred and determining whether reasonable estimates of losses can be made.

Specifically, the key judgments and assumptions related to the following:

- the nature and extent of future cleanup and removal activities and the extent and duration of governmental oversight

- the final outcome of the legal proceedings and claims (non-environmental)

- the final outcome of any current or future inquiries and investigations arising from the Incident.

We evaluated the design and tested the operating effectiveness of certain internal controls over the Company’s processes to 1) recognize and measure liabilities associated with environmental matters, legal proceedings and claims (non-environmental), and inquiries and investigations and 2) prepare the related financial statement disclosures.

We evaluated the Company's assessment of the likelihood and magnitude of losses being incurred including whether the estimates of losses are reasonably estimable for liabilities associated with the Incident by:

- assessing the estimates of environmental cleanup and remediation liabilities by comparing them to incurred costs

- inquiring of management regarding the expected timeline for both probable and reasonably estimable costs for soil and water disposal and air monitoring activities as well as related governmental oversight

- obtaining a legal confirmation letter from external legal counsel, and inquiring of the Company’s internal and external legal counsel regarding the likelihood and magnitude of losses related to environmental matters, legal proceedings and claims (non-environmental) and inquiries and investigations

- obtaining and inspecting correspondence with government authorities and regulatory agencies for environmental matters, legal proceedings and claims (non-environmental) and inquiries and investigations.

We evaluated whether the Company’s disclosures were appropriate and consistent with the information obtained in our procedures.

February 5, 2024

| Eastern Ohio incident | | | 1,116 | | | | | | — | | | | | | — | | |

| Depreciation | | | 1,298 | | | | | | 1,221 | | | | | | 1,181 | | |

| $5.40 per share | | | | | | | | | | | | | | | | | | | | | (1,225) | | | | | | (1,225) | | |

| Share repurchases | | | (3) | | | | | | (24) | | | | | | | | | | | | (600) | | | | | | (627) | | |

| Balance at December 31, 2023 | | | $ | 227 | | | | | $ | 2,179 | | | | | $ | (320) | | | | | $ | 10,695 | | | | | $ | 12,781 | |

Certain prior year information has been reclassified to conform to current year presentation.

In November 2023, the FASB issued ASU 2023-07, “*Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures.*” This update requires additional reportable segment disclosures, primarily through enhanced disclosures about significant segment expenses and information used to assess performance.

The ASU is effective for fiscal years beginning after December 15, 2023 and interim periods within fiscal years beginning after December 15, 2024.

We will not early adopt the standard and are currently evaluating the effect on our financial statements.

In December 2023, the FASB issued ASU 2023-09, “*Income Taxes (Topic 740): Improvements to Income Tax Disclosures.*” This update requires additional disclosures including greater disaggregation of information in the reconciliation of the statutory rate to the effective rate and income taxes paid disaggregated by jurisdiction.

The ASU is effective for fiscal years ending after December 15, 2024.

We will not early adopt the standard and are currently evaluating the effect on our financial statements.

| Total | | | $ | 191 | | | | | $ | 13 | | | | | $ | 77 | |

| Tax credits | | | (27) | | | | | | (1.2) | | | | | | (10) | | | | | | (0.2) | | | | | | (10) | | | | | | (0.3) | | |

| Other, net | | | (32) | | | | | | (1.4) | | | | | | (4) | | | | | | (0.2) | | | | | | (36) | | | | | | (1.0) | | |

| | | | 2023 | | | | | | 2022 | | |

| Reductions for tax positions of prior years | | | (1) | | | | | | — | | |

| | | | 2023 | | | | | | | | | | | | 2022 | | | | | | | | |

| | | | 2023 | | | | | | 2022 | | |

K33

February 3, 2023

Norfolk Southern Corporation:

K34

Report of Independent Registered Public Accounting Firm

To the Stockholders and Board of Directors

We conducted our audit in accordance with the standards of the PCAOB.

K35

/s/ KPMG LLP

KPMG LLP

Atlanta, Georgia

K36

*Opinion on the Consolidated Financial Statements*

We have audited the accompanying consolidated balance sheets of Norfolk Southern Corporation and subsidiaries (the Company) as of December 31, 2022 and 2021, the related consolidated statements of income, comprehensive income, cash flows, and changes in stockholders’ equity for each of the years in the three‑year period ended December 31, 2022, and the related notes and financial statement schedule of valuation and qualifying accounts as listed in Item 15(A)2 (collectively, the consolidated financial statements).

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company’s internal control over financial reporting as of December 31, 2022, based on criteria established in *Internal Control – Integrated Framework (2013)* issued by the Committee of Sponsoring Organizations of the Treadway Commission, and our report dated February 3, 2023 expressed an unqualified opinion on the effectiveness of the Company’s internal control over financial reporting.

These consolidated financial statements are the responsibility of the Company’s management.

Our responsibility is to express an opinion on these consolidated financial statements based on our audits.

Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud.

We believe that our audits provide a reasonable basis for our opinion.

K37

K38

| Loss on asset disposal | | | — | | | | | | — | | | | | | 385 | | |

| | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| | | | *($ in millions)* | | | | | | | | |

| Impairment of investment | | | — | | | | | | — | | | | | | 99 | | |

| Balance at December 31, 2019 | | | $ | 259 | | | | | $ | 2,209 | | | | | $ | (491) | | | | | $ | 13,207 | | | | | $ | 15,184 | |

| $3.76 per share | | | | | | | | | | | | | | | | | | | | | (960) | | | | | | (960) | | |

| Share repurchases | | | (7) | | | | | | (59) | | | | | | | | | | | | (1,373) | | | | | | (1,439) | | |

In December 2019, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 2019-12, “*Simplifying the Accounting for Income Taxes*,” which added new guidance to simplify the accounting for income taxes, changed the accounting for certain income tax transactions, and made other minor changes.

We adopted the standard on January 1, 2021 and there was no material impact to the financial statements upon adoption.

There were no non-current customer receivables at December 31, 2022, while “Other assets” on the

Consolidated Balance Sheets included $23 million at December 31, 2021.

| Total | | | $ | 13 | | | | | $ | 77 | | | | | $ | 153 | |

| Excess tax benefits on stock-based compensation | | | (18) | | | | | | (0.4) | | | | | | (25) | | | | | | (0.6) | | | | | | (39) | | | | | | (1.5) | | |

| Other, net | | | 1 | | | | | | — | | | | | | (25) | | | | | | (0.7) | | | | | | (60) | | | | | | (2.4) | | |

January 1, 2023 through January 1, 2031.

thereafter.

Impairment of Investment

In 2020, we recorded an other-than-temporary impairment of $99 million related to the carrying value of an equity method investment.

Our Chief Executive Officer and Chief Financial Officer, with the assistance of management, evaluated the effectiveness of our disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (Exchange Act)) at December 31, [removed: 2022.][added: 2023.]

Based on such evaluation, our officers have concluded that, at December 31, [removed: 2022,] [added: 2023,] our disclosure controls and procedures were effective to ensure that information required to be disclosed in our reports under the Exchange Act is recorded, processed, summarized, and reported, within the time period specified in the SEC’s rules and forms, and that such information is accumulated and communicated to management, including the Chief Executive Officer and the Chief Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.

We have issued a report of our assessment of internal control over financial reporting, and our independent registered public accounting firm has issued an [removed: attestation report] [added: opinion] on our internal control over financial reporting at December 31, [removed: 2022.][added: 2023.]

During the fourth quarter of [removed: 2022,] [added: 2023,] we have not identified any changes in internal control over financial reporting that have materially affected, or are reasonably likely to materially effect, our internal control over financial reporting.

K86

Director and Officer Trading Arrangements

None of our directors or officers (as defined in Rule 16a-1(f) of the Exchange Act) adopted or terminated a Rule 10b5-1 trading arrangement or a non-Rule 10b5-1 trading arrangement (as defined in Item 408(c) of Regulation S-K) during the fourth quarter of 2023.

None.

K87

K77

In accordance with General Instruction G(3), information called for by Part III, Item 10, is incorporated herein by reference [removed: from the information appearing under the caption “Election of the 13 Directors Named in the Proxy Statement for a One-Year Term,” under the caption “Delinquent Section 16(a) Reports,” under the caption “Committees of the Board,” under the caption “Shareholder Recommendations and Nominations,” and under the caption “The Thoroughbred Code of Ethics” in] [added: to] our definitive Proxy Statement for our [removed: 2023] [added: 2024] Annual Meeting of Stockholders, which definitive Proxy Statement will be filed electronically with the SEC pursuant to Regulation 14A.

In accordance with General Instruction G(3), information called for by Part III, Item 11, is incorporated herein by reference [removed: from] [added: to our definitive Proxy Statement for our 2024 Annual Meeting of Stockholders, which definitive Proxy Statement will be filed electronically with] the [removed: information:][added: SEC pursuant to Regulation 14A.]

K88

- under the caption “Compensation of Directors;”

- under the caption “Compensation Discussion and Analysis,” the information appearing in the “Summary Compensation Table” and the “2022 Grants of Plan-Based Awards” table, including the narrative to such tables, the “Outstanding Equity Awards at Fiscal Year-End 2022” and “Option Exercises and Stock Vested in 2022” tables, and the tabular and narrative information appearing under the subcaptions “Retirement Benefits,” “Deferred Compensation,” and “Potential Payments Upon a Change in Control or Other Termination of Employment;” and,

- under the captions “Compensation Committee Interlocks and Insider Participation,” “Compensation Policy Risk Assessment,” and “Compensation Committee Report,”

in each case included in our definitive Proxy Statement for our 2023 Annual Meeting of Stockholders, which definitive Proxy Statement will be filed electronically with the SEC pursuant to Regulation 14A.

K78

In accordance with General Instruction G(3), information on security ownership of certain beneficial owners and management called for by Part III, Item 12, is incorporated herein by reference [removed: from the information appearing under the caption “Beneficial Ownership of Stock” in] [added: to] our definitive Proxy Statement for our [removed: 2023] [added: 2024] Annual Meeting of Stockholders, which definitive Proxy Statement will be filed electronically with the SEC pursuant to Regulation 14A.

Equity Compensation Plan Information (at December 31, [removed: 2022)][added: 2023)]

(5)Calculated without regard to [removed: 746,094] [added: 872,863] outstanding RSUs and PSUs at December 31, [removed: 2022.][added: 2023.]

For the [removed: 2022] [added: 2023] PSU awards, corporate performance will be based directly on return on average capital invested, with total return to stockholders [added: and revenue growth] serving as [removed: a modifier,] [added: modifiers,] and will be settled in shares of Common Stock.

| approved by securities holders(2) | | | | | | 1,507,054 | | | (3) | | | $ | 165.30 | | (5) | | | 7,731,573 | | | | | |

| not approved by securities holders | | | | | | 109,206 | | | (4) | | | 96.35 | | | | | | 436,571 | | | (6) | | |

| Total | | | | | | 1,616,260 | | | | | | | | | | | | 8,168,144 | | | | | |

K89

K90

| approved by securities holders(2) | | | | | | 1,476,081 | | | (3) | | | $ | 143.28 | | (5) | | | 8,238,993 | | | | | |

| not approved by securities holders | | | | | | 150,015 | | | (4) | | | 92.72 | | | | | | 436,402 | | | (6) | | |

| Total | | | | | | 1,626,096 | | | | | | | | | | | | 8,675,395 | | | | | |

K79

K80

In accordance with General Instruction G(3), information called for by Part III, Item 13, is incorporated herein by reference [removed: from the information appearing under the caption “Related Persons Transactions” and under the caption “Director Independence” in] [added: to] our definitive Proxy Statement for our [removed: 2023] [added: 2024] Annual Meeting of Stockholders, which definitive Proxy Statement will be filed electronically with the SEC pursuant to Regulation 14A.

In accordance with General Instruction G(3), information called for by Part III, Item 14, is incorporated herein by reference [removed: from the information appearing under the caption “Ratification of Appointment of Independent Registered Public Accounting Firm” in] [added: to] our definitive Proxy Statement for our [removed: 2023] [added: 2024] Annual Meeting of Stockholders, which definitive Proxy Statement will be filed electronically with the SEC pursuant to Regulation 14A.

K91

K81

| | | | 1. | | | [Index to Financial [removed: Statements](#if5919fb7593645d283f9ced7c9a90d12_124)] [added: Statements](#icc5aa50a10bd4feaa9e3410850067afd_124)] | | | | | |

| | | | | | | [Report of [removed: Management](#if5919fb7593645d283f9ced7c9a90d12_127)] [added: Management](#icc5aa50a10bd4feaa9e3410850067afd_127)] | | | [removed: [K](#if5919fb7593645d283f9ced7c9a90d12_127)[34](#if5919fb7593645d283f9ced7c9a90d12_127)] [added: [K](#icc5aa50a10bd4feaa9e3410850067afd_127)[40](#icc5aa50a10bd4feaa9e3410850067afd_127)] | | |

| | | | | | | [removed: [Reports] [added: [Report] of Independent Registered Public Accounting [removed: Firm](#if5919fb7593645d283f9ced7c9a90d12_130)] [added: Firm](#icc5aa50a10bd4feaa9e3410850067afd_130)] | | | [removed: [K](#if5919fb7593645d283f9ced7c9a90d12_130)[35](#if5919fb7593645d283f9ced7c9a90d12_130)] [added: [K](#icc5aa50a10bd4feaa9e3410850067afd_130)[41](#icc5aa50a10bd4feaa9e3410850067afd_130)] | | |

| | | | | | | [Consolidated Statements of [added: Comprehensive] Income, Years ended December [removed: 31,] [added: 31,](#icc5aa50a10bd4feaa9e3410850067afd_139) [2023,] 2022, [removed: 2021,] and [removed: 2020](#if5919fb7593645d283f9ced7c9a90d12_136)] [added: 2021](#icc5aa50a10bd4feaa9e3410850067afd_136)] | | | [removed: [K](#if5919fb7593645d283f9ced7c9a90d12_136)[39](#if5919fb7593645d283f9ced7c9a90d12_136)] [added: [K](#icc5aa50a10bd4feaa9e3410850067afd_139)[46](#icc5aa50a10bd4feaa9e3410850067afd_139)] | | |

| | | | | | | [Consolidated Statements of [removed: Comprehensive] Income, Years ended December 31, [removed: 2022, 2021,] [added: 202](#icc5aa50a10bd4feaa9e3410850067afd_136)[3](#icc5aa50a10bd4feaa9e3410850067afd_136)[, 202](#icc5aa50a10bd4feaa9e3410850067afd_136)[2](#icc5aa50a10bd4feaa9e3410850067afd_136)[,] and [removed: 2020](#if5919fb7593645d283f9ced7c9a90d12_139)] [added: 202](#icc5aa50a10bd4feaa9e3410850067afd_136)[1](#icc5aa50a10bd4feaa9e3410850067afd_136)] | | | [removed: [K](#if5919fb7593645d283f9ced7c9a90d12_139)[40](#if5919fb7593645d283f9ced7c9a90d12_139)] [added: [K](#icc5aa50a10bd4feaa9e3410850067afd_136)[45](#icc5aa50a10bd4feaa9e3410850067afd_136)] | | |

| | | | | | | [Consolidated Balance Sheets at December 31, [removed: 2022 and 2021](#if5919fb7593645d283f9ced7c9a90d12_142)] [added: 202](#icc5aa50a10bd4feaa9e3410850067afd_142)[3](#icc5aa50a10bd4feaa9e3410850067afd_142) [and 202](#icc5aa50a10bd4feaa9e3410850067afd_142)[2](#icc5aa50a10bd4feaa9e3410850067afd_142)] | | | [removed: [K](#if5919fb7593645d283f9ced7c9a90d12_142)[41](#if5919fb7593645d283f9ced7c9a90d12_142)] [added: [K](#icc5aa50a10bd4feaa9e3410850067afd_142)[47](#icc5aa50a10bd4feaa9e3410850067afd_142)] | | |

| | | | | | | [Consolidated Statements of Cash Flows, Years ended December [removed: 31,] [added: 31,](#icc5aa50a10bd4feaa9e3410850067afd_145) [2023,] 2022, [removed: 2021,] and [removed: 2020](#if5919fb7593645d283f9ced7c9a90d12_145)] [added: 2021](#icc5aa50a10bd4feaa9e3410850067afd_136)] | | | [removed: [K](#if5919fb7593645d283f9ced7c9a90d12_145)[42](#if5919fb7593645d283f9ced7c9a90d12_145)] [added: [K](#icc5aa50a10bd4feaa9e3410850067afd_145)[48](#icc5aa50a10bd4feaa9e3410850067afd_145)] | | |

| | | | | | | [Consolidated Statements of Changes in Stockholders’ Equity, Years ended December [removed: 31,] [added: 31,](#icc5aa50a10bd4feaa9e3410850067afd_148) [2023,] 2022, [removed: 2021,] and [removed: 2020](#if5919fb7593645d283f9ced7c9a90d12_148)] [added: 2021](#icc5aa50a10bd4feaa9e3410850067afd_136)] | | | [removed: [K](#if5919fb7593645d283f9ced7c9a90d12_148)[43](#if5919fb7593645d283f9ced7c9a90d12_148)] [added: [K](#icc5aa50a10bd4feaa9e3410850067afd_148)[49](#icc5aa50a10bd4feaa9e3410850067afd_148)] | | |

| | | | | | | [Notes to Consolidated Financial [removed: Statements](#if5919fb7593645d283f9ced7c9a90d12_151)] [added: Statements](#icc5aa50a10bd4feaa9e3410850067afd_151)] | | | [removed: [K](#if5919fb7593645d283f9ced7c9a90d12_151)[44](#if5919fb7593645d283f9ced7c9a90d12_151)] [added: [K](#icc5aa50a10bd4feaa9e3410850067afd_151)[50](#icc5aa50a10bd4feaa9e3410850067afd_151)] | | |

| | | | 2. | | | Financial Statement [removed: Schedule:] [added: Schedules:] | | | | | |

| | | | | | | Index to Consolidated Financial Statement [removed: Schedule] [added: Schedules] | | | | | |

| | | | | | | [Schedule II – Valuation and Qualifying [removed: Accounts](#if5919fb7593645d283f9ced7c9a90d12_253)] [added: Accounts](#icc5aa50a10bd4feaa9e3410850067afd_253)] | | | [removed: [K](#if5919fb7593645d283f9ced7c9a90d12_151)[93](#if5919fb7593645d283f9ced7c9a90d12_253)] [added: [K](#icc5aa50a10bd4feaa9e3410850067afd_151)[104](#icc5aa50a10bd4feaa9e3410850067afd_253)] | | |

| (ii) | | | | | | [The Bylaws of Norfolk Southern [removed: Corporation, as] [added: Corporation,](https://www.sec.gov/Archives/edgar/data/702165/000155278123000329/e23326_ex3-ii.htm) [as] amended [removed: January] [added: July] 25, [removed: 2022,] [added: 2023,] are incorporated by reference to Exhibit 3(ii) to [removed: Norfolk Southern Corporation’s] [added: the Registrant’s] Form 8-K filed on [removed: January 26, 2022. (SEC] [added: July 27, 2023.](https://www.sec.gov/Archives/edgar/data/702165/000155278123000329/e23326_ex3-ii.htm) [(SEC] File No. [removed: 001-08339)](http://www.sec.gov/Archives/edgar/data/702165/000155278122000119/e22049_ex3-ii.htm)] [added: 001-08339)](https://www.sec.gov/Archives/edgar/data/702165/000155278123000329/e23326_ex3-ii.htm)] | | | | | |

| (e) | | | | | | [First Supplemental Indenture, dated August 27, 2004, among PRR Newco, Inc., as Issuer, and Norfolk Southern Railway Company, as Guarantor, and The Bank of New York, as [removed: Trustee, related to the] [added: Trustee,](http://www.sec.gov/Archives/edgar/data/702165/000070216504000240/indenturesupps.htm) [related to](http://www.sec.gov/Archives/edgar/data/702165/000070216504000240/indenturesupps.htm) [](http://www.sec.gov/Archives/edgar/data/702165/000070216504000240/indenturesupps.htm)[the] issuance of notes in the principal amount of approximately $451.8 million, is incorporated by reference to Exhibit 4(m) to Norfolk Southern Corporation’s Form 10-Q filed on October 28, [removed: 2004. (SEC] [added: 2004.](http://www.sec.gov/Archives/edgar/data/702165/000070216504000240/indenturesupps.htm) [(](http://www.sec.gov/Archives/edgar/data/702165/000070216504000240/indenturesupps.htm)[SEC] File No. 001-08339)](http://www.sec.gov/Archives/edgar/data/702165/000070216504000240/indenturesupps.htm) | | |

| (p) | | | | | | [removed: [Indenture,] [added: [Second Supplemental Indenture,] dated as of [removed: August 20,] [added: September 7,] 2012, between the Registrant and U.S. Bank Trust National Association, as Trustee, is incorporated by reference to Exhibit 4.1 to [removed: the Registrant’s] [added: Norfolk Southern Corporation’s] Form 8-K filed on [removed: August 21,] [added: September 7,] 2012. (SEC File No. [removed: 001-08339)](http://www.sec.gov/Archives/edgar/data/702165/000134100412001108/ex4-1.htm)] [added: 001-08339)](http://www.sec.gov/Archives/edgar/data/702165/000134100412001175/ex4-1.htm)] | | |

| [removed: (q)] [added: (t)] | | | | | | [Second Supplemental Indenture, dated as of [removed: September 7, 2012,] [added: November 3, 2015,] between the Registrant and U.S. Bank [removed: Trust] National Association, as Trustee, is incorporated by reference to Exhibit 4.1 to Norfolk Southern Corporation’s Form 8-K filed on [removed: September 7, 2012.] [added: November 3, 2015.] (SEC File No. [removed: 001-08339)](http://www.sec.gov/Archives/edgar/data/702165/000134100412001175/ex4-1.htm)] [added: 001-08339)](http://www.sec.gov/Archives/edgar/data/702165/000119312515364209/d50915dex41.htm)] | | |

| [removed: (r)] [added: (q)] | | | | | | [Third Supplemental Indenture, dated as of August 13, 2013, between the Registrant and U.S. Bank Trust National Association, as Trustee, related to the issuance of notes in the principal amount of $500,000,000, is incorporated by reference to Exhibit 4.1 to Norfolk Southern Corporation’s Form 8-K filed on August 13, 2013. (SEC File No. 001-08339)](http://www.sec.gov/Archives/edgar/data/702165/000134100413000854/ex4-1.htm) | | |

| [removed: (s)] [added: (bb)] | | | | | | [Fourth Supplemental Indenture, dated as of November [removed: 21, 2013,] [added: 4, 2019,] between the Registrant and U.S. Bank [removed: Trust] National Association, as Trustee, [removed: related to the issuance of notes in the principal amount of $400,000,000,] is incorporated by reference to Exhibit 4.1 to [removed: Norfolk Southern Corporation’s] [added: the Registrant’s] Form 8-K filed on November [removed: 21, 2013.] [added: 4, 2019.] (SEC File No. [removed: 001-08339)](http://www.sec.gov/Archives/edgar/data/702165/000134100413001221/ex4-1.htm)] [added: 001-08339)](http://www.sec.gov/Archives/edgar/data/702165/000119312519283315/d800741dex41.htm)] | | |

| [removed: (t)] [added: (r)] | | | | | | [Indenture, dated as of June 2, 2015, between Registrant and U.S. Bank National Association, as Trustee, is incorporated by reference to Exhibit 4.1 to Norfolk Southern Corporation’s Form 8-K filed on June 2, 2015. (SEC File No. 001-08339)](http://www.sec.gov/Archives/edgar/data/702165/000119312515210467/d935693dex41.htm) | | |

| [removed: (u)] [added: (s)] | | | | | | [First Supplemental Indenture, dated as of June 2, 2015, between the Registrant and U.S. Bank National Association, as Trustee, is incorporated by reference to Exhibit 4.2 to Norfolk Southern Corporation’s Form 8-K filed on June 2, 2015. (SEC File No. 001-08339)](http://www.sec.gov/Archives/edgar/data/702165/000119312515210467/d935693dex42.htm) | | |

| [removed: (v)] [added: (u)] | | | | | | [removed: [Second] [added: [Third] Supplemental Indenture, dated as of [removed: November] [added: June] 3, [removed: 2015,] [added: 2016,] between the Registrant and U.S. Bank National Association, as Trustee, is incorporated by reference to Exhibit 4.1 to Norfolk Southern Corporation’s Form 8-K filed on [removed: November] [added: June] 3, [removed: 2015.] [added: 2016.] (SEC File No. [removed: 001-08339)](http://www.sec.gov/Archives/edgar/data/702165/000119312515364209/d50915dex41.htm)] [added: 001-08339)](http://www.sec.gov/Archives/edgar/data/702165/000119312516612078/d179976dex41.htm)] | | |

| [removed: (w)] [added: (aa)] | | | | | | [Third Supplemental Indenture, dated as of [removed: June 3, 2016,] [added: May 8, 2019,] between the Registrant and U.S. Bank National Association, as Trustee, is incorporated by reference to Exhibit 4.1 to [removed: Norfolk Southern Corporation’s] [added: the Registrant’s] Form 8-K filed on [removed: June 3, 2016.] [added: May 8, 2019] (SEC File No. [removed: 001-08339)](http://www.sec.gov/Archives/edgar/data/702165/000119312516612078/d179976dex41.htm)] [added: 001-08339).](http://www.sec.gov/Archives/edgar/data/702165/000119312519141116/d734455dex41.htm)] | | |

| [removed: (x)] [added: (v)] | | | | | | [Fourth Supplemental Indenture, dated as of May 31, 2017, between the Registrant and U.S. Bank National Association, as Trustee, is incorporated by reference to Exhibit 4.1 to the Corporation’s Form 8-K filed May 31, 2017. (SEC File No. 001-08339)](http://www.sec.gov/Archives/edgar/data/702165/000119312517188552/d403868dex41.htm) | | |

| [removed: (y)] [added: (w)] | | | | | | [Indenture, dated as of August 15, 2017, between the Registrant and U.S. Bank National Association, as Trustee, is incorporated by reference herein to Exhibit 4.1 to Norfolk Southern Corporation’s Form 8-K filed August 15, 2017. (SEC File No. 001-08339)](http://www.sec.gov/Archives/edgar/data/702165/000070216517000083/ns41-indenture081517.htm) | | |

| [removed: (z)] [added: (x)] | | | | | | [Indenture, dated as of February 28, 2018 between the Registrant and U.S. Bank National Association, as Trustee. The Indenture is incorporated by reference herein to Exhibit 4.1 to Norfolk Southern Corporation’s Form 8-K filed February 28, 2018. (SEC File No. 001-08339)](http://www.sec.gov/Archives/edgar/data/702165/000119312518062770/d536589dex41.htm) | | |

| [removed: (aa)] [added: (y)] | | | | | | [First Supplemental Indenture, dated as of February 28, 2018, between the Registrant and U.S. Bank National Association, as [removed: Trustee.](http://www.sec.gov/Archives/edgar/data/702165/000119312518062770/d536589dex42.htm) [](http://www.sec.gov/Archives/edgar/data/702165/000119312518062770/d536589dex42.htm)[The] [added: Trustee. The] Indenture is incorporated by reference herein to Exhibit 4.2 to Norfolk Southern Corporation’s Form 8-K filed February 28, 2018. (SEC File No. 001-08339)](http://www.sec.gov/Archives/edgar/data/702165/000119312518062770/d536589dex42.htm) | | |

| [removed: (bb)] [added: (z)] | | | | | | [Second Supplemental Indenture, dated as of August 2, 2018, between the Registrant and U.S. Bank National Association, as [removed: Trustee.](http://www.sec.gov/Archives/edgar/data/702165/000119312518236288/d569046dex41.htm) [](http://www.sec.gov/Archives/edgar/data/702165/000119312518236288/d569046dex41.htm)[The] [added: Trustee. The] Indenture is incorporated by reference herein to Exhibit 4.1 to Norfolk Southern Corporation’s Form 8-K filed August 2, 2018. (SEC File No. 001-08339)](http://www.sec.gov/Archives/edgar/data/702165/000119312518236288/d569046dex41.htm) | | |

| [removed: (cc)] [added: (ee)] | | | | | | [removed: [Third Supplemental Indenture,] [added: [Indenture] dated as of May [removed: 8, 2019,] [added: 15, 2020,] between the Registrant and U.S. Bank National Association, as [removed: Trustee,] [added: Trustee] is incorporated by reference to Exhibit 4.1 to the Registrant’s Form 8-K filed on May [removed: 8, 2019] [added: 15, 2020.] (SEC File No. [removed: 001-08339).](http://www.sec.gov/Archives/edgar/data/702165/000119312519141116/d734455dex41.htm)] [added: 001-08339)](http://www.sec.gov/Archives/edgar/data/702165/000119312520143974/d927752dex41.htm)] | | |

| [removed: (dd)] [added: (gg)] | | | | | | [removed: [Fourth] [added: [Seventh] Supplemental Indenture, dated as [removed: of](http://www.sec.gov/Archives/edgar/data/702165/000119312519283315/d800741dex41.htm) [November](http://www.sec.gov/Archives/edgar/data/702165/000119312519283315/d800741dex41.htm) [4](http://www.sec.gov/Archives/edgar/data/702165/000119312519283315/d800741dex41.htm)[, 2019,] [added: of August 25, 2021,] between the Registrant and U.S. Bank National Association, as [removed: Trustee,] [added: trustee,] is incorporated by reference to Exhibit 4.1 to the Registrant’s Form 8-K filed on [removed: November 4, 2019.] [added: August 25, 2021.](http://www.sec.gov/Archives/edgar/data/702165/000155278121000689/e21536_ex4-1.htm)] (SEC File No. [removed: 001-08339)](http://www.sec.gov/Archives/edgar/data/702165/000119312519283315/d800741dex41.htm)] [added: 001-08339)] | | |

| [removed: (ee)] [added: (cc)] | | | | | | [Description of the Registrant’s Common Stock Registered Under Section 12 of the Securities Exchange Act of 1934, is incorporated by reference to Exhibit 4(hh) to Norfolk Southern Corporation's Form 10-K filed on February 6, 2020. (SEC File No. 001-08339)](http://www.sec.gov/Archives/edgar/data/702165/000070216520000011/nsc201910-kexhibit4hh.htm) | | |

| [removed: (ff)] [added: (dd)] | | | | | | [Fifth Supplemental Indenture, dated as of May 11, 2020, between the Registrant and U.S. Bank National Association, as Trustee, is incorporated by reference to Exhibit 4.1 to the Registrant’s Form 8-K filed on May 11, 2020. (SEC File No. 001-08339)](https://www.sec.gov/Archives/edgar/data/702165/000119312520139054/d918391dex41.htm) | | |

| [removed: (gg)] [added: (ff)] | | | | | | [removed: [Indenture] [added: [Sixth Supplemental Indenture,] dated as of May [removed: 15, 2020,] [added: 12, 2021,] between the Registrant and U.S. Bank National Association, as [removed: Trustee] [added: Trustee,] is incorporated by reference to Exhibit [removed: 4.1] [added: 4.2] to the Registrant’s Form 8-K filed on May [removed: 15, 2020.] [added: 12, 2021.](http://www.sec.gov/Archives/edgar/data/702165/000155278121000416/e21380_ex4-2.htm)] (SEC File No. [removed: 001-08339)](http://www.sec.gov/Archives/edgar/data/702165/000119312520143974/d927752dex41.htm)] [added: 001-08339)] | | |