Norfolk Southern 10-Q 2025-03-31

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2025

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ___________ to___________

Commission File Number: 1-8339

NORFOLK SOUTHERN CORPORATION

(Exact name of registrant as specified in its charter)

Virginia						52-1188014
(State or other jurisdiction of incorporation or organization)						(I.R.S. Employer Identification No.)

650 West Peachtree Street NW						30308-1925
Atlanta,			Georgia
(Address of principal executive offices)						(Zip Code)
(855)						667-3655
(Registrant’s telephone number, including area code)

No change
(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class			Trading Symbol			Name of each exchange on which registered
Norfolk Southern Corporation Common Stock (Par Value $1.00)			NSC			New York Stock Exchange

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer ☒ Accelerated filer ☐ Non-accelerated filer ☐ Smaller reporting company ☐ Emerging growth company ☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No ☒

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

Class						Outstanding at March 31, 2025
Common Stock ($1.00 par value per share)						225,443,501			(excluding 20,320,777 shares held by the registrant’s
						consolidated subsidiaries)

TABLE OF CONTENTS

NORFOLK SOUTHERN CORPORATION AND SUBSIDIARIES

						Page
Part I.			Financial Information:
			Item 1.			Financial Statements:
						Consolidated Statements of Income First Quarter of 2025 and 2024			3
						Consolidated Statements of Comprehensive Income First Quarter of 2025 and 2024			4
						Consolidated Balance Sheets At March 31, 2025 and December 31, 2024			5
						Consolidated Statements of Cash Flows First Three Months of 2025 and 2024			6
						Consolidated Statements of Changes in Stockholders’ Equity First Quarter of 2025 and 2024			7
						Notes to Consolidated Financial Statements			8
			Item 2.			Management’s Discussion and Analysis of Financial Condition and Results of Operations			26
			Item 3.			Quantitative and Qualitative Disclosures About Market Risk			35
			Item 4.			Controls and Procedures			35
Part II.			Other Information:
			Item 1.			Legal Proceedings			36
			Item 1A.			Risk Factors			36
			Item 2.			Unregistered Sales of Equity Securities, Use of Proceeds, and Issuer Purchases of Equity Securities			36
			Item 3.			Defaults Upon Senior Securities			36
			Item 4.			Mine Safety Disclosures			36
			Item 5.			Other Information			36
			Item 6.			Exhibits			37
						Signatures			38

PART I. FINANCIAL INFORMATION

Norfolk Southern Corporation and Subsidiaries

Consolidated Statements of Income

(Unaudited)

			First Quarter
			2025						2024
			($ in millions, except per share amounts)
Railway operating revenues			$	2,993					$	3,004
Railway operating expenses
Compensation and benefits			739						736
Purchased services and rents			498						528
Fuel			244						284
Depreciation			346						337
Materials and other			205						215
Restructuring and other charges			—						99
Eastern Ohio incident			(185)						592
Total railway operating expenses			1,847						2,791
Income from railway operations			1,146						213
Other income – net			31						18
Interest expense on debt			199						201
Income before income taxes			978						30
Income taxes			228						(23)
Net income			$	750					$	53
Earnings per share
Basic			$	3.31					$	0.23
Diluted			3.31						0.23

See accompanying notes to consolidated financial statements.

Norfolk Southern Corporation and Subsidiaries

Consolidated Statements of Comprehensive Income

(Unaudited)

			First Quarter
			2025						2024
			($ in millions)
Net income			$	750					$	53
Other comprehensive income (loss), before tax:
Pension and other postretirement expense			—						(2)
Other comprehensive income of equity investees			1						—
Other comprehensive income (loss), before tax			1						(2)
Income tax benefit related to items of other
comprehensive income			—						—
Other comprehensive income (loss), net of tax			1						(2)
Total comprehensive income			$	751					$	51

See accompanying notes to consolidated financial statements.

Norfolk Southern Corporation and Subsidiaries

Consolidated Balance Sheets

(Unaudited)

			March 31, 2025						December 31, 2024
			($ in millions)
Assets
Current assets:
Cash and cash equivalents			$	1,006					$	1,641
Accounts receivable – net			1,231						1,069
Materials and supplies			273						277
Other current assets			191						201
Total current assets			2,701						3,188
Investments			4,003						3,370
Properties less accumulated depreciation of $14,188
and $13,957, respectively			35,803						35,831
Other assets			1,293						1,293
Total assets			$	43,800					$	43,682
Liabilities and stockholders’ equity
Current liabilities:
Accounts payable			$	1,445					$	1,704
Income and other taxes			490						337
Other current liabilities			960						949
Current maturities of long-term debt			555						555
Total current liabilities			3,450						3,545
Long-term debt			16,660						16,651
Other liabilities			1,702						1,760
Deferred income taxes			7,477						7,420
Total liabilities			29,289						29,376
Stockholders’ equity:
Common stock $1.00 per share par value, 1,350,000,000 shares
authorized; outstanding 225,443,501 and 226,320,894 shares,
respectively, net of treasury shares			227						228
Additional paid-in capit

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The following discussion and analysis should be read in conjunction with the Consolidated Financial Statements and Notes.

OVERVIEW

Since 1827, Norfolk Southern Corporation and its predecessor companies have safely moved the goods and materials that drive the U.S. economy. Our dedicated team members deliver a wide variety of commodities annually for our customers, from agriculture products to consumer goods, and help them reduce carbon emissions by shipping via rail. We have the most extensive intermodal network in the eastern U.S. Our network serves a majority of the country's population and manufacturing base, with connections to every major container port on the Atlantic coast as well as major ports across the Gulf Coast and Great Lakes.

Our resiliency was evident in the quarter as we responded to numerous weather-related disruptions by quickly restoring the network while focusing on safely providing high-quality service to our customers and delivering on productivity initiatives. As a result, we drove improved financial performance. Additionally, insurance recoveries related to the Eastern Ohio Incident (as defined further and described in Note 12 in the Notes to Consolidated Financial Statements) further benefited our financial results. In the first quarter, we achieved an operating ratio (a measure of the amount of operating revenues consumed by operating expenses) of 61.7%, and an adjusted operating ratio of 67.9% (see our non-GAAP reconciliations beginning on page 27). We remain committed to being a safe, productive, resilient, and efficient railroad with industry-competitive margins.

SUMMARIZED RESULTS OF OPERATIONS

			First Quarter
			2025						2024						% change
			($ in millions, except per share amounts)
Railway operating revenues			$	2,993					$	3,004					—%
Railway operating expenses			$	1,847					$	2,791					(34%)
Income from railway operations			$	1,146					$	213					438%
Net income			$	750					$	53					1,315%
Diluted earnings per share			$	3.31					$	0.23					1,339%
Railway operating ratio (percent)			61.7						92.9						(34%)

Income from railway operations increased significantly, the result of lower railway operating expenses, primarily related to the Eastern Ohio Incident as insurance recoveries exceeded incremental Incident-related expenses in the current year. Our financial results also benefited from the absence of restructuring and other charges, lower fuel expense, and reduced costs for purchased services and equipment rents. Operating revenue declined slightly due to decreased average revenue per unit, primarily driven by lower fuel surcharge revenue and an adverse mix of traffic.

The following tables adjust our GAAP financial results for the first quarters of 2025 and 2024 to exclude the effects of the Incident. First quarter 2024 also excludes restructuring and other charges, shareholder advisory costs, and a deferred income tax adjustment. The income tax effects of these non-GAAP adjustments were calculated based on the applicable tax rates to which the non-GAAP adjustments 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 these items. While we believe that these non-GAAP financial measures are useful in evaluating our business, this information should be considered as supplemental in nature and is not meant to be considered in isolation from, or as a substitute for, the related financial information prepared in

accordance with GAAP. In addition, these non-GAAP financial measures may not be the same as similar measures presented by other companies.

			Non-GAAP Reconciliation for First Quarter 2025
			Reported (GAAP)												Eastern Ohio Incident																		Adjusted (non-GAAP)
			($ in millions, except per share amounts)
Railway operating expenses			$	1,847											$	185																	$	2,032
Income from railway operations			$	1,146											$	(185)																	$	961
Net income			$	750											$	(141)																	$	609
Diluted earnings per share			$	3.31											$	(0.62)																	$	2.69
Railway operating ratio (percent)			61.7												6.2																		67.9

			Non-GAAP Reconciliation for First Quarter 2024
			Reported (GAAP)						Restructuring and Other Charges						Eastern Ohio Incident						Shareholder Advisory Costs						Deferred Income Tax Adjustment						Adjusted (non-GAAP)
			($ in millions, except per share amounts)
Railway operating			$	2,791					$	(99)					$	(592)					$	—					$	—					$	2,100
expenses
Income from railway			$	213					$	99					$	592					$	—					$	—					$	904
operations
Net income			$	53					$	75					$	448					$	16					$	(27)					$	565
Diluted earnings			$	0.23					$	0.33					$	1.98					$	0.07					$	(0.12)					$	2.49
per share
Railway operating			92.9						(3.3)						(19.7)						—						—						69.9
ratio (percent)

In the table below, references to the results for the first quarters of 2025 and 2024 and related comparisons use the adjusted, non-GAAP results from the reconciliations in the tables above.

			First Quarter
			Adjusted 2025 (non-GAAP)						Adjusted 2024 (non-GAAP)						Adjusted 2025 vs. Adjusted 2024 (non-GAAP)
			($ in millions, except per share amounts)												% change
Railway operating expenses			$	2,032					$	2,100					(3%)
Income from railway operations			$	961					$	904					6%
Net income			$	609					$	565					8%
Diluted earnings per share			$	2.69					$	2.49					8%
Railway operating ratio (percent)			67.9						69.9						(3%)

On an adjusted basis, income from railway operations increased due to lower adjusted railway operating expenses. The decline in adjusted railway operating expenses reflects lower fuel expenses and a decline in purchased services and equipment rents expense.

DETAILED RESULTS OF OPERATIONS

Railway Operating Revenues

The following tables present a comparison of revenues ($ in millions), units (in thousands), and average revenue per unit ($ per unit) by commodity group.

			First Quarter
Revenues			2025						2024						% change
Merchandise:
Agriculture, forest and consumer products			$	636					$	629					1%
Chemicals			535						527						2%
Metals and construction			414						430						(4%)
Automotive			278						277						—%
Merchandise			1,863						1,863						—%
Intermodal			760						745						2%
Coal			370						396						(7%)
Total			$	2,993					$	3,004					—%

Units
Merchandise:
Agriculture, forest and consumer products			183.6						184.1						—%
Chemicals			132.0						130.5						1%
Metals and construction			148.3						160.6						(8%)
Automotive			88.3						88.3						—%
Merchandise			552.2						563.5						(2%)
Intermodal			1,022.9						988.8						3%
Coal			164.7						167.1						(1%)
Total			1,739.8						1,719.4						1%

Revenue per Unit
Merchandise:
Agriculture, forest and consumer products			$	3,466					$	3,415					1%
Chemicals			4,051						4,039						—%
Metals and construction			2,791						2,679						4%
Automotive			3,152						3,133						1%
Merchandise			3,374						3,306						2%
Intermodal			743						754						(1%)
Coal			2,247						2,369						(5%)
Total			1,720						1,747						(2%)

Railway operating revenues decreased $11 million compared with the same period last year. The table below reflects the components of the revenue change by major commodity group ($ in millions).

			First Quarter
			Merchandise						Intermodal						Coal
			Increase (Decrease)
Volume			$	(38)					$	26					$	(6)
Fuel surcharge revenue			(34)						(16)						(8)
Rate, mix and other			72						5						(12)
Total			$	—					$	15					$	(26)

Approximately 95% of our revenue base is covered by contracts that include negotiated fuel surcharges. Revenues associated with these surcharges totaled $202 million and $260 million in the first quarters of 2025 and 2024, respectively. The decrease in fuel surcharge revenues is driven by lower fuel commodity prices.

For the remainder of 2025, while we acknowledge the uncertainty in the economy, we currently expect revenue to increase compared to 2024, driven by higher volume.

Merchandise

Merchandise revenues were flat as declines in volume were offset by higher average revenue per unit, driven by increased pricing and positive mix, offset partly by lower fuel surcharge revenues.

Agriculture, forest and consumer products volume decreased due to lower volume in wheat and fertilizers partially offset by increased volume in corn and soybeans. The decrease in wheat and fertilizers is largely in anticipation of potential changes to tariffs. Corn shipments in the current year were higher due to a poor crop in the southeast in the prior year. Soybean volume has risen due to increased exports.

Chemicals volume increased due to higher volume in sand, partially offset by a decrease in inorganic chemicals. Sand volume rose due to strong demand to support natural gas drilling. Volume declines in inorganic chemicals were due to lower demand for rock salt as a result of higher existing inventory levels and local emergency demand being supported by truck.

Metals and construction volume decreased due to lower aggregates and coil steel shipments. Aggregates volume decreased due to inclement weather across the network and coil steel volume decreased due to equipment availability.

Automotive volume was flat driven by shippers increasing volume in anticipation of potential changes to tariffs, partially offset by reduced parts demand and production downtime for certain manufacturers due to quality holds and weather events.

Intermodal

Intermodal revenues increased due to higher volume, partially offset by lower average revenue per unit driven primarily by lower fuel surcharge revenue.

Intermodal units (in thousands) by market were as follows:

			First Quarter
			2025						2024						% change
Domestic			608.8						590.4						3%
International			414.1						398.4						4%
Total			1,022.9						988.8						3%

Domestic volume increased due to higher demand and improved service. International volume rose primarily driven by shippers increasing volume in anticipation of potential changes to tariffs.

Coal

Coal revenues decreased due to lower average revenue per unit driven by reduced pricing, unfavorable mix, and lower fuel surcharge revenue, in addition to volume declines.

Coal tonnage (in thousands) by market was as follows:

			First Quarter
			2025						2024						% change
Utility			7,312						7,019						4%
Export			8,260						8,749						(6%)
Domestic metallurgical			2,085						2,193						(5%)
Industrial			860						786						9%
Total			18,517						18,747						(1%)

Export tonnage was negatively impacted by unfavorable coal pricing. In addition, export and domestic metallurgical tonnage decreased due to weather-related impacts on coal production. Utility tonnage increased due to higher electricity demand and higher natural gas prices, partially offset by weather impacts. Industrial coal tonnage increased due to higher demand.

Railway Operating Expenses

Railway operating expenses summarized by major classifications follow ($ in millions):

			First Quarter
			2025						2024						% change
Compensation and benefits			$	739					$	736					—%
Purchased services			401						420						(5%)
Equipment rents			97						108						(10%)
Fuel			244						284						(14%)
Depreciation			346						337						3%
Materials			100						98						2%
Claims			66						48						38%
Other			39						69						(43%)
Restructuring and other charges			—						99						(100%)
Eastern Ohio incident			(185)						592						(131%)
Total			$	1,847					$	2,791					(34%)

Compensation and benefits expense increased as follows:

• incentive compensation (up $38 million),

• pay rates (up $19 million),

• employee activity levels (down $40 million), net of weather-related costs,

• health and welfare benefits (down $12 million), and

• other (down $2 million).

Average rail headcount for the quarter was down by approximately 1,350 compared with the first quarter of 2024.

Purchased services includes the costs of services purchased from external vendors and contractors, including the net costs of operating joint facilities with other railroads. Expense decreased due to reduced operational and transportation expenses driven by network performance improvements and productivity initiatives. These improvements were also partially offset by weather-related costs.

Equipment rents, which includes our cost of using equipment (mostly freight cars) owned by other railroads or private owners less the rent paid to us for the use of our equipment, decreased due to lower short-term locomotive resource costs.

Fuel expense, which includes the cost of locomotive fuel as well as other fuel used in railway operations, decreased due to lower locomotive fuel prices (down 11%) and decreased consumption (down 4%).

Depreciation expense increased due to a higher asset base.

Materials expense increased due to higher freight car repairs expense, primarily due to weather-related events in the quarter.

Claims expense includes costs related to personal injury, property damage, and environmental matters. Claims expense increased as a result of higher costs related to environmental clean-up, partially due to weather events in the quarter, and other environmental matters unrelated to the Incident. Expense also increased due to personal injury case development, and increased insurance costs.

Other expense decreased due to increased gains from operating property sales, lower travel-related expenses, and lower non-income-based taxes. We had $23 million in gains from operating property sales in 2025, as compared to no gains in the prior year.

Restructuring and other charges

During the first quarter of 2024, we recorded $99 million in expense associated with our voluntary and involuntary separation programs that reduced our management workforce. Additionally, we incurred costs associated with the appointment of our new chief operating officer.

Eastern Ohio incident

During the first quarter of 2025, our insurance recoveries exceeded additional Incident-related expenses by $185 million whereas we incurred $592 million in expenses, net of insurance proceeds, for the same period last year. Insurance recoveries collected exceeded incremental cash expenditures by $58 million for the first three months of 2025, while cash expenditures attributable to the Incident, net of insurance proceeds, were $117 million for the first three months of 2024, which are presented in “Net cash provided by operating activities” on the Consolidated Statements of Cash Flows. For further details regarding the Incident, see Note 12 in the Notes to Consolidated Financial Statements.

Other income – net

Other income – net increased $13 million primarily due to the absence of costs associated with shareholder matters incurred in the first quarter of 2024. This increase was partially offset by lower interest income.

Income taxes

The effective tax rate for the first three months of 2025 was 23.3% compared with (76.7)% for the same period last year. The negative effective rate for the first quarter of 2024 was driven by low pre-tax income coupled with a $27 million deferred income tax benefit recognized in the quarter, which was the result of a subsidiary restructuring that reduced our estimated deferred state income tax rate.

FINANCIAL CONDITION AND LIQUIDITY

Cash provided by operating activities, our principal source of liquidity, was $950 million for the first three months of 2025, compared with $839 million for the same period of 2024. The increase reflects improved operating results. We had negative working capital of $749 million and $357 million at March 31, 2025 and December 31, 2024, respectively, with the increase driven in part by COLI loan repayments. Cash and cash equivalents totaled $1.0 billion at March 31, 2025.

Cash used in investing activities was $1.0 billion for the first three months of 2025, compared with $1.8 billion for the same period last year. The decrease was driven by the acquisition of the assets of the Cincinnati Southern Railway (CSR) in the prior year, partially offset by an increase in COLI loan repayments in the current year.

Cash used in financing activities was $564 million for the first three months of 2025, compared with cash provided by financing activities of $89 million for the same period last year. The decrease reflects lower proceeds from borrowing and increased repurchases of Common Stock. We spent $248 million on repurchases of Common Stock during the first three months of 2025, while we did not repurchase any during the same period last year. As of March 31, 2025, $6.6 billion remains authorized by our Board of Directors for repurchase. The timing and volume of future share repurchases will be guided by our assessment of market conditions and other pertinent factors. Repurchases may be executed in the open market, through derivatives, accelerated repurchase and other negotiated transactions and through plans designed to comply with Rule 10b5-1(c) and Rule 10b-18 under the Securities and

Exchange Act of 1934. Any near-term purchases under the program are expected to be made with internally-generated cash, cash on hand, or proceeds from borrowings.

In June 2024, we entered into an agreement that provides us the ability to issue up to $800 million of unsecured commercial paper and is backed by our credit agreement. The unsecured short-term commercial paper program provides for borrowing at prevailing rates and includes covenants. At both March 31, 2025 and December 31, 2024, we had no outstanding commercial paper.

In May 2024, we renewed our accounts receivable securitization program with a maximum borrowing capacity of $400 million. Amounts under our accounts receivable securitization program are borrowed and repaid from time to time in the ordinary course for general corporate and cash management purposes. The term of our accounts receivable securitization program expires in May 2025. We had no amounts outstanding under this program and our available borrowing capacity was $400 million at both March 31, 2025 and December 31, 2024.

In January 2024, we renewed and amended our $800 million credit agreement. The amended agreement expires in January 2029, and provides for borrowings at prevailing rates and includes covenants. We had no amounts outstanding under this facility at either March 31, 2025 or December 31, 2024, and we are in compliance with all of its covenants.

In addition, we have investments in general purpose COLI policies and have the ability to borrow against these policies. We had no amounts borrowed against these policies at March 31, 2025 and $605 million borrowed at December 31, 2024. Our remaining borrowing capacity was $610 million and $40 million at March 31, 2025 and December 31, 2024, respectively.

Our debt-to-total capitalization ratio was 54.3% at March 31, 2025 and 54.6% at December 31, 2024. We expect cash on hand combined with cash provided by operating activities will be sufficient to meet our ongoing obligations. In addition, we believe our currently-available borrowing capacity, access to additional financing, and ability to decrease shareholder distributions, provide additional flexibility to meet our ongoing obligations. There have been no material changes to the information on future contractual obligations, including those that may have material cash requirements, contained in our Form 10-K for the year ended December 31, 2024.

CRITICAL ACCOUNTING ESTIMATES

The preparation of financial statements in accordance with GAAP requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenue and expenses during the reporting period. These estimates and assumptions may require judgment about matters that are inherently uncertain, and future events are likely to occur that may require us to make changes to these estimates and assumptions. Accordingly, we regularly review these estimates and assumptions based on historical experience, changes in the business environment, and other factors we believe to be reasonable under the circumstances. There have been no significant changes to the critical accounting estimates contained in our Form 10-K at December 31, 2024.

OTHER MATTERS

Labor Agreements

Approximately 80% of our railroad employees are covered by collective bargaining agreements with various labor unions. Pursuant to the RLA, these agreements remain in effect until new agreements are reached, or until the bargaining procedures mandated by the RLA are completed. Moratorium provisions in the labor agreements govern when the railroads and unions may propose changes to the agreements. We largely bargain nationally in concert with other major railroads, represented by the NCCC.

Under moratorium provisions from the last round of negotiations, neither party was permitted to serve notice to compel a new round of mandatory collective bargaining until November 1, 2024. In the months prior to the opening of the current national bargaining round, we engaged in voluntary local discussions with our labor unions and, as a result, reached local tentative agreements with ten of our thirteen unions. A majority of those tentative agreements were subsequently ratified by union membership and became effective January 1, 2025, foreclosing the parties from serving new notices to compel mandatory bargaining until November 1, 2029.

For those unions with whom we had not yet reached a ratified agreement, the NCCC, on behalf of Norfolk Southern, sent bargaining notices on November 1, 2024, to commence mandatory direct negotiations as prescribed under the RLA. Since then, the NCCC has reached several additional agreements, subject to ratification, on behalf of Norfolk Southern and other members of the bargaining coalition.

For unions where bargaining currently remains open, even if the parties are unable to reach a voluntary ratified agreement during this first phase of RLA bargaining, self-help (e.g., a strike or other work stoppage) related to this collective-bargaining process remains prohibited by law until a lengthy series of additional procedures mandated by the RLA, including federal mediation, are exhausted.

Inflation

In preparing financial statements, GAAP requires the use of historical cost that disregards the effects of inflation on the replacement cost of property. As a capital-intensive company, we have most of our capital invested in long-lived assets. The replacement cost of these assets, as well as the related depreciation expense, would be substantially greater than the amounts reported on the basis of historical cost.

FORWARD-LOOKING STATEMENTS

Certain statements in this report, including in Management’s Discussion and Analysis of Financial Condition and Results of Operations, are “forward-looking statements” within the meaning of the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995, as amended. These statements relate to future events or our future financial performance and involve known and unknown risks, uncertainties, and other factors that may cause our actual results, levels of activity, performance, or our achievements or those of our industry to be materially different from those expressed or implied by any forward-looking statements. In some cases, forward-looking statements can be identified by terminology such as “may,” “will,” “could,” “would,” “should,” “expect,” “plan,” “anticipate,” “intend,” “believe,” “estimate,” “project,” “consider,” “predict,” “potential,” “feel,” or other comparable terminology. We have based these forward-looking statements on our current expectations, assumptions, estimates, beliefs, and projections. While we believe these expectations, assumptions, estimates, beliefs, and projections are reasonable, such forward-looking statements are only predictions and involve known and unknown risks and uncertainties, many of which involve factors or circumstances that are beyond our control. The following important factors, including those discussed under “Risk Factors” in our latest Form 10-K as well as our subsequent filings with the Securities and Exchange Commission, may cause actual results, performance, or achievements to differ materially from those expressed or implied by these forward-looking statements:

• changes in domestic or international economic, political or business conditions, including those impacting the transportation industry;

• our ability to successfully implement our operational, productivity, and strategic initiatives;

• a significant adverse event on our network, including but not limited to a mainline accident, discharge of hazardous material, or climate-related or other network outage;

• the outcome of claims, litigation, governmental proceedings, and investigations involving the Company, including but not limited to the Incident Proceedings;

• the nature and extent of the Company's environmental remediation obligations with respect to the Incident;

• new or additional governmental regulation and/or operational changes resulting from or related to the Incident or the Incident Proceedings; and

• a significant cybersecurity incident or other disruption to our technology infrastructure.

The forward-looking statements herein are made only as of the date they were first issued, and unless otherwise required by applicable securities laws, we disclaim any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise.

Additional Information

Investors and others should note that we routinely use the Investor Relations, Performance Metrics, and Sustainability sections of our website (norfolksouthern.investorroom.com/key-investor-information, norfolksouthern.investorroom.com/weekly-performance-reports & norfolksouthern.com/sustainability) to post presentations to investors and other important information, including information that may be deemed material to investors. Information about us, including information that may be deemed material, may also be announced by posts on our social media channels, including X (formerly known as Twitter) (x.com/nscorp) and LinkedIn (www.linkedin.com/company/norfolk-southern). We may also use our website and social media channels for the purpose of complying with our disclosure obligations under Regulation FD. As a result, we encourage investors, the media, and others interested in Norfolk Southern to review the information posted on our website and social media channels. The information posted on our website and social media channels is not incorporated by reference in this Quarterly Report on Form 10-Q.