Norfolk Southern 10-Q 2025-06-30

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 June 30, 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 June 30, 2025
Common Stock ($1.00 par value per share)						224,614,894			(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 Second Quarter and First Six Months of 2025 and 2024			3
						Consolidated Statements of Comprehensive Income Second Quarter and First Six Months of 2025 and 2024			4
						Consolidated Balance Sheets At June 30, 2025 and December 31, 2024			5
						Consolidated Statements of Cash Flows First Six Months of 2025 and 2024			6
						Consolidated Statements of Changes in Stockholders’ Equity Second Quarter and First Six Months of 2025 and 2024			7
						Notes to Consolidated Financial Statements			9
			Item 2.			Management’s Discussion and Analysis of Financial Condition and Results of Operations			27
			Item 3.			Quantitative and Qualitative Disclosures About Market Risk			38
			Item 4.			Controls and Procedures			38
Part II.			Other Information:
			Item 1.			Legal Proceedings			39
			Item 1A.			Risk Factors			39
			Item 2.			Unregistered Sales of Equity Securities, Use of Proceeds, and Issuer Purchases of Equity Securities			39
			Item 3.			Defaults Upon Senior Securities			39
			Item 4.			Mine Safety Disclosures			39
			Item 5.			Other Information			39
			Item 6.			Exhibits			40
						Signatures			41

PART I. FINANCIAL INFORMATION

Norfolk Southern Corporation and Subsidiaries

Consolidated Statements of Income

(Unaudited)

			Second Quarter												First Six Months
			2025						2024						2025						2024
			($ in millions, except per share amounts)
Railway operating revenues			$	3,110					$	3,044					$	6,103					$	6,048
Railway operating expenses
Compensation and benefits			692						700						1,431						1,436
Purchased services and rents			520						516						1,018						1,044
Fuel			219						257						463						541
Depreciation			346						335						692						672
Materials and other			195						173						400						388
Restructuring and other charges			10						(3)						10						96
Eastern Ohio incident			(47)						(65)						(232)						527
Total railway operating expenses			1,935						1,913						3,782						4,704
Income from railway operations			1,175						1,131						2,321						1,344
Other income – net			24						17						55						35
Interest expense on debt			201						204						400						405
Income before income taxes			998						944						1,976						974
Income taxes			230						207						458						184
Net income			$	768					$	737					$	1,518					$	790
Earnings per share
Basic			$	3.41					$	3.26					$	6.72					$	3.49
Diluted			3.41						3.25						6.72						3.48

See accompanying notes to consolidated financial statements.

Norfolk Southern Corporation and Subsidiaries

Consolidated Statements of Comprehensive Income

(Unaudited)

			Second Quarter												First Six Months
			2025						2024						2025						2024
			($ in millions)
Net income			$	768					$	737					$	1,518					$	790
Other comprehensive income (loss), before tax:
Pension and other postretirement expense			—						(11)						—						(13)
Other comprehensive income of equity investees			—						1						1						1
Other comprehensive income (loss), before tax			—						(10)						1						(12)
Income tax benefit related to items of other
comprehensive income			—						2						—						2
Other comprehensive income (loss), net of tax			—						(8)						1						(10)
Total comprehensive income			$	768					$	729					$	1,519					$	780

See accompanying notes to consolidated financial statements.

Norfolk Southern Corporation and Subsidiaries

Consolidated Balance Sheets

(Unaudited)

			June 30, 2025						December 31, 2024
			($ in millions)
Assets
Current assets:
Cash and cash equivalents			$	1,303					$	1,641
Accounts receivable – net			1,123						1,069
Materials and supplies			313						277
Other current assets			168						201
Total current assets			2,907						3,188
Investments			4,038						3,370
Properties less accumulated depreciation of $14,250
and $13,957, respectively			35,921						35,831
Other assets			1,289						1,293
Total assets			$	44,155					$	43,682
Liabilities and stockholders’ equity
Current liabilities:
Accounts payable			$	1,504					$	1,704
Income and other taxes			223						337
Other current liabilities			1,037						949
Current maturities of long-term debt			903						555
Total current liabilities			3,667						3,545
Long-term debt			16,464						16,651
Other liabilities			1,708						1,760
Deferred income taxes			7,529						7,420
Total liabilities			29,368						29,376
Stockholders’ equity:
Common stock $1.00 per share par value, 1,

Showing the first 8K of 97K characters. Open the full section

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.

Throughout the first half of 2025, we have remained focused on managing what we can control, including providing safe and reliable service for our customers while continuing efforts to drive productivity in our organization. During the quarter, we delivered revenue growth that helped drive improved financial performance amid ongoing macroeconomic uncertainty. We were able to handle additional volumes while generating improvements in labor productivity and fuel efficiency. Additionally, we continued to experience recoveries related to the Eastern Ohio Incident (as defined further and described in Note 12 in the Notes to Consolidated Financial Statements) in excess of incremental expenses, which further benefited our financial results. For the second quarter, we achieved an operating ratio (a measure of the amount of operating revenues consumed by operating expenses) of 62.2%, and an adjusted operating ratio of 63.4% (see our non-GAAP reconciliations beginning on page 28). We remain committed to being a safe, productive, resilient, and efficient railroad with industry-competitive margins.

SUMMARIZED RESULTS OF OPERATIONS

			Second Quarter																		First Six Months
			2025						2024						% change						2025						2024						% change
			($ in millions, except per share amounts)
Railway operating revenues			$	3,110					$	3,044					2%						$	6,103					$	6,048					1%
Railway operating expenses			$	1,935					$	1,913					1%						$	3,782					$	4,704					(20%)
Income from railway operations			$	1,175					$	1,131					4%						$	2,321					$	1,344					73%
Net income			$	768					$	737					4%						$	1,518					$	790					92%
Diluted earnings per share			$	3.41					$	3.25					5%						$	6.72					$	3.48					93%
Railway operating ratio (percent)			62.2						62.8						(1%)						62.0						77.8						(20%)

Income from railway operations increased in both periods. Second quarter financial results rose due to higher railway operating revenues driven by increased volumes, leading to gains in income from railway operations, net income, and diluted earnings per share. For the first six months, financial results improved primarily as a result of lower railway operating expenses associated with the Eastern Ohio Incident, as insurance and other recoveries exceeded incremental Incident-related costs, in addition to lower expenses associated with restructuring activities. As a result, we improved our railway operating ratio and delivered significant increases in income from railway operations, net income, and diluted earnings per share.

The following tables adjust our GAAP financial results for the second quarter and first six months of 2025 and 2024 to exclude restructuring and other charges and the effects of the Incident. The adjusted results for the second quarter and first six months of 2024 also exclude 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 Second Quarter 2025
			Reported (GAAP)						Restructuring and Other Charges						Eastern Ohio Incident																		Adjusted (non-GAAP)
			($ in millions, except per share amounts)
Railway operating expenses			$	1,935					$	(10)					$	47																	$	1,972
Income from railway operations			$	1,175					$	10					$	(47)																	$	1,138
Net income			$	768					$	8					$	(35)																	$	741
Diluted earnings per share			$	3.41					$	0.04					$	(0.16)																	$	3.29
Railway operating ratio (percent)			62.2						(0.3)						1.5																		63.4

			Non-GAAP Reconciliation for Second Quarter 2024
			Reported (GAAP)						Restructuring and Other Charges						Eastern Ohio Incident						Shareholder Advisory Costs												Adjusted (non-GAAP)
			($ in millions, except per share amounts)
Railway operating expenses			$	1,913					$	3					$	65					$	—											$	1,981
Income from railway operations			$	1,131					$	(3)					$	(65)					$	—											$	1,063
Net income			$	737					$	(16)					$	(49)					$	22											$	694
Diluted earnings per share			$	3.25					$	(0.07)					$	(0.22)					$	0.10											$	3.06
Railway operating ratio (percent)			62.8						0.1						2.2						—												65.1

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

			Second 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			$	1,972					$	1,981					—%
Income from railway operations			$	1,138					$	1,063					7%
Net income			$	741					$	694					7%
Diluted earnings per share			$	3.29					$	3.06					8%
Railway operating ratio (percent)			63.4						65.1						(3%)

			Non-GAAP Reconciliation for First Six Months 2025
			Reported (GAAP)						Restructuring and Other Charges						Eastern Ohio Incident																		Adjusted (non-GAAP)
			($ in millions, except per share amounts)
Railway operating expenses			$	3,782					$	(10)					$	232																	$	4,004
Income from railway operations			$	2,321					$	10					$	(232)																	$	2,099
Net income			$	1,518					$	8					$	(176)																	$	1,350
Diluted earnings per share			$	6.72					$	0.03					$	(0.78)																	$	5.97
Railway operating ratio (percent)			62.0						(0.2)						3.8																		65.6

			Non-GAAP Reconciliation for First Six Months 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			$	4,704					$	(96)					$	(527)					$	—					$	—					$	4,081
expenses
Income from railway			$	1,344					$	96					$	527					$	—					$	—					$	1,967
operations
Net income			$	790					$	59					$	399					$	38					$	(27)					$	1,259
Diluted earnings			$	3.48					$	0.26					$	1.77					$	0.17					$	(0.12)					$	5.56
per share
Railway operating			77.8						(1.6)						(8.7)						—						—						67.5
ratio (percent)

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

			First Six Months
			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			$	4,004					$	4,081					(2%)
Income from railway operations			$	2,099					$	1,967					7%
Net income			$	1,350					$	1,259					7%
Diluted earnings per share			$	5.97					$	5.56					7%
Railway operating ratio (percent)			65.6						67.5						(3%)

On an adjusted basis, income from railway operations increased in both periods due to higher railway operating revenues, driven by higher volumes, and lower adjusted railway operating expenses. The declines in adjusted railway operating expenses in both periods reflect lower fuel costs and purchased services.

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.

			Second Quarter																		First Six Months
Revenues			2025						2024						% change						2025						2024						% change
Merchandise:
Agriculture, forest and consumer products			$	645					$	622					4%						$	1,281					$	1,251					2%
Chemicals			546						532						3%						1,081						1,059						2%
Metals and construction			458						440						4%						872						870						—%
Automotive			323						310						4%						601						587						2%
Merchandise			1,972						1,904						4%						3,835						3,767						2%
Intermodal			743						742						—%						1,503						1,487						1%
Coal			395						398						(1%)						765						794						(4%)
Total			$	3,110					$	3,044					2%						$	6,103					$	6,048					1%

Units
Merchandise:
Agriculture, forest and consumer products			186.4						181.2						3%						370.0						365.3						1%
Chemicals			139.1						130.1						7%						271.1						260.6						4%
Metals and construction			171.1						167.9						2%						319.4						328.5						(3%)
Automotive			104.0						97.2						7%						192.3						185.5						4%
Merchandise			600.6						576.4						4%						1,152.8						1,139.9						1%
Intermodal			1,010.9						1,003.5						1%						2,033.8						1,992.3						2%
Coal			181.7						162.9						12%						346.4						330.0						5%
Total			1,793.2						1,742.8						3%						3,533.0						3,462.2						2%

Revenue per Unit
Merchandise:
Agriculture, forest and consumer products			$	3,456					$	3,433					1%						$	3,461					$	3,424					1%
Chemicals			3,927						4,090						(4%)						3,987						4,064						(2%)
Metals and construction			2,676						2,620						2%						2,729						2,649						3%
Automotive			3,104						3,196						(3%)						3,126						3,166						(1%)
Merchandise			3,282						3,304						(1%)						3,326						3,305						1%
Intermodal			735						739						(1%)						739						746						(1%)
Coal			2,173						2,445						(11%)						2,209						2,407						(8%)
Total			1,734						1,747						(1%)						1,727						1,747						(1%)

Railway operating revenues increased $66 million and $55 million in the second quarter and first six months, respectively. The table below reflects the components of the revenue change by major commodity group ($ in millions).

			Second Quarter																		First Six Months
			Merchandise						Intermodal						Coal						Merchandise						Intermodal						Coal
			Increase (Decrease)
Volume			$	80					$	6					$	46					$	42					$	31					$	40
Fuel surcharge revenue			(28)						(24)						(4)						(62)						(40)						(12)
Rate, mix and other			16						19						(45)						88						25						(57)
Total			$	68					$	1					$	(3)					$	68					$	16					$	(29)

Approximately 95% of our revenue base is covered by contracts that include negotiated fuel surcharges. Revenues associated with these surcharges totaled $203 million and $259 million in the second quarters of 2025 and 2024, respectively, and $405 million and $519 million for the first six months 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 increased in both periods due to higher volume. Volume growth in the second quarter was partially offset by lower average revenue per unit, driven by lower fuel surcharge revenue. The first six months experienced increased average revenue per unit, driven by increased pricing and favorable mix partially offset by lower fuel surcharge revenue.

Agriculture, forest and consumer products volume rose in both periods due to increases in corn and ethanol. Higher corn volume was the result of increased rail demand. Ethanol increased due to improved terminal access and new business.

Chemicals volume rose in both periods, primarily due to increased sand and natural gas liquids shipments. Sand volume increased due to strong demand to support natural gas drilling. Natural gas liquids volume rose due to increased demand for product bound for export markets.

Metals and construction volume increased in the second quarter but decreased for the first six months. Scrap metal and iron and steel volume increased in both periods due to stronger demand. Additionally, volume increased in the second quarter due to higher empty equipment repositioning. Volume declined in aggregates and coil steel for both periods, driving the decline in the first six months. Weather-related impacts negatively impacted shipments of aggregates and coil steel volume decreased due to lower demand.

Automotive volumes increased in both periods, driven by shippers increasing volume in anticipation of potential changes to tariffs and growth with existing customers.

Intermodal

Intermodal revenues were nearly flat in the second quarter and increased for the first six months. Both periods reflect higher volumes, partially offset by lower average revenue per unit primarily driven by lower fuel surcharge revenue.

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

			Second Quarter																		First Six Months
			2025						2024						% change						2025						2024						% change
Domestic			603.1						616.3						(2%)						1,211.9						1,206.7						—		%
International			407.8						387.2						5%						821.9						785.6						5		%
Total			1,010.9						1,003.5						1%						2,033.8						1,992.3						2		%

Domestic volume decreased in the second quarter but was flat for the first six months. While domestic volume was positively impacted during both periods by shippers increasing volume in anticipation of potential changes to tariffs, these increases were offset by reduced premium shipments related to economic uncertainties. Additionally, the second quarter was impacted by reduced traffic originating from the West coast. International volume rose in both periods primarily driven by new business with existing customers, including increased volume in anticipation of potential changes to tariffs.

Coal

Coal revenues declined in both periods due to lower average revenue per unit, driven by reduced pricing, adverse mix, and lower fuel surcharge revenue, partially offset by higher volume.

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

			Second Quarter																		First Six Months
			2025						2024						% change						2025						2024						% change
Utility			9,296						7,555						23%						16,608						14,574						14%
Export			7,504						7,247						4%						15,764						15,996						(1%)
Domestic metallurgical			2,742						2,573						7%						4,827						4,766						1%
Industrial			875						863						1%						1,735						1,649						5%
Total			20,417						18,238						12%						38,934						36,985						5%

Utility tonnage increased in both periods due to higher electricity demand and higher natural gas prices. Export tonnage increased in the second quarter, as prior year volumes were negatively impacted by the temporary closure of the Baltimore port in 2024. Export tonnage in the second quarter and first six months of 2025 was negatively impacted by unfavorable coal pricing. Domestic metallurgical and industrial coal tonnage rose in both periods as a result of increased demand.

Railway Operating Expenses

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

			Second Quarter																		First Six Months
			2025						2024						% change						2025						2024						% change
Compensation and benefits			$	692					$	700					(1%)						$	1,431					$	1,436					—%
Purchased services			409						419						(2%)						810						839						(3%)
Equipment rents			111						97						14%						208						205						1%
Fuel			219						257						(15%)						463						541						(14%)
Depreciation			346						335						3%						692						672						3%
Materials			98						92						7%						198						190						4%
Claims			59						50						18%						125						98						28%
Other			38						31						23%						77						100						(23%)
Restructuring and other charges			10						(3)						433%						10						96						(90%)
Eastern Ohio incident			(47)						(65)						28%						(232)						527						(144%)
Total			$	1,935					$	1,913					1%						$	3,782					$	4,704					(20%)

Compensation and benefits expense decreased in both periods as follows:

• employee activity levels (down $28 million for the quarter and $68 million for the first six months),

• health and welfare benefits (down $11 million for the quarter and $23 million for the first six months),

• incentive compensation (up $6 million for the quarter and $44 million for the first six months),

• pay rates (up $24 million for the quarter and $43 million for the first six months), and

• other (up $1 million for the quarter but down $1 million for the first six months).

Average rail headcount for the quarter was down by approximately 970 compared with the second 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 in both periods driven by network performance improvements and productivity initiatives, partially offset by higher intermodal lift costs and, for the first six months, increased weather-related response 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, increased in both periods due to higher automotive equipment expense as a result of higher volumes, partially offset by lower short-term locomotive resource costs for the first six months.

Fuel expense, which includes the cost of locomotive fuel as well as other fuel used in railway operations decreased in both periods. Locomotive fuel price decreased in both periods (down 15% in the second quarter and 13% for the first six months). Locomotive fuel consumption was flat in the second quarter and down 2% for the first six months.

Depreciation expense increased in both periods due to a higher asset base.

Materials expense increased in both periods due to higher expenses related to intermodal and engineering material consumption.

Claims expense includes costs related to personal injury, property damage, and environmental matters. Claims expense increased in both periods as a result of higher expenses related to personal injury case development, increased accident-related costs, and higher insurance premiums. Additionally, for the first six months, expenses incurred on environmental matters, unrelated to the Incident, were higher and included costs related to weather events in the first quarter. The increases in both periods were partially offset by a favorable third-party settlement for recovery of previously incurred costs.

Other expense increased in the second quarter but decreased for the first six months. The second quarter increased due to higher allowances for losses, partially offset by increased gains from operating property sales. The first six months decreased due to higher gains from operating property sales partially offset by higher allowances for losses. Gains from operating property sales totaled $34 million and $25 million for the second quarter in 2025 and 2024, respectively, and $57 million and $25 million in the first six months of 2025 and 2024, respectively.

Restructuring and other charges

During the second quarter of 2025, we recorded $10 million in expenses primarily related to the restructuring of certain technology functions. During the first six months of 2024, we recorded $96 million in expense associated with our voluntary and involuntary separation programs that reduced our management workforce, as well as costs associated with the appointment of our new chief operating officer.

Eastern Ohio incident

During the second quarters of 2025 and 2024, insurance and other recoveries exceeded additional Incident-related expenses by $47 million and $65 million, respectively. For the first six months of 2025, our recoveries exceeded additional Incident-related expenses by $232 million whereas we incurred expenses of $527 million for costs associated with the Incident, net of recoveries, for the same period last year. Recoveries collected exceeded incremental cash expenditures by $234 million for the first six months of 2025, while cash expenditures attributable to the Incident, net of recovery proceeds, were $133 million for the first six 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 $7 million in the second quarter and $20 million for the first six months. Both periods were impacted by the absence of costs associated with shareholder matters incurred in 2024 and a $20 million curtailment gain on our other postretirement benefit plan in 2024.

Income taxes

The effective tax rate for the second quarter and first six months of 2025 was 23.0% and 23.2% compared with 21.9% and 18.9% for the same periods last year. Both periods in 2024 reflect a $13 million deferred income tax benefit due to a change in a state corporate income tax rate, while the first six months also includes a $27 million deferred income tax benefit, which was the result of a subsidiary restructuring.

On July 4, 2025, OBBBA was signed into law. The OBBBA makes permanent or introduces certain changes to the Internal Revenue Code, including 100% bonus depreciation, the deductibility of business interest expense, and expensing of domestic research costs. FASB ASC 740 “Income Taxes” requires that the effect of changes in tax rates and laws be recognized in the period in which the legislation is enacted. The Company is evaluating the impact of OBBBA but expects that the primary effect will be a shift between current and deferred taxes.

FINANCIAL CONDITION AND LIQUIDITY

Cash provided by operating activities, our principal source of liquidity, was $2.0 billion for the first six months of 2025, compared with $1.9 billion for the same period of 2024. The increase reflects improved operating results. We had negative working capital of $760 million and $357 million at June 30, 2025 and December 31, 2024, respectively, with the increase driven in part by COLI loan repayments. Cash and cash equivalents totaled $1.3 billion at June 30, 2025.

Cash used in investing activities was $1.4 billion for the first six months of 2025, compared with $2.6 billion for the same period last year. The decrease was driven by the prior year acquisition of the assets of the Cincinnati Southern Railway (CSR), partially offset by an increase in COLI loan repayments in the current year.

Cash used in financing activities was $930 million for the first six months of 2025, compared with $217 million for the same period last year. The increase reflects increased repurchases of Common Stock and lower proceeds from borrowing. We repurchased $456 million of Common Stock, inclusive of excise taxes, during the first six months of 2025, while we did not repurchase any Common Stock during the same period last year. As of June 30, 2025, $6.4 billion remains authorized by our Board of Directors for future repurchase activity. 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 May 2025, we issued $400 million of 5.10% senior notes due 2035.

In May 2025, 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 2026. We had no amounts outstanding under this program and our available borrowing capacity was $400 million at both June 30, 2025 and December 31, 2024.

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 June 30, 2025 and December 31, 2024, we had no outstanding commercial paper.

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 June 30, 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 June 30, 2025 and $605 million borrowed at December 31, 2024. Our remaining borrowing capacity was $600 million and $40 million at June 30, 2025 and December 31, 2024, respectively.

Our debt-to-total capitalization ratio was 54.0% at June 30, 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, with the exception of

additional senior notes (see Note 9) and over $400 million of additional unconditional purchase obligations, which extend through 2030.

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 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;

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

• the occurrence of any event, change or other circumstance that could give rise to the right of one or both of the parties to terminate the definitive merger agreement between Union Pacific and the Company providing for the acquisition of the Company by Union Pacific (the “Transaction”); the possibility that the Transaction does not close when expected or at all because required Surface Transportation Board, shareholder or other approvals and other conditions to closing are not received or satisfied on a timely basis or at all (and the risk that such approvals may result in the imposition of conditions that could adversely affect the combined company or the expected benefits of the Transaction); the risk that the combined company will not realize expected benefits, cost savings, accretion, synergies and/or growth from the Transaction, or that such benefits may take longer to realize or be more costly to achieve than expected; disruption to the Company’s business as a result of the announcement and pendency of the Transaction; the costs associated with the anticipated length of time of the pendency of the Transaction, including the restrictions contained in the definitive merger agreement on the ability of the Company to operate its business outside the ordinary course during the pendency of the Transaction; the diversion of the Company’s management’s attention and time from ongoing business operations and opportunities on merger-related matters; and reputational risk and potential adverse reactions of Union Pacific’s or the Company’s customers, suppliers, employees, labor unions or other business partners, including those resulting from the announcement or completion of the Transaction.

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.