Norfolk Southern : Financial document (Q3 2025 Website Financial Statements)

‌Third Quarter First Nine Months 2025 2024 2025 2024

(in millions, except per share amounts)

Railway operating revenues

Merchandise	$ 1,969		$ 1,861		$ 5,804		$ 5,628
Intermodal	759		763		2,262		2,250
Coal	375		427		1,140		1,221
Total railway operating revenues	3,103		3,051		9,206		9,099
Railway operating expenses
Compensation and benefits	738		690		2,169		2,126
Purchased services and rents	519		497		1,537		1,541
Fuel	237		216		700		757
Depreciation	348		339		1,040		1,011
Materials and other	147		(188)		547		200
Merger-related expenses	15		-		15		-
Restructuring and other charges	12		60		22		156
Eastern Ohio incident	(11)		(159)		(243)		368
Total railway operating expenses	2,005		1,455		5,787		6,159
Income from railway operations	1,098		1,596		3,419		2,940
Other income - net	23		34		78		69
Interest expense on debt	197		203		597		608
Income before income taxes	924		1,427		2,900		2,401
Income taxes	213		328		671		512
Net income	$ 711		$ 1,099		$ 2,229		$ 1,889
Earnings per share - diluted	$ 3.16		$ 4.85		$ 9.88		$ 8.34
Weighted average shares outstanding - diluted	224.7		226.5		225.5		226.3

‌Assets

Current assets:

September 30, December 31, 2025 2024

($ in millions)

Cash and cash equivalents	$ 1,418		$ 1,641
Accounts receivable - net	1,102		1,069
Materials and supplies	297		277
Other current assets	219		201
Total current assets	3,036		3,188
Investments	4,081		3,370
Properties less accumulated depreciation of $14,438
and $13,957, respectively	36,112		35,831
Other assets	1,351		1,293
Total assets	$ 44,580		$ 43,682

Liabilities and stockholders' equity

Current liabilities:

Accounts payable	$ 1,657		$ 1,704
Income and other taxes	227		337
Other current liabilities	1,033		949
Current maturities of long-term debt	607		555
Total current liabilities	3,524		3,545
Long-term debt	16,476		16,651
Other liabilities	1,705		1,760
Deferred income taxes	7,734		7,420
Total liabilities	29,439		29,376
Stockholders' equity:
Common stock $1.00 per share par value, 1,350,000,000 shares
authorized; outstanding 224,386,617 and 226,320,894 shares, respectively, net of treasury shares	226		228
Additional paid-in capital	2,283		2,247
Accumulated other comprehensive loss	(262)		(262)
Retained income	12,894		12,093
Total stockholders' equity	15,141		14,306
Total liabilities and stockholders' equity	$ 44,580		$ 43,682

‌Cash flows from operating activities First Nine Months 2025 2024

($ in millions)

Net income Reconciliation of net income to net cash provided by operating activities:	$ 2,229		$ 1,889
Depreciation	1,040		1,011
Deferred income taxes	315		141
Gains and losses on properties	(142)		(425)
Changes in assets and liabilities affecting operations: Accounts receivable	(53)		(156)
Materials and supplies	(20)		(24)
Other current assets	68		80
Current liabilities other than debt	25		774
Other - net	(164)		(189)
Net cash provided by operating activities	3,298		3,101
Cash flows from investing activities
Property additions	(1,475)		(1,706)
Acquisition of assets of CSR	-		(1,643)
Property sales and other transactions	120		527
Investment purchases	(615)		(318)
Investment sales and other transactions	52		349
Net cash used in investing activities	(1,918)		(2,791)
Cash flows from financing activities
Dividends	(912)		(915)
Common stock transactions	1		15
Purchase and retirement of common stock	(534)		-
Proceeds from borrowings	396		1,051
Debt repayments	(554)		(1,054)
Net cash used in financing activities	(1,603)		(903)
Net decrease in cash and cash equivalents	(223)		(593)
Cash and cash equivalents
At beginning of year	1,641		1,568
At end of period	$ 1,418		$ 975

Supplemental disclosures of cash flow information

Cash paid during the period for:

Interest (net of amounts capitalized)	$ 570	$ 571
Income taxes (net of refunds)	433	284

‌NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1. Gains on Railway Line Sales

   During the third quarter of 2024, we completed sales of two railway lines in the states of Virginia and North Carolina resulting in gains of $380 million included in "Materials and other" expense. The gains from these transactions are reflected in "Gains and losses on properties" and cash proceeds are included in "Property sales and other transactions" on the Consolidated Statement of Cash Flows.

2. Merger-Related Expenses

   During the third quarter of 2025, we incurred $15 million in merger-related expenses primarily related to third-party advisor fees, legal fees, and costs associated with employee retention arrangements.

3. Restructuring and Other Charges

   Restructuring and other charges in 2025 includes expenses associated with the rationalization of certain software development projects that had not been placed into service and the restructuring of certain technology functions, including severance costs for impacted employees. Restructuring and other charges in 2024 includes expenses associated with our voluntary and involuntary separation programs that reduced our management workforce, expenses associated with the rationalization of certain software development projects that had not been placed into service, costs associated with the appointment of our new chief operating officer, and the disposition of an asset class. We incurred expenses of $12 million and $60 million in the third quarters of 2025 and 2024, respectively, and $22 million and $156 million for the first nine months of 2025 and 2024, respectively.

   Additionally, the first nine months of 2024 "Other income - net" includes a $20 million curtailment gain on our other postretirement benefit plan resulting from the restructuring, recorded in the second quarter of 2024.

4. Eastern Ohio Incident

   On February 3, 2023, a train operated by us derailed in East Palestine, Ohio (the Incident). During the third quarter of 2025, we incurred net expenses of $13 million, as compared to $159 million of net benefits for the same period last year. Recoveries exceeded expenses by $219 million in the first nine months of 2025 as compared to expenses of $368 million during the first nine months of 2024. The total expense recognized includes the impact of

   $394 million and $552 million in recoveries during the first nine months of 2025 and 2024, respectively, of which

   $16 million and $288 million was recognized in the third quarters of 2025 and 2024, respectively. Any additional amounts recoverable under our insurance policies or from third parties will be reflected in future periods in which recovery is considered probable.

5. Shareholder Advisory Costs

   "Other income - net" includes costs associated with shareholder advisory matters, which amounted to $1 million and $51 million during the third quarter and first nine months of 2024, respectively.

6. Deferred Income Taxes

   During the first nine months of 2024, we recorded a $27 million reduction to deferred income taxes, the result of a subsidiary restructuring that reduced our estimated deferred state income tax rate.

7. Stock Repurchase Program

We repurchased and retired 2.2 million shares of common stock under our stock repurchase program in the first nine months of 2025 at a cost of $533 million, inclusive of accrued excise taxes, while we did not repurchase any shares of common stock in the first nine months of 2024.