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What changed in Norfolk Southern's 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of Norfolk Southern's 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+221 added−205 removedSource: 10-K (2026-02-09) vs 10-K (2025-02-10)

Top changes in Norfolk Southern's 2025 10-K

221 paragraphs added · 205 removed · 165 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

21 edited+3 added−1 removed39 unchanged
Biggest changeAt December 31, 2024, we owned or leased the following revenue generating equipment: Owned Leased Total Capacity of Equipment Locomotives: (Horsepower) Multiple purpose 3,101 — 3,101 12,073,500 Auxiliary units 140 — 140 — Switching 4 — 4 4,400 Total locomotives 3,245 — 3,245 12,077,900 Freight cars: (Tons) Gondola 17,007 3,739 20,746 2,346,243 Hopper 6,875 — 6,875 787,764 Covered hopper 5,107 310 5,417 602,841 Box 1,743 513 2,256 211,489 Flat 1,038 670 1,708 122,369 Other 121 — 121 — Total freight cars 31,891 5,232 37,123 4,070,706 Intermodal equipment: Chassis 39,037 — 39,037 Containers 17,443 — 17,443 Total intermodal equipment 56,480 — 56,480 The following table indicates the number and year built for locomotives and freight cars owned at December 31, 2024: 2024 2023 2022 2021 2020 2015- 2019 2010- 2014 2009 & Before Total Locomotives: No. of units — — — 1 10 178 325 2,731 3,245 % of fleet — % — % — % — % — % 6 % 10 % 84 % 100 % Freight cars: No. of units 254 1,059 236 — — 3,505 6,745 20,092 31,891 % of fleet 1 % 3 % 1 % — % — % 11 % 21 % 63 % 100 % K7 The following table shows the average age of our owned locomotive and freight car fleets at December 31, 2024 and information regarding 2024 retirements: Locomotives Freight Cars Average age – in service 29.6 years 24.2 years Retirements 61 units 3,937 units Average age – retired 23.9 years 42.4 years Track Maintenance – Of the 35,000 total miles of track on which we operate, we are responsible for maintaining 28,300 miles, with the remainder being operated under trackage rights from other parties responsible for maintenance.
Biggest changeAt December 31, 2025, we owned or leased the following revenue generating equipment: Owned Leased Total Capacity of Equipment Locomotives: (Horsepower) Multiple purpose 3,114 — 3,114 12,114,700 Auxiliary units 140 — 140 — Switching 4 — 4 4,400 Total locomotives 3,258 — 3,258 12,119,100 Freight cars: (Tons) Gondola 17,079 3,441 20,520 2,316,360 Hopper 6,445 687 7,132 820,710 Covered hopper 4,956 310 5,266 585,876 Box 1,542 331 1,873 175,753 Flat 986 667 1,653 119,375 Other 120 — 120 — Total freight cars 31,128 5,436 36,564 4,018,074 Intermodal equipment: Chassis 38,987 — 38,987 Containers 17,404 — 17,404 Total intermodal equipment 56,391 — 56,391 The following table indicates the number and year built for locomotives and freight cars owned at December 31, 2025: 2025 2024 2023 2022 2021 2016- 2020 2011- 2015 2010 & Before Total Locomotives: No. of units — — — — 1 180 291 2,786 3,258 % of fleet — % — % — % — % — % 6 % 9 % 85 % 100 % Freight cars: No. of units 324 348 1,059 235 — 1,440 8,622 19,100 31,128 % of fleet 1 % 1 % 3 % 1 % — % 5 % 28 % 61 % 100 % K7 The following table shows the average age of our owned locomotive and freight car fleets at December 31, 2025 and information regarding 2025 retirements: Locomotives Freight Cars Average age – in service 30.5 years 24.1 years Retirements 27 units 1,182 units Average age – retired 27.5 years 45.6 years Track Maintenance – Of the 35,000 total miles of track on which we operate, we are responsible for maintaining 28,200 miles, with the remainder being operated under trackage rights from other parties responsible for maintenance.
We take a data-centric approach, including the use of periodic surveys among employees, to identify new initiatives that will help boost engagement and drive business results. Employee Development and Training – We provide a range of developmental programs, opportunities, skills, and resources for our employees to be successful in their careers.
We take a data-centric approach, including the use of ongoing surveys among employees, to identify new initiatives that will help boost engagement and drive business results. Employee Development and Training – We provide a range of developmental programs, opportunities, skills, and resources for our employees to be successful in their careers.
We handled 76.7 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.
We handled 78.0 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.
Surface Transportation Board (STB). The STB has jurisdiction to varying extents over rates, routes, customer access provisions, fuel surcharges, conditions of service, and the extension or abandonment of rail lines. The STB has jurisdiction to determine whether we are “revenue adequate” on an annual basis based on the results of the prior year.
The STB has jurisdiction to varying extents over rates, routes, customer access provisions, fuel surcharges, conditions of service, and the extension or abandonment of rail lines. The STB has jurisdiction to determine whether we are “revenue adequate” on an annual basis based on the results of the prior year.
Approximately 40% of our lines, excluding rail operated pursuant to trackage rights, carried 20 million or more gross tons per track mile during 2024.
Approximately 40% of our lines, excluding rail operated pursuant to trackage rights, carried 20 million or more gross tons per track mile during 2025.
K9 Efforts have been made over the past several years to increase federal economic regulation of the rail industry, and such efforts may continue in 2025.
K9 Efforts have been made over the past several years to increase federal economic regulation of the rail industry, and such efforts may continue in 2026.
Our coal franchise supports the electric generation market, directly serving 18 coal-fired power plants, as well as the export, domestic metallurgical, and industrial markets, primarily through direct rail and river, lake, and coastal facilities, including various terminals on the Ohio River, at Lamberts Point in Norfolk, Virginia, at the Port of Baltimore, and on Lake Erie.
Our coal franchise supports the electric generation market, directly serving 18 coal-fired power plants, as well as the export, domestic metallurgical, and industrial markets, primarily through direct rail and river, lake, and coastal facilities, including various terminals on the Ohio River, at Lamberts Point in Norfolk, Virginia, at the Port of Baltimore, at McDuffie Coal Terminal in Mobile, AL, and on Lake Erie.
K5 In 2024, we handled 2.3 million merchandise carloads, which accounted for 62% of our total railway operating revenues. INTERMODAL – Our intermodal commodity group consists of shipments moving in domestic and international containers and trailers. These shipments are handled on behalf of intermodal marketing companies, international steamship lines, premium customers, and asset-owning companies.
In 2025, we handled 2.3 million merchandise carloads, which accounted for 63% of our total railway operating revenues. K5 INTERMODAL – Our intermodal commodity group consists of shipments moving in domestic and international containers and trailers. These shipments are handled on behalf of intermodal marketing companies, international steamship lines, premium customers, and asset-owning companies.
In 2024, through the Norfolk Southern Operation Awareness and Response Program as well as participation in the Transportation Community Awareness and Emergency Response Program, we provided rail accident response training to more than 5,500 emergency responders, such as local police and fire personnel, utilizing a combination of online training and face-to-face training sessions as well as the Norfolk Southern Safety Train.
In 2025, through the Norfolk Southern Operation Awareness and Response Program as well as participation in the Transportation Community Awareness and Emergency Response Program, we provided rail accident response training to more than 5,800 emergency responders, such as local police and fire personnel, utilizing a combination of online training and face-to-face training sessions as well as the Norfolk Southern Safety Train.
Property Additions – Property additions for the past five years were as follows: 2024 2023 2022 2021 2020 ($ in millions) Road and other property $ 1,711 $ 1,525 $ 1,345 $ 1,041 $ 1,046 Acquisition of assets of CSR 1,643 22 — — — Equipment 670 802 603 429 448 Total $ 4,024 $ 2,349 $ 1,948 $ 1,470 $ 1,494 Our capital spending and replacement programs are and have been designed to support our ability to provide safe, efficient, and reliable rail transportation services.
Property Additions – Property additions for the past five years were as follows: 2025 2024 2023 2022 2021 ($ in millions) Road and other property $ 1,824 $ 1,711 $ 1,525 $ 1,345 $ 1,041 Acquisition of assets of CSR — 1,643 22 — — Equipment 380 670 802 603 429 Total $ 2,204 $ 4,024 $ 2,349 $ 1,948 $ 1,470 Our capital spending and replacement programs are and have been designed to support our ability to provide safe, efficient, and reliable rail transportation services.
The following table sets forth certain statistics relating to our operations for the past five years: Years ended December 31, 2024 2023 2022 2021 2020 Revenue ton miles (billions) 178 176 179 178 164 Revenue per thousand revenue ton miles $ 68.09 $ 69.05 $ 71.35 $ 62.56 $ 59.67 Revenue ton miles (thousands) per railroad employee 8,846 8,719 9,513 9,694 8,191 Ratio of railway operating expenses to railway operating revenues (railway operating ratio) 66.4% 76.5% 62.3% 60.1% 69.3% RAILWAY OPERATING REVENUES – Total railway operating revenues were $12.1 billion in 2024.
The following table sets forth certain statistics relating to our operations for the past five years: Years ended December 31, 2025 2024 2023 2022 2021 Revenue ton miles (billions) 184 178 176 179 178 Revenue per thousand revenue ton miles $ 66.31 $ 68.09 $ 69.05 $ 71.35 $ 62.56 Revenue ton miles (thousands) per railroad employee 9,486 8,846 8,719 9,513 9,694 Ratio of railway operating expenses to railway operating revenues (railway operating ratio) 64.2% 66.4% 76.5% 62.3% 60.1% RAILWAY OPERATING REVENUES – Total railway operating revenues were $12.2 billion in 2025.
In pursuit of this goal, we are dedicated to establishing a workplace where a broad spectrum of identities, perspectives, and experiences is not only represented but also valued and empowered to thrive. GOVERNMENT REGULATION – In addition to environmental, safety, securities, and other regulations generally applicable to all business, our railroads are subject to regulation by the U.S.
In pursuit of this goal, we are dedicated to establishing a workplace where a broad spectrum of identities, perspectives, and experiences is not only represented but also valued and enabled to deliver outstanding results. GOVERNMENT REGULATION – In addition to environmental, safety, securities, and other regulations generally applicable to all business, our railroads are subject to regulation by the STB.
In 2024, we handled 4.1 million intermodal units, which accounted for 25% of our total railway operating revenues. COAL – Coal revenues accounted for 13% of our total railway operating revenues in 2024.
In 2025, we handled 4.1 million intermodal units, which accounted for 25% of our total railway operating revenues. COAL – Coal revenues accounted for 12% of our total railway operating revenues in 2025.
Craft Workforce Levels and Productivity – Maintaining appropriate headcount levels for our craft-employee workforce is critical to our on-time and consistent delivery of customers’ goods and operational efficiency goals. We manage this human capital metric through forecasting tools designed to ensure the optimal level of staffing to meet business demands.
Craft Workforce Levels and Productivity – Maintaining appropriate headcount levels for our craft-employee workforce is critical to our on-time and consistent delivery of customers’ goods and operational efficiency goals. We manage this human capital metric through strategic cross functional teams from multiple departments who utilize forecasting tools designed to ensure the optimal level of staffing to meet business demands.
For further information on the Incident and environmental matters, see Note 18 in Item 8 “Notes to Consolidated Financial Statements.” HUMAN CAPITAL MANAGEMENT Workforce – We employed an average of 20,200 employees during 2024 and 19,600 employees at the end of 2024.
For further information on the Incident and environmental matters, see Note 19 in Item 8 “Notes to Consolidated Financial Statements.” HUMAN CAPITAL MANAGEMENT Workforce – We employed an average of 19,400 employees during 2025 and 19,300 employees at the end of 2025.
The following table summarizes several measurements regarding our track roadway additions and replacements during the past five years: 2024 2023 2022 2021 2020 Track miles of rail installed 559 584 541 458 418 Miles of track surfaced 3,957 4,013 4,155 4,225 4,785 Crossties installed (millions) 2.1 2.1 2.2 2.0 1.8 Traffic Control – Of the 16,200 route miles we dispatch, 11,300 miles are equipped with signalization.
The following table summarizes several measurements regarding our track roadway additions and replacements during the past five years: 2025 2024 2023 2022 2021 Track miles of rail installed 479 559 584 541 458 Miles of track surfaced 4,061 3,957 4,013 4,155 4,225 Crossties installed (millions) 2.0 2.1 2.1 2.2 2.0 Traffic Control – Of the 16,200 route miles we dispatch, 10,300 miles incorporate signalization.
With the exception of our response to the Eastern Ohio Incident (the “Incident” as defined in Note 18) such compliance has not had a material effect on our financial position, results of operations, or liquidity.
ENVIRONMENTAL MATTERS – Compliance with laws and regulations relating to the protection of the environment is one of our principal goals. With the exception of our response to the Eastern Ohio Incident (the “Incident” as defined in Note 19) such compliance has not had a material effect on our financial position, results of operations, or liquidity.
Corridors with heaviest freight volume: • New York City area to Chicago (via Allentown and Pittsburgh) • Chicago to Macon (via Cincinnati, Chattanooga, and Atlanta) • Central Ohio to Norfolk (via Columbus and Roanoke) • Cleveland to Kansas City • Birmingham to Meridian • Memphis to Chattanooga K4 The miles operated, which include an exclusive operating agreement for trackage rights over property owned by North Carolina Railroad Company, were as follows: Mileage Operated at December 31, 2024 Route Miles Second and Other Main Track Passing Track, Crossovers, and Turnouts Way and Yard Switching Total Owned 14,629 2,826 1,983 8,241 27,679 Operated under lease, contract, or trackage rights 4,525 1,735 373 720 7,353 Total 19,154 4,561 2,356 8,961 35,032 In March 2024, we completed the acquisition of a 337 mile railway line that extends from Cincinnati, Ohio to Chattanooga, Tennessee from the Cincinnati Southern Railway (CSR), which we previously operated under a lease.
Corridors with heaviest freight volume: • New York City area to Chicago (via Allentown and Pittsburgh) • Chicago to Macon (via Cincinnati, Chattanooga, and Atlanta) • Central Ohio to Norfolk (via Columbus and Roanoke) • Birmingham to Meridian • Cleveland to Kansas City K4 The miles operated, which include an exclusive operating agreement for trackage rights over property owned by North Carolina Railroad Company, were as follows: Mileage Operated at December 31, 2025 Route Miles Second and Other Main Track Passing Track, Crossovers, and Turnouts Way and Yard Switching Total Owned 14,594 2,826 1,975 8,212 27,607 Operated under lease, contract, or trackage rights 4,525 1,735 373 719 7,352 Total 19,119 4,561 2,348 8,931 34,959 We operate freight service over lines with ongoing Amtrak and commuter passenger operations, including trackage owned or leased by Amtrak, New Jersey Transit, Southeastern Pennsylvania Transportation Authority, Metro-North Commuter Railroad Company, Virginia Passenger Rail Authority (VPRA), and the Michigan Department of Transportation.
Our system reaches many manufacturing plants, electric generating facilities, mines, distribution centers, transload facilities, and other businesses located in our service area.
K3 RAILROAD OPERATIONS – At December 31, 2025, we operated approximately 19,100 route miles in 22 states and the District of Columbia. Our system reaches many manufacturing plants, electric generating facilities, mines, distribution centers, transload facilities, and other businesses located in our service area.
In addition, the following documents are available on our website and in print to any shareholder who requests them: • Norfolk Southern Corporation Bylaws • Charters of the Committees of the Board of Directors • Corporate Governance Guidelines • Categorical Independence Standards • The Thoroughbred Code of Ethics • Code of Ethical Conduct for Senior Financial Officers K3 RAILROAD OPERATIONS – At December 31, 2024, we operated approximately 19,200 route miles in 22 states and the District of Columbia.
In addition, the following documents are available on our website and in print to any shareholder who requests them: • Norfolk Southern Corporation Bylaws • Charters of the Committees of the Board of Directors • Corporate Governance Guidelines • Categorical Independence Standards • The Thoroughbred Code of Ethics • Code of Ethical Conduct for Senior Financial Officers Merger Agreement – On July 28, 2025, we entered into an Agreement and Plan of Merger (the “Merger Agreement”) with Union Pacific Corporation, a Utah corporation (“Union Pacific”), Ruby Merger Sub 1 Corporation, a Virginia corporation and a direct wholly owned subsidiary of Union Pacific (“Merger Sub 1”), and Ruby Merger Sub 2 LLC, a Virginia limited liability company and a direct wholly owned subsidiary of Union Pacific (“Merger Sub 2”).
This includes 8,500 miles governed by Centralized Traffic Control (CTC) and 2,800 miles utilizing Automatic Block Signals. Within the 8,500 CTC miles, 7,600 miles are controlled wirelessly through our data radio network and other infrastructure. ENVIRONMENTAL MATTERS – Compliance with laws and regulations relating to the protection of the environment is one of our principal goals.
This includes 8,600 miles governed by Centralized Traffic Control, 1,700 miles utilizing Automatic Block Signals, and 600 miles utilizing Cab Signals. The majority of these locations are controlled wirelessly through NS’s Interoperable Train Control Messaging and Advanced Train Control System communications networks and associated infrastructure.
Removed
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.” 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, Virginia Passenger Rail Authority (VPRA), and Michigan Department of Transportation.
Added
The Merger Agreement provides that Union Pacific will acquire the Company in a stock-and-cash transaction whereby (a) Merger Sub 1 will be merged with and into the Company (the “First Merger”), with the Company surviving the First Merger as a direct wholly owned subsidiary of Union Pacific, and (b) immediately following the First Merger, the Company will be merged with and into Merger Sub 2 (the “Second Merger” and together with the First Merger, the “Mergers”), with Merger Sub 2 surviving the Second Merger as a direct, wholly owned subsidiary of Union Pacific.
Added
At the effective time of the First Merger, each share of Common Stock, par value $1.00 per share, of the Company, issued and outstanding immediately prior to the effective time of the First Merger, subject to certain exclusions set forth in the Merger Agreement, will be converted into the right to receive one share of common stock, par value $2.50 per share, of Union Pacific, and $88.82 in cash without interest.
Added
The consummation of the Mergers is subject to certain conditions, including approval by the U.S. Surface Transportation Board (STB). Additionally, if the Merger Agreement is terminated under specific circumstances, either we or Union Pacific are required to pay a termination fee of $2.5 billion.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

24 edited+27 added−5 removed88 unchanged
Biggest changeThe risks described below should be read in conjunction with the information regarding the Incident and Incident Proceedings provided in Note 18 in Item 8 “Notes to Consolidated Financial Statements.” INCIDENT RISKS As defined and as further described in Note 18 in Item 8 “Notes to Consolidated Financial Statements,” there was an Incident that occurred in the first quarter of 2023 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.
Biggest changeINCIDENT RISKS As defined and as further described in Note 19 in Item 8 “Notes to Consolidated Financial Statements,” there was an Incident that occurred in the first quarter of 2023 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.
Instability or disruptions of the capital markets and deterioration of our financial position, alone or in combination, could also result in a reduction of our credit rating to below investment grade, which could prohibit or restrict us from accessing external sources of short- and long-term debt financing and/or significantly increase the associated costs. Item 1B. Unresolved Staff Comments None.
Instability or disruptions of the capital markets and deterioration of our financial position, alone or in combination, could also result in a reduction of our credit rating to below investment grade, which could prohibit or restrict us K20 from accessing external sources of short- and long-term debt financing and/or significantly increase the associated costs. Item 1B. Unresolved Staff Comments None.
Additionally, we compete with other industries for available capacity and raw materials used in the production of locomotives and certain track and rolling stock materials. Changes in the competitive landscapes of these limited supplier markets could also result in significantly increased prices or material shortages. We may be negatively affected by energy prices.
Additionally, we compete with other industries for available capacity and raw materials used in K17 the production of locomotives and certain track and rolling stock materials. Changes in the competitive landscapes of these limited supplier markets could also result in significantly increased prices or material shortages. We may be negatively affected by energy prices.
Difficulties in recruiting and retaining skilled employees, including train and engine workers, key executives, and other skilled professional and technical employees; the loss of such individuals; and/or our inability to successfully transition key executive, professional, technical, or skilled roles could each have a material adverse effect on our financial position, results of operations, and operations.
Difficulties in recruiting and retaining skilled employees, including train and K19 engine workers, key executives, and other skilled professional and technical employees; the loss of such individuals; and/or our inability to successfully transition key executive, professional, technical, or skilled roles could each have a material adverse effect on our financial position, results of operations, and operations.
Although we maintain security programs designed to protect our information and operational technology systems, 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.
Although we maintain security programs designed to protect our information and operational technology systems, 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 equipment or disruption to our service in the future.
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 who provide services and are in our supply chain.
We also could be impacted by cybersecurity events targeting third parties K18 that we rely on for business operations, including third party vendors that have access to our systems or data and third parties who provide services and are in our supply chain.
Our success depends on our ability to attract and retain skilled employees, including key executive officers to oversee our operational, productivity, marketing, and technological initiatives, as well as a sufficient number of skilled professional and craft employees to enable us to K17 efficiently conduct our operations.
Our success depends on our ability to attract and retain skilled employees, including key executive officers to oversee our operational, productivity, marketing, and technological initiatives, as well as a sufficient number of skilled professional and craft employees to enable us to efficiently conduct our operations.
Disruption to one or more of our key suppliers or manufacturers, including as a result of stopped or restricted production, labor stoppage or restriction, or significant supply shortage or outage could negatively impact our operating efficiency K15 and increase costs.
Disruption to one or more of our key suppliers or manufacturers, including as a result of stopped or restricted production, labor stoppage or restriction, or significant supply shortage or outage could negatively impact our operating efficiency and increase costs.
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 18 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.
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 19 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.
We are addressing multiple governmental actions as a result of the Incident, as noted in “Incident Risks” above. K12 Federal and state environmental laws and regulations could negatively impact us and our operations.
We are addressing multiple governmental actions as a result of the Incident, as noted in “Incident Risks” above. Federal and state environmental laws and regulations could negatively impact us and our operations.
Railroads are also subject to the enactment of laws by Congress and regulation by the DOT (including the FRA) and the DHS (including the TSA), which regulate many aspects of our operations related to safety, security, and cybersecurity.
Railroads are also subject to the enactment of laws by Congress and regulation by the DOT (including the FRA) and the DHS (including the TSA), which regulate many aspects of our operations related to safety, security, and K14 cybersecurity.
Any future improvements, expenditures, legislation, or regulation changing or materially increasing the efficiency or reducing the cost of one or more alternative modes of transportation in the regions in which we operate (such as granting materially greater latitude for motor carriers with respect to size or weight limitations or adoption and utilization of K14 autonomous commercial vehicles) could have a material adverse effect on our ability to compete with other modes of transportation.
Any future improvements, expenditures, legislation, or regulation changing or materially increasing the efficiency or reducing the cost of one or more alternative modes of transportation in the regions in which we operate (such as granting materially greater latitude for motor carriers with respect to size or weight limitations or adoption and utilization of K16 autonomous commercial vehicles) could have a material adverse effect on our ability to compete with other modes of transportation.
Any failure to comply with applicable laws, regulations or policies in the U.S. or other countries could result in substantial fines or possible revocation of our authority to conduct our operations, which could materially adversely affect us. K13 OPERATIONAL RISKS A significant adverse event on our network may significantly impede our ability to operate and serve our customers.
Any failure to comply with applicable laws, regulations or policies in the U.S. or other countries could result in substantial fines or possible revocation of our authority to conduct our operations, which could materially adversely affect us. K15 OPERATIONAL RISKS A significant adverse event on our network may significantly impede our ability to operate and serve our customers.
We have obtained insurance for potential losses for third-party liability and first-party property damages (see Note 18 in Item 8 “Notes to Consolidated Financial 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.
We have obtained insurance for potential losses for third-party liability and first-party property damages (see Note 19 in Item 8 “Notes to Consolidated Financial 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.
K11 While we have accrued estimates of probable and reasonably estimable liabilities with respect to the Incident and the Incident Proceedings, 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 18 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.
While we have accrued estimates of probable and reasonably estimable liabilities with respect to the Incident and the Incident Proceedings, 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 19 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.
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 18 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, crew size, or detection systems (collectively, the “Incident Proceedings”).
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 19 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, K13 train composition, crew size, or detection systems (collectively, the “Incident Proceedings”).
The rapid evolution and increased adoption of emerging technologies, such as artificial intelligence and machine learning, may make it more difficult to anticipate cybersecurity threats and implement adequate protective countermeasures.
The rapid evolution and increased adoption of emerging technologies, such as artificial intelligence and machine learning (both of which we use), may make it more difficult to anticipate cybersecurity threats and implement adequate protective countermeasures.
We consumed approximately 373 million gallons of diesel fuel in 2024. Fuel availability could be affected by limitation in the fuel supply or by imposition of mandatory allocation or rationing regulations.
We consumed approximately 366 million gallons of diesel fuel in 2025. Fuel availability could be affected by limitation in the fuel supply or by imposition of mandatory allocation or rationing regulations.
MACROECONOMIC AND MARKET RISKS We may be negatively impacted by changes in general economic conditions. Because our business is dependent on the rail shipping needs of our customers, negative changes in domestic and global economic conditions, K18 including reduced import and export volumes, could affect the producers and consumers of the freight we carry.
Because our business is dependent on the rail shipping needs of our customers, negative changes in domestic and global economic conditions, including reduced import and export volumes, could affect the producers and consumers of the freight we carry.
Additional or updated regulation of the rail industry by Congress or the STB, whether under new, existing or amended laws or regulations, could have a significant negative impact on our ability to negotiate prices for rail services, on our railway operating revenues, and on the efficiency, conduct, or complexity of our operations.
Additional, updated, or changed oversight and regulation of the rail industry by Congress or the STB, whether under new, existing, amended, or repealed laws or regulations, including but not limited to those pertaining to reciprocal switching, if imposed, could have a significant negative impact on our ability to negotiate prices for rail services, on our railway operating revenues, and on the efficiency, conduct, or complexity of our operations.
Because we play a critical role in the nation’s transportation system, we could become the target of such an attack or have a significant role in the government’s preemptive approach or response to an attack or war.
Because we play a critical role in the nation’s transportation system, we could become the target of such an attack or have a significant role in the government’s preemptive approach or response to an attack or war. Insurance coverage under Norfolk Southern's property and liability policies extends to certain acts of terrorism.
We transport a significant number of shipments that have either been imported into the U.S. or are destined for export from the U.S.
U.S. international trade relationships may adversely impact our customers, our industry, and our business. We transport a significant number of shipments that have either been imported into the U.S. or are destined for export from the U.S.
In addition, 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. These potentially impactful future events could include service disruptions, unauthorized access to our systems, viruses, ransomware, and/or the compromise, acquisition, or destruction of our K16 data.
In addition, 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.
Furthermore, climate change may contribute to an increase in the incidence and severity of natural disasters and adverse weather conditions and reduce the availability or increase the cost of insurance for such events. Concern over climate change has led to significant federal, state, and international legislative and regulatory efforts to limit greenhouse gas (GHG) emissions.
Furthermore, climate change may contribute to an increase in the incidence and severity of natural disasters and adverse weather conditions and reduce the availability or increase the cost of insurance for such events. MACROECONOMIC AND MARKET RISKS We may be negatively impacted by changes in general economic conditions.
Removed
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. U.S. international trade relationships may adversely impact our customers, our industry, and our business.
Added
The risks described below should be read in conjunction with the information regarding the Incident and Incident Proceedings provided in Note 19 in Item 8 “Notes to Consolidated Financial Statements.” RISKS RELATED TO THE MERGERS We have identified certain additional risk factors in connection with the Mergers.
Removed
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, custody, or control caused by certain acts of terrorism.
Added
For additional information concerning these risks, uncertainties and assumptions, please refer to the section entitled “Risk Factors” included in our proxy statement filed with the SEC on October 1, 2025. The Mergers are subject to conditions, some or all of which may not be satisfied or completed on a timely basis, if at all.
Removed
In the third and fourth quarters of 2024, the Company reached tentative collective bargaining agreements with ten of these labor unions, a majority of which were subsequently ratified by union membership and became effective January 1, 2025.
Added
Failure to complete the Mergers could have material adverse effects on the Company. The completion of the Mergers is subject to a number of conditions, including, among others, the receipt of the requisite regulatory approvals, which make the completion of the Mergers and timing thereof uncertain.
Removed
Restrictions, caps, taxes, or other legislative or regulatory controls on GHG emissions, including diesel exhaust, could significantly increase our operating costs and decrease the amount of traffic we handle. In addition, legislation and regulation related to climate change or GHG emissions could negatively affect the markets we serve and our customers.
Added
Also, either Union Pacific or the Company may terminate the Merger Agreement if the Mergers have not been consummated by the end date (subject to an automatic extension in certain circumstances), except that this right to terminate the Merger Agreement will not be available to any party whose failure to perform any obligation under the Merger Agreement has been the primary cause of the failure of the Mergers to be consummated on or before that date.
Removed
Even without legislation or regulation, government incentives and adverse publicity relating to climate change or GHG emissions could negatively affect the markets for certain of the commodities we carry, or our customers that use commodities we carry to produce energy (including coal), use significant amounts of energy in producing or delivering the commodities we carry, or manufacture or produce goods that consume significant amounts of energy associated with GHG emissions.
Added
If the Mergers are not completed, the Company’s ongoing business may be materially adversely affected and, without realizing any of the benefits of having completed the Mergers, the Company will be subject to a number of risks, including the following: • the market price of the Company’s Common Stock could decline; • the Company could owe substantial termination fees to Union Pacific under certain circumstances; • if the Merger Agreement is terminated and the Union Pacific board or the Company’s board seeks another business combination, Union Pacific shareholders and Norfolk Southern shareholders cannot be certain that Union Pacific or the Company will be able to find a party willing to enter into a transaction on terms equivalent to or more attractive than the terms that the other party has agreed to in the Merger Agreement; K11 • time, resources, and costs committed by the Company’s management team to matters relating to the Mergers could otherwise have been devoted to pursuing other beneficial opportunities; • negative reactions from the financial markets or from its customers (certain of whom have and may continue to diversify their distribution networks, including in response to actions by our competitors), suppliers, employees, labor unions, or other business partners; and • the Company will be required to pay its respective costs relating to the Mergers, such as legal, accounting, financial advisory, and printing fees, whether or not the Mergers are completed.
Added
In addition, if the Mergers are not completed, the Company could be subject to litigation related to any failure to complete the Mergers or related to any enforcement proceeding commenced against the Company to perform its obligations under the Merger Agreement, and whether or not any such litigation has any merit, the cost of defending such litigation may be significant.
Added
The materialization of any of these risks could adversely impact the Company’s ongoing business. Similarly, delays in the completion of the Mergers could, among other things, result in additional transaction costs, loss of revenue, or other negative effects associated with uncertainty about completion of the Mergers.
Added
The Mergers are subject to the receipt of the requisite regulatory approvals, which requisite regulatory approvals may never be obtained, therefore preventing completion of the Mergers.
Added
In addition, in granting such approvals, regulatory authorities may impose conditions that could have a significant adverse effect on the Company or the combined company and the expected benefits of the Mergers therefore preventing completion of the Mergers. Before the Mergers may be completed, the requisite regulatory approvals must have been obtained, including STB approval.
Added
While the initial Merger application with the STB was determined to be incomplete, the Company and Union Pacific are in process of preparing a revised application that incorporates the additional items identified by the STB.
Added
The terms and conditions of the approvals that are granted may impose requirements, concessions, limitations, or costs or place restrictions on the conduct of the combined company’s business.
Added
Subject to the terms and conditions of the Merger Agreement, Union Pacific and the Company have each agreed to use their reasonable best efforts to take, or cause to be taken, all actions, and to do, or cause to be done, and to assist and cooperate with each other in doing, all things necessary, proper, or advisable to cause the conditions to closing set forth in the Merger Agreement to be satisfied and to consummate and make effective the Mergers and the other transactions contemplated by the Merger Agreement prior to the end date, except that Union Pacific and its subsidiaries are not required to take, or commit to take, or agree to or accept any “materially burdensome regulatory condition.” For purposes of the foregoing, “reasonable best efforts” includes, among others, (i) proposing, negotiating, committing to, and effecting, by consent decree, hold separate order, or otherwise, the sale, divestiture, license, hold separate, or disposition of any and all of the share capital or other equity interest, assets, products, or businesses of Union Pacific and its subsidiaries or of the Company and its subsidiaries and (ii) otherwise taking or committing to take any actions that after the first effective time would limit Union Pacific’s or its subsidiaries’ freedom of action with respect to, or their ability to retain, or otherwise agreeing to any restriction, requirement, or limitation with respect to their or one or more of their subsidiaries’ assets, products, or businesses, in each case as may be required in order to avoid the entry of, or to effect the dissolution of, any injunction, temporary restraining order, or other order that would otherwise have the effect of preventing or delaying the closing.
Added
The STB and other regulatory and governmental authorities may impose requirements, concessions, and other conditions on the granting of such approvals. If such regulatory and governmental authorities seek to impose such requirements, concessions, or conditions, lengthy negotiations may ensue among such authorities, Union Pacific and the Company.
Added
Such requirements, concessions, and conditions and the process of obtaining regulatory approvals could have the effect of delaying completion of the Mergers and such requirements, concessions, and conditions may not be identified or satisfied for an extended period of time following the Union Pacific special meeting and the Company’s special meeting.
Added
Such requirements, concessions and conditions may also impose additional costs or limitations on the combined company following the completion of the Mergers and the parties have agreed to accept such requirements, concessions, and conditions, even if significant, subject to the agreed-upon materially burdensome regulatory condition limitation in favor of Union Pacific.
Added
These requirements, concessions, and conditions may therefore reduce the anticipated benefits of the Mergers, including synergies, which could also have a significant adverse effect on the combined company’s business and cash flows and results of operations, and K12 neither Union Pacific nor the Company can predict what, if any, requirements, concessions, and conditions may be required by regulatory or governmental authorities whose approvals are required.
Added
The requisite regulatory approvals may not be obtained at all, may not be obtained in a timely fashion, and may contain conditions on the completion of the Mergers.
Added
In addition, under existing law, railroad competitors and customers of Union Pacific and the Company and other interested parties may intervene to oppose the STB application or seek protective conditions in the event approval by the STB is granted, which might affect the decision of the STB, delay the approval process, or reduce the anticipated benefits of the Mergers.
Added
Furthermore, if the STB does not provide final approval or imposes conditions on its approval in a final order, and Union Pacific and the Company decide to appeal such final order from the STB, any such appeal might not be resolved for a substantial period of time after the entry of such order by the STB.
Added
The Company is subject to business uncertainties and contractual restrictions while the Mergers are pending, which could adversely affect the Company’s business and operations.
Added
In connection with the pendency of the Mergers, some customers, suppliers, and other persons with whom the Company has a business relationship have or may delay or defer certain business decisions or terminate, change, or renegotiate their relationships with the Company, as the case may be, as a result of the Mergers or responsive actions taken by one or more of our competitors, which could negatively affect the Company’s revenues, earnings, and cash flows, as well as the market price of the Company’s Common Stock, regardless of whether the Mergers are completed.
Added
Under the terms of the Merger Agreement, the Company is subject to certain restrictions on the conduct of its business prior to completing the first Merger, which may adversely affect its ability to execute certain of its business strategies, including the ability in certain cases to enter into or amend contracts, acquire or dispose of assets, incur indebtedness, incur capital expenditures, settle litigation, amend organizational documents, declare dividends, enter new business lines, and invest in third parties.
Added
Such limitations could adversely affect the Company’s businesses and operations prior to the completion of the Mergers. Uncertainties associated with the Mergers may cause a loss of management personnel and other key employees, and the Company may have difficulty attracting and motivating management personnel and other key employees.
Added
The Company is dependent on the experience and industry knowledge of its management personnel and other key employees to execute its business plans. The combined company’s success after the completion of the Mergers will depend in part upon the ability of the Company to attract and retain key management personnel and other key employees.
Added
Prior to completion of the Mergers, current and prospective employees of the Company may experience uncertainty about their roles within the combined company following the completion of the Mergers, which may have an adverse effect on the ability of the Company to attract or retain management personnel and other key employees.
Added
Each of the risks described above may be exacerbated by delays or other adverse developments with respect to the completion of the Mergers.
Added
These potentially impactful future events could include service disruptions, unauthorized access to our systems or equipment, viruses, ransomware, and/or the compromise, acquisition, or destruction of our data.

Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

19 edited+1 added−2 removed12 unchanged
Biggest changeThe Board receives a periodic update from the Chair of the F&RM Committee regarding the matters addressed by the F&RM Committee, as well as an annual report from the CIDO highlighting the emerging threat landscape, our progress executing on our defensive cybersecurity strategy, and a review of our cybersecurity incident investigation and response processes.
Biggest changeThe Board receives an annual report from the CIDO and CISO highlighting the emerging threat landscape, our progress executing on our defensive cybersecurity strategy, and a review of our cybersecurity incident investigation and response processes. Management's Role Our CISO, reporting to the CIDO, is directly responsible for the assessment, oversight, and management of our enterprise-wide cybersecurity strategy and governance.
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.
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 K22 cybersecurity vulnerabilities, information technology resiliency, and our related processes and procedures, so that we can continue to identify and address key cybersecurity risks.
K21 In an effort to deter and detect cyber threats, we also periodically provide all employees with a data protection and cybersecurity awareness training program, which covers timely and relevant topics, including phishing, password protection, confidential data protection, asset use, and mobile security and further educates employees on the importance of and process for reporting all potential incidents immediately.
In an effort to deter and detect cyber threats, we also periodically provide all employees with a data protection and cybersecurity awareness training program, which covers timely and relevant topics, including phishing, password protection, confidential data protection, asset use, and mobile security and further educates employees on the importance of and process for reporting all potential incidents immediately.
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.
Based on the NIST CSF, our processes to identify, assess, manage, and govern 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.
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. Technology is one of the five primary risk categories addressed by the ERM framework, and cybersecurity is identified as a subcategory of the technology risk.
K21 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. Technology is one of the five primary risk categories addressed by the ERM framework, and cybersecurity is identified as a subcategory of the technology risk.
K19 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.
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.
K20 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.
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 noted above, our technology risk working group, comprised of leaders across the information technology, information security, and law departments, including our CIDO, SDIS, and Data Privacy Officer (DPO), among others, further monitor developments in the threat landscape so that key cybersecurity threats impacting the Company continue to be identified and prioritized.
As noted above, our technology risk working group, comprised of leaders across the information technology, information security, and law departments, including our CIDO, CISO, and Data Privacy Officer (DPO), among others, further monitor developments in the threat landscape so that key cybersecurity threats impacting the Company continue to be identified and prioritized.
We also have a cybersecurity incident response plan including specific responsive protocols administered by a predesignated incident response team, led by the SDIS and DPO and comprised of other members of management. This incident response team also conducts periodic table-top exercises with management to ensure adherence to our cybersecurity incident response plan.
We also have a cybersecurity incident response plan including specific responsive protocols administered by a predesignated incident response team, led by the CISO and DPO and comprised of other members of management. This incident response team also conducts periodic table-top exercises with management to ensure adherence to our cybersecurity incident response plan.
We also use technology-based tools to mitigate cybersecurity risks and to bolster employee-based cybersecurity programs. Item 3. Legal Proceedings For information on our legal proceedings, see Note 18 “Commitments and Contingencies” in Item 8 “Notes to Consolidated Financial Statements.”
We also use technology-based tools to mitigate cybersecurity risks and to bolster employee-based cybersecurity programs. K23 Item 3. Legal Proceedings For information on our legal proceedings, see Note 19 “Commitments and Contingencies” in Item 8 “Notes to Consolidated Financial Statements.”
Management and Board Reporting Cybersecurity incidents are reported directly to the SDIS in accordance with the applicable incident response plan.
Management and Board Reporting Cybersecurity incidents are reported directly to the CISO in accordance with the applicable incident response plan.
Our ERM leadership team works with the Chief Information and Digital Officer (CIDO), the Senior Director of Information Security (SDIS) and other technology leaders to identify, define, and assess top areas of technology and cybersecurity risks, which are included in our ERM risk framework and mapped to the NIST CSF.
Our ERM leadership team works with the Chief Information and Digital Officer (CIDO), the Chief Information Security Officer (CISO), and other technology leaders to identify, define, and assess top areas of technology and cybersecurity risks, which are included in our ERM risk framework and mapped to the NIST CSF.
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.
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 Board.
The SDIS, together with the DPO, determine incident severity and response, and in turn report material or potentially material incidents to our internal 8-K subcommittee (comprised of senior leaders from the law, accounting, finance, investor relations, and communications departments), our CEO, and our Chief Legal Officer, who in turn notify the Chairs of the Board and the F&RM Committee.
The CISO, together with the DPO, determine incident severity and response, and in turn report material or potentially material incidents to our internal 8-K subcommittee (comprised of senior leaders from the law, accounting, finance, investor relations, and communications departments), our Chief Executive Officer (CEO), and our Chief Legal Officer, who in turn notify the Chair of the Board.
The Board is promptly notified prior to filing any 8-K disclosing any material or potentially material cybersecurity incidents, with the F&RM Committee provided further updates regarding root causes and remediation efforts.
The Board is promptly notified prior to filing any 8-K disclosing any material or potentially material cybersecurity incidents, with the CIDO and CISO providing the Board with further updates regarding root causes and remediation efforts.
CYBERSECURITY GOVERNANCE Board Oversight The Norfolk Southern Board, both directly itself and indirectly through the F&RM Committee, has oversight of cybersecurity risks. The F&RM Committee receives periodic reports from the CIDO 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.
CYBERSECURITY GOVERNANCE Board Oversight The Norfolk Southern Board has direct oversight of cybersecurity risks. The Board receives periodic reports from the CIDO 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.
Such individual has significant relevant experience in the area, including over 27 years of technology experience in various industries with 17 years focused on information security, as well as significant experience working closely with government agencies including the Federal Bureau of Investigation, the Transportation Security Agency, and the Department of Homeland Security.
Such individual has over 20 years of experience in critical infrastructure security, including significant experience working with government agencies such as the Federal Bureau of Investigation, the Transportation Security Agency, and the Department of Homeland Security.
Agendas for these periodic updates may be further adjusted to address any emerging risks or key topics in greater detail, including emerging regulations, best practices, cyber readiness, and third-party assessment results.
Agendas for these periodic updates may be further adjusted to address any emerging risks or key topics in greater detail, including emerging regulations, best practices, cyber readiness, and third-party assessment results. Regular updates are also provided to the Board regarding all material or potentially material cybersecurity incidents, including root causes, and identification of and progress towards, remediation activities through completion.
We prioritize defensive mechanisms, including administrative, procedural, and technical controls, according to their relative cost and reduction in risk based on the NIST CSF.
We prioritize defensive mechanisms, including administrative, procedural, and technical controls, according to their relative cost and reduction in risk based on the NIST CSF. Govern We govern cybersecurity risk by establishing and maintaining the policies, processes, and oversight mechanisms that define how risk is identified, assessed, and managed across the enterprise.
Removed
Regular updates are also provided to the F&RM Committee regarding all material or potentially material cybersecurity incidents, including root causes, and identification of and progress towards, remediation activities through completion.
Added
Governance ensures that roles, responsibilities, and decision-making authority are clearly articulated and aligned with organizational objectives, regulatory requirements, and risk appetite. Through governance, we embed accountability and transparency into our cybersecurity program, enabling informed prioritization of resources and consistent execution of risk management practices.
Removed
Management's Role Our SDIS, reporting to the CIDO, is directly responsible for the assessment, oversight, and management of our enterprise-wide cybersecurity strategy and governance.

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

1 edited+0 added−0 removed0 unchanged
Biggest changeItem 3. Legal Proceedings K 22 Item 4. Mine Safety Disclosures K 22 Information About Our Executive Officers K 23 Part II. Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities K 24
Biggest changeItem 3. Legal Proceedings K 24 Item 4. Mine Safety Disclosures K 24 Information About Our Executive Officers K 25 Part II. Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities K 26

Item 4. Mine Safety Disclosures

Mine Safety Disclosures — required of mining issuers

8 edited+0 added−1 removed1 unchanged
Biggest changeName, Age, Present Position Business Experience During Past Five Years Mark R. George, 57, President and Chief Executive Officer Present position since September 11, 2024. Served as Executive Vice President and Chief Financial Officer from November 1, 2019 to September 11, 2024. Ann A. Adams, 54, Chief Human Resources Officer Present position since December 9, 2024.
Biggest changeName, Age, Present Position Business Experience During Past Five Years Mark R. George, 58, President and Chief Executive Officer Present position since September 11, 2024. Served as Executive Vice President and Chief Financial Officer from November 1, 2019 to September 11, 2024. Anil Bhatt, 51, Executive Vice President and Chief Information and Digital Officer Present position since August 19, 2024.
Executive officers also may be elected and designated throughout the year as the Board considers appropriate. There are no family relationships among our officers, nor any arrangement or understanding between any officer and any other person pursuant to which the officer was selected. The following table sets forth certain information, at February 1, 2025, relating to our officers.
Executive officers also may be elected and designated throughout the year as the Board considers appropriate. There are no family relationships among our officers, nor any arrangement or understanding between any officer and any other person pursuant to which the officer was selected. The following table sets forth certain information, at February 1, 2026, relating to our officers.
Prior to joining Norfolk Southern, served in various positions at Elevance Health. Served as Global Chief Information Officer from December 2020 through August 2024 and Senior Vice President & Chief Technology Officer from August 2018 to December 2020. John F. Orr, 61, Executive Vice President and Chief Operating Officer Present position since March 20, 2024.
Prior to joining Norfolk Southern, served in various positions at Elevance Health. Served as Global Chief Information Officer from December 2020 through August 2024 and Senior Vice President & Chief Technology Officer from August 2018 to December 2020. John F. Orr, 62, Executive Vice President and Chief Operating Officer Present position since March 20, 2024.
Item 4. Mine Safety Disclosures Not applicable. K22 Information About Our Executive Officers Our executive officers generally are elected and designated annually by the Board at its first meeting held after the annual meeting of stockholders, and they hold office until their successors are elected.
Item 4. Mine Safety Disclosures Not applicable. K24 Information About Our Executive Officers Our executive officers generally are elected and designated annually by the Board at its first meeting held after the annual meeting of stockholders, and they hold office until their successors are elected.
Served as Vice President of Financial Planning and Analysis from June 1, 2020 to September 24, 2024. Served as Vice President and Controller from December 16, 2018 to June 1, 2020. Claiborne L. Moore, 45, 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 Vice President of Financial Planning and Analysis from June 1, 2020 to September 24, 2024. Served as Vice President and Controller from December 16, 2018 to June 1, 2020. Claiborne L. Moore, 46, 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 Vice President Industrial Products from April 1, 2018 to December 1, 2021. Jason A. Zampi, 50, Executive Vice President and Chief Financial Officer Present position since September 24, 2024. Served as Senior Vice President Finance and Treasurer from August 20, 2024 to September 24, 2024.
Served as Vice President Industrial Products from April 1, 2018 to December 1, 2021. Jason A. Zampi, 51, Executive Vice President and Chief Financial Officer Present position since September 24, 2024. Served as Senior Vice President Finance and Treasurer from August 20, 2024 to September 24, 2024.
Served more than three decades at Canadian National in various positions of increasing responsibility across Canada and North America, concluding career as Senior Vice President and Chief Transportation Officer. Claude E. Elkins, Jr., 59, Executive Vice President and Chief Marketing Officer Present position since December 1, 2021.
Served more than three decades at Canadian National in various positions of increasing responsibility across Canada and North America, concluding career as Senior Vice President and Chief Transportation Officer. Claude E. Elkins, Jr., 60, Executive Vice President and Chief Commercial Officer Present position since December 1, 2021.
K23 PART II NORFOLK SOUTHERN CORPORATION AND SUBSIDIARIES
K25 PART II NORFOLK SOUTHERN CORPORATION AND SUBSIDIARIES
Removed
Served as Special Advisor to CEO from March 17, 2024 to December 9, 2024, and as Executive Vice President & Chief Transformation Officer from April 1, 2019 to March 16, 2024. Anil Bhatt, 50, Executive Vice President and Chief Information and Digital Officer Present position since August 19, 2024.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

2 edited+0 added−0 removed0 unchanged
Biggest change(2) On March 29, 2022, our Board of Directors authorized a new program for the repurchase of up to $10.0 billion of Common Stock beginning April 1, 2022. As of December 31, 2024, $6.9 billion remains authorized for repurchase, until such amount is exhausted. Item 6. [Reserved] K24
Biggest changeAs of December 31, 2025, $6.3 billion remains authorized for repurchase, until such amount is exhausted. With limited exceptions, the Merger Agreement prohibits repurchases of our Common Stock without Union Pacific’s consent. As a result, we suspended repurchases upon entering into the Merger Agreement. Item 6. [Reserved] K26
Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities STOCK INFORMATION Common Stock is owned by 18,025 stockholders of record as of December 31, 2024, and is traded on the New York Stock Exchange under the symbol “NSC.” ISSUER PURCHASES OF EQUITY SECURITIES 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 Publicly Announced Plans or Programs (2) Approximate Dollar Value of Shares that may yet be Purchased under Publicly Announced Plans or Programs (2) October 1-31, 2024 — $ — — $ 6,868,152,575 November 1-30, 2024 143 275.52 — 6,868,152,575 December 1-31, 2024 335 233.35 — 6,868,152,575 Total 478 — (1) Of this amount, 478 represent shares tendered by employees in connection with the exercise of stock options under the stockholder-approved Long-Term Incentive Plan (LTIP).
Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities STOCK INFORMATION Common Stock is owned by 17,030 stockholders of record as of December 31, 2025, and is traded on the New York Stock Exchange under the symbol “NSC.” ISSUER PURCHASES OF EQUITY SECURITIES Period Total Number of Shares (or Units) Purchased Average Price Paid per Share (or Unit) Total Number of Shares (or Units) Purchased as Part of Publicly Announced Plans or Programs (1) Approximate Dollar Value of Shares that may yet be Purchased under Publicly Announced Plans or Programs (1) October 1-31, 2025 — $ — — $ 6,339,415,156 November 1-30, 2025 — — — 6,339,415,156 December 1-31, 2025 — — — 6,339,415,156 Total — — (1) On March 29, 2022, our Board of Directors authorized a new program for the repurchase of up to $10.0 billion of Common Stock beginning April 1, 2022.

Item 6. [Reserved]

Selected Financial Data — reserved (removed by SEC in 2021)

1 edited+0 added−0 removed0 unchanged
Biggest changeItem 6. [Reserved] K 24 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations K 25 Item 7A. Quantitative and Qualitative Disclosures About Market Risk K 40 Item 8. Financial Statements and Supplementary Data K 41
Biggest changeItem 6. [Reserved] K 26 Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations K 27 Item 7A. Quantitative and Qualitative Disclosures About Market Risk K 43 Item 8. Financial Statements and Supplementary Data K 44

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

89 edited+25 added−31 removed28 unchanged
Biggest changeThe following important K39 factors, including those discussed in Item 1A “Risk Factors,” may cause actual results, performance, or achievements to differ materially from those expressed or implied by these forward-looking statements: • our ability to successfully implement our operational, productivity, and strategic initiatives; • changes in domestic or international economic, political or business conditions, including those impacting the transportation industry; • 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.
Biggest changeThe following important factors, including those discussed in Item 1A “Risk Factors,” 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; • 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; • our ability to complete the Mergers with Union Pacific; • the occurrence of any event, change or other circumstance that could give rise to the right of one or both of the Company or Union Pacific to terminate the Merger Agreement; • the possibility that the Mergers do not close when expected or at all because required Surface Transportation Board review and approval, or other approvals and other conditions to close 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 Mergers); • the risk that the combined company will not realize expected benefits, cost savings, accretion, synergies and/or growth from the Mergers, 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 Mergers, including the restrictions contained in the Merger Agreement on the ability of the Company to operate its business outside the ordinary course during the pendency of the Mergers; • the diversion of the Company's management's attention and time from ongoing business operations and opportunities on Merger-related items; • the possibility that the Mergers may be more expensive to complete than anticipated, including as a result of unexpected factors or events; and • the reputational risk and adverse reactions of customers (certain of whom have and may continue to diversify their distribution networks, including in response to actions by our competitors), suppliers, K42 employees, labor unions or other business partners, including those resulting from the announcement or completion of the Mergers.
Additionally, the final outcome of any of the legal proceedings and regulatory inquiries and investigations cannot be predicted with certainty, and developments related to the progress of such legal proceedings, inquiries, or investigations or other unfavorable or unexpected outcomes could result in additional costs or new or additionally accrued amounts that could be material to our results of operations in any particular year.
Additionally, the final outcome of any of the legal proceedings and regulatory inquiries and investigations cannot be predicted with certainty, and developments related to the progress of such legal proceedings, inquiries, or investigations or other unfavorable or unexpected outcomes could result in additional costs or new or additionally accrued amounts that could be material to our results of operations in any K39 particular year.
Personal Injury Claims expense, included in “Materials and other” in the Consolidated Statements of Income, includes our estimate of costs for personal injuries. To aid in valuing our personal injury liability and determining the amount to accrue with respect to such claims during the year, we utilize studies prepared by an independent actuarial consulting firm.
Personal Injury Claims expense, included in “Materials and other” in the Consolidated Statements of Income, includes our estimate of costs for personal injuries. K40 To aid in valuing our personal injury liability and determining the amount to accrue with respect to such claims during the year, we utilize studies prepared by an independent actuarial consulting firm.
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 in the Gulf of Mexico and Great Lakes.
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 in the Gulf Coast and Great Lakes.
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 & www.norfolksouthern.com/sustainability) to post presentations to investors and other important information, including information that may be deemed material to investors.
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.
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.
K41 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.
Estimates associated with the legal proceedings to K36 which we are subject are based on information that is currently available, including but not limited to an assessment of the proceedings and the potential and likely results of such proceedings.
Estimates associated with the legal proceedings to which we are subject are based on information that is currently available, including but not limited to an assessment of the proceedings and the potential and likely results of such proceedings.
We utilize an independent actuarial consulting firm’s studies to assist us in selecting appropriate actuarial assumptions and valuing related liabilities. For 2024, we assumed a long-term investment rate of return of 8.0%, which was supported by our long-term total rate of return on pension plan assets since inception, as well as our expectation of future returns.
We utilize an independent actuarial consulting firm’s studies to assist us in selecting appropriate actuarial assumptions and valuing related liabilities. For 2025, we assumed a long-term investment rate of return of 8.0%, which was supported by our long-term total rate of return on pension plan assets since inception, as well as our expectation of future returns.
The accuracy of our estimate of the liability is subject to inherent limitation given the difficulty of predicting future events and, as such, the ultimate loss sustained may vary from the estimated liability recorded. See Note 18 for a more detailed discussion of the assumptions and estimates we use for personal injury.
The accuracy of our estimate of the liability is subject to inherent limitation given the difficulty of predicting future events and, as such, the ultimate loss sustained may vary from the estimated liability recorded. See Note 19 for a more detailed discussion of the assumptions and estimates we use for personal injury.
Pensions and Other Postretirement Benefits Accounting for pensions and other postretirement benefit plans requires us to make several estimates and assumptions (Note 13). These include the expected rate of return from investment of the plans’ assets and the expected retirement age of employees as well as their projected earnings and mortality.
Pensions and Other Postretirement Benefits Accounting for pensions and other postretirement benefit plans requires us to make several estimates and assumptions (Note 14). These include the expected rate of return from investment of the plans’ assets and the expected retirement age of employees as well as their projected earnings and mortality.
Market risk for fixed-rate debt is estimated as the potential increase in fair value resulting from a one-percentage point decrease in interest rates as of December 31, 2024 and amounts to an increase of approximately $1.5 billion to the fair value of our debt at December 31, 2024.
Market risk for fixed-rate debt is estimated as the potential increase in fair value resulting from a one-percentage point decrease in interest rates as of December 31, 2025 and amounts to an increase of approximately $1.5 billion to the fair value of our debt at December 31, 2025.
A significant portion of our annual capital spending relates to self-constructed assets. Costs related to repairs and K37 maintenance activities that, in our judgment, do not extend an asset’s useful life or increase its utility are expensed when such repairs are performed. Depreciation expense for 2024 totaled $1.4 billion.
A significant portion of our annual capital spending relates to self-constructed assets. Costs related to repairs and maintenance activities that, in our judgment, do not extend an asset’s useful life or increase its utility are expensed when such repairs are performed. Depreciation expense for 2025 totaled $1.4 billion.
Market Risks We manage overall exposure to fluctuations in interest rates by issuing both fixed- and floating- rate debt instruments. At December 31, 2024, we have no outstanding debt subject to interest rate fluctuations.
Market Risks We manage overall exposure to fluctuations in interest rates by issuing both fixed- and floating- rate debt instruments. At December 31, 2025, we have no outstanding debt subject to interest rate fluctuations.
K27 DETAILED RESULTS OF OPERATIONS Railway Operating Revenues The following tables present a three-year comparison of revenues, volumes (units), and average revenue per unit by commodity group.
K30 DETAILED RESULTS OF OPERATIONS Railway Operating Revenues The following tables present a three-year comparison of revenues, volumes (units), and average revenue per unit by commodity group.
The reduction in our operating expenses includes lower net expenses related to the Eastern Ohio Incident and $433 million of gains on the sale of railway lines. Railway operating revenues were slightly lower as decreased fuel surcharge revenue, an adverse mix of traffic, and decreased pricing were nearly offset by increased volumes. Our railway operating ratio improved to 66.4 percent.
The reduction in our operating expenses included lower net expenses related to the Incident and $433 million of gains on the sale of railway lines. Railway operating revenues were slightly lower as decreased fuel surcharge revenue, an adverse mix of traffic, and decreased pricing were nearly offset by increased volumes. Our railway operating ratio improved to 66.4 percent.
A one-percentage point decrease to this rate of return assumption would result in a $24 million increase in annual pension expense.
A one-percentage point decrease to this rate of return assumption would result in a $26 million increase in annual pension expense.
The decrease in 2024 reflects costs associated with shareholder matters, lower returns on corporate-owned life insurance (COLI), and higher pension and other postretirement benefits expense, partially offset by a $20 million curtailment gain on our other postretirement benefit plan as a result of our voluntary and involuntary separation programs (Note 3).
The decrease in 2024 reflects costs associated with shareholder matters, lower returns on corporate-owned life insurance (COLI), and higher pension and other postretirement benefits expense, partially offset by a $20 million curtailment gain on our other postretirement benefit plan as a result of our voluntary and involuntary separation programs (Notes 4 and 14).
Incident Contingencies We are currently involved in certain environmental response and remediation activities and subject to numerous legal proceedings and regulatory inquiries and investigations relating to the Incident. We have accrued estimates of the probable and reasonably estimable costs for the resolution of these matters.
Incident Contingencies We are currently involved in certain ongoing environmental monitoring activities and subject to numerous legal proceedings and regulatory inquiries and investigations relating to the Incident. We have accrued estimates of the probable and reasonably estimable costs for the resolution of these matters.
A one-percentage point decrease to this discount rate assumption would result in a $14 million increase in annual pension expense. Properties and Depreciation Most of our assets are long-lived railway properties (Note 8).
A one-percentage point decrease to this discount rate assumption would result in a $15 million increase in annual pension expense. Properties and Depreciation Most of our assets are long-lived railway properties (Note 9).
Intermodal units by market were as follows: 2024 2023 2024 2023 2022 vs. 2023 vs. 2022 (units in thousands) (% change) Domestic 2,500.0 2,371.6 2,573.6 5 % (8 %) International 1,607.7 1,450.8 1,339.5 11 % 8 % Total 4,107.7 3,822.4 3,913.1 7 % (2 %) Domestic volume increased in 2024 but decreased in 2023 compared with the prior years.
Intermodal units by market were as follows: 2025 2024 2025 2024 2023 vs. 2024 vs. 2023 (units in thousands) (% change) Domestic 2,450.2 2,500.0 2,371.6 (2 %) 5 % International 1,604.8 1,607.7 1,450.8 — % 11 % Total 4,055.0 4,107.7 3,822.4 (1 %) 7 % Domestic volume decreased in 2025 but increased in 2024 compared with the prior years.
Income Taxes Our net deferred tax liability totaled $7.4 billion at December 31, 2024 (Note 5). This liability is estimated based on the expected future tax consequences of items recognized in the financial statements.
Income Taxes Our net deferred tax liability totaled $7.7 billion at December 31, 2025 (Note 6). This liability is estimated based on the expected future tax consequences of items recognized in the financial statements.
A valuation allowance is recorded if we expect that it is more likely than not that deferred tax assets will not be realized. We have a $42 million valuation allowance on $467 million of deferred tax assets as of December 31, 2024, reflecting the expectation that substantially all of these assets will be realized.
A valuation allowance is recorded if we expect that it is more likely than not that deferred tax assets will not be realized. We have a $45 million valuation allowance on $412 million of deferred tax assets as of December 31, 2025, reflecting the expectation that substantially all of these assets will be realized.
Our composite depreciation rates for 2024 are disclosed in Note 8; a one-year increase (or decrease) in the estimated average useful lives of depreciable assets would have resulted in an approximate $51 million decrease (or increase) to annual depreciation expense.
Our composite depreciation rates for 2025 are disclosed in Note 9; a one-year increase (or decrease) in the estimated average useful lives of depreciable assets would have resulted in an approximate $49 million decrease (or increase) to annual depreciation expense.
We had negative working capital of $357 million at December 31, 2024 and working capital of $639 million at December 31, 2023. Cash and cash equivalents totaled $1.6 billion at both December 31, 2024, and December 31, 2023. We expect that cash on hand combined with cash provided by operating activities will be sufficient to meet our ongoing obligations.
We had negative working capital of $577 million at December 31, 2025 and $357 million at December 31, 2024. Cash and cash equivalents totaled $1.5 billion and $1.6 billion at December 31, 2025, and 2024, respectively. We expect that cash on hand combined with cash provided by operating activities will be sufficient to meet our ongoing obligations.
Claims expense decreased in both 2024 and 2023 compared to the prior years. The decrease in 2024 is the result of lower personal injury case development and declines in lading and property damage expenses. These were partially offset by the absence of a prior-year claims-related recovery and higher insurance costs.
The decrease in 2024 is the result of lower personal injury case development and declines in lading and property damage expenses. These were partially offset by the absence of a prior-year claims-related recovery and higher insurance costs.
The decrease in 2024 was a result of lower average revenue per unit, driven by decreased pricing and lower fuel surcharge revenue, partially offset by positive mix and increased volume. The decrease in 2023 was a result of decreased volumes. Average revenue per unit was flat as lower fuel surcharge revenue and pricing declines were offset by positive mix.
The decrease in 2024 was a result of lower average revenue per unit, driven by decreased pricing and lower fuel surcharge revenue, partially offset by positive mix and increased volume.
Non-GAAP Reconciliation for 2024 Reported (GAAP) Gains on Railway Line Sales Restructuring and Other Charges Eastern Ohio Incident Shareholder Advisory Costs Deferred Income Tax Adjustment Adjusted (non-GAAP) ($ in millions, except per share amounts) Railway operating $ 8,052 $ 433 $ (183) $ (325) $ — $ — $ 7,977 expenses Income from railway $ 4,071 $ (433) $ 183 $ 325 $ — $ — $ 4,146 operations Net income $ 2,622 $ (327) $ 125 $ 247 $ 44 $ (27) $ 2,684 Diluted earnings $ 11.57 $ (1.44) $ 0.55 $ 1.09 $ 0.20 $ (0.12) $ 11.85 per share Railway operating ratio 66.4 3.6 (1.5) (2.7) — — 65.8 (percent) K26 Non-GAAP Reconciliation for 2023 Reported (GAAP) Eastern Ohio Incident Adjusted (non-GAAP) ($ in millions, except per share amounts) Railway operating expenses $ 9,305 $ (1,116) $ 8,189 Income from railway operations $ 2,851 $ 1,116 $ 3,967 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 In the table below, references to 2024 and 2023 results and related comparisons use the adjusted, non-GAAP results from the reconciliations in the tables above.
Non-GAAP Reconciliation for 2025 Reported (GAAP) Merger-Related Expenses Restructuring and Other Charges Eastern Ohio Incident Adjusted (non-GAAP) ($ in millions, except per share amounts) Railway operating expenses $ 7,824 $ (80) $ (22) $ 190 $ 7,912 Income from railway operations $ 4,356 $ 80 $ 22 $ (190) $ 4,268 Net income $ 2,873 $ 69 $ 17 $ (143) $ 2,816 Diluted earnings per share $ 12.75 $ 0.31 $ 0.07 $ (0.64) $ 12.49 Railway operating ratio (percent) 64.2 (0.6) (0.2) 1.6 65.0 K28 Non-GAAP Reconciliation for 2024 Reported (GAAP) Gains on Railway Line Sales 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 $ 8,052 $ 433 $ (183) $ (325) $ — $ — $ 7,977 expenses Income from railway $ 4,071 $ (433) $ 183 $ 325 $ — $ — $ 4,146 operations Net income $ 2,622 $ (327) $ 125 $ 247 $ 44 $ (27) $ 2,684 Diluted earnings $ 11.57 $ (1.44) $ 0.55 $ 1.09 $ 0.20 $ (0.12) $ 11.85 per share Railway operating ratio 66.4 3.6 (1.5) (2.7) — — 65.8 (percent) Non-GAAP Reconciliation for 2023 Reported (GAAP) Eastern Ohio Incident Adjusted (non-GAAP) ($ in millions, except per share amounts) Railway operating expenses $ 9,305 $ (1,116) $ 8,189 Income from railway operations $ 2,851 $ 1,116 $ 3,967 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 K29 In the table below, references to 2025, 2024, and 2023 results and related comparisons use the adjusted, non-GAAP results from the reconciliations in the preceding tables.
In addition, we believe our currently-available borrowing capacity, access to additional financing, ability to reduce shareholder distributions, and ability to moderate or defer property additions provide additional flexibility to meet our ongoing obligations in the short- and long-term.
In addition, we believe our currently-available borrowing capacity, access to additional financing, ability to reduce shareholder distributions, and ability to moderate or defer property additions provide additional flexibility to meet our ongoing obligations in the short- and long-term, subject to certain restrictions on incurring additional indebtedness under the Merger Agreement.
K34 Contractual obligations at December 31, 2024, including those that may have material cash requirements, include interest on fixed-rate long-term debt, long-term debt (Note 10), unconditional purchase obligations (Note 18), long-term advances from Conrail Inc. (Conrail) (Note 7), operating leases (Note 11), agreements with Consolidated Rail Corporation (CRC) (Note 7), and unrecognized tax benefits (Note 5).
K37 Contractual obligations at December 31, 2025, including those that may have material cash requirements, include interest on fixed-rate long-term debt, long-term debt (Note 11), unconditional purchase obligations (Note 19), long-term advances from Conrail Inc. (Conrail) (Note 8), operating leases (Note 12), agreements with Consolidated Rail Corporation (CRC) (Note 8), and unrecognized tax benefits (Note 6).
Automotive revenues rose in both 2024 and 2023 compared with the prior years. The increase in revenues in 2024 was driven by slightly higher average revenue per unit driven by increased price, partially offset by lower fuel surcharge revenue, and slightly higher volume.
The increase in revenues in 2024 was driven by slightly higher average revenue per unit driven by increased price, partially offset by lower fuel surcharge revenue, and slightly higher volume.
Locomotive fuel consumption was down in 2024 and nearly flat in 2023 compared to prior periods. We consumed 373 million gallons of diesel fuel in 2024, compared with 377 million gallons in 2023 and 376 million gallons in 2022. Depreciation expense increased in both periods compared to the prior years, reflecting reinvestment in our infrastructure, rolling stock, and technology.
We consumed 366 million gallons of diesel fuel in 2025, compared with 373 million gallons in 2024 and 377 million gallons in 2023. Depreciation expense increased in both periods compared to the prior years, reflecting reinvestment in our infrastructure, rolling stock, and technology. Materials expense increased in both 2025 and 2024.
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.
K38 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.
As shown in the following table, total tonnage increased in 2024 but decreased in 2023 compared to prior years. 2024 2023 2024 2023 2022 vs. 2023 vs. 2022 (tons in thousands) (% change) Utility 29,577 30,419 35,705 (3 %) (15 %) Export 33,309 31,005 25,887 7 % 20 % Domestic metallurgical 10,088 11,096 11,307 (9 %) (2 %) Industrial 3,728 3,372 3,765 11 % (10 %) Total 76,702 75,892 76,664 1 % (1 %) Utility coal tonnage decreased in both 2024 and 2023 compared with the prior years.
As shown in the following table, total tonnage increased in 2025 and 2024 compared to prior years. 2025 2024 2025 2024 2023 vs. 2024 vs. 2023 (tons in thousands) (% change) Utility 33,126 29,577 30,419 12 % (3 %) Export 31,175 33,309 31,005 (6 %) 7 % Domestic metallurgical 9,989 10,088 11,096 (1 %) (9 %) Industrial 3,756 3,728 3,372 1 % 11 % Total 78,046 76,702 75,892 2 % 1 % Utility coal tonnage increased in 2025 but decreased in 2024 compared with the prior years.
Materials expense increased in both 2024 and 2023. The increase in 2024 was due to higher freight car repairs expense, partially offset by lower locomotive materials spending. The increase in 2023 was due to increased locomotive, freight car, and track materials costs. Claims expense includes costs related to personal injury, property damage, and environmental matters.
The increase in 2025 was partly due to higher locomotive and freight car material consumption coupled with increased spend for other materials. The increase in 2024 was due to higher freight car repairs expense, partially offset by lower locomotive materials spending. Claims expense includes costs related to personal injury, property damage, and environmental matters.
In 2024, revenues rose as volume was higher for all commodity groups and pricing gains more than offset lower fuel surcharge revenue. In 2023, revenues were slightly higher as pricing and volume gains were nearly offset by lower fuel surcharge revenue and unfavorable mix.
In 2025, revenues increased as volume was higher and favorable pricing and mix more than offset lower fuel surcharge revenue. In 2024, revenues rose as volume was higher for all commodity groups and pricing gains more than offset lower fuel surcharge revenue.
Off balance sheet arrangements consist primarily of unrecognized obligations, including future interest payments on fixed-rate long-term debt and unconditional purchase obligations, which are included in the table above.
Off balance sheet arrangements consist primarily of unrecognized obligations, including future interest payments on fixed-rate long-term debt and unconditional purchase obligations, which are included in the table above. Cash used in investing activities was $2.6 billion in 2025, $2.8 billion in 2024, and $2.2 billion in 2023.
In 2023, the increase in cash provided by financing activities reflects lower repurchases of Common Stock and increased proceeds from borrowings, partially offset by higher debt repayments.
The increase in cash used in financing activities in 2025 reflects increased repurchases of Common Stock and lower proceeds from borrowing, partially offset by lower debt repayments. In 2024, the increase in cash used in financing activities reflects lower proceeds from borrowing partially offset by the absence of repurchases of Common Stock.
Fuel surcharge revenues totaled $962 million, $1.2 billion, and $1.6 billion in 2024, 2023, and 2022, respectively. The decline in fuel surcharge revenues in each period was primarily driven by fluctuations in fuel commodity prices. For 2025, we expect that revenue will increase driven by higher volumes. MERCHANDISE revenues increased in both 2024 and 2023 compared with the prior years.
Fuel surcharge revenues totaled $828 million, $962 million, and $1.2 billion in 2025, 2024, and 2023, respectively. The decline in fuel surcharge revenues in each comparison was primarily driven by fluctuations in fuel commodity prices. MERCHANDISE revenues increased in both 2025 and 2024 compared with the prior years.
We had no amounts outstanding under this program and our available borrowing capacity was $400 million at both December 31, 2024 and December 31, 2023. 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.
The unsecured short-term commercial paper program provides for borrowing at prevailing rates and includes covenants. At both December 31, 2025 and December 31, 2024, we had no outstanding commercial paper. In January 2024, we renewed and amended our $800 million credit agreement. The amended agreement expires in January 2029 and provides for borrowings at prevailing rates and includes covenants.
The table below reflects the components of the revenue change by major commodity group. 2024 vs. 2023 2023 vs. 2022 Increase (Decrease) Increase (Decrease) ($ in millions) Merchandise Intermodal Coal Merchandise Intermodal Coal Volume $ 64 $ 231 $ 19 $ 26 $ (85) $ (19) Fuel surcharge revenue (131) (101) (29) (119) (208) (23) Rate, mix and other 184 (178) (92) 115 (298) 22 Total $ 117 $ (48) $ (102) $ 22 $ (591) $ (20) Approximately 95% of our revenue base is covered by contracts that include negotiated fuel surcharges.
The table below reflects the components of the revenue change by major commodity group. 2025 vs. 2024 2024 vs. 2023 Increase (Decrease) Increase (Decrease) ($ in millions) Merchandise Intermodal Coal Merchandise Intermodal Coal Volume $ 161 $ (39) $ 24 $ 64 $ 231 $ 19 Fuel surcharge revenue (73) (45) (16) (131) (101) (29) Rate, mix and other 126 51 (132) 184 (178) (92) Total $ 214 $ (33) $ (124) $ 117 $ (48) $ (102) Approximately 95% of our revenue base is covered by contracts that include negotiated fuel surcharges.
The decline in 2024 was due to reduced demand from continued low natural gas prices and high stockpiles. The decrease in 2023 was due to low natural gas prices, high stockpiles, and unplanned customer outages. Export coal tonnage increased in both 2024 and 2023 compared with the prior years.
The increase in 2025 was due to higher electricity demand and higher natural gas prices. The decline in 2024 was due to reduced demand from continued low natural gas prices and high stockpiles. Export coal tonnage declined in 2025 but increased in 2024 compared with the prior years.
SUMMARIZED RESULTS OF OPERATIONS 2024 2023 2024 2023 2022 vs. 2023 vs. 2022 ($ in millions, except per share amounts) (% change) Railway operating revenues $ 12,123 $ 12,156 $ 12,745 — % (5 %) Railway operating expenses $ 8,052 $ 9,305 $ 7,936 (13 %) 17 % Income from railway operations $ 4,071 $ 2,851 $ 4,809 43 % (41 %) Net income $ 2,622 $ 1,827 $ 3,270 44 % (44 %) Diluted earnings per share $ 11.57 $ 8.02 $ 13.88 44 % (42 %) Railway operating ratio (percent) 66.4 76.5 62.3 (13 %) 23 % Income from railway operations, net income and diluted earnings per share increased in 2024 compared to 2023, primarily as a result of lower railway operating expenses.
SUMMARIZED RESULTS OF OPERATIONS 2025 2024 2025 2024 2023 vs. 2024 vs. 2023 ($ in millions, except per share amounts) (% change) Railway operating revenues $ 12,180 $ 12,123 $ 12,156 — % — % Railway operating expenses $ 7,824 $ 8,052 $ 9,305 (3 %) (13 %) Income from railway operations $ 4,356 $ 4,071 $ 2,851 7 % 43 % Net income $ 2,873 $ 2,622 $ 1,827 10 % 44 % Diluted earnings per share $ 12.75 $ 11.57 $ 8.02 10 % 44 % Railway operating ratio (percent) 64.2 66.4 76.5 (3 %) (13 %) K27 Income from railway operations, net income, and diluted earnings per share increased in 2025 compared to 2024, the result of lower railway operating expense and higher railway operating revenues.
Revenues decreased in 2024 as a result of lower average revenue per unit, driven by lower fuel surcharge revenue, adverse mix, and decreased pricing, partially offset by higher volume. Revenues declined in 2023 as a result of lower average revenue per unit, driven by decreases in fuel surcharge and intermodal storage revenues, and volume declines.
Revenues increased in 2025 as a result of improved average revenue per unit, driven by favorable traffic mix being partially offset by lower fuel surcharge revenues, and increased volume. Revenues decreased in 2024 as a result of lower average revenue per unit, driven by lower fuel surcharge revenue, adverse mix, and decreased pricing, partially offset by higher volume.
In 2024, the decrease was the result of lower average revenue per unit driven by lower fuel surcharge revenue, partially offset by increased price, and increased volume. Increased volume in soybeans, corn, and feed were partially offset by lower volume in fertilizers and ethanol. Soybean volume increased due to spot opportunities.
Decreased corn volumes were the result of decreased demand for shipments to the southeast. Soybean volumes decreased due to lower export demand. In 2024, the decrease was the result of lower average revenue per unit driven by lower fuel surcharge revenue, partially offset by increased price, and increased volume.
Capital spending and track and equipment statistics can be found within the “Railway Property” section of Part I of this report on Form 10-K. For 2025, we expect property additions to approximate $2.2 billion.
Capital spending and track and equipment statistics can be found within the “Railway Property” section of Part I of this report on Form 10-K. For 2026, we expect property additions to approximate $1.9 billion. Cash used in financing activities was $1.9 billion in 2025 and $1.2 billion in 2024, while cash provided by financing activities was $115 million in 2023.
In 2023, compensation and benefits increased, a result of changes in: • employee activity levels (up $138 million), • pay rates (up $86 million), • overtime (up $9 million), • incentive and stock-based compensation (down $30 million), and • other (down $5 million). Our employment averaged 20,200 in 2024, compared with 20,300 in 2023, and 18,900 in 2022.
In 2024, compensation and benefits increased, a result of changes in: • pay rates (up $91 million), • incentive and stock-based compensation (up $56 million), • overtime (down $37 million), • employee activity levels (down $68 million), and • other (down $38 million). Our employment averaged 19,400 in 2025, compared with 20,200 in 2024, and 20,300 in 2023.
Furthermore, certain costs may be recoverable under our insurance policies in effect at the date of the Incident or from third parties. Any amounts that are recoverable under our insurance policies or from third parties will be reflected in the period in which recovery is considered probable. See Note 18 for more detailed information as it pertains to these contingencies.
We have now completed recoveries under our liability insurance policies. Any additional amounts that are recoverable under other insurance policies or from third parties will be reflected in the period in which recovery is considered probable. See Note 19 for more detailed information as it pertains to these contingencies.
The increase in purchased services in 2023 was due to higher technology-related costs, increased operational and transportation expenses, and higher engineering activity. 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.
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. In 2025, the increase was due to increased automotive equipment expense resulting from higher volumes.
For the full year, we achieved an operating ratio of 66.4%, and an adjusted operating ratio of 65.8% (see our non-GAAP reconciliations beginning on page K26), both of which improved on a year-over-year basis. We remain committed to being a safe, productive, resilient, and efficient railroad with industry-competitive margins.
For the full year, we achieved an operating ratio (a measure of the amount of operating revenues consumed by operating expenses) of 64.2%, and an adjusted operating ratio of 65.0% (see our non-GAAP reconciliations beginning on page K28). We remain committed to being a safe, productive, resilient, and efficient railroad with industry-competitive margins.
The increase in 2024 was due to growth with our customers and increased production. The increase in 2023 was a result of increased demand and coal supply. Domestic metallurgical coal tonnage decreased in both 2024 and 2023 compared with the prior years. The decrease in 2024 was as a result of reduced customer demand.
The decrease in 2025 was due to soft global demand and unfavorable seaborne coal pricing. The increase in 2024 was due to growth with our customers and increased production. Domestic metallurgical coal tonnage decreased in both 2025 and 2024 compared with the prior years.
Volume increases were due to improvements in equipment availability and their cycle time paired with higher demand, mostly offset by reduced production and quality holds at certain manufacturers, and extended plant shutdowns. The increase in revenues in 2023 was driven by increased volume and higher average revenue per unit, driven by favorable price.
Volume increases were due to improvements in equipment availability and their cycle time paired with higher demand, mostly offset by reduced production and quality holds at certain manufacturers, and extended plant shutdowns. INTERMODAL revenues decreased in both 2025 and 2024 compared with the prior years.
K32 Purchased services includes the costs of services purchased from external vendors and contractors, including the net costs of operating joint facilities with other railroads. The decrease in purchased services in 2024 was due to lower lease costs and declines in technology-related and operational expenses, partially offset by higher volume-related expenses and Conrail-related activity.
The decrease in purchased services in 2024 was due to lower lease costs and declines in technology-related and operational expenses, partially offset by higher volume-related expenses and Conrail-related activity.
Revenues 2024 2023 2024 2023 2022 vs. 2023 vs. 2022 ($ in millions) (% change) Merchandise: Agriculture, forest and consumer products $ 2,521 $ 2,530 $ 2,493 — % 1 % Chemicals 2,123 2,054 2,148 3 % (4 %) Metals and construction 1,682 1,634 1,652 3 % (1 %) Automotive 1,144 1,135 1,038 1 % 9 % Merchandise 7,470 7,353 7,331 2 % — % Intermodal 3,042 3,090 3,681 (2 %) (16 %) Coal 1,611 1,713 1,733 (6 %) (1 %) Total $ 12,123 $ 12,156 $ 12,745 — % (5 %) Units 2024 2023 2024 2023 2022 vs. 2023 vs. 2022 (in thousands) (% change) Merchandise: Agriculture, forest and consumer products 741.7 734.3 723.0 1 % 2 % Chemicals 518.3 515.0 540.1 1 % (5 %) Metals and construction 641.6 634.1 634.6 1 % — % Automotive 362.7 361.5 339.1 — % 7 % Merchandise 2,264.3 2,244.9 2,236.8 1 % — % Intermodal 4,107.7 3,822.4 3,913.1 7 % (2 %) Coal 684.8 677.1 684.6 1 % (1 %) Total 7,056.8 6,744.4 6,834.5 5 % (1 %) Revenue per Unit 2024 2023 2024 2023 2022 vs. 2023 vs. 2022 ($ per unit) (% change) Merchandise: Agriculture, forest and consumer products $ 3,399 $ 3,445 $ 3,448 (1 %) — % Chemicals 4,096 3,989 3,978 3 % — % Metals and construction 2,621 2,577 2,604 2 % (1 %) Automotive 3,155 3,140 3,059 — % 3 % Merchandise 3,299 3,275 3,277 1 % — % Intermodal 740 808 941 (8 %) (14 %) Coal 2,352 2,530 2,532 (7 %) — % Total 1,718 1,802 1,865 (5 %) (3 %) K28 Revenues decreased $33 million in 2024 and $589 million in 2023 compared to the prior years.
Revenues 2025 2024 2025 2024 2023 vs. 2024 vs. 2023 ($ in millions) (% change) Merchandise: Agriculture, forest and consumer products $ 2,538 $ 2,521 $ 2,530 1 % — % Chemicals 2,206 2,123 2,054 4 % 3 % Metals and construction 1,724 1,682 1,634 2 % 3 % Automotive 1,216 1,144 1,135 6 % 1 % Merchandise 7,684 7,470 7,353 3 % 2 % Intermodal 3,009 3,042 3,090 (1 %) (2 %) Coal 1,487 1,611 1,713 (8 %) (6 %) Total $ 12,180 $ 12,123 $ 12,156 — % — % Units 2025 2024 2025 2024 2023 vs. 2024 vs. 2023 (in thousands) (% change) Merchandise: Agriculture, forest and consumer products 733.4 741.7 734.3 (1 %) 1 % Chemicals 551.5 518.3 515.0 6 % 1 % Metals and construction 638.6 641.6 634.1 — % 1 % Automotive 389.7 362.7 361.5 7 % — % Merchandise 2,313.2 2,264.3 2,244.9 2 % 1 % Intermodal 4,055.0 4,107.7 3,822.4 (1 %) 7 % Coal 695.0 684.8 677.1 1 % 1 % Total 7,063.2 7,056.8 6,744.4 — % 5 % Revenue per Unit 2025 2024 2025 2024 2023 vs. 2024 vs. 2023 ($ per unit) (% change) Merchandise: Agriculture, forest and consumer products $ 3,460 $ 3,399 $ 3,445 2 % (1 %) Chemicals 4,000 4,096 3,989 (2 %) 3 % Metals and construction 2,700 2,621 2,577 3 % 2 % Automotive 3,121 3,155 3,140 (1 %) — % Merchandise 3,322 3,299 3,275 1 % 1 % Intermodal 742 740 808 — % (8 %) Coal 2,139 2,352 2,530 (9 %) (7 %) Total 1,724 1,718 1,802 — % (5 %) K31 Revenues increased $57 million in 2025 but decreased $33 million in 2024 compared to the prior year.
The total amount recorded in 2024 is net of $650 million of insurance recoveries, resulting from claims made under our insurance policies in effect at the time of the Incident. During 2023, we recorded $1.1 billion for costs primarily associated with environmental matters and legal proceedings.
The total amount recorded in 2024 is net of $650 million of insurance recoveries, resulting from claims made under our insurance policies in effect at the time of the Incident.
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 National Carriers’ Conference Committee (NCCC). Under current moratorium provisions, neither party was permitted to serve notice to compel a new round of mandatory collective bargaining until November 1, 2024.
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 National Carriers’ Conference Committee (NCCC).
Volume declines in crude oil were due to a market share shift, while declines in petroleum were related to the conclusion of a spot opportunity handled last year to support a customer during a refinery outage. In 2023, the decrease was as a result K29 of volume declines.
Volume declines in crude oil were due to a market share shift, while declines in petroleum were related to the conclusion of a spot opportunity handled last year to support a customer during a refinery outage. K32 Metals and construction revenues were higher in both 2025 and 2024 compared with the prior years.
Please see Note 8 in the Notes to Consolidated Financial Statements for additional details on certain railway line sales and a discussion of the acquisition of the CSR assets. In 2023, the increase was primarily driven by higher property additions and lower proceeds from property sales.
In 2024, the increase was driven by the acquisition of the assets of the CSR, partially offset by higher borrowings against our COLI policies and increased proceeds from property sales. Please see Note 9 for additional details on certain railway line sales and a discussion of the acquisition of the CSR assets.
K31 Railway Operating Expenses Railway operating expenses summarized by major classifications were as follows: 2024 2023 2024 2023 2022 vs. 2023 vs. 2022 ($ in millions) (% change) Compensation and benefits $ 2,823 $ 2,819 $ 2,621 — % 8 % Purchased services 1,655 1,683 1,565 (2 %) 8 % Equipment rents 393 387 357 2 % 8 % Fuel 987 1,170 1,459 (16 %) (20 %) Depreciation 1,353 1,298 1,221 4 % 6 % Materials 369 364 283 1 % 29 % Claims 237 242 270 (2 %) (10 %) Other (273) 226 160 (221 %) 41 % Restructuring and other charges 183 — — Eastern Ohio incident 325 1,116 — (71 %) Total $ 8,052 $ 9,305 $ 7,936 (13 %) 17 % In 2024, the decline in railway operating expenses reflects lower net expenses related to the Eastern Ohio incident (Note 18), higher gains on operating property sales, including certain gains on railway line sales (Note 8), and lower fuel prices, partially offset by restructuring and other charges (Note 3), and increased depreciation on our higher asset base.
K34 Railway Operating Expenses Railway operating expenses summarized by major classifications were as follows: 2025 2024 2025 2024 2023 vs. 2024 vs. 2023 ($ in millions) (% change) Compensation and benefits $ 2,922 $ 2,823 $ 2,819 4 % — % Purchased services 1,675 1,655 1,683 1 % (2 %) Equipment rents 420 393 387 7 % 2 % Fuel 932 987 1,170 (6 %) (16 %) Depreciation 1,393 1,353 1,298 3 % 4 % Materials 411 369 364 11 % 1 % Claims 281 237 242 19 % (2 %) Other (58) (273) 226 (79 %) (221 %) Merger-related expenses 80 — — n/m n/m Restructuring and other charges 22 183 — (88 %) n/m Eastern Ohio incident (254) 325 1,116 (178 %) (71 %) Total $ 7,824 $ 8,052 $ 9,305 (3 %) (13 %) n/m - not meaningful In 2025, the decline in railway operating expenses reflects net recoveries related to the Incident (Note 19) and lower restructuring charges (Note 4), which were partially offset by lower gains from the sales of railway lines and properties (Note 9) and the incurrence of merger-related expenses (Note 2).
Increased corn and feed volumes were the result of customers shifting from truck to rail service to meet market demands. The decrease in fertilizer volume was driven by lower potash shipments due to customer operational issues and cost pressures. Ethanol volume declined primarily as a result of decreased demand. In 2023, higher revenues were the result of increased volume.
The decrease in fertilizer volume was driven by lower potash shipments due to customer operational issues and cost pressures. Ethanol volume declined primarily as a result of decreased demand. Chemicals revenues increased in both 2025 and 2024 compared with the prior years.
Adjusted 2023 (Non-GAAP) Adjusted 2023 (Non-GAAP) vs. 2022 ($ in millions, except per share amounts) (% change) Railway operating expenses $ 7,977 $ 8,189 $ 7,936 (3 %) 3 % Income from railway operations $ 4,146 $ 3,967 $ 4,809 5 % (18 %) Net income $ 2,684 $ 2,673 $ 3,270 — % (18 %) Diluted earnings per share $ 11.85 $ 11.74 $ 13.88 1 % (15 %) Railway operating ratio (percent) 65.8 67.4 62.3 (2 %) 8 % On an adjusted basis, income from railway operations in 2024 increased due to lower adjusted railway operating expenses, with lower fuel prices, decreased costs of purchased services, and lower other expenses contributing significantly to the overall decline, and more than offsetting the decline in revenue.
Adjusted (Non-GAAP) 2025 2024 2023 2025 vs. 2024 2024 vs. 2023 ($ in millions, except per share amounts) (% change) Railway operating expenses $ 7,912 $ 7,977 $ 8,189 (1 %) (3 %) Income from railway operations $ 4,268 $ 4,146 $ 3,967 3 % 5 % Net income $ 2,816 $ 2,684 $ 2,673 5 % — % Diluted earnings per share $ 12.49 $ 11.85 $ 11.74 5 % 1 % Railway operating ratio (percent) 65.0 65.8 67.4 (1 %) (2 %) On an adjusted basis, income from railway operations in 2025 increased due to lower adjusted railway operating expenses and higher railway operating revenues, which drove improvements in net income, diluted earnings per share, and operating ratio.
Fuel expense, which includes the cost of locomotive fuel as well as other fuel used in railway operations, decreased in both 2024 and 2023. The decrease in both periods was due to lower locomotive fuel prices (down 15% in 2024 and 20% in 2023), which decreased fuel expense by $159 million and $275 million in 2024 and 2023, respectively.
The decrease in both periods was due to lower locomotive fuel prices (down 4% in 2025 and 15% in 2024), which decreased fuel expense by $35 million and $159 million in 2025 and 2024, respectively. Locomotive fuel consumption was down in 2025 and 2024 compared to prior periods.
Compensation and benefits increased in 2024, reflecting changes in: • pay rates (up $91 million), • incentive and stock-based compensation (up $56 million), • overtime (down $37 million), • employee activity levels (down $68 million), and • other (down $38 million).
Compensation and benefits increased in 2025, reflecting changes in: • incentive and stock-based compensation (up $154 million), • pay rates (up $81 million), • health and welfare benefits (down $41 million), • employee activity levels (down $75 million), and • other (down $20 million).
Lower other income-net and higher interest expense on debt contributed to net income and diluted earnings per share that were only up slightly compared to the prior year. In 2023, on a non-GAAP basis excluding the impact of direct costs resulting from the Incident, income from railway operations decreased due to lower railway operating revenues and higher railway operating expenses.
Net income and diluted earnings per share were only up slightly compared to the prior year as lower other income-net and higher interest expense on debt offset the increase in income from railway operations.
See Notes 3 and 13 in the Notes to Consolidated Financial Statements for additional information. K33 Eastern Ohio incident During 2024, we incurred net expenses of $325 million associated with the Incident, including additional costs associated with environmental matters and legal proceedings.
See Notes 4 and 14 for additional information. Eastern Ohio incident activity during 2025 reflected insurance and other recoveries that exceeded additional Incident-related expenses by $254 million. Insurance and other recoveries total $418 million in 2025. During 2024, K36 we incurred net expenses of $325 million associated with the Incident, including additional costs associated with environmental matters and legal proceedings.
Our current estimates of future environmental cleanup and remediation liabilities related to the Incident may change over time due to various factors, including but not limited to, the nature and extent of required future cleanup and removal activities (including those resulting from soil, water, sediment, and air assessment and investigative activities conducted at the site), and the extent and duration of governmental oversight, amongst other factors.
Our current estimates of the long-term monitoring liabilities related to the Incident may change over time due to various factors, including but not limited to, results from monitoring activities and the extent of governmental oversight, amongst other factors.
Our environmental estimates are based upon types of remediation efforts currently anticipated, the volume of contaminants in the impacted areas, and governmental oversight and other costs, amongst other factors.
Our environmental estimates are based upon the long-term monitoring activities that are currently anticipated and governmental oversight and other costs, amongst other factors.
FINANCIAL CONDITION, LIQUIDITY, AND CAPITAL RESOURCES Cash provided by operating activities, our principal source of liquidity, was $4.1 billion in 2024, $3.2 billion in 2023, and $4.2 billion in 2022. The increase in 2024 reflects improved operating results. The decrease in 2023 reflects lower operating results, offset in part by changes in working capital.
For 2026, we expect an effective income tax rate between 23% and 24%. FINANCIAL CONDITION, LIQUIDITY, AND CAPITAL RESOURCES Cash provided by operating activities, our principal source of liquidity, was $4.4 billion in 2025, $4.1 billion in 2024, and $3.2 billion in 2023. The increases in 2025 and 2024 reflect improved operating results.
Overall, our goal is to maintain a capital structure with appropriate leverage to support our business strategy and provide flexibility through business cycles.
We discuss our credit agreement and our accounts receivable securitization program in Note 11. Upcoming annual debt maturities are also disclosed in Note 11. Overall, our goal is to maintain a capital structure with appropriate leverage to support our business strategy and provide flexibility through business cycles.
We had borrowed $605 million against these policies at December 31, 2024 and no amounts borrowed at December 31, 2023. Our remaining borrowing capacity was $40 million and $640 million at December 31, 2024 and December 31, 2023, respectively. In January 2025, we repaid all amounts that were borrowed against these policies at December 31, 2024.
We had no amounts borrowed against these policies at December 31, 2025 and $605 million borrowed against these policies on December 31, 2024. Our remaining borrowing capacity was $595 million and $40 million at December 31, 2025 and December 31, 2024, respectively. Our debt-to-total capitalization ratio was 52.4% at December 31, 2025, compared with 54.6% at December 31, 2024.
The decrease in 2023 was due to reduced coke shipments resulting from idled customer facilities. Industrial coal tonnage increased in 2024 but decreased in 2023 compared with the prior years. The growth in 2024 was due to higher demand. The decrease in 2023 was due to reduced coal shipments related to customer sourcing changes.
The decrease in 2025 was due to a soft domestic market that resulted in idled facilities due to reduced customer demand. The decrease in 2024 was as a result of reduced customer demand. Industrial coal tonnage increased in both 2025 and 2024 compared with the prior years. The growth in both years was due to higher demand.
Our cash expenditures attributable to the Incident, net of insurance proceeds received, were $119 million and $652 million in 2024 and 2023, respectively, and 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 18 in Notes to Consolidated Financial Statements.
In 2025, net cash inflows attributable to the Incident were $249 million driven by insurance and other recoveries, while 2024 resulted in cash expenditures, net of insurance proceeds, of $119 million. The overall net cash impact attributable to the Incident is presented in “Net cash provided by operating activities” on the Consolidated Statements of Cash Flows.
The current year reflects a $15 million deferred income tax benefit due to a change in a state corporate income tax rate and a $27 million deferred income tax benefit from subsidiary restructuring. These benefits were partially offset by the absence of certain business tax credits recognized in the prior year.
We recorded a $15 million deferred income tax benefit due to a change in a state corporate income tax rate and a $27 million deferred income tax benefit from subsidiary restructuring in 2024. The 2023 effective rate benefited from tax credits and higher COLI returns offset by reduced benefits from stock-based compensation.
The decrease in 2023 was the result of lower average revenue per unit, driven by reduced storage service revenues and lower fuel surcharge revenue, and decreased volume.
K33 COAL revenues decreased in both 2025 and 2024 compared with the prior years. The decrease in 2025 was a result of lower average revenue per unit, driven by decreased pricing, adverse mix, and lower fuel surcharge revenue, partially offset by increased volume.
In 2024, the increase was due to increased automotive and intermodal equipment expenses as a result of higher volumes. In 2023, the increase was due to increased intermodal equipment expenses, higher freight car lease costs, and decreased equity in TTX Company's (TTX) earnings.
In 2024, the increase was due to increased automotive and intermodal equipment expenses as a result of higher volumes. Fuel expense, which includes the cost of locomotive fuel as well as other fuel used in railway operations, decreased in both 2025 and 2024.
Total 2025 2026 - 2027 2028 - 2029 2030 and Subsequent ($ in millions) Interest on fixed-rate long-term debt $ 19,413 $ 776 $ 1,472 $ 1,383 $ 15,782 Long-term debt principal 18,108 555 1,223 1,212 15,118 Unconditional purchase obligations 1,225 519 455 95 156 Long-term advances from Conrail 534 — — — 534 Operating leases 314 89 116 62 47 Agreements with CRC 209 47 94 68 — Unrecognized tax benefits* 82 — — — 82 Total $ 39,885 $ 1,986 $ 3,360 $ 2,820 $ 31,719 * This amount is shown in the 2030 and Subsequent column because the year of settlement cannot be reasonably estimated.
Total 2026 2027 - 2028 2029 - 2030 2031 and Subsequent ($ in millions) Interest on fixed-rate long-term debt $ 18,832 $ 770 $ 1,470 $ 1,379 $ 15,213 Long-term debt principal 17,963 607 1,227 1,211 14,918 Unconditional purchase obligations 2,047 902 714 307 124 Long-term advances from Conrail 534 — — — 534 Operating leases 253 77 94 39 43 Agreements with CRC 185 54 108 23 — Unrecognized tax benefits* 37 — — — 37 Total $ 39,851 $ 2,410 $ 3,613 $ 2,959 $ 30,869 * This amount is shown in the 2031 and Subsequent column because the year of settlement cannot be reasonably estimated.
We did not repurchase any Common Stock during 2024, while we repurchased $622 million in 2023 and $3.1 billion in 2022, which resulted in the retirement of 2.8 million and 12.6 million shares in 2023 and 2022, respectively. As of December 31, 2024, $6.9 billion remains authorized by our Board of Directors for repurchase.
In 2025, we repurchased and retired $534 million of Common Stock, inclusive of paid excise taxes, which resulted in the retirement of 2.2 million shares. While we did not repurchase any Common Stock in 2024, we repurchased and retired $622 million in 2023, which resulted in the retirement of 2.8 million shares.
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.
We had no amounts outstanding under this program and our available borrowing capacity was approximately $397 million and $400 million at December 31, 2025 and December 31, 2024, respectively. 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.
In 2024, volume increased due to growth in new and existing customers and improved service, partially offset by reduced demand for premium shipments. In 2023, volume declined due to a decrease in freight demand as a result of reduced consumer consumption combined with high inventories, and increased truck competition. International volume increased in both 2024 and 2023.
In 2025, volume decreased due to reduced traffic originating on the West Coast, increased market competition, and reduced demand for premium shipments. In 2024, volume increased due to growth in new and existing customers and improved service, partially offset by reduced demand for premium shipments. International volume was flat in 2025 and increased in 2024.
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.
Agriculture, forest and consumer products revenues increased in 2025 but decreased slightly in 2024 compared with the prior years. In 2025, the increase in revenues was the result of higher average revenue per unit due to favorable pricing and mix, offset partially by lower fuel surcharge revenue. Volume declined from the prior year, primarily related to corn and soybean shipments.
Generally Accepted Accounting Principles (GAAP) financial results to exclude gains on railway line sales, restructuring and other charges (including the curtailment gain on our other postretirement benefit plan which is included in “Other income – net”), shareholder advisory costs, and a deferred income tax adjustment, all which occurred in 2024, as well as the effects of the Incident that were present in both years.
Adjusted 2024 financial results exclude gains on railway line sales, restructuring and other charges, costs and recoveries associated with the Incident, shareholder advisory costs, and a deferred tax adjustment. Adjusted 2023 financial results exclude the effects of the Incident.

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