Norfolk Southern

DEAR FELLOW 
SHAREHOLDERS

As 2021 came to a close, we 
concluded our three-year  
strategic plan to transform 
the company into a more 
innovative and efficient 
railroad. As part of this 
strategy, we deployed our 
own brand of precision 
scheduled railroading 
principles through our 
TOP21 operating plan. With 
tremendous dedication from 
the entire team, we delivered 
on our commitments in spite 
of significant headwinds 
associated with a freight 
recession and a global pandemic.

1  See Footnote 1 on the Financial Highlights page of this 
report regarding these non-GAAP financial measures.

2 See Footnote 2 on the Financial Highlights page of this 

report regarding this non-GAAP financial measure.

1

Over the last three years, Norfolk 
Southern has reduced our operating 
ratio by 530 basis points and achieved 
a company record of 60.1%. We’ve 
reached record productivity levels 
across our operations, improving 
average train weight and length 21% 
and 20%, respectively. Since beginning 
the strategic plan, earnings per share 
grew 27%, and we returned nearly $10 
billion to shareholders in the form 
of dividends and share repurchases. 
During this time, our company led the 
industry in total shareholder returns 
with growth of 110%.

We achieved strong financial results in 
2021. Our company grew revenue 14%, 
outpacing a 6% increase in adjusted 
operating expenses driven largely by 
rising fuel costs.1 We achieved net 
income of $3 billion, a 27% increase, 
while earnings per share increased 
31%, compared to the adjusted 
prior year amounts.1 In addition, 
we accomplished record highs in 
operating income and free cash flow.2 

Each of our markets experienced 
volume and revenue growth in 2021, 
reflecting a resurgent economy and 
strong demand for our service product. 
Both our merchandise and intermodal 
markets grew by over half a billion 
dollars in 2021, as markets benefitted 
from higher demand, elevated 
consumer activity, and favorable 
pricing conditions. Coal revenue was 
bolstered by higher export prices and 
growth in steel production.

While our focus on productivity and 
revenue growth produced record 
financial results, our service – 
impacted by labor shortages across 
key areas of our network – was not 
where it needed to be. Accordingly, we 
have increased our hiring and retention 
efforts, and begun development of a 
new operating plan that is fully aligned 
around a return to the service levels 
our customers expect.  

NORFOLK SOUTHERN2021 Annual Report2

SETTING THE BAR ON SUSTAINABILITY 

Helping shippers reduce their carbon 
footprint is one of our industry’s competitive 
advantages, and Norfolk Southern made 
substantial sustainability gains in 2021. 

We set a science-based target to reduce our 
carbon emissions, aligning our commitment 
to combat climate change with the Paris 
Climate Accords. Consistent with our 
goal, we also became the first North 
American Class I railroad to issue green 
bonds to finance projects that generate 
environmental benefits.

Sustainable business practices are 
increasingly important to our customers 
as well, and many have set their own 
public goals for carbon reduction. 
Norfolk Southern is partnering with these 
companies to deliver results. By choosing 
rail, our customers avoid 15 million metric 
tons of carbon emissions annually. 

INCREASING VALUE WITH THE DIGITAL 
RAILROAD OF THE FUTURE

We continue to deploy innovative 
technology solutions to improve safety and 
efficiency, reduce our environmental impact, 
and make it easier to do business with 
Norfolk Southern. From 
artificial intelligence 
to automated 
inspections  
to mobile 
applications, we 
are leading the 
charge to build 
the digital railroad 
of the future. 

In 2021, we developed 
new resources to 
deliver value to our 
customers and the marketplace, including 
our first-in-class industrial site search 
engine, NSites. This one-stop digital tool 
allows users to create customized searches 
for some 800 rail-served industrial sites and 
250 rail-truck transload facilities across 
our system. As manufacturers expressed a 
desire to redesign their supply chains with 
supply certainty and inventory closer to 
their customers, the Norfolk Southern team 
responded quickly with a solution to meet 
their unique business needs.  

OPENING OUR NEW CORPORATE 
HEADQUARTERS IN ATLANTA

In November, we celebrated the ribbon-
cutting of 650 WPT, our new home in 
Midtown on West Peachtree Street. 

Located in the heart of Atlanta’s Tech 
Square, the campus is ideally suited 
for Norfolk Southern’s innovative and 
collaborative team. We brought our 
company’s leaders – including operations, 
marketing, finance, and technology 
– together in one location to drive 
productivity and efficiency across our 
organization. The design, location, and 
accommodations of 650 WPT promote the 
health and well-being of our employees, 
underscoring our commitment to a safe  
and inclusive work environment.

2021 Annual ReportNORFOLK SOUTHERN3

ENSURING A SAFE, INCLUSIVE, AND 
ACCOUNTABLE EMPLOYEE EXPERIENCE

For Norfolk Southern to reach its full 
potential, our people must be able to thrive. 
With that in mind, we’re building a best-in-
class employee experience. From expanded 
leadership development programs to 
ambitious Diversity, Equity, and Inclusion 
initiatives, our team is working to align, 
engage, and develop our workforce. 

We’ve taken multiple steps to bring DEI into 
every aspect of our company and operations, 
building a representative and inclusive 
culture. To further drive accountability within 
our organization, we expanded our Inclusion 
Leadership Council, which includes senior 
leaders from every department. 

The Norfolk Southern team showed 
impressive resilience throughout the 
year, and produced record results despite 
significant challenges and uncertainty. 
Moving forward, our company has an 
optimistic and confident outlook. 

BUILDING LASTING RELATIONSHIPS  
IN OUR COMMUNITIES

With operations across 22 states and 
Washington, D.C., Norfolk Southern has a 
tremendous opportunity to make a positive 
impact. Through our corporate giving 
strategy, we’re intent on cultivating lasting relationships that go beyond charitable 
contributions to build genuine connections through service.

In 2021, in conjunction with our move from Norfolk to Atlanta, we made a $5 million 
investment in the Hampton Roads, Virginia, community to provide local nonprofits 
access to $1 million in grants over the next five years. We wanted to send a clear message 
that our presence in Virginia will remain strong, and is important to our company.

In our new corporate hometown, we partnered with the Atlanta History Center to donate 
the comprehensive historical archives of our predecessor company Southern Railway. 
Our company played a major role in the growth of Atlanta, and we’re making this rich 
history accessible to scholars, students, and railfans. Norfolk Southern is providing 
$500,000 to support the collection in perpetuity and create paid internship opportunities 
for underrepresented communities for five years.

Norfolk 
Southern 
has a 
tremendous 
opportunity 
to make a 
positive 
impact.

NORFOLK SOUTHERN2021 Annual Report4

We are in a 
rock-solid 
position for 
continued 
success.

DELIVERING A SMOOTH TRANSITION  
IN LEADERSHIP

During my time as chairman and CEO 
of Norfolk Southern, I am proud of what 
we’ve accomplished. We’ve delivered 
industry-leading shareholder returns over 
the course of our latest strategic plan, 
become a more efficient, sustainable, and 
technologically innovative railroad, and 
brought company leadership together in a 
new, state-of-the-art Atlanta headquarters.

We are in a rock-solid position for 
continued success. Alan Shaw, who was 
named company president in December 
2021, is the right leader for the next chapter 
in our ongoing story of transformation. He 
is a veteran railroader who understands 
every aspect of our business, and will 
lead continued improvement in service 
and efficiency. Alan has unparalleled 
knowledge of our customers and the 
markets we serve, as well as the vision to 
grow shareholder value in our competitive, 
rapidly evolving industry.

Effective May 1, Alan will assume the role 
of CEO and join Norfolk Southern’s board. 
At that time, Amy E. Miles – a director 
since 2014 – will become the non-executive 
chair of your board of directors. In the 
months ahead, we will continue working 
together to complete a smooth transition 
and are confident that all Norfolk Southern 
stakeholders will be in good hands with our 
new leadership.

Thank you for your investment  
in Norfolk Southern.

Sincerely,

2021 Annual ReportNORFOLK SOUTHERN5

BOARD OF 
DIRECTORS

THOMAS D.  
BELL JR.
Director Since 2010

MITCHELL E. 
DANIELS JR.
Director Since 2016 

MARCELA E. 
DONADIO 
Director Since 2016 

JOHN C. 
HUFFARD JR. 
Director Since 2020 

COMMITTEES:
compensation, 
finance and risk 
management

COMMITTEES:
compensation, 
executive, governance 
and nominating (chair)

CAREER 
HIGHLIGHTS:
Daniels has been 
president of Purdue 
University since 
2013 and served as 
governor of Indiana 
from 2005 to 2013. 
From 1990 to 2000, 
Daniels worked for  
Eli Lilly and Company, 
holding the executive 
positions of president 
of North American 
pharmaceutical 
operations and senior 
vice president of 
corporate strategy 
and policy. He is a 
director of Cerner 
Corporation.

EXPERTISE: 
CEO/senior 
officer; finance 
and accounting; 
governance/board; 
governmental and 
stakeholder relations; 
strategic planning

CAREER 
HIGHLIGHTS:
Bell is the chairman 
of Mesa Capital 
Partners LLC, a real-
estate investment 
company. From 2002 
to 2009, Bell served as 
chairman and CEO of 
Cousins Properties, a 
publicly traded real-
estate investment 
trust that invests 
in office buildings 
throughout the South. 
He is a director of 
Southern Company 
Gas, formerly AGL 
Resources, and was 
a director of Regal 
Entertainment Group 
Inc. until its acquisition 
in March 2018.

EXPERTISE: 
CEO/senior officer; 
environmental and 
safety; governance/
board; governmental 
and stakeholder 
relations; human 
resources and 
compensation; 
marketing;  
strategic planning

COMMITTEES:
compensation,
finance and risk 
management 

CAREER 
HIGHLIGHTS: 
Huffard is a co-founder 
of Tenable Network 
Security Inc. and 
Tenable Holdings 
Inc., a cybersecurity 
software company. 
From 2002 to 2018, he 
served as president 
and chief operating 
officer and as a 
director of Tenable 
Network Security Inc. 
He was responsible 
for driving Tenable’s 
global corporate 
strategy and business 
operations and was 
instrumental in the 
venture funding and 
IPO process. From 
2018 to 2019, Huffard 
focused exclusively on 
business operations 
as chief operating 
officer of Tenable 
Holdings. He has been 
a director of Tenable 
Holdings since 2016.

EXPERTISE: 
CEO/senior officer;
finance and accounting; 
governance/board; 
human resources 
and compensation; 
information technology

COMMITTEES:
audit, finance  
and risk management 

CAREER 
HIGHLIGHTS:
Donadio is a certified 
public accountant with 
over 37 years of audit 
and public accounting 
experience. She retired 
in 2014 as a partner 
of Ernst & Young 
LLP, a multinational 
professional services 
firm. From 2007 
until her retirement, 
Donadio was 
Americas Oil & Gas 
sector leader, with 
responsibility for one 
of Ernst & Young’s 
significant industry 
groups, helping set 
firm strategy for oil 
and gas industry 
clients in the United 
States and throughout 
the Americas. 
Donadio serves as 
lead independent 
director of Marathon 
Oil Corporation and 
as a director of NOV 
Inc. She has been a 
director of Freeport-
McMoRan since 
August 2021. 

EXPERTISE: 
CEO/senior 
officer; finance 
and accounting; 
governance/board; 
human resources 
and compensation; 
strategic planning

A

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NORFOLK SOUTHERN2021 Annual Report 
 
 
 
 
 
 
 
 
 
 
 
 
 
6

CHRISTOPHER T. 
JONES 
Director Since 2020 

THOMAS C. 
KELLEHER 
Director Since 2019 

STEVEN F. 
LEER
Director Since 1999 

MICHAEL D. 
LOCKHART  
Director Since 2008 

AMY E. 
MILES  
Director Since 2014 

COMMITTEES: 
audit, governance and 
nominating, safety

CAREER 
HIGHLIGHTS: 
Jones served as 
corporate vice 
president and 
president of the 
technology services 
sector of Northrop 
Grumman Corporation, 
a global aerospace 
and defense 
technology company, 
from January 2013 
through December 
2019. He served as 
vice president and 
general manager of 
Northrop Grumman’s 
integrated logistics 
and modernization 
division from 2010 
through 2012. Jones 
was a maintenance 
officer in the 
Connecticut  
Air National Guard 
from 1997 to 2011. 

EXPERTISE: 
CEO/senior 
officer; finance 
and accounting; 
governmental 
and stakeholder 
relations; information 
technology;  
strategic planning 

COMMITTEES: 
audit, executive, 
finance and risk 
management (chair)

COMMITTEES: 
compensation, 
executive, governance 
and nominating 

CAREER 
HIGHLIGHTS: 
Kelleher served as 
president of Morgan 
Stanley, a leading 
global financial 
services firm, 
from 2016 until his 
retirement in June 
2019. He served as 
chairman and chief 
executive officer of 
Morgan Stanley Bank 
N.A. until June 2019. 
In addition, he was 
president of Morgan 
Stanley Institutional 
Securities from 
2010 to 2016; CEO 
of Morgan Stanley 
International from 
2011 to 2016; chief 
financial officer and 
co-head of corporate 
strategy from 2007 to 
early 2010; and head of 
global capital markets 
for Morgan Stanley 
from 2006 to 2007.

EXPERTISE: 
CEO/senior 
officer; finance 
and accounting; 
governance/board; 
governmental and 
stakeholder relations; 
human resources 
and compensation; 
strategic planning

CAREER 
HIGHLIGHTS: 
Leer served as the 
chief executive officer 
of Arch Coal Inc., a 
company engaged 
in coal mining and 
related businesses, 
from 1992 through 
2012. He was chairman 
of its board from 2006 
through 2012 and its 
executive chairman 
from 2012 through 
2014. He served as 
senior advisor to the 
president and CEO  
of Arch Coal from 2014 
through May 2015. 
Leer was a director of 
Cenovus Energy Inc. 
until Jan. 1, 2021. He is 
a director of Parsons 
Corporation and 
served as the non-
executive chairman  
of USG Corporation 
until April 2019.

EXPERTISE: 
CEO/senior officer; 
environmental and 
safety; governance/
board; governmental 
and stakeholder 
relations; human 
resources and 
compensation; 
marketing; 
strategic planning; 
transportation

COMMITTEES: 
audit, executive, 
finance and risk 
management,  
safety (chair)

CAREER 
HIGHLIGHTS: 
Lockhart served 
as chairman of the 
board, president, 
and chief executive 
officer of Armstrong 
World Industries Inc., 
and its predecessor, 
Armstrong Holdings 
Inc., a leading global 
producer of flooring 
products and ceiling 
systems, from 2000 
until his retirement 
in February 2010. He 
served as chairman 
and chief executive 
officer of General 
Signal Corporation, 
a diversified 
manufacturer, from 
September 1995 until it 
was acquired in 1998. 

EXPERTISE: 
CEO/senior officer; 
environmental 
and safety; finance 
and accounting; 
governance/
board; marketing; 
strategic planning; 
transportation

COMMITTEES: 
audit (chair), 
executive, governance 
and nominating

CAREER 
HIGHLIGHTS: 
Miles has been a 
director since 2014 
and will be non-
executive chair of 
Norfolk Southern’s 
board effective May 
1, 2022. She served 
as chief executive 
officer of Regal 
Entertainment Group 
Inc., a leading motion 
picture exhibitor, 
from 2009 until its 
acquisition in 
March 2018. During 
that time, Miles served 
as a director of Regal 
and was named chair 
of its board in 2015. 
From 2002 to 2009, 
she served as Regal 
Entertainment’s 
executive vice 
president, chief 
financial officer, and 
treasurer. Miles has 
been a director of The 
Gap Inc. since April 
2020 and Amgen Inc. 
since July 2020.

EXPERTISE: 
CEO/senior 
officer; finance 
and accounting; 
governance/
board; information 
technology; 
marketing;  
strategic planning

2021 Annual ReportNORFOLK SOUTHERN7

CLAUDE 
MONGEAU
Director Since 2019

JENNIFER F. 
SCANLON 
Director Since 2018 

JAMES A. 
SQUIRES    
Director Since 2014 

JOHN R. 
THOMPSON 
Director Since 2013 

COMMITTEES: 
compensation (chair), 
executive, governance 
and nominating 

CAREER 
HIGHLIGHTS: 
Thompson served 
as a government 
relations consultant 
for Best Buy Co. 
Inc., a multinational 
consumer electronics 
corporation, from 
October 2012 to April 
2016. He served as 
senior vice president 
and general manager 
of BestBuy.com LLC, a 
subsidiary of Best Buy, 
from 2002 through 
2012. Thompson was 
formerly a director of 
Belk Inc. and Wendy’s 
International Inc. 

EXPERTISE: 
CEO/senior officer; 
finance and accounting; 
governance/board; 
governmental and 
stakeholder relations; 
human resources 
and compensation; 
information technology; 
marketing; strategic 
planning

COMMITTEES: 
executive (chair) 

CAREER 
HIGHLIGHTS: 
Squires has been 
chief executive officer 
of Norfolk Southern 
since June 2015 and 
will be chairman of  
the company’s board 
until his retirement 
on May 1, 2022. 
Squires served as 
Norfolk Southern’s 
president from 2013 
until December 
2021 and previously 
served as executive 
vice president 
administration, 
executive vice 
president finance and 
chief financial officer, 
senior vice president 
finance, senior vice 
president law, and 
vice president law.  

EXPERTISE: 
CEO/senior 
officer; finance 
and accounting; 
governance/board; 
governmental and 
stakeholder relations; 
human resources 
and compensation; 
marketing; 
strategic planning; 
transportation

COMMITTEES: 
compensation, 
finance and risk 
management, safety 

COMMITTEES: 
compensation, 
governance and 
nominating, safety 

CAREER 
HIGHLIGHTS: 
Scanlon has been 
president and chief 
executive officer  
and director of UL,  
a global science 
safety organization, 
since Sept. 30, 
2019. She is the first 
woman to lead the 
organization. She 
previously served as 
president and chief 
executive officer of 
USG Corporation 
from 2016 until its 
acquisition in April 
2019. During that 
time, she served as 
a director of USG. 
Scanlon previously 
served as president 
of USG’s international 
business, president 
of its L&W Supply 
Corporation, and chief 
information officer 
and chairman of the 
board for USG Boral 
Building Products. 

EXPERTISE: 
CEO/senior officer; 
environmental and 
safety; governance/
board; information 
technology; marketing; 
strategic planning; 
transportation

CAREER 
HIGHLIGHTS: 
Mongeau served as 
president and chief 
executive officer of 
Canadian National 
Railway Company, 
known as CN, a North 
American railroad 
and transportation 
company, from 
January 2010 to June 
2016 and as a director 
from October 2009 
to June 2016. During 
his 22-year career at 
CN, he also served 
as executive vice 
president and chief 
financial officer, vice 
president strategic 
and financial planning, 
and assistant vice 
president corporate 
development. 
Mongeau is a 
director of Cenovus 
Energy and Toronto-
Dominion Bank. He 
was a director of Telus 
from 2017 to 2019.

EXPERTISE: 
CEO/senior officer; 
environmental 
and safety; finance 
and accounting; 
governance/board; 
governmental and 
stakeholder relations; 
human resources 
and compensation; 
marketing; 
strategic planning; 
transportation

NORFOLK SOUTHERN2021 Annual Report 
8

OFFICERS

A
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2

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EQUAL EMPLOYMENT 
OPPORTUNITY POLICY
Norfolk Southern Corporation’s policy is to comply with  
all applicable laws, regulations, and executive orders  
concerning equal opportunity and nondiscrimination.  
The company’s policy is to offer employment, training, 
remuneration, advancement, and all other privileges of 
employment on the basis of qualification and performance 
regardless of race, religion, color, national origin, gender, 
age, status as a covered veteran, sexual orientation, gender 
identity, the presence of a disability, genetic information,  
or any other legally protected status.

John S. Hatfield
Vice President Corporate Communications

Jeffrey S. Heller
Vice President Intermodal and Automotive 

James L. Kitchin
Vice President Industrial Products

Michael R. McClellan
Vice President Strategic Planning

Jason M. Morris
Vice President Labor Relations

Christopher R. Neikirk
Vice President and Treasurer

Barbara N. Paul
Vice President Human Resources

Thomas W. Schnautz
Vice President Advanced Train Control

Kathleen C. Smith
Vice President Business Development 
and Real Estate

Susan S. Stuart
Vice President Audit and Compliance

Frank J. Voyack
Vice President Government Relations

Jason A. Zampi 
Vice President Financial Planning and Analysis

James A. Squires
Chairman and Chief Executive Officer

Alan H. Shaw
President 

Ann A. Adams
Executive Vice President 
and Chief Transformation Officer

Claude E. Elkins
Executive Vice President 
and Chief Marketing Officer

Mark R. George
Executive Vice President Finance 
and Chief Financial Officer

Cynthia M. Sanborn
Executive Vice President 
and Chief Operating Officer

Lorri J. Kleine
Senior Vice President Law 
and Chief Legal Officer

Clyde H. Allison Jr. 
Vice President and Controller

Edward F. Boyle Jr. 
Vice President Engineering

Hunsdon Cary IV
Vice President Transportation

Michael F. Cox
Vice President Taxation

Fredric M. Ehlers
Vice President Information Technology 
and Chief Information Officer

John H. Friedmann
Vice President Network Planning 
and Optimization 

Denise W. Hutson
Corporate Secretary

2021 Annual ReportNORFOLK SOUTHERN 
 
 
 
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K 

☒     ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
for the fiscal year ended DECEMBER 31, 2021

☐      TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
for the transition period from ___________ to___________ 

Commission File Number 1-8339 

NORFOLK SOUTHERN CORPORATION 
(Exact name of registrant as specified in its charter)

Virginia

(State or other jurisdiction of incorporation or organization)
650 West Peachtree Street NW

Atlanta, Georgia

(Address of principal executive offices)

52-1188014
(I.R.S Employer Identification No.)

30308-1925

(Zip Code)

(855) 667-3655

(Registrant’s telephone number, including area code)

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

Norfolk Southern Corporation Common Stock (Par Value $1.00)

NSC

New York Stock Exchange

Title of each class

Trading Symbol(s)

Name of each exchange on which registered

Securities registered pursuant to Section 12(g) of the Act: NONE

Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.  Yes  ☒  No ☐

Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or 15(d) of the Act.  Yes ☐  No ☒

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

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

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an 
emerging growth company.  See the definitions of "large accelerated filer", "accelerated filer", "smaller reporting company", and "emerging growth company" 
in Rule 12b-2 of the Exchange Act. 
Large accelerated filer  ☒    Accelerated filer ☐   Non-accelerated filer ☐   Smaller reporting company ☐  Emerging growth company ☐ 

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

Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control 
over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its 
audit report. ☒

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

The aggregate market value of the voting common equity held by non-affiliates at June 30, 2021 was $65,486,012,788 (based on the closing price as quoted on 
the New York Stock Exchange on June 30, 2021).

The number of shares outstanding of each of the registrant’s classes of common stock, at January 31, 2022: 239,777,444 (excluding 20,320,777 shares held by 
the registrant’s consolidated subsidiaries).

DOCUMENTS  INCORPORATED  BY  REFERENCE:    Portions  of  the  Registrant’s  definitive  proxy  statement  to  be  filed  electronically  pursuant  to 
Regulation 14A not later than 120 days after the end of the fiscal year, are incorporated herein by reference in Part III.

 
 
 
 
 
 
 
 
 
 
 
TABLE OF CONTENTS

NORFOLK SOUTHERN CORPORATION AND SUBSIDIARIES

Part I.

Items 1 and 2. Business and Properties
Item 1A.
Item 1B.
Item 3.
Item 4.

Risk Factors
Unresolved Staff Comments
Legal Proceedings
Mine Safety Disclosures
Information About Our Executive Officers

Part II.

Item 5.

Market for Registrant’s Common Equity, Related Stockholder Matters and

Issuer Purchases of Equity Securities

Item 7.

Management’s Discussion and Analysis of Financial Condition and

Item 7A.
Item 8.
Item 9.

Item 9A.
Item 9B.
Item 9C.

Item 10.
Item 11.
Item 12.

Item 13.
Item 14.

Item 15.
Item 16.

Part III.

Part IV.

Results of Operations

Quantitative and Qualitative Disclosures About Market Risk
Financial Statements and Supplementary Data
Changes in and Disagreements with Accountants on Accounting and

Financial Disclosure
Controls and Procedures
Other Information
Disclosure Regarding Foreign Jurisdictions that Prevent Inspections

Directors, Executive Officers and Corporate Governance
Executive Compensation
Security Ownership of Certain Beneficial Owners and Management

and Related Stockholder Matters

Certain Relationships and Related Transactions, and Director Independence
Principal Accountant Fees and Services

Exhibits and Financial Statement Schedule
Form 10-K Summary

Power of Attorney

Signatures

Page
K3
K11
K15
K15
K15
K16

K17

K18
K31
K32

K75
K75
K75
K75

K76
K76

K77
K79
K79

K80
K88

K89

K89

K2

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
PART I

NORFOLK SOUTHERN CORPORATION AND SUBSIDIARIES

Item 1. Business and Item 2. Properties

GENERAL – Norfolk Southern Corporation (Norfolk Southern) is an Atlanta, Georgia-based company that owns a 
major freight railroad, Norfolk Southern Railway Company (NSR).  We were incorporated on July 23, 1980, under 
the laws of the Commonwealth of Virginia.  Our common stock (Common Stock) is listed on the New York Stock 
Exchange (NYSE) under the symbol “NSC.”

Unless indicated otherwise, Norfolk Southern Corporation and its subsidiaries, including NSR, are referred to 
collectively as NS, we, us, and our. 

We are primarily engaged in the rail transportation of raw materials, intermediate products, and finished goods 
primarily in the Southeast, East, and Midwest and, via interchange with rail carriers, to and from the rest of the 
United States (U.S.).  We also transport overseas freight through several Atlantic and Gulf Coast ports.  We offer 
the most extensive intermodal network in the eastern half of the U.S.

We make available free of charge through our website, www.norfolksouthern.com, our annual report on Form 10-K, 
quarterly reports on Form 10-Q, current reports on Form 8-K, and all amendments to those reports as soon as 
reasonably practicable after such material is electronically filed with or furnished to the U.S. Securities and 
Exchange Commission (SEC).  In addition, the following documents are available on our website and in print to any 
shareholder who requests them:

The Thoroughbred Code of Ethics

• Corporate Governance Guidelines
• Charters of the Committees of the Board of Directors
•
• Code of Ethical Conduct for Senior Financial Officers
• Categorical Independence Standards for Directors
• Norfolk Southern Corporation Bylaws

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RAILROAD OPERATIONS – At December 31, 2021, we operated approximately 19,300 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.

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
• Memphis to Chattanooga

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The miles operated, which include major leased lines between Cincinnati and Chattanooga, and an exclusive 
operating agreement for trackage rights over property owned by North Carolina Railroad Company, were as 
follows:

Mileage Operated at December 31, 2021
Passing
Track,
Crossovers
and
Turnouts

Second
and
Other
Main
Track

Way and
Yard
Switching 

Route 
Miles

Total 

Owned
Operated under lease, contract or trackage 

rights

Total

14,522 

2,677 

1,985 

8,202 

27,386 

4,797 

1,889 

405 

839 

7,930 

19,319 

4,566 

2,390 

9,041 

35,316 

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, Maryland Department of 
Transportation, and Michigan Department of Transportation.

The following table sets forth certain statistics relating to our operations for the past five years:

2021

Years ended December 31,
2018
2019
2020

2017

Revenue ton miles (billions)
Revenue per thousand revenue ton miles
Revenue ton miles (thousands) per railroad employee
Ratio of railway operating expenses to railway 
operating revenues (railway operating ratio)

178 
$  62.56 
  9,694 

164 
$  59.67 
  8,191 

194 
$  58.21 
  7,939 

207 
$  55.25 
  7,822 

201 
$  52.38 
  7,474 

60.1%

69.3%

64.7%

65.4%

66.6%

RAILWAY OPERATING REVENUES – Total railway operating revenues were $11.1 billion in 2021.  
Following is an overview of our three commodity groups.  See the discussion of merchandise revenues by major 
commodity group, intermodal revenues, and coal revenues and tonnage in Item 7 “Management’s Discussion and 
Analysis of Financial Condition and Results of Operations.”

MERCHANDISE – Our merchandise commodity group is composed of four groupings: 

• Agriculture, forest and consumer products includes soybeans, wheat, corn, fertilizer, livestock and poultry 
feed, food products, food oils, flour, sweeteners, ethanol, lumber and wood products, pulp board and paper 
products, wood fibers, wood pulp, scrap paper, beverages, canned goods, and consumer products.

• Chemicals includes sulfur and related chemicals, petroleum products (including crude oil), chlorine and 

bleaching compounds, plastics, rubber, industrial chemicals, chemical wastes and sand.

• Metals and construction includes steel, aluminum products, machinery, scrap metals, cement, aggregates, 

minerals, clay, transportation equipment, and items for the U.S. military.

• Automotive includes finished motor vehicles and automotive parts.

In 2021, we handled 2.3 million merchandise carloads, which accounted for 60% of our total railway operating 
revenues.

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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 2021, we handled 4.1 million intermodal 
units, which accounted for 28% of our total railway operating revenues.

COAL – Coal revenues accounted for 12% of our total railway operating revenues in 2021.  We handled 73 million 
tons, or 0.7 million carloads, most of which originated on our lines from major eastern coal basins, with the balance 
from major western coal basins received via the Memphis and Chicago gateways.  Our coal franchise supports the 
electric generation market, serving approximately 50 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, Lamberts Point in Norfolk, Virginia, the Port of Baltimore, and Lake Erie.

FREIGHT RATES – Our predominant pricing mechanisms, private contracts and exempt price quotes, are not 
subject to regulation.  In general, market forces are the primary determinant of rail service prices.

RAILWAY PROPERTY

Our railroad infrastructure makes us capital intensive with net properties of approximately $32 billion on a historical 
cost basis.

Property Additions – Property additions for the past five years were as follows:

2021

2020

2019
($ in millions)

2018

2017

Road and other property
Equipment

$  1,041  $  1,046  $  1,371  $  1,276  $  1,210 
513 

675 

429 

448 

648 

Total

$  1,470  $  1,494  $  2,019  $  1,951  $  1,723 

Our capital spending and replacement programs are and have been designed to assure the ability to provide safe, 
efficient, and reliable rail transportation services.

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Equipment – At December 31, 2021, we owned or leased the following units of equipment:

Owned

Leased

Total

Locomotives:

Multiple purpose
Auxiliary units
Switching

Total locomotives

Freight cars:
Gondola
Hopper
Covered hopper
Box
Flat
Other

Total freight cars

Other:

Chassis
Containers
Work equipment
Vehicles
Miscellaneous

Total other

3,068 
138 
4 

3,210 

17,781 
8,113 
5,664 
2,684 
1,428 
1,558 

37,228 

33,751 
18,310 
5,502 
2,833 
2,245 

62,641 

— 
— 
— 

— 

2,643 
— 
— 
706 
136 
— 

3,485 

880 
— 
243 
19 
— 

1,142 

3,068 
138 
4 

3,210 

20,424 
8,113 
5,664 
3,390 
1,564 
1,558 

40,713 

34,631 
18,310 
5,745 
2,852 
2,245 

63,783 

Capacity of
Equipment
(Horsepower)
11,940,400 
— 
4,400 

11,944,800 

(Tons)
2,282,819 
925,510 
629,896 
308,515 
131,168 
69,649 

4,347,557 

The following table indicates the number and year built for locomotives and freight cars owned at December 31, 
2021:

2021

2020

2019

2018

2017

2012-
2016

2007-
2011

2006 &
Before

Total

Locomotives:
No. of units
% of fleet

Freight cars:
No. of units
% of fleet

—
—

—
—

10
—

—
—

35
 1% 

200
 1% 

15
 1% 

55
 2% 

266
 8% 

259
 8% 

2,570
 80% 

3,210
 100% 

—
—

470
 1% 

5,745
 15% 

8,041
 22% 

22,772
 61% 

37,228
 100% 

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The following table shows the average age of our owned locomotive and freight car fleets at December 31, 2021 
and information regarding 2021 retirements:

Average age – in service
Retirements
Average age – retired

Locomotives

26.7 years
2 units
31.5 years

Freight Cars 
25.7 years
2,308 units
42.2 years

Track Maintenance – Of the 35,300 total miles of track on which we operate, we are responsible for maintaining 
28,700 miles, with the remainder being operated under trackage rights from other parties responsible for 
maintenance.

Over 84% of the main line trackage (including first, second, third, and branch main tracks, all excluding rail 
operated pursuant to trackage rights) has rail ranging from 131 to 155 pounds per yard with the standard installation 
currently at 136 pounds per yard.  Approximately 41% of our lines, excluding rail operated pursuant to trackage 
rights, carried 20 million or more gross tons per track mile during 2021.  

The following table summarizes several measurements regarding our track roadway additions and replacements 
during the past five years:

Track miles of rail installed
Miles of track surfaced
Crossties installed (millions)

2021

2020

2019

2018

2017

458 
4,225 
2.0 

418 
4,785 
1.8 

449 
5,012 
2.4 

416 
4,594 
2.2 

466 
5,368 
2.5 

Traffic Control – Of the 16,200 route miles we dispatch, 11,300 miles are signalized, including 8,500 miles of 
centralized traffic control (CTC) and 2,800 miles of automatic block signals.  Of the 8,500 miles of CTC, 7,600 
miles are controlled by data radio originating at 355 base station radio sites.

ENVIRONMENTAL MATTERS – Compliance with federal, state, and local laws and regulations relating to the 
protection of the environment is one of our principal goals.  To date, such compliance has not had a material effect 
on our financial position, results of operations, liquidity, or competitive position.  See Note 17 to the Consolidated 
Financial Statements.

HUMAN CAPITAL MANAGEMENT

Workforce – We employed an average of 18,500 employees during 2021, and 18,100 employees at the end of 
2021.  Approximately 80% of our railroad employees – referred to as “craft” employees – are covered by collective 
bargaining agreements with various labor unions.  See the discussion of “Labor Agreements” in Item 7 
“Management’s Discussion and Analysis of Financial Condition and Results of Operations.”  The remainder of our 
workforce is composed of management employees.  

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 while controlling costs.  We measure and monitor employee productivity based on gross ton 
miles per train and engine employee.  

Safety – We are dedicated to providing employees with a safe workplace and the knowledge and tools they need to 
work safely and return home safely every day.  Our commitment to an injury-free workplace is illustrated by our “I 
am Coming Home” safety message, which is featured prominently in our yards, shops, and facilities and further 
reinforces the importance of working safely.  We measure employee safety performance through internal metrics 
such as lost-time injuries and serious injuries per 200,000 employee-hours and metrics established by the Federal 

K8

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Railroad Administration (FRA), such as FRA reportable injuries per 200,000 employee-hours.  Given the 
importance of safety among our workforce and business, in 2020, our Board of Directors established a standing 
Safety Committee that, among other duties, reviews, monitors, and evaluates our compliance with our safety 
programs and practices.  

Attracting and Retaining Management Employees – Our talent strategy for management employees is essential 
to attracting strong candidates in a competitive talent environment.  We evaluate the effectiveness of that strategy by 
studying market trends, benchmarking the attractiveness of our employee value proposition, and analyzing retention 
data.  

We also focus on driving employee engagement, which is key to increasing employee productivity, retention, and 
safety.  We take a data-centric approach, including the use of quarterly surveys among management 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 work safely and be successful in their careers.  We provide hands-on training and 
simulation training designed to improve training effectiveness and safety outcomes.  

We also use modern learning and performance technologies to offer robust professional growth opportunities.  
Through on-demand digital course offerings, custom-built learning paths, and performance-management tools, our 
platforms deliver a contemporary, convenient, and inclusive approach to professional development.  

Diversity, Equity and Inclusion – As a leading transportation service company, we understand that competing in 
the global marketplace requires recruiting the most qualified, talented, and diverse people.  We strive to create a 
diverse, equitable, and inclusive workplace where a wide range of perspectives and experiences are represented, 
valued, and empowered to thrive.  

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

To underscore our commitment to cultivating a workplace experience where the unique experiences, perspectives, 
and contributions of all our people are valued, our senior management team recently signed a pledge reaffirming our 
commitment to diversity, equity, and inclusion.  To advance that commitment, senior leaders from across the 
company serve on an Inclusion Leadership Council, which is accountable for setting our enterprise inclusion 
strategy and articulating measurable goals and actions needed to achieve them.  

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. 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.  A railroad is “revenue 
adequate” on an annual basis under the applicable law when its return on net investment exceeds the rail industry’s 
composite cost of capital.  This determination is made pursuant to a statutory requirement.  The STB also has 
jurisdiction over the consolidation, merger, or acquisition of control of and by rail common carriers. 

The relaxation of economic regulation of railroads, following the Staggers Rail Act of 1980, included exemption 
from STB regulation of the rates and most service terms for intermodal business (trailer-on-flat-car, container-on-
flat-car), rail boxcar shipments, lumber, manufactured steel, automobiles, and certain bulk commodities such as 
sand, gravel, pulpwood, and wood chips for paper manufacturing.  Further, all shipments that we have under 
contract are effectively removed from commercial regulation for the duration of the contract.  Approximately 90% 
of our revenues comes from either exempt shipments or shipments moving under transportation contracts; the 
remainder comes from shipments moving under public tariff rates.

K9

 
 
Efforts have been made over the past several years to increase federal economic regulation of the rail industry, and 
such efforts are expected to continue in 2022.  The Staggers Rail Act of 1980 substantially balanced the interests of 
shippers and rail carriers, and encouraged and enabled rail carriers to innovate, invest in their infrastructure, and 
compete for business, thereby contributing to the economic health of the nation and to the revitalization of the 
industry.  Accordingly, we will continue to oppose efforts to reimpose increased economic regulation. 

Government regulations are further discussed within Item 1A “Risk Factors” and the safety and security of our 
railroads are discussed within the “Security of Operations” section contained herein.

COMPETITION – There is continuing strong competition among rail, water, and highway carriers.  Price is 
usually only one factor of importance as shippers and receivers choose a transport mode and specific hauling 
company.  Inventory carrying costs, service reliability, ease of handling, and the desire to avoid loss and damage 
during transit are also important considerations, especially for higher-valued finished goods, machinery, and 
consumer products.  Even for raw materials, semi-finished goods, and work-in-progress, users are increasingly 
sensitive to transport arrangements that minimize problems at successive production stages.

Our primary rail competitor is CSX Corporation (CSX); both we and CSX operate throughout much of the same 
territory.  Other railroads also operate in parts of the territory.  We also compete with motor carriers, water carriers, 
and with shippers who have the additional options of handling their own goods in private carriage, sourcing 
products from different geographic areas, and using substitute products.

Certain marketing strategies to expand reach and shipping options among railroads and between railroads and motor 
carriers enable railroads to compete more effectively in specific markets. 

SECURITY OF OPERATIONS – We continue to enhance the security of our rail system.  Our comprehensive 
security plan is modeled on and was developed in conjunction with the security plan prepared by the Association of 
American Railroads (AAR) post September 11, 2001.  The AAR Security Plan defines four Alert Levels and details 
the actions and countermeasures that are being applied across the railroad industry to mitigate the risk of terrorist, 
violent extremist or seriously disruptive cyber-attack increases or decreases.  The Alert Level actions include 
countermeasures that will be applied in three general areas: (1) operations (including transportation, engineering, 
and mechanical); (2) information technology and communications; and, (3) railroad police.  All of our Operations 
Division employees are advised by their supervisors or train dispatchers, as appropriate, of any change in Alert 
Level and any additional responsibilities they may incur due to such change. 

Our security plan also complies with U.S. Department of Transportation (DOT) security regulations pertaining to 
training and security plans with respect to the transportation of hazardous materials.  As part of the plan, security 
awareness training is given to all railroad employees who directly affect hazardous material transportation safety, 
and is integrated into hazardous material training programs.  Additionally, location-specific security plans are in 
place for rail corridors in certain metropolitan areas referred to as High Threat Urban Areas (HTUA).  Particular 
attention is aimed at reducing risk in a HTUA by: (1) the establishment of secure storage areas for rail cars carrying 
toxic-by-inhalation (TIH) materials; (2) the expedited movement of trains transporting rail cars carrying TIH 
materials; (3) reducing the number of unattended loaded tank cars carrying TIH materials; and (4) cooperation with 
federal, state, local, and tribal governments to identify those locations where security risks are the highest.  

We also operate five facilities that are under U.S. Coast Guard (USCG) Maritime Security Regulations.  With 
respect to these facilities, each facility’s security plan has been approved by the applicable Captain of the Port and 
remains subject to inspection by the USCG.  

Additionally, we continue to engage in close and regular coordination with numerous federal and state agencies, 
including the U.S. Department of Homeland Security (DHS), the Transportation Security Administration, the 
Federal Bureau of Investigation, the FRA, the USCG, U.S. Customs and Border Protection, the Department of 
Defense, and various state Homeland Security offices.  

In 2021, 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 

K10

 
 
 
training to approximately 3,500 emergency responders, such as local police and fire personnel, utilizing a 
combination of online training and face-to-face training sessions.  In addition, 2021 saw the return of the Safety 
Train Tour; we conducted an abbreviated Six-Stop Safety Train Tour that provided hands-on training to 
approximately 700 first responders.  

We also continually evaluate ourselves for appropriate business continuity and disaster recovery planning, with test 
scenarios that include cybersecurity attacks.  Our risk-based information security program helps ensure our defenses 
and resources are aligned to address the most likely and most damaging potential attacks, to provide support for our 
organizational mission and operational objectives, and to keep us in the best position to detect, mitigate, and recover 
from a wide variety of potential attacks in a timely fashion.  

Item 1A. Risk Factors

The risks set forth in the following risk factors could have a materially adverse effect on our financial position, 
results of operations, or liquidity in a particular year or quarter, and could cause those results to differ materially 
from those expressed or implied in our forward-looking statements.  The information set forth in this Item 1A “Risk 
Factors” should be read in conjunction with the rest of the information included in this annual report, including 
Item 7 “Management’s Discussion and Analysis of Financial Condition and Results of Operations” and Item 8 
“Financial Statements and Supplementary Data.”  

REGULATORY AND LEGISLATIVE RISKS

Significant governmental legislation, regulation, and Executive Orders over commercial, tax, operating and 
environmental matters could affect us, our customers, and the markets we serve.  Congress can enact laws that 
could increase economic regulation of the industry.  Similarly, regulations promulgated by agencies and the 
issuance of Executive Orders can affect us, our customers, and the markets we serve.  Railroads presently are 
subject to commercial regulation by the STB, which 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 
also has jurisdiction over the consolidation, merger, or acquisition of control of and by rail common carriers.  
Additional economic regulation of the rail industry by Congress or the STB, whether under new or existing laws, 
could have a significant negative impact on our ability to negotiate prices for rail services, on railway operating 
revenues, and on the efficiency of our operations.  Such additional industry regulation, as well as enactment of any 
new tax laws, could also negatively impact cash flows from operating activities and, therefore, could result in 
reduced capital spending on our rail network or abandonment of lines.  

Railroads are also subject to the enactment of laws by Congress and regulation by the DOT and the DHS, which 
regulate most aspects of our operations related to safety and security.  The Rail Safety Improvement Act of 2008, 
the Surface Transportation Extension Act of 2015, and the implementing regulations promulgated by the FRA 
required us (and each other Class I railroad) to implement an interoperable positive train control system (PTC) on 
main lines over which five million or more gross tons of annual traffic and certain hazardous materials are 
transported, and on any main lines over which intercity or commuter rail passenger transportation is regularly 
provided.  We completed our PTC implementation prior to the December 31, 2020 deadline.  PTC is designed to 
prevent train-to-train collisions, speed-related derailments, and certain other accidents caused by human error, but it 
will not prevent all types of train accidents or incidents.  The PTC system will continue to result in additional 
operating costs and capital expenditures, and may result in increased claims and litigation costs.

Our operations are subject to extensive federal and state environmental laws and regulations concerning, among 
other things: emissions to the air; discharges to waterways or groundwater supplies; handling, storage, 
transportation, and disposal of waste and other materials; and, the cleanup of hazardous material or petroleum 
releases.  The risk of incurring environmental liability, for acts and omissions, past, present, and future, is inherent 
in the railroad business.  This risk includes property owned by us, whether currently or in the past, that is or has 
been subject to a variety of uses, including our railroad operations and other industrial activity by past owners or our 
past and present tenants.  

Environmental problems that are latent or undisclosed may exist on these properties, and we could incur 
environmental liabilities or costs, the amount and materiality of which cannot be estimated reliably at this time, with 

K11

respect to one or more of these properties.  Moreover, lawsuits and claims involving other unidentified 
environmental sites and matters are likely to arise from time to time.  

OPERATIONAL RISKS

Pandemics, epidemics or endemic diseases could further impact us, our customers, our supply chain and our 
operations.  The magnitude and duration of a pandemic, epidemic or endemic disease, and its impact on our 
customers and general economic conditions will influence the demand for our services and affect our revenues.  In 
addition, such outbreaks could affect our operations and business continuity if a significant number of our essential 
employees, overall or in a key location, are quarantined from contraction of or exposure to the disease or if 
governmental orders prevent our employees or critical suppliers (including individuals that have not received 
mandated vaccinations) from working.  Our compliance with vaccine mandates could lead to employee absences, 
resignations, labor disputes or work stoppages.  The COVID-19 pandemic negatively impacted the economy and 
continues to generate economic uncertainty.  Future pandemics, epidemics or endemic diseases may cause similar 
consequences.  To the extent such diseases adversely affects our business and financial results, they may also have 
the effect of heightening many of the other risks described in the risk factors included herein, or may affect our 
operating and financial results in a manner that is not presently known to us.  

A significant cybersecurity incident or other disruption to our technology infrastructure could disrupt our 
business operations.  We rely on information technology, and improvements in that technology, in all aspects of 
our business.  If we experience significant disruption or failure of one or more of information technology systems 
operated by us or under control of third parties, including computer hardware, software, and communications 
equipment, we could experience a service interruption or other operational difficulties.  Although we maintain 
comprehensive security programs designed to protect our information technology systems, we are continually 
targeted by threat actors attempting to access our networks.  While we have experienced cybersecurity events that 
have had minimal impact, future events may result in more significant impacts to business operations.  These 
potentially impactful events could include unauthorized access to our systems, viruses, ransomware, and/or 
compromise, acquisition, or destruction of our data.  We also could be impacted by cybersecurity events targeting 
third parties that we rely on for business operations, including third party vendors that have access to our systems or 
data and third parties in our supply chain.  Such a direct or indirect cybersecurity incident could interrupt our 
service, cause safety failures or operational difficulties, decrease revenues, increase operating costs, impact our 
efficiency, damage our corporate reputation, and/or expose us to litigation or government investigations, which 
could result in penalties, fines or judgments.  In addition, our failure to comply with privacy-related or data 
protection laws and regulations could result in government investigations and proceedings against us, or litigation, 
resulting in adverse reputational impacts, penalties, and legal liability.

Our business may be seriously harmed if we fail to develop, implement, maintain, upgrade, enhance, protect 
and integrate our information technology systems.  If we do not have sufficient capital to develop, acquire or 
implement new technology, we may suffer a competitive disadvantage within the rail industry and with companies 
providing alternative modes of transportation service.

As a common carrier by rail, we must offer to transport hazardous materials, regardless of risk.  
Transportation of certain hazardous materials could create catastrophic losses in terms of personal injury and 
property (including environmental) damage and compromise critical parts of our rail network.  The costs of a 
catastrophic rail accident involving hazardous materials could exceed our insurance coverage.  We have obtained 
insurance for potential losses for third-party liability and first-party property damages (see Note 17 to the 
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 face competition from other transportation providers.  We are subject to competition from motor carriers, 
railroads and, to a lesser extent, ships, barges, and pipelines, on the basis of transit time, pricing, and quality and 
reliability of service.  While we have used primarily internal resources to build or acquire and maintain our rail 
system, trucks and barges have been able to use public rights-of-way maintained by public entities.  Any future 
improvements, expenditures, legislation, or regulation materially increasing the quality or reducing the cost of 
alternative modes of transportation in the regions in which we operate (such as granting materially greater latitude 

K12

for motor carriers with respect to size or weight limitations or adoption of autonomous commercial vehicles) could 
have a material adverse effect on our ability to compete with other modes of transportation.  

Capacity constraints could negatively impact our service and operating efficiency.  We could experience 
capacity constraints on our rail network related to increased demand for rail services, locomotive or employee 
shortages, severe weather, congestion on other railroads, including passenger activities, or impacts from changes to 
our network structure or composition.  Such constraints could result in operational inefficiencies or adversely affect 
our operations. 

Significant increases in demand for rail services could result in the unavailability of qualified personnel and 
resources like locomotives.  Changes in workforce demographics, training requirements, and availability of 
qualified personnel, particularly for engineers and conductors, could have a negative impact on our ability to meet 
short-term demand for rail service.  Unpredicted increases in demand for rail services may exacerbate such risks and 
could negatively impact our operational efficiency.  

Constraints on the supply chain or the operations of carriers with which we interchange may adversely affect 
our operations.  Our ability to provide rail service to customers in the U.S. and Canada depends in large part upon 
a functioning global supply chain and our ability to maintain collaborative relationships with connecting carriers 
(including shortlines and regional railroads) with respect to, among other matters, freight rates, revenue division, car 
supply and locomotive availability, data exchange and communications, reciprocal switching, interchange, and 
trackage rights.  Deterioration in the supply chain or operations of or service provided by connecting carriers, or in 
our relationship with those connecting carriers, could result in our inability to meet our customers’ demands or 
require us to use alternate train routes, which could result in significant additional costs and network inefficiencies.  
Additionally, any significant consolidations, mergers or operational changes among other railroads may 
significantly redefine our market access and reach.  

The vast majority of our employees belong to labor unions, and labor agreements, strikes, or work stoppages 
could adversely affect our operations.  Approximately 80% of our railroad employees are covered by collective 
bargaining agreements with various labor unions.  If our craft employees were to engage in a strike, work stoppage, 
or other slowdown, we could experience a significant disruption of our operations.  Additionally, future national 
labor agreements, or renegotiation of labor agreements or provisions of labor agreements, could significantly 
increase our costs for health care, wages, and other benefits.  

We may be affected by terrorism or war.  Any terrorist attack, or other similar event, any government response 
thereto, and war or risk of war could cause significant business interruption.  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.  

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.  In addition, premiums for some or all of our current 
insurance programs covering these losses could increase dramatically, or insurance coverage for certain losses could 
be unavailable to us in the future.  

We may be affected by supply constraints resulting from disruptions in the fuel markets or the nature of 
some of our supplier markets.  We consumed over 380 million gallons of diesel fuel in 2021.  Fuel availability 
could be affected by any limitation in the fuel supply or by any imposition of mandatory allocation or rationing 
regulations.  A severe fuel supply shortage arising from production curtailments, increased demand in existing or 
emerging foreign markets, disruption of oil imports, disruption of domestic refinery production, damage to refinery 
or pipeline infrastructure, political unrest, war or other factors could impact us as well as our customers and other 
transportation companies.

Due to the capital-intensive nature, as well as the industry-specific requirements of the rail industry, high barriers of 
entry exist for potential new suppliers of core railroad items, such as locomotives and rolling stock equipment.  
Additionally, we compete with other industries for available capacity and raw materials used in the production of 

K13

locomotives and certain track and rolling stock materials.  Changes in the competitive landscapes of these limited 
supplier markets could result in increased prices or significant shortages of materials.

LITIGATION RISKS

We may be subject to various claims and lawsuits that could result in significant expenditures.  The nature of 
our business exposes us to the potential for various claims and litigation related to labor and employment, personal 
injury, commercial disputes, freight loss and other property damage, and other matters.  Job-related personal injury 
and occupational claims are subject to the Federal Employer’s Liability Act (FELA), which is applicable only to 
railroads.  FELA’s fault-based tort system produces results that are unpredictable and inconsistent as compared with 
a no-fault worker’s compensation system.  The variability inherent in this system could result in actual costs being 
different from the liability recorded.  

A catastrophic rail accident, whether on our lines or another carrier’s, involving any or all of release of hazardous 
materials, freight loss, property damage, personal injury, and environmental liability could compromise critical parts 
of our rail network.  Losses associated with such an accident involving us could exceed our insurance coverage, 
resulting in a material adverse effect on our liquidity.  Any material changes to current litigation trends could also 
have a material adverse effect on our liquidity to the extent not covered by insurance.  

We have obtained insurance for potential losses for third-party liability and first-party property damages (see Note 
17 to the 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.  

CLIMATE CHANGE RISKS

Severe weather and disasters have caused, and could again cause, significant business interruptions and 
expenditures.  Severe weather conditions and other natural phenomena resulting from changing weather patterns 
and rising sea levels or other causes, including hurricanes, floods, fires, landslides, extreme temperatures, significant 
precipitation, and earthquakes, have caused, and may again cause damage to our network, our workforce to be 
unavailable and us to be unable to use our equipment.  Additionally, shifts in weather patterns caused by climate 
change are expected to increase the frequency, severity or duration of certain adverse weather conditions, which 
could cause more significant business interruptions that result in increased costs, increased liabilities, and decreased 
revenues.  

Concern over climate change has led to significant federal, state, and international legislative and regulatory 
efforts to limit greenhouse gas (GHG) emissions.  Restrictions, caps, taxes, or other 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 GHG emissions could negatively affect the markets we serve and 
our customers.  Even without legislation or regulation, government incentives and adverse publicity relating to 
GHG emissions could negatively affect the markets for certain of the commodities we carry and our customers that 
(1) use commodities we carry to produce energy, including coal, (2) use significant amounts of energy in producing 
or delivering the commodities we carry, or (3) manufacture or produce goods that consume significant amounts of 
energy associated with GHG emissions.  

MACROECONOMIC AND MARKET RISKS

We may be affected by general economic conditions.  Negative changes in domestic and global economic 
conditions, including reduced import and export volumes, could affect the producers and consumers of the 
commodities we carry.  Economic conditions could also result in bankruptcies of one or more large customers. 

We may be affected by energy prices.  Volatility in energy prices could have a significant effect on a variety of 
items including, but not limited to: the economy; demand for transportation services; business related to the energy 
sector, including crude oil, natural gas, and coal; fuel prices; and, fuel surcharges.  

K14

The state of capital markets could adversely affect our liquidity.  We rely on the capital markets to provide 
some of our capital requirements, including the issuance of debt instruments and the sale of certain receivables.  
Significant instability or disruptions of the capital markets, including the credit markets, or deterioration of our 
financial position due to internal or external factors could restrict or eliminate our access to, and/or significantly 
increase the cost of, various financing sources, including bank credit facilities and issuance of corporate bonds.  
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.

Item 3. Legal Proceedings

In 2007, various antitrust class actions filed against us and other Class I railroads in various Federal district courts 
regarding fuel surcharges were consolidated in the District of Columbia by the Judicial Panel on Multidistrict 
Litigation.  In 2012, the court certified the case as a class action.  The defendant railroads appealed this certification, 
and the Court of Appeals for the District of Columbia vacated the District Court’s decision and remanded the case 
for further consideration.  On October 10, 2017, the District Court denied class certification.  The decision was 
upheld by the Court of Appeals on August 16, 2019.  Since that decision, various individual cases have been filed in 
multiple jurisdictions and also consolidated in the District of Columbia.  We believe the allegations in the 
complaints are without merit and intend to vigorously defend the cases.  We do not believe the outcome of these 
proceedings will have a material effect on our financial position, results of operations, or liquidity.

In 2018, a lawsuit was filed against one of our subsidiaries by the minority owner in a jointly-owned terminal 
railroad company in which our subsidiary has the majority ownership.  The lawsuit alleged violations of various 
state laws and federal antitrust laws.  It is reasonably possible that we could incur a loss in the case; however, we 
intend to vigorously defend the case and believe that we will prevail.  The potential range of loss cannot be 
estimated at this time.

Item 4. Mine Safety Disclosures

Not applicable.

K15

 
 
 
Information About Our Executive Officers

Our executive officers generally are elected and designated annually by the Board of Directors (Board) at its first 
meeting held after the annual meeting of stockholders, and they hold office until their successors are elected.  
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, 2022, relating to our officers.

Name, Age, Present Position

Business Experience During Past Five Years

James A. Squires, 60,
Chairman and
Chief Executive Officer

Alan H. Shaw, 54,
President

Present position since October 1, 2015. 

Present position since December 1, 2021.
Served as Executive Vice President and Chief Marketing Officer 
from May 16, 2015 to December 1, 2021.  

Ann A. Adams, 51,
  Executive Vice President and
  Chief Transformation Officer

Present position since April 1, 2019.
Served as Vice President Human Resources from April 1, 2016 to 
April 1, 2019.  

Claude E. Elkins, Jr., 56,
Executive Vice President and
Chief Marketing Officer

Present position since December 1, 2021.
Served as Vice President Industrial Products from April 1, 2018 to 
December 1, 2021.  Served as Group Vice President Chemicals 
from March 1, 2016 to April 1, 2018.

Mark R. George, 54,
  Executive Vice President Finance and
  Chief Financial Officer

Cynthia M. Sanborn, 57,
Executive Vice President and
Chief Operating Officer

Lorri J. Kleine, 57,
  Senior Vice President Law and
  Chief Legal Officer

Present position since November 1, 2019. 
Prior to joining Norfolk Southern, served as Vice President, 
Finance and Chief Financial Officer at segments of United 
Technologies Corporation.  The positions were Vice President 
Finance, Strategy, IT and Chief Financial Officer at Otis Elevator 
Company from October 2015 to May 2019, and Vice President 
Finance and Chief Financial Officer at Carrier Corporation from 
June 2019 until joining Norfolk Southern.

Present position since September 1, 2020. 
Prior to joining Norfolk Southern, served as served as Vice 
President Network Planning & Operations at Union Pacific from 
May 2019 to September 2020 and as Regional Vice President – 
Western Region from February 2018 to May 2019.  Previously 
served as Executive Vice President and Chief Operating Officer at 
CSX from September 2015 to November 2017.

Present position since January 10, 2022.
Served as Vice President Law from March 1, 2020 to January 10, 
2022.  Served as Senior General Counsel from August 1, 2019 to 
March 1, 2020.  Served as General Counsel from December 1, 
2016 to August 1, 2019.

Clyde H. Allison, Jr., 58,
Vice President and Controller

Present position since June 1, 2020.
Served as Vice President and Treasurer from February 1, 2017 to 
June 1, 2020.  

K16

 
 
 
 
 
 
 
 
PART II

NORFOLK SOUTHERN CORPORATION AND SUBSIDIARIES

Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of 
Equity Securities

STOCK INFORMATION

Common Stock is owned by 20,616 stockholders of record as of December 31, 2021, 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)

October 1-31, 2021
November 1-30, 2021
December 1-31, 2021

$ 

861,374 
269 
2,427,166 

268.13 
282.17 
287.85 

Total

3,288,809   

Maximum 
Number
(or Approximate
Dollar Value)
of Shares (or 
Units)
that may yet be
Purchased under
the Plans or  
Programs(2)

10,467,071 
10,467,071 
8,040,073 

Total
Number of
Shares (or Units)
Purchased as
Part of Publicly
Announced Plans
or Programs(2)

861,374 
— 
2,426,998 

3,288,372   

(1) Of this amount, 437 represent shares tendered by employees in connection with the exercise of stock options 

under the stockholder-approved Long-Term Incentive Plan (LTIP).

(2) On September 26, 2017, our Board of Directors authorized the repurchase of up to an additional 50 million 
shares of Common Stock through December 31, 2022.  As of December 31, 2021, 8.0 million shares remain 
authorized for repurchase.

K17

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations

Norfolk Southern Corporation and Subsidiaries

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

OVERVIEW

We are one of the nation’s premier transportation companies, moving goods and materials that help drive the U.S. 
economy.  We connect customers to markets and communities to economic opportunity with safe, reliable, and cost-
effective shipping solutions.  Our Norfolk Southern Railway Company subsidiary operates in 22 states and the 
District of Columbia.  We are a major transporter of industrial products, including agriculture, forest and consumer 
products, chemicals, and metals and construction materials.  In addition, in the East we serve every major container 
port and operate the most extensive intermodal network.  We are also a principal carrier of coal, automobiles, and 
automotive parts.  

During 2021, revenue growth and the absence of two prior-year charges resulted in substantial increases in 
operating income, net income and earnings per share.  Our current year results compare favorably to the prior year, 
during which there was a pandemic-induced decline in demand which resulted in reduced earnings.  

The COVID-19 pandemic continues to impact the U.S. and global economies and has resulted in ongoing supply 
chain challenges.  We are monitoring and reacting to the evolving nature of the pandemic, governmental responses, 
and their impacts on our business, including employee availability.  We remain committed to protecting our 
employees, operating safely, and providing excellent transportation service products for our customers.

SUMMARIZED RESULTS OF OPERATIONS

2021

2020
($ in millions, except per share amounts)

2019

2021
vs. 2020

2020
vs. 2019

(% change)

Income from railway operations
Net income
Diluted earnings per share
Railway operating ratio (percent)

$ 
$ 
$ 

4,447  $ 
3,005  $ 
12.11  $ 
60.1 

3,002  $ 
2,013  $ 
7.84  $ 
69.3 

3,989 
2,722 
10.25 
64.7 

 48% 
 49% 
 54% 
 (13%) 

 (25%) 
 (26%) 
 (24%) 
 7% 

Income from railway operations increased in 2021 compared to 2020, the result of a 14% increase in railway 
operating revenues and a 1% reduction in railway operating expenses.  Revenue growth was driven by increased 
average revenue per unit and higher volumes, the result of improved customer demand.  The decline in railway 
operating expenses was largely due to the absence of two charges, as 2020 results were adversely impacted by a 
$385 million loss on asset disposal related to locomotives and a $99 million impairment charge related to an equity 
method investment.  For more information on these charges, see Notes 7 and 6, respectively.  Higher fuel costs, 
purchased services, and compensation and benefits expense mostly offset the reduction associated with these 
charges.  Additionally, gains on the sale of operating properties increased compared to the prior year.  The 48% 
increase in income from railway operations drove comparable increases in net income and diluted earnings per 
share.  Our railway operating ratio (a measure of the amount of operating revenues consumed by operating 
expenses) decreased to 60.1 percent.  

Income from railway operations declined in 2020 compared to 2019 as railway operating revenues fell 13% which 
exceeded a 7% reduction in operating expenses.  Railway operating revenues declined as lower customer demand 
resulted in reduced volume.  Additionally, negative mix and lower fuel surcharge revenue, partially offset by 
increased pricing, led to lower average revenue per unit.  Railway operating expenses decreased due to declines in 

K18

 
 
 
 
 
 
 
 
fuel price and consumption, reduced employment levels, lower volumes and operational efficiency improvements.  
These decreases in expenses were partially offset by the impact of the aforementioned charges. 

The following tables adjust our 2020 U.S. Generally Accepted Accounting Principles (GAAP) financial results to 
exclude the effects of the loss on asset disposal and investment impairment.  The income tax effects on these non-
GAAP adjustments were calculated based on the applicable tax rates to which the non-GAAP adjustments relate.  
We use these non-GAAP financial measures internally and believe this information provides useful supplemental 
information to investors to facilitate making period-to-period comparisons by excluding the 2020 charges.  While 
we believe that these non-GAAP financial measures are useful in evaluating our business, this information should 
be considered as supplemental in nature and is not meant to be considered in isolation from, or as a substitute for, 
the related financial information prepared in accordance with GAAP.  In addition, these non-GAAP financial 
measures may not be the same as similar measures presented by other companies.  

Non-GAAP Reconciliation for 2020

Reported 
(GAAP)

Loss on Asset 
Disposal

Investment 
Impairment

Adjusted
(non-GAAP)

($ in millions, except per share amounts)

Railway operating expenses
Income from railway operations
Income before income taxes
Income taxes
Net income
Diluted earnings per share
Railway operating ratio (percent)

$ 
$ 
$ 
$ 
$ 
$ 

6,787  $ 
3,002  $ 
2,530  $ 
517  $ 
2,013  $ 
7.84  $ 
69.3 

(385)  $ 
385  $ 
385  $ 
97  $ 
288  $ 
1.12  $ 
 (3.9) 

(99)  $ 
99  $ 
99  $ 
25  $ 
74  $ 
0.29  $ 
 (1.0) 

6,303 
3,486 
3,014 
639 
2,375 
9.25 
 64.4 

In the table below, references to 2020 results and related comparisons use the adjusted, non-GAAP results from the 
table above.  

Adjusted
2020
(non-GAAP)
($ in millions, except per share amounts)

2021

2019

2021
vs. Adjusted
2020
(non-GAAP)

Adjusted
2020
(non-GAAP)
vs. 2019

(% change)

Railway operating expenses
Income from railway operations
Income before income taxes
Income taxes
Net income
Diluted earnings per share
Railway operating ratio (percent)

$ 
$ 
$ 
$ 
$ 
$ 

6,695  $ 
4,447  $ 
3,878  $ 
873  $ 
3,005  $ 
12.11  $ 
60.1 

6,303  $ 
3,486  $ 
3,014  $ 
639  $ 
2,375  $ 
9.25  $ 
 64.4 

7,307 
3,989 
3,491 
769 
2,722 
10.25 
64.7 

 6% 
 28% 
 29% 
 37% 
 27% 
 31% 
 (7%) 

 (14%) 
 (13%) 
 (14%) 
 (17%) 
 (13%) 
 (10%) 
 —% 

K19

 
 
 
 
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.    

Merchandise:

Agriculture, forest and consumer
    products
Chemicals
Metals and construction
Automotive
     Merchandise
Intermodal
Coal

 Total

Merchandise:

Agriculture, forest and consumer
    products
Chemicals
Metals and construction
Automotive
     Merchandise
Intermodal
Coal

Total

Merchandise:

Agriculture, forest and consumer
    products
Chemicals
Metals and construction
Automotive
     Merchandise
Intermodal
Coal

 Total

2021

Revenues
2020
($ in millions)

2019

2021
vs. 2020

2020
vs. 2019

(% change)

$ 

$ 

2,251  $ 
1,951 
1,562 
905 
6,669 
3,163 
1,310 
11,142  $ 

2,116  $ 
1,809 
1,333 
830 
6,088 
2,654 
1,047 
9,789  $ 

2,256 
2,092 
1,461 
994 
6,803 
2,824 
1,669 
11,296 

 6% 
 8% 
 17% 
 9% 
 10% 
 19% 
 25% 
 14% 

 (6%) 
 (14%) 
 (9%) 
 (16%) 
 (11%) 
 (6%) 
 (37%) 
 (13%) 

2021

Units
2020
(in thousands)

2019

2021
vs. 2020

2020
vs. 2019

(% change)

725.5 
529.7 
669.0 
345.4 
2,269.6 
4,104.1 
658.0 
7,031.7 

704.4 
482.0 
601.2 
329.7 
2,117.3 
3,992.1 
574.1 
6,683.5 

763.7 
588.9 
685.1 
394.7 
2,432.4 
4,207.2 
914.0 
7,553.6 

 3% 
 10% 
 11% 
 5% 
 7% 
 3% 
 15% 
 5% 

 (8%) 
 (18%) 
 (12%) 
 (16%) 
 (13%) 
 (5%) 
 (37%) 
 (12%) 

2021

Revenue per Unit
2020
($ per unit)

2019

2021
vs. 2020

2020
vs. 2019

(% change)

$ 

3,102  $ 
3,684 
2,334 
2,621 
2,938 
771 
1,991 
1,584 

3,004  $ 
3,753 
2,216 
2,518 
2,875 
665 
1,824 
1,465 

2,953 
3,553 
2,133 
2,517 
2,797 
671 
1,826 
1,495 

 3% 
 (2%) 
 5% 
 4% 
 2% 
 16% 
 9% 
 8% 

 2% 
 6% 
 4% 
 —% 
 3% 
 (1%) 
 —% 
 (2%) 

K20

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Revenues increased $1.4 billion in 2021 and decreased $1.5 billion in 2020 compared to the prior years.  Higher 
revenue for 2021 was the result of increased average revenue per unit, driven by pricing gains, higher fuel surcharge 
revenue, increased intermodal storage service charges and improved mix, as well as volume growth.  In 2020, lower 
revenue was the result of decreased volumes and lower fuel surcharge revenue, partially offset by pricing gains. 

The table below reflects the components of the revenue change by major commodity group.  

 2021 vs. 2020
Increase (Decrease)

2020 vs. 2019
Increase (Decrease)

($ in millions)

Merchandise

Intermodal

Coal

Merchandise

Intermodal

Coal

$ 

438  $ 

75  $ 

153  $ 

(881)  $ 

(144)  $ 

(621) 

91 

52 

178 

256 

4 

106 

(92)   

(124)   

(13) 

258 

98 

12 

$ 

581  $ 

509  $ 

263  $ 

(715)  $ 

(170)  $ 

(622) 

Volume 
Fuel surcharge
revenue
Rate, mix and

other

Total

Approximately 90% of our revenue base is covered by contracts that include negotiated fuel surcharges.  These 
revenues totaled $622 million, $349 million, and $578 million in 2021, 2020, and 2019, respectively.

MERCHANDISE revenues increased in 2021 but decreased in 2020 compared with the prior years.  In 2021, 
revenues rose due to increased volume and higher average revenue per unit driven by increased fuel surcharge 
revenue and pricing.  Volumes increased in all merchandise commodity groups, reflecting continued economic 
recovery following the onset of the COVID-19 pandemic.  In 2020, revenues decreased due to volume declines in 
all commodity groups which were partially offset by higher average revenue per unit, driven by pricing gains. 

For 2022, merchandise revenues are expected to increase, the result of higher revenue per unit, driven by pricing 
gains and increased fuel surcharge revenue, and higher volumes.

Agriculture, forest and consumer products revenues increased in 2021 but decreased in 2020 compared with the 
prior years.  In 2021, the rise was the result of higher volume across almost all markets as the economy has 
improved since the early months of the pandemic in 2020 and increased average revenue per unit, the result of 
pricing gains and higher fuel surcharge revenue.  Gains in ethanol, pulpboard, beverages, lumber and wood, and 
woodchips more than offset declines in soybeans and pulp.  In 2020, the decline was the result of reduced volume 
partially offset by higher average revenue per unit, driven by pricing gains partially offset by lower fuel surcharge 
revenue.  Volume declined due to the impact of COVID-19 on the demand for ethanol, corn, food service products, 
and building, industrial and commercial products.  

In 2022, agriculture, forest and consumer products revenues are expected to rise, a result of increased volume and 
average revenue per unit increases resulting from pricing gains.  We expect volumes to increase in most markets led 
by corn, soybeans, pulpboard, and feed.

Chemicals revenues rose in 2021 and fell in 2020 compared with the prior years.  In 2021, the increase was the 
result of volume growth partially offset by lower average revenue per unit, driven by mix of traffic.  The increase in 
volume was due to economic and production recovery since the beginning of the pandemic, despite ongoing 
challenges in the energy markets.  The markets with the largest gains were solid waste, industrial chemicals, sand, 
natural gas liquids, and plastics.  In 2020, the decrease was the result of volume declines partially offset by higher 
average revenue per unit, due to pricing gains.  Volume declined due to the impact from COVID-19 and ongoing 
disruptions in the energy markets.  The onset of the pandemic created an overabundance of products in the market 

K21

 
 
 
 
 
 
 
 
 
 
 
as companies reduced stockpiles before requiring more products.  Oil and petroleum shipments were negatively 
impacted due to reductions in gasoline/jet fuel demand and travel. 

For 2022, chemicals revenues are anticipated to increase, a result of higher average revenue per unit, driven by 
pricing gains, and increased volume.  We expect carload increases in plastics, solid waste, and petroleum products 
to be partially offset by reduced volumes of inorganic chemicals.

Metals and construction revenues were higher in 2021 but declined in 2020 compared with the prior years.  In 
2021, revenue growth was driven by increased volumes and higher average revenue per unit, the result of pricing 
gains and higher fuel surcharge revenue.  Volume increased across almost all markets due to economic 
improvement since the beginning of the pandemic.  The markets serving the metal production industry, including 
coil steel, scrap metal, and iron and steel, experienced the largest gains.  In 2020, volume declines were partially 
offset by higher average revenue per unit, the result of pricing gains.  Volume declines were largely the result of 
weakened demand due to reductions in metal and domestic vehicle production.  The onset of the pandemic caused 
industries to suspend production which heavily impacted customers’ needs for materials and shipping of finished 
and semi-finished goods.  These declines were partially offset by increased demand for cement. 

For 2022, metals and construction revenues are expected to rise, a result of higher average revenue per unit, driven 
by pricing gains, and increased volume.  As the economic recovery continues, volume growth is expected in almost 
all markets led by aggregates, coil steel, scrap metal, and construction.

Automotive revenues rose in 2021 but were lower in 2020 compared with the prior years.  The increase in revenues 
in 2021 were driven by volume growth and higher average revenue per unit, driven by an increase in fuel surcharge 
revenue and pricing gains.  Automotive volumes were higher due primarily to increased retail demand and the 
impact of prior-year pandemic-induced production shutdowns.  This was partially offset by the impact of the 
microchip shortage on production.  In 2020, revenue declines were driven by lower volume and fuel surcharge 
revenue, partially offset by pricing gains.  The volume decline was mostly the result of unplanned automotive plant 
shutdowns in the first half of the year, primarily due to the COVID-19 pandemic, which was partially offset by 
increased demand in the second half of the year. 

In 2022, automotive revenues are expected to increase as a result of higher volume, as inventories replenish, and 
increased average revenue per unit driven by pricing gains. 

INTERMODAL revenues increased in 2021 but decreased in 2020 compared with the prior years.  The rise in 2021 
was primarily the result of higher average revenue per unit driven by increased storage service charges, higher fuel 
surcharge revenue and pricing gains.  The decline in 2020 was driven by lower volume and fuel surcharge revenue, 
which were partially offset by pricing gains and favorable mix. 

For 2022, we expect intermodal revenues to rise, the result of increased volume, higher fuel surcharge revenue and 
pricing gains, partially offset by lower storage service charges.

Intermodal units by market were as follows:

Domestic
International

Total

2021

2020
(units in thousands)

2019

2021
vs. 2020

2020
vs. 2019

(% change)

2,630.6 
1,473.5 

2,568.7 
1,423.4 

2,593.5 
1,613.7 

4,104.1 

3,992.1 

4,207.2 

 2% 
 4% 

 3% 

 (1%) 
 (12%) 

 (5%) 

K22

  
 
 
 
 
 
 
 
 
 
 
Domestic volume increased in 2021 but decreased in 2020 compared with the prior years.  Volume rose due to 
strong consumer demand which was partially offset by overall supply chain congestion, including chassis 
availability issues.  In 2020, volume declined due to supply chain disruptions related to the onset of the pandemic 
and strong over-the-road competition in the first half of the year.  Inventory replenishment and a strong peak season 
in the second half of the year assisted in dampening the overall volume decline. 

For 2022, we expect higher domestic volume driven by new business and growth from existing customers.

International volume rose in 2021 but fell in 2020.  The increase in 2021 was the result of continued strong import 
demand despite being limited by various supply chain constraints, including chassis availability issues.  The decline 
in 2020 resulted from supply chain disruptions due to the onset of the pandemic. 

For 2022, we expect international volume growth due to increased demand and supply chain recovery.

COAL revenues increased in 2021 but decreased in 2020 compared with the prior years.  The increase in 2021 was 
due to increased volumes and higher average revenue per unit driven by pricing gains and positive mix.  The 
decrease in 2020 was a result of significant volume declines.

For 2022, we expect coal revenues to decline due to lower average revenue per unit and decreased volume driven by 
coal supply challenges. 

As shown in the following table, total tonnage increased in 2021 but decreased in 2020.

2021

2020
(tons in thousands)

2019

2021
vs. 2020

2020
vs. 2019

(% change)

Utility
Export
Domestic metallurgical
Industrial

33,169 
24,886 
11,804 
3,595 

32,479 
18,900 
9,441 
3,566 

60,278 
23,324 
13,562 
4,655 

 2% 
 32% 
 25% 
 1% 

 (46%) 
 (19%) 
 (30%) 
 (23%) 

Total

73,454 

64,386 

101,819 

 14% 

 (37%) 

Utility coal tonnage increased in 2021 but decreased in 2020 compared with the prior years.  The increase in 2021 
was due to higher natural gas prices and increased demand from coal-sourced electrical generation.  The decline in 
2020 was due to low natural gas prices, diminished industrial and commercial electricity demand, and high 
stockpiles. 

For 2022, utility coal tonnage is expected to decline due to higher coal prices, lower natural gas prices, uncertainty 
regarding coal production and impacts of weather on demand.

Export coal tonnage increased in 2021 but decreased in 2020 compared with the prior years.  The increase in 2021 
was a result of strong seaborne pricing, improved global economic conditions, and greater global demand.  The 
decline in 2020 was a result of weak seaborne pricing, COVID-19-related global disruptions, and import 
restrictions.  

For 2022, export coal tonnage is expected to decrease due to uncertainty regarding the global coal market and tight 
coal supply availability.

Domestic metallurgical coal tonnage increased in 2021 but decreased in 2020 compared with the prior years.  The 
increase in 2021 was the result of strong recovery in the steel market.  The decrease in 2020 was a reflection of 
reduced domestic steel demand which led to idled customer facilities and lower production. 

K23

  
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
For 2022, domestic metallurgical coal tonnage is expected to decrease due to customer sourcing challenges and tight 
coal supply availability.

Industrial coal tonnage increased in 2021 but decreased in 2020 compared with the prior years.  The increase in 
2021 was a result of improved demand.  The decrease in 2020 was driven by pressure from natural gas conversions 
and customer sourcing changes.

For 2022, industrial coal tonnage is expected to decrease due to continued natural gas conversions and coal supply 
sourcing challenges.

Railway Operating Expenses

Railway operating expenses summarized by major classifications were as follows:

2021

2020
($ in millions)

2019

2021
vs. 2020

2020
vs. 2019

(% change)

Compensation and benefits
Purchased services and rents
Fuel
Depreciation
Materials and other
Loss on asset disposal

$ 

2,442  $ 
1,726 
799 
1,181 
547 
— 

2,373  $ 
1,687 
535 
1,154 
653 
385 

2,751 
1,725 
953 
1,138 
740 
— 

 3% 
 2% 
 49% 
 2% 
 (16%) 

 (14%) 
 (2%) 
 (44%) 
 1% 
 (12%) 

Total

$ 

6,695  $ 

6,787  $ 

7,307 

 (1%) 

 (7%) 

In 2021, expenses declined primarily as a result of the absence of the 2020 loss on asset disposal and the equity 
method investment impairment charge, which is included in purchased services and rents.  This was partially offset 
by higher fuel costs, increased other purchased services, and higher compensation and benefits expense.  In 2020, 
expenses fell as our strategic initiatives to improve productivity and asset utilization resulted in lower compensation 
and benefits expense, declines in fuel consumption, reduced purchased services, and lower materials expense.  Fuel 
expense also declined due to lower prices.  These expense reductions were partially offset by the loss on asset 
disposal and impairment charge previously discussed.

Compensation and benefits increased in 2021, reflecting changes in:

•
•
•
•
•
•

incentive and stock-based compensation (up $128 million),
overtime and recrews (up $47 million),
increased pay rates (up $41 million),
health and welfare benefits for craft employees (down $19 million),
employment levels (down $154 million), and
other (up $26 million).

K24

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
In 2020, compensation and benefits decreased, a result of changes in:

•
•
•
•
•
•
•

employment levels (down $309 million),
health and welfare benefits for craft employees (down $77 million),
overtime and recrews (down $54 million),
incentive and stock-based compensation (down $38 million),
increased pay rates (up $50 million),
lower capitalized labor (additional expense of $51 million), and
other (down $1 million).

Our employment averaged 18,500 in 2021, compared with 20,200 in 2020, and 24,600 in 2019. 

Purchased services and rents includes the costs of services purchased from external vendors and contractors, 
including the net costs of operating joint (or leased) facilities with other railroads and the net cost of equipment 
rentals.  

2021

2020
($ in millions)

2019

2021
vs. 2020

2020
vs. 2019

(% change)

Purchased services
Equipment rents

$ 

1,409  $ 
317 

1,387  $ 
300 

1,434 
291 

Total

$ 

1,726  $ 

1,687  $ 

1,725 

 2% 
 6% 

 2% 

 (3%) 
 3% 

 (2%) 

The increase in purchased services in 2021 was due to increased technology costs, higher intermodal-related 
expenses, and increased Conrail costs.  This was partially offset by the absence of a prior year $99 million 
impairment related to an equity method investment.  The decrease in purchased services in 2020 resulted from 
volume-related declines and strategic initiatives to improve productivity and asset utilization, partially offset by the 
impairment of an equity method investment. 

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 2021, equipment 
rents were higher for general-use equipment due to decreased network velocity and increased volume.  These 
increases were partially offset by lower intermodal costs and higher equity in TTX earnings.  In 2020, the increase 
was primarily the result of lower equity in TTX earnings and increased automotive equipment expenses partially 
offset by decreased intermodal equipment expenses. 

Fuel expense, which includes the cost of locomotive fuel as well as other fuel used in railway operations, increased 
in 2021 but decreased in 2020 compared with the prior years.  The increase in 2021 was primarily due to locomotive 
fuel prices (up 43%), which increased expenses $224 million.  Additionally, locomotive fuel consumption increased 
4%.  The decline in 2020 was primarily due to locomotive fuel prices (down 32%), which decreased expenses $235 
million.  We consumed 384 million gallons of diesel fuel in 2021, compared with 368 million gallons in 2020 and 
451 million gallons in 2019. 

Depreciation expense increased in both periods, a reflection of reinvestment in our infrastructure, rolling stock, and 
technology.

K25

 
 
 
 
 
Materials and other expenses decreased in both periods as shown in the following table.

Materials
Claims
Other

Total

2021

2020
($ in millions)

2019

2021
vs. 2020

2020
vs. 2019

(% change)

$ 

250  $ 
165 
132 

274  $ 
179 
200 

327 
193 
220 

 (9%) 
 (8%) 
 (34%) 

 (16%) 
 (7%) 
 (9%) 

$ 

547  $ 

653  $ 

740 

 (16%) 

 (12%) 

Materials expense decreased in both periods due primarily to lower maintenance requirements as a result of fewer 
locomotives and freight cars in service.

Claims expense includes costs related to personal injury, property damage, and environmental matters.  The 
decrease in 2021 was primarily the result of lower costs associated with derailments and personal injuries.  In 2020, 
claims expense declined, the result of lower costs related to environmental remediation matters that were partially 
offset by increased derailment costs. 

Other expense decreased in 2021, primarily due to higher gains from sales of operating property.  Gains from 
operating property sales amounted to $82 million, $26 million, and $64 million in 2021, 2020, and 2019, 
respectively.  In 2020, other expense decreased largely due to the absence of the 2019 write-off of a $32 million 
receivable as a result of a legal dispute.  Additionally, 2020 benefited from reduced travel expenses resulting from 
the COVID-19 pandemic.  These reductions were partially offset by lower gains from sales of operating property.  

Loss on asset disposal

During 2020, we recorded a $385 million charge related to the disposal of 703 locomotives.  For more information 
on the impact of the charge, see Note 7.  

Other income – net

Other income – net decreased in 2021 but increased in 2020.  Other income fell in 2021 due to lower net returns on 
corporate-owned life insurance (COLI) and lower gains on sales of non-operating property.  The increase in 2020 
was driven by the absence of a prior year $49 million impairment loss related to natural resource assets, lower 
pension and postretirement benefit expenses, and higher returns on COLI investments, which more than offset the 
absence of coal royalties and lower gains on sales of non-operating property.  

Income taxes

The effective income tax rate was 22.5% in 2021, compared with 20.4% in 2020 and 22.0% in 2019.  All three 
years benefited from favorable tax benefits associated with stock-based compensation and COLI returns.  The 
current year benefited from a reduction in deferred taxes associated with state tax law changes, while 2020 benefited 
from a reduction of taxes upon the resolution of our 2012 amended return (see Note 4).  

For 2022, we expect an effective income tax rate between 23% and 24%.  

K26

 
 
 
 
 
 
 
 
 
 
FINANCIAL CONDITION, LIQUIDITY, AND CAPITAL RESOURCES

Cash provided by operating activities, our principal source of liquidity, was $4.3 billion in 2021, $3.6 billion in 
2020, and $3.9 billion in 2019.  The increase in 2021 was primarily the result of improved operating results.  The 
decline in 2020 reflected a decrease in income from railway operations offset in part by lower income tax payments.  
We had negative working capital of $354 million at December 31, 2021 and working capital of $158 million at 
December 31, 2020.  Cash and cash equivalents totaled $839 million and $1.1 billion at December 31, 2021, and 
2020, respectively.  We expect cash on hand combined with cash provided by operating activities will be sufficient 
to meet our ongoing obligations.  In addition, we believe our currently-available borrowing capacity, access to 
additional financing, and ability to reduce property additions and shareholder distributions, including share 
repurchases, provide additional flexibility to meet our ongoing obligations.  Nonetheless, we continue to monitor the 
ongoing impacts of the COVID-19 pandemic, which could lead to a reduction in cash flows from operations.

Contractual obligations at December 31, 2021, including those that may have material cash requirements, include 
interest on fixed-rate long-term debt, long-term debt (Note 9), unconditional purchase obligations (Note 17), long-
term advances from Conrail Inc. (Conrail) (Note 6), operating leases (Note 10), agreements with Consolidated Rail 
Corporation (CRC) (Note 6), and unrecognized tax benefits (Note 4).

Total

2022

2023 -
2024

2025 -
2026
($ in millions)

2027 and

Subsequent Other

Interest on fixed-rate long-term debt
Long-term debt principal
Unconditional purchase obligations
Long-term advances from Conrail
Operating leases
Agreements with CRC
Unrecognized tax benefits*

$  16,014  $ 
  14,816 
916 
534 
470 
103 
21 

593  $  1,136  $  1,063  $ 
553 
586 
— 
92 
42 
— 

1,156 
75 
— 
124 
— 
— 

1,006 
159 
— 
156 
61 
— 

13,222 
12,101 
96 
534 
98 
— 
— 

— 
— 
— 
— 
— 
— 
21 

Total

$  32,874  $  1,866  $  2,518  $  2,418  $ 

26,051  $ 

21 

*  This amount is shown in the Other column because the year of settlement cannot be reasonably estimated.

Off balance sheet arrangements consist primarily of unrecognized obligations, including unconditional purchase 
obligations and future interest payments on fixed-rate long-term debt, which are included in the table above. 

Cash used in investing activities was $1.2 billion in both 2021 and 2020, and $1.8 billion in 2019.  In 2021, lower 
proceeds from property sales were mostly offset by reduced COLI policy loan repayments and lower property 
additions.  In 2020, the decrease was primarily driven by lower property additions.

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 2022, we expect property additions will be between $1.8 billion and $1.9 billion.

Cash used in financing activities was $3.3 billion in 2021, compared with $1.9 billion in 2020, and $2.0 billion in 
2019.  The increase in 2021 reflects higher repurchases of Common Stock and debt repayments, partially offset by 
increased proceeds from borrowings.  In 2020, the change reflects lower repurchases of Common Stock and debt 
repayments, partially offset by reduced proceeds from borrowings.

Share repurchases of $3.4 billion in 2021, $1.4 billion in 2020, and $2.1 billion in 2019 resulted in the retirement of 
12.7 million, 7.4 million, and 11.3 million shares, respectively.  As of December 31, 2021, 8.0 million shares 
remain authorized by our Board of Directors for repurchase.  The timing and volume of future share repurchases 

K27

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
will be guided by our assessment of market conditions and other pertinent factors.  Repurchases may be executed in 
the open market, through derivatives, accelerated repurchase and other negotiated transactions and through plans 
designed to comply with Rule 10b5-1(c) under the Securities and Exchange Act of 1934.  Any near-term purchases 
under the program are expected to be made with internally generated cash, cash on hand, or proceeds from 
borrowings.

In August 2021, we issued $600 million of 2.90% senior notes due 2051.

In May 2021, we issued $500 million of 2.30% senior notes due 2031 and $600 million of 4.10% senior notes due 
2121.  The net proceeds of the 2.30% senior notes due 2031 will be used to finance or refinance, in whole or in part, 
new or existing eligible projects with environmental benefits, as outlined in our Green Financing Framework. 

In May 2021, we renewed, amended and restated our accounts receivable securitization program with a maximum 
borrowing capacity of $400 million.  The term expires in May 2022.  We had no amounts outstanding under this 
program and our available borrowing capacity was $400 million at both December 31, 2021 and December 31, 
2020.

We also have in place and available an $800 million credit agreement expiring in March 2025, which provides for 
borrowings at prevailing rates and includes covenants.  We had no amounts outstanding under this facility at 
December 31, 2021 or December 31, 2020.  In addition, we have investments in general purpose COLI policies and 
had the ability to borrow against these policies up to $715 million and $750 million at December 31, 2021 and 
December 31, 2020, respectively.

We discuss our credit agreement and our accounts receivable securitization program in Note 9, and we have 
authority from our Board of Directors to issue an additional $3.0 billion of debt or equity securities through public 
or private sale, all of which provide for access to additional liquidity should the need arise.  Our debt-to-total 
capitalization ratio was 50.4% at December 31, 2021, compared with 46.2% at December 31, 2020.

Upcoming annual debt maturities are disclosed in Note 9.  Overall, our goal is to maintain a capital structure with 
appropriate leverage to support our business strategy and provide flexibility through business cycles.

CRITICAL ACCOUNTING ESTIMATES

The preparation of financial statements in accordance with GAAP requires us to make estimates and assumptions 
that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date 
of the financial statements, and the reported amounts of revenues and expenses during the reporting period.  These 
estimates and assumptions may require judgment about matters that are inherently uncertain, and future events are 
likely to occur that may require us to make changes to these estimates and assumptions.  Accordingly, we regularly 
review these estimates and assumptions based on historical experience, changes in the business environment, and 
other factors we believe to be reasonable under the circumstances.  The following critical accounting estimates are a 
subset of our significant accounting policies described in Note 1.

Pensions and Other Postretirement Benefits

Accounting for pensions and other postretirement benefit plans requires us to make several estimates and 
assumptions (Note 12).  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.  In addition, the amounts 
recorded are affected by changes in the interest rate environment because the associated liabilities are discounted to 
their present value.  We make these estimates based on our historical experience and other information we deem 
pertinent under the circumstances (for example, expectations of future stock market performance).  We utilize an 
independent actuarial consulting firm’s studies to assist us in selecting appropriate actuarial assumptions and 
valuing related liabilities.

K28

 
 
 
 
 
For 2021, 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.  A one-percentage 
point change to this rate of return assumption would result in a $27 million change in annual pension expense.  We 
review assumptions related to our defined benefit plans annually, and while changes are likely to occur in 
assumptions concerning retirement age, projected earnings, and mortality, they are not expected to have a material 
effect on our net pension expense or net pension liability in the future.  The net pension liability is recorded at net 
present value using discount rates that are based on the current interest rate environment in light of the timing of 
expected benefit payments.  We utilize analyses in which the projected annual cash flows from the pension and 
postretirement benefit plans are matched with yield curves based on an appropriate universe of high-quality 
corporate bonds.  We use the results of the yield curve analyses to select the discount rates that match the payment 
streams of the benefits in these plans.  A one-percentage point change to this discount rate assumption would result 
in a $20 million change in annual pension expense.  

Properties and Depreciation

Most of our assets are long-lived railway properties (Note 7).  “Properties” are stated principally at cost and are 
depreciated using the group method whereby assets with similar characteristics, use, and expected lives are grouped 
together in asset classes and depreciated using a composite depreciation rate.  See Note 1 for a more detailed 
discussion of assumptions and estimates.

Expenditures, including those on leased assets, that extend an asset’s useful life or increase its utility are capitalized.  
Expenditures capitalized include those that are directly related to a capital project and may include materials, labor, 
and other direct costs, in addition to an allocable portion of indirect costs that relate to a capital project.  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 2021 totaled $1.2 billion.  Our composite depreciation rates for 2021 are disclosed in Note 
7; a one-year increase (or decrease) in the estimated average useful lives of depreciable assets would have resulted 
in an approximate $45 million decrease (or increase) to annual depreciation expense.

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.  The actuarial firm studies 
our historical patterns of reserving for claims and subsequent settlements, taking into account relevant outside 
influences.  We adjust the liability quarterly based upon our assessment and the results of the study.  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 17 for a more detailed discussion of the assumptions and estimates we use for personal injury.

Income Taxes

Our net deferred tax liability totaled $7.2 billion at December 31, 2021 (Note 4).  This liability is estimated based on 
the expected future tax consequences of items recognized in the financial statements.  After application of the 
federal statutory tax rate to book income, judgment is required with respect to the timing and deductibility of 
expenses in our income tax returns.  For state income and other taxes, judgment is also required with respect to the 
apportionment among the various jurisdictions.  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 $60 million valuation allowance on $461 million of 

K29

 
 
 
 
 
deferred tax assets as of December 31, 2021, reflecting the expectation that substantially all of these assets will be 
realized.

OTHER MATTERS

Labor Agreements

Approximately 80% of our railroad employees are covered by collective bargaining agreements with various labor 
unions.  Pursuant to the Railway Labor Act, these agreements remain in effect until new agreements are reached, or 
until the bargaining procedures mandated by the Railway Labor Act are completed.  We largely bargain nationally 
in concert with other major railroads, represented by the National Carriers Conference Committee.  Moratorium 
provisions in the labor agreements govern when the railroads and unions may propose changes to the agreements.  
The current round of bargaining commenced on November 1, 2019 with both management and the unions serving 
their formal proposals for changes to the collective bargaining agreements and negotiations are ongoing.

Market Risks

At December 31, 2021, we had no outstanding debt subject to interest rate fluctuations.  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, 2021 and amounts to an increase of approximately $1.9 billion to the fair value of our debt 
at December 31, 2021.  We consider it unlikely that interest rate fluctuations applicable to these instruments will 
result in a material adverse effect on our financial position, results of operations, or liquidity.  

New Accounting Pronouncements

For a detailed discussion of new accounting pronouncements, see Note 1.

Inflation

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

FORWARD-LOOKING STATEMENTS

Certain statements in Management’s Discussion and Analysis of Financial Condition and Results of Operations are 
“forward-looking statements” within the meaning of the “safe harbor” provisions of the Private Securities Litigation 
Reform Act of 1995, as amended.  These statements relate to future events or our future financial performance and 
involve known and unknown risks, uncertainties, and other factors that may cause our actual results, levels of 
activity, performance, or our achievements or those of our industry to be materially different from those expressed 
or implied by any forward-looking statements.  In some cases, forward-looking statements can be identified by 
terminology such as “may,” “will,” “could,” “would,” “should,” “expect,” “plan,” “anticipate,” “intend,” “believe,” 
“estimate,” “project,” “consider,” “predict,” “potential,” “feel,” or other comparable terminology.  We have based 
these forward-looking statements on our current expectations, assumptions, estimates, beliefs, and projections.  
While we believe these expectations, assumptions, estimates, beliefs, and projections are reasonable, such forward-
looking statements are only predictions and involve known and unknown risks and uncertainties, many of which 
involve factors or circumstances that are beyond our control.  These and other 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.  The forward-looking statements herein are 
made only as of the date they were first issued, and unless otherwise required by applicable securities laws, we 
disclaim any intention or obligation to update or revise any forward-looking statements, whether as a result of new 
information, future events, or otherwise.  

K30

 
 
 
 
Additional Information

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

Item 7A. Quantitative and Qualitative Disclosures About Market Risk 
The information required by this item is included in Item 7 “Management’s Discussion and Analysis of Financial 
Condition and Results of Operations” under the heading “Market Risks.”

K31

 
 
Item 8. Financial Statements and Supplementary Data

INDEX TO FINANCIAL STATEMENTS

Report of Management

Reports of Independent Registered Public Accounting Firm

Consolidated Statements of Income
Years ended December 31, 2021, 2020, and 2019

Consolidated Statements of Comprehensive Income
Years ended December 31, 2021, 2020, and 2019

Consolidated Balance Sheets
At December 31, 2021 and 2020

Consolidated Statements of Cash Flows
Years ended December 31, 2021, 2020, and 2019

Consolidated Statements of Changes in Stockholders’ Equity
Years ended December 31, 2021, 2020, and 2019

Notes to Consolidated Financial Statements

Index to Financial Statement Schedule in Item 15

Page

K33

K34

K38

K39

K40

K41

K42

K43

K80

K32

 
 
 
 
 
 
 
 
 
 
 
 
Report of Management

February 4, 2022 

To the Stockholders
Norfolk Southern Corporation:

Management is responsible for establishing and maintaining adequate internal control over financial reporting.  In 
order to ensure that Norfolk Southern’s internal control over financial reporting is effective, management regularly 
assesses such controls and did so most recently as of December 31, 2021.  This assessment was based on criteria for 
effective internal control over financial reporting described in Internal Control – Integrated Framework (2013) 
issued by the Committee of Sponsoring Organizations of the Treadway Commission.  Based on this assessment, 
management has concluded that we maintained effective internal control over financial reporting as of December 
31, 2021.

KPMG LLP, independent registered public accounting firm, has audited our financial statements and issued an 
attestation report on our internal control over financial reporting as of December 31, 2021.

/s/ James A. Squires
James A. Squires
Chairman and
Chief Executive Officer

/s/ Mark R. George
Mark R. George
Executive Vice President Finance
and Chief Financial Officer

/s/ Clyde H. Allison, Jr.
Clyde H. Allison, Jr.
Vice President and
Controller

K33

 
 
 
 
 
Report of Independent Registered Public Accounting Firm

To the Stockholders and Board of Directors
Norfolk Southern Corporation:

Opinion on Internal Control Over Financial Reporting 

We have audited Norfolk Southern Corporation and subsidiaries’ (the Company) internal control over financial 
reporting as of December 31, 2021, based on criteria established in Internal Control – Integrated Framework (2013) 
issued by the Committee of Sponsoring Organizations of the Treadway Commission.  In our opinion, the Company 
maintained, in all material respects, effective internal control over financial reporting as of December 31, 2021, 
based on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of 
Sponsoring Organizations of the Treadway Commission.  

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board 
(United States) (PCAOB), the consolidated balance sheets of the Company as of December 31, 2021 and 2020, the 
related consolidated statements of income, comprehensive income, cash flows, and changes in stockholders’ equity 
for each of the years in the three-year period ended December 31, 2021, and the related notes and financial 
statement schedule of valuation and qualifying accounts as listed in Item 15(A)2 (collectively, the consolidated 
financial statements), and our report dated February 4, 2022 expressed an unqualified opinion on those consolidated 
financial statements.  

Basis for Opinion 

The Company’s management is responsible for maintaining effective internal control over financial reporting and 
for its assessment of the effectiveness of internal control over financial reporting, included in the accompanying 
Management's Annual Report on Internal Control Over Financial Reporting.  Our responsibility is to express an 
opinion on the Company’s internal control over financial reporting based on our audit.  We are a public accounting 
firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with 
the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission 
and the PCAOB.  

We conducted our audit in accordance with the standards of the PCAOB.  Those standards require that we plan and 
perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting 
was maintained in all material respects.  Our audit of internal control over financial reporting included obtaining an 
understanding of internal control over financial reporting, assessing the risk that a material weakness exists, and 
testing and evaluating the design and operating effectiveness of internal control based on the assessed risk.  Our 
audit also included performing such other procedures as we considered necessary in the circumstances.  We believe 
that our audit provides a reasonable basis for our opinion.  

Definition and Limitations of Internal Control Over Financial Reporting 

A company’s internal control over financial reporting is a process designed to provide reasonable assurance 
regarding the reliability of financial reporting and the preparation of financial statements for external purposes in 
accordance with generally accepted accounting principles.  A company’s internal control over financial reporting 
includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, 
accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable 
assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance 
with generally accepted accounting principles, and that receipts and expenditures of the company are being made 
only in accordance with authorizations of management and directors of the company; and (3) provide reasonable 
assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s 
assets that could have a material effect on the financial statements.  

K34

 
 
Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements.  
Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may 
become inadequate because of changes in conditions, or that the degree of compliance with the policies or 
procedures may deteriorate.

Atlanta, Georgia
February 4, 2022 

/s/ KPMG LLP
KPMG LLP

K35

Report of Independent Registered Public Accounting Firm

To the Stockholders and Board of Directors
Norfolk Southern Corporation:

Opinion on the Consolidated Financial Statements 

We have audited the accompanying consolidated balance sheets of Norfolk Southern Corporation and subsidiaries 
(the Company) as of December 31, 2021 and 2020, the related consolidated statements of income, comprehensive 
income, cash flows, and changes in stockholders’ equity for each of the years in the three‑year period ended 
December 31, 2021, and the related notes and financial statement schedule of valuation and qualifying accounts as 
listed in Item 15(A)2  (collectively, the consolidated financial statements).  In our opinion, the consolidated 
financial statements present fairly, in all material respects, the financial position of the Company as of 
December 31, 2021 and 2020, and the results of its operations and its cash flows for each of the years in the 
three‑year period ended December 31, 2021, in conformity with U.S. generally accepted accounting principles.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board 
(United States) (PCAOB), the Company’s internal control over financial reporting as of  December 31, 2021, based 
on criteria established in Internal Control – Integrated Framework (2013) issued by the Committee of Sponsoring 
Organizations of the Treadway Commission, and our report dated February 4, 2022 expressed an unqualified 
opinion on the effectiveness of the Company’s internal control over financial reporting.

Basis for Opinion 

These consolidated financial statements are the responsibility of the Company’s management.  Our responsibility is 
to express an opinion on these consolidated financial statements based on our audits.  We are a public accounting 
firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with 
the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission 
and the PCAOB.

We conducted our audits in accordance with the standards of the PCAOB.  Those standards require that we plan and 
perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of 
material misstatement, whether due to error or fraud.  Our audits included performing procedures to assess the risks 
of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing 
procedures that respond to those risks.  Such procedures included examining, on a test basis, evidence regarding the 
amounts and disclosures in the consolidated financial statements.  Our audits also included evaluating the 
accounting principles used and significant estimates made by management, as well as evaluating the overall 
presentation of the consolidated financial statements.  We believe that our audits provide a reasonable basis for our 
opinion.

K36

 
 
Critical Audit Matter

The critical audit matter communicated below is a matter arising from the current period audit of the consolidated 
financial statements that was communicated or required to be communicated to the audit committee and that: (1) 
relates to accounts or disclosures that are material to the consolidated financial statements and (2) involved our 
especially challenging, subjective, or complex judgments.  The communication of a critical audit matter does not 
alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by 
communicating the critical audit matter below, providing a separate opinion on the critical audit matter or on the 
accounts or disclosures to which it relates.

Sufficiency of audit evidence related to the capitalization of property expenditures

As discussed in Note 1 to the consolidated financial statements, expenditures that extend an asset’s useful 
life or increase its utility are capitalized.  The Company has recorded $31,653 million in net book value of 
properties at December 31, 2021 and has recorded $1,470 million in property additions for the year ended 
December 31, 2021.  Expenditures capitalized include those that are directly related to a capital project and 
may include materials, labor and other direct costs, in addition to an allocable portion of indirect costs that 
relate to a capital project.  A significant portion of the Company’s annual capital spending relates to self-
constructed assets.  Costs related to repair and maintenance activities, that in the Company’s judgment, do 
not extend an asset’s useful life or increase its utility are expensed when such repairs are performed.

We identified the evaluation of the sufficiency of audit evidence related to capitalization of property 
expenditures as a critical audit matter.  Subjective auditor judgment was required in determining procedures 
and evaluating audit results related to the capitalization of purchased services and compensation due to their 
usage for both self-constructed assets and repairs and maintenance.

The following are the primary procedures we performed to address this critical audit matter.  We applied 
auditor judgment to determine the nature and extent of procedures to be performed over capitalized property 
expenditures.  We evaluated the design and tested the operating effectiveness of certain internal controls 
over the Company’s process to capitalize property expenditures, including controls over the determination 
of whether purchased services and compensation expenditures extend an asset’s useful life or increase its 
utility.  For a sample of property addition expenditures, we inquired and inspected support to evaluate that 
the expenditure extended an asset’s useful life or increased its utility.  We evaluated the sufficiency of audit 
evidence obtained by assessing the results of the procedures performed, including the appropriateness of the 
nature of such evidence.

/s/ KPMG LLP
KPMG LLP

We have served as the Company’s auditor since 1982. 

Atlanta, Georgia
February 4, 2022 

K37

Norfolk Southern Corporation and Subsidiaries
Consolidated Statements of Income

Years ended December 31,
2020
($ in millions, except per share amounts)

2019

2021

Railway operating revenues

$ 

11,142  $ 

9,789  $ 

11,296 

Railway operating expenses
Compensation and benefits
Purchased services and rents
Fuel
Depreciation
Materials and other
Loss on asset disposal

2,442 
1,726 
799 
1,181 
547 
— 

2,373 
1,687 
535 
1,154 
653 
385 

2,751 
1,725 
953 
1,138 
740 
— 

Total railway operating expenses

6,695 

6,787 

7,307 

Income from railway operations

4,447 

3,002 

3,989 

Other income – net
Interest expense on debt

77 
646 

153 
625 

106 
604 

Income before income taxes

3,878 

2,530 

3,491 

Income taxes

Net income

Earnings per share

Basic
Diluted

873 

517 

769 

$ 

3,005  $ 

2,013  $ 

2,722 

$ 

12.16  $ 
12.11 

7.88  $ 
7.84 

10.32 
10.25 

See accompanying notes to consolidated financial statements.

K38

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Norfolk Southern Corporation and Subsidiaries
Consolidated Statements of Comprehensive Income

2021

Years ended December 31,
2020
($ in millions)

2019

Net income
Other comprehensive income (loss), before tax:
Pension and other postretirement benefits
Other comprehensive income (loss) of equity investees

Other comprehensive income (loss), before tax
Income tax benefit (expense) related to items of

other comprehensive income (loss)

$ 

3,005  $ 

2,013  $ 

2,722 

226 
24 

250 

(140)   
2 

101 
(4) 

(138)   

97 

(58)   

35 

(25) 

Other comprehensive income (loss), net of tax

192 

(103)   

72 

Total comprehensive income

$ 

3,197  $ 

1,910  $ 

2,794 

See accompanying notes to consolidated financial statements.

K39

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Norfolk Southern Corporation and Subsidiaries
Consolidated Balance Sheets

Assets
Current assets:

Cash and cash equivalents
Accounts receivable – net
Materials and supplies
Other current assets

Total current assets

Investments
Properties less accumulated depreciation of $12,031 and

$11,985, respectively

Other assets

Total assets

Liabilities and stockholders’ equity
Current liabilities:
Accounts payable
Income and other taxes
Other current liabilities
Current maturities of long-term debt

Total current liabilities

Long-term debt
Other liabilities
Deferred income taxes

Total liabilities

Stockholders’ equity:

Common Stock $1.00 per share par value, 1,350,000,000 shares
authorized; outstanding 240,162,790 and 252,095,082 shares,
respectively, net of treasury shares

Additional paid-in capital
Accumulated other comprehensive loss
Retained income

Total stockholders’ equity

At December 31,
2020
2021

($ in millions)

$ 

839  $ 
976 
218 
134 
2,167 

3,707 

31,653 
966 

1,115 
848 
221 
134 
2,318 

3,590 

31,345 
709 

$ 

38,493  $ 

37,962 

$ 

1,351  $ 
305 
312 
553 
2,521 

13,287 
1,879 
7,165 

1,016 
263 
302 
579 
2,160 

12,102 
1,987 
6,922 

24,852 

23,171 

242 
2,215 
(402)   

11,586 

254 
2,248 
(594) 
12,883 

13,641 

14,791 

Total liabilities and stockholders’ equity

$ 

38,493  $ 

37,962 

See accompanying notes to consolidated financial statements.

K40

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Norfolk Southern Corporation and Subsidiaries
Consolidated Statements of Cash Flows

Years ended December 31,
2019
2020
2021
($ in millions)

Cash flows from operating activities

Net income
Reconciliation of net income to net cash provided by operating activities:

$ 

3,005  $ 

2,013  $ 

2,722 

Depreciation
Deferred income taxes
Gains and losses on properties
Loss on asset disposal
Impairment of investment
Changes in assets and liabilities affecting operations:

Accounts receivable
Materials and supplies
Other current assets
Current liabilities other than debt

  Other – net

1,181 
184 
(86)   
— 
— 

(133)   
3 
(6)   

283 
(176)   

1,154 
142 
(39)   
385 
99 

71 
23 
3 
34 
(248)   

1,139 
330 
(42) 
— 
— 

87 
(37) 
(4) 
(185) 
(118) 

Net cash provided by operating activities

4,255 

3,637 

3,892 

Cash flows from investing activities

Property additions
Property sales and other transactions
Investment purchases
Investment sales and other transactions

Net cash used in investing activities

Cash flows from financing activities

Dividends
Common Stock transactions
Purchase and retirement of Common Stock
Proceeds from borrowings – net of issuance costs
Debt repayments
Other

Net cash used in financing activities

(1,470)   
159 
(10)   
99 

(1,494)   
333 
(13)   
(1)   

(2,019) 
377 
(18) 
(104) 

(1,222)   

(1,175)   

(1,764) 

(1,028)   
17 
(3,390)   
1,676 
(584)   
— 

(960)   
69 
(1,439)   
784 
(381)   
— 

(949) 
27 
(2,099) 
2,192 
(1,188) 
23 

(3,309)   

(1,927)   

(1,994) 

Net increase (decrease) in cash and cash equivalents

(276)   

535 

1,115 

580 

$ 

839  $ 

1,115  $ 

134 

446 

580 

$ 

579  $ 
654 

577  $ 
311 

555 
543 

Cash and cash equivalents

At beginning of year

At end of year

Supplemental disclosures of cash flow information

Cash paid during the year for:

Interest (net of amounts capitalized)
Income taxes (net of refunds)

See accompanying notes to consolidated financial statements.

K41

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Norfolk Southern Corporation and Subsidiaries
Consolidated Statements of Changes in Stockholders’ Equity

Common
Stock

Accum. Other
Additional
Retained
Comprehensive
Paid-in
Capital
Income
Loss
($ in millions, except per share amounts)

Total

Balance at December 31, 2018

$ 

269  $ 

2,216  $ 

(563)  $ 

13,440  $ 

15,362 

Comprehensive income:

Net income
Other comprehensive income

Total comprehensive income

Dividends on Common Stock,

$3.60 per share
Share repurchases
Stock-based compensation

2,722 

72 

(949)   
(2,000)   
(6)   

2,722 
72 
2,794 

(949) 
(2,099) 
76 

(11)   
1 

(88) 
81 

Balance at December 31, 2019

259 

2,209 

(491)   

13,207 

15,184 

Comprehensive income:

Net income
Other comprehensive loss

Total comprehensive income

Dividends on Common Stock,

$3.76 per share
Share repurchases
Stock-based compensation

2,013 

(103) 

(7)   
2 

(59) 
98 

(960)   
(1,373)   
(4)   

2,013 
(103) 
1,910 

(960) 
(1,439) 
96 

Balance at December 31, 2020

254 

2,248 

(594)   

12,883 

14,791 

Comprehensive income:

Net income
Other comprehensive income

Total comprehensive income

Dividends on Common Stock,

$4.16 per share
Share repurchases
Stock-based compensation

3,005 

192 

(1,028)   
(3,271)   
(3)   

3,005 
192 
3,197 

(1,028) 
(3,390) 
71 

(13)   
1 

(106) 
73 

Balance at December 31, 2021

$ 

242  $ 

2,215  $ 

(402)  $ 

11,586  $ 

13,641 

See accompanying notes to consolidated financial statements.

K42

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Norfolk Southern Corporation and Subsidiaries
Notes to Consolidated Financial Statements

The following Notes are an integral part of the Consolidated Financial Statements.

1.  Summary of Significant Accounting Policies

Description of Business

Norfolk Southern Corporation is a Georgia-based holding company engaged principally in the rail transportation 
business, operating 19,300 route miles primarily in the Southeast, East, and Midwest.  These consolidated financial 
statements include Norfolk Southern and its majority-owned and controlled subsidiaries (collectively, NS, we, us, 
and our).  Norfolk Southern’s major subsidiary is NSR.  All significant intercompany balances and transactions 
have been eliminated in consolidation.

NSR and its railroad subsidiaries transport raw materials, intermediate products, and finished goods classified in the 
following commodity groups (percent of total railway operating revenues in 2021): intermodal (28%); agriculture, 
forest and consumer products (20%); chemicals (18%); metals and construction (14%); coal (12%); and automotive 
(8%).  Although most of our customers are domestic, ultimate points of origination or destination for some of the 
products transported (particularly coal bound for export and some intermodal shipments) may be outside the 
U.S.  Approximately 80% of our railroad employees are covered by collective bargaining agreements with various 
labor unions.

Use of Estimates

The preparation of financial statements in accordance with GAAP requires us to make estimates and assumptions 
that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date 
of the financial statements, and the reported amounts of revenues and expenses during the reporting period.  We 
periodically review our estimates, including those related to the recoverability and useful lives of assets, as well as 
liabilities for litigation, environmental remediation, casualty claims, income taxes and pension and other 
postretirement benefits.  Changes in facts and circumstances may result in revised estimates.

Revenue Recognition

Transportation revenues are recognized proportionally as a shipment moves from origin to destination, and related 
expenses are recognized as incurred.  Certain of our contract refunds (which are primarily volume-based incentives) 
are recorded as a reduction to revenues on the basis of our best estimate of projected liability, which is based on 
historical activity, current shipment counts and expectation of future activity.  Certain ancillary services, such as 
switching, demurrage and other incidental activities, may be provided to customers under their transportation 
contracts.  These are distinct performance obligations that are recognized at a point in time when the services are 
performed or as contractual obligations are met. 

Cash Equivalents

“Cash equivalents” are highly liquid investments purchased three months or less from maturity.

Allowance for Doubtful Accounts

Our allowance for doubtful accounts was $8 million and $6 million at December 31, 2021 and 2020, 
respectively.  To determine our allowance for doubtful accounts, we evaluate historical loss experience (which has 
not been significant), the characteristics of current accounts, and general economic conditions and trends.

K43

 
 
 
 
 
 
 
 
 
 
 
 
Materials and Supplies

“Materials and supplies,” consisting mainly of items for maintenance of property and equipment, are stated at the 
lower of average cost or net realizable value.  The cost of materials and supplies expected to be used in property 
additions or improvements is included in “Properties.”

Investments

Investments in entities over which we have the ability to exercise significant influence but do not control the entity 
are accounted for using the equity method, whereby the investment is carried at the cost of the acquisition plus our 
equity in undistributed earnings or losses since acquisition.

Properties

“Properties” are stated principally at cost and are depreciated using the group method whereby assets with similar 
characteristics, use, and expected lives are grouped together in asset classes and depreciated using a composite 
depreciation rate.  This methodology treats each asset class as a pool of resources, not as singular items.  We use 
approximately 75 depreciable asset classes.  

Depreciation expense is based on our assumptions concerning expected service lives of our properties as well as the 
expected net salvage that will be received upon their retirement.  In developing these assumptions, we utilize 
periodic depreciation studies that are performed by an independent outside firm of consulting engineers and 
approved by the STB.  Our depreciation studies are conducted about every three years for equipment and every six 
years for track assets and other roadway property.  The frequency of these studies is consistent with guidelines 
established by the STB.  We adjust our rates based on the results of these studies and implement the changes 
prospectively.  The studies may also indicate that the recorded amount of accumulated depreciation is deficient (or 
in excess) of the amount indicated by the study.  Any such deficiency (or excess) is amortized as a component of 
depreciation expense over the remaining service lives of the affected class of property, as determined by the study. 

Key factors that are considered in developing average service life and salvage estimates include:

•
•
•

•
•

statistical analysis of historical retirement data and surviving asset records,
review of historical salvage received and current market rates,
review of our operations including expected changes in technology, customer demand, maintenance 
practices and asset management strategies,
review of accounting policies and assumptions, and
industry review and analysis.

The composite depreciation rate for rail in high density corridors is derived based on consideration of annual gross 
tons as compared to the total or ultimate capacity of rail in these corridors.  Our experience has shown that traffic 
density is a leading factor in the determination of the expected service life of rail in high density corridors.  In 
developing the respective depreciation rate, consideration is also given to several rail characteristics including age, 
weight, condition (new or second-hand) and type (curved or straight).  

We capitalize interest on major projects during the period of their construction.  Expenditures, including those on 
leased assets, that extend an asset’s useful life or increase its utility are capitalized.  Expenditures capitalized 
include those that are directly related to a capital project and may include materials, labor, and other direct costs, in 
addition to an allocable portion of indirect costs that relate to a capital project.  A significant portion of our annual 
capital spending relates to self-constructed assets.  Removal activities occur in conjunction with replacement and are 
estimated based on the average percentage of time employees replacing assets spend on removal functions.  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.

K44

 
 
  
 
 
 
 
 
When depreciable operating road and equipment assets are sold or retired in the ordinary course of business, the 
cost of the assets, net of sales proceeds or salvage, is charged to accumulated depreciation, and no gain or loss is 
recognized in earnings.  Actual historical cost values are retired when available, such as with most equipment 
assets.  The use of estimates in recording the retirement of certain roadway assets is necessary based on the 
impracticality of tracking individual asset costs.  When retiring rail, ties and ballast, we use statistical curves that 
indicate the relative distribution of the age of the assets retired.  The historical cost of other roadway assets is 
estimated using a combination of inflation indices specific to the rail industry and those published by the U.S. 
Bureau of Labor Statistics.  The indices are applied to the replacement value based on the age of the retired 
assets.  These indices are used because they closely correlate with the costs of roadway assets.  Gains and losses on 
disposal of operating land are included in “Materials and other” expenses.  Gains and losses on disposal of 
nonoperating land and nonrail assets are included in “Other income – net” since such income is not a product of our 
railroad operations.

A retirement is considered abnormal if it does not occur in the ordinary course of business, if it relates to disposition 
of a large segment of an asset class and if the retirement varies significantly from the retirement profile identified 
through our depreciation studies, which inherently consider the impact of normal retirements on expected service 
lives and depreciation rates.  Gains or losses from abnormal retirements are recognized in income from railway 
operations.

We review the carrying amount of properties whenever events or changes in circumstances indicate that such 
carrying amount may not be recoverable based on future undiscounted cash flows.  Assets that are deemed impaired 
as a result of such review are recorded at the lower of carrying amount or fair value.

New Accounting Pronouncements

In June 2016, the Financial Accounting Standards Board (FASB) issued Accounting Standards Update (ASU) 
2016-13, “Credit Losses - Measurement of Credit Losses on Financial Instruments,” which replaced the current 
incurred loss impairment method with a method that reflects expected credit losses.  Short-term and long-term 
financial assets, as defined by the standard, are impacted by immediate recognition of estimated credit losses in the 
financial statements, reflecting the net amount expected to be collected.  Historically, losses associated from the 
inability to collect on accounts receivable have been insignificant, with little divergence in collection trends through 
varying economic cycles.  We adopted the standard on January 1, 2020 and there was no material impact to the 
financial statements upon adoption.

In December 2019, the FASB issued ASU 2019-12, “Simplifying the Accounting for Income Taxes,” which added 
new guidance to simplify the accounting for income taxes, changed the accounting for certain income tax 
transactions, and made other minor changes.  We adopted the standard on January 1, 2021 and there was no material 
impact to the financial statements upon adoption. 

K45

 
 
2. Railway Operating Revenues

The following table disaggregates our revenues by major commodity group:  

Merchandise:

Agriculture, forest and consumer products
Chemicals
Metals and construction
Automotive

Merchandise

Intermodal
Coal

Total

2021

2020
($ in millions)

2019

$ 

2,251  $ 
1,951 
1,562 
905 
6,669 
3,163 
1,310 

2,116  $ 
1,809 
1,333 
830 
6,088 
2,654 
1,047 

2,256 
2,092 
1,461 
994 
6,803 
2,824 
1,669 

$ 

11,142  $ 

9,789  $ 

11,296 

We recognize the amount of revenues to which we expect to be entitled for the transfer of promised goods or 
services to customers.  A performance obligation is created when a customer under a transportation contract or 
public tariff submits a bill of lading to us for the transport of goods.  These performance obligations are satisfied as 
the shipments move from origin to destination.  As such, transportation revenues are recognized proportionally as a 
shipment moves, and related expenses are recognized as incurred.  These performance obligations are generally 
short-term in nature with transit days averaging approximately one week or less for each commodity group.  The 
customer has an unconditional obligation to pay for the service once the service has been completed.  Estimated 
revenues associated with in-process shipments at period-end are recorded based on the estimated percentage of 
service completed.  We had no material remaining performance obligations at December 31, 2021 and 2020.

We may provide customers ancillary services, such as switching, demurrage and other incidental activities, under 
their transportation contracts.  These are distinct performance obligations that are recognized at a point in time when 
the services are performed or as contractual obligations are met.  These revenues are included within each of the 
commodity groups and represent approximately 7%, 5% and 5%, respectively, of total “Railway operating 
revenues” on the Consolidated Statements of Income for the years ended December 31, 2021, 2020 and 2019.  

Revenues related to interline transportation services that involve another railroad are reported on a net basis.  
Therefore, the portion of the amount that relates to another party is not reflected in revenues.  

K46

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Under the typical terms of our freight contracts, payment for services is due within fifteen days of billing the 
customer, thus there are no significant financing components.  “Accounts receivable – net” on the Consolidated 
Balance Sheets includes both customer and non-customer receivables as follows:

Customer                                       
Non-customer

  Accounts receivable – net

December 31,

2021

2020

($ in millions)

$ 

$ 

741  $ 
235 

629 
219 

976  $ 

848 

Non-customer receivables include non-revenue-related amounts due from other railroads, governmental entities, and 
others.  “Other assets” on the Consolidated Balance Sheets includes non-current customer receivables of $23 million  
at both December 31, 2021 and 2020.  We do not have any material contract assets or liabilities at December 31, 
2021 and 2020.

3.  Other Income – Net

2021

2020
($ in millions)

2019

$ 

102  $ 
17 
(42)   

91  $ 
85 
(23)   

63 
69 
(26) 

$ 

77  $ 

153  $ 

106 

2021

2020
($ in millions)

2019

$ 

553  $ 
136 
689 

307  $ 
68 
375 

186 

(2)   

184 

111 
31 
142 

356 
83 
439 

280 
50 
330 

$ 

873  $ 

517  $ 

769 

Pension and other postretirement benefits (Note 12)
COLI – net
Other

Total

  4.  Income Taxes

Current:

Federal
State

Total current taxes

Deferred:
Federal
State

Total deferred taxes

Income taxes

K47

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Reconciliation of Statutory Rate to Effective Rate

“Income taxes” on the Consolidated Statements of Income differs from the amounts computed by applying the 
statutory federal corporate tax rate as follows:

2021

2020
Amount % Amount % Amount %
($ in millions)

2019

Federal income tax at statutory rate
State income taxes, net of federal tax effect
Excess tax benefits on stock-based compensation
Other, net

$ 

814 
109 
(25)   
(25)   

  21.0  $ 
2.8 
(0.6)   
(0.7)   

531 
85 
(39)   
(60)   

  21.0  $ 
3.3 
(1.5)   
(2.4)   

733 
110 
(29)   
(45)   

  21.0 
3.1 
(0.8) 
(1.3) 

Income taxes

$ 

873 

  22.5  $ 

517 

  20.4  $ 

769 

  22.0 

Deferred Tax Assets and Liabilities

Certain items are reported in different periods for financial reporting and income tax purposes.  Deferred tax assets 
and liabilities are recorded in recognition of these differences.  The tax effects of temporary differences that give 
rise to significant portions of the deferred tax assets and deferred tax liabilities are as follows:

Deferred tax assets:

Compensation and benefits, including postretirement benefits
Accruals, including casualty and other claims
Other

Total gross deferred tax assets

Less valuation allowance
Net deferred tax assets

Deferred tax liabilities:

Property
Other

Total deferred tax liabilities

Deferred income taxes

December 31,

2021

2020

($ in millions)

$ 

181  $ 
92 
188 
461 
(60)   
401 

218 
93 
198 
509 
(57) 
452 

(7,016)   
(550)   
(7,566)   

(6,820) 
(554) 
(7,374) 

$ 

(7,165)  $ 

(6,922) 

Except for amounts for which a valuation allowance has been provided, we believe that it is more likely than not 
that the results of future operations will generate sufficient taxable income to realize the deferred tax assets.  The 
valuation allowance at the end of each year primarily relates to subsidiary state income tax net operating losses and 
state investment tax credits that may not be utilized prior to their expiration.  The total valuation allowance 
increased by $3 million in both 2021 and 2020, and $4 million in 2019.

K48

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Uncertain Tax Positions

A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows:

December 31,

2021

2020

($ in millions)

Balance at beginning of year

$ 

22  $ 

24 

Additions based on tax positions related to the current year
Additions for tax positions of prior years
Settlements with taxing authorities
Lapse of statutes of limitations

3 
3 
(5)   
(2)   

4 
— 
(4) 
(2) 

Balance at end of year

$ 

21  $ 

22 

Included in the balance of unrecognized tax benefits at December 31, 2021 are potential benefits of $17 million that 
would affect the effective tax rate if recognized.  Unrecognized tax benefits are adjusted in the period in which new 
information about a tax position becomes available or the final outcome differs from the amount recorded.

The statute of limitations on Internal Revenue Service (IRS) examinations has expired for all years prior to 2018.  
The IRS accepted our 2012 amended income tax return.  As a result, we received a refund of $46 million and 
recognized a tax benefit of $19 million in 2020.  State income tax returns generally are subject to examination for a 
period of three to four years after filing the return.  In addition, we are generally obligated to report changes in 
taxable income arising from federal income tax examinations to the states within a period of up to two years from 
the date the federal examination is final.  We have various state income tax returns either under examination, 
administrative appeal, or litigation.   

5.  Fair Value Measurements

FASB Accounting Standards Codification (ASC) 820-10, “Fair Value Measurements,” established a framework for 
measuring fair value and a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure 
fair value into three broad levels, as follows:

Level 1 Inputs to the valuation methodology are unadjusted quoted prices for identical assets or liabilities in 

active markets that we have the ability to access.

Level 2 Inputs to the valuation methodology include:

•         quoted prices for similar assets or liabilities in active markets, 
•         quoted prices for identical or similar assets or liabilities in inactive markets,
•         inputs other than quoted prices that are observable for the asset or liability, and
•         inputs that are derived principally from or corroborated by observable market data by
          correlation or other means.

If the asset or liability has a specified (contractual) term, the Level 2 input must be observable for 
substantially the full term of the asset or liability.

Level 3 Inputs to the valuation methodology are unobservable and significant to the fair value measurement.

The asset or liability’s fair value measurement level within the hierarchy is based on the lowest level of any input 
that is significant to the fair value measurement.

K49

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Fair Values of Financial Instruments

The fair values of “Cash and cash equivalents,” “Accounts receivable – net,” and “Accounts payable” approximate 
carrying values because of the short maturity of these financial instruments.  The carrying value of COLI is 
recorded at cash surrender value and, accordingly, approximates fair value.  There are no other assets or liabilities 
measured at fair value on a recurring basis at December 31, 2021 or 2020.  The carrying amounts and estimated fair 
values, based on Level 1 inputs, of long-term debt consist of the following at December 31:

2021

2020

Carrying
Amount

Fair
Value

Carrying
Amount

Fair
Value

($ in millions)

Long-term debt, including current maturities

$ 

(13,840)  $ 

(17,033)  $ 

(12,681)  $ 

(16,664) 

6.  Investments

Long-term investments:

Equity method investments:

Conrail
TTX Company
Other

Total equity method investments

COLI at net cash surrender value
Other investments

Total long-term investments

Investment in Conrail

December 31,

2021

2020

($ in millions)

$  1,526  $  1,446 
798 
418 
2,662 

851 
420 
2,797 

885 
25 

902 
26 

$  3,707  $  3,590 

Through a limited liability company, we and CSX jointly own Conrail, whose primary subsidiary is CRC.  We have 
a 58% economic and 50% voting interest in the jointly-owned entity, and CSX has the remainder of the economic 
and voting interests.  We are amortizing the excess of the purchase price over Conrail’s net equity using the 
principles of purchase accounting, based primarily on the estimated useful lives of Conrail’s depreciable property 
and equipment, including the related deferred tax effect of the differences in book and tax accounting bases for such 
assets, as all of the purchase price at acquisition was allocable to Conrail’s tangible assets and liabilities.  At 
December 31, 2021, our investment in Conrail exceeds our share of Conrail’s underlying net equity by $487 
million.  

CRC owns and operates certain properties (the Shared Assets Areas) for the joint and exclusive benefit of NSR and 
CSX Transportation, Inc. (CSXT).  The costs of operating the Shared Assets Areas are borne by NSR and CSXT 
based on usage.  In addition, NSR and CSXT pay CRC a fee for access to the Shared Assets Areas.  “Purchased 
services and rents” and “Fuel” include expenses payable to CRC for operation of the Shared Assets Areas totaling 
$147 million in 2021, $129 million in 2020, and $149 million in 2019.  Future payments for access fees due to CRC 
under the Shared Assets Areas agreements are as follows: $42 million in 2022, $43 million in 2023, and $18 million 

K50

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
in 2024.  We provide certain general and administrative support functions to Conrail, the fees for which are billed in 
accordance with several service-provider arrangements and approximate $6 million annually.

In 2020, we converted $254 million of accounts payable into long-term advances from Conrail included in “Other 
liabilities.”  “Accounts payable” includes $112 million at December 31, 2021, and $56 million at December 31, 
2020, due to Conrail for the operation of the Shared Assets Areas.  “Other liabilities” includes $534 million at 
December 31, 2021 and 2020, respectively, for long-term advances from Conrail, maturing in 2050 that bear interest 
at an average rate of 1.31%.  

Our equity in Conrail’s earnings, net of amortization, was $56 million for 2021, $58 million for 2020, and $53 
million for 2019.  These amounts partially offset the costs of operating the Shared Assets Areas and are included in 
“Purchased services and rents.”  Equity in Conrail’s earnings is included in the “Other – net” line item within 
operating activities in the Consolidated Statements of Cash Flows.  

Investment in TTX

We and eight other North American railroads collectively own TTX Company (TTX), a railcar pooling company 
that provides its owner-railroads with standardized fleets of intermodal, automotive, and general use railcars at 
stated rates.  We have a 19.65% ownership interest in TTX.  

Expenses incurred for use of TTX equipment are included in “Purchased services and rents.”  This amounted to 
$246 million, $250 million, and $244 million, respectively, for the years ended December 31, 2021, 2020 and 2019.  
Our equity in TTX’s earnings partially offsets these costs and totaled $53 million for 2021, $48 million for 2020, 
and $58 million for 2019.  Equity in TTX’s earnings is included in the “Other – net” line item within operating 
activities in the Consolidated Statements of Cash Flows.  

Impairment of Investment

In 2020, we recorded an other-than-temporary impairment of $99 million related to the carrying value of an equity 
method investment.  This non-cash impairment charge is recorded in “Purchased services and rents” on the 2020 
Consolidated Statements of Income and had a $74 million impact on net income.  

K51

7.  Properties

December 31, 2021

Cost

Accumulated
Depreciation
($ in millions)

Net Book
Value

Depreciation
Rate (1)

Land

Roadway:

Rail and other track material
Ties
Ballast
Construction in process
Other roadway
Total roadway

Equipment:

Locomotives
Freight cars
Computers and software
Construction in process
Other equipment
Total equipment

$ 

2,453  $ 

—  $ 

2,453 

                 — 

7,330 
5,779 
3,041 
339 
14,111 
30,600 

5,695 
2,701 
893 
164 
1,088 
10,541 

(1,907)   
(1,642)   
(818)   
— 
(3,733)   
(8,100)   

(1,994)   
(1,009)   
(438)   
— 
(420)   
(3,861)   

 2.40% 
 3.44% 
 2.79% 

                 — 

 2.69% 

 3.87% 
 2.59% 
 10.34% 

                 — 

 4.63% 

5,423 
4,137 
2,223 
339 
10,378 
22,500 

3,701 
1,692 
455 
164 
668 
6,680 

Other property

90 

(70)   

20 

 2.25% 

Total properties

$ 

43,684  $ 

(12,031)  $ 

31,653 

K52

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
December 31, 2020

Cost

Accumulated
Depreciation
($ in millions)

Net Book
Value

Depreciation
Rate (1)

Land

Roadway:

Rail and other track material
Ties
Ballast
Construction in process
Other roadway
Total roadway

Equipment:

Locomotives
Freight cars
Computers and software
Construction in process
Other equipment
Total equipment

$ 

2,394  $ 

—  $ 

2,394 

                 — 

7,153 
5,685 
2,973 
297 
14,320 
30,428 

5,478 
2,780 
732 
333 
1,094 
10,417 

(1,892)   
(1,601)   
(774)   
— 
(3,926)   
(8,193)   

(1,911)   
(1,023)   
(391)   
— 
(399)   
(3,724)   

 2.35% 
 3.41% 
 2.76% 

                 — 

 2.71% 

 3.56% 
 2.59% 
 9.86% 

                 — 

 4.70% 

5,261 
4,084 
2,199 
297 
10,394 
22,235 

3,567 
1,757 
341 
333 
695 
6,693 

Other property

91 

(68)   

23 

 2.24% 

Total properties

$ 

43,330  $ 

(11,985)  $ 

31,345 

(1) Composite annual depreciation rate for the underlying assets, excluding the effects of the amortization of any 

deficiency (or excess) that resulted from our depreciation studies.

Loss on Asset Disposal

In 2020, we sold 703 locomotives deemed excess and no longer needed for railroad operations.  We evaluated these 
locomotive retirements and concluded they were abnormal (see Note 1).  Accordingly, we recorded a $385 million 
loss to adjust their carrying amount to their estimated fair value, which resulted in a $97 million tax benefit.  

Capitalized Interest

Total interest cost incurred on debt was $657 million, $639 million, and $620 million during 2021, 2020 and 2019, 
respectively, of which $11 million, $14 million, and $16 million was capitalized during 2021, 2020 and 2019, 
respectively.

K53

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
8.  Current Liabilities

Accounts payable:

Accounts and wages payable
Casualty and other claims (Note 17)
Vacation liability
Due to Conrail (Note 6)
Other

Total

Other current liabilities:

Interest payable
Current operating lease liability (Note 10)
Pension benefit obligations (Note 12)
Other

Total

9.  Debt

Debt maturities are presented below:

Notes and debentures, with weighted-average interest rates as of December 31, 2021:

3.40% maturing to 2026
4.26% maturing 2027 to 2031
4.02% maturing 2037 to 2055
5.22% maturing 2097 to 2121

Finance leases
Discounts, premiums, and debt issuance costs

Total debt

Less current maturities

December 31,

2021

2020

($ in millions)

$ 

850  $ 
166 
119 
112 
104 

552 
182 
121 
56 
105 

$ 

1,351  $ 

1,016 

$ 

150  $ 
82 
20 
60 

141 
89 
19 
53 

$ 

312  $ 

302 

December 31,

2021

2020

($ in millions)

$ 

2,699  $ 
2,614 
8,097 
1,384 
22 
(976)   

13,840 

3,273 
2,114 
7,497 
784 
25 
(1,012) 
12,681 

(553)   

(579) 

Long-term debt excluding current maturities

$ 

13,287  $ 

12,102 

K54

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Long-term debt maturities subsequent to 2022 are as follows:

2023
2024
2025
2026
2027 and subsequent years

Total

$ 

603 
403 
554 
602 
11,125 

$ 

13,287 

In August 2021, we issued $600 million of 2.90% senior notes due 2051, resulting in $589 million in net proceeds.

In May 2021, we issued $500 million of 2.30% senior notes due 2031, resulting in $495 million in net proceeds and 
$600 million of 4.10% senior notes due 2121, resulting in $592 million in net proceeds.  The net proceeds of the 
2.30% senior notes due 2031 will be used to finance or refinance, in whole or in part, new or existing eligible 
projects with environmental benefits as outlined in our Green Financing Framework.

In May 2021, we renewed, amended and restated our accounts receivable securitization program with a maximum 
borrowing capacity of $400 million.  The term expires in May 2022.  We had no amounts outstanding under this 
program and our available borrowing capacity was $400 million at both December 31, 2021 and December 31, 
2020.

Credit Agreement and Debt Covenants

We also have in place and available an $800 million credit agreement expiring in March 2025, which provides for 
borrowings at prevailing rates and includes covenants.  We had no amounts outstanding under this facility at either 
December 31, 2021 or December 31, 2020, and we are in compliance with all of its covenants.

10.  Leases

We are committed under long-term lease agreements for equipment, lines of road, and other property.  We combine 
lease and non-lease components for new and reassessed leases.  Some of these agreements are variable lease 
agreements that include usage-based payments.  These agreements contain payment provisions that depend on an 
index or rate, initially measured using the index or rate at the lease commencement date, and are therefore not 
included in our future minimum lease payments.  Our long-term lease agreements do not contain any material 
restrictive covenants.  

Our equipment leases have remaining terms of less than 1 year to 5 years and our lines of road and land leases have 
remaining terms of less than 1 year to 136 years.  Some of these leases include options to extend the leases for up to 
99 years and some include options to terminate the leases within 30 days.  Because we are not reasonably certain to 
exercise these renewal options, the options are not considered in determining the lease term, and associated 
payments are excluded from future minimum lease payments.  

Leases with an initial term of twelve months or less are not recorded on the balance sheet.  We recognize lease 
expense for these leases on a straight-line basis over the lease term.

K55

 
 
 
 
 
 
 
 
Operating lease amounts included on the Consolidated Balance Sheets are as follows:

Assets

ROU assets

Liabilities

Classification

Other assets

Current lease liabilities
Non-current lease liabilities

Other current liabilities
Other liabilities

Total lease liabilities

December 31,

2021

2020

($ in millions)

$ 

$ 

$ 

411  $ 

433 

82  $ 
331 

89 
344 

413  $ 

433 

The components of total lease expense, primarily included in “Purchased services and rents,” are as follows:

Operating lease expense
Variable lease expense
Short-term lease expense

Total lease expense

2021

2020

($ in millions)

$ 

106  $ 
44 
9 

109 
42 
9 

$ 

159  $ 

160 

In March 2019, we entered into a non-cancellable lease for an office building.  In 2021, the construction of the 
office building was completed and the lease commenced.  The initial lease term is five years with options to renew, 
purchase, or sell the office building at the end of the lease term.  The lease contains a residual value guarantee of up 
to eighty-three percent of the total construction cost of $499 million.  

Other information related to operating leases is as follows:

December 31,

2021

2020

Weighted-average remaining lease term (years) on operating leases

7.49

8.18

Weighted-average discount rates on operating leases

 3.04% 

 3.50% 

As the rates implicit in most of our leases are not readily determinable, we use a collateralized incremental 
borrowing rate based on the information available at the lease commencement date in determining the present value 
of future payments.  We use the portfolio approach and group leases into short-, medium-, and long-term categories, 
applying the corresponding incremental borrowing rates to these categories.  

K56

 
 
 
 
 
 
 
During 2021 and 2020, respectively, ROU assets obtained in exchange for new operating lease liabilities were $57 
million and $22 million.  Cash paid for amounts included in the measurement of lease liabilities was $103 million 
and $109 million in 2021 and 2020, respectively, and is included in operating cash flows.

Future minimum lease payments under non-cancellable operating leases are as follows:

December 31, 2021
($ in millions)

92 
83 
73 
69 
55 
98 
470 
57 

413 

December 31, 2020
($ in millions)

101 
76 
67 
58 
57 
145 
504 
71 

433 

$ 

$ 

$ 

$ 

2022
2023
2024
2025
2026
2027 and subsequent years
Total lease payments
Less: Interest

Present value of lease liabilities

2021
2022
2023
2024
2025
2026 and subsequent years
Total lease payments
Less: Interest

Present value of lease liabilities

K57

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
11.  Other Liabilities

Long-term advances from Conrail (Note 6)
Net pension benefit obligations (Note 12)
Non-current operating lease liability (Note 10)
Net other postretirement benefit obligations (Note 12)
Casualty and other claims (Note 17)
Deferred compensation
Other

Total

December 31,

2021

2020

($ in millions)

$ 

534  $ 
338 
331 
244 
170 
109 
153 

534 
340 
344 
306 
169 
107 
187 

$ 

1,879  $ 

1,987 

K58

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
12.  Pensions and Other Postretirement Benefits

We have both funded and unfunded defined benefit pension plans covering eligible employees.  We also provide 
specified health care benefits to eligible retired employees; these plans can be amended or terminated at our option.  
Under our self-insured retiree health care plan, for those participants who are not Medicare-eligible, certain health 
care expenses are covered for retired employees and their dependents, reduced by any deductibles, coinsurance, and, 
in some cases, coverage provided under other group insurance policies.  Eligible retired participants and their 
spouses who are Medicare-eligible are not covered under the self-insured retiree health care plan, but instead are 
provided with an employer-funded health reimbursement account which can be used for reimbursement of health 
insurance premiums or eligible out-of-pocket medical expenses. 

Pension and Other Postretirement Benefit Obligations and Plan Assets

Change in benefit obligations:
Benefit obligation at beginning of year
Service cost
Interest cost
Actuarial (gains) losses 
Plan amendment
Benefits paid

Benefit obligation at end of year

Change in plan assets:
Fair value of plan assets at beginning of year
Actual return on plan assets
Employer contributions
Benefits paid

Fair value of plan assets at end of year

Funded status at end of year

Amounts recognized in the Consolidated Balance Sheets: 

Other assets
Other current liabilities
Other liabilities

Pension Benefits
2020
2021

Other Postretirement
Benefits

2021

2020

($ in millions)

$ 

$ 

$ 

2,845  $ 
43 
55 
(13)   
(2)   
(151)   
2,777 

2,588  $ 
40 
74 
294 
— 
(151)   
2,845 

2,675 
317 
20 
(151)   
2,861 

2,462 
345 
19 
(151)   
2,675 

471  $ 
6 
7 
(29)   
— 
(38)   
417 

165 
29 
17 
(38)   
173 

457 
6 
12 
35 
— 
(39) 
471 

170 
21 
13 
(39) 
165 

84  $ 

(170)  $ 

(244)  $ 

(306) 

442  $ 
(20)   
(338)   

189  $ 
(19)   
(340)   

—  $ 
— 
(244)   

— 
— 
(306) 

Net amount recognized

$ 

84  $ 

(170)  $ 

(244)  $ 

(306) 

Amounts included in accumulated other comprehensive

loss (before tax):

Net loss
Prior service benefit

$ 

666  $ 
(2)   

869  $ 
— 

10  $ 
(202)   

57 
(228) 

K59

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Our accumulated benefit obligation for our defined benefit pension plans is $2.6 billion at both December 31, 2021 
and 2020, respectively.  Our unfunded pension plans, included above, which in all cases have no assets, had 
projected benefit obligations of $358 million and $359 million at December 31, 2021 and 2020, respectively, and 
had accumulated benefit obligations of $332 million and $330 million at December 31, 2021 and 2020, respectively.

Pension and Other Postretirement Benefit Cost Components

Pension benefits:
Service cost
Interest cost
Expected return on plan assets
Amortization of net losses
Amortization of prior service cost

Net benefit

Other postretirement benefits:
Service cost
Interest cost
Expected return on plan assets
Amortization of net losses
Amortization of prior service benefit

2021

2020
($ in millions)

2019

$ 

$ 

$ 

43  $ 
55 
(193)   
66 
— 

40  $ 
74 
(190)   
51 
1 

35 
93 
(179) 
43 
1 

(29)  $ 

(24)  $ 

(7) 

6  $ 
7 
(12)   
1  
(26)   

6  $ 
12 
(14)   
— 
(25)   

6 
17 
(14) 
— 
(24) 

Net benefit

$ 

(24)  $ 

(21)  $ 

(15) 

Other Changes in Plan Assets and Benefit Obligations Recognized in Other Comprehensive Income

Net gains arising during the year
Prior service effect of plan amendment
Amortization of net losses
Amortization of prior service benefit

Total recognized in other comprehensive income

Total recognized in net periodic cost and other comprehensive income

2021

Pension
Benefits

Other
Postretirement 
Benefits

($ in millions)

$ 

$ 

$ 

(137)  $ 
(2)   
(66)   
— 

(205)  $ 

(234)  $ 

(46) 
— 
(1) 
26 

(21) 

(45) 

Net gains arising during the year for both pension benefits and other postretirement benefits were due primarily to 
higher actual returns on plan assets and increases in discount rates. 

K60

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
The estimated net losses for the pension plans that will be amortized from accumulated other comprehensive loss 
into net periodic cost over the next year are $48 million.  The estimated net losses and prior service benefit for the 
other postretirement benefit plans that will be amortized from accumulated other comprehensive loss into net 
periodic benefit over the next year is $25 million. 

Pension and Other Postretirement Benefits Assumptions

Costs for pension and other postretirement benefits are determined based on actuarial valuations that reflect 
appropriate assumptions as of the measurement date, ordinarily the beginning of each year.  The funded status of the 
plans is determined using appropriate assumptions as of each year end.  A summary of the major assumptions 
follows:

Pension funded status:

Discount rate
Future salary increases

Other postretirement benefits funded status:

Discount rate
Pension cost:

Discount rate - service cost
Discount rate - interest cost
Return on assets in plans
Future salary increases

Other postretirement benefits cost:

Discount rate - service cost
Discount rate - interest cost
Return on assets in plans
Health care trend rate

2021

2020

2019

 2.97% 
 4.44% 

 2.67% 
 4.21% 

 3.38% 
 4.21% 

 2.72% 

 2.27% 

 3.13% 

 3.14% 
 1.95% 
 8.00% 
 4.44% 

 2.71% 
 1.57% 
 7.75% 
 6.00% 

 3.71% 
 2.92% 
 8.25% 
 4.21% 

 3.41% 
 2.69% 
 8.00% 
 6.25% 

 4.55% 
 3.99% 
 8.25% 
 4.21% 

 4.39% 
 3.83% 
 8.00% 
 6.50% 

To determine the discount rates used to measure our benefit obligations, we utilize analyses in which the projected 
annual cash flows from the pension and other postretirement benefit plans were matched with yield curves based on 
an appropriate universe of high-quality corporate bonds.  We use the results of the yield curve analyses to select the 
discount rates that match the payment streams of the benefits in these plans.

We use a spot rate approach to estimate the service cost and interest cost components of net periodic benefit cost for 
our pension and other postretirement benefit plans.

Health Care Cost Trend Assumptions

For measurement purposes at December 31, 2021, increases in the per capita cost of pre-Medicare covered health 
care benefits were assumed to be 6.50% for 2022.  We assume the rate will ratably decrease to an ultimate rate of 
5.0% for 2028 and remain at that level thereafter.

K61

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Assumed health care cost trend rates affect the amounts reported in the financial statements.  To illustrate, a one-
percentage point change in the assumed health care cost trend would have the following effects:

Increase (decrease) in:

Total service and interest cost components
Postretirement benefit obligation

Asset Management

One-percentage Point

Increase

Decrease

($ in millions)

$ 

1  $ 
7 

(1) 
(7) 

Eleven investment firms manage our defined benefit pension plan’s assets under investment guidelines approved by 
our Benefits Investment Committee that is composed of members of our management.  Investments are restricted to 
domestic and international equity securities, domestic and international fixed income securities, and unleveraged 
exchange-traded options and financial futures.  Limitations restrict investment concentration and use of certain 
derivative investments.  The target asset allocation for equity is 75% of the pension plan’s assets.  Fixed income 
investments must consist predominantly of securities rated investment grade or higher.  Equity investments must be 
in liquid securities listed on national exchanges.  No investment is permitted in our securities (except through 
commingled pension trust funds).

Our pension plan’s weighted-average asset allocations, by asset category, were as follows:

Domestic equity securities
Debt securities
International equity securities
Cash and cash equivalents

Total

Percentage of Plan
Assets at December 31,
2020
2021

 52% 
 24% 
 23% 
 1% 

 52% 
 22% 
 24% 
 2% 

 100% 

 100% 

The other postretirement benefit plan assets consist primarily of trust-owned variable life insurance policies with an 
asset allocation at December 31, 2021 of 65% in equity securities and 35% in debt securities compared with 68% in 
equity securities and 32% in debt securities at December 31, 2020.  The target asset allocation for equity is between 
50% and 75% of the plan’s assets.

The plans’ assumed future returns are based principally on the asset allocations and historical returns for the plans’ 
asset classes determined from both actual plan returns and, over longer time periods, expected market returns for 
those asset classes.  For 2022, we assume an 8.00% return on pension plan assets.

K62

 
 
 
 
 
 
 
 
 
 
 
Fair Value of Plan Assets

The following is a description of the valuation methodologies used for pension plan assets measured at fair value.

Common stock:  Shares held by the plan at year end are valued at the official closing price as defined by the 
exchange or at the most recent trade price of the security at the close of the active market.

Common collective trusts:  The readily determinable fair value is based on the published fair value per unit 
of the trusts.  The common collective trusts hold equity securities, fixed income securities and cash and cash 
equivalents.

Fixed income securities:  Valued based on quotes received from independent pricing services or at an 
estimated price at which a dealer would pay for the security at year end using observable market-based 
inputs.

Commingled funds:  The readily determinable fair value is based on the published fair value per unit of the 
funds.  The commingled funds hold equity securities.

Cash and cash equivalents:  Short-term Treasury bills or notes are valued at an estimated price at which a 
dealer would pay for the security at year end using observable market-based inputs; money market funds are 
valued at the closing price reported on the active market on which the funds are traded.

The following table sets forth the pension plan’s assets by valuation technique level, within the fair value hierarchy.  
There were no level 3 valued assets at December 31, 2021 or 2020.

Common stock
Common collective trusts:

International equity securities
Debt securities
Domestic equity securities

Fixed income securities:

Government and agencies securities
Corporate bonds
Mortgage and other asset-backed securities

Commingled funds
Cash and cash equivalents

Total investments

Level 1

December 31, 2021
Level 2
($ in millions)

Total

$ 

1,383  $ 

—  $ 

1,383 

— 
— 
— 

— 
— 
— 
— 
42 

397 
367 
189 

170 
120 
33 
160 
— 

397 
367 
189 

170 
120 
33 
160 
42 

$ 

1,425  $ 

1,436  $ 

2,861 

K63

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Common stock
Common collective trusts:

International equity securities
Debt securities

Fixed income securities:

Government and agencies securities
Corporate bonds
Mortgage and other asset-backed securities

Commingled funds
Cash and cash equivalents

Total investments

Level 1

December 31, 2020
Level 2
($ in millions)

Total

$ 

1,483  $ 

—  $ 

1,483 

— 
— 

— 
— 
— 
— 
60 

399 
297 

146 
117 
24 
149 
— 

399 
297 

146 
117 
24 
149 
60 

$ 

1,543  $ 

1,132  $ 

2,675 

The following is a description of the valuation methodologies used for other postretirement benefit plan assets 
measured at fair value.

Trust-owned life insurance:  Valued at our share of the net assets of trust-owned life insurance issued by a 
major insurance company.  The underlying investments of that trust consist of a U.S. stock account and a 
U.S. bond account but may retain cash at times as well.  The U.S. stock account and U.S. bond account are 
valued based on readily determinable fair values.

The other postretirement benefit plan assets consisted of trust-owned life insurance with fair values of $173 million 
and $165 million at December 31, 2021 and 2020, respectively, and are valued under level 2 of the fair value 
hierarchy.  There were no level 1 or level 3 valued assets.

Contributions and Estimated Future Benefit Payments

In 2022, we expect to contribute approximately $20 million to our unfunded pension plans for payments to 
pensioners and approximately $34 million to our other postretirement benefit plans for retiree health and death 
benefits.  We do not expect to contribute to our funded pension plan in 2022. 

Benefit payments, which reflect expected future service, as appropriate, are expected to be paid as follows:

Pension
Benefits

Other
Postretirement 
Benefits

($ in millions)

$ 

148  $ 
148 
148 
147 
147 
738 

34 
32 
31 
30 
29 
134 

2022
2023
2024
2025
2026
Years 2027 – 2031

K64

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Other Postretirement Coverage

Under collective bargaining agreements, Norfolk Southern and certain subsidiaries participate in a multi-employer 
benefit plan, which provides certain postretirement health care and life insurance benefits to eligible craft 
employees.  Premiums under this plan are expensed as incurred and totaled $21 million in 2021, $22 million in 
2020, and $31 million in 2019.

Section 401(k) Plans

Norfolk Southern and certain subsidiaries provide Section 401(k) savings plans for employees.  Under the plans, we 
match a portion of employee contributions, subject to applicable limitations.  Our matching contributions, recorded 
as an expense, totaled $23 million in 2021, $21 million in 2020, and $22 million in 2019.

13.  Stock-Based Compensation

Under the stockholder-approved LTIP, the Compensation Committee (Committee), which is made up of 
nonemployee members of the Board, or the Chief Executive Officer (when delegated authority by such Committee), 
may grant stock options, stock appreciation rights (SARs), restricted stock units (RSUs), restricted shares, 
performance share units (PSUs), and performance shares, up to a maximum of 104,125,000 shares of our Common 
Stock, of which 8,609,075 remain available for future grants as of December 31, 2021.  

The number of shares remaining for issuance under the LTIP is reduced (i) by 1 for each award granted as a stock 
option or stock-settled SAR, or (ii) by 1.61 for an award made in the form other than a stock option or stock-settled 
SAR.  Under the Board-approved Thoroughbred Stock Option Plan (TSOP), the Committee may grant stock options 
up to a maximum of 6,000,000 shares of Common Stock.  We use newly issued shares to satisfy any exercises and 
awards under the LTIP and the TSOP.

The LTIP also permits the payment, on a current or a deferred basis and in cash or in stock, of dividend equivalents 
on shares of Common Stock covered by stock options, RSUs, or PSUs in an amount commensurate with regular 
quarterly dividends paid on Common Stock.  With respect to stock options, if employment of the participant is 
terminated for any reason, including retirement, disability, or death, we have no further obligation to make any 
dividend equivalent payments.  Regarding RSUs, we have no further obligation to make any dividend equivalent 
payments unless employment of the participant is terminated as a result of qualifying retirement or disability.  
Should an employee terminate employment, they are not required to forfeit dividend equivalent payments already 
received.  Outstanding PSUs do not receive dividend equivalent payments.

The Committee granted stock options, RSUs and PSUs pursuant to the LTIP for the last three years as follows:

2021

2020

2019

 Granted

Granted

Granted

Weighted- 
Average 
Grant-Date 
Fair Value
62.49 
240.09 
240.72 

42,770 $ 
183,093  
50,100  

Weighted- 
Average 
Grant-Date 
Fair Value
52.05 
210.11 
212.66 

43,770 $ 
178,190  
78,830  

Weighted- 
Average 
Grant-Date 
Fair Value
45.74 
164.47 
160.97 

47,360 $ 
219,710  
102,250  

Stock options
RSUs
PSUs

Recipients of certain RSUs and PSUs pursuant to the LTIP who retire prior to October 1st will forfeit awards 
received in the current year.  Receipt of certain LTIP awards is contingent on the recipient having executed a non-
compete agreement with the company.

K65

 
 
 
 
 
 
We account for our grants of stock options, RSUs, PSUs, and dividend equivalent payments in accordance with 
FASB ASC 718, “Compensation - Stock Compensation.”  Accordingly, all awards result in charges to net income 
while dividend equivalent payments, which are all related to equity classified awards, are charged to retained 
income.  Compensation cost for the awards is recognized on a straight-line basis over the requisite service period for 
the entire award.  Related compensation costs and tax benefits during the years were:

2021

2020
($ in millions)

2019

Stock-based compensation expense
Total tax benefit

$ 

54  $ 
34 

28  $ 
44 

53 
37 

Stock Options

Option exercise prices will be at least the higher of (i) the average of the high and low prices at which Common 
Stock is traded on the grant date, or (ii) the closing price of Common Stock on the grant date.  All options are 
subject to a vesting period of at least one year, and the term of the option will not exceed ten years.  Holders of the 
options granted under the LTIP who remain actively employed receive cash dividend equivalent payments for four 
years in an amount equal to the regular quarterly dividends paid on Common Stock.

For all years, options granted under the LTIP and the TSOP may not be exercised prior to the fourth and third 
anniversaries of the date of grant, respectively, or if the optionee retires or dies before that anniversary date, may not 
be exercised before the later of one year after the grant date or the date of the optionee’s retirement or death.

The fair value of each option awarded was measured on the date of grant using the Black-Scholes valuation model.  
Expected volatility is based on implied volatility from traded options on, and historical volatility of, Common 
Stock.  Historical data is used to estimate option exercises and employee terminations within the valuation model.  
Historical exercise data is used to estimate the average expected option term.  The average risk-free interest rate is 
based on the U.S. Treasury yield curve in effect at the time of grant.  A dividend yield of zero was used for the LTIP 
options during the vesting period.  For 2021, 2020, and 2019, a dividend yield of 1.64%, 1.76%, and 2.06%, 
respectively, was used for all vested LTIP options.

The assumptions for the LTIP grants for the last three years are shown in the following table:

Average expected volatility
Average risk-free interest rate
Average expected option term

2021

2020

2019

 26% 
 0.75% 
7.5 years

 22% 
 1.47% 
7.5 years

 23% 
 2.56% 
7.2 years

K66

 
 
 
 
 
 
 
 
 
A summary of changes in stock options is presented below:

Outstanding at December 31, 2020
Granted
Exercised
Forfeited

Outstanding at December 31, 2021

Stock
Options

Weighted- 
Average
Exercise 
Price 

1,526,125  $ 
42,770 
(470,632)   
(2,368)   

98.17 
241.79 
91.66 
94.31 

1,095,895 

106.58 

The aggregate intrinsic value of options outstanding at December 31, 2021 was $209 million with a weighted-
average remaining contractual term of 4.1 years.  Of these options outstanding, 953,680 were exercisable and had an 
aggregate intrinsic value of $196 million with a weighted-average exercise price of $92.43 and a weighted-average 
remaining contractual term of 2.5 years.

The following table provides information related to options exercised for the last three years:

Options exercised
Total intrinsic value
Cash received upon exercise
Related tax benefits realized

2021

2020
($ in millions)

2019

$ 

470,632 

1,171,786 

83  $ 
42 
17 

144  $ 
98 
29 

770,597 
86 
53 
18 

At December 31, 2021, total unrecognized compensation related to options granted under the LTIP was $1 million, 
and is expected to be recognized over a weighted-average period of approximately 2.6 years.

Restricted Stock Units

RSUs granted primarily have a four-year ratable restriction period and will be settled through the issuance of shares 
of Common Stock.  Certain RSU grants include cash dividend equivalent payments during the restriction period in 
an amount equal to regular quarterly dividends paid on Common Stock.

RSUs vested
Common Stock issued net of tax withholding
Related tax benefits realized

260,307 
184,319 

204,665 
146,047 

$ 

7  $ 

4  $ 

166,197 
119,346 
2 

2021

2020
($ in millions)

2019

K67

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
A summary of changes in RSUs is presented below:

Nonvested at December 31, 2020
Granted
Vested
Forfeited

Nonvested at December 31, 2021

Weighted-
Average
Grant-Date
Fair Value

RSUs

600,240  $ 
183,093 
(260,307)   
(21,923)   

148.29 
240.09 
121.84 
201.84 

501,103 

193.23 

At December 31, 2021, total unrecognized compensation related to RSUs was $34 million, and is expected to be 
recognized over a weighted-average period of approximately 2.6 years. 

Performance Share Units

PSUs provide for awards based on the achievement of certain predetermined corporate performance goals at the end 
of a three-year cycle and are settled through the issuance of shares of Common Stock.  All PSUs will earn out based 
on the achievement of performance conditions and some will also earn out based on a market condition.  The market 
condition fair value was measured on the date of grant using a Monte Carlo simulation model.

2021

2020
($ in millions)

2019

PSUs earned
Common Stock issued net of tax withholding
Related tax benefits realized

78,727 
49,967 

235,935 
156,477 

$ 

1  $ 

7  $ 

331,099 
221,241 
9 

A summary of changes in PSUs is presented below:

Balance at December 31, 2020
Granted
Earned
Unearned
Forfeited

Balance at December 31, 2021

Weighted-
Average
Grant-Date
Fair Value

PSUs

240,100  $ 
50,100 
(78,727)   
(4,143)   
(4,400)   

171.34 
240.72 
147.75 
147.75 
207.40 

202,930 

197.33 

At December 31, 2021, total unrecognized compensation related to PSUs granted under the LTIP was $4 million, 
and is expected to be recognized over a weighted-average period of approximately 1.7 years.

K68

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Shares Available and Issued

Shares of Common Stock available for future grants and issued in connection with all features of the LTIP and the 
TSOP at December 31, were as follows:

Available for future grants:

LTIP
TSOP

Issued:
LTIP
TSOP

14. Stockholders’ Equity

Common Stock

2021

2020

2019

8,609,075 
435,867 

8,995,582 
435,699 

9,294,726 
434,401 

632,279 
72,639 

1,270,208 
204,102 

852,869 
258,315 

Common Stock is reported net of shares held by our consolidated subsidiaries (Treasury Shares).  Treasury Shares 
at December 31, 2021 and 2020 amounted to 20,320,777, with a cost of $19 million at both dates.   

Accumulated Other Comprehensive Loss

The components of “Other comprehensive income (loss)” reported in the Consolidated Statements of 
Comprehensive Income and changes in the cumulative balances of “Accumulated other comprehensive loss” 
reported in the Consolidated Balance Sheets consisted of the following:

Balance
at 
Beginning
of Year

Net 
Income
(Loss)

Reclassification
Adjustments

Balance
at End
of Year

($ in millions)    

Year ended December 31, 2021

Pensions and other postretirement liabilities
Other comprehensive income of equity investees

$ 

(526)  $ 
(68)   

139  $ 
22 

31  $ 
— 

(356) 
(46) 

Accumulated other comprehensive loss

$ 

(594)  $ 

161  $ 

31  $ 

(402) 

Year ended December 31, 2020

Pensions and other postretirement liabilities
Other comprehensive income of equity investees

$ 

(421)  $ 
(70)   

(125)  $ 
2 

20  $ 
— 

(526) 
(68) 

Accumulated other comprehensive loss

$ 

(491)  $ 

(123)  $ 

20  $ 

(594) 

K69

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Other Comprehensive Income (Loss)

“Other comprehensive income (loss)” reported in the Consolidated Statements of Comprehensive Income consisted 
of the following:

Year ended December 31, 2021
Net gain arising during the year:
  Pensions and other postretirement benefits

Reclassification adjustments for costs included in net income

         Subtotal

Other comprehensive income of equity investees

Pretax
Amount

Tax
(Expense)
Benefit
($ in millions)

Net-of-Tax
Amount

$ 

185  $ 
41 

(46)  $ 
(10)   

226 

24 

(56)   

(2)   

139 
31 

170 

22 

Other comprehensive income

$ 

250  $ 

(58)  $ 

192 

Year ended December 31, 2020
Net loss arising during the year:
  Pensions and other postretirement benefits

Reclassification adjustments for costs included in net income

         Subtotal

Other comprehensive income of equity investees

$ 

(167)  $ 
27 

42  $ 
(7)   

(140)   

2 

35 

— 

(125) 
20 

(105) 

2 

Other comprehensive loss

$ 

(138)  $ 

35  $ 

(103) 

Year ended December 31, 2019
Net gain arising during the year:
  Pensions and other postretirement benefits

Reclassification adjustments for costs included in net income

         Subtotal

Other comprehensive loss of equity investees

$ 

81  $ 
20 

(20)  $ 
(5)   

101 

(25)   

(4)   

— 

61 
15 

76 

(4) 

Other comprehensive income

$ 

97  $ 

(25)  $ 

72 

15.  Stock Repurchase Programs

We repurchased and retired 12.7 million, 7.4 million, and 11.3 million shares of Common Stock under our stock 
repurchase programs in 2021, 2020, and 2019, respectively, at a cost of $3.4 billion, $1.4 billion, and $2.1 billion, 
respectively.  

K70

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
On September 26, 2017, our Board of Directors authorized the repurchase of up to an additional 50 million shares of 
Common Stock through December 31, 2022.  As of December 31, 2021, 8.0 million shares remain authorized for 
repurchase.

16.  Earnings Per Share

The following table sets forth the calculation of basic and diluted earnings per share:

Basic
2020

Diluted
2020

2019
2021
($ in millions except per share amounts, shares in millions)

2019

2021

Net income
Dividend equivalent payments

$  3,005  $  2,013  $  2,722  $  3,005  $  2,013  $  2,722 
— 

(5)    — 

(3)   

(2)   

(2)   

Income available to common stockholders

$  3,003  $  2,010  $  2,717  $  3,005  $  2,011  $  2,722 

Weighted-average shares outstanding
Dilutive effect of outstanding options

and share-settled awards

Adjusted weighted-average shares outstanding

  246.9 

  255.1 

  263.3 

  246.9 

  255.1 

  263.3 

1.2 
  248.1 

1.5 
  256.6 

2.3 
  265.6 

Earnings per share

$  12.16  $  7.88  $  10.32  $  12.11  $  7.84  $  10.25 

In each year, dividend equivalent payments were made to holders of stock options and RSUs.  For purposes of 
computing basic earnings per share, dividend equivalent payments made to holders of stock options and RSUs were 
deducted from net income to determine income available to common stockholders.  For purposes of computing 
diluted earnings per share, we evaluate on a grant-by-grant basis those stock options and RSUs receiving dividend 
equivalent payments under the two-class and treasury stock methods to determine which method is more dilutive for 
each grant.  For those grants for which the two-class method was more dilutive, net income was reduced by 
dividend equivalent payments to determine income available to common stockholders.  There are no options 
excluded from the dilution calculations due to exercise prices exceeding the average market price of Common Stock 
for each of the years ended December 31, 2021, 2020, and 2019.

17.  Commitments and Contingencies

Lawsuits

We and/or certain subsidiaries are defendants in numerous lawsuits and other claims relating principally to railroad 
operations.  When we conclude that it is probable that a liability has been incurred and the amount of the liability 
can be reasonably estimated, it is accrued through a charge to earnings and, if material, disclosed below.  While the 
ultimate amount of liability incurred in any of these lawsuits and claims is dependent on future developments, in our 
opinion, the recorded liability is adequate to cover the future payment of such liability and claims.  However, the 
final outcome of any of these lawsuits and claims cannot be predicted with certainty, and unfavorable or unexpected 
outcomes could result in additional accruals that could be significant to results of operations in a particular year or 
quarter.  Any adjustments to the recorded liability will be reflected in earnings in the periods in which such 
adjustments become known.  For lawsuits and other claims where a loss may be reasonably possible, but not 
probable, or is probable but not reasonably estimable, no accrual is established but the matter, if potentially 
material, is disclosed below.  We routinely review relevant information with respect to our lawsuits and other claims 
and update our accruals, disclosures and estimates of reasonably possible loss based on such reviews.  

K71

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
In 2007, various antitrust class actions filed against us and other Class I railroads in various Federal district courts 
regarding fuel surcharges were consolidated in the District of Columbia by the Judicial Panel on Multidistrict 
Litigation.  In 2012, the court certified the case as a class action.  The defendant railroads appealed this certification, 
and the Court of Appeals for the District of Columbia vacated the District Court’s decision and remanded the case 
for further consideration.  On October 10, 2017, the District Court denied class certification.  The decision was 
upheld by the Court of Appeals on August 16, 2019.  Since that decision, various individual cases have been filed in 
multiple jurisdictions and also consolidated in the District of Columbia.  We believe the allegations in the 
complaints are without merit and intend to vigorously defend the cases.  We do not believe the outcome of these 
proceedings will have a material effect on our financial position, results of operations, or liquidity.  

In 2018, a lawsuit was filed against one of our subsidiaries by the minority owner in a jointly-owned terminal 
railroad company in which our subsidiary has the majority ownership.  The lawsuit alleged violations of various 
state laws and federal antitrust laws.  It is reasonably possible that we could incur a loss in the case; however, we 
intend to vigorously defend the case and believe that we will prevail.  The potential range of loss cannot be 
estimated at this time.  

Casualty Claims

Casualty claims include employee personal injury and occupational claims as well as third-party claims, all 
exclusive of legal costs.  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 consulting actuarial firm.  Job-
related personal injury and occupational claims are subject to FELA, which is applicable only to railroads.  The 
variability inherent in FELA’s fault-based tort system could result in actual costs being different from the liability 
recorded.  While the ultimate amount of claims incurred is dependent on future developments, in our opinion, the 
recorded liability is adequate to cover the future payments of claims and is supported by the most recent actuarial 
study.  In all cases, we record a liability when the expected loss for the claim is both probable and reasonably 
estimable.

Employee personal injury claims – The largest component of claims expense is employee personal injury 
costs.  The independent actuarial firm we engage provides quarterly studies to aid in valuing our employee personal 
injury liability and estimating personal injury expense.  The actuarial firm studies our historical patterns of reserving 
for claims and subsequent settlements, taking into account relevant outside influences.  The actuarial firm uses the 
results of these analyses to estimate the ultimate amount of liability.  We adjust the liability quarterly based upon 
our assessment and the results of the study.  The accuracy of our estimate of the liability is subject to inherent 
limitation given the difficulty of predicting future events such as jury decisions, court interpretations, or legislative 
changes.  As a result, actual claim settlements may vary from the estimated liability recorded.

Occupational claims – Occupational claims include injuries and illnesses alleged to be caused by exposures which 
occur over time as opposed to injuries or illnesses caused by a specific accident or event.  Types of occupational 
claims commonly seen allege exposure to asbestos and other claimed toxic substances resulting in respiratory 
diseases or cancer.  Many such claims are being asserted by former or retired employees, some of whom have not 
been employed in the rail industry for decades.  The independent actuarial firm provides an estimate of the 
occupational claims liability based upon our history of claim filings, severity, payments, and other pertinent 
facts.  The liability is dependent upon judgments we make as to the specific case reserves as well as judgments of 
the actuarial firm in the quarterly studies.  Our estimate of ultimate loss includes a provision for those claims that 
have been incurred but not reported.  This provision is derived by analyzing industry data and projecting our 
experience.  We adjust the liability quarterly based upon our assessment and the results of the study.  However, it is 
possible that the recorded liability may not be adequate to cover the future payment of claims.  Adjustments to the 
recorded liability are reflected in operating expenses in the periods in which such adjustments become known.

Third-party claims – We record a liability for third-party claims including those for highway crossing accidents, 
trespasser and other injuries, property damage, and lading damage.  The actuarial firm assists us with the calculation 
of potential liability for third-party claims, except lading damage, based upon our experience including the number 

K72

 
 
and timing of incidents, amount of payments, settlement rates, number of open claims, and legal defenses.  We 
adjust the liability quarterly based upon our assessment and the results of the study.  Given the inherent uncertainty 
in regard to the ultimate outcome of third-party claims, it is possible that the actual loss may differ from the  
estimated liability recorded.

Environmental Matters

We are subject to various jurisdictions’ environmental laws and regulations.  We record a liability where such 
liability or loss is probable and reasonably estimable.  Environmental specialists regularly participate in ongoing 
evaluations of all known sites and in determining any necessary adjustments to liability estimates.  

Our Consolidated Balance Sheets include liabilities for environmental exposures of $49 million at December 31, 
2021, and $54 million at December 31, 2020, of which $15 million is classified as a current liability at the end of 
both 2021 and 2020.  At December 31, 2021, the liability represents our estimates of the probable cleanup, 
investigation, and remediation costs based on available information at 88 known locations and projects compared 
with 100 locations and projects at December 31, 2020.  At December 31, 2021, sixteen sites accounted for $36 
million of the liability, and no individual site was considered to be material.  We anticipate that most of this liability 
will be paid out over five years; however, some costs will be paid out over a longer period. 

At eight locations, one or more of our subsidiaries in conjunction with a number of other parties have been 
identified as potentially responsible parties under the Comprehensive Environmental Response, Compensation and 
Liability Act of 1980 or comparable state statutes that impose joint and several liability for cleanup costs.  We 
calculate our estimated liability for these sites based on facts and legal defenses applicable to each site and not 
solely on the basis of the potential for joint liability.

With respect to known environmental sites (whether identified by us or by the Environmental Protection Agency or 
comparable state authorities), estimates of our ultimate potential financial exposure for a given site or in the 
aggregate for all such sites can change over time because of the widely varying costs of currently available cleanup 
techniques, unpredictable contaminant recovery and reduction rates associated with available cleanup technologies, 
the likely development of new cleanup technologies, the difficulty of determining in advance the nature and full 
extent of contamination and each potential participant’s share of any estimated loss (and that participant’s ability to 
bear it), and evolving statutory and regulatory standards governing liability.

The risk of incurring environmental liability for acts and omissions, past, present, and future, is inherent in the 
railroad business.  Some of the commodities we transport, particularly those classified as hazardous materials, pose 
special risks that we work diligently to reduce.  In addition, several of our subsidiaries own, or have owned, land 
used as operating property, or which is leased and operated by others, or held for sale.  Because environmental 
problems that are latent or undisclosed may exist on these properties, there can be no assurance that we will not 
incur environmental liabilities or costs with respect to one or more of them, the amount and materiality of which 
cannot be estimated reliably at this time.  Moreover, lawsuits and claims involving these and potentially other 
unidentified environmental sites and matters are likely to arise from time to time.  The resulting liabilities could 
have a significant effect on financial position, results of operations, or liquidity in a particular year or quarter.  

Based on our assessment of the facts and circumstances now known, we believe we have recorded the probable and 
reasonably estimable costs for dealing with those environmental matters of which we are aware.  Further, we 
believe that it is unlikely that any known matters, either individually or in the aggregate, will have a material 
adverse effect on our financial position, results of operations, or liquidity.  

K73

 
 
 
 
 
 
 
Insurance

We purchase insurance covering legal liabilities for bodily injury and property damage to third parties.  This 
insurance provides coverage above $75 million and below $800 million ($1.1 billion for specific perils) per 
occurrence and/or policy year.  In addition, we purchase insurance covering damage to property owned by us or in 
our care, custody, or control.  This insurance covers 87% of potential losses above $75 million and below $275 
million per occurrence and/or policy year.

Purchase Commitments

At December 31, 2021, we had outstanding purchase commitments totaling $916 million through 2030 for 
locomotives, track material, long-term service contracts, track and yard expansion projects in connection with our 
capital programs, freight cars and containers.

Change-In-Control Arrangements

We have compensation agreements with certain officers and key employees that become operative only upon a 
change in control of Norfolk Southern, as defined in those agreements.  The agreements provide generally for 
payments based on compensation at the time of a covered individual’s involuntary or other specified termination 
and for certain other benefits.  

Indemnifications

In a number of instances, we have agreed to indemnify lenders for additional costs they may bear as a result of 
certain changes in laws or regulations applicable to their loans.  Such changes may include impositions or 
modifications with respect to taxes, duties, reserves, liquidity, capital adequacy, special deposits, and similar 
requirements relating to extensions of credit by, deposits with, or the assets or liabilities of such lenders.  The nature 
and timing of changes in laws or regulations applicable to our financings are inherently unpredictable, and therefore 
our exposure in connection with the foregoing indemnifications cannot be quantified.  No liability has been 
recorded related to these indemnifications.  

K74

 
 
 
 
Item 9.  Changes in and Disagreements with Accountants on Accounting and Financial Disclosure

Not applicable.

Item 9A.  Controls and Procedures

Disclosure Controls and Procedures

Our Chief Executive Officer and Chief Financial Officer, with the assistance of management, evaluated the 
effectiveness of our disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) 
under the Securities Exchange Act of 1934, as amended (Exchange Act)) at December 31, 2021.  Based on such 
evaluation, our officers have concluded that, at December 31, 2021, our disclosure controls and procedures were 
effective to ensure that information required to be disclosed in our reports under the Exchange Act is recorded, 
processed, summarized, and reported, within the time period specified in the SEC’s rules and forms, and that such 
information is accumulated and communicated to management, including the Chief Executive Officer and the Chief 
Financial Officer, as appropriate, to allow timely decisions regarding required disclosure.

Management’s Annual Report on Internal Control Over Financial Reporting

We are responsible for establishing and maintaining adequate internal control over financial reporting.  Our internal 
control over financial reporting includes those policies and procedures that pertain to our ability to record, process, 
summarize, and report reliable financial data.  We recognize that there are inherent limitations in the effectiveness 
of any internal control over financial reporting, including the possibility of human error and the circumvention or 
overriding of internal control.  Accordingly, even effective internal control over financial reporting can provide only 
reasonable assurance with respect to financial statement preparation.  Further, because of changes in conditions, the 
effectiveness of internal control over financial reporting may vary over time.

Our Board of Directors, acting through its Audit Committee, is responsible for the oversight of our accounting 
policies, financial reporting, and internal control.  The Audit Committee of our Board of Directors is comprised of 
outside directors who are independent of management.  The independent registered public accounting firm and our 
internal auditors have full and unlimited access to the Audit Committee, with or without management, to discuss the 
adequacy of internal control over financial reporting, and any other matters which they believe should be brought to 
the attention of the Audit Committee.

We have issued a report of our assessment of internal control over financial reporting, and our independent 
registered public accounting firm has issued an attestation report on our internal control over financial reporting at 
December 31, 2021.  These reports appear in Item 8 of this report on Form 10-K.

Changes in Internal Control Over Financial Reporting

During the fourth quarter of 2021, we have not identified any changes in internal control over financial reporting 
that have materially affected, or are reasonably likely to materially effect, our internal control over financial 
reporting.

Item 9B.  Other Information

None.

Item 9C.  Disclosure Regarding Foreign Jurisdictions that Prevent Inspections

Not applicable.

K75

 
 
 
 
 
 
 
 
 
 
 
PART III

NORFOLK SOUTHERN CORPORATION AND SUBSIDIARIES

Item 10.  Directors, Executive Officers and Corporate Governance

In accordance with General Instruction G(3), information called for by Part III, Item 10, is incorporated herein by 
reference from the information appearing under the caption “Election of Directors,” under the caption “Delinquent 
Section 16(a) Reports,” under the caption “Committees of the Board,” under the caption “Shareholder 
Recommendations and Nominations,” and under the caption “The Thoroughbred Code of Ethics” in our definitive 
Proxy Statement for our 2022 Annual Meeting of Stockholders, which definitive Proxy Statement will be filed 
electronically with the SEC pursuant to Regulation 14A.  The information regarding executive officers called for by 
Item 401 of Regulation S-K is included in Part I hereof beginning under “Information about our Executive 
Officers.”

Item 11.  Executive Compensation

In accordance with General Instruction G(3), information called for by Part III, Item 11, is incorporated herein by 
reference from the information:

•
•

•

under the caption “Compensation of Directors;”
under the caption “Compensation Discussion and Analysis,” the information appearing in the “Summary 
Compensation Table” and the “2021 Grants of Plan-Based Awards” table, including the narrative to such 
tables, the “Outstanding Equity Awards at Fiscal Year-End 2021” and “Option Exercises and Stock Vested 
in 2021” tables, and the tabular and narrative information appearing under the subcaptions “Retirement 
Benefits,” “Deferred Compensation,” and “Potential Payments Upon a Change in Control or Other 
Termination of Employment;” and,
under the captions “Compensation Committee Interlocks and Insider Participation,” “Compensation Policy 
Risk Assessment,” and “Compensation Committee Report,”

in each case included in our definitive Proxy Statement for our 2022 Annual Meeting of Stockholders, which 
definitive Proxy Statement will be filed electronically with the SEC pursuant to Regulation 14A.

K76

 
 
 
 
 
 
 
Item 12.  Security Ownership of Certain Beneficial Owners and Management and Related Stockholder 
Matters

In accordance with General Instruction G(3), information on security ownership of certain beneficial owners and 
management called for by Part III, Item 12, is incorporated herein by reference from the information appearing 
under the caption “Beneficial Ownership of Stock” in our definitive Proxy Statement for our 2022 Annual Meeting 
of Stockholders, which definitive Proxy Statement will be filed electronically with the SEC pursuant to Regulation 
14A.

Equity Compensation Plan Information (at December 31, 2021)

Plan
Category

Equity compensation plans

approved by securities holders(2)

Equity compensation plans

not approved by securities holders

Number of
securities
to be issued upon
exercise of
outstanding 
options,
warrants and 
rights
(a)

Weighted-
average
exercise price
of outstanding
options, 
warrants
and rights
(b)

Number of 
securities
remaining 
available
for future issuance
under equity
compensation 
plans (1)
(c)

1,820,307  (3) $ 

109.88  (5)

8,609,075 

185,552  (4)

90.35 

435,867  (6)

Total

2,005,859 

9,044,942 

Includes options, RSUs and PSUs granted under LTIP that will be settled in shares of Common Stock.

(1) Excludes securities reflected in column (a).
(2) LTIP.
(3)
(4) TSOP.
(5) Calculated without regard to 909,964 outstanding RSUs and PSUs at December 31, 2021.
(6) Reflects shares remaining available for grant under TSOP.

Norfolk Southern Corporation Long-Term Incentive Plan

Established on June 28, 1983, and approved by our stockholders at their Annual Meeting held on May 10, 1984, 
LTIP was adopted to promote the success of our company by providing an opportunity for non-employee Directors, 
officers, and other key employees to acquire a proprietary interest in Norfolk Southern Corporation (the 
Corporation).  The Board of Directors amended LTIP on January 23, 2015, which amendment was approved by 
shareholders on May 14, 2015, to include the reservation for issuance of an additional 8,000,000 shares of 
authorized but unissued Common Stock.

The amended LTIP adopted a fungible share reserve ratio so that, for awards granted after May 13, 2010, the 
number of shares remaining for issuance under the amended LTIP will be reduced (i) by 1 for each award granted as 
an option or stock-settled SAR, or (ii) by 1.61 for an award made in the form other than an option or stock-settled 
SAR.  Any shares of Common Stock subject to options, PSUs, restricted shares, or RSUs which are not issued as 
Common Stock will again be available for award under LTIP after the expiration or forfeiture of an award.

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Non-employee Directors, officers, and other key employees residing in the U.S. or Canada are eligible for selection 
to receive LTIP awards.  Under LTIP, the Committee, or the Corporation’s chief executive officer to the extent the 
Committee delegates award-making authority pursuant to LTIP, may grant incentive stock options, nonqualified 
stock options, SARs, RSUs, restricted shares, PSUs and performance shares.  In addition, dividend equivalent 
payments may be awarded for options, RSUs and PSUs.  Awards under LTIP may be made subject to forfeiture 
under certain circumstances and the Committee may establish such other terms and conditions for the awards as 
provided in LTIP.  

The option price is at least the higher of (i) the average of the high and low prices at which Common Stock is traded 
on the date of grant, or (ii) the closing price of Common Stock on the date of the grant.  All options are subject to a 
vesting period of at least one year, and the term of the option will not exceed ten years.  LTIP specifically prohibits 
option repricing without stockholder approval, except that adjustments may be made in the event of changes in our 
capital structure or Common Stock.  

PSUs entitle a recipient to receive performance-based compensation at the end of a three-year cycle based on our 
performance during that period.  For the 2021 PSU awards, corporate performance will be based directly on return 
on average capital invested, with total return to stockholders serving as a modifier, and will be settled in shares of 
Common Stock.  

RSUs are payable in cash or in shares of Common Stock at the end of a restriction period.  During the restriction 
period, the holder of the RSUs has no beneficial ownership interest in the Common Stock represented by the RSUs 
and has no right to vote the shares represented by the units or to receive dividends (except for dividend equivalent 
payment rights that may be awarded with respect to the RSUs).  The Committee at its discretion may waive the 
restriction period, but settlement of any RSUs will occur on the same settlement date as would have applied absent a 
waiver of restrictions, if no performance goals were imposed.  RSUs will be settled in shares of Common Stock.  

Norfolk Southern Corporation Thoroughbred Stock Option Plan

Our Board of Directors adopted TSOP on January 26, 1999, to promote the success of our company by providing an 
opportunity for management employees to acquire a proprietary interest in our company and thereby to provide an 
additional incentive to management employees to devote their maximum efforts and skills to the advancement, 
betterment, and prosperity of our company and our stockholders.  Under TSOP there were 6,000,000 shares of 
authorized but unissued Common Stock reserved for issuance.  TSOP has not been and is not required to have been 
approved by our stockholders.  

Active full-time management employees residing in the U.S. or Canada are eligible for selection to receive TSOP 
awards.  Under TSOP, the Committee, or the Corporation’s chief executive officer to the extent the Committee 
delegates award-making authority pursuant to TSOP, may grant nonqualified stock options subject to such terms 
and conditions as provided in TSOP.

The option price may not be less than the average of the high and low prices at which Common Stock is traded on 
the date of the grant.  All options are subject to a vesting period of at least one year, and the term of the option will 
not exceed ten years.  TSOP specifically prohibits repricing without stockholder approval, except for capital 
adjustments.

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Norfolk Southern Corporation Directors’ Restricted Stock Plan

The Plan was adopted on January 1, 1994, and was designed to increase ownership of Common Stock by our non-
employee Directors so as to further align their ownership interest in our company with that of our stockholders.  The 
Plan has not been and is not required to have been approved by our stockholders.  

Effective January 23, 2015, the Board amended the Plan to provide that no additional awards will be made under the 
Plan.  Prior to that amendment, only non-employee Directors who are not and never have been employees of our 
company were eligible to participate in the Plan.  Upon becoming a Director, each eligible Director received a one-
time grant of 3,000 restricted shares of Common Stock.  No additional shares may be granted under the Plan.  No 
individual member of the Board exercised discretion concerning the eligibility of any Director or the number of 
shares granted.

The restriction period applicable to restricted shares granted under the Plan begins on the date of the grant and ends 
on the earlier of the recipient’s death or the day after the recipient ceases to be a Director by reason of disability or 
retirement.  During the restriction period, shares may not be sold, pledged, or otherwise encumbered.  Directors 
forfeit the restricted shares if they cease to serve as a Director of our company for reasons other than their disability, 
retirement, or death.

Item 13.  Certain Relationships and Related Transactions, and Director Independence

In accordance with General Instruction G(3), information called for by Part III, Item 13, is incorporated herein by 
reference from the information appearing under the caption “Related Persons Transactions” and under the caption 
“Director Independence” in our definitive Proxy Statement for our 2022 Annual Meeting of Stockholders, which 
definitive Proxy Statement will be filed electronically with the SEC pursuant to Regulation 14A.

Item 14.  Principal Accountant Fees and Services

Our independent registered public accounting firm is KPMG LLP, Atlanta, GA, Auditor Firm ID: 185.

In accordance with General Instruction G(3), information called for by Part III, Item 14, is incorporated herein by 
reference from the information appearing under the caption “Ratification of Appointment of Independent Registered 
Public Accounting Firm” in our definitive Proxy Statement for our 2022 Annual Meeting of Stockholders, which 
definitive Proxy Statement will be filed electronically with the SEC pursuant to Regulation 14A.

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PART IV

NORFOLK SOUTHERN CORPORATION AND SUBSIDIARIES

Page

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Item 15.  Exhibits and Financial Statement Schedule

(A)

The following documents are filed as part of this report:
1.

Index to Financial Statements 

Report of Management
Reports of Independent Registered Public Accounting Firm

Consolidated Statements of Income, Years ended December 31, 2021, 2020, and 2019
Consolidated Statements of Comprehensive Income, Years ended December 31, 2021, 
2020, and 2019

Consolidated Balance Sheets at December 31, 2021 and 2020
Consolidated Statements of Cash Flows, Years ended December 31, 2021, 2020, and 
2019
Consolidated Statements of Changes in Stockholders’ Equity, Years ended December 31, 
2021, 2020, and 2019
Notes to Consolidated Financial Statements

2. Financial Statement Schedule:

The following consolidated financial statement schedule should be read in connection 
with the consolidated financial statements:
Index to Consolidated Financial Statement Schedule

Schedule II – Valuation and Qualifying Accounts

Schedules other than the one listed above are omitted either because they are not required 
or are inapplicable, or because the information is included in the consolidated financial 
statements or related notes.

3. Exhibits

Description
Distribution Agreement, dated as of July 26, 2004, by and among CSX Corporation, CSX 
Transportation, Inc., CSX Rail Holding Corporation, CSX Northeast Holdings 
Corporation, Norfolk Southern Corporation, Norfolk Southern Railway Company, CRR 
Holdings LLC, Green Acquisition Corp., Conrail Inc., Consolidated Rail Corporation, 
New York Central Lines LLC, Pennsylvania Lines LLC, NYC Newco, Inc., and PRR 
Newco, Inc., is incorporated by reference to Exhibit 2.1 to Norfolk Southern 
Corporation’s Form 8-K filed on September 2, 2004.  (SEC File No. 001-08339)

Articles of Incorporation and Bylaws –

The Restated Articles of Incorporation of Norfolk Southern Corporation are incorporated 
by reference to Exhibit 3(i) to Norfolk Southern Corporation’s 10-K filed on March 5, 
2001.  (SEC File No. 001-08339)
An amendment to the Articles of Incorporation of Norfolk Southern Corporation is 
incorporated by reference to Exhibit 3(i) to Norfolk Southern Corporation’s Form 8-K 
filed on May 18, 2010.  (SEC File No. 001-08339)

An amendment to the Articles of Incorporation of Norfolk Southern Corporation is 
incorporated by reference to Exhibit 3(i) to Norfolk Southern Corporation’s Form 10-Q 
filed on July 29, 2020.  (SEC File No. 001-08339)
The Bylaws of Norfolk Southern Corporation, as amended January 25, 2022, are 
incorporated by reference to Exhibit 3(ii) to Norfolk Southern Corporation’s Form 8-K 
filed on January 26, 2022.  (SEC File No. 001-08339)

Exhibit 
Number
2.1

3

(i)(a)

(i)(b)

(i)(c)

(ii)

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(a)

(b)

(c)

(d)

(e)

(f)

(g)

(h)

(i)

(j)

(k)

(l)

(m)

Instruments Defining the Rights of Security Holders, Including Indentures:

Indenture, dated as of January 15, 1991, from Norfolk Southern Corporation to First Trust of New 
York, National Association, as Trustee, is incorporated by reference to Exhibit 4.1 to Norfolk 
Southern Corporation’s Registration Statement on Form S-3 (No. 33-38595).

First Supplemental Indenture, dated May 19, 1997, between Norfolk Southern Corporation and 
First Trust of New York, National Association, as Trustee, related to the issuance of notes in the 
principal amount of $4.3 billion, is incorporated by reference to Exhibit 1.1(d) to Norfolk Southern 
Corporation’s Form 8-K filed on May 21, 1997.  (SEC File No. 001-08339)

Fourth Supplemental Indenture, dated as of February 6, 2001, between Norfolk Southern 
Corporation and U.S. Bank Trust National Association, as Trustee, related to the issuance of notes 
in the principal amount of $1 billion, is incorporated by reference to Exhibit 4.1 to Norfolk 
Southern Corporation’s Form 8-K filed on February 7, 2001.  (SEC File No. 001-08339)

Indenture, dated August 27, 2004, among PRR Newco, Inc., as Issuer, and Norfolk Southern 
Railway Company, as Guarantor, and The Bank of New York, as Trustee, is incorporated by 
reference to Exhibit 4(1) to Norfolk Southern Corporation’s Form 10-Q filed on October 28, 2004.  
(SEC File No. 001-08339)

First Supplemental Indenture, dated August 27, 2004, among PRR Newco, Inc., as Issuer, and 
Norfolk Southern Railway Company, as Guarantor, and The Bank of New York, as Trustee, related 
to the issuance of notes in the principal amount of approximately $451.8 million, is incorporated by 
reference to Exhibit 4(m) to Norfolk Southern Corporation’s Form 10-Q filed on October 28, 2004.  
(SEC File No. 001-08339)

Ninth Supplemental Indenture, dated as of March 11, 2005, between Norfolk Southern Corporation 
and U.S. Bank Trust National Association, as Trustee, related to the issuance of notes in the 
principal amount of $300 million, is incorporated by reference to Exhibit 4.1 to Norfolk Southern 
Corporation’s Form 8-K filed on March 15, 2005.  (SEC File No. 001-08339)

Tenth Supplemental Indenture, dated as of May 17, 2005, between Norfolk Southern Corporation 
and U.S. Bank Trust National Association, as Trustee, related to the issuance of notes in the 
principal amount of $366.6 million, is incorporated by reference to Exhibit 99.1 to Norfolk 
Southern Corporation’s Form 8-K filed on May 18, 2005.  (SEC File No. 001-08339)

Eleventh Supplemental Indenture, dated as of May 17, 2005, between Norfolk Southern 
Corporation and U.S. Bank Trust National Association, as Trustee, related to the issuance of notes 
in the principal amount of $350 million, is incorporated by reference to Exhibit 99.2 to Norfolk 
Southern Corporation’s Form 8-K filed on May 18, 2005.  (SEC File No. 001-08339)

Twelfth Supplemental Indenture, dated as of August 26, 2010, between Norfolk Southern 
Corporation and U.S. Bank Trust National Association, as Trustee, related to the issuance of notes 
in the principal amount of $250 million, is incorporated by reference to Exhibit 4.2 to Norfolk 
Southern Corporation’s Form 8-K filed on August 26, 2010.  (SEC File No. 001-08339)

Indenture, dated as of June 1, 2009, between Norfolk Southern Corporation and U.S. Bank Trust 
National Association, as Trustee, is incorporated by reference to Exhibit 4.1 to Norfolk Southern 
Corporation’s Form 8-K filed on June 1, 2009.  (SEC File No. 001-08339)

Second Supplemental Indenture, dated as of May 23, 2011, between the Registrant and U.S. Bank 
Trust National Association, as Trustee, related to the issuance of notes in the principal amount of 
$400 million, is incorporated by reference to Exhibit 4.1 to Norfolk Southern Corporation’s Form 
8-K filed on May 23, 2011.  (SEC File No. 001-08339)

Indenture, dated as of September 14, 2011, between the Registrant and U.S. Bank Trust National 
Association, as Trustee, related to the issuance of notes in the principal amount of $595,504,000, is 
incorporated by reference to Exhibit 4.1 to Norfolk Southern Corporation’s Form 8-K filed on 
September 15, 2011.  (SEC File No. 001-08339)

Third Supplemental Indenture, dated as of September 14, 2011, between the Registrant and U.S. 
Bank Trust National Association, as Trustee, related to the issuance of notes in the principal 
amount of $4,492,000, is incorporated by reference to Exhibit 4.2 to Norfolk Southern 
Corporation’s Form 8-K filed on September 15, 2011.  (SEC File No. 001-08339)

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Fourth Supplemental Indenture, dated as of November 17, 2011, between the Registrant and U.S. 
Bank Trust National Association, as Trustee, related to the issuance of two series of notes, one in 
the principal amount of $500 million and one in the principal amount of $100 million, is 
incorporated by reference to Exhibit 4.1 to Norfolk Southern Corporation’s Form 8-K filed on 
November 17, 2011.  (SEC File No. 001-08339)

Indenture, dated as of March 15, 2012, between the Registrant and U.S. Bank Trust National 
Association, as Trustee, is incorporated by reference to Exhibit 4.1 to Norfolk Southern 
Corporation’s Form 8-K filed on March 15, 2012.  (SEC File No. 001-08339)

First Supplemental Indenture, dated as of March 15, 2012, between the Registrant and U.S. Bank 
Trust National Association, as Trustee, is incorporated by reference to Exhibit 4.2 to Norfolk 
Southern Corporation’s Form 8-K filed on March 15, 2012.  (SEC File No. 001-08339)

Indenture, dated as of August 20, 2012, between the Registrant and U.S. Bank Trust National 
Association, as Trustee, is incorporated by reference to Exhibit 4.1 to the Registrant’s Form 8-K 
filed on August 21, 2012.  (SEC File No. 001-08339)

Second Supplemental Indenture, dated as of September 7, 2012, between the Registrant and U.S. 
Bank Trust National Association, as Trustee, is incorporated by reference to Exhibit 4.1 to Norfolk 
Southern Corporation’s Form 8-K filed on September 7, 2012.  (SEC File No. 001-08339)

Third Supplemental Indenture, dated as of August 13, 2013, between the Registrant and U.S. Bank 
Trust National Association, as Trustee, related to the issuance of notes in the principal amount of 
$500,000,000, is incorporated by reference to Exhibit 4.1 to Norfolk Southern Corporation’s Form 
8-K filed on August 13, 2013.  (SEC File No. 001-08339)

Fourth Supplemental Indenture, dated as of November 21, 2013, between the Registrant and U.S. 
Bank Trust National Association, as Trustee, related to the issuance of notes in the principal 
amount of $400,000,000, is incorporated by reference to Exhibit 4.1 to Norfolk Southern 
Corporation’s Form 8-K filed on November 21, 2013.  (SEC File No. 001-08339)

Indenture, dated as of June 2, 2015, between Registrant and U.S. Bank National Association, as 
Trustee, is incorporated by reference to Exhibit 4.1 to Norfolk Southern Corporation’s Form 8-K 
filed on June 2, 2015.  (SEC File No. 001-08339)

First Supplemental Indenture, dated as of June 2, 2015, between the Registrant and U.S. Bank 
National Association, as Trustee, is incorporated by reference to Exhibit 4.2 to Norfolk Southern 
Corporation’s Form 8-K filed on June 2, 2015.  (SEC File No. 001-08339)

Second Supplemental Indenture, dated as of November 3, 2015, between the Registrant and U.S. 
Bank National Association, as Trustee, is incorporated by reference to Exhibit 4.1 to Norfolk 
Southern Corporation’s Form 8-K filed on November 3, 2015.  (SEC File No. 001-08339)

Third Supplemental Indenture, dated as of June 3, 2016, between the Registrant and U.S. Bank 
National Association, as Trustee, is incorporated by reference to Exhibit 4.1 to Norfolk Southern 
Corporation’s Form 8-K filed on June 3, 2016.  (SEC File No. 001-08339)

Fourth Supplemental Indenture, dated as of May 31, 2017, between the Registrant and U.S. Bank 
National Association, as Trustee, is incorporated by reference to Exhibit 4.1 to the Corporation’s 
Form 8-K filed May 31, 2017.  (SEC File No. 001-08339)

Indenture, dated as of August 15, 2017, between the Registrant and U.S. Bank National 
Association, as Trustee, is incorporated by reference herein to Exhibit 4.1 to Norfolk Southern 
Corporation’s Form 8-K filed August 15, 2017.  (SEC File No. 001-08339)

Indenture, dated as of February 28, 2018 between the Registrant and U.S. Bank National 
Association, as Trustee.  The Indenture is incorporated by reference herein to Exhibit 4.1 to 
Norfolk Southern Corporation’s Form 8-K filed February 28, 2018.  (SEC File No. 001-08339)

First Supplemental Indenture, dated as of February 28, 2018, between the Registrant and U.S. Bank 
National Association, as Trustee. The Indenture is incorporated by reference herein to Exhibit 4.2 
to Norfolk Southern Corporation’s Form 8-K filed February 28, 2018.  (SEC File No. 001-08339)

Second Supplemental Indenture, dated as of August 2, 2018, between the Registrant and U.S. Bank 
National Association, as Trustee. The Indenture is incorporated by reference herein to Exhibit 4.1 
to Norfolk Southern Corporation’s Form 8-K filed August 2, 2018.  (SEC File No. 001-08339)

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Third Supplemental Indenture, dated as of May 8, 2019, between the Registrant and U.S. Bank 
National Association, as Trustee, is incorporated by reference to Exhibit 4.1 to the Registrant’s 
Form 8-K filed on May 8, 2019 (SEC File No. 001-08339). 

Fourth Supplemental Indenture, dated as of October 24, 2019, between the Registrant and U.S. 
Bank National Association, as Trustee, is incorporated by reference to Exhibit 4.1 to the 
Registrant’s Form 8-K filed on November 4, 2019.  (SEC File No. 001-08339)

Description of the Registrant’s Common Stock Registered Under Section 12 of the Securities 
Exchange Act of 1934, is incorporated by reference to Exhibit 4(hh) to Norfolk Southern 
Corporation's Form 10-K filed on February 6, 2020.  (SEC File No. 001-08339)

Fifth Supplemental Indenture, dated as of May 11, 2020, between the Registrant and U.S. Bank 
National Association, as Trustee, is incorporated by reference to Exhibit 4.1 to the Registrant’s 
Form 8-K filed on May 11, 2020.  (SEC File No. 001-08339)

Indenture dated as of May 15, 2020, between the Registrant and U.S. Bank National Association, 
as Trustee is incorporated by reference to Exhibit 4.1 to the Registrant’s Form 8-K filed on May 
15, 2020.  (SEC File No. 001-08339)

Sixth Supplemental Indenture, dated as of May 12, 2021, between the Registrant and U.S. Bank 
National Association, as Trustee, is incorporated by reference to Exhibit 4.2 to the Registrant’s 
Form 8-K filed on May 12, 2021. (SEC File No. 001-08339)

Seventh Supplemental Indenture, dated as of August 25, 2021, between the Registrant and U.S. 
Bank National Association, as trustee, is incorporated by reference to Exhibit 4.1 to the 
Registrant’s Form 8-K filed on August 25, 2021. (SEC File No. 001-08339)

In accordance with Item 601(b)(4)(iii) of Regulation S-K, copies of other instruments of Norfolk 
Southern Corporation and its subsidiaries with respect to the rights of holders of long-term debt are 
not filed herewith, or incorporated by reference, but will be furnished to the Commission upon 
request.

Material Contracts -

The Transaction Agreement, dated as of June 10, 1997, by and among CSX and CSX 
Transportation, Inc., Registrant, Norfolk Southern Railway Company, Conrail Inc., Consolidated 
Rail Corporation, and CRR Holdings LLC, with certain schedules thereto, previously filed, is 
incorporated by reference to Exhibit 10(a) to Norfolk Southern Corporation’s Form 10-K filed on 
February 24, 2003.  (SEC File No. 001-08339)

Amendment No. 1 dated as of August 22, 1998, to the Transaction Agreement, dated as of June 10, 
1997, by and among CSX Corporation, CSX Transportation, Inc., Norfolk Southern Corporation, 
Norfolk Southern Railway Company, Conrail, Inc., Consolidated Rail Corporation, and CRR 
Holdings LLC, is incorporated by reference from Exhibit 10.1 to Norfolk Southern Corporation’s 
Form 10-Q filed on August 11, 1999.  (SEC File No. 001-08339)

Amendment No. 2 dated as of June 1, 1999, to the Transaction Agreement, dated June 10, 1997, by 
and among CSX Corporation, CSX Transportation, Inc., Norfolk Southern Corporation, Norfolk 
Southern Railway Company, Conrail, Inc., Consolidated Rail Corporation, and CRR Holdings 
LLC, is incorporated by reference from Exhibit 10.2 to Norfolk Southern Corporation’s Form 10-Q 
filed on August 11, 1999.  (SEC File No. 001-08339)

Amendment No. 3 dated as of June 1, 1999, and executed in April 2004, to the Transaction 
Agreement, dated June 10, 1997, by and among CSX Corporation, CSX Transportation, Inc., 
Norfolk Southern Corporation, Norfolk Southern Railway Company, Conrail, Inc., Consolidated 
Rail Corporation, and CRR Holdings LLC, is incorporated by reference from Exhibit 10(dd) to 
Norfolk Southern Corporation’s Form 10-Q filed on July 30, 2004.  (SEC File No. 001-08339)

Amendment No. 5 to the Transaction Agreement, dated as of August 27, 2004, by and among CSX 
Corporation, CSX Transportation, Inc., Norfolk Southern Corporation, Norfolk Southern Railway 
Company, Conrail, Inc., Consolidated Rail Corporation, and CRR Holdings LLC, is incorporated 
by reference to Exhibit 10.1 to Norfolk Southern Corporation’s Form 8-K filed on September 2, 
2004.  (SEC File No. 001-08339)

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Amendment No. 6 dated as of April 1, 2007, to the Transaction Agreement, dated June 10, 1997, 
by and among CSX Corporation, CSX Transportation, Inc., Norfolk Southern Railway Company, 
Conrail, Inc., Consolidated Rail Corporation, and CRR Holdings LLC, is incorporated by reference 
to Exhibit 10.5 to Norfolk Southern Corporation’s Form 10-Q filed on July 27, 2007.  (SEC File 
No. 001-08339)

Shared Assets Area Operating Agreement for North Jersey, dated as of June 1, 1999, by and among 
Consolidated Rail Corporation, CSX Transportation, Inc., and Norfolk Southern Railway 
Company, with exhibit thereto, is incorporated by reference from Exhibit 10.4 to Norfolk Southern 
Corporation’s Form 10-Q filed on August 11, 1999.  (SEC File No. 001-08339)

Shared Assets Area Operating Agreement for Detroit, dated as of June 1, 1999, by and among 
Consolidated Rail Corporation, CSX Transportation, Inc., and Norfolk Southern Railway 
Company, with exhibit thereto, is incorporated by reference from Exhibit 10.6 to Norfolk Southern 
Corporation’s Form 10-Q filed on August 11, 1999.  (SEC File No. 001-08339)

Shared Assets Area Operating Agreement for South Jersey/Philadelphia, dated as of June 1, 1999, 
by and among Consolidated Rail Corporation, CSX Transportation, Inc., and Norfolk Southern 
Railway Company, with exhibit thereto, is incorporated by reference from Exhibit 10.5 to Norfolk 
Southern Corporation’s Form 10-Q filed on August 11, 1999.  (SEC File No. 001-08339)

Amendment No. 1, dated as of June 1, 2000, to the Shared Assets Area Operating Agreements for 
North Jersey, South Jersey/Philadelphia, and Detroit, dated as of June 1, 1999, by and among 
Consolidated Rail Corporation, CSX Transportation, Inc., and Norfolk Southern Railway 
Company, with exhibits thereto, is incorporated by reference to Exhibit 10(h) to Norfolk Southern 
Corporation’s Form 10-K filed on March 5, 2001.  (SEC File No. 001-08339)

Amendment No. 2, dated as of January 1, 2001, to the Shared Assets Area Operating Agreements 
for North Jersey, South Jersey/Philadelphia, and Detroit, dated as of June 1, 1999, by and among 
Consolidated Rail Corporation, CSX Transportation, Inc., and Norfolk Southern Railway 
Company, with exhibits thereto, is incorporated by reference to Exhibit 10(j) to Norfolk Southern 
Corporation’s Form 10-K filed on February 21, 2002.  (SEC File No. 001-08339)

Amendment No. 3, dated as of June 1, 2001, and executed in May of 2002, to the Shared Assets 
Area Operating Agreements for North Jersey, South Jersey/Philadelphia, and Detroit, dated as of 
June 1, 1999, by and among Consolidated Rail Corporation, CSX Transportation, Inc., and Norfolk 
Southern Railway Company, with exhibits thereto, is incorporated by reference to Exhibit 10(k) to 
Norfolk Southern Corporation’s Form 10-K filed on February 24, 2003.  (SEC File No. 001-08339)

Amendment No. 4, dated as of June 1, 2005, and executed in late June 2005, to the Shared Assets 
Area Operating Agreements for North Jersey, South Jersey/Philadelphia, and Detroit, dated as of 
June 1, 1999, by and among Consolidated Rail Corporation, CSX Transportation, Inc., and Norfolk 
Southern Railway Company, with exhibits thereto, is incorporated by reference to Exhibit 99 to 
Norfolk Southern Corporation’s Form 8-K filed on July 1, 2005.  (SEC File No. 001-08339)

Monongahela Usage Agreement, dated as of June 1, 1999, by and among CSX Transportation, Inc., 
Norfolk Southern Railway Company, Pennsylvania Lines LLC, and New York Central Lines LLC, 
with exhibit thereto, is incorporated by reference from  -Exhibit 10.7 to Norfolk Southern 
Corporation’s Form 10-Q filed on August 11, 1999.  (SEC File No. 001-08339)

The Agreement, entered into as of July 27, 1999, between North Carolina Railroad Company and 
Norfolk Southern Railway Company, is incorporated by reference from Exhibit 10(i) to Norfolk 
Southern Corporation’s Form 10-K filed on March 6, 2000.  (SEC File No. 001-08339)

Second Amendment, dated December 28, 2009, to the Master Agreement dated July 27, 1999, by 
and between North Carolina Railroad Company and Norfolk Southern Railway Company, is 
incorporated by reference to Exhibit 10(q) to Norfolk Southern Corporation’s Form 10-K filed on 
February 17, 2010 (Exhibits, annexes and schedules omitted.  The Registrant will furnish 
supplementary copies of such materials to the SEC upon request).  (SEC File No. 001-08339)

The Supplementary Agreement, entered into as of January 1, 1987, between the Trustees of the 
Cincinnati Southern Railway and The Cincinnati, New Orleans and Texas Pacific Railway 
Company (the latter a wholly owned subsidiary of Norfolk Southern Railway Company) – 
extending and amending a Lease, dated as of October 11, 1881 – is incorporated by reference to 
Exhibit 10(k) to Norfolk Southern Corporation’s Form 10-K filed on March 5, 2001.  (SEC File 
No. 001-08339)

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(y)

(z)*

(aa)*

(bb)*

Norfolk Southern Corporation Executive Management Incentive Plan, as approved by shareholders 
May 14, 2015, and as amended effective March 27, 2018, and November 17, 2020, is incorporated 
by reference to Exhibit 10.1 to Norfolk Southern Corporation’s Form 8-K filed on January 8, 2021.  
(SEC File No. 001-08339)

The Norfolk Southern Corporation Directors’ Restricted Stock Plan, adopted January 1, 1994, and 
amended and restated effective as of January 23, 2015, is incorporated by reference to Exhibit 10.1 
to Norfolk Southern Corporation’s Form 10-Q filed on October 25, 2017.  (SEC File No. 
001-08339)

Supplemental Benefit Plan of Norfolk Southern Corporation and Participating Subsidiary 
Companies, adopted June 1, 1982, as amended and restated effective as of June 26, 2015, is 
incorporated by reference to Exhibit 10.2 to Norfolk Southern Corporation’s Form 10-Q filed on 
October 25, 2017.  (SEC File No. 001-08339)

The Norfolk Southern Corporation Directors’ Charitable Award Program, as amended effective 
July 2007, is incorporated by reference to Exhibit 10.6 to Norfolk Southern Corporation’s Form 
10-Q filed on July 27, 2007.  (SEC File No. 001-08339)

The Norfolk Southern Corporation Thoroughbred Stock Option Plan, as amended effective July 22, 
2013, is incorporated by reference to Exhibit 10.2 to Norfolk Southern Corporation’s Form 10-Q 
filed on July 24, 2013.  (SEC File No. 001-08339)

The Norfolk Southern Corporation Executive Life Insurance Plan, as amended and restated 
effective December 1, 2018, is incorporated by reference to Exhibit 10(y) to Norfolk Southern 
Corporation's Form 10-K filed on February 8, 2019.  (SEC File No. 001-08339)

The Norfolk Southern Corporation Long-Term Incentive Plan, as approved by shareholders May 
14, 2015, and as amended July 29, 2016, November 29, 2016, November 28, 2017, November 27, 
2018, and November 19, 2019, is incorporated by referenced to Exhibit 10(aa) to Norfolk Southern 
Corporation’s Form 10-K filed on February 6, 2020.  (SEC File No. 001-08339)

Amended and Restated Transfer and Administration Agreement dated as of May 28, 2021 is 
incorporated by reference to Exhibit 10.1 on Norfolk Southern Corporation’s Form 8-K filed on 
May 28, 2021.  (SEC File No. 001-08339)

Directors’ Deferred Fee Plan of Norfolk Southern Corporation, adopted June 1, 1982 and as 
amended and restated effective December 1, 2019, is incorporated by referenced to Exhibit 10(xx) 
to Norfolk Southern Corporation’s Form 10-K filed on February 6, 2020.  (SEC File No. 
001-08339)

Norfolk Southern Corporation Executives’ Deferred Compensation Plan, as amended and restated 
effective January 1, 2019, is incorporated by reference to Exhibit 10(ww) to Norfolk Southern 
Corporation's Form 10-K filed on February 8, 2019.  (SEC File No. 001-08339)

Form of Amended and Restated Change in Control Agreement between Norfolk Southern Form of 
Amended and Restated Change in Control Agreement between Norfolk Southern Corporation and 
the Corporation’s Chairman, President and Chief Executive Officer,  is incorporated by reference 
to Exhibit 10(aaaa) to Norfolk Southern Corporation’s Form 10-K filed on February 18, 2009.  
(SEC File No. 001-08339)

(cc)*,**

(dd)*

(ee)*,**

(ff)*,**

(gg)*,**

Form of Norfolk Southern Corporation Long-Term Incentive Plan, Award Agreement for Outside 
Directors for restricted stock units and deferral election form as approved by the Compensation 
Committee on November 18, 2021.

Form of Norfolk Southern Corporation Long-Term Incentive Plan, Award Agreement for 
performance share units approved by the Compensation Committee on November 16, 2020.

Form of Norfolk Southern Corporation Long-Term Incentive Plan, Award Agreement for non-
qualified stock options approved by the Compensation Committee on January 24, 2022.

Form of Norfolk Southern Corporation Long-Term Incentive Plan, Award Agreement for restricted 
stock units approved by the Compensation Committee on November 18, 2021. 

Form of Norfolk Southern Corporation Long-Term Incentive Plan, Award Agreement for 
performance share units approved by the Compensation Committee on November 18, 2021.

K85

(hh)*

(ii)*

(jj)

(kk)*,**

(ll)*,**

(mm)*,*
*

(nn)*

(oo)*

(pp)*

(qq)*

(rr)

(ss)

(tt)

Form of Amendment to Amended and Restated Change in Control Agreement between Norfolk 
Southern Corporation and the Corporation’s Chairman, President and Chief Executive Officer, to 
eliminate the excise tax gross-up provision in the Agreement, is incorporated by reference to 
Exhibit 10.1 to Norfolk Southern Corporation’s Form 8-K filed on January 23, 2013.  (SEC File 
No. 001-08339)

Form of Change in Control Agreement between Norfolk Southern Corporation and executive 
officers who entered into a change in control agreement after 2015 is incorporated by reference to 
Exhibit 10.2 to Norfolk Southern Corporation’s Form 10-Q filed on July 29, 2020.  (SEC File No. 
001-08339)

Credit Agreement dated as of March 27, 2020 establishing a 5 year, $800 million, unsecured 
revolving credit facility of the Registrant, is incorporated by reference to Exhibit 10.1 to Norfolk 
Southern Corporation’s Form 8-K filed on March 30, 2020.  (SEC File No. 001-08339)

Form of Norfolk Southern Corporation Long-Term Incentive Plan, Off-Cycle Award Agreement 
for Non-Qualified Stock Options as approved by the Compensation Committee on January 24, 
2022. 

Form of Norfolk Southern Corporation Long-Term Incentive Plan, Off-Cycle Award Agreement 
for Performance Share Units as approved by the Compensation Committee on November 18, 2021. 

Form of Norfolk Southern Corporation Long-Term Incentive Plan, Off-Cycle Award Agreement 
for Restricted Stock Units as approved by the Compensation Committee on November 18, 2021. 

Offer Letter for Mark R. George, dated August 26, 2019, is incorporated by reference to Exhibit 
99.1 to Norfolk Southern Corporation’s Form 8-K filed on August 28, 2019.  (SEC File No. 
001-08339)

Norfolk Southern Corporation Long-Term Incentive Plan Inducement Award Agreement for 
Performance-Based Restricted Stock Units is incorporated by reference to Exhibit 99.2 to Norfolk 
Southern Corporation’s Form 8-K filed on August 28, 2019.  (SEC File No. 001-08339)

Norfolk Southern Corporation Long-Term Incentive Plan Inducement Award Agreement for 
Restricted Stock Units is incorporated by reference to Exhibit 99.3 to Norfolk Southern 
Corporation’s Form 8-K filed on August 28, 2019.  (SEC File No. 001-08339)

Norfolk Southern Corporation Long-Term Incentive Plan Inducement Award Agreement for Non-
Qualified Stock Options is incorporated by reference to Exhibit 99.4 to Norfolk Southern 
Corporation’s Form 8-K filed on August 28, 2019.  (SEC File No. 001-08339)

A Lease Agreement, dated March 1, 2019, between NSRC and BA Leasing BSC, LLC.  This 
Agreement is incorporated by reference herein to Exhibit 10.2 to Norfolk Southern Corporation’s 
Form 8-K filed March 5, 2019.  (See SEC File No. 001-08339).

A Participation Agreement, dated March 1, 2019, between NSRC, BA Leasing BSC, LLC, Bank of 
America, N.A. as Administrative Agent, and each of the Rent Assignees listed on Schedule II 
thereto.  This Agreement is incorporated by reference herein to Exhibit 10.3 to Norfolk Southern 
Corporation’s Form 8-K filed March 5, 2019.  (See SEC File No. 001-08339).

Guaranty of NSRC’s obligations under the Participation Agreement, Construction Agency 
Agreement, Lease Agreement and related documents by Norfolk Southern Corporation.  This 
Agreement is incorporated by reference herein to Exhibit 10.4 to Norfolk Southern Corporation’s 
Form 8-K filed March 5, 2019.  (See SEC File No. 001-08339).

(uu)*

(vv)*,**

(ww)*,*
*

Norfolk Southern Executive Severance Plan as adopted on May 14, 2020, and as amended July 28, 
2020, is incorporated by reference to Exhibit 10.1 to Norfolk Southern Corporation Form 10-Q 
filed on July 29, 2020.  (SEC File No. 001-08339).

Form of Norfolk Southern Corporation Long-Term Incentive Plan, Award Agreement for Pro-Rata 
Forfeiture of Non-Qualified Stock Options Due to Retirement as approved by the Compensation 
Committee on January 24, 2022. 

Form of Norfolk Southern Corporation Long-Term Incentive Plan, Award Agreement for Pro-Rata 
Forfeiture of Restricted Stock Units Due to Retirement as approved by the Compensation 
Committee on January 24, 2022.

K86

(xx)*,**

(yy)*,**

21**

23**

31-A**

31-B**

32**

101**

(B)

(C)

Form of Norfolk Southern Corporation Long-Term Incentive Plan, Award Agreement for Pro-Rata 
Forfeiture of Performance Share Units Due to Retirement as approved by the Compensation 
Committee on January 24, 2022.

Form of Norfolk Southern Corporation Long-Term Incentive Plan, Award Agreement for Pro-Rata 
Vesting of Non-Qualified Stock Options as approved by the Compensation Committee on January 
24, 2022.

Subsidiaries of the Registrant.

Consent of Independent Registered Public Accounting Firm.

Rule 13a-14(a)/15d-014(a) CEO Certification.

Rule 13a-14(a)/15d-014(a) CFO Certification.

Section 1350 Certifications.

The following financial information from Norfolk Southern Corporation’s Annual Report on Form 
10-K for the year ended December 31, 2021, formatted in Inline Extensible Business Reporting 
Language (iXBRL) includes:  (i) the Consolidated Statements of Income for each of the years 
ended December 31, 2021, 2020, and 2019; (ii) the Consolidated Statements of Comprehensive 
Income for each of the years ended December 31, 2021, 2020, and 2019; (iii) the Consolidated 
Balance Sheets at December 31, 2021 and 2020; (iv) the Consolidated Statements of Cash Flows 
for each of the years ended December 31, 2021, 2020, and 2019; (v) the Consolidated Statements 
of Changes in Stockholders’ Equity for each of the years ended December 31, 2021, 2020, and 
2019; and (vi) the Notes to Consolidated Financial Statements.

* Management contract or compensatory arrangement.
** Filed herewith.

Exhibits.

The Exhibits required by Item 601 of Regulation S-K as listed in Item 15(A)3 are filed 
herewith or incorporated by reference.

Financial Statement Schedules.

Financial statement schedules and separate financial statements specified by this Item are 
included in Item 15(A)2 or are otherwise not required or are not applicable.

Exhibits 23, 31, and 32 are included in copies assembled for public dissemination.  All 
exhibits are included in the 2021 Form 10-K posted on our website at 
www.norfolksouthern.com under “Invest in NS” and “SEC Filings” or you may request 
copies by writing to:

Office of Corporate Secretary
Norfolk Southern Corporation
650 West Peachtree Street NW
Atlanta, Georgia 30308-1925 

K87

 
Item 16.  Form 10-K Summary

Not applicable.

K88

POWER OF ATTORNEY

Each person whose signature appears on the next page under SIGNATURES hereby authorizes Lorri J. Kleine and 
Mark R. George, or any one of them, to execute in the name of each such person, and to file, any amendments to 
this report, and hereby appoints Lorri J. Kleine and Mark R. George, or any one of them, as attorneys-in-fact to sign 
on his or her behalf, individually and in each capacity stated below, and to file, any and all amendments to this 
report.

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, Norfolk Southern 
Corporation has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized, on 
this 4th day of February, 2022.

/s/ James A. Squires

By: James A. Squires

(Chairman and Chief Executive Officer)

K89

 
 
 
 
Pursuant to the requirements of the Securities Exchange Act of 1934, this report has been signed below on this 4th 
day of February, 2022, by the following persons on behalf of Norfolk Southern Corporation and in the capacities 
indicated.

Signature

Title

/s/ James A. Squires
(James A. Squires)

Chairman and Chief Executive Officer and Director
(Principal Executive Officer)

/s/ Mark R. George
(Mark R. George)

Executive Vice President Finance and Chief Financial Officer
(Principal Financial Officer)

/s/ Clyde H. Allison, Jr.
(Clyde H. Allison, Jr.)

Vice President and Controller
(Principal Accounting Officer)

/s/ Thomas D. Bell, Jr.
(Thomas D. Bell, Jr.)

Director

/s/ Mitchell E. Daniels, Jr.
(Mitchell E. Daniels, Jr.)

Director

/s/ Marcela E. Donadio
(Marcela E. Donadio)

Director

/s/ John C. Hufford, Jr.
(John C. Hufford, Jr.)

Director

/s/ Christopher T. Jones
(Christopher T. Jones)

Director

/s/ Thomas C. Kelleher
(Thomas C. Kelleher)

Director

/s/ Steven F. Leer
(Steven F. Leer)

Director

/s/ Michael D. Lockhart
(Michael D. Lockhart)

Director

/s/ Amy E. Miles
(Amy E. Miles)

/s/ Claude Mongeau
(Claude Mongeau)

Director

Director

/s/ Jennifer F. Scanlon
(Jennifer F. Scanlon)

Director

/s/ John R. Thompson
(John R. Thompson)

Director

K90

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Norfolk Southern Corporation and Subsidiaries
Valuation and Qualifying Accounts
Years ended December 31, 2021, 2020, and 2019
($ in millions)

Schedule II

Additions charged to:

Beginning
Balance

Expenses

Other
Accounts 

Deductions

Ending
Balance

Year ended December 31, 2021
Current portion of casualty and
other claims included in
accounts payable

Casualty and other claims

included in other liabilities

Year ended December 31, 2020
Current portion of casualty and
other claims included in
accounts payable

Casualty and other claims

included in other liabilities

Year ended December 31, 2019
Current portion of casualty and
other claims included in
accounts payable

Casualty and other claims

included in other liabilities

$ 

182 

$ 

20 

$ 

80  (2) $ 

116  (3) $ 

166 

169 

77  (1)

— 

76  (4)

170 

$ 

212 

$ 

27 

$ 

81  (2) $ 

138  (3) $ 

182 

171 

80  (1)

— 

82  (4)

169 

$ 

213 

$ 

22 

$ 

131  (2) $ 

154  (3) $ 

212 

158 

89  (1)

— 

76  (4)

171 

(1)

(2)

Includes adjustments for changes in estimates for prior years’ claims.
Includes revenue refunds and overcharges provided through deductions from operating revenues and transfers  
from other accounts.

(3) Payments and reclassifications to/from accounts payable.
(4) Payments and reclassifications to/from other liabilities.

K91