What changed in this filing

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Item 1. Financial Statements

2025-07-29 compared with 2025-04-23 · 169 added, 117 removed, 480 unchanged (37% of the section changed)

2 unchanged sentences

Consolidated Statements of Income

First Quarter

Second Quarter First Six Months

2025 2024 2025 2024

($ in millions, except per share amounts)

3 unchanged sentences

Purchased services and rents 520 516 1,018 1,044

Fuel 219 257 463 541

Depreciation 346 335 692 672

15 unchanged sentences

Consolidated Statements of Comprehensive Income

First Quarter

Second Quarter First Six Months

2025 2024 2025 2024

($ in millions)

48 unchanged sentences

Consolidated Statements of Cash Flows

First Three Months

First Six Months

($ in millions)

25 unchanged sentences

Debt repayments ( 253 ) ( 202 )

Net cash provided by (used in) financing activities ( 564 ) 89

Net cash used in financing activities ( 930 ) ( 217 )

Net decrease in cash and cash equivalents ( 338 ) ( 909 )

25 unchanged sentences

Balance at March 31, 2025 227 2,249 ( 261 ) 12,296 14,511

Comprehensive income:

Net income 768 768

Other comprehensive income — —

Total comprehensive income 768

Dividends on common stock,

$ 1.35 per share

( 303 ) ( 303 )

Share repurchases ( 1 ) ( 8 ) ( 196 ) ( 205 )

Stock-based compensation 18 ( 2 ) 16

Balance at June 30, 2025 $ 226 $ 2,259 $ ( 261 ) $ 12,563 $ 14,787

See accompanying notes to consolidated financial statements.

Norfolk Southern Corporation and Subsidiaries

Consolidated Statements of Changes in Stockholders’ Equity

Stock Additional

13 unchanged sentences

Balance at March 31, 2024 227 2,188 ( 322 ) 10,443 12,536

Comprehensive income:

Net income 737 737

Other comprehensive loss ( 8 ) ( 8 )

Total comprehensive income 729

Dividends on common stock,

$ 1.35 per share

( 305 ) ( 305 )

Stock-based compensation 20 ( 1 ) 19

Balance at June 30, 2024 $ 227 $ 2,208 $ ( 330 ) $ 10,874 $ 12,979

See accompanying notes to consolidated financial statements.

1 unchanged sentence

Notes to Consolidated Financial Statements

In the opinion of management, the accompanying unaudited interim consolidated financial statements contain all adjustments (consisting of normal recurring accruals) necessary to present fairly Norfolk Southern Corporation (Norfolk Southern) and subsidiaries’ (collectively, NS, we, us, and our) financial position at March 31, 2025 and December 31, 2024, our results of operations, comprehensive income and changes in stockholders’ equity for the first quarters of 2025 and 2024, and our cash flows for the first three months of 2025 and 2024 in conformity with U.S.

In the opinion of management, the accompanying unaudited interim consolidated financial statements contain all adjustments (consisting of normal recurring accruals) necessary to present fairly Norfolk Southern Corporation (Norfolk Southern) and subsidiaries’ (collectively, NS, we, us, and our) financial position at June 30, 2025 and December 31, 2024, our results of operations, comprehensive income and changes in stockholders’ equity for the second quarters and first six months of 2025 and 2024, and our cash flows for the first six months of 2025 and 2024 in conformity with U.S.

Generally Accepted Accounting Principles (GAAP).

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There are no other significant segment items or reconciling items to segment profit.

First Quarter

Second Quarter First Six Months

2025 2024 2025 2024

($ in millions)

5 unchanged sentences

Equipment rents 111 97 208 205

Fuel 219 257 463 541

Depreciation 346 335 692 672

Materials 98 92 198 190

Claims 59 50 125 98

Other 38 31 77 100

Restructuring and other charges 10 ( 3 ) 10 96

9 unchanged sentences

The following table disaggregates our revenues by major commodity group:

First Quarter

Second Quarter First Six Months

2025 2024 2025 2024

($ in millions)

5 unchanged sentences

Intermodal 743 742 1,503 1,487

Coal 395 398 765 794

Total $ 3,110 $ 3,044 $ 6,103 $ 6,048

6 unchanged sentences

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 March 31, 2025 and December 31, 2024.

We had no material remaining performance obligations at June 30, 2025 and December 31, 2024.

We may provide customers ancillary services, such as switching, demurrage and other incidental activities, under their transportation contracts.

The revenues associated with these distinct performance obligations are recognized when the services are performed or as contractual obligations are met.

These revenues are included within each of the commodity groups and represent approximately 5 % and 4 % of total “Railway operating revenues” on the Consolidated Statements of Income for the first quarters of 2025 and 2024, respectively.

These revenues are included within each of the commodity groups and represent approximately 5 % of total “Railway operating revenues” on the Consolidated Statements of Income for the second quarter and first six months of 2025, and 4 % for the second quarter and first six months of 2024.

Revenues related to interline transportation services that involve another railroad are reported on a net basis.

8 unchanged sentences

Non-customer receivables include non-revenue-related amounts due from other railroads, governmental entities, insurers, and others.

We do no t have any material contract assets or liabilities at March 31, 2025 and December 31, 2024.

We do no t have any material contract assets or liabilities at June 30, 2025 and December 31, 2024.

Stock-Based Compensation

First Quarter

Second Quarter First Six Months

2025 2024 2025 2024

($ in millions)

1 unchanged sentence

Total tax benefit 3 3 8 8

During the first quarter of 2025, we granted stock options, restricted stock units (RSUs) and performance share units (PSUs) pursuant to the Long-Term Incentive Plan (LTIP), as follows:

First Quarter

Granted Weighted-Average Grant-Date Fair Value

During 2025, we granted stock options, restricted stock units (RSUs) and performance share units (PSUs) pursuant to the Long-Term Incentive Plan (LTIP), as follows:

Second Quarter First Six Months

Granted Weighted-Average Grant-Date Fair Value Granted Weighted-Average Grant-Date Fair Value

Stock options — $ — 80,067 $ 87.33

2 unchanged sentences

Stock Options

First Quarter

Second Quarter First Six Months

2025 2024 2025 2024

($ in millions)

5 unchanged sentences

Certain RSU grants include cash dividend equivalent payments during the restriction period in an amount equal to the regular quarterly dividends paid on Common Stock.

First Quarter

Second Quarter First Six Months

2025 2024 2025 2024

($ in millions)

6 unchanged sentences

The market condition fair value was measured on the date of grant using a Monte Carlo simulation model.

First Quarter

First Six Months

($ in millions)

3 unchanged sentences

Restructuring and Other Charges

During the second quarter of 2025, we recorded $ 10 million in “Restructuring and other charges” primarily related to the restructuring of certain technology functions, which includes severance costs for impacted employees and other expenses.

During the first quarter of 2024, we initiated voluntary and involuntary separation programs to reduce our management workforce.

Through these programs, approximately 350 management employees were separated from service by May 2024.

“Restructuring and other charges” reflects separation payments and other benefits to the impacted management employees and amounted to $ 64 million.

Additionally, we evaluated the impact of these separation programs on our pension and other postretirement benefit plans, as further discussed in Note 10.

“Restructuring and other charges” reflects separation payments and other benefits to the impacted management employees and amounted to $ 61 million for the first six months of 2024.

Additionally, we

evaluated the impact of these separation programs on our pension and other postretirement benefit plans, as further discussed in Note 10.

In March 2024, we appointed John Orr as Executive Vice President and Chief Operating Officer of the Company.

“Restructuring and other charges” also includes $ 35 million of costs related to this appointment, including an

agreement with his previous employer, Canadian Pacific Kansas City (CPKC), that resulted in a $ 25 million payment and certain commercial considerations to CPKC in exchange for a waiver of his non-compete provisions.

“Restructuring and other charges” in the first six months of 2024 also includes $ 35 million of costs related to this appointment, including an agreement with his previous employer, Canadian Pacific Kansas City (CPKC), that resulted in a $ 25 million payment and certain commercial considerations to CPKC in exchange for a waiver of his non-compete provisions.

Earnings Per Share

1 unchanged sentence

Basic Diluted

First Quarter

Second Quarter

2025 2024 2025 2024

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Earnings per share $ 3.41 $ 3.26 $ 3.41 $ 3.25

During the first quarters of 2025 and 2024, dividend equivalent payments were made to certain 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.

Basic Diluted

First Six Months

2025 2024 2025 2024

($ in millions, except per share amounts,

shares in millions)

Net income $ 1,518 $ 790 $ 1,518 $ 790

Dividend equivalent payments ( 2 ) ( 2 ) ( 1 ) ( 2 )

Income available to common stockholders $ 1,516 $ 788 $ 1,517 $ 788

Weighted-average shares outstanding 225.5 225.9 225.5 225.9

Dilutive effect of outstanding options and share-settled awards 0.3 0.4

Adjusted weighted-average shares outstanding 225.8 226.3

Earnings per share $ 6.72 $ 3.49 $ 6.72 $ 3.48

During the second quarters and first six months of 2025 and 2024, dividend equivalent payments were made to certain 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.

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The dilution calculations exclude options having exercise prices exceeding the average market price of Common Stock as follows:

0.1 million in both the first quarters ended March 31, 2025 and 2024, respectively .

0.1 million in the second quarters and first six months ended June 30, 2025 and 2024, respectively .

Accumulated Other Comprehensive Loss

4 unchanged sentences

($ in millions)

Three months ended March 31, 2025

Six months ended June 30, 2025

Pensions and other postretirement liabilities $ ( 240 ) $ — $ — $ ( 240 )

Other comprehensive income of equity investees ( 22 ) 1 — ( 21 )

Other comprehensive income (loss) of equity investees ( 22 ) 1 — ( 21 )

Accumulated other comprehensive loss $ ( 262 ) $ 1 $ — $ ( 261 )

Three months ended March 31, 2024

Six months ended June 30, 2024

Pensions and other postretirement liabilities $ ( 292 ) $ ( 7 ) $ ( 4 ) $ ( 303 )

Other comprehensive loss of equity investees ( 28 ) — — ( 28 )

Other comprehensive income (loss) of equity investees ( 28 ) 1 — ( 27 )

Accumulated other comprehensive loss $ ( 320 ) $ ( 6 ) $ ( 4 ) $ ( 330 )

Stock Repurchase Program

We repurchased and retired 1.0 million shares of Common Stock under our stock repurchase program in the first three months of 2025 at a cost of $ 250 million, inclusive of excise taxes, while w e did not repurchase any shares of Common Stock in the first three months of 2024.

We repurchased and retired 1.9 million shares of Common Stock under our stock repurchase program in the first six months of 2025 at a cost of $ 455 million, inclusive of accrued excise taxes, while w e did not repurchase any shares of Common Stock in the first six months of 2024.

Investment in Conrail

2 unchanged sentences

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.

Our investment in Conrail was $ 1.8 billion and $ 1.7 billion at March 31, 2025 and December 31, 2024, respectively.

Our investment in Conrail was $ 1.8 billion and $ 1.7 billion at June 30, 2025 and December 31, 2024, respectively.

CRC owns and operates certain properties (the Shared Assets Areas) for the joint and exclusive benefit of Norfolk Southern Railway Company (NSR) and CSX Transportation, Inc.

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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 $ 49 million and $ 52 million for the first quarters of 2025 and 2024, respectively.

Our equity in Conrail’s earnings, net of amortization, was $ 16 million and $ 21 million for the first quarters of 2025 and 2024, respectively.

These amounts partially offset the costs of operating the Shared Assets Areas and are included in “Purchased services and rents.”

“Other liabilities” includes $ 534 million at both March 31, 2025 and December 31, 2024 for long-term advances from Conrail, maturing in 2050 that bear interest at an average rate of 1.31 %.

“Purchased services and rents” and “Fuel” include expenses payable to CRC for operation of the Shared Assets Areas totaling $ 44 million and $ 50 million for the second quarters of 2025 and 2024, respectively, and $ 93 million and $ 102 million for the first six months of 2025 and 2024, respectively.

Our equity in Conrail’s earnings, net of amortization, was $ 23 million and $ 22 million for the second quarters of 2025 and 2024, respectively, and $ 39 million and $ 43 million for the first six months of 2025 and 2024, respectively.

amounts partially offset the costs of operating the Shared Assets Areas and are included in “Purchased services and rents.”

“Other liabilities” includes $ 534 million at both June 30, 2025 and December 31, 2024 for long-term advances from Conrail, maturing in 2050 that bear interest at an average rate of 1.31 %.

Investment in TTX

1 unchanged sentence

We have a 19.78 % ownership interest in TTX.

Expenses incurred for use of TTX equipment are included in “Purchased services and rents.” These expenses amounted to $ 74 million for both the first quarters of 2025 and 2024.

Our equity in TTX’s earnings partially offsets these costs and totaled $ 11 million and $ 13 million for the first quarters of 2025 and 2024, respectively.

In June 2024, we entered into an agreement that provides us the ability to issue up to $ 800 million of unsecured commercial paper and is backed by our credit agreement.

The unsecured short-term commercial paper program provides for borrowing at prevailing rates and includes covenants.

At March 31, 2025 and December 31, 2024, we had no outstanding commercial paper.

Expenses incurred for use of TTX equipment are included in “Purchased services and rents.” These expenses amounted to $ 81 million and $ 74 million for the second quarters of 2025 and 2024, respectively, and $ 155 million and $ 148 million for the first six months of 2025 and 2024, respectively.

Our equity in TTX’s earnings partially offsets these costs and totaled $ 9 million and $ 14 million for the second quarters of 2025 and 2024, respectively, and $ 20 million and $ 27 million for the first six months of 2025 and 2024, respectively.

In May 2025, we issued $ 400 million of 5.10 % senior notes due 2035.

In May 2025, we renewed our accounts receivable securitization program with a maximum borrowing capacity of $ 400 million.

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Amounts received under this facility are accounted for as borrowings.

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

Our accounts receivable securitization program was supported by $ 870 million and $ 790 million in receivables at March 31, 2025 and December 31, 2024, respectively, which are included in “Accounts receivable – net”.

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

Our accounts receivable securitization program was supported by $ 841 million and $ 790 million in receivables at June 30, 2025 and December 31, 2024, respectively, which are included in “Accounts receivable – net”.

In June 2024, we entered into an agreement that provides us the ability to issue up to $ 800 million of unsecured commercial paper and is backed by our credit agreement.

The unsecured short-term commercial paper program provides for borrowing at prevailing rates and includes covenants.

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

In January 2024, we renewed and amended our $ 800 million credit agreement.

The amended agreement expires in January 2029, and provides for borrowings at prevailing rates and includes covenants.

We had no amounts outstanding under this facility at either March 31, 2025 or December 31, 2024, and we are in compliance with all of its covenants.

We had no amounts outstanding under this facility at either June 30, 2025 or December 31, 2024, and we are in compliance with all of its covenants.

Pensions and Other Postretirement Benefits

6 unchanged sentences

Pension Benefits Other Postretirement Benefits

First Quarter

Second Quarter

2025 2024 2025 2024

5 unchanged sentences

Amortization of prior service benefit — — ( 5 ) ( 6 )

Curtailment gain — — — ( 20 )

Net benefit $ ( 11 ) $ ( 13 ) $ ( 4 ) $ ( 24 )

Pension Benefits Other Postretirement Benefits

First Six Months

2025 2024 2025 2024

($ in millions)

Service cost $ 12 $ 13 $ 1 $ 2

Interest cost 53 54 7 7

Expected return on plan assets ( 98 ) ( 102 ) ( 5 ) ( 6 )

Amortization of net losses 11 8 — —

Amortization of prior service benefit — — ( 11 ) ( 12 )

Curtailment gain — — — ( 20 )

Net benefit $ ( 22 ) $ ( 27 ) $ ( 8 ) $ ( 29 )

The service cost component of defined benefit pension cost and postretirement benefit cost are reported within “Compensation and benefits” and all other components are presented in “Other income – net” on the Consolidated Statements of Income.

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The carrying value of corporate-owned life insurance (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 March 31, 2025 or December 31, 2024.

There are no other assets or liabilities measured at fair value on a recurring basis at June 30, 2025 or December 31, 2024.

The carrying amounts and estimated fair values, based on Level 1 inputs, of long-term debt consist of the following:

March 31, 2025 December 31, 2024

June 30, 2025 December 31, 2024

Value Carrying

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On February 3, 2023, a train operated by us derailed in East Palestine, Ohio.

The derailed equipment included 38 railcars, 11 of which were non-Company-owned tank cars containing hazardous materials.

Fires associated with the derailment threatened certain tank cars.

There was concern that the pressure inside of the tank cars carrying vinyl chloride was rising and that the pressure relief devices were no longer functioning properly, which would have posed the risk of a catastrophic explosion.

As a consequence, on February 6, 2023, the local incident commander (the East Palestine Fire Chief)—in consultation with the incident command that included, among others, federal, state and local officials and Norfolk Southern—opted to conduct a controlled vent and burn of five derailed tank cars, all of which contained vinyl chloride.

This procedure involved creating holes in the five tank cars to drain the vinyl chloride into adjacent trenches that had been dug into the ground where the vinyl chloride was ignited and burned.

Any remaining materials released from the derailment or during the vent and burn have been or are being remediated.

The February 3rd derailment, the associated fire, and the resulting vent and burn of the tank cars containing vinyl chloride on February 6th is hereinafter referred to as the “Incident.”

In response to the Incident, we have been working to clean the site safely and thoroughly, including those activities described in the Environmental Matters section below with respect to potentially impacted air, soil, and water and to monitor for any impact on public health and the environment.

The February 3rd derailment, the associated fire, and the resulting vent and burn of the tank cars containing vinyl chloride on February 6th is hereinafter referred to as the “Incident.” In response to the Incident, we have been working to clean the site safely and thoroughly, including those activities described in the Environmental Matters section below with respect to potentially impacted air, soil, and water and to monitor for any impact on public health and the environment.

We are working with federal, state, and local officials to mitigate impacts from the Incident, including, among other efforts, conducting environmental monitoring and clean-up activities (as more fully described below), and operating a field office to provide support to members of East Palestine and the surrounding communities.

Financial Impact

Although we cannot predict the final outcome or estimate the reasonably possible range of loss related to the Incident with certainty, we have accrued amounts for probable and reasonably estimable liabilities for those environmental and non-environmental matters described below.

Certain costs incurred thus far and related to the Incident may be recoverable under our insurance policies in effect at the date of the Incident or from third parties.

Although we cannot predict the final outcome or estimate the reasonably possible range of the total loss related to the Incident with certainty, we have accrued amounts for probable and reasonably estimable liabilities for those environmental and non-environmental matters described below.

Certain costs incurred and related to the Incident may be recoverable under our insurance policies in effect at the date of the Incident.

For additional information about our insurance coverage, see “Insurance” below.

Any additional amounts recoverable under our insurance policies or from third parties will be reflected in future periods when recovery is considered probable.

Amounts recorded related to the Incident, including outstanding liabilities at the end of each period, are summarized in the tables below.

Our current estimates of probable and reasonably estimable liabilities principally associated with environmental matters and legal proceedings are discussed in further detail below.

Environmental Matters Legal Contingencies and Other Total Insurance Recoveries Total - Net of Recoveries

Environmental Matters Legal Contingencies and Other Total Total Recoveries Total - Net of Recoveries

($ in millions)

3 unchanged sentences

At March 31, 2025 227 436 663 ( 120 ) 543

Environmental Matters Legal Contingencies and Other Total Insurance Recoveries Total - Net of Recoveries

Expense/(Recoveries) — 107 107 ( 154 ) ( 47 )

(Payments)/Receipts ( 18 ) ( 31 ) ( 49 ) 225 176

At June 30, 2025 $ 209 $ 512 $ 721 $ ( 49 ) $ 672

Environmental Matters Legal Contingencies and Other Total Total Recoveries Total - Net of Recoveries

($ in millions)

3 unchanged sentences

At March 31, 2024 292 745 1,037 ( 98 ) 939

From the inception of the Incident, we have recognized a total of $ 1.3 billion in net expenses directly attributable to the Incident, which includes $ 975 million of insurance recoveries from claims made under our insurance policies.

At March 31, 2025 and December 31, 2024, we have also recorded a deferred tax asset of $ 158 million and $ 211 million, respectively, related to the Incident expecting that certain expenses will be deductible for tax purposes in future periods or offset with insurance recoveries.

Expense/(Recoveries) 53 38 91 ( 156 ) ( 65 )

(Payments)/Receipts ( 80 ) ( 71 ) ( 151 ) 135 ( 16 )

At June 30, 2024 $ 265 $ 712 $ 977 $ ( 119 ) $ 858

From the inception of the Incident, we have recognized a total of $ 1.2 billion in net expenses directly attributable to the Incident, which includes $ 1.1 billion of recoveries.

At June 30, 2025 and December 31, 2024, we have also recorded a deferred tax asset of $ 122 million and $ 211 million, respectively, related to the Incident expecting that certain expenses will be deductible for tax purposes in future periods or offset with insurance recoveries.

Environmental Matters – In response to the Incident, we have been working with federal, state, and local officials such as the U.S.

Environmental Protection Agency (EPA), the Ohio EPA, the Pennsylvania Department of Environmental Protection (DEP), and the Columbiana County Health District to conduct environmental response and remediation activities, most of which have concluded and some which are continuing, including but not limited to, excavating and disposing of potentially affected soil (based on sampling results), air monitoring, indoor air quality screenings, municipal water and private water well testing, residential, commercial, and agricultural soil sampling, surface water and groundwater sampling, re-routing a local waterway around the affected site, and capturing and shipping stormwater that enters the impacted derailment site to proper disposal facilities.

The EPA issued a Unilateral Administrative Order (UAO) on February 21, 2023, containing various requirements, including the submission of numerous work plans to assess and remediate various environmental media and performance of certain removal actions at the affected site.

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We have filed an answer, and discovery is ongoing in the Ohio AG case.

On June 30, 2023, we filed third-party claims against certain railcar defendants and shippers involved in the Incident.

The Court dismissed the third party claims on March 6, 2024, and on March 26, 2024, we filed a motion requesting the Court to enter partial final judgment as to the third party claims.

The Court denied the motion on March 24, 2025.

On May 23, 2024, the DOJ and the Company reached a settlement to resolve all of the government’s civil claims against the Company related to the Incident, and jointly lodged a proposed Consent Decree with the court.

the Consent Decree will require the Company to pay for the federal government’s oversight costs of $ 57 million through November 30, 2023 as well as additional oversight costs from December 1, 2023 until the remediation is complete.

As proposed, the Consent Decree will require the Company to pay for the federal government’s oversight costs of $ 57 million through November 30, 2023 as well as additional oversight costs from December 1, 2023 until the remediation is complete.

The proposed Consent Decree also requires the Company to pay a civil penalty of $ 15 million for alleged violations of the CWA.

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Our current estimate includes ongoing and future environmental cleanup activities and remediation efforts, governmental oversight costs (including those incurred by the EPA and the Ohio EPA), and other related costs, including those in connection with the proposed DOJ Consent Decree (including civil penalties related to alleged violations of the CWA).

Our current estimates of future environmental cleanup and remediation liabilities related to the Incident may change over time due to various factors, including but not limited to, the nature and extent of required future cleanup and removal activities (including those resulting from soil, water, and sediment remediation activities that are currently being, and will continue to be, conducted at the site), and the extent and duration of governmental oversight, amongst other factors.

As clean-up efforts progress and more information is available, we will review these estimates and revise as appropriate.

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• There is a consolidated putative class action pending in the Northern District of Ohio (Eastern Division) (the Ohio Class Action) in which plaintiffs allege various claims, including negligence, gross negligence, strict liability, and nuisance, and seeking as relief compensatory and punitive damages, medical monitoring and business losses.

On July 12, 2023, we filed a third-party complaint bringing in multiple parties involved in the Incident.

Fact discovery ended on February 5, 2024.

The Court denied in part and granted in part all motions to dismiss, as to the plaintiffs’ case and as to our third-party complaint, on March 13, 2024.

On April 26, 2024, we entered into a class action settlement with the plaintiffs to resolve the Ohio Class Action for $ 600 million.

The settlement agreement resolves all class action claims within a 20 -mile radius from the derailment and, for those residents who choose to participate, personal injury claims within a 10 -mile radius from the derailment.

The settlement agreement does not resolve, and expressly preserves, our third-party claims in the third-party complaint.

The district court granted final approval of the settlement on September 27, 2024, which was subsequently appealed.

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Payment of the remaining balance, including timing, is dependent upon resolution of any appeals to the settlement.

Another putative class action is pending in the Western District of Pennsylvania, brought by Pennsylvania school districts and students.

Our claims against third parties were resolved during the second quarter.

Another putative class action is pending in the Western District of Pennsylvania, brought by Pennsylvania school districts and students (the Pennsylvania Class Action).

On August 22, 2023, six Pennsylvania school districts and students filed a putative class action lawsuit alleging negligence, strict liability, nuisance, and trespass, and seeking damages and health monitoring.

On December 8, 2023, the school districts amended their complaint to add additional companies as defendants in the action.

December 8, 2023, the school districts amended their complaint to add additional companies as defendants in the action.

On February 23, 2024, we and the other defendants filed motions to dismiss and those motions are fully briefed and currently pending before the court.

Combined with the Ohio Class Action, these lawsuits are collectively referred to herein as the Incident Lawsuits.

In accordance with FASB ASC 450, “ Contingencies, ” as of March 31, 2025 and December 31, 2024, we had accruals for probable and reasonably estimable liabilities principally associated with the Incident Lawsuits and related contingencies of $ 394 million and $ 369 million, respectively.

We are also named as a defendant in various other Incident-related lawsuits involving other potentially affected third parties, a number of which were filed in early 2025.

We are continuing to assess the claims and their potential impact on the Company.

Combined with the Ohio Class Action and the Pennsylvania Class Action, these lawsuits are collectively referred to herein as the Incident Lawsuits.

In accordance with FASB ASC 450, “ Contingencies, ” as of June 30, 2025 and December 31, 2024, we had accruals for probable and reasonably estimable liabilities principally associated with the Incident Lawsuits and related contingencies of $ 483 million and $ 369 million, respectively.

For the reasons set forth below, our estimated loss or range of loss with respect to the Incident Lawsuits may change from time to time, and it is reasonably possible that we will incur actual losses in excess of the amounts currently accrued and such additional amounts may be material.

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• We have received securities and derivative litigation and multiple shareholder document and litigation demand letters, including a securities class action lawsuit under the Securities Exchange Act of 1934 (Exchange Act) initially filed in the Southern District of Ohio alleging multiple securities law violations but since transferred to the Northern District of Georgia, a securities class action lawsuit under the Securities Act of 1933 (Securities Act) filed in the Southern District of New York alleging misstatements in association with our debt offerings, and six shareholder derivative complaints filed in Virginia state court asserting claims for breach of fiduciary duties, waste of corporate assets, and unjust enrichment in connection with safety of the Company’s operations, among other claims (collectively, the Shareholder Matters).

On February 2, 2024, defendants filed a motion to dismiss the complaint in the Securities Act lawsuit, and on July 26, 2024, the magistrate judge issued a Report and Recommendation to the district judge, recommending that the defendants’ motion to dismiss be granted in part and denied in part.

Defendants’ objections to the Report and Recommendation were filed on August 9, 2024, and plaintiffs’ response to defendants’ objections were filed on August 23, 2024.

On February 27, 2025, the district judge granted defendants’ motion to dismiss in its entirety, and closed the case.

On February 27, 2025, the district judge granted defendants’ motion to dismiss the Securities Act lawsuit in its entirety, and closed the case.

On March 28, 2025, plaintiffs in the Securities Act lawsuit filed a notice of appeal of the decision to the U.S.

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In the Exchange Act lawsuit, the plaintiffs filed an amended complaint on April 25, 2024, and the defendants filed a motion to dismiss on June 24, 2024.

On March 24, 2025, the district court denied defendants’ motion to dismiss, and ordered defendants to file their answer to the complaint within thirty days of the order, and the parties to file their joint preliminary report and discovery plan within thirty days of the answer.

On March 24, 2025, the district court denied defendants’ motion to dismiss, with the Exchange Act lawsuit now proceeding to discovery.

No responsive pleadings have been filed yet with respect to the other Shareholder Matters.

• We are also named as a defendant in various other Incident-related lawsuits involving other potentially affected third parties, a number of which were filed in the first quarter of 2025.

We are continuing to assess the claims and their potential impact on the Company.

With respect to the Incident-related litigation and regulatory matters, we record a liability for loss contingencies through a charge to earnings when we conclude that it is probable that a liability has been incurred and the amount of the liability can be reasonably estimated and disclose such liability if we conclude it to be material.

With respect to all Incident-related litigation and regulatory matters, we record a liability for loss contingencies through a charge to earnings when we conclude that it is probable that a liability has been incurred and the amount of the liability can be reasonably estimated and disclose such liability if we conclude it to be material.

Any adjustments to the recorded liability will be reflected in earnings in the periods in which such adjustments become known.

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We are cooperating with all pending inquiries and investigations, including responding to civil and criminal subpoenas and other requests for information (the aforementioned inquiries and investigations, as well as the civil and criminal subpoenas are collectively referred to herein as the Incident Inquiries and Investigations).

Aside from the FRA Safety Assessment (defined and described below) and the OSHA investigation (which has been completed), the outcome of any current or future Incident Inquiries and Investigations is uncertain at this time, including any related fines, penalties or settlements.

Aside from the FRA’s safety assessment and the OSHA investigation (both of which have been completed), the outcome of any current or future Incident Inquiries and Investigations is uncertain at this time, including any related fines, penalties or settlements.

Therefore, our accruals for probable and reasonably estimable liabilities related to the Incident do not include estimates of the total amount that we may incur for any such fines, penalties or settlements.

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and completed certain interviews (the NTSB Investigation).

The NTSB concluded its investigation and adopted a final investigative report on June 25, 2024, then issued the final public report on July 12, 2024.

The NTSB concluded the NTSB Investigation and issued a final public report in July 2024.

The NTSB found that the probable cause of the derailment was the failure of a bearing which overheated and caused the axle to separate, derailing the train and leading to a post-derailment fire.

The NTSB issued over 30 recommendations, of which four were issued to Norfolk Southern.

The NTSB continues to work on a safety culture investigation, and a report on this part of the investigation is expected to be issued in the spring of 2025.

The NTSB continues to work on a safety culture investigation, and a report on this part of the investigation is expected to be issued in the third quarter of 2025.

Concurrent with the NTSB Investigation, the FRA also investigated the Incident.

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The FRA Incident Investigation will likely result in the assessment of civil penalties, though the amount and materiality of these penalties cannot be reasonably estimated at this time.

In addition to the FRA Incident Investigation, the FRA completed a 60-day supplemental safety assessment (the FRA Safety Assessment).

The FRA Safety Assessment included a review of findings from a previously completed 2022 system audit and an assessment of operational elements including, but not limited to:

track, signal, and rolling stock maintenance, inspection and repair practices;

protection of employees;

communications between transportation departments and mechanical and engineering staff;

operation control center procedures and dispatcher training.

The overall scope of the FRA Safety Assessment was to examine our safety culture.

The FRA issued a public report in early August 2023 which included its findings and related corrective actions.

We have launched initiatives to implement all of these items, and will monitor progress on these initiatives going forward.

Other Commitments and Contingencies

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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.

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.

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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.

The defendant railroads appealed this certification, and the Court of Appeals for the D.C.

Circuit vacated the District Court’s decision and remanded the case for further consideration.

On October 10, 2017, the District Court denied class certification.

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Since that decision, various individual cases have been filed in multiple jurisdictions and also consolidated in the District of Columbia.

We intend to vigorously defend the cases and we believe that we will prevail.

On June 24, 2025, the District Court granted summary judgement dismissing the consolidated cases in full.

On July 24, 2025, a majority of plaintiffs appealed this ruling to the Court of Appeals for the D.C.

We intend to vigorously defend the cases through appeal and believe that we will prevail.

However, given that litigation is inherently unpredictable and subject to uncertainties, there can be no assurances that the final resolution of the litigation will not be material.

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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 studies our historical patterns of reserving for claims and subsequent settlements, taking into account relevant outside influences.

The actuarial firm provides the results of these analyses to aid in our estimate of the ultimate amount of liability.

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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.

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.

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Environmental specialists regularly participate in ongoing evaluations of all known sites and in determining any necessary adjustments to liability estimates.

In addition to environmental claims associated with the Incident, our Consolidated Balance Sheets include liabilities for other environmental exposures of $ 65 million at both March 31, 2025 and December 31, 2024, of which $ 15 million is classified as a current liability at the end of both periods.

At March 31, 2025, the liability represents our estimates of the probable cleanup, investigation, and remediation costs based on available information at 73 known locations and projects compared with 74 locations and projects at December 31, 2024.

At March 31, 2025, twenty-one sites accounted for $ 56 million of the liability, and no individual site was considered to be material.

In addition to environmental claims associated with the Incident, our Consolidated Balance Sheets include liabilities for other environmental exposures of $ 63 million at June 30, 2025 and $ 65 million at December 31, 2024, of which $ 15 million is classified as a current liability at the end of both periods.

At June 30, 2025, the liability represents our estimates of the probable cleanup, investigation, and remediation costs based on available information at 71 known locations and projects compared with 74 locations and projects at December 31, 2024.

At June 30, 2025, eighteen sites accounted for $ 54 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 ;

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As set forth above, with respect to known environmental sites (whether identified by us or by the U.S.

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.

EPA 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.

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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.

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.

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For those unions with whom we have not yet reached a ratified agreement, the NCCC, on behalf of Norfolk Southern, sent bargaining notices on November 1, 2024, to commence mandatory direct negotiations as prescribed under the RLA.

Since then, the NCCC has reached several additional agreements, subject to ratification, on behalf of Norfolk Southern and other members of the bargaining coalition.

Since then, the NCCC has reached several additional agreements on behalf of Norfolk Southern and other members of the bargaining coalition.

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

We purchase insurance covering legal liabilities for bodily injury and property damage to third parties.

Our current liability insurance provides limits for approximately 83 % of covered losses above $ 75 million and below $ 734 million per occurrence and/or policy year.

Our liability insurance provides limits for approximately 83 % of covered losses above $ 75 million and below $ 734 million per occurrence and/or policy year.

Above $ 800 million per occurrence and/or policy year, we maintain approximately $ 43 million additional liability insurance limits for certain types of pollution releases.

We also purchase insurance for property damage to property owned by us or in our care, custody, or control.

Our current property insurance provides limits for approximately 82 % of covered losses above $ 75 million and below $ 275 million per occurrence and/or policy year.

With respect to the Incident, our insurance in effect at such time

provided coverage above $ 75 million and below $ 800 million (or up to $ 1.1 billion for specified types of pollution releases) per occurrence and/or policy year, and with respect to property owned by us or in our care, custody, or control, our insurance covered approximately 82 % of potential losses above $ 75 million and below $ 275 million per occurrence and/or policy year.

Insurance coverage with respect to the Incident is subject to certain conditions, including but not limited to our insurers’ reservation of rights to further investigate and contest coverage, the express restrictions and sub-limits of coverage, and various policy exclusions, including those for some governmental fines or penalties.

Some (re)insurers have questioned certain payments we have made, for example, as part of our effort to respond to, mitigate, and compensate for the impact to the community and affected residents and businesses.

We are pursuing coverage with respect to the Incident, and we have recognized $ 975 million in insurance recoveries (including $ 224 million and $ 108 million during the first quarters of 2025 and 2024, respectively), principally from excess liability (re)insurers.

At March 31, 2025 and December 31, 2024, $ 120 million and $ 18 million was outstanding and is included in “Accounts receivable – net” on the Consolidated Balance Sheets.

With the exception of amounts that have been recognized, potential recoveries under our insurance coverage have not yet been recorded (given the insurers ongoing evaluation of our claims).

In addition, no amounts have been recorded related to potential recoveries from other third parties, which may reduce amounts payable by our insurers under our applicable insurance coverage.

Our property insurance provides limits for approximately 77 % of covered losses above $ 75 million and below $ 275 million per occurrence and/or policy year.

With respect to the Incident, we have recognized over $ 1.0 billion in insurance recoveries (including $ 74 million and $ 156 million during the second quarters of 2025 and 2024, respectively, and $ 298 million and $ 264 million during the first six months of 2025 and 2024, respectively), principally from excess liability (re)insurers.

At June 30, 2025 and December 31, 2024, $ 49 million and $ 18 million was outstanding and is included in “Accounts receivable – net” on the Consolidated Balance Sheets.

At June 30, 2025, we have exhausted coverage under our liability insurance policies with respect to the Incident.

With the exception of amounts that have been recognized, potential future recoveries under our property and other insurance coverage have not yet been recorded (given the insurers ongoing evaluation of our claims).

New Accounting Pronouncements

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We will not early adopt the standard and are currently evaluating the effect on our financial statements.

Subsequent Events

On July 4, 2025, the One Big Beautiful Bill Act (OBBBA) was signed into law.

The OBBBA makes permanent or introduces certain changes to the Internal Revenue Code, including 100% bonus depreciation, the deductibility of business interest expense, and expensing of domestic research costs.

FASB ASC 740 “ Income Taxes ” requires that the effect of changes in tax rates and laws be recognized in the period in which the legislation is enacted.

The Company is evaluating the impact of OBBBA but expects that the primary effect will be a shift between current and deferred taxes.

As previously announced in the Company’s Current Report on Form 8-K filed with the Securities and Exchange Commission (SEC) on July 29, 2025, on July 28, 2025, the Company entered into an Agreement and Plan of Merger (the “Merger Agreement”) with Union Pacific Corporation, a Utah corporation (Union Pacific), Ruby Merger Sub 1 Corporation, a Virginia corporation and a direct wholly owned subsidiary of Union Pacific (Merger Sub 1), and Ruby Merger Sub 2 LLC, a Virginia limited liability company and a direct wholly owned subsidiary of Union Pacific (Merger Sub 2).

The Merger Agreement provides that, among other things and on the terms and subject to the conditions set forth therein, Union Pacific will acquire the Company in a stock-and-cash transaction whereby (a) Merger Sub 1 will be merged with and into the Company (the “First Merger”), with the Company surviving the First Merger as a direct wholly owned subsidiary of Union Pacific, and (b) immediately following the First Merger, the Company will be merged with and into Merger Sub 2 (the “Second Merger” and together with the First Merger, the “Mergers”), with Merger Sub 2 surviving the Second Merger as a direct, wholly owned subsidiary of Union Pacific.

Upon the terms and subject to the conditions set forth in the Merger Agreement, at the effective time of the First Merger, each share of common stock, par value $ 1.00 per share, of the Company, issued and outstanding immediately prior to the effective time of the First Merger, subject to certain exclusions set forth in the Merger Agreement, will be converted into the right to receive one share of common stock, par value $ 2.50 per share, of Union Pacific, and $ 88.82 in cash without interest.

The consummation of the Mergers is subject to certain conditions, including approval by the Surface Transportation Board, and termination rights.

In addition, the Company and Union Pacific are required to pay the other a termination fee of $ 2.5 billion in cash upon termination of the Merger Agreement under specified circumstances, which will be further described in the Company’s Current Report on Form 8-K, to be filed with the SEC.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements