What changed in this filing

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Item 1. Financial Statements

2025-10-23 compared with 2025-07-29 · 147 added, 95 removed, 554 unchanged (30% of the section changed)

2 unchanged sentences

Consolidated Statements of Income

Second Quarter First Six Months

Third Quarter First Nine Months

2025 2024 2025 2024

7 unchanged sentences

Materials and other 147 ( 188 ) 547 200

Merger-related expenses 15 — 15 —

Restructuring and other charges 12 60 22 156

13 unchanged sentences

Consolidated Statements of Comprehensive Income

Second Quarter First Six Months

Third Quarter First Nine Months

2025 2024 2025 2024

3 unchanged sentences

Pension and other postretirement expense — ( 2 ) — ( 15 )

Other comprehensive income of equity investees — 1 1 1

Other comprehensive income (loss), before tax — ( 10 ) 1 ( 12 )

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

Other comprehensive loss, before tax ( 1 ) ( 2 ) — ( 14 )

Income tax benefit related to items of other

comprehensive income — — — 2

Other comprehensive income (loss), net of tax — ( 8 ) 1 ( 10 )

Other comprehensive loss, net of tax ( 1 ) ( 2 ) — ( 12 )

Total comprehensive income $ 710 $ 1,097 $ 2,229 $ 1,877

2 unchanged sentences

Consolidated Balance Sheets

September 30,

2025 December 31,

35 unchanged sentences

Consolidated Statements of Cash Flows

First Six Months

First Nine Months

($ in millions)

63 unchanged sentences

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

Comprehensive income:

Net income 711 711

Other comprehensive loss ( 1 ) ( 1 )

Total comprehensive income 710

Dividends on common stock,

$ 1.35 per share

( 303 ) ( 303 )

Share repurchases ( 3 ) ( 75 ) ( 78 )

Stock-based compensation 27 ( 2 ) 25

Balance at September 30, 2025 $ 226 $ 2,283 $ ( 262 ) $ 12,894 $ 15,141

See accompanying notes to consolidated financial statements.

25 unchanged sentences

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

Comprehensive income:

Net income 1,099 1,099

Other comprehensive loss ( 2 ) ( 2 )

Total comprehensive income 1,097

Dividends on common stock,

$ 1.35 per share

( 305 ) ( 305 )

Stock-based compensation 1 15 ( 2 ) 14

Balance at September 30, 2024 $ 228 $ 2,223 $ ( 332 ) $ 11,666 $ 13,785

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 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.

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 September 30, 2025 and December 31, 2024, our results of operations, comprehensive income and changes in stockholders’ equity for the third quarters and first nine months of 2025 and 2024, and our cash flows for the first nine months of 2025 and 2024 in conformity with U.S.

Generally Accepted Accounting Principles (GAAP).

These consolidated financial statements should be read in conjunction with the consolidated financial statements and notes included in our latest Annual Report on Form 10-K.

Merger Agreement

On July 28, 2025, we entered into an Agreement and Plan of Merger (the “Merger Agreement”) with Union Pacific Corporation, a Utah corporation (“Union Pacific”), Ruby Merger Sub 1 Corporation, a Virginia corporation and a direct wholly owned subsidiary of Union Pacific (“Merger Sub 1”), and Ruby Merger Sub 2 LLC, a Virginia limited liability company and a direct wholly owned subsidiary of Union Pacific (“Merger Sub 2”).

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

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 each company’s shareholders and the Surface Transportation Board (STB).

Additionally, if the Merger Agreement is terminated under specific circumstances, either we or Union Pacific are required to pay a termination fee of $ 2.5 billion.

The full text of the Merger Agreement can be found as Exhibit 2.1 in our Current Report on Form 8-K filed with the SEC on July 29, 2025.

We incurred $ 15 million in Merger-related expenses during the third quarter and the first nine months of 2025.

These costs, which include fees for third-party advisors, legal services, and employee retention arrangements, are recorded in “Merger-related expenses” on the Consolidated Statements of Income.

Segment Reporting

4 unchanged sentences

Although we provide and analyze revenues by commodity group, the overall financial and operational performance of the railroad is analyzed as one operating segment due to the nature of our integrated rail network.

The chief operating decision maker assesses performance for the railway operations segment and decides how to allocate resources based on “Net income” that is reported on the Consolidated Statements of Income.

The chief operating decision maker assesses the performance of the railway operations segment and decides how to allocate resources based on “Net income” that is reported on the Consolidated Statements of Income.

The measure of segment assets is reported on the Consolidated Balance Sheets as “Total assets.” Total expenditures for long-lived assets are disclosed as “Property additions” on the Consolidated Statement of Cash Flows.

1 unchanged sentence

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

Second Quarter First Six Months

Third Quarter First Nine Months

2025 2024 2025 2024

11 unchanged sentences

Other ( 32 ) ( 350 ) 45 ( 250 )

Merger-related expenses 15 — 15 —

Restructuring and other charges 12 60 22 156

9 unchanged sentences

The following table disaggregates our revenues by major commodity group:

Second Quarter First Six Months

Third Quarter First Nine Months

2025 2024 2025 2024

15 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 June 30, 2025 and December 31, 2024.

We had no material remaining performance obligations at September 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 % 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.

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 third quarter and first nine months of 2025, and 4 % for the third quarter and first nine months of 2024.

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

2 unchanged sentences

“Accounts receivable – net” on the Consolidated Balance Sheets includes both customer and non-customer receivables as follows:

September 30,

2025 December 31, 2024

4 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 June 30, 2025 and December 31, 2024.

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

Stock-Based Compensation

Second Quarter First Six Months

Third Quarter First Nine Months

2025 2024 2025 2024

3 unchanged sentences

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

Third Quarter First Nine Months

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

3 unchanged sentences

Stock Options

Second Quarter First Six Months

Third Quarter First Nine Months

2025 2024 2025 2024

6 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.

Second Quarter First Six Months

Third Quarter First Nine Months

2025 2024 2025 2024

7 unchanged sentences

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

First Six Months

No PSUs were earned or paid out during the third quarters of 2025 or 2024.

First Nine Months

($ in millions)

2 unchanged sentences

Related tax benefits realized $ — $ —

Sales of Railway Lines

On September 5, 2024, we consummated a transaction with the Virginia Passenger Rail Authority (VPRA) to sell a railway line to support the expansion of passenger rail service in the Commonwealth of Virginia.

The total purchase price to be paid by the VPRA is $ 357 million and we received $ 315 million in cash proceeds at closing.

The remainder of the proceeds are expected to be received by the end of 2027.

The total gain recognized as a result of the transaction was $ 323 million.

On September 6, 2024, we consummated an agreement with the City of Charlotte to sell a railway line between Charlotte and Mecklenburg County, NC in exchange for $ 74 million.

The cash proceeds from the transaction were received at closing and the transaction resulted in a gain of $ 57 million.

The gains from these transactions are reflected in “Gains and losses on properties” and cash proceeds are included in “Property sales and other transactions” on the Consolidated Statement of Cash Flows.

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 $ 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” 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.

Restructuring and other charges in 2025 includes expenses associated with the rationalization of certain software development projects that had not been placed into service and the restructuring of certain technology functions, including severance costs for impacted employees.

Restructuring and other charges in 2024 includes expenses associated with our voluntary and involuntary separation programs that reduced our management workforce, expenses associated with the rationalization of certain software development projects that had not been placed into service, costs associated with the appointment of our new chief operating officer, and the disposition of an asset class.

We incurred expenses of $ 12 million and $ 60 million in the third quarters of 2025 and 2024, respectively, and $ 22 million and $ 156 million for the first nine months of 2025 and 2024, respectively.

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 Accounting Standards Codification (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 impact of this change is primarily a reclassification from current to deferred taxes.

Earnings Per Share

1 unchanged sentence

Basic Diluted

Second Quarter

Third Quarter

2025 2024 2025 2024

9 unchanged sentences

Basic Diluted

First Six Months

First Nine Months

2025 2024 2025 2024

8 unchanged sentences

Earnings per share $ 9.89 $ 8.35 $ 9.88 $ 8.34

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.

During the third quarters and first nine 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.

1 unchanged sentence

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

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

none in the third quarter of 2025 and 0.1 million in the third quarter of 2024 and the first nine months ended September 30, 2025 and 2024.

Accumulated Other Comprehensive Loss

4 unchanged sentences

($ in millions)

Six months ended June 30, 2025

Nine months ended September 30, 2025

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

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

Other comprehensive loss of equity investees ( 22 ) — — ( 22 )

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

Six months ended June 30, 2024

Nine months ended September 30, 2024

Pensions and other postretirement liabilities $ ( 292 ) $ ( 7 ) $ ( 6 ) $ ( 305 )

2 unchanged sentences

Stock Repurchase Program

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.

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

With limited exceptions, the Merger Agreement prohibits repurchases of our common stock without Union Pacific’s consent.

As a result, we suspended share repurchases upon entering into the Merger Agreement.

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 June 30, 2025 and December 31, 2024, respectively.

Our investment in Conrail was $ 1.8 billion and $ 1.7 billion at September 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.

1 unchanged sentence

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 $ 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 %.

“Purchased services and rents” and “Fuel” include expenses payable to CRC for operation of the Shared Assets Areas totaling $ 47 million and $ 44 million for the third quarters of 2025 and 2024, respectively, and $ 140 million and $ 146 million for the first nine months of 2025 and 2024, respectively.

Our equity in Conrail’s earnings, net of amortization, was $ 20 million and $ 19 million for the third quarters of 2025 and 2024, respectively, and $ 59 million and $ 62 million for the first nine months 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 September 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 $ 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.

Expenses incurred for use of TTX equipment are included in “Purchased services and rents.” These expenses amounted to $ 81 million and $ 72 million for the third quarters of 2025 and 2024, respectively, and $ 236 million and $ 220 million for the first nine months of 2025 and 2024, respectively.

Our equity in TTX’s earnings partially offsets these costs and totaled $ 13 million for both the third quarters of 2025 and 2024, and $ 33 million and $ 40 million for the first nine months of 2025 and 2024, respectively.

Under the terms of the Merger Agreement, we are subject to certain restrictions on the incurrence of additional indebtedness.

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

3 unchanged sentences

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 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”.

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

Our accounts receivable securitization program was supported by $ 798 million and $ 790 million in receivables at September 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.

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

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

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

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

We had no amounts outstanding under this facility at either September 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

Second Quarter

Third Quarter

2025 2024 2025 2024

3 unchanged sentences

Expected return on plan assets ( 49 ) ( 51 ) ( 2 ) ( 2 )

Amortization of net losses 5 4 — —

Amortization of net losses (gains) 6 4 ( 1 ) —

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

Curtailment gain — — — ( 20 )

Net benefit $ ( 10 ) $ ( 14 ) $ ( 4 ) $ ( 4 )

Pension Benefits Other Postretirement Benefits

First Six Months

First Nine Months

2025 2024 2025 2024

3 unchanged sentences

Expected return on plan assets ( 147 ) ( 153 ) ( 7 ) ( 8 )

Amortization of net losses 11 8 — —

Amortization of net losses (gains) 17 12 ( 1 ) —

Amortization of prior service benefit — — ( 16 ) ( 18 )

4 unchanged sentences

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

In accordance with FASB Accounting Standard Codification (ASC) Topic 715, “ Compensation-Retirement Benefits ,” we evaluated whether a curtailment of our pension and other postretirement benefit plans had occurred.

In accordance with FASB ASC Topic 715, “ Compensation-Retirement Benefits ,” we evaluated whether a curtailment of our pension and other postretirement benefit plans had occurred.

While the reduction in our workforce did no t result in a curtailment to our pension benefit plans, a curtailment to our other postretirement benefit plan did occur as the future years of service of plan participants were reduced in excess of 10 %.

3 unchanged sentences

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 June 30, 2025 or December 31, 2024.

There are no other assets or liabilities measured at fair value on a recurring basis at September 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:

June 30, 2025 December 31, 2024

September 30, 2025 December 31, 2024

Value Carrying

21 unchanged sentences

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

Expense/(Recoveries) — 5 5 ( 16 ) ( 11 )

(Payments)/Receipts ( 12 ) ( 11 ) ( 23 ) 16 ( 7 )

At September 30, 2025 $ 197 $ 506 $ 703 $ ( 49 ) $ 654

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

7 unchanged sentences

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

Expense/(Recoveries) 51 78 129 ( 288 ) ( 159 )

(Payments)/Receipts ( 52 ) ( 31 ) ( 83 ) 184 101

At September 30, 2024 $ 264 $ 759 $ 1,023 $ ( 223 ) $ 800

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.

At September 30, 2025 and December 31, 2024, we have also recorded a deferred tax asset of $ 81 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.

6 unchanged sentences

We timely submitted our Notice of Intent to Comply with the CWA Order and continue to complete environmental assessment and remediation (if needed based on assessment results) as required by the EPA, as well as state agencies, in compliance with the CWA Order.

In September 2025, we completed the environmental remediation and

restoration work at the site.

Surface water and groundwater monitoring will continue pursuant to the approved plans under the UAO.

Once approved by the court, the proposed Consent Decree (discussed below) will supersede the UAO and CWA Order.

4 unchanged sentences

The DOJ and Ohio AG cases have been consolidated for discovery purposes.

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

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

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.

7 unchanged sentences

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, 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.

Our current estimates of future environmental cleanup and remediation liabilities related to the Incident recognize that the remediation and restoration efforts have now largely concluded.

The remaining cost estimates could change over time based on various factors, including but not limited to, the issuance of additional cleanup and removal orders or directives, and the extent of continued government oversight amongst other factors.

Legal Proceedings and Claims (Non-Environmental) – To date, numerous non-environmental legal actions have commenced with respect to the Incident, including those more specifically set forth below.

4 unchanged sentences

We made a partial payment of the settlement in 2024, in the amount of $ 315 million.

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

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

Payment of the remaining balance, including timing, is dependent

upon resolution of any appeals to the settlement.

Our claims against third parties were resolved during the second quarter of 2025.

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.

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

On 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.

2 unchanged sentences

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.

In accordance with FASB ASC 450, “ Contingencies, ” as of September 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 $ 482 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.

5 unchanged sentences

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, with the Exchange Act lawsuit now proceeding to discovery.

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

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

In the derivative litigation, the six actions were consolidated on July 10, 2025, by agreement of the parties.

No responsive pleadings have been filed yet in the derivative litigation or Securities Act lawsuit.

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.

1 unchanged sentence

Because the final outcome of any of these legal proceedings cannot be predicted with certainty, developments related to the progress of such legal proceedings or other unfavorable or unexpected developments or outcomes could result in additional costs or new or additionally accrued amounts that could be material to our results of operations in a particular year or quarter.

In addition, if it is reasonably possible that we will incur Incident-related losses in excess of the amounts currently recorded as a loss contingency, we disclose the potential range of loss, if reasonably estimable, or we disclose that we cannot reasonably estimate such an amount at this time.

In addition, if it is reasonably possible that we will incur Incident-related losses in excess

of the amounts currently recorded as a loss contingency, we disclose the potential range of loss, if reasonably estimable, or we disclose that we cannot reasonably estimate such an amount at this time.

For Incident-related litigation and regulatory matters where a loss may be reasonably possible, but not probable, or probable but not reasonably estimable, no accrual is established but the matter, if potentially material, is disclosed.

Our estimates of probable losses and reasonably possible losses are based upon currently available information and involve significant judgement and a variety of assumptions, given that (1) certain legal and

regulatory proceedings are in early stages;

(2) discovery may not be completed;

17 unchanged sentences

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 third quarter 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 2025.

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

2 unchanged sentences

Other Commitments and Contingencies

Litigation Related to the Mergers

Shareholders may file lawsuits challenging the Mergers, which may name us, Union Pacific, members of our board, members of the Union Pacific board, or others as defendants.

No assurance can be made as to the outcome of such lawsuits, including the amount of costs associated with defending claims or any other liabilities that may be incurred in connection with the litigation of any claims.

If plaintiffs are successful in obtaining an injunction prohibiting the parties from completing the Mergers on the agreed-upon terms, such an injunction may delay the completion of the Mergers or may prevent the Mergers from being completed altogether.

We and Union Pacific have each received demand letters from certain purported shareholders of Norfolk Southern and Union Pacific, as applicable, that allege deficiencies and/or omissions in the registration statement on Form S-4 filed by Union Pacific with the SEC relating to the Mergers.

The demand letters seek additional disclosures to remedy these purported deficiencies.

We believe that the allegations in these letters are without merit.

There can be no assurances that complaints or additional demands will not be filed or made with respect to the Mergers.

If additional similar demands are made, absent new or different allegations that are material, neither we nor Union Pacific will necessarily announce them.

We and/or certain subsidiaries are defendants in numerous lawsuits and other claims relating principally to railroad operations.

1 unchanged sentence

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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On April 19, 2023, the court disposed of all remaining state equitable relief claims.

On August 29, 2024, the United States Court of Appeals for the Fourth Circuit affirmed the opinion of the lower court.

August 29, 2024, the United States Court of Appeals for the Fourth Circuit affirmed the opinion of the lower court.

In April 2025, the U.S.

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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 $ 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.

In addition to environmental claims associated with the Incident, our Consolidated Balance Sheets include liabilities for other environmental exposures of $ 62 million at September 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 September 30, 2025, the liability represents our estimates of the probable cleanup, investigation, and remediation costs based on available information at 69 known locations and projects compared with 74 locations and projects at December 31, 2024.

At September 30, 2025, eighteen sites accounted for $ 53 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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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.

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A majority of those tentative agreements were subsequently ratified by union membership and became effective January 1, 2025, foreclosing the parties from serving new notices to compel mandatory bargaining until November 1, 2029.

For those unions with whom we 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.

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

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

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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 respect to the Incident, we have recognized approximately $ 1.1 billion in insurance recoveries (including $ 16 million and $ 288 million during the third quarters of 2025 and 2024, respectively, and $ 314 million and $ 552 million during the first nine months of 2025 and 2024, respectively), principally from excess liability (re)insurers.

At September 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.

By June 30, 2025, we 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).

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The ASU is effective for fiscal years beginning after December 15, 2024, and we did not adopt the standard early.

We are currently evaluating the impact of this amendment on our disclosures.

In November 2024, the FASB issued ASU 2024-03, “ Income Statement - Reporting Comprehensive Income - Expense Disaggregation Disclosures (Subtopic 220-40).

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The ASU is effective for fiscal years beginning after December 15, 2026 and interim periods within fiscal years beginning after December 15, 2027.

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.

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.

We will not early adopt the standard and are currently evaluating the impact of this amendment on our disclosures.

In September 2025, the FASB issued ASU 2025-06, “ Intangibles-Goodwill and Other-Internal-Use Software (Subtopic 350-40):

Targeted Improvements to the Accounting for Internal-Use Software .” This update revises the recognition guidance for internal-use software by eliminating the previous model based on software development stages and introducing a principles-based approach.

Under the new guidance, capitalization begins when management has authorized and committed to funding the project, and it is probable that the software will be completed and used for its intended purpose.

The ASU is effective for interim periods and fiscal years beginning after December 15, 2027.

We will not early adopt the standard and are currently evaluating the impact.

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