What changed in this filing

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Item 1. Financial Statements

2026-07-23 compared with 2026-04-24 · 147 added, 78 removed, 441 unchanged (34% of the section changed)

2 unchanged sentences

Consolidated Statements of Income

First Quarter

Second Quarter First Six Months

2026 2025 2026 2025

($ in millions, except per share amounts)

3 unchanged sentences

Purchased services and rents 550 520 1,072 1,018

Fuel 405 219 661 463

Depreciation 358 346 710 692

1 unchanged sentence

Merger-related expenses 51 — 103 —

Restructuring and other charges 6 10 6 10

Eastern Ohio incident 15 ( 47 ) 25 ( 232 )

12 unchanged sentences

Consolidated Statements of Comprehensive Income

First Quarter

Second Quarter First Six Months

2026 2025 2026 2025

($ in millions)

2 unchanged sentences

Pension and other postretirement expense — — ( 2 ) —

Other comprehensive income of equity investees — 1

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

Other comprehensive income (loss), before tax ( 1 ) — ( 3 ) 1

43 unchanged sentences

Consolidated Statements of Cash Flows

First Three Months

First Six Months

($ in millions)

22 unchanged sentences

Purchase and retirement of common stock ( 5 ) ( 456 )

Proceeds from borrowings — 396

Debt repayments ( 607 ) ( 253 )

26 unchanged sentences

Balance at March 31, 2026 226 2,312 ( 211 ) 13,477 15,804

Comprehensive income:

Net income 734 734

Other comprehensive loss ( 1 ) ( 1 )

Total comprehensive income 733

Dividends on common stock,

$ 1.35 per share

( 303 ) ( 303 )

Stock-based compensation 20 ( 1 ) 19

Balance at June 30, 2026 $ 226 $ 2,332 $ ( 212 ) $ 13,907 $ 16,253

See accompanying notes to consolidated financial statements.

Norfolk Southern Corporation and Subsidiaries

Consolidated Statements of Changes in Stockholders’ Equity

Stock Additional

14 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.

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, 2026 and December 31, 2025, our results of operations, comprehensive income and changes in stockholders’ equity for the first quarters of 2026 and 2025, and our cash flows for the first three months of 2026 and 2025 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, 2026 and December 31, 2025, our results of operations, comprehensive income and changes in stockholders’ equity for the second quarters and first six months of 2026 and 2025, and our cash flows for the first six months of 2026 and 2025 in conformity with U.S.

Generally Accepted Accounting Principles (GAAP).

1 unchanged sentence

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 the U.S.

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”), pursuant to which Union Pacific will acquire the Company in a stock-and-cash transaction more fully described therein.

The consummation of this transaction is subject to certain conditions, including approval by the U.S.

Surface Transportation Board (STB).

2 unchanged sentences

Securities and Exchange Commission (SEC) on July 29, 2025.

During the first quarter of 2026, we incurred $ 52 million in expenses related to or resulting from the proposed transaction.

We incurred $ 51 million and $ 103 million in expenses during the second quarter and first six months of 2026, respectively, related to or resulting from the proposed transaction.

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

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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.

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.

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 Statements of Cash Flows.

Railway operations segment revenues, expenses, and profit are disclosed below as reviewed and used by the chief operating decision maker.

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

First Quarter

Second Quarter First Six Months

2026 2025 2026 2025

($ in millions)

5 unchanged sentences

Equipment rents 115 111 219 208

Fuel 405 219 661 463

Depreciation 358 346 710 692

Materials 113 98 207 198

Claims 69 59 122 125

Other 30 38 72 77

Merger-related expenses 51 — 103 —

Restructuring and other charges 6 10 6 10

Eastern Ohio incident 15 ( 47 ) 25 ( 232 )

8 unchanged sentences

The following table disaggregates our revenues by major commodity group:

First Quarter

Second Quarter First Six Months

2026 2025 2026 2025

($ in millions)

5 unchanged sentences

Intermodal 908 743 1,657 1,503

Coal 424 395 788 765

Total $ 3,465 $ 3,110 $ 6,463 $ 6,103

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, 2026 and December 31, 2025.

We had no material remaining performance obligations at June 30, 2026 and December 31, 2025.

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 6 % and 5 % of total “Railway operating revenues” on the Consolidated Statements of Income for the first quarters of 2026 and 2025, 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 quarters and first six months of 2026 and 2025.

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, and others.

We do no t have any material contract assets or liabilities at March 31, 2026 and December 31, 2025.

We do no t have any material contract assets or liabilities at June 30, 2026 and December 31, 2025.

Stock-Based Compensation

First Quarter

Second Quarter First Six Months

2026 2025 2026 2025

($ in millions)

1 unchanged sentence

Total tax benefit 3 3 10 8

During the first quarter of 2026, no stock options were granted.

During the second quarter and first six months of 2026, no stock options were granted.

We granted 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

Second Quarter First Six Months

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

RSUs 1,132 $ 315.93 198,891 $ 288.07

1 unchanged sentence

Stock Options

First Quarter

Second Quarter First Six Months

2026 2025 2026 2025

($ 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

2026 2025 2026 2025

($ in millions)

6 unchanged sentences

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

No PSUs were earned or paid out during the first quarter of 2026.

First Quarter

No PSUs were earned or paid out during the second quarter and first six months of 2026.

First Six Months

($ in millions)

2 unchanged sentences

Related tax benefits realized $ —

Restructuring and Other Charges

During the second quarter of 2026, we recorded $ 6 million in expenses related to severance costs associated with organizational changes.

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

Earnings Per Share

1 unchanged sentence

Basic Diluted

First Quarter

Second Quarter

2026 2025 2026 2025

8 unchanged sentences

Earnings per share $ 3.26 $ 3.41 $ 3.26 $ 3.41

During the first quarters of 2026 and 2025, dividend equivalent payments were made to certain holders of stock options and RSUs.

Basic Diluted

First Six Months

2026 2025 2026 2025

($ in millions, except per share amounts,

shares in millions)

Net income $ 1,281 $ 1,518 $ 1,281 $ 1,518

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

Income available to common stockholders $ 1,279 $ 1,516 $ 1,280 $ 1,517

Weighted-average shares outstanding 224.5 225.5 224.5 225.5

Dilutive effect of outstanding options and share-settled awards 0.5 0.3

Adjusted weighted-average shares outstanding 225.0 225.8

Earnings per share $ 5.70 $ 6.72 $ 5.69 $ 6.72

During the second quarters and first six months of 2026 and 2025, 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.

2 unchanged sentences

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

none and 0.1 million in the first quarters ended March 31, 2026 and 2025, respectively.

none in the second quarter and first six months ended June 30, 2026 and 0.1 million in the second quarter and first six months ended June 30, 2025.

Accumulated Other Comprehensive Loss

4 unchanged sentences

($ in millions)

Three months ended March 31, 2026

Six months ended June 30, 2026

Pensions and other postretirement liabilities $ ( 192 ) $ — $ ( 1 ) $ ( 193 )

1 unchanged sentence

Accumulated other comprehensive loss $ ( 210 ) $ ( 1 ) $ ( 1 ) $ ( 212 )

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 )

Stock Repurchase Program

We did not repurchase shares of Common Stock under our stock repurchase program in the first three months of 2026, while we repurchased and retired 1.0 million shares of Common Stock at a cost of $ 250 million in the first three months of 2025, inclusive of accrued excise taxes.

We did not repurchase shares of Common Stock under our stock repurchase program in the first six months of 2026, while we repurchased and retired 1.9 million shares of Common Stock at a cost of $ 455 million in the first six months of 2025, inclusive of accrued excise taxes.

“Purchase and retirement of common stock” in 2026 as presented on the Consolidated Statements of Cash Flows reflects the payment of excise taxes on shares repurchased in 2025.

5 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 at both March 31, 2026 and December 31, 2025.

Our investment in Conrail was $ 1.9 billion and $ 1.8 billion at June 30, 2026 and December 31, 2025, 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 $ 52 million and $ 49 million for the first quarters of 2026 and 2025, respectively.

Our equity in Conrail’s earnings, net of amortization, was $ 19 million and $ 16 million for the first quarters of 2026 and 2025, respectively.

“Purchased services and rents” and “Fuel” include expenses payable to CRC for operation of the Shared Assets Areas totaling $ 51 million and $ 44 million for the second quarters of 2026 and 2025, respectively, and $ 103 million and $ 93 million for the first six months of 2026 and 2025, respectively.

Our equity in Conrail’s earnings, net of amortization, was $ 20 million and $ 23 million for the second quarters of 2026 and 2025, respectively, and $ 39 million in both the first six months of 2026 and 2025.

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, 2026 and December 31, 2025 for long-term advances from Conrail, maturing in 2050 that bear interest at an average rate of 1.31 %.

“Other liabilities” includes $ 534 million at both June 30, 2026 and December 31, 2025 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 $ 76 million and $ 74 million for the first quarters of 2026 and 2025, respectively.

Our equity in TTX’s earnings partially offsets these costs and totaled $ 8 million and $ 11 million for the first quarters of 2026 and 2025, respectively.

Expenses incurred for use of TTX equipment are included in “Purchased services and rents.” These expenses amounted to $ 85 million and $ 81 million for the second quarters of 2026 and 2025, respectively, and $ 161 million and $ 155 million for the first six months of 2026 and 2025, respectively.

Our equity in TTX’s earnings partially offsets these costs and totaled $ 8 million and $ 9 million for the second quarters of 2026 and 2025, respectively, and $ 16 million and $ 20 million for the first six months of 2026 and 2025, respectively.

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

In April 2026, we entered into a non-cancellable finance lease of an office building in replacement of a previous operating lease.

The lease term is for five years and includes options to renew, purchase, or sell the building at the end of the lease.

We recorded a right-of-use asset of $ 117 million and a finance lease liability of $ 115 million, based on the initial five -year term.

The lease contains a residual value guarantee of approximately $ 499 million for the total construction cost of the building.

We determined no amounts are probable of being owed under the guarantee and, as such, were not included in the measurement of the finance lease liability.

Right-of-use assets related to finance leases are included in “Properties less accumulated depreciation,” and finance lease liabilities are included in “Current maturities of long-term debt” and “Long-term debt” in the Consolidated Balance Sheet.

In connection with the transaction, a third-party bank paid $ 272 million directly to other bank counterparties related to the restructuring of our prior operating lease.

In May 2026, we renewed our accounts receivable securitization program with a maximum borrowing capacity of $ 400 million.

Amounts under our accounts receivable securitization program are borrowed and repaid from time to time in the ordinary course for general corporate and cash management purposes.

The term of our accounts receivable securitization program expires in May 2027.

Amounts received under this facility are accounted for as borrowings.

We had no amounts outstanding under this program and our available borrowing capacity was approximately $ 400 million and $ 397 million at June 30, 2026 and December 31, 2025, respectively.

Our accounts receivable securitization program was supported by $ 901 million and $ 735 million in receivables at June 30, 2026 and December 31, 2025, respectively, which are included in “Accounts receivable – net.”

We have in place an $ 800 million credit agreement.

The 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, 2026 or December 31, 2025, and we are in compliance with all of its covenants.

We had no amounts outstanding under this facility at either June 30, 2026 or December 31, 2025, and we are in compliance with all of its covenants.

We have in place 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, 2026 and December 31, 2025, we had no outstanding commercial paper, and we are in compliance with all of its covenants.

We have in place an accounts receivable securitization program with a maximum borrowing capacity of $ 400 million.

Amounts under our accounts receivable securitization program are borrowed and repaid from time to time in the ordinary course for general corporate and cash management purposes.

The term of our accounts receivable securitization program expires in May 2026.

Amounts received under this facility are accounted for as borrowings.

We had no amounts outstanding under this program and our available borrowing capacity was approximately $ 400 million and $ 397 million at March 31, 2026 and December 31, 2025, respectively.

Our accounts receivable securitization program was supported by $ 843 million and $ 735 million in receivables at March 31, 2026 and December 31, 2025, respectively, which are included in “Accounts receivable – net.”

At June 30, 2026 and December 31, 2025, we had no outstanding commercial paper, 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

2026 2025 2026 2025

6 unchanged sentences

Net benefit $ ( 16 ) $ ( 11 ) $ ( 5 ) $ ( 4 )

Pension Benefits Other Postretirement Benefits

First Six Months

2026 2025 2026 2025

($ in millions)

Service cost $ 13 $ 12 $ 1 $ 1

Interest cost 50 53 6 7

Expected return on plan assets ( 104 ) ( 98 ) ( 5 ) ( 5 )

Amortization of net losses 9 11 — —

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

Net benefit $ ( 32 ) $ ( 22 ) $ ( 9 ) $ ( 8 )

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.

2 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 March 31, 2026 or December 31, 2025.

There are no other assets or liabilities measured at fair value on a recurring basis at June 30, 2026 or December 31, 2025.

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

March 31, 2026 December 31, 2025

June 30, 2026 December 31, 2025

Value Carrying

3 unchanged sentences

We and/or certain subsidiaries are subject to numerous lawsuits, inquiries, investigations and other claims and proceedings relating principally to railroad operations.

In accordance with Financial Accounting Standards Board (FASB) ASC 450, “ Contingencies ,” when we conclude that it is probable that a liability has been incurred and the amount of the liability can be reasonably estimated, it is accrued through a charge to earnings and, if material, disclosed.

In accordance with Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) 450, “ Contingencies ,” when we conclude that it is probable that a liability has been incurred and the amount of the liability can be reasonably estimated, it is accrued through a charge to earnings and, if material, disclosed.

While the ultimate amount of liability incurred in any of these matters is dependent on future developments, in our opinion, the recorded liability is adequate to cover the future payment of such liabilities and claims.

2 unchanged sentences

If it is reasonably possible that we will incur 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.

contingency matters where a loss may be reasonably possible, but not probable, or is probable but not reasonably estimable, no accrual is established but the matter, if potentially material, is disclosed.

For loss contingency matters where a loss may be reasonably possible, but not probable, or is probable but not reasonably estimable, no accrual is established but the matter, if potentially material, is disclosed.

We routinely review relevant information with respect to our lawsuits, inquiries, investigations and other claims and proceedings and update our accruals, disclosures and estimates of reasonably possible loss based on such reviews.

5 unchanged sentences

Accordingly, our estimated range of loss with respect to these matters may change from time to time, and actual losses may exceed current estimates.

Litigation Related to the Mergers

Shareholders have and may continue to file lawsuits challenging the Mergers, which may name us, Union Pacific, members of our Board of Directors, members of the Union Pacific board, or others as defendants.

Litigation Related to our Pending Merger with Union Pacific

Shareholders have and may continue to file lawsuits challenging our pending merger with Union Pacific, which may name us, Union Pacific, members of our Board of Directors, 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.

In response to shareholder demand letters alleging deficiencies in the registration statement on Form S-4, we provided additional disclosure via Form 8-K filed on November 6, 2025, which clarified financial projections, board deliberations, and risk factors related to the Mergers.

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

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.

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

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

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◦ A securities class action lawsuit under the Securities Act of 1933 (Securities Act) was filed in the Southern District of New York alleging misstatements in association with our debt offerings.

On February 27, 2025, the district judge granted defendants' motion to dismiss the Securities Act lawsuit in its entirety, and close the case, which plaintiffs appealed on March 28, 2025 to the U.S.

On February 27, 2025, the district judge granted defendants' motion to dismiss the Securities Act lawsuit in its entirety, and closed the case, which plaintiffs appealed on March 28, 2025 to the U.S.

Court of Appeals for the Second Circuit.

2 unchanged sentences

The case is now closed.

◦ Six shareholder derivative complaints were 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 Derivative Matters).

The Shareholder Derivative Matters were consolidated on July 10, 2025, by agreement of the parties.

No responsive pleadings have been filed yet in the Shareholder Derivative Matters.

Incident accruals principally related to ongoing legal proceedings totaled $ 189 million and $ 474 million at March 31, 2026 and December 31, 2025, respectively.

◦ Six shareholder derivative complaints were filed in Virginia state court asserting claims for breach of fiduciary duties, waste of corporate assets, and unjust enrichment in connection with the safety of the Company’s operations, among other claims (collectively, the Shareholder Derivative Matters).

The lead plaintiffs filed an amended complaint on April 7, 2026, and the defendants filed a motion to dismiss on June 8, 2026.

We received an additional shareholder litigation demand letter dated June 4, 2026, asserting substantially the same claims as in the Shareholder Derivative Matters.

Incident accruals principally related to ongoing legal proceedings totaled $ 186 million and $ 474 million at June 30, 2026 and December 31, 2025, respectively.

In regards to the Incident, the U.S.

6 unchanged sentences

If approved, the Consent Decree will require the Company to pay a civil penalty of $ 15 million for alleged violations of the CWA, plus $ 57 million for the federal government’s oversight costs through November 30, 2023 as well as additional oversight costs from December 1, 2023 until the remediation is complete.

Other provisions of the proposed Consent Decree relate to injunctive relief for safety, community support including medical and mental health programs, and environmental support, which provisions, if approved by the court, will be in effect between five years to twenty years .

The Ohio AG did not join this settlement, and the litigation remains ongoing in the Ohio AG case.

2 unchanged sentences

In granting the motion to intervene, the Court stayed the pending summary judgment and Daubert motions until it determines whether additional discovery is necessary.

Total Incident-related environmental liabilities related to ongoing environmental monitoring activities and regulatory oversight are $ 186 million and $ 191 million at March 31, 2026 and December 31, 2025, respectively.

With respect to the Incident, we have recognized approximately $ 1.1 billion in insurance recoveries (including $ 1 million and $ 224 million during the first quarters of 2026 and 2025, respectively), principally from excess liability (re)insurers.

Total Incident-related environmental liabilities related to ongoing environmental monitoring activities and regulatory oversight are $ 185 million and $ 191 million at June 30, 2026 and December 31, 2025, respectively.

With respect to the Incident, we have recognized approximately $ 1.1 billion in insurance recoveries (including $ 3 million and $ 74 million during the second quarters of 2026 and 2025, respectively, and $ 4 million and $ 298 million during the first six months of 2026 and 2025, respectively), principally from excess liability (re)insurers.

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

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The FRA examined railroad equipment, track conditions, hazardous materials train placement and routing, and emergency response (the FRA Incident Investigation), similar in scope to an investigation by the National Transportation Safety Board.

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.

The FRA Incident Investigation is substantially complete and did not result in a specific findings report.

We do not expect any civil penalties imposed in connection with such investigation to be significant.

In 2007, various antitrust class actions filed against us and other Class I railroads in various federal district courts regarding fuel surcharges were consolidated in the District of Columbia by the Judicial Panel on Multidistrict Litigation.

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To aid in valuing our personal injury liability and determining the amount to accrue with respect to such claims during the year, we utilize studies prepared by an independent consulting actuarial firm.

Job-related personal injury and occupational claims are subject to the Federal Employer’s Liability Act (FELA), which is applicable only to railroads.

Job-related personal injury and occupational claims are subject to the Federal Employers’ Liability Act (FELA), which is applicable only to railroads.

The variability inherent in FELA’s fault-based tort system could result in actual costs being different from the liability recorded.

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We adjust the liability quarterly based upon our assessment and the results of the study.

The accuracy of our estimate of the liability is subject to inherent limitation given the difficulty of predicting future

events such as jury decisions, court interpretations, or legislative changes.

The accuracy of our estimate of the liability is subject to inherent limitations given the difficulty of predicting future events such as jury decisions, court interpretations, or legislative changes.

As a result, actual claim settlements may vary from the estimated liability recorded.

10 unchanged sentences

Third-party claims – We record a liability for third-party claims including those for highway crossing accidents, trespasser and other injuries, property damage, and lading damage.

The actuarial firm assists us with the calculation of potential liability for third-party claims, except lading damage, based upon our experience including the number and timing of incidents, amount of payments, settlement rates, number of open claims, and legal defenses.

The actuarial firm assists us with the calculation of potential liability for third-party claims, except lading damage, based upon our experience including the number

and timing of incidents, amount of payments, settlement rates, number of open claims, and legal defenses.

We adjust the liability quarterly based upon our assessment and the results of the study.

4 unchanged sentences

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 $ 62 million at March 31, 2026 and $ 63 million at December 31, 2025, of which $ 15 million is classified as a current liability at the end of both periods.

At March 31, 2026 and December 31, 2025, the liability represents our estimates of the probable cleanup, investigation, and remediation costs based on available information at 69 known locations and projects.

At March 31, 2026, 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 $ 60 million at June 30, 2026 and $ 63 million at December 31, 2025, of which $ 15 million is classified as a current liability at the end of both periods.

At June 30, 2026, the liability represents our estimates of the probable cleanup, investigation, and remediation costs based on available information at 70 known locations and projects compared with 69 locations and projects at December 31, 2025.

At June 30, 2026, 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 ;

14 unchanged sentences

Approximately 80 % of our railroad employees are covered by collective bargaining agreements with various labor unions.

Pursuant to the Railway Labor Act (RLA), these agreements remain in effect until new agreements are reached, or until the bargaining procedures mandated by the RLA are completed.

Pursuant to the Railway Labor Act (RLA), these agreements remain in effect until new agreements are

reached, or until the bargaining procedures mandated by the RLA are completed.

Moratorium provisions in the labor agreements govern when the railroads and unions may propose changes to the agreements.

6 unchanged sentences

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 $ 57 million additional liability insurance limits for certain types of pollution releases.

Above $ 800 million per occurrence and/or policy year, we maintain approximately $ 57 million of 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.

13 unchanged sentences

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

Subsequent Events

On April 1, 2026, we entered into amended and restated agreements to renew the lease of our corporate headquarters building in Atlanta, Georgia, for an additional five‑year term.

The lease includes options to extend the lease for an additional five years , purchase the office building, or arrange a sale of the office building at the end of the lease term.

The lease contains a residual value guarantee of up to 100 % of the total lease balance of $ 499 million.

In December 2025, the FASB issued ASU 2025-10, “ Accounting for Government Grants Received by Business Entities.

” This update establishes guidance for the recognition, measurement, and presentation of government grants, including specific criteria for grants related to assets and grants related to income.

The ASU is effective for interim periods and fiscal years beginning after December 15, 2028.

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