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Item 2. Management’s Discussion and Analysis

2026-07-23 compared with 2026-04-24 · 146 added, 107 removed, 150 unchanged (63% of the section changed)

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Since 1827, Norfolk Southern Corporation and its predecessor companies have safely moved the goods and materials that drive the U.S.

Our dedicated team members deliver a wide variety of commodities annually for our customers, from agriculture products to consumer goods, and help them reduce carbon emissions by shipping via rail.

Our dedicated team members deliver a wide variety of commodities annually for our customers, from agriculture to consumer products, and help them reduce carbon emissions by shipping via rail.

We have the most extensive intermodal network in the eastern U.S.

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By integrating two complementary networks, we believe the merged company will be positioned to deliver more efficient, reliable, and sustainable freight service across the nation.

Details of the proposed transaction are further described in Note 1.

Our first-quarter performance reflected disciplined cost control despite headwinds from rising fuel costs.

Our year-over-year results were impacted by incremental Merger-related expenses and the absence of insurance recoveries related to the Eastern Ohio Incident.

Nevertheless, we continued to drive improvements in labor productivity and fuel efficiency.

For the first quarter, we achieved an operating ratio (a measure of the amount of operating revenues consumed by operating expenses) of 70.7%, and an adjusted operating ratio of 68.7% (see our non-GAAP reconciliations beginning on page 24).

See Note 1 for additional information on the proposed transaction.

Our second-quarter performance reflected strong volume growth which led to overall improvements in our adjusted financial results.

Higher fuel prices had a significant impact on both railway operating revenues and expenses in the quarter.

Our year-over-year results were also impacted by the absence of insurance recoveries related to the Eastern Ohio incident and incremental merger-related expenses.

For the second quarter, we achieved an operating ratio (a measure of the amount of operating revenues consumed by operating expenses) of 67.6%, and an adjusted operating ratio of 65.5% (see our non-GAAP reconciliations beginning on page 25).

We remain committed to being a safe, productive, resilient, and efficient railroad with industry-competitive margins.

SUMMARIZED RESULTS OF OPERATIONS

First Quarter

2026 2025 % change

Second Quarter First Six Months

2026 2025 % change 2026 2025 % change

($ in millions, except per share amounts)

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Railway operating ratio (percent) 67.6 62.2 9% 69.0 62.0 11%

Income from railway operations, net income, and diluted earnings per share decreased, the result of higher railway operating expenses, primarily related to the absence of insurance recoveries related to the Eastern Ohio Incident recognized in the prior year.

Our financial results were further impacted by Merger-related expenses, inflation, and higher fuel prices, partially offset by productivity savings and an increase in average revenue per unit, primarily driven by favorable mix.

The following tables adjust our GAAP financial results for the first quarters of 2026 and 2025 to exclude the effects of the Incident.

First quarter 2026 results are also adjusted to exclude Merger-related expenses.

The income tax effects of these non-GAAP adjustments were calculated based on the applicable tax rates to which the non-GAAP adjustments related.

We use these non-GAAP financial measures internally and believe this information provides

useful supplemental information to investors to facilitate making period-to-period comparisons by excluding these items.

Income from railway operations, net income, and diluted earnings per share decreased in both periods, the result of higher railway operating expenses, primarily related to the absence of insurance recoveries related to the Eastern Ohio incident recognized in the prior year.

Our financial results were further impacted by higher fuel prices, merger-related expenses, and inflation.

These effects were partially offset by higher railway operating revenues, driven by increased average revenue per unit, primarily driven by higher fuel surcharge revenue, and increased volume.

The following tables adjust our GAAP financial results for the second quarters and first six months of 2026 and 2025 to exclude restructuring and other charges and the effects of the Incident.

The adjusted results for the second quarter and first six months of 2026 also exclude merger-related expenses.

The income tax effects of these non-

GAAP adjustments were calculated based on the applicable tax rates to which the non-GAAP adjustments related.

We use these non-GAAP financial measures internally and believe this information provides useful supplemental information to investors to facilitate making period-to-period comparisons by excluding these items.

While we believe that these non-GAAP financial measures are useful in evaluating our business, this information should be considered as supplemental in nature and is not meant to be considered in isolation from, or as a substitute for, the related financial information prepared in accordance with GAAP.

In addition, these non-GAAP financial measures may not be the same as similar measures presented by other companies.

Non-GAAP Reconciliation for First Quarter 2026

Reported (GAAP) Merger - Related Expenses Eastern Ohio Incident Adjusted

Non-GAAP Reconciliation for Second Quarter 2026

Reported (GAAP) Merger-Related Expenses Restructuring and Other Charges Eastern Ohio Incident Adjusted

($ in millions, except per share amounts)

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Railway operating ratio (percent) 67.6 (1.5) (0.2) (0.4) 65.5

Non-GAAP Reconciliation for First Quarter 2025

Reported (GAAP) Eastern Ohio Incident Adjusted

Non-GAAP Reconciliation for Second Quarter 2025

Reported (GAAP) Restructuring and Other Charges Eastern Ohio Incident Adjusted

($ in millions, except per share amounts)

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Railway operating ratio (percent) 62.2 (0.3) 1.5 63.4

In the table below, references to the results for the first quarters of 2026 and 2025 and related comparisons use the adjusted, non-GAAP results from the reconciliations in the previous tables.

In the table below, references to the results for the second quarters of 2026 and 2025 and related comparisons use the adjusted, non-GAAP results from the reconciliations in the previous tables.

Adjusted (non-GAAP)

First Quarter

Second Quarter

2026 2025 % change

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Railway operating ratio (percent) 65.5 63.4 3%

On an adjusted basis, income from railway operations decreased due to higher railway operating expenses.

The increase in adjusted railway operating expenses reflects inflation and higher fuel prices, partially offset by productivity savings and an increase in average revenue per unit, primarily driven by favorable mix.

Non-GAAP Reconciliation for First Six Months 2026

Reported (GAAP) Merger-Related Expenses Restructuring and Other Charges Eastern Ohio Incident Adjusted

($ in millions, except per share amounts)

Railway operating expenses $ 4,462 $ (103) $ (6) $ (25) $ 4,328

Income from railway operations $ 2,001 $ 103 $ 6 $ 25 $ 2,135

Net income $ 1,281 $ 85 $ 5 $ 19 $ 1,390

Diluted earnings per share $ 5.69 $ 0.38 $ 0.02 $ 0.08 $ 6.17

Railway operating ratio (percent) 69.0 (1.6) (0.1) (0.3) 67.0

Non-GAAP Reconciliation for First Six Months 2025

Reported (GAAP) Restructuring and Other Charges Eastern Ohio Incident Adjusted

($ in millions, except per share amounts)

Railway operating expenses $ 3,782 $ (10) $ 232 $ 4,004

Income from railway operations $ 2,321 $ 10 $ (232) $ 2,099

Net income $ 1,518 $ 8 $ (176) $ 1,350

Diluted earnings per share $ 6.72 $ 0.03 $ (0.78) $ 5.97

Railway operating ratio (percent) 62.0 (0.2) 3.8 65.6

In the table below, references to the results for the first six months of 2026 and 2025 and related comparisons use the adjusted, non-GAAP results from the reconciliations in the previous tables.

Adjusted (non-GAAP)

First Six Months

2026 2025 % change

($ in millions, except per share amounts)

Railway operating expenses $ 4,328 $ 4,004 8%

Income from railway operations $ 2,135 $ 2,099 2%

Net income $ 1,390 $ 1,350 3%

Diluted earnings per share $ 6.17 $ 5.97 3%

Railway operating ratio (percent) 67.0 65.6 2%

On an adjusted basis, income from railway operations increased in the second quarter and first six months due to higher railway operating revenues, driven by higher average revenue per unit, primarily driven by increased fuel surcharge revenue, and increased volume.

Partially offsetting the increase in revenues were higher adjusted railway operating expenses, reflecting higher fuel prices and inflation.

DETAILED RESULTS OF OPERATIONS

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The following tables present a comparison of revenues ($ in millions), units (in thousands), and average revenue per unit ($ per unit) by commodity group.

First Quarter

Revenues 2026 2025 % change

Second Quarter First Six Months

Revenues 2026 2025 % change 2026 2025 % change

Agriculture, forest and consumer products $ 673 $ 645 4% $ 1,298 $ 1,281 1%

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Total 1,861 1,734 7% 1,806 1,727 5%

Railway operating revenues increased $5 million compared with the same period last year.

Railway operating revenues increased $355 million and $360 million in the second quarter and first six months, respectively.

The table below reflects the components of the revenue change by major commodity group ($ in millions).

First Quarter

Merchandise Intermodal Coal

Second Quarter First Six Months

Merchandise Intermodal Coal Merchandise Intermodal Coal

Increase (Decrease)

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Approximately 95% of our revenue base is covered by contracts that include negotiated fuel surcharges.

Revenues associated with these surcharges totaled $210 million and $202 million in the first quarters of 2026 and 2025, respectively.

Fuel surcharge revenues for the remainder of the year are expected to increase based on current fuel commodity prices.

Merchandise revenues increased primarily due to higher volume.

Agriculture, forest and consumer products volume declined primarily due to lower pulpboard and corn shipments, partially offset by higher feed and fertilizer volume.

Pulpboard volume decreased as a result of unplanned customer downtime resulting from severe winter weather.

Corn volume declined due to reduced demand for shipments to the southeast compared to the prior year.

These declines were partially offset by higher feed volume, reflecting gains in soymeal and corn germ meal shipments, and increased fertilizer volume driven by lower phosphate commodity prices early in the year.

Chemicals volume rose primarily due to higher shipments of natural gas liquids, inorganic chemicals, crude oil, and sand.

Natural gas liquids volume rose due to increased domestic and export demand.

Inorganic chemical volume increased, driven by rock salt restocking resulting from severe winter weather.

Crude oil volume increased compared to the prior year, which was impacted by tariff-related uncertainty.

Sand volume increased due to strong demand to support natural gas drilling.

Metals and construction volume decreased primarily driven by lower aggregate shipments as a result of severe winter weather conditions.

Automotive volume increased driven by growth with existing customers, partially offset by production downtime and model discontinuations for certain manufacturers.

Intermodal revenues decreased due to lower volume, partially offset by higher average revenue per unit, driven by increased pricing.

Revenues associated with these surcharges totaled $415 million and $203 million in the second quarters of 2026 and 2025, respectively, and $625 million and $405 million for the first six months of 2026 and 2025, respectively.

Fuel surcharge revenues for the remainder of the year are expected to increase compared to the prior year based on current fuel commodity prices.

Merchandise revenues were higher in both periods due to increased average revenue per unit, driven by increased fuel surcharge revenue and pricing, and higher volume.

Agriculture, forest and consumer products volume declined in both periods, primarily due to lower corn shipments, partially offset by higher ethanol shipments.

Corn volume declined due to reduced shipments to the Southeast compared to the prior year, while ethanol volume benefited from increased demand.

Chemicals volume rose in both periods primarily due to higher shipments of natural gas liquids, sand, and petroleum products.

Natural gas liquids and petroleum products volume rose due to increased domestic and export demand, while sand shipments increased due to strong demand to support natural gas drilling.

Metals and construction volume decreased in both periods primarily driven by lower aggregate shipments as a result of idled customer facilities, partially offset by increased cement and coil shipments due to increased demand.

Automotive volume was flat in the second quarter but increased in the first six months driven by growth with existing customers, with offsetting impacts driven by production downtime and model discontinuations for certain manufacturers.

Intermodal revenues were higher in both periods due to increased average revenue per unit, driven by increased fuel surcharge revenue and pricing, and higher volume.

Intermodal units (in thousands) by market were as follows:

First Quarter

2026 2025 % change

Second Quarter First Six Months

2026 2025 % change 2026 2025 % change

Domestic 668.9 603.1 11% 1,272.7 1,211.9 5 %

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Total 1,064.1 1,010.9 5% 2,044.7 2,033.8 1 %

Domestic volume decreased as a result of lower premium demand.

International volume declined in the current period as the prior year benefited from elevated volume related to anticipated tariff changes.

Coal revenues decreased due to lower average revenue per unit, driven by reduced pricing and adverse mix, partially offset by higher volumes.

Domestic volume increased in both periods as a result of an increase in freight demand and constrained truck capacity.

International volume declined in both periods as the prior year benefited from elevated volume related to anticipated tariff changes.

Coal revenues increased in both periods due to higher volumes and increased fuel surcharge revenue.

The increase for the first six months was partially offset by reduced pricing.

Coal tonnage (in thousands) by market was as follows:

First Quarter

2026 2025 % change

Second Quarter First Six Months

2026 2025 % change 2026 2025 % change

Utility 8,577 9,296 (8%) 17,894 16,608 8%

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Total 21,187 20,417 4% 41,359 38,934 6%

Utility tonnage increased due to higher electricity demand, higher natural gas prices, and restocking of customer inventories.

Export tonnage was flat as increased customer demand was offset by winter weather-related impacts.

Domestic metallurgical tonnage decreased due to idled facilities and winter weather impacts.

Industrial coal tonnage increased as a result of increased demand.

Utility tonnage decreased in the second quarter but increased for the first six months.

The decline in the second quarter was primarily due to increased natural gas and renewables production.

The increase for the first six months was driven by higher natural gas prices and restocking of customer inventories.

Export tonnage increased in both periods due to increased global demand for export thermal coal volumes driven by higher coal production and supportive seaborne coal pricing.

Domestic metallurgical tonnage decreased in both periods due to idled customer facilities and reduced equipment availability.

Industrial coal tonnage increased in both periods as a result of increased demand.

Railway Operating Expenses

Railway operating expenses summarized by major classifications follow ($ in millions):

First Quarter

2026 2025 % change

Second Quarter First Six Months

2026 2025 % change 2026 2025 % change

Compensation and benefits $ 744 $ 692 8% $ 1,484 $ 1,431 4%

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Merger-related expenses 51 — 103 —

Restructuring and other charges 6 10 (40%) 6 10 (40%)

Eastern Ohio incident 15 (47) 132% 25 (232) 111%

Total $ 2,341 $ 1,935 21% $ 4,462 $ 3,782 18%

Compensation and benefits expense increased slightly as follows:

• pay rates (up $21 million),

• health and welfare benefit rates (up $7 million),

• payroll taxes (up $6 million),

• incentive and stock-based compensation (down $24 million),

• employee activity levels (down $11 million), and

• other (up $2 million).

Average rail headcount for the quarter was down by approximately 320 compared with the first quarter of 2025.

Compensation and benefits expense increased in both periods as follows:

• pay rates (up $22 million for the quarter and $43 million for the first six months),

• incentive and stock-based compensation (up $20 million for the quarter but down $4 million for the first six months),

• overtime (up $6 million for both the quarter and first six months),

• health and welfare benefits (up $5 million for the quarter and $12 million for the first six months),

• employee activity levels (down $1 million for the quarter and $12 million for the first six months), and

• other (up $8 million for the first six months).

Average rail headcount for the quarter was down by approximately 320 compared with the second quarter of 2025.

Purchased services includes the costs of services purchased from external vendors and contractors, including the net costs of operating joint facilities with other railroads.

Expense increased primarily due to higher costs associated with severe winter weather and technology-related costs.

Equipment rents , which includes our cost of using equipment (mostly freight cars) owned by other railroads or private owners less the rent paid to us for the use of our equipment, increased due to higher automotive equipment expenses driven by higher volumes as well as lower earnings from our investment in TTX.

Fuel expense, which includes the cost of locomotive fuel as well as other fuel used in railway operations, increased due to higher locomotive fuel prices.

We expect fuel expense for the remainder of the year to increase based on current fuel commodity prices.

Depreciation expense increased due to a higher asset base.

Materials expense decreased due to lower freight car repairs and reduced engineering material consumption.

Expense increased in both periods primarily due to higher technology-related costs, elevated expenses associated with intermodal and automotive operations, and increased Conrail expenses.

Equipment rents , which includes our cost of using equipment (mostly freight cars) owned by other railroads or private owners less the rent paid to us for the use of our equipment, increased in both periods primarily due to higher time and mileage expense.

The first six months also contained higher automotive equipment expenses driven by higher volumes as well as lower earnings from our investment in TTX.

Fuel expense, which includes the cost of locomotive fuel as well as other fuel used in railway operations, increased in both periods due to higher locomotive fuel prices.

We expect fuel expense for the remainder of the year to increase compared to the prior year based on current fuel commodity prices.

Depreciation expense increased in both periods due to a higher asset base.

Materials expense increased in both periods primarily due to higher locomotive maintenance costs.

Claims expense includes costs related to personal injury, property damage, and environmental matters.

Claims expense decreased primarily due to lower personal injury expense and reduced costs related to environmental matters unrelated to the Incident.

Other expense increased primarily due to lower gains from operating property sales.

Gains from the sales of operating property totaled $17 million and $23 million in the first quarter of 2026 and 2025, respectively.

Merger-related expenses primarily relate to costs associated with employee retention agreements, third-party advisor fees, and legal fees and were $52 million in the first quarter.

Eastern Ohio incident expenses were $10 million in the first quarter of 2026.

In the first quarter of 2025, insurance and other recoveries exceeded additional Incident-related expenses by $185 million.

Cash payments attributable to the Incident were $300 million during the first three months of 2026, while insurance recoveries collected exceeded payments by $58 million during the first three months of 2025, which are presented in “Net cash provided by operating activities” on the Consolidated Statements of Cash Flows.

Claims expense increased in the second quarter but decreased for the first six months.

The increase in the second quarter was primarily due to higher accident-related costs and the absence of a cost recovery settlement, partially offset by lower expenses related to personal injury case development.

The decrease for the first six months reflected lower expenses related to personal injury case development, partially offset by the absence of a favorable third-party settlement and higher accident-related costs.

Other expense decreased in both periods primarily due to lower allowances for losses and increased insurance recoveries not related to the Incident, partially offset by lower gains from operating property sales.

Gains from the sales of operating property totaled $1 million and $34 million in the second quarter of 2026 and 2025, respectively, and $18 million and $57 million in the first six months of 2026 and 2025, respectively.

Merger-related expenses in 2026 primarily relate to costs associated with employee retention agreements, third-party advisor fees, and legal fees that totaled $51 million in the second quarter and $103 million for the first six months.

Restructuring and other charges were $6 million in 2026 related to severance costs associated with organizational changes.

During 2025, we recorded $10 million in expenses primarily related to the restructuring of certain technology functions.

Eastern Ohio incident expenses were $15 million in the second quarter of 2026, whereas recoveries exceeded additional Incident-related expenses by $47 million in the second quarter of 2025.

For the first six months of 2026, we incurred expenses of $25 million for costs associated with the Incident, whereas recoveries exceeded additional Incident-related expenses by $232 million for the first six months of 2025.

Cash payments attributable to the Incident were $322 million during the first six months of 2026, while insurance recoveries collected exceeded payments by $234 million during the first six months of 2025, which are presented in “Net cash provided by operating activities” on the Consolidated Statements of Cash Flows.

For further details regarding the Incident, see Note 13.

Other income – net

Other income – net increased $4 million primarily due to higher pension and postretirement benefits and higher interest income, partially offset by lower returns on COLI.

The effective tax rate for the first three months of 2026 was 23.5% compared with 23.3% for the same period last year.

Other income – net increased $8 million in the second quarter and $12 million for the first six months primarily due to higher pension and postretirement benefits, partially offset by lower returns on COLI.

The effective tax rate for the second quarter and first six months of 2026 was 23.5% for both periods, as compared with 23.0% and 23.2%, respectively, for the same periods last year.

The increase over prior year is primarily due to non-deductible merger-related expenses.

FINANCIAL CONDITION AND LIQUIDITY

Cash provided by operating activities, our principal source of liquidity, was $344 million for the first three months of 2026, compared with $950 million for the same period of 2025.

The decrease was driven by higher cash payments related to the Incident and higher cash paid for income taxes.

We had negative working capital of $311 million and $577 million at March 31, 2026 and December 31, 2025, respectively.

Cash and cash equivalents totaled $1.3 billion and $1.5 billion at March 31, 2026 and December 31, 2025, respectively.

Cash used in investing activities was $213 million for the first three months of 2026, compared with $1.0 billion for the same period last year.

The decrease was driven by the absence of COLI loan repayments and lower property additions, partially offset by higher proceeds from property sales and other transactions.

Cash used in financing activities was $320 million for the first three months of 2026, compared with $564 million for the same period last year.

The decrease reflects lower repurchases of Common Stock.

We did not repurchase any Common Stock during the first three months of 2026, while we repurchased $248 million during the same period last year.

As of March 31, 2026, $6.3 billion remains authorized by our Board of Directors for repurchase.

Cash provided by operating activities, our principal source of liquidity, was $1.4 billion for the first six months of 2026, compared with $2.0 billion for the same period of 2025.

The decrease was driven by higher cash payments related to the Incident.

We had negative working capital of $569 million and $577 million at June 30, 2026 and December 31, 2025, respectively.

Cash and cash equivalents totaled $1.1 billion and $1.5 billion at June 30, 2026 and December 31, 2025, respectively.

Cash used in investing activities was $629 million for the first six months of 2026, compared with $1.4 billion for the same period last year.

The decrease was driven by the absence of COLI loan repayments that occurred in 2025,

coupled with lower property additions and higher proceeds from property sales and other transactions in the current year.

Cash used in financing activities was $1.2 billion for the first six months of 2026, compared with $930 million for the same period last year.

The increase reflects lower proceeds from borrowing and higher debt repayments, partially offset by lower repurchases of Common Stock.

We did not repurchase any Common Stock during the first six months of 2026, while we repurchased $456 million during the same period last year.

As of June 30, 2026, $6.3 billion remains authorized by our Board of Directors for repurchase.

With limited exceptions, the Merger Agreement prohibits the Company from repurchasing shares of its common stock without approval by Union Pacific.

As a result, the Company has suspended share repurchase activities.

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.

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.

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

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 have an agreement that provides us the ability to issue up to $800 million of unsecured commercial paper and is backed by our credit agreement.

We had no amounts outstanding under this 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 both March 31, 2026 and December 31, 2025, we had no outstanding commercial paper.

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.

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

At both June 30, 2026 and December 31, 2025, we had no outstanding commercial paper, and we are in compliance with all of its covenants.

In addition, we have investments in general purpose COLI policies and have the ability to borrow against these policies.

We had no amounts borrowed against these policies at March 31, 2026 and December 31, 2025.

Our remaining borrowing capacity was approximately $590 million and $595 million at March 31, 2026 and December 31, 2025, respectively.

Our debt-to-total capitalization ratio was 52.0% at March 31, 2026 and 52.4% at December 31, 2025.

We had no amounts borrowed against these policies at June 30, 2026 and December 31, 2025.

Our remaining borrowing capacity was approximately $590 million and $595 million at June 30, 2026 and December 31, 2025, respectively.

Our debt-to-total capitalization ratio was 50.6% at June 30, 2026 and 52.4% at December 31, 2025.

We expect cash on hand combined with cash provided by operating activities will be sufficient to meet our ongoing obligations.

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The preparation of financial statements in accordance with GAAP requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenues and expenses during the reporting period.

These estimates and assumptions may require judgment about matters that are inherently uncertain, and future events are likely to occur that may require us to make changes to these estimates and assumptions.

estimates and assumptions may require judgment about matters that are inherently uncertain, and future events are likely to occur that may require us to make changes to these estimates and assumptions.

Accordingly, we regularly review these estimates and assumptions based on historical experience, changes in the business environment, and other factors we believe to be reasonable under the circumstances.

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While we believe these expectations, assumptions, estimates, beliefs, and projections are reasonable, such forward-looking statements are only predictions and involve known and unknown risks and uncertainties, many of which involve factors or circumstances that are beyond our control.

The following important factors, including those discussed under “Risk Factors” in our latest Form 10-K as well as our subsequent filings with the Securities and Exchange Commission, may cause actual results, performance, or achievements to differ materially from those expressed or implied by these forward-looking statements:

The following important factors, including those discussed under “Risk Factors” in our latest Form 10-K as well as our subsequent filings

with the Securities and Exchange Commission, may cause actual results, performance, or achievements to differ materially from those expressed or implied by these forward-looking statements:

• changes in domestic or international economic, political or business conditions, including those impacting the transportation industry;

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• a significant cybersecurity incident or other disruption to our technology infrastructure;

• our ability to complete the Mergers with Union Pacific;

• our ability to complete the merger with Union Pacific;

• the occurrence of any event, change or other circumstance that could give rise to the right of one or both of the Company or Union Pacific to terminate the Merger Agreement;

• the possibility that the Mergers do not close when expected or at all because required Surface Transportation Board review and approval, or other approvals and other conditions to close are not received or satisfied on a timely basis or at all (and the risk that such approvals may result in the imposition of conditions that could adversely affect the combined company or the expected benefits of the Mergers);

• the risk that the combined company will not realize expected benefits, cost savings, accretion, synergies and/or growth from the Mergers, or that such benefits may take longer to realize or be more costly to achieve than expected;

• disruption to the Company’s business as a result of the announcement and pendency of the Mergers, including the restrictions contained in the Merger Agreement on the ability of the Company to operate its business outside the ordinary course during the pendency of the Mergers;

• the possibility that the merger does not close when expected or at all because the required Surface Transportation Board review and approval, or other approvals and other conditions to close are not received or satisfied on a timely basis or at all (and the risk that such approvals may result in the imposition of conditions that could adversely affect the combined company or the expected benefits of the merger);

• the risk that the combined company will not realize expected benefits, cost savings, accretion, synergies and/or growth from the merger, or that such benefits may take longer to realize or be more costly to achieve than expected;

• disruption to the Company’s business as a result of the announcement and pendency of the merger, including the restrictions contained in the Merger Agreement on the ability of the Company to operate its business outside the ordinary course during the pendency of the merger;

• the diversion of the Company’s management’s attention and time from ongoing business operations and opportunities on merger-related items;

• the possibility that the Mergers may be more expensive to complete than anticipated, including as a result of unexpected factors or events;

• the reputational risk and adverse reactions of customers (certain of whom have and may continue to diversify their distribution networks, including in response to actions by our competitors), suppliers, employees, labor unions or other business partners, including those resulting from the announcement or completion of the Mergers.

• the possibility that the merger may be more expensive to complete than anticipated, including as a result of unexpected factors or events;

The forward-looking statements herein are made only as of the date they were first issued, and unless otherwise required by applicable securities laws, we disclaim any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise.

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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 2. Management’s Discussion and Analysis