nsc-20220930

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

FORM 10-Q

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended SEPTEMBER 30, 2022

☐ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from ___________ to___________

Commission File Number: 1-8339

NORFOLK SOUTHERN CORPORATION

(Exact name of registrant as specified in its charter)


Virginia						52-1188014
(State or other jurisdiction of incorporation or organization)						(I.R.S. Employer Identification No.)


650 West Peachtree Street NW		30308-1925
Atlanta,	Georgia
(Address of principal executive offices)		(Zip Code)
(855)		667-3655
(Registrant’s telephone number, including area code)


No change
(Former name, former address and former fiscal year, if changed since last report)

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


Title of each class	Trading Symbol	Name of each exchange on which registered
Norfolk Southern Corporation Common Stock (Par Value $1.00)	NSC	New York Stock Exchange

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

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

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.

Large accelerated filer ☒ Accelerated filer ☐ Non-accelerated filer ☐ Smaller reporting company ☐ Emerging growth company ☐

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

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

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.


Class	Outstanding at September 30, 2022
Common Stock ($1.00 par value per share)	231,514,213	(excluding 20,320,777 shares held by the registrant’s
	consolidated subsidiaries)

TABLE OF CONTENTS

NORFOLK SOUTHERN CORPORATION AND SUBSIDIARIES


		Page
Part I.	Financial Information:
	Item 1.	Financial Statements:
		Consolidated Statements of Income Third Quarter and First Nine Months of 2022 and 2021	3
		Consolidated Statements of Comprehensive Income Third Quarter and First Nine Months of 2022 and 2021	4
		Consolidated Balance Sheets At September 30, 2022 and December 31, 2021	5
		Consolidated Statements of Cash Flows First Nine Months of 2022 and 2021	6
		Consolidated Statements of Changes in Stockholders’ Equity Third Quarter and First Nine Months of 2022 and 2021	7
		Notes to Consolidated Financial Statements	9
	Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	19
	Item 3.	Quantitative and Qualitative Disclosures About Market Risk	27
	Item 4.	Controls and Procedures	27

Part II.	Other Information:
	Item 1.	Legal Proceedings	29
	Item 1A.	Risk Factors	29
	Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	29
	Item 3.	Defaults Upon Senior Securities	29
	Item 4.	Mine Safety Disclosures	29
	Item 5.	Other Information	29
	Item 6.	Exhibits	30

		Signatures	31

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements

Norfolk Southern Corporation and Subsidiaries

Consolidated Statements of Income

(Unaudited)


	Third Quarter				First Nine Months
	2022		2021		2022		2021
	($ in millions, except per share amounts)

Railway operating revenues	$	3,343	$	2,852	$	9,508	$	8,290

Railway operating expenses
Compensation and benefits	735		609		1,968		1,844
Purchased services and rents	484		432		1,402		1,254
Fuel	383		208		1,092		573
Depreciation	306		297		912		883
Materials and other	163		170		506		418

Total railway operating expenses	2,071		1,716		5,880		4,972

Income from railway operations	1,272		1,136		3,628		3,318

Other income (expense) – net	(2)		14		(21)		56
Interest expense on debt	177		164		515		481

Income before income taxes	1,093		986		3,092		2,893

Income taxes	135		233		612		648

Net income	$	958	$	753	$	2,480	$	2,245

Earnings per share
Basic	$	4.11	$	3.07	$	10.49	$	9.03
Diluted	4.10		3.06		10.45		8.99

See accompanying notes to consolidated financial statements.

Norfolk Southern Corporation and Subsidiaries

Consolidated Statements of Comprehensive Income

(Unaudited)


	Third Quarter				First Nine Months
	2022		2021		2022		2021
	($ in millions)

Net income	$	958	$	753	$	2,480	$	2,245
Other comprehensive income, before tax:
Pension and other postretirement benefits	6		10		17		31
Other comprehensive income of equity investees	5		—		13		—

Other comprehensive income, before tax	11		10		30		31
Income tax expense related to items of other
comprehensive income	—		(3)		(5)		(8)

Other comprehensive income, net of tax	11		7		25		23

Total comprehensive income	$	969	$	760	$	2,505	$	2,268

See accompanying notes to consolidated financial statements.

Norfolk Southern Corporation and Subsidiaries

Consolidated Balance Sheets

(Unaudited)


	September 30, 2022		December 31, 2021
	($ in millions)
Assets
Current assets:
Cash and cash equivalents	$	1,214	$	839

Accounts receivable – net	1,151		976
Materials and supplies	276		218
Other current assets	74		134
Total current assets	2,715		2,167

Investments	3,686		3,707
Properties less accumulated depreciation of $12,445
and $12,031, respectively	31,838		31,653
Other assets	1,067		966

Total assets	$	39,306	$	38,493

Liabilities and stockholders’ equity
Current liabilities:
Accounts payable	$	1,486	$	1,351

Income and other taxes	299		305
Other current liabilities	408		312
Current maturities of long-term debt	605		553
Total current liabilities	2,798		2,521

Long-term debt	14,463		13,287
Other liabilities	1,828		1,879
Deferred income taxes	7,193		7,165

Total liabilities	26,282		24,852

Stockholders’ equity:
Common stock $1.00 per share par value, 1,350,000,000 shares
authorized; outstanding 231,514,213 and 240,162,790 shares,
respectively, net of treasury shares	233		242
Additional paid-in capital	2,181		2,215
Accumulated other comprehensive loss	(377)		(402)
Retained income	10,987		11,586

Total stockholders’ equity	13,024		13,641

Total liabilities and stockholders’ equity	$	39,306	$	38,493

See accompanying notes to consolidated financial statements.

Norfolk Southern Corporation and Subsidiaries

Consolidated Statements of Cash Flows

(Unaudited)


		First Nine Months
		2022		2021
		($ in millions)
Cash flows from operating activities
	Net income	$	2,480	$	2,245
	Reconciliation of net income to net cash provided by operating activities:
	Depreciation	912		883
	Deferred income taxes	23		158
	Gains and losses on properties	(54)		(80)
	Changes in assets and liabilities affecting operations:
	Accounts receivable	(174)		(102)
	Materials and supplies	(58)		(14)
	Other current assets	57		57
	Current liabilities other than debt	273		294
	Other – net	(35)		(128)

	Net cash provided by operating activities	3,424		3,313

Cash flows from investing activities
	Property additions	(1,282)		(1,025)
	Property sales and other transactions	193		135
	Investment purchases	(8)		(5)
	Investment sales and other transactions	37		48

	Net cash used in investing activities	(1,060)

SEC Form 10-Q filed by Norfolk Southern Corporation