EX-99.2 3 e22049_ex99-2.htm

Norfolk Southern Corporation and Subsidiaries

Consolidated Statements of Income

(Unaudited)

	Fourth Quarter				Years Ended December 31,
	2021		2020		2021		2020
	(in millions, except per share amounts)
Railway operating revenues
Merchandise	$	1,671	$	1,553	$	6,669	$	6,088
Intermodal		831		730		3,163		2,654
Coal		350		290		1,310		1,047
Total railway operating revenues		2,852		2,573		11,142		9,789

Railway operating expenses
Compensation and benefits		598		587		2,442		2,373
Purchased services and rents		472		426		1,726		1,687
Fuel		226		136		799		535
Depreciation		298		287		1,181		1,154
Materials and other		129		153		547		653
Loss on asset disposal		—		—		—		385
Total railway operating expenses		1,723		1,589		6,695		6,787

Income from railway operations		1,129		984		4,447		3,002

Other income – net		21		43		77		153
Interest expense on debt		165		160		646		625

Income before income taxes		985		867		3,878		2,530

Income taxes
Current		199		132		689		375
Deferred		26		64		184		142
Total income taxes		225		196		873		517

Net income	$	760	$	671	$	3,005	$	2,013

Earnings per share – diluted	$	3.12	$	2.64	$	12.11	$	7.84

Weighted average shares outstanding – diluted		243.5		254.7		248.1		256.6

See accompanying notes to consolidated financial statements

Norfolk Southern Corporation and Subsidiaries

Consolidated Balance Sheets

(Unaudited)

	At December 31,
	2021			2020
	($ in millions)
Assets
Current assets:
Cash and cash equivalents	$	839		$	1,115
Accounts receivable – net		976			848
Materials and supplies		218			221
Other current assets		134			134
Total current assets		2,167			2,318

Investments		3,707			3,590
Properties less accumulated depreciation of $12,031 and $11,985, respectively		31,653			31,345
Other assets		966			709

Total assets	$	38,493		$	37,962

Liabilities and stockholders’ equity
Current liabilities:
Accounts payable	$	1,351		$	1,016
Income and other taxes		305			263
Other current liabilities		312			302
Current maturities of long-term debt		553			579
Total current liabilities		2,521			2,160

Long-term debt		13,287			12,102
Other liabilities		1,879			1,987
Deferred income taxes		7,165			6,922

Total liabilities		24,852			23,171

Stockholders’ equity:
Common stock $1.00 per share par value, 1,350,000,000 shares authorized; outstanding 240,162,790 and 252,095,082 shares, respectively, net of treasury shares		242			254
Additional paid-in capital		2,215			2,248
Accumulated other comprehensive loss		(402	)		(594	)
Retained income		11,586			12,883

Total stockholders’ equity		13,641			14,791

Total liabilities and stockholders’ equity	$	38,493		$	37,962

See accompanying notes to consolidated financial statements

Norfolk Southern Corporation and Subsidiaries

Consolidated Statements of Cash Flows

(Unaudited)

	Years Ended December 31,
	2021			2020
	($ in millions)
Cash flows from operating activities
Net income	$	3,005		$	2,013
Reconciliation of net income to net cash provided by operating activities:
Depreciation		1,181			1,154
Deferred income taxes		184			142
Gains and losses on properties		(86	)		(39	)
Loss on asset disposal		—			385
Impairment of investment		—			99
Changes in assets and liabilities affecting operations:
Accounts receivable		(133	)		71
Materials and supplies		3			23
Other current assets		(6	)		3
Current liabilities other than debt		283			34
Other – net		(176	)		(248	)

Net cash provided by operating activities		4,255			3,637

Cash flows from investing activities
Property additions		(1,470	)		(1,494	)
Property sales and other transactions		159			333
Investment purchases		(10	)		(13	)
Investment sales and other transactions		99			(1	)

Net cash used in investing activities		(1,222	)		(1,175	)

Cash flows from financing activities
Dividends		(1,028	)		(960	)
Common stock transactions		17			69
Purchase and retirement of common stock		(3,390	)		(1,439	)
Proceeds from borrowings – net of issuance costs		1,676			784
Debt repayments		(584	)		(381	)

Net cash used in financing activities		(3,309	)		(1,927	)

Net increase (decrease) in cash and cash equivalents		(276	)		535

Cash and cash equivalents
At beginning of year		1,115			580

At end of year	$	839		$	1,115

Supplemental disclosures of cash flow information
Cash paid during the year for:
Interest (net of amounts capitalized)	$	579		$	577
Income taxes (net of refunds)		654			311

See accompanying notes to consolidated financial statements

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS:

1. Impairment of Investment

In 2020, we recorded an other-than-temporary impairment of $99 million related to the carrying value of an equity method investment. This non-cash impairment charge is recorded in “Purchased services and rents” on the Consolidated Statement of Income and had a $74 million impact on net income.

2. Loss on Asset Disposal

In 2020, we sold 703 locomotives deemed excess and no longer needed for railroad operations. We evaluated these locomotive retirements and concluded they were abnormal. Accordingly, we recorded a $385 million loss to adjust their carrying amount to their estimated fair value, which resulted in a $97 million tax benefit.

3. Stock Repurchase Program

We repurchased and retired 12.7 million and 7.4 million shares of common stock under our stock repurchase programs in 2021 and 2020, respectively, at a cost of $3.4 billion and $1.4 billion, respectively.