On this page of StockholderLetter.com we present the latest annual shareholder letter from NORFOLK SOUTHERN CORP — ticker symbol NSC. Reading current and past NSC letters to shareholders can bring important insights into the investment thesis.

 •  3/28/2025 Letter Continued (Full PDF)
 •  3/31/2023 NSC Stockholder Letter
 •  3/20/2024 NSC Stockholder Letter
 •  More "Railroads" Category Stockholder Letters
 •  NSC Benford's Law Stock Score = 79

NSC Shareholder/Stockholder Letter Transcript:

Itt o
I\ I
I


~INANCIAL HIGHLIGHTS
Norfolk Southern Corporat ion & Subsidiaries
FOR THE YEAR
2024
ABOUT NORFOLK SOUTHERN
2023
2022
(dollars    n m   ll10ns, except per-shore amounts}
Since 1827, Norfolk Southern
Corporation (NYSE: NSC) and its
Railway operating revenues
$ 12,123
$ 12,156
$ 12,745
predecessor companies have safely
Income from railway operations
(as adjusted for both 2024 and 2023)'
$ 4,146
$ 3,967
$ 4,809
Net income
(as adjusted for bot h 2024 and 2023)'
t he U.S. economy. Today, it operates a
22-state freight transportat ion network.
$ 2,684
$ 2,673
$ 3,270
$ 11.85
$ 11.74
$ 13.88

5.40
$ 4 .96
45%
46%
36%
Net cash provided by operating activities
$ 4,052
$ 3,179
$ 4,222
Property additions
$ 2,381
$ 2,327
$ 1,948
Acquisit ion of assets of CSR
$ 1,643


eastern U.S. It serves a maj ority of the
country's population and manufacturing
base, with connections to every major
moved the goods and materials that drive
Per share- diluted
(as adjusted for both 2024 and 2023)1
Dividends per share
5.40

Committed to furt heri ng sust ainability,
Norfolk Southern helps its customers
avoid approximately 15 million tons of
yearly carbon emissions by shipping
via rail. Its dedicated team members
Dividend payout rati o
(as adjusted for both 2024 and 2023)'
22
$ 1,671
$ 852
$ 2,274
Total asset s
$43,682
$ 41,652
$ 38,885
Total debt
$ 17,206
$ 17,179
$ 15,182
Shareholders' equity
$ 14,306
$ 12,781
$ 12,733
Free cash flow'
AT YEAR END
deliver approximately 7 milli on carloads
annually, from agriculture to consumer
goods. Norfolk Southern also has the
most extensive intermodal network in the
container port on the Atlantic coast as
well as major ports across the Gulf Coast
and Great Lakes. Learn more by visit ing
www.NorfolkSouthern.com.
Shares out standing [millions)
226.3
225.7
228.1
Operat ing Ratio'
65.8%
67.4%
62.3%
Debt-to-tot al-capitalization ratio
54.6%
57.3%
54.4%
FINANCIAL RATIOS
Total Shareholder Returns3
s 250
s 200
{in dollars)
I
Norfolk Southern Corp. Common Stock
S&P Railroad Stock Price Index
S&P Composite- 500 Stock Price Index
97%
s 150
$ 100
s
50
s
0
1212019
1212020
1212021
1212022
Railway Operating
Revenues
Income from Railway
Operations
(in millions)
(as adjusted for 2024 and 2023)'
(lnmUiions)
$12,745
$12,123$12,156
1212023
1212024
Free Cash Flow   
(in millions)
$4,809
$2,274
$4,146 $3,967
$1,671
$852
1 Our 2024 financial results include gains on railway line soles ($433M
benefit to railway operating expense), restructuring and other charges
($183M expense to railway operating expense and a $20M benefit to other
income  net), the Eastern Ohio incldenl ($325M .expense to railway opera l ing
expense)J shareholder advisory costs (S59M expense to other income-net),
and o deferred tax adjustment ($27M benefit to deferred income taxes).
Our 2023 financial results includes $1.1 billion of expenses related to the
Eastern Ohio incident. For purposes of period-over-period comparability,
2024 and 2023 results for income from railway operations, net income, net
income per share- diluted, dividend payout ratio, a nd operating ratio have
been adjusted to exclude these charges, and ore considered non-GAAP
financial measures. The 2024 and 2023 dividend payout ratios ore dividends
paid ($1,221M and S1,225M, respeclively) as a percentage of net income
($2,684M and $2,673M, respectively), as compared to a 47% (2024) and
67% (2023) dividend payout ratios using net income under GAAP ($2,622M
and S1,827M, respectively). For more informatron, see the *Non-GAAP
Reconciliation for 2024 and 2023" on pages K26 and K27 of o ur Annual
Report on Form 10-K.
2 Free cash flow is cons:idered a non-GAAP tinanciol measure and is a meosvre
of cosh available for other investing and financing activities, including
payment of dividends, repurchases of common stock, and repayments ot
debt. Management believes that this non-GAAP financial measure provides
useful supplemental information to investors regarding our ability to
generate cosh flows after taking into consideration cosh necessary to cover
operations and maintain and grow our capitol b ose. Net cosh provided by
operating activities is a GAAP measure. Free cash now ($1,671M) is net cash
provided by operating activities ($4,052M) reduced by payments for prop,rty
additions ($2,381M), e xcluding our acquisition of assets of CSR.
3 This graph compares the cumulative shareholder returns on Norfolk Soutl>ern
Corporation common stock with the other identified indices. It assumes on
investment of $100 in NSC common stock and each index on Dec. 31, 2019,
and that all dividends were reinvested over th" five  yeor period, ending
Dec. 31, 2024. Data furnished by Bloomberg Financial Markets.

FELLOW SHAREHOLDER,
2024 was a year of transformation and progress for
Norfolk Southern. Our network is fluid, our terminals
are operating efficiently, and service levels are at all-time
highs. Our customers are noticing and rewarding us
with more business. We have momentum on all fronts-
safety, operations, customer trust, and finances and every Norfolk Southern employee worked
hard to deliver these results. It's energizing
to see what we're achieving together with
an aligned leadership team and engaged
employees at every level. We are well
positioned to build on our success
and consistently deliver competitive
results for our stakeholders.

GOVERNANCE AND LEADERSHIP
TRANSFORMATION
Since the start of 2024, we have welcomed
seven new Board members, and elected a new
Board Chair and new Chairs of the Human
Capital Management and Compensation and
Governance and Nominating committees.
Each brings extensive knowledge from a variety
of backgrounds, including transportation,
regulatory affairs, governance, as well as
executive leadership. These changes have
enhanced our Board's ability to hold
management accountable while providing
strategic oversight that drives improved
operational and financial performance.
Additionally, our new senior management
team -
including a new CEO, CFO, COO,
CHRO, CLO, and CIDO -
has brought a
disciplined focus to operational improvements,
productivity, and process enhancements.
SAFETY AND OPERATIONAL
EXCELLENCE
Safety is a core value. In 2024, we reduced
our FRA-reportable mainline train accident
rate by more than 40% to an indust ry-leading
level. We also launched an ongoing series of
safety leadership training events, equipping
leaders across the company with skills and
expertise to strengthen our safety culture.
We continued to invest in technology to
augment the work of our railroaders, including
doubling the number of autonomous track
inspection locomotives, installing five new
digital train inspection portals, and adding more
than 130 new hot bearing detector systems
across our network. We also trained more than
5,600 first responders in 2024 through our
Operation Awareness & Response program.
Operational excellence with a strong safety
foundation isn't just a goal; it's our commitment
to our stakeholders and a launch point for
growth. We continue to implement principles
of Total Qual ity Management, including a focus
on relentless root cause analysis to optimize
2 /
NORFOLK SOUTHERN 2024 Annual Report

network performance, enhance service
reliability, and deliver measurable
improvements. And we did deliver.
We accelerated our entire network,
improving our network tra in
speed by 10% year-over-year,
with merchandise train speed
improving 11% and unit t rain speed
improving 17% in our last quarter.
We also improved intermodal
train efficiency by 3.1% in our last
quarter, even as our team handled
7% more parcel volume per
day. The Norfolk Southern team
delivered a perfect peak season
with zero controllable failures.
We also dr ove meaningful
cost efficiencies- deliver ing
a $292 million year-over-year
improvement in productivity and
cost take-out. Our commitment to operational
excellence translated into a 160-basis-point
adjusted operating ratio improvement,
exceeding our 100- to 150-basis-point
guidance despite slightly lower revenues.
Our metrics show a strong productivity
story, driven by d isciplined execution and
continuous improvement.
This year also tested our resilience, and we
INDUSTRIAL DEVELOPMENT
AND GROWTH
Industrial development remains a strong driver
of growth along our network. In 2024, we
advanced more than 140 projects representing
$4.3 billion in customer investment. Our project
pipeline remains robust, with activity in steel
and metals production, renewable fuels, energy,
proved our ability to navigate challenges.
and food processing and production that will
When the Port of Baltimore temporarily shut
drive future freight volume growth.
down, we worked swiftly w ith customers to
reroute traffic to Norfolk, ensuring supply chain
continuity. In the wake of Hurricane Helene, our
We look forward to advancing our culture and
high-performing organization with confidence
that we can propel our business to new heights
team cleared more than 15,000 fallen trees and
restored key routes w ithin 72 hours. Our team
and deliver top-tier results in the year s ahead.
also showed resolve and nimbleness in the
Norfolk Southern is on the move and, together,
face of potential work stoppages at East Coast
we are building a stronger, more reliable railroad
ports, proactively implementing contingency
to power our nation's economy.
plans and communicating with customers well
in advance to continue serving their business.
These moments reinforced our ability to safely
manage through d ifficulties and minimize
customer impact.
NORFOLK SOUTHERN 2024 Annual Report

3



 3/28/2025 Letter Continued (Full PDF)