On this page of StockholderLetter.com we present the 3/31/2023 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.

 •  3/31/2023 Letter Continued (Full PDF)
 •  3/20/2024 NSC Stockholder Letter
 •  3/28/2025 NSC Stockholder Letter
 •  More "Railroads" Category Stockholder Letters
 •  NSC Benford's Law Stock Score = 81

NSC 3/31/2023 Shareholder/Stockholder Letter Transcript:

FINANCIAL HIGHLIGHTS
Norfolk Southern Corporation & Subsidiaries
FOR THE YEAR
2022
(numbers in millions, except per-share amounts)
2021
2020
Railway operating revenues

12,745

11,142

9,789
Income from railway operations1

4,809

4,447

3,486

3,270

3,005

2,375

13.88

12.11

9.25

4.96

4.16

3.76
1
Net income
Per share     diluted
1
Dividends per share
36%
1
Dividend pay-out ratio
34%
40%
Net cash provided by operating activities

4,222

4,255

3,637
Property additions

1,948

1,470

1,494
Free cash    ow2

2,274

2,785

2,143
Total assets

38,885

38,493

37,962
Total debt

15,182

13,840

12,681
Stockholders    equity

12,733

13,641

14,791
AT YEAR-END
228.1
240.2
252.1
Operating ratio1
62.3%
60.1%
64.4%
Debt-to-total capitalization ratio
54.4%
50.4%
46.2%
Shares outstanding
FINANCIAL RATIOS
RAILWAY
OPERATING
REVENUES
INCOME FROM
RAILWAY
OPERATIONS
FREE
CASH
FLOW2
(in millions)
(in millions)
(in millions)
$12,745
TOTAL STOCKHOLDER RETURNS3
$ 250
$2,785
$9,789
$3,486
$2,274
Norfolk Southern Corporation (NYSE:
NSC) is one of the nation   s premier
transportation companies, moving
the goods and materials that drive the
U.S. economy. Its Norfolk Southern
Railway Company subsidiary connects
customers to markets and communities
to economic opportunity with safe,
reliable, and cost-effective shipping
solutions. The company operates
approximately 19,100 route miles across
a service territory that includes 22
states and the District of Columbia,
every major container port in the
eastern United States, and a majority of
the U.S. population and manufacturing
base. In addition to operating the most
extensive intermodal network in the
East, the company is a major transporter
of industrial products, automobiles,
automotive parts, and coal.
(in dollars)
$4,809
$4,447
$11,142
DESCRIPTION OF BUSINESS
Norfolk Southern Corp. Common Stock
S&P Railroad Stock Price Index
S&P Composite     500 Stock Price Index
$ 200
$2,143
$ 150
$ 100
$ 50

2022 2021 2020
2022 2021 20201
2022 2021 2020
0
12/2017
12/2018
12/2019
12/2020
12/2021
12/2022
1 Our 2020    nancial results included a loss on asset disposal of $385M related to locomotives sold and a $99M impairment charge related to an equity method investment. For purposes of periodover-period comparability, 2020 results for income from railway operations, net income, net income per share    diluted, dividend payout ratio, and operating ratio have been adjusted to exclude
these charges, and are considered non-GAAP    nancial measures. The 2020 dividend payout ratio is dividends paid ($960M) as a percentage of adjusted net income ($2,375M), as compared to
a 48% dividend payout ratio using net income under GAAP ($2,013M). For more information, see the    Non-GAAP Reconciliation for 2020    on page K20 of our Annual Report on Form 10-K.
2 Free cash    ow is considered a non-GAAP    nancial measure and is a measure of cash available for other investing and    nancing activities, including payment of dividends, repurchases of
common stock, and repayments of debt. Management believes that this non-GAAP    nancial measure provides useful supplemental information to investors regarding our ability to generate
cash    ows after taking into consideration cash necessary to cover operations and maintain and grow our capital base. Net cash provided by operating activities is a GAAP measure. Free cash
   ow ($2,274M) is net cash provided by operating activities ($4,222M) reduced by payments for property additions ($1,948M).
3 This graph compares the cumulative stockholder returns on Norfolk Southern Corporation common stock with the other identi   ed indices. It assumes an investment of $100 in NSC common
stock and each index on Dec. 31, 2017, and that all dividends were reinvested over the    ve-year period, ending Dec. 31, 2022. Data furnished by Bloomberg Financial Markets.

NORFOLK SOUTHERN 2022 ANNUAL REPORT | 1

2 | NORFOLK SOUTHERN 2022 ANNUAL REPORT
DEAR FELLOW
SHAREHOLDERS
The priority for your management team in 2022 was to
improve service. To achieve that goal, we implemented
our new TOP|SPG operating plan, with safety at its
core; launched recruiting and training initiatives that
achieved industry-leading success hiring conductors
in a historically tight job market, and strengthened our
leadership team and culture.
Our e   orts took hold in the fourth quarter, and we
ended 2022 delivering our best service in more than two
years. Our customers noticed the di   erence. Volumes in
December were at 52-week highs, outperforming typical
seasonality.
Overcoming headwinds associated with a slower network
in the    rst three quarters, your company achieved strong
   nancial results in a challenging year. Total revenue grew
by 14 percent to reach a company-record $12.7 billion.
We achieved company-record operating income and our
second-best annual operating ratio.
We returned more than $4 billion to shareholders in
2022, with more than 12.6 million shares repurchased.
Earnings per share grew 15 percent for the year, dividend
distributions increased 14 percent, and we raised our
dividend 9 percent in the    rst quarter of 2023.
We entered 2023 with tremendous momentum, ready to
execute on the pioneering new strategy we announced
at our Investor Day in December.

NORFOLK SOUTHERN 2022 ANNUAL REPORT | 3
Our strategy is to create long-term shareholder value
through a balanced approach of:
    reliable and resilient service,
    continuous productivity improvement, and
    smart and sustainable growth.
These are not competing priorities     they are
complementary in a carefully blended balance.
The resulting value proposition is simple and powerful:
Norfolk Southern is uniquely positioned to deliver longterm shareholder value through top-tier revenue and
earnings growth, industry-competitive margins, and
balanced capital deployment.
We will look to compete in the $860 billion U.S. truck and
logistics market by being a customer-centric, operationsdriven service organization. Customer-centric means
we will deliver a service product the market values.
Operations-driven means we will make reliable and
resilient service an enduring competitive strength.
With the right strategy, the right team, and a franchise
built for growth, Norfolk Southern intends to lead the
industry in service and growth.
As I near the end of my    rst year as President and CEO of
Norfolk Southern, I would like to thank our outstanding
Board of Directors for their thoughtful guidance,
especially our Independent Chair Amy Miles for her
leadership and partnership.
I would also like to recognize all the members of the
Thoroughbred team, including our dedicated craft
railroaders, who deliver every day for our company, our
customers, and the U.S. economy.
This is an exciting and important time for our company.
We thank you for your con   dence and support as we
launch a new way forward for our industry.
With the right strategy, the
right team, and a franchise
built for growth, Norfolk
Southern intends to lead the
industry in service and growth.



 3/31/2023 Letter Continued (Full PDF)