UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

________________________________

FORM 8-K

CURRENT REPORT
Pursuant to Section 13 or 15(d)
of the Securities Exchange Act of 1934

Date of Report (Date of earliest event reported):

January 27, 2021 (January 27, 2021)

________________________________

soaring nameunderblacklg

NORFOLK SOUTHERN CORPORATION

(Exact name of registrant as specified in its charter)

______________________________________

Virginia	1-8339	52-1188014
(State or other jurisdiction of incorporation)	(Commission File Number)	(IRS Employer Identification Number)

Three Commercial Place

Norfolk, Virginia

23510-2191

757-629-2680

(Address of principal executive offices, including zip code)

(Registrant’s telephone number, including area code)

No Change
(Former name or former address, if changed since last report)

Check the appropriate box below if the Form 8-K filing is intended to simultaneously satisfy the filing obligation of the registrant under any of the following provisions:

☐ Written communications pursuant to Rule 425 under the Securities Act (17 CFR 230.425)

☐ Soliciting material pursuant to Rule 14a-12 under the Exchange Act (17 CFR 240.14a-12)

☐ Pre-commencement communications pursuant to Rule 14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))

☐ Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange Act (17 CFR 240.13e-4(c))

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 is an emerging growth company as defined in Rule 405 of the Securities Act of 1933 (§230.405 of this chapter) or Rule 12b-2 of the Securities Exchange Act of 1934 (§240.12b-2 of this chapter).

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. ☐

Item 2.02. Results of Operations and Financial Condition

On January 27, 2021, the Registrant issued a Press Release, attached hereto as Exhibit 99.1, reporting fourth-quarter and full-year results for 2020.

Item 7.01. Regulation FD Disclosure

Quarterly Financial Data. Attached hereto, as Exhibit 99.2, is the Quarterly Financial Data for the fourth quarter of 2020. This document is available on the Registrant’s website, www.norfolksouthern.com, in the “Invest in NS” section, under “Financial Reports.” This unaudited financial information and summary of certain notes to the consolidated financial statements should be read in conjunction with: (a) the consolidated financial statements and notes included in the Registrant's latest Annual Report on Form 10-K and in subsequent Quarterly Reports on Form 10-Q; and (b) any Current Reports on Form 8-K.

Dividend Declaration. On January 27, 2021, the Registrant issued a Press Release, attached hereto as Exhibit 99.3, announcing the declaration of a quarterly dividend of $0.99 per share of common stock, payable on March 10, 2021, to shareholders of record as of February 5, 2021 and an increased targeted dividend payout ratio range of 35% to 40%.

Item 9.01. Financial Statements and Exhibits.

(d) Exhibits.

The following exhibits are filed as part of this Current Report on Form 8-K:

Exhibit Number	Description
99.1	Press Release dated January 27, 2021
99.2	2020 Q4 Financial Data
99.3	Press Release dated January 27, 2021
104	Cover Page Interactive Data File (embedded within the Inline XBRL document)

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

	SIGNATURES
	NORFOLK SOUTHERN CORPORATION
	(Registrant)


	/s/ Denise W. Hutson
	Name: Denise W. Hutson
	Title: Corporate Secretary

Date: January 27, 2021

Norfolk Southern Corporation, Three Commercial Place, Norfolk, Va. 23510-2191

FOR IMMEDIATE RELEASE

Norfolk Southern reports fourth-quarter and full-year 2020 results

Achieves record low operating ratio in the fourth quarter

NORFOLK, Va., January 27, 2021 – Norfolk Southern Corporation (NYSE: NSC) today reported fourth-quarter and full-year 2020 financial results.

Fourth-quarter net income was $671 million, diluted earnings per share were $2.64, and the operating ratio improved to an all-time quarterly record of 61.8%. Full-year net income was $2.0 billion, diluted earnings per share were $7.84 and the operating ratio was 69.3%. During the first quarter of 2020, Norfolk Southern reported a $385 million non-cash locomotive rationalization charge, and in the third quarter of 2020 reported a $99 million non-cash investment impairment charge. Excluding these non-cash charges, adjusted full-year net income was $2.4 billion, adjusted diluted earnings per share were $9.25, and the adjusted operating ratio improved to 64.4% versus the record of 64.7% set in 2019.

“During a year of unprecedented market disruption and uncertainty, the Norfolk Southern team delivered record productivity levels while providing safe and reliable freight solutions for our customers,” said James A. Squires, Norfolk Southern chairman, president and CEO. “As we take stock of what we achieved in 2020 while managing both the pandemic and energy market challenges, including the successful idling of four additional hump operations while driving productivity to record levels, we see much more opportunity ahead. We have set the stage to drive further efficiency and profitable growth in 2021 through our precision scheduled railroading operating plan, which will deliver long-term value for both our shareholders and customers.”

Fourth-quarter summary

Railway operating revenues of $2.6 billion decreased 4% compared with fourth-quarter 2019, driven by a 1% decline in volume, lower fuel surcharges, and differing business mix.

Railway operating expenses were $1.6 billion, a decrease of 8%, or $139 million, compared with the same period last year. Lower fuel costs, compensation and benefits, and purchased services were partially offset by lower gains on property sales.

Income from railway operations was $1.0 billion, an increase of 2%, or $22 million, year-over-year. The railway operating ratio was 61.8%, an all-time record.

2020 summary

Railway operating revenues of $9.8 billion declined 13% as volume was down 12% year-over-year, reflecting declines in all major commodity categories driven by the global pandemic.

Railway operating expenses of $6.8 billion decreased $520 million, or 7%, compared with last year. Lower fuel costs, compensation and benefits, purchased services, and materials costs were partially offset by a $385 million non-cash locomotive rationalization charge as well as a $99 million non-cash impairment charge related to an equity-method investment.

Excluding the non-cash locomotive rationalization and investment impairment charges, adjusted operating expenses declined by $1.0 billion, or 14%, compared to last year.

Income from railway operations was $3.0 billion and the operating ratio was 69.3%.

Excluding the non-cash locomotive rationalization and investment impairment charges, adjusted income from railway operations was $3.5 billion, while the adjusted operating ratio improved to 64.4% versus the record of 64.7% set in 2019.

About Norfolk Southern

Norfolk Southern Corporation (NYSE: NSC) is one of the nation’s premier transportation companies. Its Norfolk Southern Railway Company subsidiary operates approximately 19,300 route miles in 22 states and the District of Columbia, serves every major container port in the eastern United States, and provides efficient connections to other rail carriers. Norfolk Southern is a major transporter of industrial products, including agriculture, forest and consumer products, chemicals, and metals and construction materials. In addition, the railroad operates the most extensive intermodal network in the East and is a principal carrier of coal, automobiles, and automotive parts.

Non-GAAP Financial Measures
This news release includes certain non-GAAP financial measures. Reconciliation of these non-GAAP financial measures is provided in the table below, entitled “Reconciliation of Non-GAAP Financial Measures.”

Forward-looking statements

This news release contains forward-looking statements that may be identified by the use of words like “believe,” “expect,” “anticipate,” “estimate,” “plan,” “consider,” “project,” and similar references to the future. Forward-looking statements reflect our good-faith evaluation of information currently available. These forward-looking statements are subject to a number of risks and uncertainties, and our actual results may differ materially from those projected. Please refer to our annual and quarterly reports filed with the SEC for a full discussion of those risks and uncertainties we view as most important. Forward-looking statements are not, and should not be relied upon as, a guarantee of future performance or results, nor will they necessarily prove to be accurate indications of the times at or by which any such performance or results will be achieved. As a result, actual outcomes and results may differ materially from those expressed in forward-looking statements. We undertake no obligation to update or revise forward-looking statements.

Media Inquiries:

Media Relations, 404-420-4444 ([email protected])

Investor Inquiries:

Pete Sharbel, 470-867-4807 ([email protected])

http://www.norfolksouthern.com

Reconciliation of Non-GAAP Financial Measures

Information included within this filing includes non-GAAP financial measures, as defined by SEC Regulation G. Non-GAAP financial measures should be considered in addition to, not as a substitute for, the financial measures reported in accordance with U.S. generally accepted accounting principles (GAAP).

GAAP financial results are adjusted to exclude the effects of a non-cash charge in the first quarter of 2020 related to the sale of 703 locomotives. The introduction of precision scheduled railroading in 2019 continues to provide significant benefits to the network operations and resulted in excess capacity resulting in the sale of these locomotives. GAAP financial results are also adjusted to exclude the effects of an impairment charge in the third quarter of 2020 related to an equity method investment. The income tax effects on the non-GAAP adjustments were calculated based on the applicable tax rates to which the non-GAAP adjustments relate.

Norfolk Southern believes that these non-GAAP financial measures provide valuable information regarding its earnings and business trends by excluding specific items that it believes are not indicative of the ongoing operating results of its business, providing a useful way for investors to make a comparison of our performance over time and against other companies in our industry by excluding the effects of the locomotive and impairment charges. These non-GAAP financial measures are being provided as supplemental information to Norfolk Southern’s GAAP financial measures, and Norfolk Southern believes these measures provide investors with additional meaningful financial information regarding our operational performance. Norfolk Southern also uses these non-GAAP measures as supplemental measures to evaluate its business and performance.

($ in millions except per share amounts)
	2020

Railway operating expenses	$	6,787
Effect of locomotive & investment impairment charges		(484	)
Adjusted railway operating expenses	$	6,303

Income from railway operations	$	3,002
Effect of locomotive & investment impairment charges		484
Adjusted income from railway operations	$	3,486

Operating ratio (%)		69.3
Effect of locomotive & investment impairment charges (%)		(4.9	)
Adjusted operating ratio (%)		64.4

Income before income taxes	$	2,530
Effect of locomotive & investment impairment charges		484
Adjusted income before income taxes	$	3,014

Income taxes	$	517
Effect of locomotive & investment impairment charges		122
Adjusted income taxes	$	639

Net income	$	2,013
Effect of locomotive & investment impairment charges		362
Adjusted net income	$	2,375

Diluted earnings per share	$	7.84
Effect of locomotive & investment impairment charges		1.41
Adjusted diluted earnings per share	$	9.25

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Norfolk Southern Corporation and Subsidiaries

Consolidated Statements of Income

(Unaudited)

	Fourth Quarter				Years Ended December 31,
	2020		2019		2020		2019
	(in millions, except per share amounts)

Railway operating revenues
Merchandise	$	1,553	$	1,630	$	6,088	$	6,803
Intermodal		730		697		2,654		2,824
Coal		290		363		1,047		1,669
Total railway operating revenues		2,573		2,690		9,789		11,296

Railway operating expenses
Compensation and benefits		587		630		2,373		2,751
Purchased services and rents		426		460		1,687		1,725
Fuel		136		223		535		953
Depreciation		287		285		1,154		1,138
Materials and other		153		130		653		740
Loss on asset disposal		—		—		385		—
Total railway operating expenses		1,589		1,728		6,787		7,307

Income from railway operations		984		962		3,002		3,989

Other income – net		43		18		153		106
Interest expense on debt		160		152		625		604

Income before income taxes		867		828		2,530		3,491

Income taxes
Current		132		57		375		439
Deferred		64		105		142		330
Total income taxes		196		162		517		769

Net income	$	671	$	666	$	2,013	$	2,722

Earnings per share – diluted	$	2.64	$	2.55	$	7.84	$	10.25

Weighted average shares outstanding – diluted		254.7		261.6		256.6		265.6

See accompanying notes to consolidated financial statements

Norfolk Southern Corporation and Subsidiaries

Consolidated Balance Sheets

(Unaudited)

	At December 31,
	2020			2019
	($ in millions)
Assets
Current assets:
Cash and cash equivalents	$	1,115		$	580
Accounts receivable – net		848			920
Materials and supplies		221			244
Other current assets		134			337
Total current assets		2,318			2,081

Investments		3,590			3,428
Properties less accumulated depreciation of $11,985 and $11,982, respectively		31,345			31,614
Other assets		709			800

Total assets	$	37,962		$	37,923

Liabilities and stockholders’ equity
Current liabilities:
Accounts payable	$	1,016		$	1,428
Income and other taxes		263			229
Other current liabilities		302			327
Current maturities of long-term debt		579			316
Total current liabilities		2,160			2,300

Long-term debt		12,102			11,880
Other liabilities		1,987			1,744
Deferred income taxes		6,922			6,815

Total liabilities		23,171			22,739

Stockholders’ equity:
Common stock $1.00 per share par value, 1,350,000,000 shares authorized; outstanding 252,095,082 and 257,904,956 shares, respectively, net of treasury shares		254			259
Additional paid-in capital		2,248			2,209
Accumulated other comprehensive loss		(594	)		(491	)
Retained income		12,883			13,207

Total stockholders’ equity		14,791			15,184

Total liabilities and stockholders’ equity	$	37,962		$	37,923

See accompanying notes to consolidated financial statements

Norfolk Southern Corporation and Subsidiaries

Consolidated Statements of Cash Flows

(Unaudited)

	Years Ended December 31,
	2020			2019
	($ in millions)
Cash flows from operating activities
Net income	$	2,013		$	2,722
Reconciliation of net income to net cash provided by operating activities:
Depreciation		1,154			1,139
Deferred income taxes		142			330
Gains and losses on properties		(39	)		(42	)
Loss on asset disposal		385			—
Impairment of investment		99			—
Changes in assets and liabilities affecting operations:
Accounts receivable		71			87
Materials and supplies		23			(37	)
Other current assets		3			(4	)
Current liabilities other than debt		34			(185	)
Other – net		(248	)		(118	)
Net cash provided by operating activities		3,637			3,892

Cash flows from investing activities
Property additions		(1,494	)		(2,019	)
Property sales and other transactions		333			377
Investment purchases		(13	)		(18	)
Investment sales and other transactions		(1	)		(104	)
Net cash used in investing activities		(1,175	)		(1,764	)

Cash flows from financing activities
Dividends		(960	)		(949	)
Common stock transactions		69			27
Purchase and retirement of common stock		(1,439	)		(2,099	)
Proceeds from borrowings – net of issuance costs		784			2,192
Debt repayments		(381	)		(1,188	)
Other		—			23
Net cash used in financing activities		(1,927	)		(1,994	)
Net increase in cash, cash equivalents, and restricted cash		535			134

Cash, cash equivalents, and restricted cash
At beginning of year		580			446
At end of year	$	1,115		$	580

Supplemental disclosures of cash flow information
Cash paid during the year for:
Interest (net of amounts capitalized)	$	577		$	555
Income taxes (net of refunds)		311			543

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. Accordingly, we recorded a $385 million loss to adjust their carrying amount to their estimated fair value.

3. Stock Repurchase Program

We repurchased and retired 7.4 million and 11.3 million shares of common stock under our stock repurchase programs in 2020 and 2019, respectively, at a cost of $1.4 billion and $2.1 billion, respectively.

4. Restricted Cash

The “Cash, cash equivalents, and restricted cash” line item on the Consolidated Statement of Cash Flows at January 1, 2019 includes restricted cash of $88 million, which reflects deposits held by a third-party bond agent as collateral for certain debt obligations which matured on October 1, 2019.

Norfolk Southern Corporation, Three Commercial Place, Norfolk, Va. 23510

FOR IMMEDIATE RELEASE

Norfolk Southern increases quarterly dividend by 5 cents and increases target dividend payout ratio

NORFOLK, Va., Jan. 27, 2021 – Norfolk Southern Corporation (NYSE: NSC) today announced that its board of directors approved a 5% increase in its quarterly dividend on the company’s common stock, from 94 to 99 cents per share. The company also announced an increase to its long-term target dividend payout ratio from 33% to a range of 35-40% of net income.

“Strong operational results achieved through our precision scheduled railroading transformation have underpinned robust cash flow generation,” said James A. Squires, Norfolk Southern chairman, president and CEO. “Today’s announcements highlight our confidence in long-term value creation and commitment to superior shareholder returns.”

The dividend is payable March 10 to shareholders of record on Feb. 5. Norfolk Southern has paid a dividend on its common stock for 154 consecutive quarters since its formation in 1982.

About Norfolk Southern

Forward-looking statements

Media Inquiries:

Media Relations, 404-420-4444 ([email protected])

Investor Inquiries:

Pete Sharbel, 470-867-4807 ([email protected])

http://www.norfolksouthern.com

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