AI interpretation based on checked source excerpts. Issuer assertions and evidence limitations remain explicit.
Policy quality-scores-3: six equally weighted categories. The overall score requires full coverage. Missing inputs are not zero. Qualitative grades are sourced interpretations, not probabilities. 6/6 · 30/10/2026
Moat56
Equal-weight average of four evidence-backed rubric grades (0–4), scaled to 100.
structural advantage · 3/4 · NS controls a large, contiguous rail network with exclusive trackage rights and a substantial rail property base in a capital‑intensive industry, making replication difficult and supporting regional scale advantages. Direct competitor cost superiority is not evidenced.
durability · 2/4 · Ongoing property additions are “designed to support” safe, reliable service, indicating maintenance of the franchise; however, potential re‑regulation could diminish advantages, tempering durability confidence.
customer dependency · 2/4 · Direct service to numerous coal power plants and disclosures of growth with existing automotive and export coal customers suggest embedded relationships and repeat use. Specific contract terms, durations, and switching frictions are not disclosed.
erosion resilience · 2/4 · Intermodal pricing and volume improvements show relevance, but coal pricing declines and port routing headwinds highlight exposure to mix and external logistics dynamics, limiting resilience.
Pricing power56
Equal-weight average of four evidence-backed rubric grades (0–4), scaled to 100.
realized pricing · 2/4 · Intermodal realized pricing increased alongside fuel surcharges, while coal pricing decreased in 2024–2025. Net effect is mixed, not uniformly strong across commodities.
retention · 2/4 · Commentary cites growth with existing customers in automotive and export coal, indicating repeat demand, but there are no disclosed renewal rates or churn metrics tied to price changes.
margin resilience · 2/4 · Operating ratio improved to 64.2% in 2025, but 2026 income weakened due to higher fuel, merger costs, and absence of prior‑year incident recoveries, signaling only mixed margin resilience rather than deterioration purely from pricing.
contractual freedom · 3/4 · Pricing is predominantly via private contracts and exempt quotes not subject to regulation; approximately 90% of revenue is from exempt or contract traffic, indicating substantial formal price‑setting discretion (albeit constrained by market forces).
Predictability82
5 consecutive published annual periods. Equal weights: nondeclining revenue frequency; revenue-growth volatility (5–40pp); positive FCF frequency; FCF-margin volatility (3–20pp). Stability indicator, not a growth forecast.
- Nondeclining revenue years (%)
- 50.00
- Revenue growth volatility (pp)
- 7.14
- Positive FCF years (%)
- 100.00
- FCF margin volatility (pp)
- 5.93
- observedAnnualPeriods
- 5.00
Financial strength20
Equal-weight grades: debt/FCF (1–8x), net debt/earnings before interest and tax (0–5x), interest service (1–12x), current ratio (0.75–2x). Earnings use reported operating income, an original issuer-reported unadjusted EBIT reconciled to net income, income tax and signed net interest, or reported pretax profit plus reported gross interest expense. Reported EBIT is distinct from GAAP operating income and gross interest. Interest service uses earnings/interest expense; if unavailable, it uses reported operating cash flow/cash interest paid, without relabeling cash paid as accrued expense. Nonpositive cash flow/earnings score 0 for their service component; reported zero interest with a positive numerator scores 100. Net cash scores 100 for net leverage. Missing disclosures remain unavailable. General nonfinancial-company rubric, not a credit rating; exceptional and nonoperating gains are not normalized out. IFRS finance-cost and cash-flow classifications retain their reported scope.
- debtFcfGrade
- 1.12
- netDebtEbitGrade
- 28.57
- interestCoverageGrade
- 40.91
- currentRatioGrade
- 7.77
- Debt / FCF (x)
- 7.92
- Net debt / operating income (x)
- 3.57
- Interest coverage (x)
- 5.50
- Current ratio (x)
- 0.85
Capital allocation79
Three-year equal-weight indicators: pretax return on average invested capital (0–25%; equity + debt − cash, each year and its prior year), share-count growth (0–5%, lower better), share-based cost/revenue (2–20%, lower better), consolidated FCF/net income (0–1x). Return uses reported operating income, an original issuer-reported unadjusted EBIT reconciled to net income, income tax and signed net interest, or EBIT calculated from reported pretax profit plus reported gross interest expense; the issuer-reported EBIT is distinct from GAAP operating income and gross interest; exceptional/nonoperating gains are not normalized out. Share-based cost uses the reported cash-flow add-back or, if absent, separately reported recognized compensation expense; the latter never becomes an FCF adjustment. Nonpositive net income scores 0 for cash conversion; absent income/FCF stays unavailable. ROIC remains undefined for nonpositive invested capital; the explicit asset-return alternative does not change the ROIC chart. Missing financial inputs alone never trigger an alternative. Does not establish acquisition quality or buyback timing.
- 3-year pre-tax operating return (%)
- 12.82
- 3-year average dilution (%)
- -1.40
- 3-year average SBC / revenue (%)
- 0.39
- cashConversionGrade
- 63.62
Management63
Equal-weight average of four evidence-backed rubric grades (0–4), scaled to 100.
capital discipline · 2/4 · Significant, recurring property additions are explicitly intended to support safe, efficient, reliable service, showing active reinvestment. Broader capital allocation outcomes versus alternatives and hurdle disclosures are not provided.
incentive alignment · 3/4 · Executive incentives emphasize Operating Ratio, ROAIC, and TSR, with clawbacks and a decision to include incident impacts in 2025 awards, demonstrating alignment with investor outcomes and risk accountability.
execution · 2/4 · Revenue and volume rose in 2026, but higher fuel, merger costs, and the absence of prior‑year incident recoveries weighed on income, indicating mixed execution rather than sustained outperformance.
governance · 3/4 · Governance features include an independent chair, majority voting, proxy access, and enhancements to oversight, supporting strong formal accountability. These practices are robust but not exceptional in isolation.
Evidence
The miles operated, which include an exclusive operating agreement for trackage rights over property owned by North Carolina Railroad Company, were as follows:
Mileage Operated at December 31, 2025
Route Miles
Second
and
Other
Main
Track
Passing
Track,
Crossovers,
and
Turnouts
Way and
Yard
Switching
Total
Owned
14,594
2,826
1,975
8,212
27,607
Operated under lease, contract, or trackage
rights
4,525
1,735
373
719
7,352
Total
19,119
4,561
2,348
8,931
34,959
We operate freight service over lines with ongoing Amtrak and commuter passenger operations, including trackage owned or leased by Amtrak, New Jersey Transit, Southeastern Pennsylvania Transportation Authority, Metro-North Commuter Railroad Company, Virginia Passenger Rail Authority (VPRA), and the Michigan Department of Transportation.
Business and Properties – Mileage operated and exclusive trackage rights · Filed 09/02/2026
RAILWAY PROPERTY
Our railroad infrastructure makes us capital intensive with net properties of approximately $36 billion on a historical cost basis.
Business – Railway property and capital intensity · Filed 09/02/2026
Property Additions – Property additions for the past five years were as follows:
2025
2024
2023
2022
2021
($ in millions)
Road and other property
$
1,824
$
1,711
$
1,525
$
1,345
$
1,041
Acquisition of assets of CSR
—
1,643
22
—
—
Equipment
380
670
802
603
429
Total
$
2,204
$
4,024
$
2,349
$
1,948
$
1,470
Our capital spending and replacement programs are and have been designed to support our ability to provide safe, efficient, and reliable rail transportation services.
Business – Property additions and stated purpose · Filed 09/02/2026
K9
Efforts have been made over the past several years to increase federal economic regulation of the rail industry, and such efforts are expected to continue in 2024.
Regulatory environment – potential increased regulation · Filed 05/02/2024
Significant instability or disruptions of the capital markets, including the credit markets, or deterioration of our financial position due to internal or external factors could restrict or eliminate our access to, and/or significantly increase the cost of, various financing sources, including bank credit facilities and issuance of corporate bonds.
Risk factors – capital markets disruption · Filed 09/02/2026
International volume declined in both periods due to lower volumes through East Coast ports as a result of congestion at Asian ports and ocean carriers redeploying capacity to West Coast ports.
MD&A – Intermodal international volume and port routing · Filed 22/10/2026
The decrease in 2024 was a result of lower average revenue per unit, driven by decreased pricing and lower fuel surcharge revenue, partially offset by positive mix and increased volume.
MD&A – Coal pricing declines in 2024 · Filed 10/02/2025
FREIGHT RATES – Our predominant pricing mechanisms, private contracts and exempt price quotes, are not subject to regulation.
Business – Predominant pricing mechanisms not subject to regulation · Filed 09/02/2026
Approximately 90% of our revenues comes from either exempt shipments or shipments moving under transportation contracts; the remainder comes from shipments moving under public tariff rates.
Regulatory environment – ~90% of revenues from exempt/contract shipments · Filed 05/02/2024
29
Intermodal
Intermodal revenues were higher in both periods due to increased average revenue per unit, driven by increased fuel surcharge revenue and pricing, and higher volume.
MD&A – Intermodal revenues aided by pricing and fuel surcharge · Filed 22/10/2026
Intermodal units (in thousands) by market were as follows:
Third Quarter
First Nine Months
2026
2025
% change
2026
2025
% change
Domestic
678.7
616.7
10%
1,951.4
1,828.6
7
%
International
381.9
415.4
(8%)
1,153.9
1,237.3
(7
%)
Total
1,060.6
1,032.1
3%
3,105.3
3,065.9
1
%
Domestic volume increased in both periods as a result of an increase in freight demand and constrained truck capacity.
MD&A – Domestic intermodal volume up; constrained truck capacity · Filed 22/10/2026
operating revenues (railway operating ratio)
64.2%
66.4%
76.5%
62.3%
60.1%
RAILWAY OPERATING REVENUES – Total railway operating revenues were $12.2 billion in 2025.
Business – Operating ratio trend (2021–2025) · Filed 09/02/2026
Railway operating expenses increased in both periods, reflecting inflationary pressures inclusive of higher fuel costs, increased merger-related expenses, and lower gains from property sales.
MD&A – 2026 expenses, fuel, merger costs, absence of recoveries · Filed 22/10/2026
Automotive volume was flat in the second quarter but increased in the first six months driven by growth with existing customers, with offsetting impacts driven by production downtime and model discontinuations for certain manufacturers.
MD&A – Automotive growth with existing customers · Filed 23/07/2026
The increase in 2024 was due to growth with our customers and increased production.
MD&A – Export coal growth with customers · Filed 10/02/2025
Our coal franchise supports the electric generation market, directly serving 18 coal-fired power plants, as well as the export, domestic metallurgical, and industrial markets, primarily through direct rail and river, lake, and coastal facilities, including various terminals on the Ohio River, at Lamberts Point in Norfolk, Virginia, at the Port of Baltimore, at McDuffie Coal Terminal in Mobile, AL, and on Lake Erie.
Business – Coal franchise, directly served plants and terminals · Filed 09/02/2026
The decrease in 2025 was a result of lower average revenue per unit, driven by decreased pricing, adverse mix, and lower fuel surcharge revenue, partially offset by increased volume.
MD&A – 2025 coal pricing decline · Filed 09/02/2026
In general, market forces are the primary determinant of rail service prices.
Business – Market forces primary price determinant · Filed 09/02/2026
Building on prior-year updates resulting from a refreshed benchmarking analysis and significant shareholder feedback, the Committee made several additional refinements to our executive compensation program during 2025:
Proxy – Increased Operating Ratio weighting; program refinements · Filed 27/03/2026
The Committee also shifted the relative total shareholder return (TSR) measure from a modifier to a stand-alone PSU metric with a 40% weighting, while also eliminating all PSU payout modifiers and requiring above-median relative TSR performance for target payouts under this metric.
Proxy – TSR as stand‑alone PSU metric (40%) · Filed 27/03/2026
Based on extensive shareholder feedback received in 2024, the Committee determined to continue including the financial impact of the East Palestine incident in calculating our executive compensation outcomes for 2025.
Proxy – Incident impact included in 2025 comp calculations · Filed 27/03/2026
Norfolk Southern Corporation
2026 Proxy Statement 5
Table of Contents
Proxy Summary
Commitment to Robust Governance Practices
Strong Corporate Governance and Shareholder Rights
■
Annual election of directors
■
Majority vote standard with resignation policy in uncontested director elections
■
Independent, non-employee Board Chair
■
Proxy access right
■
Annual Say-on-Pay vote
■
Shareholder right to call special meetings
■
Policies prohibiting hedging and pledging of Norfolk Southern securities
■
Stock ownership guidelines and share retention requirements for executives and directors
■
New York Stock Exchange (“NYSE”) clawback policy covering financial restatements
■
Comprehensive supplemental clawback policy applicable to all incentive compensation, covering detrimental conduct, including reputational harm
■
Robust annual shareholder engagement program involving senior management and various Board members, with detailed summaries provided to the Governance and Nominating and Compensation and Talent Management Committees
■
Board-specific Code of Ethics and Business conduct adopted to help guide director behavior and accountability
Board Composition and Refreshment
■
Annual board and committee self-evaluation process, overseen by our independent Board Chair, coupled with one-on-one discussions with our Governance and Nominating Committee and Board Chairs to secure and relay, respectively, individual director feedback to promote growth and enhanced oversight and effectiveness, with periodic facilitation by an independent third party
■
Annual review of Board composition, skills and experience, and succession planning for board positions led by the Governance and Nominating Committee
■
Director retirement policy at age 75 supports refreshment
■
Onboarded one new director to our Board since the start of 2025
■
Annual review of director commitments and overboarding, with formal policy
Proxy – Governance rights (independent chair, majority vote, etc.) · Filed 27/03/2026
Railway operating revenues were higher in both periods, driven by increased average revenue per unit, reflecting higher fuel surcharge revenue, and increased volume.
MD&A – 2026 revenues up on pricing and volume · Filed 22/10/2026
