10-Q

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

Washington, DC 20549

FORM 10-Q

☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

for the quarterly period ended JUNE 30, 2020

☐    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 

for the transition period from ___________ to___________

Commission file number 1-8339

NORFOLK SOUTHERN CORPORATION

(Exact name of registrant as specified in its charter) 

Virginia		52-1188014
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)
Three Commercial Place		23510-2191
Norfolk,	Virginia
(Address of principal executive offices)		(Zip Code)
(757)		629-2680
(Registrant’s telephone number, including area code)
No Change
(Former name, former address and former fiscal year, if changed since last report)

 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 (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.   Yes ☒ No ☐

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).        Yes ☒ No ☐

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company.  See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act. 

Large accelerated filer  ☒  Accelerated filer ☐ Non-accelerated filer  ☐

Smaller reporting company  ☐  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. ☐

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐  No ☒

Indicate the number of shares outstanding of each of the issuer’s classes of common stock, as of the latest practicable date.

Class	Outstanding at June 30, 2020
Common Stock ($1.00 par value per share)	255,109,247	(excluding 20,320,777 shares held by the registrant’s
	consolidated subsidiaries)

TABLE OF CONTENTS

NORFOLK SOUTHERN CORPORATION AND SUBSIDIARIES

		Page
Part I.	Financial Information:
	Item 1.	Financial Statements:
		Consolidated Statements of Income Second Quarter and First Six Months of 2020 and 2019	3
		Consolidated Statements of Comprehensive Income Second Quarter and First Six Months of 2020 and 2019	4
		Consolidated Balance Sheets At June 30, 2020 and December 31, 2019	5
		Consolidated Statements of Cash Flows First Six Months of 2020 and 2019	6
		Consolidated Statements of Changes in Stockholders’ Equity Second Quarter and First Six Months of 2020 and 2019	7
		Notes to Consolidated Financial Statements	9
	Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	19
	Item 3.	Quantitative and Qualitative Disclosures About Market Risk	28
	Item 4.	Controls and Procedures	28
Part II.	Other Information:
	Item 1.	Legal Proceedings	29
	Item 1A.	Risk Factors	29
	Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	30
	Item 6.	Exhibits	31
		Signatures	32

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PART I. FINANCIAL INFORMATION

Item 1. Financial Statements.

Norfolk Southern Corporation and Subsidiaries

Consolidated Statements of Income

(Unaudited)

	Second Quarter				First Six Months
	2020		2019		2020		2019
	($ in millions, except per share amounts)
Railway operating revenues	$	2,085	$	2,925	$	4,710	$	5,765
Railway operating expenses:
Compensation and benefits	586		712		1,208		1,439
Purchased services and rents	372		418		775		842
Fuel	84		254		273		504
Depreciation	282		284		574		567
Materials and other	151		192		317		382
Loss on asset disposal	—		—		385		—
Total railway operating expenses	1,475		1,860		3,532		3,734
Income from railway operations	610		1,065		1,178		2,031
Other income – net	49		22		71		66
Interest expense on debt	156		153		310		302
Income before income taxes	503		934		939		1,795
Income taxes	111		212		166		396
Net income	$	392	$	722	$	773	$	1,399
Earnings per share:
Basic	$	1.53	$	2.72	$	3.01	$	5.25
Diluted	1.53		2.70		3.00		5.21

 See accompanying notes to consolidated financial statements.

3

Norfolk Southern Corporation and Subsidiaries

Consolidated Statements of Comprehensive Income

(Unaudited)

	Second Quarter				First Six Months
	2020		2019		2020		2019
	($ in millions)
Net income	$	392	$	722	$	773	$	1,399
Other comprehensive income, before tax:
Pension and other postretirement benefits	6		5		13		10
Other comprehensive income (loss) of equity investees	1		—		6		(1)
Other comprehensive income, before tax	7		5		19		9
Income tax expense related to items of
other comprehensive income	(1)		(2)		(3)		(3)
Other comprehensive income, net of tax	6		3		16		6
Total comprehensive income	$	398	$	725	$	789	$	1,405

 See accompanying notes to consolidated financial statements.

4

Norfolk Southern Corporation and Subsidiaries

Consolidated Balance Sheets

(Unaudited)

	June 30, 2020		December 31, 2019
	($ in millions)
Assets
Current assets:
Cash and cash equivalents	$	1,143	$	580
Accounts receivable – net	822		920
Materials and supplies	257		244
Other current assets	128		337
Total current assets	2,350		2,081
Investments	3,590		3,428
Properties less accumulated depreciation of $11,823
and $11,982, respectively	31,217		31,614
Other assets	805		800
Total assets	$	37,962	$	37,923
Liabilities and stockholders’ equity
Current liabilities:
Accounts payable	$	1,268	$	1,428
Income and other taxes	239		229
Other current liabilities	343		327
Current maturities of long-term debt	85		316
Total current liabilities	1,935		2,300
Long-term debt	12,612		11,880
Other liabilities	1,680		1,744
Deferred income taxes	6,874		6,815
Total liabilities	23,101		22,739
Stockholders’ equity:
Common stock $1.00 per share par value, 1,350,000,000 shares
authorized; outstanding 255,109,247 and 257,904,956 shares,
respectively, net of treasury shares	256		259
Additional paid-in capital	2,217		2,209
Accumulated other comprehensive loss	(475)		(491)
Retained income	12,863		13,207
Total stockholders’ equity	14,861		15,184
Total liabilities and stockholders’ equity	$	37,962	$	37,923

 See accompanying notes to consolidated financial statements.

5

Norfolk Southern Corporation and Subsidiaries

Consolidated Statements of Cash Flows

(Unaudited)

		First Six Months
		2020		2019
		($ in millions)
Cash flows from operating activities:
	Net income	$	773	$	1,399
	Reconciliation of net income to net cash provided by operating activities:
	Depreciation	574		567
	Deferred income taxes	56		133
	Gains and losses on properties	(11)		(7)
	Loss on asset disposal	385		—
	Changes in assets and liabilities affecting operations:
	Accounts receivable	98		(30)
	Materials and supplies	(13)		(49)
	Other current assets	30		55
	Current liabilities other than debt	—		(30)
	Other – net	(134)		(86)
	Net cash provided by operating activities	1,758		1,952
Cash flows from investing activities:
	Property additions	(735)		(979)
	Property sales and other transactions	258		214
	Investment purchases	(5)		(12)
	Investment sales and other transactions	(58)		(75)
	Net cash used in investing activities	(540)		(852)
Cash flows from financing activities:
	Dividends	(482)		(458)
	Common stock transactions	26		18
	Purchase and retirement of common stock	(669)		(1,050)
	Proceeds from borrowings	784		1,054
	Debt repayments	(314)		(750)
	Net cash used in financing activities	(655)		(1,186)
	Net increase (decrease) in cash, cash equivalents, and restricted cash	563		(86)
Cash, cash equivalents, and restricted cash:
	At beginning of year	580		446
	At end of period	$	1,143	$	360
Supplemental disclosures of cash flow information:
	Cash paid during the period for:
	Interest (net of amounts capitalized)	$	287	$	271
	Income taxes (net of refunds)	1		215

 See accompanying notes to consolidated financial statements.

6

Norfolk Southern Corporation and Subsidiaries

Consolidated Statements of Changes in Stockholders’ Equity

(Unaudited)

	Common Stock		Additional Paid-in Capital		Accum. Other Comprehensive Loss		Retained Income		Total
	($ in millions, except per share amounts)
Balance at December 31, 2019	$	259	$	2,209	$	(491)	$	13,207	$	15,184
Comprehensive income:
Net income							381		381
Other comprehensive income					10				10
Total comprehensive income									391
Dividends on common stock,
$0.94 per share							(242)		(242)
Share repurchases	(2)		(21)				(443)		(466)
Stock-based compensation	1		17				(1)		17
Balance at March 31, 2020	258		2,205		(481)		12,902		14,884
Comprehensive income:
Net income							392		392
Other comprehensive income					6				6
Total comprehensive income									398
Dividends on common stock,
$0.94 per share							(240)		(240)
Share repurchases	(2)		(10)				(191)		(203)
Stock-based compensation			22						22
Balance at June 30, 2020	$	256	$	2,217	$	(475)	$	12,863	$	14,861

 See accompanying notes to consolidated financial statements.

7

Norfolk Southern Corporation and Subsidiaries

Consolidated Statements of Changes in Stockholders’ Equity

(Unaudited)

	Common Stock		Additional Paid-in Capital		Accum. Other Comprehensive Loss		Retained Income		Total
	($ in millions, except per share amounts)
Balance at December 31, 2018	$	269	$	2,216	$	(563)	$	13,440	$	15,362
Comprehensive income:
Net income							677		677
Other comprehensive income					3				3
Total comprehensive income									680
Dividends on common stock,
$0.86 per share							(230)		(230)
Share repurchases	(3)		(22)				(475)		(500)
Stock-based compensation	1		19				(1)		19
Balance at March 31, 2019	267		2,213		(560)		13,411		15,331
Comprehensive income:
Net income							722		722
Other comprehensive income					3				3
Total comprehensive income									725
Dividends on common stock,
$0.86 per share							(228)		(228)
Share repurchases	(2)		(22)				(526)		(550)
Stock-based compensation			35				(2)		33
Balance at June 30, 2019	$	265	$	2,226	$	(557)	$	13,377	$	15,311

 See accompanying notes to consolidated financial statements.

8

Norfolk Southern Corporation and Subsidiaries

Notes to Consolidated Financial Statements

(Unaudited)

In the opinion of management, the accompanying unaudited interim consolidated financial statements contain all adjustments (consisting of normal recurring accruals) necessary to present fairly Norfolk Southern Corporation (Norfolk Southern) and subsidiaries’ (collectively, NS, we, us, and our) financial position at June 30, 2020, and December 31, 2019, our results of operations, comprehensive income and changes in stockholders’ equity for the second quarters and first six months of 2020 and 2019, and our cash flows for the first six months of 2020 and 2019 in conformity with U.S. generally accepted accounting principles (GAAP).

These consolidated financial statements should be read in conjunction with the consolidated financial statements and notes included in our latest Annual Report on Form 10-K.

1. Railway Operating Revenues

The following table disaggregates our revenues by major commodity group:

	Second Quarter				First Six Months
	2020		2019		2020		2019
Merchandise:	($ in millions)
Agriculture, forest and consumer products	$	498	$	577	$	1,049	$	1,135
Chemicals	423		544		943		1,051
Metals and construction	293		384		660		754
Automotive	93		251		327		502
Merchandise	1,307		1,756		2,979		3,442
Intermodal	569		701		1,224		1,420
Coal	209		468		507		903
Total	$	2,085	$	2,925	$	4,710	$	5,765

At the beginning of 2020, we combined the agriculture products and forest and consumer commodity groups. In addition, we also made changes in the categorization of certain other commodity groups within Merchandise. Specifically, certain commodities were shifted between agriculture, forest, and consumer products; chemicals; and, metals and construction. These changes were made as a result of organizational initiatives to better align with how we manage these commodities. Prior period railway operating revenues have been reclassified to conform to the current presentation.

We recognize the amount of revenue we expect to be entitled to for the transfer of promised goods or services to customers. A performance obligation is created when a customer under a transportation contract or public tariff submits a bill of lading to NS for the transport of goods. These performance obligations are satisfied as the shipments move from origin to destination. As such, transportation revenue is recognized proportionally as a shipment moves, and related expenses are recognized as incurred. These performance obligations are generally short-term in nature with transit days averaging approximately one week or less for each commodity group. The customer has an unconditional obligation to pay for the service once the service has been completed. Estimated revenue associated with in-process shipments at period-end is recorded based on the estimated percentage of service completed to total transit days. We had no material remaining performance obligations as of June 30, 2020 or December 31, 2019.

Revenue related to interline transportation services that involve another railroad is reported on a net basis. Therefore, the portion of the amount that relates to another party is not reflected in revenue.

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Under the typical payment terms of our freight contracts, payment for services is due within fifteen days of billing the customer, thus there are no significant financing components. “Accounts receivable – net” on the Consolidated Balance Sheets includes both customer and non-customer receivables as follows:

	June 30, 2020		December 31, 2019
	($ in millions)
Customer	$	592	$	682
Non-customer	230		238
Accounts receivable – net	$	822	$	920

Non-customer receivables include non-revenue-related amounts due from other railroads, governmental entities, and others. “Other assets” on the Consolidated Balance Sheets includes non-current customer receivables of $23 million at both June 30, 2020 and December 31, 2019. We do not have any material contract assets or liabilities at June 30, 2020 or December 31, 2019.

Certain ancillary services may be provided to customers under their transportation contracts such as switching, demurrage and other incidental service revenues. These are distinct performance obligations that are recognized at a point in time when the services are performed or as contractual obligations are met. This revenue is included within each of the commodity groups and represents 5% of total “Railway operating revenues” on the Consolidated Statements of Income for the second quarter and first six months of 2020 and 4% for the second quarter and first six months of 2019.

2.  Stock-Based Compensation

	Second Quarter				First Six Months
	2020		2019		2020		2019
	($ in millions)
Stock-based compensation expense	$	10	$	20	$	12	$	36
Total tax benefit	3		8		29		31

During 2020, a committee of nonemployee members of our Board of Directors (and the Chief Executive Officer when delegated authority by such committee) granted stock options, restricted stock units (RSUs) and performance share units (PSUs) pursuant to the Long-Term Incentive Plan (LTIP), as follows:

	Second Quarter			First Six Months
	Granted	Weighted-Average Grant-Date Fair Value		Granted	Weighted-Average Grant-Date Fair Value
Stock options	1,050	$	39.10	43,770	$	52.05
RSUs	3,380	173.56		167,540	210.02
PSUs	1,930	184.47		78,720	212.67

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Stock Options

	Second Quarter				First Six Months
	2020		2019		2020		2019
	($ in millions)
Stock options exercised	162,400		215,546		685,638		621,917
Cash received upon exercise	$	12	$	16	$	55	$	44
Related tax benefit realized	3		6		16		15

Restricted Stock Units

RSUs granted primarily have a four-year ratable restriction period and will be settled through the issuance of shares of Norfolk Southern common stock (Common Stock). Certain RSU grants include cash dividend equivalent payments during the restriction period in an amount equal to the regular quarterly dividends paid on Common Stock. 

	Second Quarter				First Six Months
	2020		2019		2020		2019
	($ in millions)
RSUs vested	—		506		202,299		166,055
Common Stock issued net of tax withholding	—		363		143,712		119,244
Related tax benefit realized	$	—	$	—	$	4	$	2

Performance Share Units

PSUs provide for awards based on the achievement of certain predetermined corporate performance goals at the end of a three-year cycle and are settled through the issuance of shares of Common Stock. All PSUs will earn out based on the achievement of performance conditions and some will also earn out based on a market condition. The market condition fair value was measured on the date of grant using a Monte Carlo simulation model. No PSUs were earned or paid out during the second quarters of 2020 or 2019.

	First Six Months
	2020		2019
	($ in millions)
PSUs earned	235,935		331,099
Common Stock issued net of tax withholding	156,450		221,241
Related tax benefit realized	$	7	$	9

3. Loss on Asset Disposal

In the first quarter of 2020, in connection with our initiatives to increase operational fluidity and asset utilization and improve labor and fuel efficiency, we committed to a plan to dispose of certain locomotives deemed excess and no longer needed for railroad operations. When depreciable operating road and equipment assets are sold or retired in the ordinary course of business, the cost of the assets, net of sale proceeds or salvage, is charged to accumulated depreciation, and no gain or loss is recognized in earnings. A retirement is considered abnormal if it does not occur in the ordinary course of business, if it relates to disposition of a large segment of an asset class and if the retirement varies significantly from the retirement profile identified through our depreciation studies, which inherently consider the impact of normal retirements on expected service lives and depreciation rates. We evaluated the planned locomotive retirements and concluded they were abnormal. Accordingly, a $385 million loss was recorded to adjust their carrying amount to their estimated fair value, which resulted in a $97 million tax benefit. During the first six months, we sold 446 of 703 locomotives under the plan. The carrying amount of the remaining assets held for sale of $29 million is classified as “Other current assets” in the Consolidated Balance Sheets at June 30, 2020.

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4.  Earnings Per Share

The following table sets forth the calculation of basic and diluted earnings per share:

	Basic				Diluted
	Second Quarter
	2020		2019		2020		2019
	($ in millions, except per share amounts, shares in millions)
Net income	$	392	$	722	$	392	$	722
Dividend equivalent payments	—		(2)		—		—
Income available to common stockholders	$	392	$	720	$	392	$	722
Weighted-average shares outstanding	255.4		264.8		255.4		264.8
Dilutive effect of outstanding options
and share-settled awards					1.3		2.3
Adjusted weighted-average shares outstanding					256.7		267.1
Earnings per share	$	1.53	$	2.72	$	1.53	$	2.70
	Basic				Diluted
	First Six Months
	2020		2019		2020		2019
	($ in millions, except per share amounts, shares in millions)
Net income	$	773	$	1,399	$	773	$	1,399
Dividend equivalent payments	(1)		(3)		(1)		—
Income available to common stockholders	$	772	$	1,396	$	772	$	1,399
Weighted-average shares outstanding	256.3		265.9		256.3		265.9
Dilutive effect of outstanding options
and share-settled awards					1.4		2.4
Adjusted weighted-average shares outstanding					257.7		268.3
Earnings per share	$	3.01	$	5.25	$	3.00	$	5.21

During the second quarters and first six months of 2020 and 2019, dividend equivalent payments were made to certain holders of stock options and RSUs.  For purposes of computing basic earnings per share, dividend equivalent payments made to holders of stock options and RSUs were deducted from net income to determine income available to common stockholders. For purposes of computing diluted earnings per share, we evaluate on a grant-by-grant basis those stock options and RSUs receiving dividend equivalent payments under the two-class and treasury stock methods to determine which method is more dilutive for each grant. For those grants for which the two-class

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method was more dilutive, net income was reduced by dividend equivalent payments to determine income available to common stockholders. There are no awards outstanding that were antidilutive for the second quarters and first six months ended June 30, 2020 and 2019.

5. Accumulated Other Comprehensive Loss

The changes in the cumulative balances of “Accumulated other comprehensive loss” reported in the Consolidated Balance Sheets consisted of the following:

	Balance at Beginning of Year		Net Income (Loss)		Reclassification Adjustments		Balance at End of Period
	($ in millions)
Six Months Ended June 30, 2020
Pensions and other postretirement liabilities	$	(421)	$	—	$	10	$	(411)
Other comprehensive income (loss)
of equity investees	(70)		6		—		(64)
Accumulated other comprehensive loss	$	(491)	$	6	$	10	$	(475)
Six Months Ended June 30, 2019
Pensions and other postretirement liabilities	$	(497)	$	—	$	7	$	(490)
Other comprehensive loss
of equity investees	(66)		(1)		—		(67)
Accumulated other comprehensive loss	$	(563)	$	(1)	$	7	$	(557)

6.  Stock Repurchase Program

We repurchased and retired 3.9 million and 5.7 million shares of Common Stock under our stock repurchase program during the first six months of 2020 and 2019, respectively, at a cost of $669 million and $1.1 billion, respectively.

7.  Investments

Investment in Conrail

Through a limited liability company, we and CSX Corporation (CSX) jointly own Conrail Inc. (Conrail), whose primary subsidiary is Consolidated Rail Corporation (CRC). We have a 58% economic and 50% voting interest in the jointly owned entity, and CSX has the remainder of the economic and voting interests. Our investment in Conrail was $1.4 billion at both June 30, 2020 and December 31, 2019.

CRC owns and operates certain properties (the Shared Assets Areas) for the joint and exclusive benefit of Norfolk Southern Railway Company (NSR) and CSX Transportation, Inc. (CSXT). The costs of operating the Shared Assets Areas are borne by NSR and CSXT based on usage. In addition, NSR and CSXT pay CRC a fee for access to the Shared Assets Areas. “Purchased services and rents” and “Fuel” include amounts payable to CRC for the operation of the Shared Assets Areas totaling $30 million and $38 million for the second quarters of 2020 and 2019, respectively, and $65 million and $75 million for the first six months of 2020 and 2019, respectively. Our equity in the earnings of Conrail, net of amortization, included in “Purchased services and rents,” which offsets the costs of operating the Shared Assets Areas, was $13 million and $15 million for the second quarters of 2020 and 2019, respectively, and $22 million and $23 million for the first six months of 2020 and 2019, respectively.

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“Other liabilities” includes $280 million at both June 30, 2020, and December 31, 2019, for long-term advances from Conrail, maturing 2044, that bear interest at an average rate of 2.9%.

Investment in TTX

NS and eight other North American railroads jointly own TTX Company (TTX).  NS has a 19.65% ownership interest in TTX, a railcar pooling company that provides its owner-railroads with standardized fleets of intermodal, automotive, and general use railcars at stated rates.

Amounts paid to TTX for use of equipment are included in “Purchased services and rents” and amounted to $58 million and $60 million of expense for the second quarters of 2020 and 2019, respectively, and $118 million and $122 million for the first six months of 2020 and 2019, respectively. Our equity in the earnings of TTX, which offset the costs and are also included in “Purchased services and rents,” totaled $10 million and $12 million for the second quarters of 2020 and 2019, respectively, and $14 million and $25 million for the first six months of 2020 and 2019, respectively.

8.  Debt

In May 2020, we issued $800 million of 3.05% senior notes due 2050, resulting in $790 million in net proceeds.

In May 2020, we also issued $800 million of 3.155% senior notes due 2055 in exchange for $554 million of previously issued notes ($450 million at 5.1% due 2118, $42 million at 6% due 2111, $29 million at 7.9% due 2097, $26 million at 6% due 2105, and $7 million at 7.05% due 2037). As part of the debt exchange, a $4 million loss on extinguishment was recognized in “Other income – net.”

In May 2020, we renewed and amended our accounts receivable securitization program with maximum borrowing capacity of $400 million and a term expiring in May 2021. We had no amounts outstanding at both June 30, 2020, and December 31, 2019, and our available borrowing capacity was $308 million and $429 million, respectively.

In March 2020, we renewed and amended our five-year credit agreement which expires in March 2025 and provides for borrowings at prevailing rates and includes covenants. We increased the program’s borrowing capacity from $750 million to $800 million. We had no amounts outstanding under this facility at both June 30, 2020, and December 31, 2019.

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

9.  Pensions and Other Postretirement Benefits

We have both funded and unfunded defined benefit pension plans covering principally salaried employees. We also provide specified health care and life insurance benefits to eligible retired employees; these plans can be amended or terminated at our option.  Under our self-insured retiree health care plan, for those participants who are not Medicare-eligible, certain health care expenses are covered for retired employees and their dependents, reduced by any deductibles, coinsurance, and, in some cases, coverage provided under other group insurance policies.  Those participants who are Medicare-eligible are not covered under the self-insured retiree health care plan, but instead are provided with an employer-funded health reimbursement account which can be used for reimbursement of health insurance premiums or eligible out-of-pocket medical expenses.

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Pension and postretirement benefit cost components for the second quarter and first six months were as follows:

					Other Postretirement
	Pension Benefits				Benefits
	Second Quarter
	2020		2019		2020		2019
	($ in millions)
Service cost	$	10	$	8	$	2	$	1
Interest cost	18		23		3		5
Expected return on plan assets	(47)		(44)		(3)		(3)
Amortization of net losses	13		11		—		—
Amortization of prior service benefit	—		—		(7)		(6)
Net benefit	$	(6)	$	(2)	$	(5)	$	(3)

					Other Postretirement
	Pension Benefits				Benefits
	First Six Months
	2020		2019		2020		2019
	($ in millions)
Service cost	$	20	$	17	$	3	$	3
Interest cost	37		46		6		9
Expected return on plan assets	(95)		(89)		(6)		(7)
Amortization of net losses	26		22		—		—
Amortization of prior service benefit	—		—		(13)		(12)
Net benefit	$	(12)	$	(4)	$	(10)	$	(7)

The service cost component of defined benefit pension cost and postretirement benefit cost are reported within “Compensation and benefits” and all other components of net benefit cost are presented in “Other income – net” on the Consolidated Statements of Income.

10.  Fair Values of Financial Instruments

The fair values of “Cash and cash equivalents,” “Accounts receivable – net,” and “Accounts payable,” approximate carrying values because of the short maturity of these financial instruments. The carrying value of corporate-owned life insurance is recorded at cash surrender value and, accordingly, approximates fair value. There are no other assets or liabilities measured at fair value on a recurring basis at June 30, 2020 or December 31, 2019. The carrying amounts and estimated fair values, based on Level 1 inputs, of long-term debt consisted of the following:

	June 30, 2020				December 31, 2019
	Carrying Amount		Fair Value		Carrying Amount		Fair Value
	($ in millions)
Long-term debt, including current maturities	$	(12,697)	$	(16,362)	$	(12,196)	$	(14,806)

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11.  Commitments and Contingencies

Lawsuits

We and/or certain subsidiaries are defendants in numerous lawsuits and other claims relating principally to railroad operations.  When we conclude that it is probable that a liability has been incurred and the amount of the liability can be reasonably estimated, it is accrued through a charge to earnings.  While the ultimate amount of liability incurred in any of these lawsuits and claims is dependent on future developments, in our opinion, the recorded liability is adequate to cover the future payment of such liability and claims.  However, the final outcome of any of these lawsuits and claims cannot be predicted with certainty, and unfavorable or unexpected outcomes could result in additional accruals that could be significant to results of operations in a particular year or quarter.  Any adjustments to the recorded liability will be reflected in earnings in the periods in which such adjustments become known.

In 2007, various antitrust class actions filed against us and other Class I railroads in various Federal district courts regarding fuel surcharges were consolidated in the District of Columbia by the Judicial Panel on Multidistrict Litigation. In 2012, the court certified the case as a class action. The defendant railroads appealed this certification, and the Court of Appeals for the District of Columbia vacated the District Court’s decision and remanded the case for further consideration. On October 10, 2017, the District Court denied class certification. The decision was upheld by the Court of Appeals on August 16, 2019. Since that decision, various individual cases have been filed in multiple jurisdictions and also consolidated in the District of Columbia. We believe the allegations in the complaints are without merit and intend to vigorously defend the cases. We do not believe the outcome of these proceedings will have a material effect on our financial position, results of operations, or liquidity.

In 2018, a lawsuit was filed against one of our subsidiaries by the minority owner in a jointly-owned terminal railroad company in which our subsidiary has the majority ownership. The lawsuit alleged violations of various state laws and federal antitrust laws. It is reasonably possible that we could incur a loss in the case; however, we intend to vigorously defend the case and believe that we will prevail. The potential range of loss cannot be estimated at this time.

Casualty Claims

Casualty claims include employee personal injury and occupational claims as well as third-party claims, all exclusive of legal costs.  To aid in valuing our personal injury liability and determining the amount to accrue with respect to such claims during the year, we utilize studies prepared by an independent consulting actuarial firm.  Job-related personal injury and occupational claims are subject to the Federal Employer’s Liability Act (FELA), which is applicable only to railroads.  FELA’s fault-based tort system produces results that are unpredictable and inconsistent as compared with a no-fault workers’ compensation system.  The variability inherent in this system could result in actual costs being different from the liability recorded.  While the ultimate amount of claims incurred is dependent on future developments, in our opinion the recorded liability is adequate to cover the future payments of claims and is supported by the most recent actuarial study.  In all cases, we record a liability when the expected loss for the claim is both probable and reasonably estimable.

Employee personal injury claims – The largest component of claims expense is employee personal injury costs.  The independent actuarial firm engaged by us provides quarterly studies to aid in valuing our employee personal injury liability and estimating personal injury expense.  The actuarial firm studies our historical patterns of reserving for claims and subsequent settlements, taking into account relevant outside influences.  The actuarial firm uses the results of these analyses to estimate the ultimate amount of liability. We adjust the liability quarterly based upon our assessment and the results of the study. Our estimate of the liability is subject to inherent limitation given the difficulty of predicting future events such as jury decisions, court interpretations, or legislative changes. As a result, actual claim settlements may vary from the estimated liability recorded.

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Occupational claims – Occupational claims include injuries and illnesses alleged to be caused by exposures which occur over time as opposed to injuries or illnesses caused by a specific accident or event. Types of occupational claims commonly seen allege exposure to asbestos and other claimed toxic substances resulting in respiratory diseases or cancer. Many such claims are being asserted by former or retired employees, some of whom have not been employed in the rail industry for decades.  The independent actuarial firm provides an estimate of the occupational claims liability based upon our history of claim filings, severity, payments, and other pertinent facts.  The liability is dependent upon judgments we make as to the specific case reserves as well as judgments of the actuarial firm in the quarterly studies.  The actuarial firm’s estimate of ultimate loss includes a provision for those claims that have been incurred but not reported.  This provision is derived by analyzing industry data and projecting our experience. We adjust the liability quarterly based upon our assessment and the results of the study.  However, it is possible that the recorded liability may not be adequate to cover the future payment of claims.  Adjustments to the recorded liability are reflected in operating expenses in the periods in which such adjustments become known.

Third-party claims – We record a liability for third-party claims including those for highway crossing accidents, trespasser and other injuries, property damage, and lading damage.  The actuarial firm assists us with the calculation of potential liability for third-party claims, except lading damage, based upon our experience including the number and timing of incidents, amount of payments, settlement rates, number of open claims, and legal defenses. We adjust the liability quarterly based upon our assessment and the results of the study.  Given the inherent uncertainty in regard to the ultimate outcome of third-party claims, it is possible that the actual loss may differ from the estimated liability recorded.

Environmental Matters

We are subject to various jurisdictions’ environmental laws and regulations.  We record a liability where such liability or loss is probable and reasonably estimable. Environmental specialists regularly participate in ongoing evaluations of all known sites and in determining any necessary adjustments to liability estimates.  

Our Consolidated Balance Sheets include liabilities for environmental exposures of $54 million and $56 million at June 30, 2020 and December 31, 2019, respectively, of which $15 million is classified as a current liability at both dates. At June 30, 2020, the liability represents our estimates of the probable cleanup, investigation, and remediation costs based on available information at 109 known locations and projects compared with 110 locations and projects at December 31, 2019. At June 30, 2020, fifteen sites accounted for $38 million of the liability, and no individual site was considered to be material. We anticipate that much of this liability will be paid out over five years; however, some costs will be paid out over a longer period.

At eleven locations, one or more of our subsidiaries in conjunction with a number of other parties have been identified as potentially responsible parties under the Comprehensive Environmental Response, Compensation and Liability Act of 1980 or comparable state statutes that impose joint and several liability for cleanup costs.  We calculate our estimated liability for these sites based on facts and legal defenses applicable to each site and not solely on the basis of the potential for joint liability.

With respect to known environmental sites (whether identified by us or by the Environmental Protection Agency or comparable state authorities), estimates of our ultimate potential financial exposure for a given site or in the aggregate for all such sites can change over time because of the widely varying costs of currently available cleanup techniques, unpredictable contaminant recovery and reduction rates associated with available cleanup technologies, the likely development of new cleanup technologies, the difficulty of determining in advance the nature and full extent of contamination and each potential participant’s share of any estimated loss (and that participant’s ability to bear it), and evolving statutory and regulatory standards governing liability.

The risk of incurring environmental liability for acts and omissions, past, present, and future, is inherent in the railroad business.  Some of the commodities we transport, particularly those classified as hazardous materials, pose special risks that we work diligently to reduce.  In addition, several of our subsidiaries own, or have owned, land

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used as operating property, or which is leased and operated by others, or held for sale.  Because environmental problems that are latent or undisclosed may exist on these properties, there can be no assurance that we will not incur environmental liabilities or costs with respect to one or more of them, the amount and materiality of which cannot be estimated reliably at this time.  Moreover, lawsuits and claims involving these and potentially other unidentified environmental sites and matters are likely to arise from time to time.  The resulting liabilities could have a significant effect on financial position, results of operations, or liquidity in a particular year or quarter.

Based on our assessment of the facts and circumstances now known, we believe we have recorded the probable and reasonably estimable costs for dealing with those environmental matters of which we are aware.  Further, we believe that it is unlikely that any known matters, either individually or in the aggregate, will have a material adverse effect on our financial position, results of operations, or liquidity.

Insurance

We obtain on behalf of ourself and our subsidiaries insurance for potential losses for third-party liability and first-party property damages.  With limited exceptions, we are currently insured above $75 million and below $1.1 billion ($1.5 billion for specific perils) per occurrence and/or policy year for bodily injury. For property damage to third parties, we are insured for approximately 85% of potential losses above $75 million and below $275 million per occurrence and/or policy year for property owned by us or in our care, custody, or control.

12. New Accounting Pronouncements

On January 1, 2020, we adopted the Financial Accounting Standards Board (FASB) Accounting Standards Update (ASU) 2016-13, “Credit Losses - Measurement of Credit Losses on Financial Instruments,” which replaced the current incurred loss impairment method with a method that reflects expected credit losses. Historically, losses associated from the inability to collect on accounts receivable have been insignificant, with little divergence in collection trends through varying economic cycles. Short-term and long-term financial assets, as defined by the standard, are impacted by immediate recognition of estimated credit losses in the financial statements, reflecting the net amount expected to be collected. There was no material impact to the financial statements upon adoption.

In December 2019, the FASB issued ASU 2019-12, “Simplifying the Accounting for Income Taxes,” which adds new guidance to simplify the accounting for income taxes, changes the accounting for certain income tax transactions, and makes other minor changes. The new standard is effective as of January 1, 2021, and early adoption is permitted for any interim period for which financial statements have not been issued. We do not expect this standard to have a material effect on our financial statements. We will not adopt the standard early.

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Item 2.  Management’s Discussion and Analysis of Financial Condition and Results of Operations.

Norfolk Southern Corporation and Subsidiaries

The following discussion and analysis should be read in conjunction with the Consolidated Financial Statements and Notes.

OVERVIEW

We are one of the nation’s premier transportation companies.  Our Norfolk Southern Railway Company subsidiary operates approximately 19,500 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.  We are a major transporter of industrial products, including chemicals, agriculture, and metals and construction materials. In addition, we operate the most extensive intermodal network in the East and are a principal carrier of coal, automobiles, and automotive parts.

Our second-quarter 2020 results were negatively impacted by the COVID-19 pandemic that caused significant global economic contraction. The pandemic influenced the demand for our services and, as a result, our volumes fell significantly across all of our major commodity groups. In response to lower customer demand, we focused on tailoring operating plans for the low-demand environment and reducing expenses, including further implementation of structural cost reductions associated with our strategic plan. Although the revenue reduction in the quarter exceeded the cost reductions we achieved, the initiatives implemented have further optimized our operating activities and network and have positioned us to benefit when volumes return in the future.

The COVID-19 pandemic continues to generate significant uncertainty in the economy and our outlook for the remainder of 2020. The magnitude and duration of the pandemic, including its impact on our customers and general economic conditions, is still uncertain. We continue to monitor the impact of the pandemic on our employees’ availability, which has not been adversely affected in a significant manner thus far in 2020. We remain committed to protecting our employees and providing excellent transportation service products for our customers.

SUMMARIZED RESULTS OF OPERATIONS

($ in millions, except per share amounts)

	Second Quarter					First Six Months
	2020		2019		% change	2020		2019		% change
Income from railway operations	$	610	$	1,065	(43%)	$	1,178	$	2,031	(42%)
Net income	$	392	$	722	(46%)	$	773	$	1,399	(45%)
Diluted earnings per share	$	1.53	$	2.70	(43%)	$	3.00	$	5.21	(42%)
Railway operating ratio (percent)	70.7		63.6		11%	75.0		64.8		16%

Income from railway operations decreased in both periods, leading to lower net income and diluted earnings per share. The reduction in income from railway operations resulted from decreased railway operating revenues that exceeded the operating expense declines, driving the increases in the railway operating ratio. Railway operating revenues declined as lower customer demand resulted in volume declines. Railway operating expenses decreased due to declines in fuel price and consumption, reduced employment levels, lower volumes and operational efficiency improvements.

Additionally, our results for the first six months of 2020 were adversely impacted by a first-quarter loss on asset disposal of $385 million related to the loss on locomotives sold and a write-down of locomotives held-for-sale. For more information on the impact of the charge, see Note 3.

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The following table adjusts our 2020 GAAP financial results for the first six months to exclude the effects of this charge. We use these non-GAAP financial measures internally and believe this information provides useful supplemental information to investors to facilitate making period-to-period comparisons by excluding the 2020 charge. While we believe that these non-GAAP financial measures are useful in evaluating our business, this information should be considered as supplemental in nature and is not meant to be considered in isolation, or as a substitute for, the related financial information prepared in accordance with GAAP. In addition, these non-GAAP financial measures may not be the same as similar measures presented by other companies.

	Non-GAAP Reconciliation for First Six Months
	Reported 2020 (GAAP)		2020 Loss on Asset Disposal		Adjusted 2020 (non-GAAP)
	($ in millions, except per share amounts)
Railway operating expenses	$	3,532	$	(385)	$	3,147
Income from railway operations	$	1,178	$	385	$	1,563
Net income	$	773	$	288	$	1,061
Diluted earnings per share	$	3.00	$	1.11	$	4.11
Railway operating ratio (percent)	75.0		(8.2)		66.8

In the table below, references to the first six months of 2020 results and related comparisons use the adjusted, non-GAAP results from the reconciliation in the table above.

	First Six Months
	Adjusted 2020 (non-GAAP)		2019		Adjusted 2020 (non-GAAP) vs. 2019
	($ in millions, except per share amounts)				% change
Railway operating expenses	$	3,147	$	3,734	(16%)
Income from railway operations	$	1,563	$	2,031	(23%)
Net income	$	1,061	$	1,399	(24%)
Diluted earnings per share	$	4.11	$	5.21	(21%)
Railway operating ratio (percent)	66.8		64.8		3%

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DETAILED RESULTS OF OPERATIONS

Railway Operating Revenues

The following tables present a comparison of revenues ($ in millions), volumes (units in thousands), and average revenue per unit ($ per unit) by commodity group.

	Second Quarter					First Six Months
Revenues	2020		2019		% change	2020		2019		% change
Merchandise:
Agriculture, forest and consumer products	$	498	$	577	(14%)	$	1,049	$	1,135	(8%)
Chemicals	423		544		(22%)	943		1,051		(10%)
Metals and construction	293		384		(24%)	660		754		(12%)
Automotive	93		251		(63%)	327		502		(35%)
Merchandise	1,307		1,756		(26%)	2,979		3,442		(13%)
Intermodal	569		701		(19%)	1,224		1,420		(14%)
Coal	209		468		(55%)	507		903		(44%)
Total	$	2,085	$	2,925	(29%)	$	4,710	$	5,765	(18%)

Units
Merchandise:
Agriculture, forest and consumer products	165.8	200.6	(17%)	347.3	391.3	(11%)
Chemicals	112.1	153.7	(27%)	254.4	298.7	(15%)
Metals and construction	136.1	182.1	(25%)	291.0	346.5	(16%)
Automotive	37.1	101.8	(64%)	127.5	199.9	(36%)
Merchandise	451.1	638.2	(29%)	1,020.2	1,236.4	(17%)
Intermodal	884.4	1,048.5	(16%)	1,839.5	2,119.5	(13%)
Coal	111.6	258.3	(57%)	275.1	494.6	(44%)
Total	1,447.1	1,945.0	(26%)	3,134.8	3,850.5	(19%)

Revenue per Unit
Merchandise:
Agriculture, forest and consumer products	$	3,004	$	2,875	4%	$	3,021	$	2,900	4%
Chemicals	3,771		3,541		6%	3,705		3,519		5%
Metals and construction	2,154		2,104		2%	2,269		2,175		4%
Automotive	2,499		2,471		1%	2,566		2,513		2%
Merchandise	2,897		2,751		5%	2,920		2,784		5%
Intermodal	644		668		(4%)	665		670		(1%)
Coal	1,864		1,815		3%	1,841		1,826		1%
Total	1,440		1,504		(4%)	1,502		1,497		—%

At the beginning of 2020, we combined the agriculture products and forest and consumer commodity groups. In addition, we also made changes in the categorization of certain other commodity groups within Merchandise. Specifically, certain commodities were shifted between agriculture, forest, and consumer products; chemicals; and,

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metals and construction. These changes were made as a result of organizational initiatives to better align with how we manage these commodities. Prior period railway operating revenues, units, and revenue per unit have been reclassified to conform to the current presentation.

Railway operating revenues decreased $840 million in the second quarter and $1.1 billion for the first six months compared with the same periods last year. The table below reflects the components of the revenue change by major commodity group ($ in millions).

	Second Quarter						First Six Months
	Increase (Decrease)						Increase (Decrease)
	Merchandise		Intermodal		Coal		Merchandise		Intermodal		Coal
Volume	$	(515)	$	(110)	$	(266)	$	(602)	$	(188)	$	(401)
Fuel surcharge revenue	(24)		(48)		(3)		(30)		(58)		(9)
Rate, mix and other	90		26		10		169		50		14
Total	$	(449)	$	(132)	$	(259)	$	(463)	$	(196)	$	(396)

Approximately 90% of our revenue base is covered by contracts that include negotiated fuel surcharges. Revenues associated with these surcharges totaled $69 million and $144 million in the second quarters of 2020 and 2019, respectively, and $200 million and $297 million for the first six months of 2020 and 2019, respectively. The decrease in fuel surcharge revenues for the second quarter and first six months are driven by lower fuel commodity prices and volume declines.

Merchandise

Merchandise revenue decreased in both periods as lower volumes were partially offset by higher average revenue per unit driven by pricing gains. Overall, volumes fell in all merchandise commodity groups and across almost all markets within those commodity groups due to the impact of the COVID-19 pandemic. The pandemic caused industries to close and suspend production which negatively impacted customers’ needs for receiving materials and shipping finished and semi-finished goods.

Agriculture, forest and consumer products volume decreased in both periods across almost all markets due to the impact of COVID-19 on gasoline consumption, the food service industry, and building, industrial, commercial and consumer activities.

Chemicals volume decreased in both periods for all markets due to the impact from COVID-19 and the continuing disruptions in the energy market. Oil and petroleum shipments were negatively impacted due to reductions in gasoline/jet fuel demand and consumer travel. The pandemic caused industries to close which negatively impacted our customers’ needs for materials.

Metals and construction volume fell in both periods, largely the result of weakened demand due to reductions in metal and domestic vehicle production. Low coal power generation in the second quarter weakened scrubber stone demand, which negatively affected aggregates volumes. The pandemic caused industries to close and suspend production which heavily impacted customers’ needs for receiving materials and shipping finished and semi-finished goods.

Automotive volume declined in both periods due to unplanned automotive plant shutdowns, primarily associated with the COVID-19 pandemic.

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Intermodal

Intermodal revenue declined in both periods, the result of decreased volumes and lower revenue per unit, a result of lower fuel surcharge revenue.

Intermodal units (in thousands) by market were as follows:

	Second Quarter			First Six Months
	2020	2019	% change	2020	2019	% change
Domestic	566.6	635.8	(11%)	1,164.9	1,292.1	(10%)
International	317.8	412.7	(23%)	674.6	827.4	(18%)
Total	884.4	1,048.5	(16%)	1,839.5	2,119.5	(13%)

Domestic and international volumes fell in both periods, the result of supply chain disruption resulting from COVID-19 related shutdowns and lower consumer demand. The first six months were additionally impacted by stronger over-the-road competition.

Coal

Coal revenues decreased in both periods, primarily driven by significant volume declines partially offset by higher revenue per unit, resulting from volume shortfalls and favorable mix.

Coal tonnage (in thousands) by market was as follows:

	Second Quarter			First Six Months
	2020	2019	% change	2020	2019	% change
Utility	5,700	17,129	(67%)	14,598	32,884	(56%)
Export	3,669	6,626	(45%)	9,738	13,014	(25%)
Domestic metallurgical	2,338	3,851	(39%)	4,614	6,782	(32%)
Industrial	747	1,181	(37%)	1,728	2,403	(28%)
Total	12,454	28,787	(57%)	30,678	55,083	(44%)

In both periods, low natural gas prices and reduced demand in global and domestic manufacturing due to COVID-19 negatively impacted all four of our distinct coal markets. Utility coal tonnage was challenged by low natural gas prices, high stockpiles, and diminished industrial and commercial electricity demand. Export coal tonnage declined in both periods as a result of COVID-19 related global disruptions and weak seaborne pricing. Domestic metallurgical coal and coke tonnage fell in both periods due to reduced domestic steel demand leading to idled customer facilities and lower production. Industrial coal tonnage decreased in both periods as a result of customer sourcing changes and continued pressure from natural gas conversions.

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Railway Operating Expenses

Railway operating expenses summarized by major classifications were as follows ($ in millions):

	Second Quarter					First Six Months
	2020		2019		% change	2020		2019		% change
Compensation and benefits	$	586	$	712	(18%)	$	1,208	$	1,439	(16%)
Purchased services and rents	372		418		(11%)	775		842		(8%)
Fuel	84		254		(67%)	273		504		(46%)
Depreciation	282		284		(1%)	574		567		1%
Materials and other	151		192		(21%)	317		382		(17%)
Loss on asset disposal	—		—			385		—
Total	$	1,475	$	1,860	(21%)	$	3,532	$	3,734	(5%)

Compensation and benefits expense decreased in both periods as follows:

•employment levels (down $98 million for the quarter and $174 million for the first six months),

•health and welfare benefits for agreement employees (down $21 million for the quarter and $39 million for the first six months),

•overtime and recrews (down $20 million for the quarter and $37 million for the first six months),

•stock-based and incentive compensation (down $16 million for the quarter and $33 million for the first six months),

•lower capitalized labor (additional expense of $13 million for the quarter and $23 million for the first six months),

•increased pay rates (up $14 million for the quarter and $30 million for the first six months), and

•other (up $2 million for the quarter and down $1 million for the first six months).

Average rail headcount for the quarter was down by over 4,900 compared with the second quarter of 2019.

Purchased services and rents declined in both periods as follows ($ in millions):

	Second Quarter					First Six Months
	2020		2019		% change	2020		2019		% change
Purchased services	$	302	$	347	(13%)	$	623	$	693	(10%)
Equipment rents	70		71		(1%)	152		149		2%
Total	$	372	$	418	(11%)	$	775	$	842	(8%)

The decline in purchased services in both periods was largely the result of decreased intermodal-related costs and lower operational and transportation expenses. Equipment rents remained relatively flat for the second quarter but increased modestly for the first six months, primarily the result of lower TTX equity earnings partially offset by decreased intermodal volume-related expenses.

Fuel expense, which includes the cost of locomotive fuel as well as other fuel used in railway operations, decreased due to lower locomotive fuel prices (down 53% in the second quarter and 31% in the first six months), and decreased consumption (down 32% in the second quarter and 23% in the first six months).

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Materials and other expenses decreased in both periods as follows ($ in millions):  

	Second Quarter					First Six Months
	2020		2019		% change	2020		2019		% change
Materials	$	62	$	82	(24%)	$	134	$	169	(21%)
Claims	40		50		(20%)	82		99		(17%)
Other	49		60		(18%)	101		114		(11%)
Total	$	151	$	192	(21%)	$	317	$	382	(17%)

Materials costs decreased in both periods, due primarily to lower locomotive maintenance requirements as a result of fewer locomotives in service. Claims expenses declined in both periods, driven by lower costs related to environmental remediation matters. Other expense decreased in both periods, due to lower travel-related expenses. The decrease in the first six months was partially offset by lower gains from sales of operating properties. Gains from operating property sales amounted to $13 million and $21 million in the first six months of 2020 and 2019, respectively.

Other income – net

Other income – net increased $27 million in the second quarter and $5 million for the first six months. The second quarter experienced higher investment returns on corporate-owned life insurance partially offset by expenses associated with the debt exchange. Both periods reflect the impact of a prior year impairment loss on our natural resource assets, lower pension expenses, and lower 2020 non-operating property sales. Coal royalties were also lower in both periods due to the sale of our natural resource assets in the first quarter of 2020. In 2019, coal royalties were $24 million for the full year.

Income taxes

The second-quarter effective tax rate was 22.1% compared with 22.7% for the same period last year. Both periods benefited from favorable tax benefits on stock-based compensation while the current quarter reflects increased tax benefits from higher returns on corporate-owned life insurance. The effective tax rates were 17.7% and 22.1% for the first six months of 2020 and 2019, respectively. Both periods reflect tax benefits on stock-based compensation, while the effective rate for the first six months includes a $19 million reduction of taxes upon the resolution of our 2012 amended federal return.

FINANCIAL CONDITION AND LIQUIDITY

Cash provided by operating activities, our principal source of liquidity, was $1.8 billion for the first six months of 2020, compared with $2.0 billion for the same period of 2019. We had working capital of $415 million at June 30, 2020 and negative working capital of $219 million at December 31, 2019. Cash and cash equivalents totaled $1.1 billion at June 30, 2020.

Cash used in investing activities was $540 million for the first six months of 2020, compared with $852 million for the same period last year. The decrease was primarily driven by lower property additions in 2020.

Cash used in financing activities was $655 million for the first six months of 2020, compared with $1.2 billion in the same period last year, reflecting lower repayments of debt and repurchases of Common Stock, partially offset by lower proceeds from borrowing. We repurchased 3.9 million shares of Common Stock totaling $669 million in the first six months of 2020 compared to 5.7 million shares, totaling $1.1 billion in the same period last year.  The timing and volume of future share repurchases will be guided by our assessment of market conditions, cash flow and other pertinent factors.  Any near-term purchases under the program are expected to be made with internally-generated cash, cash on hand, or proceeds from borrowings. 

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Our total-debt-to-total capitalization ratio was 46.1% at June 30, 2020, and 44.5% at December 31, 2019.

In May 2020, we issued $800 million of 3.05% senior notes due 2050, resulting in $790 million in net proceeds.

In May 2020, we also issued $800 million of 3.155% senior notes due 2055 in exchange for $554 million of our previously-issued notes ($450 million at 5.1% due 2118, $42 million at 6% due 2111, $29 million at 7.9% due 2097, $26 million at 6% due 2105, and $7 million at 7.05% due 2037). As part of the debt exchange, a $4 million loss on extinguishment was recognized in “Other income – net.”

In May 2020, we renewed and amended our accounts receivable securitization program with maximum borrowing capacity of $400 million and a term expiring in May 2021. We had no amounts outstanding at both June 30, 2020, and December 31, 2019, and our available borrowing capacity was $308 million and $429 million, respectively. In addition, we have investments in general purpose corporate-owned life insurance policies and had the ability to borrow up to $725 million against these policies at June 30, 2020.

In March 2020, we renewed and amended our five-year credit agreement which expires in March 2025 and provides for borrowings at prevailing rates and includes covenants. We increased the program’s borrowing capacity from $750 million to $800 million. We had no amounts outstanding under this facility at both June 30, 2020, and December 31, 2019, and we are in compliance with all of its covenants.

We expect cash on hand combined with cash provided by operating activities will be sufficient to meet our ongoing obligations. In addition, we believe our currently-available borrowing capacity, access to additional financing, and ability to reduce expenditures on property additions and shareholder distributions, including share repurchases, provide additional flexibility to meet our ongoing obligations. Nonetheless, we are monitoring the ongoing impacts of the COVID-19 pandemic, which could lead to a further decline of cash inflows from operations. There have been no material changes to the information on future contractual obligations contained in our Form 10-K for the year ended December 31, 2019, with the exception of additional senior notes (see Note 8).

APPLICATION OF CRITICAL ACCOUNTING POLICIES

The preparation of financial statements in accordance with GAAP requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenue and expenses during the reporting period. These estimates and assumptions may require judgment about matters that are inherently uncertain, and future events are likely to occur that may require us to make changes to these estimates and assumptions. Accordingly, we regularly review these estimates and assumptions based on historical experience, changes in the business environment, and other factors we believe to be reasonable under the circumstances.  There have been no significant changes to the application of the critical accounting policies contained in our Form 10-K at December 31, 2019. 

26

OTHER MATTERS

Labor Agreements

Approximately 80% of our railroad employees are covered by collective bargaining agreements with various labor unions.  Pursuant to the Railway Labor Act, these agreements remain in effect until new agreements are reached, or until the bargaining procedures mandated by the Railway Labor Act are completed.  We largely bargain nationally in concert with other major railroads, represented by the National Carriers Conference Committee.  Moratorium provisions in the labor agreements govern when the railroads and unions may propose changes to the agreements. The current round of bargaining commenced on November 1, 2019 with both management and the unions serving their formal proposals for changes to the collective bargaining agreements.

New Accounting Pronouncements

For a detailed discussion of new accounting pronouncements, see Note 12.

Inflation

In preparing financial statements, GAAP requires the use of historical cost that disregards the effects of inflation on the replacement cost of property.  As a capital-intensive company, we have most of our capital invested in long-lived assets.  The replacement cost of these assets, as well as the related depreciation expense, would be substantially greater than the amounts reported on the basis of historical cost.

FORWARD-LOOKING STATEMENTS

Certain statements in Management’s Discussion and Analysis of Financial Condition and Results of Operations are “forward-looking statements” within the meaning of the “safe harbor” provisions of the Private Securities Litigation Reform Act of 1995, as amended.  These statements relate to future events or our future financial performance and involve known and unknown risks, uncertainties, and other factors that may cause our actual results, levels of activity, performance, or our achievements or those of our industry to be materially different from those expressed or implied by any forward-looking statements.  In some cases, forward-looking statements can be identified by terminology such as “may,” “will,” “could,” “would,” “should,” “expect,” “plan,” “anticipate,” “intend,” “believe,” “estimate,” “project,” “consider,” “predict,” “potential,” “feel,” or other comparable terminology.  We have based these forward-looking statements on our current expectations, assumptions, estimates, beliefs, and projections.  While we believe these expectations, assumptions, estimates, beliefs, and projections are reasonable, such forward-looking statements are only predictions and involve known and unknown risks and uncertainties, many of which involve factors or circumstances that are beyond our control.  These and other important factors, including the risks and uncertainties related to the COVID-19 pandemic and those discussed under “Risk Factors” in our latest Form 10-K, as well as our subsequent filings with the Securities and Exchange Commission, may cause actual results, performance, or achievements to differ materially from those expressed or implied by these forward-looking statements.  The forward-looking statements herein are made only as of the date they were first issued, and unless otherwise required by applicable securities laws, we disclaim any intention or obligation to update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise.

27

Item 3.  Quantitative and Qualitative Disclosures About Market Risk.

The information required by this item is included in Part I, Item 2, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” under the heading “Financial Condition and Liquidity.”

Item 4.  Controls and Procedures.

Evaluation of Disclosure Controls and Procedures

Our Chief Executive Officer and Chief Financial Officer, with the assistance of management, evaluated the effectiveness of our disclosure controls and procedures (as such term is defined in Rules 13a-15(e) and 15d-15(e) under the Securities Exchange Act of 1934, as amended (Exchange Act)) at June 30, 2020.  Based on such evaluation, our officers have concluded that, at June 30, 2020, our disclosure controls and procedures were effective in alerting them on a timely basis to material information required to be included in our periodic filings under the Exchange Act.

Changes in Internal Control Over Financial Reporting

During the second quarter of 2020, we have not identified any changes in internal control over financial reporting that have materially affected, or are reasonably likely to materially affect, our internal control over financial reporting. 

28

PART II. OTHER INFORMATION

Item 1.  Legal Proceedings.

In 2007, various antitrust class actions filed against us and other Class I railroads in various Federal district courts regarding fuel surcharges were consolidated in the District of Columbia by the Judicial Panel on Multidistrict Litigation. In 2012, the court certified the case as a class action. The defendant railroads appealed this certification, and the Court of Appeals for the District of Columbia vacated the District Court’s decision and remanded the case for further consideration. On October 10, 2017, the District Court denied class certification. The decision was upheld by the Court of Appeals on August 16, 2019. Since that decision, various individual cases have been filed in multiple jurisdictions and also consolidated in the District of Columbia. We believe the allegations in the complaints are without merit and intend to vigorously defend the cases. We do not believe the outcome of these proceedings will have a material effect on our financial position, results of operations, or liquidity.

Item 1A. Risk Factors.

The risks set forth in “Risk Factors” included in our 2019 Form 10-K could have a material adverse effect on our financial position, results of operations, or liquidity in a particular year or quarter, and could cause those results to differ materially from those expressed or implied in our forward-looking statements. Those risks remain unchanged and are incorporated herein by reference and are updated to include the following risk.

The COVID-19 pandemic could impact us, our customers, our supply chain and our operations. The pandemic has negatively impacted the economy and continues to generate significant economic uncertainty. It has had a significant adverse impact on our results of operations, and may have material adverse impacts on our financial position, results of operations, or liquidity. The magnitude and duration of the pandemic, and its impact on our customers and general economic conditions will influence the demand for our services and affect our revenues. In addition, COVID-19 could affect our operations and business continuity if a significant number of our essential employees, overall or in a key location, are quarantined from contraction of or exposure to the disease or if governmental orders prevent our operating employees or critical suppliers from working. To the extent COVID-19 adversely affects our business and financial results, it may also have the effect of heightening many of the other risks described in the risk factors included in our 2019 Form 10-K.

29

Item 2.  Unregistered Sales of Equity Securities and Use of Proceeds. 

	(a) Total Number of Shares (or Units)	(b) Average Price Paid per Share		(c) Total Number of Shares (or Units) Purchased as Part of Publicly Announced Plans or	(d) Maximum Number (or Approximate Dollar Value) of Shares (or Units) that may yet be purchased under the Plans or
Period	Purchased (1)	(or Unit)		Programs (2)	Programs (2)
April 1-30, 2020	907,482	$	153.36	906,515	24,546,356
May 1-31, 2020	178,852	171.06		177,206	24,369,150
June 1-30, 2020	185,000	178.97		183,956	24,185,194
Total	1,271,334			1,267,677

⁽¹⁾Of this amount, 3,657 represent shares tendered by employees in connection with the exercise of options under the stockholder-approved Long-Term Incentive Plan.

⁽²⁾On September 26, 2017, our Board of Directors authorized the repurchase of up to an additional 50 million shares of Common Stock through December 31, 2022. As of June 30, 2020, 24.2 million shares remain authorized for repurchase.

30

Item 6. Exhibits.

3(i)**	Restated Articles of Incorporation, as amended.
4.1	Fifth Supplemental Indenture, dated as of May 11, 2020, between the Registrant and U.S. Bank National Association, as trustee is incorporated by reference herein to Exhibit 4.1 to Norfolk Southern Corporation’s Form 8-K filed on May 11, 2020.
4.2	Indenture dated as of May 15, 2020, between the Registrant and U.S. Bank National Association, a as trustee is incorporated by reference herein to Exhibit 4.1 to Norfolk Southern Corporation’s Form 8-K filed on May 15, 2020.
10.1*,**	Norfolk Southern Executive Severance Plan as adopted on May 14, 2020, and as amended effective July 28, 2020.
10.2*,**	Form of Change in Control Agreement between Norfolk Southern Corporation and executive officers who did not enter into a change in control agreement before 2016.
10.3	Amendment No. 15, dated as of May 29, 2020, to Transfer and Administration Agreement, dated as of November 8, 2007, is incorporated by reference herein to Exhibit 10.1 to Norfolk Southern Corporation’s Form 8-K filed on June 1, 2020. 8, 2007, is incorporated by reference herein to Exhibit 10.1 to Norfolk Southern Corporation’s Form 8-K filed on June 1, 2020.
31-A**	Rule 13a-14(a)/15d-014(a) CEO Certifications.
31-B**	Rule 13a-14(a)/15d-014(a) CFO Certifications.
32**	Section 1350 Certifications.
101**	The following financial information from Norfolk Southern Corporation’s Quarterly Report on Form 10-Q for the second quarter of 2020, formatted in Inline Extensible Business Reporting Language (iXBRL) includes (i) the Consolidated Statements of Income for the second quarter and first six months of 2020 and 2019; (ii) the Consolidated Statements of Comprehensive Income for the second quarter and first six months of 2020 and 2019; (iii) the Consolidated Balance Sheets at June 30, 2020 and December 31, 2019; (iv) the Consolidated Statements of Cash Flows for the first six months of 2020 and 2019; (v) the Consolidated Statements of Changes in Stockholders’ Equity for the second quarter and first six months of 2020 and 2019; and (vi) the Notes to Consolidated Financial Statements.
104**	Cover Page Interactive Data File (formatted as Inline XBRL and contained in Exhibit 101).
*   Management contract or compensatory arrangement.
**  Filed herewith.

31

SIGNATURES

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

		NORFOLK SOUTHERN CORPORATION Registrant
Date:	July 29, 2020	/s/ Clyde H. Allison, Jr.
		Clyde H. Allison, Jr. Vice President and Controller (Principal Accounting Officer) (Signature)
Date:	July 29, 2020	/s/ Denise W. Hutson
		Denise W. Hutson Corporate Secretary (Signature)

32

EX-3.I

Exhibit 3(1)

NORFOLK SOUTHERN CORPORATION

ARTICLES OF RESTATEMENT

        The following restatement of the Corporation's Articles of Incorporation, which contains as an amendment not requiring shareholder approval a new Article 111, was adopted by the Corporation's Board of Directors at a meeting held on July 22, 1997.

RESTATED ARTICLES OF INCORPORATION

OF

NORFOLK SOUTHERN CORPORATION

ARTICLE I

        The name of the Corporation is NORFOLK SOUTHERN CORPORATION.

ARTICLE II

        The purpose for which the Corporation is organized is to transact any lawful business not required to be specifically stated in the Articles of Incorporation.

ARTICLE III

        The Corporation shall have authority to issue one billion, three hundred fifty million (1,350,000,000) shares of Common Stock, par value $1 per share, and twenty-five million (25,000,000) shares of Serial Preferred Stock, without par value.

A. Serial Preferred Stock

        1.  Issuance in Series. The Board of Directors is hereby empowered to cause the Serial Preferred Stock of the Corporation to be issued in series with such of the variations permitted by clauses (a)-(h), both inclusive, of this Section 1 as shall have been fixed and determined by the Board of Directors with respect to any series prior to the issue of any shares of such series.

Exhibit 3(1)

  The shares of the Serial Preferred Stock of different series may vary as to:

(a) the number of shares constituting such series and the designation of such series, which shall be such as to distinguish the shares thereof from the shares of all other series and classes:

(b)  the rate of dividend, the time of payment and, if cumulative, the dates from which dividends shall be cumulative, and the extent of participation rights, if any;

(c) any right to vote with holders of shares of any other series or class and any right to vote as a class, either generally or as a condition to specified corporate action;

(d)  the price at and the terms and conditions on which shares may be redeemed;

         (e)  the amount payable upon shares in event of involuntary liquidation;

         (f)  the amount payable upon shares in event of voluntary liquidation;

         (g) any sinking fund provisions for the redemption or purchase of shares; and

         (h) the terms and conditions on which shares may be converted, if the shares of any series are issued with the privilege of conversion.

        The shares of all series of Serial Preferred Stock shall be identical except as, within the limitations set forth above in this Section 1, shall have been fixed and determined by the Board of Directors prior to the issuance thereof.

        2. Dividends. The holders of the Serial Preferred Stock of each series shall be entitled to receive, if and when declared payable by the Board of Directors, dividends in lawful money of the United States of America, at the dividend rate for such series, and not exceeding such rate except to the extent of any participation right. Such dividends shall be payable on such dates as shall be fixed for such series. Dividends, if cumulative and in arrears, shall not bear interest.

        No dividends shall be declared or paid upon or set apart for the Common Stock or for stock of any other class hereafter created ranking junior to the Serial Preferred Stock in respect of dividends or assets (hereinafter called Junior Stock), and no shares of Serial Preferred Stock, Common Stock or Junior Stock shall be purchased, redeemed or otherwise reacquired for a consideration, nor shall any funds be set aside for or paid to any sinking fund therefor, unless and until (i) full dividends on the outstanding Serial Preferred Stock at the dividend rate or rates therefor, together with the full additional amount required by any participation right, shall have been paid or declared and set apart for payment with respect to all past dividend periods, to the extent that the holders

Exhibit 3(1)

of the Serial Preferred Stock are entitled to dividends with respect to any past dividend period, and the current dividend period, and (ii) all mandatory sinking fund payments that shall have become due in respect of any series of the Serial Preferred Stock shall have been made. Unless full dividends with respect to all past dividend periods on the outstanding Serial Preferred Stock at the dividend rate or rates therefor, to the extent that holders of the Serial Preferred Stock are entitled to dividends with respect to any particular past dividend period, together with the full additional amount required by any participation right, shall have been paid or declared and set apart for payment and all mandatory sinking fund payments that shall have become due in respect of any series of the Serial Preferred Stock shall have been made, no distributions shall be made to the holders of the Serial Preferred Stock of any series unless distributions are made to the holders of the Serial Preferred Stock of all series then outstanding in proportion to the aggregate amounts of the deficiencies in payments due to the respective series, and all payments shall be applied, first, to dividends accrued and in arrears, next, to any amount required by any participation right, and, finally, to mandatory sinking fund payments. The terms "current dividend period" and "past dividend period" mean, if two or more series of Serial Preferred Stock having different dividend periods are at the time outstanding, the current dividend period or any past dividend period, as the case may be, with respect to each such series.

        3. Preference on Liquidation. In the event of any liquidation, dissolution or winding up of the Corporation, the holders of the Serial Preferred Stock of each series shall be entitled to receive, for each share thereof, the fixed liquidation price for such series, plus, in case such liquidation, dissolution or winding up shall have been voluntary, the fixed liquidation premium for such series, if any, together in all cases with a sum equal to all dividends accrued or in arrears thereon and the full additional amount required by any participation right, before any distribution of the assets shall be made to holders of the Common Stock or Junior Stock; but the holders of the Serial Preferred Stock shall be entitled to no further participation in such distribution. If, upon any such liquidation, dissolution or winding up, the assets distributable among the holders of the Serial Preferred Stock shall be insufficient to permit the payment of the full preferential amounts aforesaid, then such assets shall be distributed among the holders of the Serial Preferred Stock then outstanding ratably in proportion to the full preferential amounts to which they are respectively entitled. For the purposes of this Section 3, the expression "dividends accrued or in arrears" means, in respect of each share of the Serial Preferred Stock of any series at a particular time, an amount equal to the product of the rate of dividend per annum applicable to the shares of such series multiplied by the number of years and any fractional part of a year that shall have elapsed from the date when dividends on such shares became cumulative to the particular time in question less the total amount of dividends actually paid on the shares of such series or declared and set apart for payment thereon; provided, however, that, if the dividends on such shares shall not be fully cumulative, such expression shall mean the dividends, if any, cumulative in respect of such shares for the period stated in the articles of serial designation creating such shares less all dividends paid in or with respect to such period.

Exhibit 3(1)

        B. Common Stock

        1. Subject to the provisions of law and the rights of holders of shares at the time outstanding of all classes of stock having prior rights as to dividends, the holders of Common Stock at the time outstanding shall be entitled to receive such dividends at such times and in such amounts as the Board of Directors may deem advisable.

        2. In the event of any liquidation, dissolution or winding up (whether voluntary or involuntary) of the Corporation, after the payment or provision for payment in full of all debts and other liabilities of the Corporation and all preferential amounts to which the holders of shares at the time outstanding of all classes of stock having prior rights thereto shall be entitled, the remaining net assets of the Corporation shall be distributed ratably among the holders of the shares at the time outstanding of Common Stock.

        3. The holders of Common Stock shall be entitled to one vote per share on all matters.

ARTICLE IV

        No holder of capital stock of the Corporation of any class shall have any preemptive right to subscribe to or purchase (i) any shares of capital stock of the Corporation, (ii) any securities convertible into such shares or (iii) any options, warrants or rights to purchase such shares or securities convertible into such shares.

ARTICLE V

        The number of directors, unless otherwise fixed by the bylaws, shall be sixteen. The directors shall be divided into three classes, one of which shall be composed of six directors and two of which shall be composed of five directors. At each annual meeting of stockholders, the number of directors to be elected shall be equal to the number of directors whose terms of office then expire, except that, if the total number of directors shall have been increased or decreased, the number of directors then to be elected shall be as nearly as possible one third of the total number of directors, and each director shall hold office until the third succeeding annual meeting after his election; provided, however, that at no election shall a greater number of directors be elected than the number of vacancies then existing, and provided further that, upon any increase in the total number of directors, the additional vacancies shall be so assigned by the Board of Directors to classes that the number of directors of each class shall be as nearly equal as possible and the vacancies shall be filled for terms corresponding to the classes to which the vacancies are so assigned. Each director shall hold office until his successor shall have been elected, and the terms of office of directors elected by the Board of Directors to succeed former directors shall expire at the next stockholders' meeting at which directors are elected.

Exhibit 3(1)

ARTICLE VI

         1. in this Article:

         "expenses" includes, without limitation, counsel fees.

         "liability" means the obligation to pay a judgment, settlement, penalty, fine (including any excise tax assessed with respect to an employee benefit plan), or reasonable expenses incurred with respect to a proceeding.

         "party" includes, without limitation, an individual who was, is, or is threatened to be made a named defendant or respondent in a proceeding.

"proceeding" means any threatened, pending, or completed action, suit, or proceeding whether civil, criminal, administrative, or investigative and whether formal or informal.

         2. To the full extent that the Virginia Stock Corporation Act, as it exists on the date hereof or as hereafter amended, permits the limitation or elimination of the liability of directors and officers, no director or officer of the Corporation made a party to any proceeding shall be liable to the Corporation or its stockholders for monetary damages arising out of any transaction, occurrence or course of conduct, whether occurring prior or subsequent to the effective date of this Article.

         3. To the full extent permitted by the Virginia Stock Corporation Act, as it exists on the date hereof or as hereafter amended, the Corporation shall indemnify any person who was or is a party to any proceeding, including a proceeding brought by or in the right of the Corporation, by reason of the fact that he is or was a director or officer of the Corporation, or while serving as such director or officer, is or was serving at the request of the Corporation as a director, trustee, partner or officer of another corporation, partnership, joint venture, trust, employee benefit plan or other enterprise, against any liability incurred by him in connection with such proceeding. A person shall be considered to be serving an employee benefit plan at the Corporation's request if his duties to the Corporation also impose duties on, or otherwise involve services by, him to the plan or to participants in or beneficiaries of the plan. To the same extent, the Board of Directors is hereby empowered, by a majority vote of a quorum of disinterested directors, to enter into a contract to indemnify any director or officer against liability and/or to advance or reimburse his expenses in respect of any proceedings arising from any act of omission, whether occurring before or after the execution of such contract.

         4. The provisions of this Article shall be applicable to all proceedings commenced after it becomes effective, arising from any act or omission, whether occurring before or after such effective date. No amendment or repeal of this Article shall impair or otherwise diminish the rights provided under this Article (including those created by contract) with respect to any act or omission occurring prior to such

Exhibit 3(1)

amendment or repeal. The Corporation shall promptly take all such actions and make all such determinations and authorizations as shall be necessary or appropriate to comply with its obligation to make any indemnity against liability, or to advance any expenses, under this Article and shall promptly pay or reimburse all reasonable expenses, including attorneys' fees, incurred by any such director or officer in connection with such actions and determinations or proceedings of any kind arising therefrom.

         5. The termination of any proceeding by judgment, order, settlement, conviction, or upon a plea of nolo contendere or its equivalent, shall not of itself create a presumption that the director or officer did not meet any standard of conduct that is a prerequisite to the limitation or elimination of liability provided in Section 2 or to his entitlement to indemnification under Section 3 of this Article.

         6.  Any indemnification under Section 3 of this Article (unless ordered by a court) shall be made by the Corporation only as authorized in the specific case upon a determination that indemnification is proper in the circumstances because the proposed indemnitee has met any standard of conduct that is a prerequisite to his entitlement to indemnification under Section 3 of this Article.

        The determination shall be made:

(a) By the Board of Directors by a majority vote of a quorum consisting of directors not at the time parties to the proceeding;

(b) If a quorum cannot be obtained under subsection (a) of this section, by majority vote of a committee duly designated by the Board of Directors (in which designation directors who are parties may participate), consisting solely of two or more directors not at the time parties to the proceeding;

(c) By special legal counsel:

(i) Selected by the Board of Directors or its committee in the manner prescribed in subsection (a) or (b) of this section; or

(ii) If a quorum of the Board of Directors cannot be obtained under subsection (a) or this section and a committee cannot be designated under subsection (b) of this section, selected by a majority vote of the full Board of Directors, in which selection directors who are parties may participate; or

(d) By the stockholders, but shares owned by or voted under the control of directors who are at the time parties to the proceeding may not be voted on the determination.

Exhibit 3(1)

         Authorization of indemnification and evaluation as to reasonableness of expenses shall be made in the same manner as the determination that indemnification is appropriate, except that if the determination is made by special legal counsel, such authorizations and evaluations shall be made by those entitled under subsection (c) of this section to select counsel.

         Notwithstanding the foregoing, in the event there has been a change in the composition of a majority of the Board of Directors after the date of the alleged act or omission with respect to which indemnification, an advance or reimbursement is claimed, any determination as to such indemnification, advance or reimbursement shall be made by special legal counsel agreed upon by the Board of Directors and the proposed indemnitee, If the Board of Directors and the proposed indemnitee are unable to agree upon such special legal counsel, the Board of Directors and the proposed indemnitee each shall select a nominee, and the nominees shall select such special legal counsel.

        7. (a)  The Corporation shall pay for or reimburse the reasonable expenses incurred by a director or officer (and may do so for a person referred to in Section 8 of this Article) who is a party to a proceeding in advance of final disposition of the proceeding or the making of any determination under Section 3 if the director, officer or person furnishes the Corporation:

          (i) a written statement, executed personally, of his good faith belief that he has met any standard of conduct that is a prerequisite to his entitlement to indemnification under Section 3 of this Article; and

          (ii) a written undertaking, executed personally or on his behalf, to repay the advance if it is ultimately determined that he did not meet such standard of conduct.

         (b) The undertaking required by paragraph (ii) of subsection (a) of this section shall be an unlimited general obligation but need not be secured and may be accepted without reference to financial ability to make repayment.

          (c) Authorizations of payments under this section shall be made by the persons specified in Section 6.

        8. The Board of Directors is hereby empowered, by majority vote of a quorum consisting of disinterested directors, to cause the Corporation to indemnify or contract to indemnify any person not specified in Section 3 of this Article who was, is or may become a party to any proceeding, by reason of the fact that he is or was an employee or agent of the Corporation, or is or was serving at the request of the Corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust, employee benefit plan or other enterprise, to the same or a lesser extent as if such person were specified as one to whom indemnification is granted in Section 3. The

Exhibit 3(1)

provisions of Sections 4 through 6 of this Article shall be applicable to any indemnification provided hereafter pursuant to this section.

        9. The Corporation may purchase and maintain insurance to indemnify it against the whole or any portion of the liability assumed by it in accordance with this Article and may also procure insurance, in such amounts as the Board of Directors may determine, on behalf of any person who is or was a director, officer, employee or agent of the Corporation, or is or was serving at the request of the Corporation as a director, officer, employee or agent of another corporation, partnership, joint venture, trust, employee benefit plan or other enterprise, against any liability asserted against or incurred by him in any such capacity or arising from his status as such, whether or not the Corporation would have power to indemnify him against such liability under the provisions of this Article.

        10. Every reference herein to directors, officers, employees or agents shall include former directors, officers, employees and agents and their respective heirs, executors and administrators. The indemnification hereby provided and provided hereafter pursuant to the power hereby conferred by this Article on the Board of Directors shall not be exclusive of any other rights to which any person may be entitled, including any right under policies of insurance that may be purchased and maintained by the Corporation or others, with respect to claims, issues or matters in relation to which the Corporation would not have the power to indemnify such person under the provisions of this Article. Nothing herein shall prevent or restrict the power of the Corporation to make or provide for any further indemnity, or provisions for determining entitlement to indemnity, pursuant to one or more indemnification agreements, bylaws, or other, arrangements (including, without limitation, creation of trust funds or security interests funded by letters of credit or other means) approved by the Board of Directors (whether or not any of the directors of the Corporation shall be a party to or beneficiary of any such agreements, bylaws or arrangements); provided, however, that any provision of such agreements, bylaws or other arrangements shall not be effective if and to the extent that it is determined to be contrary to this Article or applicable laws of the Commonwealth of Virginia, but other provisions of any such agreements, bylaws or other arrangements shall not be affected by any such determination.

 11. Each provision of this Article shall be severable, and an adverse determination as to any such provision shall in no way affect the validity of any other provision.

ARTICLE VII

Exhibit 3(1)

        The shareholder vote required, of each voting group entitled to vote thereon, to approve an amendment to the Corporation's Articles of Incorporation is a majority of all votes entitled to be cast by that voting group, unless the Board of Directors conditions approval of such an amendment upon a greater vote.

Dated:  September 5, 1997

            NORFOLK SOUTHERN CORPORATION

             By /s/ David R. Goode

David R. Goode

              Chairman of the Board, President

              and Chief Executive Officer

[SEAL]    Attest /s/ Sandra T. Pierce

               Sandra T. Pierce

              Assistant Corporate Secretary

AMENDMENT TO THE RESTATED ARTICLES OF INCORPORATION

Exhibit 3(1)

of

NORFOLK SOUTHERN CORPORATION

September 26, 2000

Pursuant to Section 13.1-369 of the Virginia Stock Corporation Act and the authority conferred upon the Board of Directors by the Restated Articles of Incorporation of the Corporation, the Restated Articles of Incorporation of the Corporation are hereby amended to create a new series of 600,000 shares of Preferred Stock, designated as "Series A Junior Participating Preferred Stock" by adding the following as Section C to Article III of such Restated Articles of Incorporation:

C. Series A Junior Participating Preferred Stock

         1. Designation and Amount. The shares of such series shall be designated as "Series A Junior Participating Preferred Stock" and the number of shares constituting such series shall be 600,000.

         2. Dividends and Distributions.

(a) Subject to the prior and superior rights of the holders of any shares of any series of Preferred Stock ranking prior and superior to the shares of Series A Junior Participating Preferred Stock with respect to dividends, the holders of shares of Series A Junior Participating Preferred Stock shall be entitled to receive, when, as and if declared by the Board of Directors out of funds legally available for the purpose, quarterly dividends payable in cashon the first day of January, April, July and October in each year (each such date being referred to herein as a "Quarterly Dividend Payment Date"), commencing on the first Quarterly Dividend Payment Date after the first issuance of a share or fraction of a share of Series A Junior Participating Preferred Stock, in an amount per share (rounded to the nearest cent) equal to the greater of (a) $1.00 or (b) subject to the provision for adjustment hereinafter set forth, 1000 times the aggregate per share amount of all cash dividends, and 1000 times the aggregate per share

amount (payable in kind) of all non-cash dividends or other distributions other than a dividend payable in shares of Common Stock or a subdivision of the outstanding shares of Common Stock (by reclassification or otherwise), declared on the Common Stock, par value $1.00 per share, of the Corporation (the "Common Stock") since the immediately preceding Quarterly Dividend Payment Date, or, with respect to the first Quarterly Dividend Payment Date, since the first issuance of any share or fraction of a share of Series A Junior Participating Preferred Stock. In the event the Corporation shall at any time after September 26, 2000 (the "Rights Declaration Date"), (i) declare any dividend on Common Stock payable in

Exhibit 3(1)

shares of Common Stock, (ii) subdivide the outstanding Common Stock or (iii) combine the outstanding Common Stock into a smaller number of shares, then in each such case the amount to which holders of shares of Series A Junior Participating Preferred Stock were entitled immediately prior to such event under clause (b) of the preceding sentence shall be adjusted by multiplying such amount by a fraction the numerator of which is the number of shares of Common Stock outstanding immediately after such event and the denominator of which is the number of shares of Common Stock that were outstanding immediately prior to such event.

(b) The Corporation shall declare a dividend or distribution on the Series A Junior Participating Preferred Stock immediately after it declares a dividend or distribution on the Common Stock (other than a dividend payable in shares of Common Stock); provided that, in the event no dividend or distribution shall have been declared on the Common Stock during the period between any Quarterly Dividend Payment Date and the next subsequent Quarterly Dividend Payment Date, a dividend of $1.00 per share on the Series A Junior Participating Preferred Stock shall nevertheless be payable on such subsequent Quarterly Dividend Payment Date.

(c) Dividends shall begin to accrue and be cumulative on outstanding shares of Series A Junior Participating Preferred Stock from the Quarterly Dividend Payment Date next preceding the date of issue of such shares of Series A Junior Participating Preferred Stock, unless the date of issue of such shares is prior to the record date for the first Quarterly Dividend Payment Date, in which case dividends on such shares shall begin to accrue from the date of issue of such shares, or unless the date of issue is a Quarterly Dividend Payment Date or is a date after the record date for the determination of holders of shares of Series A Junior Participating Preferred Stock entitled to receive a quarterly dividend and before such Quarterly Dividend Payment Date, in either of which events such dividends shall begin to accrue and be cumulative from such Quarterly Dividend Payment Date. Accrued but unpaid dividends shall not bear interest. Dividends paid on the shares of Series A Junior Participating Preferred Stock in an amount less than the total amount of such dividends at the time accrued and payable on such shares shall be allocated pro rata on a share-by-share basis among all such shares at the time outstanding. The Board of Directors may fix a record date for the determination of holders of shares of Series A Junior Participating Preferred Stock entitled to receive payment of a dividend or distribution declared thereon, which record date shall be no more than 30 days prior to the date fixed for the payment thereof.

Exhibit 3(1)

         3. Voting Rights. The holders of shares of Series A Junior Participating Preferred Stock shall have the following voting rights:

(a) Subject to the provision for adjustment hereinafter set forth, each share of Series A Junior Participating Preferred Stock shall entitle the holder thereof to 1000 votes on all matters submitted to a vote of the shareholders of the Corporation. In the event the Corporation shall at any time after the Rights Declaration Date (i) declare any dividend on Common

Stock payable in shares of Common Stock, (ii) subdivide the outstanding Common Stock or (iii) combine the outstanding Common Stock into a smaller number of shares, then in each such case the number of votes per share to which holders of shares of Series A Junior Participating Preferred Stock were entitled immediately prior to such event shall be adjusted by multiplying such number by a fraction the numerator of which is the number of shares of Common Stock outstanding immediately after such event and the denominator of which is the number of shares of Common Stock that were outstanding immediately prior to such event.

(b) Except as otherwise provided herein or by law, the holders of shares of Series A Junior Participating Preferred Stock and the holders of shares of Common Stock shall vote together as one class on all matters submitted to a vote of shareholders of the Corporation.

(i)If at any time dividends on any Series A Junior Participating Preferred Stock shall be in arrears in an amount equal to six (6) quarterly dividends thereon, the occurrence of such contingency shall mark the beginning of a period (herein called a "Default Period") that shall extend until such time when all accrued and unpaid dividends for all previous quarterly dividend periods and for the current quarterly dividend period on all shares of Series A Junior Participating Preferred Stock then outstanding shall have been declared and paid or set apart for payment. During each Default Period, all holders of Preferred Stock (including holders of the Series A Junior Participating Preferred Stock) with dividends in arrears in an amount equal to six (6) quarterly dividends thereon, voting as a class, irrespective of series, shall have the right to elect two (2) directors.

(ii) During any Default Period, such voting right of the holders of Series A Junior Participating Preferred Stock may be exercised initially at a special meeting called pursuant to subparagraph (iii) of this Section 3(b) or at any annual meeting of shareholders, and thereafter at annual meetings of shareholders; provided that neither such voting right nor the right of the holders of any other series of Preferred Stock, if any, to increase, in certain

Exhibit 3(1)

cases, the authorized number of directors shall be exercised unless the holders of ten percent (10%) in number of shares of Preferred Stock outstanding shall be present in person or by proxy. The absence of a quorum of the holders of Common Stock shall not affect the exercise by the holders of Preferred Stock of such voting right. At any meeting at which the holders of Preferred Stock shall exercise such voting right initially during an existing Default Period, they shall have the right, voting as a class, to elect directors to fill such vacancies, if any, in the Board of Directors as may then exist up to two (2) directors or, if such right is exercised at an annual meeting, to elect two (2) directors. If the number that may be so elected at any special meeting does not amount to the required number, the holders of the Preferred Stock shall have the right to make such increase in the number of directors as shall be necessary to permit the election by them of the required number. After the holders of the Preferred Stock shall have exercised their right to elect directors in any Default Period and during the continuance of such period, the number of directors shall not be increased or decreased except by vote of the holders of Preferred Stock as herein provided or pursuant to the rights of any equity securities ranking senior to or pari passu with the Series A Junior Participating Preferred Stock.

(iii) Unless the holders of Preferred Stock shall, during an existing Default Period, have previously exercised their right to elect directors, the Board of Directors may order, or any shareholder or shareholders owning in the aggregate not less than ten percent (10%) of the total number of shares of Preferred Stock outstanding, irrespective of series, may request, the calling of a special meeting of the holders of Preferred Stock, which meeting shall thereupon be called by the President, a Vice President or the Corporate Secretary of the Corporation. Notice of such meeting and of any annual meeting at which holders of Preferred Stock are entitled to vote pursuant to this Paragraph (a)(i ii) shall be given to each holder of record of Preferred Stock by mailing a copy of such notice to him at his last address as the same appears on the books of the Corporation. Such meeting shall be called for a time not earlier than 20 days and not later than 60 days after such order or request or in default of the calling of such meeting within 60 days after such order or request, such meeting may be called on similar notice by any shareholder or shareholders owning in the aggregate not less than ten percent (10%) of the total number of shares of Preferred Stock outstanding. Notwithstanding the provisions of this Paragraph (a)(iii), no such special meeting shall be called during the period within 60

Exhibit 3(1)

days immediately preceding the date fixed for the next annual meeting of the shareholders.

(iv) In any Default Period, the holders of Common Stock, and other classes of stock of the Corporation if applicable, shall continue to be entitled to elect the whole number of directors until the holders of Preferred Stock shall have exercised their right to elect two (2) directors voting, as a class, after the exercise of which right (x) the directors so elected by the holders of Preferred Stock shall continue in office until their successors shall have been elected by such holders or until the expiration of the Default Period, and (y) any vacancy in the Board of Directors may (except as provided in Paragraph (a)(iii) of this Section 3) be filled by vote of a majority of the remaining directors theretofore elected by the holders of the class of stock that elected the director whose office shall have become vacant. References in this Paragraph (a) to directors elected by the holders of a particular class of stock shall include directors elected by such directors to fill vacancies as provided in clause (y) of the foregoing sentence.

(v) Immediately upon the expiration of a Default Period, (x) the right of the holders of Preferred Stock as a class to elect directors shall cease, (y) the term of any directors elected by the holders of Preferred Stock as a class shall terminate and (z) the number of directors shall be such number as may be provided for in the Restated Articles of Incorporation or Bylaws irrespective of any increase made pursuant to the provisions of Paragraph (a)(i) of this Section 3 (such number being subject, however, to change thereafter in any manner provided by law or in the Restated Articles of Incorporation or Bylaws). Any vacancies in the Board of Directors effected by the provisions of clauses (y) and (z) in the preceding sentence may be filled by a majority of the remaining directors.

(c) Except as set forth herein, holders of Series A Junior Participating Preferred Stock shall have no special voting rights, and their consent shall not be required (except to the extent they are entitled to vote with holders of Common Stock as set forth herein) for taking any corporate action.

         4. Certain Restrictions.

(a) Whenever quarterly dividends or other dividends or distributions payable on the Series A Junior Participating Preferred Stock as provided in Section 2 are in arrears, thereafter and until all accrued and unpaid dividends and distributions, whether or not declared, on shares of

Exhibit 3(1)

Series A Junior Participating Preferred Stock outstanding shall have been paid in full, the Corporation shall not:

(i) declare or pay dividends on, make any other distributions on, or redeem or purchase or otherwise acquire for consideration any shares of stock ranking junior (either as to dividends or upon liquidation, dissolution or winding up) to the Series A Junior Participating Preferred Stock;

(ii) declare or pay dividends on or make any other distributions on any shares of stock ranking on a parity (either as to dividends or upon liquidation, dissolution or winding up) with the Series A Junior Participating Preferred Stock, except dividends paid ratably on the Series A Junior Participating Preferred Stock and all such parity stock on which dividends are payable or in arrears in proportion to the total amounts to which the holders of all such shares are then entitled;

(iii) redeem or purchase or otherwise acquire for consideration shares of any stock ranking on a parity (either as to dividends or upon liquidation, dissolution or winding up) with the Series A Junior Participating Preferred Stock, provided that the Corporation may at any time redeem, purchase or otherwise acquire shares of any such parity stock in exchange for shares of any stock of the Corporation ranking junior (either as to dividends or upon dissolution, liquidation or winding up) to the Series A Junior Participating Preferred Stock; or

(iv) purchase or otherwise acquire for consideration any shares of Series A Junior Participating Preferred Stock, or any shares of stock ranking on a parity with the Series A Participating Preferred Stock, except in accordance with a purchase offer made in writing or by publication (as determined by the Board of Directors) to all holders of such shares upon such terms as the Board of Directors. after consideration of the respective annual dividend rates and other relative rights and preferences of the respective series and classes, shall determine in good faith will result in fair and equitable treatment among the respective series or classes.

(b) The Corporation shall not permit any subsidiary of the Corporation to purchase or otherwise acquire for consideration any shares of stock of the Corporation unless the Corporation could, under Paragraph (a) of this Section 4, purchase or otherwise acquire such shares at such time and in such manner.

Exhibit 3(1)

5. Reacquired Shares. Any shares of Series A Junior Participating Preferred Stock purchased or otherwise acquired by the Corporation in any manner whatsoever shall be retired and cancelled promptly after the acquisition thereof. All such shares shall upon their cancellation become authorized but unissued shares of Preferred Stock to be created by resolution or resolutions of the Board of Directors, subject to the conditions and restrictions on issuance set forth herein.

6. Liquidation Dissolution or Winding Up.

(a) Upon any liquidation (voluntary or otherwise), dissolution or winding up of the Corporation, no distribution shall be made to the holders of shares of stock ranking junior (either as to dividends or upon liquidation, dissolution or winding up) to the Series A Junior Participating Preferred Stock unless, prior thereto, the holders of shares of Series A Junior Participating Preferred Stock shall have received $100 per share, plus an amount equal to accrued and unpaid dividends and distributions thereon, whether or not declared, to the date of such payment (the "Series A Liquidation Preference"). Following the payment of the full amount of the Series A Liquidation Preference, no additional distributions shall be made to the holders of shares of Series A Junior Participating Preferred Stock unless, prior thereto, the holders of shares of Common Stock shall have received an amount per share (the "Common Adjustment") equal to the quotient obtained by dividing (i) the Series A Liquidation Preference by (ii) 1000 (as appropriately adjusted as set forth in subparagraph (c) below to reflect such events as stock splits, stock dividends and recapitalizations with respect to the Common Stock) (such number in clause (ii), the "Adjustment Number"). Following the payment of the full amount of the Series A Series A Liquidation Preference and the Common Adjustment in respect of all outstanding shares of Series A Junior Participating Preferred Stock and Common Stock, respectively, holders of Series A Junior Participating Preferred Stock and holders of shares of Common Stock shall receive their ratable and proportionate share of the remaining assets to be distributed in the ratio of the Adjustment Number to one with respect to such Preferred Stock and Common Stock. on a per share basis, respectively.

(b) In the event, however, that there are not sufficient assets available to permit payment in full of the Series A Liquidation Preference and the liquidation preferences of all other series of Preferred Stock, if any, that rank on a parity with the Series A Junior Participating Preferred Stock, then such remaining assets shall be distributed ratably to the holders of such parity shares in proportion to their respective liquidation preferences. In the event, however, that there are not sufficient assets available to permit payment in full of the Common Adjustment, then such remaining assets shall be distributed ratably to the holders of Common Stock.

Exhibit 3(1)

(c) In the event the Corporation shall at any time after the Rights Declaration Date (i) declare any dividend on Common Stock payable in shares of Common Stock, (ii) subdivide the outstanding Common Stock or (iii) combine the outstanding Common Stock into a smaller number of shares, then in each such case the Adjustment Number in effect immediately prior to such event shall be adjusted by multiplying such Adjustment Number by a fraction, the numerator of which is the number of shares of Common Stock outstanding immediately after such event and the denominator of which is the number of shares of Common Stock that were outstanding immediately prior to such event.

7. Consolidation, Merger, etc. In case the Corporation shall enter into any consolidation, merger, combination or other transaction in which the shares of Common Stock are exchanged for or changed into other stock or securities, cash and/or any other property, then in any such case the shares of Series A Junior Participating Preferred Stock shall at the same time be similarly exchanged or changed in an amount per share (subject to the provision for adjustment hereinafter set forth) equal to 1000 times the aggregate amount of stock, securities, cash and/or any other property (payable in kind), as the case may be, into which or for which each share of Common Stock is changed or exchanged. In the event the Corporation shall at any time after the Rights Declaration Date (i) declare any dividend on Common Stock payable in shares of Common Stock, (ii) subdivide the outstanding Common Stock, or (iii) combine the Outstanding Common Stock into a smaller number of shares, then in each such case the amount set forth in the preceding sentence with respect to the exchange or change of shares of Series A Junior Participating Preferred Stock shall be adjusted by multiplying such amount by a fraction the numerator of which is the number of shares of Common Stock Outstanding immediately after such event and the denominator of which is the number of shares of Common Stock that were outstanding immediately prior to such event.

8. No Redemption. The shares of Series A Junior Participating Preferred Stock shall not be redeemable.

9. Ranking. The Series A Junior Participating Preferred Stock shall rank junior to all other series of the Corporation's Preferred Stock as to the payment of dividends and the distribution of assets, unless the terms of any such series shall provide otherwise.

10. Amendment. At any time when any shares of Series A Junior Participating Preferred Stock are outstanding, the Restated Articles of Incorporation of the Corporation, as amended hereby, shall not be amended in any manner that would materially alter or change the powers, preferences or special rights of the Series A Junior Participating Preferred Stock so as to affect them adversely without the affirmative vote of the holders of a majority or more of the outstanding shares of Series A Junior Participating Preferred Stock, voting separately as a class.

Exhibit 3(1)

11. Fractional Shares. Series A Junior Participating Preferred Stock may be issued in fractions of a share which shall entitle the holder, in proportion to such holder's fractional shares, to exercise voting rights, receive dividends, participate in distributions and to have the benefit of all other rights of holders of Series A Junior Participating Preferred Stock.

AMENDMENT TO THE RESTATED ARTICLES OF INCORPORATION

of

NORFOLK SOUTHERN CORPORATION

June 4, 2010

The Restated Articles of Incorporation of Norfolk Southern Corporation are amended to declassify the Board of Directors by replacing Article V with the following:

ARTICLE V

The number of directors, unless otherwise fixed by the bylaws, shall be sixteen. At the 2011 Annual Meeting of Stockholders, the successors of the directors whose terms expire at that meeting shall be elected for a term expiring at the 2012 Annual Meeting of Stockholders and until such director's successor shall have been elected and qualified. At the 2012 Annual Meeting of Stockholders, the successors of the directors whose terms expire at that meeting shall be elected for a term expiring at the 2013 Annual Meeting of Stockholders and until such director's successor shall have been elected and qualified. At the Annual Meeting of Stockholders in 2013 and thereafter, the successors of the directors whose terms expire at that meeting shall be elected for a one year term expiring at the next Annual Meeting of Stockholders and until such director's successor shall have been elected and qualified. Each director shall hold office until his successor shall have been elected, and the terms of office of directors elected by the Board of Directors to succeed former directors shall expire at the next stockholders' meeting at which directors are elected.

AMENDMENT TO THE RESTATED ARTICLES OF INCORPORATION

Exhibit 3(1)

of

NORFOLK SOUTHERN CORPORATION

June 12, 2020

The Restated Articles of Incorporation of Norfolk Southern Corporation are amended to (a) change the voting standard required to amend the Articles, (b) adopt a simple majority voting standard to approve a merger, share exchange, conversion, sale, or dissolution of the Corporation, and (c) adopt a majority voting standard to approve re-domestication of the corporation and affiliated transactions by replacing Article VII and adding a new Article VIII as follows:

ARTICLE VII

The shareholder vote required, of each voting group entitled to vote thereon, to approve an amendment to the Corporation’s Articles of Incorporation is a majority of all votes entitled to be cast by that voting group, unless the Virginia Stock Corporation Act (the “VSCA”) conditions approval of such an amendment upon a greater vote.

ARTICLE VIII

Any action on a matter involving:

(a)a plan of merger or acquisition for which the VSCA requires shareholder approval;

(b)a share exchange for which the VSCA requires shareholder approval;

(c)the conversion of the Corporation;

(d)a sale of all or substantially all the Corporation’s property for which the VSCA requires shareholder approval; or

(e)the dissolution of the Corporation

shall require the approval, by the affirmative vote, of a majority of the votes cast thereon.

Any action on a matter involving:

(a)the re-domestication of the Corporation; or

(b)an affiliated transaction for which the VSCA requires shareholder approval

shall require the approval, by the affirmative vote, of a majority of the votes entitled to be cast thereon.

EX-10.1

Exhibit 10.1

NORFOLK SOUTHERN

EXECUTIVE SEVERANCE PLAN

1. Introduction

1.1.Purpose. The purpose of the Plan is to ensure that the Company will have the continued dedication of its key employees by providing severance protection to selected individuals. The Plan is intended to be an unfunded welfare plan maintained primarily for the purpose of providing severance benefits to a select group of key management employees.

1.2.Effective Date. The Plan is effective as of May 14, 2020, and was amended effective July 28, 2020, to clarify the application of Section 409A to certain benefits under the Plan.

2. Definitions and Construction

2.1.Definitions. When used in capitalized form in the Plan, the following words and phrases have the following meanings, unless the context clearly indicates that a different meaning is intended:

(a)“Administrator” means the Compensation Committee.

(b) “Board” means the Board of Directors of Norfolk Southern Corporation.

(c) “Cause” has the meaning provided in Section 4.4(c).

(d) “Claim Reviewer” means a person or entity designated in writing by the Administrator as the Claim Reviewer for this Plan.

(e) “Code” means the Internal Revenue Code of 1986, as amended.

(f) “Company” means Norfolk Southern Corporation.

(g) “Compensation Committee” means the Compensation Committee of the Board.

(h) “Eligible Employee” means any employee of the Company who, on the date of a Qualifying Termination, is either: (1) employed at the level of Executive Vice President, or (2) employed at the level of Senior Vice President but only if the Board or its designee has designated such Participant as eligible to participate in the Plan. Notwithstanding the foregoing, employees who reach mandatory retirement age shall not be eligible to participate in the Plan.

(i) “Entity” means a corporation, partnership, limited liability company or other entity.

(j) “ERISA” means the Employee Retirement Income Security Act of 1974, as amended.

(k) “Good Reason” has the meaning provided in Section 4.4(b).

(l) “Participant” means an Eligible Employee who participates in the Plan under Section 3.

(m) “Plan” means the Norfolk Southern Executive Severance Plan as set forth in this document.

(n) “Qualifying Termination” has the meaning provided in Section 4.4(a).

(o) “Section 409A” means section 409A of the Code.

(q) “Severance Benefit” has the meaning provided in Section 4.

2.2.Gender and Number. Words used in the masculine gender in the Plan are intended to include the feminine and neuter genders, where appropriate. Words used in the singular form in the Plan are intended to include the plural form, where appropriate, and vice versa.

2.3.Section 409A. Payments under the Plan are intended to be exempt from, or comply with, Section 409A, and the Plan will be interpreted to achieve this result. However, in no event is the Company responsible for any tax or penalty owed by a Participant with respect to the payments under the Plan.

3. Participation.An Eligible Employee of the Company shall become a Participant in the Plan on the date on which the Company adopts the Plan or the date the Eligible Employee is employed at the level of Executive Vice President, whichever is later. An employee who is employed at the level of Senior Vice President shall become a Participant on the date the Board designates that he or she is eligible.

4. Severance Benefits

4.1.Cash Severance Benefits. A Participant who has a Qualifying Termination is eligible for a Severance Benefit in the amount described in subsection (a). The Severance Benefit shall be paid in the time and form specified in Section 4.3 and shall be conditioned upon the Participant’s timely execution of a release as provided in Section 6 and such release becoming irrevocable.

(a) Amount.

(1)Base Salary. The Participant’s Severance Benefit includes an amount equal to two times (2) the Participant’s base salary, at the rate in effect immediately prior to the Participant’s Qualifying Termination. Notwithstanding the foregoing, in the event the Participant experienced a material reduction in base salary prior to his or her Qualifying Termination that would give rise to a Good Reason, then the base salary rate used in the preceding sentence shall, if greater, be the rate in effect immediately prior to such material reduction in base salary.

(2)Bonus Award.

(i) The Participant’s Severance Benefit includes an amount equal to the Participant’s total salary paid up to the date of the Qualifying Termination during the incentive year in which the Qualifying Termination occurs multiplied by the Participant’s bonus level multiplied by the payout percentage for the Corporate Performance Factor accrued on the books of the Company as of the quarter coincident with or immediately preceding the quarter in which the Qualifying Termination occurs. Notwithstanding the foregoing, for a Participant whose Qualifying Termination occurs in the first quarter of the calendar year, the Participant’s Severance Benefit shall include an amount equal to the Participant’s total salary paid up to the date of the Qualifying Termination during the incentive year in which the Qualifying Termination occurs multiplied by the Participant’s bonus level multiplied by the payout percentage for the Corporate Performance Factor as budgeted for the incentive year.

(ii) Notwithstanding the foregoing, for Participants who are eligible to retire, the date of the Qualifying Termination shall be established as the last day of a month so that they can retire under the terms of the Retirement Plan of Norfolk Southern Corporation and Participating Subsidiary Companies and consequently be eligible for a bonus award in accordance with the terms of the Executive Management Incentive Plan. Such Participants shall not be eligible for an amount described under the previous paragraph. In addition, Participants who are eligible for a bonus award in accordance with the terms of the Executive Management Incentive Plan for reasons other than retirement shall receive a bonus award under the terms of that plan and shall not be eligible for an amount described under the previous paragraph.

(3) Outplacement Services. The Participant shall be entitled to a lump sum of $30,000 for outplacement services.

(4) Health Coverage. The Participant shall be entitled to a lump sum of $36,000 for health coverage.

4.2.Equity Awards.

(a)In General. Provided that the Participant timely executes a release as provided in Section 6 and such release becomes irrevocable, then notwithstanding anything in the applicable stock incentive plan and/or award agreement to the contrary, upon a Participant’s Qualifying Termination, the Participant’s stock options and restricted stock unit awards will be paid in cash using the closing price per share of stock or equivalent on the New York Stock Exchange (or if unavailable, on another U.S. stock exchange) on the date of the Qualifying Termination, or, if a stock is not traded on the date of the Qualifying Termination, on the most recent trading day immediately preceding such date. Furthermore, provided that the Participant timely executes a release as provided in Section 6 and such release becomes irrevocable, then the Participant shall be entitled to the pro-rata value of Performance Share Units, paid in cash upon the Participant’s Qualifying Termination, in accordance with the following formula: For each

2

Performance Share Unit award, the number of units granted shall be multiplied by the total earnout percentage as reflected on the books of the company for the prior quarter, multiplied by a fraction, the numerator of which is the number of months worked in the 3-year award period and the denominator of which is 36 and using the closing price per share of stock or equivalent on the New York Stock Exchange (or if unavailable, on another U.S. stock exchange) on the date of the Qualifying Termination, or, if a stock is not traded on the date of the Qualifying Termination, on the most recent trading day immediately preceding such date. If a Participant is entitled to continued or accelerated vesting of stock options, continued vesting of restricted stock units, or payout of performance share units based on the full performance period in accordance with the terms of the Norfolk Southern Long-Term Incentive Plan, then the terms of the awards under the Norfolk Southern Long-Term Incentive Plan shall govern and the Participant shall not be entitled to the payout of equity awards under this section 4.2(a).

(b) Participants Eligible to Retire. Notwithstanding section 4.2(a), for a Participant who is eligible to retire, and who properly executes a release as provided in Section 6 and such release becomes irrevocable, then the date of the Qualifying Termination shall be established as the last day of a month so that the Participant can retire under the terms of the Retirement Plan of Norfolk Southern Corporation and Participating Subsidiary Companies. Thereafter, provided that the Participant properly applies for retirement pursuant to the Retirement Plan, the Participant shall be entitled to favorable treatment of long-term incentive awards as provided upon retirement in accordance with the terms of such awards under the Norfolk Southern Long-Term Incentive Plan. A Participant who is eligible to retire as described in this section 4.2(b) shall not be entitled to the payout of equity awards as described under section 4.2(a) of this Plan.

(c) Notwithstanding the foregoing, if the Participant’s Qualifying Termination occurs before October 1 of the calendar year, the restricted stock units and performance share units granted in the year of the Qualifying Termination shall be forfeited in accordance with the terms of the awards. Therefore, no amount will be payable under section 4.2(a) with respect to such awards, and such awards shall be forfeited for purposes of section 4.2(b).

4.3.Time and Form of Payment. If a Participant is entitled to a Severance Benefit, the Severance Benefit and any benefit payable under Sections 4.1 or 4.2(a) will be paid as follows:

(a)In General. Except as otherwise provided below, the Participant’s Severance Benefit and any benefit payable under Sections 4.1 or 4.2(a) will be paid in a lump sum within thirty days following the expiration of the 7-day rescission period unless a delay is required by subsection (b)(2) or (b)(3) below.

(b)Time of Payment under Section 409A. To comply with Section 409A of the Code:

(1) Any payment under the Plan that is subject to Section 409A and that is contingent on a termination of employment is contingent on a “separation from service” within the meaning of Section 409A.

(2) If, upon separation from service, the Participant is a “specified employee” within the meaning of Section 409A, any payment under the Plan that is subject to Section 409A and would otherwise be paid within six months after the Participant’s separation from service will instead be paid in the seventh month following the Participant’s separation from service.

(3) If the payment or distribution of any amount or award as provided in Section 4.3(a) would violate Section 409A of the Code, then if the Participant timely executes a release as provided in Section 6 and such release becomes irrevocable, the amount or award will be paid at the earliest possible time it can be paid without violating Section 409A of the Code.

4.4. Qualifying Termination.

(a) A Participant has a Qualifying Termination if his or her employment with the Company is terminated:

(1) by the Participant for Good Reason; or

(2) by the Company for any reason other than for Cause or for disability under the Company’s long-term disability plan.

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(b)Good Reason. “Good Reason” means the existence or occurrence of one or more of the following conditions or events without the Participant’s prior written consent: (i) a material reduction of the Participant’s base salary or target bonus opportunity (other than as part of an across-the-board, proportional salary reduction applicable to all officers employed at the level of Executive Vice President); (ii) a sustained and material reduction in the Participant’s job title or responsibilities, it being agreed that “Good Reason” shall not exist solely because the Company reorganizes one or more units of its business, its functional organization, or its reporting relationships; or (iii) a material breach by the Company of any term of the Participant’s written employment agreement with the Company or of the Participant’s other agreements with the Company, if any; provided, however, that, in each case under sub-clauses (i) to (iii) above, any termination of employment by the Participant will be for “Good Reason” only if: (1) the Participant gives the Company written notice, within ninety (90) days following the first occurrence of the condition(s) that the Participant believes constitute(s) “Good Reason,” which notice shall describe such condition(s); (2) the Company fails to remedy such condition(s) within thirty (30) days following receipt of the written notice (such 30-day period, the “Company Cure Period”); and (3) the Participant voluntarily terminates the Participant’s employment with the Company within thirty (30) days following the end of the Company Cure Period.

(c)Cause. “Cause” means, with respect to a Participant, the occurrence of any of the following events, as reasonably determined by the Administrator in its discretion: (i) the Participant’s conviction of, or plea of nolo contendere to, any felony (other than a vehicular-related felony); (ii) the Participant’s commission of, or participation in, intentional acts of fraud or dishonesty that in either case results in material harm to the reputation or business of the Company; (iii) the Participant’s intentional, material violation of any term of the Participant’s employment agreement with the Company or any other contract or agreement between the Participant and the Company, if any, or any statutory duty the Participant owes to the Company that in either case results in material harm to the business of the Company; (iv) the Participant’s conduct that constitutes gross insubordination or habitual neglect of duties and that in either case results in material harm to the business of the Company; (v) the Participant’s intentional, material refusal to follow the lawful directions of the Board of Directors, Norfolk Southern’s Chief Executive Officer, or his or her direct manager (other than as a result of physical or mental illness); or (vi) the Participant’s intentional, material failure to follow, or intentional conduct that violates (or would have violated, if such conduct occurred within ten (10) years prior to the date the Participant entered this Agreement and has not been previously disclosed to the Company), the Company’s written policies that are generally applicable to all employees or all officers of the Company and that results in material harm to the reputation or business of the Company; provided, however, (1) that willful bad faith disregard will be deemed to constitute intentionality for purposes of this definition and (2) that, in each case under sub-clauses (i) through (vi) above, any termination of employment by the Company will be for “Cause” only if: (1) the Company gives the Participant written notice, within ninety (90) days following the date on which the Company first becomes aware of the action or conduct that it alleges constitutes Cause (or, in the case of clauses (ii), (iii), or (vi), when the Company first becomes aware that the action or conduct has resulted in material harm to the reputation or business of the Company), which notice shall describe such action or conduct; (2) in the case of clauses (iii) through (vi), except in circumstances where the Participant’s actions are deemed by the Company not subject to cure, the Participant fails to remedy such condition(s) within thirty (30) days following receipt of the written notice (such 30-day period, the “Employee Cure Period”); and (3) except if a reasonable period is needed to investigate the conduct at issue in (vi) (which investigation, for the avoidance of doubt, shall not constitute Good Reason), the Company terminates the Participant’s employment within thirty (30) days following the end of the Employee Cure Period (or, in the case of clauses (i) and (ii), the Company terminates the Participant’s employment within sixty (60) days following the Participant’s receipt of the written notice).

5. Covenants

5.1.Generally. In consideration for the benefits provided under the Plan, each Participant will agree to the covenants as set forth in the release described in section 6, which shall include the items set forth in sections 5.2 through 5.5.

5.2.Non-disparagement. The Participant will at no time make any derogatory, misleading or otherwise negative statement about the actions, performance or behavior of the Company or its officers, directors, employees and agents.

5.3.Cooperation. The Participant will cooperate with the Company in order to ensure an orderly transfer of his or her duties and responsibilities. In addition, the Participant will at all times, both before and after termination of

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employment, (a) provide reasonable cooperation in connection with any action or proceeding (or any appeal from any action or proceeding) that relates to events occurring during the Participant’s employment hereunder, provided that such cooperation does not materially interfere with the Participant’s then current employment, and (b) cooperate with the Company in executing and delivering documents requested by the Company, and taking any other actions, that are necessary or requested by the Company to assist the Company in patenting, copyrighting, or registering any programs, ideas, inventions, discoveries, patented or copyrighted material, or trademarks, and to vest title thereto in the Company.

5.4. Confidentiality and Non-Compete. The Participant covenants and agrees that any confidential or proprietary information and any corporate policies, procedures and documents acquired during his or her employment with the Company is the exclusive property of the Company. The Participant acknowledges that he or she has no ownership interest or right of any kind to said property. Except as otherwise required by law, the Participant agrees that he or she will not use or directly or indirectly, disclose or divulge to any unauthorized party for his or her own benefit or to the detriment of the Company, any such information that was acquired during his or her employment with the Company, whether or not developed or compiled by the Company and whether or not the Participant was authorized to have access to such information. The Participant covenants that he or she has returned all such information to the Company.

The Participant further covenants that he or she will not seek or accept employment with a direct competitor of the Company for one (1) year from date of Qualifying Termination, unless Participant seeks, and is granted, a waiver from the Chief Executive Officer of the Company. The Participant will not disclose any trade secrets, customer lists, vendor and contractor rates, designs, information regarding product development, names of vendors and contractors, phone numbers or contact information of vendors and contractors, operating plans, strategic plans, marketing plans, sales plans, projected acquisitions or dispositions of properties, assets, or management agreements, management information (including data and other information relating to members of the Board and management), operating policies or manuals, business plans, purchasing agreements, financial records, or other financial, commercial, business or technical information relating to Company or information designated as confidential or proprietary that Company may receive belonging to suppliers, customers, or others who do business with Company. Notwithstanding the foregoing, this Release does not prohibit the Participant from: (i) providing truthful testimony in response to compulsory legal process; (ii) participating in any government investigation; (iii) providing truthful statements in conjunction with any claim permitted to be brought by the employee; or (iv) providing information to the extent required by an order of a court having competent jurisdiction or under subpoena from an appropriate government agency.

5.5.Recoupment. If the Participant breaches any of the covenants set forth in this Section 5, as specified in the release, then the Participant will be obligated to repay to the Company all benefits previously paid to, or on behalf of, the Participant under the Plan.

6. Release

6.1.Generally. A Participant will not be entitled to any benefits under the Plan unless, at the time of the Participant’s Qualifying Termination, he or she executes and does not subsequently revoke therelease provided in Exhibit A, releasing the Company, its affiliates, subsidiaries, shareholders, directors, officers, employees, representatives, and agents and their successors and assigns from any and all employment-related claims the Participant or his or her successors and beneficiaries might then have against them (excluding any claims the Participant might then have under the Plan or any employee benefit plan sponsored by the Company). The release will be substantially in the form that is attached as Exhibit A to the Plan.

6.2.Time Limit for Providing Release. A Participant will execute and submit the release to the Company within 21 days after the date the release is presented to the Participant. With respect to any payment under the Plan that is subject to Section 409A, if payment is otherwise due prior to the latest date on which the release may become irrevocable and the period between separation from service and such date spans two calendar years, payment shall be made in the second of those two years.

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7. Nature of Participant’s Interest in the Plan

7.1.No Right to Assets. Participation in the Plan does not create, in favor of any Participant, any right or lien in or against any asset of the Company. Nothing contained in the Plan, and no action taken under its provisions, will create or be construed to create a trust of any kind, or a fiduciary relationship, between the Company and a Participant or any other person. The Company’s promise to pay benefits under the Plan will at all times remain unfunded as to each Participant, whose rights under the Plan are limited to those of a general and unsecured creditor of the Company.

7.2.No Right to Transfer Interest. Rights to benefits payable under the Plan are not subject in any manner to alienation, sale, transfer, assignment, pledge, or encumbrance, except as required by law.

7.3.No Employment Rights. No provisions of the Plan and no action taken by the Company or the Administrator will give any person any right to be retained in the employ of the Company, and the Company specifically reserves the right and power to dismiss or discharge any Participant for any reason or no reason and at any time.

7.4.Withholding and Tax Liabilities. All payments under the Plan will be subject to tax withholding or other withholding required or permitted by applicable law to the extent deemed necessary by the Administrator. The Participant will bear the cost of any taxes not withheld on benefits provided under the Plan, regardless of whether withholding is required.

7.5. Change in Control. Notwithstanding the provisions of this Agreement, Participants who have entered into a Change in Control Agreement with the Company who are terminated following a Change in Control (as defined in such Agreement) will be entitled to benefits under that Agreement and shall not be entitled to benefits under this Plan.

8. Administration, Interpretation, and Modification of Plan

8.1.Plan Administrator. The Administrator will administer the Plan.

8.2.Powers of the Administrator. The Administrator’s powers include, but are not limited to, the power to adopt rules consistent with the Plan; the power to decide all questions relating to the interpretation of the terms and provisions of the Plan; and the power to resolve all other questions arising under the Plan (including, without limitation, the power to remedy possible ambiguities, inconsistencies, or omissions by a general rule or particular decision). The Administrator has full discretionary authority to exercise each of the foregoing powers.

8.3.Death of Participant. If a Participant dies after having a Qualifying Termination, any payment of the Participant’s Severance Benefit or benefit under Section 4 remaining due to the Participant will be paid to the Participant’s estate at the time such payment would otherwise be paid to the Participant but no later than 90 days after the Participant’s death.

8.4.Amendment, Suspension, and Termination. The Compensation Committee has the right by written resolution to amend, suspend, or terminate the Plan at any time, subject to the terms of this Section 8.4. Notwithstanding the foregoing, the Compensation Committee may amend the Plan at any time to the extent necessary to comply with Section 409A, provided that, to the extent possible, such amendment does not reduce the benefits of an employee who is already a Participant.

8.5.Power to Delegate Authority. The Administrator may, in its sole discretion, delegate to any person or persons all or part of its authority and responsibility under the Plan, including, without limitation, the authority to amend the Plan.

8.6.Headings. The headings used in this document are for convenience of reference only and may not be given any weight in interpreting any provision of the Plan.

8.7.Severability. If an arbitrator or court of competent jurisdiction determines that any term, provision, or portion of the Plan is void, illegal, or unenforceable, the other terms, provisions, and portions of the Plan will remain in full force and effect, and the terms, provisions, and portions that are determined to be void, illegal, or unenforceable will either be limited so that they will remain in effect to the extent permissible by law, or such

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arbitrator or court will substitute, to the extent enforceable, provisions similar thereto or other provisions, so as to provide to the Company, to the fullest extent permitted by applicable law, the benefits intended by the Plan.

8.8.Governing Law. The Plan will be construed, administered, and regulated in accordance with the laws of Virginia (excluding any conflicts or choice of law rule or principle), except to the extent that those laws are preempted by federal law.

8.9.Complete Statement of Plan. The Plan contains a complete statement of its terms. The Plan may be amended, suspended, or terminated only in writing and then only as provided in Section 8.4 or 8.5. A Participant’s right to any benefit of a type provided under the Plan will be determined solely in accordance with the terms of the Plan. No other evidence, whether written or oral, will be taken into account in interpreting the provisions of the Plan. Notwithstanding the preceding provisions of this Section 8.9, for purposes of determining benefits with respect to a Participant, the Plan will be deemed to include the provisions of any other written agreement between the Company and the Participant to the extent such other agreement explicitly provides for the incorporation of some or all of its terms into the Plan. Nothing in the Plan shall supersede any Change in Control Agreement the Participant has or will enter into, and in the event of a Change in Control (as defined under that policy), benefits shall be paid under that policy in lieu of any benefits described hereunder.

9. Claims and Appeals

9.1. Application of Claims and Appeals Procedures.

(a) If a Participant believes that he or she did not receive the full amount of benefits under the Plan to which he or she is entitled, the Participant may file a claim under the provisions of this Section 9.

(b) No claim for non-payment or underpayment of benefits allegedly owed under the Plan may be filed in court until the claimant has exhausted the claims review procedures established in accordance with this Section 9.

9.2. Initial Claims.

(a) Any claim for benefits will be in writing (which may be electronic if permitted by the Administrator) and will be delivered to the Claim Reviewer.

(b) Each claim for benefits will be decided by the Claim Reviewer within a reasonable period of time, but not later than 90 days after such claim is received by the Claim Reviewer (without regard to whether the claim submission includes sufficient information to make a determination), unless the Claim Reviewer determines that special circumstances require an extension of time for processing the claim. If the Claim Reviewer determines that an extension of time for processing is required, the Claim Reviewer will notify the claimant in writing before the end of the initial 90-day period of the circumstances requiring an extension of time and the date by which a decision is expected.

(c) If any claim is denied in whole or in part, the Claim Reviewer will provide to the claimant a written decision, issued by the end of the period prescribed by subsection (b), above, that includes the following information:

(1) The specific reason or reasons for denial of the claim;

(2) References to the specific Plan provisions upon which such denial is based;

(3) A description of any additional material or information necessary to perfect the claim, and an explanation of why such material or information is necessary;

(4) An explanation of the appeal procedures Plan’s and the applicable time limits; and

(5) A statement of the claimant’s right to bring a civil action under section 502(a) of ERISA, if his or her claim is denied upon review.

9.3. Appeals.

(a) If a claim for benefits is denied in whole or in part, the claimant may appeal the denial to the Claim Reviewer. Such appeal will be in writing (which may be electronic, if permitted by the Claim Reviewer), may include any written comments, documents, records, or other information relating to the claim for benefits, and will

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be delivered to the Claim Reviewer within 60 days after the claimant receives written notice that his or her claim has been denied.

(b) The Claim Reviewer will decide each appeal within a reasonable period of time, but not later than 60 days after such claim is received by the Claim Reviewer, unless the Claim Reviewer determines that special circumstances require an extension of time for processing the appeal.

(1) If the Claim Reviewer determines that an extension of time for processing is required, the Claim Reviewer will notify the claimant in writing before the end of the initial 60-day period of the circumstances requiring an extension of time and the date by which the Claim Reviewer expects to render a decision.

(2) If an extension of time pursuant to paragraph (1), above, is due to the claimant’s failure to submit information necessary to decide the appeal, the period for deciding the appeal will be tolled from the date on which the notification of extension is sent to the claimant until the date on which the claimant responds to the request for additional information.

(c) In connection with any appeal, the claimant will be provided, upon request and free of charge, reasonable access to, and copies of, all documents, records, and other information relevant to his or her claim for benefits. A document, record, or other information will be considered relevant to a claim for benefits if such document, record, or other information:

(1) Was relied upon in making the benefit determination;

(2) Was submitted, considered, or generated in the course of making the benefit determination, without regard to whether such document, record, or other information was relied upon in making the benefit determination; or

(3) Demonstrates compliance with processes and safeguards designed to ensure and to verify that the benefit determination was made in accordance with the terms of the Plan and that such terms of the Plan have been applied consistently with respect to similarly situated claimants.

(d) The Claim Reviewer review on appeal will take into account all comments, documents, records and other information submitted by the claimant, without regard to whether such information was considered in the initial benefit determination.

(e) If any appeal is denied in whole or in part, the Claim Reviewer will provide to the claimant a written decision, issued by the end of the period prescribed by subsection (b), above, that includes the following information:

(1) The specific reason or reasons for the decision;

(2) References to the specific Plan provisions upon which the decision is based;

(3) An explanation of the claimant’s right to receive, upon request and free of charge, reasonable access to, and copies of, all documents, records, and other information relevant to his or her claim for benefits (as determined pursuant to subsection (c), above); and

(4) A statement of the claimant’s right to bring a civil action under section 502(a) of ERISA.

9.4. Other Rules and Rights Regarding Claims and Appeals.

(a) A claimant may authorize a representative to pursue any claim or appeal on his or her behalf. The Claim Reviewer may establish reasonable procedures for verifying that any representative has in fact been authorized to act on his or her behalf.

(b) Notwithstanding the deadlines prescribed by this Section 9.4, the Claim Reviewer and any claimant may agree to a longer period for deciding a claim or appeal or for filing an appeal, provided that the Claim Reviewer will not extend any deadline for filing an appeal unless imposition of the deadline prescribed by Section 9.3(a) would be unreasonable under the applicable circumstances.

9.5.Interpretation. The provisions of this Section 9 are intended to comply with section 503 of ERISA and will be administered and interpreted in a manner consistent with such intent.

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EXHIBIT A – FORM OF RELEASE AGREEMENT

SEPARATION AGREEMENT

This Separation Agreement (“Agreement” or “Release”) is entered into by and between Norfolk Southern Corporation (“Company”) and _____________________(“Executive” or “I”).

WITNESSETH:

WHEREAS, Executive is an at-will employee and as such, Executive’s employment can be terminated at any time.

WHEREAS, Executive will be separated by the Company effective ________________, _____ (“Separation Date”) for reasons unrelated to sexual harassment or sexual abuse, as a result of which Executive would be eligible to receive certain severance benefits under the Norfolk Southern Executive Severance Plan (“Severance Plan”), and desires to receive the benefits under the Executive Severance Plan and to relinquish and waive any rights and benefits provided under the NS Severance Pay Plan;

WHEREAS, a condition to receipt of benefits under the Severance Plan is for the Executive to execute a Settlement Agreement and Release satisfactory to the Company;

NOW, THEREFORE, in consideration of the premises, and for other good and valuable consideration contained herein, the parties hereto, intending to be legally bound, hereby agree as follows:

The foregoing WHEREAS clauses are incorporated and made a part of this Agreement.

1. Separation of Employment.

A.I understand that my employment with Company shall terminate or was terminated effective as of the above-referenced Separation Date.

B.I understand that Company has paid or will timely pay me, in accordance with its normal payroll and other procedures, for: (i) my work from the date this Release was received through the Separation Date; (ii) my properly reported and reimbursable business expenses that remain unpaid, provided that I submit any such claims for reimbursement together with this Release; and (iii) my accrued but unused vacation for the current year, less all required tax withholdings and other deductions.

C.I understand that, for benefit plans governed by the Employee Retirement Income Security Act of 1974 (ERISA), benefits following the Separation Date, if any, will be determined in accordance with the terms of the applicable plan or other governing documents.

D.I understand that the foregoing payments and benefits, other than benefits provided under the Severance Plan, have been or will be provided to me regardless of whether I sign or revoke this Release.

2. Payment and Other Benefits.

I acknowledge that, in consideration for signing this Release within 21 days after I receive it and provided that I do not revoke the Release during the seven-day revocation period described in Section 8, I will receive the following:

A.Payment in the gross amount of $[ ], equal to two (2) times Executive’s base salary, paid in a lump sum.

B.Payment in the gross amount of $[ ] for the Bonus portion of the severance benefit under the Severance Plan; provided, however, that if my Separation Date is on or after the date on which a deferral election under the Norfolk Southern Corporation Executives’ Deferred Compensation Plan (“EDCP”) becomes irrevocable (generally July 1), any portion of my Bonus for which I had made an election to defer under the EDCP will be paid under the terms of the EDCP and not under the Severance Plan.

C.Payment in the gross amount of $[ ], equal to full value of stock options, paid in a lump sum.

D.Payment in the gross amount of $36,000 for health coverage, paid in a lump sum.

E.Payment in the gross amount of $30,000 for outplacement services, paid in a lump sum.

F.Payment in the gross amount of $[ ], equal to full value of restricted share units, payable in separate installments at the time each underlying restricted stock unit award would have been distributed if I had continued in employment through each applicable distribution date.

G.Payment in the gross amount of $[ ], equal to Pro-rated value of Performance Share Units, payable in installments at the time each underlying Performance Share Unit award would have been distributed if I had continued in employment through December 31 of each Performance Cycle.

H.The payments provided in this Section 2A through 2E will be paid by direct deposit or, if not possible, by check sent by regular mail to my last known address, within 30 calendar days after the date on which Company receives an executed copy of this Release from me; provided, however, that if I am a “specified employee” within the meaning of Section 409A, any payment that is subject to Section 409A that is to be made under this Agreement that would otherwise be paid within six months after my separation from service will instead be paid in the seventh month following my separation from service Each installment payment provided in Section 2F and Section 2G will be paid by direct deposit or, if not possible, by check sent by regular mail to my last known address at the time provided in the underlying restricted stock unit award or following the conclusion of the Performance Cycle. All payments made under this Section 2 shall be net of all taxes, withholdings and any other amount required by law to be withheld from such payments. Furthermore, debts owed to the Company may also be deducted from the payments.

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3.Release of COMPANY.

In consideration of the Payment and Benefits provided for in Section 2:

A.On behalf of myself and my heirs and personal representatives, I hereby surrender any right to employment with Company and its predecessors, successors, and assigns, as well as its subsidiaries, affiliates, and parents (cumulatively referred to as the “Affiliates”), and release and forever discharge Company and the Affiliates, and their respective past, present and future partners, principals, managers, directors, officers, employees, agents, attorneys, employee benefit plans, trustees and all others acting in concert with them, from any and all claims, actions, suits, proceedings, complaints, causes of action, grievances, debts, costs and expenses (including attorney’s fees), at law or in equity, known or unknown, that I: (i) have or may have through the date I sign this Release, arising out of, based on, or relating in any way to any acts or omissions that occurred, in whole or in part, prior to the time that I sign this Release, including, but not limited to: claims for breach of any express or implied contract, wrongful termination, retaliation, defamation of character, personal injury, intentional or negligent infliction of emotional distress, discrimination or harassment based on race, religion, sex, age, color, handicap and/or disability, national origin, or any other protected class, and any other claim based on or related to my employment with Company or my departure therefrom, including but not limited to claims under ERISA, Title VII of the Civil Rights Act of 1964, Section 1981 of Title 42 of the United States Code, the Civil Rights Act of 1866, Executive Order 11246, the Equal Pay Act, the Americans with Disabilities Act, the Rehabilitation Act of 1973, the Family and Medical Leave Act, the Age Discrimination in Employment Act of 1967, the Uniformed Services Employment and Reemployment Rights Act, the Occupational Safety and Health Act, the Federal Railroad Safety Act, the Federal Employers Liability Act, the Georgia Fair Employment Practices Act, the Virginia Human Rights Act, and any other federal, state or local statute or regulation, all as amended; and (ii) have or may have at any time before or after I sign this Release arising under, based on, or related to the Worker Adjustment and Retraining Notification Act. Nothing in this Release is intended to or shall be construed as an admission by Company or any of its Affiliates that any of them violated any law, interfered with any right, breached any obligation or otherwise engaged in any improper or illegal conduct with respect to me or otherwise. Company and its Affiliates expressly deny any such illegal or wrongful conduct.

B.I do not waive, nor has Company asked me to waive, any rights or claims that cannot be released by law, such as any vested retirement benefits that I may have.

C.I agree that I will not provide any information, advice, or services to, and will not serve as a consulting or testifying expert witness for, any person, law firm, or entity in connection with any claim of any type or nature by that person, law firm, or entity against the Company or any of the Affiliates. Notwithstanding the foregoing, this Release does not and is not intended to prevent, restrict, or otherwise interfere with my right to: (i) provide information to any appropriate federal, state, or local governmental agency or court, including the Securities and Exchange Commission (“SEC”); (ii) testify, assist, participate in, or cooperate with the investigation of any charge or complaint pending before or being investigated by such governmental agency or court, or make any disclosures that are protected under the whistleblower provisions of federal law or regulation; (iii) receive a monetary award from the SEC related to my participation in an SEC investigation or proceeding; or (iv) enforce this Agreement.

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4. Participant’s Covenants.

In consideration of the Payment and other benefits provided for in Section 2, I also covenant and agree that:

A.Confidentiality of Release.

Subject to Section 3(C) above, I shall hold this Release confidential, and not disclose its terms to anyone, except for my immediate family, legal counsel, and tax advisor, and that I will inform them of this confidentiality provision upon any such disclosure. I understand that this confidentiality provision is a material provision of this Release.

B.Confidentiality of Company Information.

Executive covenants and agrees that any confidential or proprietary information and any corporate policies, procedures and documents acquired by Executive during his employment with the Company is the exclusive property of the Company, and Executive acknowledges that he has no ownership interest or right of any kind to said property. Except as otherwise required by law, Executive agrees that he will not use or directly or indirectly, disclose or divulge to any unauthorized party for his own benefit or to the detriment of the Company, any such information that he may have acquired during his employment with the Company, whether or not developed or compiled by the Company and whether or not Executive was authorized to have access to such information. Executive covenants that he has returned all such information (as referenced in this section B) to the Company.

Executive further covenants that he will not disclose any trade secrets, customer lists, vendor and contractor rates, designs, information regarding product development, names of vendors and contractors, phone numbers or contact information of vendors and contractors, operating plans, strategic plans, marketing plans, sales plans, projected acquisitions or dispositions of properties, assets, or management agreements, management organization information (including data and other information relating to members of the Board and management), operating policies or manuals, business plans, purchasing agreements, financial records, or other financial, commercial, business or technical information relating to Company or any of the Affiliates or information designated as confidential or proprietary that Company or any of the Affiliates may receive belonging to suppliers, customers, or others who do business with Company or any of the Affiliates.

Notwithstanding the foregoing, this Release does not prohibit me from: (i) providing truthful testimony in response to compulsory legal process; (ii) participating in any government investigation; (iii) providing truthful statements in conjunction with any claim permitted to be brought by the employee; or (iv) providing information to the extent required by an order of a court having competent jurisdiction or under subpoena from an appropriate government agency.

C.Non-Disparagement Clause.

Subject to Section 3(C) above, I shall not make any disparaging comments, whether oral or written, regarding Company, its officers, directors, employees, agents, leadership, partners, owners, stockholders, predecessors, successors, assigns or any of the Affiliates and their respective agents, directors, officers, employees, representatives or attorneys. Such disparaging

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comments include, but are not limited to, comments containing false or misleading information, or potentially having the effect of damaging the reputation of Company or its leadership.

D.Cooperation.

I agree that I will fully cooperate and assist in the transition of my work, files, and pending matters to other Company representatives as directed by Company. In addition, I will at all times, both before and after termination of employment, (a) provide reasonable cooperation in connection with any action or proceeding (or any appeal from any action or proceeding) that relates to events occurring during my employment with the Company, provided that such cooperation does not materially interfere with my then current employment, and (b) cooperate with the Company in executing and delivering documents requested by the Company, and taking any other actions, that are necessary or requested by the Company to assist the Company in patenting, copyrighting, or registering any programs, ideas, inventions, discoveries, patented or copyrighted material, or trademarks, and to vest title thereto in the Company.

E.Non-Compete.

I will not seek or accept employment with, or provide services to or on behalf of (including, but not limited to, as a consultant, independent contractor, director, owner, partner, joint venturer, or employee), a direct competitor of the Company for one (1) year from my Separation Date, unless I seek a waiver from the Chief Executive Officer of the Company, and the waiver is granted in writing.

For this purpose, a “direct competitor of the Company” is (i) any North American Class I freight rail carrier (including, without limitation, a holding or other company that controls or operates, or is controlled by or under common control with, any North American Class I rail carrier), or (ii) any short line or other rail carrier that is competing with the Company in North American markets in which the Company competes.

Nothing contained in this subsection will operate or be construed to restrict a lawyer in the practice of law in contravention of Rule 5.6 of the Virginia Rules of Professional Conduct or a similar professional conduct rule applicable to a lawyer who is an active member of any other state bar.

F. Remedies with Respect to Covenants.

I understand and agree that if I breach or threaten to breach the covenants and obligations contained in Section 4 of this Release, Company shall be entitled to the following remedies, which shall be cumulative and are not mutually exclusive:

i.I acknowledge and agree that my covenants and obligations with respect to Section 4 of this Release relate to special, unique and extraordinary matters and that a violation of any of the terms of such covenants and obligations will cause Company irreparable injury for which adequate remedies are not available at law. Therefore, I understand and agree that if I breach or threaten to breach the covenants and obligations of Section 4 of this Release, in any respect, Company shall be entitled to an injunction, restraining order or other equitable relief (without the requirement to post bond) to restrain such breach or threatened breach or otherwise specifically enforce the covenants and obligations set forth therein.

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ii.I acknowledge and agree that the damages resulting from my breach of the covenants and obligations contained in Section 4 of this Release would be uncertain and difficult to ascertain.

5. Company Property.

As soon as practicable, but in no event later than the Effective Date of this Release, I shall return to Company: (A) any and all business equipment, credit cards, and other Company property made available for my use while an employee of Company; and (B) any files, data, or other copies of information (whether in hard copy or in electronic form) pertaining to Company or any of the Affiliates, or the business or operation thereof.

6. Agreement Not To Seek Reemployment

In consideration of the Payment and Benefits provided for in Section 2, I further agree that I will not reapply for work with Company or the Affiliates. I understand that if I apply for work with Company or the Affiliates, Company or the Affiliates will have the right to refuse to hire, rehire or otherwise engage me. I further agree that it will not constitute discrimination or retaliation if, in the future, Company declines to hire me or terminates me after inadvertently hiring, reinstating or engaging me.

7. Miscellaneous Other Terms.

A.I acknowledge that in executing this Release, I do not rely, and have not relied, upon any representation or statement made by Company, any of the Affiliates, or by any of its employees or representatives with regard to the subject matter hereof, other than documents specifically referenced in this Release.

B.I acknowledge that I was advised to consult with an attorney of my choice (at my expense) before I sign this Release. Company will rely on my signature on this Agreement as my representation that I have read this Release carefully before signing it, and that I have a full and complete understanding of its terms.

C.The language of all parts of this Release shall, in all cases, be construed as a whole, according to its fair meaning, and not strictly for or against any of the parties. To the extent there are any ambiguities in the terms of this Release, those ambiguities shall not be construed against one party or the other.

D.This Agreement shall be construed and enforced in accordance with the laws of the Commonwealth of Virginia, without regard to its choice of law rules. Employee consents to the personal jurisdiction of the federal and/or state courts serving the Commonwealth of Virginia and waives any defense of forum non conveniens. Employee agrees that any and all initial judicial actions related to this Agreement shall only be brought in the United States District Court for the Eastern District of Virginia, Norfolk Division, or the appropriate state court in the City of Norfolk, Virginia, regardless of Employee's place of residence or work location at the time of such action.

E.Should any provision of this Release be declared or be determined by any court of competent jurisdiction to be illegal, invalid, or unenforceable, the legality, validity, and enforceability of the

6

remaining parts, terms or provisions shall not be effected thereby, and said illegal, unenforceable, or invalid part, term or provision shall be deemed not to be a part of this Agreement.

F.This Release sets forth the entire agreement between the parties hereto and fully supersedes any and all prior agreements or understandings, written or oral, between the parties hereto pertaining to the subject matter hereof.

G.I agree that Company’s provision of the Payment and Benefits provided for in Section 2 does not constitute an acknowledgement that I have complied with this Release. I understand that Company specifically reserves the right to pursue legal remedies against me arising out of my noncompliance with this Agreement.

H.I represent and warrant that I have not incurred a work-related injury or occupational disease and that I am not suffering from any work-related injuries or occupational diseases and I further warrant that I am competent to execute this Release.

I.Section 409A Compliance. This Agreement is intended to comply with the requirements of Section 409A of the Internal Revenue Code of 1986, as amended (“Code”), or an exemption or exclusion therefrom and, with respect to amounts that are subject to Code Section 409A, it is intended that this Agreement be administered in all respects in accordance with Code Section 409A. Each payment under this Agreement that constitutes nonqualified deferred compensation subject to Code Section 409A shall be treated as a separate payment for purposes of Code Section 409A. In no event may Executive (or Executive’s estate, in the event of Executive’s death), directly or indirectly, designate the taxable year of any payment to be made under the Agreement.

8. Time Limits, Revocation, and Effective Date.

A.I acknowledge and agree that I received this Release on _____________, _____. I understand that I have twenty-one (21) days from the date I received this Release to consider its terms. Any changes to this Release during that period, whether material or not, will not extend the 21-day period. If I sign this Release, I may still revoke my acceptance of the Release for up to seven (7) days after I sign it, by notifying Company in writing before the expiration of that seven-day period. If I decide to revoke the Release, the written revocation notice should be sent by email (with delivery confirmation notification) to Annie Adams at Annie.Adams@nscorp.com, with a copy to Vanessa Allen Sutherland at Vanessa.Sutherland@nscorp.com.

7

B.If not revoked, this Release will become effective on the eighth day after I sign it (“Effective Date”). If I do not sign this Release within the 21-day period, or if I timely revoke this Release during the seven-day revocation period, this Release will not become effective and I will not be entitled to the Payment and Benefits provided for in Section 2.

Norfolk Southern Corporation

By: ____________________________

____________________________________  

(Executive Signature – DO NOT PRINT)  

________________________________

Date Signed

8

EX-10.2

Exhibit 10.2

AGREEMENT

This agreement, dated as of [DATE](Agreement) between Norfolk Southern Corporation (Corporation) and [NAME], Employee ID No. [##] memorializes your entitlement to certain rights and benefits that would mature upon, and only upon, your Termination (this and other terms not defined in the text are defined in Attachment A hereto) following a Change in Control and your commitment not to engage in Competing Employment for certain periods; (2) absent such Termination, is not intended to affect, and shall not be construed as affecting, the compensation and benefits you are entitled to receive, except as otherwise provided in Article III, subparagraph (iii)(d) of the Agreement; and (3) is not under any circumstances a contract or guarantee of employment with the Corporation. Moreover, upon the happening of such conditions, your rights under any and all employee retirement income or welfare benefit policies, plans, programs or arrangements of the Corporation in which you participate shall be governed by the terms thereof and, except as herein expressly provided, shall not be enlarged hereunder or otherwise affected hereby.

The Agreement's terms and protections reflect the Corporation's beliefs that, in the event of a potential Change in Control, (1) the best interests of its stockholders require management focus and continuity; and (2) such focus and continuity will be enhanced by providing economic protection to officers and other key employees whose employment is most likely to be affected adversely by such a change.

As consideration for the Corporation's offer of this Agreement, and by your acceptance of it, you hereby covenant and agree as follows:

(i)  in the event you (a) are Terminated following a Change in Control and (b) accept any benefits provided for in Article III of this Agreement, you will engage in no Competing Employment for the one-year period that begins on your Termination Date;

(ii) you waive, forgo and otherwise renounce, on your behalf and that of any individual or organization that does or may claim through you, any and all benefits (including without limitation any prior notice of agreement termination therein provided) to which you may or would be entitled under and by virtue of any other agreement, including amendments and supplements thereto, as in effect on the date hereof between you and the Corporation affording you benefits in the event of your Termination, with the result that all and any such agreements, from and after the date hereof, shall have no force and effect; and

(iii)if, prior to a Change in Control, a modification in the nature of your responsibilities with the Corporation (Reassignment) results in a change in the maximum percentage of your salary that may be earned as incentive compensation (Participation Level), upon the effective date of your Reassignment (Reassignment Date), you will become and be eligible to receive only those benefits following a Change in Control as are other individuals at the Participation Level applicable to your new position, the Corporation hereby undertakes to furnish you a new agreement or to furnish an amendment or supplement to this Agreement, to reflect your changed benefits, but its failure or omission to do so shall not affect the benefits to which, under this subparagraph (iii), you are entitled upon and after such Reassignment Date.

          - 2 -

I. Effective Date and Term

This Agreement is effective and its term (Term) begins on the date hereof; its Term ends on the earliest of:

1.(i)  the date, prior to a Change in Control, you cease to be an employee of the Corporation;

2.(ii) the date, prior to a Change in Control, you cease to be eligible to participate in the Corporation's Executive Management Incentive Plan or Management Incentive Plan, or any successor plan[s] or program[s]; and

(iii) the date, prior to a Change in Control, that is twenty-four (24) months after you or the Corporation gives notice to the other of the termination of this Agreement, provided, however, that if a Change in Control occurs during the Term hereof, this agreement shall terminate after a period of twenty-four (24) months, beginning on the first day of the month next following the month in which the Change in Control occurs (such period, plus the portion of the month following the Change in Control in which the Change in Control occurs, constituting "the Change in Control Period").

II. Binding on Successors

The Corporation shall require any successor (whether direct or in-direct, by purchase, merger, consolidation, reorganization, share exchange or otherwise) to all or substantially all of the business and/or assets of the Corporation (Successor; and such result, Succession) by agreement, in form and substance satisfactory to the Corporation's chief legal officer or his designee(s), serving immediately prior to the Change in Control, expressly to assume and agree to perform this Agreement in the same manner and to the same extent the Corporation would have been required to perform it had no such Succession occurred. This Agreement shall be binding upon and inure to the benefit of the Corporation and any Successor (and, from and after any such Succession, that Successor shall be deemed the

"Corporation" for purposes of this Agreement), but otherwise the Corporation shall not assign or transfer any of its rights, or delegate any of its duties or obligations, hereunder.

III. Protection Afforded by the Agreement During the Change in Control Period

Except as limited by subparagraph (ii) concerning retirement, in the event of your Termination during the Change in Control Period, the Corporation shall pay you within ten (10) business days after your Termination Date the Severance Pay indicated in subparagraph (i) herein:

(i) Severance Pay. In lieu of, and in full satisfaction of any and all claims you have or may have thereafter to receive severance pay or benefits under the Norfolk Southern Corporation Severance Pay Plan (or any successor severance pay plan), or to earn any base salary or incentive awards that you had not earned as of your Termination Date, you shall receive a lump-sum payment (Severance Pay) equal to 2.99 times the sum of:

          - 3 -

(a) an amount equal to your Base Pay (determined in accordance with Item (B)(ii) in Attachment A);and

(b)  an amount equal to your Incentive Pay (determined in accordance with Item (H) in Attachment A).

(ii) Special Proviso for Those Eligible to Retire. If on your Termination Date you are eligible to retire under the provisions of any of the Corporation's retirement plans (excluding any special, temporary early retirement amendment[s]), as in effect either on the day immediately preceding the Change in Control or on your Termination Date, you may elect to retire on your Termination Date by giving the Corporation written notice as provided in this subparagraph (ii). Not later than two (2) business days following, but not including, the date on which Notice of Termination is given (whether by you or by the Corporation), the Corporation shall advise you in writing of your right herein provided to elect to retire. If you wish to exercise that right, you must so advise the Corporation prior to your Termination Date on an election form it provides and in the manner prescribed under Article IX.

        If and only if you make this election, your retirement will be deemed to have occurred simultaneously with your Termination Date (provided, however, that the "effective date" of such retirement for purposes of such retirement plans shall be as provided under such plans), and, instead of your having the rights provided in this Article III, your rights shall be governed by the retiree (or any specific change in control) provisions of the respective, applicable plans (as to each, on the terms most favorable to you under such plan [excluding any special, temporary early retirement amendment(s)] as in effect either immediately preceding the Change in Control or on your Termination Date), provided, however, that if you make the election herein afforded, you shall still receive the Severance Payments called for in subparagraph (i), and (2) any deferred compensation that you are eligible to receive under this subparagraph (ii) shall be paid in accordance with clause (b) or clause (c) of subparagraph (iii), as applicable, as if your retirement had been a Termination.

(iii) Special Provisions for Deferred Compensation. To the extent that any amount payable under this Article III constitutes “deferred compensation” within the meaning of Section 409A of the Internal Revenue Code, the amount shall be subject to the rules set forth below in this subparagraph (iii).

(a) No Revocation of Deferral Election. If you have elected to defer all or any portion of your base pay or incentive pay under the terms of the Executives' Deferred Compensation Plan (or any successor plan[s] or program[s]), and your deferral election has become irrevocable on or before your Termination Date, a corresponding portion of the Base Pay or Incentive Pay provided under subparagraph (i)(a) or (i)(b), above, shall not be paid in a lump sum within 10 days after your Termination Date, but instead shall be deferred and paid out solely under the terms of the Executives' Deferred Compensation Plan (or any successor plan[s] or program[s]), as modified (if applicable) by this subparagraph (iii). The special provision in this clause (a) is intended, and shall be applied, solely to

          - 4 -

prevent your deferral election or an automatic deferral provision from being revocable or from providing an accelerated payment to the extent such revocation or accelerated payment would violate Section 409A of the Internal Revenue Code.

(b) Payment Following A Section 409A Change in Control. If the Change in Control is a Section 409A Change in Control, as defined in Item (J) in Attachment A, and your Termination Date occurs within 24 months after the Section 409A Change in Control, your entire benefit shall be paid as provided in this Agreement, including clause (a) and clause (e) of this subparagraph (iii).

(c) Payment Following Any Other Change in Control. If the Change in Control is not a Section 409A Change in Control, or if your Termination Date occurs within the Change in Control Period but more than 24 months after the Change in Control, your deferred compensation shall be paid as follows:

(1) Your Severance Pay shall be paid as provided in this Agreement, including clause (a) and clause (e) of this subparagraph (iii).

(2) Your deferred compensation under the Executives’ Deferred Compensation Plan or any successor plan[s] or program[s] shall be paid at the time and in the form provided under the applicable terms of the plan in which you earned the benefit, without any acceleration or other alteration in the time and form of payment as a result of the Change in Control.

(d)Voluntary Termination Following A Section 409A Change in Control. If your employment terminates voluntarily (without good reason) within 24 months following a Section 409A Change in Control, so that your termination is a “separation from service” within the meaning of Section 409A of the Internal Revenue Code but is not a “Termination” within the meaning of Item (L) in Attachment A, then your deferred compensation shall be paid at the time and in the form provided under the applicable terms of the plan in which you earned the benefit.

(e)Six-Month Delay for Specified Employees. If, on your Termination Date, you are a “Specified Employee” within the meaning of Item (K) in Attachment A, any portion of your deferred compensation shall be paid no earlier than six months after your Termination Date. During any period in which a payment to which you are otherwise entitled under this Agreement is delayed solely as a result of this clause (e), the payment shall be credited with interest during the period from your Termination Date until the benefit is distributed at 120% of the short term Applicable Federal Rate determined under Section 1274(d) of the Internal Revenue Code that is in effect on your Termination Date.

There shall be no right of setoff or counterclaim in respect of any claim, debt or obligation against any payment to, or benefit for, you provided for in this Agreement.

          - 5 -

Without limiting your rights to arbitration, at law or in equity, if the Corporation fails on a timely basis to make any payment required to be made pursuant to provisions under this Article III, the Corporation shall pay interest on the amount thereof at an annualized rate of interest equal to three percent (3%) above the then-applicable Prime Rate ("Prime Rate" means the rate of interest publicly announced by JP Morgan Chase Bank in New York City, or its successor, from time to time as its prime rate), unless the payment is subject to a bona fide dispute between the parties that is being pursued in good faith and that has not been finally resolved.

IV. No Mitigation Obligation

You and the Corporation agree that payments made by the Corporation pursuant to this Agreement will be liquidated damages (and in lieu of any claims for any breach whatsoever of this Agreement by the Corporation) and that you will not be required to mitigate the amount of any such payment by seeking other employment or otherwise, nor shall any profits, income, earnings or other benefits from any source whatsoever, other than from Competing Employment, create any mitigation, offset reduction or other obligation on your part hereunder or otherwise.

V. Arbitration

Any controversy or claim between you and the Corporation arising out of or relating to the existence, enforceability, terms or application of this Agreement or any breach or alleged breach thereof, shall be settled by three (3) arbitrators, one of whom shall be appointed by the Corporation, one by you and the third of whom shall be appointed by the first two arbitrators. If the first two arbitrators cannot agree on the third arbitrator required to be appointed hereunder, then such arbitrator shall be appointed by the Chief Judge of the United States District Court for the district having jurisdiction of the city or other municipality in which the arbitration is to be held. The arbitration shall be conducted in accordance with the rules of the American Arbitration Association, except with respect to the selection of arbitrators, which shall be as hereinbefore provided. Judgment upon the award rendered by the arbitrators may be entered in any court having jurisdiction thereof. The arbitrators shall have no authority to award punitive, incidental or consequential damages, and they shall apply the substantive law of the Commonwealth of Virginia in reaching a decision.

If you determine in good faith to retain legal counsel and/or to incur other reasonable costs or expenses in connection with any such arbitration or to enforce any or all of your rights under this Agreement or under any arbitration award, the Corporation shall pay all such attorneys' fees, costs and expenses you incur during your lifetime or in the five-year period following your death in connection with non-frivolous applications to interpret or enforce your rights, including enforcement of any arbitration award in court, regardless of the final outcome. Taxable reimbursements shall be provided under this Article V subject to the following requirements: (A) all reimbursements shall be provided pursuant to a written policy that provides an objectively determinable nondiscretionary description of the reimbursements provided; (B) all reimbursements shall be paid no later than the end of the calendar year following the year in which the expense was incurred; (C) no reimbursement shall be subject to liquidation or exchange for another benefit; and (D) the amount of reimbursable expense incurred in one year shall not affect the amount of reimbursement available in another year. In addition, during the pendency of such arbitration, the Corporation will continue to pay you, with the customary frequency, the greater of your Base Pay as in effect immediately prior to the Change in Control or immediately prior to your Termination until the controversy or claim finally is resolved in accordance herewith.

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These payments hereunder shall be in addition to, and not in derogation or mitigation of any other payment or benefit due you under this Agreement. If you are a Specified Employee on your Termination Date, the payments described in this paragraph shall be subject to the six-month delay as provided in the following paragraph.

If you are a Specified Employee on your Termination Date, the only taxable payments or reimbursements provided under this Article V during the first six months following your Termination Date shall be reimbursements that you could otherwise deduct as business expenses under Sections 162 or 167 of the Code (disregarding limitations based on adjusted gross income). After the end of the sixth month following your Termination Date, taxable reimbursements and Base Pay shall be provided as described in the preceding paragraph of this Article V. Any taxable reimbursements and Base Pay that otherwise would have been paid during the first six months following your Termination Date if you had not been a Specified Employee shall be paid or reimbursed in a lump sum, on the first regular payroll date after the end of the sixth month following your Termination Date, with interest payable on such amount at 120% of the short term Applicable Federal Rate determined under Section 1274(d) of the Internal Revenue Code that is in effect on your Termination Date.

Notwithstanding any other provision hereof, the parties' respective rights and obligations under this Article V will survive a termination or expiration of this Agreement or the termination of your employment for any reason whatsoever.

VI. Employment Rights

Nothing expressed or implied in this Agreement shall create any right or duty on your part or that of the Corporation to have you remain in the employment of the Corporation prior to or following any Change in Control.

VII. Withholding of Taxes and Liability for Taxes

The Corporation may withhold from any amounts payable under this Agreement all federal, state, city, local or other taxes as shall be required pursuant to any law or governmental regulation or ruling.

VIII. Personal Nature of Agreement

This Agreement is personal in nature, and neither you nor the Corporation (except as provided under the caption "Binding on Successors"), without the prior written consent of the other, shall assign or transfer any of its rights, or delegate any of its duties or obligations, except as expressly provided under this caption. Without limiting the generality and effect of the foregoing, your right to receive payments hereunder shall not be assignable or transferable, whether by pledge, creation of a security interest or otherwise, other than by a transfer by will or by the laws of descent and distribution; in no event shall the Corporation have any obligation or liability to recognize or honor any attempted assignment or transfer that is contrary hereto.

IX. Notice

For all purposes of this Agreement, except as otherwise expressly provided in subparagraph (ii) of Article III, all communications, including without limitation, notices, consents, requests and approvals, provided for herein shall be in writing and shall be deemed to have been duly given when (1) actually

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delivered or (2) if mailed, five (5) business days after having been mailed by United States registered or certified mail, return receipt requested, postage prepaid,

(i) if to the Corporation, to the attention of its Corporate Secretary at its principal executive office at the time, and

(ii) if to you, at the address at the time on file with the Corporation as your principal residence address, or

(iii)in either case, to such other address as either the Corporation or you shall have furnished the other in writing and in accordance herewith, provided, however, that notices of change of address hereunder shall be effective only upon actual receipt.

X. Governing Law

The validity, interpretation, construction and performance of this Agreement shall be governed by the laws of the Commonwealth of Virginia, without giving effect to the Commonwealth's principles of conflicts of law, save those permitting the parties to an agreement to stipulate the substantive law applicable to the agreement and the procedural law applicable to suits, actions or proceeding relating to it.

XI. Validity/Severability

If any provision of this Agreement or the application of any provision hereof to any person (including a Person) or circumstance is held invalid, illegal or unenforceable, the remainder of this Agreement and the application of such provision to any other person (including a Person) shall not be affected, and the provision(s) so held to be invalid, illegal or unenforceable shall be reformed or excised in good faith by the Corporation, without the necessity of your agreeing thereto, to the extent (and only to the extent) necessary to make it or them valid, legal or enforceable.

XII. Miscellaneous

No provision of this Agreement may be amended, modified, waived or discharged unless such amendment, modification, waiver or discharge is agreed to in a writing signed by you and the Corporation. No waiver by either party hereto at any time of any breach or of compliance with any condition or provision of this Agreement to be performed by such other party shall be deemed a waiver of similar or dissimilar provisions or conditions at the same or any prior or subsequent time. No agreements or representations, oral or otherwise, express or implied, with respect to the subject matter hereof have been made by either party which are not set forth expressly in this Agreement.

XIII. Counterparts

This Agreement may be executed in any number of counterparts, each of which shall be deemed an original, and all of which together shall constitute but one and the same instrument.

IN WITNESS WHEREOF, the Board of Directors of the Corporation has directed that this Agreement be executed and delivered on its behalf by one or more officers of the Corporation thereunto duly

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authorized, and you have indicated your acceptance of and intent to be bound by this Agreement in the space provided below.

NORFOLK SOUTHERN CORPORATION

By:   __________________________________

             Name:

    Title: 

Accepted:

        By: ____________________________________

        Being the same individual named

        in the preamble hereto and referred

        to as "You" in the text.

Date:____________________________________

Attachment A

CERTAIN DEFINITIONS

For purposes of this Agreement:

(A) Actual Incentive Pay Percentage means, in any given year, the percentage actually earned, as determined pursuant to the authority of the Board of Directors, of the maximum potential bonus amount potentially payable to participants in the Corporation's Executive Management Incentive Plan and its Management Incentive Plan, or any successor plan[s] or program[s] to either or both (respectively, EMIP and MIP).

(B) Base Pay means

(i) in determining whether a Termination has occurred, the gross amount of your annual salary in effect on the date of a Change in Control (the gross amount you actually were paid in the pay period coinciding with or immediately preceding the date of the Change in Control, multiplied by the number of pay periods in the year or otherwise determined and expressed as an annual amount).

(ii) in calculating the amount of Severance Pay, the larger of (a) or (b), in either case as limited by (c):

(a)  the amount calculated under Item (B)(i);or

(b) the amount calculated as provided in Item (B)(i), but substituting "Termination Date" for "date of a Change in Control" wherever the latter term appears; and

         A-9

(c) further provided that, Base Pay used in calculating the amount Severance Pay may not exceed 2.99 times the sum of your annual salary paid during the twelve-month period immediately preceding your Termination Date.

(C) Beneficial Owner means any Person who, under Rule 13d-3 (or successor rules or regulations thereto) promulgated under the Securities Exchange Act of 1934, would be deemed beneficially to own Voting Stock.

(D)Cause refers to your having engaged in any of the following if the result of the same is materially harmful to the Corporation:

(i)  an intentional act of fraud, embezzlement or theft in connection with your duties or in the course of your employment with the Corporation;

(ii)  intentional wrongful damage to property of the Corporation;

(iii) intentional wrongful disclosure of secret processes or of confidential information of the Corporation; or

(iv)  intentional violation of the Corporation's Code of Conduct/Ethics (or any successor[s]) as in effect immediately prior to a Change in Control.

For these purposes, an act or failure to act on your part shall be deemed "intentional" only if you acted or omitted to act otherwise than in accordance with your good faith business judgment of the best interests of the Corporation; in determining whether this standard has been satisfied, you shall be afforded all the presumptions and be entitled to all the protections available to directors under Section 13.1-690 of the Virginia Stock Corporation Act.

(E) A Change in Control occurs upon any of the following circumstances or events:

(i)  The Corporation consummates a merger or other similar control-type transaction or transactions (however denominated or effectuated) with another corporation or other Person (Combination), and immediately thereafter less than eighty percent (80%) of the combined voting power of the then-outstanding securities of such corporation or Person is held in the aggregate by the holders of securities entitled, immediately prior to such Combination, to vote generally in the election of directors of the Corporation (Voting Stock);

(ii)  The Corporation consummates any stockholder-approved consolidation or dissolution (however denominated or effectuated) pursuant to a recommendation of the Board;

(iii) At any time, Continuing Directors (as herein defined) shall not constitute a majority of the members of the Board ("Continuing Director" means (i) each individual who has been a director of the Corporation for at least twenty-four (24) consecutive months before such time and (ii) each individual who was nominated or elected to be a director of the Corporation by at least two thirds of the Continuing Directors at the time of such nomination or election);

(iv) The Corporation sells all or substantially all of its assets to any other corporation or other Person, and less than eighty percent (80%) of the combined voting power of the then-outstanding securities of such corporation or Person immediately after such transaction is held in the aggregate by the holders of Voting Stock immediately prior to such sale;

(v) A report is filed on Schedule 13D or Schedule 14D-1 (or any successor schedule, form or report), pursuant to the Securities Exchange Act of 1934, as amended (Exchange Act), disclosing that any Person has become the Beneficial Owner of twenty (20) or more percent of the voting power of Voting Stock; or

(vi) The Board determines by a majority vote that, because of the occurrence, or the threat or imminence of the occurrence, of another event or situation with import or effects similar to the foregoing, those who have accepted an agreement of this type are entitled to its protections.

         A-10

Notwithstanding the provisions of the foregoing subparagraph (v), unless otherwise determined in a specific case by majority vote of the Board, a Change in Control for purposes of this Agreement shall not be deemed to have occurred solely because (a) the Corporation, (b) an entity of which the Corporation is the direct or indirect Beneficial Owner of 50 or more percent of the voting securities or (c) any Corporation-sponsored employee stock ownership plan or any other employee benefit plan of the Corporation either files or becomes obligated to file a report or a proxy statement under or in response to Schedule 13D, Schedule 14D-1, Form 8-K, or Schedule 14A (or any successor schedule, form or report or item therein) under the Exchange Act, disclosing beneficial ownership by it of shares of Voting Stock, whether in excess of 20 percent or otherwise, or because the Corporation reports that a change in control of the Corporation has or may have occurred or will or may occur in the future by reason of such beneficial ownership.

(F)  Competing Employment means the provision of services of any type, kind or nature and in any capacity (whether as a director, partner, officer, employee, independent contractor, consultant or otherwise), whether or not for compensation or other remuneration of any type, kind or nature (current or deferred and whether or not paid or payable to you, or at your direction), to any organization or person

(i)  that is, or

(ii)  that controls, or

(iii) that is controlled by, or

(iv)one of whose customers or clients which accounted for 5% or more of the organization's or person's gross revenues in the immediately preceding fiscal year or is likely to account for 5% or more of such gross revenues in the current or next succeeding fiscal year is:

(a)  a Class I railroad operating in the United States, Canada or Mexico; or

(b)  a provider or arranger (as to either - one incorporated under the laws of the United States or of any state or political subdivision of either or both) of intermodal services of any kind or nature, any portion of which services is provided or arranged in the United States,

provided, however, that the provision of services otherwise prohibited by the foregoing may be permitted if, in the sole judgment of the Corporation's chief legal officer at the time, in providing such services, you do not draw or rely extensively on, or use for a purpose contrary to the Corporation's business interests, the experience and expertise you acquired during and as a result of your employment with, or that you used or employed for the benefit of, the Corporation.

(G) Incentive Opportunity means the percentage of your salary or other fixed compensation that, in accordance with all applicable provisions of the EMIP and MIP –including, without limitation, earnings and return targets - in effect immediately prior to the Change in Control, could be earned as incentive pay.

(H) Incentive Pay means the product of (i) and (ii), as limited by (iii), where:

(i) is 100%of the larger of your Incentive Opportunity

(a) on your Termination Date; or

(b) immediately preceding the date of the Change in Control; and

(ii) is your Base Pay; and

         A-11

(iii) Incentive Pay used in calculating the amount of your Severance Pay may not exceed 2.99 times the target incentive payment for which you are eligible for the entire current year under the terms of EMIP or MIP (or successor plan[s] or program[s]).

(I) Person means any"person" as that term is used in the Exchange Act or any rules and regulations promulgated thereunder, including any "affiliate" or "associate" of any person, as those terms are used in the Exchange Act or any rules and regulations promulgated thereunder.

(J) Section 409A Change in Control means any event that qualifies as a "Change in Control" (as defined in Item (H), above), and that also constitutes a "change in ownership," "change in effective control," or "change in the ownership of a substantial portion of the Corporation’s assets" with respect to you, as defined in regulations or other guidance under Section 409A of the Internal Revenue Code.

(K) Specified Employee means an officer of the Corporation or of any company controlled by or under common control with the Corporation within the meaning of Section 414(b) or (c) of the Internal Revenue Code (including the Corporation, an “NSC Company”) with annual compensation greater than $130,000 indexed), a five percent (5%) owner of an NSC Company, or a one percent (1%) owner of an NSC Company with annual compensation greater than $150,000 (not indexed), determined in each case in accordance with Section 409A of the Internal Revenue Code. If all NSC Companies have (in the aggregate) more than 50 officers whose annual compensation exceeds $130,000 (indexed), only the 50 officers with the greatest annual compensation shall be considered “Specified Employees.” For purposes of this definition, “annual compensation” shall be determined on the basis of Internal Revenue Service Form W-2, Wage and Tax Statement, excluding foreign compensation.

        If an individual meets the definition of “Specified Employee” at any time during a calendar year, the individual shall be a “Specified Employee” during the 12-month period beginning on the following April 1.

(L) Termination means your “separation from service” within the meaning of Section 409A of the Internal Revenue Code and the regulations thereunder in the circumstances described in (i) or (ii) below.

(i) If a condition listed in any one or more of (a) through (h), below, occurs without your prior written consent during the Change in Control Period and results in a material negative change in your relationship with the Corporation, your “separation from service” within the meaning of Section 409A of the Internal Revenue Code, excluding a separation from service on account of disability or death, within two years after the initial existence of the condition:

(a)  You are not elected or reelected to the office of the Corporation you held immediately prior to the Change in Control, or - if you were serving as a director of the Corporation immediately prior to the Change in Control - you are removed as a director;

(b)  Your Base Pay is, or when annualized will be, materially less than the amount determined in accordance with (B)(i) herein;

(c)  Your Incentive Opportunity is materially less than that provided for under Item (G) herein;

(d) The Corporation, except to meet the requirements of applicable federal or state law, (i) terminates, or (ii) materially reduces the value or scope of your rights to any benefits to which you are entitled, and which (before the reduction or termination) have substantial value;

(e)  You determine in good faith that following a Change in Control, you have been rendered substantially unable to carry out or have suffered a substantial reduction in any of the substantial authorities, powers, functions, responsibilities or duties attached to the position you held immediately prior to the Change in Control;

(f) The liquidation, dissolution, merger, consolidation or reorganization of the Corporation or the transfer of all or a significant portion of its business and/or assets, unless the successor or

         A-12

successors (by liquidation, merger, consolidation, reorganization or otherwise) to which all or a significant portion of its business and/or assets have been transferred (directly or by operation of law) shall have assumed all the duties and obligations of the Corporation under this Agreement either by operation of law or pursuant to the provisions under the Agreement caption "Binding on Successors";

(g)  The Corporation requires you to relocate your principal location of work outside a circle having (i) as its center your principal location of work immediately prior to the Change in Control and (ii) a radius of fifty (50) miles, or requires you to travel away from your office in the course of discharging your responsibilities or duties hereunder significantly more (in terms either of consecutive days or of aggregate days in any calendar year) than was required of you immediately prior to the Change in Control; or

(h)  Without limiting the generality or the effect of the foregoing, any material breach of this Agreement by the Corporation or any successor thereto.

If a condition listed in (a) through (h) occurs, you must provide the Corporation with written notice of the condition within 90 calendar days after the initial existence of the condition, and you must allow the Corporation at least 30 calendar days in which to remedy the condition. If the Corporation remedies the condition within the 30-day period, the condition shall not provide a reason for your Termination.

        OR

(ii)  The termination of your employment by the Corporation, during the twenty-four months next succeeding a Change in Control, for any reason except:

(a)  Your death;

(b)  Your Total Disability, as defined in the Long Term Disability Plan of Norfolk Southern Corporation and Participating Subsidiary Companies (or any plan that is successor or in addition thereto), as then in effect, and you begin to receive disability benefits pursuant to that plan;

(c)  Your retirement pursuant to any Board-approved policy or plan, on the terms in effect immediately prior to the Change in Control, providing for mandatory retirement of certain personnel; or

(d)  Cause.

(M) Termination Date means the date on which your Termination becomes effective, as specified in the Notice of Termination (hereinafter defined) or as otherwise occurring.

For these purposes, any purported termination of your employment by the Corporation or by you shall be communicated by written Notice of Termination to the other party hereto, delivered in accordance with the caption concerning "Notice" in the Agreement. The Notice of Termination shall

(i) indicate the specific Termination provision relied upon;

(ii) set forth in reasonable detail the facts and circumstances claimed to provide a basis for Termination under the provision(s) so indicated; and

(iii) shall specify the Termination Date, which:

         A-13

(a)  if the Termination is for Cause, shall be a date not less than thirty (30) days from the date the Notice of Termination is given; and

(b)  if the Termination is not for Cause, shall be a date not less than fifteen (15) nor more than sixty (60) days after such Notice of Termination is given.

EX-31.A

Exhibit 31-A

CERTIFICATIONS

I, James A. Squires, certify that:

1.I have reviewed this Quarterly Report on Form 10-Q of Norfolk Southern Corporation;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a.Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b.Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c.Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d.Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a.All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b.Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Dated: July 29, 2020

/s/ James A. Squires

James A. Squires

Chairman, President and Chief Executive Officer

EX-31.B

Exhibit 31-B

CERTIFICATIONS

I, Mark R. George, certify that:

1.I have reviewed this Quarterly Report on Form 10-Q of Norfolk Southern Corporation;

2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;

3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;

4.The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:

a.Designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;

b.Designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;

c.Evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and

d.Disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting; and

5.The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):

a.All significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and

b.Any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.

Dated: July 29, 2020

/s/ Mark R. George

Mark R. George

Executive Vice President Finance and Chief Financial Officer

EX-32

Exhibit 32

CERTIFICATIONS OF CEO AND CFO REQUIRED BY RULE 13a-14(b) OR RULE

15d-14(b) AND SECTION 1350 OF CHAPTER 63 OF TITLE 18 OF THE U.S. CODE

I certify, to the best of my knowledge, that the Quarterly Report on Form 10-Q for the period ended

June 30, 2020, of Norfolk Southern Corporation fully complies with the requirements of Section 13(a) or

15(d) of the Securities Exchange Act of 1934 and that the information contained in the Form 10-Q fairly presents, in all material respects, the financial condition and results of operations of Norfolk Southern Corporation.

Signed:	/s/ James A. Squires
	James A. Squires
	Chairman, President and Chief Executive Officer
	Norfolk Southern Corporation

Dated: July 29, 2020

I certify, to the best of my knowledge, that the Quarterly Report on Form 10-Q for the period ended

June 30, 2020, of Norfolk Southern Corporation fully complies with the requirements of Section 13(a) or

15(d) of the Securities Exchange Act of 1934 and that the information contained in the Form 10-Q fairly presents, in all material respects, the financial condition and results of operations of Norfolk Southern Corporation.

Signed:	/s/ Mark R. George
	Mark R. George
	Executive Vice President Finance and Chief Financial Officer
	Norfolk Southern Corporation

Dated: July 29, 2020

XML

Cover Page	6 Months Ended
	Jun. 30, 2020 shares
Cover [Abstract]
Document Type	10-Q
Document Quarterly Report	true
Document Period End Date	Jun. 30, 2020
Document Transition Report	false
Entity File Number	1-8339
Entity Registrant Name	NORFOLK SOUTHERN CORPORATION
Entity Incorporation, State or Country Code	VA
Entity Tax Identification Number	52-1188014
Entity Address, Address Line One	Three Commercial Place
Entity Address, City or Town	Norfolk,
Entity Address, State or Province	VA
Entity Address, Postal Zip Code	23510-2191
City Area Code	(757)
Local Phone Number	629-2680
Title of 12(b) Security	Norfolk Southern Corporation Common Stock (Par Value $1.00)
Trading Symbol	NSC
Security Exchange Name	NYSE
Entity Current Reporting Status	Yes
Entity Interactive Data Current	Yes
Entity Filer Category	Large Accelerated Filer
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Common Stock, Shares Outstanding	255,109,247
Entity Central Index Key	0000702165
Current Fiscal Year End Date	--12-31
Document Fiscal Year Focus	2020
Document Fiscal Period Focus	Q2
Amendment Flag	false

XML

Consolidated Statements of Income - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019
Income Statement [Abstract]
Railway operating revenues	$ 2,085	$ 2,925	$ 4,710	$ 5,765
Railway operating expenses:
Compensation and benefits	586	712	1,208	1,439
Purchased services and rents	372	418	775	842
Fuel	84	254	273	504
Depreciation	282	284	574	567
Materials and other	151	192	317	382
Loss on asset disposal	0	0	(385)	0
Total railway operating expenses	1,475	1,860	3,532	3,734
Income from railway operations	610	1,065	1,178	2,031
Other income – net	49	22	71	66
Interest expense on debt	156	153	310	302
Income before income taxes	503	934	939	1,795
Income taxes	111	212	166	396
Net income	$ 392	$ 722	$ 773	$ 1,399
Earnings per share:
Basic (in dollars per share)	$ 1.53	$ 2.72	$ 3.01	$ 5.25
Diluted (in dollars per share)	$ 1.53	$ 2.70	$ 3.00	$ 5.21

XML

Consolidated Statements of Comprehensive Income - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019
Net income	$ 392	$ 722	$ 773	$ 1,399
Other comprehensive income, before tax:
Pension and other postretirement benefits	6	5	13	10
Other comprehensive income, before tax	7	5	19	9
Income tax expense related to items of other comprehensive income	(1)	(2)	(3)	(3)
Other comprehensive income, net of tax	6	3	16	6
Total comprehensive income	398	725	789	1,405
Accumulated Other Comprehensive Loss Equity Investees
Other comprehensive income, before tax:
Other comprehensive income, before tax	$ 1	$ 0	$ 6	$ (1)

XML

Consolidated Balance Sheets - USD ($) $ in Millions	Jun. 30, 2020	Dec. 31, 2019
Current assets:
Cash and cash equivalents	$ 1,143	$ 580
Accounts receivable – net	822	920
Materials and supplies	257	244
Other current assets	128	337
Total current assets	2,350	2,081
Investments	3,590	3,428
Properties less accumulated depreciation of $11,823 and $11,982, respectively	31,217	31,614
Other assets	805	800
Total assets	37,962	37,923
Current liabilities:
Accounts payable	1,268	1,428
Income and other taxes	239	229
Other current liabilities	343	327
Current maturities of long-term debt	85	316
Total current liabilities	1,935	2,300
Long-term debt	12,612	11,880
Other liabilities	1,680	1,744
Deferred income taxes	6,874	6,815
Total liabilities	23,101	22,739
Stockholders’ equity:
Common stock $1.00 per share par value, 1,350,000,000 shares authorized; outstanding 256,179,130 and 257,904,956 shares, respectively, net of treasury shares	256	259
Additional paid-in capital	2,217	2,209
Accumulated other comprehensive loss	(475)	(491)
Retained income	12,863	13,207
Total stockholders’ equity	14,861	15,184
Total liabilities and stockholders’ equity	$ 37,962	$ 37,923

XML

Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Millions	Jun. 30, 2020	Dec. 31, 2019
Statement of Financial Position [Abstract]
Properties, accumulated depreciation	$ 11,823	$ 11,982
Common stock, par or stated value per share (in dollars per share)	$ 1.00	$ 1.00
Common stock, shares authorized (in shares)	1,350,000,000	1,350,000,000
Common stock, shares outstanding, net of treasury shares (in shares)	255,109,247	257,904,956

XML

Consolidated Statements of Cash Flows - USD ($) $ in Millions	6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019
Cash flows from operating activities:
Net income	$ 773	$ 1,399
Reconciliation of net income to net cash provided by operating activities:
Depreciation	574	567
Deferred income taxes	56	133
Gains and losses on properties	(11)	(7)
Loss on asset disposal	385	0
Changes in assets and liabilities affecting operations:
Accounts receivable	98	(30)
Materials and supplies	(13)	(49)
Other current assets	30	55
Current liabilities other than debt	0	(30)
Other – net	(134)	(86)
Net cash provided by operating activities	1,758	1,952
Cash flows from investing activities:
Property additions	(735)	(979)
Property sales and other transactions	258	214
Investment purchases	(5)	(12)
Investment sales and other transactions	(58)	(75)
Net cash used in investing activities	(540)	(852)
Cash flows from financing activities:
Dividends	(482)	(458)
Common stock transactions	26	18
Purchase and retirement of common stock	(669)	(1,050)
Proceeds from borrowings	784	1,054
Debt repayments	(314)	(750)
Net cash used in financing activities	(655)	(1,186)
Net increase (decrease) in cash, cash equivalents, and restricted cash	563	(86)
Cash, cash equivalents, and restricted cash:
At beginning of year	580	446
At end of period	1,143	360
Supplemental disclosures of cash flow information:
Interest (net of amounts capitalized)	287	271
Income taxes (net of refunds)	$ 1	$ 215

XML

Consolidated Statements of Changes in Stockholders' Equity - USD ($) $ in Millions	Total	Common Stock	Additional Paid-in Capital	Accum. Other Comprehensive Loss	Retained Income
Balance at Beginning of Year at Dec. 31, 2018	$ 15,362	$ 269	$ 2,216	$ (563)	$ 13,440
Comprehensive income:
Net income	677				677
Other comprehensive income	3			3
Total comprehensive income	680
Dividends on common stock,	(230)				(230)
Share repurchases	(500)	(3)	(22)		(475)
Stock-based compensation	19	1	19		(1)
Balance at End of Period at Mar. 31, 2019	$ 15,331	267	2,213	(560)	13,411
Comprehensive income:
Common stock, dividends, per share, declared (in dollars per share)	$ 0.86
Balance at Beginning of Year at Dec. 31, 2018	$ 15,362	269	2,216	(563)	13,440
Comprehensive income:
Net income	1,399
Other comprehensive income	6
Total comprehensive income	1,405
Share repurchases	(1,100)
Balance at End of Period at Jun. 30, 2019	15,311	265	2,226	(557)	13,377
Balance at Beginning of Year at Mar. 31, 2019	15,331	267	2,213	(560)	13,411
Comprehensive income:
Net income	722				722
Other comprehensive income	3			3
Total comprehensive income	725
Dividends on common stock,	(228)				(228)
Share repurchases	(550)	(2)	(22)		(526)
Stock-based compensation	33		35		(2)
Balance at End of Period at Jun. 30, 2019	$ 15,311	265	2,226	(557)	13,377
Comprehensive income:
Common stock, dividends, per share, declared (in dollars per share)	$ 0.86
Balance at Beginning of Year at Dec. 31, 2019	$ 15,184	259	2,209	(491)	13,207
Comprehensive income:
Net income	381				381
Other comprehensive income	10			10
Total comprehensive income	391
Dividends on common stock,	(242)				(242)
Share repurchases	(466)	(2)	(21)		(443)
Stock-based compensation	17	1	17		(1)
Balance at End of Period at Mar. 31, 2020	$ 14,884	258	2,205	(481)	12,902
Comprehensive income:
Common stock, dividends, per share, declared (in dollars per share)	$ 0.94
Balance at Beginning of Year at Dec. 31, 2019	$ 15,184	259	2,209	(491)	13,207
Comprehensive income:
Net income	773
Other comprehensive income	16
Total comprehensive income	789
Share repurchases	(669)
Balance at End of Period at Jun. 30, 2020	14,861	256	2,217	(475)	12,863
Balance at Beginning of Year at Mar. 31, 2020	14,884	258	2,205	(481)	12,902
Comprehensive income:
Net income	392				392
Other comprehensive income	6			6
Total comprehensive income	398
Dividends on common stock,	(240)				(240)
Share repurchases	(203)	(2)	(10)		(191)
Stock-based compensation	22		22
Balance at End of Period at Jun. 30, 2020	$ 14,861	$ 256	$ 2,217	$ (475)	$ 12,863
Comprehensive income:
Common stock, dividends, per share, declared (in dollars per share)	$ 0.94

XML

Consolidated Statements of Changes in Stockholders' Equity (Parenthetical) - $ / shares	3 Months Ended
	Jun. 30, 2020	Mar. 31, 2020	Jun. 30, 2019	Mar. 31, 2019
Statement of Stockholders' Equity [Abstract]
Common stock, dividends, per share, declared (in dollars per share)	$ 0.94	$ 0.94	$ 0.86	$ 0.86

XML

Railway Operating Revenues

6 Months Ended

Jun. 30, 2020

Revenue from Contract with Customer [Abstract]

Railway Operating Revenues

Railway Operating Revenues

The following table disaggregates our revenues by major commodity group:

	Second Quarter				First Six Months
	2020		2019		2020		2019
Merchandise:	($ in millions)
Agriculture, forest and consumer products	$	498	$	577	$	1,049	$	1,135
Chemicals	423		544		943		1,051
Metals and construction	293		384		660		754
Automotive	93		251		327		502
Merchandise	1,307		1,756		2,979		3,442
Intermodal	569		701		1,224		1,420
Coal	209		468		507		903
Total	$	2,085	$	2,925	$	4,710	$	5,765

At the beginning of 2020, we combined the agriculture products and forest and consumer commodity groups. In addition, we also made changes in the categorization of certain other commodity groups within Merchandise. Specifically, certain commodities were shifted between agriculture, forest, and consumer products; chemicals; and, metals and construction. These changes were made as a result of organizational initiatives to better align with how we manage these commodities. Prior period railway operating revenues have been reclassified to conform to the current presentation.

We recognize the amount of revenue we expect to be entitled to for the transfer of promised goods or services to customers. A performance obligation is created when a customer under a transportation contract or public tariff submits a bill of lading to NS for the transport of goods. These performance obligations are satisfied as the shipments move from origin to destination. As such, transportation revenue is recognized proportionally as a shipment moves, and related expenses are recognized as incurred. These performance obligations are generally short-term in nature with transit days averaging approximately one week or less for each commodity group. The customer has an unconditional obligation to pay for the service once the service has been completed. Estimated revenue associated with in-process shipments at period-end is recorded based on the estimated percentage of service completed to total transit days. We had no material remaining performance obligations as of June 30, 2020 or December 31, 2019.

Revenue related to interline transportation services that involve another railroad is reported on a net basis. Therefore, the portion of the amount that relates to another party is not reflected in revenue.

Under the typical payment terms of our freight contracts, payment for services is due within fifteen days of billing the customer, thus there are no significant financing components. “Accounts receivable – net” on the Consolidated Balance Sheets includes both customer and non-customer receivables as follows:

	June 30, 2020		December 31, 2019
	($ in millions)
Customer	$	592	$	682
Non-customer	230		238
Accounts receivable – net	$	822	$	920

Non-customer receivables include non-revenue-related amounts due from other railroads, governmental entities, and others. “Other assets” on the Consolidated Balance Sheets includes non-current customer receivables of $23 million at both June 30, 2020 and December 31, 2019. We do not have any material contract assets or liabilities at June 30, 2020 or December 31, 2019.

Certain ancillary services may be provided to customers under their transportation contracts such as switching, demurrage and other incidental service revenues. These are distinct performance obligations that are recognized at a point in time when the services are performed or as contractual obligations are met. This revenue is included within each of the commodity groups and represents 5% of total “Railway operating revenues” on the Consolidated Statements of Income for the second quarter and first six months of 2020 and 4% for the second quarter and first six months of 2019.

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Stock-Based Compensation

6 Months Ended

Jun. 30, 2020

Share-based Payment Arrangement [Abstract]

Stock-Based Compensation

Stock-Based Compensation

	Second Quarter				First Six Months
	2020		2019		2020		2019
	($ in millions)
Stock-based compensation expense	$	10	$	20	$	12	$	36
Total tax benefit	3		8		29		31

During 2020, a committee of nonemployee members of our Board of Directors (and the Chief Executive Officer when delegated authority by such committee) granted stock options, restricted stock units (RSUs) and performance share units (PSUs) pursuant to the Long-Term Incentive Plan (LTIP), as follows:

	Second Quarter			First Six Months
	Granted	Weighted-Average Grant-Date Fair Value		Granted	Weighted-Average Grant-Date Fair Value
Stock options	1,050	$	39.10	43,770	$	52.05
RSUs	3,380	173.56		167,540	210.02
PSUs	1,930	184.47		78,720	212.67

Stock Options

	Second Quarter				First Six Months
	2020		2019		2020		2019
	($ in millions)
Stock options exercised	162,400		215,546		685,638		621,917
Cash received upon exercise	$	12	$	16	$	55	$	44
Related tax benefit realized	3		6		16		15

Restricted Stock Units

RSUs granted primarily have a four-year ratable restriction period and will be settled through the issuance of shares of Norfolk Southern common stock (Common Stock). Certain RSU grants include cash dividend equivalent payments during the restriction period in an amount equal to the regular quarterly dividends paid on Common Stock. 

	Second Quarter				First Six Months
	2020		2019		2020		2019
	($ in millions)
RSUs vested	—		506		202,299		166,055
Common Stock issued net of tax withholding	—		363		143,712		119,244
Related tax benefit realized	$	—	$	—	$	4	$	2

Performance Share Units

PSUs provide for awards based on the achievement of certain predetermined corporate performance goals at the end of a three-year cycle and are settled through the issuance of shares of Common Stock. All PSUs will earn out based on the achievement of performance conditions and some will also earn out based on a market condition. The market condition fair value was measured on the date of grant using a Monte Carlo simulation model. No PSUs were earned or paid out during the second quarters of 2020 or 2019.

	First Six Months
	2020		2019
	($ in millions)
PSUs earned	235,935		331,099
Common Stock issued net of tax withholding	156,450		221,241
Related tax benefit realized	$	7	$	9

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Loss on Asset Disposal	6 Months Ended
	Jun. 30, 2020
Property, Plant and Equipment [Abstract]
Loss on Asset Disposal	Loss on Asset DisposalIn the first quarter of 2020, in connection with our initiatives to increase operational fluidity and asset utilization and improve labor and fuel efficiency, we committed to a plan to dispose of certain locomotives deemed excess and no longer needed for railroad operations. When depreciable operating road and equipment assets are sold or retired in the ordinary course of business, the cost of the assets, net of sale proceeds or salvage, is charged to accumulated depreciation, and no gain or loss is recognized in earnings. A retirement is considered abnormal if it does not occur in the ordinary course of business, if it relates to disposition of a large segment of an asset class and if the retirement varies significantly from the retirement profile identified through our depreciation studies, which inherently consider the impact of normal retirements on expected service lives and depreciation rates. We evaluated the planned locomotive retirements and concluded they were abnormal. Accordingly, a $385 million loss was recorded to adjust their carrying amount to their estimated fair value, which resulted in a $97 million tax benefit. During the first six months, we sold 446 of 703 locomotives under the plan. The carrying amount of the remaining assets held for sale of $29 million is classified as “Other current assets” in the Consolidated Balance Sheets at June 30, 2020.

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Earnings Per Share

6 Months Ended

Jun. 30, 2020

Earnings Per Share [Abstract]

Earnings Per Share

Earnings Per Share

The following table sets forth the calculation of basic and diluted earnings per share:

	Basic				Diluted
	Second Quarter
	2020		2019		2020		2019
	($ in millions, except per share amounts, shares in millions)
Net income	$	392	$	722	$	392	$	722
Dividend equivalent payments	—		(2)		—		—
Income available to common stockholders	$	392	$	720	$	392	$	722
Weighted-average shares outstanding	255.4		264.8		255.4		264.8
Dilutive effect of outstanding options
and share-settled awards					1.3		2.3
Adjusted weighted-average shares outstanding					256.7		267.1
Earnings per share	$	1.53	$	2.72	$	1.53	$	2.70
	Basic				Diluted
	First Six Months
	2020		2019		2020		2019
	($ in millions, except per share amounts, shares in millions)
Net income	$	773	$	1,399	$	773	$	1,399
Dividend equivalent payments	(1)		(3)		(1)		—
Income available to common stockholders	$	772	$	1,396	$	772	$	1,399
Weighted-average shares outstanding	256.3		265.9		256.3		265.9
Dilutive effect of outstanding options
and share-settled awards					1.4		2.4
Adjusted weighted-average shares outstanding					257.7		268.3
Earnings per share	$	3.01	$	5.25	$	3.00	$	5.21

During the second quarters and first six months of 2020 and 2019, dividend equivalent payments were made to certain holders of stock options and RSUs.  For purposes of computing basic earnings per share, dividend equivalent payments made to holders of stock options and RSUs were deducted from net income to determine income available to common stockholders. For purposes of computing diluted earnings per share, we evaluate on a grant-by-grant basis those stock options and RSUs receiving dividend equivalent payments under the two-class and treasury stock methods to determine which method is more dilutive for each grant. For those grants for which the two-class

method was more dilutive, net income was reduced by dividend equivalent payments to determine income available to common stockholders. There are no awards outstanding that were antidilutive for the second quarters and first six months ended June 30, 2020 and 2019.

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Accumulated Other Comprehensive Loss

6 Months Ended

Jun. 30, 2020

Equity [Abstract]

Accumulated Other Comprehensive Loss

Accumulated Other Comprehensive Loss

The changes in the cumulative balances of “Accumulated other comprehensive loss” reported in the Consolidated Balance Sheets consisted of the following:

	Balance at Beginning of Year		Net Income (Loss)		Reclassification Adjustments		Balance at End of Period
	($ in millions)
Six Months Ended June 30, 2020
Pensions and other postretirement liabilities	$	(421)	$	—	$	10	$	(411)
Other comprehensive income (loss)
of equity investees	(70)		6		—		(64)
Accumulated other comprehensive loss	$	(491)	$	6	$	10	$	(475)
Six Months Ended June 30, 2019
Pensions and other postretirement liabilities	$	(497)	$	—	$	7	$	(490)
Other comprehensive loss
of equity investees	(66)		(1)		—		(67)
Accumulated other comprehensive loss	$	(563)	$	(1)	$	7	$	(557)

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Stock Repurchase Program	6 Months Ended
	Jun. 30, 2020
Stock Repurchase Program [Abstract]
Stock Repurchase Program	Stock Repurchase Program We repurchased and retired 3.9 million and 5.7 million shares of Common Stock under our stock repurchase program during the first six months of 2020 and 2019, respectively, at a cost of $669 million and $1.1 billion, respectively.

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Investments

6 Months Ended

Jun. 30, 2020

Investments [Abstract]

Investments

Investments

Investment in Conrail

Through a limited liability company, we and CSX Corporation (CSX) jointly own Conrail Inc. (Conrail), whose primary subsidiary is Consolidated Rail Corporation (CRC). We have a 58% economic and 50% voting interest in the jointly owned entity, and CSX has the remainder of the economic and voting interests. Our investment in Conrail was $1.4 billion at both June 30, 2020 and December 31, 2019.

CRC owns and operates certain properties (the Shared Assets Areas) for the joint and exclusive benefit of Norfolk Southern Railway Company (NSR) and CSX Transportation, Inc. (CSXT). The costs of operating the Shared Assets Areas are borne by NSR and CSXT based on usage. In addition, NSR and CSXT pay CRC a fee for access to the Shared Assets Areas. “Purchased services and rents” and “Fuel” include amounts payable to CRC for the operation of the Shared Assets Areas totaling $30 million and $38 million for the second quarters of 2020 and 2019, respectively, and $65 million and $75 million for the first six months of 2020 and 2019, respectively. Our equity in the earnings of Conrail, net of amortization, included in “Purchased services and rents,” which offsets the costs of operating the Shared Assets Areas, was $13 million and $15 million for the second quarters of 2020 and 2019, respectively, and $22 million and $23 million for the first six months of 2020 and 2019, respectively.

“Other liabilities” includes $280 million at both June 30, 2020, and December 31, 2019, for long-term advances from Conrail, maturing 2044, that bear interest at an average rate of 2.9%.

Investment in TTX

NS and eight other North American railroads jointly own TTX Company (TTX).  NS has a 19.65% ownership interest in TTX, a railcar pooling company that provides its owner-railroads with standardized fleets of intermodal, automotive, and general use railcars at stated rates.

Amounts paid to TTX for use of equipment are included in “Purchased services and rents” and amounted to $58 million and $60 million of expense for the second quarters of 2020 and 2019, respectively, and $118 million and $122 million for the first six months of 2020 and 2019, respectively. Our equity in the earnings of TTX, which offset the costs and are also included in “Purchased services and rents,” totaled $10 million and $12 million for the second quarters of 2020 and 2019, respectively, and $14 million and $25 million for the first six months of 2020 and 2019, respectively.

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Debt

1 Months Ended

Mar. 31, 2019

Debt Disclosure [Abstract]

Debt

Debt

In May 2020, we issued $800 million of 3.05% senior notes due 2050, resulting in $790 million in net proceeds.

In May 2020, we also issued $800 million of 3.155% senior notes due 2055 in exchange for $554 million of previously issued notes ($450 million at 5.1% due 2118, $42 million at 6% due 2111, $29 million at 7.9% due 2097, $26 million at 6% due 2105, and $7 million at 7.05% due 2037). As part of the debt exchange, a $4 million loss on extinguishment was recognized in “Other income – net.”

In May 2020, we renewed and amended our accounts receivable securitization program with maximum borrowing capacity of $400 million and a term expiring in May 2021. We had no amounts outstanding at both June 30, 2020, and December 31, 2019, and our available borrowing capacity was $308 million and $429 million, respectively.

In March 2020, we renewed and amended our five-year credit agreement which expires in March 2025 and provides for borrowings at prevailing rates and includes covenants. We increased the program’s borrowing capacity from $750 million to $800 million. We had no amounts outstanding under this facility at both June 30, 2020, and December 31, 2019.

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

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Pensions and Other Postretirement Benefits

6 Months Ended

Jun. 30, 2020

Defined Benefit Plans and Other Postretirement Benefit Plans Disclosures [Abstract]

Pensions and Other Postretirement Benefits

Pensions and Other Postretirement Benefits

We have both funded and unfunded defined benefit pension plans covering principally salaried employees. We also provide specified health care and life insurance benefits to eligible retired employees; these plans can be amended or terminated at our option.  Under our self-insured retiree health care plan, for those participants who are not Medicare-eligible, certain health care expenses are covered for retired employees and their dependents, reduced by any deductibles, coinsurance, and, in some cases, coverage provided under other group insurance policies.  Those participants who are Medicare-eligible are not covered under the self-insured retiree health care plan, but instead are provided with an employer-funded health reimbursement account which can be used for reimbursement of health insurance premiums or eligible out-of-pocket medical expenses.

Pension and postretirement benefit cost components for the second quarter and first six months were as follows:

					Other Postretirement
	Pension Benefits				Benefits
	Second Quarter
	2020		2019		2020		2019
	($ in millions)
Service cost	$	10	$	8	$	2	$	1
Interest cost	18		23		3		5
Expected return on plan assets	(47)		(44)		(3)		(3)
Amortization of net losses	13		11		—		—
Amortization of prior service benefit	—		—		(7)		(6)
Net benefit	$	(6)	$	(2)	$	(5)	$	(3)

					Other Postretirement
	Pension Benefits				Benefits
	First Six Months
	2020		2019		2020		2019
	($ in millions)
Service cost	$	20	$	17	$	3	$	3
Interest cost	37		46		6		9
Expected return on plan assets	(95)		(89)		(6)		(7)
Amortization of net losses	26		22		—		—
Amortization of prior service benefit	—		—		(13)		(12)
Net benefit	$	(12)	$	(4)	$	(10)	$	(7)

The service cost component of defined benefit pension cost and postretirement benefit cost are reported within “Compensation and benefits” and all other components of net benefit cost are presented in “Other income – net” on the Consolidated Statements of Income.

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Fair Value of Financial Instruments

6 Months Ended

Jun. 30, 2020

Fair Value Disclosures [Abstract]

Fair Value of Financial Instruments

Fair Values of Financial Instruments

The fair values of “Cash and cash equivalents,” “Accounts receivable – net,” and “Accounts payable,” approximate carrying values because of the short maturity of these financial instruments. The carrying value of corporate-owned life insurance is recorded at cash surrender value and, accordingly, approximates fair value. There are no other assets or liabilities measured at fair value on a recurring basis at June 30, 2020 or December 31, 2019. The carrying amounts and estimated fair values, based on Level 1 inputs, of long-term debt consisted of the following:

	June 30, 2020				December 31, 2019
	Carrying Amount		Fair Value		Carrying Amount		Fair Value
	($ in millions)
Long-term debt, including current maturities	$	(12,697)	$	(16,362)	$	(12,196)	$	(14,806)

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Commitments and Contingencies

6 Months Ended

Jun. 30, 2020

Commitments and Contingencies Disclosure [Abstract]

Commitments and Contingencies

Commitments and Contingencies

Lawsuits

We and/or certain subsidiaries are defendants in numerous lawsuits and other claims relating principally to railroad operations.  When we conclude that it is probable that a liability has been incurred and the amount of the liability can be reasonably estimated, it is accrued through a charge to earnings.  While the ultimate amount of liability incurred in any of these lawsuits and claims is dependent on future developments, in our opinion, the recorded liability is adequate to cover the future payment of such liability and claims.  However, the final outcome of any of these lawsuits and claims cannot be predicted with certainty, and unfavorable or unexpected outcomes could result in additional accruals that could be significant to results of operations in a particular year or quarter.  Any adjustments to the recorded liability will be reflected in earnings in the periods in which such adjustments become known.

In 2007, various antitrust class actions filed against us and other Class I railroads in various Federal district courts regarding fuel surcharges were consolidated in the District of Columbia by the Judicial Panel on Multidistrict Litigation. In 2012, the court certified the case as a class action. The defendant railroads appealed this certification, and the Court of Appeals for the District of Columbia vacated the District Court’s decision and remanded the case for further consideration. On October 10, 2017, the District Court denied class certification. The decision was upheld by the Court of Appeals on August 16, 2019. Since that decision, various individual cases have been filed in multiple jurisdictions and also consolidated in the District of Columbia. We believe the allegations in the complaints are without merit and intend to vigorously defend the cases. We do not believe the outcome of these proceedings will have a material effect on our financial position, results of operations, or liquidity.

In 2018, a lawsuit was filed against one of our subsidiaries by the minority owner in a jointly-owned terminal railroad company in which our subsidiary has the majority ownership. The lawsuit alleged violations of various state laws and federal antitrust laws. It is reasonably possible that we could incur a loss in the case; however, we intend to vigorously defend the case and believe that we will prevail. The potential range of loss cannot be estimated at this time.

Casualty Claims

Casualty claims include employee personal injury and occupational claims as well as third-party claims, all exclusive of legal costs.  To aid in valuing our personal injury liability and determining the amount to accrue with respect to such claims during the year, we utilize studies prepared by an independent consulting actuarial firm.  Job-related personal injury and occupational claims are subject to the Federal Employer’s Liability Act (FELA), which is applicable only to railroads.  FELA’s fault-based tort system produces results that are unpredictable and inconsistent as compared with a no-fault workers’ compensation system.  The variability inherent in this system could result in actual costs being different from the liability recorded.  While the ultimate amount of claims incurred is dependent on future developments, in our opinion the recorded liability is adequate to cover the future payments of claims and is supported by the most recent actuarial study.  In all cases, we record a liability when the expected loss for the claim is both probable and reasonably estimable.

Employee personal injury claims – The largest component of claims expense is employee personal injury costs.  The independent actuarial firm engaged by us provides quarterly studies to aid in valuing our employee personal injury liability and estimating personal injury expense.  The actuarial firm studies our historical patterns of reserving for claims and subsequent settlements, taking into account relevant outside influences.  The actuarial firm uses the results of these analyses to estimate the ultimate amount of liability. We adjust the liability quarterly based upon our assessment and the results of the study. Our estimate of the liability is subject to inherent limitation given the difficulty of predicting future events such as jury decisions, court interpretations, or legislative changes. As a result, actual claim settlements may vary from the estimated liability recorded.

Occupational claims – Occupational claims include injuries and illnesses alleged to be caused by exposures which occur over time as opposed to injuries or illnesses caused by a specific accident or event. Types of occupational claims commonly seen allege exposure to asbestos and other claimed toxic substances resulting in respiratory diseases or cancer. Many such claims are being asserted by former or retired employees, some of whom have not been employed in the rail industry for decades.  The independent actuarial firm provides an estimate of the occupational claims liability based upon our history of claim filings, severity, payments, and other pertinent facts.  The liability is dependent upon judgments we make as to the specific case reserves as well as judgments of the actuarial firm in the quarterly studies.  The actuarial firm’s estimate of ultimate loss includes a provision for those claims that have been incurred but not reported.  This provision is derived by analyzing industry data and projecting our experience. We adjust the liability quarterly based upon our assessment and the results of the study.  However, it is possible that the recorded liability may not be adequate to cover the future payment of claims.  Adjustments to the recorded liability are reflected in operating expenses in the periods in which such adjustments become known.

Third-party claims – We record a liability for third-party claims including those for highway crossing accidents, trespasser and other injuries, property damage, and lading damage.  The actuarial firm assists us with the calculation of potential liability for third-party claims, except lading damage, based upon our experience including the number and timing of incidents, amount of payments, settlement rates, number of open claims, and legal defenses. We adjust the liability quarterly based upon our assessment and the results of the study.  Given the inherent uncertainty in regard to the ultimate outcome of third-party claims, it is possible that the actual loss may differ from the estimated liability recorded.

Environmental Matters

We are subject to various jurisdictions’ environmental laws and regulations.  We record a liability where such liability or loss is probable and reasonably estimable. Environmental specialists regularly participate in ongoing evaluations of all known sites and in determining any necessary adjustments to liability estimates.  

Our Consolidated Balance Sheets include liabilities for environmental exposures of $54 million and $56 million at June 30, 2020 and December 31, 2019, respectively, of which $15 million is classified as a current liability at both dates. At June 30, 2020, the liability represents our estimates of the probable cleanup, investigation, and remediation costs based on available information at 109 known locations and projects compared with 110 locations and projects at December 31, 2019. At June 30, 2020, fifteen sites accounted for $38 million of the liability, and no individual site was considered to be material. We anticipate that much of this liability will be paid out over five years; however, some costs will be paid out over a longer period.

At eleven locations, one or more of our subsidiaries in conjunction with a number of other parties have been identified as potentially responsible parties under the Comprehensive Environmental Response, Compensation and Liability Act of 1980 or comparable state statutes that impose joint and several liability for cleanup costs.  We calculate our estimated liability for these sites based on facts and legal defenses applicable to each site and not solely on the basis of the potential for joint liability.

With respect to known environmental sites (whether identified by us or by the Environmental Protection Agency or comparable state authorities), estimates of our ultimate potential financial exposure for a given site or in the aggregate for all such sites can change over time because of the widely varying costs of currently available cleanup techniques, unpredictable contaminant recovery and reduction rates associated with available cleanup technologies, the likely development of new cleanup technologies, the difficulty of determining in advance the nature and full extent of contamination and each potential participant’s share of any estimated loss (and that participant’s ability to bear it), and evolving statutory and regulatory standards governing liability.

The risk of incurring environmental liability for acts and omissions, past, present, and future, is inherent in the railroad business.  Some of the commodities we transport, particularly those classified as hazardous materials, pose special risks that we work diligently to reduce.  In addition, several of our subsidiaries own, or have owned, land

used as operating property, or which is leased and operated by others, or held for sale.  Because environmental problems that are latent or undisclosed may exist on these properties, there can be no assurance that we will not incur environmental liabilities or costs with respect to one or more of them, the amount and materiality of which cannot be estimated reliably at this time.  Moreover, lawsuits and claims involving these and potentially other unidentified environmental sites and matters are likely to arise from time to time.  The resulting liabilities could have a significant effect on financial position, results of operations, or liquidity in a particular year or quarter.

Based on our assessment of the facts and circumstances now known, we believe we have recorded the probable and reasonably estimable costs for dealing with those environmental matters of which we are aware.  Further, we believe that it is unlikely that any known matters, either individually or in the aggregate, will have a material adverse effect on our financial position, results of operations, or liquidity.

Insurance

We obtain on behalf of ourself and our subsidiaries insurance for potential losses for third-party liability and first-party property damages.  With limited exceptions, we are currently insured above $75 million and below $1.1 billion ($1.5 billion for specific perils) per occurrence and/or policy year for bodily injury. For property damage to third parties, we are insured for approximately 85% of potential losses above $75 million and below $275 million per occurrence and/or policy year for property owned by us or in our care, custody, or control.

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New Accounting Pronouncements	6 Months Ended
	Jun. 30, 2020
Accounting Standards Update and Change in Accounting Principle [Abstract]
New Accounting Pronouncements	New Accounting PronouncementsOn January 1, 2020, we adopted the Financial Accounting Standards Board (FASB) Accounting Standards Update (ASU) 2016-13, “Credit Losses - Measurement of Credit Losses on Financial Instruments,” which replaced the current incurred loss impairment method with a method that reflects expected credit losses. Historically, losses associated from the inability to collect on accounts receivable have been insignificant, with little divergence in collection trends through varying economic cycles. Short-term and long-term financial assets, as defined by the standard, are impacted by immediate recognition of estimated credit losses in the financial statements, reflecting the net amount expected to be collected. There was no material impact to the financial statements upon adoption. In December 2019, the FASB issued ASU 2019-12, “Simplifying the Accounting for Income Taxes,” which adds new guidance to simplify the accounting for income taxes, changes the accounting for certain income tax transactions, and makes other minor changes. The new standard is effective as of January 1, 2021, and early adoption is permitted for any interim period for which financial statements have not been issued. We do not expect this standard to have a material effect on our financial statements. We will not adopt the standard early.

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New Accounting Pronouncements (Policies)	6 Months Ended
	Jun. 30, 2020
Accounting Standards Update and Change in Accounting Principle [Abstract]
New Accounting Pronouncements	New Accounting PronouncementsOn January 1, 2020, we adopted the Financial Accounting Standards Board (FASB) Accounting Standards Update (ASU) 2016-13, “Credit Losses - Measurement of Credit Losses on Financial Instruments,” which replaced the current incurred loss impairment method with a method that reflects expected credit losses. Historically, losses associated from the inability to collect on accounts receivable have been insignificant, with little divergence in collection trends through varying economic cycles. Short-term and long-term financial assets, as defined by the standard, are impacted by immediate recognition of estimated credit losses in the financial statements, reflecting the net amount expected to be collected. There was no material impact to the financial statements upon adoption. In December 2019, the FASB issued ASU 2019-12, “Simplifying the Accounting for Income Taxes,” which adds new guidance to simplify the accounting for income taxes, changes the accounting for certain income tax transactions, and makes other minor changes. The new standard is effective as of January 1, 2021, and early adoption is permitted for any interim period for which financial statements have not been issued. We do not expect this standard to have a material effect on our financial statements. We will not adopt the standard early.

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Railway Operating Revenues (Tables)

6 Months Ended

Jun. 30, 2020

Revenue from Contract with Customer [Abstract]

Disaggregation of Revenue

The following table disaggregates our revenues by major commodity group:

	Second Quarter				First Six Months
	2020		2019		2020		2019
Merchandise:	($ in millions)
Agriculture, forest and consumer products	$	498	$	577	$	1,049	$	1,135
Chemicals	423		544		943		1,051
Metals and construction	293		384		660		754
Automotive	93		251		327		502
Merchandise	1,307		1,756		2,979		3,442
Intermodal	569		701		1,224		1,420
Coal	209		468		507		903
Total	$	2,085	$	2,925	$	4,710	$	5,765

Schedule of Accounts Receivable

“Accounts receivable – net” on the Consolidated Balance Sheets includes both customer and non-customer receivables as follows:

	June 30, 2020		December 31, 2019
	($ in millions)
Customer	$	592	$	682
Non-customer	230		238
Accounts receivable – net	$	822	$	920

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Stock-Based Compensation (Tables)

6 Months Ended

Jun. 30, 2020

Share-based Compensation Arrangement by Share-based Payment Award [Line Items]

Schedule of Compensation Cost for Share-based Payment Arrangements, Allocation of Share-based Compensation Costs by Plan

	Second Quarter				First Six Months
	2020		2019		2020		2019
	($ in millions)
Stock-based compensation expense	$	10	$	20	$	12	$	36
Total tax benefit	3		8		29		31

Share-based Compensation Arrangement by Share-based Payment Award, Options, Grants in Period, Weighted Average Grant Date Fair Value

During 2020, a committee of nonemployee members of our Board of Directors (and the Chief Executive Officer when delegated authority by such committee) granted stock options, restricted stock units (RSUs) and performance share units (PSUs) pursuant to the Long-Term Incentive Plan (LTIP), as follows:

	Second Quarter			First Six Months
	Granted	Weighted-Average Grant-Date Fair Value		Granted	Weighted-Average Grant-Date Fair Value
Stock options	1,050	$	39.10	43,770	$	52.05
RSUs	3,380	173.56		167,540	210.02
PSUs	1,930	184.47		78,720	212.67

Schedule of Cash Proceeds Received from Share-based Payment Awards

	Second Quarter				First Six Months
	2020		2019		2020		2019
	($ in millions)
Stock options exercised	162,400		215,546		685,638		621,917
Cash received upon exercise	$	12	$	16	$	55	$	44
Related tax benefit realized	3		6		16		15

Restricted Stock Units (RSUs)

Share-based Compensation Arrangement by Share-based Payment Award [Line Items]

Schedule of Share-based Compensation, Activity

	Second Quarter				First Six Months
	2020		2019		2020		2019
	($ in millions)
RSUs vested	—		506		202,299		166,055
Common Stock issued net of tax withholding	—		363		143,712		119,244
Related tax benefit realized	$	—	$	—	$	4	$	2

Performance Share Units

Share-based Compensation Arrangement by Share-based Payment Award [Line Items]

Schedule of Share-based Compensation, Activity

	First Six Months
	2020		2019
	($ in millions)
PSUs earned	235,935		331,099
Common Stock issued net of tax withholding	156,450		221,241
Related tax benefit realized	$	7	$	9

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Earnings Per Share (Tables)

6 Months Ended

Jun. 30, 2020

Earnings Per Share [Abstract]

Schedule of Earnings Per Share, Basic and Diluted

The following table sets forth the calculation of basic and diluted earnings per share:

	Basic				Diluted
	Second Quarter
	2020		2019		2020		2019
	($ in millions, except per share amounts, shares in millions)
Net income	$	392	$	722	$	392	$	722
Dividend equivalent payments	—		(2)		—		—
Income available to common stockholders	$	392	$	720	$	392	$	722
Weighted-average shares outstanding	255.4		264.8		255.4		264.8
Dilutive effect of outstanding options
and share-settled awards					1.3		2.3
Adjusted weighted-average shares outstanding					256.7		267.1
Earnings per share	$	1.53	$	2.72	$	1.53	$	2.70
	Basic				Diluted
	First Six Months
	2020		2019		2020		2019
	($ in millions, except per share amounts, shares in millions)
Net income	$	773	$	1,399	$	773	$	1,399
Dividend equivalent payments	(1)		(3)		(1)		—
Income available to common stockholders	$	772	$	1,396	$	772	$	1,399
Weighted-average shares outstanding	256.3		265.9		256.3		265.9
Dilutive effect of outstanding options
and share-settled awards					1.4		2.4
Adjusted weighted-average shares outstanding					257.7		268.3
Earnings per share	$	3.01	$	5.25	$	3.00	$	5.21

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Accumulated Other Comprehensive Loss (Tables)

6 Months Ended

Jun. 30, 2020

Equity [Abstract]

Accumulated Other Comprehensive Loss

The changes in the cumulative balances of “Accumulated other comprehensive loss” reported in the Consolidated Balance Sheets consisted of the following:

	Balance at Beginning of Year		Net Income (Loss)		Reclassification Adjustments		Balance at End of Period
	($ in millions)
Six Months Ended June 30, 2020
Pensions and other postretirement liabilities	$	(421)	$	—	$	10	$	(411)
Other comprehensive income (loss)
of equity investees	(70)		6		—		(64)
Accumulated other comprehensive loss	$	(491)	$	6	$	10	$	(475)
Six Months Ended June 30, 2019
Pensions and other postretirement liabilities	$	(497)	$	—	$	7	$	(490)
Other comprehensive loss
of equity investees	(66)		(1)		—		(67)
Accumulated other comprehensive loss	$	(563)	$	(1)	$	7	$	(557)

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Pensions and Other Postretirement Benefits (Tables)

6 Months Ended

Jun. 30, 2020

Defined Benefit Plans and Other Postretirement Benefit Plans Disclosures [Abstract]

Pension and Other Postretirement Benefit Cost Components

Pension and postretirement benefit cost components for the second quarter and first six months were as follows:

					Other Postretirement
	Pension Benefits				Benefits
	Second Quarter
	2020		2019		2020		2019
	($ in millions)
Service cost	$	10	$	8	$	2	$	1
Interest cost	18		23		3		5
Expected return on plan assets	(47)		(44)		(3)		(3)
Amortization of net losses	13		11		—		—
Amortization of prior service benefit	—		—		(7)		(6)
Net benefit	$	(6)	$	(2)	$	(5)	$	(3)

					Other Postretirement
	Pension Benefits				Benefits
	First Six Months
	2020		2019		2020		2019
	($ in millions)
Service cost	$	20	$	17	$	3	$	3
Interest cost	37		46		6		9
Expected return on plan assets	(95)		(89)		(6)		(7)
Amortization of net losses	26		22		—		—
Amortization of prior service benefit	—		—		(13)		(12)
Net benefit	$	(12)	$	(4)	$	(10)	$	(7)

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Fair Value of Financial Instruments (Tables)

6 Months Ended

Jun. 30, 2020

Fair Value Disclosures [Abstract]

Schedule of Carrying Amounts and Estimated Fair Values

The carrying amounts and estimated fair values, based on Level 1 inputs, of long-term debt consisted of the following:

	June 30, 2020				December 31, 2019
	Carrying Amount		Fair Value		Carrying Amount		Fair Value
	($ in millions)
Long-term debt, including current maturities	$	(12,697)	$	(16,362)	$	(12,196)	$	(14,806)

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Railway Operating Revenues (Details) - USD ($)	3 Months Ended		6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019	Dec. 31, 2019
Disaggregation of Revenue [Line Items]
Revenue from contract with customer	$ 2,085,000,000	$ 2,925,000,000	$ 4,710,000,000	$ 5,765,000,000
Revenue, payment terms			15 days
Contract assets	0		$ 0		$ 0
Contract liabilities	$ 0		$ 0		$ 0
Accessorial Services
Disaggregation of Revenue [Line Items]
Accessorial services percent of total railway operating revenues	5.00%	4.00%	5.00%	4.00%
Merchandise
Disaggregation of Revenue [Line Items]
Revenue from contract with customer	$ 1,307,000,000	$ 1,756,000,000	$ 2,979,000,000	$ 3,442,000,000
Merchandise | Agriculture, forest and consumer products
Disaggregation of Revenue [Line Items]
Revenue from contract with customer	498,000,000	577,000,000	1,049,000,000	1,135,000,000
Merchandise | Chemicals
Disaggregation of Revenue [Line Items]
Revenue from contract with customer	423,000,000	544,000,000	943,000,000	1,051,000,000
Merchandise | Metals and construction
Disaggregation of Revenue [Line Items]
Revenue from contract with customer	293,000,000	384,000,000	660,000,000	754,000,000
Merchandise | Automotive
Disaggregation of Revenue [Line Items]
Revenue from contract with customer	93,000,000	251,000,000	327,000,000	502,000,000
Intermodal
Disaggregation of Revenue [Line Items]
Revenue from contract with customer	569,000,000	701,000,000	1,224,000,000	1,420,000,000
Coal
Disaggregation of Revenue [Line Items]
Revenue from contract with customer	$ 209,000,000	$ 468,000,000	$ 507,000,000	$ 903,000,000

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Railway Operating Revenues - Schedule of Account Receivables (Details) - USD ($) $ in Millions	Jun. 30, 2020	Dec. 31, 2019
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Accounts receivable – net	$ 822	$ 920
Trade Accounts Receivable
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Accounts receivable – net	592	682
Other Receivables
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Accounts receivable – net	230	238
Other Noncurrent Receivables
New Accounting Pronouncements or Change in Accounting Principle [Line Items]
Accounts receivable, net, noncurrent	$ 23	$ 23

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Stock-Based Compensation - Schedule of Stock-Based Compensation Expense and Related Tax Benefits (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019
Share-based Payment Arrangement [Abstract]
Stock-based compensation expense	$ 10	$ 20	$ 12	$ 36
Total tax benefit	$ 3	$ 8	$ 29	$ 31

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Stock-Based Compensation - Schedule of Grants and Weighted-Average Grant-Date Fair Values (Details) - $ / shares	3 Months Ended	6 Months Ended
	Jun. 30, 2020	Jun. 30, 2020
Stock options
Granted
Stock options (in shares)	1,050	43,770
Weighted-Average Grant-Date Fair Value
Stock options (in dollars per shares)	$ 39.10	$ 52.05
RSUs
Granted
Other than stock options (in shares)	3,380	167,540
Weighted-Average Grant-Date Fair Value
Other than stock options (in dollars per share)	$ 173.56	$ 210.02
PSUs
Granted
Other than stock options (in shares)	1,930	78,720
Weighted-Average Grant-Date Fair Value
Other than stock options (in dollars per share)	$ 184.47	$ 212.67

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Stock-Based Compensation - Schedule of Options Exercised, Cash Received, and Related Tax Benefits (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019
Share-based Payment Arrangement [Abstract]
Stock options exercised (in shares)	162,400	215,546	685,638	621,917
Cash received upon exercise	$ 12	$ 16	$ 55	$ 44
Related tax benefit realized	$ 3	$ 6	$ 16	$ 15

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Stock-Based Compensation - Narrative (Details)	6 Months Ended
	Jun. 30, 2020
RSUs
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Award vesting period (in years)	4 years
PSUs
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
PSU Cycle	3 years

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Stock-Based Compensation - Schedule of RSU Activity (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Related tax benefit realized	$ 3	$ 6	$ 16	$ 15
Restricted Stock Units (RSUs)
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share units earned (in shares)	0	506	202,299	166,055
Shares issued net of withholding taxes (in shares)	0	363	143,712	119,244
Related tax benefit realized	$ 0	$ 0	$ 4	$ 2

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Stock-Based Compensation - Schedule of PSU Activity (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Related tax benefit realized	$ 3	$ 6	$ 16	$ 15
PSUs
Share-based Compensation Arrangement by Share-based Payment Award [Line Items]
Share units earned (in shares)	235,935	331,099
Shares issued net of withholding taxes (in shares)	156,450	221,241
Related tax benefit realized	$ 7	$ 9

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Loss on Asset Disposal (Details) $ in Millions	3 Months Ended	6 Months Ended
	Mar. 31, 2020 USD ($)	Jun. 30, 2020 USD ($) locomotive	Jun. 30, 2019 USD ($)
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Loss on locomotives		$ 11	$ 7
Railroad Transportation Equipment
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items]
Loss on locomotives	$ (385)
Tax benefit on loss from sale of locomotives	$ 97
Number of locomotives sold | locomotive		446
Number of locomotives classified as Held-for-Sale | locomotive		703
Assets Held-for-sale, Not Part of Disposal Group		$ 29

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Earnings Per Share (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions	3 Months Ended				6 Months Ended
	Jun. 30, 2020	Mar. 31, 2020	Jun. 30, 2019	Mar. 31, 2019	Jun. 30, 2020	Jun. 30, 2019
Earnings Per Share [Abstract]
Net income	$ 392	$ 381	$ 722	$ 677	$ 773	$ 1,399
Dividend equivalent payments, basic	0		(2)		(1)	(3)
Dividend equivalent payments, diluted	0		0		(1)	0
Income available to common stockholders, basic	392		720		772	1,396
Income available to common stockholders, diluted	$ 392		$ 722		$ 772	$ 1,399
Weighted-average shares outstanding (in shares)	255.4		264.8		256.3	265.9
Dilutive effect of outstanding options and share-settled awards (in shares)	1.3		2.3		1.4	2.4
Adjusted weighted-average shares outstanding (in shares)	256.7		267.1		257.7	268.3
Basic (in dollars per share)	$ 1.53		$ 2.72		$ 3.01	$ 5.25
Diluted (in dollars per share)	$ 1.53		$ 2.70		$ 3.00	$ 5.21

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Earnings Per Share - Antidilutive Securities Excluded From Computation Of Earnings Per Share (Details) - shares	3 Months Ended		6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019
Earnings Per Share [Abstract]
Antidilutive securities excluded from computation of earnings per share (in shares)	0	0	0	0

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Accumulated Other Comprehensive Loss (Details) - USD ($) $ in Millions	6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward]
Balance at Beginning of Year	$ 15,184	$ 15,362
Net Income (Loss)	6	(1)
Reclassification Adjustments	10	7
Balance at End of Period	14,861	15,311
Accum. Other Comprehensive Loss
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward]
Balance at Beginning of Year	(491)	(563)
Balance at End of Period	(475)	(557)
Pensions and other postretirment liabilities
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward]
Balance at Beginning of Year	(421)	(497)
Net Income (Loss)	0	0
Reclassification Adjustments	10	7
Balance at End of Period	(411)	(490)
Other comprehensive loss of equity investees
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward]
Balance at Beginning of Year	(70)	(66)
Net Income (Loss)	6	(1)
Reclassification Adjustments	0	0
Balance at End of Period	$ (64)	$ (67)

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Stock Repurchase Program (Details) - USD ($) shares in Millions, $ in Millions	3 Months Ended				6 Months Ended
	Jun. 30, 2020	Mar. 31, 2020	Jun. 30, 2019	Mar. 31, 2019	Jun. 30, 2020	Jun. 30, 2019
Stock Repurchase Program [Abstract]
Stock repurchased and retired during period (in shares)					3.9	5.7
Stock repurchased and retired during period, cost	$ 203	$ 466	$ 550	$ 500	$ 669	$ 1,100

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Investments (Details) $ in Millions	3 Months Ended		6 Months Ended		12 Months Ended
	Jun. 30, 2020 USD ($)	Jun. 30, 2019 USD ($)	Jun. 30, 2020 USD ($) railroad	Jun. 30, 2019 USD ($)	Dec. 31, 2019 USD ($)
Schedule of Investments [Line Items]
Number of North American railroads | railroad			8
Equity Method Investee
Schedule of Investments [Line Items]
Equity method investment, ownership percentage	58.00%		58.00%
Conrail Voting
Schedule of Investments [Line Items]
Equity method investment, ownership percentage	50.00%		50.00%
Conrail Inc
Schedule of Investments [Line Items]
Equity method investments	$ 1,400		$ 1,400		$ 1,400
Expenses from transactions with related party	30	$ 38	65	$ 75
Equity in the earnings of investee	13	15	22	23
Due to affiliate, noncurrent	$ 280		$ 280		$ 280
Due to affiliate, average interest rate			2.90%		2.90%
TTX Company
Schedule of Investments [Line Items]
Equity method investment, ownership percentage	19.65%		19.65%
Expenses from transactions with related party	$ 58	60	$ 118	122
Equity in the earnings of investee	$ 10	$ 12	$ 14	$ 25

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Debt (Details) - USD ($)	1 Months Ended
	May 31, 2020	Mar. 31, 2020	Jun. 30, 2020	Apr. 30, 2020	Feb. 29, 2020	Dec. 31, 2019	Jun. 30, 2019
Debt Instrument [Line Items]
Restricted cash							$ 88,000,000
Revolving Credit Facility
Debt Instrument [Line Items]
Senior notes issued			$ 800,000,000		$ 750,000,000
Credit agreement term, years		5 years
Long-term line of credit			0			$ 0
Senior Notes
Debt Instrument [Line Items]
Senior notes issued				$ 554,000,000
Loss on extinguishment of debt	$ 4,000,000
Senior Notes | Senior Notes Due 2050
Debt Instrument [Line Items]
Senior notes issued	$ 800,000,000
Stated rates	3.05%
Proceeds from issuance of senior notes	$ 790,000,000
Senior Notes | Senior Notes Due 2055
Debt Instrument [Line Items]
Senior notes issued	$ 800,000,000
Stated rates	3.155%
Senior Notes | Senior Notes Due 2118
Debt Instrument [Line Items]
Senior notes issued				$ 450,000,000
Stated rates				5.10%
Senior Notes | Senior Notes Due 2097
Debt Instrument [Line Items]
Senior notes issued				$ 29,000,000
Stated rates				7.90%
Senior Notes | Senior Notes Due 2111
Debt Instrument [Line Items]
Senior notes issued				$ 42,000,000
Stated rates				6.00%
Senior Notes | Senior Notes Due 2105
Debt Instrument [Line Items]
Senior notes issued				$ 26,000,000
Stated rates				6.00%
Senior Notes | Senior Notes Due 2037
Debt Instrument [Line Items]
Senior notes issued				$ 7,000,000
Stated rates				7.05%
Securitization Borrowings
Debt Instrument [Line Items]
Credit agreement	$ 400,000,000
Accounts receivable securitization balance			0			0
Available borrowing capacity			$ 308,000,000			$ 429,000,000

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Pensions and Other Postretirement Benefits (Details) - USD ($) $ in Millions	3 Months Ended		6 Months Ended
	Jun. 30, 2020	Jun. 30, 2019	Jun. 30, 2020	Jun. 30, 2019
Pension Benefits
Defined Benefit Plan Disclosure [Line Items]
Service cost	$ 10	$ 8	$ 20	$ 17
Interest cost	18	23	37	46
Expected return on plan assets	(47)	(44)	(95)	(89)
Amortization of net losses	13	11	26	22
Amortization of prior service benefit	0	0	0	0
Net benefit	(6)	(2)	(12)	(4)
Other Postretirement Benefits
Defined Benefit Plan Disclosure [Line Items]
Service cost	2	1	3	3
Interest cost	3	5	6	9
Expected return on plan assets	(3)	(3)	(6)	(7)
Amortization of net losses	0	0	0	0
Amortization of prior service benefit	(7)	(6)	(13)	(12)
Net benefit	$ (5)	$ (3)	$ (10)	$ (7)

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Fair Value of Financial Instruments - Schedule of Carrying Amounts and Estimated Fair Values (Details) - Fair Value, Measurements, Recurring - USD ($) $ in Millions	Jun. 30, 2020	Dec. 31, 2019
Carrying Amount
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Long-term debt, including current maturities	$ (12,697)	$ (12,196)
Fair Value
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items]
Long-term debt, including current maturities	$ (16,362)	$ (14,806)

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Commitments and Contingencies (Details)	6 Months Ended
	Jun. 30, 2020 USD ($) location	Dec. 31, 2019 USD ($) location
Commitments and Contingencies Disclosure [Abstract]
Environmental liability	$ 54,000,000	$ 56,000,000
Current environmental liability	$ 15,000,000	$ 15,000,000
Known cleanup and remediation locations and projects | location	109	110
Number of sites - representative sample | location	15
Liability associated with those sites	$ 38,000,000
Environmental locations representative sample liability payout period, in years	5 years
Responsible locations with another party | location	11
Self-insured injury/damage to third parties - and above, per occurrence	$ 75,000,000
Self-insured injury/damage to third party - up to	1,100,000,000
Self-insured injury/damage to third parties - and above, per occurrence for specific perils	1,500,000,000
Self-insured NS owned property - and above, per occurrence	75,000,000
Self-insured NS owned property - up to	$ 275,000,000
Portion Of Potential Losses Within A Specified Range Covered By Third Party Insurer, As A Percentage	85.00%