Railway Operating Revenues

9 Months Ended

Sep. 30, 2020

Revenue from Contract with Customer [Abstract]

Railway Operating Revenues

Railway Operating Revenues

The following table disaggregates our revenues by major commodity group:

	Third Quarter				First Nine Months
	2020		2019		2020		2019
	($ in millions)
Merchandise:
Agriculture, forest and consumer products	$	521	$	572	$	1,570	$	1,707
Chemicals	428		535		1,371		1,586
Metals and construction	337		377		997		1,131
Automotive	270		247		597		749
Merchandise	1,556		1,731		4,535		5,173
Intermodal	700		707		1,924		2,127
Coal	250		403		757		1,306
Total	$	2,506	$	2,841	$	7,216	$	8,606

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. We had no material remaining performance obligations as of September 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:

	September 30, 2020		December 31, 2019
	($ in millions)
Customer	$	664	$	682
Non-customer	219		238
Accounts receivable – net	$	883	$	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 September 30, 2020 and December 31, 2019. We do not have any material contract assets or liabilities at September 30, 2020 or December 31, 2019.

We may provide customers ancillary services, such as switching, demurrage and other incidental services, under their transportation contracts. 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 third quarters and first nine months of 2020 and 2019.