Norfolk Southern (NSC) 10-K 17 Feb 10 2009 FY Annual report Financial data

Consolidated Statements of Inco

Consolidated Statements of Income (USD $)
In Millions, except Per Share data	12 Months Ended Dec. 31, 2009	12 Months Ended Dec. 31, 2008	12 Months Ended Dec. 31, 2007
Railway operating revenues	$7,969	$10,661	$9,432
Railway operating expenses:
Compensation and benefits	2,401	2,684	2,552
Purchased services and rents	1,403	1,599	1,551
Fuel	725	1,638	1,169
Depreciation	837	804	775
Materials and other	641	852	800
Total railway operating expenses	6,007	7,577	6,847
Income from railway operations	1,962	3,084	2,585
Other income - net	127	110	93
Interest expense on debt	467	444	441
Income before income taxes	1,622	2,750	2,237
Provision for income taxes	588	1,034	773
Net income	$1,034	$1,716	$1,464
Per share amounts
Basic	2.79	4.58	3.73
Diluted	2.76	4.52	3.68

Consolidated Balance Sheets

Consolidated Balance Sheets (USD $)
In Millions	Dec. 31, 2009	Dec. 31, 2008
Assets
Cash and cash equivalents	$996	$618
Short-term investments	90	0
Accounts receivable - net	766	870
Materials and supplies	164	194
Deferred income taxes	142	149
Other current assets	88	168
Total current assets	2,246	1,999
Investments	2,164	1,779
Properties less accumulated depreciation	22,643	22,247
Other assets	316	272
Total assets	27,369	26,297
Liabilities and stockholders' equity
Accounts payable	974	1,140
Short-term debt	100	0
Income and other taxes	109	261
Other current liabilities	232	220
Current maturities of long-term debt	374	484
Total current liabilities	1,789	2,105
Long-term debt	6,679	6,183
Other liabilities	1,801	2,030
Deferred income taxes	6,747	6,372
Total liabilities	17,016	16,690
Stockholders' equity:
Common stock $1.00 per share par value, 1,350,000,000 shares authorized; outstanding 369,019,990 and 366,233,106 shares, respectively, net of treasury shares	370	368
Additional paid-in capital	1,809	1,680
Accumulated other comprehensive loss	(853)	(942)
Retained income	9,027	8,501
Total stockholders' equity	10,353	9,607
Total liabilities and stockholders' equity	$27,369	$26,297

Consolidated Balance Sheets (Pa

Consolidated Balance Sheets (Parenthetical) (USD $)
	Dec. 31, 2009	Dec. 31, 2008
Consolidated Balance Sheets (Parenthetical) [Abstract]
Common Stock, Par or Stated Value Per Share	1	1
Common Stock, Shares Authorized	1,350,000,000	1,350,000,000
Common Stock, Shares, Outstanding, net of treasury shares	369,019,990	366,233,106

Consolidated Statements of Cash

Consolidated Statements of Cash Flows (USD $)
In Millions	12 Months Ended Dec. 31, 2009	12 Months Ended Dec. 31, 2008	12 Months Ended Dec. 31, 2007
Cash flows from operating activities
Net income	$1,034	$1,716	$1,464
Reconciliation of net income to net cash provided by operating activities:
Depreciation	845	815	786
Deferred income taxes	338	290	125
Gains and losses on properties and investments	(18)	(29)	(51)
Changes in assets and liabilities affecting operations:
Accounts receivable	63	269	30
Materials and supplies	30	(18)	(25)
Other current assets	72	(8)	(17)
Current liabilities other than debt	(365)	(262)	38
Other - net	(139)	(58)	(17)
Net cash provided by operating activities	1,860	2,715	2,333
Cash flows from investing activities
Property additions	(1,299)	(1,558)	(1,341)
Property sales and other transactions	84	109	124
Investments, including short-term	(266)	(86)	(635)
Investment sales and other transactions	30	307	827
Net Cash Used in Investing Activities	(1,451)	(1,228)	(1,025)
Cash flows from financing activities
Dividends	(500)	(456)	(377)
Common stock issued - net	66	229	183
Purchase and retirement of common stock	0	(1,128)	(1,196)
Proceeds from borrowings - net	1,090	1,425	250
Debt repayments	(687)	(1,145)	(489)
Net cash used in financing activities	(31)	(1,075)	(1,629)
Net increase (decrease) in cash and cash equivalents	378	412	(321)
Cash and cash equivalents
At beginning of year	618	206	527
At end of year	996	618	206
Supplemental disclosure of cash flow information
Interest (net of amounts capitalized)	458	421	441
Income taxes (net of refunds)	$381	$615	$603

Consolidated Statements of Chan

Consolidated Statements of Changes in Stockholders Equity (USD $)
In Millions	Additional Paid-in Capital	Accumulated Other Comprehensive Loss	Common Stock	Retained Income	Total
Balance at Dec. 31, 2006	$1,303	($369)	$398	$8,283	$9,615
Comprehensive income
Net income				1,464	1,464
Other comprehensive income (loss)		(30)			(30)
Adoption of FIN 48, net of tax				10	10
Dividends on Common Stock				(377)	(377)
Share repurchases	(81)		(24)	(1,091)	(1,196)
Stock-based compensation, including tax benefit	238		6	(9)	235
Other	6				6
Balance at Dec. 31, 2007	1,466	(399)	380	8,280	9,727
Comprehensive income
Net income				1,716	1,716
Other comprehensive income (loss)		(543)			(543)
Dividends on Common Stock				(456)	(456)
Share repurchases	(79)		(19)	(1,030)	(1,128)
Stock-based compensation, including tax benefit	287		6	(9)	284
Other	6		1		7
Balance at Dec. 31, 2008	1,680	(942)	368	8,501	9,607
Comprehensive income
Net income				1,034	1,034
Other comprehensive income (loss)		89			89
Dividends on Common Stock				(500)	(500)
Stock-based compensation, including tax benefit	123		2	(8)	117
Other	6				6
Balance at Dec. 31, 2009	$1,809	($853)	$370	$9,027	$10,353

1_Consolidated Statements of Ch

Consolidated Statements of Changes in Stockholders Equity (Parenthetical) (USD $)
In Millions, except Per Share data	1/1/2009 - 12/31/2009	1/1/2008 - 12/31/2008	1/1/2007 - 12/31/2007
Consolidated Statements of Changes in Stockholders' Equity (Parenthetical) [Abstract]
Common Stock, Dividends, Per Share, Declared	1.36	1.22	0.96
Adjustments to Additional Paid in Capital, Tax Effect from Share-based Compensation	$15	$76	$57

Summary of Significant Accounti

Summary of Significant Accounting Policies
	12 Months Ended Dec. 31, 2009 USD / shares
Summary of Significant Accounting Policies [Abstract]
Summary of Significant Accounting Policies	1. Summary of Significant Accounting Policies Description of Business Norfolk Southern Corporation is a Virginia-based holding company engaged principally in the rail transportation business, operating approximately 21,000 route miles primarily in the East and Midwest. These consolidated financial statements include Norfolk Southern Corporation (Norfolk Southern) and its majority-owned and controlled subsidiaries (collectively, NS). Norfolk Southerns major subsidiary is Norfolk Southern Railway Company (NSR). All significant intercompany balances and transactions have been eliminated in consolidation. NSR and its railroad subsidiaries transport raw materials, intermediate products and finished goods classified in the following market groups (percent of total railway operating revenues in 2009): coal (29%); intermodal(19%); agriculture/consumer products/government (15%); chemicals(13%); metals/construction (9%); paper/clay/forest products (8%); and, automotive (7%). Although most of NS customers are domestic, ultimate points of origination or destination for some of the products transported (particularly coal bound for export and some intermodal containers) may be outside the U.S. More than 80% of NS railroad employees are covered by collective bargaining agreements with various labor unions. Use of Estimates The preparation of financial statements in accordance with U.S. generally accepted accounting principles requires management 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 revenues and expenses during the reporting period. Management periodically reviews its estimates, including those related to the recoverability and useful lives of assets, as well as liabilities for litigation, environmental remediation, casualty claims, income taxes and pension and other postretirement benefits. Changes in facts and circumstances may result in revised estimates. Revenue Recognition Transportation revenue is recognized proportionally as a shipment moves from origin to destination and related expenses are recognized as incurred. Refunds (which are primarily volume-based incentives) are recorded as a reduction to revenues on the basis of managements best estimate of projected liability, which is based on historical activity, current traffic counts and the expectation of future activity. NS regularly monitors its contract refund liability, and historically, the estimates have not differed significantly from the amounts ultimately refunded. Switching, demurrage and other incidental service revenues are recognized when the services are performed. Derivatives NS does not engage in the trading of derivatives. NS uses derivative financial instruments in the management of its mix of fixed- and floating-rate debt. Management has determined that these derivative instruments qualify as fair-value hedges, having values that highly correlate with the underlying hedged exposures, and has designated such instruments as hedging transactions. Income and expense related to the

Other Income - Net

Other Income - Net
	12 Months Ended Dec. 31, 2009 USD / shares
Other Income Disclosure, Nonoperating [Abstract]
Other Income - Net	2. Other Income Net 2009 2008 2007 ($ in millions) Income from natural resources: Royalties from coal $ 67 $ 64 $ 52 Nonoperating depletion and depreciation (8) (11) (11) Subtotal 59 53 41 Rental income 47 47 46 Equity in earnings of Conrail (Note 5) 32 29 45 Gains and losses from sale of properties and investments 18 29 51 Interest income 13 20 45 Corporate-owned life insurance net 1 (31) 7 Expenses related to synthetic fuel investments -- -- (77) Taxes on nonoperating property (10) (10) (10) Other interest expense net (5) 2 (25) Other (28) (29) (30) Total $ 127 $ 110 $ 93 Other income net includes income and costs not part of rail operations and the income generated by the activities of NS noncarrier subsidiaries as well as the costs incurred by those subsidiaries in their operations. NS had a 40.5% interest in a limited liability company that owned and operated facilities that produced synthetic fuel from coal. In addition, in 2007 NS purchased two facilities that produced synthetic fuel from coal. The production of synthetic fuel resulted in tax credits as well as expenses related to the investments. The expenses are included in Expenses related to synthetic fuel investments above. The tax credits related to the synthetic fuel investments expired at the end of 2007 and are no longer available.

Income Taxes

Income Taxes
	12 Months Ended Dec. 31, 2009 USD / shares
Income Taxes [Abstract]
Income Taxes	3. Income Taxes Provision for Income Taxes 2009 2008 2007 ($ in millions) Current: Federal $ 239 $ 657 $ 570 State 11 87 78 Total current taxes 250 744 648 Deferred: Federal 289 257 77 State 49 33 48 Total deferred taxes 338 290 125 Provision for income taxes $ 588 $ 1,034 $ 773 Reconciliation of Statutory Rate to Effective Rate The Provision for income taxes in the Consolidated Statements of Income differs from the amounts computed by applying the statutory federal corporate tax rate as follows: 2009 2008 2007 Amount % Amount % Amount % ($ in millions) Federal income tax at statutory rate $ 568 35 $ 963 35 $ 783 35 State income taxes, net of Federal tax effect 39 2 77 3 63 3 Illinois tax law change, net of Federal tax effect -- -- 1 -- 19 1 Tax credits (4) -- (2) -- (65) (3) Other net (15) (1) (5) -- (27) (1) Provision for income taxes $ 588 36 $ 1,034 38 $ 773 35 Illinois enacted tax legislation in August 2007, revised in January 2008, which modified the way transportation companies apportion their taxable income to the state. The change resulted in an increase in NS income tax liability as shown above. Deferred Tax Assets and Liabilities Certain items are reported in different periods for financial reporting and income tax purposes. Deferred tax assets and liabilities are recorded in recognition of these differences. The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and deferred tax liabilities are as follows: December 31, 2009 2008 ($ in millions) Deferred tax assets: Compensation and benefits, including postretirement $ 661 $ 728 Accruals, including casualty and other claims 164 218 Other 46 45 Total gross deferred tax assets 871 991 Less valuation allowance (14) (11) Net deferred tax asset 857 980 Deferred tax liabilities: Property (7,195) (6,957) Other (267) (246) Total gross deferred tax liabilities (7,462) (7,203) Net deferred tax liability (6,605) (6,223) Net current deferred tax asset 142 149 Net long-term deferred tax liability $ (6,747) $ (6,372) Except for amounts for which a valuation allowance has been provided, management believes that it is more likely than not that the results of future operations will generate sufficient taxable income to realize the deferred tax assets. The valuation allowance at the end of each year relates to subsidiary state income tax net operating losses that may not be utilized prior to their expirat

Fair Value

Fair Value
	12 Months Ended Dec. 31, 2009 USD / shares
Fair Value [Abstract]
Fair Value	4. Fair Value Fair Value Measurements ASC 820-10, Fair Value Measurements, established a framework for measuring fair value and a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value into three broad levels, as follows: Level 1 Inputs to the valuation methodology are unadjusted quoted prices for identical assets or liabilities in active markets that NS has the ability to access. Level 2 Inputs to the valuation methodology include: Quoted prices for similar assets or liabilities in active markets; Quoted prices for identical or similar assets or liabilities in inactive markets; Inputs other than quoted prices that are observable for the asset or liability; Inputs that are derived principally from or corroborated by observable market data by correlation or other means. If the asset or liability has a specified (contractual) term, the Level 2 input must be observable for substantially the full term of the asset or liability. Level 3 Inputs to the valuation methodology are unobservable and significant to the fair value measurement. The assets or liabilitys fair value measurement level within the hierarchy is based on the lowest level of any input that is significant to the fair value measurement. At December 31, 2009 for assets measured at fair value on a recurring basis, there were $90 million of available-for-sale securities as valued under level 2 of the fair value hierarchy. There were no such assets valued under level 1 or level 3 valuation techniques. Fair Values of Financial Instruments In accordance with ASC 825, Financial Instruments, NS has evaluated the fair values of financial instruments and methods used to determine those fair values. The fair values of Cash and cash equivalents, Short-term investments, Accounts receivable, Accounts payable, and Short-term debt approximate carrying values because of the short maturity of these financial instruments. The carrying value of corporate-owned life insurance is recorded at cash surrender value and, accordingly, approximates fair value. The carrying amounts and estimated fair values for the remaining financial instruments, excluding derivatives and investments accounted for under the equity method, consisted of the following at December 31: 2009 2008 Carrying Fair Carrying Fair Amount Value Amount Value ($ in millions) Investments $ 237 $ 260 $ 163 $ 179 Long-term debt $ (7,053) $ (8,048) $ (6,667) $ (6,885) Underlying net assets were used to estimate the fair value of investments. The fair value of notes receivable are based on future discounted cash flows. The fair values of debt were estimated based on quoted market prices or discounted cash flows using current interest rates for debt with similar terms, company rating, and remaining maturity. Carrying amounts of available-for-sale securities reflect unrealized holding losses of less than $1million on December31, 2009, and zero on December 31, 2008. Sales of available-for-sale securities were immaterial

Investments

Investments
	12 Months Ended Dec. 31, 2009 USD / shares
Investments [Abstract]
Investments	5. Investments December 31, 2009 2008 ($ in millions) Short-term investments with average maturities: Federal government notes, 9 months $ 60 $ -- Other short-term investments, 8 months 30 -- Total short-term investments $ 90 $ -- Long-term investments: Investment in Conrail Inc. $ 924 $ 868 Other equity method investments 829 674 Company-owned life insurance at net cash surrender value 173 74 Corporate bonds, held to maturity, with average maturities of 19 months 56 40 Federal government notes, held to maturity, with average maturities of 26 months 45 -- Other investments 137 123 Total long-term investments $ 2,164 $ 1,779 Other equity method investments above includes $272million at December 31, 2009, and $267million at December 31, 2008, related to NS investment in Meridian Speedway LLC, a joint venture formed with Kansas City Southern. Also included is NS investment in Pan Am Southern LLC, a joint venture formed with Pan Am Railways, Inc. in 2009, which was $140 million at December 31, 2009. Investment in Conrail Through a limited liability company, Norfolk Southern and CSX Corporation (CSX) jointly own Conrail Inc. (Conrail), whose primary subsidiary is Consolidated Rail Corporation (CRC). NS has a 58% economic and 50% voting interest in the jointly owned entity, and CSX has the remainder of the economic and voting interests. NS is applying the equity method of accounting to its investment in Conrail. NS is amortizing the excess of the purchase price over Conrails net equity using the principles of purchase accounting, based primarily on the estimated useful lives of Conrails depreciable property and equipment, including the related deferred tax effect of the differences in tax accounting bases for such assets, as all of the purchase price at acquisition was allocable to Conrails tangible assets and liabilities. At December 31, 2009, based on the funded status of Conrails pension plans, NS increased its proportional investment in Conrail by $24million. This resulted in income of $22million recorded to other comprehensive income (loss) and a combined federal and state deferred tax liability of $2million. At December 31, 2008, NS year-end adjustment reduced its proportional investment in Conrail by $60million. This resulted in a $55million loss recorded to other comprehensive income (loss) and a combined federal and state deferred tax asset of $5million. At December31, 2009, the difference between NS investment in Conrail and its share of Conrails underlying net equity was $548million. NS equity in the earnings of Conrail, net of amortization, included in Other income net was $32million, $29million, and $45million in 2009, 2008 and 2007, respectively. CRC owns and operates certain properties (the Shared Assets Areas) for the joint and exclusive benefit of NSR and CSX Transportation, Inc. (CSXT). The costs of operating the Shared Assets Areas are borne by NSR and CSXT based on usage. In additio

Properties

Properties
	12 Months Ended Dec. 31, 2009 USD / shares
Properties [Abstract]
Properties	6. Properties December 31, Depreciation 2009 2008 Rate for 2009 ($ in millions) Land $ 2,181 $ 2,119 Railway property: Road 21,049 20,240 2.7% Equipment 7,737 7,688 3.7% Other property 469 473 1.7% 31,436 30,520 Less accumulated depreciation (8,793) (8,273) Net properties $ 22,643 $ 22,247 Railway property includes $243million at December 31, 2009, and $483million at December31, 2008, of assets recorded pursuant to capital leases with accumulated amortization of $94million and $189million at December 31, 2009 and 2008, respectively. Other property includes the costs of obtaining rights to natural resources of $336million at December31, 2009 and 2008, with accumulated depletion of $184million and $179million respectively. Capitalized Interest Total interest cost incurred on debt in 2009, 2008, and 2007 was $484million, $459million, and $455million, respectively, of which $17million, $15million and $14million was capitalized.

Current Liabilities

Current Liabilities
	12 Months Ended Dec. 31, 2009 USD / shares
Current Liabilities [Abstract]
Current Liabilities	7. Current Liabilities December 31, 2009 2008 ($ in millions) Accounts payable: Accounts and wages payable $ 417 $ 577 Casualty and other claims (Note 17) 233 248 Vacation liability 123 125 Due to Conrail (Note 5) 104 82 Equipment rents payable net 75 84 Other 22 24 Total $ 974 $ 1,140 Other current liabilities: Interest payable $ 106 $ 91 Retiree benefit obligations (Note 11) 65 59 Liabilities for forwarded traffic 42 44 Other 19 26 Total $ 232 $ 220

Debt

Debt
	12 Months Ended Dec. 31, 2009 USD / shares
Debt [Abstract]
Debt	8. Debt Debt with weighted average interest rates and maturities is presented below: December 31, 2009 2008 ($ in millions) Notes and debentures: 6.70%, maturing to 2014 $ 1,031 $ 1,431 6.40%, maturing 2016 and 2018 1,650 1,150 7.27%, maturing 2019 to 2025 1,264 764 7.11%, maturing 2027 to 2031 1,290 1,290 7.21%, maturing 2037 and 2043 855 855 7.02%, maturing 2097 and 2105 650 650 Securitization borrowings, 2.22% 200 300 Equipment obligations, 6.43%, maturing to 2014 80 99 Capitalized leases, 4.32%, maturing to 2024 73 139 PAS non-interest bearing, maturing to 2012 71 -- Other debt, 7.50%, maturing to 2019 113 113 Discounts and premiums, net (124) (124) Total debt 7,153 6,667 Less current maturities and short-term debt (474) (484) Long-term debt excluding current maturities and short-term debt $ 6,679 $ 6,183 Long-term debt maturities subsequent to 2010 are as follows: 2011 $ 371 2012 43 2013 46 2014 446 2015 and subsequent years 5,773 Total $ 6,679 During the second quarter of 2009, NS issued $500 million of unsecured notes at 5.90% due 2019 pursuant to its automatic shelf registration statement described below. The net proceeds from the offering were approximately $496 million after deducting the purchase discount and expenses. During the first quarter of 2009, NS issued $500 million of unsecured notes at 5.75% due 2016 in a private offering. The net proceeds from the offering were approximately $494 million after deducting the purchase discount and expenses. During the fourth quarter of 2009, NS exchanged the unregistered securities with essentially identical securities registered under the Securities Act of 1933. During the second quarter of 2008, $200million of commercial paper matured and was refinanced as part of a private offering under which NS issued and sold $600million of unsecured notes at 5.75% due 2018. NS subsequently exchanged substantially all of these unregistered securities with essentially identical securities registered under the Securities Act of 1933. In November 2007, NS entered into a $500 million receivables securitization facility under which NSR sells substantially all of its eligible third-party receivables to an NS subsidiary, which in turn may transfer beneficial interests in the receivables to various commercial paper vehicles. Amounts received under the facility are accounted for as borrowings. Under this facility, NS received $100million and repaid $200million in 2009. At December 31, 2009 and 2008, the amounts outstanding under the facility were $200million at an average variable interest rate of 2.22% and $300million at an average variable interest rate of 3.01%, respectively. NS intent is to refinance $100 million and $300 million, respectively, of these borrowings by issuing long-term debt, which is supported by its $1billion credit agreement (see below)

Lease Commitments

Lease Commitments
	12 Months Ended Dec. 31, 2009 USD / shares
Leases [Abstract]
Lease Commitments	9. Lease Commitments NS is committed under long-term lease agreements, which expire on various dates through 2067, for equipment, lines of road and other property. The following amounts do not include payments to CRC under the Shared Assets Areas agreements (see Note 5). Future minimum lease payments and operating lease expense are as follows: Operating Capital Leases Leases ($ in millions) 2010 $ 111 $ 27 2011 96 25 2012 81 17 2013 72 3 2014 52 2 2015 and subsequent years 312 3 Total $ 724 $ 77 Less imputed interest on capital leases at an average rate of 5.1% (4) Present value of minimum lease payments included in debt $ 73 Operating Lease Expense 2009 2008 2007 ($ in millions) Minimum rents $ 163 $ 183 $ 191 Contingent rents 65 80 79 Total $ 228 $ 263 $ 270 Contingent rents are primarily comprised of usage-based rent paid to other railroads for joint facility operations.

Other Liabilities

Other Liabilities
	12 Months Ended Dec. 31, 2009 USD / shares
Other Liabilities and Shares Subject to Mandatory Redemption [Abstract]
Other Liabilities	10. Other Liabilities December 31, 2009 2008 ($ in millions) Retiree health and death benefit obligations (Note 11) $ 829 $ 732 Casualty and other claims (Note 17) 265 320 Net pension obligations (Note 11) 170 329 Long-term advances from Conrail (Note 5) 133 133 Deferred compensation 130 131 Federal and state income taxes 94 144 Other 180 241 Total $ 1,801 $ 2,030

Pension and Other Postretiremen

Pension and Other Postretirement Benefits
	12 Months Ended Dec. 31, 2009 USD / shares
Pension and Other Postretirement Benefits [Abstract]
Pension and Other Postretirement Benefits	11. Pensions and Other Postretirement Benefits Norfolk Southern and certain subsidiaries have both funded and unfunded defined benefit pension plans covering principally salaried employees. Norfolk Southern and certain subsidiaries also provide specified health care and death benefits to eligible retired employees and their dependents. Under the present plans, which may be amended or terminated at NS option, a defined percentage of health care expenses is covered, reduced by any deductibles, co-payments, Medicare payments, and in some cases, coverage provided under other group insurance policies. Pension and Other Postretirement Benefit Obligations and Plan Assets Other Postretirement Pension Benefits Benefits 2009 2008 2009 2008 ($ in millions) Change in benefit obligations Benefit obligation at beginning of year $ 1,670 $ 1,644 $ 920 $ 859 Service cost 26 25 16 16 Interest cost 101 99 57 51 Actuarial losses 8 4 106 44 Plan amendments -- 7 -- -- Benefits paid (109) (109) (55) (50) Benefit obligation at end of year 1,696 1,670 1,044 920 Change in plan assets Fair value of plan assets at beginning of year 1,333 1,963 138 176 Actual return on plan assets 307 (531) 23 (38) Employer contribution 11 10 55 50 Benefits paid (109) (109) (55) (50) Fair value of plan assets at end of year 1,542 1,333 161 138 Funded status at end of year $ (154) $ (337) $ (883) $ (782) Amounts recognized in the Consolidated Balance Sheets consist of: Noncurrent assets $ 27 $ 1 $ -- $ -- Current liabilities (11) (9) (54) (50) Noncurrent liabilities (170) (329) (829) (732) Net amount recognized $ (154) $ (337) $ (883) $ (782) Amounts recognized in accumulated other comprehensive loss (pretax) consist of: Net loss $ 821 $ 991 $ 414 $ 351 Prior service cost (benefit) 10 13 -- (2) NS unfunded pension plans, included above, which in all cases have no assets and therefore have an accumulated benefit obligation in excess of plan assets, had projected benefit obligations of $181million at December31, 2009, and $168million at December31, 2008, and had accumulated benefit obligations of $159million at December31, 2009, and $146million at December31, 2008. Pension and Other Postretirement Benefit Cost Components 2009 2008 2007 ($ in millions) Pension benefits Service cost $ 26 $ 25 $ 24 Interest cost 101 99 92 Expected return on plan assets (154) (173) (167) Amortization of prior service cost 3 3 2 Amortization of net losses 25 7 9

Stock-based Compensation

Stock-based Compensation
	12 Months Ended Dec. 31, 2009 USD / shares
Stock-based Compensation [Abstract]
Stock-based Compensation	12. Stock-Based Compensation Under the stockholder-approved Long-Term Incentive Plan (LTIP), a committee of nonemployee directors of the Board or the chief executive officer (if delegated such authority by the committee) may grant stock options, stock appreciation rights (SARs), restricted stock units, restricted shares, performance shares, and performance share units (PSUs), up to a maximum of 88,025,000 shares of Norfolk Southern Common Stock (Common Stock). Of these shares, 5,000,000 were approved by the Board for issuance to non-officer participants; as a broad-based issuance, stockholder approval was not required. In May 2005, the stockholders approved an amended LTIP which provided that 8,500,000 shares of stock previously approved for issuance under LTIP could be granted as restricted stock units, restricted shares, or performance shares. Under the Board-approved Thoroughbred Stock Option Plan (TSOP), the committee may grant stock options up to a maximum of 6,000,000 shares of Common Stock; as a broad-based stock option plan, stockholder approval of TSOP was not required. NS uses newly issued shares to satisfy any exercises and awards under LTIP and TSOP. The LTIP also permits the payment on a current or a deferred basis and in cash or in stock of dividend equivalents on shares of Common Stock covered by options, PSUs, or restricted stock units in an amount commensurate with regular quarterly dividends paid on Common Stock. Tax absorption payments also are authorized for any awards under LTIP in amounts estimated to equal the federal and state income taxes applicable to shares of Common Stock issued subject to a share retention agreement. During the first quarter of 2009, a committee of nonemployee directors of NS Board granted stock options, restricted stock units and PSUs pursuant to LTIP and granted stock options pursuant to TSOP. Receipt of an award under LTIP was made contingent upon the awardees execution of a non-compete agreement, and all awards under LTIP were made subject to forfeiture in the event the awardee engages in competing employment for a period of time following retirement. Accounting Method NS accounts for its grants of PSUs, restricted stock units, restricted shares, dividend equivalents, tax absorption payments, and SARs in accordance with ASC 718 Share-Based Payment. Accordingly, all awards result in charges to net income while dividend equivalents, which are all related to equity classified awards, are charged to retained income. Related compensation costs were $60 million in 2009, $89million in 2008, and $96million in 2007. The total tax effects recognized in income in relation to stock-based compensation were benefits of $18million in 2009, $30million in 2008, and $32million in 2007. Common stock issued net in the Consolidated Statements of Cash Flows for the years ended December31, 2009, 2008, and 2007 includes tax benefits generated from tax deductions in excess of compensation costs recognized (excess tax benefits) for share-based awards of $15million, $76million, and $57million, respectively. Stock Options Options may be granted for a term not to exceed 10 years and are subj

Stockholders' Equity

Stockholders' Equity
	1/1/2009 - 12/31/2009 USD / shares
Stockholders' Equity [Abstract]
Stockholders' Equity	13. Stockholders Equity Common Stock Common stock is reported net of shares held by consolidated subsidiaries (Treasury Shares) of Norfolk Southern. Treasury Shares at December 31, 2009 and 2008, amounted to 20,443,337 and 20,579,088 shares, respectively, with a cost of $19million in both 2009 and 2008. Accumulated Other Comprehensive Loss Accumulated other comprehensive loss reported in the Consolidated Statements of Changes in Stockholders Equity consisted of the following: Balance Net Balance at Beginning Gain Reclassification at End of Year (Loss) Adjustments of Year ($ in millions) Year-Ended 2009 Pension and other postretirement liabilities $ (831) $ 29 $ 38 $ (764) Other comprehensive loss of equity investees (111) 22 -- (89) Accumulated other comprehensive loss $ (942) $ 51 $ 38 $ (853) Year-Ended 2008 Pension and other postretirement liabilities $ (349) $ (498) $ 16 $ (831) Other comprehensive loss of equity investees (50) (61) -- (111) Accumulated other comprehensive loss $ (399) $ (559) $ 16 $ (942) Other Comprehensive Income (Loss) Other comprehensive income (loss) reported in the Consolidated Statements of Changes in Stockholders Equity consisted of the following: Tax Pretax (Expense) Net-of-Tax Amount Benefit Amount ($ in millions) Year ended December 31, 2009 Net gain (loss) arising during the year: Pensions and other postretirement benefits $ 47 $ (18) $ 29 Reclassification adjustments for costs included in net income 61 (23) 38 Subtotal 108 (41) 67 Other comprehensive income (loss) of equity investees 24 (2) 22 Other comprehensive income (loss) $ 132 $ (43) $ 89 Year ended December 31, 2008 Net gain (loss) arising during the year: Pensions and other postretirement benefits $ (812) $ 314 $ (498) Reclassification adjustments for costs included in net income 27 (11) 16 Subtotal (785) 303 (482) Other comprehensive income (loss) of equity investees (65) 4 (61) Other comprehensive income (loss) $ (850) $ 307 $ (543) Year ended December 31, 2007 Net gain (loss) arising during the year: Pensions and other postretirement benefits $ (88) $ 34 $ (54) Reclassification adjustments for costs included in net income 31 (11) 20 Subtotal (57) 23 (34) Other comprehensive income of equity investees 5 -- 5 Reclassification adjustment for unrealized gains on securities included in net income (2) 1 (1) Other comprehensive income (loss) $ (54) $ 24 $ (30)

Stock Repurchase Program

Stock Repurchase Program
	12 Months Ended Dec. 31, 2009 USD / shares
Stock Repurchase Program [Abstract]
Stock Repurchase Program [Text Block]	14. Stock Repurchase Program In March 2007, NS Board of Directors amended NS share repurchase program, increasing the authorized amount of share repurchases from 50 million to 75 million shares and shortening the term of the program from 2015 to 2010. The timing and volume of purchases is guided by managements assessment of market conditions and other pertinent facts. Any near-term purchases under the program are expected to be made with internally generated cash or proceeds from borrowings. There were no shares repurchased under this program in 2009. NS repurchased and retired 19.4million shares and 23.6million shares of its common stock under this program in 2008 and 2007, respectively, at a cost of $1.1billion and $1.2billion, respectively. Since inception of this program in 2006, NS has repurchased and retired 64.7million shares of Common Stock at a total cost of $3.3billion.

Earnings Per Share

Earnings Per Share
	12 Months Ended Dec. 31, 2009 USD / shares
Earnings Per Share [Abstract]
Earnings Per Share	15. Earnings Per Share The following tables set forth the calculation of basic and diluted earnings per share: 2009 2008 2007 ($ in millions except per share, shares in millions) Basic earnings per share: Income available to common stockholders $ 1,026 $ 1,707 $ 1,455 Weighted-average shares outstanding 367.1 372.3 389.6 Basic earnings per share $ 2.79 $ 4.58 $ 3.73 In the first quarter of 2009, NS adopted the provisions of the FASB FSP EITF No. 03-6-1, Determining Whether Instruments Granted in Share-Based Payment Transactions are Participating Securities (ASC 260-10), which requires the treatment of unvested stock options receiving dividend equivalents as participating securities in computing earnings per share under the two-class method. NS has retrospectively applied the provisions of this FSP and accordingly, income available to common stockholders for 2009, reflects an $8million reduction, and 2008 and 2007 both reflect a $9 million reduction from net income for the effect of dividend equivalent payments made to holders of stock options, which had the effect of reducing the previously reported basic earnings per share for 2008, from $4.60 to $4.58 and for 2007, from $3.74 to $3.73. 2009 2008 2007 ($ in millions except per share, shares in millions) Diluted earnings per share: Income available to common stockholders $ 1,026 $ 1,716 $ 1,464 Weighted-average shares outstanding per above 367.1 372.3 389.6 Dilutive effect of outstanding options, PSUs and restricted shares 5.0 7.7 8.2 Adjusted weighted-average shares outstanding 372.1 380.0 397.8 Diluted earnings per share $ 2.76 $ 4.52 $ 3.68 As required under the provisions of FSP EITF No. 03-6-1 (ASC 260-10), diluted earnings per share for 2009 was calculated under the more dilutive two-class method (as compared to the treasury stock method) and accordingly, income available to common stockholders for 2009 reflects an $8million reduction from net income for dividend equivalent payments. The diluted calculations exclude options having exercise prices exceeding the average market price of Common Stock as follows: in 2009, 1.4 million, and none in 2008 and 2007.

Derivative Financial Instrument

Derivative Financial Instruments
	12 Months Ended Dec. 31, 2009 USD / shares
Derivative Financial Instruments [Abstract]
Derivative Financial Instruments	16. Derivative Financial Instruments All derivatives are recognized in the financial statements as either assets or liabilities and are measured at fair value. Changes in fair value are recorded as adjustments to the assets or liabilities being hedged in Other comprehensive loss, or in current earnings, depending on whether the derivative is designated and qualifies for hedge accounting, the type of hedge transaction represented, and the effectiveness of the hedge. NS has used derivative financial instruments to manage its overall exposure to fluctuations in interest rates. NS does not engage in the trading of derivatives. Management has determined that its derivative financial instruments qualify as fair-value hedges, having values that highly correlate with the underlying hedged exposures, and has designated such instruments as hedging transactions. Credit risk related to the derivative financial instruments is considered to be minimal and is managed by requiring high credit standards for counterparties and periodic settlements. Interest Rate Hedging NS manages its overall exposure to fluctuations in interest rates by issuing both fixed- and floating-rate debt instruments, and by entering into interest rate hedging transactions to achieve an appropriate mix within its debt portfolio. NS had $4million, or less than 1%, and $17million, or less than 1%, of its fixed-rate debt portfolio hedged as of December31, 2009, and 2008, respectively, using interest rate swaps that qualify for and are designated as fair-value hedge transactions. NS interest rate hedging activity resulted in decreases in interest expense of approximately $1million for 2009, 2008 and 2007. These swaps have been effective in hedging the changes in fair value of the related debt arising from changes in interest rates and there has been no impact on earnings resulting from ineffectiveness associated with these derivative transactions. Fair Values Fair values of interest rate swaps at December 31, 2009, and 2008, were determined based upon the present value of expected future cash flows discounted at the appropriate implied spot rate from the spot rate yield curve. Fair value adjustments are noncash transactions and, accordingly, are excluded from the Consolidated Statements of Cash Flows. The gross and net asset position of NS outstanding derivative financial instruments was less than $1million at December31, 2009, and approximately $1million at December31, 2008.

Commitments and Contingencies

Commitments and Contingencies
	12 Months Ended Dec. 31, 2009 USD / shares
Commitments and Contingencies [Abstract]
Commitments and Contingencies	17. Commitments and Contingencies Lawsuits Norfolk Southern and/or certain subsidiaries are defendants in numerous lawsuits and other claims relating principally to railroad operations. When management concludes 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 managements 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 are known. 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 its personal injury liability and determining the amount to accrue with respect to such claim during the year, NS management utilizes studies prepared by an independent consulting actuarial firm. Job-related accidental injury and occupational claims are subject to the Federal Employers Liability Act (FELA), which is applicable only to railroads. FELAs fault-based 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 managements 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, NS records a liability when the expected loss for the claim is both probable and estimable. In April 2008, NS settled the lawsuit brought by Avondale Mills for claims associated with the January 6, 2005, derailment in Graniteville, SC. A portion of the settlement was not reimbursed by insurance and was included in first quarter 2008 expenses. The total liability related to the derailment represents NS best estimate based on current facts and circumstances. The estimate includes amounts related to property damage, personal injury and response costs. NS commercial insurance policies are expected to cover substantially all expenses related to this derailment above the unreimbursed portion and NS self-insured retention, including NS response costs and legal fees. The Consolidated Balance Sheets reflect long-term receivables for estimated recoveries from NS insurance carriers. NS is engaged in arbitration with two of its insurance carriers that failed to respond to insurance claims submitted by NS. NS believes these expenses are covered by the insurance policies and that recoveries of the contested amounts are probable. Accordingly, NS has recorded the full re

Schedule of Valuation and Quali

Schedule of Valuation and Qualifying Accounts
	12 Months Ended Dec. 31, 2009 USD / shares
Schedule of Valuation and Qualifying Accounts [Abstract]
Schedule of Valuation and Qualifying Accounts Disclosure	Schedule II Norfolk Southern Corporation and Subsidiaries Valuation and Qualifying Accounts Years Ended December 31, 2007, 2008, and 2009 ($ in millions) Additions charged to: Beginning Other Ending Balance Expenses Accounts Deductions Balance Year ended December 31, 2007 Valuation allowance (included net in deferred tax liability) for deferred tax assets $ 9 $ 1 $ -- $ -- $ 10 Casualty and other claims included in other liabilities $ 471 $ 113 $ 162 2,3 $ 158 2 $ 588 Current portion of casualty and other claims included in accounts payable $ 301 $ 17 $ 122 1 $ 181 3 $ 259 Year ended December 31, 2008 Valuation allowance (included net in deferred tax liability) for deferred tax assets $ 10 $ 1 $ -- $ -- $ 11 Casualty and other claims included in other liabilities $ 588 $ 84 $ 80 2,3 $ 432 2 $ 320 Current portion of casualty and other claims included in accounts payable $ 259 $ 28 $ 127 1 $ 166 3 $ 248 Year ended December 31, 2009 Valuation allowance (included net in deferred tax liability) for deferred tax assets $ 11 $ 3 $ -- $ -- $ 14 Casualty and other claims included in other liabilities $ 320 $ 58 $ 4 2,3 $ 117 2 $ 265 Current portion of casualty and other claims included in accounts payable $ 248 $ 3 $ 115 1 $ 133 3 $ 233 1 Includes revenue refunds and overcharges provided through deductions from operating revenues and transfers from other accounts. 2 Payments and reclassifications to/from accounts payable. 3 Payments and reclassifications to/from other liabilities.

Document Information

Document Information
	12 Months Ended Dec. 31, 2009 USD / shares
Document Information [Line Items]
Document Type	10-K
Amendment Flag	false
Document Period End Date	2009-12-31

Entity Information

Entity Information (USD $)
	12 Months Ended Dec. 31, 2009	Jan. 31, 2010	Jun. 30, 2009
Entity Information [Line Items]
Entity Registrant Name	Norfolk Southern Corporation
Entity Central Index Key	0000702165
Current Fiscal Year End Date	--12-31
Entity Well-known Seasoned Issuer	Yes
Entity Voluntary Filers	No
Entity Current Reporting Status	Yes
Entity Filer Category	Large Accelerated Filer
Entity Public Float			$13,820,960,718
Entity Listings [Line Items]
Entity Common Stock, Shares Outstanding		369,655,129