Cover Page
Cover Page | 3 Months Ended |
Mar. 31, 2023 shares | |
Cover [Abstract] | |
Document Type | 10-Q |
Document Quarterly Report | true |
Document Period End Date | Mar. 31, 2023 |
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 | 650 West Peachtree Street NW |
Entity Address, Postal Zip Code | 30308-1925 |
Entity Address, City or Town | Atlanta, |
Entity Address, State or Province | GA |
City Area Code | (855) |
Local Phone Number | 667-3655 |
Title of 12(b) Security | Norfolk Southern Corporation Common Stock (Par Value $1.00) |
Trading Symbol | NSC |
Security Exchange Name | NYSE |
Entity Current Reporting Status | Yes |
Entity Interactive Data Current | Yes |
Entity Filer Category | Large Accelerated Filer |
Entity Small Business | false |
Entity Emerging Growth Company | false |
Entity Shell Company | false |
Entity Common Stock, Shares Outstanding | 227,639,602 |
Entity Central Index Key | 0000702165 |
Current Fiscal Year End Date | --12-31 |
Document Fiscal Year Focus | 2023 |
Document Fiscal Period Focus | Q1 |
Amendment Flag | false |
Consolidated Statements of Inco
Consolidated Statements of Income (Unaudited) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Income Statement [Abstract] | ||
Railway operating revenues | $ 3,132 | $ 2,915 |
Railway operating expenses | ||
Compensation and benefits | 690 | 619 |
Purchased services and rents | 496 | 437 |
Fuel | 315 | 301 |
Depreciation | 321 | 302 |
Materials and other | 212 | 171 |
Eastern Ohio incident | 387 | 0 |
Total railway operating expenses | 2,421 | 1,830 |
Income from railway operations | 711 | 1,085 |
Other income (expense) – net | 56 | (5) |
Interest expense on debt | 175 | 168 |
Income before income taxes | 592 | 912 |
Income taxes | 126 | 209 |
Net income | $ 466 | $ 703 |
Earnings per share | ||
Basic (in dollars per share) | $ 2.04 | $ 2.94 |
Diluted (in dollars per share) | $ 2.04 | $ 2.93 |
Consolidated Statements of Comp
Consolidated Statements of Comprehensive Income (Unaudited) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Statement of Comprehensive Income [Abstract] | ||
Net income | $ 466 | $ 703 |
Other comprehensive income (loss), before tax: | ||
Pension and other postretirement benefit (expense) | (5) | 6 |
Other comprehensive income (loss) of equity investees | (1) | 6 |
Other comprehensive income (loss), before tax | (6) | 12 |
Income tax benefit (expense) related to items of other comprehensive income (loss) | 2 | (4) |
Other comprehensive income (loss), net of tax | (4) | 8 |
Total comprehensive income | $ 462 | $ 711 |
Consolidated Balance Sheets (Un
Consolidated Balance Sheets (Unaudited) - USD ($) $ in Millions | Mar. 31, 2023 | Dec. 31, 2022 |
Current assets: | ||
Cash and cash equivalents | $ 552 | $ 456 |
Accounts receivable – net | 1,170 | 1,148 |
Materials and supplies | 262 | 253 |
Other current assets | 138 | 150 |
Total current assets | 2,122 | 2,007 |
Investments | 3,738 | 3,694 |
Properties less accumulated depreciation | 32,240 | 32,156 |
Other assets | 1,069 | 1,028 |
Total assets | 39,169 | 38,885 |
Current liabilities: | ||
Accounts payable | 1,315 | 1,293 |
Short-term debt | 0 | 100 |
Income and other taxes | 438 | 312 |
Other current liabilities | 668 | 341 |
Current maturities of long-term debt | 403 | 603 |
Total current liabilities | 2,824 | 2,649 |
Long-term debt | 14,585 | 14,479 |
Other liabilities | 1,785 | 1,759 |
Deferred income taxes | 7,248 | 7,265 |
Total liabilities | 26,442 | 26,152 |
Stockholders’ equity: | ||
Common stock | 229 | 230 |
Additional paid-in capital | 2,155 | 2,157 |
Accumulated other comprehensive loss | (355) | (351) |
Retained income | 10,698 | 10,697 |
Total stockholders’ equity | 12,727 | 12,733 |
Total liabilities and stockholders’ equity | $ 39,169 | $ 38,885 |
Consolidated Balance Sheets (_2
Consolidated Balance Sheets (Unaudited) (Parenthetical) - USD ($) $ in Millions | Mar. 31, 2023 | Dec. 31, 2022 |
Statement of Financial Position [Abstract] | ||
Accumulated depreciation | $ 12,810 | $ 12,592 |
Common stock, par or stated value per share (in dollars per share) | $ 1 | $ 1 |
Common stock, shares authorized (in shares) | 1,350,000,000 | 1,350,000,000 |
Common stock, shares outstanding, net of treasury shares (in shares) | 227,639,602 | 228,076,415 |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows (Unaudited) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Cash flows from operating activities | ||
Net income | $ 466 | $ 703 |
Reconciliation of net income to net cash provided by operating activities: | ||
Depreciation | 321 | 302 |
Deferred income taxes | (15) | 48 |
Gains and losses on properties | (4) | (6) |
Changes in assets and liabilities affecting operations: | ||
Accounts receivable | (22) | (94) |
Materials and supplies | (9) | (46) |
Other current assets | 12 | 21 |
Current liabilities other than debt | 480 | 83 |
Other – net | (56) | (17) |
Net cash provided by operating activities | 1,173 | 994 |
Cash flows from investing activities | ||
Property additions | (428) | (389) |
Property sales and other transactions | 20 | 36 |
Investment purchases | 0 | (1) |
Investment sales and other transactions | 17 | 19 |
Net cash used in investing activities | (391) | (335) |
Cash flows from financing activities | ||
Dividends | (307) | (297) |
Common stock transactions | (10) | (18) |
Purchase and retirement of common stock | (163) | (600) |
Proceeds from borrowings | 594 | 989 |
Debt repayments | (800) | (1) |
Net cash provided by (used in) financing activities | (686) | 73 |
Net increase in cash and cash equivalents | 96 | 732 |
Cash and cash equivalents | ||
At beginning of year | 456 | 839 |
At end of period | 552 | 1,571 |
Supplemental disclosures of cash flow information | ||
Interest (net of amounts capitalized) | 129 | 114 |
Income taxes (net of refunds) | $ (1) | $ 9 |
Consolidated Statements of Chan
Consolidated Statements of Changes in Stockholders’ Equity (Unaudited) - USD ($) $ in Millions | Total | Common Stock | Additional Paid-in Capital | Accum. Other Comprehensive Loss | Retained Income |
Balance at Beginning of Year at Dec. 31, 2021 | $ 13,641 | $ 242 | $ 2,215 | $ (402) | $ 11,586 |
Comprehensive income: | |||||
Net income | 703 | 703 | |||
Other comprehensive income (loss) | 8 | 8 | |||
Total comprehensive income | 711 | ||||
Dividends on common stock, | (297) | (297) | |||
Share repurchases | (600) | (2) | (19) | (579) | |
Stock-based compensation | 6 | 7 | (1) | ||
Balance at End of Period at Mar. 31, 2022 | 13,461 | 240 | 2,203 | (394) | 11,412 |
Balance at Beginning of Year at Dec. 31, 2022 | 12,733 | 230 | 2,157 | (351) | 10,697 |
Comprehensive income: | |||||
Net income | 466 | 466 | |||
Other comprehensive income (loss) | (4) | (4) | |||
Total comprehensive income | 462 | ||||
Dividends on common stock, | (307) | (307) | |||
Share repurchases | (163) | (1) | (6) | (156) | |
Stock-based compensation | 2 | 4 | (2) | ||
Balance at End of Period at Mar. 31, 2023 | $ 12,727 | $ 229 | $ 2,155 | $ (355) | $ 10,698 |
Consolidated Statements of Ch_2
Consolidated Statements of Changes in Stockholders’ Equity (Unaudited) (Parenthetical) - $ / shares | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Statement of Stockholders' Equity [Abstract] | ||
Common stock, dividends, per share, declared (in dollars per share) | $ 1.35 | $ 1.24 |
Railway Operating Revenues
Railway Operating Revenues | 3 Months Ended |
Mar. 31, 2023 | |
Revenue from Contract with Customer [Abstract] | |
Railway Operating Revenues | Railway Operating Revenues The following table disaggregates our revenues by major commodity group: First Quarter 2023 2022 ($ in millions) Merchandise: Agriculture, forest and consumer products $ 653 $ 573 Chemicals 541 498 Metals and construction 400 375 Automotive 284 226 Merchandise 1,878 1,672 Intermodal 814 854 Coal 440 389 Total $ 3,132 $ 2,915 We recognize the amount of revenues to which we expect to be entitled 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 us for the transport of goods. These performance obligations are satisfied as the shipments move from origin to destination. As such, transportation revenues are 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 revenues associated with in-process shipments at period-end are recorded based on the estimated percentage of service completed. We had no material remaining performance obligations at March 31, 2023 and December 31, 2022. We may provide customers ancillary services, such as switching, demurrage and other incidental activities, under their transportation contracts. The revenues associated with these distinct performance obligations are recognized when the services are performed or as contractual obligations are met. These revenues are included within each of the commodity groups and represent approximately 6% and 7% of total “Railway operating revenues” on the Consolidated Statements of Income for the first quarters of 2023 and 2022, respectively. Revenues related to interline transportation services that involve another railroad are reported on a net basis. Therefore, the portion of the amount that relates to another party is not reflected in revenues. Under the typical 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: March 31, December 31, 2022 ($ in millions) Customer $ 919 $ 895 Non-customer 251 253 Accounts receivable – net $ 1,170 $ 1,148 Non-customer receivables include non-revenue-related amounts due from other railroads, governmental entities, and others. We do not have any material contract assets or liabilities at March 31, 2023 and December 31, 2022. |
Stock-Based Compensation
Stock-Based Compensation | 3 Months Ended |
Mar. 31, 2023 | |
Share-Based Payment Arrangement [Abstract] | |
Stock-Based Compensation | Stock-Based Compensation First Quarter 2023 2022 ($ in millions) Stock-based compensation expense $ 11 $ 23 Total tax benefit 6 13 During the first quarter of 2023, we granted stock options, restricted stock units (RSUs) and performance share units (PSUs) pursuant to the Long-Term Incentive Plan (LTIP), as follows: First Quarter Granted Weighted-Average Grant-Date Fair Value Stock options 69,580 $ 77.60 RSUs 173,221 237.70 PSUs 58,040 236.68 Stock Options First Quarter 2023 2022 ($ in millions) Options exercised 66,811 119,343 Cash received upon exercise $ 5 $ 10 Related tax benefits realized 3 5 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. First Quarter 2023 2022 ($ in millions) RSUs vested 149,122 243,301 Common Stock issued net of tax withholding 104,608 172,364 Related tax benefits realized $ 1 $ 5 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. First Quarter 2023 2022 ($ in millions) PSUs earned 58,599 86,420 Common Stock issued net of tax withholding 40,255 54,651 Related tax benefits realized $ — $ 1 |
Earnings Per Share
Earnings Per Share | 3 Months Ended |
Mar. 31, 2023 | |
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 First Quarter 2023 2022 2023 2022 ($ in millions, except per share amounts, Net income $ 466 $ 703 $ 466 $ 703 Dividend equivalent payments (1) — — — Income available to common stockholders $ 465 $ 703 $ 466 $ 703 Weighted-average shares outstanding 227.7 239.3 227.7 239.3 Dilutive effect of outstanding options and share-settled awards 0.6 0.9 Adjusted weighted-average shares outstanding 228.3 240.2 Earnings per share $ 2.04 $ 2.94 $ 2.04 $ 2.93 |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Loss | 3 Months Ended |
Mar. 31, 2023 | |
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 Net Income Reclassification Balance at ($ in millions) Three months ended March 31, 2023 Pensions and other postretirement liabilities $ (319) $ — $ (4) $ (323) Other comprehensive loss of equity investees (32) — — (32) Accumulated other comprehensive loss $ (351) $ — $ (4) $ (355) Three months ended March 31, 2022 Pensions and other postretirement liabilities $ (356) $ — $ 4 $ (352) Other comprehensive income (loss) of equity investees (46) 4 — (42) Accumulated other comprehensive loss $ (402) $ 4 $ 4 $ (394) |
Stock Repurchase Program
Stock Repurchase Program | 3 Months Ended |
Mar. 31, 2023 | |
Equity [Abstract] | |
Stock Repurchase Program | Stock Repurchase Program We repurchased and retired 0.6 million and 2.2 million shares of Common Stock under our stock repurchase programs in the first three months of 2023 and 2022, respectively, at a cost of $163 million and $600 million. |
Investments
Investments | 3 Months Ended |
Mar. 31, 2023 | |
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 $1.6 billion at March 31, 2023 and December 31, 2022. 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 expenses payable to CRC for operation of the Shared Assets Areas totaling $45 million and $38 million for the first quarters of 2023 and 2022, respectively. Our equity in Conrail’s earnings, net of amortization, was $16 million and $14 million for the first quarters of 2023 and 2022, respectively. These amounts partially offset the costs of operating the Shared Assets Areas and are included in “Purchased services and rents.” “Other liabilities” includes $534 million at both March 31, 2023 and December 31, 2022 for long-term advances from Conrail, maturing in 2050 that bear interest at an average rate of 1.31%. Investment in TTX We and seven other North American railroads collectively own TTX Company (TTX), a railcar pooling company that provides its owner-railroads with standardized fleets of intermodal, automotive, and general use railcars at stated rates. We have a 19.78% ownership interest in TTX. |
Debt
Debt | 3 Months Ended |
Mar. 31, 2023 | |
Debt Disclosure [Abstract] | |
Debt | DebtIn February 2023, we issued $500 million of 4.45% senior notes due 2033.We have in place an accounts receivable securitization program with a maximum borrowing capacity of $400 million and a term that expires in May 2023. Amounts received under this facility are accounted for as borrowings. We had no amounts outstanding under this program at March 31, 2023 and our available borrowing capacity was $400 million. At December 31, 2022, we had $100 million (at an average variable interest rate of 5.05%) outstanding, which is included within “Short-term debt” and our available borrowing capacity was $300 million. Our accounts receivable securitization program was supported by $916 million and $883 million in receivables at March 31, 2023 and December 31, 2022, respectively, which are included in “Accounts receivable – net”. |
Pensions and Other Postretireme
Pensions and Other Postretirement Benefits | 3 Months Ended |
Mar. 31, 2023 | |
Defined Benefit Plans and Other Postretirement Benefit Plans Disclosures [Abstract] | |
Pensions and Other Postretirement Benefits | Pensions and Other Postretirement Benefits We have both funded and unfunded defined benefit pension plans covering eligible employees. We also provide specified health care benefits to eligible retired employees; these plans can be amended or terminated at our option. Under our self-insured retiree health care plan, for those participants who are not Medicare-eligible, certain health care expenses are covered for retired employees and their dependents, reduced by any deductibles, coinsurance, and, in some cases, coverage provided under other group insurance policies. Eligible retired participants and their spouses who are Medicare-eligible are not covered under the self-insured retiree health care plan, but instead are provided with an employer-funded health reimbursement account which can be used for reimbursement of health insurance premiums or eligible out-of-pocket medical expenses. Pension and postretirement benefit cost components were as follows: Pension Benefits Other Postretirement Benefits First Quarter 2023 2022 2023 2022 ($ in millions) Service cost $ 6 $ 10 $ 1 $ 1 Interest cost 27 17 4 2 Expected return on plan assets (52) (53) (3) (3) Amortization of net losses 1 12 — — Amortization of prior service benefit — — (6) (6) Net benefit $ (18) $ (14) $ (4) $ (6) |
Fair Values of Financial Instru
Fair Values of Financial Instruments | 3 Months Ended |
Mar. 31, 2023 | |
Fair Value Disclosures [Abstract] | |
Fair Values of Financial Instruments | Fair Values of Financial Instruments The fair values of “Cash and cash equivalents,” “Accounts receivable – net,” “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. There are no other assets or liabilities measured at fair value on a recurring basis at March 31, 2023 or December 31, 2022. The carrying amounts and estimated fair values, based on Level 1 inputs, of long-term debt consist of the following: March 31, 2023 December 31, 2022 Carrying Fair Carrying Fair ($ in millions) Long-term debt, including current maturities $ (14,988) $ (13,889) $ (15,082) $ (13,846) |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies Eastern Ohio Incident Summary On February 3, 2023, a train we operated derailed in East Palestine, Ohio. The derailed equipment included 38 railcars, 11 of which were non-Company-owned tank cars containing hazardous materials. Fires associated with the derailment threatened certain of the tank cars. There was concern about the risk that the content of five of the tank cars carrying vinyl chloride might polymerize, which would have posed the risk of a catastrophic explosion. As a consequence, on February 6, 2023, the local incident commander—in consultation with the incident command that included, among others, federal, state and local officials and Norfolk Southern—opted to conduct a controlled vent and burn of five derailed tank cars, all of which contained vinyl chloride. This procedure involved creating holes in the five tank cars to drain the vinyl chloride into adjacent trenches that had been dug into the ground where such vinyl chloride was then burned, with any material remaining after burning of the vinyl chloride being remediated. The February 3rd derailment, the associated fire, and the resulting vent and burn of the tank cars containing vinyl chloride on February 6th is hereinafter referred to as the “Incident.” In response to the Incident, we have worked to clean the site safely and thoroughly, including those activities described in the Environmental Matters section below with respect to potentially impacted air, soil and water and to monitor for any impact on public health and the environment. We are working with federal, state, and local officials to mitigate impacts from the Incident, including, among other efforts, conducting environmental monitoring and clean-up activities (as more fully described below), and establishing a family assistance center to provide financial support to affected members of the East Palestine and surrounding communities . Financial Impact Although we cannot predict the final outcome or estimate the reasonably possible range of loss with certainty, we have recognized $387 million of expense for costs directly attributable to the Incident, which is presented in “Eastern Ohio incident” on the Consolidated Statements of Income. During the first quarter, our cash expenditures attributable to the Incident were $55 million, which are presented in “Net cash provided by operating activities” on the Consolidated Statement of Cash Flows. The remainder, $332 million, is primarily comprised of our estimates of probable and reasonably estimable liabilities principally associated with environmental matters and legal proceedings, which are discussed in further detail below. While certain costs recorded in the first quarter may be recoverable under our insurance policies in effect at the date of the Incident, no estimate of potential recoveries has yet been recorded. Any amounts recoverable under our insurance policies will be reflected in future periods in which recovery is considered probable. For additional information about our insurance coverage, see “Insurance” below. Environmental Matters – In response to the Incident, we have been working with federal, state, and local officials such as the U.S. Environmental Protection Agency (EPA), the Ohio EPA, and the Pennsylvania Department of Environmental Protection, to conduct environmental response and remediation activities, including but not limited to, air monitoring, indoor air quality screenings, municipal water and private water well testing, residential, commercial, and agricultural soil sampling, surface water and groundwater sampling, re-routing a local waterway around the affected site, capturing and shipping stormwater that enters the impacted derailment site to proper disposal facilities, and excavating and disposing of potentially affected soil at hazardous waste landfills or incinerators. The U.S. EPA issued a Unilateral Administrative Order (UAO) on February 21, 2023, containing various requirements, including the submission of numerous work plans to assess and remediate various environmental media and performance of certain removal actions at the affected site. On February 24, 2023, we submitted to the U.S. EPA our Notice of Intent to Comply with the UAO and are currently cooperating with U.S. EPA as well as the Ohio EPA and Pennsylvania Department of Environmental Protection, pursuant to the UAO and the directives issued thereunder. We are also subject to the following legal proceedings that principally relate to the environmental impact of the Incident: • The U.S. Department of Justice (DOJ) and the U.S. EPA filed a civil complaint (the DOJ Complaint) in the Northern District of Ohio (Eastern Division) seeking injunctive relief, cost recovery and civil penalties for violations of the Clean Water Act and seeking cost recovery under the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA); and • The Ohio Attorney General filed a CERCLA lawsuit (the Ohio Complaint) in the Northern District of Ohio (Eastern Division) requesting statutory damages for a variety of tort and environmental claims under CERCLA. In connection with the foregoing items, we recognized $317 million of expense during the first quarter, of which $31 million was paid, related to probable obligations that are reasonably estimable, in accordance with Financial Accounting Standards Board (FASB) Accounting Standards Codification (ASC) 410-30, “Environmental Obligations.” Our current estimate includes ongoing and future environmental cleanup activities and remediation efforts, governmental oversight costs (including those incurred by the U.S. EPA and the Ohio EPA), and other related costs, including those in connection with the DOJ Complaint (including potential civil penalties related to violations of the Clean Water Act). Our current estimates of future environmental cleanup and remediation liabilities related to the Incident may change over time due to various factors, including but not limited to, the success of current cleanup techniques, the nature and extent of required future cleanup activities, and the extent of governmental oversight, amongst other factors. As clean-up efforts progress and more information is available, including any federal and state requirements, we will review these estimates and revise as appropriate. Legal Proceedings (Non-Environmental) – To date, numerous non-environmental legal actions have been filed with respect to the Incident, including those more specifically set forth below. • There are currently numerous putative class action and individual lawsuits that have been filed, primarily consolidated in the Northern District of Ohio (Eastern Division). The putative class action complaints currently allege numerous claims, including negligence, nuisance, trespass, and medical monitoring, and seek as relief, among other things, compensatory and punitive damages. The putative classes are currently defined by reference to class areas ranging from the evacuation zone up to 100 miles away. Additional multi-plaintiff lawsuits are also pending in the same court and others, such as additional lawsuits pending in the Western District of Pennsylvania brought by local school districts including claims such as negligence, nuisance, trespass, and future health monitoring. No responsive pleadings have yet been filed with respect to these matters (collectively referred to herein as the Incident Lawsuits). In accordance with ASC 450, “Contingencies,” we have recognized a $12 million probable loss in the first quarter with respect to the Incident Lawsuits, which is in addition to $16 million in amounts paid during the first quarter with respect to these matters. • Securities litigation, including a securities class action lawsuit filed in the Southern District of Ohio alleging multiple securities law violations for which no responsive pleading has yet been filed, as well as multiple shareholder demand letters that we have received (collectively, the Shareholder Lawsuits). If and when we conclude that it is probable that a liability has been incurred and the amount of the liability can be reasonably estimated, it will be accrued through a charge to earnings and, if material, disclosed. Any adjustments to the recorded liability will be reflected in earnings in the periods in which such adjustments become known. Because the final outcome of any of these legal proceedings cannot be predicted with certainty, unfavorable or unexpected developments or outcomes could result in additional accruals that could be significant to results of operations in a particular year or quarter. For legal proceedings where a loss may be reasonably possible, but not probable, or is probable but not reasonably estimable, no accrual is established but the matter, if potentially material, is disclosed. The reserves established by us during the first quarter do not include any estimate of loss for the following items, for which we believe a loss is either not probable or not reasonably estimable for the reasons noted: (i) the overall cost to us for programs being developed in conjunction with the Ohio Attorney General for affected residents and businesses, which amounts will impact our loss contingency analysis with respect to the Incident Lawsuits described above, namely a healthcare fund, tailored protection for property owners, and programs to protect drinking water over the long term (given the preliminary nature of such discussions), or (ii) any fines or penalties (in excess of the reserves established for Clean Water Act-related civil penalties) that may be imposed as a result of the Incident Inquiries and Investigations, as more specifically set forth and defined below (the outcome of which are uncertain at this time). Additionally, as noted above, amounts recognized during the first quarter do not include potential recoveries from third parties, including the impact of our insurance coverage, which may apply to various Incident-related expenses or liabilities, as more specifically set forth further below (given the preliminary nature of any related discussions with our insurers). Inquiries and Investigations As set forth above, we are subject to inquiries and investigations by numerous federal, state, and local government authorities and regulatory agencies regarding the Incident, including but not limited to, the DOJ and the U.S. EPA, the Ohio EPA, the National Transportation Safety Board (NTSB), the Federal Railroad Administration (FRA), the Occupational Safety and Health Administration, the Ohio Attorney General, and the Pennsylvania Attorney General. Further details regarding the NTSB and FRA investigations are set forth below. We are cooperating with all inquiries and investigations, including responding to civil and criminal subpoenas and other requests for information (the aforementioned inquiries and investigations, as well as the civil and criminal subpoenas are collectively referred to herein as the Incident Inquiries and Investigations). The outcome of any current or future Incident Inquiries and Investigations is uncertain at this time, including any related fines, penalties or settlements. Therefore, our first quarter expenses do not include estimates of the total amount that we may incur for any such fines, penalties or settlements. Subsequent to the Incident, investigators from the NTSB examined railroad equipment and track conditions; reviewed data from the signal system, wayside defect detectors, local surveillance cameras, and the lead locomotive’s event recorder and forward-facing and inward-facing image recorders; and completed certain interviews (the NTSB Investigation). The NTSB issued a preliminary report indicating that one of the cars involved in the derailment appeared to have a wheel bearing in the final stage of overheat failure moments before the derailment. Their preliminary report also indicates that the rail crew was operating the train within our rules; the rail crew operated the train below the track speed limit, the wayside heat detectors were operating as designed; and once the rail crew was alerted by the wayside detector, they immediately began to stop the train. The NTSB’s investigation remains ongoing. Concurrent with the NTSB Investigation, the FRA is also investigating the Incident. Similar in scope to the NTSB Investigation, the FRA is examining railroad equipment, track conditions, hazardous materials train placement and routing, and emergency response (the FRA Incident Investigation). The FRA Incident Investigation may result in the assessment of civil penalties. In addition to the FRA Incident Investigation, the FRA announced on March 7, 2023 that it would conduct a 60-day supplemental safety assessment (the FRA Safety Assessment). The FRA Safety Assessment will review findings from a previously completed 2022 system audit and assess operational elements including, but not limited to: track, signal, and rolling stock maintenance, inspection and repair practices; protection of employees; communications between transportation departments and mechanical and engineering staff; operation control center procedures and dispatcher training. The overall scope of the FRA Safety Assessment is to examine our safety culture. At the conclusion of the FRA Safety Assessment, the FRA will issue a public report which will include its findings and recommended corrective actions. The FRA Incident Investigation and the FRA Safety Assessment remain ongoing. Other 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 and, if material, disclosed below. 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. For lawsuits and other claims where a loss may be reasonably possible, but not probable, or is probable but not reasonably estimable, no accrual is established but the matter, if potentially material, is disclosed below. We routinely review relevant information with respect to our lawsuits and other claims and update our accruals, disclosures and estimates of reasonably possible loss based on such reviews. 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. On January 3, 2023, the court granted summary judgment to us on all of the compensatory claims but denied summary judgment for all equitable relief claims. On January 18, 2023, the court dismissed the federal equitable relief claims, leaving the state equitable relief claims as the sole remaining issue under consideration. On April 19, 2023, the court disposed of all remaining state equitable relief claims. These rulings may be appealed. If appealed, we will continue to vigorously defend the lawsuit and, although it is reasonably possible we could incur a loss in the case, we believe that we will prevail. However, given that litigation is inherently unpredictable and subject to uncertainties, there can be no assurances that the final outcome of the litigation (including any related appeal) will not be material. Until such appeal is final, we cannot reasonably estimate the potential loss or range of loss associated with this matter. 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. The variability inherent in FELA’s fault-based tort 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 – Other than Incident-related matters noted above, the largest component of claims expense is employee personal injury costs. The independent actuarial firm we engage 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. The accuracy of 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. Our 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. In addition to environmental claims associated with the Incident, our Consolidated Balance Sheets include liabilities for other environmental exposures of $61 million at March 31, 2023 and $66 million at December 31, 2022, of which $15 million is classified as a current liability at the end of both periods. At March 31, 2023 and December 31, 2022, the liability represents our estimates of the probable cleanup, investigation, and remediation costs based on available information at 85 known locations and projects. At March 31, 2023, twenty sites accounted for $49 million of the liability, and no individual site was considered to be material. We anticipate that most of this liability will be paid out over five years; however, some costs will be paid out over a longer period. At eight locations, one or more of our subsidiaries in conjunction with a number of other parties have been identified as potentially responsible parties under CERCLA 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. As set forth above, with respect to known environmental sites (whether identified by us or by the U.S. EPA 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. 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. Moratorium provisions in the labor agreements govern when the railroads and unions may propose changes to the agreements. We largely bargain nationally in concert with other major railroads, represented by the National Carriers’ Conference Committee. The latest round of national bargaining concluded in December 2022, when agreements were either ratified or enacted through legislative action for all twelve of our unions. We are currently participating in additional discussions (none of which carry the risk of a work stoppage) with several of our unions to conclude the implementation of these national agreements. With the conclusion of national bargaining, neither party can compel mandatory bargaining around any new proposals until November 1, 2024. In addition, we understand the imperative to continue improving quality of life for our craft employees and are actively engaged in voluntary local discussions with our unions on this important issue. Insurance We purchase insurance covering legal liabilities for bodily injury and property damage to third parties. This insurance provides coverage above $75 million and below $800 million (or up to $1.1 billion for specified types of pollution releases) per occurrence and/or policy year. In addition, we purchase insurance covering damage to property owned by us or in our care, custody, or control. This insurance covers approximately 82% of potential losses above $75 million and below $275 million per occurrence and/or policy year. Our ability to recoup any of the foregoing amounts under our insurance coverage, including any amounts that may be recoverable with respect to the Incident, is subject to certain conditions, including but not limited to our insurers’ reservation of rights to further investigate and contest coverage, the express restrictions and sub-limits of coverage, and various policy exclusions, including those for some governmental fines or penalties, as well as potential coverage disputes over payments we make as part of our effort to mitigate the impact to the community and affected residents. We are working with our insurers to confirm applicable coverage with respect to the Incident, but no estimate for potential insurance recovery has been accrued at this time. |
Railway Operating Revenues (Tab
Railway Operating Revenues (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Revenue from Contract with Customer [Abstract] | |
Disaggregation of Revenue | The following table disaggregates our revenues by major commodity group: First Quarter 2023 2022 ($ in millions) Merchandise: Agriculture, forest and consumer products $ 653 $ 573 Chemicals 541 498 Metals and construction 400 375 Automotive 284 226 Merchandise 1,878 1,672 Intermodal 814 854 Coal 440 389 Total $ 3,132 $ 2,915 |
Schedule of Accounts Receivable | “Accounts receivable – net” on the Consolidated Balance Sheets includes both customer and non-customer receivables as follows: March 31, December 31, 2022 ($ in millions) Customer $ 919 $ 895 Non-customer 251 253 Accounts receivable – net $ 1,170 $ 1,148 |
Stock-Based Compensation (Table
Stock-Based Compensation (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Schedule of stock-based compensation cost | First Quarter 2023 2022 ($ in millions) Stock-based compensation expense $ 11 $ 23 Total tax benefit 6 13 |
Schedule of LTIP awards | During the first quarter of 2023, we granted stock options, restricted stock units (RSUs) and performance share units (PSUs) pursuant to the Long-Term Incentive Plan (LTIP), as follows: First Quarter Granted Weighted-Average Grant-Date Fair Value Stock options 69,580 $ 77.60 RSUs 173,221 237.70 PSUs 58,040 236.68 |
Schedule of cash proceeds received from share-based payment awards | First Quarter 2023 2022 ($ in millions) Options exercised 66,811 119,343 Cash received upon exercise $ 5 $ 10 Related tax benefits realized 3 5 |
Restricted Stock Units (RSUs) | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Schedule of share-based compensation, activity | First Quarter 2023 2022 ($ in millions) RSUs vested 149,122 243,301 Common Stock issued net of tax withholding 104,608 172,364 Related tax benefits realized $ 1 $ 5 |
Performance Share Units | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Schedule of share-based compensation, activity | First Quarter 2023 2022 ($ in millions) PSUs earned 58,599 86,420 Common Stock issued net of tax withholding 40,255 54,651 Related tax benefits realized $ — $ 1 |
Earnings Per Share (Tables)
Earnings Per Share (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Earnings Per Share [Abstract] | |
Schedule of Earnings Per Share Calculation | The following table sets forth the calculation of basic and diluted earnings per share: Basic Diluted First Quarter 2023 2022 2023 2022 ($ in millions, except per share amounts, Net income $ 466 $ 703 $ 466 $ 703 Dividend equivalent payments (1) — — — Income available to common stockholders $ 465 $ 703 $ 466 $ 703 Weighted-average shares outstanding 227.7 239.3 227.7 239.3 Dilutive effect of outstanding options and share-settled awards 0.6 0.9 Adjusted weighted-average shares outstanding 228.3 240.2 Earnings per share $ 2.04 $ 2.94 $ 2.04 $ 2.93 |
Accumulated Other Comprehensi_2
Accumulated Other Comprehensive Loss (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
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 Net Income Reclassification Balance at ($ in millions) Three months ended March 31, 2023 Pensions and other postretirement liabilities $ (319) $ — $ (4) $ (323) Other comprehensive loss of equity investees (32) — — (32) Accumulated other comprehensive loss $ (351) $ — $ (4) $ (355) Three months ended March 31, 2022 Pensions and other postretirement liabilities $ (356) $ — $ 4 $ (352) Other comprehensive income (loss) of equity investees (46) 4 — (42) Accumulated other comprehensive loss $ (402) $ 4 $ 4 $ (394) |
Pensions and Other Postretire_2
Pensions and Other Postretirement Benefits (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Defined Benefit Plans and Other Postretirement Benefit Plans Disclosures [Abstract] | |
Pension and Other Postretirement Benefit Cost Components | Pension and postretirement benefit cost components were as follows: Pension Benefits Other Postretirement Benefits First Quarter 2023 2022 2023 2022 ($ in millions) Service cost $ 6 $ 10 $ 1 $ 1 Interest cost 27 17 4 2 Expected return on plan assets (52) (53) (3) (3) Amortization of net losses 1 12 — — Amortization of prior service benefit — — (6) (6) Net benefit $ (18) $ (14) $ (4) $ (6) |
Fair Values of Financial Inst_2
Fair Values of Financial Instruments (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
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 consist of the following: March 31, 2023 December 31, 2022 Carrying Fair Carrying Fair ($ in millions) Long-term debt, including current maturities $ (14,988) $ (13,889) $ (15,082) $ (13,846) |
Railway Operating Revenues - Di
Railway Operating Revenues - Disaggregation of Revenues (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Disaggregation of Revenue [Line Items] | ||
Revenue from contract with customer | $ 3,132 | $ 2,915 |
Merchandise | ||
Disaggregation of Revenue [Line Items] | ||
Revenue from contract with customer | 1,878 | 1,672 |
Merchandise | Agriculture, forest and consumer products | ||
Disaggregation of Revenue [Line Items] | ||
Revenue from contract with customer | 653 | 573 |
Merchandise | Chemicals | ||
Disaggregation of Revenue [Line Items] | ||
Revenue from contract with customer | 541 | 498 |
Merchandise | Metals and construction | ||
Disaggregation of Revenue [Line Items] | ||
Revenue from contract with customer | 400 | 375 |
Merchandise | Automotive | ||
Disaggregation of Revenue [Line Items] | ||
Revenue from contract with customer | 284 | 226 |
Intermodal | ||
Disaggregation of Revenue [Line Items] | ||
Revenue from contract with customer | 814 | 854 |
Coal | ||
Disaggregation of Revenue [Line Items] | ||
Revenue from contract with customer | $ 440 | $ 389 |
Railway Operating Revenues - Na
Railway Operating Revenues - Narrative (Details) - USD ($) $ in Millions | 3 Months Ended | ||
Mar. 31, 2023 | Mar. 31, 2022 | Dec. 31, 2022 | |
Disaggregation of Revenue [Line Items] | |||
Revenue, payment terms | 15 days | ||
Contract assets | $ 0 | $ 0 | |
Contract liabilities | $ 0 | $ 0 | |
Accessorial Services | |||
Disaggregation of Revenue [Line Items] | |||
Accessorial services percent of total railway operating revenues | 6% | 7% |
Railway Operating Revenues - Sc
Railway Operating Revenues - Schedule of Account Receivables (Details) - USD ($) $ in Millions | Mar. 31, 2023 | Dec. 31, 2022 |
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Accounts receivable – net | $ 1,170 | $ 1,148 |
Customer | ||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Accounts receivable – net | 919 | 895 |
Non-customer | ||
New Accounting Pronouncements or Change in Accounting Principle [Line Items] | ||
Accounts receivable – net | $ 251 | $ 253 |
Stock-Based Compensation - Sche
Stock-Based Compensation - Schedule of Stock-Based Compensation Expense and Related Tax Benefits (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Share-Based Payment Arrangement [Abstract] | ||
Stock-based compensation expense | $ 11 | $ 23 |
Total tax benefit | $ 6 | $ 13 |
Stock-Based Compensation - Sc_2
Stock-Based Compensation - Schedule of Grants and Weighted-Average Grant-Date Fair Values (Details) | 3 Months Ended |
Mar. 31, 2023 $ / shares shares | |
Stock options | |
Granted | |
Stock options (in shares) | shares | 69,580 |
Weighted-Average Grant-Date Fair Value | |
Stock options (in dollars per shares) | $ / shares | $ 77.60 |
RSUs | |
Granted | |
Other than stock options (in shares) | shares | 173,221 |
Weighted-Average Grant-Date Fair Value | |
Other than stock options (in dollars per share) | $ / shares | $ 237.70 |
PSUs | |
Granted | |
Other than stock options (in shares) | shares | 58,040 |
Weighted-Average Grant-Date Fair Value | |
Other than stock options (in dollars per share) | $ / shares | $ 236.68 |
Stock-Based Compensation - Sc_3
Stock-Based Compensation - Schedule of Options Exercised, Cash Received, and Related Tax Benefits (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Share-Based Payment Arrangement [Abstract] | ||
Options exercised (in shares) | 66,811 | 119,343 |
Cash received upon exercise | $ 5 | $ 10 |
Related tax benefits realized | $ 3 | $ 5 |
Stock-Based Compensation - Narr
Stock-Based Compensation - Narrative (Details) | 3 Months Ended |
Mar. 31, 2023 | |
Restricted Stock Units (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] | |
Awards measurement cycle (in years) | 3 years |
Stock-Based Compensation - Sc_4
Stock-Based Compensation - Schedule of RSU Activity (Details) - Restricted Stock Units (RSUs) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
RSUs vested (in shares) | 149,122 | 243,301 |
Common Stock issued net of tax withholding (in shares) | 104,608 | 172,364 |
Related tax benefits realized | $ 1 | $ 5 |
Stock-Based Compensation - Sc_5
Stock-Based Compensation - Schedule of PSU Activity (Details) - PSUs - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
PSUs earned (in shares) | 58,599 | 86,420 |
Common Stock issued net of tax withholding (in shares) | 40,255 | 54,651 |
Related tax benefits realized | $ 0 | $ 1 |
Earnings Per Share - Calculatio
Earnings Per Share - Calculation of Basic and Diluted Earnings Per Share (Details) - USD ($) $ / shares in Units, shares in Millions, $ in Millions | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Earnings Per Share [Abstract] | ||
Net income | $ 466 | $ 703 |
Dividend equivalent payments, basic | (1) | 0 |
Dividend equivalent payments, diluted | 0 | 0 |
Income available to common stockholders, basic | 465 | 703 |
Income available to common stockholders, diluted | $ 466 | $ 703 |
Weighted-average shares outstanding (in shares) | 227.7 | 239.3 |
Dilutive effect of outstanding options and share-settled awards (in shares) | 0.6 | 0.9 |
Adjusted weighted-average shares outstanding (in shares) | 228.3 | 240.2 |
Basic (in dollars per share) | $ 2.04 | $ 2.94 |
Diluted (in dollars per share) | $ 2.04 | $ 2.93 |
Earnings Per Share - Narrative
Earnings Per Share - Narrative (Details) - shares shares in Millions | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Earnings Per Share [Abstract] | ||
Antidilutive securities excluded from computation of earnings per share (in shares) | 0.1 | 0.1 |
Accumulated Other Comprehensi_3
Accumulated Other Comprehensive Loss (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | ||
Balance at Beginning of Year | $ 12,733 | $ 13,641 |
Net Income | 0 | 4 |
Reclassification Adjustments | (4) | 4 |
Balance at End of Period | 12,727 | 13,461 |
Accum. Other Comprehensive Loss | ||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | ||
Balance at Beginning of Year | (351) | (402) |
Balance at End of Period | (355) | (394) |
Pensions and other postretirement liabilities | ||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | ||
Balance at Beginning of Year | (319) | (356) |
Net Income | 0 | 0 |
Reclassification Adjustments | (4) | 4 |
Balance at End of Period | (323) | (352) |
Other comprehensive loss of equity investees | ||
Accumulated Other Comprehensive Income (Loss), Net of Tax [Roll Forward] | ||
Balance at Beginning of Year | (32) | (46) |
Net Income | 0 | 4 |
Reclassification Adjustments | 0 | 0 |
Balance at End of Period | $ (32) | $ (42) |
Stock Repurchase Program (Detai
Stock Repurchase Program (Details) - USD ($) shares in Millions, $ in Millions | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Equity [Abstract] | ||
Stock repurchased and retired during period (in shares) | 0.6 | 2.2 |
Stock repurchased and retired during period, cost | $ 163 | $ 600 |
Investments (Details)
Investments (Details) $ in Millions | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2023 USD ($) railroad | Mar. 31, 2022 USD ($) | Dec. 31, 2022 USD ($) | |
Schedule of Investments [Line Items] | |||
Number of railroads | railroad | 7 | ||
Purchased services and rents | $ 496 | $ 437 | |
Conrail, Economic | |||
Schedule of Investments [Line Items] | |||
Equity method investment, ownership percentage | 58% | ||
Conrail, Voting | |||
Schedule of Investments [Line Items] | |||
Equity method investment, ownership percentage | 50% | ||
Conrail Inc | |||
Schedule of Investments [Line Items] | |||
Equity method investments | $ 1,600 | $ 1,600 | |
Expenses for operation of the Shared Assets Areas | 45 | 38 | |
Equity in the earnings of investee | 16 | 14 | |
Long-term advances, amount | $ 534 | $ 534 | |
Long-term advances, average interest rate | 1.31% | 1.31% | |
TTX Company | |||
Schedule of Investments [Line Items] | |||
Equity method investment, ownership percentage | 19.78% | ||
Equity in the earnings of investee | $ 9 | 10 | |
Purchased services and rents | $ 66 | $ 64 |
Debt (Details)
Debt (Details) - USD ($) | Mar. 31, 2023 | Feb. 28, 2023 | Dec. 31, 2022 |
Debt Instrument [Line Items] | |||
Accounts receivable securitization balance | $ 0 | $ 100,000,000 | |
Securitization Borrowings | |||
Debt Instrument [Line Items] | |||
Accounts receivable securitization program, maximum borrowing capacity | 400,000,000 | ||
Available borrowing capacity | 400,000,000 | $ 300,000,000 | |
Average interest rate of borrowings outstanding | 5.05% | ||
Accounts receivable securitization program | $ 916,000,000 | $ 883,000,000 | |
4.45% Senior Notes Due 2033 | Senior Notes | |||
Debt Instrument [Line Items] | |||
Senior notes issued | $ 500,000,000 | ||
Stated rates | 4.45% |
Pensions and Other Postretire_3
Pensions and Other Postretirement Benefits (Details) - USD ($) $ in Millions | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Pension Benefits | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Service cost | $ 6 | $ 10 |
Interest cost | 27 | 17 |
Expected return on plan assets | (52) | (53) |
Amortization of net losses | 1 | 12 |
Amortization of prior service benefit | 0 | 0 |
Net benefit | (18) | (14) |
Other Postretirement Benefits | ||
Defined Benefit Plan Disclosure [Line Items] | ||
Service cost | 1 | 1 |
Interest cost | 4 | 2 |
Expected return on plan assets | (3) | (3) |
Amortization of net losses | 0 | 0 |
Amortization of prior service benefit | (6) | (6) |
Net benefit | $ (4) | $ (6) |
Fair Values of Financial Inst_3
Fair Values of Financial Instruments - Schedule of Carrying Amounts and Estimated Fair Values (Details) - Fair Value, Measurements, Recurring - USD ($) $ in Millions | Mar. 31, 2023 | Dec. 31, 2022 |
Carrying Amount | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Long-term debt, including current maturities | $ (14,988) | $ (15,082) |
Fair Value | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Long-term debt, including current maturities | $ (13,889) | $ (13,846) |
Commitments and Contingencies (
Commitments and Contingencies (Details) | 3 Months Ended | 12 Months Ended | ||
Mar. 31, 2023 USD ($) location | Mar. 31, 2022 USD ($) | Dec. 31, 2022 USD ($) location | Feb. 03, 2023 railcar | |
Loss Contingencies [Line Items] | ||||
Eastern Ohio incident expense | $ 387,000,000 | $ 0 | ||
Environmental loss contingency, statement of financial position, extensible enumeration, not disclosed flag | Consolidated Balance Sheets | Consolidated Balance Sheets | ||
Responsible locations with another party | location | 8 | |||
Employees covered by collective bargaining agreements, percentage | 80% | |||
Self-insured injury/damage to third parties - and above, per occurrence | $ 75,000,000 | |||
Self-insured injury/damage to third party - up to | 800,000,000 | |||
Self-insured injury/damage to third parties - and above, per occurrence for specific pollution releases | $ 1,100,000,000 | |||
Percentage of potential losses covered | 82% | |||
Self-insured NS owned property - and above, per occurrence | $ 75,000,000 | |||
Self-insured NS owned property - up to | 275,000,000 | |||
Eastern Ohio Incident | ||||
Loss Contingencies [Line Items] | ||||
Environmental remediation expense | 317,000,000 | |||
Payments for environmental liabilities | 31,000,000 | |||
Other Environmental Claims | ||||
Loss Contingencies [Line Items] | ||||
Environmental matters liabilities | 61,000,000 | $ 66,000,000 | ||
Current environmental liability | $ 15,000,000 | $ 15,000,000 | ||
Known cleanup and remediation locations and projects | location | 85 | 85 | ||
Number of sites - representative sample | location | 20 | |||
Liability associated with those sites | $ 49,000,000 | |||
Environmental locations representative sample liability payout period, in years | 5 years | |||
Eastern Ohio Incident | ||||
Loss Contingencies [Line Items] | ||||
Number of railcars derailed | railcar | 38 | |||
Number of non-Company-owned tank cars contained hazardous materials | railcar | 11 | |||
Number of tank cars with risk of catastrophic explosion | railcar | 5 | |||
Eastern Ohio incident expense | $ 387,000,000 | |||
Cash expenditures attributable to the Incident | 55,000,000 | |||
Environmental matters liabilities | 332,000,000 | |||
Loss contingency recognized | 12,000,000 | |||
Loss contingency payments | $ 16,000,000 |