Norfolk Southern (NSC) 8-K Norfolk Southern reports third quarter 2023 results

Exhibit 99.2

Norfolk Southern Corporation and Subsidiaries

Consolidated Statements of Income

(Unaudited)

	Third Quarter						First Nine Months
	2023			2022			2023			2022
	(in millions, except per share amounts)
Railway operating revenues
Merchandise	$	1,800		$	1,930		$	5,504		$	5,455
Intermodal		737			942			2,296			2,768
Coal		434			471			1,283			1,285
Total railway operating revenues		2,971			3,343			9,083			9,508
Railway operating expenses
Compensation and benefits		715			735			2,098			1,968
Purchased services and rents		517			484			1,519			1,402
Fuel		289			383			867			1,092
Depreciation		326			306			968			912
Materials and other		205			163			622			506
Eastern Ohio incident		163			—			966			—
Total railway operating expenses		2,215			2,071			7,040			5,880
Income from railway operations		756			1,272			2,043			3,628
Other income (expense) – net		40			(2	)		153			(21	)
Interest expense on debt		182			177			527			515
Income before income taxes		614			1,093			1,669			3,092
Income tax expense (benefit)
Current		154			223			422			589
Deferred		(18	)		(88	)		(53	)		23
Total income tax expense		136			135			369			612
Net income	$	478		$	958		$	1,300		$	2,480
Earnings per share – diluted	$	2.10		$	4.10		$	5.70		$	10.45
Weighted average shares outstanding – diluted		227.0			234.0			227.8			237.2

See accompanying notes to consolidated financial statements.

Norfolk Southern Corporation and Subsidiaries

Consolidated Balance Sheets

(Unaudited)

	September 30,			December 31,
	2023			2022
	($ in millions)
Assets
Current assets:
Cash and cash equivalents	$	1,506		$	456
Accounts receivable – net		1,210			1,148
Materials and supplies		303			253
Other current assets		123			150
Total current assets		3,142			2,007
Investments		3,824			3,694
Properties less accumulated depreciation of $13,162 and $12,592, respectively		32,668			32,156
Other assets		1,105			1,028
Total assets	$	40,739		$	38,885
Liabilities and stockholders’ equity
Current liabilities:
Accounts payable	$	1,499		$	1,293
Short-term debt		—			100
Income and other taxes		213			312
Other current liabilities		797			341
Current maturities of long-term debt		405			603
Total current liabilities		2,914			2,649
Long-term debt		16,179			14,479
Other liabilities		1,824			1,759
Deferred income taxes		7,207			7,265
Total liabilities		28,124			26,152
Stockholders’ equity:
Common stock $1.00 per share par value, 1,350,000,000 shares authorized; outstanding 226,136,334 and 228,076,415 shares, respectively, net of treasury shares		227			230
Additional paid-in capital		2,163			2,157
Accumulated other comprehensive loss		(364	)		(351	)
Retained income		10,589			10,697
Total stockholders’ equity		12,615			12,733
Total liabilities and stockholders’ equity	$	40,739		$	38,885

See accompanying notes to consolidated financial statements.

Norfolk Southern Corporation and Subsidiaries

Consolidated Statements of Cash Flows

(Unaudited)

	First Nine Months
	2023			2022
	($ in millions)
Cash flows from operating activities
Net income	$	1,300		$	2,480
Reconciliation of net income to net cash provided by operating activities:
Depreciation		968			912
Deferred income taxes		(53	)		23
Gains and losses on properties		(34	)		(54	)
Changes in assets and liabilities affecting operations:
Accounts receivable		(65	)		(174	)
Materials and supplies		(50	)		(58	)
Other current assets		37			57
Current liabilities other than debt		538			273
Other – net		(135	)		(35	)
Net cash provided by operating activities		2,506			3,424
Cash flows from investing activities
Property additions		(1,496	)		(1,282	)
Property sales and other transactions		62			193
Investment purchases		(120	)		(8	)
Investment sales and other transactions		160			37
Net cash used in investing activities		(1,394	)		(1,060	)
Cash flows from financing activities
Dividends		(920	)		(881	)
Common stock transactions		(9	)		(5	)
Purchase and retirement of common stock		(503	)		(2,284	)
Proceeds from borrowings		2,303			1,732
Debt repayments		(933	)		(551	)
Net cash used in financing activities		(62	)		(1,989	)
Net increase in cash and cash equivalents		1,050			375
Cash and cash equivalents
At beginning of year		456			839
At end of period	$	1,506		$	1,214
Supplemental disclosures of cash flow information
Cash paid during the period for:
Interest (net of amounts capitalized)	$	451		$	425
Income taxes (net of refunds)		521			578

See accompanying notes to consolidated financial statements.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1. Eastern Ohio Incident

On February 3, 2023, a train operated by Norfolk Southern derailed in East Palestine, Ohio. During the first nine months of 2023, we recognized $966 million of expense for costs primarily associated with environmental matters and legal proceedings resulting from the incident ($163 million of which was recognized in the third quarter). These amounts are net of $25 million in insurance recoveries recorded during the third quarter related to the incident. Any additional amounts recoverable under our insurance policies or from third parties will be reflected in future periods in which recovery is considered probable. No amounts have been recorded related to potential third-party recoveries, which may reduce amounts payable by our insurers under applicable insurance coverage.

2. Stock Repurchase Program

We repurchased and retired 2.2 million and 9.2 million shares of common stock under our stock repurchase programs in the first nine months of 2023 and 2022, respectively, at a cost of $508 million and $2.3 billion, inclusive of excise taxes.