Income Tax Expense (Benefit)
Effective Income Tax Rate (EITR)
Components of Deferred Tax Assets and Liabilities
Deferred Tax Assets and Liabilities, Classification
Adjustments to Financial Statements: Removal of Deferred Taxes
Adjusted Financial Ratios: Removal of Deferred Taxes (Summary)
Adjusted Net Profit Margin
Adjusted Financial Leverage
Adjusted Return on Equity (ROE)
Adjusted Return on Assets (ROA)

Norfolk Southern Corp., income tax expense (benefit), continuing operations

US$ in millions

12 months ended:	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019	Dec 31, 2018	Dec 31, 2017
Federal	553)	307)	356)	499)	500)
State	136)	68)	83)	131)	83)
Current taxes	689)	375)	439)	630)	583)
Federal	186)	111)	280)	156)	(2,924)
State	(2)	31)	50)	17)	65)
Deferred taxes	184)	142)	330)	173)	(2,859)
Income taxes	873)	517)	769)	803)	(2,276)

Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).

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Item	Description	The company
Current taxes	Amount of current income tax expense (benefit) pertaining to taxable income (loss) from continuing operations.	Norfolk Southern Corp. current taxes decreased from 2019 to 2020 but then increased from 2020 to 2021 exceeding 2019 level.
Deferred taxes	Amount of deferred income tax expense (benefit) pertaining to income (loss) from continuing operations.	Norfolk Southern Corp. deferred taxes decreased from 2019 to 2020 but then slightly increased from 2020 to 2021.
Income taxes	Amount of current income tax expense (benefit) and deferred income tax expense (benefit) pertaining to continuing operations.	Norfolk Southern Corp. income taxes decreased from 2019 to 2020 but then increased from 2020 to 2021 exceeding 2019 level.

Norfolk Southern Corp., effective income tax rate (EITR) reconciliation

	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019	Dec 31, 2018	Dec 31, 2017
Federal income statutory tax rate	21.00%	21.00%	21.00%	21.00%	35.00%
State income taxes, net of federal tax effect	2.80%	3.30%	3.10%	3.50%	2.80%
Excess tax benefits on stock-based compensation	-0.60%	-1.50%	-0.80%	-0.70%	-1.20%
Other, net	-0.70%	-2.40%	-1.30%	-0.70%	-1.70%
Effective income tax rate, before tax reform	22.50%	20.40%	22.00%	23.10%	34.90%
Equity in earnings related to tax reform	0.00%	0.00%	0.00%	0.00%	-1.20%
Tax reform	0.00%	0.00%	0.00%	0.00%	-106.50%
Effective income tax rate	22.50%	20.40%	22.00%	23.10%	-72.80%

Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).

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Item	Description	The company
Effective income tax rate, before tax reform	Percentage of current income tax expense (benefit) and deferred income tax expense (benefit) pertaining to continuing operations.	Norfolk Southern Corp. effective income tax rate, before tax reform decreased from 2019 to 2020 but then increased from 2020 to 2021 exceeding 2019 level.

Norfolk Southern Corp., components of deferred tax assets and liabilities

US$ in millions

	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019	Dec 31, 2018	Dec 31, 2017
Compensation and benefits, including postretirement benefits	181)	218)	222)	284)	235)
Accruals, including casualty and other claims	92)	93)	89)	69)	64)
Other	188)	198)	202)	72)	67)
Gross deferred tax assets	461)	509)	513)	425)	366)
Valuation allowance	(60)	(57)	(54)	(50)	(44)
Net deferred tax assets	401)	452)	459)	375)	322)
Property	(7,016)	(6,820)	(6,714)	(6,422)	(6,212)
Other	(550)	(554)	(560)	(413)	(434)
Deferred tax liabilities	(7,566)	(7,374)	(7,274)	(6,835)	(6,646)
Deferred income taxes	(7,165)	(6,922)	(6,815)	(6,460)	(6,324)

Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).

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Item	Description	The company
Gross deferred tax assets	Amount before allocation of valuation allowances of deferred tax asset attributable to deductible temporary differences and carryforwards.	Norfolk Southern Corp. gross deferred tax assets decreased from 2019 to 2020 and from 2020 to 2021.
Net deferred tax assets	Amount after allocation of valuation allowances of deferred tax asset attributable to deductible temporary differences and carryforwards.	Norfolk Southern Corp. net deferred tax assets decreased from 2019 to 2020 and from 2020 to 2021.
Deferred income taxes	Amount, after allocation of valuation allowances and deferred tax liability, of deferred tax asset attributable to deductible differences and carryforwards, without jurisdictional netting.	Norfolk Southern Corp. deferred income taxes decreased from 2019 to 2020 and from 2020 to 2021.

Norfolk Southern Corp., deferred tax assets and liabilities, classification

US$ in millions

		Dec 31, 2021	Dec 31, 2020	Dec 31, 2019	Dec 31, 2018	Dec 31, 2017
	Net deferred tax liabilities	7,165)	6,922)	6,815)	6,460)	6,324)

Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).

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Item	Description	The company
Net deferred tax liabilities	Amount, after deferred tax asset, of deferred tax liability attributable to taxable differences, with jurisdictional netting and classified as noncurrent.	Norfolk Southern Corp. net deferred tax liabilities increased from 2019 to 2020 and from 2020 to 2021.

Norfolk Southern Corp., adjustments to financial statements

US$ in millions

	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019	Dec 31, 2018	Dec 31, 2017
Adjustment to Total Liabilities
Total liabilities (as reported)	24,852)	23,171)	22,739)	20,877)	19,352)
Less: Noncurrent deferred tax liabilities, net	7,165)	6,922)	6,815)	6,460)	6,324)
Total liabilities (adjusted)	17,687)	16,249)	15,924)	14,417)	13,028)
Adjustment to Stockholders’ Equity
Stockholders’ equity (as reported)	13,641)	14,791)	15,184)	15,362)	16,359)
Less: Net deferred tax assets (liabilities)	(7,165)	(6,922)	(6,815)	(6,460)	(6,324)
Stockholders’ equity (adjusted)	20,806)	21,713)	21,999)	21,822)	22,683)
Adjustment to Net Income
Net income (as reported)	3,005)	2,013)	2,722)	2,666)	5,404)
Add: Deferred income tax expense (benefit)	184)	142)	330)	173)	(2,859)
Net income (adjusted)	3,189)	2,155)	3,052)	2,839)	2,545)

Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).

Norfolk Southern Corp., Financial Data: Reported vs. Adjusted

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Norfolk Southern Corp., adjusted financial ratios

	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019	Dec 31, 2018	Dec 31, 2017
Net Profit Margin
Reported net profit margin	26.97%	20.56%	24.10%	23.27%	51.22%
Adjusted net profit margin	28.62%	22.01%	27.02%	24.78%	24.12%
Financial Leverage
Reported financial leverage	2.82	2.57	2.50	2.36	2.18
Adjusted financial leverage	1.85	1.75	1.72	1.66	1.57
Return on Equity (ROE)
Reported ROE	22.03%	13.61%	17.93%	17.35%	33.03%
Adjusted ROE	15.33%	9.92%	13.87%	13.01%	11.22%
Return on Assets (ROA)
Reported ROA	7.81%	5.30%	7.18%	7.36%	15.13%
Adjusted ROA	8.28%	5.68%	8.05%	7.83%	7.13%

Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).

Financial ratio	Description	The company
Adjusted net profit margin	An indicator of profitability, calculated as adjusted net income divided by total revenue.	Norfolk Southern Corp. adjusted net profit margin ratio deteriorated from 2019 to 2020 but then improved from 2020 to 2021 exceeding 2019 level.
Adjusted financial leverage	A measure of financial leverage calculated as adjusted total assets divided by adjusted total equity. Financial leverage is the extent to which a company can effect, through the use of debt, a proportional change in the return on common equity that is greater than a given proportional change in operating income.	Norfolk Southern Corp. adjusted financial leverage ratio increased from 2019 to 2020 and from 2020 to 2021.
Adjusted ROE	A profitability ratio calculated as adjusted net income divided by adjusted shareholders’ equity.	Norfolk Southern Corp. adjusted ROE deteriorated from 2019 to 2020 but then improved from 2020 to 2021 exceeding 2019 level.
Adjusted ROA	A profitability ratio calculated as adjusted net income divided by adjusted total assets.	Norfolk Southern Corp. adjusted ROA deteriorated from 2019 to 2020 but then improved from 2020 to 2021 exceeding 2019 level.

Norfolk Southern Corp., Financial Ratios: Reported vs. Adjusted

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	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019	Dec 31, 2018	Dec 31, 2017
As Reported
Selected Financial Data (US$ in millions)
Net income	3,005)	2,013)	2,722)	2,666)	5,404)
Railway operating revenues	11,142)	9,789)	11,296)	11,458)	10,551)
Profitability Ratio
Net profit margin¹	26.97%	20.56%	24.10%	23.27%	51.22%
Adjusted for Deferred Taxes
Selected Financial Data (US$ in millions)
Adjusted net income	3,189)	2,155)	3,052)	2,839)	2,545)
Railway operating revenues	11,142)	9,789)	11,296)	11,458)	10,551)
Profitability Ratio
Adjusted net profit margin²	28.62%	22.01%	27.02%	24.78%	24.12%

Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).

2021 Calculations

¹ Net profit margin = 100 × Net income ÷ Railway operating revenues
= 100 × 3,005 ÷ 11,142 = 26.97%

² Adjusted net profit margin = 100 × Adjusted net income ÷ Railway operating revenues
= 100 × 3,189 ÷ 11,142 = 28.62%

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Profitability ratio	Description	The company
Adjusted net profit margin	An indicator of profitability, calculated as adjusted net income divided by total revenue.	Norfolk Southern Corp. adjusted net profit margin ratio deteriorated from 2019 to 2020 but then improved from 2020 to 2021 exceeding 2019 level.

	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019	Dec 31, 2018	Dec 31, 2017
As Reported
Selected Financial Data (US$ in millions)
Total assets	38,493)	37,962)	37,923)	36,239)	35,711)
Stockholders’ equity	13,641)	14,791)	15,184)	15,362)	16,359)
Solvency Ratio
Financial leverage¹	2.82	2.57	2.50	2.36	2.18
Adjusted for Deferred Taxes
Selected Financial Data (US$ in millions)
Total assets	38,493)	37,962)	37,923)	36,239)	35,711)
Adjusted stockholders’ equity	20,806)	21,713)	21,999)	21,822)	22,683)
Solvency Ratio
Adjusted financial leverage²	1.85	1.75	1.72	1.66	1.57

Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).

2021 Calculations

¹ Financial leverage = Total assets ÷ Stockholders’ equity
= 38,493 ÷ 13,641 = 2.82

² Adjusted financial leverage = Total assets ÷ Adjusted stockholders’ equity
= 38,493 ÷ 20,806 = 1.85

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Solvency ratio	Description	The company
Adjusted financial leverage	A measure of financial leverage calculated as adjusted total assets divided by adjusted total equity. Financial leverage is the extent to which a company can effect, through the use of debt, a proportional change in the return on common equity that is greater than a given proportional change in operating income.	Norfolk Southern Corp. adjusted financial leverage ratio increased from 2019 to 2020 and from 2020 to 2021.

	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019	Dec 31, 2018	Dec 31, 2017
As Reported
Selected Financial Data (US$ in millions)
Net income	3,005)	2,013)	2,722)	2,666)	5,404)
Stockholders’ equity	13,641)	14,791)	15,184)	15,362)	16,359)
Profitability Ratio
ROE¹	22.03%	13.61%	17.93%	17.35%	33.03%
Adjusted for Deferred Taxes
Selected Financial Data (US$ in millions)
Adjusted net income	3,189)	2,155)	3,052)	2,839)	2,545)
Adjusted stockholders’ equity	20,806)	21,713)	21,999)	21,822)	22,683)
Profitability Ratio
Adjusted ROE²	15.33%	9.92%	13.87%	13.01%	11.22%

Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).

2021 Calculations

¹ ROE = 100 × Net income ÷ Stockholders’ equity
= 100 × 3,005 ÷ 13,641 = 22.03%

² Adjusted ROE = 100 × Adjusted net income ÷ Adjusted stockholders’ equity
= 100 × 3,189 ÷ 20,806 = 15.33%

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Profitability ratio	Description	The company
Adjusted ROE	A profitability ratio calculated as adjusted net income divided by adjusted shareholders’ equity.	Norfolk Southern Corp. adjusted ROE deteriorated from 2019 to 2020 but then improved from 2020 to 2021 exceeding 2019 level.

	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019	Dec 31, 2018	Dec 31, 2017
As Reported
Selected Financial Data (US$ in millions)
Net income	3,005)	2,013)	2,722)	2,666)	5,404)
Total assets	38,493)	37,962)	37,923)	36,239)	35,711)
Profitability Ratio
ROA¹	7.81%	5.30%	7.18%	7.36%	15.13%
Adjusted for Deferred Taxes
Selected Financial Data (US$ in millions)
Adjusted net income	3,189)	2,155)	3,052)	2,839)	2,545)
Total assets	38,493)	37,962)	37,923)	36,239)	35,711)
Profitability Ratio
Adjusted ROA²	8.28%	5.68%	8.05%	7.83%	7.13%

Based on: 10-K (reporting date: 2021-12-31), 10-K (reporting date: 2020-12-31), 10-K (reporting date: 2019-12-31), 10-K (reporting date: 2018-12-31), 10-K (reporting date: 2017-12-31).

2021 Calculations

¹ ROA = 100 × Net income ÷ Total assets
= 100 × 3,005 ÷ 38,493 = 7.81%

² Adjusted ROA = 100 × Adjusted net income ÷ Total assets
= 100 × 3,189 ÷ 38,493 = 8.28%

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Profitability ratio	Description	The company
Adjusted ROA	A profitability ratio calculated as adjusted net income divided by adjusted total assets.	Norfolk Southern Corp. adjusted ROA deteriorated from 2019 to 2020 but then improved from 2020 to 2021 exceeding 2019 level.

Norfolk Southern Corp. (NYSE:NSC)

Analysis of Income Taxes

Income Tax Expense (Benefit)

Effective Income Tax Rate (EITR)

Components of Deferred Tax Assets and Liabilities

Deferred Tax Assets and Liabilities, Classification

Adjustments to Financial Statements: Removal of Deferred Taxes

Norfolk Southern Corp., Financial Data: Reported vs. Adjusted

Adjusted Financial Ratios: Removal of Deferred Taxes (Summary)

Norfolk Southern Corp., Financial Ratios: Reported vs. Adjusted

Adjusted Net Profit Margin

Adjusted Financial Leverage

Adjusted Return on Equity (ROE)

Adjusted Return on Assets (ROA)