Norfolk Southern Corp., FCFF calculation

US$ in millions

12 months ended:	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019	Dec 31, 2018	Dec 31, 2017
Net income	3,005)	2,013)	2,722)	2,666)	5,404)
Net noncash charges	1,103)	1,493)	1,309)	938)	(2,209)
Changes in assets and liabilities affecting operations	147)	131)	(139)	122)	58)
Net cash provided by operating activities	4,255)	3,637)	3,892)	3,726)	3,253)
Cash paid during the year for interest, net of amounts capitalized, net of tax¹	449)	459)	433)	381)	344)
Interest capitalized, net of tax²	9)	11)	12)	13)	13)
Property additions	(1,470)	(1,494)	(2,019)	(1,951)	(1,723)
Property sales and other transactions	159)	333)	377)	204)	202)
Free cash flow to the firm (FCFF)	3,401)	2,946)	2,695)	2,373)	2,089)

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
FCFF	Free cash flow to the firm is the cash flow available to the Norfolk Southern Corp. suppliers of capital after all operating expenses have been paid and necessary investments in working and fixed capital have been made.	Norfolk Southern Corp. FCFF increased from 2019 to 2020 and from 2020 to 2021.

Norfolk Southern Corp., interest paid, net of tax calculation

US$ in millions

12 months ended:	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019	Dec 31, 2018	Dec 31, 2017
Effective Income Tax Rate (EITR)
EITR¹	22.50%	20.40%	22.00%	23.10%	34.90%
Interest Paid, Net of Tax
Cash paid during the year for interest, net of amounts capitalized, before tax	579)	577)	555)	496)	528)
Less: Cash paid during the year for interest, net of amounts capitalized, tax²	130)	118)	122)	115)	184)
Cash paid during the year for interest, net of amounts capitalized, net of tax	449)	459)	433)	381)	344)
Interest Costs Capitalized, Net of Tax
Interest capitalized, before tax	11)	14)	16)	17)	20)
Less: Interest capitalized, tax³	2)	3)	4)	4)	7)
Interest capitalized, net of tax	9)	11)	12)	13)	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).

¹ See details »

² 2021 Calculation
Cash paid during the year for interest, net of amounts capitalized, tax = Cash paid during the year for interest, net of amounts capitalized × EITR
= 579 × 22.50% = 130

³ 2021 Calculation
Interest capitalized, tax = Interest capitalized × EITR
= 11 × 22.50% = 2

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Norfolk Southern Corp., current EV/FCFF calculation, comparison to benchmarks

Selected Financial Data (US$ in millions)
Enterprise value (EV)	75,570)
Free cash flow to the firm (FCFF)	3,401)
Valuation Ratio
EV/FCFF	22.22
Benchmarks
EV/FCFF, Competitors¹
FedEx Corp.	21.37
Uber Technologies Inc.	35.62
Union Pacific Corp.	29.32
United Parcel Service Inc.	21.40
EV/FCFF, Sector
Transportation	21.91
EV/FCFF, Industry
Industrials	32.54

Based on: 10-K (reporting date: 2021-12-31).

¹ Click competitor name to see calculations.

If the company EV/FCFF is lower then the EV/FCFF of benchmark then company is relatively undervalued.
Otherwise, if the company EV/FCFF is higher then the EV/FCFF of benchmark then company is relatively overvalued.

Norfolk Southern Corp., historical EV/FCFF calculation, comparison to benchmarks

	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019	Dec 31, 2018	Dec 31, 2017
Selected Financial Data (US$ in millions)
Enterprise value (EV)¹	77,842)	73,428)	66,454)	56,645)	48,511)
Free cash flow to the firm (FCFF)²	3,401)	2,946)	2,695)	2,373)	2,089)
Valuation Ratio
EV/FCFF³	22.89	24.92	24.65	23.87	23.22
Benchmarks
EV/FCFF, Competitors⁴
FedEx Corp.	18.72	—	87.04	—	—
Uber Technologies Inc.	—	—	—	—	—
Union Pacific Corp.	26.42	25.20	25.44	—	—
United Parcel Service Inc.	16.95	28.23	39.28	—	—
EV/FCFF, Sector
Transportation	23.87	65.92	104.98	—	—
EV/FCFF, Industry
Industrials	28.41	72.49	31.28	—	—

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).

¹ See details »

² See details »

³ 2021 Calculation
EV/FCFF = EV ÷ FCFF
= 77,842 ÷ 3,401 = 22.89

⁴ Click competitor name to see calculations.

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Valuation ratio	Description	The company
EV/FCFF	Enterprise value to free cash flow to the firm is whole company valuation indicator.	Norfolk Southern Corp. EV/FCFF ratio increased from 2019 to 2020 but then decreased significantly from 2020 to 2021.

Norfolk Southern Corp. (NYSE:NSC)

Enterprise Value to FCFF (EV/FCFF)

Free Cash Flow to The Firm (FCFF)

Interest Paid, Net of Tax

Enterprise Value to FCFF Ratio, Current

Enterprise Value to FCFF Ratio, Historical