Stock Analysis on Net

Norfolk Southern Corp. (NYSE:NSC)

This company has been moved to the archive! The financial data has not been updated since April 27, 2022.

Analysis of Operating Leases

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An operating lease is treated like a rental contract. Neither the leased asset nor the associated liability is reported on the lessee balance sheet, but the rights may be very similar to the rights of an owner. The lessee only records the lease payments as a rental expense in income statement.


Adjustments to Financial Statements for Operating Leases

Norfolk Southern Corp., adjustments to financial statements

US$ in millions

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Dec 31, 2021 Dec 31, 2020 Dec 31, 2019 Dec 31, 2018 Dec 31, 2017
Adjustment to Total Assets
Total assets (as reported) 38,493 37,962 37,923 36,239 35,711
Add: Operating lease right-of-use asset (before adoption of FASB Topic 842)1 567 500
Total assets (adjusted) 38,493 37,962 37,923 36,806 36,211
Adjustment to Total Debt
Total debt (as reported) 13,840 12,681 12,196 11,145 9,836
Add: Operating lease liability (before adoption of FASB Topic 842)2 567 500
Add: Current operating lease liability 82 89 97
Add: Non-current operating lease liability 331 344 441
Total debt (adjusted) 14,253 13,114 12,734 11,712 10,336

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, 2 Equal to total present value of future operating lease payments.


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


Adjusted Financial Ratios for Operating Leases (Summary)

Norfolk Southern Corp., adjusted financial ratios

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Dec 31, 2021 Dec 31, 2020 Dec 31, 2019 Dec 31, 2018 Dec 31, 2017
Total Asset Turnover1
Reported total asset turnover 0.29 0.26 0.30 0.32 0.30
Adjusted total asset turnover 0.29 0.26 0.30 0.31 0.29
Debt to Equity2
Reported debt to equity 1.01 0.86 0.80 0.73 0.60
Adjusted debt to equity 1.04 0.89 0.84 0.76 0.63
Return on Assets3 (ROA)
Reported ROA 7.81% 5.30% 7.18% 7.36% 15.13%
Adjusted ROA 7.81% 5.30% 7.18% 7.24% 14.92%

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 total asset turnover An activity ratio calculated as total revenue divided by adjusted total assets. Norfolk Southern Corp. adjusted total asset turnover ratio deteriorated from 2019 to 2020 but then improved from 2020 to 2021 not reaching 2019 level.
Adjusted debt to equity A solvency ratio calculated as adjusted total debt divided by total shareholders’ equity. Norfolk Southern Corp. adjusted debt to equity ratio deteriorated from 2019 to 2020 and from 2020 to 2021.
Adjusted ROA A profitability ratio calculated as 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


Adjusted Total Asset Turnover

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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)
Railway operating revenues 11,142 9,789 11,296 11,458 10,551
Total assets 38,493 37,962 37,923 36,239 35,711
Activity Ratio
Total asset turnover1 0.29 0.26 0.30 0.32 0.30
Adjusted for Operating Leases
Selected Financial Data (US$ in millions)
Railway operating revenues 11,142 9,789 11,296 11,458 10,551
Adjusted total assets 38,493 37,962 37,923 36,806 36,211
Activity Ratio
Adjusted total asset turnover2 0.29 0.26 0.30 0.31 0.29

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 Total asset turnover = Railway operating revenues ÷ Total assets
= 11,142 ÷ 38,493 = 0.29

2 Adjusted total asset turnover = Railway operating revenues ÷ Adjusted total assets
= 11,142 ÷ 38,493 = 0.29

Activity ratio Description The company
Adjusted total asset turnover An activity ratio calculated as total revenue divided by adjusted total assets. Norfolk Southern Corp. adjusted total asset turnover ratio deteriorated from 2019 to 2020 but then improved from 2020 to 2021 not reaching 2019 level.

Adjusted Debt to Equity

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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)
Total debt 13,840 12,681 12,196 11,145 9,836
Stockholders’ equity 13,641 14,791 15,184 15,362 16,359
Solvency Ratio
Debt to equity1 1.01 0.86 0.80 0.73 0.60
Adjusted for Operating Leases
Selected Financial Data (US$ in millions)
Adjusted total debt 14,253 13,114 12,734 11,712 10,336
Stockholders’ equity 13,641 14,791 15,184 15,362 16,359
Solvency Ratio
Adjusted debt to equity2 1.04 0.89 0.84 0.76 0.63

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 Debt to equity = Total debt ÷ Stockholders’ equity
= 13,840 ÷ 13,641 = 1.01

2 Adjusted debt to equity = Adjusted total debt ÷ Stockholders’ equity
= 14,253 ÷ 13,641 = 1.04

Solvency ratio Description The company
Adjusted debt-to-equity A solvency ratio calculated as adjusted total debt divided by total shareholders’ equity. Norfolk Southern Corp. adjusted debt-to-equity ratio deteriorated from 2019 to 2020 and from 2020 to 2021.

Adjusted Return on Assets (ROA)

Microsoft Excel
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 Operating Leases
Selected Financial Data (US$ in millions)
Net income 3,005 2,013 2,722 2,666 5,404
Adjusted total assets 38,493 37,962 37,923 36,806 36,211
Profitability Ratio
Adjusted ROA2 7.81% 5.30% 7.18% 7.24% 14.92%

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 × Net income ÷ Adjusted total assets
= 100 × 3,005 ÷ 38,493 = 7.81%

Profitability ratio Description The company
Adjusted ROA A profitability ratio calculated as 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.