Analysis of Property, Plant and Equipment
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- Income Statement
- Statement of Comprehensive Income
- Common-Size Income Statement
- Common-Size Balance Sheet: Assets
- Analysis of Short-term (Operating) Activity Ratios
- Analysis of Long-term (Investment) Activity Ratios
- Selected Financial Data since 2005
- Debt to Equity since 2005
- Price to Earnings (P/E) since 2005
- Price to Operating Profit (P/OP) since 2005
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Property, Plant and Equipment Disclosure
Norfolk Southern Corp., balance sheet: property, plant and equipment
US$ in millions
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).
The analysis of the annual property, plant, and equipment data reveals several notable trends and patterns over the five-year period.
- Land
- The value of land has shown a steady increase from US$2,342 million in 2017 to US$2,453 million in 2021, indicating ongoing investment or appreciation in land assets.
- Rail and Other Track Material
- There is a consistent upward trend in rail and other track material, rising from US$6,730 million in 2017 to US$7,330 million in 2021, reflecting continuous maintenance or expansion efforts.
- Ties and Ballast
- Ties increased steadily from US$5,181 million to US$5,779 million, and ballast rose from US$2,654 million to US$3,041 million over the same period. These components show gradual growth, supporting infrastructure improvements.
- Construction in Process (Roadway)
- This category decreased from US$447 million in 2017 to US$339 million in 2021, with a notable dip in 2020 (US$297 million). The decline suggests completion of several projects and reduced ongoing construction activity towards the end of the period.
- Other Roadway Items
- Other roadway values showed minor fluctuations, peaking at US$14,320 million in 2020 before slightly declining to US$14,111 million in 2021, indicating relative stability with minor adjustments.
- Roadway Total
- The roadway total increased steadily from US$28,648 million to US$30,600 million, demonstrating overall growth in roadway assets despite some variances in components.
- Locomotives
- Locomotive values increased modestly from US$5,658 million in 2017 to US$5,973 million in 2019, then declined to US$5,478 million in 2020 before partially recovering to US$5,695 million in 2021. This pattern may reflect asset disposals, impairments, or updated valuations during the pandemic period, followed by reinvestment.
- Freight Cars
- The freight cars category exhibits a clear downward trend, decreasing from US$3,256 million to US$2,701 million, indicating possible retirements, sales, or decreased investment in this asset class.
- Computers and Software
- This category shows a steady increase, moving from US$610 million in 2017 to US$893 million in 2021, highlighting growing investment in technology and digital assets.
- Construction in Process (Equipment)
- Values fluctuate significantly with a peak of US$437 million in 2018, dropping to US$164 million in 2021, suggesting variable investment activity or project completion rates in equipment-related construction.
- Other Equipment
- Other equipment shows minor increases, stabilizing around US$1,088 million by 2021, indicating stable asset levels in this category.
- Equipment Total
- The total equipment value showed an increase from US$10,775 million in 2017 to US$11,184 million in 2018, followed by a decline to US$10,417 million in 2020 and a slight recovery to US$10,541 million in 2021, reflecting overall moderate volatility in equipment asset management.
- Other Property
- Other property values decline sharply from US$474 million in 2017 to US$90 million in 2021, indicating significant asset disposals or reclassifications.
- Properties, Cost
- The cost of properties remains relatively stable, fluctuating narrowly around the US$43,000 million mark, suggesting maintenance of asset base with little net expansion or contraction.
- Accumulated Depreciation
- Accumulated depreciation increased from negative US$11,909 million to approximately negative US$12,031 million, indicating ongoing wear, obsolescence, or usage of properties offset by some fluctuations possibly due to asset retirements or changes in depreciation policies.
- Properties, Net Book Value
- The net book value of properties increased gradually from US$30,330 million in 2017 to US$31,653 million in 2021, reflecting stable asset values after depreciation and suggesting sustained capital investment balanced with asset usage.
Overall, the data indicates a steady development and maintenance of core property, plant, and equipment assets, with particular growth in land, track materials, and technology assets. Declines in freight cars and other property point to shifts in asset composition. The stability in net book value amid consistent depreciation suggests a balanced approach between capital expenditure and asset utilization over the period.
Asset Age Ratios (Summary)
Norfolk Southern Corp., asset age ratios
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).
- Average age ratio
- The average age ratio remained relatively stable over the five-year period, fluctuating slightly around 29%. It started at 29.85% in 2017, showed a minor increase to 30.09% in 2018, then decreased to 29.07% in 2019, followed by a slight increase to 29.28% in 2020, and a marginal decrease to 29.18% in 2021. This stability suggests consistent asset aging relative to their total useful life.
- Estimated total useful life
- The estimated total useful life of the assets showed a gradual decline from 38 years in 2017 to 35 years by 2020 and remained constant at 35 years through 2021. This decrement implies a reassessment or revaluation of the expected longevity of property, plant, and equipment over time.
- Estimated age, time elapsed since purchase
- The estimated age of the assets remained steady at 11 years from 2017 through 2019 but decreased slightly to 10 years in both 2020 and 2021. This change could indicate asset retirements, disposals, or acquisitions affecting the average age.
- Estimated remaining life
- The estimated remaining life decreased from 26 years in 2017 to 25 years by 2020 and stayed constant at 25 years in 2021. This trend aligns with the decreasing total useful life and consistent aging of the asset base, indicating that the remaining service potential of assets is gradually declining over time.
Average Age
| Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Accumulated depreciation | ||||||
| Properties, cost | ||||||
| Land | ||||||
| Asset Age Ratio | ||||||
| Average age1 | ||||||
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 Average age = 100 × Accumulated depreciation ÷ (Properties, cost – Land)
= 100 × ÷ ( – ) =
- Accumulated Depreciation
- Accumulated depreciation exhibited a generally stable pattern over the five-year period, starting at 11,909 million USD in 2017 and showing a slight increase to 12,031 million USD by the end of 2021. Despite minor fluctuations, the accumulated depreciation remained within a narrow range, indicating steady depreciation expenses and consistent asset usage.
- Properties, Cost
- The total cost of properties demonstrated a gradual upward trend. Beginning at 42,239 million USD in 2017, the cost increased moderately each year, reaching 43,684 million USD by 2021. This trend suggests ongoing investments or acquisitions in property assets, albeit at a measured pace without dramatic shifts.
- Land
- The value of land assets showed modest growth over the period. Starting at 2,342 million USD in 2017, it slightly decreased by 2018 but then increased steadily to 2,453 million USD by 2021. The incremental rise in land value may reflect land acquisitions or appreciation, with minimal volatility year-over-year.
- Average Age Ratio
- The average age ratio of the property, plant, and equipment assets hovered around 29%, indicating a relatively consistent asset age profile. Starting at 29.85% in 2017, the ratio fluctuated marginally but remained stable, closing at 29.18% in 2021. This stability implies a balanced maintenance and replacement strategy, preventing significant aging or obsolescence shifts in the asset base.
Estimated Total Useful Life
| Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Properties, cost | ||||||
| Land | ||||||
| Depreciation | ||||||
| Asset Age Ratio (Years) | ||||||
| Estimated total useful life1 | ||||||
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 Estimated total useful life = (Properties, cost – Land) ÷ Depreciation
= ( – ) ÷ =
- Properties, cost
- The cost of properties remained relatively stable throughout the five-year period, with values fluctuating slightly around the 43,000 million US$ mark. The cost increased from 42,239 million US$ in 2017 to a peak of 43,596 million US$ in 2019, then experienced a minor decline in 2020 before slightly increasing again to 43,684 million US$ in 2021. This indicates a steady investment in property assets without significant expansion or reduction.
- Land
- The value of land demonstrated a gradual upward trend, increasing from 2,342 million US$ in 2017 to 2,453 million US$ in 2021. The yearly increments were modest but consistent, reflecting steady acquisitions or revaluations of land assets over the period.
- Depreciation
- Accumulated depreciation showed a continuous rise each year, starting at 1,059 million US$ in 2017 and reaching 1,181 million US$ by 2021. The increase suggests ongoing consumption of property assets' value in line with use and accounting practices, consistent with steady asset utilization.
- Estimated total useful life
- The estimated total useful life of the assets decreased progressively from 38 years in 2017 to 35 years in 2020 and remained constant in 2021. This reduction in useful life estimates may indicate changes in asset longevity assumptions, possibly due to updated assessments of asset wear or technological obsolescence.
Estimated Age, Time Elapsed since Purchase
| Dec 31, 2021 | Dec 31, 2020 | Dec 31, 2019 | Dec 31, 2018 | Dec 31, 2017 | ||
|---|---|---|---|---|---|---|
| Selected Financial Data (US$ in millions) | ||||||
| Accumulated depreciation | ||||||
| Depreciation | ||||||
| Asset Age Ratio (Years) | ||||||
| Time elapsed since purchase1 | ||||||
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 Time elapsed since purchase = Accumulated depreciation ÷ Depreciation
= ÷ =
- Accumulated Depreciation
- The accumulated depreciation slightly increased from $11,909 million in 2017 to $12,031 million in 2021. There was a minor dip observed in 2019 to $11,982 million, but the overall trend is relatively stable with a gradual increase over the five-year period.
- Depreciation Expense
- Depreciation expense shows a consistent upward trend, starting at $1,059 million in 2017 and increasing each year to $1,181 million in 2021. This steady rise reflects ongoing depreciation charges associated with the company's property, plant, and equipment.
- Time Elapsed Since Purchase
- The average time elapsed since purchase remained at 11 years from 2017 to 2019, then decreased to 10 years in 2020 and 2021. This reduction suggests asset renewal or replacement activities during the later years, potentially indicating investment in newer assets.
Estimated Remaining Life
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 Estimated remaining life = (Properties, net book value – Land) ÷ Depreciation
= ( – ) ÷ =
- Properties, net book value
- The net book value of properties demonstrated a gradual upward trend from 2017 to 2021. Starting at $30,330 million in 2017, it increased steadily each year, reaching $31,653 million in 2021. The values show small but consistent growth, indicating ongoing investment or revaluation of assets without significant decline.
- Land
- The value of land remained relatively stable over the five-year period, with a slight increase from $2,342 million in 2017 to $2,453 million in 2021. This relatively minor growth suggests limited acquisition or revaluation of land assets in comparison to other property components.
- Depreciation
- Depreciation expenses rose incrementally year over year, increasing from $1,059 million in 2017 to $1,181 million in 2021. The consistent rise in depreciation corresponds with the increase in net book value and reflects the aging and usage of assets, as well as regular annual expense recognition.
- Estimated remaining life
- The estimated remaining life of the asset base showed stability initially at 26 years from 2017 through 2019, with a slight decrease to 25 years in 2020 and 2021. This minor reduction may signify marginal asset aging or changes in asset mix affecting the average remaining useful life.