Income Statement

The income statement presents information on the financial results of a company business activities over a period of time. The income statement communicates how much revenue the company generated during a period and what cost it incurred in connection with generating that revenue.

Norfolk Southern Corp., consolidated income statement

US$ in millions

12 months ended:	Dec 31, 2021	Dec 31, 2020	Dec 31, 2019	Dec 31, 2018	Dec 31, 2017
Railway operating revenues	11,142)	9,789)	11,296)	11,458)	10,551)
Purchased services and rents	(1,726)	(1,687)	(1,725)	(1,730)	(1,414)
Fuel	(799)	(535)	(953)	(1,087)	(840)
Cost of railway operating revenues	(2,525)	(2,222)	(2,678)	(2,817)	(2,254)
Gross profit	8,617)	7,567)	8,618)	8,641)	8,297)
Compensation and benefits	(2,442)	(2,373)	(2,751)	(2,925)	(2,915)
Depreciation	(1,181)	(1,154)	(1,138)	(1,102)	(1,055)
Materials and other	(547)	(653)	(740)	(655)	(741)
Loss on asset disposal	—)	(385)	—)	—)	—)
Income from railway operations	4,447)	3,002)	3,989)	3,959)	3,586)
Pension and other postretirement benefits	102)	91)	63)	61)	—)
COLI, net	17)	85)	69)	(10)	33)
Other	(42)	(23)	(26)	16)	59)
Other income, net	77)	153)	106)	67)	92)
Interest expense on debt	(646)	(625)	(604)	(557)	(550)
Income before income taxes	3,878)	2,530)	3,491)	3,469)	3,128)
Income taxes	(873)	(517)	(769)	(803)	2,276)
Net income	3,005)	2,013)	2,722)	2,666)	5,404)

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 financial data reveals several notable trends over the five-year period from 2017 to 2021.

Revenue and Operating Performance: Railway operating revenues increased from 10,551 million USD in 2017 to a peak of 11,458 million USD in 2018, followed by a slight decline in 2019 and a sharper drop in 2020 to 9,789 million USD. Revenues partially recovered to 11,142 million USD in 2021. Purchased services and rents exhibited some fluctuation but remained relatively stable around -1,700 million USD in the last three years. Fuel expenses showed volatility, peaking at -1,087 million USD in 2018, declining significantly in 2020, and rising again in 2021. The cost of railway operating revenues followed a similar pattern, decreasing in 2020 before increasing again in 2021.
Profitability: Gross profit peaked in 2018 at 8,641 million USD, then declined in 2020 to 7,567 million USD, recovering to 8,617 million USD in 2021. Income from railway operations showed a similar trend, rising from 3,586 million USD in 2017 to a high of 3,989 million USD in 2019, dipping to 3,002 million USD in 2020, and significantly increasing to 4,447 million USD in 2021.
Expenses: Compensation and benefits expenses were relatively stable but displayed a downward trend from -2,915 million USD in 2017 to -2,442 million USD in 2021, with the lowest point in 2020. Depreciation expenses gradually increased over the period, indicating steady capital asset usage and aging. Materials and other expenses declined noticeably, especially in 2021, which may reflect cost control measures or changes in operational scale. There was a significant one-time loss on asset disposal recorded in 2020 at -385 million USD.
Other Income and Expenses: Pension and other postretirement benefits expenses increased steadily, indicating growing obligations in this area. COLI (Corporate-Owned Life Insurance) net amounts fluctuated without a clear trend. Other income, net, was positive throughout the period but varied in size, peaking in 2020 at 153 million USD. Interest expense on debt gradually increased, consistent with potentially higher borrowings or interest rates.
Income Taxes and Net Income: Income before income taxes followed the profit trends, with a drop in 2020 and a strong rebound in 2021. Income tax figures showed unusual negative values from 2018 to 2021, which might indicate tax benefits, carrybacks, or adjustments not detailed here. Despite this, net income declined sharply from 5,404 million USD in 2017 to 2,013 million USD in 2020, before recovering to 3,005 million USD in 2021. The 2017 net income figure may include non-operational factors given its divergence from other income indicators.

Overall, the data suggests the company faced challenges in 2020, likely impacted by external factors affecting revenue and operations, but demonstrated resilience with a recovery evident in 2021. Cost management appears effective in several areas, although certain expenses such as depreciation and pension obligations continued an upward trajectory. The fluctuations in income tax and net income signals complexity in tax treatment and earnings quality.

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Norfolk Southern Corp. (NYSE:NSC)

Income Statement