Norfolk Southern NSC Operating Lease ROU Assets

In April 2026, we entered into a non-cancellable finance lease of an office building in replacement of a previous operating lease. The lease term is for five years and includes options to renew, purchase, or sell the building at the end of the lease. We recorded a right-of-use asset of $117 million and a finance lease liability of $115 million, based on the initial five-year term. The lease contains a residual value guarantee of approximately $499 million for the total construction cost of the building. We determined no amounts are probable of being owed under the guarantee and, as such, were not included in the measurement of the finance lease liability. Right-of-use assets related to finance leases are included in “Properties less accumulated depreciation,” and finance lease liabilities are included in “Current maturities of long-term debt” and “Long-term debt” in the Consolidated Balance Sheet. In connection with the transaction, a third-party bank paid $272 million directly to other bank counterparties related to the restructuring of our prior operating lease.