FELLOW SHAREHOLDER,

In 2025, we took a decisive step to help shape the future of our company and the North American rail industry. Building from a position of operational strength, disciplined execution, and sustained performance, we announced a proposed combination with Union Pacific — a transformational opportunity to create America's first transcontinental railroad. This proposal reflects confidence and a clear conviction that a seamless coast-to-coast network can deliver better outcomes for customers, employees, communities, and shareholders. That conviction was overwhelmingly shared by our owners, with 99% of voting shareholders supporting the transaction.

For more than a century, railroads have consolidated to create more expansive, more efficient, more reliable, and safer networks. Yet the U.S. rail network remains configured along an east-west divide, creating friction, complexity, and delays for customers. A single-line transcontinental network would remove those barriers improving service consistency, reducing handoffs, strengthening the supply chain, and enabling new growth opportunities for American industry. This proposed merger is about solving long-standing customer challenges while transforming how freight moves across the continent.

FOCUS ON THE FUNDAMENTALS

Our ability to pursue this opportunity reflects the progress we made in 2025. Against a complex economic backdrop, our employees remained focused on operational fundamentals — running a safe and reliable network, serving customers, and supporting the communities where we operate.

That discipline stabilized performance in a challenging demand environment and positioned us to exit the year operationally stronger than we entered it.

This focus was evident across our network. Performance improved steadily, with higher train speeds, better terminal fluidity, and more reliable service. These results were driven by productivity gains and a relentless focus on the work that matters most.

SAFETY AND OPERATIONAL EXCELLENCE

At the core of that work is safety. In 2025, we achieved our lowest FRA accident rate in more than a decade — a 31% reduction versus 2024 — and reached 1 million man hours injury free, the collective achievement of nearly 20,000 railroaders across 22 states.

These results reflect sustained investment in training, culture, and technology, including Safety Camps, expanded Safety Walkabouts, and data-driven programs designed to identify and address risk before incidents occur. As safety and performance improved, customers benefited from fewer service disruptions and faster, more predictable transit.

Record fuel efficiency and lower emissions intensity supported our environmental commitments while enabling customers to participate in verified rail-based emissions reduction solutions. And when more than 20 weather events tested our network, we demonstrated resilience.

CUSTOMER CONFIDENCE AND INDUSTRIAL GROWTH

Reliability is ultimately measured by customer confidence. Over the past two years, customer service metrics improved significantly, translating into share gains across key sectors and stronger trust in our service.

That confidence is reflected in customer investment. In 2025, our network supported $7.7 billion in industrial development across more than 60 new or expanded rail-served projects in manufacturing, energy, automotive, and logistics. This growth is driven by stronger network performance, expanded market access, and a focused portfolio of development ready sites that help customers grow with greater certainty.

COMMUNITY COMMITMENTS

Our railroad is deeply rooted in the communities we serve. In 2025, we invested more than $18 million with nonprofits and charities for the third consecutive year, supporting safety, workforce development, sustainability, and thriving communities. These investments, alongside thousands of volunteer hours, reflect our belief that long term value is created when communities and our railroad succeed together.

FINANCIAL DISCIPLINE AND GOVERNANCE

While the demand environment remained uneven, strong execution underpinned our solid financial performance. Operational efficiency and cost management delivered more than $215 million in annual productivity and cost savings. We achieved year-over-year improvements in revenue, operating income, earnings per share, and operating ratio, while maintaining a disciplined approach to capital deployment and long term value creation.

Consistent execution depends on strong leadership and governance. Our leadership team and Board remain aligned on strategy, safety, service, and operational discipline. During the year, we strengthened enterprise governance practices, enhancing risk assessment, ethics and compliance, and crisis preparedness.

STRONGER FOUNDATION FOR THE TRACK AHEAD

Looking ahead, the proposed combination with Union Pacific builds directly on the strong results we delivered in 2025 — made possible by the commitment of our Thoroughbred team. Their focus on safety, service, and operational excellence positions us to extend the benefits of a safer, more fluid, and more reliable network across the U.S. freight rail system.

At the same time, our priorities remain unchanged: operate safely, deliver dependable service, maintain strong cost control, and be there for those customers who rely on our network every day. We are confident that the strength of our foundation, the clarity of our strategy, and the support of our shareholders position us well for the track ahead.

Thank you for your continued confidence in Norfolk Southern.

Mark George
President & Chief Executive Officer