Free cash flow remains highly unstable, evidenced by a swing from a negative 45.3% margin in 2024Q1 to an 85.3% peak in 2025Q4, complicating the sustainability of the $303 million quarterly dividend payout.
| Metric | TTM | Dec'25 | Dec'24 | Dec'23 | Dec'22 | Dec'21 | Dec'20 | Dec'19 | Dec'18 | Dec'17 | Dec'16 | Dec'15 | Dec'14 | Dec'13 | Dec'12 | Dec'11 | Dec'10 | Dec'09 | Dec'08 | Dec'07 | Dec'06 | Dec'05 | Dec'04 | Dec'03 | Dec'02 | Dec'01 | Dec'00 | Dec'99 | Dec'98 | Dec'97 | Dec'96 |
|---|
| Cash from Operations | 3.75B | 4.36B | 4.05B | 3.18B | 4.22B | 4.25B | 3.64B | 3.89B | 3.73B | 3.25B | 3.03B | 2.88B | 2.85B | 3.08B | 3.06B | 3.23B | 2.71B | 1.86B | 2.71B | 2.33B | 2.21B | 2.1B | 1.66B | 1.05B | 803M | 654M | 1.34B | 533M | 890M | 1.15B | 1.2B |
| Operating CF Margin % | - | 35.8% | 33.42% | 26.15% | 33.13% | 38.19% | 37.15% | 34.45% | 32.52% | 30.83% | 30.68% | 27.37% | 24.54% | 27.37% | 27.76% | 28.88% | 28.52% | 23.34% | 25.47% | 24.73% | 23.45% | 24.69% | 22.72% | 16.3% | 12.81% | 10.6% | 21.79% | 10.26% | 21.09% | 27.23% | 25.26% |
| Operating CF Growth % | -44.38% | 7.63% | 27.46% | -24.7% | -0.78% | 16.99% | -6.55% | 4.46% | 14.54% | 7.22% | 5.46% | 0.88% | -7.34% | 0.42% | -5.02% | 18.9% | 45.91% | -31.49% | 16.37% | 5.76% | 4.8% | 26.73% | 57.59% | 31.26% | 22.78% | -51.27% | 151.78% | -40.11% | -22.61% | -4.54% | -2.64% |
| Net Income | 2.67B | 2.87B | 2.62B | 1.83B | 3.27B | 3B | 2.01B | 2.72B | 2.67B | 5.4B | 1.67B | 1.56B | 2B | 1.91B | 1.75B | 1.92B | 1.5B | 1.03B | 1.72B | 1.46B | 1.48B | 1.28B | 923M | 525M | 460M | 362M | 172M | 239M | 525M | 699M | 770.4M |
| Depreciation & Amortization | 1.4B | 1.39B | 1.35B | 1.3B | 1.22B | 1.18B | 1.15B | 1.14B | 1.1B | 1.06B | 1.03B | 1.06B | 956M | 922M | 922M | 869M | 826M | 845M | 815M | 786M | 750M | 787M | 609M | 528M | 529M | 527M | 517M | 489M | 450M | 432M | 429.2M |
| Stock-Based Compensation | 0 | 0 | 0 | 0 | 53M | 0 | 28M | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 45M | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 |
| Deferred Taxes | 268M | 277M | 176M | -49M | 83M | 184M | 142M | 330M | 173M | -2.86B | 227M | 320M | 294M | 262M | 366M | 527M | 312M | 338M | 290M | 125M | -8M | 80M | 200M | 132M | 178M | 44M | 2M | 85M | 114M | 75M | 97.1M |
| Other Non-Cash Items | -749M | -241M | -724M | -265M | -204M | -262M | 169M | -160M | -339M | -409M | -196M | -78M | -84M | -94M | -22M | -32M | 1M | -149M | -87M | -51M | -79M | -88M | -153M | -217M | 51M | -103M | -14M | -24M | -149M | -99M | -74.8M |
| Working Capital Changes | 167M | 71M | 625M | 368M | -201M | 147M | 131M | -139M | 122M | 58M | 305M | 114M | -251M | 78M | 5M | -53M | 79M | -200M | -19M | 9M | 62M | 45M | 82M | 86M | -84M | -176M | 832M | -48M | -50M | 43M | -17.2M |
| Change in Receivables | 89M | 59M | 85M | -2M | -171M | -133M | 71M | 87M | -70M | -41M | 23M | 109M | -31M | 85M | -64M | -215M | -41M | 63M | 269M | 30M | -60M | -94M | -71M | -12M | -208M | -74M | 446M | -322M | 33M | -23M | -800K |
| Change in Inventory | -4M | 6M | -13M | -11M | -35M | 3M | 23M | -37M | 15M | 35M | 42M | -35M | -13M | -7M | -7M | -40M | -5M | 30M | -18M | -25M | -19M | -28M | -12M | 5M | -7M | 1M | 9M | -40M | -1M | 3M | -1.3M |
| Change in Payables | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 82M | 0 | 0 | 0 | 21M | 27M | 75M | 108M | -29M | 36M | 19M | 280M | 209M | -89M | 0 | 0 |
| Cash from Investing | -1.75B | -2.56B | -2.78B | -2.18B | -1.6B | -1.22B | -1.18B | -1.76B | -1.66B | -1.48B | -1.83B | -2.09B | -2B | -1.89B | -1.99B | -1.77B | -1.46B | -1.45B | -1.23B | -1.02B | -684M | -1.83B | -1.13B | -640M | -673M | -601M | -581M | -591M | -667M | -6.51B | -535.7M |
| Capital Expenditures | 449M | -2.2B | -4.02B | -2.35B | -1.95B | -1.47B | -1.49B | -2.02B | -1.95B | -1.72B | -1.89B | -2.38B | -2.12B | -1.97B | -2.24B | -2.16B | -1.47B | -1.3B | -1.56B | -1.34B | -1.18B | -1.02B | -1.04B | -720M | -689M | -746M | -731M | -912M | -956M | -875M | -688.2M |
| CapEx % of Revenue | 3.68% | 18.1% | 33.19% | 19.32% | 15.28% | 13.19% | 15.26% | 17.87% | 17.03% | 16.33% | 19.08% | 22.69% | 18.22% | 17.53% | 20.3% | 19.33% | 15.45% | 16.3% | 14.61% | 14.22% | 12.52% | 12.02% | 14.24% | 11.13% | 10.99% | 12.09% | 11.87% | 17.56% | 22.65% | 20.72% | 14.43% |
| Acquisitions | 0 | 164M | 558M | 86M | 263M | 159M | 1M | 104M | 204M | 202M | 130M | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 1.47B | 1.3B | 1.14B | 1.12B | 798M | 720M | 902M | 868M | 1.02B | 1.04B | 949M | 131.1M |
| Investments | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - | - |
| Other Investing | -2.9B | 0 | 0 | 0 | 0 | 0 | 333M | 377M | 0 | 0 | 0 | 63M | 114M | 144M | 192M | 84M | 97M | 84M | 109M | -1.34B | -1.18B | -1.02B | -1.04B | -720M | -689M | -746M | -731M | -915M | -789M | -6.62B | -82M |
| Cash from Financing | -1.67B | -1.91B | -1.2B | 115M | -3B | -3.31B | -1.93B | -1.99B | -2.31B | -2.04B | -1.35B | -662M | -1.32B | -394M | -694M | -2.01B | -1.43B | -31M | -1.07B | -1.63B | -1.28B | -456M | -233M | -314M | -150M | 151M | -798M | 90M | -252M | 5.19B | -527.5M |
| Debt Issued (Net) | 1M | -163M | -4M | 1.96B | 1.28B | 1.09B | 403M | 1B | 1.27B | -412M | 94M | 1.08B | -445M | 739M | 1.13B | 501M | -139M | 403M | 280M | -239M | -339M | -456M | -253M | -167M | -91M | 230M | -494M | 380M | 17M | 4B | 116M |
| Equity Issued (Net) | -277M | -534M | 26M | -622M | -3.11B | -3.37B | -1.37B | -2.07B | -2.74B | -923M | -746M | -1.06B | -188M | -496M | -1.2B | -1.93B | -774M | 66M | -899M | -1.01B | -667M | 194M | 162M | 13M | 42M | 14M | 2M | 14M | 34M | 24M | 29M |
| Dividends Paid | -1.21B | -1.22B | -1.22B | -1.23B | -1.17B | -1.03B | -960M | -949M | -844M | -703M | -695M | -713M | -687M | -637M | -624M | -576M | -514M | -500M | -456M | -377M | -278M | -194M | -142M | -117M | -101M | -93M | -306M | -304M | -303M | -301M | -283.7M |
| Share Repurchases | -282M | -534M | 26M | -619M | -3.11B | -3.39B | -1.44B | -2.1B | -2.78B | -1.01B | -803M | -1.07B | -318M | -627M | -1.29B | -2.05B | -863M | 0 | -1.13B | -1.2B | -964M | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | -389M |
| Other Financing | -178M | 2M | 0 | 3M | 0 | 0 | 0 | 23M | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | 0 | -43M | 0 | 0 | 0 | 0 | 0 | 1.47B | -388.8M |
| Net Change in Cash | 335M | -111M | 73M | 1.11B | -383M | -276M | 535M | 134M | -244M | -266M | -145M | 128M | -470M | 790M | 377M | -551M | -169M | 378M | 412M | -321M | 238M | -178M | 295M | 100M | -20M | 151M | -798M | 32M | -29M | -173M | 141.5M |
| Free Cash Flow | 4.2B | 2.16B | 1.67B | 830M | 2.27B | 2.79B | 2.14B | 1.87B | 1.77B | 1.53B | 1.15B | 492M | 734M | 1.11B | 824M | 1.07B | 1.24B | 561M | 1.16B | 992M | 1.03B | 1.08B | 620M | 334M | 114M | -92M | 611M | -379M | -66M | 275M | 516.5M |
| FCF Margin % | 34.5% | 17.71% | 13.78% | 6.83% | 17.84% | 25% | 21.89% | 16.58% | 15.49% | 14.5% | 11.6% | 4.68% | 6.31% | 9.84% | 7.46% | 9.55% | 13.07% | 7.04% | 10.85% | 10.52% | 10.93% | 12.67% | 8.48% | 5.16% | 1.82% | -1.49% | 9.92% | -7.3% | -1.56% | 6.51% | 10.83% |
| FCF Growth % | 122.55% | 29.08% | 101.33% | -63.5% | -18.35% | 29.96% | 14.42% | 5.52% | 16.01% | 33.39% | 133.13% | -32.97% | -33.69% | 34.34% | -22.77% | -14.23% | 121.75% | -51.51% | 16.63% | -3.5% | -4.81% | 74.19% | 85.63% | 192.98% | 223.91% | -115.06% | 261.21% | -474.24% | -124% | -46.76% | -10.72% |
| FCF per Share | - | 9.60 | 7.38 | 3.65 | 9.65 | 11.23 | 8.35 | 7.05 | 6.33 | 5.27 | 3.88 | 1.62 | 2.35 | 3.51 | 2.53 | 3.04 | 3.35 | 1.51 | 3.04 | 2.49 | 2.48 | 2.62 | 1.55 | 0.86 | 0.29 | -0.24 | 1.60 | -1.00 | -0.17 | 0.72 | 1.35 |
| FCF Conversion (FCF/Net Income) | 1.57x | 1.52x | 1.55x | 1.74x | 1.29x | 1.42x | 1.81x | 1.43x | 1.40x | 0.60x | 1.82x | 1.85x | 1.43x | 1.61x | 1.75x | 1.68x | 1.81x | 1.80x | 1.58x | 1.59x | 1.49x | 1.64x | 1.80x | 1.97x | 1.75x | 1.74x | 7.80x | 2.23x | 1.21x | 1.60x | 1.56x |
| Interest Paid | -192M | 0 | 764M | 653M | 619M | 579M | 577M | 555M | 496M | 528M | 543M | 518M | 522M | 492M | 473M | 435M | 453M | 458M | 421M | 441M | 473M | 485M | 483M | 510M | 525M | 550M | 543M | 520M | 519M | 379M | 127.5M |
| Taxes Paid | -1M | 0 | 305M | 681M | 750M | 654M | 311M | 543M | 519M | 705M | 593M | 386M | 1.1B | 735M | 618M | 289M | 602M | 381M | 615M | 603M | 692M | 271M | 146M | 93M | 54M | 74M | 5M | 16M | 76M | 209M | 324.1M |
Operational and Regulatory Volatility
As reported in recent financial statements, NSC's operating cash flow to net income ratio has fluctuated significantly, reaching an extreme 15.83x in 2024Q1, which suggests that reported net income is frequently decoupled from the actual cash-generating capacity of the underlying rail operations during periods of operational stress.
The wide variance in the OCF/NI ratio indicates that accounting earnings are heavily influenced by non-cash charges or significant reserve adjustments, particularly following operational incidents. Investors should monitor this divergence as it suggests that net income may not be a reliable proxy for the company's ability to fund its capital-intensive infrastructure requirements.
Based on the provided cash flow data, NSC's free cash flow margin has demonstrated extreme instability, swinging from a negative 45.3% in 2024Q1 to a peak of 85.3% in 2025Q4, highlighting the company's difficulty in maintaining consistent cash generation amidst ongoing operational and capital expenditure cycles.
This volatility appears to be driven by lumpy capital investments and the timing of cash outflows related to network maintenance and legal liabilities. The lack of a stable FCF trajectory suggests that shareholders should be cautious about relying on current cash flow levels to support long-term dividend or buyback commitments.
According to historical data, NSC's capital expenditure as a percentage of revenue has reached as high as 73.2% in 2024Q1, indicating a high level of capital intensity that is necessary to maintain the integrity of its 19,300-mile rail network against competitive and regulatory pressures.
The significant fluctuations in CapEx suggest that the company is frequently forced to prioritize heavy infrastructure spending to address network fluidity or safety mandates. This high capital burden may continue to constrain free cash flow, potentially limiting the company's flexibility to pursue growth-oriented investments without impacting shareholder returns.
As evidenced by the 2024Q1 working capital change of $536 million, NSC's cash flow is periodically bolstered by significant shifts in working capital, which may mask underlying operational inefficiencies or the timing of payments to suppliers and regulatory bodies following major network disruptions.
The inconsistent nature of these working capital swings suggests that the company's cash conversion cycle is highly sensitive to external events rather than internal process improvements. Analysts should investigate whether these fluctuations represent sustainable improvements in collection and payment cycles or merely temporary timing differences that will reverse in subsequent periods.
Based on reported figures, NSC has maintained a consistent dividend payout of approximately $303 million per quarter, even during periods of negative free cash flow, which suggests a management commitment to shareholder returns that may be at odds with the company's current cash-generating reality.
The reliance on external financing or cash reserves to fund dividends during periods of high capital intensity warrants further investigation into the sustainability of this policy. Investors should monitor whether the company's capital allocation strategy remains prudent if operational cash flow continues to exhibit such high levels of volatility.
Quick answers to the most common questions about buying NSC stock.
Norfolk Southern Corporation (NSC) generated $4.36B in net cash from operating activities in 2025. This reflects the cash generated directly from core business operations.
Norfolk Southern Corporation (NSC) generated $2.16B in free cash flow in 2025. Free cash flow is the cash left over after capital expenditures, which can be used to pay dividends, repurchase shares, or pay down debt.
Norfolk Southern Corporation (NSC) spent $2.20B on capital expenditures in 2025. CapEx represents the cash invested in physical assets like property, plant, and equipment to maintain or grow the business.
In 2025, Norfolk Southern Corporation (NSC) returned $1.22B to shareholders via cash dividends and spent $534.0M on share repurchases. This shows the company's commitment to returning capital to its equity investors.