Document And Entity Information - USD ($)	12 Months Ended
Document And Entity Information - USD ($)	Dec. 31, 2018	Jan. 31, 2019	Jun. 30, 2018
Document And Entity Information [Abstract]
Entity Registrant Name	NORFOLK SOUTHERN CORP
Entity Central Index Key	0000702165
Current Fiscal Year End Date	--12-31
Entity Filer Category	Large Accelerated Filer
Document Type	10-K
Document Period End Date	Dec. 31, 2018
Document Fiscal Year Focus	2018
Document Fiscal Period Focus	FY
Amendment Flag	false
Entity Common Stock, Shares Outstanding		267,455,326
Entity Well-known Seasoned Issuer	Yes
Entity Voluntary Filers	No
Entity Current Reporting Status	Yes
Entity Small Business	false
Entity Emerging Growth Company	false
Entity Shell Company	false
Entity Public Float			$ 42,224,842,213

Consolidated Statements of Income - USD ($) $ in Millions	12 Months Ended
Consolidated Statements of Income - USD ($) $ in Millions	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Income Statement [Abstract]
Railway operating revenues	$ 11,458	$ 10,551	$ 9,888
Railway operating expenses:
Compensation and benefits	2,925	2,979	2,808
Purchased services and rents	1,730	1,414	1,548
Fuel	1,087	840	698
Depreciation	1,102	1,055	1,026
Materials and other	655	741	799
Total railway operating expenses	7,499	7,029	6,879
Income from railway operations	3,959	3,522	3,009
Other income – net	67	156	136
Interest expense on debt	557	550	563
Income before income taxes	3,469	3,128	2,582
Income taxes	803	(2,276)	914
Net income	$ 2,666	$ 5,404	$ 1,668
Earnings per share:
Basic (in dollars per share)	$ 9.58	$ 18.76	$ 5.66
Diluted (in dollars per share)	$ 9.51	$ 18.61	$ 5.62

Consolidated Statements of Comprehensive Income - USD ($) $ in Millions	3 Months Ended								12 Months Ended
	Dec. 31, 2018	Sep. 30, 2018	Jun. 30, 2018	Mar. 31, 2018	Dec. 31, 2017	Sep. 30, 2017	Jun. 30, 2017	Mar. 31, 2017	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Net income	$ 702	$ 702	$ 710	$ 552	$ 3,968	$ 506	$ 497	$ 433	$ 2,666	$ 5,404	$ 1,668
Other comprehensive income (loss), before tax:
Pension and other postretirement benefits									(148)	155	(74)
Other comprehensive income (loss), before tax									(157)	174	(69)
Income tax benefit (expense) related to items of other comprehensive income (loss)									38	(43)	27
Other comprehensive income (loss), net of tax									(119)	131	(42)
Total comprehensive income									2,547	5,535	1,626
Accumulated Other Comprehensive Loss Equity Investees
Other comprehensive income (loss), before tax:
Other comprehensive income (loss), before tax									(9)	19	5
Income tax benefit (expense) related to items of other comprehensive income (loss)									1	(2)	0
Other comprehensive income (loss), net of tax									$ (8)	$ 17	$ 5

The consolidated profit or loss for the period, net of income taxes, including the portion attributable to the noncontrolling interest.

+ References

Reference 1: http://www.xbrl.org/2003/role/disclosureRef
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+ Details

Consolidated Balance Sheets - USD ($) $ in Millions	Dec. 31, 2018	Dec. 31, 2017
Assets
Cash and cash equivalents	$ 358	$ 690
Accounts receivable – net	1,009	955
Materials and supplies	207	222
Other current assets	288	282
Total current assets	1,862	2,149
Investments	3,109	2,981
Properties less accumulated depreciation of $12,374 and $11,909 respectively	31,091	30,330
Other assets	177	251
Total assets	36,239	35,711
Liabilities and stockholders’ equity
Accounts payable	1,505	1,401
Short-term debt	0	100
Income and other taxes	255	211
Other current liabilities	246	233
Current maturities of long-term debt	585	600
Total current liabilities	2,591	2,545
Long-term debt	10,560	9,136
Other liabilities	1,266	1,347
Deferred income taxes	6,460	6,324
Total liabilities	20,877	19,352
Stockholders’ equity:
Common stock $1.00 per share par value, 1,350,000,000 shares authorized; outstanding 268,098,472 and 284,157,187 shares, respectively, net of treasury shares	269	285
Additional paid-in capital	2,216	2,254
Accumulated other comprehensive loss	(563)	(356)
Retained income	13,440	14,176
Total stockholders’ equity	15,362	16,359
Total liabilities and stockholders’ equity	$ 36,239	$ 35,711

Consolidated Balance Sheets (Parenthetical) - USD ($) $ in Millions	Dec. 31, 2018	Dec. 31, 2017
Statement of Financial Position [Abstract]
Properties, accumulated depreciation	$ 12,374	$ 11,909
Common stock, par or stated value per share (in dollars per share)	$ 1.00	$ 1.00
Common stock, shares authorized (in shares)	1,350,000,000	1,350,000,000
Common stock, shares outstanding, net of treasury shares (in shares)	268,098,472	284,157,187

Consolidated Statements of Cash Flows - USD ($) $ in Millions	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Cash flows from operating activities:
Net income	$ 2,666	$ 5,404	$ 1,668
Reconciliation of net income to net cash provided by operating activities:
Depreciation	1,104	1,059	1,030
Deferred income taxes	173	(2,859)	227
Gains and losses on properties	(171)	(92)	(46)
Changes in assets and liabilities affecting operations:
Accounts receivable	(70)	(41)	23
Materials and supplies	15	35	42
Other current assets	(46)	(71)	82
Current liabilities other than debt	223	135	158
Other – net	(168)	(317)	(150)
Net cash provided by operating activities	3,726	3,253	3,034
Cash flows from investing activities:
Property additions	(1,951)	(1,723)	(1,887)
Property sales and other transactions	204	202	130
Investment purchases	(10)	(7)	(123)
Investment sales and other transactions	99	47	48
Net cash used in investing activities	(1,658)	(1,481)	(1,832)
Cash flows from financing activities:
Dividends	(844)	(703)	(695)
Common Stock transactions	40	89	57
Purchase and retirement of Common Stock	(2,781)	(1,012)	(803)
Proceeds from borrowings – net of issuance costs	2,023	290	694
Debt repayments	(750)	(702)	(600)
Net cash used in financing activities	(2,312)	(2,038)	(1,347)
Net decrease in cash, cash equivalents, and restricted cash	(244)	(266)	(145)
Cash, cash equivalents, and restricted cash:
At beginning of year	690	956	1,101
At end of year	446	690	956
Supplemental disclosures of cash flow information:
Interest (net of amounts capitalized)	496	528	543
Income taxes (net of refunds)	$ 519	$ 705	$ 593

Consolidated Statements of Changes In Stockholders' Equity - USD ($) $ in Millions	Total	Common Stock	Additional Paid-In Capital	Accumulated Other Comprehensive Loss	Retained Income
Beginning Balance at Dec. 31, 2015	$ 12,188	$ 299	$ 2,143	$ (445)	$ 10,191
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income	1,668				1,668
Other comprehensive income (loss)	(42)			(42)
Total comprehensive income	1,626
Dividends on Common Stock ($2.36, $2.44 and $3.04 for years ended 2016, 2017 and 2018, respectively)	(695)				(695)
Share repurchases	(803)	(9)	(63)		(731)
Stock-based compensation	95	2	99		(6)
Other	(2)				(2)
Ending Balance at Dec. 31, 2016	12,409	292	2,179	(487)	10,425
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income	5,404				5,404
Other comprehensive income (loss)	131			131
Total comprehensive income	5,535
Dividends on Common Stock ($2.36, $2.44 and $3.04 for years ended 2016, 2017 and 2018, respectively)	(703)				(703)
Share repurchases	(1,012)	(8)	(59)		(945)
Stock-based compensation	130	1	134		(5)
Reclassification of stranded tax effect	0
Ending Balance at Dec. 31, 2017	16,359	285	2,254	(356)	14,176
Increase (Decrease) in Stockholders' Equity [Roll Forward]
Net income	2,666				2,666
Other comprehensive income (loss)	(119)			(119)
Total comprehensive income	2,547
Dividends on Common Stock ($2.36, $2.44 and $3.04 for years ended 2016, 2017 and 2018, respectively)	(844)				(844)
Share repurchases	(2,781)	(17)	(125)		(2,639)
Stock-based compensation	81	1	87		(7)
Reclassification of stranded tax effect	(88)			(88)	88
Ending Balance at Dec. 31, 2018	$ 15,362	$ 269	$ 2,216	$ (563)	$ 13,440

Summary Of Significant Accounting Policies

12 Months Ended

Dec. 31, 2018

Accounting Policies [Abstract]

Summary Of Significant Accounting Policies

Summary of Significant Accounting Policies

Description of Business

Norfolk Southern Corporation is a Virginia-based holding company engaged principally in the rail transportation business, operating approximately 19,500 route miles primarily in the East and Midwest. These consolidated financial statements include Norfolk Southern and its majority-owned and controlled subsidiaries (collectively, NS, we, us, and our). Norfolk Southern’s major subsidiary is NSR. All significant intercompany balances and transactions have been eliminated in consolidation.

NSR and its railroad subsidiaries transport raw materials, intermediate products, and finished goods classified in the following commodity groups (percent of total railway operating revenues in 2018): intermodal (25%); coal (16%); chemicals (16%); agriculture, consumer products, and government (14%); metals and construction (13%); automotive (9%); and, paper, clay, and forest products (7%). Although most of our customers are domestic, ultimate points of origination or destination for some of the products transported (particularly coal bound for export and some intermodal containers) may be outside the U.S. Approximately 80% of our railroad employees are covered by collective bargaining agreements with various labor unions.

Use of Estimates

The preparation of financial statements in accordance with GAAP requires us to make estimates and assumptions that affect the reported amounts of assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. We periodically review our estimates, including those related to the recoverability and useful lives of assets, as well as liabilities for litigation, environmental remediation, casualty claims, income taxes and pension and other postretirement benefits. Changes in facts and circumstances may result in revised estimates.

Revenue Recognition

Transportation revenue is recognized proportionally as a shipment moves from origin to destination, and related expenses are recognized as incurred. Certain of our contract refunds (which are primarily volume-based incentives) are recorded as a reduction to revenues on the basis of management’s best estimate of projected liability, which is based on historical activity, current shipment counts and expectation of future activity. Switching, demurrage and other incidental service revenues are recognized at a point in time when the services are performed or as contractual obligations are met.

Cash Equivalents

“Cash equivalents” are highly liquid investments purchased three months or less from maturity.

Allowance for Doubtful Accounts

Our allowance for doubtful accounts was $7 million at both December 31, 2018 and 2017. To determine our allowance for doubtful accounts, we evaluate historical loss experience (which has not been significant), the characteristics of current accounts, and general economic conditions and trends.

Materials and Supplies

“Materials and supplies,” consisting mainly of items for maintenance of property and equipment, are stated at the lower of average cost or net realizable value. The cost of materials and supplies expected to be used in property additions or improvements is included in “Properties.”

Investments

Investments in entities over which we have the ability to exercise significant influence but do not control the entity are accounted for using the equity method, whereby the investment is carried at the cost of the acquisition plus our equity in undistributed earnings or losses since acquisition.

Properties

“Properties” are stated principally at cost and are depreciated using the group method whereby assets with similar characteristics, use, and expected lives are grouped together in asset classes and depreciated using a composite depreciation rate. This methodology treats each asset class as a pool of resources, not as singular items. We use approximately 75 depreciable asset classes. “Depreciation” in the Consolidated Statements of Cash Flows includes both depreciation and depletion on operating and nonoperating properties.

Depreciation expense is based on our assumptions concerning expected service lives of our properties as well as the expected net salvage that will be received upon their retirement. In developing these assumptions, we utilize periodic depreciation studies that are performed by an independent outside firm of consulting engineers and approved by the STB. Our depreciation studies are conducted about every three years for equipment and every six years for track assets and other roadway property. The frequency of these studies is consistent with guidelines established by the STB. We adjust our rates based on the results of these studies and implement the changes prospectively. The studies may also indicate that the recorded amount of accumulated depreciation is deficient (or in excess) of the amount indicated by the study. Any such deficiency (or excess) is amortized as a component of depreciation expense over the remaining service lives of the affected class of property, as determined by the study.

Key factors that are considered in developing average service life and salvage estimates include:


•	statistical analysis of historical retirement data and surviving asset records;


•	review of historical salvage received and current market rates;


•	review of our operations including expected changes in technology, customer demand, maintenance practices and asset management strategies;


•	review of accounting policies and assumptions; and


•	industry review and analysis.

The composite depreciation rate for rail in high density corridors is derived based on consideration of annual gross tons as compared to the total or ultimate capacity of rail in these corridors. Our experience has shown that traffic density is a leading factor in the determination of the expected service life of rail in high density corridors. In developing the respective depreciation rate, consideration is also given to several rail characteristics including age, weight, condition (new or second-hand) and type (curved or straight).

We capitalize interest on major projects during the period of their construction. Expenditures, including those on leased assets, that extend an asset’s useful life or increase its utility are capitalized. Expenditures capitalized include those that are directly related to a capital project and may include materials, labor and equipment, in addition to an allocable portion of indirect costs that relate to a capital project. A significant portion of annual capital spending relates to the replacement of self-constructed assets. Removal activities occur in conjunction with replacement and are estimated based on the average percentage of time employees replacing assets spend on removal functions. Costs related to repairs and maintenance activities that do not extend an asset’s useful life or increase its utility are expensed when such repairs are performed.

When depreciable operating road and equipment assets are sold or retired in the ordinary course of business, the cost of the assets, net of sale proceeds or salvage, is charged to accumulated depreciation, and no gain or loss is recognized in earnings. Actual historical cost values are retired when available, such as with most equipment assets. The use of estimates in recording the retirement of certain roadway assets is necessary based on the impracticality of tracking individual asset costs. When retiring rail, ties and ballast, we use statistical curves that indicate the relative distribution of the age of the assets retired. The historical cost of other roadway assets is estimated using a combination of inflation indices specific to the rail industry and those published by the U.S. Bureau of Labor Statistics. The indices are applied to the replacement value based on the age of the retired assets. These indices are used because they closely correlate with the costs of roadway assets. Gains and losses on disposal of operating land are included in “Materials and other” expenses. Gains and losses on disposal of nonoperating land and nonrail assets are included in “Other income – net” since such income is not a product of our railroad operations.

A retirement is considered abnormal if it does not occur in the ordinary course of business, if it relates to disposition of a large segment of an asset class and if the retirement varies significantly from the retirement profile identified through our depreciation studies, which inherently consider the impact of normal retirements on expected service lives and depreciation rates. Gains or losses from abnormal retirements would be recognized in income from railway operations.

We review the carrying amount of properties whenever events or changes in circumstances indicate that such carrying amount may not be recoverable based on future undiscounted cash flows. Assets that are deemed impaired as a result of such review are recorded at the lower of carrying amount or fair value.

New Accounting Pronouncements

The FASB issued ASU 2014-09, “Revenue from Contracts with Customers,” and related amendments, which are jointly referred to as Accounting Standards Codification (ASC) Topic 606. This standard replaced most existing revenue recognition guidance in GAAP and requires entities to recognize the amount of revenue to which it expects to be entitled for the transfer of promised goods or services to customers. A performance obligation is defined as a promise in a contract to transfer a distinct good or service to the customer. A contract’s transaction price is allocated to each distinct performance obligation and recognized as revenue when, or as, the performance obligation is satisfied. We adopted the provisions of this standard on January 1, 2018, using the modified retrospective method. There was no cumulative effect of initially applying the standard, nor is there any material difference in revenue for the year ended December 31, 2018, as compared with GAAP that was in effect prior to January 1, 2018.

In March 2017, the FASB issued ASU 2017-07, “Improving the Presentation of Net Periodic Pension Cost and Net Periodic Postretirement Benefit Cost.” This update requires segregation of net benefit costs between operating and nonoperating expenses and requires retrospective application. We adopted the standard on January 1, 2018. Under the new standard, only the service cost component of defined benefit pension cost and postretirement benefit cost are reported within “Compensation and benefits” and all other components of net benefit cost are presented in “Other income – net” on the Consolidated Statements of Income, whereas under the previous standard all components were included in “Compensation and benefits.” The retrospective application resulted in an increase to “Compensation and benefits” expense and an offsetting increase to “Other income – net” on the Consolidated Statements of Income of $64 million and $65 million for the years ended December 31, 2017 and December 31, 2016, respectively, with no impact on “Net income.”

In February 2018, the FASB issued ASU 2018-02, “Reclassification of Certain Tax Effects from Accumulated Other Comprehensive Income.” This update is intended to reclassify the stranded tax effects resulting from tax reform from accumulated other comprehensive income (AOCI) to retained earnings. The amount of the reclassification is the difference between the amount initially charged or credited directly to other comprehensive income at the previously enacted U.S. federal corporate income tax rate that remains in AOCI and the amount that would have been charged or credited directly to other comprehensive income using the newly enacted U.S. federal corporate income tax rate. In the first quarter of 2018, we adopted the provisions of ASU 2018-02 resulting in an increase to “Accumulated other comprehensive loss” of $88 million and a corresponding increase to “Retained income,” with no impact on “Total stockholders’ equity.”

In February 2016, the FASB issued ASU 2016-02, “Leases (Topic 842),” and subsequent amendments, which replaced existing lease guidance in GAAP and requires lessees to recognize right-of-use (ROU) assets and lease liabilities on the balance sheet for leases greater than twelve months and disclose key information about leasing arrangements. We adopted the standard on January 1, 2019 using the modified retrospective method and used the effective date as our date of initial application. Financial information will not be updated and the disclosures required under the new standard will not be provided for dates and periods before January 1, 2019.

The new standard provides a number of optional practical expedients for transition. We elected the package of practical expedients under the transition guidance which permits us not to reassess under the new standards our prior conclusions for lease identification and lease classification on expired or existing contracts and whether initial direct costs previously capitalized would qualify for capitalization under ASC 842. We also elected the practical expedient related to land easements, allowing us to not reasses our current accounting treatment for existing agreements on land easements, which are not accounted for as leases. We did not elect the hindsight practical expedient to determine the reasonably certain lease term for existing leases.

The new standard also provides practical expedients and recognition exemptions for an entity’s ongoing accounting policy elections. We elected the short-term lease recognition exemption for all leases that qualify. This means, for those leases that qualify, we will not recognize ROU assets or lease liabilities. We also elected the practical expedient not to separate lease and non-lease components for all of our leases.

We expect that adoption of the standard will result in recognition of lease liabilities of approximately $600 million as of January 1, 2019, with corresponding ROU assets of the same amount based on the present value of the remaining minimum rental payments under current leasing standards for existing operating leases. There will be no adjustment to “Retained income” on adoption.

In June 2016, the FASB issued ASU 2016-13, “Credit Losses - Measurement of Credit Losses on Financial Instruments,” which replaces the current incurred loss impairment method with a method that reflects expected credit losses. The new standard is effective as of January 1, 2020, and early adoption is permitted as of January 1, 2019. Because credit losses associated from our trade receivables have historically been insignificant, we do not expect this standard to have a material effect on our financial statements. We will not adopt the standard early.

Railway Operating Revenues

12 Months Ended

Dec. 31, 2018

Revenue from Contract with Customer [Abstract]

Railway Operating Revenues

The following table disaggregates our revenues by commodity group:



	2018
	($ in millions)
Merchandise:
Chemicals	$	1,808
Agriculture, consumer products, and government	1,674
Metals and construction	1,462
Automotive	991
Paper, clay, and forest products	809
Merchandise	6,744
Intermodal	2,893
Coal	1,821

Total	$	11,458

A performance obligation is created when a customer under a transportation contract or public tariff submits a bill of lading to NS for the transport of goods. These performance obligations are satisfied as the shipments move from origin to destination. As such, transportation revenue is recognized proportionally as a shipment moves, and related expenses are recognized as incurred. These performance obligations are generally short-term in nature with transit days averaging approximately one week or less for each commodity group. The customer has an unconditional obligation to pay for the service once the service has been completed. Estimated revenue associated with in-process shipments at period-end is recorded based on the estimated percentage of service completed to total transit days. We had no material remaining performance obligations as of December 31, 2018.

Under the typical payment terms of our freight contracts, payment for services is due within fifteen days of billing the customer, thus there are no significant financing components. “Accounts receivable – net” on the Consolidated Balance Sheets includes both customer and non-customer receivables as follows:



	December 31,
	2018		2017
	($ in millions)

Customer	$	740	$	703
Non-customer	269		252

Accounts receivable – net	$	1,009	$	955

Non-customer receivables include non-revenue-related amounts due from other railroads, governmental entities, and others. “Other assets” on the Consolidated Balance Sheets includes non-current customer receivables of $55 million and $39 million at December 31, 2018 and December 31, 2017, respectively. We do not have any material contract assets or liabilities.

Certain of our contracts contain refunds (which are primarily volume-based incentives) that are recorded as a reduction to revenue. Refunds are recorded on the basis of management’s best estimate of projected liability, which is based on historical activity, current shipment counts and expectation of future activity.

Certain accessorial services may be provided to customers under their transportation contracts such as switching, demurrage and other incidental service revenues. These are distinct performance obligations that are recognized at a point in time when the services are performed or as contractual obligations are met. This revenue is included within each of the commodity groups and represents approximately 4% of total “Railway operating revenues” on the Consolidated Statements of Income.

Income Taxes

12 Months Ended

Dec. 31, 2018

Income Tax Disclosure [Abstract]

Income Taxes

Tax reform, enacted in 2017, lowered the Federal corporate tax rate from 35% to 21% and made numerous other tax law changes. GAAP requires companies to recognize the effect of tax law changes in the period of enactment. As a result, in 2017, “Purchased services and rents” included a $151 million benefit for earnings generated from reductions to net deferred tax liabilities at certain equity investees and “Income taxes” included a $3,331 million benefit primarily due to the remeasurement of our net deferred tax liabilities to reflect the lower rate. In 2017, reasonable estimates were made based on our analysis of tax reform that could have required provisional amounts to be adjusted when additional information was obtained. No material adjustments to our provisional amounts were made in 2018.



	2018		2017			2016
	($ in millions)
Current:
Federal	$	499	$	500		$	612
State	131		83			75
Total current taxes	630		583			687

Deferred:
Federal	156		(2,924		)	206
State	17		65			21
Total deferred taxes	173		(2,859		)	227

Income taxes	$	803	$	(2,276	)	$	914

Reconciliation of Statutory Rate to Effective Rate

“Income taxes” on the Consolidated Statements of Income differs from the amounts computed by applying the statutory federal corporate tax rate as follows:



	2018					2017					2016
	Amount			%		Amount			%		Amount			%
	($ in millions)

Federal income tax at statutory rate	$	728		21.0		$	1,095		35.0		$	904		35.0
State income taxes, net of federal tax effect	120			3.5		88			2.8		70			2.8
Equity in earnings related to tax reform	—			—		(38		)	(1.2	)	—			—
Tax reform	—			—		(3,331		)	(106.5	)	—			—
Excess tax benefits on stock-based compensation	(22		)	(0.7	)	(39		)	(1.2	)	(17		)	(0.7	)
Other, net	(23		)	(0.7	)	(51		)	(1.7	)	(43		)	(1.7	)

Income taxes	$	803		23.1		$	(2,276	)	(72.8	)	$	914		35.4

Deferred Tax Assets and Liabilities

Certain items are reported in different periods for financial reporting and income tax purposes. Deferred tax assets and liabilities are recorded in recognition of these differences. The tax effects of temporary differences that give rise to significant portions of the deferred tax assets and deferred tax liabilities are as follows:



	December 31,
	2018			2017
	($ in millions)
Deferred tax assets:
Compensation and benefits, including postretirement benefits	$	284		$	235
Accruals, including casualty and other claims	69			64
Other	72			67
Total gross deferred tax assets	425			366
Less valuation allowance	(50		)	(44		)
Net deferred tax assets	375			322

Deferred tax liabilities:
Property	(6,422		)	(6,212		)
Other	(413		)	(434		)
Total deferred tax liabilities	(6,835		)	(6,646		)

Deferred income taxes	$	(6,460	)	$	(6,324	)

Except for amounts for which a valuation allowance has been provided, we believe that it is more likely than not that the results of future operations will generate sufficient taxable income to realize the deferred tax assets. The valuation allowance at the end of each year primarily relates to subsidiary state income tax net operating losses and state investment tax credits that may not be utilized prior to their expiration. The total valuation allowance increased by $6 million in 2018, $5 million in 2017, and $4 million in 2016.

Uncertain Tax Positions

A reconciliation of the beginning and ending amount of unrecognized tax benefits is as follows:



	December 31,
	2018			2017
	($ in millions)

Balance at beginning of year	$	17		$	27

Additions based on tax positions related to the current year	5			4
Additions for tax positions of prior years	—			2
Reductions for tax positions of prior years	—			(2		)
Settlements with taxing authorities	—			(11		)
Lapse of statutes of limitations	(1		)	(3		)

Balance at end of year	$	21		$	17

Included in the balance of unrecognized tax benefits at December 31, 2018 are potential benefits of $17 million that would affect the effective tax rate if recognized. Unrecognized tax benefits are adjusted in the period in which new information about a tax position becomes available or the final outcome differs from the amount recorded.

The statute of limitations on IRS examinations has expired for all years prior to 2015. We have amended our 2012 income tax return to request a refund of $46 million, which is not included in the above balance of unrecognized tax benefits. State income tax returns generally are subject to examination for a period of three to four years after filing of the return. In addition, we are generally obligated to report changes in taxable income arising from federal income tax examinations to the states within a period of up to two years from the date the federal examination is final. We have various state income tax returns either under examination, administrative appeal, or litigation.

Fair Value Measurements

12 Months Ended

Dec. 31, 2018

Fair Value Disclosures [Abstract]

Fair Value Measurements

FASB ASC 820-10, “Fair Value Measurements,” established a framework for measuring fair value and a fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value into three broad levels, as follows:



Level 1	Inputs to the valuation methodology are unadjusted quoted prices for identical assets or liabilities in active markets that we have the ability to access.

Level 2	Inputs to the valuation methodology include:
	• quoted prices for similar assets or liabilities in active markets; • quoted prices for identical or similar assets or liabilities in inactive markets; • inputs other than quoted prices that are observable for the asset or liability; • inputs that are derived principally from or corroborated by observable market data by correlation or other means.

	If the asset or liability has a specified (contractual) term, the Level 2 input must be observable for substantially the full term of the asset or liability.

Level 3	Inputs to the valuation methodology are unobservable and significant to the fair value measurement.

The asset’s or liability’s fair value measurement level within the hierarchy is based on the lowest level of any input that is significant to the fair value measurement.

Fair Values of Financial Instruments

The fair values of “Cash and cash equivalents,” “Accounts receivable – net,” “Accounts payable,” and “Short-term debt” approximate carrying values because of the short maturity of these financial instruments. The carrying value of corporate-owned life insurance is recorded at cash surrender value and, accordingly, approximates fair value. There are no other assets or liabilities measured at fair value on a recurring basis at December 31, 2018 or 2017. The carrying amounts and estimated fair values, based on Level 1 inputs, of long-term debt consisted of the following at December 31:



	2018						2017
	Carrying Amount			Fair Value			Carrying Amount			Fair Value
	($ in millions)

Long-term debt, including current maturities	$	(11,145	)	$	(12,203	)	$	(9,736	)	$	(11,771	)

Investments

12 Months Ended

Dec. 31, 2018

Investments [Abstract]

Investments



	December 31,
	2018		2017
	($ in millions)
Long-term investments:
Equity method investments:
Conrail Inc.	$	1,337	$	1,293
TTX Company	692		629
Meridian Speedway LLC	271		272
Pan Am Southern LLC	155		154
Other	77		77
Total equity method investments	2,532		2,425

Corporate-owned life insurance at net cash surrender value	556		530
Other investments	21		26

Total long-term investments	$	3,109	$	2,981

Investment in Conrail

Through a limited liability company, we and CSX jointly own Conrail, whose primary subsidiary is CRC. We have a 58% economic and 50% voting interest in the jointly owned entity, and CSX has the remainder of the economic and voting interests. We are amortizing the excess of the purchase price over Conrail’s net equity using the principles of purchase accounting, based primarily on the estimated useful lives of Conrail’s depreciable property and equipment, including the related deferred tax effect of the differences in book and tax accounting bases for such assets, as all of the purchase price at acquisition was allocable to Conrail’s tangible assets and liabilities.

At December 31, 2018, based on the funded status of Conrail’s pension plans, we decreased our proportional investment in Conrail by $11 million. This resulted in a loss of $10 million recorded to “Other comprehensive loss” and a combined federal and state deferred tax asset of $1 million.

At December 31, 2017, based on the funded status of Conrail’s pension plans, we increased our proportional investment in Conrail by $19 million. This resulted in income of $17 million recorded to “Other comprehensive income” and a combined federal and state deferred tax liability of $2 million.

At December 31, 2018, the difference between our investment in Conrail and our share of Conrail’s underlying net equity was $511 million. Our equity in the earnings of Conrail, net of amortization, included in “Purchased services and rents” was $55 million for 2018, $75 million for 2017 (including $33 million related to the enactment of tax reform – see Note 4), and $47 million for 2016. Equity in earnings are included in the “Other – net” line item within operating activities in the Consolidated Statements of Cash Flows.

CRC owns and operates certain properties (the Shared Assets Areas) for the joint and exclusive benefit of NSR and CSX Transportation, Inc. (CSXT). The costs of operating the Shared Assets Areas are borne by NSR and CSXT based on usage. In addition, NSR and CSXT pay CRC a fee for access to the Shared Assets Areas. “Purchased services and rents” and “Fuel” include expenses payable to CRC for operation of the Shared Assets Areas totaling $150 million in 2018, $141 million in 2017, and $151 million in 2016. Future payments for access fees due to CRC under the Shared Assets Areas agreements are as follows: $38 million in each of 2019 through 2023 and $16 million thereafter. We provide certain general and administrative support functions to Conrail, the fees for which are billed in accordance with several service-provider arrangements and approximate $7 million annually.

“Accounts payable” includes $202 million at December 31, 2018, and $146 million at December 31, 2017, due to Conrail for the operation of the Shared Assets Areas. “Other liabilities” includes $280 million at both December 31, 2018 and 2017 for long-term advances from Conrail, maturing in 2044, that bear interest at an average rate of 2.9%.

Investment in TTX

NS and eight other North American railroads jointly own TTX Company (TTX). NS has a 19.65% ownership interest in TTX, a railcar pooling company that provides its owner-railroads with standardized fleets of intermodal,

automotive, and general use railcars at stated rates.

Amounts paid to TTX for use of equipment are included in “Purchased services and rents.” This amounted to $262 million, $237 million, and $229 million of expense, respectively, for the years ended December 31, 2018, 2017 and 2016. Our equity in the earnings of TTX, also included in “Purchased services and rents,” totaled $61 million for 2018, $158 million (including $115 million related to the enactment of tax reform – see Note 4) for 2017, and $26 million for 2016.

Properties

12 Months Ended

Dec. 31, 2018

Property, Plant and Equipment [Abstract]

Properties



			Accumulated			Net Book		Depreciation
December 31, 2018	Cost		Depreciation			Value		Rate ⁽¹⁾
	($ in millions)

Land	$	2,337	$	—		$	2,337	—

Roadway:
Rail and other track material	6,888		(1,951		)	4,937		2.29	%
Ties	5,346		(1,448		)	3,898		3.36	%
Ballast	2,759		(676		)	2,083		2.70	%
Construction in process	442		—			442		—
Other roadway	14,072		(3,737		)	10,335		2.64	%
Total roadway	29,507		(7,812		)	21,695

Equipment:
Locomotives	5,870		(2,262		)	3,608		3.77	%
Freight cars	3,183		(1,288		)	1,895		2.47	%
Computers and software	623		(365		)	258		10.65	%
Construction in process	437		—			437		—
Other equipment	1,071		(380		)	691		4.94	%
Total equipment	11,184		(4,295		)	6,889

Other property	437		(267		)	170		0.78	%

Total properties	$	43,465	$	(12,374	)	$	31,091



			Accumulated			Net Book		Depreciation
December 31, 2017	Cost		Depreciation			Value		Rate ⁽¹⁾
	($ in millions)

Land	$	2,342	$	—		$	2,342	—

Roadway:
Rail and other track material	6,730		(1,961		)	4,769		2.28	%
Ties	5,181		(1,374		)	3,807		3.37	%
Ballast	2,654		(624		)	2,030		2.71	%
Construction in process	447		—			447		—
Other roadway	13,636		(3,523		)	10,113		2.59	%
Total roadway	28,648		(7,482		)	21,166

Equipment:
Locomotives	5,658		(2,158		)	3,500		3.77	%
Freight cars	3,256		(1,286		)	1,970		2.48	%
Computers and software	610		(334		)	276		10.61	%
Construction in process	247		—			247		—
Other equipment	1,004		(366		)	638		5.06	%
Total equipment	10,775		(4,144		)	6,631

Other property	474		(283		)	191		0.77	%

Total properties	$	42,239	$	(11,909	)	$	30,330


⁽¹⁾	Composite annual depreciation rate for the underlying assets, excluding the effects of the amortization of any deficiency (or excess) that resulted from our depreciation studies.

Other property includes the costs of obtaining rights to natural resources of $336 million at both December 31, 2018 and 2017, with accumulated depletion of $200 million at both dates.

Capitalized Interest

Total interest cost incurred on debt was $574 million in 2018, $570 million in 2017, and $583 million in 2016, of which $17 million in 2018 and $20 million in both 2017 and 2016 was capitalized.

Debt

12 Months Ended

Dec. 31, 2018

Debt Disclosure [Abstract]

Debt

Debt with weighted average interest rates and maturities is presented below:



	December 31,
	2018			2017
	($ in millions)
Notes and debentures:
4.68% maturing to 2023	$	2,682		$	3,282
4.57% maturing 2024 to 2031	3,065			2,365
4.49% maturing 2037 to 2052	5,104			4,404
5.90% maturing 2097 to 2118	1,131			531
Securitization borrowings and capital leases	2			102
Discounts, premiums, and debt issuance costs	(839		)	(848		)
Total debt	11,145			9,836

Less current maturities and short-term debt	(585		)	(700		)

Long-term debt excluding current maturities and short-term debt	$	10,560		$	9,136



Long-term debt maturities subsequent to 2019 are as follows:
2020	$	314
2021	584
2022	600
2023	600
2024 and subsequent years	8,462

Total	$	10,560

In February of 2018, we issued $500 million of 4.15% senior notes due 2048.

In August of 2018, we issued $300 million of 3.65% senior notes due 2025, $400 million of 3.80% senior notes due 2028, $200 million of 4.15% senior notes due 2048, and $600 million of 5.10% senior notes due 2118.

In June of 2018, we renewed our accounts receivable securitization program for a 364-day term expiring in May 2019. We also increased the program’s capacity from $350 million to $400 million. Under this facility NSR sells substantially all of its eligible third-party receivables to a subsidiary, which in turn may transfer beneficial interests in the receivables to various commercial paper vehicles. Amounts received under the facility are accounted for as borrowings. Under this facility, we received $50 million in 2018, and paid $150 million and $100 million during 2018 and 2017, respectively. We had no amounts outstanding under this program at December 31, 2018 and $100 million (at an average variable interest rate of 3.21%) at December 31, 2017, which is included within “Short-term debt.” At December 31, 2018 and 2017, the receivables included in “Accounts receivable – net” serving as collateral for these borrowings totaled $793 million and $751 million, respectively. Borrowings under this program are supported by our $750 million credit agreement.

The “Cash, cash equivalents, and restricted cash” line item in the Consolidated Statements of Cash Flows includes restricted cash of $88 million at December 31, 2018 which reflects deposits held by a third-party bond agent as collateral for certain debt obligations maturing in 2019. The restricted cash balance is included as part of “Other current assets” on the Consolidated Balance Sheets.

Credit Agreement and Debt Covenants

We have in place and available a $750 million, five-year credit agreement which expires in May 2021 and provides for borrowings at prevailing rates and includes covenants. We had no amounts outstanding under this facility at December 31, 2018 and 2017, and we are in compliance with all of its covenants.

Consolidated Statements of Changes In Stockholders' Equity (Parenthetical) - $ / shares	12 Months Ended
	Dec. 31, 2018	Dec. 31, 2017	Dec. 31, 2016
Statement of Stockholders' Equity [Abstract]
Common stock, dividends, per share, declared (in dollars per share)	$ 3.04	$ 2.44	$ 2.36