Railway Operating Revenues
The following table disaggregates our revenues by major commodity group: | | | | | | | | | | | | | | | | | | | | |
| | 2025 | | 2024 | | 2023 |
| | ($ in millions) |
| Merchandise: | | | | |
| Agriculture, forest and consumer products | | $ | 2,538 | | | $ | 2,521 | | | $ | 2,530 | |
| Chemicals | | 2,206 | | | 2,123 | | | 2,054 | |
| Metals and construction | | 1,724 | | | 1,682 | | | 1,634 | |
| Automotive | | 1,216 | | | 1,144 | | | 1,135 | |
| Merchandise | | 7,684 | | | 7,470 | | | 7,353 | |
| Intermodal | | 3,009 | | | 3,042 | | | 3,090 | |
| Coal | | 1,487 | | | 1,611 | | | 1,713 | |
| | | | | | |
| Total | | $ | 12,180 | | | $ | 12,123 | | | $ | 12,156 | |
We recognize the amount of revenues to which we expect to be entitled for the transfer of promised goods or services to customers. A performance obligation is created when a customer under a transportation contract or public tariff submits a bill of lading to us for the transport of goods. These performance obligations are satisfied as the shipments move from origin to destination. As such, transportation revenues are 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 revenues associated with in-process shipments at period-end are recorded based on the estimated percentage of service completed. We had no material remaining performance obligations at December 31, 2025 and 2024.
We may provide customers ancillary services, such as switching, demurrage, and other incidental activities, under their transportation contracts. The revenues associated with these distinct performance obligations are recognized when the services are performed or as contractual obligations are met. These revenues are included within each of the commodity groups and represent approximately 5%, 4%, and 5%, respectively, of total “Railway operating revenues” on the Consolidated Statements of Income for the years ended December 31, 2025, 2024, and 2023.
Revenues related to interline transportation services that involve another railroad are reported on a net basis. Therefore, the portion of the amount that relates to another party is not reflected in revenues.
Under the typical 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, |
| | 2025 | | 2024 |
| | ($ in millions) |
| | | | |
| Customer | | $ | 715 | | | $ | 787 | |
| Non-customer | | 273 | | | 282 | |
| | | | |
| Accounts receivable – net | | $ | 988 | | | $ | 1,069 | |
Non-customer receivables include non-revenue-related amounts due from other railroads, governmental entities, insurers, and others. We do not have any material contract assets or liabilities at December 31, 2025 and 2024.
About Revenue Disclosures
Revenue disclosures under ASC 606 explain how a company identifies performance obligations, allocates transaction prices, and determines when revenue is recognized. This section is essential for understanding whether reported revenue reflects genuine economic activity or aggressive accounting choices. Analysts examine the mix of point-in-time versus over-time recognition, which directly affects revenue timing and comparability.
Key signals: rising contract liabilities (deferred revenue) suggest strong future revenue visibility, while declining contract assets may indicate slowing project milestones. Watch for variable consideration estimates — rebates, returns, and performance bonuses that require management judgment. Significant changes in disaggregated revenue by geography or product line can reveal shifting business mix before it appears in headline numbers. Compare revenue growth against contract liability growth to assess sustainability, and scrutinize any changes in the timing of recognition that coincide with earnings pressure.