Morgan Keegan Industrial/Transportation Conference · Change vs. Prior Year ($ in millions, except per share) 1Q11 2Q11 First Half 2011 ... Export Coal •Continued European, Asian

Morgan Keegan

Industrial/Transportation ConferenceSeptember 14, 2011

Marta R. Stewart

Vice President and Treasurer

Norfolk Southern System

Norfolk Southern Update

Recent results

2nd Qtr Financial Highlights

2nd Qtr Revenues

Six Months Summary

Current status

3rd Qtr-to-date Volumes

3rd Qtr-to-date Service Performance

Business Outlook

Traffic Volumes

Service Performance

Corridors and Terminals

Shareholder Returns

Second Quarter Financial Highlights($ in millions, except per share)

2Q11 vs. 2Q10 Change

Revenues $436 18%

Income From Ops $142 19%

Net Income* $102 26%

Earnings per Share* $0.34 33%* Excludes income tax-related benefits, see reconciliation to GAAP posted on our website, www.nscorp.com.

Railway VolumeSecond Quarter

17%

9%

2%

-1%

-2%

-7%

-10%

Automotive

Intermodal

Coal

MetCon

Agriculture

Paper

Chemicals

1,412

1,720 1,787

2Q09 2Q10 2Q11

Units (000) Change in Units2Q11 vs. 2Q10

22%

4%

Revenue Per Unit Second Quarter

26%

18%

17%

16%

13%

9%

3%

Coal *

Chemicals *

Agriculture *

MetCon*

Paper*

Intermodal

Automotive*

$1,315$1,413

$1,604

2Q09 2Q10 2Q11

RPUChange in RPU2Q11 vs. 2Q10

7%

14%

* Record RPU

Total Railway RevenuesSecond Quarter

28%

20%

20%

15%

15%

6%

5%

Coal

Intermodal

Automotive

MetCon

Agriculture

Chemicals

Paper

$1,857

$2,430

$2,866

2Q09 2Q10 2Q11

Revenue in $ Mill.Change in Revenue 2Q11 vs. 2Q10

31%

18%

Export volume of 75,786 carloads, up

14,200 or 23%

Highest volume since Conrail

acquisition

Improves overall coal length of haul

Tightened global supply

Global steel production up 5%

Export Carloads 1Q 2008 - 2Q 2011

Export Coal Market

1Q 2008

2Q 2008

3Q 2008

4Q 2008

1Q 2009

2Q 2009

3Q 2009

4Q 2009

1Q 2010

2Q 2010

3Q 2010

4Q 2010

1Q 2011

2Q 2011

55,121 59,078 59,66345,873 40,995

22,238

45,10759,933 56,863 61,557

50,156 49,234

70,851 75,786

Utility volume of 256,548 carloads,

flat with 2010

Utility South up 9%, North down 8%

Impact from flooding and planned

outages at utilities

Inventories remain under target

1Q 2008

2Q 2008

3Q 2008

4Q 2008

1Q 2009

2Q 2009

3Q 2009

4Q 2009

1Q 2010

2Q 2010

3Q 2010

4Q 2010

1Q 2011

2Q 2011

315,508 317,619 314,890 324,644294,169

267,045 254,070 237,117 245,240 257,349275,517 275,243 276,685

256,548

Utility Carloads 1Q 2008 - 2Q 2011

Utility Coal Market

Six Months Financial SummaryChange vs. Prior Year ($ in millions, except per share)

1Q11 2Q11 First Half 2011

Revenues $382 $436 $818 18%

Income From Ops* $103 $142 $245 19%

Net Income* $104 $102 $206 32%

Earnings per Share* $0.32 $0.34 $0.66 33%

* Excludes insurance arbitration charge and income tax-related benefits, see reconciliation to GAAP posted on our website, www.nscorp.com.

Current Railway VolumeThird Quarter through Week 36 (September 10, 2011)

9%

8%

7%

1%

-5%

-6%

-11%

Automotive

Intermodal

MetCon

Coal

Paper

Agriculture

Chemicals

1,154

1,314

1,358

2009 2010 2011

Units (000) Change in Units2011 vs. 2010

14%

4%

Source: AAR carloadings, which are reported weekly and may not equal NS’ reported volumes.

Third Quarter – Primary Volume Drivers

Increase in Units

Intermodal 43,995 Continued strong domestic demand

Metals and Construction 9,151 Increased steel production

Automotive 4,598 US production, VW plant

Train SpeedYear-to-Date through September 2, 2011

19.5

20.0

20.5

21.0

21.5

22.0

NS Train Speed (miles per hour) Better

Source: As reported publicly to the AAR

Terminal DwellYear-to-Date through September 2, 2011

Source: As reported publicly to the AAR

21

23

25

27

29

31

33

NS Terminal Dwell (hours) Better

0.890.77

0.00.20.40.60.81.01.21.41.61.8

2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 thru

July *

Injury Ratio per 200,000 Employee Hours2010: NS

Record Year

Leading Industry in Safety

NS Earns 22nd Consecutive Harriman Gold Medal in 2010

*Pending

Business Outlook

• Improving volumes through project growth in crude oil and waste products, and long-term improved feedstock prices

Chemicals

• Increased domestic steel production, favorable seasonal paving and construction, and new business gains

Metals and Construction

• Increasing demand for U.S. agricultural productsAgriculture

•Continued European, Asian and South American demandExport Coal

• Increased domestic steel production – low domestic met stockpiles

Domestic Metallurgical Coal

• Falling stockpiles and new business offsetting gas displacement/lower industrial electric demand, record cooling days

Utility Coal

•New business, improved auto production for 2nd halfAutomotive

•Highway conversionsDomestic and Premium Intermodal

• Import growth and continued strength of exportsInternational Intermodal

• Improving rental construction market, more favorable paper demand

Paper and Forest Products

Manpower Planning ModelTotal Qualified T&E plus Trainees

0

2,000

4,000

6,000

8,000

10,000

12,000

14,000

Ja

n-1

0

Fe

b-1

0

Ma

r-10

Ap

r-10

Ma

y-1

0

Ju

n-1

0

Ju

l-10

Au

g-1

0

Se

p-1

0

Oc

t-10

No

v-1

0

Dec

-10

Ja

n-1

1

Feb

-11

Ma

r-11

Ap

r-11

Ma

y-1

1

Ju

n-1

1

Ju

l-11

Au

g-1

1

Se

p-1

1

Oc

t-11

No

v-1

1

Dec

-11

Qualified Employees Trainees

Chicago

Cincinnati

Columbus

Pritchard Roanoke

Norfolk

Detroit

Philadelphia

Ayer

Atlanta

Charlotte

Lynchburg

Corinth

Shreveport

Meridian

New Orleans

Memphis

NY/NJ

Bethlehem

NS Corridor Strategy

Greencastle

Mechanicville

Birmingham

Intermodal Terminal Expansion Update

Ground Breaking Date

Completion Date

Annual Volume Capability (Lifts)

Mechanicville, NY July 2010 Spring 2012 70,000

Memphis, TN January 2011 Fall 2012 200,000

Greencastle, PA June 2011 Fall 2012 85,000

Birmingham, AL June 2011 Fall 2012 100,000

Charlotte, NC Summer 2011 Summer 2013 200,000

$763

$489

$244

$212

$146

$96

$79

$194

Roadway

Freight Cars

Facilities & Terminals

Locomotives

PTC

Technology

Infrastructure

Other Projects

2011 Capital Program($ millions)

Total Projected Spending = $2.2 billion

2006 2007 2008 2009 2010 1H11

$1,028 $992

$1,157

$561

$1,244

$812

* Free Cash Flow is defined as cash provided by operations less property additions.

Please see reconciliation to GAAP on our website, www.nscorp.com.

Free Cash Flow Generation*($ millions)

Capital Structure as of June 30, 2011

Equity60%

Debt40%

Investment Grade Rating

BBB+ (Standard & Poor’s)

Baa1 (Moody’s)

Recent Capital Markets Transactions

May Debt Issuance

• 100-year bond

• $400 million at 6.00%

September Debt Exchange

• Waterfall exchange

• $600 million - 30-year notes at 4.837%

• $159 million in cash

$51 $47

$447

$3

$500

$550

$600$585

$314

$83

$367

$440

$350

473

$133

295

$596

$138

273

$550

$404

'12 '13 '14 '15 '16 '17 '18 '19 '20 '21 '25 '27 '29 '31 '35 '37 '41 '43 '97 2105 2111

Debt Maturities Pro Forma($ millions)

Cash Flows and Related BalancesFirst Six Months 2011 vs. 2010 ($ Millions)

2011 2010

Cash from operating activities $ 1,700 $ 1,382

Property additions (888) (569)

Free cash flow * $ 812 $ 813

Share repurchases $ (792) $ (114)

Dividends $ (283) $ (252)

Proceeds from borrowing – net $ 396 $ --

Cash and Short Term investments at

June 30$ 906 $ 1,060

* Free Cash Flow is defined as cash provided by operations less property additions.

Please see reconciliation to GAAP on our website, www.nscorp.com.

Dividends (CGR 19%) Share Repurchases Capital Expenditures

Balanced Cash Flow Utilization2006 through Second Quarter 2011

$7.4 Billion*$7.7 Billion

$5.0 Billion

$2.4 Billion

* See reconciliation to GAAP of Total Shareholder Distributions posted on our website, www.nscorp.com.

$5.0 Billion

$2.4 Billion

Total Shareholder Return2006 through Second Quarter 2011

Source: Bloomberg

Thank You