Norfolk Southern Reports
First-Quarter 2001 Results

NEW YORK, N.Y. - Norfolk Southern Corporation (NYSE: NSC) today announced first-quarter income from continuing operations of $61 million, or $0.16 per diluted share, compared with $14 million, or $0.04 per diluted share, in the first quarter of 2000, which excluded the cost of a work-force reduction program.

"We're encouraged with our progress in the first quarter in light of the difficult and uncertain economic climate," said David R. Goode, Norfolk Southern chairman, president and chief executive officer. "We are increasing capacity and introducing new services while at the same time continuing to drive out expenses."

Reported net income for the first quarter was $74 million, or $0.19 per diluted share, reflecting an after-tax gain of $13 million, or $0.03 per share, related to the 1998 sale of Norfolk Southern's former trucking subsidiary, North American Van Lines, Inc. For the comparable period in 2000, reported results were a net loss of $48 million, or $0.12 per diluted share, and included an after-tax work-force reduction charge of $62 million, or $0.16 per diluted share.

Railway operating revenues in the first quarter were $1.54 billion, 2 percent higher compared with operating revenues of $1.51 billion in the first quarter of 2000. Coal revenues increased $46 million, or 13 percent, to $393 million, driven by increased electricity generation and the replenishing of stockpiles by utilities. Strong utility demand reduced the supply of export coal, which resulted in a decrease in export coal revenues. Intermodal revenues increased $30 million, or 12 percent over the first quarter 2000, to $276 million, strengthened by increased domestic container business. General merchandise revenues declined $44 million, or 5 percent, to $871 million, primarily due to cutbacks in automotive production, which also impacted metals revenues.

First-quarter railway operating expenses were $1.34 billion in 2001, down 3 percent compared with $1.38 billion in 2000, excluding last year's work-force reduction charge. The decline largely was due to reduced compensation and benefit costs.

"Our restructuring initiatives are beginning to generate momentum," Goode said. "As we move ahead, we will continue to take the necessary steps to deliver the service our customers deserve and the returns our investors expect."

For the quarter, the railway operating ratio improved to 86.7 percent, compared with 91.4 percent in 2000, excluding the cost of a work-force reduction charge.


               Norfolk Southern Corporation and Subsidiaries
                    Consolidated Statements of Income
                               (Unaudited)
                     ($ millions except per share)


                                                      Three Months Ended
                                                          March 31,  
                                                      ------------------
                                                        2001       2000      
                                                        ----       ----
    Railway operating revenues:           
     Coal                                            $   393    $   347 
     General merchandise                                 871        915 
     Intermodal                                          276        246 
                                                     -------    ------- 
       TOTAL RAILWAY OPERATING REVENUES                1,540      1,508  
                                                     -------    ------- 
    
    Railway operating expenses:
     Compensation and benefits (note 2)                  519        655   
     Materials, services and rents                       372        371   
     Conrail rents and services                          105        121
     Depreciation                                        127        125   
     Diesel fuel                                         117        115      
     Casualties and other claims                          37         32   
     Other                                                58         61    
                                                     -------    ------- 
       TOTAL RAILWAY OPERATING EXPENSES                1,335      1,480
                                                     -------    ------- 
                                            
        Income from railway operations                   205         28

    Other income - net                                    27         28
    Interest expense on debt                            (141)      (140)
                                                     -------    ------- 
        Income (loss) from continuing operations
            before income taxes                           91        (84) 

    Provision (benefit) for income taxes: 
     Current                                              66         (2)
     Deferred                                            (36)       (34) 
                                                     -------    -------
       TOTAL INCOME TAXES                                 30        (36) 
                                                     -------    -------
        Income (loss) from continuing operations          61        (48)

    Discontinued operations - gain on sale
     of motor carrier, net of taxes (note 1)              13         --
                                                     -------    -------
          
         NET INCOME (LOSS) (notes 1 and 2)           $    74    $   (48) 
                                                     =======    =======

    Earnings (loss) per share (notes 1 and 2):
     Income from continuing operations,
      basic and diluted                             $   0.16    $ (0.12) 
     Net income, basic and diluted                      0.19      (0.12)

    Average shares outstanding (000's)               384,490    382,937 

    See notes to financial statements.



              Norfolk Southern Corporation and Subsidiaries
                       Consolidated Balance Sheets
                               (Unaudited)
                              ($ millions)

                                              March 31,       December 31,
                                                2001             2000    
                                                ----             ----
    ASSETS
    Current assets:
     Cash and cash equivalents               $    54          $    --           
     Short-term investments                        1                2                
     Accounts receivable - net                   440              411               
     Due from Conrail                             20               31
     Materials and supplies                       93               91                 
     Deferred income taxes                       171              182              
     Other current assets                         75              132              
                                             -------          -------
           Total current assets                  854              849                 
                                         
    Investment in Conrail                      6,166            6,154             
    
    Properties less accumulated depreciation  11,268           11,105           
    
    Other assets                                 952              868               
                                             -------          -------
            TOTAL ASSETS                     $19,240          $18,976          
                                             =======          =======
   LIABILITIES AND STOCKHOLDERS' EQUITY
    Current liabilities:
     Accounts payable                        $   866          $   925          
     Income and other taxes                      246              251             
     Notes and accounts payable to Conrail       219              155
     Other current liabilities                   329              259                     
     Current maturities of long-term debt        306              297
                                             -------          -------
           Total current liabilities           1,966            1,887            
                 
    Long-term debt                             7,535            7,339            
    
    Other liabilities                          1,108            1,131            
    
    Minority interests                            46               50               
    
    Deferred income taxes                      2,703            2,745            
                                             -------          -------
            TOTAL LIABILITIES                 13,358           13,152           
                                             -------          -------
    Stockholders' equity:
     Common stock $1.00 per share par value      406              405              
     Additional paid-in capital                  399              392              
     Accumulated other comprehensive income       (7)              (6)
     Retained income                           5,104            5,053            
                                             -------          -------
                                               5,902            5,844
      Less treasury stock at cost, 
       21,363,974 shares                         (20)             (20)             
                                             -------          -------
            TOTAL STOCKHOLDERS' EQUITY         5,882            5,824            
                                             -------          -------
            TOTAL LIABILITIES AND
             STOCKHOLDERS' EQUITY            $19,240          $18,976          
                                             =======          =======
    See notes to financial statements.


              Norfolk Southern Corporation and Subsidiaries
                  Consolidated Statements of Cash Flows
                               (Unaudited)
                              ($ millions)
                                
                                                     Three Months Ended
                                                          March 31,
                                                     -------------------
                                                      2001         2000  
                                                      ----         ----
    CASH FLOWS FROM OPERATING ACTIVITIES:
     Net income (loss)                              $   74       $  (48)    
     Reconciliation of net income (loss) to
      net cash provided by operating activities:      
       Depreciation                                    130          129         
       Deferred income taxes                           (36)         (34)          
       Equity in earnings of Conrail                   (12)         (11)
       Gains on properties and investments              (9)         (20)
        Income from discontinued operations (note 1)   (13)          --
       Changes in assets and liabilities 
        affecting operations:
        Accounts receivable                            (28)           3        
        Materials and supplies                          (2)         (20)         
        Other current assets and due from Conrail       68           89          
        Current liabilities other than debt             --          165          
        Other - net                                    (54)          39           
                                                   -------      ------- 
          Net cash provided by operating activities    118          292         

    CASH FLOWS FROM INVESTING ACTIVITIES:
     Property additions                               (294)        (170)       
     Property sales and other transactions              10           30
     Investments, including short-term                 (35)         (21)        
     Investment sales and other transactions             2           35          
                                                   -------      ------- 
          Net cash used for investing activities      (317)        (126)        

    CASH FLOWS FROM FINANCING ACTIVITIES:
     Dividends                                         (23)         (77)        
     Common stock issued - net                           4           --
     Proceeds from borrowings                        1,275           68           
     Debt repayments                                (1,003)        (134)        
                                                    -------      ------- 
          Net cash provided by (used for) 
           financing activities                        253         (143)       
                                                    -------      -------
          Net increase in cash and
           cash equivalents                             54           23        

    CASH AND CASH EQUIVALENTS:
     At beginning of year                               --           37          
                                                   -------      ------- 
     At end of period                              $    54      $    60      
                                                   =======      ======= 

    SUPPLEMENTAL DISCLOSURES OF CASH-FLOW 
     INFORMATION
      Cash paid during the period for:
       Interest (net of amounts capitalized)       $    82      $    74     
       Income taxes                                $    62      $    (2)   

    See notes to financial statements.

NOTES:

NOTES TO FINANCIAL STATEMENTS:

1. DISCONTINUED OPERATIONS -
First quarter 2001 includes an adjustment to the estimated gain recorded in 1998 on the sale of North American Van Lines, Inc., NS' motor carrier subsidiary. The adjustment resulted in additional after-tax gain of $13 million, or 3 cents per share, and was related to the expiration of certain indemnities contained in the sales agreement.

During 1998, NS received $207 million of proceeds from the sale and recorded an after-tax gain of $105 million, or 28 cents per share.

2. WORK-FORCE REDUCTION CHARGE IN 2000 - First quarter 2000 "Compensation and benefits" expenses include a $101 million work-force reduction charge which reduced net income by $62 million, or 16 cents per share. Reductions in non-union personnel were achieved primarily through a voluntary early retirement program while union personnel reductions resulted primarily from furloughs. The voluntary early retirement program was accepted by 919 of 1,180 eligible employees. The retirements were effective March 1, 2000, and most of the related benefits will be paid from NS' overfunded pension plan.

These unaudited interim financial statements should be read in conjunction with the financial statements and notes thereto included in the Corporation's most recent Annual Report to Stockholders and quarterly report to the Securities and Exchange Commission.

Media Contact: Bob Fort, Norfolk, 757/629-2710

Norfolk Southern Reports First-Quarter 2001 Results

NOTES:

Norfolk Southern Reports
First-Quarter 2001 Results