<PAGE 1>
UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C.  20549
---------------------------

FORM 10-K405

(X)  ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
EXCHANGE ACT OF 1934
For the fiscal year ended December 31, 2000
OR
( )  TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the transition period from          to
---------------   ---------------
Commission file number 1-8339

NORFOLK SOUTHERN CORPORATION
-----------------------------------------------------------------------
(Exact name of registrant as specified in its charter)

Virginia                              52-1188014
------------------------------------------------     ------------------
(State or other jurisdiction of            (I.R.S. Employer
incorporation or organization)             Identification No.)

Three Commercial Place, Norfolk, Virginia               23510-2191
------------------------------------------------     ------------------
(Address of principal executive offices)            (Zip Code)

Registrant's telephone number, including area code    (757) 629-2680
------------------

Securities registered pursuant to Section 12(b) of the Act:

Name of each exchange
Title of each Class                 on which registered
-------------------                 ---------------------
Norfolk Southern Corporation
Common Stock (Par Value $1.00)            New York Stock Exchange

Securities registered pursuant to Section 12(g) of the Act:  NONE

Indicate by check mark whether the registrant (1) has filed all
reports required to be filed by Section 13 or 15(d) of the Securities
Exchange Act of 1934 during the preceding 12 months (or for such shorter
period that the registrant was required to file such reports) and (2) has
been subject to such filing requirements for the past 90 days.
Yes (X)  No ( )

Indicate by check mark if disclosure of delinquent filers pursuant to
Item 405 of Regulation S-K is not contained herein and will not be
contained, to the best of registrant's knowledge, in definitive proxy or
information statements incorporated by reference in Part III of this Form
10-K405 or any amendment to this Form 10-K405. (X)

The aggregate market value of the voting stock held by nonaffiliates
as of January 31, 2001:  $6,277,704,194.

The number of shares outstanding of each of the registrant's classes
of common stock, as of January 31, 2001:  384,427,691 (excluding
21,363,974 shares held by registrant's consolidated subsidiaries).

PAGE 2

DOCUMENTS INCORPORATED BY REFERENCE:

Portions of the Registrant's definitive proxy statement (to be
dated April 2, 2001), to be filed electronically pursuant to
Regulation 14A not later than 120 days after the end of the fiscal
year, are incorporated by reference in Part III.

PAGE 3

TABLE OF CONTENTS
-----------------

NORFOLK SOUTHERN CORPORATION AND SUBSIDIARIES (NS)

Page
----

Part I.    1.  Business                                              4

2.  Properties                                            4

3.  Legal Proceedings                                    19

4.  Submission of Matters to a Vote of Security Holders  19

Executive Officers of the Registrant                 19

Part II.   5.  Market for Registrant's Common Stock and
Related Stockholder Matters                         22

6.  Selected Financial Data                              23

7.  Management's Discussion and Analysis of
Financial Condition and Results of Operations       30

7A.  Quantitative and Qualitative Disclosures
About Market Risk                                   50

8.  Financial Statements and Supplementary Data          51

9.  Changes in and Disagreements with Accountants on
Accounting and Financial Disclosure                 81

Part III. 10.  Directors and Executive Officers of the Registrant   82

11.  Executive Compensation                               82

12.  Security Ownership of Certain Beneficial Owners
and Management                                      82

13.  Certain Relationships and Related Transactions       82

Part IV.  14.  Exhibits, Financial Statement Schedule and
Reports on Form 8-K                                 83

Index to Consolidated Financial Statement Schedule   83

Power of Attorney                                                   90

Signatures                                                          90

Exhibit Index                                                       94

PAGE 4

PART I
------

NORFOLK SOUTHERN CORPORATION AND SUBSIDIARIES (NS)

Item 1.   Business.
------    --------

and

Item 2.   Properties.
------    ----------

GENERAL - Norfolk Southern Corporation (Norfolk Southern) was
incorporated on July 23, 1980, under the laws of the Commonwealth of
Virginia.  On June l, 1982, Norfolk Southern acquired control of two
major operating railroads, Norfolk and Western Railway Company (NW) and
Southern Railway Company (Southern) in accordance with an Agreement of
Merger and Reorganization dated as of July 31, 1980, and with the
approval of the transaction by the Interstate Commerce Commission (ICC)
(now the Surface Transportation Board [STB]).

Effective Dec. 31, 1990, Norfolk Southern transferred all the
common stock of NW to Southern, and Southern's name was changed to
Norfolk Southern Railway Company (Norfolk Southern Railway).  Effective
Sept. 1, 1998, NW was merged with and into Norfolk Southern Railway.
As of Dec. 31, 2000, all the common stock of Norfolk Southern Railway
and 16.1 percent of its voting preferred stock (resulting in
94.8 percent voting control) was owned directly by Norfolk Southern.

Through a jointly owned entity, Norfolk Southern and CSX
Corporation (CSX) own the stock of Conrail Inc., which owns the major
freight railroad in the Northeast.  Norfolk Southern has a 58% economic
and 50% voting interest in the jointly owned entity.  See also the
discussion concerning operation of a portion of Conrail's rail assets,
below.

On March 28, 1998, Norfolk Southern closed the sale of its motor
carrier company, North American Van Lines, Inc. (NAVL) (see
"Discontinued Operations" on Page 42 and Note 16 on Page 78).  NAVL's
results of operations, financial position and cash flows are presented
as "Discontinued operations" in the accompanying financial statements.

Unless indicated otherwise, Norfolk Southern and its subsidiaries
are referred to collectively as NS.

OPERATION OF A PORTION OF THE CONRAIL RAIL ASSETS - On June 1,
1999, NS and CSX, through their respective railroad subsidiaries, began
operating separate portions of Conrail's rail routes and assets.
Substantially all such assets are owned by two wholly owned
subsidiaries of Consolidated Rail Corporation (CRC); one of those
subsidiaries, Pennsylvania Lines LLC (PRR), has entered into various

PAGE 5

operating and leasing arrangements, more particularly described in
Note 2 on Page 60, with Norfolk Southern Railway.  Certain rail assets
(Shared Assets Areas) still are owned by CRC, which operates them for
joint and exclusive use by Norfolk Southern Railway and the rail
subsidiary of CSX.

Operation of the PRR routes and assets increased the size of the
system over which Norfolk Southern Railway provides service by nearly
50% and afforded access to the New York metropolitan area, to much of
the Northeast and to most of the major East Coast ports north of
Norfolk, Va.  Also, the leasing arrangements with PRR augmented Norfolk
Southern Railway's locomotive, freight car and intermodal fleet.

CONTINUING OPERATIONS:

RAILROAD OPERATIONS - As of Dec. 31, 2000, NS' railroads operated
approximately 21,800 miles of road in the states of Alabama, Delaware,
Florida, Georgia, Illinois, Indiana, Iowa, Kentucky, Louisiana,
Maryland, Michigan, Mississippi, Missouri, New Jersey, New York, North
Carolina, Ohio, Pennsylvania, South Carolina, Tennessee, Virginia and
West Virginia, and in the Province of Ontario, Canada.  Of this total,
about 12,000 miles are owned with the balance operated under lease or
trackage rights; most of this total is main line track.  In addition,
its railroads operate almost 17,000 miles of passing, industrial, yard
and side tracks.

In addition to the lines leased from Conrail previously discussed,
NS' railroads have major leased lines between Cincinnati, Ohio, and
Chattanooga, Tennessee, and operate over trackage owned by North
Carolina Railway Company (NCRR).

The Cincinnati-Chattanooga lease, covering about 335 miles,
expires in 2026, and is subject to an option to extend the lease for
an additional 25 years, at terms to be agreed upon.

Operations over the approximately 330 miles of tracks of NCRR,
previously under a 100-year lease which expired on Dec. 31, 1994, are
now under a trackage rights agreement.  The term of the agreement is 15
years with NS' railroads having the right to renew for two additional
15-year periods.  The new arrangement resolved all outstanding
litigation between NS' railroads and NCRR and settled a number of
contested real property issues.  The agreement also includes very broad
dispute resolution provisions.

NS' railroads carry raw materials, intermediate products and
finished goods primarily in the Southeast, East and Midwest, and to and
from the rest of the United States and parts of Canada.  They also
transport overseas freight through several Atlantic and Gulf Coast
ports.  Atlantic ports served by NS include:  Norfolk, Virginia;
Morehead City, North Carolina; Charleston, South Carolina; Savannah and
Brunswick, Georgia; Jacksonville, Florida; Baltimore, Maryland;
Philadelphia, Pennsylvania/Camden, New Jersey; Wilmington, Delaware;

PAGE 6

and the Ports of New York/New Jersey.  Gulf Coast ports served include
Mobile, Alabama, and New Orleans, Louisiana.

The lines of NS' railroads reach most of the larger industrial and
trading centers of the Southeast, East and Midwest, with the exception
of those in central and southern Florida.  Atlanta, Birmingham, New
Orleans, Memphis, St. Louis, Kansas City (Missouri), Chicago, Detroit,
Cincinnati, Buffalo, Norfolk, Charleston, Savannah, Jacksonville,
Cleveland, Newark, Pittsburgh, Philadelphia and Baltimore are among the
leading centers originating and terminating freight traffic on the
system.  In addition, a haulage arrangement with Florida East Coast
Railway Company allows NS' railroads to provide single-line service to
and from south Florida, including the port cities of Miami, West Palm
Beach and Fort Lauderdale.  The system's lines also reach many
individual industries, mines (in western Virginia, eastern Kentucky,
southern and northern West Virginia and western Pennsylvania) and
businesses located in smaller communities in its service area.  The
traffic corridors carrying the heaviest volumes of freight include
those from the Appalachian coal fields of Virginia, West Virginia and
Kentucky, to Norfolk and Sandusky, Ohio; Buffalo to Chicago and Kansas
City; Chicago to Jacksonville (via Cincinnati, Chattanooga and
Atlanta); and Washington, D.C./Hagerstown, Maryland, to New Orleans
(via Atlanta and Birmingham); and the New Jersey area to Chicago (via
Allentown and Pittsburgh).

Buffalo, Chicago, Hagerstown, Kansas City, Memphis, Meridian, New
Orleans, Sidney/Salem and St. Louis are major gateways for
interterritorial system traffic.

TRIPLE CROWN OPERATIONS - Until April 1993, NS' intermodal
subsidiary, Triple Crown Services, Inc. (TCS), offered intermodal service
using RoadRailer (Registered Trademark hereinafter abbreviated RT)
equipment and domestic containers.  RoadRailer(RT) units are enclosed
vans that can be pulled over highways in tractor-trailer configuration
and over the rails by locomotives.  On April 1, 1993, the business, name
and operations of TCS were transferred to Triple Crown Services Company
(TCSC), a partnership in which subsidiaries of NS and Conrail are equal
partners.  RoadRailer(RT) equipment owned or leased by TCS (which was
renamed TCS Leasing, Inc.) is operated by TCSC.  From April 1, 1993, to
June 1, 1999, the revenues of TCSC were not consolidated with the results
of NS; however, effective June 1, 1999, NS gained control of TCSC and,
therefore, now includes TCSC's results in its consolidated financial
statements.  TCSC offers door-to-door intermodal service using
RoadRailer(RT) equipment and domestic containers in major traffic
corridors, including those between New York and Chicago, Chicago and
Atlanta, and Atlanta and New York.

PAGE 7

RAILWAY OPERATING REVENUES - NS' total railway operating revenues
were $6.2 billion in 2000.  Revenue, shipments and revenue yield by
principal railway operating revenue sources for the past five years are
set forth in the following table.  The prior year "chemicals"and
"agriculture/consumer products/government" groups have been
reclassified to conform to the year 2000 presentation.

Year Ended December 31,
Principal Sources of --------------------------------------------------
Railway Operating
Revenues                   2000      1999      1998      1997     1996
--------------------       ----      ----      ----      ----     ----
(Revenues in millions, shipments in thousands, revenue yield in dollars
per shipment)

COAL
Revenues                 $1,435    $1,322    $1,252    $1,301   $1,305
% of total revenues         23%       25%       29%       31%      32%
Shipments                 1,687     1,519     1,310     1,324    1,310
% of total shipments        25%       25%       27%       28%      29%
Revenue Yield            $  850    $  870    $  955    $  983   $  996

AUTOMOTIVE
Revenues                 $  921    $  746    $  577    $  492   $  489
% of total revenues         15%       14%       13%       11%      12%
Shipments                   692       611       487       361      354
% of total shipments        10%       10%       10%       7%        8%
Revenue Yield            $1,331    $1,220    $1,186    $1,364   $1,379

CHEMICALS
Revenues                 $  756    $  641    $  492    $  504   $  482
% of total revenues         13%       12%       12%       12%      12%
Shipments                   453       394       315       316      299
% of total shipments         6%        7%        7%        7%       6%
Revenue Yield            $1,668    $1,627    $1,559    $1,595   $1,612

METALS/CONSTRUCTION
Revenues                 $  689    $  567    $  375    $  369   $  355
% of total revenues         11%       11%        9%        9%       9%
Shipments                   757       587       372       374      359
% of total shipments        11%       10%        8%        8%       8%
Revenue Yield            $  911    $  965    $1,008    $  987   $  989

PAPER/CLAY/FOREST
Revenues                 $  630    $  578    $  535    $  539   $  514
% of total revenues         10%       11%       13%       13%      12%
Shipments                   491       465       445       457      438
% of total shipments         7%        8%        9%       10%      10%
Revenue Yield            $1,285    $1,243    $1,202    $1,178   $1,172

AGR./CONSUMER PRODUCTS/GOVT.
Revenues                 $  609    $  539    $  468    $  476   $  474
% of total revenues         10%       11%       11%       11%      11%
Shipments                   525       489       441       455      462
% of total shipments         8%        8%        9%        9%      10%
Revenue Yield            $1,160     1,103    $1,063    $1,046   $1,026

PAGE 8

Year Ended December 31,
Principal Sources of --------------------------------------------------
Railway Operating
Revenues                   2000      1999      1998      1997      1996
--------------------       ----      ----      ----      ----      ----
(Revenues in millions, shipments in thousands, revenue yield in dollars
per shipment)

INTERMODAL
(Trailers, Containers
and RoadRailers)
Revenues                $1,119    $  849    $  555    $  568    $  499
% of total revenues        18%       16%       13%       13%       12%
Shipments                2,242     1,896     1,443     1,472     1,331
% of total shipments       33%       32%       30%       31%       29%
Revenue Yield           $  499    $  448    $  385    $  386    $  375

Total Railway Operating
Revenues                 $6,159    $5,242    $4,254    $4,249    $4,118
Total Railway Shipments    6,847     5,961     4,813     4,759     4,553
Railway Revenue Yield     $  900    $  879    $  884    $  893    $  904

Note:  Effective in 2000, NS adopted the consensus reached by the
Emerging Issues Task Force of the Financial Accounting Standards Board
(FASB) concerning Issue No. 99-19, "Reporting Revenue Gross as a
Principal versus Net as an Agent."  The consensus presents indicators
to consider in establishing the accounting for revenue.  As a result of
the application of the consensus, NS has reclassified to railway
operating expenses certain charges that previously have been reported
net with railway operating revenues.  This change in reporting has no
effect on income from railway operations.  Prior period amounts have
been reclassified to conform to the current presentation.

COAL TRAFFIC - Coal, coke and iron ore -- most of which is
bituminous coal -- is NS' railroads' largest commodity group as
measured by revenues.  The railroads originated 156 million tons of
coal, coke and iron ore in 2000 and handled a total of 175 million
tons.  Originated tonnage and total tons handled increased due to a
full year of operations in the Northern Region.  Revenues from coal,
coke and iron ore accounted for about 23 percent of NS' total railway
operating revenues in 2000.

PAGE 9

The following table shows total coal, coke and iron ore tonnage
originated on line, received from connections and handled for the past
five years:

Tons of Coal, Coke and Iron Ore (Millions)
--------------------------------------------

2000     1999      1998      1997      1996
----     ----      ----      ----      ----

Originated       156     138       119       119       117
Received          19      20        15        15        13
----     ----      ----      ----      ----
Handled          175     158       134       134       130
====     ====      ====      ====      ====

Of the 156 million tons of coal, coke and iron ore originated on
lines operated by NS' railroads in 2000, the approximate breakdown by
origin state was as follows:

Origin State          Millions of Tons
------------          ----------------

West Virginia               50
Virginia                    34
Pennsylvania                24
Kentucky                    23
Ohio                         8
Indiana                      7
Alabama                      4
Illinois                     4
Tennessee                    1
Other                        1
---
156
===

Of the 175 million tons handled, approximately 20 million tons
moved for export, principally through NS' pier facilities at Norfolk
(Lamberts Point), Virginia; 25 million tons moved to domestic and
Canadian steel industries; 119 million tons of steam coal moved to
electric utilities; and 11 million tons moved to other industrial and
miscellaneous users.

PAGE 10

NS' railroads moved 9 million tons of originated coal, coke and
iron ore to various docks on the Ohio River, and 9 million tons to
various Lake Erie ports.  Other than coal for export, virtually all
coal handled by NS' railroads was terminated in states situated east of
the Mississippi River.

Total coal handled through all system ports in 2000 was 40 million
tons.  Of this total, 19 million tons (including coastwise traffic)
moved through Lambert's Point and 4 million tons moved through the
Baltimore Terminal.

The quantities of NS export coal handled through Lamberts Point
for the past five years were as follows:

Export Coal through Lamberts Point
(Millions of tons)
----------------------------------

2000      1999      1998      1997      1996
----      ----      ----      ----      ----

16        17        24        28        26

See the discussion of coal traffic, by type of coal, in Part II,
Item 7, "Management's Discussion and Analysis."

MERCHANDISE TRAFFIC - The merchandise traffic group consists of
intermodal and general merchandise, which consists of five major
commodity groupings:  automotive; chemicals; paper, clay and forest
products; metals and construction; and agriculture, consumer products
and government.  Total merchandise revenues in 2000 were $4.7 billion,
a 21 percent increase, compared with 1999.  Merchandise carloads and
intermodal units handled in 2000 were 5.16 million, compared with
4.44 million handled in 1999, an increase of 16 percent.  The increases
in revenues and carloads reflect a full year of operations in the
Northern Region.

In 2000, 164 million tons of merchandise freight, or approximately
68 percent of total merchandise tonnage handled by NS, originated
online.  The balance of merchandise traffic was received from
connecting carriers, usually at interterritorial gateways.  The
principal interchange points for NS-received traffic included Chicago,
Memphis, New Orleans, Cincinnati, Kansas City, Detroit, Hagerstown,
St. Louis/East St. Louis and Louisville.

Revenues in all six market groups comprising merchandise traffic
increased in 2000, due to a full year of operations in the Northern
Region.

PAGE 11

See the discussion of general merchandise rail traffic by
commodity group and intermodal rail traffic in Part II, Item 7,
"Management's Discussion and Analysis."

RAIL OPERATING STATISTICS - The following table sets forth certain
statistics relating to NS' railroads' operations for the past five
years, including operations in the Northern Region that commenced
June 1, 1999:

Year Ended December 31,
--------------------------------------
2000    1999     1998     1997     1996
----    ----     ----     ----     ----

Revenue ton miles (billions)      197      167       135     137      131
Freight train miles
traveled (millions)             74.4     61.5      53.0    49.7     49.4
Revenue per ton mile          $0.0312  $0.0315   $0.0316  $0.0310  $0.0315
Revenue tons per train          2,653    2,710     2,539   2,755    2,648
Revenue ton miles
per man-hour worked            2,888    2,577     2,659   2,930    2,787
Percentage ratio of
railway operating
expenses to railway
operating revenues             89.7%    86.3%     75.3%   71.5%    71.7%

FREIGHT RATES - In 2000, NS' railroads continued their reliance on
private contracts and exempt price quotes as their predominant pricing
mechanisms.  Thus, a major portion of NS' railroads' freight business
is not currently economically regulated by the government.  In general,
market forces have been substituted for government regulation and now
are the primary determinant of rail service prices.

In 2000, NS' railroads were found by the STB not to be "revenue
adequate" based on results for the year 1999.  A railroad is "revenue
adequate" under the applicable law when its return on net investment
exceeds the rail industry's composite cost of capital.

PASSENGER OPERATIONS - Regularly scheduled passenger operations on
NS' lines consist of Amtrak trains operating between Alexandria and New
Orleans, and between Greensboro and Selma, North Carolina.  Commuter
trains are operated on the NS line between Manassas and Alexandria
under contract with two transportation commissions of the Commonwealth
of Virginia.  NS also leases the Chicago to Manhattan, Illinois, line
to the Commuter Rail Division of the Regional Transportation Authority
of Northeast Illinois.  Since June 1, 1999, Norfolk Southern Railway
has operated former Conrail lines on which Amtrak conducts regularly

PAGE 12

scheduled passenger operations between Chicago, Illinois, and Detroit,
Michigan, and between Chicago and Harrisburg, Pennsylvania.

Also since June 1, 1999, through its operation of PRR's routes,
Norfolk Southern Railway has been providing freight service over former
Conrail lines with significant ongoing Amtrak and commuter passenger
operations, and is conducting freight operations over some trackage
owned by Amtrak or by New Jersey Transit, the Southeastern Pennsylvania
Transportation Authority, Metro-North Commuter Railway Company and
Maryland DOT.  Finally, passenger operations are conducted either by
Amtrak or by the commuter agencies over trackage owned by Pennsylvania
Lines LLC, or by Conrail in the Shared Assets Areas.

NONCARRIER OPERATIONS - NS' noncarrier subsidiaries engage
principally in telecommunications, the acquisition and subsequent
leasing of coal, oil, gas and timberlands, the development of
commercial real estate and the leasing or sale of rail property and
equipment.  In 2000, no such noncarrier subsidiary or industry segment
grouping of noncarrier subsidiaries met the requirements for a
reportable business segment set forth in Statement of Financial
Accounting Standards No. 131.

PAGE 13

RAILWAY PROPERTY:

EQUIPMENT - As of Dec. 31, 2000, NS owned or leased the following
units of equipment:

Number of Units
----------------------------      Capacity
Owned*     Leased**    Total    of Equipment
-----      ------      -----    ------------

Type of Equipment
-----------------
Locomotives:                                             (Horsepower)
Multiple purpose        2,251     1,028        3,279    10,792,300
Switching                 106       113          219       319,800
Auxiliary units            59        18           77            --
------    ------      -------    ----------
Total locomotives     2,416     1,159        3,575    11,112,100
======    ======      =======    ==========

Freight Cars:                                                  (Tons)
Hopper                 20,484     5,634       26,118     2,746,297
Box                    18,802     5,296       24,098     1,881,269
Covered Hopper         11,349     3,516       14,865     1,617,580
Gondola                28,551    11,293       39,844     4,260,435
Flat                    4,008     1,409        5,417       392,862
Caboose                   180        77          257            --
Other                   3,900        --        3,900       213,029
------    ------      -------    ----------
Total freight cars   87,274    27,225      114,499    11,111,472
======    ======      =======    ==========

Other:
Work equipment          5,771     2,101        7,872
Vehicles                3,684     1,720        5,404
Highway trailers
and containers           426     7,779        8,205
RoadRailers(RT)         5,577        --        5,577
Miscellaneous           1,450     9,241       10,691
------    ------      -------
Total other          16,908    20,841       37,749
======    ======      =======

*  Includes equipment leased to outside parties and equipment subject to
equipment trusts, conditional sale agreements and capitalized leases.

**  Includes 982 locomotives, 18,404 freight cars and 3,830 units of other 
equipment leased from PRR.

PAGE 14

The following table indicates the number and year built for
locomotives and freight cars owned at Dec. 31, 2000:

Year Built
------------------------------------------------------------
1990-  1984-  1983 &
2000   1999   1998  1997 1996   1995   1989   Before   Total
----   ----   ----  ---- ----   ----   ----   ------   -----

Locomotives:
Number of
units       35    147    119    120   119    334     403   1,139  2,416
Percent of
fleet       1%     6%     5%     5%    5%    14%     17%     47%   100%

Freight cars:
Number of
units      106    503  1,567  1,076   987  7,108   3,870  72,057 87,274
Percent of
fleet       --     1%     2%     1%    1%     8%      4%     83%   100%

The average age of the freight car fleet at Dec. 31, 2000, was
24.6 years.  During 2000, 1,569 freight cars were retired.  As of
Dec. 31, 2000, the average age of the locomotive fleet was 16.1 years.
During 2000, 20 locomotives, the average age of which was 24.5 years,
were retired.  Since 1988, about 29,000 coal cars have been rebodied.
As a result, the remaining serviceability of the freight car fleet is
greater than may be inferred from the high percentage of freight cars
built in earlier years.

Annual Average Bad Order Ratio
-----------------------------------

2000    1999   1998    1997   1996
----    ----   ----    ----   ----

Freight Cars (excluding cabooses):
NS Rail                           5.7%    3.7%   4.1%    4.6%   4.8%

Locomotives:
NS Rail                           5.5%    5.3%   4.3%    5.0%   4.5%

PAGE 15

Ongoing freight car and locomotive maintenance programs are
intended to ensure the highest standards of safety, reliability,
customer satisfaction and equipment marketability.  In past years, the
freight car bad order ratio reflected the storage of certain types of
cars that were not in high demand.  The ratio had declined more
recently as a result of a disposition program, which is expected to be
accelerated in 2001, for underutilized, unserviceable and overage
revenue cars.  The ratio rose in 2000 as a result of decreased
maintenance activity.  The locomotive bad order ratio rose in 1997,
particularly in the early months of the year, as older units required
additional servicing and some new units were out-of-service related to
warranty work.  By year-end 1997, the locomotive bad order ratio had
returned to a level nearer that of prior years.  The increase in the
locomotive bad order ratio in 1999 was primarily due to the maintenance
requirements of units being rented to meet short-term needs and to
weather-related failures.  The ratio remained high in 2000 as
maintenance activities were curtailed in response to a slowing economy.

TRACKAGE - All NS trackage is standard gauge, and the rail in
approximately 96 percent of the main line trackage (including first,
second, third and branch main tracks, all excluding trackage rights)
ranges from 100 to 140 pounds per yard.  Of the approximately
31,900 miles of track maintained as of Dec. 31, 2000, about 22,100 were
laid with welded rail.

The density of traffic on running tracks (main line trackage plus
passing tracks) during 2000 was as follows:

Gross tons of
freight carried
per track mile      Track miles of     Percent
(Millions)          running tracks*    of total
---------------     --------------     --------

0-4                     7,821             34
5-19                    6,590             29
20 and over             8,598             37
------            ---
23,009            100
======            ===

*    Excludes trackage rights.

PAGE 16

The following table summarizes certain information about NS' track
roadway additions and replacements during the past five years:

2000   1999    1998   1997    1996
----   ----    ----   ----    ----

Track miles of rail installed        392    403     429    451     401
Miles of track surfaced            3,687  5,087   4,715  4,703   4,686
New crossties installed
(millions)                          1.5    2.3     2.0    2.2     1.9

MICROWAVE SYSTEM - The NS microwave system, consisting of
8,374 radio path miles, 443 active stations and 4 passive repeater
stations, provides communications between most operating locations.
The microwave system is used primarily for voice communications, VHF
radio control circuits, data and facsimile transmissions, traffic
control operations, AEI data transmissions and relay of intelligence
from defective equipment detectors.

TRAFFIC CONTROL - Of a total of 21,800 road miles operated by NS,
excluding trackage rights over foreign lines, 8,420 road miles are
governed by centralized traffic control systems (of which 1,490 miles
are controlled by data radio from 135 microwave site locations and
460 miles are cab-signal only) and 3,070 road miles are equipped for
automatic block system operation.

COMPUTERS - Data processing facilities connect the yards,
terminals, transportation offices, rolling stock repair points, sales
offices and other key system locations to the central computer complex
in Atlanta, Georgia.  Operating and traffic data are compiled and
stored to provide customers with information on their shipments
throughout the system.  Data processing facilities are capable of
providing current information on the location of every train and each
car on line, as well as related waybill and other train and car
movement data.  Additionally, these facilities afford substantial
capacity for, and are utilized to assist management in the performance
of, a wide variety of functions and services, including payroll, car
and revenue accounting, billing, material management activities and
controls, and special studies.

OTHER - The railroads have extensive facilities for support of
operations, including freight depots, car construction shops,
maintenance shops, office buildings, and signals and communications
facilities.

ENCUMBRANCES - Certain railroad equipment is subject to the prior
lien of equipment financing obligations amounting to approximately
$816 million as of Dec. 31, 2000, and $930 million at Dec. 31, 1999.

PAGE 17

CAPITAL EXPENDITURES - Capital expenditures for road, equipment
and other property for the past five years were as follows (including
capitalized leases):

Capital Expenditures
-------------------------------------------

2000     1999    1998     1997     1996
----     ----    ----     ----     ----
(In millions of dollars)

Road                $  557  $   559  $  612   $  599   $  438
Equipment              146      349     442      306      326
Other property          28        4       6       24       25
------   ------  ------   ------   ------
Total          $  731  $   912  $1,060   $  929   $  789
======   ======  ======   ======   ======

Capital spending and maintenance programs are and have been
designed to assure the ability to provide safe, efficient and reliable
transportation services.  For 2001, NS has budgeted $806 million of
capital spending.  See the discussion following "Cash used for
investing activities," on Page 43 in Part II, Item 7, "Management's
Discussion and Analysis."

ENVIRONMENTAL MATTERS - Compliance with federal, state and local
laws and regulations relating to the protection of the environment is a
principal NS goal.  To date, such compliance has not affected
materially NS' capital additions, earnings, liquidity or competitive
position.  See the discussion of "Environmental Matters" on Page 47 in
Part II, Item 7, "Management's Discussion and Analysis," and in Note 17
to the Consolidated Financial Statements on Page 78.

EMPLOYEES - NS employed an average of 33,738 employees in 2000,
compared with an average of 31,166 in 1999.  The increase reflects the
substantial number of former Conrail employees who became NS employees
on June 1, 1999 and therefore are included in the year 2000 average for
a full year.  The approximate average cost per employee during 2000 was
$51,000 in wages and $21,000 in employee benefits.

Approximately 85 percent of NS' railroad employees are covered by
collective bargaining agreements with 15 different labor unions.  See
the discussion of "Labor Agreements" on Page 48 in Part II, Item 7,
"Management's Discussion and Analysis."

PAGE 18

GOVERNMENT REGULATION - In addition to environmental, safety,
securities and other regulations generally applicable to all
businesses, NS' railroads are subject to regulation by the STB, which
succeeded the ICC on Jan. 1, 1996.  The STB has jurisdiction over some
rates, routes, conditions of service and the extension or abandonment
of rail lines.  The STB also has jurisdiction over the consolidation,
merger or acquisition of control of and by rail common carriers.  The
Department of Transportation regulates certain track and mechanical
equipment standards.

The relaxation of economic regulation of railroads, begun over a
decade ago by the ICC under the Staggers Rail Act of 1980, has
continued under the STB, and additional rail business could be exempted
from regulation in the future.  Significant exemptions are TOFC/COFC
(i.e., "piggyback") business, rail boxcar traffic, lumber, manufactured
steel, automobiles and certain bulk commodities such as sand, gravel,
pulpwood and wood chips for paper manufacturing.  Transportation
contracts on regulated shipments effectively remove those shipments
from regulation as well.  About 80 percent of NS' freight revenues come
from either exempt traffic or traffic moving under transportation
contracts.

Efforts may be made in 2001 to re-subject the rail industry to
unwarranted federal economic regulation.  The Staggers Rail Act of
1980, which substantially reduced such regulation, encouraged and
enabled rail carriers to innovate and to compete for business, thereby
contributing to the economic health of the nation and to the
revitalization of the industry.  Accordingly, NS and other rail
carriers vigorously will oppose these counterproductive efforts to
reimpose or to authorize reimposing such economic regulation.

COMPETITION - There is continuing strong competition among rail,
water and highway carriers.  Price is usually only one factor of
importance as shippers and receivers choose a transport mode and
specific hauling company.  Inventory carrying costs, service
reliability, ease of handling and the desire to avoid loss and damage
during transit are increasingly important considerations, especially
for higher-valued finished goods, machinery and consumer products.
Even for raw materials, semi-finished goods and work-in-process, users
are increasingly sensitive to transport arrangements which minimize
problems at successive production stages.

NS' primary rail competitor is the CSX system; both operate
throughout much of the same territory.  Other railroads also operate in
parts of the territory.  NS also competes with motor carriers, water
carriers and with shippers who have the additional option of handling
their own goods in private carriage.

Certain cooperative strategies between railroads and between
railroads and motor carriers enable carriers to compete more
effectively in specific markets.

PAGE 19

Item 3.   Legal Proceedings.
------    -----------------

None.

Item 4.   Submission of Matters to a Vote of Security Holders.
------    ---------------------------------------------------

There were no matters submitted to a vote of security holders
during the fourth quarter of 2000.

Executive Officers of the Registrant.
------------------------------------

Norfolk Southern's executive officers generally are elected and
designated annually by the Board of Directors at its first meeting held
after the annual meeting of stockholders, and they hold office until
their successors are elected.  Executive officers also may be elected
and designated throughout the year as the Board of Directors considers
appropriate.  There are no family relationships among the officers, nor
any arrangement or understanding between any officer and any other
person pursuant to which the officer was selected.  The following table
sets forth certain information, as of February 1, 2001, relating to the
executive officers.

Business Experience During Past
Name, Age, Present Position          Five Years
---------------------------          ------------------------------------

David R. Goode, 60,                  Present position since September
Chairman, President and              1992.
Chief Executive Officer

L. I. Prillaman, 57,                 Present position since August 1998;
Vice Chairman and                    prior thereto was Executive Vice
Chief Marketing Officer              President-Marketing

Stephen C. Tobias, 56,               Present position since August 1998;
Vice Chairman and                    prior thereto was Executive Vice
Chief Operating Officer              President-Operations.

Henry C. Wolf, 58,                   Present position since August 1998;
Vice Chairman and                    prior thereto was Executive Vice
Chief Financial Officer              President-Finance.

John F. Corcoran, 60,                Present position since August 1997;
Senior Vice President-               prior thereto was Vice President-
Public Affairs                       Public Affairs.

PAGE 20

Business Experience During Past
Name, Age, Present Position          Five Years
---------------------------             -----------------------------------

John W. Fox, Jr., 53,                Present position since December 1999;
Senior Vice President-               prior thereto was Vice President-
Coal Marketing                       Coal Marketing.

James A. Hixon, 47,                  Present position since February 1, 2001.
Senior Vice President-               Served as Senior Vice President-
Administration                       Employee Relations from November 1999
to February 1, 2001, and prior thereto
was Vice President-Taxation.

J. Gary Lane, 51,                    Present position since April 1, 2000.
Senior Vice President-Law            Served as Senior General Counsel
from November 1999 to April 1, 2000,
General Counsel-Corporate from April
1996 to November 1999, and prior
thereto was General Solicitor.

James W. McClellan, 61,              Present position since August 1998;
Senior Vice President-               prior thereto was Vice President-
Planning                             Strategic Planning.

Kathryn B. McQuade, 44,              Present position since April 1, 2000.
Senior Vice President-               Served as Vice President- Financial
Financial Planning                   Planning from August 1998 to
April 1, 2000, and prior thereto
was Vice President-Internal Audit.

Charles W. Moorman, 49,              Present position since October 1999;
President-Thoroughbred               prior thereto was Vice President-
Technology and                       Information Technology.
Telecommunications, Inc.

John P. Rathbone, 49,                Present position since April 1, 2000;
Senior Vice President                prior thereto was Vice President
and Controller                       and Controller.

Stephen P. Renken, 57,               Present position since February 1, 2001.
Senior Vice President-               Served as Vice President-Information
Chief Information Officer            Technology from September 1999 to
February 1, 2001, Assistant Vice
President-Program Management from
December 1997 to September 1999, and
prior thereto was a consultant to NS.

PAGE 21

Business Experience During Past
Name, Age, Present Position          Five Years
---------------------------             -----------------------------------

John M. Samuels, 57,                 Present position since April 1, 2000;
Senior Vice President-               Served as Vice President-Operations
Operations Planning and              Planning and Budget from January
Support                              1998 to April 1, 2000; prior
thereto was Vice President-
Operating Assets of Conrail.

Donald W. Seale, 48,                 Present position since December 1999;
Senior Vice President-               prior thereto was Vice President-
Merchandise Marketing                Merchandise Marketing.

PAGE 22

PART II
-------

NORFOLK SOUTHERN CORPORATION AND SUBSIDIARIES (NS)

Item 5.   Market for Registrant's Common Stock and Related
------    ------------------------------------------------
Stockholder Matters.
-------------------

NORFOLK SOUTHERN CORPORATION AND SUBSIDIARIES
STOCK PRICE AND DIVIDEND INFORMATION
(Unaudited)

The Common Stock of Norfolk Southern Corporation, owned by 53,194
stockholders of record as of Dec. 31, 2000, is traded on the New York
Stock Exchange with the symbol NSC.  The following table shows the high
and low sales prices and dividends per share, by quarter, for 2000 and
1999.

Quarter
----------------------------------------------
2000                  1st        2nd          3rd         4th
----                  ---        ---          ---         ---

Market price
High               $  22-3/4   $ 19-11/16   $  19-3/4   $   15-5/8
Low                 12-11/16      14-3/16      14-1/8     11-15/16
Dividends per share  $    0.20   $     0.20   $    0.20   $     0.20

1999                  1st        2nd          3rd         4th
----                  ---        ---          ---         ---
Market price
High               $ 32-3/16   $  36-7/16   $ 31-5/16   $   25-3/8
Low                   26-1/4       25-1/2      24-1/8       19-5/8
Dividends per share  $    0.20   $     0.20   $    0.20   $     0.20

PAGE 23

Item 6.   Selected Financial Data.
------    -----------------------

NORFOLK SOUTHERN CORPORATION AND SUBSIDIARIES
ELEVEN-YEAR FINANCIAL REVIEW
1997 - 2000
Page One

2000(1)    1999(2)     1998       1997
----       ----        ----       ----
($ in millions, except per share amounts)

RESULTS OF OPERATIONS
Railway operating revenues  $   6,159   $  5,242   $   4,254  $   4,249
Railway operating expenses      5,526      4,524       3,202      3,036
---------  ---------   ---------  ---------
Income from
railway operations            633        718       1,052      1,213

Other income - net                168        164         309        170
Interest expense on debt          551        531         516        385
---------  ---------   ---------  ---------
Income from continuing
operations before
income taxes                  250        351         845        998

Provision for income taxes         78        112         215        299
---------  ---------   ---------  ---------
Income from continuing
operations before
accounting changes            172        239         630        699

Discontinued operations (3)        --         --         104         22
Cumulative effect
of accounting changes             --         --          --         --
---------  ---------   ---------  ---------
Net income          $     172   $    239   $     734  $     721
=========  =========   =========  =========

PER SHARE DATA
Net income - basic          $    0.45   $   0.63   $    1.94  $    1.91
Net income - diluted        $    0.45   $   0.63   $    1.93  $    1.90
Dividends                   $    0.80   $   0.80   $    0.80  $    0.80
Stockholders' equity
at year end                $   15.16   $  15.50   $   15.61  $   14.44

PAGE 24

Item 6.   Selected Financial Data. (continued)
------    -----------------------

NORFOLK SOUTHERN CORPORATION AND SUBSIDIARIES
ELEVEN-YEAR FINANCIAL REVIEW
1997 - 2000
Page Two

2000(1)    1999(2)     1998       1997
----       ----        ----       ----
($ in millions, except per share amounts)

FINANCIAL POSITION
Total assets                $  18,976   $ 19,250   $  18,180  $  17,350
Total long-term debt,
including current
maturities                 $   7,636   $  8,059   $   7,624  $   7,459
Stockholders' equity        $   5,824   $  5,932   $   5,921  $   5,445

OTHER

Capital expenditures        $     731   $    912   $   1,060  $     929

Average number of shares
outstanding (thousands)      383,358    380,606     378,749    376,593

Number of stockholders
at year end                   53,194     51,123      51,727     50,938

Average number of employees:
Rail                         33,344     30,897      24,185     23,323
Nonrail (3)                     394        269         115      2,494
---------  ---------   ---------  ---------

Total                  33,738     31,166      24,300     25,817
=========  =========   =========  =========

NOTES
(1)  2000 operating expenses include $165 million in work-force
reduction costs for early retirement and separation programs.
These costs reduced net income by $101 million, or 26 cents per
diluted share.
(2)  On June 1, 1999, NS began operating a substantial portion of
Conrail's properties. As a result, both its railroad route miles
and the number of its railroad employees increased by
approximately 50% on that date.
(3)  In 1998, NS sold all the common stock of its motor carrier
subsidiary, North American Van Lines, Inc. (NAVL), for $207
million and recorded a $90 million pretax ($105 million, or 28
cents per diluted share, after-tax) gain. Accordingly, NAVL's
results of operations, financial position and cash flows are
presented as "Discontinued operations."

PAGE 25

Item 6.   Selected Financial Data. (continued)
------    -----------------------

NORFOLK SOUTHERN CORPORATION AND SUBSIDIARIES
ELEVEN-YEAR FINANCIAL REVIEW
1993 - 1996
Page One

1996       1995        1994      1993(4)
----       ----        ----       ----
($ in millions, except per share amounts)

RESULTS OF OPERATIONS
Railway operating revenues  $   4,118   $  4,028   $   3,921  $   3,746
Railway operating expenses      2,953      2,966       2,878      2,831
---------  ---------   ---------  ---------
Income from
railway operations          1,165      1,062       1,043        915

Other income - net                117        140          86        135
Interest expense on debt          116        113         101         98
---------  ---------   ---------  ---------
Income from continuing
operations before
income taxes                1,166      1,089       1,028        952

Provision for income taxes        413        391         372        370
---------  ---------   ---------  ---------
Income from continuing
operations before
accounting changes            753        698         656        582

Discontinued operations (3)        17         15          12       (33)
Cumulative effect
of accounting changes             --         --          --        223
---------  ---------   ---------  ---------
Net income          $     770   $    713   $     668  $     772
=========  =========   =========  =========

PER SHARE DATA
Net income - basic          $    2.03   $   1.81   $    1.63  $    1.85
Net income - diluted        $    2.01   $   1.80   $    1.62  $    1.83
Dividends                   $0.74-2/3   $0.69-1/3  $    0.64  $    0.62
Stockholders' equity
at year end                $   13.26   $  12.47   $   11.73  $   11.12

PAGE 26

Item 6.   Selected Financial Data. (continued)
------    -----------------------

NORFOLK SOUTHERN CORPORATION AND SUBSIDIARIES
ELEVEN-YEAR FINANCIAL REVIEW
1993 - 1996
Page Two

1996       1995        1994      1993(4)
----       ----        ----       ----
($ in millions, except per share amounts)

FINANCIAL POSITION
Total assets                $  11,234   $ 10,718   $  10,403  $  10,301
Total long-term debt,
including current
maturities                 $   1,856   $  1,638   $   1,619  $   1,594
Stockholders' equity        $   4,977   $  4,829   $   4,685  $   4,621

OTHER

Capital expenditures        $     789   $    757   $     707  $     639

Average number of shares
outstanding (thousands)      379,372    392,987     408,904    418,243

Number of stockholders
at year end                   50,748     53,401      52,442     51,884

Average number of employees:
Rail                         23,361     24,488      24,710     25,531
Nonrail                       2,469      2,456       2,458      3,773
---------  ---------   ---------  ---------
Total                  25,830     26,944      27,168     29,304
=========  =========   =========  =========

NOTES

(4)  1993 results include an increase in the provision for income taxes
reflecting a 1% increase in the federal income tax rate, which
reduced net income by $54 million, or 13 cents per diluted share.
"Discontinued operations" includes a $50 million pretax
charge for the disposition of two NAVL businesses.
Net income also reflects two accounting changes, the cumulative
effect of which increased 1993 net income by $223 million, or
53 cents per diluted share: a change in accounting for income
taxes increased net income by $467 million, with a corresponding
reduction in deferred taxes, and changes in accounting for
postretirement and postemployment benefits decreased net income by
$244 million.

PAGE 27

Item 6.   Selected Financial Data. (continued)
------    -----------------------

NORFOLK SOUTHERN CORPORATION AND SUBSIDIARIES
ELEVEN-YEAR FINANCIAL REVIEW
1990 - 1992
Page One

1992         1991(5)     1990
----         ----        ----
($ in millions, except per share amounts)

RESULTS OF OPERATIONS
Railway operating revenues       $   3,777    $   3,654   $   3,786
Railway operating expenses           2,851        3,345       2,969
---------    ---------   ---------
Income from
railway operations                 926          309         817

Other income - net                      97          131         142
Interest expense on debt               109           99          78
---------    ---------   ---------
Income from continuing
operations before
income taxes                       914          341         881

Provision for income taxes             328          112         316
---------    ---------   ---------
Income from continuing
operations before
accounting changes                 586          229         565

Discontinued operations (3 and 5)      (28)        (199)         (9)
Cumulative effect
of accounting changes                  --           --          --
---------    ---------   ---------
Net income               $     558    $      30   $     556
=========    =========   =========

PER SHARE DATA
Net income - basic               $    1.31    $    0.07   $    1.14
Net income - diluted             $    1.30    $    0.07   $    1.14
Dividends                        $    0.60    $0.53-1/3   $0.50-2/3
Stockholders' equity
at year end                     $   10.05    $    9.55   $   10.52

PAGE 28

Item 6.   Selected Financial Data. (continued)
------    -----------------------

NORFOLK SOUTHERN CORPORATION AND SUBSIDIARIES
ELEVEN-YEAR FINANCIAL REVIEW
1990 - 1992
Page Two

1992         1991(5)     1990
----         ----        ----
($ in millions, except per share amounts)

FINANCIAL POSITION
Total assets                     $  10,188    $   9,959   $  10,326
Total long-term debt,
including current
maturities                      $   1,648    $   1,387   $   1,122
Stockholders' equity             $   4,233    $   4,093   $   4,912

OTHER

Capital expenditures             $     628    $     688   $     605

Average number of shares
outstanding (thousands)           424,378      443,276     486,284

Number of stockholders
at year end                        51,200       53,725      56,187

Average number of employees:
Rail                              25,650       27,366      28,697
Nonrail                            4,485        4,586       4,584
---------    ---------   ---------
Total                       30,135       31,952      33,281
=========    =========   =========

NOTES

(5)  1991 operating expenses include a $483 million charge primarily
for labor force reductions. "Discontinued operations" includes a
$197 million charge primarily for the write-down of the goodwill
portion of NS' investment in NAVL. These charges reduced net
income by $498 million, or $1.12 per diluted share.

PAGE 29

Item 6.   Selected Financial Data. (continued)
------    -----------------------

NORFOLK SOUTHERN CORPORATION AND SUBSIDIARIES
Table of Graphs
Included with the Eleven-Year Financial Review

The following financial information appears as three (3) separate
graphs with the Eleven-Year Financial Review in the 2000 Norfolk Southern
Corporation Annual Report to Stockholders.

(millions)                  2000*   1999     1998     1997     1996    1995*
----------                  ----    ----     ----     ----     ----    ----

NET INCOME                  $273    $239     $734     $721     $770    $733

(dollars)                   2000*   1999     1998     1997     1996    1995*
---------                   ----    ----     ----     ----     ----    ----

EARNINGS PER SHARE-DILUTED  $0.71   $0.63    $1.93    $1.90    $2.01   $1.86

* 2000 excludes work-force reduction costs that reduced net
income by $101 million and diluted earnings per share by 26
cents.  1995 excludes an early retirement charge that reduced
net income by $20 million and diluted earnings per share by
6 cents.

In 2000, excluding the work-force reduction costs, net
income increased 14% and diluted earnings per share increased
13%, compared with results in 1999.  The improvement reflected
gains from the sale of nonoperating properties and higher income
from railway operations.

(millions)               2000    1999     1998     1997     1996    1995
----------               ----    ----     ----     ----     ----    ----

CAPITAL EXPENDITURES     $731    $ 912    $1,060   $929     $789    $ 757

NS has made more than $5 billion of capital expenditures
since 1995 -- demonstrating a commitment to make the investments
necessary to support safe, efficient and reliable operations and
revenue growth.

PAGE 30

Item 7.   Management's Discussion and Analysis of Financial
------    -------------------------------------------------
Condition and Results of Operations.
-----------------------------------

NORFOLK SOUTHERN CORPORATION AND SUBSIDIARIES
Management's Discussion and Analysis of
Financial Condition and Results of Operations

The following discussion and analysis should be read in conjunction with
the Consolidated Financial Statements and Notes beginning on Page 53 and
the Eleven-Year Financial Review beginning on Page 23.

OPERATIONS OVER CONRAIL'S LINES

Results for 2000 reflect the first full year of operations over
Conrail's lines. On June 1, 1999 (the "Closing Date"), NS' railroad
subsidiary (Norfolk Southern Railway Company [NSR]) began operating a
substantial portion of Conrail's properties (NSR's "Northern Region") under
various agreements with Pennsylvania Lines LLC (PRR), a wholly owned
subsidiary of Consolidated Rail Corporation (CRC) (see Note 2 on Page 60).
As a result, both the railroad route miles operated by NSR and the number
of its railroad employees increased by approximately 50% on that date.
Results for 1999 reflect five months (January through May) of operating the
former Norfolk Southern railroad system and seven months (June through
December) of operating the present system, which includes the Northern
Region.
Results in 1999 were adversely affected by difficulties encountered in
the assimilation of the Northern Region into NSR's existing system that
resulted in system congestion, an increase in cars on line, increased
terminal dwell time and reduced system velocity. These service issues and
actions taken to address them increased operating expenses, primarily labor
costs and equipment costs, including car hire and locomotive rentals.
Moreover, revenues were lower than expected as some customers diverted
traffic to other modes of transportation.

SUMMARIZED RESULTS OF OPERATIONS

2000 Compared with 1999
-----------------------
Net income in 2000 was $172 million, down 28%. Results in 2000
included $165 million of costs related to actions taken to reduce the size
of the work force, which reduced net income by $101 million, or 26 cents
per diluted share. Excluding these costs, net income would have been $273
million, up 14%. The increase resulted from gains from the sale of
nonoperating properties (see Note 3 on Page 63) and higher income from
railway operations, compared with a weak 1999.
Diluted earnings per share were 45 cents, down 29%. Excluding the
effects of the work-force reduction costs, diluted earnings per share were
up 13%.

1999 Compared with 1998
-----------------------
Net income in 1999 was $239 million, a decrease of 67%. Net income in
1998 included the $105 million gain from the sale of NS' former motor
carrier subsidiary (see Note 16 on Page 78). Income from continuing
operations, which excludes both the motor carrier's results of operations
prior to its sale and the gain from its sale, declined 62%. The decrease
resulted from lower income from railway operations and from lower Conrail
earnings before the Closing Date. The decline in income from railway
operations reflected the difficulties in integrating the Northern Region
and a sharp decline in export coal traffic.

PAGE 31

Item 7.   Management's Discussion and Analysis of Financial
------    -------------------------------------------------
Condition and Results of Operations. (continued)
-----------------------------------

Diluted earnings per share of 63 cents were down 67%. Diluted earnings
per share from continuing operations were down 62%.

INCOME FROM RAILWAY OPERATIONS
(Shown as a graph in the Annual Report to Stockholders)
(millions)

2000*   1999     1998     1997     1996    1995*
----    ----     ----     ----     ----    ----

$  798   $  718   $1,052   $1,213  $1,165   $1,096

Income from railway operations increased 11% in 2000,
despite a sharp rise in diesel fuel prices, reflecting a full
year of Northern Region operations.

* 2000 excludes $165 million of work-force reduction
costs. 1995 excludes a $34 million charge for an early
retirement program.

DETAILED RESULTS OF OPERATIONS

Railway Operating Revenues
--------------------------
Railway operating revenues were $6.2 billion in 2000, $5.2 billion in
1999, and $4.3 billion in 1998. Revenues in 2000 and 1999 include results
of operations in the Northern Region for 12 months and seven months,
respectively. The following table presents a three-year comparison of
revenues by market group.

RAILWAY OPERATING REVENUES BY MARKET GROUP

($ in millions)                     2000      1999      1998
---------------                     ----      ----      ----

Coal                               $1,435    $1,322    $1,252
General merchandise:
Automotive                         921       746       577
Chemicals                          756       641       492
Metals/construction                689       567       375
Paper/clay/forest                  630       578       535
Agriculture/consumer products/
government                       609       539       468
------    ------    ------
General merchandise                 3,605     3,071     2,447
Intermodal                          1,119       849       555
------    ------    ------
Total                         $6,159    $5,242    $4,254
======    ======    ======

PAGE 32

Item 7.   Management's Discussion and Analysis of Financial
------    -------------------------------------------------
Condition and Results of Operations. (continued)
-----------------------------------

In 2000, revenues increased for all market groups, reflecting a full
year of handling Northern Region traffic. Revenues for the last seven
months, a comparison that fully includes the Northern Region in both years,
improved, reflecting recovery of most of the diverted traffic and new
business. However, weakness in the economy resulted in lower revenues very
late in the year. As shown in the following table, the full-year volume
gains attributable to expanded operations produced most of the revenue
increase.

RAILWAY OPERATING REVENUE VARIANCE ANALYSIS
Increases (Decreases)

($ in millions)                    2000 vs. 1999       1999 vs. 1998
---------------                    -------------       -------------

Volume                             $779                $1,015
Revenue per unit/mix                138                   (27)
----                ------
Total                         $917                $  988
====                ======

Revenue per unit improved in most market groups, principally due to
the effects of Northern Region traffic and increased rates. About one-half
of the revenue per unit increase for the intermodal market group was
attributable to the effects of the consolidation of Triple Crown Services
Company (TCS) revenues.
In 1999, revenues increased for all market groups as a result of
Northern Region traffic. Prior to the Closing Date, revenues for all market
groups, except automotive, were below or even with those of the prior year.
Revenue per unit improved principally due to the effects of consolidating
TCS' revenues and Northern Region traffic; however, the effects of changes
in the mix of traffic, most notably reduced export coal traffic, more than
offset the revenue-per-unit improvements.

COAL tonnage increased 11% in 2000, and revenues increased 9%,
reflecting a full year of Northern Region traffic. Revenue per unit
declined, a result of a higher proportion of traffic with a shorter length
of haul, principally attributable to a full year of Northern Region
operations. Coal revenues represented 23% of total railway operating
revenues in 2000, and 89% of NS' coal shipments originated on lines it
operated. In 1999, coal tonnage increased 18%, but revenues increased only
5%. The positive revenue effects of handling Northern Region tonnage were
largely offset by the significant drop in export coal tonnage. In addition,
a larger proportion of the Northern Region traffic is shorter-haul (lower
revenue-per-unit) traffic.

PAGE 33

Item 7.   Management's Discussion and Analysis of Financial
------    -------------------------------------------------
Condition and Results of Operations. (continued)
-----------------------------------

TOTAL COAL, COKE AND IRON ORE TONNAGE

(In millions of tons)              2000      1999      1998
---------------------              ----      ----      ----

Utility                            119       108        83
Export                              20        18        25
Domestic metallurgical              25        22        18
Other                               11        10         8
----      ----      ----
Total                         175       158       134
====      ====      ====

Utility coal traffic increased 11% in 2000, reflecting a full year of
Northern Region operations. The effects of expanded operations were
somewhat offset by coal production problems at several NS-served mines,
unanticipated outages at some NS-served utility plants, large stockpiles at
the beginning of the year and mild summer weather in portions of NS'
service territory. In 1999, utility coal traffic increased 30%, due to the
expansion of operations into the Northern Region after the Closing Date.
The near-term outlook for utility coal remains positive. U.S. demand
for electricity continues to grow rapidly, and coal-fired generation
remains the cheapest marginal source of electricity. Several underutilized
coal-fired power plants are making the transition from peak-only generation
to full-time generation. In addition, natural gas prices reached record
levels in 2000 and are anticipated to remain higher than historical levels
for the near future, further improving the competitive position of coal-
fired generation.
Phase II of Title IV of the Clean Air Act Amendments of 1990, which
imposes more stringent limits on sulfur dioxide emissions, took effect on
Jan. 1, 2000. Many of the mines served by NS produce coals that satisfy
Phase II requirements. In addition, substantial banks of sulfur dioxide
allowances held by many NS-served utilities should continue to provide a
market for other NS-served mines for nearly a decade. However, several
federal environmental regulatory initiatives continued to be pursued during
2000. Many of the rules that have been promulgated to date are in
litigation. If the rules survive litigation and are implemented, they could
increase the cost of coal-fired generation and potentially adversely affect
the value of the sulfur dioxide allowance bank. Also, the Kyoto Protocol,
if ratified and implemented, could put additional cost pressures on coal-
fired generation.
A 1999 decision by a federal district court judge in West Virginia
held that some common mountaintop mining practices in the coal industry are
illegal. There are a small number of mountaintop mining operations on NS'
lines; however, if sustained, the decision could have an adverse effect on
these operations and on NS' coal traffic, revenues and royalties (see Note 3
on Page 63, "Royalties from coal"). A decision by the appellate court is
expected in 2001. The district court's ruling already has made coal mine
permitting a more arduous and lengthy process.

Export coal tonnage increased 8% in 2000, a result of a full year of
access to Baltimore through the Northern Region, mitigated by lower tonnage
through Lambert's Point. Several additional factors also adversely affected
export coal traffic volume. Delayed settlements between buyers and sellers
in the spring postponed shipments of some export tonnage. Foreign buyers
ultimately intended to purchase additional U.S. metallurgical coal, but
production capacity available for export had been diminished by two years
of dramatically lower prices. Toward the end of 2000, production
difficulties at several large NS-served mines significantly reduced tonnage
available for export. Limited supplies overall prevented other coal
producers from providing substitute coal.

PAGE 34

Item 7.   Management's Discussion and Analysis of Financial
------    -------------------------------------------------
Condition and Results of Operations. (continued)
-----------------------------------

In 1999, export coal tonnage decreased 28%, despite the expansion of
operations into the Northern Region. The lower traffic resulted from
reduced demand for U.S. coking coal (in part, the result of a strong U.S.
dollar), productivity gains made by foreign producers, lower ocean
transportation rates and lower foreign royalties. Steam coal exports
continued to be noncompetitive on price, making domestic markets more
attractive for U.S. producers.
Export tonnage is expected to continue to be limited by supply and
competition from Australian coals. In addition, environmental issues 
concerning carbon-based fuels could increase pressure to reduce their use.

Domestic metallurgical coal, coke and iron ore traffic increased 17%
in 2000, due to a full year of Northern Region operations. In addition,
increased production in the first half of the year and gains in NS' market
share contributed to the higher traffic. However, the softening economy and
increased steel imports diminished blast furnace production rates, sharply
reducing demand for raw materials.
In 1999, domestic metallurgical coal, coke and iron ore traffic
increased 22%, as the addition of Northern Region traffic more than offset
the effects of reduced U.S. steel production. Lower-priced steel imports
led to reduced production levels at integrated steel manufacturers,
especially through the first three quarters of 1999, thereby lowering
demand for raw materials.
Domestic metallurgical coal, coke and iron ore traffic is expected to
continue to suffer from the effects of the slowing economy. Curtailed steel
production levels are expected to continue in the near term, which could
further weaken the steel industry. In 2000, an Alabama steel producer
closed permanently, and several others filed for Chapter 11 bankruptcy
protection. Long-term demand is expected to continue to decline, due to
advanced technologies that allow production of steel using less coke.

Other coal traffic, principally steam coal shipped to manufacturing
plants, increased 4% in 2000, reflecting a full year of handling Northern
Region traffic; however, this was mitigated by the loss of some traffic to
competitors. Other coal traffic increased 25% in 1999, due to the
commencement of operations in the Northern Region.

COAL
(Shown as a graph in the Annual Report to Stockholders)
(millions)

2000    1999    1998     1997     1996     1995
----    ----    ----     ----     ----     ----

Export      $  201   $ 204   $  314   $  380   $  374   $  353
Domestic     1,234   1,118      938      921      931      915
------   ------  ------   ------   ------   ------
$1,435   $1,322  $1,252   $1,301   $1,305   $1,268
======   ======  ======   ======   ======   ======

Revenues increased $113 million, or 9%, in 2000, due to
the effects of a full year of Northern Region traffic. This
group includes utility coal, export coal, domestic
metallurgical coal and industrial coal, coke and iron ore.

PAGE 35

Item 7.   Management's Discussion and Analysis of Financial
------    -------------------------------------------------
Condition and Results of Operations. (continued)
-----------------------------------

GENERAL MERCHANDISE traffic volume (carloads) increased 15% in 2000,
and revenues increased 17%, principally due to a full year of operating the
Northern Region. In 1999, traffic volume increased 24%, and revenues
increased 26%, reflecting the commencement of operations in the Northern
Region; however, service issues resulted in traffic diversions in all
market groups.

Automotive traffic volume increased 13%, and revenues increased 23% in
2000, reflecting a full year of Northern Region operations, record vehicle
production and the recapture of business diverted because of service issues
after the Closing Date. The carload increase was less than the revenue
increase principally due to the effects of a redesign of the mixing center
network. This redesign improves vehicle velocity through the network and
includes changes in traffic flows that resulted in a decline in carloads,
with no corresponding decrease in revenues.
In 1999, automotive traffic volume increased 26%, and revenues
increased 29%, largely due to the expansion of operations into the Northern
Region and record vehicle production. The NS-served Toyota plant in
Princeton, Ind., and the vehicle parts distribution center in Dayton, Ohio,
which were new in 1999, also contributed to the increase. However, design
and service issues and equipment shortages caused by extended cycle times
adversely affected NS' mixing center network. In addition, service issues
after the Closing Date resulted in significant traffic diversions.
Automotive revenues in 2001 are expected to be down, reflecting an
anticipated decline in light vehicle production from the record level of
2000.

AUTOMOTIVE
(Shown as a graph in the Annual Report to Stockholders)
(millions)

2000    1999     1998     1997     1996    1995
----    ----     ----     ----     ----    ----

$921     $746    $ 577    $ 492    $489     $449

Revenues increased $175 million, or 23%, in 2000, due to a
full year of operations in the Northeast and record vehicle
production. This group includes finished vehicles for BMW,
DaimlerChrysler, Ford Motor Company, General Motors, Honda,
Isuzu, Jaguar, Land Rover, Mazda, Mercedes-Benz,
Mitsubishi, Nissan, Saab, Subaru, Suzuki, Toyota and
Volkswagen, and auto parts for Ford Motor Company, General
Motors, Mercedes-Benz and Toyota.

Chemicals traffic volume increased 15%, and revenues increased 18% in
2000, due to a full year of Northern Region operations and the return of
traffic that had been diverted because of service issues after the Closing
Date. Shipments of miscellaneous chemicals, chlorine, caustic soda and
plastics continued to rebound, but sulfur carloads were down due to weak
fertilizer markets. Chemicals shipments continued to increase through NS'
Thoroughbred Bulk Transfer (TBT) facilities that handle chemicals and bulk
commodities for customers not located on NS-served lines.

PAGE 36

Item 7.   Management's Discussion and Analysis of Financial
------    -------------------------------------------------
Condition and Results of Operations. (continued)
-----------------------------------

In 1999, chemicals traffic volume increased 25%, and revenues
increased 30%, due to the addition of Northern Region traffic. Chemical
production increased slightly during the year, and shipments of chlorine,
caustic soda and PVC plastics rebounded from 1998 levels, benefiting from
an improved Asian economy. The location of new and expanded processing
plants on lines NS serves increased shipments of plastic pellets. Chemicals
shipments also increased through NS' TBT facilities. Shipments of sulfur
declined, due to production cutbacks at plants served by NS.
Chemicals revenues in 2001 are expected to remain relatively flat, due
to fewer plant expansions and softness in U.S. chemical and petroleum
production.

CHEMICALS
(Shown as a graph in the Annual Report to Stockholders)
(millions)

2000    1999     1998     1997     1996    1995
----    ----     ----     ----     ----    ----

$756     $641    $ 492    $ 504    $482     $541

Revenues increased $115 million, or 18%, in 2000,
reflecting a full year of Northern Region traffic and the
return of traffic diverted last year.  This group includes
sulfur and related chemicals, petroleum products, chlorine
and bleaching compounds, plastics, rubber, industrial
chemicals, chemical wastes and municipal wastes.

Metals and construction traffic volume increased 29%, and revenues
increased 22% in 2000, reflecting a full year of operations over the
expanded system. Revenue per unit declined, largely due to a change in the
mix of traffic. Metals traffic benefited from increased shipments of sheet
steel, imported slab steel and ferrous scrap; however, this was tempered by
a significant slowdown in the steel industry in the last half of the year.
Construction traffic benefited from continued strength in housing starts
and highway construction.
In 1999, metals and construction traffic volume increased 57%, and
revenues increased 51%, due to the addition of Northern Region traffic.
Continued growth, resulting from the location of new mini-mills and steel
processors in NS' service territory, offset the effects of a weaker scrap
market. Construction traffic benefited from strong housing starts and
highway construction in the Southeast. In addition, new cement terminals on
NS' lines generated additional traffic.

PAGE 37

Item 7.   Management's Discussion and Analysis of Financial
------    -------------------------------------------------
Condition and Results of Operations. (continued)
-----------------------------------

Metals and construction revenues in 2001 are expected to suffer from
the effects of a continued softness in the steel market.

METALS AND CONSTRUCTION
(Shown as a graph in the Annual Report to Stockholders)
(millions)

2000    1999     1998     1997     1996    1995
----    ----     ----     ----     ----    ----

$689     $567    $ 375    $ 369    $355     $350

Revenues increased $122 million, or 22%, in 2000, principally
due to the effects of a full year of expanded operations.
This group includes steel, aluminum products, machinery,
scrap metals, cement, aggregates, bricks and minerals.

Paper, clay and forest products traffic volume increased 5%, and
revenues increased 9% in 2000, principally due to the effects of a full
year of Northern Region operations. Additional consolidation in the paper
industry and a weakening paper market in the second half of the year
contributed to lower carloads during the summer months and into the fall.
Demand for paper production inputs, such as scrap paper and wood pulp, was
weak, but this was tempered by stronger demand for newsprint and printing
paper.
In 1999, paper, clay and forest products traffic volume increased 4%,
and revenues increased 8%, reflecting the commencement of Northern Region
operations. The closure of four major paper mills and some chip mills late
in 1998, coupled with the effects of consolidations and weak demand within
the paper industry, had a negative impact on traffic volume.
Paper, clay and forest products revenues are expected to continue to
be adversely affected by weak demand in 2001, due to continued
consolidations and little anticipated capacity expansion through 2003.

PAPER, CLAY AND FOREST PRODUCTS
(Shown as a graph in the Annual Report to Stockholders)
(millions)

2000    1999     1998     1997     1996    1995
----    ----     ----     ----     ----    ----

$630     $578    $ 535    $ 539    $514     $538

Revenues increased $52 million, or 9%, in 2000, reflecting
a full year of operations in the Northern Region. This
group includes lumber and wood products, pulpboard and
paper products, wood fibers, woodpulp, scrap paper and
clay. NS serves 85 paper mills, 95 paper distribution
centers and more than 100 lumber reload centers.

PAGE 38

Item 7.   Management's Discussion and Analysis of Financial
------    -------------------------------------------------
Condition and Results of Operations. (continued)
-----------------------------------

Agriculture, consumer products and government traffic volume increased
7%, and revenues increased 13% in 2000, due to the effects of a full year
of Northern Region traffic and modest growth in the Southeast markets. Rate
increases and more longer-haul (higher revenue-per-unit) traffic also
contributed to the revenue increase. Grain traffic benefited from new
shuttle-train service that improved service to new and expanded Southeast
feed mills. In addition, traffic increased for Midwest grain and sweeteners
and consumer goods from the West.
In 1999, agriculture, consumer products and government traffic volume
increased 11%, and revenues increased 15%, reflecting access to the large
Northeast consumer markets. Service issues that arose early in the year due
to harsh weather conditions and continued during integration of the
Northern Region had an adverse effect on volume. In addition, soybean
traffic was negatively affected by low-priced imports from South America.
Shipments of fertilizer declined, reflecting significantly lower
production.
Agriculture, consumer products and government revenues are expected to
be tempered by the soft economic conditions. While only a normal crop year
is expected, strong export demand could help offset the resulting drop in
domestic shipments.

AGRICULTURE, CONSUMER PRODUCTS AND GOVERNMENT
(Shown as a graph in the Annual Report to Stockholders)
(millions)

2000    1999     1998     1997     1996    1995
----    ----     ----     ----     ----    ----

$609     $539    $ 468    $ 476    $474     $397

Revenues increased $70 million, or 13%, in 2000, reflecting
a full year of Northern Region operations and modest growth
in the Southeast markets. This group includes soybeans,
wheat, corn, fertilizers, animal and poultry feed, food
oils, flour, beverages, canned goods, sweeteners, consumer
products and items for the military.

INTERMODAL traffic volume increased 18%, and revenues increased 32% in
2000, primarily due to a full year of Northern Region traffic and the
consolidation of TCS revenues (see Note 2 on Page 60). About one-half of
the improvement in revenue per unit resulted from the effects of
consolidating TCS. Prior to June 1, 1999, NS' revenues included only the
amounts for rail services it performed under contract to TCS, but NS'
volume included most TCS units. Also contributing to the revenue-per-unit
improvement were rate increases throughout the year on domestic business
and the implementation of fuel surcharges later in the year. In addition,
increased demand, new business and improved service contributed to the
gains, as major customers, including UPS, JB Hunt, Hub Group and Maersk,
increased volumes. Despite weak demand in the first quarter and the loss in
December 1999 of a major customer, NS had regained its market share by the
second quarter. Domestic and premium business volumes benefited from
service improvements and expansion initiatives. International traffic,
which accounts for about half of intermodal volume, grew 5%,
notwithstanding the loss of business from the major customer. TCS traffic
increased 3%, as it recovered from service shortcomings after the Closing
Date.

PAGE 39

Item 7.   Management's Discussion and Analysis of Financial
------    -------------------------------------------------
Condition and Results of Operations. (continued)
-----------------------------------

In 1999, intermodal traffic volume increased 31%, and revenues
increased 53%, due to the addition of the Northern Region and the
consolidation of TCS after the Closing Date. More than half of the increase
in revenue per unit resulted from the effects of consolidating TCS.
Intermodal traffic volume declined in the first five months of 1999,
reflecting the network redesign implemented in August 1998, which pared a
significant number of lanes and associated volumes. Service issues
following the integration of the Northern Region also negatively affected
volume and revenues.
Intermodal revenues are expected to continue to grow, supported by
continued improvements in service and added capacity, notably through a new
terminal in Austell, Ga., scheduled to open in the third quarter of 2001.
However, a softening economy could temper this positive outlook.

INTERMODAL
(Shown as a graph in the Annual Report to Stockholders)
(millions)

2000    1999     1998     1997     1996    1995
----    ----     ----     ----     ----    ----

$1,119   $849    $ 555    $ 568    $499     $485

Revenues increased $270 million, or 32%, in 2000, due to a
full year of Northern Region traffic and the consolidation
of TCS revenues. This group handles trailers, domestic and
international containers, TCS equipment and equipment for
intermodal marketing companies, international steamship
lines, truckers and other shippers.

Railway Operating Expenses
--------------------------
Railway operating expenses increased 22% in 2000 and included $165
million of costs related to actions taken to reduce the size of the work
force. Excluding these costs, railway operating expenses increased 19%,
while carloadings increased 15%, reflecting a full year of Northern Region
operations and sharply higher diesel fuel prices.
In 1999, railway operating expenses increased 41%, while carloadings
increased 24%. The expense increase was attributable to the commencement of
operations in the Northern Region, and included significant costs arising
from the service issues experienced after the Closing Date.
As a result, the railway operating ratio, which measures the
percentage of railway operating revenues consumed by railway operating
expenses, was 87.0% in 2000 (excluding the work-force reduction costs,
which increased the ratio 2.7 percentage points), compared with 86.3% in
1999 and 75.3% in 1998.
The increase in the 2000 ratio reflected the effects of a full year of
Northern Region operations and the sharp increase in diesel fuel prices,
which more than offset the absence of the significant costs incurred in
1999 related to the service issues after the Closing Date. In addition, the
ratio was adversely affected by a continuation of the trends seen in 1999
involving changes in the mix of traffic.

PAGE 40

Item 7.   Management's Discussion and Analysis of Financial
------    -------------------------------------------------
Condition and Results of Operations. (continued)
-----------------------------------

In 1999, the railway operating ratio reflected the effects of
integration-related service issues, including traffic diversions, which in
total were estimated to have resulted in more than half of the ratio's 1999
increase. The remaining increase was principally attributable to the change
in traffic mix (more resource-intensive traffic, such as automotive and
intermodal) and the new traffic in the Northern Region, coupled with the
decrease in export coal traffic.
The railway operating ratio is not expected to return to pre-Closing
Date levels in the near term, due to the changes in NS' traffic mix and the
higher cost structure attributable to the Conrail properties now operated
by NSR.
In response to the economic slowdown and changes to its transportation
markets, NS announced in January 2001 several strategies designed to reduce
costs. These include additional work-force reductions, disposition of
surplus freight cars, line rationalization programs, consolidation or
disposition of underutilized or redundant facilities and a redesign of its
service network.
The following table shows the changes in railway operating expenses
summarized by major classifications.

RAILWAY OPERATING EXPENSES
Increases (Decreases)

($ in millions)                  2000 vs. 1999             1999 vs. 1998
---------------                  -------------             -------------

Compensation and benefits         $    379*                   $   363
Materials, services and rents          171                        435
Conrail rents and services             167                        311
Depreciation                            28                         38
Diesel fuel                            223                         81
Casualties and other claims              4                         43
Other                                   30                         51
------                     ------
Total                         $ 1,002                    $ 1,322
======                     ======

* Includes $165 million of work-force reduction costs in 2000.

Compensation and benefits (excluding work-force reduction costs)
represented 39% of total railway operating expenses in 2000 and increased
12% in 2000 and 24% in 1999.
The work-force reduction costs, which totaled $165 million,
principally resulted from voluntary early retirement and separation
programs accepted by 1,446 nonunion employees (see Note 11 on Page 70 for
details concerning the early retirement programs). In addition, an accrual
was made for certain postemployment benefits due to some union employees
who were furloughed. At year end, employment levels were down about 9%,
largely the result of these programs and other actions taken throughout the
year to reduce the size of the work force.
The 12% increase (excluding the work-force reduction costs) in
compensation and benefits in 2000 was largely attributable to the effects
of a full year of expanded operations and higher wages and benefit costs
for union employees. These increases were mitigated by higher pension
income and the absence of the $49 million incurred in 1999 for the Special
Work Incentive Program (SWIP) for union employees in the third quarter of
1999. Pension income was higher in 2000 largely due to the transfer of
assets from the Conrail pension plan after the Closing Date. NS has
substantial unrecognized gains related to its overfunded pension plan;
amortization of these gains will continue to be included in "Compensation
and benefits" expenses (see Note 11 on Page 70).
In 1999, the increase resulted largely from the almost 50% increase in
the railroad work force following commencement of operations in the
Northern Region. The service issues encountered after the Closing Date also

PAGE 41

Item 7.   Management's Discussion and Analysis of Financial
------    -------------------------------------------------
Condition and Results of Operations. (continued)
-----------------------------------

contributed to the increase, including the $49 million cost of the SWIP.
These increases were somewhat offset by reduced stock-based incentive 
compensation, the absence of bonus accruals and reduced pension and other
postretirement benefits expenses.

Materials, services and rents includes items used for the maintenance
of the railroads' lines, structures and equipment; the costs of services
purchased from outside contractors, including the net costs of operating
joint (or leased) facilities with other railroads; and the net cost of
equipment rentals. This category of expenses increased 13% in 2000 and 52%
in 1999.
The 2000 increase was mostly attributable to the effects of a full
year of Northern Region operations and the consolidation of TCS and was
mitigated by the absence of significant costs incurred in 1999 related to
the service issues encountered after the Closing Date.
The increase in 1999 reflected the expanded operations in the Northern
Region; additional costs attributable to the service issues, including
costs for alternate transportation to meet the needs of customers; and the
effects of consolidating TCS.
Equipment rents, which include the cost to NS of using equipment
(mostly freight cars) owned by other railroads or private owners, less the
rent paid to NS for the use of its equipment, increased 22% in 2000 and 93%
in 1999. The 2000 increase was principally due to the effects of a full
year of expanded operations, but was mitigated by a favorable comparison
for the last seven months, as expenses in 1999 were high due to the service
issues encountered after the Closing Date. The 1999 increase principally
was due to: (1) the commencement of Northern Region operations, (2) higher
rental costs driven by cycle times that were increased because of the
service issues and (3) short-term locomotive leases to improve system
fluidity. In addition, Conrail historically rented a higher percentage of
its freight cars than NS, resulting in higher equipment rents in the
Northern Region.
Locomotive and car repair costs increased in 2000, reflecting a full
year of Northern Region operations; however, the increase was tempered by
reduced maintenance activities, a result of cost control efforts. In 1999,
maintenance costs increased due to the expansion of operations and higher
repair costs associated with temporarily leased locomotives.

Conrail rents and services, a new category of expense arising from the
expansion of operations on the Closing Date, amounted to $478 million in
2000 and $311 million in 1999. This item includes amounts due to PRR and
CRC for use of their operating properties and equipment and CRC's operation
of the Shared Assets Areas. Also included is NS' equity in Conrail's net
earnings since the Closing Date, plus the additional amortization related
to the difference between NS' investment in Conrail and its underlying
equity (see Note 2 on Page 60).

Depreciation expense was up 6% in 2000 and 9% in 1999. Increases in
both years were due to property additions, reflecting substantial levels of
capital spending (see Note 1, "Properties," on Page 59 for NS' depreciation
policy).

Diesel fuel expenses increased 87% in 2000 and 47% in 1999. In both
years, most of the increase resulted from higher prices. In 2000, 86% of
the increase resulted from a 61% rise in the average price per gallon,
which ranged from 77 cents in January to $1.07 in December. In 1999, 53% of
the increase was attributable to a 19% increase in the average price per
gallon, due to a sharp rise in the last half of the year. Higher
consumption accounted for the remainder of the increases, primarily the
result of the addition of the Northern Region.

PAGE 42

Item 7.   Management's Discussion and Analysis of Financial
------    -------------------------------------------------
Condition and Results of Operations. (continued)
-----------------------------------

Casualties and other claims expenses (including the estimates of costs
related to personal injury, property damage and environmental matters)
increased 3% in 2000 and 45% in 1999. The 1999 increase resulted
principally from higher personal injury accruals related to the increased
size of the work force as well as higher environmental expenses.
The largest component of casualties and other claims expense is
personal injury costs. In 2000, cases involving so-called "occupational"
injuries comprised about 40% of the total employee injury cases settled and
20% of the total settlement payments made. Injuries of this type are not
generally caused by a specific accident or event, but,
rather, result from a claimed exposure over time to some condition of
employment. Many such claims are being asserted by former or retired
employees, some of whom have not been actively employed in the rail
industry for decades. NS continues to work actively to eliminate all
employee injuries and to reduce the associated costs.
The rail industry remains uniquely susceptible to litigation involving
job-related accidental injury and occupational claims because of an
outmoded law, the Federal Employers' Liability Act (FELA), originally
passed in 1908 and applicable only to railroads. This law, which covers
employee claims for job-related injuries, promotes an adversarial claims
environment and produces results that are unpredictable and inconsistent,
at a far greater cost to the rail industry than the no-fault workers'
compensation system to which nonrail competitors and other employers are
universally subject. The railroads have been unsuccessful so far in efforts
to persuade Congress to replace FELA with a no-fault workers' compensation
system.
NS maintains substantial amounts of commercial insurance for potential
third-party liability and property damage claims. It also retains
reasonable levels of risk through self-insurance.

Other expenses increased 14% in 2000 and 31% in 1999. The increase in
2000 reflected a full year of Northern Region operations and higher bad
debt expense. The 1999 increase resulted from the expansion of operations,
including property and other taxes related to the Northern Region, and to
costs arising from service issues.

Income Taxes
------------
Income tax expense in 2000 was $78 million, for an effective rate of
31%, compared with effective rates of 32% in 1999 and 25% in 1998.
Excluding the equity in Conrail's after-tax earnings, the effective rate
was 34% in both 2000 and 1999 and was 33% in 1998.
The effective rates in all three years were below the statutory
federal and state rates because of investments in coal-seam gas properties,
favorable adjustments upon filing the prior year tax returns and favorable
adjustments to state tax liabilities. In addition, the rate in 1998
benefited from investments in corporate-owned life insurance and favorable
adjustments resulting from settlement of federal income tax years 1993 and
1994.
The effective rate in 2001 is expected to increase somewhat, primarily
due to a substantial reduction in the level of benefits from investments in
coal-seam gas properties.
In January 1995, the United States Tax Court issued a preliminary
decision that disallowed some of the tax benefits a subsidiary of NS
purchased from a third party pursuant to a safe harbor lease agreement in
1981. In January 2001, NS received payment from the third party in
accordance with indemnification provisions of the lease agreement.

Discontinued Operations
-----------------------
Income from discontinued operations in 1998 included the $105 million
after-tax gain from the sale of NS' motor carrier subsidiary (see Note 16
on Page 78). Motor carrier operations in 1998 (through March 28) produced a
$1 million loss.

PAGE 43

Item 7.   Management's Discussion and Analysis of Financial
------    -------------------------------------------------
Condition and Results of Operations. (continued)
-----------------------------------

FINANCIAL CONDITION, LIQUIDITY AND CAPITAL RESOURCES

Cash provided by operating activities, NS' principal source of
liquidity, was $1.3 billion in 2000, and reflects a new program under which
accounts receivable are sold on a revolving basis (see Note 5 on Page 65).
Excluding the infusion of cash from this program, operating cash flow was
$954 million in 2000, compared with $533 million in 1999 and $890 million
in 1998.
The improvement in 2000 resulted primarily from favorable changes in
working capital, including an improvement in collection of accounts
receivable, a lengthening of accounts payable and the lack of bonus
payments.  The decline in 1999 reflected lower income from operations,
offset somewhat by lower income tax payments.  The large changes in
"Accounts receivable" and "Current liabilities other than debt" in the 1999
cash flow statement primarily resulted from the commencement of operations
in the Northern Region.  In addition, collection of accounts receivable had
slowed.
NS' working capital deficit was $1.0 billion at Dec. 31, 2000,
compared with $553 million at Dec. 31, 1999.  The large increase reflected
the use of accounts receivable sale proceeds to reduce long-term debt.  NS
currently has the capability to issue commercial paper to meet its more
immediate working capital needs (see the discussion of financing
activities, below).

CASH PROVIDED BY OPERATIONS
(Shown as a graph in the Annual Report to Stockholders)
(millions)

2000      1999      1998      1997      1996      1995
------    ------    ------    ------    ------    ------

$1,342    $  533    $  890    $1,150    $1,198    $1,234

Cash provided by operations increased significantly,
reflecting an infusion of cash from the commencement of
a revolving accounts receivable sale program and
favorable changes in working capital.

Cash used for investing activities decreased slightly in 2000,
following an 11% decline in 1999.  In 2000, property additions were
significantly lower than in the prior years - locomotive fleet additions in
2000 were accomplished by operating lease, whereas locomotives were
purchased in prior years.  Investing activities in 1999 included more
borrowings against the net cash surrender value of corporate-owned life
insurance:  approximately $140 million more than in 2000 and $160 million
more than in 1998.  In addition, 1999 included $60 million in proceeds from
the sublease of certain licensing rights and the sale of NS' signboard
business.  Investing activities in 1998 included the $207 million of
proceeds from the sale of NS' motor carrier subsidiary.  Property additions
account for most of the recurring spending in this category.
The following tables show capital spending and track and equipment
statistics for the past five years.  Capital expenditures include amounts
relating to capital leases, which are excluded from the Consolidated
Statements of Cash Flows (see Note 8, "Capital Lease Obligations," on Page
69).

PAGE 44

Item 7.   Management's Discussion and Analysis of Financial
------    -------------------------------------------------
Condition and Results of Operations. (continued)
-----------------------------------

CAPITAL EXPENDITURES

($ in millions)                2000      1999      1998      1997      1996
------    ------    ------    ------    ------

Road                          $  557    $  559    $  612    $  599    $  438
Equipment                        146       349       442       306       326
Other property                    28         4         6        24        25
------    ------    ------    ------    ------
Total                    $  731    $  912    $1,060    $  929    $  789
======    ======    ======    ======    ======

Capital expenditures decreased 20% in 2000 and 14% in 1999.  The
decline in 2000 reflected lower capital expenditures for locomotives as a
result of the operating lease. The 1999 decrease was largely attributable
to significant outlays in 1998 for roadway projects and equipment in
anticipation of the Closing Date and automotive-related projects.

TRACK STRUCTURE STATISTICS (CAPITAL AND MAINTENANCE)

2000     1999     1998      1997      1996
------   ------   ------    ------    ------

Track miles of rail installed       392       403       429       451      401
Miles of track surfaced           3,687     5,087     4,715     4,703    4,686
New crossties installed (millions)  1.5       2.3       2.0       2.2      1.9

AVERAGE AGE OF OWNED RAILWAY EQUIPMENT

(Years)                        2000      1999      1998      1997      1996
------    ------    ------    ------    ------

Freight Cars                   24.6      23.8      23.6      23.0      22.3
Locomotives                    16.1      15.4      15.4      15.3      15.4
Retired locomotives            24.5      22.7      20.6      23.3      24.4

In addition to NS-owned equipment, 16% of the freight car fleet and
27% of the locomotive fleet is leased from PRR (see Note 2 on Page 60).
The increase in 2000 in the average age of owned locomotives reflects
the fact that locomotives leased in 2000 are not included in the statistic.
The 1998 decrease in the average age of retired locomotives resulted from a
disproportionate share of early retirements due to casualties and service
failures and retention of older units in anticipation of the Closing Date.
Through its coal car rebody program, which was suspended in 2000, NS
converted about 29,000 hopper cars into high-capacity steel gondolas or
hoppers. As a result, the remaining service life of the freight-car fleet
is greater than may be inferred from the increasing average age shown in
the table, above.
For 2001, NS has budgeted $806 million for capital expenditures. The
anticipated spending includes $449 million for roadway projects, of which
$264 million is for track and bridge program work.  Also included are
projects for new or improved intermodal facilities, marketing and
industrial development initiatives, signal upgrades and environmental and
other public improvements. Equipment spending includes the purchase of
locomotives and the upgrade of existing locomotives. In addition, NS'
telecommunications subsidiary plans to spend $62 million on the
installation of fiber optic conduits.

PAGE 45

Item 7.   Management's Discussion and Analysis of Financial
------    -------------------------------------------------
Condition and Results of Operations. (continued)
-----------------------------------

Cash used for financing activities was $798 million in 2000 and
reflected a substantial net reduction of debt, accomplished using the
proceeds from the sale of accounts receivable, compared with the net
increase in 1999.  Dividend payments were comparable in all three years;
however, in January 2001 the Corporation's Board of Directors declared a
quarterly dividend of 6 cents per share, compared with the 20 cents per
share that had been paid in recent quarters.  NS' debt-to-total
capitalization ratio at year end was 57% in 2000 and 58% in 1999.
NS currently has in place a $2.0 billion credit facility to support
the $1.1 billion of commercial paper outstanding at Dec. 31, 2000.  In
February 2001, NS issued $1.0 billion of debt under its $1.0 billion shelf
registration and used the proceeds to reduce the amount of commercial paper
outstanding.
NS is subject to various financial covenants with respect to its
credit agreement, including a maximum leverage ratio restriction (see Note
8, "Debt Covenants," on Page 69).  As a result of a negotiated amendment 
to the credit agreement, the maximum leverage ratio will not tighten 
through the remainder of the agreement's term.

CONRAIL'S RESULTS OF OPERATIONS, FINANCIAL CONDITION AND LIQUIDITY

Through May 31, 1999, Conrail's results of operations include freight
line-haul revenues and related expenses. After the Closing Date, June 1,
1999, its results reflect its new structure and operations (see Note 2 on
Page 60). Currently, Conrail's major sources of operating revenues are
operating fees and rents from NSR and CSXT. The composition of Conrail's
operating expenses also has changed.
Conrail's net income was $170 million in 2000, compared with $26
million in 1999 and $267 million in 1998 (see Note 2 on Page 60).
Results in 1999 included $180 million of expenses ($121 million after
taxes), principally to increase certain components of its casualty reserves
based on an actuarial valuation, to adjust certain litigation and
environmental reserves related to settlements and completion of site
reviews and a credit adjustment related to the assumption of a lease
obligation by CSX. Results in 1998 included a $170 million charge ($105
million after taxes) for severance benefits covering nonunion employees and
$132 million ($82 million after taxes) of other charges and reserves.
Excluding the effects of these items, net income increased $23 million
in 2000, but decreased $307 million in 1999. The 2000 increase reflected a
$37 million after-tax gain from a property sale. The 1999 decrease was
principally the result of Conrail's change in operations.
Conrail's operating revenues were $985 million in 2000, $2.2 billion
in 1999 and $3.9 billion in 1998.  Both year-to-year declines were
attributable to the change in operations. In addition, 1999's comparison
reflected a 2% decrease in freight revenues prior to the Closing Date.
Conrail's operating expenses were $749 million in 2000, $2.0 billion in
1999 and $3.3 billion in 1998.
In addition to the $180 million of 1999 expenses and the $302 million
of 1998 expenses discussed above, Conrail's operating expenses reflect
transition-related expenses of $60 million in 1999 and $149 million in 1998
(principally technology integration costs and employee stay bonuses).
Excluding the effects of the acquisition-related compensation and
transition costs, operating expenses decreased 62% in 2000 and 34% in 1999.
Both declines reflected the change in operations. In 1999, this was
somewhat offset by higher casualty and other claims expenses.
Conrail's cash provided by operations decreased $34 million, or 9%, in
2000, and $331 million, or 46%, in 1999. The 2000 reduction reflected the
change in operations and payment of one-time items owed to NSR and CSXT.
The 1999 decrease was principally due to the change in operations. Cash
generated from operations is Conrail's principal source of liquidity and is
primarily used for debt repayments and capital expenditures. Debt
repayments totaled $318 million in 2000 and $112 million in 1999. Capital
expenditures totaled $220 million in 2000 and $176 million in 1999, but are
expected to decrease significantly in 2001.

PAGE 46

Item 7.   Management's Discussion and Analysis of Financial
------    -------------------------------------------------
Condition and Results of Operations. (continued)
-----------------------------------

Conrail had working capital of $85 million at Dec. 31, 2000, compared
with a working capital deficit of $194 million at Dec. 31, 1999.  The
deficit at Dec. 31, 1999, reflected $250 million of long-term debt paid in
June 2000.
Conrail is not an SEC registrant and, therefore, presently cannot
issue any publicly traded securities. Conrail is expected to have
sufficient cash flow to meet its ongoing obligations.
NS' equity in earnings of Conrail, net of amortization, was $21
million in 2000, $17 million in 1999 and $194 million in 1998.

OTHER MATTERS

Proposed Merger Guidelines
--------------------------
The Surface Transportation Board (STB) has issued proposed merger
guidelines which, if adopted as proposed, would increase the substantive
and evidentiary standards that Class 1 railroad applicants will have to
satisfy. Final rules are due in June 2001.
Prior to the STB's release of its proposed guidelines, Canadian
National Railway Company and Burlington Northern Sante Fe Corporation
announced the cancellation of their earlier proposal to combine their
companies under common control.

Market Risks and Hedging Activities
-----------------------------------
NS does not engage in the trading of derivatives. NS manages its
overall exposure to fluctuations in interest rates by issuing both fixed-
and floating-rate debt instruments and by entering into interest-rate
hedging transactions to achieve a targeted mix within its debt portfolio.
Of NS' total debt outstanding (see Note 8 on Page 67), all is fixed-
rate debt, except for commercial paper and most capital leases. As a
result, NS' debt subject to interest rate exposure totaled $1.4 billion on
Dec. 31, 2000. A 1% increase in interest rates would increase NS' total
annual interest expense related to all its variable debt by approximately
$14 million. Management considers it unlikely that interest rate
fluctuations applicable to these instruments will result in a material
adverse effect on NS' financial position, results of operations or
liquidity.
The average interest rate on commercial paper was 7.0% on Dec. 31,
2000, and 6.4% on Dec. 31, 1999.  During 2000, the weighted-average
interest rate on NS' outstanding commercial paper ranged from 6.1% to 7.0%.
The capital leases, which carry an average fixed rate of 7.1%, were
effectively converted to variable rate obligations using interest rate swap
agreements. On Dec. 31, 2000, the average pay rate under these agreements
was 7.2%, and the average receive rate was 7.1%. During 2000, the effect of
the swaps was to reduce interest expense by $1 million. A portion of the
lease obligations is payable in Japanese yen. NS hedged the associated
exchange rate risk at the inception of each lease with a yen deposit
sufficient to fund the yen-denominated obligation. Most of these deposits
are held by Japanese banks. As a result, NS is exposed to financial market
risk relative to Japan. Counterparties to the interest rate swaps and
Japanese banks holding yen deposits are major financial institutions
believed by Management to be creditworthy.

Accounting Changes and New Pronouncements
-----------------------------------------
As discussed in Note 1 under "Required Accounting Changes" on Page 59,
NS adopted in 2000 the consensus reached by the Emerging Issues Task Force
of the Financial Accounting Standards Board (FASB) concerning Issue No. 99-
19, "Reporting Revenue Gross as a Principal versus Net as an Agent." In
addition, NS has adopted the disclosure provisions of the FASB's Statement
of Financial Accounting Standards (SFAS) No. 140.
NS has adopted SFAS No. 133, "Accounting for Derivative Instruments
and Hedging Activities," effective Jan. 1, 2001. This adoption did not have
a material effect on NS' consolidated financial statements.

PAGE 47

Item 7.   Management's Discussion and Analysis of Financial
------    -------------------------------------------------
Condition and Results of Operations. (continued)
-----------------------------------

Lawsuits
--------
Norfolk Southern and certain subsidiaries are defendants in numerous
lawsuits relating principally to railroad operations. While the final
outcome of these lawsuits cannot be predicted with certainty, it is the
opinion of Management, based on known facts and circumstances, that the
amount of NS' ultimate liability is unlikely to have a material adverse
effect on NS' financial position, results of operations or liquidity.
The Corporation has reached agreement on terms of a consent decree
that should bring to a conclusion a class action suit filed in federal
district court in Birmingham, Ala. The action had been brought on behalf of
African-Americans currently employed or working since Dec. 16, 1989, who
alleged that the Corporation had discriminated against them in promotion to
nonunion positions because of their race. The consent decree, which
received preliminary approval from the court on Dec. 22, 2000, provides for
a total payment of $28 million to the class of approximately 7,700 African-
Americans and their attorneys and commits the Corporation to establish good
faith goals for the promotion of class members to management-level
positions during the four-year term of the decree. In addition, the decree
commits the Corporation to make extensive improvements to its procedures
for identifying, training and selecting candidates for promotion to higher-
rated positions for all its employees.
The settlement funds have been paid into a trust account in the South
Trust Bank in Birmingham. Final approval of the consent decree and
distribution of the settlement proceeds to qualified members of the class
are subject to a fairness hearing scheduled for March 2, 2001.
While it is possible that the district court will decline to give
final approval to the settlement, or that the settlement will be overturned
on appeal, Management believes that the consent decree is a fair resolution
of this controversy and that disapproval by the courts is unlikely.
On Sept. 8, 1997, a state court jury in New Orleans returned a verdict
awarding $175 million in punitive damages against The Alabama Great
Southern Railroad Company (AGS), a subsidiary of NSR. The verdict was
returned in a class action suit which ultimately involved some 10,000
individuals who claimed injury or damage as the result of an explosion and
fire that occurred in New Orleans on Sept. 9, 1987, when a chemical called
butadiene leaked from a tankcar.
The jury verdict awarded a total of nearly $3.2 billion in punitive
damages against four other defendants in the same case:  two rail carriers,
the owner of the car and the shipper. Previously, the jury had awarded
nearly $2 million in compensatory damages to 20 of the individual
plaintiffs. Prior to the trial court's ruling on the post trial motions,
AGS and four other defendants agreed to settle their liability in this case
for a total payment of approximately $150 million, of which AGS' share was
$15 million. The settlement has been given final approval by the trial
court, the time for appeals has expired, and the case has been concluded
insofar as AGS is concerned.

Environmental Matters
---------------------
NS is subject to various jurisdictions' environmental laws and
regulations.  It is NS' policy to record a liability where such liability
or loss is probable and its amount can be estimated reasonably. Claims, if
any, against third parties for recovery of cleanup costs incurred by NS are
reflected as receivables (when collection is probable) in the balance sheet
and are not netted against the associated NS liability. Environmental
engineers regularly participate in ongoing evaluations of all identified
sites and in determining any necessary adjustments to initial liability
estimates. NS also has established an Environmental Policy Council,
composed of senior managers, to oversee and interpret its environmental
policy.

PAGE 48

Item 7.   Management's Discussion and Analysis of Financial
------    -------------------------------------------------
Condition and Results of Operations. (continued)
-----------------------------------

Operating expenses for environmental matters totaled approximately $11
million in 2000, $12 million in 1999 and $4 million in 1998, and capital
expenditures totaled approximately $10 million in 2000, $8 million in 1999
and $7 million in 1998. The lower operating expenses in 1998 principally
were due to higher recoveries from third parties of amounts paid by NS in
prior years for environmental cleanup and remediation.  Capital
expenditures in 2001 are expected to be comparable to those of 2000.
As of Dec. 31, 2000, NS' balance sheet included a reserve for
environmental exposures in the amount of $36 million (of which $8 million
is accounted for as a current liability), which is NS' estimate of the
probable cleanup and remediation costs based on available information at
125 identified locations. On that date, 10 sites accounted for $18 million
of the reserve, and no individual site was considered to be material. NS
anticipates that much of this liability will be paid out over five years;
however, some costs will be paid out over a longer period.
At some of the 125 locations, certain NS subsidiaries, usually in
conjunction with a number of other parties, have been identified as
potentially responsible parties by the Environmental Protection Agency
(EPA) or similar state authorities under the Comprehensive Environmental
Response, Compensation and Liability Act of 1980, or comparable state
statutes, which often impose joint and several liability for cleanup costs.
With respect to known environmental sites (whether identified by NS or
by the EPA or comparable state authorities), estimates of NS' ultimate
potential financial exposure for a given site or in the aggregate for all
such sites are necessarily imprecise because of the widely varying costs of
currently available cleanup techniques, the likely development of new
cleanup technologies, the difficulty of determining in advance the nature
and full extent of contamination and each potential participant's share of
any estimated loss (and that participant's ability to bear it), and
evolving statutory and regulatory standards governing liability.
The risk of incurring environmental liability - for acts and
omissions, past, present and future - is inherent in the railroad business.
Some of the commodities in NS' traffic mix, particularly those classified
as hazardous materials, can pose special risks that NS and its subsidiaries
work diligently to minimize. In addition, several NS subsidiaries own, or
have owned, land used as operating property, or which is leased or may have
been leased and operated by others, or held for sale.
Because environmental problems that are latent or undisclosed may
exist on these properties, there can be no assurance that NS will not incur
environmentally related liabilities or costs with respect to one or more of
them, the amount and materiality of which cannot be estimated reliably at
this time. Moreover, lawsuits and claims involving these and other now-
unidentified environmental sites and matters are likely to arise from time
to time.  The resulting liabilities could have a significant effect on
financial condition, results of operations or liquidity in a particular
year or quarter.
However, based on its assessments of the facts and circumstances now
known, Management believes that it has recorded the probable costs for
dealing with those environmental matters of which the Corporation is aware.
Further, Management believes that it is unlikely that any identified
matters, either individually or in the aggregate, will have a material
adverse effect on NS' financial position, results of operations or
liquidity.

Labor Agreements
----------------
Approximately 85% of NS' railroad employees are covered by collective
bargaining agreements with 15 different labor unions. These agreements
remain in effect until changed pursuant to the Railway Labor Act.
Moratorium provisions in these agreements permitted NS and the unions to
propose such changes in late 1999; negotiations at the national level
commenced shortly thereafter.  The outcome of these negotiations is
uncertain at this time. However, an agreement was reached with the
Brotherhood of Locomotive Engineers,

PAGE 49

Item 7.   Management's Discussion and Analysis of Financial
------    -------------------------------------------------
Condition and Results of Operations. (continued)
-----------------------------------

which represents about 5,000 locomotive engineers on NS, and a tentative
national agreement (subject to ratification) has been reached with the
United Transportation Union, which represents about 7,500 train service
employees on NS.

Inflation
---------
Generally accepted accounting principals require the use of historical
cost in preparing financial statements.  This approach disregards the
effects of inflation on the replacement cost of property.  NS, a capital-
intensive company, has most of its capital invested in such assets.  The
replacement cost of these assets, as well as the related depreciation
expense, would be substantially greater than the amounts reported on the
basis of historical cost.

Trends
------
-    Federal Economic Regulation -- Efforts may be made in 2001 to re-
subject the rail industry to unwarranted federal economic regulation.  The
Staggers Rail Act of 1980, which substantially reduced such regulation,
encouraged and enabled rail carriers to innovate and to compete for
business, thereby contributing to the economic health of the nation and to
the revitalization of the industry.  Accordingly, NS and other rail
carriers vigorously will oppose these counterproductive efforts to reimpose
or to authorize reimposing such economic regulation.

-    Utility Deregulation -- Deregulation of the electrical utility
industry is expected to increase competition among electric power
generators; deregulation over time would permit wholesalers and possibly
retailers of electric power to sell or purchase increasing quantities of
power to or from far-distant parties.  The effects of deregulation on NS
and on its customers cannot be predicted with certainty; however, NS serves
a number of efficient power producers and is working diligently to assure
that its customers remain competitive in this evolving environment.

-    Carbon-Based Fuel -- There is growing concern that emissions resulting
from burning carbon-based fuel, including coal, are contributing to global
warming and causing other environmental changes. To the extent that these
concerns evolve into a firm consensus, the impact could be either a
reduction in the demand for coal or imposition of even more stringent
regulations on emissions, which might result in making coal a less
economical source of power generation or make permitting of coal-fired
facilities even more difficult. The revenues and net income of NSR and
other railroads that move large quantities of coal could be affected
adversely.

Forward-Looking Statements
--------------------------
This Management's Discussion and Analysis of Financial Condition and
Results of Operations and other sections of this Annual Report contain
forward-looking statements that are based on current expectations,
estimates and projections.  Such forward-looking statements reflect
Management's good-faith evaluation of information currently available.
However, because such statements are based upon and, therefore, can be
influenced by, a number of external variables over which Management has no,
or incomplete, control, they are not, and should not be read as being,
guarantees of future performance or of actual future results; nor will they
necessarily prove to be accurate indications of the times at or by which
any such performance or result will be achieved.  Accordingly, actual
outcomes and results may differ materially from those expressed in such
forward-looking statements.  This caveat has particular importance in the
context of all such statements that relate to the addition of new business
and the ability to reduce expenses.

PAGE 50

Item 7A.  Quantitative and Qualitative Disclosures about Market Risk.
-------   ----------------------------------------------------------

The information required by this item is included in Part II,
Item 7, "Management's Discussion and Analysis of Financial Condition
and Results of Operations" on Page 46 under the heading "Market Risks
and Hedging Activities."

PAGE 51

Item 8.   Financial Statements and Supplementary Data.
------    -------------------------------------------

NORFOLK SOUTHERN CORPORATION AND SUBSIDIARIES
QUARTERLY FINANCIAL DATA
(Unaudited)

Three Months Ended
-----------------------------------------------
March 31     June 30      Sept. 30      Dec. 31
--------     -------      --------      -------
(In millions of dollars, except per share amounts)

2000
----
Railway operating revenues           $1,508       $1,592       $1,535        $1,524
Income from railway operations           28          278          211           116
Net income (loss)                       (48)         116           99             5
Earnings (loss) per share - Basic    $(0.12)      $ 0.30       $ 0.26        $ 0.01
- Diluted  $(0.12)      $ 0.30       $ 0.26        $ 0.01

1999
----
Railway operating revenues           $1,038       $1,202       $1,514        $1,488
Income from railway operations          237          198          146           137
Net income                              112           77           19            31
Earnings (loss) per share - Basic    $ 0.30       $ 0.20       $ 0.05        $ 0.08
- Diluted  $ 0.30       $ 0.20       $ 0.05        $ 0.08

PAGE 52

Item 8.   Financial Statements and Supplementary Data. (continued)
------    -------------------------------------------

Index to Financial Statements:                   Page
-----------------------------                    ----

Consolidated Statements of Income
Years ended December 31, 2000, 1999, and 1998          53

Consolidated Balance Sheets
As of December 31, 2000 and 1999                       54

Consolidated Statements of Cash Flows
Years ended December 31, 2000, 1999, and 1998          55

Consolidated Statements of Changes in
Stockholders' Equity
Years ended December 31, 2000, 1999, and 1998          57

Notes to Consolidated Financial Statements              58

Independent Auditors' Report                            80

The Index to Consolidated Financial Statement Schedule appears in
Item 14 on Page 83.

PAGE 53

Item 8.   Financial Statements and Supplementary Data. (continued)
------    -------------------------------------------

NORFOLK SOUTHERN CORPORATION AND SUBSIDIARIES
Consolidated Statements of Income

Years ended December 31,
2000      1999      1998
----      ----      ----
($ in millions, except earnings per share)

RAILWAY OPERATING REVENUES                    $ 6,159   $ 5,242   $ 4,254

RAILWAY OPERATING EXPENSES
Compensation and benefits (Note 11)            2,234     1,855     1,492
Materials, services and rents                  1,445     1,274       839
Conrail rents and services (Note 2)              478       311        --
Depreciation                                     503       475       437
Diesel fuel                                      478       255       174
Casualties and other claims                      142       138        95
Other                                            246       216       165
-------   -------   -------
Total railway operating expenses           5,526     4,524     3,202
-------   -------   -------

Income from railway operations               633       718     1,052

Equity in earnings of Conrail (Note 2)             --        49       194
Other income - net (Note 3)                       168       115       115
Interest expense on debt (Note 6)                (551)     (531)     (516)
-------   -------   -------
Income from continuing
operations before income taxes              250       351       845

Provision for income taxes (Note 4)                78       112       215
-------   -------   -------
Income from continuing operations            172       239       630

Discontinued operations (Note 16):
Loss from motor carrier
operations, net of taxes                         --        --       (1)
Gain on sale of motor carrier,
net of taxes                                     --        --       105
-------   -------   -------
Income from discontinued operations           --        --       104
-------   -------   -------
NET INCOME                               $   172   $   239   $   734
=======   =======   =======

EARNINGS PER SHARE (Note 14)
Income from continuing operations - Basic    $  0.45   $  0.63   $  1.66
- Diluted  $  0.45   $  0.63   $  1.65

Net income - Basic                           $  0.45   $  0.63   $  1.94
- Diluted                         $  0.45   $  0.63   $  1.93

See accompanying Notes to Consolidated Financial Statements.

PAGE 54

Item 8.   Financial Statements and Supplementary Data. (continued)
------    -------------------------------------------

NORFOLK SOUTHERN CORPORATION AND SUBSIDIARIES
Consolidated Balance Sheets

As of December 31,
2000      1999
----      ----
($ in millions)

ASSETS
Current assets:
Cash and cash equivalents                         $   --  $    37
Short-term investments                                 2       14
Accounts receivable, net (Note 5)                    411      857
Due from Conrail (Note 2)                             31       77
Materials and supplies                                91      100
Deferred income taxes (Note 4)                       182      134
Other current assets                                 132      152
-------  -------
Total current assets                             849    1,371

Investment in Conrail (Note 2)                      6,154    6,132
Properties less accumulated depreciation (Note 6)  11,105   10,956
Other assets                                          868      791
-------  -------
TOTAL ASSETS                                 $18,976  $19,250
=======  =======
LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
Accounts payable (Note 7)                         $  925  $   818
Income and other taxes                               251      163
Notes and accounts payable to Conrail (Note 2)       155      184

Other current liabilities (Note 7)                   259      256
Current maturities of long-term debt (Note 8)        297      503
-------  -------
Total current liabilities                      1,887    1,924

Long-term debt (Note 8)                             7,339    7,556
Other liabilities (Note 10)                         1,131    1,101
Minority interests                                     50       50
Deferred income taxes (Note 4)                      2,745    2,687
-------  -------
TOTAL LIABILITIES                             13,152   13,318
-------  -------

Stockholders' equity:
Common stock $1.00 per share par value,
1,350,000,000 shares authorized; issued
405,421,447 and 404,309,672 shares, respectively    405      404
Additional paid-in capital                           392      372
Accumulated other comprehensive income (Note 13)      (6)     (11)
Retained income                                    5,053    5,187
Less treasury stock at cost, 21,363,974 and
21,627,902 shares, respectively                     (20)     (20)
-------  -------
TOTAL STOCKHOLDERS' EQUITY                     5,824    5,932
-------  -------
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY   $18,976  $19,250
=======  =======

See accompanying Notes to Consolidated Financial Statements.

PAGE 55

Item 8.   Financial Statements and Supplementary Data. (continued)
------    -------------------------------------------

NORFOLK SOUTHERN CORPORATION AND SUBSIDIARIES
Consolidated Statements of Cash Flows

Years ended December 31,
2000      1999      1998
----      ----      ----
($ in millions)

CASH FLOWS FROM OPERATING ACTIVITIES
Net income                                      $   172   $   239   $   734
Reconciliation of net income to
net cash provided by continuing operations:
Depreciation                                      517       489       450
Deferred income taxes                               2        85       114
Equity in earnings of Conrail                     (21)      (17)     (194)
Gains and losses on properties and investments   (160)      (62)      (51)
Income from discontinued operations                --        --      (104)
Changes in assets and liabilities
affecting continuing operations:
Accounts receivable (Note 5)                   446      (322)       33
Materials and supplies                           9       (40)       (1)
Other current assets and due from Conrail       60       (50)      (16)
Current liabilities other than debt            220       259       (23)
Other - net (Note 11)                           97       (48)      (50)
-------   -------   -------
Net cash provided by continuing operations  1,342       533       892
Net cash used for discontinued operations      --        --        (2)
-------   -------   -------
Net cash provided by operating activities   1,342       533       890

CASH FLOWS FROM INVESTING ACTIVITIES
Property additions                                 (731)     (912)     (956)
Property sales and other transactions               137       104        83
Investments, including short-term                   (77)     (126)     (156)
Investment sales and other transactions              90       343       155
Proceeds from sale of motor carrier                  --        --       207
-------   -------   -------
Net cash used for investing activities       (581)     (591)     (667)

CASH FLOWS FROM FINANCING ACTIVITIES
Dividends                                          (306)     (304)     (303)
Common stock issued - net                             2        14        34
Proceeds from borrowings                          1,055     1,110       196
Debt repayments                                  (1,549)     (730)     (179)
-------   -------   -------
Net cash provided by (used for)
financing activities                        (798)       90      (252)

Net increase (decrease) in cash
and cash equivalents                         (37)       32       (29)

CASH AND CASH EQUIVALENTS
At beginning of year                                 37         5        34
-------   -------   -------
At end of year                                    $  --    $   37     $   5
=======   =======   =======

(continued)

PAGE 56

Item 8.   Financial Statements and Supplementary Data. (continued)
------    -------------------------------------------

NORFOLK SOUTHERN CORPORATION AND SUBSIDIARIES
Consolidated Statements of Cash Flows (continued)

Years ended December 31,
2000      1999      1998
----      ----      ----
($ in millions)

SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
Cash paid during the year for:
Interest (net of amounts capitalized)            $   543   $   520   $   519
Income taxes                                     $     5   $    16   $    76

See accompanying Notes to Consolidated Financial Statements.

PAGE 57

Item 8.   Financial Statements and Supplementary Data. (continued)
------    -------------------------------------------

NORFOLK SOUTHERN CORPORATION AND SUBSIDIARIES
Consolidated Statements of Changes in Stockholders' Equity

Accumu-
lated
Addi-    Other
tional   Compre-
Common  Paid-In  hensive Retained Treasury
Stock   Capital  Income   Income   Stock   Total
------- -------  ------- -------- -------- -------
($ in millions, except per share amounts)

BALANCE DECEMBER 31, 1997      $  399  $   241  $    5   $ 4,821 $   (21)  $ 5,445
Comprehensive income - 1998
Net income                                                 734               734
Other comprehensive
income (Note 13)                                (13)                        (13)
-------
Total comprehensive
income                                                                   721
Dividends on Common Stock,
$0.80 per share                                           (303)             (303)
Other                               2       55                          1       58
------   ------  ------    ------   ------   ------

BALANCE DECEMBER 31, 1998         401      296      (8)    5,252      (20)   5,921
Comprehensive income - 1999
Net income                                                 239               239
Other comprehensive
income (Note 13)                                 (3)                         (3)
------
Total comprehensive
income                                                                   236
Dividends on Common Stock,
$0.80 per share                                           (304)             (304)
Other                               3       76                                  79
------   ------   ------   ------   ------   ------

BALANCE DECEMBER 31, 1999         404      372     (11)    5,187      (20)   5,932
Comprehensive income - 2000
Net income                                                 172               172
Other comprehensive
income (Note 13)                                  5                           5
------
Total comprehensive
income                                                                   177
Dividends on Common Stock,
$0.80 per share                                           (306)             (306)
Other                               1       20                                  21
------   ------   ------   ------   ------   ------

BALANCE DECEMBER 31, 2000     $   405  $   392  $    (6)  $5,053   $  (20)  $5,824
======   ======   ======   ======   ======   ======

See accompanying Notes to Consolidated Financial Statements.

PAGE 58

Item 8.   Financial Statements and Supplementary Data. (continued)
------    -------------------------------------------

NORFOLK SOUTHERN CORPORATION AND SUBSIDIARIES
Notes to Consolidated Financial Statements

The following Notes are an integral part of the Consolidated Financial
Statements.

1.   SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Description of Business
-----------------------
Norfolk Southern Corporation is a Virginia-based holding company
engaged principally in the transportation of freight by rail, operating
approximately 21,800 route miles primarily in the East and Midwest. These
financial statements include Norfolk Southern Corporation (Norfolk
Southern) and its majority-owned and controlled subsidiaries (collectively
NS) on a consolidated basis. Norfolk Southern's major subsidiary is Norfolk
Southern Railway Company (NSR). Financial results of a former motor carrier
subsidiary, North American Van Lines, Inc. (NAVL), are reflected as
"Discontinued Operations" (see Note 16). All significant intercompany
balances and transactions have been eliminated in consolidation.
The railroad transports raw materials, intermediate products and
finished goods classified in the following market groups (percent of total
railway operating revenues): coal (23%); automotive (15%); chemicals (13%);
metals/construction (11%); paper/clay/forest products (10%);
agriculture/consumer products/government (10%); and intermodal (18%).
Ultimate points of origination or destination for some of the freight
(particularly coal bound for export and intermodal containers) are outside
the United States. Approximately 85% of NS' railroad employees are covered
by collective bargaining agreements with 15 different labor unions.
Through a jointly owned entity, Norfolk Southern and CSX Corporation
own the stock of Conrail Inc., which owns the major Northeast freight
railroad. Norfolk Southern has a 58% economic and 50% voting interest in
the jointly owned entity (see Note 2).

Use of Estimates
----------------
The preparation of financial statements in conformity with generally
accepted accounting principles requires Management 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. Actual results could differ from those
estimates.

Cash Equivalents
----------------
"Cash equivalents" are highly liquid investments purchased three
months or less from maturity.

Investments
-----------
Marketable equity and debt securities are reported at amortized cost
or fair value, depending upon their classification as securities "held-to-
maturity," "trading" or "available-for-sale." On Dec. 31, 2000 and 1999,
all "Short-term investments," consisting primarily of United States
government and federal agency securities, were designated as "available-for-
sale." Accordingly, unrealized gains and losses, net of taxes, are
recognized in "Accumulated other comprehensive income."
Investments where NS has the ability to exercise significant influence
over, but does not control, the entity are accounted for using the equity
method in accordance with APB Opinion No. 18, "The Equity Method of
Accounting for Investments in Common Stock."

PAGE 59

Item 8.   Financial Statements and Supplementary Data. (continued)
------    -------------------------------------------

Materials and Supplies
----------------------
"Materials and supplies," consisting mainly of fuel oil and items for
maintenance of property and equipment, are stated at the lower of average
cost or market. The cost of materials and supplies expected to be used in
capital additions or improvements is included in "Properties."

Properties
----------
"Properties" are stated principally at cost and are depreciated using
group depreciation. Rail is depreciated primarily on the basis of use
measured by gross ton-miles. Other properties are depreciated generally
using the straight-line method over the lesser of estimated service or
lease lives. NS capitalizes interest on major capital projects during the
period of their construction. Additions to properties, including those
under lease, are capitalized. Maintenance expense is recognized when
repairs are performed. When properties other than land and nonrail 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 rather than recognized through income. Gains and losses on
disposal of land and nonrail assets are included in "Other income - net"
(see Note 3).
NS reviews 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 or estimated net
realizable value. Assets that are deemed impaired as a result of such
review are recorded at the lower of carrying amount or fair value.

Revenue Recognition
-------------------
Revenue is recognized proportionally as a shipment moves from origin
to destination. Refunds due in accordance with transportation contracts are
recorded as a reduction to revenues during the life of the contract, based
on Management's best estimate of projected liability.

Derivatives
-----------
NS does not engage in the trading of derivatives. NS has entered into
a limited number of derivative agreements to hedge interest rate exposures
on certain components of its debt portfolio. All of these derivative
instruments are designated as hedges, have high correlation with the
underlying exposure and are highly effective in offsetting underlying price
movements. Accordingly, payments made or received under interest rate swap
agreements are recorded in the income statement with the corresponding
interest expense. Payments made to hedge interest rate exposure related to
the anticipated issuance of debt were deferred as a reduction of the debt
proceeds and are being amortized to interest expense over the life of the
underlying debt.

Required Accounting Changes
---------------------------
Effective Oct. 1, 2000, NS adopted the consensus reached by the
Emerging Issues Task Force of the Financial Accounting Standards Board
(FASB) concerning Issue No. 99-19, "Reporting Revenue Gross as a Principal
versus Net as an Agent." The consensus presents indicators to consider in
establishing the accounting for revenue. As a result of the application of
the consensus, NS has reclassified to railway operating expenses certain
charges that previously have been reported net with railway operating
revenues. This change in reporting has no effect on income from railway
operations. Prior period amounts have been reclassified to conform to the
current presentation.

PAGE 60

Item 8.   Financial Statements and Supplementary Data. (continued)
------    -------------------------------------------

Effective with this Annual Report, NS has adopted the disclosure
provisions of the FASB's Statement of Financial Accounting Standards (SFAS)
No. 140, "Accounting for Transfers and Servicing of Financial Assets and
Extinguishment of Liabilities," which replaced SFAS No. 125 of the same
name. SFAS No. 140 revises the standards for accounting for securitizations
and other transfers of financial assets and requires certain disclosures,
but carries over most of the provisions of SFAS No. 125.

Reclassifications
-----------------
Certain amounts in the financial statements and notes thereto have
been reclassified to conform to the 2000 presentation.

2.   INVESTMENT IN CONRAIL AND OPERATIONS OVER ITS LINES

Overview
--------
NS and CSX Corporation (CSX) jointly own Conrail Inc. (Conrail), whose
primary subsidiary is Consolidated Rail Corporation (CRC), the major
freight railroad in the Northeast. From May 23, 1997, the date NS and CSX
completed their acquisition of Conrail stock, until June 1, 1999, Conrail's
operations continued substantially unchanged while NS and CSX awaited
regulatory approvals and prepared for the integration of the respective
Conrail routes and assets to be leased to their railroad subsidiaries, NSR
and CSX Transportation, Inc. (CSXT).  From time to time, NS and CSX, as the
indirect owners of Conrail, may need to make capital contributions, loans
or advances to Conrail.

Commencement of Operations
--------------------------
On June 1, 1999 (the "Closing Date"), NSR and CSXT began operating as
parts of their respective rail systems the separate Conrail routes and
assets leased to them pursuant to operating and lease agreements.
The Operating Agreement between NSR and Pennsylvania Lines LLC (PRR),
a wholly owned subsidiary of CRC, governs substantially all nonequipment
assets to be operated by NSR and has an initial 25-year term, renewable at
the option of NSR for two five-year terms. Payments under the Operating
Agreement are subject to adjustment every six years to reflect changes in
values. NSR also has leased or subleased for varying terms from PRR a
number of equipment assets. Costs necessary to operate and maintain the PRR
assets, including leasehold improvements, are borne by NSR. CSXT has
entered into comparable arrangements, for the operation and use of certain
other CRC routes and assets, with another wholly owned CRC subsidiary.
NSR and CSXT also have entered into agreements with CRC governing
other Conrail properties that continue to be owned and operated by Conrail
(the "Shared Assets Areas"). NSR and CSXT pay CRC a fee for joint and
exclusive access to the Shared Assets Areas. In addition, NSR and CSXT pay,
based on usage, the costs incurred by CRC to operate the Shared Assets
Areas.
Future minimum lease payments due to PRR under the Operating Agreement
and lease agreements and to CRC under the Shared Assets Areas (SAA)
agreements are as follows:

PAGE 61

Item 8.   Financial Statements and Supplementary Data. (continued)
------    -------------------------------------------

PRR Oper.   PRR Lease     SAA
($ in millions)                   Agmt.       Agmts.     Agmts.
--------------                  ---------   ---------   --------

2001                           $    178    $    126    $    24
2002                                196         119         27
2003                                217         105         30
2004                                238          89         32
2005                                246          71         34
2006 and subsequent years         4,776         229        652
---------   ---------   --------
Total                         $  5,851    $    739    $   799
=========   =========   ========

Operating lease expense related to the agreements, which is included
in "Conrail rents and services," amounted to $502 million in 2000 and $273
million in 1999.
On the Closing Date, both NS' railroad route miles and its railroad
employees increased approximately 50 percent. NSR and CSXT now provide
substantially all rail freight services on Conrail's route system, perform
or are responsible for performing most services incident to customer
freight contracts and employ the majority of Conrail's former work force.
As a result, NSR began to receive all freight revenues and incur all
expenses on the PRR lines.

Investment in Conrail
---------------------
NS is applying the equity method of accounting to its investment in
Conrail in accordance with APB Opinion No. 18, "The Equity Method of
Accounting for Investments in Common Stock."
NS is amortizing the excess of the purchase price over Conrail's net
equity using the principles of purchase accounting, based primarily on the
estimated remaining useful lives of Conrail's property and equipment,
including the related deferred tax effect of the differences in tax and
accounting bases for certain assets. At Dec. 31, 2000, the difference
between NS' investment in Conrail and its share of Conrail's underlying net
equity was $3.8 billion.
NS' consolidated balance sheet at Dec. 31, 2000, includes $116 million
of liabilities related to the Conrail transaction, principally for
contractual obligations to Conrail employees imposed by the STB when it
approved the transaction. Through Dec. 31, 2000, NS had paid $71 million of
these costs.
Effective June 1, 1999, NS' consolidated financial statements include
the consolidated financial position and results of Triple Crown Services
Company (TCS), a partnership in which subsidiaries of NS and PRR are
partners.

Related-Party Transactions
--------------------------
Until the Closing Date, NSR and CRC had transactions with each other
in the customary course of handling interline traffic. As of Dec. 31, 2000,
substantially all of the amounts receivable or payable related to these
transactions had been satisfied.
NS provides certain general and administrative support functions to
Conrail, the fees for which are billed in accordance with several service-
provider arrangements.
"Conrail rents and services," a new line on the income statements
beginning June 1, 1999, includes: (1) expenses for amounts due to PRR and CRC
for use by NSR of operating properties and equipment, operation of the Shared
Assets Areas and continued operation of certain facilities during a
transition period; and (2) NS' equity in the earnings (or loss) of Conrail,
net of amortization.

PAGE 62

Item 8.   Financial Statements and Supplementary Data. (continued)
------    -------------------------------------------

"Notes and accounts payable to Conrail" includes $51 million at Dec.
31, 2000, and $123 million at Dec. 31, 1999, of interest-bearing loans made
to NS by a PRR subsidiary that are payable on demand. The interest rate for
these loans is variable and was 5.9% at Dec. 31, 2000. Also included is
$104 million at Dec. 31, 2000, and $61 million at Dec. 31, 1999, due to PRR
and CRC related to expenses included in "Conrail rents and services," as
discussed above.

Summary Financial Information - Conrail
----------------------------------------
The following summary financial information should be read in
conjunction with Conrail's audited financial statements, included as 
Exhibit 99 with this Annual Report on Form 10-K.
Through May 31, 1999, Conrail's results of operations include freight
line-haul revenues and related expenses. After the Closing Date, June 1,
1999, its results reflect its new structure and operations. Currently,
Conrail's major sources of operating revenues are from NSR and CSXT. The
composition of Conrail's operating expenses also has changed.

Summarized Consolidated Statements of Income - Conrail
-------------------------------------------------------

($ in millions)                2000      1999      1998
---------------                ----      ----      ----

Operating revenues            $ 985     $ 2,174   $ 3,863
Operating expenses              749       2,046     3,348
-----      -------   -------
Operating income             236         128       515
Other - net                      31         (83)      (81)
-----      -------   -------
Income before
income taxes               267          45       434
Provision for income taxes       97          19       167
-----      -------   -------
Net income                 $ 170      $   26   $   267
=====      =======   =======

Note: Conrail's results for 2000 included gains from the sale of
property that had been written up to fair market value in the allocation of NS'
investment in Conrail.
Accordingly, the gains related to that fair-value write-up, totaling
$17 million after taxes, were excluded in determining NS' equity in Conrail's
net income.
Conrail's results in 1999 included after-tax expenses of $121 million,
principally:  (1) to increase certain components of its casualty reserves based
on an actuarial valuation, (2) to adjust certain litigation and environmental 
reserves related to settlements and completion of site reviews and (3) to adjust
a credit related to the assumption of a lease obligation by CSX. Conrail's 
results in 1998 included a $187 million after-tax charge, primarily for 
estimated severance obligations to nonunion employees. These 1999 and 1998 
items were considered in the allocation of NS' investment in Conrail to the 
fair values of Conrail's assets and liabilities and, accordingly, were
excluded in determining NS' equity in Conrail's net income.

PAGE 63

Item 8.   Financial Statements and Supplementary Data. (continued)
------    -------------------------------------------

Summarized Consolidated Balance Sheets - Conrail
-------------------------------------------------

December 31,
($ in millions)                                2000      1999
---------------                                ----      ----

Assets:
Current assets                            $    520  $    669
Noncurrent assets                            7,540     7,714
--------- ---------
Total assets                            $  8,060  $  8,383
========= =========

Liabilities and
stockholders' equity:
Current liabilities                       $    435  $    863
Noncurrent liabilities                       3,643     3,701
Stockholders' equity                         3,982     3,819
--------- ---------
Total liabilities and
stockholders' equity                   $  8,060  $  8,383
========= =========

3.   OTHER INCOME - NET

($ in millions)                                2000      1999     1998
---------------                                ----      ----     ----

Income from natural resources:
Gains from sale of timber, oil
and gas rights and interests               $    101  $    -    $   -
Royalties from coal                               55      59       57
Nonoperating depletion
and depreciation                                (13)    (14)     (13)
--------- -------   -------
Subtotal                                      143      45       44
Gains from sale of properties
and investments                                     59      62       51
Rental income                                        40      34       26
Interest income                                      11       8       12
Other interest expense                              (39)    (30)     (21)
Sale of accounts receivable
(Note 5)                                           (23)      -        -
Taxes on nonoperating property                       (9)     (7)      (4)
Corporate-owned
life insurance - net                                 -      (3)      11
Other - net                                         (14)      6       (4)
---------- -------- -------
Total                                    $    168   $ 115    $ 115
========== ======== =======

"Other current assets" in the Consolidated Balance Sheets includes
prepaid interest on corporate-owned life insurance borrowings of $43
million at Dec. 31, 2000, and $37 million at Dec. 31, 1999.

PAGE 64

Item 8.   Financial Statements and Supplementary Data. (continued)
------    -------------------------------------------

4.   INCOME TAXES

Provision for Income Taxes
--------------------------

($ in millions)                                2000      1999    1998
---------------                                ----      ----    ----

Current:
Federal                                    $    65   $    18   $   89
State                                           11         9       12
-------   -------   ------
Total current taxes                           76        27      101

Deferred:
Federal                                          1        78      100
State                                            1         7       14
--------   -------   ------
Total deferred taxes                           2        85      114
--------   -------   ------
Provision for income taxes               $    78   $   112   $  215
========   =======   ======

Reconciliation of Statutory Rate to Effective Rate
--------------------------------------------------
Total income taxes as reflected in the Consolidated Statements of
Income differ from the amounts computed by applying the statutory federal
corporate tax rate as follows:

2000           1999           1998
($ in millions)               Amount    %    Amount    %    Amount   %
---------------               ------   --    ------   --    ------  --

Federal income tax
at statutory rate          $   87    35   $  123    35   $  296   35
State income taxes,
net of federal tax
benefit                         8     3       10     3       17    2
Equity in earnings
of Conrail                     (7)   (3)      (6)   (2)     (68)  (8)
Corporate-owned
life insurance                 (2)   (1)       1     -      (11)  (1)
Other - net                      (8)   (3)     (16)   (4)     (19)  (3)
------    --   ------    --   ------   --
Provision for
income taxes          $   78    31   $  112    32   $  215   25
======    ==   ======    ==   ======   ==

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.

PAGE 65

Item 8.   Financial Statements and Supplementary Data. (continued)
------    -------------------------------------------

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,
($ in millions)                                2000      1999
---------------                                ----      ----

Deferred tax assets:
Reserves, including casualty
and other claims                           $    158  $    168
Employee benefits                                104       111
Retiree health and death
benefit obligation                              139       127
Taxes, including state and property              200       174
Other                                             28        42
--------- ---------
Total gross deferred tax assets                629       622
Less valuation allowance                         (12)       (9)
--------- ---------
Net deferred tax assets                        617       613
--------- ---------
Deferred tax liabilities:
Property                                      (3,117)   (3,093)
Other                                            (63)      (73)
--------- ---------
Total gross deferred
tax liabilities                           (3,180)   (3,166)
--------- ---------
Net deferred tax liability                  (2,563)   (2,553)
Net current deferred tax assets                182       134
--------- ---------
Net long-term deferred
tax liability                          $  (2,745)$  (2,687)
========= =========

Except for amounts for which a valuation allowance has been provided,
Management believes the other deferred tax assets will be realized. The
total valuation allowance increased $3 million in 2000, $6 million in 1999
and $1 million in 1998.

Internal Revenue Service (IRS) Reviews
--------------------------------------
Consolidated federal income tax returns have been examined and Revenue
Agent Reports have been received for all years up to and including 1996.
The consolidated federal income tax returns for 1997, 1998 and 1999 are
being audited by the IRS. Management believes that adequate provision has
been made for any additional taxes and interest thereon that might arise as
a result of IRS examinations.

5.   ACCOUNTS RECEIVABLE

Beginning in May 2000, a bankruptcy-remote special purpose subsidiary
of NS sold without recourse undivided ownership interests in a pool of
accounts receivable totaling approximately $700 million. Upon commencement
of this program, NS received cash proceeds of $460 million. The buyers have
a priority collection interest in the entire pool of receivables, and as a
result, NS has retained credit risk to the extent the pool exceeds the
amount sold. NS services and collects the receivables on behalf of the
buyers; however, no servicing asset or liability has been recognized
because the benefits of servicing are estimated to be just adequate to
compensate NS for its responsibilities. Payments collected from sold
receivables are reinvested in new accounts receivable on behalf of the
buyers.

PAGE 66

Item 8.   Financial Statements and Supplementary Data. (continued)
------    -------------------------------------------

At Dec. 31, 2000, $388 million had been sold under this arrangement
and, therefore, is not included in "Accounts receivable, net," on the
consolidated balance sheet. The fees associated with the sale, which are
based on the buyers' financing costs, are included in "Other income - net"
(see Note 3). NS' retained interest, which is included in "Accounts
receivable, net," is recorded at fair value using estimates of dilution
based on NS' historical experience. These estimates are adjusted regularly
based on NS' actual experience with the pool, including defaults and credit
deterioration. NS has historically experienced very low levels of default,
and as a result, little dilution. If historical dilution percentages were
to increase one percentage point, the value of NS' retained interest would
be reduced by approximately $7 million.
NS' allowance for doubtful accounts was $7 million at Dec. 31, 2000,
and $5 million at Dec. 31, 1999.

6.   PROPERTIES

December 31,     Depreciation
($ in millions)                    2000         1999   Rate for 2000
---------------                    ----         ----   -------------

Railway property:
Road                       $    10,078    $    9,681    2.9%
Equipment                        5,588         5,577    4.1%
Other property                          653           627    3.3%
------------   -----------
16,319        15,885
Less: Accumulated
depreciation                        5,214         4,929
------------   -----------
Net properties        $    11,105    $   10,956
============   ===========

Equipment includes $592 million at Dec. 31, 2000, and $593 million at
Dec. 31, 1999, of assets recorded pursuant to capital leases. Other
property includes the costs of obtaining rights to natural resources of
$341 million at Dec. 31, 2000, and $349 million at Dec. 31, 1999.

Capitalized Interest
--------------------
Total interest cost incurred on debt in 2000, 1999 and 1998 was $569
million, $546 million and $537 million, respectively, of which $18 million,
$15 million and $21 million was capitalized.

PAGE 67

Item 8.   Financial Statements and Supplementary Data. (continued)
------    -------------------------------------------

7.   CURRENT LIABILITIES

December 31,
($ in millions)                                   2000      1999
---------------                                   ----      ----

Accounts payable:
Accounts and wages payable                    $    427  $    354
Casualty and other claims                          223       181
Equipment rents payable - net                      134       135
Vacation liability                                 117       124
Other                                               24        24
--------- ---------
Total                                      $    925  $    818
========= =========

Other current liabilities:
Interest payable                              $    131  $    123
Accrued Conrail-related costs 
(Note 2)                                          47        56
Liabilities for forwarded traffic                   40        37
Retiree health and death
benefit obligation (Note 11)                      24        24
Other                                               17        16
--------- ---------
Total                                      $    259  $    256
========= =========

8.   DEBT

Shelf Registration
------------------
NS has filed with the Securities and Exchange Commission a shelf
registration statement on Form S-3 covering the issuance of up to $1
billion of securities. As of Dec. 31, 2000, NS had not issued any 
securities under this shelf registration; however, NS expected to issue
debt in February 2001 and use the proceeds to reduce the amount of 
commercial paper outstanding.

PAGE 68

Item 8.   Financial Statements and Supplementary Data. (continued)
------    -------------------------------------------

Long-Term Debt
--------------

December 31,
($ in millions)                                   2000         1999
---------------                                   ----         ----

Commercial paper at an average
rate of 7.0%                               $    1,132     $   1,722
Notes at average rates and
maturities as follows:
6.93%, maturing 2001 to 2002                   700         1,100
7.52%, maturing 2004 to 2010                 2,200         1,600
8.10%, maturing 2017 to 2021                   800           800
7.80%, maturing 2027                           800           800
7.05%, maturing 2037                           750           750
7.90%, maturing 2097                           350           350
Equipment obligations at an
average rate of 6.7%,
maturing to 2014                                  473           548
Capitalized leases at an
average rate of 7.2%,
maturing to 2015                                  343           382
Other debt at an average rate
of 7.4%, maturing to 2019                         119            35
Discounts and premiums, net                         (31)          (28)
-----------     ---------
Total long-term debt                    7,636         8,059
Current maturities                       (297)         (503)
-----------     ---------
Long-term debt less
current maturities               $    7,339      $  7,556
===========     =========

Long-term debt matures as follows:
2002                                    $      593
2003                                            92
2004                                           335
2005                                           388
2006 and subsequent years                    5,931
-----------
Total                              $    7,339
===========

Each holder of a 2037 note may require NS to redeem all or part of the
note at face value, plus accrued and unpaid interest, on May 1, 2004.
The railroad equipment obligations and the capitalized leases are
secured by liens on the underlying equipment.

Commercial Paper
----------------
Commercial paper debt is due within one year, but has been classified
as long-term because NS has the ability through a $2.0 billion credit
agreement to convert this obligation into longer-term debt. The credit
agreement expires in 2002 and provides for interest on borrowings at
prevailing rates. NS intends to refinance the commercial paper either by
issuing additional commercial paper or by replacing commercial paper notes
with long-term debt.

PAGE 69

Item 8.   Financial Statements and Supplementary Data. (continued)
------    -------------------------------------------

Capital Lease Obligations
-------------------------
During 1998, NSR entered into capital leases covering new locomotives.
The related capital lease obligations, totaling $127 million, were
reflected in the Consolidated Balance Sheets as debt and, because they were
noncash transactions, were excluded from the Consolidated Statements of
Cash Flows.
These and certain other lease obligations require the maintenance of a
yen-denominated deposit, which is pledged to the lessor to satisfy yen-
denominated lease payments. They carry an average stated interest rate of
7.1%, but were effectively converted to variable rate obligations using
interest rate swap agreements. The interest rates on the swap obligations
are based on the six-month London Interbank Offered Rate and are reset
every six months with changes in interest rates accounted for as an
adjustment of interest expense over the terms of the leases. As of Dec. 31,
2000, the notional amount of the swap agreements was $253 million, and the
average interest rate was 7.2%. As a result, NS is exposed to the market
risk associated with fluctuations in interest rates. To date, the effects
of the rate fluctuations have been favorable and not material.
Counterparties to the interest rate swap agreements are major financial
institutions believed by Management to be creditworthy.

Debt Covenants
--------------
NS is subject to various financial covenants with respect to its debt
and under its credit agreement, including a minimum net worth requirement,
a maximum leverage ratio restriction and certain restrictions on issuance
of further debt. At Dec. 31, 2000, NS was in compliance with all debt
covenants.

9.   LEASE COMMITMENTS

NS is committed under long-term lease agreements, which expire on
various dates through 2067, for equipment, lines of road and other
property. The following amounts do not include payments to PRR under the
Operating Agreement and lease agreements or to CRC under the SAA agreements
(see Note 2). Future minimum lease payments and operating lease expense,
other than to PRR and CRC, are as follows:

Operating Capital
($ in millions)                         Leases    Leases
---------------                         --------- -------

2001                                    $    107  $    47
2002                                          94       46
2003                                          84       46
2004                                          69       46
2005                                          62       44
2006 and subsequent years                    512      190
--------- -------
Total                              $    928  $   419
=========

Less imputed interest
on capital leases at an
average rate of 7.1%                                 76
-------

Present value of minimum
lease payments included
in debt                                         $   343
=======

PAGE 70

Item 8.   Financial Statements and Supplementary Data. (continued)
------    -------------------------------------------

Operating Lease Expense
-----------------------

($ in millions)                                2000      1999     1998
---------------                                ----      ----     ----

Minimum rents                                 $    167  $    118  $    75
Contingent rents                                    61        61       40
--------- --------- --------
Total                                    $    228  $    179  $   115
========= ========= ========

During 2000, NS entered into an operating lease for 140 locomotives,
which is renewable annually, has a maximum term of eight years and includes
purchase options. If NS does not purchase the locomotives at the end of the
maximum lease term, it is liable for any shortfall in the then fair-value
of the locomotives and a specified residual value. NS does not expect to be
required to make any payments under this provision.

10.  OTHER LIABILITIES

December 31,
($ in millions)                                      2000        1999
---------------                                      ----        ----

Retiree health and death
benefit obligation (Note 11)                    $    291       $   261
Casualty and other claims                              262           275
Deferred compensation                                  148           142
Net pension obligations (Note 11)                       83            74
Accrued Conrail-related costs(Note 2)                   72           102
Other                                                  275           247
---------      --------
Total                                        $  1,131       $ 1,101
=========      =========

11.  PENSIONS AND OTHER POSTRETIREMENT BENEFITS

Norfolk Southern and certain subsidiaries have both funded and
unfunded defined benefit pension plans covering principally salaried
employees. Norfolk Southern and certain subsidiaries also provide specified
health care and death benefits to eligible retired employees and their
dependents. Under the present plans, which may be amended or terminated at
NS' option, a defined percentage of health care expenses is covered,
reduced by any deductibles, copayments, Medicare payments and, in some
cases, coverage provided under other group insurance policies.

Early Retirement Programs
-------------------------
During 2000, NS offered two voluntary early retirement programs to
its salaried employees. The principal incentives offered in these
programs were enhanced pension benefits, the cost for most of which
will be paid from NS' overfunded pension plan. A February program was
accepted by 919 of 1,180 eligible employees, and a December program was
accepted by 370 of 846 eligible employees. The total cost of these
programs, which is included in "Compensation and benefits," was $133
million. The resulting noncash reduction to NS' pension plan asset is
included in "Other - net" in the Consolidated Statement of Cash Flows.

PAGE 71

Item 8.   Financial Statements and Supplementary Data. (continued)
------    -------------------------------------------

Pension Benefits         Other Benefits
($ in millions)                    2000         1999        2000       1999
---------------                    ----         ----        ----       ----

CHANGE IN BENEFIT OBLIGATIONS
Benefit obligation at
beginning of year                $ 1,058      $ 1,063     $ 340      $ 362
Cost of early retirement
benefits                             119            -        14          -
Increase related to
former Conrail employees               -           68         -          -
Service cost                            18           17        15         11
Interest cost                           79           73        27         23
Amendment                               21            -         -          -
Actuarial (gains) losses               120          (92)       79        (33)
Benefits paid                         (103)         (71)      (30)       (23)
-------       ------     -----      -----
Benefit obligation
at end of year                  1,312        1,058       445        340
-------       ------     -----      -----
CHANGE IN PLAN ASSETS
Fair value of plan assets
at beginning of year               2,072        1,544       152        139
Transfer of assets from
Conrail plan                           -          352         -          -
Actual return on plan assets            30          250        (5)        21
Employer contribution                    8            4         9         15
401(h) account transfer                 (8)          (7)        -          -
Benefits paid                         (103)         (71)      (30)       (23)
-------       ------     -----      -----
Fair value of plan
assets at end of year           1,999        2,072       126        152
-------       ------     -----      -----
Funded status                    687        1,014      (319)      (188)

Unrecognized initial net asset          (3)         (10)        -          -
Unrecognized (gain) loss              (478)        (799)        4        (97)
Unrecognized prior
service cost (benefit)                 47           40         -          -
-------       -------    -----     ------
Net amount recognized        $    253       $  245     $(315)    $ (285)
=======       =======    =====     ======

Amounts recognized in the
Consolidated Balance
Sheets consist of:
Prepaid benefit cost          $    315       $  298     $   -    $     -
Accrued benefit liability          (83)         (74)     (315)      (285)
Accumulated other
comprehensive income               21           21         -          -
-------      -------     ------    -------
Net amount recognized        $    253       $  245     $(315)   $  (285)
=======      =======     ======    =======

PAGE 72

Item 8.   Financial Statements and Supplementary Data. (continued)
------    -------------------------------------------

Of the pension plans included above, the unfunded pension plans were
the only plans with an accumulated benefit obligation in excess of plan
assets. These plans' accumulated benefit obligations were $83 million at
Dec. 31, 2000, and $74 million at Dec. 31, 1999. These plans' projected
benefit obligations were $89 million at Dec. 31, 2000, and $76 million 
at Dec. 31, 1999. Because of the nature of such plans, there are no plan
assets.
NS received Section 401(h) account transfers, from pension assets, of
$8 million in 2000 and $7 million in 1999 as reimbursement for medical
payments for retirees.
As a result of the commencement of operations over Conrail's lines
(see Note 2), NS hired a substantial portion of Conrail's former work force. 
In August 1999, NS assumed certain pension obligations related to those
employees. These obligations, along with pension plan assets in excess of
the obligations, were transferred to the NS plans in 1999. This transfer
resulted in an increase to NS' pension plan asset and a corresponding
decrease in NS' investment in Conrail.
NS amended its qualified pension plan, effective Oct. 1, 2000, to
allow for the payment of qualifying disability benefits. The amendment
increased the pension benefit obligation by $21 million at Dec. 31, 2000.
Pension and other postretirement benefit costs are determined based on
actuarial valuations that reflect appropriate assumptions as of the
measurement date, ordinarily the beginning of each year. The funded status
of the plans is determined using appropriate assumptions as of each year
end. During 1999, NS received assets from the Conrail pension plan and
assumed certain related liabilities. As a result, the measurement dates for
determining pension costs were Jan. 1, 1999, and Aug. 31, 1999; the costs
reflect discount rates of 6.75% and 7.75%, respectively, and other
assumptions appropriate at those dates. A summary of the major 
assumptions follows:

2000      1999      1998
----      ----      ----

Funded status:
Discount rate                    7.5%      7.75%     6.75%
Future salary increases          5%        5%        5%
Pension cost:
Discount rate                    7.75%     6.75%     7.25%
Return on assets in plans        10%       10%       9%
Future salary increases          5%        5%        5.25%

PAGE 73

Item 8.   Financial Statements and Supplementary Data. (continued)
------    -------------------------------------------

Pension and Other Postretirement Benefit Costs Components
---------------------------------------------------------

($ in millions)                           2000      1999      1998
---------------                           ----      ----      ----

PENSION BENEFITS
Service cost                           $    18   $    17   $    13
Interest cost                               79        73        67
Cost of early retirement
programs                                 119         -         -
Expected return on
plan assets                             (192)     (152)     (106)
Amortization of prior
service cost                               4         4         1
Amortization of initial
net asset                                 (7)       (7)       (7)
Recognized net actuarial
(gain) loss                              (38)      (22)      (12)
--------  -------   -------
Net cost (benefit)                $   (17)  $   (87)  $   (44)
========  =======   =======

OTHER POSTRETIREMENT BENEFITS
Service cost                           $    15   $    11   $    10
Interest cost                               27        23        24
Cost of early retirement
programs                                  14         -         -
Expected return on plan
assets                                   (14)      (12)       (9)
Amortization of prior
service cost                               -       (12)      (12)
Recognized net actuarial
(gain) loss                               (4)       (2)       (2)
--------  -------   -------
Net cost                          $    38   $     8   $    11
========  =======   =======

For measurement purposes, increases in the per capita cost of covered
health care benefits were assumed to be 7.0% for 2001 and 7.5% for 2000. It
is assumed the rate will decrease gradually to an ultimate rate of 5.0% for
2003 and remain at that level thereafter.
Assumed health care cost trend rates have a significant effect on the
amounts reported in the financial statements. To illustrate, a one-
percentage-point change in the assumed health care cost trend would have
the following effects:

One percentage point
($ in millions)                              Increase  Decrease
--------------------                         --------  --------

Increase (decrease) in:
Total service and interest cost components  $ 5          $ (4)
Postretirement benefit obligation           $35          $(30)

PAGE 74

Item 8.   Financial Statements and Supplementary Data. (continued)
------    -------------------------------------------

Under collective bargaining agreements, NS and certain subsidiaries
participate in a multi-employer benefit plan, which provides certain
postretirement health care and life insurance benefits to eligible union
employees. Premiums under this plan are expensed as incurred and amounted
to $7 million in 2000 and $5 million in both 1999 and 1998.

401(k) Plans
------------
Norfolk Southern and certain subsidiaries provide 401(k) savings plans
for employees. Under the plans, NS matches a portion of employee
contributions, subject to applicable limitations. Since 1999, NS has issued
shares of Common Stock to fund its contributions. NS' expenses under these
plans were $12 million in both 2000 and 1999 and $10 million in 1998.
In November 1999, NS issued and contributed to eligible participants'
accounts approximately 2 million shares of Norfolk Southern Common Stock in
connection with a temporary special work incentive program available to its
unionized employees during much of the third quarter of 1999. The cost of
the program, which was charged to compensation and benefits expenses, was
$49 million.

12.  STOCK-BASED COMPENSATION

Under the stockholder-approved Long-Term Incentive Plan (LTIP), a
committee of nonemployee directors of the Board may grant stock options,
stock appreciation rights (SARs), restricted stock and performance share
units (PSUs), up to a maximum 53,025,000 shares of Norfolk Southern Common
Stock ("Common Stock"). Under the Board-approved Thoroughbred Stock Option
Plan (TSOP), the committee may grant stock options up to a maximum of
6,000,000 shares of Common Stock. Options may be granted for a term not to
exceed 10 years, but may not be exercised prior to the first anniversary of
the date of grant. Options are exercisable at the fair market value of
Common Stock on the date of grant.
The LTIP also permits the payment - on a current or a deferred basis
and in cash or in stock - of dividend equivalents on shares of Common Stock
covered by options or PSUs in an amount commensurate with dividends paid on
Common Stock. Tax absorption payments also are authorized in amounts
estimated to equal the federal and state income taxes applicable to shares
of Common Stock issued subject to a share retention agreement.

Accounting Method
-----------------
NS applies APB Opinion 25 and related interpretations in accounting
for awards made under the plans. Accordingly, grants of PSUs, restricted
stock, dividend equivalents, tax absorption payments and SARs result in
charges to net income, while grants of stock options have no effect on net
income. Related compensation costs were $5 million in 2000, $2 million in
1999 and $25 million in 1998. NS recognized additional paid-in capital of
$4 million in 1999 and $10 million in 1998 related to the tax benefit
generated by stock option exercises.
Had such compensation costs been determined in accordance with SFAS
123, net income would have been $149 million in 2000, $210 million in 1999
and $718 million in 1998; basic earnings per share would have been $0.39 in
2000, $0.55 in 1999 and $1.90 in 1998; and diluted earnings per share would
have been $0.39 in 2000, $0.55 in 1999 and $1.89 in 1998. These pro forma
amounts include compensation costs as calculated using the Black-Scholes
option-pricing model, with average expected option lives of five years for
2000 grants, four years for 1999 grants and five years for 1998 grants;
average risk-free interest rates of 6.8% in 2000, 5.2% in 1999 and 5.5% in
1998; average stock-price volatilities of 33% in 2000, 21% in 1999 and 15%
in 1998; and dividend yields ranging from 0% to 3%. These assumptions
produce per-share grant-date fair values of $5.22 in 2000, $5.12 in 1999
and $8.82 in 1998.

PAGE 75

Item 8.   Financial Statements and Supplementary Data. (continued)
------    -------------------------------------------

Stock Option Activity
---------------------

Weighted Average
Option Shares        Exercise Price
-------------       ----------------

Balance 12/31/97         11,373,418               $22.32
Granted                   3,625,000                32.16
Exercised                (1,908,370)               19.22
Canceled                    (31,000)               29.46
-----------
Balance 12/31/98         13,059,048                25.48
Granted                   9,150,400                30.09
Exercised                  (859,085)               17.10
Canceled                   (234,000)               29.84
-----------
Balance 12/31/99         21,116,363                27.77
Granted                   7,705,800                16.94
Exercised                  (273,813)               13.95
Canceled                   (427,400)               26.84
-----------
Balance 12/31/00         28,120,950               $24.96
===========

Of the total options outstanding at Dec. 31, 2000, 20 million were
vested and have a weighted-average exercise price of $27.97.

Stock Options Outstanding
-------------------------

Exercise Price                   Number      Weighted Average
------------------------------------    Outstanding      Remaining
Range            Weighted Average  at 12/31/00   Contractual Life
-----            ----------------  -----------      ----------

$14.25 to $16.94         $16.82          8,037,350       8.7 years
18.81 to  21.08          20.43          3,059,750       2.7 years
24.31 to  27.69          26.81          7,988,100       6.7 years
29.46 to  33.25          32.09          9,035,750       7.3 years
----------------         -------        -----------      ----------
$14.25 to $33.25         $24.96         28,120,950       7.0 years
===========

Performance Share Units
-----------------------
PSUs provide for awards based on achievement of certain predetermined
corporate performance goals at the end of a three-year cycle. PSU grants
and average grant-date fair market values were 937,500 and $16.94 in 2000;
850,000 and $27.72 in 1999; and 565,500 and $32.16 in 1998, respectively.
PSUs may be paid in the form of shares of Common Stock, cash or any
combination thereof. Shares earned and issued may be subject to share
retention agreements and held by NS for up to five years.

PAGE 76

Item 8.   Financial Statements and Supplementary Data. (continued)
------    -------------------------------------------

Shares Available and Issued
---------------------------
Shares of stock available for future grants and issued in connection
with all features of the LTIP and TSOP are as follows:

2000           1999           1998
----           ----           ----

Available for future
grants 12/31:
LTIP                      2,554,584      10,512,997     16,233,600
TSOP                      2,488,700       2,349,600              -

Shares of Common Stock
issued:
LTIP                        395,626       1,086,288      2,212,323
TSOP                              -               -              -

13.  STOCKHOLDERS' EQUITY

Accumulated Other Comprehensive Income
--------------------------------------
"Accumulated other comprehensive income" reported in "Stockholders'
equity" included the following net-of-tax amounts: unrealized gains on
securities of $7 million at Dec. 31, 2000, and $2 million at Dec. 31, 1999;
and minimum pension liability of $13 million at each of Dec. 31, 2000, and
Dec. 31, 1999. "Other comprehensive income" reported in the Consolidated
Statements of Changes in Stockholders' Equity consisted of the following:

($ in millions)                          2000       1999      1998
---------------                          ----       ----      ----

Unrealized gains on securities          $    7    $    (6)   $    1
Minimum pension liability                   --          2       (23)
Income taxes                                (2)         1         9
------    -------    ------
Other comprehensive income         $    5    $    (3)   $  (13)
======    =======    ======

"Unrealized gains on securities" included reclassification adjustments
for gains realized in income from the sale of the securities of less than
$1 million in each year.

Undistributed Earnings of Equity Investees
------------------------------------------
"Retained income" includes undistributed earnings of equity investees,
principally attributable to NS' equity in the earnings of Conrail, of $351
million at Dec. 31, 2000; $330 million at Dec. 31, 1999; and $314 million
at Dec. 31, 1998.

PAGE 77

Item 8.   Financial Statements and Supplementary Data. (continued)
------    -------------------------------------------

14.  EARNINGS PER SHARE

The following table sets forth the calculation of basic and diluted
earnings per share:

($ in millions except per share,
shares in millions)                           2000       1999     1998
--------------------------------               ----       ----     ----

Basic earnings per share:
Income available to common
stockholders for basic and
diluted computations                     $    172   $    239  $    734
Weighted-average shares
outstanding                                   383        381       379
--------   --------  --------
Basic earnings per share          $    0.45   $   0.63  $   1.94
--------   --------  --------

Diluted earnings per share:
Weighted-average shares
outstanding per above                         383        381       379
Dilutive effect of outstanding
options, PSUs and SARs (as
determined by the application
of the treasury stock method)                   -          1         2
--------   --------  --------
Adjusted weighted-average
shares outstanding                       383        382       381
--------   --------  --------
Diluted earnings per share        $    0.45   $   0.63  $   1.93
========   ========  ========

These calculations exclude options the exercise price of which
exceeded the average market price of Common Stock as follows: in 2000, 28
million in the fourth, third and first quarters, and 20 million in the
second quarter; in 1999, 17 million in the fourth quarter, 9 million in the
third quarter, 7 million in the second quarter and 5 million in the first
quarter; and in 1998, 4 million in the fourth and third quarters.
There are no adjustments to "Net income" or "Income from continuing
operations" for the diluted earnings per share computations.

15.  FAIR VALUES OF FINANCIAL INSTRUMENTS

The fair values of "Cash and cash equivalents," "Short-term
investments," "Accounts receivable," "Short-term debt" and "Accounts
payable" approximate carrying values because of the short maturity of these
financial instruments. The fair value of corporate-owned life insurance
approximates carrying value. The carrying amounts and estimated fair values
for the remaining financial instruments, excluding investments accounted
for under the equity method in accordance with APB Opinion No. 18,
consisted of the following at Dec. 31:

2000                1999
----                ----
Carrying   Fair      Carrying  Fair
($ in millions)                     Amount   Value       Amount   Value
---------------                    --------  -----      --------  -----

Investments                        $   142  $   149    $    49  $    54
Long-term debt                      (7,636)  (7,809)    (8,058)  (7,980)
Interest rate swaps                      -        5          -        4

PAGE 78

Item 8.   Financial Statements and Supplementary Data. (continued)
------    -------------------------------------------

Quoted market prices were used to determine the fair value of
marketable securities; underlying net assets were used to estimate the fair
value of other investments. The fair values of debt were estimated based on
quoted market prices or discounted cash flows using current interest rates
for debt with similar terms, company rating and remaining maturity. The
fair value of interest rate swaps was estimated based on discounted cash
flows, reflecting the difference between estimated future variable-rate
payments and future fixed-rate receipts.
Carrying amounts of marketable securities reflect unrealized holding
gains of $11 million on Dec. 31, 2000, and $3 million on Dec. 31, 1999.
Sales of "available-for-sale" securities were immaterial for years ended
Dec. 31, 2000 and 1999.

16.  DISCONTINUED OPERATIONS - MOTOR CARRIER

On March 28, 1998, NS sold all the common stock of North American Van
Lines, Inc. (NAVL), its motor carrier subsidiary. Total proceeds from the
sale were $207 million, resulting in a $90 million pretax gain ($105
million, or 28 cents per basic and diluted share, after taxes). The higher
after-tax gain was the result of differences between book and tax bases and
the realization of deferred tax benefits.
NAVL's results of operations, financial position and cash flows are
presented as "Discontinued operations" in the accompanying financial
statements. A summary of NAVL's results of operations follows:

($ in millions)                                   1998
---------------                                   ----

Motor carrier revenues                            $ 207
Motor carrier expenses                              208
-----
Loss from operations                            (1)
Gain on sale, net of taxes                          105
-----
Income from discontinued operations          $ 104
=====
Earnings per share (basic and diluted)
from discontinued operations                    $0.28
=====

17.  COMMITMENTS AND CONTINGENCIES

Lawsuits
--------
Norfolk Southern and certain subsidiaries are defendants in numerous
lawsuits relating principally to railroad operations. While the final
outcome of these lawsuits cannot be predicted with certainty, it is the
opinion of Management, based on known facts and circumstances, that the
amount of NS' ultimate liability is unlikely to have a material adverse
effect on NS' financial position, results of operations or liquidity.

Environmental Matters
---------------------
NS is subject to various jurisdictions' environmental laws and
regulations. It is NS' policy to record a liability where such liability or
loss is probable and its amount can be estimated reasonably. Claims, if
any, against third parties for recovery of cleanup costs incurred by NS are
reflected as receivables in the balance sheet and are not netted against
the associated NS liability. Environmental engineers regularly participate
in ongoing evaluations of all identified sites and in determining any
necessary adjustments to initial liability estimates. NS also has
established an Environmental Policy Council, composed of senior managers,
to oversee and interpret its environmental policy.

PAGE 79

Item 8.   Financial Statements and Supplementary Data. (continued)
------    -------------------------------------------

As of Dec. 31, 2000, NS' balance sheet included a reserve for
environmental exposures in the amount of $36 million (of which $8 million
is accounted for as a current liability), which is NS' estimate of the
probable cleanup and remediation costs based on available information at
125 identified locations. On that date, 10 sites accounted for $18 million
of the reserve, and no individual site was considered to be material. NS
anticipates that much of this liability will be paid out over five years;
however, some costs will be paid out over a longer period.
At some of the 125 locations, certain NS subsidiaries, usually in
conjunction with a number of other parties, have been identified as
potentially responsible parties by the Environmental Protection Agency
(EPA) or similar state authorities under the Comprehensive Environmental
Response, Compensation and Liability Act of 1980, or comparable state
statutes, which often impose joint and several liability for cleanup costs.
With respect to known environmental sites (whether identified by NS or
by the EPA or comparable state authorities), estimates of NS' ultimate
potential financial exposure for a given site or in the aggregate for all
such sites are necessarily imprecise because of the widely varying costs of
currently available cleanup techniques, the likely development
of new cleanup technologies, the difficulty of determining in advance the
nature and full extent of contamination and each potential participant's
share of any estimated loss (and that participant's ability to bear it),
and evolving statutory and regulatory standards governing liability.
The risk of incurring environmental liability - for acts and
omissions, past, present and future - is inherent in the railroad business.
Some of the commodities in NS' traffic mix, particularly those classified
as hazardous materials, can pose special risks that NS and its subsidiaries
work diligently to minimize. In addition, several NS subsidiaries own, or
have owned, land used as operating property, or which is leased or may have
been leased and operated by others, or held for sale. Because environmental
problems may exist on these properties that are latent or undisclosed,
there can be no assurance that NS will not incur environmentally related
liabilities or costs with respect to one or more of them, the amount and
materiality of which cannot be estimated reliably at this time. Moreover, 
lawsuits and claims involving these and other now-unidentified environmental
sites and matters are likely to arise from time to time. The resulting
liabilities could have a significant effect on financial condition, results
of operations or liquidity in a particular year or quarter.
However, based on its assessments of the facts and circumstances now
known, Management believes that it has recorded the probable costs for
dealing with those environmental matters of which the Corporation is aware.
Further, Management believes that it is unlikely that any identified
matters, either individually or in the aggregate, will have a material
adverse effect on NS' financial position, results of operations or
liquidity.

Purchase Commitment
-------------------
NSR committed in 2000 to purchase 160 locomotives in 2001. Some of the
locomotives were received and paid for in 2000, and the remainder will be
delivered in the first half of 2001. NSR expects to finance the purchase of
these locomotives with proceeds from the sale of equipment trust
certificates.

Change-In-Control Arrangements
------------------------------
Norfolk Southern has compensation agreements with officers and certain
key employees that become operative only upon a change in control of the
Corporation, as defined in those agreements. The agreements provide
generally for payments based on compensation at the time of a covered
individual's involuntary or other specified termination and for certain
other benefits.

Debt Guarantees
---------------
As of Dec. 31, 2000, certain Norfolk Southern subsidiaries are
contingently liable as guarantors with respect to $8 million of
indebtedness of related entities.

PAGE 80

INDEPENDENT AUDITORS' REPORT

The Stockholders and Board of Directors
Norfolk Southern Corporation:

We have audited the consolidated financial statements of Norfolk
Southern Corporation and subsidiaries as listed in the index in Item 8.
In connection with our audits of the consolidated financial statements,
we have also audited the consolidated financial statement schedule
listed in Item 14(a)2. These consolidated financial statements and this
consolidated financial statement schedule are the responsibility of the
Company's management. Our responsibility is to express an opinion on
these consolidated financial statements and this consolidated financial
statement schedule based on our audits.

We conducted our audits in accordance with auditing standards
generally accepted in the United States of America. Those standards
require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement. An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements. An
audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the
overall financial statement presentation. We believe that our audits
provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to
above present fairly, in all material respects, the financial position
of Norfolk Southern Corporation and subsidiaries as of December 31,
2000 and 1999, and the results of their operations and their cash flows
for each of the years in the three-year period ended December 31, 2000,
in conformity with accounting principles generally accepted in the
United States of America. Also in our opinion, the related consolidated
financial statement schedule, when considered in relation to the basic
consolidated financial statements taken as a whole, presents fairly, in
all material respects, the information set forth therein.

/s/ KPMG LLP
Norfolk, Virginia
January 23, 2001

PAGE 81

Item 9.   Changes in and Disagreements with Accountants on Accounting
------    -----------------------------------------------------------
and Financial Disclosure.
------------------------

None.

PAGE 82

PART III
--------

NORFOLK SOUTHERN CORPORATION AND SUBSIDIARIES (NS)

Item 10.  Directors and Executive Officers of the Registrant.
-------   --------------------------------------------------

Item 11.  Executive Compensation.
-------   ----------------------

Item 12.  Security Ownership of Certain Beneficial Owners and
-------   ---------------------------------------------------
Management.
----------

and

Item 13.  Certain Relationships and Related Transactions.
-------   ----------------------------------------------

In accordance with General Instruction G(3), the information
called for by Part III is incorporated herein by reference from Norfolk
Southern's definitive Proxy Statement, to be dated April 2, 2001, for
the Norfolk Southern Annual Meeting of Stockholders to be held on
May 10, 2001, which definitive Proxy Statement will be filed
electronically with the Commission pursuant to Regulation 14A.  The
information regarding executive officers called for by Item 401 of
Regulation S-K is included in Part I hereof beginning on Page 19 under
"Executive Officers of the Registrant."

PAGE 83

PART IV
-------

NORFOLK SOUTHERN CORPORATION AND SUBSIDIARIES (NS)

Item 14.  Exhibits, Financial Statement Schedule and
-------   ------------------------------------------
Reports on Form 8-K.
-------------------

(A)       The following documents are filed as part of this report:

1.   Index to Consolidated Financial Statements:          Page
------------------------------------------           ----

Consolidated Statements of Income
Years ended December 31, 2000, 1999, and 1998        53

Consolidated Balance Sheets
As of December 31, 2000 and 1999                     54

Consolidated Statements of Cash Flows
Years ended December 31, 2000, 1999, and 1998        55

Consolidated Statements of Changes in
Stockholders' Equity
Years ended December 31, 2000, 1999, and 1998        57

Notes to Consolidated Financial Statements             58

Independent Auditors' Report                           80

2.   Financial Statement Schedule:

The following consolidated financial statement schedule
should be read in connection with the consolidated financial
statements:

Index to Consolidated Financial Statement Schedule   Page
--------------------------------------------------   ----

Schedule II - Valuation and Qualifying Accounts        92

Schedules other than the one listed above are omitted either
because they are not required or are inapplicable, or because
the information is included in the consolidated financial
statements or related notes.

PAGE 84

Item 14.  Exhibits, Financial Statement Schedule and
-------   ------------------------------------------
Reports on Form 8-K. (continued)
-------------------

3.   Exhibits

Exhibit
Number                      Description
-------   -----------------------------------------------------------

3     Articles of Incorporation and Bylaws -

3(i)  The Restated Articles of Incorporation of Norfolk
Southern Corporation are filed herewith.

3(ii) The Bylaws of Norfolk Southern Corporation, as 
amended November 28, 2000, are incorporated herein by
reference from Exhibit 4 to Norfolk Southern Corporation's
Form S-8 filed on January 26, 2001.

4     Instruments Defining the Rights of Security Holders,
Including Indentures -

(a)   Indentures related to the issuance of notes in the 
principal amount of $4.3 billion are incorporated herein
by reference from Exhibits 4.1 and 4.2 to Norfolk Southern
Corporation's Amendment No. 3 to Form S-3, Registration
No. 333-24051, filed on May 12, 1997.

(b)  Indentures related to the issuance of notes in the principal
amount of $400 million are incorporated herein by reference from
Exhibits 4.1 and 4.2 to Norfolk Southern Corporation's Form S-3,
Registration No. 333-67937, filed on November 25, 1998.

(b)  Rights Agreement, dated as of September 26, 2000, between Norfolk
Southern Corporation and The Bank of New York, with exhibits
thereto, is incorporated herein by reference from Exhibit 4 to 
Norfolk Southern Corporation's Form 8-K filed on September 26, 
2000.

(c)  Indentures related to the issuance of notes in the principal 
amount of $1 billion are incorporated herein by reference from
Exhibits 4.1 and 4.2 to Norfolk Southern Corporation's Form 
S-3, Registration No. 333-46810, filed on September 27, 2000.

In accordance with Item 601(b)(4)(iii) of Regulation S-K, copies of
other instruments of Norfolk Southern Corporation and its 
subsidiaries with respect to the rights of holders of long-term 
debt are not filed herewith, or incorporated by reference, but 
will be furnished to the Commission upon request.

PAGE 85

Item 14.  Exhibits, Financial Statement Schedule and
-------   ------------------------------------------
Reports on Form 8-K. (continued)
-------------------

3.   Exhibits (continued)

Exhibit
Number                      Description
-------   ------------------------------------------------------------

10    Material Contracts -

(a)  The Transaction Agreement, dated as of June 10, 1997, by and 
among CSX, CSX Transportation, Inc., Registrant, Norfolk 
Southern Railway Company, Conrail Inc., Consolidated Rail 
Corporation and CRR Holdings LLC, with certain schedules 
thereto, is incorporated herein by reference from Exhibit 10 
to Norfolk Southern Corporation's Form 8-K filed 
electronically on June 30, 1997.

(b)  Amendment No. 1, dated as of August 22, 1998, to the 
Transaction Agreement, dated as of June 10, 1997, by and 
among CSX Corporation, CSX Transportation, Inc., Norfolk 
Southern Corporation, Norfolk Southern Railway Company, 
Conrail Inc., Consolidated Rail Corporation and CRR Holdings 
LLC is incorporated herein by reference from Exhibit 10.1 
to Norfolk Southern Corporation's Form 10-Q Report for the 
period ended June 30, 1999.

(c)  Amendment No. 2, dated as of June 1, 1999, to the 
Transaction Agreement, dated June 10, 1997, by and among 
CSX Corporation, CSX Transportation, Inc., Norfolk Southern 
Corporation, Norfolk Southern Railway Company, Conrail Inc., 
Consolidated Rail Corporation and CRR Holdings LLC is 
incorporated herein by reference from Exhibit 10.2 to Norfolk 
Southern Corporation's Form 10-Q Report for the period ended 
June 30, 1999.

(d)  Operating Agreement, dated as of June 1, 1999, by and between
Pennsylvania Lines LLC and Norfolk Southern Railway Company 
is incorporated herein by reference from Exhibit 10.3 to 
Norfolk Southern Corporation's Form 10-Q Report for the 
period ended June 30, 1999.

PAGE 86

Item 14.  Exhibits, Financial Statement Schedule and
-------   ------------------------------------------
Reports on Form 8-K. (continued)
-------------------

3.   Exhibits (continued)

Exhibit
Number                      Description
-------   ------------------------------------------------------------

10      Material Contracts (continued) -

(e)  Shared Assets Area Operating Agreement for North Jersey, 
dated as of June 1, 1999, by and among Consolidated Rail 
Corporation, CSX Transportation, Inc. and Norfolk Southern 
Railway Company, with exhibit thereto, is incorporated 
herein by reference from Exhibit 10.4 to Norfolk Southern 
Corporation's Form 10-Q Report for the period ended 
June 30, 1999.

(f)  Shared Assets Area Operating Agreement for South Jersey/
Philadelphia, dated as of June 1, 1999, by and among 
Consolidated Rail Corporation, CSX Transportation, Inc. 
and Norfolk Southern Railway Company, with exhibit 
thereto, is incorporated herein by reference from Exhibit 
10.5 to Norfolk Southern Corporation's Form 10-Q Report 
for the period ended June 30, 1999.

(g)  Shared Assets Area Operating Agreement for Detroit, dated 
as of June 1, 1999, by and among Consolidated Rail 
Corporation, CSX Transportation, Inc. and Norfolk Southern 
Railway Company, with exhibit thereto, is incorporated 
herein by reference from Exhibit 10.6 to Norfolk Southern 
Corporation's Form 10-Q Report for the period ended 
June 30, 1999.

(h)  Amendment No. 1, dated as of June 1, 2000, to the Shared 
Assets Areas Operating Agreement for North Jersey, South 
Jersey/Philadelphia and Detroit, dated as of June 1, 1999, 
by and among Consolidated Rail Corporation, CSX 
Transportation, Inc. and Norfolk Southern Railway Company,
with exhibit thereto, is filed herewith.

(i)  Monongahela Usage Agreement, dated as of June 1, 1999, by 
and among CSX Transportation, Inc., Norfolk Southern 
Railway Company, Pennsylvania Lines LLC and New York 
Central Lines LLC, with exhibit thereto, is incorporated 
herein by reference from Exhibit 10.7 to Norfolk Southern 
Corporation's Form 10-Q Report for the period ended 
June 30, 1999.

PAGE 87

Item 14.  Exhibits, Financial Statement Schedule and
-------   ------------------------------------------
Reports on Form 8-K. (continued)
-------------------

3.   Exhibits (continued)

Exhibit
Number                      Description
-------   ------------------------------------------------------------

10   Material Contracts (continued) -

(j)  The Agreement, entered into as of July 27, 1999, between 
North Carolina Railroad Company and Norfolk Southern 
Railway Company, is incorporated herein by reference from 
Exhibit 10(i) to Norfolk Southern Corporation's 1999 
Annual Report on Form 10-K.

(k)  The Supplementary Agreement, entered into as of January 1, 
1987, between the Trustees of the Cincinnati Southern 
Railway and The Cincinnati, New Orleans and Texas Pacific 
Railway Company (the latter a wholly owned subsidiary of 
Norfolk Southern Railway Company) - extending and amending 
a Lease, dated as of October 11, 1881 (both the Lease and 
Supplementary Agreement, formerly incorporated by reference 
with Exhibit 10(b) to Southern's 1987 Annual Report on 
Form 10-K) - is filed herewith.

(l)  The Norfolk Southern Corporation Executive Management 
Incentive Plan, effective January 25, 2000, is incorporated 
by reference herein from Exhibit 10(l) to Norfolk Southern 
Corporation's 1999 Annual Report on Form 10-K.

(m)  The Norfolk Southern Corporation Long-Term Incentive Plan, 
as amended effective January 23, 2001, is filed herewith.

(n)  The Norfolk Southern Corporation Officers' Deferred 
Compensation Plan, as amended effective September 26, 2000, 
is filed herewith.

(o)  The Norfolk Southern Corporation Executives' Deferred 
Compensation Plan, as amended effective January 20, 2001, 
is filed herewith.

PAGE 88

Item 14.  Exhibits, Financial Statement Schedule and
-------   ------------------------------------------
Reports on Form 8-K. (continued)
-------------------

3.   Exhibits (continued)

Exhibit
Number                      Description
-------   ------------------------------------------------------------

10   Material Contracts (continued) -

(p)  The Directors' Deferred Fee Plan of Norfolk Southern 
Corporation, as amended effective January 23, 2001, 
is filed herewith.

(q)  The Norfolk Southern Corporation Directors' Restricted 
Stock Plan, effective January 1, 1994, as restated 
November 24, 1998, is incorporated herein by reference 
from Exhibit 10(h) to Norfolk Southern Corporation's 
1998 Annual Report on Form 10-K.

(r)  Form of Severance Agreement, dated as of June 1, 1996, 
between Norfolk Southern Corporation and certain 
executive officers (including those defined as "named 
executive officers" and identified in the Corporation's 
Proxy Statement for the 1997 and 1998 Annual Meeting of 
Stockholders) is incorporated herein by reference from 
Exhibit 10 to Norfolk Southern Corporation's Form 10-Q 
Report for the quarter ended June 30, 1996.

(s)  Norfolk Southern Corporation Supplemental (formerly, 
Excess) Benefit Plan, effective as of August 22, 1999, 
is incorporated herein by reference from Exhibit 10(r) 
to Norfolk Southern Corporation's 1999 Annual Report 
on Form 10-K.

(t)  The Norfolk Southern Corporation Directors' Charitable
Award Program, effective February 1, 1996, is
incorporated herein by reference from Exhibit 10(j) to
Norfolk Southern Corporation's Form 10-Q Report for the
quarter ended June 30, 1996.

(u)  The Norfolk Southern Corporation Outside Directors' 
Deferred Stock Unit Program, as amended on September 23, 
1997, is incorporated herein by reference from Exhibit 
10(m) to Norfolk Southern Corporation's 1997 Annual 
Report on Form 10-K.

PAGE 89

Item 14.  Exhibits, Financial Statement Schedule and
-------   ------------------------------------------
Reports on Form 8-K. (continued)
-------------------

3.   Exhibits (continued)

Exhibit
Number                      Description
-------   ------------------------------------------------------------

12      Statement re:  Computation of Ratio of
Earnings to Fixed Charges.

21      Subsidiaries of the Registrant.

23      Consents of Experts and Counsel -

(a)  Consent of KPMG LLP.
(b)  Consent of KPMG LLP and Ernst & Young LLP.
(c)  Consent of PricewaterhouseCoopers LLP.

99      Conrail Inc. 2000 Annual Report to Stockholders.

(B)       Reports on Form 8-K.

A report on Form 8-K was filed on Oct. 2, 2000, advising of
the sales of certain timber interests and indicating the
anticipated range of earnings per share for the third quarter
and the contribution to such earnings of the timber interest
sales, and, attaching as an exhibit, the related press
release.

(C)       Exhibits.

The Exhibits required by Item 601 of Regulation S-K as listed
in Item 14(a)3 are filed herewith or incorporated herein by
reference.

(D)       Financial Statement Schedules.

Financial statement schedules and separate financial
statements specified by this Item are included in Item 14(a)2
or are otherwise not required or are not applicable.

PAGE 90

POWER OF ATTORNEY
-----------------

Each person whose signature appears below under "SIGNATURES"
hereby authorizes Henry C. Wolf and J. Gary Lane, or either of them, to
execute in the name of each such person, and to file, any amendment to
this report and hereby appoints Henry C. Wolf and J. Gary Lane, or
either of them, as attorneys-in-fact to sign on his or her behalf,
individually and in each capacity stated below, and to file, any and
all amendments to this report.

SIGNATURES
----------

Pursuant to the requirements of Section 13 or 15(d) of the
Securities Exchange Act of 1934, Norfolk Southern Corporation has
duly caused this report to be signed on its behalf by the undersigned,
thereunto duly authorized, on this 5th day of March, 2001.

NORFOLK SOUTHERN CORPORATION

By   /s/ David R. Goode
----------------------------------
(David R. Goode, Chairman,
President and Chief
Executive Officer)

Pursuant to the requirements of the Securities Exchange Act of
1934, this report has been signed below on this 5th day of March, 2001,
by the following persons on behalf of Norfolk Southern Corporation and
in the capacities indicated.

Signature                          Title
---------                          -----

/s/ David R. Goode
------------------------------     Chairman, President and Chief
(David R. Goode)                    Executive Officer and Director
(Principal Executive Officer)

/s/ Henry C. Wolf
------------------------------     Vice Chairman and
(Henry C. Wolf)                     Chief Financial Officer
(Principal Financial Officer)

PAGE 91

Signature                          Title
---------                          -----

/s/ John P. Rathbone
------------------------------     Senior Vice President and
(John P. Rathbone)                  Controller
(Principal Accounting Officer)

/s/ Gerald L. Baliles
------------------------------     Director
(Gerald L. Baliles)

------------------------------     Director
(Carroll A. Campbell, Jr.)

/s/ Gene R. Carter
------------------------------     Director
(Gene R. Carter)

/s/ Alston D. Correll
------------------------------     Director
(Alston D. Correll)

/s/ Landon Hilliard
------------------------------     Director
(Landon Hilliard)

/s/ Steven F. Leer
------------------------------     Director
(Steven F. Leer)

/s/ Jane Margaret O'Brien
------------------------------     Director
(Jane Margaret O'Brien)

/s/ Harold W. Pote
------------------------------     Director
(Harold W. Pote)

PAGE 92

Schedule II
Page 1 of 2

Norfolk Southern Corporation and Subsidiaries
---------------------------------------------
Valuation and Qualifying Accounts
Years Ended December 31, 1998, 1999 and 2000
(In millions of dollars)

Additions charged to
--------------------
Beginning   Other    Ending
Balance   Expenses Accounts  Deductions  Balance
---------  -------- --------  ---------- ---------

Year ended December 31, 1998
----------------------------
Valuation allowance (included
net in deferred tax
liability) for deferred tax
assets                             $  2      $  1     $ --       $ --       $  3
Casualty and other claims
included in other
liabilities                        $253      $ 86     $ 22 (1)   $ 90 (2)   $271
Current portion of casualty
and other claims included
in accounts payable                $172      $ 11     $149 (1)   $188 (3)   $144

Year ended December 31, 1999
----------------------------
Valuation allowance (included
net in deferred tax
liability) for deferred tax
assets                             $  3      $  6    $ --        $ --       $  9
Casualty and other claims
included in other
liabilities                        $271      $114    $  9 (1)    $119 (2)   $275
Current portion of casualty
and other claims included
in accounts payable                $144      $ 19    $191 (1)    $173 (3)   $181

(1)Includes revenue refunds and overcharges provided through deductions from
operating revenues and transfers from other accounts.

(2)Payments and reclassifications to/from accounts payable.

(3)Payments and reclassifications to/from other liabilities.

(continued)

PAGE 93

Schedule II
Page 2 of 2

Norfolk Southern Corporation and Subsidiaries
---------------------------------------------
Valuation and Qualifying Accounts
Years Ended December 31, 1998, 1999 and 2000 (continued)
(In millions of dollars)

Additions charged to
--------------------
Beginning   Other                         Ending
Balance   Expenses Accounts  Deductions  Balance
---------  -------- --------  ---------- ---------

Year ended December 31, 2000
----------------------------
Valuation allowance (included
net in deferred tax
liability) for deferred tax
assets                             $  9      $  3      $ --        $ --       $ 12
Casualty and other claims
included in other
liabilities                        $275      $117      $  8 (1)    $138 (2)   $262
Current portion of casualty
and other claims included
in accounts payable                $181      $ 19      $221 (1)    $198 (3)   $223

(1)Includes revenue refunds and overcharges provided through deductions from
operating revenues and transfers from other accounts.

(2)Payments and reclassifications to/from accounts payable.

(3)Payments and reclassifications to/from other liabilities.

PAGE 94

EXHIBIT INDEX
-------------

NORFOLK SOUTHERN CORPORATION AND SUBSIDIARIES (NS)

Electronic
Submission
Exhibit
Number                        Description
---------  ------------------------------------------------------------

3(i)      The Restated Articles of Incorporation of Norfolk Southern
Corporation.

10(h)      Amendment No. 1, dated as of June 1, 2000, to the Shared
Assets Areas Operating Agreement for North Jersey, South
Jersey/Philadelphia and Detroit.

10(k)      The Supplementary Agreement, entered into as of Jan. 1,
1987, between the Trustees of the Cincinnati Southern Railway
and The Cincinnati, New Orleans and Texas Pacific Railway 
Company, extending and amending a Lease, dated as of October 11, 
1881.

10(m)      The Norfolk Southern Corporation Long-Term Incentive Plan,
as amended effective January 23, 2001.

10(n)      The Norfolk Southern Corportation Officers' Deferred
Compensation Plan, as amended effective September 26, 2000.

10(o)      The Norfolk Southern Corporation Executives' Deferred
Compensation Plan, as amended effective January 20, 2001.

10(p)      The Directors' Deferred Fee Plan of Norfolk Southern
Corporation, as amended effective January 23, 2001.

12         Statement re:  Computation of Ratio of Earnings to Fixed
Charges.

21         Subsidiaries of Norfolk Southern Corporation.

23         Consent of Experts and Counsel -
(a)Consent of KPMG LLP.
(b)Consent of KPMG LLP and Ernst & Young LLP.
(c)Consent of PricewaterhouseCoopers LLP.

99         Conrail Inc. 2000 Annual Report to Stockholders.

EXHIBIT 3(I)

ARTICLES OF AMENDMENT

TO THE RESTATED ARTICLES OF INCORPORATION

of

NORFOLK SOUTHERN CORPORATION

I.     The name of the corporation is NORFOLK SOUTHERN
CORPORATION (the "Corporation").

II.   Pursuant to Section 13.1-369 of the Virginia
Stock Corporation Act and the authority conferred upon
the Board of Directors by the Restated Articles of Incorporation
of the Corporation, the Restated Articles of Incorporation of the
Corporation are hereby amended to create a new series of 600,000
shares of Preferred Stock, designated as "Series A Junior
Participating Preferred Stock" by adding the following
as Section C to Article III of such Restated Articles of
Incorporation:

C.    Series A Junior Participating Preferred Stock

1.    Designation and Amount. The shares of
such series shall be designated as "Series A Junior Participating
Preferred Stock" and the number of shares constituting such series
shall be 600,000.

2.    Dividends and Distributions.

(a)  Subject to the prior and superior
rights of the holders of any shares of any series
of Preferred Stock ranking prior and superior to the
shares of Series A Junior Participating Preferred
Stock with respect to dividends, the holders of shares
of Series A Junior Participating Preferred Stock
shall be entitled to receive, when, as and if declared
by the Board of Directors out of funds legally available
for the purpose, quarterly dividends payable in cash
on the first day of January, April, July and October
in each year (each such date being referred to herein
as a "Quarterly Dividend Payment Date"), commencing on
the first Quarterly Dividend Payment Date after the
first issuance of a share or fraction of a share of
Series A Junior Participating Preferred Stock, in an
amount per share (rounded to the nearest cent) equal
to the greater of (a) $1.00 or (b) subject to the
provision for adjustment hereinafter set forth,
1000 times the aggregate per share amount of all cash
dividends, and 1000 times the aggregate per share
amount (payable in kind) of all non-cash dividends
or other distributions other than a dividend payable in
shares of Common Stock or a subdivision of the
outstanding shares of Common Stock (by
reclassification or otherwise), declared on the
Common Stock, par value $1.00 per share, of the
Corporation (the "Common Stock") since the
immediately preceding Quarterly Dividend Payment
Date, or, with respect to the first Quarterly Dividend
Payment Date, since the first issuance of any share
or fraction of a share of Series A Junior
Participating Preferred Stock. In the event
the Corporation shall at any time after
September 26, 2000 (the "Rights Declaration Date"),
(i) declare any dividend on Common Stock payable
in shares of Common Stock, (ii) subdivide
the outstanding Common Stock or (iii) combine
the outstanding Common Stock into a smaller number of
shares, then in each such case the amount to which
holders of shares of Series A Junior Participating
Preferred Stock were entitled immediately prior to
such event under clause (b) of the preceding sentence
shall be adjusted by multiplying such amount by a
fraction the numerator of which is the number of
shares of Common Stock outstanding immediately
after such event and the denominator of which is
the number of shares of Common Stock that were
outstanding immediately prior to such event.

(b)  The Corporation shall declare a dividend
or distribution on the Series A Junior Participating
Preferred Stock immediately after it declares a
dividend or distribution on the Common Stock
(other than a dividend payable in shares of Common
Stock); provided that, in the event no dividend or
distribution shall have been declared on the
Common Stock during the period between any
Quarterly Dividend Payment Date and the next
subsequent Quarterly Dividend Payment Date, a
dividend of $1.00 per share on the Series A Junior
Participating Preferred Stock shall nevertheless
be payable on such subsequent Quarterly Dividend
Payment Date.

(c)   Dividends shall begin to accrue and be
cumulative on outstanding shares of Series A Junior
Participating Preferred Stock from the Quarterly
Dividend Payment Date next preceding the date of issue
of such shares of Series A Junior Participating
Preferred Stock, unless the date of issue of such
shares is prior to the record date for the first
Quarterly Dividend Payment Date, in which case
dividends on such shares shall begin to accrue from
the date of issue of such shares, or unless the date
of issue is a Quarterly Dividend Payment Date or is
a date after the record date for the determination
of holders of shares of Series A Junior Participating
Preferred Stock entitled to receive a quarterly
dividend and before such Quarterly Dividend Payment
Date, in either of which events such dividends shall
begin to accrue and be cumulative from such Quarterly
Dividend Payment Date. Accrued but unpaid dividends
shall not bear interest.  Dividends paid on the shares
of Series A Junior Participating Preferred Stock in an
amount less than the total amount of such dividends at
the time accrued and payable on such shares shall be
allocated pro rata on a share-by-share basis among all
such shares at the time outstanding. The Board of 
Directors may fix a record date for the determination
of holders of shares of Series A Junior Participating
Preferred Stock entitled to receive payment of a dividend
or distribution declared thereon, which record date shall
be no more than 30 days prior to the date fixed for
the payment thereof.

3.     Voting Rights. The holders of shares of
Series A Junior Participating Preferred Stock shall have the
following voting rights:

(a)    Subject to the provision for adjustment
hereinafter set forth, each share of Series A Junior
Participating Preferred Stock shall entitle the holder
thereof to 1000 votes on all matters submitted to a vote
of the shareholders of the Corporation. In the event the
Corporation shall at any time after the Rights
Declaration Date (i) declare any dividend on Common
Stock payable in shares of Common Stock, (ii) subdivide
the outstanding Common Stock or (iii) combine the
outstanding Common Stock into a smaller number of
shares, then in each such case the number of votes
per share to which holders of shares of Series A
Junior Participating Preferred Stock were entitled
immediately prior to such event shall be adjusted
by multiplying such number by a fraction the numerator
of which is the number of shares of Common Stock
outstanding immediately after such event and 
the denominator of which is the number of shares of
Common Stock that were outstanding immediately prior
to such event.

(b)    Except as otherwise provided herein or by law,
the holders of shares of Series A Junior Participating
Preferred Stock and the holders of shares of Common Stock
shall vote together as one class on all matters submitted
to a vote of shareholders of the Corporation.

(i)    If at any time dividends on any Series A
Junior Participating Preferred Stock shall be in arrears
in an amount equal to six (6) quarterly dividends
thereon, the occurrence of such contingency shall mark
the beginning of a period (herein called a "Default
Period") that shall extend until such time when
all accrued and unpaid dividends for all previous
quarterly dividend periods and for the current
quarterly dividend period on all shares of Series A
Junior Participating Preferred Stock then outstanding
shall have been declared and paid or set apart for
payment. During each Default Period, all holders of
Preferred Stock (including holders of the Series A
Junior Participating Preferred Stock) with dividends
in arrears in an amount equal to six (6) quarterly
dividends thereon, voting as a class, irrespective
of series, shall have the right to elect two (2)
directors.

(ii)   During any Default Period, such voting
right of the holders of Series A Junior Participating
Preferred Stock may be exercised initially at a
special meeting called pursuant to subparagraph (iii)
of this Section 3(b) or at any annual meeting of
shareholders, and thereafter at annual meetings of
shareholders; provided that neither such voting right
nor the right of the holders of any other series
of Preferred Stock, if any, to increase, in certain
cases, the authorized number of directors shall be
exercised unless the holders of ten percent (10%) in
number of shares of Preferred Stock outstanding shall
be present in person or by proxy. The absence of a
quorum of the holders of Common Stock shall not affect
the exercise by the holders of Preferred Stock of such
voting right. At any meeting at which the holders of
Preferred Stock shall exercise such voting right
initially during an existing Default Period, they
shall have the right, voting as a class, to elect 
directors to fill such vacancies,
if any, in the Board of Directors as may then exist
up to two (2) directors or, if such right is exercised
at an annual meeting, to elect two (2) directors.
If the number that may be so elected at any special
meeting does not amount to the required number, the
holders of the Preferred Stock shall have the right
to make such increase in the number of directors as
shall be necessary to permit the election by them
of the required number. After the holders of the
Preferred Stock shall have exercised their right
to elect directors in any Default Period and during
the continuance of such period, the number of directors
shall not be increased or decreased except by vote of
the holders of Preferred Stock as herein provided or
pursuant to the rights of any equity securities ranking
senior to or pari passu with the Series A Junior
Participating Preferred Stock.

(iii)   Unless the holders of Preferred Stock
shall, during an existing Default Period, have
previously exercised their right to elect directors,
the Board of Directors may order, or any shareholder
or shareholders owning in the aggregate not less than
ten percent (10%) of the total number of shares of
Preferred Stock outstanding, irrespective of series,
may request, the calling of a special meeting of the
holders of Preferred Stock, which meeting shall
thereupon be called by the President, a Vice President
or the Corporate Secretary of the Corporation. Notice
of such meeting and of any annual meeting at which
holders of Preferred Stock are entitled to vote
pursuant to this Paragraph (a)(i ii) shall be
given to each holder of record of Preferred Stock by
mailing a copy of such notice to him at his last
address as the same appears on the books of the
Corporation.  Such meeting shall be called for a
time not earlier than 20 days and not later than
60 days after such order or request or in default
of the calling of such meeting within 60 days after
such order or request, such meeting may be called
on similar notice by any shareholder or shareholders
owning in the aggregate not less than ten percent
(10%) of the total number of shares of Preferred
Stock outstanding.  Notwithstanding the provisions
of this Paragraph (a)(iii), no such special meeting
shall be called during the period within 60 days
immediately preceding the date fixed for the next
annual meeting of the shareholders.

(iv)    In any Default Period, the holders
of Common Stock, and other  classes of stock of
the Corporation if applicable, shall continue to be
entitled to elect the whole number of directors until
the holders of Preferred Stock shall have exercised
their right to elect two (2) directors voting, as a class,
after the exercise of which right (x) the directors so
elected by the holders of Preferred Stock shall continue
in office until their successors shall have been elected
by such holders or until the expiration of the Default
Period, and (y) any vacancy in the Board of Directors
may (except as provided in Paragraph (a)(iii) of this
Section 3) be filled by vote of a majority of the
remaining directors theretofore elected by the holders
of the class of stock that elected the director whose
office shall have become vacant. References in this
Paragraph (a) to directors elected by the holders of a 
particular class of stock shall include directors
elected by such directors to fill vacancies as provided
in clause (y) of the foregoing sentence.

(v)   Immediately upon the expiration of a
Default Period, (x) the right of the holders of Preferred
Stock as a class to elect directors shall cease, (y) the
term of any directors elected by the holders of Preferred
Stock as a class shall terminate and (z) the number of
directors shall be such number as may be provided for
in the Restated Articles of Incorporation or Bylaws
irrespective of any increase made pursuant to the
provisions of Paragraph (a)(i) of this Section 3 (such
number being subject, however, to change thereafter in
any manner provided by law or in the Restated Articles
of Incorporation or Bylaws). Any vacancies in the Board
of Directors effected by the provisions of clauses (y)
and (z) in the preceding sentence may be filled by
a majority of the remaining directors.

(c)   Except as set forth herein, holders of Series A
Junior Participating Preferred Stock shall have no special
voting rights, and their consent shall not be required
(except to the extent they are entitled to vote with
holders of Common Stock as set forth herein)
for taking any corporate action.

4.    Certain Restrictions.

(a)   Whenever quarterly dividends or other dividends
or distributions payable on the Series A Junior
Participating Preferred Stock as provided in Section 2
are in arrears, thereafter and until all accrued and
unpaid dividends and distributions, whether or not
declared, on shares of Series A Junior Participating
Preferred Stock outstanding shall have been paid in
full, the Corporation shall not:

(i)    declare or pay dividends on, make any
other distributions on, or redeem or
purchase or otherwise acquire for consideration
any shares of stock ranking junior
(either as to dividends or upon liquidation,
dissolution or winding up) to the
Series A Junior Participating Preferred Stock;

(ii)   declare or pay dividends on or make any
other distributions on any shares
of stock ranking on a parity (either as to
dividends or upon liquidation, dissolution
or winding up) with the Series A Junior
Participating Preferred Stock, except dividends
paid ratably on the Series A Junior
Participating Preferred Stock and all
such parity stock on which dividends are payable
or in arrears in proportion to the
total amounts to which the holders of all such
shares are then entitled;

(iii)  redeem or purchase or otherwise acquire
for consideration shares of any stock ranking
on a parity (either as to dividends or upon
liquidation, dissolution or winding up) with
the Series A Junior Participating Preferred
Stock, provided that the Corporation may at
any time redeem, purchase or otherwise acquire
shares of any such parity stock in exchange
for shares of any stock of the Corporation
ranking junior (either as to dividends or upon
dissolution, liquidation or winding
up) to the Series A Junior Participating
Preferred Stock; or

(iv)   purchase or otherwise acquire for
consideration any shares of Series A
Junior Participating Preferred Stock, or any
shares of stock ranking on a parity
with the Series A Participating Preferred Stock,
except in accordance with a purchase offer made
in writing or by publication (as determined by
the Board of Directors) to all holders of such
shares upon such terms as the Board of Directors.
after consideration of the respective annual
dividend rates and other relative rights
and preferences of the respective series and
classes, shall determine in good faith
will result in fair and equitable treatment among
the respective series or classes.

(b)   The Corporation shall not permit any subsidiary
of the Corporation to purchase or otherwise acquire
for consideration any shares of stock of the Corporation
unless the Corporation could, under Paragraph (a) of this
Section 4, purchase or otherwise acquire such shares
at such time and in such manner.

5.    Reacquired Shares. Any shares of Series A
Junior Participating Preferred Stock purchased or otherwise acquired
by the Corporation in any manner whatsoever shall be retired and
cancelled promptly after the acquisition thereof. All such shares
shall upon their cancellation become authorized but unissued shares
of Preferred Stock to be created by resolution or resolutions of
the Board of Directors, subject to the conditions and restrictions
on issuance set forth herein.

6.    Liquidation Dissolution or Winding Up.

(a)   Upon any liquidation (voluntary or
otherwise), dissolution or winding up of the
Corporation, no distribution shall be made to the holders
of shares of stock ranking junior (either as to dividends
or upon liquidation, dissolution or winding up) to the
Series A Junior Participating Preferred Stock unless,
prior thereto, the holders of shares of Series A Junior
Participating Preferred Stock shall have received $100
per share, plus an amount equal to accrued and unpaid
dividends and distributions thereon, whether or not
declared, to the date of such payment (the "Series A
Liquidation Preference"). Following the payment of
the full amount of the Series A Liquidation Preference,
no additional distributions shall be made to the holders
of shares of Series A Junior Participating Preferred
Stock unless, prior thereto, the holders of shares of
Common Stock shall have received an amount per share
(the "Common Adjustment") equal to the quotient obtained
by dividing (i) the Series A Liquidation Preference by
(ii) 1000 (as appropriately adjusted as set forth in
subparagraph (c) below to reflect such events as stock
splits, stock dividends and recapitalizations with
respect to the Common Stock) (such number in clause
(ii), the "Adjustment Number"). Following the payment of
the full amount of the Series A Series A Liquidation
Preference and the Common Adjustment in respect of
all outstanding shares of Series A Junior Participating
Preferred Stock and Common Stock, respectively, holders
of Series A Junior Participating Preferred Stock and
holders of shares of Common Stock shall receive their
ratable and proportionate share of the remaining assets
to be distributed in the ratio of the Adjustment
Number to one with respect to such Preferred Stock and
Common Stock. on a per share basis, respectively.

(b)   In the event, however, that there are
not sufficient assets available to permit payment in
full of the Series A Liquidation Preference and the
liquidation preferences of all other series of Preferred
Stock, if any, that rank on a parity with the Series A
Junior Participating Preferred Stock, then such remaining
assets shall be distributed ratably to the holders of
such parity shares in proportion to their respective
liquidation preferences. In the event, however, that
there are not sufficient assets available to permit
payment in full of the Common Adjustment, then such
remaining assets shall be distributed ratably to the
holders of Common Stock.

(c)   In the event the Corporation shall at
any time after the Rights Declaration Date (i) declare
any dividend on Common Stock payable in shares of Common
Stock, (ii) subdivide the outstanding Common Stock or
(iii) combine the outstanding Common Stock into a smaller
number of shares, then in each such case the Adjustment
Number in effect immediately prior to such event shall
be adjusted by multiplying such Adjustment Number by a
fraction, the numerator of which is the number of shares
of Common Stock outstanding immediately after such event
and the denominator of which is the number of shares of
Common Stock that were outstanding immediately prior
to such event.

7.    Consolidation, Merger, etc. In case the
Corporation shall enter into any consolidation, merger, combination
or other transaction in which the shares of Common Stock are
exchanged for or changed into other stock or securities, cash
and/or any other property, then in any such case the shares of
Series A Junior Participating Preferred Stock shall at the same
time be similarly exchanged or changed in an amount per share
(subject to the provision for adjustment hereinafter set forth)
equal to 1000 times the aggregate amount of stock, securities,
cash and/or any other property (payable in kind), as the case
may be, into which or for which each share of Common Stock is
changed or exchanged. In the event the Corporation shall at any
time after the Rights Declaration Date (i) declare any dividend
on Common Stock payable in shares of Common Stock, (ii)
subdivide the outstanding Common Stock, or (iii) combine the
Outstanding Common Stock into a smaller number of shares, then
in each such case the amount set forth in the preceding sentence
with respect to the exchange or change of shares of Series A
Junior Participating Preferred Stock shall be adjusted by
multiplying such amount by a fraction the numerator of which is
the number of shares of Common Stock Outstanding immediately after
such event and the denominator of which is the number of shares
of Common Stock that were outstanding immediately prior to
such event.

8.     No Redemption. The shares of Series A
Junior Participating Preferred Stock shall not be redeemable.

9.     Ranking. The Series A Junior
Participating Preferred Stock shall rank junior to all other
series of the Corporation's Preferred Stock as to the payment
of dividends and the distribution of assets, unless the terms
of any such series shall provide otherwise.

10.    Amendment. At any time when any
shares of Series A Junior Participating Preferred Stock are
outstanding, the Restated Articles of Incorporation of the
Corporation, as amended hereby, shall not be amended in any
manner that would materially alter or change the powers,
preferences or special rights of the Series A Junior Participating
Preferred Stock so as to affect them adversely without the
affirmative vote of the holders of a majority or more of the
outstanding shares of Series A Junior Participating Preferred
Stock, voting separately as a class.

11.    Fractional Shares. Series A Junior
Participating Preferred Stock may be issued in fractions of a
share which shall entitle the holder, in proportion to such
holder's fractional shares, to exercise voting rights, receive
dividends, participate in distributions and to have the benefit
of all other rights of holders of Series A Junior Participating
Preferred Stock.

III.    The foregoing amendment was duly adopted by
the Corporation's Board of Directors on September 26, 2000.
No shareholder action was required.

Dated: September 26, 2000             NORFOLK SOUTHERN CORPORATION

By:   ______________________
[Chairman of the Board]
ATTEST:          

Corporate Secretary

NORFOLK SOUTHERN CORPORATION

ARTICLES OF RESTATEMENT

The following restatement of the Corporation's Articles of 
Incorporation, which contains as an amendment not requiring 
shareholder approval a new Article III, was adopted by the
Corporation's Board of Directors at a meeting held on July 22,1997.

RESTATED ARTICLES OF INCORPORATION

OF

NORFOLK SOUTHERN CORPORATION

ARTICLE I

The name of the Corporation is NORFOLK SOUTHERN CORPORATION.

ARTICLE II

The purpose for which the Corporation is organized is to 
transact any lawful business not required to be specifically stated 
in the Articles of Incorporation. 

ARTICLE III

The Corporation shall have authority to issue one billion, 
three hundred fifty million (1,350,000,000) shares of Common Stock, 
par value $1 per share, and twenty-five million (25,000,000) shares 
of Serial Preferred Stock, without par value. 

A.    Serial Preferred Stock

1.    Issuance in Series. The Board of Directors is hereby 
empowered to cause the Serial Preferred Stock of the Corporation 
to be issued in series with such of the variations permitted by clauses 
(a)-(h), both inclusive, of this Section 1 as shall have been fixed 
and determined by the Board of Directors with respect to any series 
prior to the issue of any shares of such series.

The shares of the Serial Preferred Stock of different series 
may vary as to:

(a) the number of shares constituting such series and the 
designation of such series, which shall be such as to distinguish 
the shares thereof from the shares of all other series and classes;

(b) the rate of dividend, the time of payment and, if 
cumulative, the dates from which dividends shall be cumulative, 
and the extent of participation rights, if any;

(c) any right to vote with holders of shares of any 
other series or class and any right to vote as a class, either 
generally or as a condition to specified corporate action;

(d) the price at and the terms and conditions on which 
shares may be redeemed;

(e) the amount payable upon shares in event of involuntary 
liquidation;

(f) the amount payable upon shares in event of voluntary 
liquidation;

(g) any sinking fund provisions for the redemption or 
purchase of shares and

(h) the terms and conditions on which shares may be 
converted, if the shares of any series are issued with the privilege 
of conversion.

The shares of all series of Serial Preferred Stock shall 
be identical except as, within the limitations set forth above in 
this Section 1, shall have been fixed and determined by the Board
of Directors prior to the issuance thereof.

2.    Dividends. The holders of the Serial Preferred Stock 
of each series shall be entitled to receive, if and when declared 
payable by the Board of Directors, dividends in lawful money of the 
United States of America, at the dividend rate for such
series, and not exceeding such rate except to the extent of any 
participation right. Such dividends shall be payable on such dates 
as shall be fixed for such series. Dividends, if cumulative and in 
arrears, shall not bear interest.

No dividends shall be declared or paid upon or set apart 
for the Common stock or for stock of any other class hereafter created 
ranking junior to the Serial Preferred Stock in respect of dividends 
or assets (hereinafter called Junior Stock), and no shares of Serial 
preferred Stock, Common Stock or Junior Stock shall be purchased,
redeemed or otherwise reacquired for a consideration, nor shall any 
funds be set aside for or paid to any sinking fund therefor, unless 
and until (i) full dividends on the outstanding Serial Preferred 
Stock at the dividend rate or rates therefor, together with the
full additional amount required by any participation right, shall 
have been paid or declared and set apart for payment with respect 
to all past dividend periods, to the extent that the holders of the 
Serial Preferred Stock are entitled to dividends with respect to any 
past dividend period, and the current dividend period, and (ii) all
mandatory sinking fund payments that shall have become due in respect 
of any series of the Serial Preferred Stock shall have been made. 
Unless full dividends with respect to all past dividend periods on 
the outstanding Serial Preferred Stock at the dividend rate or 
rates therefor, to the extend that holders of the Serial Preferred 
Stock are entitled to dividends with respect to any particular past 
dividend period, together with the full additional amount required 
by any participation right, shall have been paid or declared and set 
apart for payment and all mandatory sinking fund payments that shall
have become due in respect of any series of the Serial Preferred 
Stock shall have been made, no distributions shall be made to the 
holders of the Serial Preferred Stock of any series unless 
distributions are made to the holders of the Serial Preferred Stock 
of all series then outstanding in proportion to the aggregate 
amounts of the deficiencies in payments due to the respective series, 
and all payments shall be applied, first, to dividends accrued and in 
arrears, next, to any amount required by any participation right, 
and, finally, to mandatory sinking fund payments. The terms "current 
dividend period" and "past dividend period" mean, if two or more 
series of Serial Preferred Stock having different dividend periods 
are at the time outstanding, the current dividend period or any past 
dividend period, as the case may be, with respect to each such
series.

3.    Preference on Liquidation. In the event of any 
liquidation, dissolution or winding up of the Corporation, the holders 
of the Serial Preferred Stock of each series shall be entitled to receive, 
for each share thereof, the fixed liquidation price for such series, 
plus, in case such liquidation, dissolution or winding up shall have
been voluntary, the fixed liquidation premium for such series, if any,
together in all cases with a sum equal to all dividends accrued or in 
arrears thereon and the full additional amount required by any 
participation right, before any distribution of the assets shall be 
made to holders of the Common Stock or Junior Stock; but the holders
of the Serial Preferred Stock shall be entitled to no further 
participation in such distribution. If, upon any such liquidation, 
dissolution or winding up, the assets distributable among the holders 
of the Serial Preferred Stock shall be insufficient to permit the 
payment of the full preferential amounts aforesaid, then such assets 
shall be distributed among the holders of the Serial Preferred Stock 
then outstanding ratably in proportion to the full preferential 
amounts to which they are respectively entitled. For the purposes of 
this Section 3, the expression "dividends accrued or in arrears" means,
in respect of each share of the Serial Preferred Stock of any series 
at a particular time, an amount equal to the product of the rate of 
dividend per annum applicable to the shares of such series multiplied 
by the number of years and any fractional part of a year that shall 
have elapsed from the date when dividends on such shares became
cumulative to the particular time in question less the total amount 
of dividends actually paid on the shares of such series or declared 
and set apart for payment thereon; provided, however, that, if the 
dividends on such shares shall not be fully cumulative, such 
expression shall mean the dividends, if any, cumulative in respect 
of such shares for the period stated in the articles of serial 
designation creating such shares less all dividends paid in or with 
respect to such period.

B.    Common Stock

1.    Subject to the provisions of law and the rights of 
holders of shares at the time outstanding of all classes of stock 
having prior rights as to dividends, the holders of Common Stock 
at the time outstanding shall be entitled to receive such dividends 
at such times and in such amounts as the Board of Directors may deem
advisable.

2.    In the event of any liquidation, dissolution or 
winding up (whether voluntary or involuntary) of the Corporation, 
after the payment or provision for payment in full of all debts and 
other liabilities of the Corporation and all preferential amounts to
which the holders of shares at the time outstanding of all classes 
of stock having prior rights thereto shall be entitled, the remaining 
net assets of the Corporation shall be distributed ratably among 
the holders of the shares at the time outstanding of Common
Stock.

3.    The holders of Common Stock shall be entitled to one 
vote per share on all matters.

ARTICLE IV

No holder of capital stock of the Corporation of any class 
shall have any preemptive right to subscribe to or purchase (i) 
any shares of capital stock of the Corporation, (ii) any 
securities convertible into such shares or (iii) any options, warrants
or rights to purchase such shares or securities convertible into such 
shares.

ARTICLE V

The number of directors, unless otherwise fixed by the 
bylaws, shall be sixteen. The directors shall be divided into three 
classes, one of which shall be composed of six directors and two 
of which shall be composed of five directors. At each annual meeting 
of stockholders, the number of directors to be elected shall be
equal to the number of directors whose terms of office then expire, 
of the Serial Preferred Stock of each series shall be entitled to receive, 
or decreased, the number of directors then to be elected shall be as 
nearly as possible one third of the total number of directors, and 
each director shall hold office until the third succeeding annual
meeting after his election; provided, however, that at no election 
shall a greater number of directors be elected than the number of 
vacancies then existing, and provided further that, upon any increase 
in the total number of directors, the additional vacancies shall
be so assigned by the Board of Directors to classes that the number 
of directors of each class shall be as nearly equal as possible and 
the vacancies shall be filled for terms corresponding to the classes 
to which the vacancies are so assigned. Each director shall hold 
office until his successor shall have been elected, and the terms of
office of directors elected by the Board of Directors to succeed former 
directors shall expire at the next stockholders' meeting at which 
directors are elected.

ARTICLE VI

1.    In this Article:

"expenses" includes, without limitation, counsel fees.

"liability" means the obligation to pay a judgment, settlement, 
penalty, fine (including any excise tax assessed with respect 
to an employee benefit plan), or reasonable expenses incurred 
with respect to a proceeding.

"party" includes, without limitation, an individual who was, 
is, or is threatened to be made a named defendant or respondent 
in a proceeding.

"proceeding" means any threatened, pending, or completed 
action, suit, or proceeding whether civil, criminal, 
administrative, or investigative and whether formal or informal.

2.    To the full extent that the Virginia Stock Corporation 
Act, as it exists on the date hereof or as hereafter amended, 
permits the limitation or elimination of the liability of directors 
and officers, no director or officer of the Corporation made a
party to any proceeding shall be liable to the Corporation or its 
stockholders for monetary damages arising out of any transaction, 
occurrence or course of conduct, whether occurring prior or subsequent 
to the effective date of this Article.

3.    To the full extent permitted by the Virginia Stock 
Corporation Act, as it exists on the date hereof or as hereafter 
amended, the Corporation shall indemnify any person who was or is 
a party to any proceeding, including a proceeding brought by or in 
the right of the Corporation, by reason of the fact that he is or 
was a director or officer of the Corporation, or while serving as 
such director or officer, is or was serving at the request of the 
Corporation as a director, trustee, partner or officer of another
corporation, partnership, joint venture, trust, employee benefit 
plan or other enterprise, against any liability incurred by him in 
connection with such proceeding. A person shall be considered to 
be serving an employee benefit plan at the Corporation's request if 
his duties to the Corporation also impose duties on, or otherwise 
involve services by, him to the plan or to participants in or 
beneficiaries of the plan. To the same extent, the Board
of Directors is hereby empowered, by a majority vote of a quorum 
of disinterested directors, to enter into a contract to indemnify 
any director or officer against liability and/or to advance or 
reimburse his expenses in respect of any proceedings arising from
any act of omission, whether occurring before or after the 
execution of such contract.

4.   The provisions of this Article shall be applicable 
to all proceedings commenced after it becomes effective, arising 
from any act or omission, whether occurring before or after such 
effective date. No amendment or repeal of this Article shall 
impair or otherwise diminish the rights provided under this 
Article (including those created by contract) with respect to any 
act or omission occurring prior to such amendment or repeal. 
The Corporation shall promptly take all such actions and make all 
such determinations and authorizations as shall be necessary or 
appropriate to comply with its obligation to make any indemnity 
against liability, or to advance any expenses, under
this Article and shall promptly pay or reimburse all reasonable 
expenses, including attorneys' fees, incurred by any such director 
or officer in connection with such actions and determinations 
or proceedings of any kind arising therefrom.

5.    The termination of any proceeding by judgment, order, 
settlement, conviction, or upon a plea of nolo contendere or its 
equivalent, shall not of itself create a presumption that the director 
or officer did not meet any standard of conduct that is a
prerequisite to the limitation or elimination of liability provided 
in Section 2 or to his entitlement to indemnification under Section 
3 of this Article.

6.    Any indemnification under Section 3 of this Article 
(unless ordered by a court) shall be made by the Corporation only 
as authorized in the specific case upon a determination that 
indemnification is proper in the circumstances because the proposed 
indemnitee has met any standard of conduct that is a prerequisite to 
his entitlement to indemnification under Section 3 of this Article.

The determination shall be made:

(a) By the Board of Directors by a majority vote of a 
quorum consisting of directors not at the time parties to the 
proceeding;

(b) If a quorum cannot be obtained under subsection (a) 
of this section, by majority vote of a committee duly designated by 
the Board of Directors (in which designation directors who are 
parties may participate), consisting solely of two or more 
directors not at the time parties to the proceeding;

(c) By special legal counsel:

(i) Selected by the Board of Directors or its committee 
in the manner prescribed in subsection (a) or (b) 
of this section; or

(ii) If a quorum of the Board of Directors cannot 
be obtained under subsection (a) this section 
and a committee cannot be designated under subsection 
(b) of this section, selected by a majority vote of 
the full Board of Directors, in which selection
directors who are parties may participate; or

(d) By the stockholders, but shares owned by or voted 
under the control of directors who are at the time parties 
to the proceeding may not be voted on the determination.

Authorization of indemnification and evaluation as to 
reasonableness of expenses shall be made in the same manner as 
the determination that indemnification is appropriate, except that 
if the determination is made by special legal counsel, such
authorizations and evaluations shall be made by those entitled 
under subsection (c) of this section to select counsel.

Notwithstanding the foregoing, in the event there has 
been a change in the composition of a majority of the Board of 
Directors after the date of the alleged act or omission with 
respect to which indemnification, an advance or reimbursement is
claimed, any determination as to such indemnification, advance or 
reimbursement shall be made by special legal counsel agreed upon 
by the Board of Directors and the proposed indemnitee. If the 
Board of Directors and the proposed indemnitee are unable to agree 
upon such special legal counsel, the Board of Directors and the
proposed indemnitee each shall select a nominee, and the nominees 
shall select such special legal counsel.

7. (a) The Corporation shall pay for or reimburse the 
reasonable expenses incurred by a director or officer 
(and may do so for a person referred to in Section 8 
of this Article) who is a party to a proceeding in
advance of final disposition of the proceeding or the 
making of any determination under Section 3 if the 
director, officer or person furnishes the Corporation:

(i)  a written statement, executed personally, of his 
good faith belief that he has met any standard of 
conduct that is a prerequisite to his entitlement to 
indemnification under Section 3 of this Article;
and

(ii) a written undertaking, executed personally or 
on his behalf, to repay the advance if it is 
ultimately determined that he did not meet
such standard of conduct.

(b) The undertaking required by paragraph (ii) of
subsection (a) of this section shall be an unlimited 
general obligation but need not be secured and may be 
accepted without reference to financial ability to make 
repayment.

(c) Authorizations of payments under this section 
shall be made by the persons specified in Section 6.

8.    The Board of Directors is hereby empowered, by 
majority vote of a quorum consisting of disinterested directors, 
to cause the Corporation to indemnify or contract to indemnify 
any person not specified in Section 3 of this Article who was, is 
or may become a party to any proceeding, by reason of the fact 
that he is or was an employee or agent of the Corporation, or 
is or was serving at the request of the Corporation as a director, 
officer, employee or agent of another corporation, partnership, 
joint venture, trust, employee benefit plan or other enterprise, 
to the same or a lesser extent as if such person were specified 
as one to whom indemnification is granted in Section 3. The 
provisions of Sections 4 through 6 of this Article shall be
applicable to any indemnification provided hereafter pursuant 
to this section.

9.    The Corporation may purchase and maintain insurance to
indemnify it against the whole or any portion of the liability 
assumed by it in accordance with this Article and may also procure 
insurance, in such amounts as the Board of Directors may determine, 
on behalf of any person who is or was a director, officer,
employee or agent of the Corporation, or is or was serving at 
the request of the Corporation as a director, officer, employee 
or agent of another corporation, partnership, joint venture, trust, 
employee benefit plan or other enterprise, against any liability 
asserted against or incurred by him in any such capacity or 
arising from his status as such, whether or not the Corporation 
would have power to indemnify him against such liability under 
the provisions of this Article.

10.   Every reference herein to directors, officers, 
employees or agents shall include former directors, officers, 
employees and agents and their respective heirs, executors and 
administrators. The indemnification hereby provided and provided
hereafter pursuant to the power hereby conferred by this Article 
on the Board of Directors shall not be exclusive of any other 
rights to which any person may be entitled, including any right 
under policies of insurance that may be purchased and maintained
by the Corporation or others, with respect to claims, issues or 
matters in relation to which the Corporation would not have the 
power to indemnify such person under the provisions of this Article. 
Nothing herein shall prevent or restrict the power of the
Corporation to make or provide for any further indemnity, or 
provisions for determining entitlement to indemnity, pursuant to 
one or more indemnification agreements, bylaws, or other 
arrangements (including, without limitation, creation of trust funds 
or security interests funded by letters of credit or other means) 
approved by the Board of Directors (whether or not any of the 
directors of the Corporation shall be a party to or beneficiary
of any such agreements, bylaws or arrangements); provided, however, 
that any provision of such agreements, bylaws or other 
arrangements shall not be effective if and to the extent that 
it is determined to be contrary to this Article or applicable 
laws of the Commonwealth of Virginia, but other provisions of any 
such agreements, bylaws or other arrangements shall not be affected 
by any such determination.

11.   Each provision of this Article shall be severable, 
and an adverse determination as to any such provision shall in 
no way affect the validity of any other provision.

ARTICLE VII

The shareholder vote required, of each voting group 
entitled to vote thereon, to approve an amendment to the 
Corporation's Articles of Incorporation is a majority of all votes 
entitled to be cast by that voting group, unless the Board of
Directors conditions approval of such an amendment upon a greater vote.

Dated: September 5,1997

NORFOLK SOUTHERN CORPORATION

By /s/ David R. Goode
David R. Goode,
Chairman of the Board, President
and Chief Executive Officer

[SEAL]          Attest /s/ Sandra T. Pierce

Sandra T. Pierce
Assistant Corporate Secretary

EXHIBIT 10(h)

AMENDMENT NO. 1

DATED AS OF JUNE 1, 2000

OF THE

SHARED ASSETS AREA

OPERATING AGREEMENT

FOR

[NORTH JERSEY]
[SOUTH JERSEY/PHILADELPHIA]
[DETROIT]

Dated as of June 1, 1999

By and Among

CONSOLIDATED RAIL CORPORATION,

CSX TRANSPORTATION, INC. and

NORFOLK SOUTHERN RAILWAY COMPANY

AMENDMENT NO. 1
OF THE
SHARED ASSETS AREA
OPERATING AGREEMENT
FOR
[NORTH JERSEY]
[SOUTH JERSEY/PHILADELPHIA]
[DETROIT]

This AMENDMENT NO. 1 dated as of June 1, 2000 (the "Amendment") 
OF THE SHARED ASSETS AREA OPERATING AGREEMENT for [North Jersey]
[South Jersey/Philadelphia], [Detroit] ("Agreement") dated as of June 
1, 1999, is by and among Consolidated Rail Corporation ("CRC"), CSX 
Transportation, Inc. ("CSXT") and Norfolk Southern Railway Company 
("NSR").

W I T N E S S E T H:

WHEREAS, the parties have previously entered into the Agreement;

WHEREAS, the parties now desire to amend the Agreement with respect 
to the apportionment of certain liabilities between the parties as more
fully set forth below;

WHEREAS, it is the intent of the parties that, except as expressly 
amended hereby, the Agreement shall remain unamended and in full force 
and effect;

NOW, THEREFORE, the parties hereby amend the Agreement as follows:

SECTION 1.   Definitions.  Capitalized terms used in this Amendment 
and not defined herein shall have the meanings assigned to such terms in 
the Agreement.

SECTION 2.  Amendments of the Agreement.  The Agreement is hereby 
amended pursuant to and in compliance with Section 17 as follows:

(a)  The heading and text of Section 11 b)(ii) are hereby deleted 
in their entirety and the following substituted therefor:

"(ii)  First Two Years.  If an incident giving rise to Damage 
for which the Operators are jointly responsible under Section 
11(b)(i) Train Usage) occurs before June 1, 2001, responsibility 
for such Damage shall be borne equally by the Operators, with each 
being liable for one-half (1/2) of the damages."

(b)  The heading and text of Section 11(f)(i)(A.1.)are hereby 
deleted in their entirety and the following substituted therefor:

"(A.1)  Tier One Damages Defined.  In this 
Section 11(f), "Tier One Damages" for any incident occurring 
during and between June 1, 1999 and May 31, 2001 shall, 
except as otherwise provided in Section 11(g) (Substance 
Abuse Exceptions), include the greater of:

(1)  $25 million of Damages; or

(2)  the lowest amount of Damages which, 
when allocated among all parties, results in an 
allocation to either Operator of Damages in an amount 
equal to all insurance benefits available to that 
Operator (called the "Lesser Insured Operator") which 
has the lesser (as between the Operators) amount of 
insurance benefits available to it, including, without 
limitation, insurance to which CRC looks under Section 
11(c) (CRC Responsibility - Allocation and Insurance).  
In determining insurance benefits available to the 
Lesser Insured Operator, both property and liability 
Insurance shall be considered but (i) only to the extent 
benefits are actually available in connection with that 
incident and (ii) they shall be calculated separately 
(i.e., property insurance benefits shall not be 
considered in any determination of available liability 
insurance benefits and vice versa).

In this Section 11(f), "Tier One Damages" for any incident 
occurring on or after June 1, 2001 shall, except as otherwise 
provided in Section 11(g) (Substance Abuse Exceptions), include 
only the first $25 million of Damages incurred by the parties, 
unless otherwise agreed by the parties."

SECTION 3.  Effectiveness.  This Amendment shall become effective 
as of June 1, 2000, the "Amendment Date."

SECTION 4.  Integration; Confirmation.  On and after the Amendment 
Date, each reference in the Agreement to "this Agreement," "herein," 
"hereunder" or words of similar import, and each reference in any Note 
or other document delivered in connection with the Agreement shall be 
deemed to be a reference to the Agreement as amended by this Amendment, 
and the Agreement as so amended shall be read as a single integrated 
document.  Except as specifically amended by this Amendment, all other 
terms and provisions of the Agreement shall continue in full force and 
effect and unchanged and are hereby confirmed in all respects.

SECTION 5.  Confirmation of Agreement.  In all respects not 
inconsistent with the terms and provisions of this Amendment, the 
Agreement is hereby ratified, adopted, approved and confirmed.

SECTION 6.  Counterparts.  This Amendment may be signed in any 
number of counterparts, each of which shall be an original, with the 
same effect as if the signatures thereto and hereto were upon the 
same instrument.

IN WITNESS WHEREOF, the parties hereto have caused this 
Agreement to be duly executed as of the day and year first above 
written.

CSX TRANSPORTATION, INC.

By:
Name:
Title:

NORFOLK SOUTHERN RAILWAY COMPANY

By:
Name:
Title:

CONSOLIDATED RAIL CORPORATION

By:
Name:
Title:

EXHIBIT 10(k)

SUPPLEMENTARY AGREEMENT

THIS SUPPLEMENTARY AGREEMENT is entered into as of January 
1, 1987, between the Trustees of the Cincinnati Southern Railway
(hereinafter "Lessor" or "Trustees"), and the Cincinnati, New
Orleans and Texas Pacific Railway Company ("Lessee"), an Ohio
corporation,

WITNESSETH

WHEREAS, the City of Cincinnati, Ohio, is the owner of a 
line railroad known as the Cincinnati Southern Railway and certain
properties which are under the control and jurisdiction of the
Lessor ("Line") and which are leased to Lessee pursuant to a Lease
made and entered into the 11th day of October, 1881, as extended,
modified and supplemented ("Lease"); and

WHEREAS, certain differences have arisen between the Lessor
and Lessee regarding the interpretation, meaning, effect and
performance of certain provisions contained in the aforementioned
Lease and regarding the amount of rental that should be paid
thereunder;

WHEREAS, the shareholder and board of directors of Lessee, at
special meetings, have authorized the undertakings hereinafter set
forth; and

WHEREAS, Southern Railway Company ("SR") and Norfolk Southern
Corporation ("NS"), Virginia corporations, are executing this
Agreement as guarantors of the performance by Lessee of its
obligations hereunder; and

WHEREAS, by and Act of the General Assembly of the State of
Ohio, passed June 25, 1961, the board of trustees of any railway
appointed under the provisions of the Act of May 4, 1869, among
other things, were authorized to modify any existing lease of such
railway in accordance with ordinances of the council of the city
owning such line of railway; and

WHEREAS, Council of the City of Cincinnati on the 5th day 
of August, 1987, passed Ordinance No. 309-1987, entitled
"Authorizing the Trustees of the Cincinnati Southern Railway to
Execute a Supplementary Agreement with The Cincinnati, New Orleans
and Texas Pacific Railway Company", a copy of which is attached 
hereto as Exhibit A;

NOW, THEREFORE, it is mutually covenanted and agreed by said
parties each for itself, its or their successors and assigns, as
follows:

1.     Commencing with the calendar year 1987, Lessee
agrees to pay rent to Lessor in advance, in quarterly
installments, on January 1, April 1, July 1 and October 1 of each
year at the offices of the Treasurer of the City of Cincinnati.
The amount of rental shall be determined as follows:

(a)     For the calendar year 1987, the rental shall be
$11,000,000.00.  Any quarterly payments, net of payments timely
made in accordance with the existing Lease, which are delayed
pending execution of this Agreement shall be paid within five days
after this Agreement is fully executed and all required approvals
obtained, and shall bear interest at 6% per annum from the date
each applicable quarter's payment was due until the day before its
payment.

(b)     For 1988 and subsequent years the annual rent by a
"Factor" obtained by dividing the Implicit Price Deflator for
Gross National Product ("IPD-GNP") for the prior calendar year by
the IPD-GNP for the year preceding the prior calendar year, 
provided, however, that the rent will not be less than
$11,000,000.00 for any year.

For any given year, the denominator of the fraction used to
calculate the Factor will be the same as the numerator of the
fraction used to calculate the previous year's Factor.  The
calculations of the Factor to be applied to the previous year's
rent shall be carried out to five places to the right of the
decimal and rounded.

IPD-GNP is developed by the U. S. Department of Commerce,
Bureau of Economic Analysis and is reported in the publication
ECONIMIC INDICATORS prepared for the Joint Economic Committee by
the Council of Economic Advisors.

(c)     If, in the rent calculation for the year 1988 or any
subsequent year, the Factor is greater than 1.04, then 1.04 will
be the Factor used.  If, in the rent calculation for 1988 or any
subsequent year, the Factor as calculated under subparagraph (b) 
hereof is less than .96, then .96 will be the Factor used.

(d)     Because the IPD-GNP for each calendar year cannot be
available on the first day of the following year, the parties 
agree that rent installments in any year will not be adjusted
until after the IPD-GNP for the previous calendar year is
published.  Any difference between the installment payment made in
any quarter and what it would have been had the IPD-GNP been known
will be reflected in the rent for the quarter next following the
date the applicable IPD-GNP becomes known.

(e)     The following examples are provided to illustrate the
application of the formula:

Example 1:      Assuming that the IPD-GNP for the calendar year 1987
is 113.1, the rent payable in 1988 would be
calculated as follows:

113.1 (IPD-GNP for 1987)  =  .98864 x $11 mill. =
114.1 (IPD-GNP for 1986)        $10.87504 million

The rent would be $11 million since the calculation
would yield a rental less than the agreed upon floor
of $11 million.

Example 2:      Assuming that IPD-GNP for the calendar year 1988 is
117.5, the rent payable in 1989 would be calculated
as follows:

117.5 (IPD-GNP for 1988)  =  1.03890 x $11 mill. =
113.1 (IPD-GNP for 1987)  =      $11.41794 million

Example 3:      Assuming that the IPD-GNP for the calendar year 1989
is 124.6, the rent payable in 1990 would be
calculated as follows:

124.6 (IPD-GNP for 1989)   =  1.06043
117.5 (IPG-GNP for 1988)      1.04 x $11.4279 mill. =
$11.885058 million

In this example, since a factor of 1.06043 is
produced by the calculation, and 1.04 is the
established cap, the 1.04 factor is to be used.

Example 4:      Assuming that the IPD-GNP for the calendar year 190
is 117.1, the rent payable in 1991 would be
calculated as follows:

117.1 (IPD-GNP for 1990)   =    .93981
124.6 (IPD-GNP for 1989)        .96 x $11.885058 mill. =
$11.409656 million

In this example, since a factor of .93981 is
produced by the calculation, and .96 is the
established minimum, the .96 factor is to be used.

(f)     The rental provided for herein shall be in lieu of the
fixed and contingent rent(s) provided for in the Lease but shall
not affect Lessee's obligation to pay in accordance with the
Supplemental Agreement of November 16, 1961, the principal and
interest on bonds issued to finance certain improvements to the
leased premises.

2.     Lessee shall have the option to extend the term of the
Lease for twenty-five (25) years beyond the present expiration
date or until December 31, 2051.  Such option shall be exercised 
on or before January 1, 2022 by Lessee notifying Lessor in writing
of Lessee's intent to extend the Lease.  Within thirty (30) days
after receipt of such notice of intent to extend, Lessor shall
notify Lessee in writing of its proposed rental terms for the
extension period.  If such proposed rental terms are acceptable to
Lessee, such acceptance shall be communicated to Lessor in writing
on or before April 1, 2022, and the parties shall execute the
appropriate documents necessary to effect the extension.  If the
proposed rental terms are unacceptable to Lessee and the parties
have been unable to reach agreement on different rental terms on
or before June 30, 2022, or such later date as is mutually agreed
to by Lessor and Lessee, either party may submit the issue to
arbitration in accordance with Section 8, in which case the
arbitrators shall determine fair market rental terms for the
leased premises for the period in extension.

Within 90 days after receiving the arbitrators' determination
of fair market rental terms, Lessor and Lessee shall file sealed
statements with the arbitrators stating whether they accept the
arbitration decision.  Such statements are only to be opened by
the arbibtrators after both parties have submitted their
statements.  If both parties accept the arbitrators' 
determination, the parties shall execute the appropriate documents
incorporating such determination necessary to effect the extension.

If Lessee accepts the arbitrators' determination but Lessor
does not, the Lessor may seek to Lease or sell the leased property
to another party; however, Lessee shall have a right of first
refusal to extend the Lease or purchase the leased property on the
same terms as any bona fide third party offer received by and
acceptable to Lessor.  If Lessor does not obtain a bona fide third
party offer acceptable to it to lease or buy the railroad prior to
one year prior to the expiration of the lease term, or prior to
one year after the date of the arbitration determination, 
whichever is later, and has not committed to operate the leased 
property itself, Lessee shall have the option to extend the Lease
on the terms decided upon in the arbitrators' determination.  In
the interim, Lessee shall have the right to continue using the
leased property on the same terms as the current Lease on a year
to year basis.

If Lessee does not accept the arbitrators' determination, the
Lessor may seek to lease or sell the leased property to another
party.  If Lessor receives a bona fide third party offer
acceptable to it on terms more favorable to it than the terms of 
the arbitrators' determination, Lessee shall have no rights to
extend the Lease.  If the best bona fide third party offer
acceptable to Lessor is less favorable to Lessor than the
arbitrators' determination, Lessee shall have a right of first
refusal to extend the Lease or purchase the leased property on the
same terms as the third party offer.  If the best bona fide third
party offer acceptable to Lessor is equal to the arbitrators'
determination, then Lessee shall have a right of first refusal on
the same terms only if Lessor has also rejected the arbitrators'
determination.  If Lessor does not receive a bona fide third party
offer to lease or buy the railway acceptable to Lessor within one
year prior to expiration of the lease term, and Lessor has not
committed to operate the leased property itself, Lessee shall have
the right to continue using the property on the same terms as the
current Lease on a year to year basis.  At any time during such
year to year extension, Lessee shall have the option to match any
bona fide third party offer acceptable to Lessor.

The right of first refusal provided for herein shall be
exercised as follows:  Lessor shall advise Lessee in writing of
the terms of such bona fide offer.  Lessee shall have sixty days
from the date of such notice within which to exercise its right of
first refusal by notifying Lessor in writing of such exercise.  If
notice of exercise of the right of first refusal is not given
within such sixty day period, the right of first refusal shall
expire.

3.     (a)  Lessee may grant to others trackage rights,
easements, licenses and subleases of any part of the leased
premises for any purpose so long as such trackage rights,
easements, licenses and subleases do not extend beyond the term of
the Lease or any extension thereof, do not exceed the rights
granted to Lessee hereunder, are subject to the rights of Lessor
arising from failure by Lessee to comply with the terms of this
Agreement, and do not impair the maintenance or operation of the
Line.  The parties agree that at the termination of the Lease, no
hazardous waste material will be stored on the leased premises in
violation of then applicable law.  In the event license,
sublease or other agreement is entered into for installation of a
fiber optics communication system on the leased property, Lessee
agrees to pay Lessor 75% of the revenue attributable to such
license, sublease or agreement.  In the event such a system is
part of a fiber optics agreement encompassing rights of way beyond
the leased property, the revenue base used for calculating
Lessor's share shall be determined taking into account the
proportionate mileage of Lessor's property which is part of the
fiber optics agreement, the relative value of such mileage to the
communications system, and any other factors necessary to
determine a fair proportion of the revenue attributable to such
mileage.

(b)    The right to develop and use the air space over the
leased property titled in the name of Lessor in the City of
Cincinnati and Kenton County, Kentucky is reserved to the Lessor,
subject to the requirements of Lessee for clearances and other
protections to prevent interference with Lessee's use of the
leased property.  Prior to undertaking development of any of the
said air rights, Lessor will provide Lessee with detailed plans
and specifications for its review.  Development and use of such
air rights shall be subject to the express written consent of
Lessee, upon terms and conditions satisfactory to Lessee, which
consent shall not unreasonably be withheld.

(c)     The right to develop and use mineral rights underlying
the leased property titled in the name of the Lessor is reserved
to the Lessor, but during the term of the Lease and any extension,
such mineral rights shall not be exercised in a manner causing
interference with Lessee's use of the leased property.  Prior to
undertaking development of any of the said mineral rights, Lessor
will provide Lessee with detailed plans and specifications for
Lessee's review.  Development and use of such mineral rights shall
be subject to the express written consent of Lessee, upon terms
and conditions satisfactory to Lessee, which consent shall not
unreasonably be withheld.

(d)     The parties agree that nothing in the Lease or this
Supplementary Agreement constitutes any impediment to the
acquisition of and exercise of all rights of ownership by Lessee
or its corporate affiliates over any property, subject only to the
requirements of the Lease that, at the termination of the Lease or
any extension, Lessee surrender to the Lessor the line of railway
complete in all respects, and that construction of additional main
or side track be upon rights of way owned by Lessor.  At the time
of surrender, the Line shall be in condition equivalent to the
classification established by the Federal Railway Administration
as applied to the line in the applicable portions of the timetable
for the Southern Railway System Kentucky Division in effect as of
the date of execution hereof (a copy of which is attached hereto
as Exhibit B).

(e)     If, at any time during the term of the Lease or any
extension thereof, leased property shall, in the opinion of the
Lessee, not be necessary for the operation of the railroad, then
the Lessee shall have the right to use he same for any other
lawful purposes, and shall have the right to receive as its own
all rents, issues and profits therefrom.  At the termination of
the Lease or any extension thereof, Lessee shall surrender the
same to the Lessor with all improvements thereon.  Alternatively, 
Lessee may at any time declare any such property to be superfluous
and upon written notice to Lessor return such property to Lessor
and release it from the leased premises.

(f)     If, at any time during the term of the Lease or any
extension thereof, leased property is condemned or conveyed under
threat of condemnation, the following provisions shall govern;
any award or payment, net of any tax and expenses, shall be held
by Lessee in an interest paying account and used, with its
interest, only to replace the property or improvements taken, or
to acquire additional real property to be titled in the name of
the Lessor and to make improvements thereon for the operation of
the railway, which property shall become part of the leased
property.  Lessee shall make an annual accounting of the use of
such funds to Lessor.  Any balance in such account at the
termination of the Lease, including any extension or renewal
thereof, shall then become the property of Lessor.

(g)     In the event of termination of this Lease or any
extension or renewal thereof, Lessee agrees to grant to Lessor or
any subsequent Lessee or purchaser of Lessor's line of railroad in
Cincinnati, Ohio, and Lessor agrees to grant to Lessee or its
successors and assigns, non-exclusive joint use of each other's
rail facilities within the Gest Street Yard in the City of
Cincinnati as necessary for the operation of their respective rail
liens in accordance with the customary terms for such usage and in
exchange for payment of the customary charges received among
railroads for such usage rights.

4.     During the term(s) hereby granted Lessee will pay and
save harmless the Lessor from the payment of any costs, expenses,
claims, liabilities, damages and demands whatsoever rising out of
the Lessee's possession, control, management and operation of the
said line of railway and its equipment, or any part of the leased
premises.  Lessee assumes the duties, liabilities and obligations
of an owner, doing every act and thing required by law of the
Trustees, their successors and assigns.  If Lessee shall be covered
by insurance for any of its obligations set forth in this Section
4, it will, if it can do so within added premium cost, name
Lessor as an additional insured.  During the term(s) hereby 
granted Lessee also shall provide to Lessor an annual report
summarizing the condition of the leased premises, the nature of
repairs or replacements made with respect thereto, and the sale of
any rail lines between Cincinnati, Ohio and Chattanooga, Tennessee
during the previous twelve months.

5.     Lessee agrees that it will, during the continuance of the
Lease, pay to the Trustees, without deduction from the rent herein
reserved, the sum of one hundred thousand dollars per annum
payable quarterly at the Cincinnati offices of the Trustees of the
Cincinnati Southern Railway to cover the necessary expense
devolving upon the Trustees in conducting the Trustees' affairs.
The amount of this payment shall be adjusted annually, beginning
with the Lease year commencing January 1, 1988, and continuing
every year thereafter during the term of the Lease and any
extension to reflect increases in the Consumer Price Index.  For
each such year the expense payment shall be determined by
multiplying the sum of $100,000 by a fraction, the numerator of
which shall be the Consumer Price Index as of the end of the
immediately preceding year, and the denominator of which shall be
the Consumer Price Index as of the end of 1986.  If the result of
this calculation is less than or equal to $100,000, the expense
payment for that year shall be $100,000.  If the result of the
calculation exceeds $100,000, the result of the calculation shall
be the expense payment for that year.  Any amounts payable under
this Section 5 in excess of $100,000 shall be paid on or before
July 1 of that year.

6.     (a)  In consideration of the Trustees' full release of
Lessee from any and all claims arising out of or on account of the
prior lease relationship between the parties, Lessee will,
concurrently with the execution of this Agreement and conditioned
upon execution of a similar release of claims by the City of
Cincinnati, pay to the Trustees the sum of six million dollars.
This release shall not apply to Lessor's claims to ownership of
the leased property under the terms of the Lease.  Lessor agrees
to defer all such claims existing as of July 15, 1987 until
termination of the Lease.  Lessor and Lessee agree that the
execution of this Agreement shall not abridge, estop, compromise,
release or waive Lessor's claims with regard to such ownership
rights an that no defense of waiver, laches, acquiescence,
release, estoppel or the like arising on or after July 15, 1987
with respect to claims existing on that date may be asserted by 
reason of Lessor's agreement not to assert or prosecute such
claims at this time.  It is the intention of the parties that
these property issues not impede the resolution of other issues in
dispute and that neither party should be prejudiced by the
deferral of issues pertaining to ownership of property until
termination of the lease.

It is understood and agreed between the parties that the
accrual and/or payment of the six million dollars, together with
the related tax benefit, shall not operate to increase or decrease 
the contingent rental for years prior to 1987, as computed i
accordance with the November 16, 1961 Supplemental Agreement
between the parties.

(b)   In further consideration of the execution hereof and
the covenants of Lessor as set forth herein, Lessee agrees to
transfer and convey, by sufficient special warranty deed, to
Lessor and the successors and assigns thereof, certain Riverfront
real estate situated in the City of Cincinnati, Hamilton County,
Ohio described on Attachment C hereto.  Said deed shall be 
executed by Lessee and delivered to Lessor no later than ninety
days after execution of this Supplementary Agreement and receipt
of all necessary approvals.  Such property shall constitute part
of the leased property, except that air rights over said property
shall be reserved to Lessor as provided in Section 3(b) hereof.

7.     As security for the faithful performance by the Lessee of
the terms of this Contract, but not in limitation of other rights
of the Lessor, Lessee agrees to deposit with the Lessor a surety
bond or bonds issued by an insurer or insurers having a
certificate of authority to act as surety in the State of Ohio in
the amount of $5,500,000.00.  During any lease year that the
annual rental exceeds $11,000,000, the amount of the surety bond
for such year shall be increased by $500,000 for each full
$1,000,000 that such year's rent exceeds $11,000,000.  Such surety
bond or bonds shall be renewed annually as of the date the rent is
calculated.

In consideration hereof, and in further consideration of the
other covenants herein by Lessee, Norfolk Southern Corporation,
and Southern Railway Company, the Mortgage by Lessee to Lessor,
dated October 11, 1881, as subsequently confirmed and extended, is
hereby cancelled, and shall be of no further force or effect.
Likewise, Clause 7 of the 1881 Indenture, creating the lien
secured by the said Mortgage, is hereby abrogated and annulled.

8.     (a)   If, during the term(s) hereby granted or upon the
expiration of other termination thereof, any disagreement,
dispute, controversy or difference shall arise between the parties
hereto concerning the construction of the Lease a modified and
supplemented by this Agreement, or the rights of either party
thereunder, it shall be submitted to arbitration pursuant to the
Federal Arbitration Act, 9 U.S.C. Sections 1-14, by three disinterested
persons, to be chosen one by each of the parties hereto and one by
the two so chosen.

(b)   The party desiring such arbitration shall give
written notice thereof by certified or registered mail to the
other party and shall in such notice name the arbitrator selected
by it and state precisely the matter or matters to be resolved
through arbitration.  Within 20 days after receipt of such notice,
the other party shall name its arbitrator to the party which gave
notice, and may also state additional matters then to be
arbitrated, such notification and statement also to be in writing
and given by certified or registered mail.  In case the other
party fails or refuses to name an arbitrator, upon application of
the party giving such written notice the arbitrator shall be
appointed by the Chief Judge, then sitting, of the United States
District Court for the Southern District of Ohio, at Cincinnati,
Ohio, or of any Court succeeding to its jurisdiction.  In the
event the Chief Judge declines to make such an appointment, the
arbitrator shall be named by the Arbitration Committee of the
American Arbitration Association, presently headquartred at 140
West Fifty-First Street, New York, New York 10020.  Only  matters
so stated by the parties shall be considered or decided by the
arbitrators.

(c)   Said two arbitrators so selected shall, within 20
days after the selection of the second arbitrator, select a third
arbitrator.  In case the two arbitrators shall fail to agree
within 20 days upon a third arbitrator, the third arbitrator shall
be appointed in the manner provided in paragraph (b) of this 
Section 8.

(d)   The three arbitrators so selected shall, as soon as
possible after their selection is completed, but not more than 60
days thereafter, meet to hear and decide the matter or matters
submitted to them and shall given to each side of the controversy
not less than 30 days' notice in writing, by certified or
registered mail, of the tie and place of such hearing.

(e)   After hearing both parties to the controversy and
taking such testimony, making such further investigation as may be
deemed necessary and considering such briefs as either party may
submit within 20 days after the close of the hearing, the
arbitrators shall make in writing, within 30 days, their award
upon the matter or matters submitted to them and shall serve a
copy of such award, by certified or registered mail, upon each of
the parties to the controversy.  Such written award, approved and
signed by not less than two of such arbitrators, shall be final
and binding upon the parties to the controversy and each shall
promptly conform thereto.  Until the arbitrators have made their
determination of the matter or matters submitted to them, the
business, settlements and payments to be transacted and made under
this Agreement shall continue to be transacted and made in the
manner and form existing prior to the arising of such questions.
No resort may be had to any court regarding such arbitration
except to compel arbitration, to enforce an award or by way of 
appeal on the grounds set forth in 9 U.S.C. Sections 10 and 11.

(f)   In the case of death, disability,
disqualification or refusal of any arbitrator, his successor shall
be chosen within 10 days thereafter by the party selecting him,
or, if he be the third arbitrator selected by the two arbitrators
already selected and acting.  If either party fails or refuses to
select an arbitrator willing to hear the controversy within said
10 day period, or to select a successor to a deceased, disabled or
disqualified arbitrator within the prescribed ten (10) day period, 
a replacement for such arbitrator shall be named in the manner set
forth in paragraph (b) of this Section 8.

(g)   Each party shall pay the compensation, costs, fees
and expenses of its arbitrator, witnesses, exhibits and counsel. 
The compensation, costs, and expenses of the third arbitrator, the
stenographic records, if any, and one copy of a transcript for
each arbitrator and each party shall be borne equally by the
parties hereto.

(h)   The Commercial Arbitration Rules of the American
Arbitration Association shall apply except to the extent the same
may be inconsistent with this Article.

(i)   The award rendered by the arbitrators shall be
final, and judgment may be entered upon it in accordance with
applicable law in any court having jurisdiction over the parties.

9.     In the event that either party believes the other has
breached any provisions of the Lease as modified and supplemented
by this Agreement, the following procedure shall be followed:

(a)   The party claiming breach shall give the other party
notice in writing referencing this Section 9, setting forth the
particular provision it claims to have been breached, and stating
the operative facts supporting such claim of breach and the dollar
amount (if applicable) by which that party claims to have been
damaged by such breach.

(b)   The responding party shall within 30 days of 
receiving such notice either:  (i) admit the breach and the
claimed damages, if any, (ii) admit the breach but deny the
claimed damages; or (iii) deny the breach.

(c)   (i)  If a party admits a breach and concurs in the
amount of any claimed damages, it shall immediately discontinue
any continuing breach and pay the amount of the claimed damages.
(ii)  If a party admits a breach but denies the claimed damages, it
shall immediately discontinue any continuing breach.

(d)   Either party may demand arbitration, in accordance
with Section 9, as to any issue of breach or damages which is not
admitted.  The arbitrators shall determine if a breach occurred
and, if so, (i) shall reduce the breach to an award of money
damages, if any such damages are determined to have been incurred;
(ii) order specific performance of the duty or duties breached;
and/or (iii) order the discontinuance of any continuing breach.

(e)   Upon receipt of the arbitration decision, any party 
that has been found in breach of the Lease shall discontinue any
continuing breach and shall pay the damaged party any monetary
award determined by the arbitrators.  If within 30 days after
receipt of the arbitration decision either the breach (if it is a 
continuing breach) is not discontinued or the damage award, if
any, is not paid, the aggrieved party may declare the Lease
forfeited and exercise all legal rights available to it to end the
tenancy and/or recover any unpaid damages.

(f)   Anything in the Lease and this Agreement to the 
contrary notwithstanding, when the claimed breach is nonpayment of
rent and the amount due is not disputed, Lessor shall give Lessee
notice of such breach in writing in accordance with subsection
(a) of this Section; if payment of the rental is not made or an
agreement for payment of the rental is not reached within 30 days
of such notice, Lessor, at its option and without prior resort to
arbitration, may declare the Lease forfeited an exercise all
legal rights available to it to end the tenancy and/or recover
damages.

(g)   The Lease may not be forfeited except as specified
in this Section 9.

(h)   If a claiming party shall be entitled to arbitration
under paragraph (d) above with regard to a claimed breach of the
Lease and/or a refusal to admit damages of which notice has been
given in accordance with subparagraph (a) hereof, and, with
knowledge of same, shall fail to seek arbitration for 30 days
after the right to arbitration becomes known to the claiming
party, then such party's claims shall be deemed waived.

10.     The Lease and all the covenants and agreements of this 
Agreement shall inure to the benefit of and be binding upon the 
respective successors and assigns of the parties hereto; provided,
however that no assignment of the Lease shall be made by the 
Lessee unless the assignee shall, by instrument in writing
executed by such assignee and delivered to the Lessor, expressly
assume all of the obligations of the Lessee hereunder.  Neither
any such assignment nor the execution and delivery by any such
assignee of any such instrument of assumption shall, except with
the express written consent of the Lessor (which, in the case of
liquidation of the Lessee, shall not be unreasonably withheld),
relieve the Lessee or its guarantors from of its or their
obligations hereunder.  Nothing in this paragraph shall be
construed to prevent the transfer of the rights of the Lessee
under the Lease in connection with a merger or consolidation or
other transfer of all of its assets if the Corporation remaining
or resulting from such merger or consolidation or to which assets
are transferred, shall execute and deliver to the Lessor a written
instrument of assumption as above provided.

11.     The covenants and agreements herein contained are made
subject to any valid existing or future law and to the lawful
exercise of power thereunder by any public authority, whether by
way of authorization, prohibition or otherwise.

12.     The Lease is to remain in full force and effect, except
insofar as it is inconsistent with or expressly modified by these 
presents, and except that Clause 6 of the October 11, 1881
Indenture and Sections 8, 9, 10 and 11 of the 1902 Contract of
Modification and Extension of Lease are expressly abrogated and
annulled.

13.     Lessee, for itself, its successors and assigns, hereby
covenants that it will keep and perform all the covenants,
stipulations and agreements of the Lease and of this Supplementary
Agreement, and will not evade or violate any of the same.

14.     Except as otherwise provided herein, notice called for
under the terms of this Supplementary Agreement shall be in
writing delivered by certified or registered mail, at the
following addresses:

For Lessor:

President
Board of Trustees
Cincinnati Southern Railway
635 West Seventh Street
Suite 300
Cincinnati, Ohio  45203

and

Office of the City Solicitor
City of Cincinnati
214 City Hall
801 Plum Street
Cincinnati, Ohio  45202

For Lessee:

President
The Cincinnati, New Orleans and Texas Pacific Railway
Company
635 West Seventh Street
Suite 300
Cincinnati, Ohio  45203

President
The Cincinnati, New Orleans and Texas Pacific Railway
Company
One Commercial Place
Norfolk, Virginia  23510

Guarantors:

President
Southern Railway Company
One Commercial Place
Norfolk, Virginia  23510

Chief Executive Officer
Norfolk Southern Corporation
One Commercial Place
Norfolk, Virginia  23510

15.     SR as the holder of all the common stock of Lessee and NS
as the holder of all the common stock of SR each hereby guarantees
to Lessor that the Lessee will fully perform all of its
obligations under the Lease and this Supplementary Agreement, and
jointly and severally argee with Lessor to make Lessor whole for
any loss suffered by it as a result of the failure of Lessee to so
perform.  Any claim made by Lessor under this guarantee shall, if
not agreed to by SR and NS, be subject to arbitration under the
provisions of Section 8 hereof, which arbitration decision shall
be binding upon Le4ssor and upon SR and NS as guarantors of the
obligations of Lessee herein.

16.     This Supplementary Agreement is subject to approval or
exemption from approval by the Interstate commerce Commission of
the undertakings by Lessee and Guarantors of the obligations
herein, as may be required by 49 U.S.C. Sections 11301 an 11343 et
seq., and such decision having become final.

IN WITNESS WHEREOF, Theodore M. Berry, Robert W. Hilton, Jr.,
Roger W. Ach, II, Paul W. Sylvester, Benjamin Gettler,
Trustees of the Cincinnati Southern Railway, authorized by
Ordinance No. 309 1987 of the City of Cincinnati and by
resolution of said Board of Trustees of the Cincinnati Southern
Railway have on this 5th day of August, 1987, 
affixed their hands; the Cincinnati, New Orleans and Texas Pacific 
Railway Company has upon this same day caused this Supplementary
Agreement to be signed an sealed by its President as the act and
deed of The Cincinnati, New Orleans and Texas Pacific Railway
Company and its corporate seal to be affixed by its secretary.

Executed in quintuplicate, upon the day and year above
mentioned.

THE LESSOR:

/s/  Theodore M. Berry
Theodore M. Berry

/s/ Robert W. Hilton, Jr.
Robert W. Hilton, Jr.

/s/ Roger W. Ach, II
Roger W. Ach, II

WITNESS:

/s/ Paul W. Sylvester
Paul W. Sylvester

/s/ Benjamin Gettler
Benjamin Gettler
Trustees of the Cincinnati
Southern Railway

THE LESSEE:
THE CINCINNATI, NEW ORLEANS AND
TEXAS PACIFIC RAILWAY COMPANY

ATTEST:

/s/                                     By: /s/
Secretary                                   President

GUARANTORS OF LESSEE:
SOUTHERN RAILWAY COMPANY

ATTEST:

/s/                                     By:  /s/
Secretary                                    President and
Chief Executive Officer
NORFOLK SOUTHERN CORPORATION

ATTEST:

/s/                                      By:  /s/
Secretary                                     Chief Executive Officer
Chairman, President and
Chief Executive Officer

State of Ohio       )
)  SS:
Hamilton County     )

Before me a Notary Public, in and for said County, personally
appeared the above named Theodore M. Berry, Robert W. Hamilton, Jr.,
Roger W. Ach, III, Paul W. Sylvester, and Benjamin Gettler, the
duly appointed, qualified and acting Trustees of the Cincinnati
Southern Railway, who acknowledged that they did sign the 
foregoing instrument on behalf of and pursuant to the direction
and in accordance with the authorization of the City of Cincinnati
and that the same is their free act and deed a such Trustees, and
for the uses and purposes therein set forth.

In testimony wherefore, I have hereunto subscribed my name and
affixed my official seal at Cincinnati, Ohio this 5th day of
August, 1987.

/s/
Notary Public

State of Virginia   )
)  SS:
City of Norfolk     )

Before me, a Notary Public in and for said City, personally
appeared H. H. Hall, President
and Mahlon D. Edwards, Secretary, of the Cincinnati, New
Orleans and Texas Pacific Railway Company, the corporation which
executed the foregoing instrument, who acknowledged that the seal
affixed to said instrument is the corporate seal of said
corporation, that they did sign and seal such instrument as
President and Secretary on behalf of said corporation and by
authority if its Board of Directors and that said instrument is
their free act and deed as such President and Secretary, and the
free act and deed of The Cincinnati, New Orleans and Texas Pacific
Railway Company

In testimony whereof, I have hereunder subscribed my name and
affixed my official seal at Norfolk, Virginia, this 13th day of
August, 1987.

/s/
Notary Public

State of Virginia   )
)  SS:
City of Norfolk     )

Before me, a Notary Public in and for said City, personally
appeared Arnold B. McKinnon, Chairman, President and Chief Executive
and Mahlon D. Edwards, Assistant Secretary, of the Norfolk
Southern Corporation, the corporation which executed the foregoing 
instrument, who acknowledged that the seal
affixed to said instrument is the corporate seal of said
corporation, that they did sign and seal such instrument as
Chairman, President and Chief Executive Officer and
Assistant Secretary on behalf of said corporation and by
authority if its Board of Directors and that said instrument is
their free act and deed as such Chairman, President and Chief 
Executive Officer and Assistant Secretary, and the
free act and deed of Norfolk Southern Corporation.

In testimony whereof, I have hereunder subscribed my name and
affixed my official seal at Norfolk, Virginia, this 13th day of
August, 1987.

/s/
Notary Public

State of Virginia   )
)  SS:
City of Norfolk     )

Before me, a Notary Public in and for said City, personally
appeared Arnold B. McKinnon, Chairman, President and Chief Executive
and Mahlon D. Edwards, Secretary, of the Southern
Railway Company, the corporation which executed the foregoing 
instrument, who acknowledged that the seal
affixed to said instrument is the corporate seal of said
corporation, that they did sign and seal such instrument as
President and Chief Executive Officer and Secretary on 
behalf of said corporation and by authority if its Board of 
Directors and that said instrument is their free act and deed 
as such Chairman, President and Chief Executive Officer and 
Assistant Secretary, and the free act and deed of Southern
Railway Company.

In testimony whereof, I have hereunder subscribed my name and
affixed my official seal at Norfolk, Virginia, this 13th day of
August, 1987.

/s/
Notary Public

EXHIBIT 10(m)

NORFOLK SOUTHERN CORPORATION
LONG-TERM INCENTIVE PLAN

AS AMENDED EFFECTIVE JANUARY 23, 2001

Section 1.      PURPOSE

The purpose of the Long-Term Incentive Plan, as amended (the 
"Plan"), is to promote the success of Norfolk Southern Corporation 
(the "Corporation") and to provide an opportunity for officers 
and other key employees of the Corporation and its Subsidiary 
Companies (as hereinafter defined) to acquire or increase a 
proprietary interest in the Corporation and thereby to provide 
an additional incentive to officers and other key employees to 
devote their maximum efforts and skills to the advancement, 
betterment, and prosperity of the Corporation and its shareholders.
The Plan provides for the grant of incentive stock options, 
non-qualified stock options, stock appreciation rights, performance 
share units, performance shares, and shares of the Corporation's 
common stock (restricted pursuant to the provisions of Section 9 
of the Plan), in accordance with the terms and conditions set forth 
below.

Section 2.      DEFINITIONS

The terms used herein shall have the following meanings unless 
otherwise specified or unless a different meaning is clearly 
required by the context:

Award           Any one or more of the following:  Incentive Stock Option; 
Non-qualified Stock Option; Stock Appreciation Right; 
Restricted Shares; Performance Share Units; and Performance 
Shares.

Beneficiary     The person or persons designated in writing by the 
Participant as his Beneficiary in respect of Awards or, 
in the absence of such a designation or if the designated 
person or persons predecease the Participant, the person 
or persons who shall acquire the Participant's rights in 
respect of Awards by bequest or inheritance in accordance 
with the applicable laws of descent and distribution. In 
order to be effective, a Participant's designation of a 
Beneficiary must be on file with the Corporation before 
the Participant's death.  Any such designation may be 
revoked and a new designation substituted therefor by the 
Participant at any time before his death without the 
consent of the previously designated Beneficiary.

Board of        The Board of Directors of the Corporation.
Directors

Code            The Internal Revenue Code of 1986, as amended from time to 
time.

Committee       The Compensation and Nominating Committee or any other 
committee of the Board of Directors which is authorized to 
grant Awards under this Plan.  

Common Stock The Common Stock of the Corporation.

Disability      A disability that enables the Participant to be eligible 
for and receive a disability benefit under the Long-Term 
Disability Plan of the Corporation or a long-term disability 
plan of a Subsidiary Company (whichever is applicable), 
as amended from time to time.

Exercise        With respect to a Stock Appreciation Right, all of the 
Gain        shares of Common Stock received upon exercise of the Stock
Shares      Appreciation Right.

With respect to an Option, the portion of the shares of 
Common Stock received upon exercise of the Option equal 
to the excess of the Fair Market Value, as of the exercise
date, over the Option price, multiplied by the number of 
shares purchased under the Option on the exercise date, 
divided by such Fair Market Value, and rounded down to the 
nearest whole number of shares.

Fair Market     The value of Common Stock on a particular date as measured
Value       by the mean of the high and low prices at which it is 
traded on such date as reported in the Composite 
Transactions for such date by The Wall Street Journal, 
or, if Common Stock was not traded on such date, on the 
next preceding day on which Common Stock was traded.

Incentive       An Option that complies with the terms and conditions set 
Stock       forth in Section 422(b) of the Code and is designated by 
Option      the Committee as an Incentive Stock Option.

Non-qualified  An Option granted under the Plan other than an Incentive
Stock Option   Stock Option

Option      Any option to purchase Common Stock granted pursuant to 
the provisions of Section 6 or Section 7 of the Plan.

Optionee        A Participant who is the holder of an Option.

Participant     Any officer or key employee of the Corporation or a 
Subsidiary Company selected by the Committee to participate 
in the Plan and any non-employee director of the 
Corporation, subject to approval of the Plan, as hereby 
amended, by the vote of the holders of a majority of the 
shares of Common Stock present or represented and entitled 
to vote at a meeting of the stockholders of the Corporation 
at which a quorum is present.  

Performance     The period of time, designated by the Committee, over 
Cycle       which Performance Shares may be earned.

Performance     Shares of Common Stock granted pursuant to Section 10 of 
Shares      the Plan, which may be made subject to the restrictions 
and other terms and conditions prescribed in Section 11 
of the Plan.

Performance     Contingent rights to receive Performance Shares pursuant 
Share Units to Section 10 of the Plan. 

Restricted      Shares of Common Stock granted pursuant to Section 9 
Shares      of the Plan and subject to the restrictions and other 
terms and conditions set forth therein.

Restriction A period of time not less than twenty-four (24) nor more 
Period      than sixty (60) months, to be       determined within those 
limits by the Committee in its sole discretion, 
commencing on the date as of which Restricted Shares are 
granted, during which the restrictions imposed by 
paragraph (b) of Section 9 of the Plan shall apply.  
The Committee shall determine the length of the 
Restriction Period at the time that the Restricted 
Shares are granted.

Retirement      Retirement from the Corporation or a Subsidiary Company 
pursuant to the provisions of the Retirement Plan of the 
Corporation or a retirement plan of a Subsidiary Company 
(whichever is applicable), as amended from time to time.

Share           An agreement entered into pursuant to Section 11 of the Plan.
Retention
Agreement

Stock            The right, granted pursuant to the provisions of Section 
Appreciation 8 of the Plan, to receive a payment equal to the excess 
Right        of the Fair Market Value of Common Stock over the Option 
price of such Common Stock, as specified in Section 8 of
the Plan.

Subsidiary      A corporation of which at least eighty percent (80%) of 
the total combined voting power of all classes of stock 
entitled to vote is owned, directly or indirectly, by the 
Corporation.

Section 3.      ADMINISTRATION

The Plan shall be administered by the Committee, which, subject to 
the limitations set forth herein, shall have the full and complete 
authority and sole discretion from time to time to construe and 
interpret the Plan; to select the officers and other key 
employees who shall be granted Awards under the Plan; to 
determine the type, size, terms, and conditions of the Award 
or Awards to be granted to each such Participant; to authorize the 
grant of such Awards pursuant to the Plan; in connection with the 
merger or consolidation of the Corporation, to give a Participant 
an election to surrender an Award in exchange for the grant of 
a new Award; to adopt, amend and rescind rules and regulations 
relating to the Plan; and to make all other determinations and 
take all other action it may deem necessary or advisable for the  
implementation and administration of the Plan.  The Committee 
may authorize the grant of more than one type of Award, and 
wards subject to differing terms and conditions, to any 
eligible employee.  The Committee's decision to authorize the 
grant of an Award to an employee at any time shall not require 
the Committee to authorize the grant of an Award to that employee 
at any other time or to any other employee at any time; nor shall 
its determination with respect to the size, type, or terms 
and conditions of the Award to be granted to an employee at 
any time require it to authorize the grant of an Award of the 
same type or size or with the same terms and conditions to that 
employee at any other time or to any other employee at any time.  
The Committee shall not be precluded from authorizing the grant 
of an Award to any eligible employee solely because the employee 
previously may have been granted an Award of any kind under 
the Plan.

All determinations of the Committee shall be by a majority of its 
members and shall be final, conclusive and binding. Each member of 
the Committee, while serving as such, shall be considered to be 
acting in his capacity as a director of the Corporation, and no 
member of the Committee shall be liable for any action taken or 
decision made in good faith with respect to the implementation or 
administration of the Plan.

Section 4.      ELIGIBILITY

To be eligible for selection by the Committee to participate in the 
Plan, an individual must be a full-time salaried officer or key 
employee of the Corporation, or of a Subsidiary Company, and must 
reside in the United States or Canada, on the date on which the 
Committee authorizes the grant to such individual of an Award.  
Subject to approval of the Plan, as hereby amended, by the vote of 
the holders of a majority of the shares of Common Stock present or 
represented and entitled to vote at a meeting of the stockholders 
of the Corporation at which a quorum is present, a non-employee 
director shall be eligible to participate in the Plan if he or she 
is a director of the Corporation and is not a full-time salaried 
employee of the Corporation or a Subsidiary Company on the date on 
which the Committee authorizes the grant of an Award to non-employee 
directors. 

Section 5.      SHARES AVAILABLE

Subject to the provisions of Section 13 of the Plan, no more than 
an aggregate of 39,878,604 shares of Common Stock may be issued 
pursuant to the Plan.  Effective January 23, 2001, an additional 
5,000,000 shares of Common Stock (an aggregate of 44,878,604) may 
be issued to Participants who are not officers of the Corporation.  
Subject to approval of the Plan, as hereby amended, by the vote 
of the holders of a majority of the shares of Common Stock present 
or represented and entitled to vote at a meeting of the stockholders 
of the Corporation, at which a quorum is present, an additional 
30,000,000 shares of Common Stock (an aggregate of 74,878,604) may 
be issued pursuant to the Plan, and no more than 6,000,000 of such 
additional shares shall be awarded as Restricted Shares or 
Performance Shares.  Such shares shall be provided from shares of 
Common Stock authorized but not issued.  Any shares of Common Stock 
which were subject to an Option, a Stock Appreciation Right, or a 
Performance Share Unit, and which were not issued prior to the 
expiration of the Award shall thereafter again be available for 
award under the Plan.  Upon the forfeiture of any Restricted Shares, 
the forfeited shares of Common Stock shall thereafter be available 
for award under the Plan.  Notwithstanding any other provision to 
the contrary, no Participant may be awarded a grant in any one year, 
which, when added to any other grant of Options, Restricted Shares, 
and Performance Share Units in the same year, shall exceed 750,000 
shares of Common Stock.  Subject to approval of the Plan, as hereby 
amended, by the vote of the holders of a majority of the shares of 
Common Stock present or represented and entitled to vote at a 
meeting of the stockholders of the Corporation, at which a quorum 
is present, notwithstanding any other provision to the contrary, 
no Participant may be awarded a grant in any one year, which, when 
added to any other grant of Options, Restricted Shares, and 
Performance Share Units in the same year, shall exceed 1,500,000 
shares of Common Stock.  If an Option is canceled, the canceled 
Option continues to count against the maximum number of shares for 
which Options may be granted to a Participant in any year.

Section 6.      INCENTIVE STOCK OPTIONS

(a)        General - The Committee may authorize the grant of
Incentive Stock Options subject to the terms and conditions set 
forth in this Section 6.  The grant of an Incentive Stock Option 
shall be evidenced by a written Incentive Stock Option Agreement
between the Corporation and the Optionee, setting forth the 
number of shares of Common Stock subject to the Incentive Stock 
Option evidenced thereby and the terms, conditions, and 
restrictions applicable thereto.  The issuance of shares of Common 
Stock pursuant to an Incentive Stock Option also shall be subject 
to the provisions of any Share Retention Agreement that may be 
required by the Committee under Section 11 of the Plan.

(b)        Option Price - The Committee shall determine the
Option price for each share of Common Stock purchased under an
Option, but, subject to the provisions of Section 13 of the Plan, 
in no event shall the Option price be less than one hundred 
percent (100%) of the Fair Market Value of the Common Stock on 
the date the Option is granted.

(c)        Duration of Options - The Committee shall fix the term or 
duration of Options, provided that such term shall not exceed ten 
(10) years from the date the Option is granted, and that such term 
shall be subject to earlier termination pursuant to the provisions of 
paragraph (g) of this Section 6 or paragraph (e) of Section 8 of the 
Plan.

(d)        Non-transferability of Options - Options are not 
transferable other than by will or the applicable laws of descent 
and distribution following the death of the Optionee. Options may 
be exercised during the lifetime of the Optionee only by him, and 
following his death only by his Beneficiary.

(e)        Exercise of Options - The Committee shall determine the 
time or times at which Options may be exercised; provided that 
such time or times shall not occur before the latest of:

(i)    the first anniversary of the date on which the Option
was granted; and

(ii)  the effectiveness of any registration statement 
required to be filed under the Securities Act of 1933 for the 
registration of the Common Stock to be issued upon exercise of the 
Option.

(f)        Payment of Option Price - The purchase price of Common 
Stock upon exercise of an Option shall be paid in full to the 
Corporation at the time of the exercise of the Option in cash or, 
at the discretion of the Committee and subject to any limitations or 
requirements that the Committee may adopt, by the surrender to the 
Corporation of shares of previously acquired Common Stock, which 
have been held by the Optionee for at least twelve (12) months and 
which shall be valued at Fair Market Value on the date that the Option 
is exercised, or, at the discretion of the Committee, by a combination 
of cash and such Common Stock.

(g)        Termination of Options - No Option shall be exercisable 
after it expires.  Each Option shall expire upon the earliest of:

(i)    the expiration of the term for which the Option 
was granted;

(ii)   (A) Except as otherwise provided by the Committee, 
in the case of an Optionee whose employment with the Corporation or 
a Subsidiary Company is terminated due to Retirement, Disability or 
death, the expiration of thirty-six (36) months after such 
termination of employment, or

(B) in the case of an Optionee whose employment 
with the Corporation or a Subsidiary Company is terminated for any 
reason other than Retirement, Disability, or death, at the close of 
business on the last day of active service by the Optionee with 
the corporation or a Subsidiary Company, or

(C) in the case of an Optionee who is granted a 
leave of absence, if the Optionee's employment with the Corporation 
or a Subsidiary Company terminates at any time during or at the end 
of the leave of absence, at the close of business on the last day 
of employment with the Corporation or a Subsidiary Company, or 

(iii)  in connection with a merger or consolidation of the 
Corporation, with the Optionee's consent, the grant of a new Award 
to replace the Option.

(h)        Limitation on Exercisability - The aggregate Fair Market 
Value (determined as of the time the Incentive Stock Option is granted) 
of the Common Stock with respect to which Incentive Stock Options 
(granted on or after January 1, 1987) are exercisable for the first 
time by the Optionee during any calendar year shall not exceed $100,000.

(i)        Order of Exercise - An Incentive Stock Option granted 
prior to January 1, 1987, shall not be exercisable while there is 
outstanding any Incentive Stock Option which was granted to the 
Optionee before the grant of the first-mentioned Incentive Stock 
Option.  For this purpose, an Incentive Stock Option shall be 
treated as outstanding until it is exercised in full or expires in 
accordance with paragraph (c) of this Section 6.

As used in paragraphs (h) and (i) of this Section 6, the term 
Incentive Stock Option shall mean an option to purchase stock which 
is granted pursuant to the provisions of this Plan or of any other 
plan of the Corporation or of a parent or subsidiary corporation 
(as defined by Section 424(f) of the Code) and which complies with 
the terms and conditions set forth in Section 422(b) of the Code.

Section 7.      NON-QUALIFIED STOCK OPTIONS

The Committee may authorize the grant of Non-qualified Stock Options 
subject to the terms and conditions specified in this Section 7.  
The grant of a Non-qualified Stock Option shall be evidenced by a 
written Non-qualified Stock Option Agreement between the Corporation 
and the Optionee, setting forth the number of shares of Common Stock 
subject to the Non-qualified Stock Option evidenced thereby and the 
terms, conditions, and restrictions applicable thereto.  Non-qualified 
Stock Options granted pursuant to the provisions of this Section 7 
shall be subject to the terms, conditions, and restrictions set forth 
in paragraphs (b) and (d) through (g) of Section 6 of the Plan.  The 
limitations set forth in paragraphs (c), (h) and (i) of Section 6 of 
the Plan shall not apply to Non-qualified Stock Options.  The issuance 
of shares of Common Stock pursuant to a Non-qualified Stock Option 
also shall be subject to the provisions of any Share Retention 
Agreement that may be required by the Committee under Section 11 of 
the Plan.

Section 8.      STOCK APPRECIATION RIGHTS

(a)        General - The Committee may grant a Stock Appreciation 
Right to a Participant in connection with an Option, or portion 
thereof as determined by the Committee, subject to the terms and 
conditions set forth in this Section 8. The Stock Appreciation 
Right may be granted at the time of grant of the related Option and 
shall be subject to the same terms and conditions as the related 
Option, except as this Section 8 may otherwise provide.  The grant 
of a Stock Appreciation Right shall be evidenced either by provisions 
in the Option agreement evidencing the related Option or by a 
written Stock Appreciation Right Agreement between the Corporation 
and the Optionee, identifying the related Option, specifying the 
number of shares of Common Stock subject thereto, and setting forth 
the terms and conditions applicable to the Stock Appreciation Right.

(b)        Exercise - A Stock Appreciation Right shall be 
exercisable only at such time or times, to such extent, and by such 
persons, as the Option to which it relates shall be exercisable; 
provided that:

(i)    if the Committee determines that all or part of a 
payment in respect of a Stock Appreciation Right shall be made in 
cash, the Stock Appreciation Right shall not be exercised before 
the expiration of one (1) year from the date on which it was 
granted; provided, however, that this subparagraph (i) shall not 
apply if the death or Disability of the Optionee occurs within one 
(1) year after the grant of the Stock Appreciation Right;

(ii)  if the Committee determines that all or part of a 
payment in respect of a Stock Appreciation Right shall be made in 
cash, such exercise may occur only on a day that is at least three 
(3) and no more than twelve (12) business days after the date on 
which the Corporation first made publicly available its most recent 
regular quarterly or annual financial statements; and

(iii)  a Stock Appreciation Right granted in connection 
with an Incentive Stock Option may not be exercised on any date on 
which the Fair Market Value of a share of Common Stock is less than 
or equal to the Option price per share under the related Incentive 
Stock Option.

A Stock Appreciation Right shall be exercised by surrendering 
the related Option, or the portion thereof pertaining to the shares 
with respect to which the Stock Appreciation Right is exercised, and 
providing the Corporation with a written notice in such form and 
containing such information (including the number of shares of Common 
Stock with respect to which the Stock Appreciation Right is being 
exercised) as the Committee may specify.  The date on which the 
Corporation receives such notice shall be the date on which the 
related Option, or portion thereof, shall be deemed surrendered and 
the Stock Appreciation Right shall be deemed exercised.

(c)        Payment - Upon exercise of a Stock Appreciation Right 
in the manner provided in paragraph (b) of this Section 8, the 
Optionee shall be entitled to receive Exercise Gain Shares equal 
to the number of shares of Common Stock that have an aggregate Fair 
Market Value on the exercise date equal to the amount by which the 
Fair Market Value of a share of Common Stock on the exercise date 
exceeds the Option price per share of the related Option, multiplied 
by the number of shares covered by the related Option, or portion 
thereof, surrendered in connection with the exercise of the Stock 
Appreciation Right.  The Exercise Gain Shares shall be subject to 
the provisions of any Share Retention Agreement that may be 
required by the Committee under Section 11 of the Plan.  In the 
sole discretion of the Committee, all or part of the payment in 
respect of a Stock Appreciation Right may be made in cash in lieu 
of Exercise Gain Shares.

(d)        Termination of Right - A Stock Appreciation Right shall 
expire, unless previously exercised or canceled, upon the expiration 
of the Option to which it relates.

(e)        Effect of Exercise - A Stock Appreciation Right shall 
be canceled when, and to the extent that, the related Option is 
exercised, and an Option shall be canceled when, and to the extent 
that, the Option is surrendered to the Corporation upon the exercise 
of a related Stock Appreciation Right.

Section 9.      RESTRICTED SHARES

(a)        General - The Committee, in its sole discretion, may from 
time to time authorize the grant of Restricted Shares to a Participant.  
A certificate or certificates representing the number of Restricted 
Shares granted shall be registered in the name of the Participant.  
Until the expiration of the Restriction Period or the lapse of 
restrictions in the manner provided in paragraph (d) or paragraph 
(e) of this Section 9, the certificate or certificates shall be held 
by the Corporation for the account of the Participant, and the 
Participant shall have beneficial ownership of the Restricted 
Shares, including the right to receive dividends on, and the right 
to vote, the Restricted Shares.

(b)        Restrictions - Until the expiration of the Restriction 
Period or the lapse of restrictions in the manner provided in 
paragraph (d) or paragraph (e) of this Section 9, Restricted Shares 
shall be subject to the following restrictions and any additional 
restrictions that the Committee, in its sole discretion, may from 
time to time deem desirable in furtherance of the objectives of 
the Plan:

(i)    the Participant shall not be entitled to receive the 
certificate or certificates representing the Restricted Shares;

(ii)   the Restricted Shares may not be sold, transferred, 
assigned, pledged, conveyed, hypothecated, or otherwise disposed of; 
and

(iii)  the Restricted Shares may be forfeited immediately 
as provided in paragraph (d) of this Section 9.

(c)        Distribution of Restricted Shares - If a Participant to 
whom Restricted Shares have been granted remains in the continuous 
employment of the Corporation or a Subsidiary Company during the 
entire Restriction Period, upon the expiration of the Restriction 
Period all restrictions applicable to the Restricted Shares shall 
lapse, and the certificate or certificates representing the shares 
of Common Stock that were granted to the Participant in the form 
of Restricted Shares shall be delivered to the Participant.

(d)        Termination of Employment - If the employment of a 
Participant is terminated for any reason other than the Retirement, 
Disability, or death of the Participant in service before the 
expiration of the Restriction Period, the Restricted Shares shall 
be forfeited immediately and all rights of the Participant to such 
shares shall terminate immediately without further obligation on 
the part of the Corporation or any Subsidiary Company.  If the 
Participant's employment is terminated by reason of the 
Retirement, Disability, or death of the Participant in service before 
the expiration of the Restriction Period, the number of Restricted 
Shares held by the Corporation for the Participant's account shall 
be reduced by the proportion of the Restriction Period remaining 
after the Participant's termination of employment; the restrictions 
on the balance of such Restricted Shares shall lapse on the date 
the Participant's employment terminated; and the certificate or 
certificates representing the shares of Common Stock upon which 
the restrictions have lapsed shall be delivered to the Participant 
(or, in the event of the Participant's death, to his Beneficiary). 

(e)     Waiver of Restrictions - The Committee, in its sole 
discretion, may waive any or all restrictions with respect to 
Restricted Shares.

Section 10.     PERFORMANCE SHARES

The Committee, in its sole discretion, may from time to time 
authorize the grant of Performance Share Units to a Participant.  
Performance Share Units shall entitle the Participant to Performance 
Shares (or cash in lieu thereof) upon the achievement of such 
performance goals as may be established by the Committee at the 
time of grant for three equally weighted performance criteria:  
(a)  the Corporation's total stockholder return as compared to the 
S&P 500 Index; (b) the Corporation's operating ratio; and 
(c) the Corporation's return on average capital invested.  At 
such time as it is certified by the Committee that the 
performance goals established by the Committee have been attained 
or otherwise satisfied, the Committee shall authorize the payment 
of cash in lieu of Performance Shares or the issuance of Performance 
Shares registered in the name of the Participant, subject to the 
provisions of any Share Retention Agreement that may be required by 
the Committee under Section 11 of the Plan, or both.

If the Participant's employment with the Corporation or a Subsidiary 
Company is terminated before the end of a Performance Cycle for any 
reason other than Retirement, Disability, or death, the Participant 
shall forfeit all rights with respect to any Performance Shares that 
were being earned during the Performance Cycle.  If the Participant 
is granted a leave of absence before the end of a Performance Cycle, 
the Participant shall not forfeit all rights with respect to any 
Performance Shares that were being earned during the Performance 
Cycle, unless the Participant's employment with the Corporation or a 
Subsidiary Company terminates at any time during or at the end of 
the leave of absence, at which time the Participant shall forfeit 
all rights with respect to any Performance Shares that were being 
earned during the Performance Cycle.  The Committee, in its sole 
discretion, may establish guidelines providing that if a Participant's 
employment is terminated before the end of a Performance Cycle by 
reason of Disability, or death, the Participant shall be entitled to 
a prorated payment with respect to any Performance Shares that were 
being earned during the Performance Cycle.  If the Participant's 
employment is terminated before the end of a Performance Cycle by 
reason of Retirement, the Participant's rights with respect to any 
Performance Shares being earned during the Performance Cycle shall, 
subject to the other provisions of this Section 10, continue as if 
the Participant's employment had continued through the end of the 
Performance Cycle.

Section 11.     SHARE RETENTION AGREEMENTS

(a)        General - The Committee, in its sole discretion, may 
require as a condition of an Award of an Option, Stock Appreciation 
Right, or Performance Share Unit that the Participant and the 
Corporation enter into a Share Retention Agreement, which shall 
provide that the certificate or certificates representing any 
Exercise Gain Shares or Performance Shares, when issued, shall be 
held by the Secretary of the Corporation for the benefit of the 
Participant until such time as the retention period specified by 
the Share Retention Agreement has expired or has been waived by 
the Committee, whichever occurs first.  Each Share Retention 
Agreement may include some or all of the terms, conditions and 
restrictions set forth in paragraphs (b) through (g) of this 
Section 11.

(b)        Retention Period - Exercise Gain Shares and Performance 
Shares that are subject to the Share Retention Agreement may not be 
sold, transferred, assigned, pledged, conveyed, hypothecated or 
otherwise disposed of within such period of time, of not less than 
twenty-four (24) months and not more than sixty (60) months following 
the date of exercise (in the case of Exercise Gain Shares) or the 
date of issuance (in the case of Performance Shares), as shall be 
prescribed by the Committee.

(c)        Tax Absorption Payment - The Corporation may make a cash 
payment, either directly to the Participant or on the Participant's 
behalf, in an amount that the Committee estimates to be equal 
(after taking into account any Federal and state taxes that the 
Committee estimates to be applicable to such cash payment) to any 
additional Federal and state income taxes that are imposed upon the 
Participant as a result of the issuance of the Exercise Gain Shares 
or Performance Shares that are subject to the Share Retention 
Agreement.  In determining the amount to be paid pursuant to this 
paragraph (c), the Committee may adopt such methods and assumptions 
as it considers appropriate, and it shall not be required to examine 
the individual tax liability of each Participant who has entered into 
a Share Retention Agreement.

(d)        Termination of Employment - If a Participant's employment 
with the Corporation or a Subsidiary Company is terminated for any 
reason other than Retirement, Disability, or death, Exercise Gain 
Shares or Performance Shares subject to the Share Retention Agreement 
shall continue to be held,  following the Participant's termination 
of employment, until the expiration of the retention period specified 
by the Share Retention Agreement.  If the Participant's employment 
is terminated by reason of Retirement or Disability, Exercise Gain 
Shares and Performance Shares then held subject to the Share Retention 
Agreement shall continue to be held until the expiration of the 
applicable retention period following termination of employment, but 
any such retention period shall cease upon the earlier of the 
Participant's attainment of age 65 or the expiration of two (2) 
years after the Participant's Retirement or Disability, if either 
of those events occurs before the expiration of the applicable 
retention period.  If the Participant dies while Exercise Gain 
Shares or Performance Shares are subject to a retention period 
under the Share Retention Agreement, such retention period shall 
expire immediately at the time of death.

(e)         Change in Control - Upon a Change in Control, the 
retention periods specified by all Share Retention Agreements 
shall immediately expire.

A Change in Control shall occur if: 

(i)    any person, other than the Corporation or a 
Subsidiary Company or any employee benefit plan sponsored by the 
Corporation or a Subsidiary Company, shall become the beneficial owner 
of, or obtain voting control over, 20% or more of the Corporation's 
outstanding Common Stock; 

(ii)   the stockholders of the Corporation shall approve 
(A) any consolidation or merger of the Corporation in which the 
Corporation is not the continuing or surviving corporation or 
pursuant to which shares of Common Stock would be converted into 
cash, securities, or other property, other than a merger of the 
Corporation in which holders of Common Stock immediately prior to 
the merger have the same proportionate ownership of common stock of 
the surviving corporation immediately after the merger as immediately 
before, or (B) any sale, lease, exchange, or other transfer (in one 
transaction or a series of related transactions) of all or 
substantially all the assets of the Corporation; or 

(iii)  there shall have been a change in the composition 
of the Board of Directors such that within any period of two (2) 
consecutive years or less individuals who at the beginning of such 
period constituted such Board, together with any new directors whose 
election, or nomination for election by the Corporation's stockholders, 
was approved by a vote of at least two-thirds of the directors then 
in office who were directors at the beginning of such period, shall 
for any reason no longer constitute a majority of the directors of the 
Corporation.

If the expiration of a Share Retention Agreement pursuant to 
this paragraph (e) causes a Participant to be subject to an excise 
tax under Section 4999 of the Code, or any successor provision thereto 
(the "Excise Tax"), the Corporation shall make a cash payment, either 
directly to the Participant or on the Participant's behalf, in an 
amount that the Committee estimates to be equal (after taking into 
account any Federal and state taxes, including interest and penalties, 
that the Committee estimates to be applicable to the additional cash 
payment) to the additional Excise Tax imposed on the Participant as 
a result of the expiration of the Share Retention Agreement.  In 
determining the amount to be paid pursuant to this subparagraph, the 
Committee may adopt such methods and assumptions as it considers 
appropriate, and it shall not be required to examine the individual 
tax liability of each Participant to whom this subparagraph applies.

(f)        Waiver of Requirements - The Committee, in its sole 
discretion, may waive any or all retention periods or other 
restrictions in the Share Retention Agreement.

(g)        Distribution of Shares - The Secretary of the Corporation 
shall promptly distribute the certificate or certificates representing 
the Exercise Gain Shares or Performance Shares subject to a Share 
Retention Agreement upon expiration of the retention period or other 
termination or waiver of the restrictions under this Section 11.

Section 12.      DIVIDEND EQUIVALENT PAYMENTS

The Committee may authorize the immediate or deferred payment of 
dividend equivalents on some or all of the shares of Common Stock 
covered by Options or Performance Share Units granted after January 
1, 1989, in an amount equal to, and commensurate with, dividends 
declared by the Board of Directors and paid on Common Stock.  
Dividend equivalents payable on Option shares or on Performance 
Share Units under this Section 12 may be paid in cash or in Common 
Stock at the discretion of the Committee.  The Committee may 
authorize the immediate payment of dividend equivalents under this 
Section 12 with respect to any Option for all or some portion of its 
term by including a specific provision, authorizing such immediate 
payment, in the Incentive Stock Option Agreement required under 
Section 6(a) of the Plan or the Non-qualified Stock Option Agreement 
required under Section 7 of the Plan.  The Committee may authorize 
the immediate payment of dividend equivalents under this Section 12 
with respect to any Performance Share Unit for all or some portion 
of its term as a term and condition of the Performance Share Unit 
grant.  The Committee also may authorize the deferred payment of 
dividend equivalents under this Section 12 with respect to any 
Option for all or some portion of its term by including a specific 
provision authorizing such deferred payment (including the manner in 
which such payment will be credited to Optionees and subsequently 
paid) in the Incentive Stock Option Agreement required under Section 
6(a) of the Plan or the Non-qualified Stock Option Agreement 
required under Section 7 of the Plan.  The Committee may authorize 
the deferred payment of dividend equivalents under this Section 12 
with respect to any Performance Share Unit for all or some portion 
of its term by including a specific provision authorizing such 
deferred payment (including the manner in which such deferred payment 
will be credited to Optionees and subsequently paid) as a term and 
condition of the Performance Share Unit grant.

Section 13.     CAPITAL ADJUSTMENTS

In the event of a recapitalization, stock split, stock dividend, 
exchange, combination, or reclassification of shares, merger, 
consolidation, reorganization, or other change in or affecting the 
capital structure or capital stock of the Corporation, the Board of 
Directors, upon the recommendation of the Committee, may make 
appropriate adjustments in the number of shares of Common Stock 
authorized for the Plan and in the annual limitation imposed by 
Section 5 of this Plan; and the Committee may make appropriate 
adjustments in the number of shares subject to outstanding Options, 
Stock Appreciation Rights, Restricted Stock, or Performance Share 
Unit grants, and in the Option price of any then outstanding Options, 
as it deems equitable, in its absolute discretion, to prevent 
dilution or enlargement of the rights of Participants.

Section 14.     REGULATORY APPROVALS

The exercise of each Option and Stock Appreciation Right, and the 
grant or distribution of Restricted Shares and Performance Shares, 
shall be subject to the condition that if at any time the Corporation 
shall determine in its discretion that the satisfaction of withholding 
tax or other tax liabilities, or the listing, registration, or 
qualification of any shares of Common Stock upon any securities 
exchange or under any Federal or state law, or the consent or approval 
of any regulatory body, is necessary or desirable as a condition of, 
or in connection with, such exercise, grant, or distribution, then 
in any such event such exercise, grant, or distribution shall not be 
effective unless such liabilities have been satisfied or such listing, 
registration, qualification, consent, or approval shall have been 
effected or obtained free of any conditions not acceptable to the 
Corporation.

Section 15.     TERM OF THE PLAN

(a)        Term of the Plan - Awards may be granted from time to time 
under the terms and conditions of the Plan, but no Incentive Stock 
Option may be granted after the expiration of ten (10) years from the 
date of adoption of the Plan, as hereby amended, by the Board of 
Directors; provided, that any future amendment to the Plan that is 
]approved by the stockholders of the Corporation in the manner provided 
under paragraph (a) of this Section 15 shall be regarded as creating a 
new Plan, and an Incentive Stock Option may be granted under such new 
Plan until the expiration of ten (10) years from the earlier of the 
approval by the Board of Directors, or the approval by the stockholders 
of the Corporation, of such new Plan.  Incentive Stock Options 
theretofore granted may extend beyond the expiration of that ten-year 
period, and the terms and conditions of the Plan shall continue to 
apply thereto and to shares of Common Stock acquired upon the 
subsequent exercise of an Incentive Stock Option or related Stock 
Appreciation Right.

Section 16.     AMENDMENT OR TERMINATION OF THE PLAN

The Corporation may at any time and from time to time alter or amend, 
in whole or in part, any or all of the provisions of the Plan, or may 
at any time suspend or terminate the Plan, through resolution of its 
Board of Directors, provided that no change in any Awards theretofore 
granted to any Participant may be made which would impair or diminish 
the rights of the Participant without the Participant's consent, and 
provided further, that no alteration or amendment may be made without 
the approval of the holders of a majority of the Common Stock then 
outstanding and entitled to vote if such stockholder approval is 
necessary to comply with the requirements of any rules promulgated 
under Section 16 of the Securities Exchange Act of 1934 or such other 
Federal or state laws or regulations as may be applicable.

Section 17.     MISCELLANEOUS

(a)        Fractional Shares - The Corporation shall not be required 
to issue or deliver any fractional share of Common Stock upon the 
exercise of an Option or Stock Appreciation Right, the award of 
Performance Shares, or the payment of a dividend equivalent in Common 
Stock pursuant to Section 12 of the Plan, but may pay, in lieu thereof, 
an amount in cash equal to the Fair Market Value of such fractional 
share.

(b)        Withholding - The Corporation and its Subsidiary Companies 
shall have the right, to the extent permitted by law, to deduct from 
any payment of any kind otherwise due to a Participant any Federal, 
state or local taxes of any kind required by law to be withheld with 
respect to Awards under the Plan, and to the extent any such 
withholding requirements are not satisfied, each Participant shall 
pay to the Corporation any Federal, state or local taxes of any kind 
required by law to be withheld with respect to Awards under the Plan.

(c)        Stockholder Rights - No person shall have any rights of 
a stockholder by virtue of an Option, Stock Appreciation Right, or 
Performance Share Unit except with respect to shares of Common Stock 
actually issued to him, and the issuance of shares of Common Stock 
shall confer no retroactive right to dividends.

(d)        No Contract of Employment - This Plan shall not be deemed 
to be an employment contract between the Corporation or any Subsidiary 
Company and any Participant or other employee.  Nothing contained 
herein, or in any agreement, certificate or other document evidencing, 
providing for, or setting forth the terms and conditions applicable 
to any Awards shall be deemed to confer upon any Participant or other 
employee a right to continue in the employment of the Corporation or 
any Subsidiary Company, or to interfere with the right of the 
Corporation or any Subsidiary Company to terminate the employment of 
such Participant or employee at any time.

(e)        Unfunded Plan - Except as may otherwise be provided in the 
Plan, the Plan shall be unfunded.  Neither the Corporation nor any 
Subsidiary Company shall be required to segregate any assets that may 
be represented by Options, Stock Appreciation Rights, or Performance 
Share Units, and neither the Corporation nor any Subsidiary Company 
shall be deemed to be a trustee of any amounts to be paid under an 
Option, Stock Appreciation Right, or Performance Share Unit.  Any 
liability of the Corporation to pay any Participant or Beneficiary 
with respect to an Option, Stock Appreciation Right, or Performance 
Share Unit shall be based solely upon any contractual obligations 
created pursuant to the provisions of the Plan; no such obligation 
shall be deemed to be secured by any pledge or encumbrance on any 
property of the Corporation or a Subsidiary Company.

(f)        Applicable Law - The Plan, its validity, interpretation, 
and administration, and the rights and obligations of all persons 
having an interest therein, shall be governed by and construed in 
accordance with the laws of the Commonwealth of Virginia, except to 
the extent that such laws may be preempted by Federal law.

(g)        Gender and Number - Wherever used in the Plan, words in the 
masculine form shall be deemed to refer to females as well as to males, 
and words in the singular or plural shall be deemed to refer also to the 
plural or singular, respectively, as the context may require.

EXHIBIT 10(n)
NORFOLK SOUTHERN CORPORATION
OFFICERS' DEFERRED COMPENSATION PLAN

ARTICLE I.  NAME AND PURPOSE OF THE PLAN

The name of the plan is the Norfolk Southern Corporation
Officers' Deferred Compensation Plan (the "Plan").  The purpose
of the Plan is to provide retirement and death benefits to those
officers of Norfolk Southern Corporation (the "Corporation") or a
Participating Subsidiary who elect to participate in the Plan.

ARTICLE II.  DEFINITIONS

Account.  The total of the amount of Deferrals by a Participant
together with Interest as provided in Article V.

Agreement.  The "Deferral Agreement" between each Participant and
the Corporation.

Beneficiary.  The person or persons designated as Beneficiary
pursuant to Article XII.

Board of Directors.  The Board of Directors of the Corporation.

Committee.  The Compensation and Nominating Committee of the
Board of Directors.

Compensation.  The fixed salary payable in the form of cash
(including vacation pay) of the Participant before any reduction
for contributions to the Thrift and Investment Plan of Norfolk
Southern Corporation and Participating Subsidiary Companies,
as amended from time to time, and before any deferrals under
this Plan.

Deferral.  A Deferred Bonus and/or a Monthly Deferred Amount.

Deferred Bonus.  That amount set forth in the Agreement which
shall be deferred from a Participant's MIP incentive award
(and any other annual cash incentive award payable to participants
in MIP) or EMIP incentive award (and any other annual cash
incentive award approved by the Board of Directors and payable
to participants in EMIP), or the bonus program of a Participating
Subsidiary, if the deferral of such incentive award or bonus under
the Plan is authorized by the Corporation.

Disability.  A disability that enables the Participant to be
eligible for a disability benefit under the Long-Term Disability
Plan of Norfolk Southern Corporation and Participating
Subsidiaries, as amended from time to time, or under any such
similar plan of a Participating Subsidiary.

EMIP.  Norfolk Southern Corporation Executive Management
Incentive Plan.

MIP.  Norfolk Southern Corporation Management Incentive Plan.

Monthly Deferred Amount.  That amount set forth in the Agreement
which shall be deferred monthly from a Participant's salary
pursuant to the Plan.

Participant.  Any employee of the Corporation or a Participating
Subsidiary eligible to participate under Article IV of the Plan.

Participating Subsidiary.  Each subsidiary or affiliated company
of the Corporation which adopts the Plan and is approved for
participation in the Plan as provided in Article XVIII.

Plan Administrator.  The Executive Vice President - Administration
of the Corporation or the successor officer who performs
substantially similar duties.

Plan Year.  Any calendar year during which deferrals under this
Plan are made.

Retirement.  Retirement from the Corporation or a Participating
Subsidiary pursuant to the provisions of the retirement plan of
the Corporation or of a Participating Subsidiary (whichever
is applicable), as amended from time to time.

ARTICLE III.  ADMINISTRATION

The Plan Administrator shall administer, construe, and
interpret this Plan and, from time to time, adopt such rules
and regulations and make such recommendations to the Committee
concerning Plan changes as are deemed necessary to ensure
effective implementation of this Plan.  The administration,
construction, and interpretation by the Plan Administrator
may be appealed to the Committee, and the decision of the
Committee shall be final and conclusive, except that any
claim for benefits with respect to a Participant shall be
subject to the claims procedure set forth in Section 503 of
the Employee Retirement Income Security Act of 1974.  The
Plan Administrator may correct errors and, so far as
practicable, may adjust any benefit or payment or credit
accordingly.  Neither the Plan Administrator nor any member
of the Committee shall be liable for any act done or
determination made in good faith.

ARTICLE IV.  ELIGIBILITY AND PARTICIPATION

Any nonagreement employee residing in the United
States or Canada with at least 830 salary administration
points assigned to his position shall be eligible to
participate in the Plan.  However, only those Participants
with annual Compensation in excess of ninety thousand dollars
($90,000) shall be eligible to defer Compensation under this
Plan, and only 20% of monthly Compensation in excess of seven
thousand five hundred dollars ($7,500) shall qualify for
deferral hereunder.  A nonagreement employee who elects to
become a Participant in the Plan and defer a portion of his
monthly Compensation thereby consents to the reduction in his
monthly Compensation by the Monthly Deferred Amount as
specified in the Agreement.  An election to participate in
the Plan must be made annually by December 22 of the year
prior to each Plan Year.  Benefits payable hereunder shall
be in addition to any other compensation or benefits to which
a Participant may be entitled from the Corporation or a
Participating Subsidiary.

A Participant may elect to defer a portion of any
incentive bonus which may be awarded to him pursuant to MIP
or EMIP or the authorized bonus program of a Participating
Subsidiary.  A Participant who elects to defer any of his
incentive bonus thereby consents to a reduction in his bonus
by the Deferred Bonus as specified in the Agreement, commencing
with the incentive bonus award earned after December 31, 1986.
By December 22 of the year prior to each Plan Year, a Participant
may elect to defer any incentive bonus which may be earned by him
during that Plan Year, either in whole or in part, in increments
of twenty-five percent (25%).

Participants may not elect to defer Compensation under this
Plan for the Plan Year beginning January 1, 2001, and for
subsequent Plan Years.

ARTICLE V.  INTEREST EQUIVALENT

Unless otherwise stated herein or determined by the Board
of Directors, an amount equivalent to interest ("Interest")
shall accrue and be compounded annually on all Deferrals.
For purposes of calculating the appropriate Interest only,
the Deferred Bonus is deemed to occur on the date on which
the incentive bonus is paid.  Interest shall accrue and be
compounded annually at rates in accordance with the schedule
below on the basis of the Participant's age attained during
the Plan Year for which the Deferral is made:

Age     Rate
Up to 45        7%
45 - 54 10%
55 - 60 11%
Over 60 12%

Interest on each Deferral shall continue to accrue at
the rate determined by the Participant's age attained during the
Plan Year for which the Deferral is made until all benefits
payable hereunder have been distributed to, or with respect to,
the Participant.

ARTICLE VI.  BENEFITS

(a)  Retirement:  When a Participant ceases active service
due to his Retirement, he shall be paid a monthly annuity
commencing in January of the first calendar year following
such Retirement for a period of years in accordance with the
schedule below:

Age at                   Distribution
Time of Deferral                        Period       

Up to 50                             5 Years
50 or Over                      10 Years

The amount of the monthly annuity payable under this Article
VI(a), shall be an amount sufficient to amortize the Participant's
Account together with Interest over the applicable period.

(b)  Disability:  When a Participant ceases active service
due to Disability, he shall be paid a monthly annuity commencing
in January of the first calendar year following such Disability
for a period of fifteen (15) years in an amount sufficient to
amortize the Participant's Account together with Interest over
that period.

(c)  Death:  If a Participant dies while in active service,
the Corporation shall pay the amount of the Participant's Account
to the Participant's Beneficiary in a single payment as soon as
practicable after the date of death.  If a Participant dies after
Retirement or Disability but prior to receiving all benefits
payable thereunder, the monthly payments shall be paid to the
Participant's Beneficiary for the scheduled annuity period.

(d)  Termination of Employment:  If a Participant ceases
active service other than by reason of leave of absence granted
under the Corporation's leave of absence policy, Retirement,
Disability or Death, he shall be paid the balance of his Account
as of the date of his separation from service as soon as
practicable after such separation from service.

(e)  Lump Sum or Other Settlement:  Notwithstanding the
foregoing provisions of this Article VI, the Committee, in its
sole discretion, may authorize and direct the Corporation to make
payments after termination of employment of a Participant to such
Participant or his Beneficiary in a lump sum or over a period other
than that provided for in this Article VI, and to charge such
payments against the Participant's Account.  Such accelerated
distribution may be made only (1) in the event of a financial
emergency which is beyond the control of the Participant if
disallowance of the accelerated distribution would result in
severe financial hardship to the Participant or Beneficiary,
and only in an amount necessary to satisfy the financial
emergency, or (2) if in the written opinion of counsel, payment
in accordance with this Article VI could create a conflict of
interest for the Participant or Beneficiary;  provided, that
all amounts due to a Participant or Beneficiary under this Plan
shall in all events be paid to the Participant or Beneficiary
by the end of the appropriate period referred to in this
Article VI.  No Participant or Beneficiary who is also a member
of the Committee shall participate in any decision of the
Committee to make accelerated payments under this Article VI.

(f)  Change in Mandatory Distribution Schedule:
Notwithstanding the foregoing provisions of this Article VI,
the Committee may, without the consent of any Participant or
Beneficiary, direct that all benefits payable thereafter
pursuant to paragraph (a), (b), or (c) above (including benefits
that accrued prior to the issuance of the direction) shall be paid
under a schedule that differs from that prescribed by paragraph
(a), (b), or (c).  Any such direction shall apply to all
Participants, without differentiating among individual
Participants, except to the extent otherwise provided by
paragraph (e), above.  No Participant or Beneficiary who is
also a member of the Committee shall participate in any decision
of the Committee to make a change in the distribution schedule.

ARTICLE VII.  NATURE AND SOURCE OF PAYMENTS

The obligation to pay benefits under Article VI with
respect to each Participant shall constitute a liability of
the Corporation to the Participant and any death Beneficiaries
in accordance with the terms of the Plan.  The Corporation may
establish one or more grantor trusts to which the Corporation may
transfer such assets as the Corporation determines in its sole
discretion to assist in meeting its obligations under the Plan.
The provisions of the Plan and the Agreement shall govern the
rights of a Participant to receive distributions pursuant
to the Plan.  The provisions of the trust shall govern the rights
of the Corporation, Participants and the creditors of the
Corporation to the assets transferred to the trust.  The
Corporation's obligations under the Plan may be satisfied
with trust assets distributed pursuant to the terms of the
trust, and any such distribution shall reduce the Corporation's
obligations under this Plan.  Participants and Beneficiaries
shall stand in the position of unsecured creditors of the
Corporation, and all rights hereunder are subject to the
claims of creditors of the Corporation.

ARTICLE VIII.   EXPENSES OF ADMINISTRATION

All expenses of administering the Plan shall be borne by
the Corporation, and no part thereof shall be charged against
the benefit of any Participant.

ARTICLE IX.  AMENDMENT TO AND TERMINATION OF PLAN

The Corporation reserves the right at any time by a
resolution duly adopted by its Board of Directors to amend this
Plan in any manner or to terminate it at any time, except that
no such amendment or termination shall deprive a Participant
or his Beneficiary of any rights hereunder theretofore legally
accrued, and no such termination shall be effective for the year
in which such resolution is adopted.

ARTICLE X.  RECALCULATION EVENTS

The Corporation's commitment to accrue and pay Interest
as provided in Article V is facilitated by the purchase of
corporate-owned life insurance purchased on the lives of eligible
Participants.  If the Board of Directors, in its sole discretion,
determines that any change whatsoever in Federal, State or local
law, or in its application or interpretation, has materially
affected, or will materially affect, the ability of the
Corporation to recover the cost of providing the benefits
otherwise payable under the Plan, then, if the Board of
Directors so elects, a Recalculation Event shall be deemed
to have occurred.  If a Recalculation Event occurs, then
Interest shall be recalculated and restated using a lower
rate of Interest determined by the Board of Directors, but
which shall be not less than one-half (1/2) the rate of
Interest provided for in Article V.

ARTICLE XI.  GOVERNING LAW

This Plan and the Agreements are subject to the laws
of the Commonwealth of Virginia.

ARTICLE XII.  DESIGNATION OF BENEFICIARY

For the purpose of this Plan, a beneficiary shall be
either (1) the named Beneficiary or Beneficiaries designated
as hereinafter provided for by the Participant, or (2)
in the absence of any such designation, his estate.  A
Participant may designate both primary and contingent
Beneficiaries.  A Participant may revoke or change any
designation.  To be effective, the designation of a named
Beneficiary or Beneficiaries, or any change in or revocation
of any designation, must be on a form provided by the
Corporation, signed by the Participant and filed with the
Office of the Plan Administrator prior to the death of such
Participant.  Any such designation, change or revocation shall
not invalidate any cash payment made or other action taken by
the Corporation pursuant to the Plan prior to its receipt by
the Corporation.  The determination by the Corporation of a
Beneficiary or Beneficiaries, or the identity thereof, or
evidence satisfactory to the Corporation shall be conclusive
as to the liability of the Corporation and any payment made
in accordance therewith shall discharge the Corporation of
all its obligations under the Plan for such payment.

ARTICLE XIII.  SUCCESSORS, MERGERS, CONSOLIDATIONS

The terms and conditions of this Plan and each Agreement
shall inure to the benefit of and bind the Corporation,
the Participants, their successors, assigns, and personal
representatives.  If substantially all the assets of the
Corporation are acquired by another corporation or entity or
if the Corporation is merged into, or consolidated with, another
corporation or entity, then the obligations created hereunder
and as a result of the Corporation's acceptance of Agreements
shall be obligations of the successor corporation or entity.

ARTICLE XIV.  WITHHOLDING FOR TAXES

The Participant agrees as a condition of participation
hereunder that the Corporation may withhold applicable Federal,
State, and local income taxes and Social Security or Railroad
Retirement taxes from any distribution or benefit paid hereunder.

ARTICLE XV.  NON-ALIENATION OF BENEFITS

No benefit under the Plan shall be subject in any manner
to anticipation, alienation, sale, transfer, assignment, pledge,
encumbrance or charge, and any attempt at such shall be void;
nor shall any such benefit be in any way subject to the debts,
contracts, liabilities, engagements, or torts of the person
who shall be entitled to such benefit;  nor shall it be subject
to attachment or legal process for or against such person.

ARTICLE XVI.  FACILITY OF PAYMENT

If the Plan Administrator shall find that any individual
to whom any amount is payable under the Plan is unable to care
for his affairs because of illness or accident, or is a minor
or other person under legal disability, any payment due such
individual (unless a prior claim therefore shall have been made
by a duly appointed guardian, committee, or other legal
representative) may be paid to the spouse, a child, a parent,
or a brother or sister of such individual or to any other person
deemed by the Plan Administrator to have incurred expenses of
such individual, in such manner and proportions as the Plan
Administrator may determine.  Any such payment shall be a
complete discharge of the liabilities of the Corporation with
respect thereto under the Plan or the Agreement.

ARTICLE XVII.  CONTINUED EMPLOYMENT

Nothing contained herein or in an Agreement shall be
construed as conferring upon any Participant the right nor
imposing upon him the obligation to continue in the employment
of the Corporation or a Participating Subsidiary in any capacity.

ARTICLE XVIII.  PARTICIPATION BY SUBSIDIARY COMPANIES

Conditional upon prior approval by the Corporation, any
company which is a subsidiary of or affiliated with the
Corporation may adopt and participate in this Plan as a
Participating Subsidiary.  Each Participating Subsidiary
shall make, execute and deliver such instruments as the
Corporation and/or the Plan Administrator shall deem necessary
or desirable, and shall constitute the Corporation and/or the
Plan Administrators as its agents to act for it in all
transactions in which the Corporation and/or the Plan
Administrators believe such agency will facilitate the
administration of this Plan.

ARTICLE XIX.  MISCELLANEOUS

Whenever used in the Plan, words in the masculine form
shall be deemed to refer to females as well as to males, and
words in the singular or plural shall be deemed to refer also
to the plural or singular, respectively, as the context may
require.

ARTICLE XX.  EFFECTIVE DATE

The effective date of the Plan is January 1, 1987, as
amended effective September 26, 2000.

EXHIBIT 10(o)

NORFOLK SOUTHERN CORPORATION
EXECUTIVES' DEFERRED COMPENSATION PLAN
as amended January 20, 2001

ARTICLE I.  NAME AND PURPOSE OF THE PLAN.

The name of the plan is the Norfolk Southern Corporation 
Executives' Deferred Compensation Plan (the Plan), which for deferrals 
on or after January 1, 2001, is the successor to the Norfolk Southern 
Corporation Officers' Deferred Compensation Plan.  The purpose of the 
Plan is to provide benefits to those officers of Norfolk Southern 
Corporation (the Corporation) or a Participating Subsidiary who elect 
to participate in the Plan.

ARTICLE II.  DEFINITIONS.

Account.  The total of the amount of Deferrals by a Participant together 
with Earnings as provided in Article V.  The Account shall be utilized 
solely as a device for the measurement of amounts to be paid to the 
Participant under the Plan.  The Account shall not constitute or be 
treated as an escrow, trust fund, or any other type of funded account 
for ERISA or Internal Revenue Code purposes and, moreover, contingent 
amounts credited thereto shall not be considered "plan assets" for ERISA 
purposes.  The Account merely provides a record of the bookkeeping 
entries relating to the contingent benefits that the Corporation intends 
to provide to Participant and thus reflects a mere unsecured promise to 
pay such amounts in the future.

Agreement.  The "Deferral Agreement" between each Participant and the 
Corporation.

Beneficiary.  The person or persons designated as Beneficiary pursuant 
to Article XII.

Board of Directors.  The Board of Directors of the Corporation.

Change in Control.  A Change in Control occurs upon any of the following 
circumstances or events:

(1) The Corporation consummates a merger or other similar control-
type transaction or transactions (however denominated or 
effectuated) with another Corporation or other Person (including 
any "affiliate" or "associate" of any Person, all as defined in the 
Securities Exchange Act of 1934, as amended, or any rules and 
regulations promulgated thereunder) (Combination), and immediately 
thereafter less than eighty percent (80%) of the combined voting 
power of the then-outstanding securities of such corporation or 
Person is held in the aggregate by the holders of securities 
entitled, immediately prior to such Combination, to vote generally 
in the election of directors of the Corporation (Voting Stock); 

(2) The Corporation consummates any stockholder-approved 
consolidation or dissolution (however denominated or effectuated) 
pursuant to a recommendation of the Board of Directors;

(3) At any time, Continuing Directors (as herein defined) shall not 
constitute a majority of the members of the Board of Directors 
("Continuing Director" means (i) each individual who has been a 
director of the Corporation for at least twenty-four consecutive 
months before such time and (ii) each individual who was nominated 
or elected to be a director of the Corporation by at least two 
thirds of the Continuing Directors at the time of such nomination 
or election);

(4) The Corporation sells all or substantially all of its assets to 
any other corporation or other Person, and less than eighty percent 
(80%) of the combined voting power of the then-outstanding 
securities of such corporation or Person immediately after such 
transaction is held in the aggregate by the holders of Voting Stock 
immediately prior to such sale;

(5) A report is filed on Schedule 13D or Schedule 14D-1 (or any 
successor schedule, form or report), pursuant to the Securities 
Exchange Act of 1934, as amended, disclosing that any Person has 
become the Beneficial Owner (any Person who, under the Securities 
Exchange Act of 1934 or any rules or regulations promulgated 
thereunder, would be deemed beneficially to own Voting Stock) of 
twenty (20) or more percent of the voting power of Voting Stock; or

(6) The Board of Directors determines by a majority vote that, 
because of the occurrence, or the threat of imminence of the 
occurrence, of another event or situation in import or effects 
similar to the foregoing, those who have accepted an agreement 
providing certain rights and benefits upon termination of 
employment following a Change in Control are entitled to its 
protections.  

Notwithstanding the provisions of the foregoing, unless otherwise 
determined in a specific case by majority vote of the Board of 
Directors, a Change in Control for purposes of this Plan shall not be 
deemed to have occurred solely because (a) the Corporation, (b) an 
entity of which the Corporation is the direct or indirect Beneficial 
Owner of 50 or more percent of the voting securities or (c) any 
Corporation-sponsored employee stock ownership plan or any other 
employee benefit plan of the Corporation either files or becomes 
obligated to file a report or a proxy statement under or in response to 
Schedule 13D, Schedule 14D-1, Form 8-K, or Schedule 14A (or any 
successor schedule, form or report or item therein) under the Exchange 
Act, disclosing beneficial ownership by it of shares of Voting Stock, 
whether in excess of 20 percent or otherwise, or because the 
Corporation reports that a change in control of the Corporation has or 
may have occurred or will or may occur in the future by reason of such 
beneficial ownership.

Committee.  The Compensation and Nominating Committee of the Board of 
Directors.

Compensation.  The fixed salary payable in the form of cash (including 
vacation pay) of the Participant before any reduction for contributions 
to the Thrift and Investment Plan of Norfolk Southern Corporation and 
Participating Subsidiary Companies, as amended from time to time, and 
before any deferrals under this Plan.

Deferral.  A Deferred Bonus and/or a Monthly Deferred Amount for each 
Plan Year which is "credited"?to a Participant's Account.

Deferred Bonus.  That amount set forth in the Agreement which shall be 
deferred from a Participant's MIP incentive award (and any other cash 
incentive award payable to participants in MIP) or EMIP incentive award 
(and any other cash incentive award approved by the Board of Directors 
and payable to participants in EMIP), or the bonus program of a 
Participating Subsidiary, if the deferral of such incentive award or 
bonus under the Plan is authorized by the Corporation.

Disability.  A disability that enables the Participant to be eligible 
for a disability benefit under the Long-Term Disability Plan of Norfolk 
Southern Corporation and Participating Subsidiaries, as amended from 
time to time, or under any such similar plan of a Participant Subsidiary.

EMIP.  Norfolk Southern Corporation Executive Management Incentive Plan 
or successor plan.

Hypothetical Investment Options.  Investment funds or benchmarks, as may 
be selected from time to time by the Plan Administrator, made available 
to Participants solely for purposes of valuing Deferrals. 

MIP.  Norfolk Southern Corporation Management Incentive Plan or 
successor plan.

Monthly Deferred Amount.  That amount set forth in the Agreement which 
shall be deferred monthly from a Participant's salary pursuant to the 
Plan.

Participant. Any employee of the Corporation or a Participating 
Subsidiary eligible to participate under Article IV of the Plan.

Participating Subsidiary.  Each subsidiary or affiliated company of the 
Corporation which adopts the Plan and is approved for participation in 
the Plans as provided in Article XVIII.

Plan Administrator.  The Senior Vice President-Employee Relations, of 
the Corporation or the successor officer who performs substantially 
similar duties.

Plan Year.  Any calendar year during which deferrals under this Plan are 
made.

Retirement.  Retirement from the Corporation or a Participating 
Subsidiary or receipt of an accrued retirement benefit pursuant to the 
provisions of the retirement plan of the Corporation or of a 
Participating Subsidiary (whichever is applicable), as amended from time 
to time.

Trust.  A grantor trust of the type commonly referred to as a "rabbi 
trust" created to informally fund contingent benefits payable under the 
Plan.  

ARTICLE III.  ADMINISTRATION.

The Plan Administrator shall administer, construe, and interpret 
this Plan and, from time to time, adopt such rules and regulations and 
make such recommendations to the Committee concerning Plan changes as 
are deemed necessary to ensure effective implementation of this Plan.  
The administration, construction, and interpretation by the Plan 
Administrator may be appealed to the Committee, and the decision of the 
Committee shall be final and conclusive, except that any claim for 
benefits with respect to a Participant shall be subject to the claims 
procedure set forth in Section 503 of the Employee Retirement Income 
Security Act of 1974.  The Plan Administrator may correct errors and, so 
far as practicable, may adjust any benefit or payment or credit 
accordingly.  Neither the Plan Administrator nor any member of the 
Committee shall be liable for any act done or determination made in good 
faith.

ARTICLE IV.  ELIGIBILITY AND ELECTIONS.

(a)   Eligibility.   Any nonagreement employee that is eligible to 
participate in either the EMIP or MIP shall be eligible to participate 
in the Plan.  A Participant may elect to defer up to 25% of his or her 
monthly Compensation.  A nonagreement employee who elects to become a 
Participant in the Plan and defer a portion of his monthly Compensation 
thereby consents to the reduction in his monthly Compensation by the 
Monthly Deferred Amount as specified in the Agreement.  Benefits payable 
hereunder shall be in addition to any other compensation or benefits to 
which a Participant may be entitled from the Corporation or a 
Participating Subsidiary.

A Participant may elect to defer a portion of any eligible 
incentive bonus which may be awarded to him pursuant to MIP, EMIP or 
otherwise or the authorized bonus program of a Participating Subsidiary.  
A Participant who elects to defer any of his incentive bonus thereby 
consents to a reduction in his bonus by the Deferred Bonus as specified 
in the Agreement, commencing with the incentive bonus award earned after 
December 31, 2000.  A Participant may elect to defer any incentive bonus 
which may be earned by him during that Plan Year, either in whole or in 
part, in increments of twenty-five percent (25%).

(b)   Deferral and Distribution Elections.   A Participant may 
elect to defer his or her monthly Compensation or incentive bonus which 
may be earned during the Plan Year.  If the Participant fails to make 
the election prior to the beginning of the Plan Year, then the 
Participant will not be eligible to defer Compensation during the Plan 
Year.    

For each year's Deferral, the Participant may elect among the 
following two distribution options.  The Participant may elect to have 
the benefit distributed (i) at the earlier of Retirement or Disability, 
or (ii) at a distribution date which is the earliest of Retirement, 
Disability, or a specified date at least five (5) years but not more 
than fifteen (15) years after the Plan Year has ended.  The Participant 
may elect to have the Retirement or Disability benefit distributed to 
him in one lump sum or in a pay out period of five (5), ten (10), or 
fifteen (15) years.  Any benefit which a Participant has elected to have 
distributed on the earliest of Retirement, Disability, or a specified 
date after the Plan Year has ended will be paid in one lump sum. If the 
participant fails to elect the time and form of distribution of his or 
her Deferral, the Participant's distribution will be made at the earlier 
of Retirement or Disability in one lump sum.            

All elections described above must be made annually by the 
Participant by a date which is no later than December 31 of the year 
prior to the Plan Year, or any earlier date prescribed by the Plan 
Administrator.  All elections made by the Participant are irrevocable.  

ARTICLE V.  EARNINGS EQUIVALENT.

(a)  Adjustment of Participant Accounts.  Unless otherwise stated 
herein or determined by the Board of Directors, an amount equivalent to 
earnings or losses ("Earnings") shall accrue on or be deducted from all 
Deferrals in accordance with the Participant's selection of Hypothetical 
Investment Options.  For purposes of calculating the appropriate 
Earnings only, the Deferred Bonus is deemed to occur on the date on 
which the incentive bonus is paid.  Earnings shall be determined based 
upon the Hypothetical Investment Option(s) elected by the participant.  
If a Participant does not elect Hypothetical Investment Options for the 
Deferrals, then Earnings shall be determined based on such Hypothetical 
Investment Options as may be designated by the Plan administrator to 
apply in the absence of an election.  Participants will be required to 
elect a Hypothetical Investment Option(s) at the time each Deferral 
election is made.  Participants will be permitted at any time prior to 
the complete pay out of their Account balances to elect to change their 
Hypothetical Investment Option(s) with respect to all or part of their 
Account balances effective as soon as practicable following such election.  
The procedure for electing to change a Hypothetical Investment Option(s) 
will be established by the Plan Administrator.  An election to change a 
Hypothetical Investment Option for part of an Account balance must be 
made in increments of 1% of the Account balance, with a minimum balance 
transfer of $500.00.

While a Participant's Account does not represent the Participant's 
ownership of, or any ownership interest in, any particular assets, the 
Participant's Account shall be adjusted in accordance with the 
Hypothetical Investment Options chosen by the Participant.  Any  Earnings 
generated under a Hypothetical Investment Option (such as interest and 
cash dividends and distributions) shall be deemed to be reinvested in 
that Hypothetical Investment Option.  All notional acquisitions and 
dispositions of Hypothetical Investment Options which occur within a 
Participant's Account, pursuant to the terms of the Plan, shall be 
deemed to occur at such times as the Plan Administrator shall determine 
to be administratively feasible in its sole discretion and the 
Participant's Account shall be adjusted accordingly.  In the event of a 
Change in Control, the practices and procedures for determining any 
Earnings credited to any Participants' Accounts following a Change in 
Control shall be made in a manner no less favorable to Participants than 
the practices and procedures employed under the Plan, or otherwise in 
effect, as of the date of the Change in Control.  

In lieu of an entitlement to receive payments under the terms of 
this Plan in the event of a Change in Control, any deferred compensation 
equivalent payment made under an agreement following a Change in Control 
(Change in Control Agreement) shall determine projected Earnings a 
Participant would have received had the Participant worked until normal 
retirement age at age 65 or, if greater, had the Participant retired on 
his or her Termination Date (as defined in the applicable Change in 
Control Agreement) in accordance with the rate of return specified in 
this section.  The rate of return for such projected Earnings shall be 
determined in accordance with the schedule below based on the 
Participant's age immediately preceding the Termination Date and shall 
be applied to the Participant's Account balance on the Termination Date:

Age               Rate
up to 45                           7%
45-54              10%
55-60              11%
over 60             12%

(b) Vesting.  The Participant shall at all times be one hundred 
percent (100%) vested in his or her Account, as well as in any 
appreciation (or depreciation) specifically attributable to such Account 
due to Earnings.

ARTICLE VI.  BENEFITS

(a) Distribution at the Earlier of Retirement or Disability: For 
each Deferral for which the Participant elected to have the benefit 
distributed in this manner, the Participant shall be paid the amount in 
his or her Account either in a lump sum or in installments as the 
Participant elected at the time of Deferral.  

For lump sum distributions, the Participant shall be paid as soon 
as practicable after January 1 of the calendar year following Retirement 
or Disability the portion of his or her Account which is attributable to 
Deferrals for which the Participant elected lump sum distribution at 
Retirement or Disability. 

For distributions other than lump sum distributions, payments shall 
commence in January of the calendar year following such Retirement or 
Disability and shall be made in installments for each applicable Deferral 
over the elected pay out period for that Deferral.  The annual 
installment payment for each applicable Deferral shall be an amount equal 
to the remaining balance in the Participant's Account for the Deferral, 
valued at the end of the calendar year preceding the installment payment, 
divided by the remaining number of annual payments not yet distributed 
for that Deferral. 

(b) Distribution at the Earliest of Retirement, Disability or a 
Specified Date Other Than Retirement or Disability: For each Deferral 
for which the Participant elected to have the benefit distributed in 
this manner, the Participant shall be paid the amount in his or her 
Account for that Deferral in a lump sum as soon as practicable after the 
date selected, or at Retirement or Disability, if earlier. 

(c) Death: If a Participant dies either while in active service or 
after Retirement or Disability, the Corporation shall pay the amount of 
the Participant's Account to the Participant's Beneficiary in a single 
payment as soon as practicable after the date of death.

(d) Termination of Employment:  Notwithstanding the foregoing 
provisions of this Article VI, if a Participant ceases active service 
other than by reason of leave of absence granted under the Corporation's 
leave of absence policy, Retirement, Disability or death, the Participant 
shall be paid the balance of his or her Account as of the date of 
separation from service as soon as practicable after such separation 
from service. 

(e) Lump Sum or Other Settlement: Notwithstanding the foregoing 
provisions of this Article VI, the Committee, in its sole discretion, 
may authorize and direct the Corporation to make payments to a 
Participant or Beneficiary in a lump sum or over a period other than 
that provided for in this Article VI, and to charge such payments against 
the Participant's Account.  Such accelerated distribution may be made 
only (1) in the event of a financial emergency which is beyond the 
control of the Participant if disallowance of the accelerated 
distribution would result in severe financial hardship to the 
Participant or Beneficiary, and only in an amount necessary to satisfy 
the financial emergency, or (2) if in the written opinion of counsel, 
payment in accordance with this Article VI could create a conflict of 
interest for the Participant or Beneficiary; provided, that all amounts 
due to a Participant or Beneficiary under this Plan shall in all events 
be paid to the Participant or Beneficiary by the end of the appropriate 
period referred to in this Article VI.  No Participant or Beneficiary who 
is also a member of the Committee shall participate in any decision of 
the Committee to make accelerated payments under this Article VI.

(f) Change in Mandatory Distribution Schedule: Notwithstanding the 
foregoing provisions of this Article VI, the Committee may, without the 
consent of any Participant or Beneficiary, direct that all benefits 
payable thereafter pursuant to paragraph (a), (b), or (c) above 
(including benefits that accrued prior to the issuance of the direction) 
shall be paid under a schedule that differs from that prescribed by 
paragraph (a), (b), or (c).  Any such direction shall apply to all 
Participants, without differentiating among individual Participants, 
except to the extent otherwise provided by paragraph (d), above.  No 
Participant or Beneficiary who is also a member of the Committee shall 
participate in any decision of the Committee to make a change in the 
distribution schedule.

ARTICLE VII.  NATURE AND SOURCE OF PAYMENTS

The obligation to pay benefits under Article VI with respect to 
each Participant shall constitute a liability of the Corporation to the 
Participant and any death Beneficiaries in accordance with the terms of 
the Plan. The Corporation may establish one or more Trusts to which the 
Corporation may transfer such assets as the Corporation determines in 
its sole discretion to assist in meeting its obligations under the Plan.  
The provisions of the Plan and the Agreement shall govern the rights of 
a Participant to receive distributions pursuant to the Plan.  The 
provisions of the Trust shall govern the rights of the Corporation, 
Participants and the creditors of the Corporation to the assets 
transferred to the Trust.  The Corporation's obligations under the Plan 
may be satisfied with Trust assets distributed pursuant to the terms of 
the Trust, and any such distribution shall reduce the Corporation's 
obligations under this Plan.

Participants and Beneficiaries shall stand in the position of 
unsecured creditors of the Corporation, the Plan constitutes a mere 
promise by the employer to make benefit payments in the future, and all 
rights hereunder are subject to the claims of creditors of the 
Corporation.  

ARTICLE VIII.  EXPENSES OF ADMINISTRATION

All expenses of administering the Plan shall be borne by the 
Corporation, and no part thereof shall be charged against the benefit of 
any Participant, except the costs of the Hypothetical Investment Options, 
which shall be charged against the value of Deferrals measured against 
those funds. 

ARTICLE IX.  AMENDMENT TO AND TERMINATION OF PLAN

The Corporation reserves the right at any time through written 
action of its chief executive officer or by a resolution duly adopted 
by its Board of Directors to amend this plan in any manner or to 
terminate it at any time, except that no such amendment or termination 
shall deprive a Participant or his Beneficiary of any rights hereunder 
theretofore legally accrued, and no such termination shall be effective 
for the year in which such resolution is adopted.

ARTICLE X. RECALCULATION EVENTS 

The Corporation's commitment to accrue and pay Earnings as provided 
in Article V is facilitated by the purchase of corporate-owned life 
insurance purchased on the lives of eligible Participants.  If the Board 
of Directors, in its sole discretion, determines that any change 
whatsoever in Federal, State, or local law, or in its application or 
interpretation, has materially affected, or will materially affect, the 
ability of the Corporation to recover the cost of providing the benefits 
otherwise payable under the Plan, then, if the Board of Directors so 
elects, a Recalculation Event shall be deemed to have occurred.  If a 
Recalculation Event occurs, then Earnings shall be recalculated and 
restated using a lower rate of Earnings determined by the Board of 
Directors, but which shall be not less than the lesser of one-half (1/2) 
the rate of Earnings provided for in Article V or 7%.  

ARTICLE XI.  GOVERNING LAW

This Plan and the Agreements are subject to the laws of the 
Commonwealth of Virginia.

ARTICLE XII.  DESIGNATION OF BENEFICIARY

For the purpose of this Plan, a beneficiary shall be either (1) 
the named Beneficiary of the Participant in the Norfolk Southern 
Corporation Officers Deferred Compensation Plan or Beneficiaries 
subsequently designated as hereinafter provided for by the Participant, 
or (2) in the absence of any such designation, his or her estate.  A 
Participant may designate both primary and contingent Beneficiaries.  A 
Participant may revoke or change any designation.  To be effective, the 
designation of a named Beneficiary or Beneficiaries, or any change in or 
revocation of any designation, must be on a form provided by the 
Corporation, signed by the Participant and filed with the Office of the 
Plan Administrator prior to the death of such Participant.  Any such 
designation, change or revocation shall not invalidate any cash payment 
made or other action taken by the Corporation pursuant to the Plan prior 
to its receipt by the Corporation.  The determination by the Corporation 
of a Beneficiary or Beneficiaries, or the identity thereof, or evidence 
satisfactory to the Corporation shall be conclusive as to the liability 
of the Corporation and any payment made in accordance therewith shall 
discharge the Corporation of all its obligations under the Plan for such 
payment.

ARTICLE XIII.  SUCCESSORS, MERGERS, CONSOLIDATIONS

The terms and conditions of this Plan and each Agreement shall 
inure to the benefit of and bind the Corporation, the Participants, 
their successors, assigns, and personal representatives.  If 
substantially all the assets of the Corporation are acquired by another 
corporation or entity or if the Corporation is merged into, or 
consolidated with, another corporation or entity, then the obligations 
created hereunder and as a result of the Corporation's acceptance of 
Agreements shall be obligations of the successor corporation or entity.

ARTICLE XIV.  WITHHOLDING FOR TAXES

The Participant agrees as a condition of participation hereunder 
that the Corporation may withhold applicable Federal, State, and local 
income taxes and Social Security or Railroad Retirement taxes from any 
distribution or benefit paid hereunder.

ARTICLE XV.  NON-ALIENATION OF BENEFITS

No benefit under the Plan shall be subject in any manner to 
anticipation, alienation, sale, transfer, assignment, pledge, encumbrance 
or charge, and any attempt at such shall be void; nor shall any such 
benefit be in any way subject to the debts, contracts, liabilities, 
engagements, or torts of the person who shall be entitled to such 
benefit; nor shall it be subject to attachment or legal process for or 
against such person.

ARTICLE XVI.  FACILITY OF PAYMENT

If the Plan Administrator shall find that any individual to whom 
any amount is payable under the Plan is unable to care for his affairs 
because of illness or accident, or is a minor or other person under 
legal disability, any payment due such individual (unless a prior claim 
therefore shall have been made by a duly appointed guardian, committee, 
or other legal representative) may be paid to the spouse, a child, a 
parent, or a brother or sister of such individual or to any other person 
deemed by the Plan Administrator to have incurred expenses of such 
individual, in such manner and proportions as the Plan Administrator may 
determine.  Any such payment shall be a complete discharge of the 
liabilities of the Corporation with respect thereto under the Plan or 
the Agreement.

ARTICLE XVII.  CONTINUED EMPLOYMENT

Nothing contained herein or in an Agreement shall be construed as 
conferring upon any Participant the right nor imposing upon him the 
obligation to continue in the employment of the Corporation or a 
Participating Subsidiary in any capacity.

ARTICLE XVIII.  PARTICIPATION BY SUBSIDIARY COMPANIES

Conditional upon prior approval by the Corporation, any company 
which is a subsidiary of or affiliated with the Corporation may adopt 
and participate in this Plan as a Participating Subsidiary.  Each 
Participating Subsidiary shall make, execute and deliver such 
instruments as the Corporation and/or Plan Administrator shall deem 
necessary or desirable, and shall constitute the Corporation and/or the 
Plan Administrators as its agents to act for it in all transactions in 
which the Corporation and/or the Plan Administrators believe such agency 
will facilitate the administration of this Plan.

ARTICLE XIX.  MISCELLANEOUS

Whenever used in the Plan, words in the masculine form shall be 
deemed to refer to females as well as to males, and words in the singular 
or plural shall be deemed to refer also to the plural or singular, 
respectively, as the context may require.

ARTICLE XX.  STATUS OF PLAN

The Plan is intended to be a plan that is not qualified within the 
meaning of Section 401(a) of the Internal Revenue Code and that "is 
unfunded and is maintained by an employer primarily for the purpose of 
providing deferred compensation for a select group of management or 
highly compensated employees" within the meaning of ERISA.  The Plan 
shall be administered and interpreted to the extent possible in a manner 
consistent with that intent.  All Participant Accounts and all credits 
and other adjustments to such Participant Accounts shall be bookkeeping 
entries only and shall be utilized solely as a device for the measurement 
and determination of amounts to be paid under the Plan.  No Participant 
Accounts, Earnings, credits or other adjustments under the Plan shall be 
interpreted as an indication that any benefits under the Plan are in any
way funded.

ARTICLE XXI.  EFFECTIVE DATE

The effective date of the Plan is January 1, 2001.

EXHIBIT 10(p)
DIRECTORS' DEFERRED FEE PLAN
OF
NORFOLK SOUTHERN CORPORATION

(Effective June 1, 1982)
Last Amended January 23, 2001

PURPOSE

The Directors' Deferred Fee Plan (the "Plan") as adopted
and approved by the Board of Directors (the "Board") of Norfolk
Southern Corporation ("NS"), effective June 1, 1982, and as last
amended effective January 23, 2001, makes available to NS directors
a deferral election with respect to the directors' annual
compensation and fees to provide for retirement and death benefits
and thereby facilitate individual financial planning.

SECTION 1.  ADMINISTRATION

The Plan Administrator shall be the Board.  The Board shall
from time to time adopt rules and regulations determined to be
necessary to ensure the effective implementation of the Plan.
The Board shall have the power to interpret the Plan, to supervise
the maintenance of the deferred memorandum accounts of participants
in the Plan and the method of distribution of those amounts credited
to the deferred memorandum accounts pursuant to Section 4.

SECTION 2.  ELIGIBILITY

Each NS director shall be eligible to be a participant in the Plan.

SECTION 3.  DEFERRED COMPENSATION

An NS director may elect to have all or a specified part of the
annual compensation and fees credited to a deferred memorandum account
established pursuant to Section 4.  The director making such an election
(the "Participant") shall do so by filing with the Board by the last
day of March, June, September or December of any year, beginning in
1982, an election on a form prescribed by the Board for the purpose of
specifying the percent of compensation and fees to be deferred for
the succeeding quarters of the election year and for succeeding
years.  An election so made by a Participant shall continue from
year to year, unless the Participant terminates it for succeeding
years by written request to the Board prior to December 31 of any
year.  In the event of such termination, the specified part of the
Participant's compensation and fees for the balance of the calendar
year following termination and previously deferred amounts shall
continue to be deferred under the Plan. Until an election is
made by a director during any year, the director shall be deemed
to have elected to receive the entire compensation and fees for
that and the succeeding years in cash.

A person elected to fill a vacancy on the Board and who was
not a director on the last day of the quarter preceding that person's
election, may elect, by filing one of the aforesaid forms with the
Board prior to the beginning of that director's term, to defer all
or a specified part of annual compensation and fees for the balance
of the calendar year following election and for succeeding years.

SECTION 4.  DEFERRED MEMORANDUM ACCOUNT

The amount of a Participant's annual compensation and fees which,
pursuant to Section 3, the Participant has elected to receive on a
deferred basis shall by appropriate bookkeeping entries be credited
to that Participant's deferred memorandum fixed interest or variable
earnings accounts (the "Accounts") in accordance with the Plan terms
and the Participant's investment election applicable to such deferral.  

The Board shall have the right to delegate to NS's chief financial
officer the responsibility for supervising the maintenance of the
Participants' respective Accounts and, subject to Section 6, the method
of distribution of the amounts credited to the Accounts.  In addition,
the Board shall have the right to delegate to NS's chief financial
officer the responsibility to select Hypothetical Investment Options,
subject to subsection (b) of this Section, made available to
Participants solely for the purpose of valuing deferrals in the
Variable Earnings Accounts.

The Accounts shall be utilized solely as a device for the
measurement of amounts to be paid to the Participant under the
Plan.  The Accounts shall not constitute or be treated as an
escrow, trust fund, or any other type of funded account for
ERISA or Internal Revenue Code purposes and, moreover,
contingent amounts credited thereto shall not be considered
plan assets for ERISA purposes.  The Accounts merely provide a record
of the bookkeeping entries relating to the contingent benefits that
the Corporation intends to provide to Participant and thus reflect
a mere unsecured promise to pay such amounts in the future.

(a)  Fixed Interest Account.  Amounts deferred before January
1, 2001, shall be credited to a Participant's Fixed Interest Account
as provided in this subsection.  Unless otherwise stated herein or
determined by the Board, each Participant's Account shall also be
credited at the end of each quarter by appropriate bookkeeping
entries with an amount equivalent to interest ("Interest") on the
amount credited to the Participant's Fixed Interest Account at the
beginning of the quarter at a rate determined by the Participant's
age at the time the deferral is made.  For purposes of determining
the appropriate rates, a deferral is deemed to occur when the
compensation and fees would otherwise have been paid.  Amounts
deferred on or after January 1, 1994, shall accrue Interest based
on the Participant's age at the time of deferral at the rates
set forth below:

Age                              Rate

Under 45                          7%
45-54                      10%
55-60                      11%
Over 60                    12%

Amounts deferred on or after January 1, 1992, and prior to
January 1, 1994, shall accrue Interest based on the Participant's age
at the time of deferral at the rates set forth below:

Age                            Rate

Under  45                          13%
45-54                           14%
55-60                     15%
Over 60                   16%

Amounts deferred on or after January 1, 1987, and prior to January
1, 1992, shall accrue Interest based on the Participant's age at the time
of deferral at the rates set forth below:

Age                            Rate

Under  45                           15%
45-54                     16%
55-60                     17%
Over 60                    18%

Amounts deferred under the Plan prior to January 1, 1987, shall
accrue Interest at a rate determined by the Participant's age on
January 1, 1987, as if such amounts had been deferred on January 1,
1987. Interest on each deferral shall continue to accrue at the rate
determined by the Participant's age at the time the deferral is
made until all benefits payable hereunder have been distributed
to, or with respect to, the Participant.

(b)  Variable Earnings Account.  Amounts deferred on or after
January 1, 2001, shall be credited to a Participant's Variable Earnings
Account as provided in this subsection.  Investment funds or benchmarks 
shall be selected from time to time by the Plan Administrator or its 
designee (as provided in this Section) and made available to
Participants solely for the purpose of valuing deferrals.  Such
funds or benchmarks shall be referred to as "Hypothetical
Investment Options."  

Unless otherwise stated herein or determined by the Board of Directors, 
an amount equivalent to earnings or losses ("Earnings") shall accrue on 
or be deducted from all deferrals, beginning when the compensation and 
fees would otherwise have been paid, in accordance with the
Participant's selection of Hypothetical Investment Options. Earnings
shall be determined based upon the Hypothetical Investment Option(s)
elected by the Participant. If a Participant does not elect
Hypothetical Investment Options for the deferrals, then Earnings shall
be determined based on such Hypothetical Investment Options as may be
designated by the Plan Administrator to apply in the absence of an
election.  Participants will be required to elect a Hypothetical
Investment Option(s) at the time a deferral election is made for
amounts deferred on or after January 1, 2001, and such investment 
election will apply to all subsequent deferrals until the Participant
changes such election.  Participants will be permitted at any time
prior to the complete pay out of their Variable Earnings Account
balance to elect to change their Hypothetical Investment Option(s)
with respect to all or part of their Variable Earnings Account
balances effective as soon as practicable following such election.
The procedure for electing to change a Hypothetical Investment
Option(s) will be established by the Plan Administrator.  An
election to change a Hypothetical Investment Option for part of a
Variable Earnings Account balance must be made in increments of 1%
of the Variable Earnings Account balance, with a minimum balance
transfer of $500.00.

While a Participant's Accounts do not represent the Participant's
ownership of, or any ownership interest in, any particular assets, the
Participant's Variable Earnings Account shall be adjusted in accordance
with the performance of the Hypothetical Investment Options chosen by
the Participant.  Any cash earnings generated under a Hypothetical
Investment Option (such as interest and cash dividends and
distributions)shall be deemed to be reinvested in that Hypothetical
Investment Option.  All notional acquisitions and dispositions
of Hypothetical Investment Options which occur within a Participant's
Variable Earnings Account, pursuant to the terms of the Plan, shall
be deemed to occur at such times as the Plan Administrator shall
determine to be administratively feasible in its sole discretion and
the Participant's Variable Earnings Account shall be adjusted
accordingly.  In the event of a Change in Control, the practices and
procedures for determining any Earnings credited to any Participants'
Variable Earnings Accounts following a Change in Control shall be made
in a manner no less favorable to Participants than the practices and
procedures employed under the Plan, or otherwise in effect, as of the
date of the Change in Control.  

SECTION 5.  RESTRICTIONS        

The Participants shall have only those rights in respect of 
the amounts credited to their Accounts specifically set forth herein.

No Participant may, prior to the distribution of funds pursuant 
to Section 6, sell, assign, transfer (except to a death beneficiary 
or beneficiaries by will or descent), distribute, pledge as collateral 
for a loan or as security for the performance of any obligation, 
exchange or otherwise dispose of any interest in the amounts credited 
to that Participant's Accounts.

The amounts credited to the Accounts shall remain assets of NS 
until distributed to Participants pursuant to Section 6.

SECTION 6.  DISTRIBUTION

(a)  Fixed Interest Account.  Except as otherwise provided in 
Section 7, distributions of the amounts credited to a Participant's 
Fixed Interest Account shall be made in ten annual cash installments 
beginning with the first day of the calendar year immediately following 
the year when a Participant ceases to be an NS director by retirement 
or otherwise.

Upon the death of a Participant prior to the expiration of the 
period during which the deferred amounts are payable, the balance of the 
deferred fees and interest credited to the Fixed Interest Account shall 
be payable to the death beneficiary or beneficiaries in full on the
first day of the calendar year following the year in which the
Participant dies.  

(b) Variable Earnings Account.  Except as otherwise provided in 
Section 7, a Participant may elect to have the amounts credited to the 
Variable Earnings Account distributed beginning with the first day of 
the calendar year immediately following the year when the Participant 
ceases to be an NS director by retirement or otherwise, or the
Participant may select a prior distribution date which is the earlier
of retirement or a specified date at least five (5) years but not more
than fifteen (15) years after the calendar year applicable to the
deferral ("Specified Date").  For benefits to be distributed after a
Participant ceases to be an NS director, the Participant may elect to
be paid in one lump sum or in a pay out period of five (5), ten (10),
or fifteen (15) years in annual installments.  Any benefit which the
Participant has elected to have distributed on a Specified Date will
be paid in one lump sum. If the Participant fails to elect the time
and form of distribution of his deferral, the Participant's
distribution will be made in one lump sum after the Participant
ceases to be an NS director by retirement or otherwise.  

All distribution elections described in this Section 6(b) must
be made by the Participant no later than December 31 of the year 
prior to the calendar year for which the deferrals will be made or 
any earlier date prescribed by the Plan Administrator.  A distribution 
election so made shall apply to all deferrals during the upcoming 
calendar year, and the election shall continue from year to year 
unless the Participant makes another election for succeeding years 
prior to December 31 of any year.  A distribution election may be 
changed, provided however that such change shall be effective only if 
it is made (i) at least thirteen months prior to distribution of the 
benefits and (ii) is approved by the Plan Administrator. 

For each calendar year's deferrals for which the Participant 
elected to have the benefit distributed on a Specified Date, the 
Participant shall be paid the amount in the Account for that calendar 
year's deferrals as soon as practicable after the date selected 
(or upon ceasing to be an NS director, if earlier).   

For a Participant who did not elect distribution on a Specified 
Date, the Participant shall be paid, for lump sum distributions, on 
January 1 of the calendar year following the date the Participant 
ceases to be an NS director the amount in the Variable Earnings 
Account which is attributable to deferrals for which the Participant 
elected to have the benefit distributed on such date in a lump sum.  
For distributions other than lump sum distributions, payments shall 
commence in January of the calendar year following the date the 
Participant ceases to be an NS director and shall be made in 
installments in January of each year for each applicable deferral 
based on the distribution elections made by the Participant at the 
time of deferral.  The annual installment payment for each applicable 
deferral shall be an amount equal to the remaining balance in the 
Participant's Account for that deferral, valued at the end of the 
calendar year preceding the installment payment, divided by the 
remaining number of annual payments not yet distributed for that deferral.

Upon the death of a Participant prior to the expiration of the 
period during which the deferred amounts are payable, the balance of 
the deferred fees and  Earnings credited to the Variable Earnings 
Account shall be payable to the death beneficiary or beneficiaries 
in full on the first day of the calendar year following the year in 
which the Participant dies.

SECTION 7.  CHANGE IN CONTROL

If, on the date of a Change in Control, a Participant who was 
serving as a director of NS on the day immediately preceding the 
date of a Change in Control has not been nominated and elected a 
director of the publicly owned entity that owns directly or 
indirectly all or substantially all the assets owned directly or 
indirectly by NS prior to the Change in Control (provided, however, 
that continued service as a director of NS after any circumstance 
or event constituting a Change in Control shall not constitute a 
waiver of the rights provided in this Section 7 with respect to 
any subsequent circumstance or event constituting a Change in Control), 
then, notwithstanding the provisions of Section 6, such Participant 
shall receive a lump-sum cash payment equal to the present value on 
the Participant's last day of service as a director, using a discount 
rate of 4.5 percent, of the stream of annual installment payments 
that the Participant would have received had the Participant served 
as a director until the latest date permitted under the Retirement 
Policy for NS directors as in effect on the day before the Change 
in Control.  For the Variable Earnings Account, the projected 
Earnings used to determine such stream of annual payments will 
be calculated in accordance with the Interest rate specified in 
Section 4(a) based on the Participant's age immediately preceding 
the date of a Change in Control and applied to the Participant's 
Variable Earnings Account balance on such date.  This payment will 
be in full satisfaction of all amounts credited to the Participant's 
Accounts.       

A Change in Control shall occur upon any of the following 
circumstances or events: 

(i)     NS consummates a merger or other similar control-type 
transaction or transactions (however denominated or effectuated) 
with another corporation or other entity (Combination), and 
immediately thereafter less than eighty percent (80%) of the combined 
voting power of the then-outstanding securities of such corporation or 
entity is held in the aggregate by the holders of securities entitled, 
immediately prior to such Combination, to vote generally in the 
election of NS directors (Voting Stock);  

(ii)    NS consummates any stockholder-approved consolidation or 
dissolution (however denominated or effectuated) pursuant to a 
recommendation of the Board;

(iii)   At any time, Continuing Directors (as herein defined) shall 
not constitute a majority of the members of the Board ("Continuing 
Director" means (i) each individual who has been a director of NS for 
at least twenty-four (24) consecutive months before such time and 
(ii) each individual who was nominated or elected to be a director 
of NS by at least two-thirds (2/3) of the Continuing Directors at 
the time of such nomination or election); or

(iv)    NS sells all or substantially all of its assets to any 
other corporation or other entity, and less than eighty percent 
(80%) of the combined voting power of the then-outstanding securities 
of such corporation or entity immediately after such transaction is 
held in the aggregate by the holders of Voting Stock immediately prior 
to such sale.

SECTION 8.  RECALCULATION EVENTS        

NS's commitment to accrue and pay Interest and Earnings as 
provided in Section 4 is facilitated by the purchase of corporate-owned 
life insurance purchased on the lives of eligible Participants.  
If the Board, in its sole discretion, determines that any change 
whatsoever in Federal, State or local law, or in its application or 
interpretation, has materially affected, or will materially affect, 
the ability of NS to recover the cost of providing the benefits
otherwise payable under the Plan, then, if the Board so elects, a 
Recalculation Event shall be deemed to have occurred.  If a
Recalculation Event occurs, then Interest and/or Earnings shall be
recalculated and restated using a lower rate of Interest and/or
Earnings determined by the Board, but which shall be not less than
one-half (1/2) the rate of Earnings provided for in Section 4(b) or
one-half (1/2) the rate of Interest provided in Section 4(a), as
applicable.  

SECTION 9.  AMENDMENTS

The Board in its sole discretion may at any time modify or 
amend any provisions of the Plan, or suspend or terminate the Plan.  
However, except as otherwise provided in Section 8, no modification, 
amendment, suspension or termination of the Plan may, without the 
Participant's consent, apply to or affect the rights of a Participant 
in respect of amounts credited to the Participant's Account for any 
month ended prior to the effective date of that modification, 
amendment, suspension or termination.

SECTION 10.  NATURE AND SOURCE OF PAYMENTS

The obligation to make payments hereunder with respect to each 
Participant shall constitute a liability of NS to the Participant and 
any death beneficiaries in accordance with the terms of the Plan.  
NS may establish one or more grantor trusts to which NS may transfer 
such assets as NS determines in its sole discretion to assist in 
meeting its obligations under the Plan.  The provisions of the Plan 
shall govern the rights of NS, Participants and the creditors of NS 
to the assets transferred to the trust.  NS' obligations under the 
Plan may be satisfied with trust assets distributed pursuant to the 
terms of the trust, and any such distribution shall reduce NS' 
obligations under this Plan.

Participants and beneficiaries shall stand in the position of 
unsecured creditors of NS, and all rights hereunder are subject to the 
claims of creditors of NS.

SECTION 11.  EXPENSES OF ADMINISTERING PLAN

All expenses of administering the Plan shall be borne by NS, 
and no part thereof shall be charged against the benefit of any 
Participant, except the costs of the Hypothetical Investment Options 
in the Variable Earnings Account, which shall be charged against the 
value of deferrals measured against those funds.

SECTION 12.  FACILITY OF PAYMENT

If the Board shall find that any individual to whom any amount 
is payable under the Plan is unable to care for his or her affairs 
because of illness or accident or is a minor or other person under 
legal disability, any payment due such individual (unless a prior 
claim therefor shall have been made by a duly appointed guardian, 
committee, or other legal representative) may be paid to the spouse, 
a child, a parent, or a brother or sister of such individual, or to 
any other person deemed by the Board to have incurred expenses of 
such individual, in such manner and proportions as the Board may 
determine.  Any such payment shall be a complete discharge of the 
liabilities of NS with respect thereto under the Plan.

SECTION 13.  CONTINUED SERVICE

Nothing contained herein or in a deferral agreement shall 
be construed as conferring upon any Participant the right nor 
imposing upon the Participant the obligation to continue in the 
service of NS in any capacity.

SECTION 14.  DISPUTED QUESTIONS

Any disputed question arising under the Plan, including 
questions of construction and interpretation, shall be determined 
conclusively and finally by the Board.

SECTION 15.  EFFECTIVE DATE

The Plan became effective on June 1, 1982, and was last 
amended effective January 23, 2001.

EXHIBIT 12, Page 1 of 1

NORFOLK SOUTHERN CORPORATION AND SUBSIDIARIES
COMPUTATION OF RATIO OF EARNINGS TO FIXED CHARGES
(Millions of Dollars)

Year ended December 31
---------------------------------------------
2000      1999      1998      1997      1996
----      ----      ----      ----      ----

EARNINGS
Income from continuing
operations before income
taxes as reported             $  250    $  351    $  845    $  998    $1,166
Add:
Total interest expenses
(as detailed below)            721       708       688       530       182
Amortization of
capitalized interest             5         4         3         3         3
Income (loss) of
partially owned
entities (1)                    60        47       165       113         1
Subsidiaries' preferred
dividend requirement             2         2         2         2         2
------    ------    ------    ------    ------
Income before
income taxes,
as adjusted              $1,038    $1,112    $1,703    $1,646    $1,354
======    ======    ======    ======    ======

FIXED CHARGES
Interest expense on debt       $  551    $  531    $  516    $  385    $  116
Other interest expense             42        35        27        32        36
Calculated interest
portion of rent expense           40        35        31        30        30
NS' share of Conrail
interest                          88       107       114        83        --
------    ------    ------    ------    ------
Total interest
expenses                    721       708       688       530       182

Capitalized interest               18        15        21        17        12
Subsidiaries' preferred
dividend requirement
on a pretax basis                  4         4         4         4         4
------    ------    ------    ------    ------
Total fixed charges       $  743    $  727    $  713    $  551    $  198
======    ======    ======    ======    ======
RATIO OF EARNINGS TO
FIXED CHARGES                   1.40      1.53      2.39      2.99      6.84

(1)  Includes: (a) the distributed income of 20%-49% owned entities,
net of equity recorded in undistributed income and the minority
income of consolidated entities which have fixed charges; and
(b) NS' share of Conrail's income before income taxes, net of
equity in earnings of Conrail included in NS' income from
continuing operations before taxes as reported.

The computations do not include $0.3 million of interest expense
related to $7.8 million of debt guaranteed for a less than 50%
owned entity.

EXHIBIT 21, Page 1 of 2

NAME AND STATE OF INCORPORATION OF SUBSIDIARIES
OF NORFOLK SOUTHERN CORPORATION
AS OF FEBRUARY 1, 2001

Agency Media Services, Inc., Indiana
Atlantic Acquisition Corporation, Pennsylvania
Atlantic Investment Company, Delaware
Norfolk Southern Properties, Inc., Virginia
Norfolk Southern Railway Company, Virginia
Northern Horizons Insurance Company, Vermont
NS Crown Services, Inc., Virginia
NS Fiber Optics, Inc., Virginia
NS Transportation Brokerage Corporation, Virginia
PDC Timber LLC, Delaware
PLC Timber LLC, Delaware
Pocahontas Development Corporation, Kentucky
Pocahontas Land Corporation, Virginia
TCS Leasing, Inc., Oklahoma
T-Cubed of North America, Inc., Delaware
T-Cubed of South Carolina, Inc., South Carolina
T-Cubed of Virginia, Inc., Virginia
Thoroughbred Direct Intermodal Services, Inc. Pennsylvania
Thoroughbred Funding, Inc., Virginia
Thoroughbred Technology and Telecommunications, Inc., Virginia
Triple Crown Services Company

Norfolk Southern Railway Company subsidiaries:
Airforce Pipeline, Inc., North Carolina
Alabama Great Southern LLC, Virginia
Alabama Great Southern Railroad Company, The; Alabama
Atlantic and East Carolina Railway Company, North Carolina
Camp Lejeune Railroad Company, North Carolina
Central of Georgia LLC, Virginia
Central of Georgia Railroad Company, Georgia
Chesapeake Western Railway, Virginia
Cincinnati, New Orleans and Texas Pacific Railway Company, The; Ohio
Citico Realty Company, Virginia
Georgia Southern and Florida Railway Company, Georgia
High Point, Randleman, Asheboro and Southern Railroad Company,
North Carolina
Interstate Railroad Company, Virginia
Lamberts Point Barge Company, Inc., Virginia
Memphis and Charleston Railway Company, Mississippi
Mobile and Birmingham Railroad Company, Alabama
Norfolk and Portsmouth Belt Line Railroad Company, Virginia
Norfolk Southern International, Inc., Virginia
North Carolina Midland Railroad Company, The; North Carolina
Rail Investment Company, Delaware
Rail Technologies, Inc., Georgia
Shenandoah-Virginia Corporation, Virginia

EXHIBIT 21, Page 2 of 2

Norfolk Southern Railway Company subsidiaries (continued):
South Western Rail Road Company, The; Georgia
Southern Rail Terminals, Inc., Georgia
Southern Rail Terminals of North Carolina, Inc., North Carolina
Southern Region Coal Transport, Inc., Alabama
Southern Region Materials Supply, Inc., Georgia
Southern Region Motor Transport, Inc., Georgia
SRIR Timber LLC, Delaware
State University Railroad Company, North Carolina
Tennessee, Alabama & Georgia Railway Company, Delaware
Tennessee Railway Company, Tennessee
Virginia and Southwestern Railway Company, Virginia
Yadkin Railroad Company, North Carolina

Norfolk Southern Properties, Inc. subsidiaries:
Alexandria-Southern Properties, Inc., Virginia
Arrowood-Southern Company, North Carolina
Arrowood Southern Executive Park, Inc., North Carolina
Carlyle CA Corporation, Virginia
Carlyle Development Corporation, Virginia
Charlotte-Southern Corporation, North Carolina
Charlotte-Southern Hotel Corporation, North Carolina
Lambert's Point Docks, Incorporated, Virginia
Nickel Plate Improvement Company, Inc., The; Indiana
NKPI Management, Inc., Indiana
Norfolk Southern Industrial Development Corp., Virginia
Norfolk Southern Tower, LLC, Washington, D.C.
Northmont Limited Partnership, Georgia
NS-Charlotte Tower Corporation, North Carolina
NS Gas Properties, Inc., Virginia
NS Gas Properties, II, Inc., Virginia
Sandusky Dock Corporation, Virginia
Southern Region Industrial Realty, Inc., Georgia
Virginia Holding Corporation, Virginia

NOTE: Of the above subsidiaries, each of which is more than
50% owned, only Norfolk Southern Railway Company meets the
Commission's "significant subsidiary" test.  This list
does not include CRR Holdings, LLC, in which
Norfolk Southern Corporation has 50% voting control;
Conrail Inc. and Consolidated Rail Corporation are
subsidiaries of CRR Holdings, LLC.

EXHIBIT 23(a), Page 1 of 1

CONSENT OF INDEPENDENT AUDITORS

The Board of Directors
Norfolk Southern Corporation:

We consent to incorporation by reference in Registration Statements
Nos. 33-52031, 333-40993, 333-54456, 333-71321 and 333-78939 on Form S-8
of Norfolk Southern Corporation of our report dated January 23, 2001,
relating to the consolidated balance sheets of Norfolk Southern
Corporation and subsidiaries as of December 31, 2000 and 1999, and the
related consolidated statements of income, changes in stockholders'
equity and cash flows, and the related consolidated financial statement
schedule for each of the years in the three-year period ended
December 31, 2000, which report appears in the December 31, 2000, Annual
Report on Form 10-K of Norfolk Southern Corporation.

/s/ KPMG LLP
KPMG LLP
Norfolk, Virginia

March 2, 2001

EXHIBIT 23(b), Page 1 of 1

CONSENT OF INDEPENDENT ACCOUNTANTS

We consent to incorporation by reference in Registration Statements
Nos. 33-52031, 333-40993, 333-54456, 333-71321 and 333-78939 on Form S-8
of Norfolk Southern Corporation of our report dated January 23, 2001,
relating to the consolidated balance sheets of Conrail Inc. and
subsidiaries as of December 31, 2000 and 1999, and the related
consolidated statements of income, stockholders' equity and cash flows,
for each of the years in the two-year period ended December 31, 2000,
which report appears in the December 31, 2000, Annual Report on
Form 10-K of Norfolk Southern Corporation.  The consolidated financial
statements of Conrail Inc. and subsidiaries as of December 31, 1998, and
the related consolidated statements of income, stockholders' equity and
cash flows for the year then ended were audited by other auditors whose
report thereon dated January 19, 1999, expressed an unqualified opinion
on those statements.

/s/ KPMG LLP                       /s/ Ernst & Young LLP
KPMG LLP                           Ernst & Young LLP
Norfolk, Virginia                  Richmond, Virginia

March 2, 2001                      March 2, 2001

EXHIBIT 23(c), Page 1 of 1

CONSENT OF PRICEWATERHOUSECOOPERS LLP,
INDEPENDENT ACCOUNTANTS

We hereby consent to the incorporation by reference in the Registration
Statements on Form S-8 (Nos. 33-52031, 333-40993, 333-54456, 333-71321
and 333-78939) of Norfolk Southern Corporation of our report dated
January 19, 1999, relating to the consolidated statements of income, of
stockholders' equity and of cash flows of Conrail Inc. and subsidiaries
for the year ended December 31, 1998, which appears in the Annual Report
on Form 10-K of Norfolk Southern Corporation for the year ended
December 31, 2000.

/s/ PRICEWATERHOUSECOOPERS LLP
PRICEWATERHOUSECOOPERS LLP
Philadelphia, Pennsylvania

March 2, 2001

EXHIBIT 99, Page 1 of 23

CONRAIL INC.

2000 ANNUAL REPORT TO STOCKHOLDERS

EXHIBIT 99, Page 2 of 23

REPORT OF MANAGEMENT

The Stockholders
Conrail Inc.

Management is responsible for the preparation, integrity and objectivity of
the Company's financial statements.  The financial statements are prepared
in conformity with generally accepted accounting principles and include
amounts based on management's best estimates and judgment.

The Company maintains a system of internal accounting controls and
procedures, which is continually reviewed and supported by written policies
and guidelines and supplemented by internal audit services.  The system
provides reasonable assurance that assets are safeguarded against loss from
unauthorized use and that the books and records reflect the transactions of
the Company and are reliable for the preparation of financial statements.
The concept of reasonable assurance recognizes that the cost of a system of
internal accounting controls should not exceed the benefits derived and
also recognizes that the evaluation of these factors necessarily requires
estimates and judgments by management.

The Company's financial statements are audited by its independent
accountants.  Their audit is conducted in accordance with auditing
standards generally accepted in the United States and includes a study and
evaluation of the Company's system of internal accounting controls to
determine the nature, timing and extent of the auditing procedures required
for expressing an opinion on the Company's financial statements.
The Company's Board of Directors, which is comprised of an equal number of
directors from Norfolk Southern Corporation ("NSC") and CSX Corporation
("CSX"), pursues its oversight responsibilities for the financial
statements and corporate conduct through periodic meetings with and written
reports from the Company's management.

/s/ Timothy T. O'Toole
Timothy T. O'Toole
President and Chief
Executive Officer

/s/ John A. McKelvey
John A. McKelvey
Senior Vice President-
Finance & Administration

January 23, 2001

EXHIBIT 99, Page 3 of 23

INDEPENDENT AUDITORS' REPORT

The Stockholders and Board of Directors
Conrail Inc.:

We have audited the accompanying consolidated balance sheets of Conrail
Inc. and subsidiaries as of December 31, 2000 and 1999, and the related
consolidated statements of income, stockholders' equity, and cash flows for
each of the years in the two-year period ended December 31, 2000.  These
consolidated financial statements are the responsibility of the Company's
management.  Our responsibility is to express an opinion on these
consolidated financial statements based on our audits.  The consolidated
financial statements of Conrail Inc. and subsidiaries as of December 31,
1998, and the accompanying related consolidated statements of income,
stockholders' equity and cash flows for the year then ended were audited by
other auditors whose report thereon dated January 19, 1999, expressed an
unqualified opinion on those statements.

We conducted our audits in accordance with auditing standards  generally
accepted in the United States of America.  These standards require that we
plan and perform the audit to obtain reasonable assurance about whether the
financial statements are free of material misstatement.  An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures
in the financial statements.  An audit also includes assessing the
accounting principles used and significant estimates made by management, as
well as evaluating the overall financial statement presentation.  We
believe that our audits provide a reasonable basis for our opinion.

In our opinion, the consolidated financial statements referred to above
present fairly, in all material respects, the financial position of Conrail
Inc. and subsidiaries as of December 31, 2000 and 1999, and the results of
their operations and their cash flows for each of the  years in the two-
year period ended December 31, 2000, in conformity with accounting
principles generally accepted in the United States of America.

/s/ KPMG LLP                            /s/ Ernst & Young LLP
KPMG LLP                                Ernst & Young LLP
Norfolk, Virginia                       Richmond, Virginia

January 23, 2001

EXHIBIT 99, Page 4 of 23

REPORT OF INDEPENDENT ACCOUNTANTS

The Stockholders and Board of Directors
Conrail Inc.

In our opinion, the consolidated statements of income, of stockholders'
equity and of cash flows present fairly, in all material respects, the
results of operations and cash flows of Conrail Inc. and subsidiaries for
the year ended December 31, 1998, in conformity with accounting principles
generally accepted in the United States of America.  These financial
statements are the responsibility of the Company's management; our
responsibility is to express an opinion on these financial statements based
on our audit.  We conducted our audit of these statements in accordance
with auditing standards generally accepted in the United States of America,
which require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements are free of material
misstatement.  An audit includes examining, on a test basis, evidence
supporting the amounts and disclosures in the financial statements,
assessing the accounting principles used and significant estimates made by
management, and evaluating the overall financial statement presentation.
We believe that our audit provides a reasonable basis for our opinion.  We
have not audited the consolidated financial statements of Conrail Inc. and
subsidiaries for any period subsequent to
December 31, 1998.

/s/ PricewaterhouseCoopers LLP
PricewaterhouseCoopers LLP
Two Commerce Square, Suite 1700
2001 Market Street
Philadelphia, PA 19103

January 19, 1999

EXHIBIT 99, Page 5 of 23

CONRAIL INC.
CONSOLIDATED STATEMENTS OF INCOME

Years ended December 31,
-----------------------
($ In Millions)                                2000      1999      1998
----      ----      ----

Revenues - NSC/CSX (Note 2)                  $   886   $   549   $     -
Revenues - Third parties                          99     1,625     3,863
-------   -------   -------
Total operating revenues                     985     2,174     3,863
-------   -------   -------
Operating expenses (Note 3)
Compensation and benefits                      195       645     1,489
Fuel                                            10        63       163
Material, services and rents                   162       590       909
Depreciation and amortization                  331       328       310
Casualties and insurance                        33       228       230
Other                                           18       192       247
-------   -------   -------

Total operating expenses                     749     2,046     3,348
-------   -------   -------
Income from operations                           236       128       515
Interest expense                                (124)     (150)     (153)
Other income, net (Note 10)                      155        67        72
-------   -------   -------
Income before income taxes                       267        45       434

Income taxes (Note  7)                            97        19       167
-------   -------   -------
Net income                                   $   170   $    26   $   267
=======   =======   =======

See accompanying notes to the consolidated financial statements.

EXHIBIT 99, Page 6 of 23

CONRAIL INC.
CONSOLIDATED BALANCE SHEETS

December 31,
-----------
($ In Millions)                                   2000      1999
----      ----
ASSETS

Current assets
Cash and cash equivalents                     $   50    $   22
Accounts receivable                               33        51
Due from NSC/CSX (Note 2)                        232       196
Notes receivable from NSC/CSX (Note 2)            91       216
Material and supplies                              9        29
Deferred tax assets (Note 7)                      96       149
Other current assets                               9         6
------    ------
Total current assets                          520       669
Property and equipment, net (Note 4)             6,996     7,143
Other assets                                       544       571
------    ------
Total assets                               $8,060    $8,383
======    ======

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities
Current maturities of long-term debt (Note 6)     61       319
Accounts payable                                  68        59
Due to NSC/CSX (Note 2)                           31       159
Wages and employee benefits                       42        43
Casualty reserves                                127       136
Accrued and other current liabilities (Note 5)   106       147
-----     -----
Total current liabilities                     435       863
Long-term debt (Note 6)                          1,229     1,302
Casualty reserves                                  189       311
Deferred income taxes (Note 7)                   1,938     1,817
Other liabilities                                  287       271
-----     -----
Total liabilities                           4,078     4,564
-----     -----
Commitments and contingencies (Note 11)
Stockholders' equity (Notes 3 and 9)
Common stock ($1 par value; 100 shares
authorized, issued and outstanding)              -         -
Additional paid-in capital                     2,222     2,229
Unearned ESOP compensation                       (20)      (20)
Retained earnings                              1,780     1,610
-----     -----
Total stockholders' equity                  3,982     3,819
-----     -----
Total liabilities and stockholders' equity $8,060    $8,383
======    ======

See accompanying notes to the consolidated financial statements.

EXHIBIT 99, Page 7 of 23

CONRAIL INC.
CONSOLIDATED STATEMENTS OF STOCKHOLDERS' EQUITY

Unearned             Additional
ESOP      Common    Paid-in   Retained   Treasury
Compensation  Stock     Capital   Earnings    Stock
------------  -----     -------   --------    -----

Balance, January 1, 1998                            $(155)       $ 6     $3,006     $1,324     $(742)
Net income                                                                           267
Common dividends                                                                      (7)
Common shares reclassified as unissued (Note 9)                 (6)      (736)                 742
Allocation of unearned ESOP compensation             80
Other                                                                      21
-----         ---    ------     ------     -----

Balance, December 31, 1998                            (75)          -     2,291      1,584         -
Net income                                                                            26
Transfer of portion of prepaid pension
assets to NSC and CSX (Note 8)                                           (54)
Allocation of unearned ESOP compensation             55
Other                                                                      (8)
-----         ---    ------    -------     -----

Balance, December 31, 1999                            (20)          -     2,229      1,610         -
Net income                                                                           170
Other                                                                      (7)
-----         ---    ------    -------     -----

Balance, December 31, 2000                          $ (20)       $  -    $2,222     $1,780      $  -
=====         ===    ======     ======     =====

See accompanying notes to the consolidated financial statements.

EXHIBIT 99, Page 8 of 23

CONRAIL INC.
CONSOLIDATED STATEMENTS OF CASH FLOWS

Years ended December 31,
-----------------------
($ In Millions)                                 2000      1999     1998
----      ----     ----

Cash flows from operating activities
Net income                                   $ 170     $  26     $ 267
Adjustments to reconcile net income to
net cash provided by operating activities:
Transition and acquisition-related
charges (Note 3)                                                 368
Depreciation and amortization                331       328       310
Deferred income taxes                        101        48       (30)
Gains from sales of property                 (70)       (6)      (21)
Pension credit                               (12)      (45)      (63)
Dividends from affiliated companies           55
Changes in:
Accounts receivable                         18       529        33
Accounts and wages payable                   8      (431)      (33)
Due from NSC/CSX                           (36)     (196)
Due to NSC/CSX                            (128)      159
Other                                        (75)      (16)     (104)
-----     -----     -----
Net cash provided by operating
activities                                362       396       727
-----     -----     -----
Cash flows from investing activities
Property and equipment acquisitions           (220)     (176)     (537)
Notes receivable from NSC/CSX                  125      (216)

Proceeds from disposals of properties           86         6        19
Other                                           (7)      (14)      (32)
-----     -----     -----
Net cash provided by (used in)             (16)     (400)     (550)
investing activities
-----     -----     -----
Cash flows from financing activities
Payment of long-term debt                     (318)     (112)     (119)
Other                                                              (17)
-----     -----     -----
Net cash used in financing
activities                               (318)     (112)     (136)
-----     -----     -----
Increase(decrease) in cash and cash equivalents   28      (116)       41
Cash and cash equivalents
Beginning of year                               22       138        97
-----     -----     -----
End of year                                  $  50     $  22     $ 138
=====     =====     =====

See accompanying notes to the consolidated financial statements.

EXHIBIT 99, Page 9 of 23

CONRAIL INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

1. Summary of Significant Accounting Policies
------------------------------------------
Description of Business
-----------------------
Conrail Inc. ("Conrail") is a holding company whose principal
subsidiary is Consolidated Rail Corporation ("CRC"), the major freight
railroad in the Northeast.  Norfolk Southern Corporation ("NSC") and
CSX Corporation ("CSX"), the major railroads in the Southeast, jointly
control Conrail through their ownership interests in CRR Holdings LLC
("CRR"), whose primary subsidiary is Green Acquisition Corporation,
which owns Conrail. NSC and CSX have equity interests in CRR of 58%
and 42%, respectively, and voting interests of 50% each.  From May 23,
1997, the date NSC and CSX completed their acquisition of Conrail
stock, until June 1, 1999, Conrail's operations continued
substantially unchanged while NSC and CSX awaited regulatory approvals
and prepared for the integration of their respective Conrail routes
and assets to be leased to their railroad subsidiaries, Norfolk
Southern Railway Company ("NSR") and CSX Transportation, Inc.
("CSXT").  The operations of CRC substantially changed beginning 
June 1, 1999, when NSC and CSX began operating a portion of the Conrail
properties under operating agreements (the "Closing Date")
(Note 2).

Beginning June 1, 1999, Conrail's major sources of operating revenues
are operating fees and lease rentals from NSC and CSX.  The
composition of CRC's operating expenses also reflects this change in
operations.  As a result, Conrail's 1999 results reflect the freight
railroad operations of CRC through May 31, 1999, and reflect 
Conrail's new structure and operations that commenced on the Closing 
Date (Note 2).

Principles of Consolidation
---------------------------
The consolidated financial statements include Conrail and majority-
owned subsidiaries.  Investments in 20% to 50% owned companies are
accounted for by the equity method.

Cash Equivalents
----------------   
Cash equivalents consist of commercial paper, certificates of deposit
and other liquid securities purchased with a maturity of three months
or less, and are stated at cost which approximates market value.

Material and Supplies
---------------------
Material and supplies consist of maintenance material valued at the
lower of cost or market.

EXHIBIT 99, Page 10 of 23

CONRAIL INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Property and Equipment
----------------------   
Property and equipment are recorded at cost. Additions to properties,
including those under lease, are capitalized.  Maintenance expense is
recognized when repairs are performed.   Depreciation is provided
using the composite straight-line method over estimated service lives.
In 2000, the overall depreciation rate averaged 3.0% for all roadway
and equipment. The cost (net of salvage) of depreciable property
retired or replaced in the ordinary course of business is charged to
accumulated depreciation and no gain or loss is recognized.

Asset Impairment
----------------
Long-lived assets are reviewed for impairment whenever events or
changes in circumstances indicate that the carrying amount of an asset
may not be recoverable.  Expected future cash flows from the use and
disposition of long-lived assets are compared to the current carrying
amounts to determine the potential impairment loss.

Revenue Recognition
-------------------   
Revenue prior to June 1, 1999, was recognized proportionally as a
shipment moved on the Conrail system from origin to destination.
Beginning June 1, 1999, the Company's major sources of revenues are
from NSC and CSX, primarily in the form of rental revenues and
operating fees which are recognized when earned. Conrail continues to
have third party revenues, which are recognized when earned, related
to the operations of Indiana Harbor Belt Railroad Company, a 51% owned
terminal railroad subsidiary.

New Accounting Standards
------------------------
There were no new accounting standards issued during 2000 which the
Company believes will have a material impact on its consolidated
financial position, results of operations or cash flows.

Use of Estimates
----------------   
The preparation of financial statements in conformity with generally
accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and
liabilities and 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.  Actual results could differ
from those estimates.

Reclassifications
-----------------
Certain prior year data have been reclassified to conform to the 2000
presentation.

EXHIBIT 99, Page 11 of 23

CONRAIL INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

2. Related Parties Transactions
----------------------------   
Background
----------
On May 23, 1997, NSC and CSX completed their joint acquisition of
Conrail stock.  On June 17, 1997, NSC and CSX executed an agreement
which generally outlines the methods of governing and operating Conrail
and its subsidiaries ("Transaction Agreement").  On July 23, 1998, the
Surface Transportation Board ("STB") issued a written opinion that
permitted NSC and CSX to exercise operating control of Conrail
beginning August 22, 1998.  On June 1, 1999, NSC and CSX began to
operate over certain Conrail lines.

Commencement of Operations by NSR and CSXT
------------------------------------------
On June 1, 1999, the majority of CRC's routes and assets were
segregated into separate subsidiaries of CRC, Pennsylvania Lines LLC
("PRR") and New York Central Lines LLC ("NYC").  PRR and NYC entered
into separate but identical operating and lease agreements with NSR and
CSXT, respectively, (the "Operating Agreements") which govern
substantially all nonequipment assets to be used by NSR and CSXT and
have initial 25-year terms, renewable at the options of NSR and CSXT
for two 5-year terms.  Payments made under the Operating Agreements are
based on appraised values that are subject to adjustment every six
years to reflect changes in such values.  NSR and CSXT have also leased
or subleased certain equipment assets at rentals based on appraised
values for varying term lengths from PRR and NYC, respectively, as well
as from CRC.

NSC and CSX have also entered into agreements with CRC governing other
Conrail properties that continue to be owned and operated by Conrail
("the Shared Assets Areas").  NSR and CSXT pay CRC a fee for joint and
exclusive access to the Shared Assets Areas.  In addition, NSR and CSXT
pay, based on usage, the costs incurred by CRC to operate the Shared
Assets Areas plus a profit factor.

Payments made by NSR to Conrail under the Shared Assets agreements were
$117 million and $45 million during 2000 and 1999, respectively, of
which $17 million and $7 million, were minimum rents.  Payments made by
CSXT to Conrail under the Shared Assets agreements were $107 million
and $43 million during 2000 and 1999, respectively, of which $12
million and $5 million, were minimum rents.

Payments from NSR under the Operating Agreements and lease agreements
to PRR amounted to $346 million and $167 million during 2000 and 1999,
respectively. Payments from CSXT under the Operating Agreements and
lease agreements to NYC amounted to $249 million and $124 million
during 2000 and 1999, respectively.  In addition, costs necessary to
operate and maintain the related assets under these agreements,
including leasehold improvements, will be borne by NSR and CSXT.

EXHIBIT 99, Page 12 of 23

CONRAIL INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Future minimum lease payments to be received from NSR/CSXT are as
follows:

$ in Millions
-------------      NSR       NSR       CSX      CSX
To PRR    To CRC    To NYC    To CRC    Total
------    ------    ------    ------    -----

2001             $  304    $   24    $  244    $   17    $   589
2002                315        27       239        19        600
2003                322        30       233        21        606
2004                327        32       238        23        620
2005                317        34       229        24        604
2006 and Beyond   5,005       652     3,626       473      9,756
------    ------    ------    ------    -------
Total    $6,590    $  799    $4,809    $  577    $12,775
------    ------    ------    ------    ------- 

Related Party Balances and Transactions
---------------------------------------   
"Due from NSC/CSX" at December 31, 2000 and 1999, is primarily
comprised of amounts due for the above-described operating and rental
activities. Also included in "Due from NSC/CSX" in 1999, are amounts
paid by Conrail for separation payments to CRC's agreement employees
that were reimbursed by NSC and CSX as required by the Transaction
Agreement.  As of December 31, 2000 and 1999, the accrued balances due
from NSC were $105 million and $91 million, respectively; and the
accrued balances due from CSX were $127 million and $105 million,
respectively.

PRR and NYC have interest-bearing notes receivable, payable on demand
from NSC and CSX of $51 million and $40 million, respectively, at
December 31, 2000, included in the "Notes receivable from NSC/CSX" line
item on the balance sheet.  The notes receivable balances due from NSC
and CSX were $123 million and $93 million, respectively, at December
31, 1999.  The interest rates on the notes receivable from NSC and CSX
are variable and were both 5.9% at December 31, 2000.  Interest income
related to the PRR and NYC notes receivable was $10 million and $4
million, in 2000 and 1999, respectively.

CRC has entered into service provider agreements with both NSC and CSX,
for such services as accounting and administrative processing, personal
injury and environmental case handling and other miscellaneous services
("Service Provider Agreements").  Payments made to NSC and CSX under
these Service Provider Agreements in 2000 were $44 million and $2
million, respectively, and are included within the various line items
of operating expenses.  Payments made to NSC in 1999 under the Service
Provider Agreements were $5 million.  CRC also paid NSC and CSX $8
million and $4 million, respectively, for the rental of locomotives and
other equipment during 2000.  In addition, CRC paid a subsidiary of CSX
$5 million in 2000 and 1999, for rental of various facilities which it
occupied subsequent to May 31, 1999. During 2000, CRC also made
payments to NSC and CSX of $86 million and $122 million, respectively,
related to completing various 1999 capital projects.

EXHIBIT 99, Page 13 of 23

CONRAIL INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

"Due to NSC/CSX"  includes $29 million and $2 million, to NSC and CSX,
respectively, for the services described above for 2000; and $64
million and $29 million to NSC and CSX, respectively, for such services
during 1999.

In 1999, "Due to NSC/CSX"  also included $42 million and $24 million
payable to NSC and CSX, respectively, for CRC's vacation liability
related to the portion of its work force that became NSC and CSX
employees subsequent to May 31, 1999.  CRC paid these amounts in 2000.

From time to time, NSC and CSX, as the indirect owners of Conrail, may
need to provide some of Conrail's cash requirements through capital
contributions, loans, or advances, none of which took place as of
December 31, 2000.

Prior to the Closing Date, the Company interchanged freight with both
NSC and CSX for transport to destinations both within and outside of
Conrail's service region.  The Company shares ownership interests with
either one or both railroads in various
transportation-related entities, all of which are immaterial to the
Company's operating results and financial position.

3. Transition, Acquisition-Related and Other Items
-----------------------------------------------
During the first quarter of 2000, the Company completed a significant
property sale and recognized a gain of $61 million on the sale ($37
million after income taxes), which is included in "Other income, net"
(Note 10).

During 1999, the Company recorded net expenses of $138 million ($85
million after income taxes) for adjustments to certain litigation and
environmental reserves related to settlements and completion of site
reviews and, in accordance with the Transaction Agreement, for the
method of settlement of certain casualty liabilities based on an
actuarial study and for the assumption of a lease obligation by a
subsidiary of CSX.  The effects of these adjustments are reflected in
the "Casualties and insurance" and "Other" operating expense line items
of the income statement for 1999.

During the third quarter of 1998, the Company recorded charges
totaling $302 million ($187 million after income taxes), primarily
for severance benefits of $170 million covering certain non-union
employees, and $132 million of other costs, such as the effect of
changing to an actuarial method of valuing certain components of the
Company's casualty reserves, primarily included in the "Compensation
and benefits" and "Casualties and insurance"  operating expense line
items of the 1998 income statement, respectively.

The charge for non-union separation benefits represents termination
payments made to approximately 1,300 non-union employees whose non-
executive positions were eliminated as a result of the joint
acquisition of Conrail.  Most of these termination payments have been
made in the form of supplemental retirement benefits from the Company's

EXHIBIT 99, Page 14 of 23

CONRAIL INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

overfunded pension plan. During 2000, 1999 and 1998, termination 
payments of $50 million, $77 million and $9 million were made, 
respectively.  The remaining amount of this liability is expected to be
paid out within the next year.

During 1998, the Company recorded charges totaling $66 million ($41
million after income taxes) representing amounts paid to certain non-
union employees as incentive to continue their employment with the
Company through August 22, 1998, the effective date of the STB
approval of the joint acquisition of Conrail, and the subsequent
transition period.  All of these amounts were subsequently paid out.

In 1997, the Company recorded a long-term liability of $221 million
related to the Non-union Employee Stock Ownership Plan ("ESOP")
termination, which has not required use of the Company's cash for
settlement.  Such liability, the balance of which is $20 million at
December 31, 2000, is being reduced as the cash proceeds, held by the
ESOP as a result of selling its ESOP preferred stock in the joint
tender offer, are allocated to eligible ESOP participants.

In 1997, the Company recorded a long-term liability of $110 million
in connection with employment "change in control" agreements with
certain executives, which became operative as a result of the joint
acquisition of Conrail.  A portion of the benefits under these
agreements, $68 million, was paid in 1998 from the Employee Benefits
Trust ("EBT").  The remaining amount will be paid out at the
discretion of the executives participating in this program.

4.   Property and Equipment
----------------------

December 31,
-----------  
2000           1999
----           ----
(In Millions)

Roadway                               $ 7,500        $ 7,410
Equipment                              1,573          1,573
Less:  Accumulated depreciation      (2,340)        (2,154)
-------        -------  
6,733          6,829
-------        -------
Capital leases (primarily equipment)     645            696
Accumulated amortization                (382)          (382)
-------        -------  
263            314
-------        -------
$ 6,996        $ 7,143
=======        =======

Substantially all assets are leased to NSR or CSXT (Note 2).

EXHIBIT 99, Page 15 of 23

CONRAIL INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

5.   Accrued and Other Current Liabilities
-------------------------------------

December 31,
-----------     
2000        1999
----        ----    
(In Millions)

Property and corporate taxes            $ 51        $ 97
Operating leases                          38          36
Other                                     17          14
----        ----     
$106        $147
====        ====

6.   Long-Term Debt and Leases
-------------------------

Long-term debt outstanding, including the weighted average interest
rates at December 31, 2000, is composed of the following:

December 31,
-----------
2000        1999
----        ----
(In Millions)

Capital leases                            $  262      $  331
Notes payable, 9.75%, due 2000                 -         250
Debentures payable, 7.88%, due 2043          250         250
Debentures payable, 9.75%, due 2020          550         550
Equipment and other obligations, 6.90%       228         240
------      ------
1,290       1,621
Less current portion                         (61)       (319)
------      ------     
$1,229      $1,302
======      ======

Interest payments were $121 million in 2000, $149 million in 1999 and
$153 million in 1998.

Leases
------
The Company's noncancelable long-term leases generally include options
to purchase at fair value and to extend the terms.  Capital leases
have been discounted at rates ranging from 3.09% to 14.26% and are
collateralized by assets with a net book value of $263 million at
December 31, 2000.

EXHIBIT 99, Page 16 of 23

CONRAIL INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Minimum commitments, exclusive of executory costs borne by the
Company, are:

Capital         Operating
Leases           Leases
------           ------           
(In Millions)

2001                        $  63             $ 70
2002                           59               63
2003                           54               52
2004                           56               53
2005                           38               59
2006 - 2010                    89              422
-----             ----         
Total                         359             $719
====
Less interest portion         (97)
-----
Present value               $ 262
=====

Equipment and other obligations mature in 2001 through 2043 and are
collateralized by assets with a net book value of $238 million at
December 31, 2000.  Maturities of long-term debt other than capital
leases are $21 million in 2001, $19 million in 2002, $20 million in
2003, $21 million in 2004, $20 million in 2005 and $927 million in total
from 2006 through 2043.

Operating lease rent expense was $75 million in 2000, $120 million in
1999 and $121 million in 1998.

7.  Income Taxes
------------

The provisions for income taxes are composed of the following:
2000       1999      1998
----       ----      ----
(In Millions)

Current
Federal                         $ (5)      $(30)     $173
State                              1          1        24
----       ----      ----   
(4)       (29)      197
----       ----      ----   
Deferred
Federal                           81         52       (27)
State                             20         (4)       (3)
----       ----      ----   
101         48       (30)
----       ----      ----   
$ 97       $ 19      $167
====       ====      ====

EXHIBIT 99, Page 17 of 23

CONRAIL INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Reconciliations of the U.S. statutory tax rates with the effective tax
rates are as follows:

2000     1999    1998
----     ----    ----       

Statutory tax rate                 35.0%   35.0%   35.0%
State income taxes,
net of federal benefit            4.2     4.2     3.2
Nondeductible transition
and acquisition-related
costs                                    23.9
Other                              (2.9)  (20.9)     .3
-----   -----   -----
Effective tax rate                 36.3%   42.2%   38.5%
=====   =====   =====

The Company has reached final settlements with the Internal Revenue
Service ("IRS") related to all of the audits of the Company's
consolidated federal income tax returns through fiscal year 1995. The
Company's consolidated federal income tax returns for April 30, 1996,
December 31, 1996 and May 23, 1997, are currently being examined by
the IRS.  Federal and state income tax payments were $3 million in
2000, $38 million in 1999 and $196 million in 1998.

Significant components of the Company's deferred income tax
liabilities (assets) are as follows:

December 31,
-----------
2000       1999
----       ----
(In Millions)

Current assets                               $   29      $   (8)
Current liabilities                            (117)       (133)
Miscellaneous                                    (8)         (8)
------      ------
Current deferred tax asset, net              $  (96)     $ (149)
======      ======   
Noncurrent liabilities:
Property and equipment                       2,049       1,977
Other long-term assets (primarily prepaid
pension asset)                                 93          89
Other (mostly equipment obligations)           117          88
------      ------   
2,259       2,154
------      ------   

Noncurrent assets:
Nondeductible reserves and other
liabilities                                  (204)       (221)
Tax benefit transfer receivable                (36)        (36)
Other (mostly equity investments)              (81)        (80)
------      ------   
(321)       (337)
------      ------
Deferred income tax liabilities, net         $1,938      $1,817
======      ======

EXHIBIT 99, Page 18 of 23

CONRAIL INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

8.  Pension and Postretirement Benefits
-----------------------------------  
The Company and its subsidiaries sponsor several qualified and
nonqualified pension plans and other postretirement benefit plans 
for its employees.

During 1999, the Company transferred approximately $350 million and $260
million of pension assets to NSC and CSX, respectively. NSC and CSX also
assumed certain pension obligations related to former Conrail employees.
The net effect on Conrail's financial statements as detailed in the table
below, was to reduce pension assets by $89 million.  This transfer
resulted in a $35 million reduction of deferred tax liabilities and is
reflected as a capital distribution of $54 million.

The Company's pension plan was amended during 1998 to include certain
enhanced benefits for qualifying Conrail employees.  The effect of the
amendment was to increase the Conrail plan's projected benefit obligation
by $59 million.  The Company's pension plan was also amended during 1998
to allow for payment of non-union supplemental retirement benefits to the
extent consistent with applicable IRS Tax Code provisions.  Both of these
liabilities are accrued as offsets to the prepaid pension asset which is
included in "Other assets" in the balance sheet (Note 3).

EXHIBIT 99, Page 19 of 23

CONRAIL INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

The following tables provide a reconciliation of the changes in the
plans' benefit obligations and fair value of assets over the two-year
period ending December 31, 2000, and a statement of the funded status
as of December 31 of both years:

Other Postretirement
Pension Benefits           Benefits
----------------    --------------------
(In Millions)                 2000      1999      2000       1999
----      ----      ----       ----

Change in benefit
obligation
Net benefit obligation
at beginning of year        $  739    $   834   $   44     $  56
Pension obligation
transferred to NSC and CSX       -        (89)       -         -
Service cost                      4         10        -         -
Interest cost                    51         53        3         3
Plan amendments                   -          -       (1)        -
Curtailment (gains)losses         -        (15)       -        (4)
Actuarial (gains)losses           5       (100)      (5)       (7)
Incorporation of special
pension benefit reserves         -        176        -         -
Gross benefits paid            (112)      (130)      (4)       (4)
------    -------    -----     -----
Net benefit obligation
at end of year              $  687    $   739    $  37     $  44

Change in plan assets
Fair value of plan assets
at beginning of year        $  791    $ 1,441    $   8     $   9
Pension assets
transferred to NSC and CSX       -       (610)       -         -
Actual return on plan
assets                          39         88        1         -
Gross benefit payments         (110)      (128)      (1)       (1)
------    -------    -----     -----
Fair value of plan assets
at end of year              $  720    $   791    $   8     $   8
Funded status at
end of year                 $   33    $    52    $ (29)    $ (36)
Unrecognized transition
asset                           (2)        (3)       -         -
Unrecognized prior
service cost                     9         10       (1)        -
Unrecognized actuarial
(gains)losses                    8        (26)     (12)       (8)
------    -------    -----     -----
Net amount recognized at
year end                    $   48    $    33    $ (42)    $ (44)
======    =======    =====     =====

EXHIBIT 99, Page 20 of 23

CONRAIL INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

The following amounts have been recognized in the balance sheets as of
December 31:

Other Postretirement
Pension Benefits           Benefits
----------------    --------------------
(In Millions)               2000      1999      2000      1999
----      ----      ----      ----   

Prepaid pension cost        $ 92      $ 74        -         -
Accrued benefit cost         (44)      (41)    $(42)     $(44)

All of the Company's plans for postretirement benefits other than pensions
have no plan assets except for the retiree life insurance plan which had
$8 million of assets in both 2000 and 1999.  The aggregate benefit
obligation for the postretirement plans other than pensions was $37
million and $44 million at December 31, 2000 and 1999, respectively.

The projected benefit obligations and accumulated benefit obligations for
pension plans with accumulated benefit obligations in excess of plan
assets were both $45 million in 2000; and $54 million and $38 million,
respectively, in 1999.  The plans had no assets in either 2000 or 1999.

The assumptions used in the measurement of the Company's benefit
obligation are as follows:

Other Postretirement
Pension Benefits              Benefits
----------------         --------------------
2000      1999            2000      1999
----      ----            ----      ----   

Discount rate                  7.50%     7.75%           7.50%     7.75%
Expected return on
plan assets                   9.00%     9.00%           8.00%     8.00%
Rate of compensation
increase                      5.00%     5.00%           5.00%     5.00%

A 7% annual rate of increase in the per capita cost of covered health care
benefits was assumed for 2001, gradually decreasing to 6% by the year
2007.

Assumed health care cost trend rates have a significant effect on the
amounts reported for the health care plans.  The effect of a one
percentage point increase and (decrease) in the assumed health care cost
trend rate on the accumulated postretirement benefit obligation is $1
million and $(1) million, respectively, and would have an immaterial
effect on the net periodic postretirement benefit cost for 2000.

EXHIBIT 99, Page 21 of 23

CONRAIL INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

The components of the Company's net periodic benefit cost for
the plans are as follows:

Other Postretirement
Pension Benefits         Benefits
----------------    --------------------
(In Millions)                 2000   1999    1998   2000    1999   1998
----   ----    ----   ----    ----   ----   

Service cost                  $  4   $  10    $  13   $  -   $  -   $  -
Interest cost                   51      53       53      3      4      4
Expected return
on assets                     (70)    (94)    (109)    (1)    (1)    (1)
Curtailment (gain)
loss                            -      19        -      -     (4)     -
Amortization of:
Transition asset               (1)    (11)     (18)     -      -      -
Prior service cost              1       4        4      -      -      -
Actuarial (gain)loss            1      (8)      (5)    (1)     -     (1)
----    ----     ----    ---    ---    ---
$(14)   $(27)    $(62)   $ 1    $(1)   $ 2
====    ====     ====    ===    ===    ===

Savings Plans
-------------   
The Company and certain subsidiaries provide 401(k) savings plans for
union and non-union employees.  Under the Company's current non-union
savings plan, 50% of employee contributions are matched for the first
6% of a participating employee's base pay and 25% of employee
contributions are matched in excess of 10% of a participating
employee's base pay.  Savings plan expense related to the current non-
union savings plan was $1 million in 2000 and 1999. The Company had no
non-union savings plan in 1998.  There is no Company match provision
under the union employee plan except for certain unions which
negotiated a Company match as part of their contract provisions.

9. Stockholders' equity
--------------------
Common Stock
------------  
On May 23, 1997, the NSC-CSX joint tender offer for the remaining
outstanding shares of Conrail's common and preferred stock was
concluded, and on June 2, 1997, Conrail became the surviving
corporation in a merger with Green Merger Corp. and remained the only
subsidiary of Green Acquisition Corp., an entity jointly-owned by NSC
and CSX.  As a result, the remaining outstanding capital stock of
Conrail was acquired by NSC and CSX and Green Acquisition was issued
100 shares of Conrail's common stock.

EXHIBIT 99, Page 22 of 23

CONRAIL INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Treasury Stock
--------------
As a result of the acquisition of Conrail, the remaining 6,320,249
shares of treasury stock at December 31, 1997, were recorded as
canceled and retired during 1998.

Undistributed Earnings of Equity Investees
------------------------------------------
"Retained earnings"  includes undistributed earnings of equity
investees of $157 million, $188 million and $173 million at December 31,
2000, 1999 and 1998, respectively.

10.  Other Income, Net
-----------------

2000      1999     1998
----      ----     ----      
(In Millions)

Interest income              $ 21       $19     $ 7
Rental income                  45        37      42
Property sales                 70         6      21
Other, net                     19         5       2
----       ---     ---
$155       $67     $72
====       ===     ===

11. Commitments and Contingencies
-----------------------------
Environmental
-------------   
The Company is subject to various federal, state and local laws
and regulations regarding environmental matters.  CRC is a party to
various proceedings brought by both regulatory agencies and private
parties under federal, state and local laws, including Superfund laws,
and has also received inquiries from governmental agencies with
respect to other potential environmental issues.  At December 31,
2000, CRC has received, together with other companies, notices of its
involvement as a potentially responsible party or requests for
information under the Superfund laws with respect to cleanup and/or
removal costs due to its status as an alleged transporter, generator
or property owner at 24 locations.  However, based on currently
available information, the Company believes CRC may have some
potential responsibility at only 21 of these sites.  Due to the number
of parties involved at many of these sites, the wide range of costs of
possible remediation alternatives, the changing technology and the
length of time over which these matters develop, it is often not
possible to estimate CRC's liability for the costs associated with the
assessment and remediation of contaminated sites.

EXHIBIT 99, Page 23 of 23

CONRAIL INC.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Continued)

Although the Company's operating results and liquidity could be
significantly affected in any quarterly or annual reporting period if
CRC were held principally liable in certain of these actions, at
December 31, 2000, the Company had accrued $80 million, an amount it
believes is sufficient to cover the probable liability and remediation
costs that will be incurred at Superfund sites and other sites based
on known information and using various estimating techniques. The
Company anticipates that much of this liability will be paid out over
five years; however some costs will be paid out over a longer period.
The Company believes the ultimate liability for these matters will not
materially affect its consolidated financial condition.

The Company spent $9 million in 2000 and 1999, and $10 million in
1998 for environmental remediation and related costs.  In addition,
the Company's capital expenditures for environmental control and
abatement projects were approximately $1 million in 2000 and 1999,
and $8 million in 1998.

Other
-----  
The Company is involved in various legal actions, principally relating
to occupational health claims, personal injuries, casualties, property
damage and damage to lading.  The Company has recorded liabilities in
amounts it believes are sufficient to cover the expected probable
payments for such actions.

CRC had 1,750 employees at December 31, 2000; approximately 86% of
who are represented by 12 different labor organizations and are
covered by 16 separate collective bargaining agreements.  The Company
was engaged in collective bargaining at December 31, 2000 with labor
organizations representing approximately 83% of its labor force.

CRC currently guarantees the principal and interest payments in the
amount of $36 million on Equipment Trust Certificates for Locomotive
Management Services, a general partnership of which CRC holds a fifty
percent interest.

12. Fair Values of Financial Instruments
------------------------------------
The fair values of "Cash and cash equivalents," "Accounts receivable,"
"Notes receivable from NSC/CSX" and  "Accounts payable"  approximate
carrying values because of the short maturity of these financial
instruments.

Using current market prices when available, or a valuation based on
the yield to maturity of comparable debt instruments having similar
characteristics, credit rating and maturity, the total fair value of
the Company's long-term debt, including the current portion, but
excluding capital leases, is $1,150 million and $1,367 million at
December 31, 2000 and 1999, respectively, compared with carrying
values of $1,028 million and $1,290 million at December 31, 2000 and
1999, respectively.