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Dahlman Rose & Co.Fifth Annual Global Transportation Conference

Donald W. SealeExecutive Vice Presidentand Chief Marketing Officer

Agenda

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• Second Quarter & First Half Results

• Third Quarter-to-Date

• Market Drivers

• Business Outlook

Second Qtr Second Qtr Favorable2012 2011 $ %

Railway operating revenues $ 2,874 $ 2,866 $ 8 --

Railway operating expenses 1,940 1,991 51 3%

Income from railway operations $ 934 $ 875 $ 59 7%

Railway operating ratio 67.5 69.5 2.0 3%

Operating ResultsSecond Quarter 2012 vs. 2011 ($ Millions)

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Revenue$2.9 Billion, up $8 Million

RPU$1,597, down ($7) per unit

Volume1,799,300 units, up 12,400 loads

2Q 2011 Volume RPU 2Q 2012

$2,866 $2,874$20 ($12)

2Q 2012 Revenue $ in Millions & y-o-y Percent Change

Components of Revenue Growth $ in Millions

Railway Operating RevenueSecond Quarter 2012 vs. 2011

Merchandise$1,556+9%

Coal$755(15%)

Intermodal$563+4%

2Q 2012 Volume (000’s) & y-o-y Percent Change

5

0

500

1,000

1,500

2,000

2Q 2011 2Q 2012

Coal

Merchandise

Intermodal

+4%

+5%

(12%)

1,786.9 1,799.3Coal down (12%) (21%) decline in Utility 6% gain in Export2% gain in Domestic Met

Intermodal up 5% 10% gain in Domestic more than offsets (1%) decline in International

Merchandise up 4% Gains in Automotive, MetCon and Chemicals more than offset decline in Paper

Total volume up 1%

Railway Volume Second Quarter 2012 vs. 2011

First Half First Half Favorable2012 2011 $ %

Railway operating revenues $ 5,663 $ 5,486 $ 177 3%

Railway operating expenses 3,984 4,011 27 1%

Income from railway operations $ 1,679 $ 1,475 $ 204 14%

Railway operating ratio 70.4 73.1 2.7 4%

Operating ResultsFirst Half 2012 vs. 2011 ($ Millions)

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Revenue$5.7 Billion, up $177 Million

RPU$1,604, up $36 per unit

Volume3,530,100 units, up 32,000 loads

1H 2011 RPU Volume 1H 2012

$5,486 $5,663$127 $50

1H 2012 Revenue $ in Millions & y-o-y Percent Change

Components of Revenue Growth $ in Millions

Railway Operating RevenueFirst Half 2012 vs. 2011

Merchandise$3,052+11%

Coal$1,521(11%)

Intermodal$1,090+6%

1H 2012 Volume (000’s) & y-o-y Percent Change

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0

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

1H 2011 1H 2012

Coal

Merchandise

Intermodal

+4%

+5%

(12%)

3,498.1 3,530.1Coal down (12%) (19%) decline in Utility 10% gain in Domestic Met(2%) decline in Export

Intermodal up 5% 11% gain in Domestic more than offsets (2%) decline in International

Merchandise up 4%Gains in Automotive, MetCon and Chemicals more than offset declines in Paper and Agriculture

Total volume up 1%

Railway Volume First Half 2012 vs. 2011

Improving Overall ServiceComposite Service Performance First Half 2012 vs. 2011

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1st Half

74.5%

82.9%20112012

Train & Engine Service Overtime Reduced 16%

Re-Crews Reduced 33%

Equipment Rents (Velocity Driven) Reduced 9%

Locomotives In Service Reduced 3%

Fuel Consumption Reduced 2%

Gross Ton Miles per Gallon Improved 1%

Improving ProductivityFirst Half 2012 vs. 2011

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Agenda

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• Second Quarter & First Half Results

• Third Quarter-to-Date

• Market Drivers

• Business Outlook

1,219,500 units, down (1%)

13%

6%

3%

0%

(4%)

(8%)

(14%)

Change in Units3QTD12 vs. 2011

1,230.6 1,219.5

2011 2012

Units (000)

Current Railway VolumeThird Quarter through Week 35 (Sept 1, 2012)

Automotive

Intermodal

Chemicals

Agriculture

Paper

MetCon

Coal

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Agenda

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• Second Quarter & First Half Results

• Third Quarter-to-Date

• Market Drivers

• Business Outlook

Market Drivers

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• Automotive strength • Sourcing and regulatory changes in coal• Energy exploration and drilling activity• U.S. crop conditions• Consecutive year-over-year growth

in housing starts• Highway conversions for Intermodal

Continued Strength in Automotive

68101214161820

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2002 2003 2004 2005 2006 2007 2008 2009 2010 2011

US Vehicle Sales (M)

Vehicle Age (yrs.) U.S. Vehicle Age vs. Sales

• Automotive volume up 18% YTD• North American vehicle production

forecasted at 15.4 million units for 2012, up 15% vs. last year

• Average vehicle age at all-time high

Source: Ward’s, Polk15

NS Coal TonnageYTD 2012 – 99.7M tons

16 Excludes coke & iron ore

Illinois Basin

12.9 M Tons13%

Northern Appalachia26.7 M Tons

27%

Western17.4 M Tons 

17% 

CentralAppalachia40.4 M Tons

41%SouthernAppalachia2.3 M Tons

2% Norfolk SouthernRailway and its Railroad Operating Subsidiaries

- - - NS Trackage and Haulage Rights

Marcellus & Utica Shale DepositsNS Shale Volume Up 27% YTD vs. 2011

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Drilling Activity in NS Service RegionYTD Permit and Rig Activity in PA, OH, WV

0

500

1,000

1,500

2,000

2,500

3,000

0

50

100

150

200

250

Jan-12 Feb-12 Mar-12 Apr-12 May-12 Jun-12 Jul-12

PermitsActive Rigs

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• New York pending decision to lift moratorium

• Market shift from dry to wet gas

• Natural gas price $2.85 in August

Source: EIA, RigData

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Bakken

Alberta

• Efficient and direct routing to East Coast, Gulf Coast and Midwest refineries

• Unit train staging & delivery

Chicago

Crude Oil to East Coast, Gulf Coast and Midwest Refineries

Grain Market Sourcing and Service Flexibility

$0$2$4$6$8

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50

100

150

04-05 05-06 06-07 07-08 08-09 09-10 10-11 11-12 12-13

Price ($/bu)Yield (bu/ac)

Crop Year

Corn Yield and Price

Source: NOAA, USDA

• Sourcing from non-traditional origins

• Additional West to East flows

• Imports through East coast ports

• Rationalization in ethanol production

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90 day Precipitation During growing season

Corridor 2Q 2012 vs. 2011

1H 2012 vs. 2011

Pan Am Southern 3% 9%

Crescent Corridor 22% 22%

Heartland Corridor 27% 23%

Meridian Speedway 14% 12%

Intermodal Corridors

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Harrisburg

Meridian

To Mexico

Bethlehem

Greencastle

Birmingham

Memphis

AtlantaCharlotte

Harrisburg

To/From West

New Orleans

Terminal Investments

Crescent CorridorSets the Stage for up to 34 New Service Lanes in 2013

Meridian

To/From Mexico

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Terminal Incremental lifts

Total Investment

$M

NS Investment

$M

Targeted Completion

Rossville 200,000 $137.9 $76.0 2012

Birmingham 150,000 $101.5 $42.4 2012

Charlotte 115,000 $90.9 $75.1 2013

Greencastle 150,000 $99.9 $54.9 2012

Rutherford 95,000 $60.9 $45.9 2014

Harrisburg 97,000 $30.1 $10.1 2013

Total 807,000 $521.2 $304.4

New Terminal Capacity on Crescent CorridorNew investment, plus current capacity, will support over 500,000 new revenue moves in Crescent related lanes

Agenda

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• Second Quarter & First Half Results

• Third Quarter-to-Date

• Market Drivers

• Business Outlook

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CoalUtility coal impacted by higher stockpiles in first half and competition from natural gasModerating strength, but continued growth in the domestic metallurgical market to support steel productionWeaker demand in European market for both met and steam coal Continued opportunities in Asian marketIntermodalIncreasing opportunities for highway conversion - tightening truck capacity New Memphis terminal open July 1Growth with NS international shipping partnersExpansion in premium market segment

MerchandiseProject growth in crude oil and demand for plastics

Moderate growth in materials for natural gas drilling operations

Solid automotive/steel production and new business development projects

Reduced U.S. corn and soybean crop

Business Outlook

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Thank You