Success! NS reports record revenues, achieves 7 and 7 goal

For fourth quarter 2004:

• Railway operating revenues increased 16 percent to a record $1.9 billion.
• Income from railway operations was a fourth-quarter record $462 million.
• Net income was a fourth-quarter record $264 million or $0.65 per diluted share.
• Operating ratio improved to 76.3 percent, the best since 1998.

For 2004:

• Railway operating revenues increased 13 percent to a record $7.3 billion.
• Income from railway operations was a record $1.7 billion.
• Net income was a record $923 million or $2.31 per diluted share.
• Operating ratio improved to 76.7 percent, the best since 1998.

Norfolk Southern reported record revenues for the fourth quarter of 2004 and for the year and achieved its goal of 7 and 7 – $7 billion in revenue and an operating ratio that begins with a seven.

“Our 7 and 7 goal was widely seen as a very ambitious one,” said David Goode, chairman and chief executive officer. “Exceeding this goal shows what can be done when business conditions coincide with an operation network that is fluid and efficient. We’re proud of reaching and exceeding our 7 and 7 goal, and we’ll reach even higher as we move forward.”

Railway operating revenues and income from railway operations each set fourth-quarter and full-year records, with railway operating revenues for the fourth quarter increasing 16 percent over fourth-quarter 2003, and increasing 13 percent year-over-year. Coal, general merchandise and intermodal traffic all set revenue records for the quarter and year. Intermodal set volume records as well for the quarter and year and reported the biggest revenue increases compared with 2003, up 32 percent for the fourth quarter and 24 percent for 2004.

General merchandise revenues were up 10 percent over fourth quarter 2003, and 9 percent compared with 2003. All merchandise commodities except automotive posted record revenue for the year, and agriculture and metals and construction set carload records for 2004. Total general merchandise carloads set a fourth-quarter record.

Coal revenue increased 19 percent in the fourth quarter over fourth-quarter 2003 and 15 percent compared with 2003.

“In practically every way, 2004 was a record year for Norfolk Southern,” Goode said. “We topped $7 billion in revenue for the first time in our history, and all of our major business sectors set revenue records. The full-year operating ratio of 76.7 percent was substantially better than the prior year. NS people responded admirably to the challenge of high demands for service. Our investments in people, systems and infrastructure to prepare for business opportunities paid off in 2004.”

Graniteville , S.C. , recovery continues: NS people respond

Recovery continues after a Jan. 6 derailment in Graniteville , S.C. , where a collision claimed the lives of nine people, including a member of the Norfolk Southern family, locomotive engineer Christopher G. Seeling. A native of Fort Wayne , Ind., Seeling, 28, resided in West Columbia , S.C., and had worked for NS since 1997.

A northbound NS train traveling on the main line entered a siding where a locomotive and two cars were parked, derailing 16 cars, three of which were carrying chlorine. Product was released from one of the chlorine cars. In addition to the fatalities, the community experienced hundreds of reported injuries and the evacuation of an estimated 5,400 residents. NS Conductor William Wright survived the crash and was hospitalized.

NS operating, safety and environmental and police forces were immediately dispatched to the scene to work with local emergency responders, hazardous material contractors, and federal, state and local officials. They were followed by NS claims representatives to work with the people impacted.

“NS people were on the scene quickly to determine the extent of the problem and to work with local, state and federal responders,” said David Goode, chairman and chief executive officer. “The level of professionalism and compassion shown by people working at the scene, both with displaced or concerned residents, and with those addressing environmental, safety and operating matters, was and continues to be exemplary.”

Local authorities set up decontamination stations for residents and opened shelters for evacuees. NS immediately opened an assistance center at a local church, where residents were able to speak with NS representatives, obtain financial assistance and consult with representatives of the Center for Toxicology and Environmental Health and medical personnel, including a physician, psychologist and nurses. Local Red Cross and Salvation Army offices also assisted residents. (See box at left.)

NS claims personnel continue to provide financial assistance to residents to facilitate inspections, testing, repairs and cleaning of homes, as well as handling claims for lost wages, property damage, inconvenience and personal injury. The company also offered to pay for home inspections to ensure that no traces of chlorine remained in the homes of those who had to evacuate.

“We believe that deeds count more than words. We’re doing everything we can, applying every resource at our disposal, and working with relevant agencies to remediate the damage to the town, its businesses and the people involved. Our efforts will continue as long as needed,” Goode said.

“This is a tragedy we can never forget. We must concentrate on safety every minute of the day and rededicate ourselves to operating the safest railroad in the nation,” Goode said.

If you’d like to help the people of Graniteville

Norfolk Southern people desiring to help in the recovery efforts at Graniteville, S.C., can do so in two ways. Two organizations in need of continuing financial support are:

American Red Cross
211 York St. N.E.
Aiken S.C. 29801
803-649-9535
www.redcross.org

The Salvation Army
322 Gayle Ave. N.W.
Aiken S.C. 29802
803-648-0461
www1.salvationarmy.org

The Norfolk Southern Foundation has contributed to both of these local organizations

NS identification cards to be renewed

Norfolk Southern corporate ID cards will expire in the holder’s birth month in 2005. New cards have been mailed to all employees who were holding an original card and whose birth month was January. When employees receive their new corporate ID card, they should destroy their old one. Every effort will be made by NS police headquarters staff to issue new cards to original holders in the month before their card officially expires.

Any employee not issued a corporate ID card should contact the closest NS Police Department office and make arrangements to be photographed so a card can be issued to them.

Link Museum commemorates famous station photo

The O. Winston Link Museum in Roanoke commemorated one of the photographer’s famous photos. On Jan. 21, 1955, a Norfolk & Western train pulled into the Waynesboro , Va. , station where Link had waited to capture a passing steam locomotive on film. His “Train No. 2 Arrives at the Waynesboro Station” photo became the first of his now-famous black and white photos documenting the last days of the steam era.

On Jan. 21, 2005 , a Norfolk Southern train consisting of business and passenger cars stopped at the same spot for photographers to create their own versions of the historic photo.

African-American Railroader Month focuses on “firsts”

Norfolk Southern’s annual African-American Railroader Month celebration in February focuses on “firsts” this year. The NS Diversity Council is the sponsor of this celebration of achievement.

“We’re highlighting people who have been pioneers in their professions and in many of our lives,” said council member Clarence Walton, lead clerk, accounting. Walton led the team that developed this year’s events.

“A number of activities and opportunities are planned to show the many contributions to building a more diverse community,” said Walton.

Educational sessions will take place at various locations throughout the NS system. Each will feature a speaker, and some will include lunch. Locations, times and dates are posted on the company’s Web site at www.nscorp.com and at local facilities. Employees must reserve a space for educational sessions through the Employee Resource Center on the NS Web site.

The NS Web site features a special section devoted to the event. Profiles of African-Americans who were pioneers in their professions and communities are featured as well as a weekly fun quiz. Information will be updated regularly.

Posters with a short fun quiz were distributed to all locations.

“We want this to be interesting, educational and fun,” Walton said. “There have been many African-Americans who helped raise the bar of achievement for all people through their determination and resolve. This is an interesting way to learn more about them.”

Other team members include Tom Brugman, assistant vice president agriculture, fertilizer and consumer products; Tamara Chaney, customer account representative, accounting; Linda Duncan, manager diversity; Allison Enedy, manager online communications; Keith Green, analyst operations support; Andrea Just, manager corporate communications; Harold Mobley, assistant vice president labor relations; and Karin Stamy, general attorney.

Norfolk employees support troops

Employees of the Norfolk Locomotive Shop and Lamberts Point showed their support of armed forces in Iraq and Afghanistan by sending care packages to two groups of U.S. Navy SEALs.

“We wanted to do something to show our support for the job they’re doing in making our world safer, especially during the holidays when we’re so fortunate to be with our families and friends,” said Jim Welch, general foreman.

John Stout , gang leader, coordinated the effort. He contacted Navy personnel and made arrangements to ship the packages for arrival by Christmas. Robert J. Welch, a retired piermaster from Lamberts Point, gave a generous donation to help defray expenses.

Packages included personal items, snacks and items sporting the NS logo. A letter from shop employees also was included. “We cannot find the words to express just how much we appreciate the sacrifices that you make to protect our freedom. Each and every one of you is a true American hero. We would like to thank you for being at the front line for the fight for freedom. We support you in everything you do. Remember you are in our thoughts, prayers and hearts. We hope that you soon will be in the arms of those you love, and we send our love to you,” the letter stated.

The employees included an American flag and asked that it be flown at one of the bases and returned to the shop for display to honor those on active duty and all NS veterans. Naval Special Warfare Task Unit SEAL Team 8, headquartered in Norfolk, returned the flag with a certificate stating the flag was “proudly flown in the face of the enemy at Camp Ouellette, Bagram, Afghanistan, during Operation Enduring Freedom on Dec. 25, 2004.”

Shop employees received a number of thank-you messages from the SEALs.

“It was nice to receive all these care packages not just from anyone but someone from our hometown. It means a lot to us out here that people back home still think of us and haven’t forgotten that there is still a war going on in Afghanistan and that lives are lost every day. Again, thank you for your generosity and support,” wrote one SEAL.

Another wrote, “My platoon mates and myself appreciate you guys thinking of us. We appreciate patriotic men such as yourselves doing what you can at home to make America a place worth fighting for.”

“This project brought everyone together, and we’re very proud that we were able to show our support in a small way,” Welch said. “One of our employees is building a frame for the flag and two certificates sent by the SEAL units, and we’ll proudly hang it next to our safety banners where all can see it as a reminder of the sacrifices of our men and women in the armed forces.”

Sinquefield first NS police officer to graduate from FBI academy

Special Agent Mark Sinquefield graduated from the FBI National Academy at Quantico , Va. He was the first Norfolk Southern police officer to attend the academy and only the second railroad police officer to attend.

The National Academy Program offers 11 weeks of advanced investigative, leadership and fitness training for selected officers with proven records as professionals within their agencies.

FBI Director Robert S. Mueller III was the principal speaker at the ceremony Dec. 10, 2004 . Sinquefield is assigned to NS police headquarters in Roanoke as manager facilities security and crime analysis.

NS Foundation will match employees’ tsunami relief donations through Feb. 28

The Norfolk Southern Foundation has a special grant program to enable eligible NS employees to maximize the value of their contributions to certain organizations engaged in tsunami relief efforts.

Under the special program, effective through Feb. 28, 2005, the Norfolk Southern Foundation will match, up to a maximum corporate contribution of $250,000, donations made by eligible active employees to the organizations listed below.

To participate, active employees should use the regular NS Foundation Matching Gifts Program Form and clearly mark “Tsunami Victims” in the purpose space. This form can be downloaded from NS’ Web site at www.nscorp.com or from the Employee Resource Center under “other links.” (A side benefit is that the Foundation’s matching donation will not be counted toward an employee’s maximum allowable match, as described in the Matching Gifts guidelines.)

Eligible gifts must be in the form of checks, credit card payments or donations of marketable securities, and the minimum eligible gift is $50. Gifts made by payroll deduction or bank account debit are not eligible. For questions, consult the Matching Gifts Program Form, or call the foundation’s director, Deborah Wyld, at 629-2881 (microwave) or 757-629-2881.

AmeriCares
88 Hamilton Ave.
Stamford CT 06902
800-486-4357
www.americares.org

American Red Cross
International Response Fund
P.O. Box 37243
Washington DC 20013
800-HELP-NOW
www.redcross.org

CARE USA
Asia Quake Disaster
151 Ellis St. N.E.
Atlanta GA 30303
800-521-CARE, ext. 999
www.careusa.org

Oxfam America
Asian Earthquake Fund
P.O. Box 1211
Albert Lea MN 56007-1211
800-77-OXFAM
www.oxfamamerica.org

Save the Children
Asia Earthquake/Tidal Wave Relief Fund
54 Wilton Road
Westport CT 06880
800-728-3843
www.savethechildren.org

US Fund for UNICEF
Tsunami Relief Fund
333 East 38th St .
New York NY 10016
800-4-UNICEF
www.unicefusa.org

Goode named 2005 Railroader of the Year

Industry trade journal Railway Age named David R. Goode, chairman and chief executive officer of Norfolk Southern, 2005 Railroader of the Year.

“In 2004, a year characterized by record traffic and revenues – but spotty performance by railroads coping with the difficulties and expenses of handling such enormous volume – Norfolk Southern was the best-performing of the U.S. Class I’s,” said Railway Age Editor William C. Vantuono.

“ Norfolk Southern stock over the past year handily beat both the Dow Jones Industrial Average and the Dow Jones U.S. Railroad Average. The railroad’s operating ratio dropped by nearly 6 percentage points to 74.7 in third-quarter 2004, compared to the prior- year period. Add to that an unprecedented 15 Harriman Gold safety awards in a row. All this is the result of sound management and a disciplined approach to operations, combined with solid forecasting and planning. Norfolk Southern saw the business boom coming and prepared for it with a carefully thought-out program of select capital investments, hiring and training, and operations planning,” Vantuono said.

Goode is the 42nd recipient of the award and the fourth to receive it twice, which was started by Modern Railroads magazine in 1964 as the “Man of the Year” award. Railway Age acquired Modern Railroads in 1992 and has presented the award annually since then. Goode will receive the award, one of the most prestigious in the railroad industry, on March 15, 2005 , at Chicago ’s Union League Club.