Dear Colleagues:

As you know, a number of your teammates and I, on behalf of everyone throughout our railroad system, were in Washington recently to accept Norfolk Southern's 13th consecutive Harriman Gold Medal Award for employee safety.

I thanked the Awards Institute, labor, management, Federal Railroad Administration, National Transportation Safety Board and everyone working to foster a culture of safety in our industry. I noted that with 2001's challenges, we might have lost some of our safety focus. Instead, our industry redoubled its emphasis on safety just when the nation most needed a safe transportation system.

I also told the group that I look forward to the day in which we no longer need an awards ceremony. That time, when it arrives, will mean that every railroader, in every position, on every carrier in every community is going home safely to their family every day, every year. Double zeros (no incidents and no injuries) no longer will be a goal; it will be a given.

I believe we can reach double zeros, through communication, attitude, awareness and commitment.

Communication is essential for safe operation, and one of our best communications tools is the job briefing. You and your co-workers make job briefings successful.

Attitude toward your own safety and that of your co-workers plays a significant role in the safety process. You determine your safety attitude. You can make a positive impact on others.

Awareness of the environment and your preparedness to handle any situation are critical components of a personal commitment to work injury-free.

Commitment to injury prevention is the right thing to do. Looking out for each other is the right thing to do. Making sure everyone goes home safely at the end of the workday is the right thing to do. Let's strengthen our commitment to it.

I congratulate you on your 2001 safety achievements, especially as they came during a challenging period. Your 13 percent improvement over the prior year shows that we continue to head in the right direction.

I am especially proud of you who already have attained double zeros. We will follow your examples as we re-challenge ourselves to work without injury today and every day forward.

Double zeros can be a reality, and the Thoroughbred team is the team that can make it happen.

Steve Tobias
vice chairman and chief operating officer

First-quarter 2002 results reported

Norfolk Southern Corporation reported that income from continuing operations rose 41 percent in first quarter 2002 as the company reduced operating expenses and increased operating efficiency.

Income from continuing operations climbed to $86 million, or $0.22 per diluted share, compared to $61 million, or $0.16 per diluted share, a year earlier, excluding last year's gain of $0.03 per diluted share from the sale of a former motor carrier subsidiary.

"We are pleased to report another quarter of year-over-year improvement in our financial results, achieved during a period marked by continuing economic slowness and weak coal demand," said David R. Goode, chairman, president and chief executive officer. "During the quarter, we made solid progress in strengthening service reliability and operating efficiency with the implementation of the Thoroughbred Operating Plan, our scheduled transportation plan for merchandise shipments. As economic conditions improve, we expect to make continued improvements and to pick up business from our better service."

In the first quarter, railway operating revenues were $1.50 billion, down 2.7 percent compared to the same period last year.

General merchandise revenues of $869 million were unchanged compared to the first quarter of 2001 despite a 2 percent, or 12,422 decrease in carloads. Automotive posted a 7 percent gain in revenues due to record sales of vehicles, and agricultural product revenues rose 3 percent on the strength of shipments of grain products. However, there was continued weakness in several business sectors sensitive to the weakened national economy, including paper and forest products, construction materials, metals and chemicals.

Intermodal revenues declined 2 percent to $270 million compared to the same period a year earlier, primarily as a result of the continued conversion of trailers to containers and the removal of a fuel surcharge that was imposed during last year's first quarter in response to high diesel fuel prices.

Record warm temperatures and high stockpiles reduced demand for utility coal and significantly impacted coal revenues, which dropped to $359 million, a 9 percent decline compared to the first quarter of 2001.

Railway operating expenses were $1.26 billion for the quarter, a 6 percent reduction from the first quarter of 2001. The improvement was due to continued cost discipline and included a $36 million, or 31 percent decline in diesel fuel expenses.

For the quarter, the railway operating ratio, the percentage of revenues that goes into operating the railroad, improved 2.5 percentage points to 84.2 percent compared to 86.7 percent a year earlier.

"Our focus for the coming quarters centers on providing unprecedented customer service, attracting freight from the highways and improving asset utilization," Goode said. He noted that NS has created a new position, vice president of customer service, to support its continuing improvement initiatives.

First Quarter Earnings News Release

Improved Norfolk Southern primed for economic recovery

On the verge of its 20th anniversary, Norfolk Southern will enter its third decade with an improved transportation network primed for an economic rebound, said David R. Goode, chairman, president and chief executive officer, as the company held its 20th annual meeting of shareholders in Chicago May 9.

Goode outlined improvements achieved during 2001 in operations, customer service, productivity and financial performance. "We now have a robust transportation infrastructure for improving our traditional business and for continuing to move new traffic from the highway to the railway. As the economy recovers and traffic increases, we will handle the volume efficiently."

NS marks its 20th anniversary June 1. "I can report to you with assurance that your company is strong today and has the network, resources and talent - all the tools - to continue making its mark in the transportation marketplace as it enters a third decade and beyond," Goode said.

In official business, stockholders re-elected four directors: Gerald L. Baliles of Richmond, Va., a partner in the law firm of Hunton & Williams and former governor of Virginia; Gene R. Carter of Alexandria, Va., executive director and chief executive officer of the Association for Supervision and Curriculum Development; Steven F. Leer of St. Louis, president and chief executive officer of Arch Coal, Inc.; and J. Paul Reason of Norfolk, president and chief operating officer of Metro Machine Corp. and retired four-star admiral and former commander in chief of the U.S. Atlantic Fleet.

Stockholders ratified the appointment of KPMG LLP as auditors and approved a stockholder proposal recommending that in the future, the board obtain stockholder approval of certain severance packages with senior management.

Chairman's Annual Meeting Remarks

Exhibit Car to visit 15 communities

Norfolk Southern's Exhibit Car will visit 15 communities on the company's rail system this year.

The car features interactive displays, including a locomotive simulator and a train dispatching center, depicting the history and modern operation of the NS transportation system. Some 1.5 million people in more than 325 cities have viewed the traveling showcase since 1971.

The car began its 32nd year of service in April with an appearance in Windsor, Va., for the town's centennial. It traveled to Lake City, Tenn., and Stevenson, Ala., in May and stopped in Manassas, Va., June 1.

Other stops on the 2002 tour are:

• June 7-16 Strasburg Railroad, Strasburg, Pa.
• July 1-21 Southeastern Railway Museum, Duluth, Ga.
• July 24-27 Atlanta Fireman's Muster, Atlanta
• Aug. 8-18 Tennessee Valley Railway Museum, Chattanooga, Tenn.
• Aug. 30-Sept. 2 Hendersonville, N.C.
• Sept. 13-22 Strasburg Railroad, Strasburg, Pa.
• Oct. 6-12 on the TRANSCAER Whistle Stop train for community emergency responders, with stops in Washington, D.C., Linwood and Asheville, N.C., Knoxville and Chattanooga, Tenn., and Decatur, Ala.
• Nov. 30 McKeesport, Pa.
• Dec. 5-8 Strasburg Railroad, Strasburg, Pa.

NS provides the Exhibit Car at no cost for community events throughout its 22-state rail transportation network. Requests for the car for 2003 can be made through the company's Web site.

13th consecutive E.H. Harriman Gold Medal awarded to NS employees

Norfolk Southern employees received an unprecedented 13th consecutive E.H. Harriman Gold Medal Award for top safety performance in 2001.

Steve Tobias, vice chairman and chief operating officer, accepted the award on behalf of all NS employees.

"I accept with gratitude the Gold Harriman Award on behalf of the people of Norfolk Southern who make safety their first priority," he said. "Their 13th consecutive gold medal - and in fact the remarkable safety record of the entire industry - is the result of the commitment of management and labor, the Federal Railroad Administration, the National Transportation Safety Board, and individuals and teams dedicated to keeping themselves and their fellow workers injury-free."

Awards are granted on the basis of the lowest casualty rates per 200,000 employee-hours worked - a formula that takes into account the volume of work performed as well as the number of fatalities, injuries and occupational illnesses confirmed by the Federal Railroad Administration. NS employees finished the year with a frequency rate of 1.25. Conrail employees, who are part of NS and CSX Transportation's Shared Assets Areas, also were honored with a gold medal for switching companies.

Tobias commended the industry for reducing injuries and incidents in difficult times.

"This past year presented unique challenges to our employees," he said. "World events such as September 11 could have resulted in a loss of focus in the work environment. Instead the industry redoubled its emphasis on safety at a time when the nation depended on a safe transportation system more than ever.

"Moving forward, the challenge is to sustain enthusiasm for continuous improvement. We must dedicate ourselves to emphasizing and teaching safety the first day an employee walks on the property. We must never stop. Safety must be in everything we do. It must be a way of life. Just as we unite in celebrating our accomplishments, we all hurt as an industry when one of us suffers a safety lapse."

Steve Tobias' Remarks at Harriman Awards Ceremony

Employees attending the awards ceremony were: 1. June Clark, 2. Barry Wells, 3. Essie Nail, 4. Chuck Wehrmeister, 5. Regina Jones, 6. Gary Jones, 7. Terry Bradshaw, 8. Dan Quam, 9. Steve Tobias, 10. Mary Gross, 11. Mark Manion, 12. Rodney Zehfuf, 13. Ray Smith, 14. Mitch Mitchell, 15. Tony Ingram,16 Gwen Smith, 17. Gary Woods, 18. Don Stephens, 19. Rick Vickrey, 20. Wayne Troester, 21. George Smart, 22. Mary Wade, 23. Haskel Stanback

NS recognizes safest chemical customers

Twenty-nine customers earned the Thoroughbred Chemical Safety Award for safe handling of hazardous chemicals on the Norfolk Southern transportation network in 2001.

The customers qualified for the award by shipping more than 1,000 carloads of hazardous chemicals with NS during the year without causing a single release of product. Together, they accounted for the safe delivery of more than 108,000 carloads of chemicals without incident.

"In the six years Norfolk Southern has recognized our safest chemical customers, the Thoroughbred Chemical Safety Award has celebrated the successful partnership of the transportation and chemical industries working together to achieve mutually rewarding safety goals," said David R. Goode, NS chairman, president and chief executive officer. "Our people, the communities where we do business, our customers and our investors all benefit from continuous dedication to safety. I applaud these companies and plants that have set the standard by transporting chemicals with zero incidents."

The 2001 winners are: Akzo Nobel Chemicals Inc.; the Archer Daniels Midland Company plant at Peoria, Ill.; BP Chemical; BP Products North America; Citgo Asphalt Refining Co.; the Dow Chemical Company; the Dupont Corp. plant at Belle, W.Va.; Eaglebrook Inc.; Enterprise Products Company; ExxonMobil Chemical Company; Finnchem USA Inc.; Honeywell International Inc.; Huntsman Corporation; Koch Industries; Koppers Industries Inc.; Lyondell Chemical Company; Marathon Ashland Petroleum LLC; Motiva Enterprises LLC; Nova Chemicals Inc.; the Occidental Chemical Corporation plant at Evans City, Ala.; the Olin Corporation plant at Nixon, Ga.; The PCS Phosphate plants at Lee Creek, N.C., and Occidental, Fla.; Rhodia Inc.; Shell Chemical Company; Sunbelt Chlor Alkali Partnership; the Sunoco Chemicals Inc. plants at Frankford, Pa., and Haverhill and Toledo, Ohio; Tosco Refining Company; Valero Marketing & Supply Company; and Young Refining Corporation.

NS awards 14 college scholarships

Fourteen students received college scholarships from Norfolk Southern Corporation as part of the company's annual scholarship programs. Ten of the students are sons and daughters of employees or retirees of Norfolk Southern and its participating subsidiaries.

Recipients of Norfolk Southern Special Scholarships:

Michael A. Charlebois, son of Buffalo conductor John Charlebois and Janice Charlebois, graduated from Maryvale High School. He will attend Cornell University.

Ryan N. Jones, son of Montpelier brakeman Rick Jones and Cheryl Ann Jones, graduated from Bryan High School. He will attend Miami University-Oxford.

Thomas B. Key, son of Selma engineer Robert Key and clerk Brenda Key, graduated from John T. Morgan Academy. He will attend Auburn University.

Katherine M. McCown, daughter of Roanoke account manager Robert McCown and Emily McCown, graduated from Patrick Henry High School. She will attend Wesleyan University.

Jenna D. Mehal, daughter of Atlanta IT architecture director Michael Mehal and Katherine Mehal, graduated from Harrison High School. She will attend Massachusetts Institute of Technology.

Valerie M. Paschall, daughter of Norfolk attorney James Paschall and Nancy Paschall, graduated from Norfolk Academy. She will attend Wake Forest University.

Sara A. Peters, daughter of Chicago trainmaster Gilbert Peters and Deborah Peters, graduated from Bremen High School. She will attend University of Illinois Urbana-Champaign.

Recipients of the National Merit Scholarships:

Marion E. Moorman, daughter of Wick Moorman, Norfolk, president of T-Cubed, and Bonnie Moorman, graduated from Norfolk Academy. She will attend University of Virginia.

Richard W. Schlauch, son of Croxton special agent Mark Schlauch and Dorothy Schlauch, graduated from Rutgers Preparatory School. He will attend The College of William & Mary.

John L. Sinclair, son of retired electrical engineer John Sinclair and Evelyn Sinclair, graduated from Collins Hill High School. He will attend University of Florida.

High school juniors who plan to enter college in 2004 are eligible to apply for one of Norfolk Southern's four-year scholarships. National Merit Scholarship Corporation (NMSC), an independent, nonprofit organization, selects scholarship recipients. Please refer to the NMSC website for detailed descriptions of the scholarships sponsored by NS and other corporations.

To compete for scholarships, students must take the Preliminary SAT/National Merit Scholarship Qualifying Test (PSAT/NMSQT) on Tuesday, Oct. 15, 2002, or Saturday, Oct. 19, 2002. Students should contact their principal or counselor to arrange to take the test.

Entry forms for NS scholarships can be requested by (1) writing to Norfolk Southern Corporation, Scholarship Program Coordinator, Three Commercial Place, Norfolk, Va., 23510-9213; (2) sending an or a MEMO to RESUPER: and (3) accessing the Employee Resource Center and clicking on "Other Links" to get to the NS Scholarship Program. Students must return completed applications to the above address postmarked no later than Dec. 31, 2002.