Annual Meeting of Stockholders
Norfolk, VA - May 8, 2008

Prepared remarks by:

Wick Moorman
Chief Executive Officer
Norfolk Southern Corporation

 I’d like to spend a few minutes to review the state of our business and where we are today, and then talk about the opportunities and challenges we face for the rest of the year and beyond.

Looking briefly at 2007, as I wrote in my letter to shareholders in the annual report, it was a year that affirmed the strength of our company in the face of an economic downturn. Railway operating revenues, income from railway operations, and diluted earnings per share all set records, even in the face of a 4 percent decline in volume, which was driven in large part by softness in the housing and automotive markets.

There was a lot of other good news for 2007 that reflected solid levels of performance throughout our organization. We posted the lowest annual operating ratio since our integration of Conrail. Our overall service metrics improved, and we continued to be recognized as a leading service provider in the industry, most recently with awards from UPS and Toyota, who are, as you might imagine, two of our most service-sensitive customers. During the year, we further sharpened our customer focus by investing in new capacity to handle business opportunities and developing and integrating new technologies to increase reliability, safety, and efficiency.

We also stayed focused on returns to our shareholders. During the year we purchased a total of 23.6 million shares at a cost of $1.2 billion. We also increased our dividend for the sixth consecutive year, by an aggregate 41 percent.

The keys to all these successes were and are the people of Norfolk Southern, who earned an 18th consecutive Harriman gold medal for employee safety and who today continue making Norfolk Southern the safest workplace in the rail industry and the best company in the rail industry.

I think that the most remarkable thing about our 2007 earnings, and our first-quarter 2008 earnings as well, is that they are set against the backdrop of an economy that is clearly very soft at best and probably will be judged to have been in a recession when the dust settles. Our results speak volumes for something that we talk about all the time – the strength of our balanced portfolio of businesses. We’re really seeing two different economies out there in that a large component of our business is very healthy. Our agricultural business and anything having to do with commodities are very strong, along with coal, steel, metals, and some other components of our business. At the same time, we are seeing the ongoing effects of slowdowns in all housing-related transportation and automotive-related business.

We saw this pattern repeated in the first quarter of this year, which was another very strong quarter for your company, even in the face of not only economic head winds, but also substantially higher fuel prices. In spite of these conditions, we reported the highest railway operating revenues in our history and a 9 percent increase in operating income.

Our performance allowed us to increase the dividend by 12 percent in January as we continue our focus on delivering returns for our investors. The stock market likewise has reacted favorably to the positive results we have achieved.

From an operations standpoint, the railroad is running smoothly, and our service metrics improved year-over-year for the first quarter. Capacity enhancements that we've put in place and our focus over the past few years on the reliability of our locomotive fleet and other assets are allowing our system to run more and more efficiently.

We continue planning for a future that we have every reason to believe is bright for our company and our industry. This is evidenced by our announcement that we plan capital expenditures of about $1.4 billion in 2008. Of that amount, about a billion dollars is planned for maintenance and renewals, with the remaining $400 million targeted at growth opportunities.

The factors that support long-term growth in rail freight demand – higher fuel prices, increased highway congestion, and truck driver shortages – all remain in place, and we're confident that volume growth will resume as the economy rebounds. The Rickenbacker Global Logistics Park in Columbus, Ohio, opened in March, and work is in progress on the tunnel clearances on the Heartland Corridor, which remains on schedule for completion in 2010. They’re great projects that will give our company a long-term competitive advantage as global trade patterns continue to shift toward East Coast ports.

Additionally, we are continuing our dialogue with federal and state governments about the win-win opportunities presented by public-private partnerships such as the Crescent Corridor, and work is already under way with support from the Commonwealth of Virginia to add capacity in this key domestic freight lane
We remain committed to the idea that superior service is the key to growing volumes and revenues, and delivering exceptional financial results. To reinforce that, this year we started making service improvement a part of our incentive compensation program, and we’re already seeing results in better service levels. We're doing an even better job of running our trains according to plan, moving cars more efficiently through our yards, and running our trains on time – not too early and not too late.

Our people are engaged in several other fronts to keep the company focused on staying on the competitive edge. Last year, we embarked on a five-year program, called Track 2012, with some ambitious five-year goals for safety, service, operating, and financial performance. We’ve kicked off a new innovations team that is encouraging employees everywhere in the company to find creative ways of doing things better and more efficiently.

And we are focusing more than ever on the environmental advantages of rail transportation. In 2007, we appointed the rail industry’s first-ever corporate sustainability officer to measure and minimize the company’s environmental footprint and to strengthen relationships with environmental stakeholders.

Looking at the rest of 2008 and beyond, we know that we face challenging economic conditions, and we are keeping a close eye on what’s happening in Washington. Reregulation proposals remain threatening to the industry, and we all need to actively support proposals for investment tax incentives for creating additional rail infrastructure capacity.

The good news for all of us at Norfolk Southern is that significant levels of project-driven growth, such as the Heartland Corridor and the new ThyssenKrupp steel plant near Mobile, Alabama, are progressing as scheduled, and we expect that the strength we've seen in key parts of our business will continue.

In the current economic environment, we will continue to operate our business in a prudent and nimble manner, which will allow us to react as necessary to whatever the economy throws our way. At the same time, we will not lose sight of or stop planning for the opportunities that will exist for us as the economy strengthens.

Most important of all, we’ll continue to invest in our people. Great people are what make our company, and our performance continues to showcase their strength and dedication. Thanks to them, we continue to handle strong and growing business demands safely and efficiently, and we’ll continue to produce good results that benefit customers and investors alike.