Investor Presentation April 29, 2016 1 Forward-Looking Statements - PDF document

Investor Presentation April 29, 2016 1

Forward-Looking Statements Certain statements in this presentation are forward-looking statements within the meaning of the safe harbor provision of the Private Securities Litigation Reform Act of 1995, as amended. These statements relate to future events or Norfolk Southern Corporation’s (NYSE: NSC) (“Norfolk Southern,” “NS” or the “Company”) future financial performance and involve known and unknown risks, uncertainties and other factors that may cause the actual results, levels of activity, performance or achievements of the Company or its industry to be materially different from those expressed or implied by any forward-looking statements. In some cases, forward-looking statements may be identified by the use of words like “believe,” “expect,” “anticipate,” “estimate,” “plan,” “consider,” “project,” and similar references to the future. The Company has based these forward-looking statements on management’s current expectations, assumptions, estimates, beliefs and projections. While the Company believes these expectations, assumptions, estimates, and projections are reasonable, such forward-looking statements are only predictions and involve known and unknown risks and uncertainties, many of which involve factors or circumstances that are beyond the Company’s control. These and other important factors, including those discussed under “Risk Factors” in the Annual Report on Form 10-K for the year ended December 31, 2015, filed with the Securities and Exchange Commission (the “SEC”) on February 8, 2016, as well as the Company’s subsequent filings with the SEC, may cause our actual results, performance or achievements to differ materially from those expressed or implied by these forward-looking statements. Forward-looking statements are not, and should not be relied upon as, a guarantee of future performance or results, nor will they necessarily prove to be accurate indications of the times at or by which any such performance or results will be achieved. As a result, actual outcomes and results may differ materially from those expressed in forward-looking statements. We undertake no obligation to update or revise forward-looking statements, whether as a result of new information, the occurrence of certain events or otherwise, unless otherwise required by applicable securities law. 2

Overview of Norfolk Southern Norfolk Southern’s network interfaces with: Strong Network Supports Future Growth  74% of U.S. population  66% of U.S. manufacturing ~20,000 22 States 43 Ports Route Miles of Track Served by Network Served by Network  55% of total energy consumption in the U.S.  Estimated 50M+ long-haul (1) truck shipments in our service area  Extensive port access Volume Mix (trailing 12-months 3/31) Coal 14% General Merchandise 34% Intermodal 52% Note: (1) Over 550 miles 3

Norfolk Southern’s Strategic Plan Since Jim Squires was named CEO in June 2015, Norfolk  Cost Plan Southern’s Board has worked closely with management to Service recovery allows Norfolk Southern to capitalize on  develop the strategic plan cost initiatives − Robust review of customer expectations, plant-level Dynamic plan with flexibility to address market headwinds  forecasts and market expectations and opportunities − Extensive evaluation by highly qualified and independent Board of Directors Revenue Plan − New management team in place to drive execution with Optimize pricing  Board ensuring accountability Growth of service-sensitive traffic  Norfolk Southern is already successfully implementing new  Conservative pricing and volume forecasts plan to increase profitability and deliver enhanced value to  shareholders On track to achieve more than $650 million of cost savings and an operating ratio of less than 65 by 2020  Superior service levels restored  Reduced 2015 and 2016 capital spending  Consolidated headquarters and reduced G&A  Operating region and division consolidation  Triple Crown restructuring  Line / terminal rationalizations  Delaware & Hudson line acquisition extended the network Strategic plan will deliver significant long-term shareholder value by balancing cost savings, growth and capital return with investment 4

Driving Increased Shareholder Value Key Financial Targets Key Focus Areas 2016E 2020E Optimize revenue – both pricing Disciplined pricing increases above rail inflation and volume Improve productivity to deliver Operating Ratio < 70 Operating Ratio < 65 efficient and superior service Increase asset utilization Double-digit compound annual EPS growth Focus capital investment to ~$2.0bn of CapEx CapEx ~17% of revenue support long-term value creation Dividend payout target of ~33% over the longer term and Reward shareholders with continuation of dividend growth and significant share significant return of capital repurchases Intensely focused on executing initiatives to drive long-term shareholder value 5

Norfolk Southern Actions and Strategic Plan Already Showing Results First Quarter 2016 Highlights  Record first quarter operating ratio  Double digit earnings per share growth 70.1% operating ratio EPS increased 29% to $1.29   630-basis point, or 8%, improvement   Service improvements provided a solid  Norfolk Southern is on track to foundation achieve its 2016 objectives Composite service performance increased Productivity savings ~ $200 million   23% Operating ratio below 70%  Train speed improved 15%  Terminal dwell reduced by 14%  Norfolk Southern continues to demonstrate its ability to deliver shareholder value 6

Capital Deployment Strategy Balances Investment with Shareholder Returns Cash from Operations Reinvest in Existing Invest for Growth Pay Dividends Repurchase Shares Asset Base Use of Cash Flow Balanced Cash Flow ($ in Millions) (2006 through 2015) 6,000 Reinvested and PTC (1) Growth Dividends Shares Reinvested and PTC (1) Growth Shares Dividends $17.7 Billion 4,000 $14.9 Billion 2,000 0 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Commitment to continue pursuing a disciplined capital allocation strategy while investing appropriately in the network Note: (1) Positive Train Control 7

Norfolk Southern’s New Leadership Team Jim Squires Marta Stewart Mike Wheeler Alan Shaw Cindy Earhart Chairman, Executive Vice Executive Vice Executive Vice Executive Vice President & CEO President & CFO President & COO President & CMO President & CIO Appointed CEO Appointed CFO Appointed COO Appointed CMO Appointed CIO in June 2015 in Sep. 2013 in Feb. 2016 in May 2015 in Sep. 2015  23 years of experience  32 years of experience at  30 years of experience  22 years of experience  30 years of experience at Norfolk Southern Norfolk Southern at Norfolk Southern at Norfolk Southern at Norfolk Southern  Previously served as  Previously served as  Previously served as  Previously served as Vice  Previously served as Chief Financial Officer, Controller and Principal Vice President President Intermodal Vice President Human Executive Vice President Accounting Officer and Vice Engineering and Vice Operations, Vice President Resources, Vice President IT Administration and Senior President Treasurer President Transportation Chemicals and Vice and Executive Vice President Vice President Law President Coal Marketing Administration Actions Taken to Establish Foundation for Success Ongoing initiatives to Drive Long-Term Value Creation • Triple Crown restructuring complete • Focusing on strong service levels • Roanoke closure complete • Managing coal-related headcount • Service levels restored to record levels • Streamlining switching yards and terminals • Reduced capital spending by $100M+ in 2015 • Reducing secondary main line network • Completed Delaware & Hudson line acquisition • Optimizing investment in locomotives • Began line rationalizations, division consolidation • Improving fuel efficiency • Downsized more than 20 terminals 8