Investor Presentation 2018 Engagement 1 Forward-Looking Statements - PowerPoint PPT Presentation

Investor Presentation 2018 Engagement 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, 2017, filed with the Securities and Exchange Commission (the “SEC”), 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

Extensive Market Research Supports Growth Growth driven by markets, service solutions, and long-standing customer relationships and development 40+ Ports 22 States Served ~19,500 Route Miles 250+ Short Lines by Network of Track Norfolk Southern’s network, alignment with shipping partners and market approach generates long-term growth:  Serves more than 50% of the US population, manufacturing activity, and energy consumption  Superior eastern Intermodal network  Alignment with steamship lines adding capacity in the East  Largest metals franchise  Largest network of automotive plants  Industry-leading short line access  First-in-class industrial development Generates diversified customer and market base 3

Norfolk Southern’s Strategic Plan Productivity Savings Plan Norfolk Southern’s Board worked closely with management to   High-quality service allows Norfolk Southern to capitalize on develop the strategic plan launched in December 2015, cost initiatives and leverage capacity for growth following Jim Squires election as CEO in June 2015. Dynamic plan with flexibility to address market headwinds  and growth opportunities − Norfolk Southern is successfully implementing its 5-year strategic plan to increase profitability and deliver enhanced value to shareholders Revenue Growth Plan − Extensive ongoing evaluation of strategic plan by highly Optimize pricing  qualified and independent Board of Directors Double digit compound annual growth rate in earnings per  − Norfolk Southern is in the middle of long-range planning to share by 2020 develop a successor strategic plan  Growth of service-sensitive traffic Conservative long-term pricing and volume forecasts  Executing plan to achieve more than $650 million of cost savings and an operating ratio of less than 65 by 2020, while delivering significant value to shareholders  Focused on improving service and network velocity  Rationalizing and revitalizing locomotives; temporarily  Increasing train length and improving crew productivity leasing locomotives to improve service  Temporary transfers and rapid deployment “go teams” to improve  Executed accelerated share repurchase program to congestion in southern regions repurchase $1.2 billion of NS stock in 2018 in addition to  Reducing headcount and consolidating dispatching operations ongoing share repurchase program  Increased dividends by 29% in 2018 Strategic plan is delivering significant long-term shareholder value by balancing growth, disciplined cost savings, capital return and increased shareholder returns 4

Driving Increased Shareholder Value Key Focus Areas Key Financial Targets Progress Through 2017 ( as conveyed December 4, 2015) Optimize revenue – both Disciplined pricing increases Continued pricing gains pricing and volume above rail inflation over rail inflation Improve productivity to 8 consecutive quarters of deliver efficient and Operating Ratio < 65 year-over-year Operating superior service Ratio improvement Double-digit compound Double-digit EPS growth in 2016 Increase asset utilization annual EPS growth and 2017 CapEx ~19% of revenue Focus capital investment through 2018 Total CapEx since 2015 to support long-term CapEx ~17% of revenue ~18% of revenues value creation thereafter Dividend payout target of ~33% Achieved dividend payout of over the longer term and Reward shareholders with >33% in 2016 & 2017; continuation of dividend significant return of capital Over $1.8 billion in share growth and significant repurchases for 2016-2017 share repurchases Intensely focused on executing initiatives to drive long-term shareholder value 5

Delivering on Our Commitments Performance Highlights  Record operating ratio and strong  Productivity achievements earnings per share growth 2017* 2017 67.4% operating ratio  Improved employee productivity, handling 5%  EPS improved 18% over 2016  more volume with 3% lower average headcount 12% increase in income from railway  Record locomotive productivity  operations compared to 2016 Record fuel efficiency   $150 million in productivity savings Record average train length  First Six Months 2018 First Six Months 2018  Continued focus on employee productivity, 66.9% operating ratio  handling 4% more volume with 3% lower average EPS improved 39% over first half 2017  headcount 14% increase in income from railway  Fuel consumption up 3% for 4% volume increase  operations compared to first half 2017 Record average train length  Norfolk Southern continues to deliver shareholder value through growth balanced with cost discipline and increased returns to shareholders. *Please see reconciliation to GAAP posted on our website on the Invest in NS page under Events for Fourth-Quarter 2017 Earnings. 6

Capital Deployment Strategy Balances Investment with Shareholder Returns Capital Allocation Capital Expenditures Dividends Share Repurchases Increased share repurchases to $1 billion in 2017. In addition to on-going repurchases in 2018, executed $1.2 billion accelerated share repurchase program. Investment and Shareholder Returns Capital Allocation by Year (2008 through 2017) ($ in Millions) 6,000 Capital Expenditures Capital Expenditures Dividends Shares Shares Dividends $18.8 Billion 4,000 $15.3 Billion 2,000 0 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Commitment to continue pursuing a disciplined capital allocation strategy while investing appropriately in the network 7

Norfolk Southern’s Highly Independent and Experienced Board of Directors James A. Squires Marcela E. Donadio President & CEO Highly Engaged & Effective Board of Directors Former Partner and Americas Oil Chairman of the Board & Gas Sector Leader Ernst & Young LLP Our Directors’ Skills & Expertise CEO/Senior Office 12 Steven F. Leer Michael D. Lockhart Environmental & Safety 5 Lead Independent Director 8 Former Chairman, President and Finance & Accounting Former CEO and Chairman, CEO, Armstrong World Governance/Board 12 Arch Coal Industries Gov't & Shareholder Relations 7 HR & Compensation 6 Information Technology 5 Amy E. Miles Thomas D. Bell, Jr. 8 Marketing Former Chair and CEO, Regal Strategic Planning 12 Chairman, Mesa Capital Partners Entertainment Group Inc. 6 Transportation Board Independence and Tenure Wesley G. Bush Martin H. Nesbitt Average Tenure: <7 Years Chairman and CEO, Co-Founder, The Vistria Group Northrop Grumman Corp 1 5 4 2 Daniel A. Carp Jennifer F. Scanlon <5 years 5-10 > 10 Former Chairman and CEO, President and CEO, USG years years Eastman Kodak Company Corporation Independent Chairman / CEO Norfolk Southern Corporate Governance Best Practices Mitchell E. Daniels, Jr. John R. Thompson   Annually elected directors Extensive shareholder President, Purdue University Former Senior Vice President  Majority voting standard engagement and General Manager, Best Buy.com   Shareholders’ right to call a special Lead independent director  meeting Enterprise risk management  Proxy access program 8