distances inspection

Y. In 2004, cash from operations was $1.
NSC ended 2004 with relatively good liquidity.40 per share.44 per share annually.

A rail mounted vehicle operated by hand, often used for inspection, or travelling short distances.

handcar mounted

88 billion at year -end 2003. economy, NSC's annual rail
revenues have grown significantly over the past several years .17 billion. Strong demand coupled
with relatively modest capacity growth should result in continued
price increases for rail transportation.

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"

About the Metropolitan Transportation Authority

The Metropolitan Transportation Authority (MTA), is the premier
provider of metropolitan transportation facilities and services in the
United States, providing rapid transit and commuter services for the
five boroughs of New York City and the surrounding metropolitan area.
MTA subways, buses, and railroads provide 2.

travelling mounted

The Rating Outlook for NSC is Stable.
Along with the improvement profitability , NSC's cash position has
been relatively strong.13 billion for investing activities, largely for
capital spending, while financing activities used $233 million in
cash, primarily related to debt repayments. 31, 2004, NSC's total balance-sheet debt stood at
approximately $7.

cummins handcar

Business Editors

ARMONK, N. In January 2005, NSC's board again raised
the dividend by an additional 10% to $0. Trucking capacity continues to
be relatively tight, which will likely push some shipments over to the
rails.

rattling mounted

IBM to Manage Data Center for New York City's Metropolitan Transportation Authority

NSC used $1. From 2002-2004, full-year
capital spending grew from $689 million-$1. NSC has
estimated that its 2005 capital spending will be down somewhat from
2004, at $938 million.

inspection derby

IBM will also manage the systems running other key back-end
applications, including the massive database that keeps track of the
parts for subways, buses and other equipment; and the applications
that oversee crew schedules, procurement, contracts, and many other
tasks.
While the improving domestic economy has led to increasing railroad
revenues and strong profitability over the past couple of years, NSC 's
leverage, though improving, remains relatively high. As NSC's revenue has grown, profitability has
remained strong, with operating margins rising from 16% in 2001 to 23%
in 2004. The ability to maintain
its operational efficiency as demand increased has set NSC apart from
some other railroads , notably Union Pacific Corp.

cummins derby

Of the total debt, $662 million matures in 2005, and $316 million
matures in 2006.
Of the roadway capital spending, 65% will cover track and bridge
program work. In the second quarter of 2004, NSC's board of
directors increased the company's dividend by 25% to an annual
dividend of $0.

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6 million people in the 5,000-square-mile area fanning out from
New York City through Long Island, southeastern New York State, and
Connecticut.

folsom operated

From a local data center outside Manhattan, IBM will manage the
computer processing operations that help run North America's largest
transportation network, including New York City Transit Authority, the
largest of the agencies; MTA Bridges and Tunnels; Long Island Rail
Road; Metro North Railroad, and Long Island Bus.
Looking out toward the remainder of 2005, Fitch expects demand for
rail transportation to remain strong.

races rails

Leading-edge Technology

The MTA Agencies' key applications will be located in one of the
world's most sophisticated IBM data centers - a "lights-out,"
remotely-managed operation equipped with the latest self-healing
computer technology and security measures. This vast
transportation network - North America's largest - serves a population
of 14.

Fitch Rates Norfolk Southern's $300MM Debt Issue 'BBB'

railroads operated

"Nobody moves people like the MTA," said Marianne Cooper, vice
president of public sector, IBM Americas and IBM's senior location
executive for New York City.

railroads handcar

com/services

00% senior
unsecured notes issued by Norfolk Southern Corporation (NYSE:NSC).
As a result of the strengthening U.0 billion bank facility
with an expiration of 2009. Fitch
estimates that full-year dividend payments could rise past $170
million in 2005.

rails travelling

MTA's
Bridges and Tunnels carry nearly 300 million vehicles annually - more
than any bridge and tunnel authority in the nation . Leveraging
IBM's unequalled scope and scale, IBM Global Services delivers
integrated, flexible and resilient processes -- across companies and
through business partners -- that enable clients to save money and
transform their businesses to be more competitive.31 billion
from $6.
NSC 's capital spending has increased over the past several years
as the company has used its operating cash flow to invest in
improvements to its railroad network.

kalamazoo held

However, the
company's management has shown a willingness to use its increasingly
robust cash flow from operations to reduce its debt load, which fell
to $7. Overall, NSC's cash
balance increased by $295 million in 2004. This debt consisted of unsecured notes,
secured equipment obligations, capital leases, and other obligations . In addition to its balance-sheet
debt, NSC also has significant off-balance-sheet obligations,
primarily operating leases on locomotives, rail cars, track lines, and
real estate.

often rails

Business Editors

CHICAGO----Fitch Ratings has
assigned a rating of 'BBB' to the $300 million of 6. The
100 -year notes mature in 2105.S. From
2001-2004, NSC's full-year rail revenue increased 19% to $7.66
billion.

held inspection

"IBM's infrastructure will help enable
the MTA Agencies to provide the highest levels of service for millions
of commuters and travelers in the New York region.
NSC's ratings reflect the company's strong operating performance
and cash flow potential, offset against a relatively high debt load.
Notwithstanding the current debt issuance, Fitch expects to see
further opportunities for debt reduction over the near term as high
demand for transportation services keeps free cash flow strong. (NYSE:CSX), that experienced significant deteriorations in their
operating efficiency in 2003 and 2004 under the strain of increased
freight demand. At year-end, the
company had $669 million in cash, cash equivalents, and short-term
investments on-hand, as well as an undrawn $1.

rail railroads

A disaster recovery site will be established at an IBM facility
outside New York City.ibm. However , NSC does not have a share-repurchase program
in place, and Fitch does not believe the company will undertake such a
program in the near term. Fitch believes NSC is well
positioned to benefit from the healthy demand environment and expects
to see the company's cash flows remain relatively strong .

boulder distances

Free cash flow (defined as
operating cash flow less capital spending and dividends) was $478
million for the year. The projected capital spending includes $671
million for roadway projects and $225 million of equipment spending. Included in the equipment spending figure is the
purchase of 52 locomotives , as well as various rail equipment upgrades
and investments in information technology systems.

inspection often

As of Dec.

kalamazoo handcar

IBM systems will manage the data center that handles MTA's fare
collection system - one of the largest in the world.

About IBM Global Services

IBM Global Services is the world's largest information technology
services and consulting provider. For more
information , visit www. The increase in profitability has been the result of NSC's
ability to increase prices in the face of heavy demand while
continuing to operate its network efficiently. (NYSE:UNP) and CSX
Corp.53 billion.04 billion.

railroads rails

----

The Nation's Largest Transportation Network,
Responsible for Subways, Trains, Buses, Bridges
and Tunnels, Expects to Lower Costs over Five Years


IBM will supply computing power to New York City's Metropolitan
Transit Authority (MTA) as part of a $65 million information
technology services contract that is expected to lower costs for the
MTA Agencies over the next five years, IBM announced today. To accommodate the variable
need for computing power that results from unpredictable changes in
demand , the applications will run on IBM computing systems that can
add or decrease processing power as needed.4 billion rides per year
for New Yorkers, moving about one in every three users of mass transit
in the United States and two-thirds of the nation's rail riders. Some 180,000 professionals in more
than 160 countries help clients integrate information technology with
business value -- from the business transformation and industry
expertise of IBM Business Consulting Services to hosting,
infrastructure , technology design and training services. Intermodal volumes are also expected to remain strong, with
robust imports driving growth in this sector.

races derby

53 billion at year-end 2004 from $7. NSC's maturity profile for the period from 2005-2009
remains relatively smooth, with maturities in a range between $300
million and $500 million each year.

often inspection

In addition to its bank facility, NSC has
a revolving receivable sales program in place that provides the
company with an additional source of short-term liquidity, when
needed.
In addition to increasing its level of capital spending, NSC has
used its increased operating cash flow for successively higher
dividend payouts, growing from a total of $93 million in 2001 to $142
million in 2004.

mounted handcar

---

- - kjjkjk

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