Norfolk Southern Commences Exchange Offers

NORFOLK, Va., April 15 /PRNewswire-FirstCall/ -- Norfolk Southern Corporation ("Norfolk Southern") announced that it plans to commence offers to exchange new unsecured Norfolk Southern debt securities and cash for a portion of its 7.80% notes due May 15, 2027, its 7.25% notes due February 15, 2031, and for any or all of its 9.00% notes due March 1, 2021. The purpose of the exchange offers is to improve Norfolk Southern's debt maturity profile.

The exchange offers will expire at 12:00 midnight, New York City time, on May 12, 2005, unless extended.

Under the terms of one exchange offer, Norfolk Southern will exchange up to $350 million aggregate principal amount of its outstanding 7.80% notes for an equal aggregate principal amount of new notes maturing on May 17, 2029, and cash. The new notes due 2029 will bear interest at a rate per annum equal to the sum of (a) the bid-side yield on the 5.375% U.S. Treasury Note due February 15, 2031, as of 2 p.m., New York City time, on the second business day prior to the expiration date, and (b) 105 basis points.

In concurrent exchange offers, Norfolk Southern will exchange up to $200 million aggregate principal amount of its outstanding 7.25% notes and any or all of its outstanding 9.00% notes for an equal aggregate principal amount of new notes maturing on May 17, 2025, and cash. The new notes due 2025 will bear interest at a rate per annum equal to (a) the sum of the bid-side yield on the 5.375% U.S. Treasury Note due February 15, 2031, as of 2 p.m., New York City time, on the second business day prior to the expiration date, and (b) 100 basis points.

The total exchange price for the old notes is equal to the price per $1,000 principal amount of the old notes intended to result in a yield to maturity on the settlement date equal to the sum of (a) the bid-side yield on the reference U.S. Treasury Note, calculated on the second business day prior to the expiration date and (b) 85 basis points for the 7.80% notes, 87.5 basis points for the 7.25% notes or 75 basis points for the 9.00% notes. The total exchange price includes an early participation payment of $20 in cash per $1,000 principal amount of the old notes tendered, which will be paid only to holders who validly tender their old notes on or prior to 5 p.m., New York City time, on April 28, 2005. Holders validly tendering their old notes after 5 p.m., New York City time, on such date but on or before 12:00 midnight, New York City time, on the expiration date will receive the total exchange price less the early participation payment. As described in more detail in the prospectuses dated April 15, 2005, only holders whose tenders are accepted by Norfolk Southern will receive the total exchange price, or the total exchange price less the early participation payment, in exchange for their old notes.

Deutsche Bank Securities is the coordinator for the exchange offers. Deutsche Bank Securities and Merrill Lynch & Co. are the joint-lead dealer managers and Citigroup and Barclays Capital are the co-dealer managers for the exchange offers.

Norfolk Southern, through its Norfolk Southern Railway Company subsidiary, operates approximately 21,300 route miles in 22 states, the District of Columbia and Ontario, Canada, serving every major container port in the eastern United States and providing connections to western rail carriers. Norfolk Southern operates an extensive intermodal network and is the nation's largest rail carrier of automotive parts and finished vehicles.

This press release contains forward-looking statements which speak only as of the date they are made, and Norfolk Southern or any of its respective subsidiaries does not undertake any obligation to update or revise any forward-looking statement. If Norfolk Southern updates any forward-looking statement, no inference should be drawn that Norfolk Southern will make additional updates with respect to that statement or any other forward-looking statements. Forward-looking statements are subject to a number of risks and uncertainties, and other factors which are, in some cases, beyond the control of Norfolk Southern and could materially affect actual results, performance or achievements. Factors that may cause actual results to differ materially from those contemplated by these forward-looking statements include, among others: (i) success in implementing its financial and operational initiatives; (ii) changes in domestic or international economic or business conditions, including those affecting the rail industry (such as the impact of industry competition, conditions, performance and consolidation); (iii) legislative or regulatory changes; and (iv) the outcome of claims and litigation involving or affecting Norfolk Southern or any of its respective subsidiaries. Other important assumptions and factors that could cause actual results to differ materially from those in the forward-looking statements made by Norfolk Southern are specified elsewhere in Norfolk Southern's documents filed with the SEC. Documents filed with the SEC by Norfolk Southern are accessible on the SEC's website at http://www.sec.gov/ and Norfolk Southern's website at http://www.nscorp.com/.

A registration statement relating to the exchange offers has been filed with the SEC and was declared effective on April 14, 2005. This press release shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of these securities in any state in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state.

ADDITIONAL INFORMATION AND WHERE TO FIND IT

A prospectus and related exchange offer materials will be mailed to holders of the old notes in connection with the proposed exchange offers. These documents will contain important information about the proposed exchange offers. HOLDERS OF THE OLD NOTES ARE URGED TO READ THESE DOCUMENTS CAREFULLY WHEN THEY BECOME AVAILABLE. Holders of the old notes will be able to obtain free copies of documents related to the exchange offers through the website maintained by the SEC at http://www.sec.gov/. In addition, free copies of any of these documents may be obtained from Norfolk Southern by directing a request to: Norfolk Southern Corp., Three Commercial Place, Norfolk, VA 23510, Attention: Corporate Secretary, (757) 629-2680. In addition to the registration statement and prospectuses, Norfolk Southern files annual, quarterly and special reports, proxy statements and other information with the SEC. These SEC filings are available to the public through the website maintained by the SEC at http://www.sec.gov/. Written prospectuses meeting the requirements of Section 10 of the Securities Act of 1933, in connection with the exchange offers, may also be obtained from: Global Bondholders Services Corp., 65 Broadway-Suite 704, New York, New York 10006, Attention: Corporate Affairs, phone number: (212) 430-3774 or (866) 470-4500. For questions regarding the exchange offers, please contact Deutsche Bank Securities, Liability Management Group, (866) 627-0391 (toll free) or (212) 250-2955.