Norfolk Southern (NSC)

Asset Management

Eleven investment firms manage NS’ defined benefit pension plan’s assets under investment guidelines approved by the Board of Directors.   Investments are restricted to domestic fixed income securities, international fixed income securities, domestic and international equity investments, and unleveraged exchange-traded options and financial futures.   Limitations restrict investment concentration and use of certain derivative instruments.   The target asset allocation for equity is 75% of the pension plan’s assets.   Fixed income investments must have an average rating of “AA” or better and all fixed income securities must be rated “A” or better except bond index funds.   Equity investments must be in liquid securities listed on national exchanges.   No investment is permitted in the securities of Norfolk Southern Corporation or its subsidiaries (except through commingled pension trust funds).   Investment managers’ returns are expected to meet or exceed selected market indices by prescribed margins.

NS’ pension plan weighted-average asset allocations at December 31, 2008 and 2007, by asset category, were as follows:

The postretirement benefit plan assets consist primarily of trust-owned variable life insurance policies with an asset allocation at December 31, 2008, of 53% in equity securities and 47% in debt securities compared with 65% in equity securities and 35% in debt securities at December 31, 2007.   The target asset allocation for equity is between 50% and 75% of the plan’s assets.

The plans’ assumed future returns are based principally on the asset allocation and on the historic returns for the plans’ asset classes determined from both actual plan returns and, over longer time periods, market returns for those asset classes.   In 2008, 2007, and 2006 NS assumed a return on pension plan assets of 9%.   For 2009, NS assumes an 8.75% return on pension plan assets.   A one percentage point change to the rate of return assumption would result in an $18 million change to the net pension (benefit) cost and, as a result, an equal change in “Compensation and benefits” expense.

Asset Management

Eleven
investment firms manage NS’ defined benefit pension plan’s assets
under investment guidelines approved by the Board of Directors.
 
Investments are restricted to domestic
fixed income securities, international fixed income securities, domestic and
international equity investments, and unleveraged exchange-traded options and
financial futures.
 
Limitations
restrict investment concentration and use of certain derivative
instruments.
 
The target asset
allocation for equity is 75% of the pension plan’s assets.
 
Fixed income investments must have an
average rating of “AA” or better and all fixed income securities
must be rated “A” or better except bond index funds.
 
Equity investments must be in liquid
securities listed on national exchanges.
 

No investment is permitted in the securities of Norfolk Southern
Corporation or its subsidiaries (except through commingled pension trust
funds).
 
Investment managers’
returns are expected to meet or exceed selected market indices by prescribed
margins.

NS’
pension plan weighted-average asset allocations at December 31, 2008 and 2007,
by asset category, were as follows:

The
postretirement benefit plan assets consist primarily of trust-owned variable
life insurance policies with an asset allocation at December 31, 2008, of 53%
in equity securities and 47% in debt securities compared with 65% in equity
securities and 35% in debt securities at December 31, 2007.
 
The target asset allocation for equity
is between 50% and 75% of the plan’s assets.

The
plans’ assumed future returns are based principally on the asset
allocation and on the historic returns for the plans’ asset classes
determined from both actual plan returns and, over longer time periods, market
returns for those asset classes.
 
In
2008, 2007, and 2006 NS
assumed a return on pension plan assets of 9%.
 
For 2009, NS assumes an 8.75% return on pension
plan assets.
 
A one percentage point
change to the rate of return assumption would result in an $18 million
change to the net pension (benefit) cost and, as a result, an equal change in “Compensation
and benefits” expense.

Asset Management

Eleven
investment firms manage NS’ defined benefit pension plan’s assets
under investment guidelines approved by the Board of Directors.
 
Investments are restricted to domestic
fixed income securities, international fixed income securities, domestic and
international equity investments, and unleveraged exchange-traded options and
financial futures.
 
Limitations
restrict investment concentration and use of certain derivative
instruments.
 
The target asset
allocation for equity is 75% of the pension plan’s assets.
 
Fixed income investments must have an
average rating of “AA” or better and all fixed income securities
must be rated “A” or better except bond index funds.
 
Equity investments must be in liquid
securities listed on national exchanges.
 

No investment is permitted in the securities of Norfolk Southern
Corporation or its subsidiaries (except through commingled pension trust
funds).
 
Investment managers’
returns are expected to meet or exceed selected market indices by prescribed
margins.

NS’
pension plan weighted-average asset allocations at December 31, 2008 and 2007,
by asset category, were as follows:

The
postretirement benefit plan assets consist primarily of trust-owned variable
life insurance policies with an asset allocation at December 31, 2008, of 53%
in equity securities and 47% in debt securities compared with 65% in equity
securities and 35% in debt securities at December 31, 2007.
 
The target asset allocation for equity
is between 50% and 75% of the plan’s assets.

The
plans’ assumed future returns are based principally on the asset
allocation and on the historic returns for the plans’ asset classes
determined from both actual plan returns and, over longer time periods, market
returns for those asset classes.
 
In
2008, 2007, and 2006 NS
assumed a return on pension plan assets of 9%.
 
For 2009, NS assumes an 8.75% return on pension
plan assets.
 
A one percentage point
change to the rate of return assumption would result in an $18 million
change to the net pension (benefit) cost and, as a result, an equal change in “Compensation
and benefits” expense.

Asset Management

Eleven
investment firms manage NS’ defined benefit pension plan’s assets
under investment guidelines approved by the Board of Directors.
 
Investments are restricted to domestic
fixed income securities, international fixed income securities, domestic and
international equity investments, and unleveraged exchange-traded options and
financial futures.
 
Limitations
restrict investment concentration and use of certain derivative
instruments.
 
The target asset
allocation for equity is 75% of the pension plan’s assets.
 
Fixed income investments must have an
average rating of “AA” or better and all fixed income securities
must be rated “A” or better except bond index funds.
 
Equity investments must be in liquid
securities listed on national exchanges.
 

No investment is permitted in the securities of Norfolk Southern
Corporation or its subsidiaries (except through commingled pension trust
funds).
 
Investment managers’
returns are expected to meet or exceed selected market indices by prescribed
margins.

NS’
pension plan weighted-average asset allocations at December 31, 2008 and 2007,
by asset category, were as follows:

The
postretirement benefit plan assets consist primarily of trust-owned variable
life insurance policies with an asset allocation at December 31, 2008, of 53%
in equity securities and 47% in debt securities compared with 65% in equity
securities and 35% in debt securities at December 31, 2007.
 
The target asset allocation for equity
is between 50% and 75% of the plan’s assets.

The
plans’ assumed future returns are based principally on the asset
allocation and on the historic returns for the plans’ asset classes
determined from both actual plan returns and, over longer time periods, market
returns for those asset classes.
 
In
2008, 2007, and 2006 NS
assumed a return on pension plan assets of 9%.
 
For 2009, NS assumes an 8.75% return on pension
plan assets.
 
A one percentage point
change to the rate of return assumption would result in an $18 million
change to the net pension (benefit) cost and, as a result, an equal change in “Compensation
and benefits” expense.

Asset Management

Eleven
investment firms manage NS’ defined benefit pension plan’s assets
under investment guidelines approved by the Board of Directors.
 
Investments are restricted to domestic
fixed income securities, international fixed income securities, domestic and
international equity investments, and unleveraged exchange-traded options and
financial futures.
 
Limitations
restrict investment concentration and use of certain derivative
instruments.
 
The target asset
allocation for equity is 75% of the pension plan’s assets.
 
Fixed income investments must have an
average rating of “AA” or better and all fixed income securities
must be rated “A” or better except bond index funds.
 
Equity investments must be in liquid
securities listed on national exchanges.
 

No investment is permitted in the securities of Norfolk Southern
Corporation or its subsidiaries (except through commingled pension trust
funds).
 
Investment managers’
returns are expected to meet or exceed selected market indices by prescribed
margins.

NS’
pension plan weighted-average asset allocations at December 31, 2008 and 2007,
by asset category, were as follows:

The
postretirement benefit plan assets consist primarily of trust-owned variable
life insurance policies with an asset allocation at December 31, 2008, of 53%
in equity securities and 47% in debt securities compared with 65% in equity
securities and 35% in debt securities at December 31, 2007.
 
The target asset allocation for equity
is between 50% and 75% of the plan’s assets.

The
plans’ assumed future returns are based principally on the asset
allocation and on the historic returns for the plans’ asset classes
determined from both actual plan returns and, over longer time periods, market
returns for those asset classes.
 
In
2008, 2007, and 2006 NS
assumed a return on pension plan assets of 9%.
 
For 2009, NS assumes an 8.75% return on pension
plan assets.
 
A one percentage point
change to the rate of return assumption would result in an $18 million
change to the net pension (benefit) cost and, as a result, an equal change in “Compensation
and benefits” expense.

Asset Management

Eleven investment firms manage NS’ defined benefit pension plan’s assets under investment guidelines approved by the Board of Directors.   Investments are restricted to domestic fixed income securities, international fixed income securities, domestic and international equity investments and unleveraged exchange-traded options and financial futures.   Limitations restrict investment concentration and use of certain derivative instruments.   The target asset allocation for equity is 75% of the pension plan’s assets.   Fixed income investments must have an average rating of “AA” or better and all fixed income securities must be rated “A” or better except bond index funds.   Equity investments must be in liquid securities listed on national exchanges.   No investment is permitted in the securities of Norfolk Southern Corporation or its subsidiaries (except through commingled pension trust funds).   Investment managers’ returns are expected to meet or exceed selected market indices by prescribed margins.

NS’ pension plan weighted-average asset allocations at Dec. 31, 2007 and 2006, by asset category, were as follows:

The postretirement benefit plan assets consist primarily of trust-owned variable life insurance policies with an asset allocation at Dec. 31, 2007, of 65% in equity securities and 35% in debt securities compared with 67% in equity securities and 33% in debt securities at Dec. 31, 2006.   The target asset allocation for equity is between 50% and 75% of the plan’s assets.

The plans’ assumed future returns are based principally on the asset allocation and on the historic returns for the plans’ asset classes determined from both actual plan returns and, over longer time periods, market returns for those asset classes.

Asset Management

Eleven
investment firms manage NS’ defined benefit pension plan’s assets
under investment guidelines approved by the Board of Directors.
 
Investments are restricted to domestic
fixed income securities, international fixed income securities, domestic and
international equity investments and unleveraged exchange-traded options and
financial futures.
 
Limitations
restrict investment concentration and use of certain derivative
instruments.
 
The target asset
allocation for equity is 75% of the pension plan’s assets.
 
Fixed income investments must have an
average rating of “AA” or better and all fixed income securities
must be rated “A” or better except bond index funds.
 
Equity investments must be in liquid
securities listed on national exchanges.
 

No investment is permitted in the securities of Norfolk Southern
Corporation or its subsidiaries (except through commingled pension trust
funds).
 
Investment managers’
returns
are expected to meet or exceed selected
market indices by prescribed margins.

NS’
pension plan weighted-average asset allocations at Dec. 31, 2007 and 2006, by
asset category, were as follows:

The
postretirement benefit plan assets consist primarily of trust-owned variable
life insurance policies with an asset allocation at Dec. 31, 2007, of 65% in
equity securities and 35% in debt securities compared with 67% in equity
securities and 33% in debt securities at Dec. 31, 2006.
 
The target asset allocation for equity
is between 50% and 75% of the plan’s assets.

The plans’ assumed
future
returns
are based principally
on the asset allocation and on the historic
returns

for the plans’ asset classes determined from both actual plan
returns
and, over longer time periods, market
returns
for those asset classes.

Asset Management

Eleven investment firms manage NS’ defined benefit pension plan’s assets under investment guidelines approved by the Board of Directors.   Investments are restricted to domestic fixed income securities, international fixed income securities, domestic and international equity investments and unleveraged exchange-traded options and financial futures.   Limitations restrict investment concentration and use of certain derivative instruments.   The target asset allocation for equity is 75% of the pension plan’s assets.   Fixed income investments must have an average rating of “AA” or better and all fixed income securities must be rated “A” or better except bond index funds.   Equity investments must be in liquid securities listed on national exchanges.   No investment is permitted in the securities of Norfolk Southern Corporation or its subsidiaries (except through commingled pension trust funds).   Investment managers’ returns are expected to meet or exceed selected market indices by prescribed margins.

NS’ pension plan weighted-average asset allocations at Dec. 31, 2006 and 2005, by asset category, were as follows:

The postretirement benefit plan assets consist primarily of trust-owned variable life insurance policies with an asset allocation at Dec. 31, 2006, of 67% in equity securities and 33% in debt securities compared with 66% in equity securities and 34% in debt securities at Dec. 31, 2005.   The target asset allocation for equity is between 50% and 75% of the plan’s assets.

The plans’ assumed future returns are based principally on the asset allocation and on the historic returns for the plans’ asset classes determined from both actual plan returns and, over longer time periods, market returns for those asset classes.

Asset Management

Eleven investment firms manage the Company’s defined benefit pension plan’s assets under investment guidelines approved by the Board of Directors.   Investments are restricted to domestic fixed income securities, international fixed income securities, domestic and international equity investments and unleveraged exchange-traded options and financial futures.   Limitations restrict investment concentration and use of certain derivative instruments.   The target asset allocation for equity is 75% of the pension plan’s assets.   Fixed income investments must have an average rating of “AA” or better and all fixed income securities must be rated “A” or better except bond index funds.   Equity investments must be in liquid securities listed on national exchanges.   No investment is permitted in the securities of Norfolk Southern Corporation or its subsidiaries (except through commingled pension trust funds).   Investment managers’ returns are expected to exceed selected market indices by prescribed margins.

NS’ pension plan weighted-average asset allocations at Dec. 31, 2005 and 2004, by asset category, are as follows:

The postretirement benefit plan assets consist primarily of trust-owned variable life insurance policies with an asset allocation at Dec. 31, 2005 , of 66% in equity securities and 34% in debt securities compared with 67% in equity securities and 33% in debt securities at Dec. 31, 2004 .   The target asset allocation for equity is between 50% and 75% of the plan’s assets.

The plans’ assumed future returns are based principally on the asset allocation and on the historic returns for the plans’ asset classes determined from both actual plan returns and, over longer time periods, market returns for those asset classes.

Asset Management

Eleven investment firms manage the Company’s defined benefit pension plan’s assets under investment guidelines approved by the Board of Directors.   Investments are restricted to domestic fixed income securities, international fixed income securities, domestic and international equity investments and unleveraged exchange-traded options and financial futures.   Limitations restrict investment concentration and use of certain derivative instruments.   The target asset allocation for equity is 75% of the pension plan’s assets.   Fixed income investments must have an average rating of “AA” or better and all fixed income securities must be rated “A” or better except bond index funds.   Equity investments must be in liquid securities listed on national exchanges.   No investment is permitted in the securities of Norfolk Southern Corporation or its subsidiaries (except through commingled pension trust funds).   Investment managers’ returns are expected to exceed selected market indices by prescribed margins.

NS’ pension plan weighted-average asset allocations at Dec. 31, 2004 and 2003, by asset category, are as follows:

The postretirement benefit plan assets consist primarily of trust-owned variable life insurance policies with an asset allocation at Dec. 31, 2004 , of 67% in equity securities and 33% in debt securities compared

K60

with 55% in equity securities and 45% in debt securities at Dec. 31, 2003 .   The target asset allocation for equity is between 50% and 75% of the plan’s assets.

The plans’ assumed future returns are based principally on the asset allocation and on the historic returns for the plans’ asset classes determined from both actual plan returns and, over longer time periods, market returns for those asset classes.