UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Washington, D.C. 20549

	FORM 10-Q
(X)	QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
	EXCHANGE ACT OF 1934
	For the quarterly period ended SEPTEMBER 30, 2002
	For the quarterly period ended MARCH 31, 2003
( )	TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
	EXCHANGE ACT OF 1934
	For the transition period from to
	For the transition period from __________ to __________
	---------- ----------
	Commission file numbers 1-743; 1-3744; 1-4793; 1-546-2

NORFOLK SOUTHERN RAILWAY COMPANY

(Exact name of registrant as specified in its charter)

Virginia	53-6002016
(State or other jurisdiction of	(IRS Employer Identification No.)
incorporation or organization)


Three Commercial Place
Norfolk, Virginia	23510-2191
(Address of principal executive offices)	Zip Code

Registrant's telephone number, including area code	(757) 629-2680

No Change
(Former name, former address and former fiscal year,
if changed since last report.)

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13
or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter
period that the registrant was required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days.	(X) Yes	( ) No
Indicate by check mark whether registrant is an accelerated filer (as defined in Rule 12b-2 of The Exchange Act).
	( ) Yes	(X) No
The number of shares outstanding of each of the registrant's classes of Common Stock, as of the last
practicable date:
Class			Outstanding as of ~~September~~March 3031, ~~2002~~2003
Common Stock (par value $1.00)			16,668,997

TABLE OF CONTENTS

				Page
Part I.		Financial information:
		Item 1.	Financial statements:
			Consolidated Statements of Income	3
			Three and Nine Months Ended Sept. 30, 2002 and 2001
			Three Months Ended March 31, 2003 and 2002
			Consolidated Balance Sheets	4
			Sept. 30, 2002 and Dec. 31, 2001
			March 31, 2003 and Dec. 31, 2002
			Consolidated Statements of Cash Flows	5
			Nine Months Ended Sept. 30, 2002 and 2001
			Three Months Ended March 31, 2003 and 2002
			Notes to Consolidated Financial Statements	6
		Item 2.	Management's Discussion and Analysis of	12
			Independent Accountants' Review Report	12
		Item 2.	Management's Discussion and Analysis of	13
			Financial Condition and Results of Operations
		Item 3.	Quantitative and Qualitative Disclosures	1819
			About Market Risks
	Item 4.		Controls and Procedures	1819
Part II.	Other Information:
	Item 6.		~~Exhibit~~Exhibits and Reports on Form 8-K	20
Signatures				21
Certifications of CEO and CFO				22
Exhibit Index				24

PART I. FINANCIAL INFORMATION

Item 1. Financial Statements.

NORFOLK SOUTHERN RAILWAY COMPANY AND SUBSIDIARIES

(A Majority-Owned Subsidiary of Norfolk Southern Corporation [NS])

Consolidated Statements of Income

($ in millions)

(Unaudited)

	Three Months Ended				Nine Months Ended
	Sept. 30,				Sept. 30,
	2002		2001		2002		2001
Railway operating revenues
Coal	$	371	$	366	$	1,080	$	1,154
General merchandise		917		862		2,734		2,655
Intermodal		268		241		746		712
Total Railway Operating Revenues		1,556		1,469		4,560		4,521
Railway operating expenses
Compensation and benefits		390		370		1,150		1,136
Materials, services and rents		465		449		1,372		1,418
Conrail rents and services (Note 3)		112		118		348		355
Depreciation		125		125		373		372
Diesel fuel		81		93		246		316
Casualties and other claims		57		33		129		110
Other		67		75		206		222
Total Railway Operating Expenses		1,297		1,263		3,824		3,929
Income from railway operations		259		206		736		592
Other income (expense) - net		(44)		(49)		(156)		(181)
Interest expense on debt		(6)		(10)		(22)		(28)
Income before income taxes		209		147		558		383
Provision for income taxes		85		52		223		143
Net income	$	124	$	95	$	335	$	240
See accompanying notes to Consolidated Financial Statements.

	Three Months Ended
	March 31,
	2003		2002

*Railway operating revenues*
Coal	$	354	$	359
General merchandise		918		869
Intermodal		247		229

Total Railway Operating Revenues		1,519		1,457

*Railway operating expenses*
Compensation and benefits		400		383
Materials, services and rents		459		453
Conrail rents and services (Note 2)		119		121
Depreciation		123		123
Diesel fuel		104		81
Casualties and other claims		51		35
Other		74		61

Total Railway Operating Expenses		1,330		1,257

Income from railway operations		189		200

Other income (expense) - net		(51)		(52)
Interest expense on debt		(7)		(9)

Income before income taxes and accounting changes		131		139

Provision for income taxes		51		54

Income before accounting changes		80		85

Cumulative effect of changes in accounting principles, net of taxes (Note 1)		104		--

Net income	$	184	$	85

See accompanying notes to consolidated financial statements.

~~<CAPTION>~~ NORFOLK SOUTHERN RAILWAY COMPANY AND SUBSIDIARIES

~~Item~~ (A Majority-Owned 1.Subsidiary ~~Financial~~of ~~Statements.~~Norfolk ~~(continued~~Southern Corporation [NS])

~~NORFOLK~~ Consolidated ~~SOUTHERN~~Balance ~~RAILWAY COMPANY AND SUBSIDIARIES~~Sheets

(A$ ~~Majority-Owned Subsidiary of Norfolk Southern Corporation~~in ~~[NS]~~millions)

~~Consolidated Balance Sheets~~ (Unaudited)

March 31, Dec. 31, 2003 2002 Assets Current assets: Cash and cash equivalents $ 63 $ 130 Accounts receivable, net (Note 2) 119 117 Due from Conrail (Note 2) 3 6 Materials and supplies 98 95 Deferred income taxes 179 174 Other current assets 108 131 Total current assets 570 653 Investments (Note 4) 693 703 Properties less accumulated depreciation 11,157 10,837 Other assets 663 660 Total assets $ 13,083 $ 12,853 Liabilities and Stockholders' Equity Current liabilities: Accounts payable $ 852 $ 860 Income and other taxes 184 187 Due to NS - net (Note 2) 193 384 Due to Conrail (Note 2) 78 86 Other current liabilities 126 122 Current maturities of long-term debt 102 94 Total current liabilities 1,535 1,733 Long-term debt 879 763 Other liabilities 949 971 Due to Conrail (Note 2) 594 513 Minority interests 9 3 Deferred income taxes 4,141 4,057 Total liabilities 8,107 8,040 Stockholders' equity: Serial preferred stock 55 55 Common stock 167 167 Additional paid-in ~~millions~~capital 709 709 Accumulated other comprehensive income (Note 4) 246 266 Retained income 3,799 3,616 Total stockholders' equity 4,976 4,813 Total liabilities and stockholders' equity $ 13,083 $ 12,853 See accompanying notes to consolidated financial statements.

~~(Unaudited)~~ 4 NORFOLK SOUTHERN RAILWAY COMPANY AND SUBSIDIARIES

	Sept. 30,		Dec. 31,
	2002		2001
Assets
Current assets:
Cash and cash equivalents	$	76	$	167
Accounts receivable, net (Note 3)		127		152
Due from Conrail (Note 3)		4		8
Materials and supplies		88		87
Deferred income taxes		154		153
Other current assets		57		98
Total current assets		506		665
Investments (Note 5)		732		631
Properties less accumulated depreciation		10,805		10,672
Other assets		648		573
Total assets	$	12,691	$	12,541
Liabilities and Stockholders' Equity
Current liabilities:
Accounts payable	$	848	$	819
Income and other taxes		185		236
Due to NS - net (Note 3)		300		517
Due to Conrail (Note 3)		84		373
Other current liabilities		101		134
Current maturities of long-term debt		92		88
Total current liabilities		1,610		2,167
Long-term debt		773		780
Other liabilities		994		1,024
Due to Conrail (Note 3)		463		--
Minority interests		3		3
Deferred income taxes		3,973		3,746
Total liabilities		7,816		7,720
Stockholders' equity
Serial preferred stock		55		55
Common stock		167		167
Additional paid-in capital		710		706
Accumulated other comprehensive income (Note 5)		265		215
Retained income		3,678		3,678
Total stockholders' equity		4,875		4,821
Total liabilities and stockholders' equity	$	12,691	$	12,541
See accompanying notes to Consolidated Financial Statements.

(A Majority-Owned Subsidiary of Norfolk Southern Corporation [NS])

4 Consolidated Statements of Cash Flows

~~Item 1. Financial Statements.~~ (~~continued~~$ in millions)

~~NORFOLK SOUTHERN RAILWAY COMPANY AND SUBSIDIARIES~~ (Unaudited)

Three Months Ended March 31, 2003 2002 Cash flows from operating activities Net income $ 184 $ 85 Reconciliation of net income to net cash provided by operating activities: Net cumulative effect of changes in accounting principles (A104) -- ~~Majority~~ Depreciation 124 124 Deferred income taxes 24 29 Gains and losses on properties and investments (2) (10) Changes in assets and liabilities affecting operations: Accounts receivable (2) 26 Materials and supplies (3) (4) Other current assets and due from Conrail 22 27 Income tax liabilities 12 (1) Other short-~~Owned~~term ~~Subsidiary~~liabilities (25) (43) of ~~Norfolk~~ Other - ~~Southern~~net (26) (52) ~~Corporation~~ [ Net cash provided by operating activities 204 181 Cash flows from investing activities Property additions (104) (179) Property sales and other transactions (3) (9) Investments, including short-term (20) (22) Net cash used for investing activities (127) (210) Cash flows from financing activities Dividends (1) (1) Advances to NS] (192) (112) Advances and repayments from NS 1 2 Proceeds from borrowings 87 133 Debt repayments (39) (40) Net cash used for financing activities (144) (18) Net decrease in cash and cash equivalents (67) (47) Cash and cash equivalents At beginning of year 130 167 At end of period $ 63 $ 120 Supplemental disclosures of cash flow information Cash paid during the period for: Interest (net of amounts capitalized) $ 9 $ 13 Income taxes $ 14 $ 27 See accompanying notes to consolidated financial statements.

~~Consolidated~~ 5 NORFOLK SOUTHERN ~~Statements~~RAILWAY ofCOMPANY ~~Cash~~AND ~~Flows~~SUBSIDIARIES (NS RAIL)

($A Majority-Owned inSubsidiary ~~millions~~of Norfolk Southern Corporation [NS])

~~(Unaudited)~~ Notes to Consolidated Financial Statements

	Nine Months Ended
	Sept. 30,
	2002		2001
Cash flows from operating activities
Net income	$	335	$	240
Reconciliation of net income to net cash provided by operating activities:
Depreciation		374		373
Deferred income taxes		142		35
Nonoperating gains and losses on properties and investments		(15)		(9)
Changes in assets and liabilities affecting operations:
Accounts receivable		26		(20)
Materials and supplies		(1)		3
Other current assets and due from Conrail		72		116
Income tax liabilities		46		54
Other short-term liabilities		(31)		(116)
Other - net		(78)		(134)
Net cash provided by operating activities		870		542
Cash flows from investing activities
Property additions		(501)		(562)
Property sales and other transactions		7		28
Investments, including short-term		(54)		(73)
Investment sales and other transactions		--		14
Net cash used for investing activities		(548)		(593)
Cash flows from financing activities
Dividends		(2)		(2)
Advances to NS		(556)		(174)
Advances and repayments from NS		6		10
Proceeds from borrowings		281		425
Debt repayments		(142)		(105)
Net cash provided by (used for) financing activities		(413)		154
Net increase (decrease) in cash and cash equivalents		(91)		103
Cash and cash equivalents
At beginning of year		167		--
At end of period	$	76	$	103
Supplemental disclosures of cash flow information
Cash paid during the period for:
Interest (net of amounts capitalized)	$	38	$	57
Income taxes	$	29	$	61
See accompanying notes to Consolidated Financial Statements.

(Unaudited)

5 In the opinion of management, the accompanying unaudited interim financial statements contain all adjustments (consisting of normal recurring accruals) necessary to present fairly the Company's financial position as of March 31, 2003, its results of operations for the three months ended March 31, 2003 and 2002, and its cash flows for the three months ended March 31, 2003 and 2002.

~~Item~~ Although 1. management believes that the disclosures presented are adequate to make the information not misleading, these Consolidated Financial Statements. should be read in conjunction with: (~~continued~~a) the financial statements and notes included in the Company's latest Annual Report on Form 10-K and (b) any Current Reports on Form 8-K.

~~NORFOLK~~ 1. Changes ~~SOUTHERN~~in ~~RAILWAY~~Accounting ~~COMPANY AND SUBSIDIARIES (NS~~Principles ~~RAIL)~~

NS Rail adopted Financial Accounting Standards Board (AFASB) ~~Majority-Owned~~Statement ~~Subsidiary~~No. 143, "Accounting for Asset Retirement Obligations," (SFAS No. 143) effective Jan. 1, 2003, and recorded a $100 million net adjustment ($165 million before taxes) for the cumulative effect of ~~Norfolk~~this ~~Southern~~change ~~Corporation~~in accounting on years prior to ~~[NS]~~2003. Pursuant to SFAS No. 143, the cost to remove crossties must be recorded as an expense when incurred; previously these removal costs were accrued as a component of depreciation. This change in accounting in the first quarter of 2003 lowered depreciation expense by almost $7 million (because the depreciation rate for crossties no longer reflects cost to remove) and increased compensation and benefits and other expenses by almost $5 million (for the costs to remove retired assets).

~~Notes~~ NS Rail also adopted FASB Interpretation No. 46, "Consolidation of Variable Interest Entities," (FIN No. 46) effective Jan. 1, 2003, and recorded a $4 million net adjustment ($6 million before taxes) for the cumulative effect of this change in accounting on years prior to ~~Consolidated~~2003. Pursuant ~~Financial~~to ~~Statements~~FIN No. 46, NS Rail has consolidated a special-purpose entity that leases certain locomotives to NS. This entity's assets and liabilities at Jan. 1, 2003, included $169 million of locomotives and $157 million of debt related to their purchase as well as a $6 million minority interest liability. This change in accounting in the first quarter of 2003 increased depreciation and interest expense (to reflect the locomotives as owned assets) and lowered lease expense. The net effect to total railway operating expenses and net income was not material.

1 2. ~~Interim~~ Related ~~Presentation~~Parties

In the opinion of Management, the accompanying unaudited interim financial statements contain all adjustments (consisting of normal recurring accruals) necessary to present fairly the Company's financial position as of Sept. 30, 2002, its results of operations for the three and nine months ended Sept. 30, 2002 and 2001, and its cash flows for the nine months ended Sept. 30, 2002 and 2001.

Although Management believes that the disclosures presented are adequate to make the information not misleading, these Consolidated Financial Statements should be read in conjunction with: (a) the financial statements and notes included in the Company's latest Annual Report on Form 10-K and in any subsequent Quarterly Report on Form 10-Q and (b) any Current Reports on Form 8-K.

2. Commitments and Contingencies

Lawsuits

NSR and certain subsidiaries are defendants in numerous lawsuits and other claims relating principally to railroad operations. When management concludes that it is probable that a liability has been incurred and the amount of the liability can be reasonably estimated, it is accrued through a charge to expenses. While the ultimate amount of liability incurred in any of these lawsuits and claims is dependent on future developments, in management's opinion the recorded liability is adequate to cover the future payment of such liability and claims. However, the final outcome of any of these lawsuits and claims cannot be predicted with certainty, and unfavorable or unexpected outcomes could result in additional accruals that could be significant to results of operations in a particular year or quarter. Any adjustments to recorded liability will be reflected in expenses in the periods in which such adjustments are known.

Presently, there are matters involving labor arbitration and other claims for "New York Dock" and other income protection benefits where the aggregated range of loss could be from zero to $40 million. Management believes that NS Rail will prevail in these matters; however, an unfavorable outcome could result in accruals that could be significant to results of operations in a particular year or quarter.

Casualty Claims

NS Rail is generally self-insured for casualty claims. Claims in excess of self-insurance levels are insured up to excess coverage limits. The casualty claims liability is determined actuarially, based upon claims filed and an estimate of claims incurred but not yet reported. While the ultimate amount of claims incurred is dependent on future developments, in management's opinion, the recorded liability is adequate to cover the future payments of claims. However, it is possible that the recorded liability may not be adequate to cover the future payments of claims. Adjustments to the recorded liability will be reflected in operating expenses in the periods in which such adjustments are known.

Environmental Matters

Item 1. Financial Statements. (continued)

regularly participate in ongoing evaluations of all identified sites and in determining any necessary adjustments to liability estimates. NS Rail also has established an Environmental Policy Council, composed of senior managers, to oversee and interpret its environmental policy.

NS Rail's balance sheets included liabilities for environmental exposures in the amount of $30 million at Sept. 30, 2002, and $33 million at Dec. 31, 2001 (of which $8 million was accounted for as a current liability for each period). At Sept. 30, 2002, the liability represented NS Rail's estimate of the probable cleanup and remediation costs based on available information at 124 identified locations. On that date, 9 sites accounted for $15 million of the liability, and no individual site was considered to be material. NS Rail anticipates that much of this liability will be paid out over five years; however, some costs will be paid out over a longer period.

At some of the 124 locations, certain NS Rail subsidiaries, usually in conjunction with a number of other parties, have been identified as potentially responsible parties by the Environmental Protection Agency (EPA) or similar state authorities under the Comprehensive Environmental Response, Compensation and Liability Act of 1980, or comparable state statutes, which often impose joint and several liability for cleanup costs.

With respect to known environmental sites (whether identified by NS Rail or by the EPA or comparable state authorities), estimates of NS Rail's ultimate potential financial exposure for a given site or in the aggregate for all such sites are necessarily imprecise because of the widely varying costs of currently available cleanup techniques, the likely development of new cleanup technologies, the difficulty of determining in advance the nature and full extent of contamination and each potential participant's share of any estimated loss (and that participant's ability to bear it) and evolving statutory and regulatory standards governing liability.

The risk of incurring environmental liability — for acts and omissions, past, present and future — is inherent in the railroad business. Some of the commodities in NS Rail's traffic mix, particularly those classified as hazardous materials, can pose special risks that NS Rail and its subsidiaries work diligently to minimize. In addition, several NS Rail subsidiaries own, or have owned, land used as operating property, or which is leased or may have been leased and operated by others, or held for sale. Because environmental problems may exist on these properties that are latent or undisclosed, there can be no assurance that NS Rail will not incur environmentally related liabilities or costs with respect to one or more of them, the amount and materiality of which cannot be estimated reliably at this time. Moreover, lawsuits and claims involving these and potentially other now-unidentified environmental sites and matters are likely to arise from time to time. The resulting liabilities could have a significant effect on financial condition, results of operations or liquidity in a particular year or quarter.

However, based on its assessments of the facts and circumstances now known, management believes that it has recorded the probable costs for dealing with those environmental matters of which the Corporation is aware. Further, management believes that it is unlikely that any identified matters, either individually or in the aggregate, will have a material adverse effect on NS Rail's financial position, results of operations or liquidity.

Purchase Commitments

At Sept. 30, 2002, NS Rail had outstanding purchase commitments of approximately $140 million in connection with its 2003 capital program.

3. Related Parties

General

NS is the parent holding company of NSR. Rail operations are coordinated at the holding company level by the NS Vice Chairman and Chief Operating Officer. NS charges NS Rail a fee for management ~~services~~ services it performs for NS Rail~~. This~~ ~~fee~~(which ~~amounted~~totaled to $~~118~~134 million and ~~$117~~included an $8 million mark-up in the ~~third~~first quarter of ~~2002~~2003 and ~~2001, respectively~~totaled ~~(including a~~ $7146 million and included a $89 million mark-up in ~~each~~the first quarter, ~~respectively~~of 2002). In addition, NS charges NS Rail a revenue-based licensing fee for use of certain intangible assets owned by NS. This fee amounted to $21 million in each of the first quarters of 2003 and 2002.

Item 1. Financial Statements. (continued)

$392 million and $398 million for the first nine months of 2002 and 2001, respectively (including a $24 million and $25 million mark-up in each period, respectively). In addition, NS charges NS Rail a revenue-based licensing fee for use of certain intangible assets owned by NS. This fee amounted to $23 million in each of the third quarters of 2002 and 2001 and $68 million in each of the nine-month periods.

NS Rail owns 21,169,125 shares of NS common stock.

Operations Over Conrail's Lines

Overview -- Through a limited liability company, NS and CSX Corporation (CSX) jointly own Conrail Inc. (Conrail), whose primary subsidiary is Consolidated Rail Corporation (CRC), the major freight railroad in the Northeast. NS has a 58% economic and 50% voting interest in the jointly owned entity, and CSX has the remainder of the economic and voting interests.

~~Operations of Conrail's Lines-- NSR~~ ~~operates as a part of its rail system the routes and assets of Pennsylvania Lines LLC (PRR), a wholly owned subsidiary of CRC,~~6 ~~pursuant to operating and lease agreements. Costs necessary to operate and maintain the PRR assets, including leasehold~~ improvements, are borne by NSR. CSX Transportation, Inc. (CSXT) operates the routes and assets of another CRC subsidiary under comparable terms. Certain other Conrail routes and assets (the "Shared Assets Areas") continue to be operated by CRC for the joint and exclusive benefit of NSR and CSXT. In addition to a fee paid for such access, NSR and CSXT pay, based on usage, the costs incurred by CRC to operate the Shared Assets Areas.

NS Operations ~~Rail~~of Conrail's ~~Consolidated~~Lines ~~Balance~~-- ~~Sheet~~NSR atoperates ~~Sept.~~as ~~30,~~a ~~2002,~~part ~~includes~~of ~~$65~~its ~~million of~~rail ~~liabilities~~system ~~related to~~ the ~~Conrail~~routes ~~transaction,~~and ~~principally~~assets ~~for~~of ~~contractual~~Pennsylvania ~~obligations~~Lines toLLC ~~Conrail~~(PRR), ~~employees~~a ~~imposed~~wholly byowned subsidiary ~~the~~of ~~Surface Transportation~~CRC, ~~Board~~pursuant ~~when~~to itoperating ~~approved~~and ~~the~~lease ~~transaction~~agreements. ~~Through~~ ~~Sept.~~CSX 30Transportation, Inc. ~~2002,~~(CSXT) NSoperates ~~Rail~~the ~~has~~routes ~~paid~~and ~~$118 million~~assets of ~~these~~another CRC subsidiary under ~~costs~~comparable terms.

~~NS Rail~~ The Operating ~~provides~~Agreement ~~certain~~between ~~general~~NSR and ~~administrative~~PRR ~~support~~governs ~~functions~~substantially all nonequipment assets to ~~Conrail~~be operated by NSR and has an initial 25-year term, renewable at the ~~fees~~option of NSR for ~~which~~two five-year terms. Payments under the Opera-ting Agreement are ~~billed~~subject to adjustment every six years to reflect changes in ~~accordance~~values. ~~with~~NSR also ~~several~~has ~~service-provider~~leased ~~arrangements~~or subleased for varying terms from PRR a number of equipment assets. ~~Any~~ ~~unpaid~~Costs ~~balance~~necessary isto ~~included~~operate inand ~~"Due~~maintain the PRR assets, including ~~from~~leasehold ~~Conrail~~improvements, are borne by NSR." NSR receives all freight revenues on the PRR lines.

NSR and CSXT also have entered into agreements with CRC governing other properties that continue to be owned and operated by CRC (the Shared Assets Areas). NSR and CSXT pay CRC a fee for joint and exclusive access to the Shared Assets Areas. In addition, NSR and CSXT pay, based on usage, the costs incurred by CRC to operate the Shared Assets Areas.

NS Rail's Consolidated Balance Sheet at March 31, 2003, includes $50 million of liabilities related to the Conrail transaction, principally for contractual obligations to Conrail employees imposed by the Surface Transportation Board when it approved the transaction. Through March 31, 2003, NS Rail has paid $133 million of these costs.

NS Rail provides certain general and administrative support functions to Conrail, the fees for which are billed in accordance with several service-provider arrangements and amount to approximately $7 million annually.

"Conrail rents and services" includes expenses for amounts due to PRR and CRC for use by NSR of operating properties and equipment and operation of the Shared Assets Areas.

A significant portion of payments made to PRR is borrowed back from a ~~PRR~~ subsidiary~~. Previously,~~ ~~these loans were made under a demand note; however, in the first quarter~~ of ~~2002, the~~ PRR ~~subsidiary exchanged~~under ~~this demand note for~~ a ~~new~~ note due in 2032. As Amounts aoutstanding ~~result,~~under ~~borrowings owed to~~ the ~~PRR~~note ~~subsidiary now~~ comprise ~~the~~ ~~noncurrent~~the long-term balance of "Due to Conrail." The interest rate for these loans is variable and was 21.1156% at March ~~Sept. 30~~31, ~~2002~~2003. ~~The~~ The current balance "Due to Conrail" ~~at Sept. 30, 2002,~~ is composed of amounts related to expenses included in "Conrail rents and services," as discussed above. ~~At Dec. 31, 2001, the current balance "Due to Conrail" included $72 million of such amounts~~ ~~and $301 million of advances owed under the previous demand note.~~

Sales of Accounts Receivable

NS Rail sells, without recourse, to a bankruptcy-remote special-purpose NS subsidiary, a pool of accounts receivable ~~totaling approximately $600 million~~. NS Rail services and collects all of the sold receivables on behalf of the buyers; however, no servicing asset or liability has been recognized because the benefits of servicing are estimated to be just adequate to compensate NS Rail for its responsibilities. Payments collected from sold receivables are remitted to the special-purpose NS subsidiary, which, in turn, reinvests the amounts by purchasing new receivables from NS Rail. NS Rail has no retained interest in the sold receivables.

8 Under the terms of the new sale agreement, the receivables are treated as sold and, accordingly, $585 million at March 31, 2003, and $513 million at Dec. 31, 2002, of sold receivables are not included on the NS Rail Consolidated Balance Sheets. Fees associated with the sale, which are based on historical dilution and prevailing interest rates, are included in "Other income (expense) - net."

~~Item 1. Financial Statements. (continued)~~ 7

Under the terms of the new sale agreement, the receivables are treated as sold and, accordingly, $574 million at Sept. 30, 2002, and $534 million at Dec. 31, 2001, of sold receivables are not included on the NS Rail Consolidated Balance Sheets. Fees associated with the sale, which are based on historical dilution and prevailing interest rates, are included in "Other income (expense) - net."

Intercompany Accounts

	Sept. 30, 2002			Dec. 31, 2001
			Average			Average
			Interest			Interest
	Balance		Rate	Balance		Rate
	($ in millions)
Due from NS:
Advances	$	68	2%	$	68	2%
Due to NS:
Advances and notes	$	(368)	3%	$	(585)	3%
Due to NS - net	$	(300)		$	(517)

	March 31, 2003			Dec. 31, 2002
			Average			Average
			Interest			Interest
	Balance		Rate	Balance		Rate
	($ in millions)

Advances due from NS	$	85	2%	$	68	2%

Advances and notes due to NS		(278)	3%		(452)	2%

Due to NS - net	$	(193)		$	(384)

Interest is applied to certain advances at the average NS yield on short-term investments and to the notes at specified rates. NS Rail's results for the ~~nine~~ three months ended ~~Sept.~~March 3031 include interest income of $8 2 million in ~~2002~~2003 and $19 3 million in ~~2001~~2002 and interest expense of $82 million in ~~2002~~2003 and $123 million in 2002 ~~2001~~ related to these intercompany accounts. These amounts are included in "Other income (expense) - net."

Noncash Dividend

NS Rail declared and issued to NS noncash dividends of $333 million in September 2002 and a total of $450 million in May and September 2001, which were settled by reduction of NS Rail's interest-bearing advances due from NS. Noncash dividends are excluded from the Consolidated Statements of Cash Flows.

Intercompany Federal Income Tax Accounts

In accordance with the NS Tax Allocation Agreement, intercompany federal income tax accounts are recorded between companies in the NS consolidated group. NS Rail had long-term intercompany federal income tax payables (which are included in "Deferred income taxes" in the Consolidated Balance Sheets) of $~~919~~941 million at ~~Sept.~~March 3031, ~~2002~~ 2003, and $~~871~~938 million at Dec. 31, ~~2001~~2002.

4 3. Derivative Financial Instruments

NS Rail uses derivative financial instruments to reduce the risk of volatility in its diesel fuel costs and to manage its overall exposure to fluctuations in interest rates. NS Rail does not engage in the trading of derivatives. NS Rail's management has determined that its derivative financial instruments qualify as either fair-value or cash-flow hedges, having values which highly correlate with the underlying hedged exposures, and has designated such instruments as hedging transactions. Credit risk related to the derivative financial instruments is considered to be minimal and is managed by requiring high credit standards for counterparties and periodic settlements.

Item 1. Financial Statements. (continued)

Diesel Fuel Hedging

In the second quarter of 2001, NS Rail began a program to hedge a portion of its diesel fuel consumption. The intent of the program is to assist in the management of NS Rail's aggregate risk exposure to fuel price fluctuations, which can significantly affect NS Rail's operating margins and profitability~~, through the use of one or more types of~~. ~~derivative~~In ~~instruments. Diesel~~order ~~fuel~~to ~~costs~~minimize ~~represented~~this ~~approximately~~risk, ~~6% of~~ NS Rail's ~~operating~~instituted ~~expenses~~a ~~for~~continuous ~~the third quarter~~hedging ~~and~~strategy ~~first~~for ~~nine~~a ~~months~~portion of ~~2002,~~its ~~and~~estimated ~~approximately~~future 7%fuel ~~and~~needs 8%by ofentering NSinto ~~Rail's operating expenses for the third quarter and first nine~~a ~~months~~series of ~~2001,~~swaps ~~respectively. The~~in ~~program~~order ~~provides~~to ~~that~~lock NSin ~~Rail~~the ~~will~~purchase ~~not~~prices ~~enter~~of ~~into~~some ~~any fuel hedges with a duration~~ of ~~more~~its diesel ~~than~~fuel. ~~thirty-six~~Management ~~months,~~has ~~and~~designated ~~that~~these noderivative ~~more~~instruments ~~than~~as ~~80%~~cash-flow hedges of NSthe ~~Rail's~~exposure ~~average~~to ~~monthly~~variability ~~fuel~~in ~~consumption~~expected ~~will~~future becash ~~hedged~~flows attributable ~~for~~to ~~each~~fluctuations ~~month within~~in ~~any~~diesel ~~thirty-six~~fuel ~~month period~~prices.

NS Following is ~~Rail's~~a ~~management~~summary ~~has designated these derivative instruments as cash-flow hedges~~ of ~~the~~ ~~exposure to variability in expected future cash flows attributable to fluctuations in diesel fuel prices. During third quarter 2002~~ NS Rail's ~~entered~~diesel ~~into 72~~ fuel swaps ~~for approximately 97 million gallons at an average price of approximately $0.69 per~~: gallon of Nymex No. 2 heating oil. As of Sept. 30, 2002, outstanding swaps covered approximately 62%, 51%, and 12% of estimated fuel purchases for the remainder of 2002 and for the years 2003 and 2004, respectively.

NS ~~Rail's~~ First ~~fuel~~Quarter ~~hedging activity resulted in a net decrease in diesel fuel expense of $5~~ ~~million~~ ~~for third quarter~~ 2003 2002 ~~and~~ ~~a net increase in diesel fuel expense~~ Number of $2swaps ~~million~~entered ~~for~~into ~~third~~during ~~quarter 2001. For~~ the first quarter ~~nine~~ 72 72 ~~months,~~ NS Approximate number ~~Rail's~~of ~~fuel~~gallons ~~hedging~~hedged ~~activity~~(millions) 94 101 ~~resulted~~ in Approximate average aprice ~~net~~per ~~decrease~~gallon ~~in diesel fuel expense~~ of Nymex $~~2 million for 2002 and a net~~0.74 ~~increase of~~ $20.61 ~~million~~ ~~for 2001~~ No. ~~Ineffectiveness,~~ 2 orheating ~~the~~oil ~~extent~~ to Remainder ~~which changes in the fair values~~ of ~~derivative~~ ~~instruments~~ do 2003 2004 2005 ~~not~~ ~~offset~~ Percent of ~~changes~~estimated infuture ~~the~~diesel ~~fair~~fuel consumption covered as ~~values~~ of ~~the~~March ~~hedged items~~31, ~~was~~2003 68% 33% 2% ~~less~~ ~~than $1 million for the third quarter and first nine months~~ of ~~2002 and 2001.~~

Hedges are placed each month by competitive bid among selected counterparties. The goal of this hedging strategy is to average fuel costs over an extended period of time while minimizing the incremental cost of hedging. The program provides that NS Rail will not enter into any fuel hedges with a duration of more than 36 months, and that no more than 80% of NS Rail's average monthly fuel consumption will be hedged for any month within the 36-month period. Diesel fuel costs represented 8% and 6% of NS Rail's operating expenses for the first quarters of 2003 and 2002, respectively.

NS Rail's fuel hedging activity resulted in a net decrease in diesel fuel expense of $26 million for first quarter 2003 and a net increase in diesel fuel expense of $4 million for first quarter 2002. The effect of the hedges was to yield average costs of 75 cents per gallon for the first quarter of 2003 and 70 cents per gallon for the same period of 2002, including federal taxes and transportation. Ineffectiveness, or the extent to which changes in the fair values of the heating oil contracts do not offset changes in the fair values of the expected diesel fuel oil transactions, was approximately $1 million for each quarter.

Interest Rate Hedging

NS Rail manages its overall exposure to fluctuations in interest rates by issuing both fixed and floating-rate debt instruments, and by entering into interest rate hedging transactions. NS Rail had $~~227~~211 million, or 3634.9%, and $~~251~~220 million, or 3735.4%, of its fixed rate debt portfolio hedged at ~~Sept. 30~~March 31, ~~2002~~2003, and Dec. 31, ~~2001~~2002, respectively, using interest rate swaps that qualify for and are designated as fair-value hedge transactions. These swaps have been effective in hedging the changes in fair value of the related debt arising from changes in interest rates, and accordingly, there has been no impact on earnings resulting from ineffectiveness associated with these derivative transactions.

Fair Values

The fair values of NS Rail's diesel fuel derivative instruments at ~~Sept.~~March 3031, ~~2002~~2003 and Dec. 31, ~~2001~~2002, were determined based upon current fair market values as quoted by third party dealers. Fair values of interest rate swaps were determined based upon the present value of expected future cash flows discounted at the appropriate implied spot rate from the spot rate yield curve. Fair value adjustments are non-cash transactions, and accordingly, are excluded from the ~~Consolidated~~ Consolidated Statement of Cash Flows. "Accumulated other comprehensive loss," a component of "Stockholders' equity," ~~includes $24~~included ~~million (pretax) of~~ unrealized gains atof ~~Sept.~~$23 ~~30,~~million ~~2002,~~ and $1529 million (pretax) ofat ~~unrealized~~March 31, ~~losses~~2003, atand Dec. 31, ~~2001~~2002, ~~related~~respectively, related to the fair value of derivative fuel hedging transactions that will terminate within twelve months of the respective dates.

10 The asset and liability positions of NS Rail's outstanding derivative financial instruments were as follows:

~~Item~~ ~~1. Financial~~ March ~~Statements~~31, Dec. 31, 2003 2002 (~~continued~~$ in millions) Interest rate hedges: Gross fair market asset position $ 22 $ 24 Gross fair market (liability) position -- -- Fuel hedges: Gross fair market asset position 27 29 Gross fair market (liability) position (2) -- Total net asset position $ 47 $ 53

~~The asset and liability positions of NS Rail's outstanding derivative financial~~ ~~instruments at Sept. 30, 2002 and Dec. 31, 2001 were as follows:~~9

	Sept. 30,		Dec. 31,
	2002		2001
	($ in millions)
Interest rate hedges:
Gross fair market asset position	$	24	$	12
Gross fair market (liability) position		--		--
Fuel hedges:
Gross fair market asset position	$	28	$	--
Gross fair market (liability) position		(1)		(19)
Total net asset (liability) position	$	51	$	(7)

4. Comprehensive Income

5. Comprehensive Income

NS Rail's total comprehensive income was as follows:

	Three Months Ended				Nine Months Ended
	Sept. 30,				Sept. 30,
	2002		2001		2002		2001
	($ in millions)
Net income	$	124	$	95	$	335	$	240
Other comprehensive income (loss)		(35)		(65)		50		32
Total comprehensive income	$	89	$	30	$	385	$	272

	Three Months Ended
	March 31,
	2003		2002
	($ in millions)

Net income	$	184	$	85
Other comprehensive income (loss)		(20)		95

Total comprehensive income	$	164	$	180

For NS Rail, "Other comprehensive income (loss)" is the unrealized gains and losses on certain investments in debt and equity securities, principally NS common stock, and net fair value adjustments to certain derivative financial instruments.

5. Commitments and Contingencies

Lawsuits

Casualty Claims

NS Rail is generally self-insured for casualty claims. NS Rail has insurance for catastrophic events, but that coverage has upper limits. The casualty claims liability is determined actuarially, based upon claims filed and an estimate of claims incurred but not yet reported. While the ultimate amount of claims incurred is dependent on future developments, in management's opinion, the recorded liability is adequate to cover the future payments of claims. However, it is possible that the recorded liability may not be adequate to cover the future payments of claims. Adjustments to the recorded liability are reflected in operating expenses in the periods in which such adjustments are known.

Environmental Matters

NS Rail is subject to various jurisdictions' environmental laws and regulations. It is NS Rail's policy to record a liability where such liability or loss is probable and its amount can be estimated reasonably. Claims, if any, against third parties for recovery of cleanup costs incurred by NS Rail are reflected as receivables (when collection is probable) in the balance sheet and are not netted against the associated NS Rail liability. Environmental engineers regularly participate in ongoing evaluations of all identified sites and in determining any necessary adjustments to liability estimates. NS Rail also has established an Environmental Policy Council, composed of senior managers, to oversee and interpret its environmental policy.

NS Rail's balance sheets included liabilities for environmental exposures in the amount of $28 million at March 31, 2003, and $29 million at Dec. 31, 2002 (of which $8 million was accounted for as a current liability for each period). At March 31, 2003, the liability represented NS Rail's estimate of the probable cleanup and remediation costs based on available information at 113 identified locations. On that date, 10 sites accounted for $15 million of the liability, and no individual site was considered to be material. NS Rail anticipates that much of this liability will be paid out over five years; however, some costs will be paid out over a longer period.

At some of the 113 locations, certain NS Rail subsidiaries, usually in conjunction with a number of other parties, have been identified as potentially responsible parties by the Environmental Protection Agency (EPA) or similar state authorities under the Comprehensive Environmental Response, Compensation and Liability Act of 1980, or comparable state statutes, which often impose joint and several liability for cleanup costs.

The risk of incurring environmental liability -- for acts and omissions, past, present and future -- is inherent in the railroad business. Some of the commodities in NS Rail's traffic mix, particularly those classified as hazardous materials, can pose special risks that NS Rail and its subsidiaries work diligently to minimize. In addition, several NS Rail subsidiaries own, or have owned, land used as operating property, or which is leased or may have been leased and operated by others, or held for sale. Because environmental problems may exist on these properties that are latent or undisclosed, there can be no assurance that NS Rail will not incur environmentally related liabilities or costs with respect to one or more of them, the amount and materiality of which cannot be estimated reliably at this time. Moreover, lawsuits and claims involving these and potentially other now-unidentified environmental sites and matters are likely to arise from time to time. The resulting liabilities could have a significant effect on financial condition, results of operations or liquidity in a particular year or quarter.

Purchase Commitments

At March 31, 2003, NS Rail had outstanding purchase commitments of approximately $63 million in connection with its 2003 capital program.

Independent Accountants' Review Report

The Stockholders and Board of Directors

Norfolk Southern Railway Company:

We have reviewed the accompanying consolidated balance sheet of Norfolk Southern Railway Company and subsidiaries as of March 31, 2003, and the related consolidated statements of income and cash flows for the three-month periods ended March 31, 2003 and 2002. These consolidated financial statements are the responsibility of the Company's management.

We conducted our reviews in accordance with standards established by the American Institute of Certified Public Accountants. A review of interim financial information consists principally of applying analytical procedures and making inquiries of persons responsible for financial and accounting matters. It is substantially less in scope than an audit conducted in accordance with auditing standards generally accepted in the United States of America, the objective of which is the expression of an opinion regarding the financial statements taken as a whole. Accordingly, we do not express such an opinion.

Based on our reviews, we are not aware of any material modifications that should be made to the consolidated financial statements referred to above for them to be in conformity with accounting principles generally accepted in the United States of America.

As discussed in Note 1 to the consolidated financial statements, the Company adopted Financial Accounting Standards Board Statement No. 143, "Accounting for Asset Retirement Obligations," and Financial Accounting Standards Board Interpretation No. 46, "Consolidation of Variable Interest Entities," as of January 1, 2003.

We have previously audited, in accordance with auditing standards generally accepted in the United States of America, the consolidated balance sheet of Norfolk Southern Railway Company and subsidiaries as of December 31, 2002, and the related consolidated statements of income, changes in stockholders' equity and cash flows for the year then ended (not presented herein); and in our report dated January 28, 2003, we expressed an unqualified opinion on those consolidated financial statements. In our opinion, the information set forth in the accompanying consolidated balance sheet as of December 31, 2002, is fairly stated, in all material respects, in relation to the consolidated balance sheet from which it has been derived.

/s/ KPMG LLP

Norfolk, Virginia

April 22, 2003

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations.

NORFOLK SOUTHERN railway company AND SUBSIDIARIES (NS RAIL)

( A Majority-Owned Subsidiary of Norfolk Southern Corporation [NS])

Management's Discussion and Analysis of Financial Condition and Results of Operations

RESULTS OF OPERATIONS

Net Income

~~Third~~ First-quarter net income was $~~124~~184 million in ~~2002~~2003, upand included $29104 million, orfor ~~31%,~~the cumulative ~~compared~~effect ~~with third~~on ~~quarter~~years ~~last~~prior ~~year.~~to ~~For~~2003 ~~the~~of ~~first~~changes ~~nine~~in ~~months~~accounting principles as required by the adoption of ~~2002,~~two ~~net~~accounting pronouncements (see Note 1). First-quarter income before accounting changes was $~~335~~80 million, updown $955 million, or 406%, compared with results for the first ~~nine~~quarter ~~months~~ of ~~2001.~~2002, ~~Both~~reflecting ~~improvements~~lower ~~reflected higher~~ income from railway operations~~, which was up 26% for the quarter and 24% for the first nine months, and lower operating expenses~~.

Railway Operating Revenues

~~Third~~ First-quarter railway operating revenues were $1.652 billion in ~~2002~~2003, up $8762 million, or 64%, compared with ~~a weak third quarter of 2001. For~~ the first ~~nine months, railway operating revenues were $4.6 billion, up~~quarter ~~$39 million,~~of ~~or 1%, compared with last year~~2002. As shown in the following table, ~~both~~the ~~periods~~increase ~~benefited~~was ~~from higher traffic volume. The unfavorable revenue per unit/mix variances were largely attributable to changes in~~ the ~~mix~~result of ~~traffic (notably less~~higher ~~coal~~ traffic volume and ~~more~~increased ~~intermodal~~average ~~traffic volume)~~revenues.

	Third Quarter		Nine Months
	2002 vs. 2001		2002 vs. 2001
	Increase (Decrease)		Increase (Decrease)
	($ in millions)
Traffic volume (carloads)	$	102	$	86
Revenue per unit/mix		(15)		(47)
Total	$	87	$	39

		First quarter
		2003 vs. 2002
		Increase (Decrease)
	($ in millions)

Traffic volume (carloads)			$	38
Revenue per unit/mix				24
Total			$	62

Revenues and carloads for the commodity groups were as follows:

	Revenues
	Third quarter				Nine months
	2002		2001		2002		2001
	($ in millions)
Coal	$	371	$	366	$	1,080	$	1,154
General merchandise:
Automotive		231		199		718		657
Chemicals		198		190		578		569
Metals/construction		181		176		530		518
Agr./consumer prod./govt.		152		147		458		445
Paper/clay/forest		155		150		450		466
General merchandise		917		862		2,734		2,655
Intermodal		268		241		746		712
Total	$	1,556	$	1,469	$	4,560	$	4,521

	First Quarter
	Revenues					Carloads
	2003		2002			2003		2002
	($ in millions)				(carloads in thousands)

Coal	$	354	$	359			395		398
General merchandise:
Automotive		242		228			167		163
Chemicals		194		186			107		104
Metals/construction		166		160			161		162
Agr./consumer prod./govt.		166		154			133		125
Paper/clay/forest		150		141			107		105

General merchandise		918		869			675		659
Intermodal		247		229			578		549

Total	$	1,519	$	1,457			1,648		1,606

12 13

~~Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations. (continued)~~ Coal

	Carloads
	Third Quarter				Nine Months
	2002		2001		2002		2001
	(in thousands)
Coal		413		403		1,204		1,279
General merchandise:
Automotive		155		137		499		462
Chemicals		112		110		326		328
Metals/construction		193		186		551		537
Agr./consumer prod./govt.		125		120		375		376
Paper/clay/forest		113		110		330		344
General merchandise		698		663		2,081		2,047
Intermodal		625		557		1,774		1,638
Total		1,736		1,623		5,059		4,964

First-quarter coal revenues decreased $5 million, or 1%, compared with last year. Total traffic volume (tonnage) handled was down slightly for the quarter, as lower traffic volume for export, domestic metallurgical and industrial coal more than offset higher traffic volume for utility coal. Export coal volume was hampered by production shortfalls from a key supplier. Domestic metallurgical coal shipments were lower as the harsh winter weather delayed shipments in the Great Lakes region. Utility coal traffic volume benefited from higher demand caused by the cold weather; however, the weather also resulted in delayed shipments as frozen coal slowed loading and unloading operations. Average revenue per carload declined 1% in the first quarter as the effects of more shorter-haul (lower revenue per unit) business more than offset the favorable effects of a fuel surcharge.

Coal volumes are expected to strengthen in the second quarter, as utilities' coal stockpiles were depleted during the winter. For the last half of the year, coal revenues are expected to be comparable to those of 2002.

CoalGeneral revenues increased $5 million, or 1%, in the third quarter, but declined $74 million, or 6%, in the first nine months, compared with the same periods last year. Total traffic volume (tonnage) handled was up 3% for the quarter, as higher traffic volume in the utility and steel markets more than offset lower export tonnage. Utility traffic volume benefited from warmer summer weather in the Northeast and Midwest and higher electricity generation in NS' service region. Domestic steel production has increased after the imposition of tariffs on imported steel. Export traffic volume continued to suffer from weak demand. For the first nine months, total tonnage handled was down 5%, reflecting less utility and export tonnage. Year-to-date utility volume continued to reflect the reduced demand experienced in the first half of the year. Average revenue per carload was down 1% in each of the third quarter and first nine months. The declines were largely the result of an increase in shorter-haul (lower revenue per unit) business coupled with a decline in longer-haul (higher revenue per unit) business, which was offset, in part, by higher rates.Merchandise

~~Coal~~ First-quarter general ~~volumes~~merchandise ~~are~~revenues increased $49 million, or 6%, compared with last year. Traffic volume (carloads) increased 2%, as all commodity groups except the metals and construction group posted increases. Agriculture, consumer products and government volume increased 6% reflecting more shipments of corn into markets affected by the 2002 drought. This is expected to ~~weaken~~continue inuntil late September when the ~~fourth~~2003 ~~quarter~~crop comes to market. In addition, astraffic volume ~~several~~benefited ~~utility~~from ~~customers~~increased volume for sweeteners and more shipments for ~~have~~the ~~planned~~military. Chemicals ~~outages~~traffic orvolume increased ~~reduced~~3% ~~volumes;~~on ~~however~~stronger demand for industrial intermediate products and increased plastics shipments, ~~stockpiles~~which ~~appear~~was supported by higher vehicle production and consumer products demand. Automotive traffic volume increased 2%, primarily due to bethe resumption of production at ~~more~~a ~~normal~~plant ~~levels~~that ~~and~~had ~~demand~~been curtailed during the first quarter of 2002. Automotive production for the year is ~~likely~~expected to be ~~influenced~~ bylower ~~the~~than ~~severity~~that of 2002. General merchandise average revenue per carload increased 3% reflecting increased rates, more longer haul (higher average revenue) business, a fuel surcharge and favorable changes in the ~~weather~~mix of traffic.

General ~~Merchandise~~merchandise revenues are expected to weaken in the second quarter, when compared with the second quarter of 2002, reflecting lower vehicle production. However, for the last half of the year, general merchandise revenues are expected to be comparable to those of 2002 and largely reflect the performance of the economy.

General merchandise revenues increased $55 million, or 6%, in the third quarter and $79 million, or 3%, in the first nine months, compared with the same periods last year. Traffic volume (carloads) increased 5% for the quarter and 2% for the first nine months. Both increases were driven by higher automotive traffic volume, which was up 13% for the quarter and 8% for the first nine months. The quarter also benefited from volume gains for the remaining commodity groups, while the first nine months were aided by increased metals/construction traffic volume and higher average revenues. The automotive revenue gains were supported by increased production, some pricing improvements, special ancillary services provided during the third quarter and the settlement of a disputed charge. The general merchandise average revenue increases were primarily the result of higher rates, longer hauls and the special automotive items noted above.Intermodal

~~General~~ First-quarter intermodal ~~merchandise~~ revenues ~~are~~increased ~~expected~~$18 tomillion, ~~return~~or to8%, ~~more~~compared ~~moderate~~with ~~growth~~last inyear. Container ~~the~~traffic ~~fourth~~volume benefited from ~~quarter,~~increased ~~when~~international ~~compared~~and ~~with~~domestic ~~the~~business ~~fourth~~as ~~quarter~~well as the conversion of truck ~~2001~~traffic to rail. Intermodal revenue per unit increased 3% for the quarter, as ~~automotive~~the ~~traffic~~favorable ~~was~~effects ~~particularly~~of ~~strong~~fuel surcharges atand ancillary revenues were slightly offset by an unfavorable change in the ~~end~~mix of ~~2001~~ traffic.

13 Intermodal revenues are expected to continue to benefit from new business supported by continued improvements in service and conversion of truck traffic to rail; however, any weakening in consumer demand could dampen this outlook.

ItemRailway 2. Management'sOperating Discussion and Analysis of Financial Condition and Results of Operations. (continued)Expenses

~~Intermodal~~ First-quarter railway operating expenses were $1.33 billion in 2003, up $73 million, or 6%, compared with last year, as most expense line items were higher.

~~Intermodal~~ As ~~revenues~~discussed ~~increased $27 million, or 11%,~~ in ~~the third quarter and $34 million,~~ orNote 5%1, ineffective ~~the~~Jan. ~~first~~1, ~~nine months~~2003, ~~compared~~NS ~~with~~Rail's ~~the~~method ~~same~~of ~~periods~~accounting ~~last year. Traffic volume (units) increased 12%~~ for ~~the quarter and~~crosstie 8%removal ~~for~~was ~~the~~changed ~~first~~as ~~nine~~a ~~months,~~result ~~reflecting~~of ~~higher~~implementation ~~container,~~of ~~Triple~~SFAS ~~Crown~~No. ~~and, for the quarter, trailer volumes~~143. This ~~The~~change ~~increases~~ in ~~container~~ ~~traffic~~accounting ~~reflected gains~~ in ~~international~~the ~~and~~first quarter ~~domestic~~lowered ~~business~~depreciation ~~that~~expense ~~continued~~by toalmost ~~benefit~~$7 ~~from~~million ~~the~~and ~~expansion of the~~increased ~~intermodal~~compensation ~~network~~ and ~~service~~benefits ~~improvements.~~and ~~Intermodal~~other ~~revenue~~expenses ~~per~~by ~~unit~~almost ~~declined~~$5 ~~slightly~~million. For ~~for~~ the ~~quarter~~year, ~~and~~it 3%is ~~for~~expected ~~the~~that ~~first~~the ~~nine~~depreciation ~~months,~~reduction ~~reflecting~~will ~~more~~total ~~shorter-haul~~approximately ~~business~~$29 ~~and~~million, awhile ~~reduction~~the inexpense increases ~~fuel~~will ~~surcharges~~total ~~that~~about ~~were~~$20 ~~in place in 2001~~million.

~~Intermodal revenues are expected to continue to benefit from ongoing improvements in~~ ~~service and the terminal capacity added in 2001; however, growth could be tempered by economic uncertainty and reduced consumer~~14 ~~demand.~~

~~Railway~~ Compensation and ~~Operating~~benefits ~~Expenses~~expenses increased $17 million, or 4%, reflecting lower pension income, higher wage rates, increased medical costs (despite additional employee contributions) and the effects of the change in accounting (see Note 1). These increases more than offset reduced payroll taxes.

~~Third-quarter~~ Materials, services ~~railway~~and ~~operating~~rents ~~expenses~~increased ~~were~~ $~~1.3~~6 ~~billion~~million, inor ~~2002~~1%, upprincipally ~~$34~~because ~~million~~of higher material expenses, orprimarily 3%for locomotive repairs, and volume-related ~~compared~~intermodal ~~with~~expenses ~~last~~and ~~year~~equipment rents. These ~~For~~increases ~~the~~were ~~first~~partially ~~nine~~offset ~~months,~~by ~~expenses~~a ~~were~~lower ~~$3.8~~management ~~billion,~~fee ~~down~~from ~~$105~~NS (see ~~million,~~Note ~~or 3%~~2).

~~Compensation~~ Conrail rents and ~~benefits~~services expenses ~~increased~~decreased $202 million, or 52%, inreflecting ~~the~~lower ~~third quarter and $14 million, or 1%, for the first nine months, compared with the same periods last year. Higher wage rates, increased health and welfare benefit~~ costs ~~and lower pension income more than offset savings from reduced employment levels and lower payroll taxes. In light of the continued weakness~~ in ~~the equity markets, NS Rail is reviewing with its consulting actuaries its 2002 long-term~~ investment rate of return assumption as well as its other assumptions used in its accounting for its pension plans. If, for example, a 9% rate of return assumption were to be used, fourth-quarter compensation and benefits expense would increase by approximately $10 million. NS Rail expects to conclude this review in the ~~fourth~~Shared ~~quarter~~Assets ~~of 2002~~Areas.

~~Materials, services and rents increased $16 million, or 4%, in the third quarter, but~~ ~~decreased~~Depreciation expense ~~$46~~was ~~million,~~even ~~or 3%,~~ in the first ~~nine months~~quarter, ~~compared~~as ~~with~~ the ~~same~~effects ~~periods last year. The increase for the quarter was principally the result~~ of ~~higher~~property ~~expenses for locomotive material and volume-related purchased services, which~~ additions were offset, ~~in part,~~ by ~~lower equipment rents. For~~ the ~~first~~change ~~nine~~in ~~months,~~accounting ~~lower~~related ~~equipment~~to ~~rents~~crosstie ~~more~~removal ~~than~~costs ~~offset higher purchased~~(see ~~services~~Note 1).

~~Conrail~~ Diesel ~~rents and services~~ fuel expenses ~~decreased~~increased $623 million, or 528%, inreflecting ~~the~~higher ~~third~~average ~~quarter~~prices and $7marginally ~~million,~~higher orconsumption. Expenses in ~~2%,~~2003 ~~for~~included ~~the~~a ~~first~~$26 million ~~nine~~benefit ~~months,~~from ~~compared~~favorable ~~with~~hedge settlements, while the ~~same~~first ~~periods~~quarter ~~last~~of ~~year,~~2002 ~~reflecting~~included ~~lower~~$4 ~~costs~~million inof ~~the~~cost ~~Shared~~related ~~Assets~~to the ~~Areas~~hedging program.

~~Depreciation~~ Casualties ~~expense was even in the third quarter~~ and other ~~was~~claims upexpense ~~slightly~~increased ~~for~~$16 million, ~~the~~or ~~first nine months~~46%, ~~compared~~primarily ~~with~~because ~~the~~of damage ~~same~~to ~~periods~~equipment ~~last~~and ~~year,~~lading asincurred ~~lower~~because ~~rates implemented as a result~~ of ~~the~~several ~~latest~~derailments, continuing ~~depreciation~~unfavorable ~~study~~personal ~~largely offset~~injury ~~the~~claims ~~effects~~development ofand ~~property~~higher ~~additions~~insurance costs.

~~Diesel~~ Other ~~fuel~~expense increased ~~expenses decreased~~ $1213 million, or 1321%, inreflecting the ~~third~~absence ~~quarter~~of ~~and~~two ~~$70~~items ~~million,~~that orbenefited ~~22%,~~2002 in-- ~~the~~a ~~first~~favorable ~~nine~~property ~~months,~~tax ~~compared~~settlement ~~with the same periods last year. The declines were the result of decreases in the average price paid per gallon~~ and, ~~for~~a ~~the quarter,~~ favorable ~~hedge~~bad ~~settlements. Consumption increased 6% for the quarter, but was~~debt ~~1% lower for the first nine months~~settlement.

~~Casualties and other claims expense increased $24 million, or 73%, in the third~~ ~~quarter~~FINANCIAL ~~and~~CONDITION ~~$19 million,~~AND ~~or 17%, for the first nine months, compared with the same periods last year. The increases were~~LIQUIDITY ~~largely attributable to adverse claims development as indicated by a recent actuarial study of NS Rail's personal injury liability, derailment costs and higher costs for environmental remediation.~~

~~Other~~ Cash ~~expense~~provided by ~~decreased~~operating ~~$8 million~~activities, orNS ~~11%,~~Rail's inprincipal ~~the~~source ~~third~~of ~~quarter~~liquidity, ~~and~~was $16 204 million, orin ~~7%, for~~ the first ~~nine~~three months of 2003, compared with $181 million in the first ~~same~~three ~~periods~~months ~~last~~of ~~year~~2002. The ~~declines~~increase ~~were~~was primarily the result of ~~settlements of prior~~favorable ~~years'~~changes ~~property~~in ~~tax~~working ~~liabilities~~capital.

14 A significant portion of payments made to PRR (which are included in "Conrail rents and services" and, therefore, are a use of cash in "Cash provided by operating activities") are borrowed back from a PRR subsidiary and, therefore, are a source of cash in "Proceeds from borrowings." NS Rail's net cash flow from these borrowings amounted to $80 million in the first three months of 2003 and $66 million for the same period of 2002.

~~Item~~ NS ~~2. Management~~Rail's working ~~Discussion~~capital ~~and~~deficit ~~Analysis~~was of$965 ~~Financial~~million ~~Condition~~at ~~and~~March ~~Results~~31, 2003, compared with $1.1 billion at Dec. 31, 2002. The improvement was principally the result of ~~Operations~~a reduction in the net amount due to NS. ~~(continued)~~

~~Other~~ NS ~~Income~~Rail ~~(Expense)~~looks to -NS ~~Net~~to provide needed funding. NS currently has the capability to increase the amount of accounts receivable being sold under the revolving sale program. Over the last twelve months, the amount of receivables NS could sell under this program ranged from $358 million to $421 million, and the amount of receivables NS sold ranged from zero to $400 million. Moreover, NS has a $1 billion credit facility, which expires in 2006, that it can borrow under or use to support commercial paper debt; however, reductions in its credit rating could limit NS' ability to access the commercial paper markets.

~~Other income (expense) - net was $5 million lower in the third quarter of 2002 and was $25~~ ~~million~~As ~~lower for~~ the ~~first~~major ~~nine months~~NS subsidiary, ~~compared~~NS ~~with~~Rail ~~the~~provides ~~same~~funding ~~periods of 2001. Both comparisons reflected lower discount on sales of accounts receivable and reduced interest accruals in 2001 related~~ to ~~potential~~service ~~federal~~NS' ~~income tax deficiencies~~debt. ~~The~~ ~~comparison for the first nine months was also affected by a settlement in~~ NS' ~~favor~~debt inat ~~the~~March ~~first~~31, ~~quarter of 2001~~2003, ~~higher~~totaled ~~investment~~$6.4 ~~returns~~billion. Of inthis ~~2001~~debt, ~~from~~$1.8 ~~corporate-owned~~billion ~~life~~is due ~~insurance~~between 2003 and ~~lower rental income in 2002~~2007.

~~Provision~~ NS ~~for~~Rail ~~Income~~expects to ~~Taxes~~generate sufficient cash flow from operations to meet its ongoing obligations, as well as to advance amounts to NS to service its debt.

~~The~~ Cash ~~third-quarter~~used ~~effective~~for investing ~~income~~activities ~~tax~~decreased ~~rate~~in ~~was~~the ~~40.7%~~first inthree ~~2002~~months of 2003, compared with ~~35.4% last~~ ~~year. For~~ the first ~~nine~~three months, ~~the~~of ~~effective~~2002, ~~rate~~principally ~~was~~because ~~40.0%,~~of ~~compared~~a ~~with~~decline ~~37.3%~~in ~~last year~~capital expenditures. The ~~increases~~decrease reflected ~~increases~~the inabsence ~~state~~of ~~tax~~locomotive ~~rates~~purchases in ~~2002~~2003; ~~and~~however, ~~the~~NS ~~absence~~Rail ofexpects ~~favorable~~to acquire ~~adjustments~~locomotives ~~upon~~later ~~filing~~in ~~federal~~the ~~tax returns that benefited 2001~~year.

~~FINANCIAL CONDITION AND LIQUIDITY~~ 15

Cash ~~provided~~used byfor financing ~~operating~~ activities, ~~NS Rail's principal source of liquidity,~~ was $~~870~~ 144 million in the first ~~nine~~three months of ~~2002~~2003, compared with $~~542~~18 million in the ~~first~~same ~~nine~~period ~~months~~ of ~~2001. The increase was the result of higher operating income~~2002, ~~lower~~reflecting ~~tax~~an ~~payments~~increase ~~(2001 included the settlement of federal tax years 1995 and 1996) and favorable~~in ~~changes~~advances ~~in working capital. A significant portion of payments made~~ to ~~PRR~~NS ~~(which~~and ~~are~~the ~~included~~absence in ~~"Conrail~~2003 ~~rents and services" and, therefore, are a use~~ of ~~cash~~proceeds ~~in "Cash provided by operating activities") are borrowed back~~ from aequipment ~~PRR subsidiary and, therefore,~~financing. ~~are~~Advances ato ~~source~~NS oftypically ~~cash~~account infor ~~"Proceeds~~most ~~from~~of ~~borrowings."~~the ~~NS Rail's net~~ cash ~~flow~~used ~~from~~for ~~these borrowings amounted to $162 million in the~~financing ~~first~~activities ~~nine months of 2002~~ and ~~$210~~reflect ~~million~~NS' ~~for the same period of 2001~~requirements.

~~NS Rail's working capital deficit was $1.1 billion at Sept. 30, 2002, compared with $1.5~~ ~~billion~~OTHER ~~at Dec. 31, 2001. The improvement was principally the result of the change in the terms of the note under which NS borrows~~MATTERS ~~funds from the PRR subsidiary (see Note 3) and a reduction in the net amount due to NS.~~

~~NS Rail looks to NS to provide needed funding. NS currently has the capability to~~ ~~increase~~Labor ~~the amount of accounts receivable being sold under the revolving sale program to meet its more immediate working capital~~Arbitration needs. Over the last twelve months, the amount of receivables NS could sell under this program ranged from $368 million to $467 million. Moreover, NS has a $1 billion credit facility, which expires in 2006, that it can borrow under or use to support commercial paper debt. However, any reduction in its credit rating could limit NS' ability to access the commercial paper markets.

As Several ~~the~~hundred ~~major~~claims NShave ~~subsidiary~~been filed with NSR on behalf of employees furloughed after June 1, NS1999, ~~Rail~~for ~~provides~~various ~~funding~~periods of totime, ~~service~~alleging ~~NS'~~that ~~debt. NS'~~the ~~debt~~furloughs were a result of the Conrail transaction atand ~~Sept.~~seeking ~~30,~~"New ~~2002,~~York ~~totaled~~Dock" ~~$6.4~~income ~~billion~~protection benefits. Of Several ~~this~~labor ~~debt,~~organizations $1have initiated arbitration on behalf of individual employees.8 One ~~billion~~such dispute has been heard and NSR is ~~due~~awaiting ~~within~~a ~~five~~decision. Another ~~years~~dispute ~~(including~~in ~~$740~~scheduled ~~million~~to ~~due~~be ~~May~~heard in ~~2007)~~May. NS ~~also~~Other ~~has~~disputes ~~outstanding~~are ~~$719~~pending ~~million~~wherein ofsimilar ~~notes~~benefits ~~due~~are ~~May~~sought 1,under ~~2037,~~labor agreement provisions that, ~~can~~in bemanagement's ~~redeemed~~judgment, bydo not apply to the involved ~~holders~~circumstances. Based on ~~May~~known facts, 1including the availability of legal defenses, management believes that ~~2004.~~ NS Rail will ~~not~~prevail ~~know~~in ~~the~~these ~~amount~~disputes ofand ~~2037~~that ~~notes~~any ~~that~~potential itliability ~~may~~for bethe involved ~~required~~claims toshould ~~redeem~~not ~~until~~have ~~April~~a 1,material ~~2004.~~ adverse effect on NS ~~expects~~Rail's financial toposition, beresults of operations or liquidity. ~~able~~ Depending toon ~~redeem~~the ~~any~~outcome ~~notes~~of ~~properly~~these arbitrations ~~presented~~and ~~using~~claims, ~~cash~~other ~~generated~~claims ~~from~~may ~~operations~~be ~~(including~~filed ~~sales~~or ofprogressed ~~accounts~~to arbitration. Should ~~receivable)~~all such claimants prevail, ~~cash~~there could be a significant effect on results of operations in a ~~hand~~particular ~~and~~quarter ~~proceeds~~(see ~~from~~Note ~~borrowings~~5).

NS Labor ~~Rail expects to generate sufficient cash flow from operations to meet its ongoing~~Agreements ~~obligations.~~

~~Cash~~ Approximately ~~used~~24,000 ~~for~~of ~~investing~~NS ~~activities~~Rail's ~~decreased~~employees are covered by collective bargaining agreements with 15 different labor unions. These agreements remain in effect until changed pursuant to the ~~first~~Railway ~~nine~~Labor ~~months~~Act. Moratorium ofprovisions ~~2002,~~in ~~compared~~these agreements permitted NS Rail and the unions to propose such changes in late 1999; negotiations at the national level commenced shortly thereafter. Agreements have been reached with the Brotherhood ~~first~~of ~~nine~~Maintenance ~~months~~of Way Employes (BMWE), which represents about 4,200 NS Rail employees; the Brotherhood of ~~2001~~Locomotive Engineers (BLE), ~~principally~~which represents ~~because~~about 4,500 NS Rail employees; the United Transportation Union (UTU), which represents about 6,700 NS Rail employees; the International Brotherhood of aBoilermakers ~~decline~~and inBlacksmiths ~~capital~~(IBB), ~~expenditures. The~~which ~~decrease~~represents ~~reflected~~about ~~fewer~~100 ~~locomotive~~NS ~~purchases~~Rail employees; the Transportation Communications International Union (TCU), which represents about 4,400 NS Rail employees; and the American Train Dispatchers Department (ATDD), which represents about 400 NS Rail employees. The agreement previously reached with the BLE was ~~partially~~through ~~offset~~2004; byNS ~~higher~~Rail ~~spending~~recently onreached ~~rail~~a ~~program~~further contract ~~work~~extension with the BLE through 2009 (subject to ratification). Health and welfare issues have been resolved with the BMWE and TCU. The UTU agreement provides that, subsequent to a further period of negotiation, health and welfare issues may be submitted to arbitration. Health and welfare issues with the other organizations have not yet been resolved.

15 Market Risks and Hedging Activities

~~Item~~ NS Rail ~~2. Management's~~uses ~~Discussion~~derivative ~~and~~financial ~~Analysis~~instruments to reduce the risk of ~~Financial~~volatility ~~Condition~~in its diesel fuel costs and ~~Results~~to manage its overall exposure to fluctuations in ofinterest ~~Operations~~rates. ~~(continued)~~

~~Cash~~ In 2001, ~~used~~NS ~~for~~Rail ~~financing~~began ~~activities~~a ~~was~~program ~~$413~~to ~~million~~hedge ina ~~the~~portion ~~first~~of ~~nine~~its ~~months~~diesel ~~of 2002,~~fuel ~~compared~~consumption. ~~with~~The ~~cash~~intent ~~provided~~of bythe ~~financing~~program ~~activities~~is ofto ~~$154~~assist ~~million~~ in the ~~same~~management ~~period~~ of ~~2001,~~NS Rail's ~~reflecting~~aggregate anrisk ~~increase~~exposure ~~in advances~~ to ~~NS,~~fuel aprice ~~decrease~~fluctuations, inwhich ~~equipment financing and a decline in net borrowings from a PRR subsidiary (see Note 3). Loan transactions with~~can asignificantly ~~PRR~~affect ~~subsidiary~~NS ~~resulted~~Rail's inoperating ~~net~~margins ~~borrowings of $162 million in 2002~~ and ~~$210~~profitability, ~~million~~through ~~in 2001. Advances to NS typically account for~~the ~~most~~use of ~~the~~one ~~cash~~or ~~used~~more ~~for~~types ~~financing~~of ~~activities~~derivative ~~and reflect NS' requirements~~instruments.

~~OTHER~~ Diesel fuel ~~MATTERS~~costs represented 8% of NS Rail's operating expenses for the first quarter of 2003. The program provides that NS Rail will not enter into any fuel hedges with a duration of more than 36 months, and that no more than 80% of NS Rail's average monthly fuel consumption will be hedged for any month within any 36-month period.

~~Labor~~ As of ~~Arbitration~~March ~~and~~31, ~~Claims~~2003, through swap transactions, NS Rail has hedged approximately 68% of expected 2003 diesel fuel requirements. The effect of the hedges is to yield an average cost of 75 cents per hedged gallon, including

~~Several hundred labor arbitration claims have been filed with NSR on behalf of NSR~~ ~~employees furloughed after June 1, 1999, for various periods of time, alleging that the furloughs were a result of the Conrail~~16 transaction and seeking "New York Dock" income protection benefits. Several labor organizations have initiated arbitration on behalf of individual employees. Other disputes also are pending wherein similar income protection benefits are sought under labor agreements. Based on known facts, including the availability of legal defenses, Management believes that NS Rail will prevail in these disputes and that the amount of any potential liability for the involved claims should not have a material adverse effect on NS Rail's financial position, results of operations or liquidity. Depending on the outcome of these arbitrations and claims, other claims may be filed or progressed to arbitration. Should all such claimants prevail, there could be a significant effect on results of operations in a particular quarter (see Note 2).

~~The~~ federal taxes ~~cases involving sixty-seven current~~ and ~~former~~transportation. ~~employees~~A ~~who~~10% ~~filed~~decrease ~~lawsuits involving labor issues against NSR~~ in ~~West~~diesel ~~Virginia~~fuel ~~state~~prices ~~court,~~would ~~alleging~~reduce ~~that NSR discriminated against them on the basis of their age when~~NS itRail's ~~assigned~~asset ~~them~~related ~~rankings~~to on the ~~conductor~~swaps ~~seniority~~by ~~roster~~approximately ~~pursuant~~$30 tomillion aas ~~national~~of ~~collective~~March ~~bargaining agreement~~31, ~~were settled in~~ ~~September 2002~~2003.

~~Labor~~ NS ~~Agreements~~Rail manages its overall exposure to fluctuations in interest rates by issuing both fixed- and floating-rate debt instruments and by entering into interest-rate hedging transactions to achieve an appropriate mix within its debt portfolio.

~~Substantially~~ At March ~~all~~31, of2003, NS Rail's ~~employees~~debt ~~are~~subject ~~covered~~to byinterest ~~collective~~rate ~~bargaining~~exposure ~~agreements with~~totaled ~~15 different labor unions~~$567 million. ~~These~~ A ~~agreements~~1 ~~remain~~percentage inpoint ~~effect until changed pursuant to the Railway Labor Act.~~ increase ~~Moratorium provisions~~ in ~~these~~interest ~~agreements~~rates ~~permitted~~would increase NS Rail's ~~and~~total ~~the~~annual ~~unions~~interest ~~to propose such changes in late 1999; negotiations at~~expense ~~the~~related ~~national~~to ~~level~~all ~~commenced~~its ~~shortly~~variable ~~thereafter. The~~debt ~~outcome~~by ofapproximately ~~these~~$6 ~~negotiations is uncertain at this time~~million. ~~However,~~ ~~agreements have been reached with the Brotherhood of Maintenance of Way Employes, which represents about 4,200 NS Rail employees,~~ ~~the~~Management ~~Brotherhood~~considers ofit ~~Locomotive~~unlikely ~~Engineers, which represents about 4,500 NS Rail employees, and the United Transportation Union, which~~that ~~represents~~interest ~~about~~rate ~~6,700~~fluctuations NSapplicable ~~Rail~~to ~~employees. An~~these ~~agreement~~instruments ~~also~~will ~~has~~result ~~been~~in ~~ratified with the International Brotherhood of~~a ~~Boilermakers~~material ~~and~~adverse ~~Blacksmiths,~~effect ~~which~~on ~~represents about 100~~ NS Rail's ~~employees. The~~financial ~~railroads and the Transportation Communications International Union~~position, ~~which~~results ~~represents~~of ~~about 4,500 NS Rail employees, have agreed to resolve their negotiations~~operations ~~through~~or ~~binding arbitration~~liquidity.

~~Market~~ Some of ~~Risks~~NS Rail's capital leases, which carry an average fixed rate of 7%, were effectively converted to variable rate obligations using interest rate swap agreements. On March 31, 2003, the average pay rate under these agreements was 2%, and ~~Hedging~~the ~~Activities~~average receive rate was 7%. During the first quarters of 2003 and 2002, the effect of the swaps was to reduce interest expense by $2 million and $3 million, respectively. A portion of the lease obligations is payable in Japanese yen. NS Rail eliminated the associated exchange rate risk at the inception of each lease with a yen deposit sufficient to fund the yen-denominated obligation. Most of these deposits are held by foreign banks, primarily Japanese. As a result, NS Rail is exposed to financial market risk relative to Japan. Counterparties to the interest rate swaps and Japanese banks holding yen deposits are major financial institutions believed by management to be creditworthy.

~~NS Rail uses derivative financial instruments to reduce the risk of volatility in its~~ ~~diesel~~Environmental ~~fuel costs and to manage its overall exposure to fluctuations in interest rates. As of Sept. 30, 2002, through swap~~Matters transactions, NS Rail has hedged approximately 62% of expected diesel fuel requirements for the remainder of 2002. The effect of the hedges is to yield an average cost of approximately 76 cents per hedged gallon, including federal taxes and transportation.

A NS ~~10%~~Rail ~~decrease~~is insubject ~~diesel~~to ~~fuel~~various ~~prices~~jurisdictions' environmental ~~would~~laws ~~reduce~~and regulations. It is NS Rail's ~~asset~~policy ~~related~~ to ~~the~~record ~~swaps~~a liability where such liability or loss is probable and its amount can be estimated reasonably. Claims, if any, against third parties for recovery of cleanup costs incurred by NS Rail are reflected as receivables (when collection is ~~approximately~~probable) ~~$28~~in ~~million~~the balance sheet and are not netted against the associated NS Rail liability. Environmental engineers regularly participate in ongoing evaluations of all known sites and in determining any necessary adjustments to liability estimates. NS Rail also has established an Environmental Policy Council, composed of senior managers, to oversee and interpret its environmental policy.

16 Operating expenses for environmental matters totaled approximately $2 million in the first quarters of 2003 and 2002. Capital expenditures totaled approximately $1 million for the first quarter of 2003 and $2 million for the first quarter of 2002.

~~Item~~ NS 2Rail's balance sheets included liabilities for environmental exposures in the amount of $28 million at March 31, 2003, and $29 million at Dec. ~~Management~~ 31, 2002 (of which $8 million was accounted for as a current liability in each period). At March 31, 2003, the liability represented NS Rail's ~~Discussion~~estimate of the probable cleanup and ~~Analysis~~remediation costs based on available information at 113 known locations. On that date, 10 sites accounted for $15 million of ~~Financial~~the ~~Condition~~liability, and ~~Results~~no individual site was considered to be material. NS Rail anticipates that much of this liability will be paid out over five years; ~~Operations~~however, some costs will be paid out over a longer period. ~~(continued)~~

At some of the 113 locations, certain NS Rail subsidiaries, ~~manages~~usually ~~its~~in ~~overall~~conjunction ~~exposure~~with toa ~~fluctuations~~number inof ~~interest~~other ~~rates~~parties, have been identified as potentially responsible parties by ~~issuing~~the ~~both~~Environmental Protection ~~fixed-~~Agency ~~and~~(EPA) ~~floating-rate~~or ~~debt~~similar ~~instruments~~state ~~and~~authorities byunder ~~entering~~the ~~into~~Comprehensive ~~interest-rate~~Environmental Response, ~~hedging~~Compensation ~~transactions~~and toLiability ~~achieve~~Act anof ~~appropriate~~1980, ~~mix~~or comparable state statutes, ~~within~~which ~~its~~often ~~debt~~impose ~~portfolio~~joint and several liability for cleanup costs.

At With ~~Sept.~~respect ~~30,~~to ~~2002~~known environmental sites (whether identified by NS or by the EPA or comparable state authorities), estimates of NS Rail's ~~debt~~ultimate ~~subject~~potential tofinancial ~~interest~~exposure ~~rate~~for ~~exposure~~a ~~totaled~~given ~~$441~~site ~~million. A~~or 1in ~~percentage~~the ~~point~~aggregate ~~increase~~for inall ~~interest~~such ~~rates~~sites ~~would~~are ~~increase~~unavoidably NSimprecise ~~Rail's~~because ~~total~~of ~~annual~~the widely ~~interest~~varying ~~expense~~costs ~~related~~of ~~to all~~currently ~~its~~available ~~variable~~cleanup ~~debt~~techniques, bythe ~~approximately~~likely development $4of ~~million. Management~~new ~~considers~~cleanup ittechnologies, ~~unlikely~~the ~~that~~difficulty ~~interest~~of ~~rate~~determining ~~fluctuations~~in ~~applicable~~advance tothe ~~these~~nature ~~instruments~~and ~~will~~full ~~result~~extent inof acontamination ~~material~~and ~~adverse~~each ~~effect~~potential participant's onshare NSof ~~Rail~~any estimated loss (and that participant's ~~financial~~ability ~~position~~to bear it), ~~results~~and ofevolving ~~operations~~statutory ~~or liquidity~~and regulatory standards governing liability.

~~Some of NS Rail's capital leases, which carry an average fixed rate of 7.1%, were~~ ~~effectively converted to variable rate obligations using interest rate swap agreements. On Sept. 30, 2002, the average pay~~17 rate under these agreements was 2.4%, and the average receive rate was 7.1%. A portion of the lease obligations is payable in Japanese yen. NS Rail eliminated the associated exchange rate risk at the inception of each lease with a yen deposit sufficient to fund the yen-denominated obligation. Most of these deposits are held by foreign banks, primarily Japanese. As a result, NS Rail is exposed to financial market risk relative to Japan. Counterparties to the interest rate swaps and Japanese banks holding yen deposits are major financial institutions believed by management to be creditworthy.

~~Environmental~~ The ~~Matters~~risk of incurring environmental liability -- for acts and omissions, past, present and future -- is inherent in the railroad business. Some of the commodities in NS Rail's traffic mix, particularly those classified as hazardous materials, can pose special risks that NS Rail and its subsidiaries work diligently to minimize. In addition, several NS Rail subsidiaries own, or have owned, land used as operating property, or which is leased or may have been leased and operated by others, or held for sale. Because environmental problems that are latent or undisclosed may exist on these properties, there can be no assurance that NS will not incur environmental liabilities or costs with respect to one or more of them, the amount and materiality of which cannot be estimated reliably at this time. Moreover, lawsuits and claims involving these and potentially other unidentified environmental sites and matters are likely to arise from time to time. The resulting liabilities could have a significant effect on financial condition, results of operations or liquidity in a particular year or quarter.

NS However, ~~Rail~~based ison ~~subject~~an toassessment ~~various~~of ~~jurisdictions'~~known ~~environmental laws~~ facts and ~~regulations. It is~~circumstances, NSmanagement ~~Rail's~~believes ~~policy~~that toit ~~record a liability where such liability or loss~~ is ~~probable~~unlikely ~~and~~that ~~its~~any ~~amount can be estimated~~known ~~reasonably. Claims~~matters, ifeither ~~any,~~individually ~~against~~or ~~third parties for recovery of cleanup costs incurred by NS Rail are reflected as receivables (when collection is probable)~~ in the ~~balance~~aggregate, ~~sheet~~will ~~and~~have ~~are~~a ~~not~~material ~~netted against the associated NS Rail liability.~~ adverse ~~Environmental~~effect ~~engineers~~on ~~regularly participate in ongoing evaluations of all known sites and in determining any necessary adjustments to liability estimates.~~ NS Rail's ~~also~~financial ~~has established an Environmental Policy Council~~position, ~~composed~~results of ~~senior managers,~~operations toor ~~oversee and interpret its environmental policy~~liquidity.

~~Operating expenses for environmental matters totaled approximately $5 million and $2~~ ~~million in third quarter 2002 and 2001, respectively, and $10 million and $7 million for the first nine months of 2002 and 2001,~~FORWARD-LOOKING ~~respectively. Capital expenditures totaled approximately $5 million for each of the first nine months of 2002 and~~STATEMENTS ~~2001.~~

NS This ~~Rail~~Management's ~~balance~~Discussion ~~sheets~~and ~~included~~Analysis ~~liabilities~~of Financial ~~for~~Condition ~~environmental~~and ~~exposures~~Results inof Operations contains forward-looking statements that may be identified by the ~~amount~~use of words like "believe," ~~$30~~"expect," ~~million~~"anticipate" atand ~~Sept~~"project." Forward-looking ~~30,~~statements ~~2002~~reflect management's good-faith evaluation of information currently available. However, such statements are dependent on and, ~~$33~~therefore, ~~million~~can atbe ~~Dec.~~influenced 31by, ~~2001~~a (number of external variables over which management $8has ~~million~~little ~~was~~or ~~accounted~~no ~~for~~control, asincluding: adomestic ~~current~~and ~~liability~~international economic conditions; the business environment in industries that produce and ~~each~~consume ~~period). At~~rail ~~Sept.~~freight; 30competition and consolidation within the transportation industry; fluctuation in prices of key materials, ~~2002~~in particular diesel fuel; labor difficulties, ~~the~~including ~~liability~~strikes ~~represented~~and NSwork ~~Rail's~~stoppages; ~~estimate~~legislative ofand regulatory ~~the~~developments; ~~probable~~changes ~~cleanup~~in securities and ~~remediation~~capital ~~costs~~markets; and natural ~~based~~events onsuch ~~available~~as ~~information~~severe atweather, ~~124~~floods ~~known~~and ~~locations~~earthquakes. On Forward-looking ~~that~~statements ~~date~~are not, 9and should ~~sites~~not ~~accounted~~be ~~for~~relied ~~$15~~upon ~~million~~as, a guaranty of ~~the~~future ~~liability,~~performance ~~and~~or results. no Nor ~~individual~~will ~~site~~they ~~was~~necessarily ~~considered~~prove to be accurate ~~material. NS~~indications ~~Rail~~of ~~anticipates~~the ~~that~~times ~~much~~at ofor ~~this~~by ~~liability~~which any such performance or results will be ~~paid~~achieved. ~~out~~As ~~over~~a ~~five~~result, actual outcomes and results may differ ~~years;~~materially ~~however,~~from ~~some~~those ~~costs~~expressed ~~will~~in beforward-looking ~~paid~~statements. ~~out~~The ~~over~~Company undertakes ano ~~longer~~obligation ~~period~~to update or revise forward-looking statements.

~~At some of the 124 locations, certain NS Rail subsidiaries, usually in conjunction with a~~ ~~number of other parties, have been identified as potentially responsible parties by the Environmental Protection Agency (EPA) or~~18 ~~similar state authorities under the Comprehensive Environmental Response, Compensation and Liability Act of 1980, or comparable~~ ~~state statutes, which often impose joint and several liability for cleanup costs.~~

With respect to known environmental sites (whether identified by NS or by the EPA or comparable state authorities), estimates of NS Rail's ultimate potential financial exposure for a given site or in the aggregate for all such sites are unavoidably imprecise because of the widely varying costs of currently available cleanup techniques, the likely development of new cleanup technologies, the difficulty of determining in advance the nature and full extent of contamination and each potential participant's share of any estimated loss (and that participant's ability to bear it), and evolving statutory and regulatory standards governing liability.

Item 2. Management's Discussion and Analysis of Financial Condition and Results of Operations. (continued)

The risk of incurring environmental liability -- for acts and omissions, past, present and future -- is inherent in the railroad business. Some of the commodities in NS Rail's traffic mix, particularly those classified as hazardous materials, can pose special risks that NS Rail and its subsidiaries work diligently to minimize. In addition, several NS Rail subsidiaries own, or have owned, land used as operating property, or which is leased or may have been leased and operated by others, or held for sale. Because environmental problems that are latent or undisclosed may exist on these properties, there can be no assurance that NS will not incur environmental liabilities or costs with respect to one or more of them, the amount and materiality of which cannot be estimated reliably at this time. Moreover, lawsuits and claims involving these and potentially other unidentified environmental sites and matters are likely to arise from time to time. The resulting liabilities could have a significant effect on financial condition, results of operations or liquidity in a particular year or quarter.

However, based on an assessment of known facts and circumstances, management believes that it is unlikely that any known matters, either individually or in the aggregate, will have a material adverse effect on NS Rail's financial position, results of operations or liquidity.

Accounting Pronouncement

The Financial Accounting Standards Board has issued Statement No. 143, "Accounting for Asset Retirement Obligations," which addresses legal obligations associated with the retirement of tangible long-lived assets and the associated asset retirement costs. NS Rail expects that its adoption of this Statement, which will occur effective Jan. 1, 2003, will not have a material effect on its financial statements.

FORWARD-LOOKING STATEMENTS

This Management's Discussion and Analysis of Financial Condition and Results of Operations contains forward-looking statements that may be identified by the use of words like "believe," "expect," "anticipate" and "project." Forward-looking statements reflect Management's good-faith evaluation of information currently available. However, such statements are dependent on and, therefore, can be influenced by, a number of external variables over which Management has little or no control, including: domestic and international economic conditions; the business environment in industries that produce and consume rail freight; competition and consolidation within the transportation industry; fluctuation in prices of key materials, in particular diesel fuel; labor difficulties, including strikes and work stoppages; legislative and regulatory developments; changes in securities and capital markets; and natural events such as severe weather, floods and earthquakes. Forward-looking statements are not, and should not be relied upon as, a guaranty 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. The Company undertakes no obligation to update or revise forward-looking statements.

Item 3. Quantitative and Qualitative Disclosures About Market Risks.

The information required by this item is included in Part I, Item 2, "Management's Discussion and Analysis of Financial Conditions and Results of Operations" on page 16 under the heading "Market Risks and Hedging Activities."

Item 4. Controls and Procedures.

(a) Evaluation of Disclosure Controls and Procedures.

NS Rail's Chief Executive Officer and Chief Financial Officer have evaluated the effectiveness of NS Rail's disclosure controls and procedures (as such term is defined in Rules 13a-14(c) and 15d-14(c) under the Securities

18 Exchange Act of 1934, as amended (the "Exchange Act")) as of a date within 90 days prior to the filing date of this quarterly report (the "Evaluation Date"). Based on such evaluation, such officers have concluded that, as of the Evaluation Date, NS Rail's disclosure controls and procedures are effective in alerting them on a timely basis to material information relating to NS Rail (including its consolidated subsidiaries) required to be included in NS Rail's periodic filings under the Exchange Act.

~~Item~~ (b) 4.Changes in ~~Controls~~Internal ~~and Procedures~~Controls. ~~(continued)~~

~~Exchange Act of 1934, as amended (the "Exchange Act")) as of a date within 90 days prior~~ toSince the ~~filing date of this quarterly report (the "~~ Evaluation Date~~"). Based on such evaluation~~, ~~such~~there ~~officers~~ have ~~concluded that,~~not asbeen ofany ~~the~~significant ~~Evaluation~~changes ~~Date,~~in NS Rail's internal ~~disclosure~~ controls ~~and~~or ~~procedures are effective~~ in ~~alerting~~other ~~them~~factors onthat acould ~~timely~~significantly ~~basis~~affect tosuch ~~material information relating to NS Rail (including its consolidated subsidiaries) required to be included in NS Rail's periodic filings under the Exchange Act~~controls.

~~(b)~~ 19 PART ~~Changes in Internal Controls~~II. OTHER INFORMATION

~~Since~~Item ~~the~~6. ~~Evaluation~~Exhibits ~~Date,~~and ~~there~~Reports ~~have~~on ~~not~~Form ~~been any significant changes in NS Rail's internal controls or in other factors that could significantly affect such controls.~~8-K

19 (a) Exhibit

~~PART~~ 99 Certifications of IIthe CEO and CFO pursuant to 18 U. ~~OTHER~~S.C. ~~INFORMATION~~Section 1350, as adopted

~~Item~~ pursuant to 6.Section ~~Exhibit~~906 of the Sarbanes-Oxley Act of 2002.

(ab) ~~Exhibit~~ Reports on Form 8-K:

~~99 Certifications of the CEO and CFO pursuant to 18 U~~ None.~~S.C.~~ ~~Section 1350, as adopted~~

~~pursuant to Section 906 of the~~ ~~Sarbanes-Oxley Act of 2002.~~20

20 SIGNATURES

~~SIGNATURES~~ Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

Pursuant to the requirements of the Securities Exchange Act of 1934, the Registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

		NORFOLK SOUTHERN RAILWAY COMPANY
		Registrant






Date:	April 30, 2003	/s/ Reginald J. Chaney
		Reginald J. Chaney
		Corporate Secretary (Signature)






Date:	April 30, 2003	/s/ John P. Rathbone
		John P. Rathbone
		Vice President and Controller
		(Principal Accounting Officer) (Signature)

		NORFOLK SOUTHERN RAILWAY COMPANY
		Registrant
Date:	Nov. 5, 2002	/s/ Reginald J. Chaney
		Reginald J. Chaney
		Corporate Secretary (Signature)
Date:	Nov. 5, 2002	/s/ John P. Rathbone
		John P. Rathbone
		Vice President and Controller
		(Principal Accounting Officer) (Signature)

I, David R. Goode, certify that:

1.	I have reviewed this quarterly report on Form 10-Q of Norfolk Southern Railway Company;
2.	Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact
	or omit to state a material fact necessary to make the statements made, in light of the circumstances
	under which such statements were made, not misleading with respect to the period covered by this quarterly report;
3.	Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report;
4.	The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:
	a.	designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared;
	b.	evaluated the effectiveness of the registrant's disclosure controls and procedures as of a date within 90 days prior to the filing date of this quarterly report (the "Evaluation Date"); and
	c.	presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date;
5.	The registrant's other certifying officers and I have disclosed, based on our most recent evaluation, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent function):
	a.	all significant deficiencies in the design or operation of internal controls which could adversely affect the registrant's ability to record, process, summarize and report financial data and have identified for the registrant's auditors any material weaknesses in internal controls; and
	b.	any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal controls; and
6.	The registrant's other certifying officers and I have indicated in this quarterly report whether or not there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses.

Date: April 30, 2003



/s/ David R. Goode
David R. Goode
President and Chief Executive Officer

I, David R. Goode, certify that:
1.	I have reviewed this quarterly report on Form 10-Q of Norfolk Southern Railway Company;
2.	Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact
	or omit to state a material fact necessary to make the statements made, in light of the circumstances
	under which such statements were made, not misleading with respect to the period covered by this quarterly report;
3.	Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report;
4.	The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:
	a.	designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared;
	b.	evaluated the effectiveness of the registrant's disclosure controls and procedures as of a date within 90 days prior to the filing date of this quarterly report (the "Evaluation Date"); and
	c.	presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date;
5.	The registrant's other certifying officers and I have disclosed, based on our most recent evaluation, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent function):
	a.	all significant deficiencies in the design or operation of internal controls which could adversely affect the registrant's ability to record, process, summarize and report financial data and have identified for the registrant's auditors any material weaknesses in internal controls; and
	b.	any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal controls; and
6.	The registrant's other certifying officers and I have indicated in this quarterly report whether or not there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses.
Date: November 4, 2002
/s/ David R. Goode
David R. Goode
President and Chief Executive Officer

I, Henry C. Wolf, certify that:

1.	I have reviewed this quarterly report on Form 10-Q of Norfolk Southern Railway Company;
2.	Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact
	or omit to state a material fact necessary to make the statements made, in light of the circumstances
	under which such statements were made, not misleading with respect to the period covered by this quarterly report;
3.	Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report;
4.	The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:
	a.	designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared;
	b.	evaluated the effectiveness of the registrant's disclosure controls and procedures as of a date within 90 days prior to the filing date of this quarterly report (the "Evaluation Date"); and
	c.	presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date;
5.	The registrant's other certifying officers and I have disclosed, based on our most recent evaluation, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent function):
	a.	all significant deficiencies in the design or operation of internal controls which could adversely affect the registrant's ability to record, process, summarize and report financial data and have identified for the registrant's auditors any material weaknesses in internal controls; and
	b.	any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal controls; and
6.	The registrant's other certifying officers and I have indicated in this quarterly report whether or not there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses.

Date: April 30, 2003



/s/ Henry C. Wolf
Henry C. Wolf
Vice President Chief Financial Officer

I, Henry C. Wolf, certify that:
1.	I have reviewed this quarterly report on Form 10-Q of Norfolk Southern Railway Company;
2.	Based on my knowledge, this quarterly report does not contain any untrue statement of a material fact
	or omit to state a material fact necessary to make the statements made, in light of the circumstances
	under which such statements were made, not misleading with respect to the period covered by this quarterly report;
3.	Based on my knowledge, the financial statements, and other financial information included in this quarterly report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this quarterly report;
4.	The registrant's other certifying officers and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-14 and 15d-14) for the registrant and we have:
	a.	designed such disclosure controls and procedures to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this quarterly report is being prepared;
	b.	evaluated the effectiveness of the registrant's disclosure controls and procedures as of a date within 90 days prior to the filing date of this quarterly report (the "Evaluation Date"); and
	c.	presented in this quarterly report our conclusions about the effectiveness of the disclosure controls and procedures based on our evaluation as of the Evaluation Date;
5.	The registrant's other certifying officers and I have disclosed, based on our most recent evaluation, to the registrant's auditors and the audit committee of registrant's board of directors (or persons performing the equivalent function):
	a.	all significant deficiencies in the design or operation of internal controls which could adversely affect the registrant's ability to record, process, summarize and report financial data and have identified for the registrant's auditors any material weaknesses in internal controls; and
	b.	any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant's internal controls; and
6.	The registrant's other certifying officers and I have indicated in this quarterly report whether or not there were significant changes in internal controls or in other factors that could significantly affect internal controls subsequent to the date of our most recent evaluation, including any corrective actions with regard to significant deficiencies and material weaknesses.
Date: November 4, 2002
/s/ Henry C. Wolf
Henry C. Wolf
Vice President Chief Financial Officer

23 Exhibit Index

Exhibit Index

Electronic
Submission
Exhibit
Number	Description

99	Certifications of the CEO and CFO pursuant to 18 U.S.C. Section 1350, as
	adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

Electronic
Submission
Exhibit
Number	Description	Page
99	Certifications of the CEO and CFO pursuant to 18 U.S.C. Section 1350, as	25
	adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

Virginia

Norfolk, Virginia

No Change

General

Operations Over Conrail's Lines

Sales of Accounts Receivable

Noncash Dividend

Intercompany Federal Income Tax Accounts

Net Income

Railway Operating Revenues

ItemRailway 2. Management'sOperating Discussion and Analysis of Financial Condition and Results of Operations. (continued)Expenses

NORFOLK SOUTHERN RAILWAY COMPANY

Electronic

Filing Compare · NORFOLK SOUTHERN RAILWAY CO /VA/