Investments (Unaudited)

9 Months Ended

Sep. 30, 2011

Investments [Abstract]

Investments

6.  Investments

	September 30,			December 31,
	2011			2010
	($ in millions)
Short-term investments with average remaining maturities:
Available-for-sale:
Corporate bonds, 8 and 4 months, respectively		$	43		$	64
Federal government bond, 6 months			15			0
Certificates of deposit, 2 and 5 months, respectively			10			76
Commercial paper, 4 months			--			35
Total available-for-sale			68			175
Held-to-maturity:
Federal government bonds, 2 and 9 months, respectively			43			49
Corporate bonds, 2 and 10 months, respectively			41			59
Total held-to-maturity			84			108
Total short-term investments		$	152		$	283

Investment in Conrail

Through a limited liability company, Norfolk Southern and CSX Corporation (CSX) jointly own Conrail Inc. (Conrail), whose primary subsidiary is Consolidated Rail Corporation (CRC).  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.  NS' investment in Conrail was $980 million at September 30, 2011, and $959 million at December 31, 2010.

CRC owns and operates certain properties (the Shared Assets Areas) for the joint and exclusive benefit of Norfolk Southern Railway Company (NSR) and CSX Transportation, Inc. (CSXT).  The costs of operating the Shared Assets Areas are borne by NSR and CSXT based on usage.  In addition, NSR and CSXT pay CRC a fee for access to the Shared Assets Areas.  "Purchased services and rents" and "Fuel" include expenses for the use of the Shared Assets Areas totaling $32 million and $30 million for the third quarters of 2011 and 2010, respectively, and $97 million and $88 million for the first nine months of 2011 and 2010, respectively.  NS' equity in the earnings of Conrail, net of amortization, included in "Other income – net" was $8 million and $3 million for the third quarters of 2011 and 2010, respectively, and $21 million and $16 million for the first nine months of 2011 and 2010, respectively.

"Accounts payable" includes $166 million at September 30, 2011, and $128 million at December 31, 2010, due to Conrail for the operation of the Shared Assets Areas.  In addition, "Other liabilities" includes $133 million at both September 30, 2011 and December 31, 2010, for long-term advances from Conrail, maturing 2035, that bear interest at an average rate of 4.4%.