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 SEPT. 30, 2001

( )   TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
      EXCHANGE ACT OF 1934
      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

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 Oct. 31, 2001
          -----                        -------------------------------
Common Stock (par value $1.00)                    16,668,997



                                        2


                                TABLE OF CONTENTS
                                -----------------

                                                                     Page
                                                                     ----
Part  I.    Financial Information:

            Item 1.     Financial Statements:

                        Consolidated Statements of Income
                        Three Months and Nine months Ended
                        Sept. 30, 2001 and 2000                         3

                        Consolidated Balance Sheets
                        Sept. 30, 2001, and December 31, 2000           4

                        Consolidated Statements of Cash Flows
                        Nine months Ended Sept. 30, 2001 and 2000       5

                        Notes to Consolidated Financial Statements      6

            Item 2.     Management's Discussion and Analysis of
                        Financial Condition and Results of Operations  11

            Item 3.     Quantitative and Qualitative Disclosures
                        About Market Risks                             16

            Signatures                                                 17



                                        3

                           PART I.  FINANCIAL INFORMATION
                           ------------------------------

Item 1.	Financial Statements.
------	--------------------

<TABLE>
                  NORFOLK SOUTHERN RAILWAY COMPANY AND SUBSIDIARIES
           (A Majority-Owned Subsidiary of Norfolk Southern Corporation)
                          Consolidated Statements of Income
                                  ($ in millions)
                                    (Unaudited)

<CAPTION>
                                               Three Months Ended    Nine months Ended
                                                    Sept. 30,            Sept. 30,
                                               ------------------    -----------------
                                                2001        2000      2001       2000
                                                ----        ----      ----       ----

<S>                                             <C>         <C>       <C>        <C>
Railway operating revenues:
   Coal                                         $  366      $  363    $1,154     $1,087
   General merchandise                             862         878     2,655      2,735
   Intermodal                                      241         259       712        704
                                                ------      ------    ------     ------
        TOTAL RAILWAY OPERATING REVENUES         1,469       1,500     4,521      4,526
                                                ------      ------    ------     ------

Railway operating expenses:
   Compensation and benefits (Notes 3 and 4)       370         389     1,136      1,526
   Materials, services and rents (Note 4)          449         460     1,418      1,151
   Conrail rents and services (Note 4)             118         123       355        378
   Depreciation                                    125         122       372        364
   Diesel fuel                                      93         118       316        339
   Casualties and other claims                      33          33       110         99
   Other                                            75          80       222        251
                                                ------      ------    ------     ------
        TOTAL RAILWAY OPERATING EXPENSES         1,263       1,325     3,929      4,108
                                                ------      ------    ------     ------

             Income from railway operations        206         175       592        418

Other income (expense) - net                       (49)        (39)     (181)      (122)
Interest expense on debt                           (10)         (8)      (28)       (29)
                                                ------      ------    ------     ------

             Income before income taxes            147         128       383        267

Provision for income taxes                          52          48       143        102
                                                ------      ------    ------     ------

             NET INCOME                         $   95      $   80    $  240     $  165
                                                ======      ======    ======     ======

</TABLE>

See accompanying notes to Consolidated Financial Statements.

                                         4

Item 1.	Financial Statements.  (continued)
------	--------------------
<TABLE>
                 NORFOLK SOUTHERN RAILWAY COMPANY AND SUBSIDIARIES
           (A Majority-Owned Subsidiary of Norfolk Southern Corporation)
                            Consolidated Balance Sheets
                                  ($ in millions)
                                    (Unaudited)

<CAPTION>
                                               Sept. 30, 2001     Dec. 31, 2000
                                               --------------     -------------
<S>                                                <C>                <C>
ASSETS
Current assets:
   Cash and cash equivalents                       $    103           $     --
   Short-term investments                                --                  1
   Accounts receivable, net                             166                146
   Due from Conrail (Note 4)                              6                 31
   Materials and supplies                                86                 89
   Deferred income taxes                                161                173
   Other current assets                                  31                125
                                                   --------           --------
      Total current assets                              553                565

Investments (Note 6)                                    614                486
Properties less accumulated depreciation             10,654             10,483
Other assets                                            567                483
                                                   --------           --------
      TOTAL ASSETS                                 $ 12,388           $ 12,017
                                                   ========           ========

LIABILITIES AND STOCKHOLDERS' EQUITY
Current liabilities:
   Accounts payable                                $    830           $    902
   Income and other taxes                               201                221
   Due to NS - net (Note 4)                             311                 26
   Notes and accounts payable to Conrail (Note 4)       351                155
   Other current liabilities                            132                159
   Current maturities of long-term debt                  86                 80
                                                   --------           --------
      Total current liabilities                       1,911              1,543

Long-term debt                                          809                691
Other liabilities                                     1,022              1,061
Minority interests                                        3                  3
Deferred income taxes                                 3,706              3,613
                                                   --------           --------
      TOTAL LIABILITIES                               7,451              6,911
                                                   --------           --------

Stockholders' equity:
   Serial preferred stock                                55                 55
   Common stock                                         167                167
   Additional paid-in capital                           706                695
   Accumulated other comprehensive income (Note 6)      189                157
   Retained income                                    3,820              4,032
                                                   --------           --------
      TOTAL STOCKHOLDERS' EQUITY                      4,937              5,106
                                                   --------           --------
      TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY   $ 12,388           $ 12,017
                                                   ========           ========
</TABLE>

See accompanying notes to Consolidated Financial Statements.

                                            5

Item 1.	Financial Statements.  (continued)
------	--------------------
<TABLE>
                       NORFOLK SOUTHERN RAILWAY COMPANY AND SUBSIDIARIES
                (A Majority-Owned Subsidiary of Norfolk Southern Corporation)
                            Consolidated Statements of Cash Flows
                                      ($ in millions)
                                        (Unaudited)

<CAPTION>
                                                                  Nine months Ended
                                                                      Sept. 30,
                                                                  -----------------
                                                                   2001       2000
                                                                   ----       ----

<S>                                                                <C>        <C>
CASH FLOWS FROM OPERATING ACTIVITIES:
   Net income                                                      $    240   $    165
   Reconciliation of net income to net cash
    provided by operating activities:
      Depreciation                                                      373        365
      Deferred income taxes                                              35          3
      Gains and losses on properties and investments                     (9)       (12)
      Changes in assets and liabilities affecting operations:
         Accounts receivable                                            (20)        41
         Materials and supplies                                           3        (15)
         Other current assets and due from Conrail                      116        126
         Income tax liabilities                                          54         95
         Other short-term liabilities                                  (116)       163
         Other - net                                                   (134)       (46)
                                                                   --------   --------
            Net cash provided by operating activities                   542        885

CASH FLOWS FROM INVESTING ACTIVITIES:
   Property additions                                                  (562)      (482)
   Property sales and other transactions                                 28         67
   Investments, including short-term                                    (73)       (60)
   Investment sales and other transactions                               14         43
                                                                   --------   --------
            Net cash used for investing activities                     (593)      (432)

CASH FLOWS FROM FINANCING ACTIVITIES:
   Dividends                                                             (2)        (2)
   Advances to NS                                                      (174)      (243)
   Advances and repayments from NS                                       10         43
   Proceeds from borrowings                                             425        203
   Debt repayments                                                     (105)      (329)
                                                                   --------   --------
            Net cash provided by (used for) financing activities        154       (328)
                                                                   --------   --------
            Net increase in cash and cash equivalents                   103        125

CASH AND CASH EQUIVALENTS:
   At beginning of year                                                  --         --
                                                                   --------   --------
   At end of period                                                $    103   $    125
                                                                   ========   ========

SUPPLEMENTAL DISCLOSURES OF CASH FLOW INFORMATION
   Cash paid during the period for:
      Interest (net of amounts capitalized)                        $     57   $     99
      Income taxes                                                 $     61   $      5
</TABLE>

See accompanying notes to Consolidated Financial Statements.

                                        6

Item 1.	Financial Statements.  (continued)
------	--------------------

          NORFOLK SOUTHERN RAILWAY COMPANY AND SUBSIDIARIES (NS RAIL)
       (A Majority-Owned Subsidiary of Norfolk Southern Corporation [NS])
                 Notes to Consolidated Financial Statements

1.    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, 2001, its results of operations
      for the three and nine months ended Sept. 30, 2001 and 2000, and
      its cash flows for the nine months ended Sept. 30, 2001 and 2000.

      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

      There have been no significant changes since year-end 2000 in the
      matters as discussed in NOTE 15, COMMITMENTS AND CONTINGENCIES,
      appearing in the NS Rail Annual Report on Form 10-K for 2000,
      Notes to Consolidated Financial Statements, beginning on page 61.

3.    Work-Force Reduction Costs in 2000

      "Compensation and benefits" expenses for the nine months ended
      Sept. 30, 2000, include $101 million of costs recorded in the
      first quarter related to actions taken to reduce the size of the
      work force, which reduced net income by $62 million.  These costs
      resulted principally from a voluntary early retirement program,
      accepted by 919 of 1,180 eligible employees.  The retirements were
      effective March 1, 2000, and most of the related benefits are
      being paid from the overfunded pension plan.  The resulting
      noncash reduction to NS Rail's pension plan asset is included in
      "Other - net" in the Consolidated Statements of Cash Flows.  In
      addition, an accrual was made for certain postemployment benefits
      due to some union employees who were furloughed.

4.    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.  Effective June 1, 2000, NS charges
      NS Rail a fee for management services it performs for NS Rail
      (which totaled $117 million in the third quarter of 2001,
      including an $8 million mark-up, and $398 million for the first
      nine months, including a $25 million mark-up).  Previously, the
      costs of functions performed by NS were charged to NS Rail.  As
      a result, costs that were previously included in "Compensation
      and benefits" and "Other" are reflected in "Materials, services
      and rents."  In addition, NS charges NS Rail a revenue-based
      licensing fee (which totaled $23 million in each of the third
      quarters of 2001 and 2000 and $68 million in each of the nine-
      month periods) for use of certain intangible assets owned by NS.

      NS Rail owns 21,363,974 shares of NS common stock.

      Operations Over Conrail's Lines
      -------------------------------
      Overview -- 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 percent economic and 50 percent voting interest in the
      jointly owned entity, and CSX has the remainder of the economic
      and voting interests.

                                        7

Item 1.	Financial Statements.  (continued)
------	--------------------

      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, 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 Rail's Consolidated Balance Sheet at Sept. 30, 2001, includes
      $84 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 Sept. 30, 2001, NS Rail has paid $83 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.  Any unpaid balance
      is included in "Due from Conrail."

      "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.

      "Notes and accounts payable to Conrail" includes $263 million at
      Sept. 30, 2001, and $51 million at Dec. 31, 2000, of interest-
      bearing loans made to NS Rail by a PRR subsidiary, payable on
      demand.  The interest rate for these loans is variable and was
      3.8 percent at Sept. 30, 2001.  Also included is $88 million at
      Sept. 30, 2001, and $104 million at Dec. 31, 2000, due to PRR
      and CRC related to expenses included in "Conrail rents and
      services," as discussed above.

      Sales of Accounts Receivable
      ----------------------------
      From Dec. 1, 1999, through April 30, 2000, NS Rail sold certain of
      its rail accounts receivable, on a nonrecourse basis, to NS.
      Based on the terms of the sale agreement, these sales were
      accounted for as secured borrowings.  The discount is included
      in "Other income (expense) - net" in the Consolidated Statements
      of Income.

      Effective May 2000, NS and NS Rail sold, without recourse, to a
      bankruptcy-remote special-purpose NS subsidiary, a pool of
      accounts receivable totaling approximately $700 million.  The pool
      consisted of receivables NS earlier had purchased from NS Rail
      (as described above), and certain additional NS Rail receivables.
      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.

      Under the terms of the new sale agreement, the receivables are
      treated as sold and, accordingly, $612 million at Sept. 30, 2001,
      and $607 million at Dec. 31, 2000, 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."


                                        8

Item 1.     Financial Statements.  (continued)
------      --------------------

<TABLE>
      Intercompany Accounts
      ---------------------

<CAPTION>
                                                    Sept. 30, 2001             Dec. 31, 2000
                                                    --------------             -------------
                                                              Average                   Average
                                                              Interest                  Interest
                                                 Balance        Rate        Balance       Rate
                                                 -------      --------      -------     --------
                                                                  ($ in millions)

      <S>                                        <C>              <C>        <C>            <C>
      Due from NS:
         Advances                                $    69          3%         $   261        6%

      Due to NS:
         Notes                                      (380)         5%            (287)       8%
                                                 -------                     -------
            Due to NS - net                      $  (311)                    $   (26)
                                                 =======                     =======
</TABLE>

      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 months ended Sept. 30 include interest
      income of $19 million in 2001 and $15 million in 2000 and interest
      expense of $12 million in 2001 and $67 million in 2000 (which
      includes the discount on the sales of accounts receivable accounted
      for as secured borrowings, as discussed under the heading "Sales
      of Accounts Receivable," above) related to these intercompany
      accounts.  These amounts are included in "Other income (expense)
      - net."

      Noncash Dividend
      ----------------
      In May and September, 2001, NS Rail declared and issued to NS two
      noncash dividends totaling $450 million, 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 $871 million at Sept. 30,
      2001, and $819 million at Dec. 31, 2000.

5.    Derivative Financial Instruments

      On January 1, 2001, NS Rail adopted Statement of Financial
      Accounting Standards No. 133, "Accounting for Derivative
      Instruments and Hedging Activities" (SFAS 133), as amended by
      Statement of Financial Accounting Standards No. 138,
      "Accounting for Certain Derivative Instruments and Certain
      Hedging Activities" (SFAS 138).  The Statements establish
      accounting and reporting standards for derivative instruments
      and hedging activities, requiring that all derivatives be
      recognized in the financial statements as either assets or
      liabilities and that they be measured at fair value.
      Changes in fair value are recorded as adjustments to the
      assets or liabilities being hedged in "Other comprehensive
      income", or in current earnings, depending on whether the
      derivative is designated and qualifies for hedge accounting, the
      type of hedge transaction represented and the effectiveness of
      the hedge.  The adoption of SFAS 133 and SFAS 138 resulted in
      the recognition of a $5 million asset and a $5 million increase
      in long-term debt as of Jan. 1, 2001.

                                         9

Item 1.     Financial Statements.  (continued)
------      --------------------

      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.

      Diesel Fuel Hedging
      -------------------

      In second quarter 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 instruments.  Diesel fuel
      costs represented approximately 7 percent and 8 percent,
      respectively, of NS Rail's operating expenses for the third
      quarter and first nine months of 2001.  The program provides
      that NS Rail will not enter into any fuel hedges with a duration
      of more than thirty-six months, and that no more than eighty
      percent of NS Rail's average monthly fuel consumption will be
      hedged for each month within any thirty-six month period.

      NS Rail has entered into two types of diesel fuel derivative
      transactions through third quarter 2001.  NS Rail's management 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.  In April, NS Rail
      purchased eight monthly call options at a strike price of $0.84
      per gallon of Nymex No. 2 heating oil.  The cost of the monthly
      options, which expire serially through Dec. 31, 2001, is being
      amortized as a component of diesel fuel expense.  Because the
      price of diesel fuel did not reach the strike price at any time
      through the third quarter, NS Rail has not recorded any benefit
      related to these transactions.  During the third quarter, NS Rail
      entered into 72 fuel swaps for approximately 108 million gallons
      at an average price of approximately $0.66 per gallon of Nymex
      No. 2 heating oil.  As of Sept. 30, 2001, outstanding swaps
      covered approximately 21 percent, 22 percent, and 12 percent of
      estimated fuel purchases for the remainder of 2001 and for the
      years 2002 and 2003, respectively.

      NS Rail's fuel hedging activity resulted in a net increase in
      diesel fuel expense of $1.8 million and $2.1 million,
      respectively, for the third quarter and first nine months of 2001.
      Ineffectiveness related to its use of diesel fuel hedges through
      Sept. 30, 2001 was less than $1 million.

      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 $258 million, or 35.8 percent, and $287 million, or 36.4
      percent, of its fixed rate debt portfolio hedged at Sept. 30,
      2001 and Sept. 30, 2000, 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.


                                          10

Item 1.     Financial Statements.  (continued)
------      --------------------

      Fair Values
      -----------
      The fair values of NS Rail's diesel fuel derivative instruments at
      Sept. 30, 2001, 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 noncash
      transactions, and accordingly, are excluded from the Consolidated
      Statement of Cash Flows.  At Sept. 30, 2001, "Accumulated other
      comprehensive income," a component of "Stockholders' equity,"
      includes $4 million relating to the decrease in the fair value of
      the derivative fuel hedging transactions that will terminate within
      the next twelve months.

      The asset and liability positions of NS Rail's outstanding
      derivative financial instruments at Sept. 30, 2001 and Dec. 31,
      2000 were as follows:

<TABLE>
<CAPTION>
                                                            Sept. 30,       Dec. 31,
                                                              2001            2000
                                                              ----            ----
                                                                ($ in millions)
      <S>                                                    <C>            <C>

      Interest rate hedges:
         Gross fair market asset position                    $ 18           $  --
         Gross fair market (liability) position                --              --

      Fuel hedges:
         Gross fair market asset position                       1              --
         Gross fair market (liability) position                (7)             --
                                                             ----            ----
      Total net asset position                               $ 12           $  --
                                                             ====            ====
</TABLE>

6.    Comprehensive Income

<TABLE>
      NS Rail's total comprehensive income was as follows:

<CAPTION>
                                                     Three Months Ended     Nine Months Ended
                                                          Sept. 30,             Sept. 30,
                                                     ------------------     -----------------
                                                      2001        2000       2001       2000
                                                      ----        ----       ----       ----
                                                                  ($ in millions)

      <S>                                             <C>         <C>        <C>        <C>
      Net income                                      $   95      $   80     $  240     $  165
      Other comprehensive income (loss)                  (65)         (3)        32        (81)
                                                      ------      ------     ------     ------
           Total comprehensive income                 $   30      $   77     $  272     $   84
                                                      ======      ======     ======     ======
</TABLE>

      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.

                                           11

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

                     NORFOLK SOUTHERN RAILWAY COMPANY AND SUBSIDIARIES
              (A Majority-Owned Subsidiary of Norfolk Southern Corporation)
               Management's Discussion and Analysis of Financial Condition
                               and Results of Operations

RESULTS OF OPERATIONS

Net Income
----------
Third-quarter net income was $95 million in 2001, up $15 million, or
19 percent, compared with the same period last year, reflecting higher
income from railway operations.  For the first nine months of 2001,
net income was $240 million, compared with $165 million for the same
period last year.  Results in 2000 included $62 million of after-tax
costs related to actions taken to reduce the size of the work force
(see Note 3).  Excluding the effects of last year's work-force reduction
costs, year-to-date net income increased $13 million, or 6 percent, as
higher income from railway operations more than offset higher
nonoperating expenses.

Railway Operating Revenues
--------------------------
<TABLE>
Third-quarter railway operating revenues were $1.5 billion in 2001,
down $31 million, or 2 percent, compared with third-quarter 2000.
For the first nine months, railway operating revenues were
$4.5 billion, down $5 million, compared with the same period last year.
Both periods benefited from higher revenue per unit; however, these
benefits were overshadowed by declines in traffic volume of 6 percent
for the quarter and 4 percent for the first nine months.

<CAPTION>
                                                         Third quarter        First nine months
                                                         2001 vs. 2000          2001 vs. 2000
                                                      Increase (Decrease)    Increase (Decrease)
                                                      ------------------     ------------------
                                                        ($ in millions)        ($ in millions)

<S>                                                         <C>                    <C>
Traffic volume (carloads)                                   $   (94)               $  (176)
Revenue per unit/mix                                             63                    171
                                                            -------                -------
                                                            $   (31)               $    (5)
                                                            =======                =======
</TABLE>

<TABLE>
Revenues and carloads for the commodity groups were as follows (prior
year data has been reclassified to conform to the current presentation):

<CAPTION>
                                                               Revenues
                                           ----------------------------------------------
                                                 Third quarter           Nine months
                                              2001          2000      2001         2000
                                              ----          ----      ----         ----
                                                            ($ in millions)

<S>                                         <C>            <C>        <C>          <C>
Coal                                        $   366        $   363    $ 1,154      $ 1,087
General merchandise:
   Automotive                                   199            208        657          698
   Chemicals                                    190            189        569          569
   Metals/construction                          176            172        518          531
   Paper/clay/forest                            150            160        466          477
   Agr./consumer prod./govt.                    147            149        445          460
                                            -------        -------    -------      -------
General merchandise                             862            878      2,655        2,735
Intermodal                                      241            259        712          704
                                            -------        -------    -------      -------
      Total                                 $ 1,469        $ 1,500    $ 4,521      $ 4,526
                                            =======        =======    =======      =======
<CAPTION>
</TABLE>

                                          12

Item 2.     Management's Discussion and Analysis of Financial Condition
------      -----------------------------------------------------------
            and Results of Operations.  (continued)
            -------------------------
<TABLE>
<CAPTION>
                                                               Carloads
                                          ----------------------------------------------
                                                Third quarter            Nine months
                                             2001           2000      2001         2000
                                             ----           ----      ----         ----
                                                            (In thousands)

<S>                                          <C>            <C>      <C>          <C>
Coal                                            403            425    1,279        1,282
General merchandise:
   Automotive                                   137            158      462          530
   Chemicals                                    110            114      328          343
   Metals/construction                          186            194      537          591
   Paper/clay/forest                            110            122      344          374
   Agr./consumer prod./govt.                    120            129      376          392
                                             ------         ------   ------       ------
General merchandise                             663            717    2,047        2,230
Intermodal                                      557            590    1,638        1,653
                                             ------         ------   ------       ------
      Total                                   1,623          1,732    4,964        5,165
                                             ======         ======   ======       ======
</TABLE>

Coal
----
Coal revenues increased $3 million, or 1 percent, in the third quarter
and $67 million, or 6 percent, in the first nine months, compared with
the same periods last year.  Total tonnage handled decreased 4 percent
for the quarter, but increased 1 percent for the year-to-date.  The
decline for the quarter reflected losses in export coal and domestic
metallurgical coal, coke and iron ore, partially offset by gains in
utility coal.  Year-to-date tonnage benefited from stronger utility
demand earlier in the year.  Utility coal volume increased 5 percent in
the quarter and 11 percent year-to-date.  Growth moderated in the
quarter, reflecting milder weather and production problems at some
mines.  Domestic metallurgical coal, coke and iron ore volume declined
23 percent for the quarter and 25 percent for the first nine months,
principally due to continued weakness in the steel-production
industry.  Export coal volume decreased 41 percent in the quarter and
25 percent year-to-date, due in part to high domestic prices which are
diverting coal from the export market.  Coal revenue per unit increased
6 percent for both the quarter and year-to-date, reflecting utilization
of higher capacity cars, higher rates and favorable changes in the mix
of traffic and length of hauls.  In addition, higher export rates
resulting from the annual contract negotiations began to take effect
late in the second quarter.

Fourth-quarter coal revenues are expected to continue to compare
favorably year-over-year, supported by steady demand for coal-fired
electricity.

General Merchandise
-------------------
General merchandise revenues decreased $16 million, or 2 percent, in
the third quarter and $80 million, or 3 percent, for the first nine
months, compared with the same periods last year.  Traffic volume
(carloads) declined 8 percent in the quarter and the year-to-date, as
all commodity groups posted decreases for both periods.  Automotive
traffic volume was 13 percent lower in both periods, reflecting
continued production cutbacks in the face of the slow economy.
Metals and construction traffic volume declined 4 percent in the
quarter and 9 percent for the first nine months, principally due to
the effects of the economic slowdown and continued weakness in the
steel industry.  Paper, clay and forest products traffic volume
decreased 10 percent in the quarter and 8 percent year-to-date,
largely due to production cutbacks by paper producers, which were
mitigated by increased lumber volume.  For both periods, higher revenue
per unit, largely the result of higher rates and favorable changes in
the mix of traffic, offset much of the effects of the traffic volume
decreases.  Revenue per unit for the automotive group also benefited
from improved yield associated with the redesign of the mixing center
network and changes in the type of equipment used on certain movements.

                                          13

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


Fourth-quarter general merchandise revenues are expected to be
comparable to those of last year, which began to show the adverse effects
of the economic slowdown.

Intermodal
----------
Intermodal revenues decreased $18 million, or 7 percent, in the third
quarter, but increased $8 million, or 1 percent, for the first nine
months, compared with the same periods last year.  For the quarter,
traffic volume (units) declined 6 percent compared with third quarter
last year, principally due to a 26 percent decrease in trailer volume.
For the year-to-date, shipments were only slightly below last year,
as a 6 percent increase in container traffic volume largely offset a
22 percent decline in trailer traffic volume.  Revenue per unit
increased for both periods, primarily due to rate increases.

Fourth-quarter intermodal revenues are expected to benefit from new
business and facility improvements; however, continued softness in the
economy could offset these benefits.

Railway Operating Expenses
--------------------------
Third-quarter railway operating expenses were $1.3 billion, down
$62 million, or 5 percent, compared with third quarter last year.  For
the first nine months, expenses were $3.9 billion, down $179 million,
or 4 percent.  Expenses in 2000 included $101 million of work-force
reduction costs in the first quarter (see Note 3); excluding these
costs, 2001 expenses were down $78 million, or 2 percent.

"Compensation and benefits" expenses decreased $19 million, or
5 percent, in the third quarter and $289 million, or 20 percent, year-
to-date, excluding the first-quarter 2000 work-force reduction costs.
The year-to-date decline was primarily due to the effects of the
management fee charged by NS (see Note 4).  Lower wages that resulted
from last year's work-force reductions were somewhat offset by higher
wage rates and benefit costs for union employees and lower pension
income.

"Materials, services and rents" expenses decreased $11 million, or
2 percent, in the quarter, but increased $267 million, or 23 percent,
year-to-date.  The decline for the quarter resulted from a decrease in
management fees charged by NS, commensurate with their decline in
management employees.  The increase for the year-to-date was principally
due to the effects of the management fee, which commenced in June 2000.
In addition, higher mechanical and engineering costs and higher expenses
for intermodal-related purchased services were partially offset by lower
equipment rents and joint facility expenses.

"Conrail rents and services" expenses decreased $5 million, or 4 percent,
in the third quarter and $23 million, or 6 percent, year-to-date.  Both
declines reflected lower costs in the Shared Assets Areas and lower
expenses for the rental of Conrail equipment.

"Diesel fuel" expenses decreased $25 million, or 21 percent, in the
third quarter and $23 million, or 7 percent, for the first nine months.
Both periods benefited from lower consumption -- down 15 percent for
the quarter and 8 percent for the year-to-date.  The price per gallon
dropped 8 percent in the quarter, but remained slightly higher for
the year-to-date.

"Casualties and other claims" expenses were unchanged in the third
quarter, but increased $11 million, or 11 percent, for the first nine
months.  The year-to-date increase reflected the absence of a premium
refund that provided a benefit last year and adverse claims development.


                                          14

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

"Other" expenses decreased $5 million, or 6 percent, in the third quarter
and $29 million, or 12 percent, for the first nine months.  Both declines
reflected lower property and sales and use taxes, and lower travel and
relocation costs.  The year-to-date decrease also reflected the effects
of the management fee charged by NS.

The third-quarter railway operating ratio was 86.0 percent in 2001,
compared with 88.3 percent in the third quarter of 2000.  For the first
nine months, the ratio was 86.9 percent in 2001, compared with
88.5 percent in 2000 (excluding the work-force reduction costs, which
added 2.3 percentage points to the ratio).

Other Income (Expense) - Net
----------------------------
"Other income (expense) - net" were expenses of $49 million in the third
quarter and $181 million for the first nine months of 2001, compared
with expenses of $39 million for the third quarter and $122 million for
the first nine months of 2000.  The increases principally resulted
from the sales of accounts receivable (see Note 4), somewhat offset by
lower interest accruals on federal income tax liabilities.


FINANCIAL CONDITION AND LIQUIDITY

Cash provided by operating activities, NS Rail's principal source of
liquidity, decreased significantly in the first nine months of 2001,
compared with the same period last year.  The decline resulted from:
(1) the absence of the proceeds received May 1, 2000, from the sales of
accounts receivable (see Note 4); (2) higher tax payments this year,
including the settlement of federal tax years 1995 and 1996; (3) the
absence of employee bonus payments in 2000; and (4) a litigation
settlement payment this year.  These items were somewhat offset by
higher operating income (excluding last year's largely noncash work-
force reduction costs) and the receipt of cash from a non-recurring
settlement.  NS Rail's working capital deficit was $1.4 billion at
Sept. 30, 2001, compared with $1.0 billion at Dec. 31, 2000.  A working
capital deficit is not unusual for NS Rail; it is expected that NS Rail
will continue to generate sufficient cash to meet its ongoing
obligations.  In addition, NS currently has the capability to issue
commercial paper, the proceeds of which could be advanced to NS Rail,
if necessary, to meet its more immediate working capital needs.

Cash used for investing activities increased significantly in the first
nine months of 2001, compared with the same period last year.  The
increase resulted from a 17 percent rise in property additions,
reflecting the purchase of locomotives versus no such purchase in the
first nine months of 2000, somewhat offset by less track program work
and fewer freight car purchases.

Cash provided by financing activities in the first nine months of 2001
included $174 million of proceeds from the sale of equipment trust
certificates and a net increase of $212 million in borrowings from PRR.

OTHER MATTERS

Labor Arbitration
-----------------
Several hundred claims have been filed 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 transaction and
seeking "New York Dock" income protection benefits.  One labor
organization has initiated arbitration on behalf of approximately
one hundred of these claimants.  Management believes, based on known
facts and circumstances, including the availability of legal defenses,
that the amount of liability for these claims should not have a material
adverse effect on NS Rail's financial position, results of operations
or liquidity.  Depending on the outcome of the arbitration, other


                                         15

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

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.

Labor Agreements
----------------
Substantially all of NS Rail's employees are covered by collective
bargaining agreements with 15 different labor unions.  These agreements
remain in effect until changed pursuant to the Railway Labor Act.
Moratorium provisions in these agreements permitted NS Rail and the
unions to propose such changes in late 1999; negotiations at the
national level commenced shortly thereafter. The outcome of these
negotiations is uncertain.  However, an agreement was reached with
the Brotherhood of Locomotive Engineers, which represents about
5,000 NS Rail employees, and a national agreement has been reached
with the Brotherhood of Maintenance of Way Employes, which represents
about 4,500 NS Rail employees.  In addition, a tentative national
agreement (subject to ratification) has been reached with the United
Transportation Union, which represents about 7,500 NS Rail employees.
The tentative national agreement reached with the International
Brotherhood of Electrical Workers, which represents about 1,000
NS Rail employees, was not ratified.

REQUIRED ACCOUNTING CHANGES

Effective Jan. 1, 2001, NS Rail adopted Statement of Financial
Accounting Standards (SFAS) No. 133, "Accounting for Derivative
Instruments and Hedging Activities and SFAS No. 138, "Accounting for
Certain Derivative Instruments and Certain Hedging Activities"
(see Note 5).

Effective April 1, 2001, NS Rail adopted SFAS No. 140, "Accounting for
Transfers and Servicing of Financial Assets and Extinguishments of
Liabilities," which replaced SFAS No. 125 of the same name.  SFAS
No. 140 revises the standards for accounting for securitizations and
other transfers of financial assets and requires certain disclosures,
but carries over most of the provisions of SFAS No. 125.  NS Rail
adopted the disclosure requirements with its 2000 Annual Report; the
remaining provisions of SFAS No. 140 did not have a material effect
on NS Rail's financial statements.

In October 2001, the Financial Accounting Standards Board issued
Statement No. 144, "Accounting for the Impairment or Disposal of
Long-Lived Assets."  Statement No. 144 supersedes Statement No. 121,
"Accounting for the Impairment of Long-Lived Assets and for Long-Lived
Assets to Be Disposed Of," but it retains many of the fundamental
provisions of that Statement.  Statement No. 144 also broadens the
presentation of discontinued operations to include more disposal
transactions.  NS Rail will adopt Statement No. 144 effective Jan. 1,
2002, and expects it 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.

                                          16

Item 3.     Quantitative and Qualitative Disclosures about Market Risks.
------      -----------------------------------------------------------

	There has been no material change to the disclosures made under
the heading "Market Risks and Hedging Activities" on page 32 of the
Company's 2000 Annual Report on Form 10-K.  Additional information
required by this item is included in Part I, Item I, "Financial
Statements" in Note 5 on page 8.


                                          17

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.



                                         NORFOLK SOUTHERN RAILWAY COMPANY
                                         --------------------------------
                                         (Registrant)




Date:	Nov. 9, 2001                       /s/ Reginald J. Chaney
      ------------                       ---------------------------------
                                         Reginald J. Chaney
                                         Corporate Secretary (Signature)




Date:	Nov. 9, 2001                       /s/ John P. Rathbone
      ------------                       ----------------------------------
                                         John P. Rathbone
                                         Vice President and Controller
                                         (Principal Accounting Officer)
                                         (Signature)