8-KAcquisitions & DispositionsMaterial AgreementsExhibits & Filings

NORFOLK SOUTHERN CORP 8-K Report, Material Agreement (Sep 2, 2004)

Filed September 2, 2004For Securities:NSC

Summary

This 8-K filing by Norfolk Southern Corporation (NSC) on September 2, 2004, details the consummation of the Conrail Spin Off Transactions, a significant restructuring involving NSC and CSX Corporation. The core of the event is the consolidation of assets and operations previously managed under a joint venture for Conrail into separate entities for NSC and CSX. Specifically, Norfolk Southern Railway Company (NSR), a subsidiary of NSC, has fully integrated the assets and operations of Pennsylvania Lines LLC (PRR), consolidating them into NSR. This restructuring effectively terminates prior operating and lease agreements between NSR and PRR, streamlining NSC's control over these former Conrail assets. Additionally, the filing outlines the execution of Amendment No. 5 to the original Transaction Agreement, which adjusts terms to reflect the asset reallocation, and a Tax Allocation Agreement designed to preserve the tax-free nature of these spin-off transactions. The company also announces the issuance of significant debentures by PRR Newco, guaranteed by NSR, as part of the consideration for the spin-off.

Key Highlights

  • 1Consummation of Conrail Spin Off Transactions, restructuring the joint ownership and operations with CSX.
  • 2Norfolk Southern Railway Company (NSR) has fully integrated the assets and operations of Pennsylvania Lines LLC (PRR).
  • 3Termination of prior operating and lease agreements related to PRR assets, simplifying NSR's operational structure.
  • 4Amendment No. 5 to the original Transaction Agreement has been executed to adjust terms following the asset reallocation.
  • 5A Tax Allocation Agreement has been put in place to govern tax matters and preserve the tax-free status of the spin-off.
  • 6NSR guaranteed $313,741,000 in 9 3/4% debentures and $138,085,000 in 7 7/8% debentures issued by PRR Newco.

Frequently Asked Questions

The main purpose of this filing is to report the completion of the Conrail Spin Off Transactions, which involved the restructuring of the joint ownership and operations of Conrail between Norfolk Southern Corporation (NSC) and CSX Corporation. This resulted in NSC, through its subsidiary NSR, taking full control and operational integration of former Conrail assets previously allocated to Pennsylvania Lines LLC (PRR).

The spin-off transactions have led to the full integration of former Conrail assets and operations, specifically those of Pennsylvania Lines LLC, into Norfolk Southern Railway Company (NSR). This means NSR now directly owns and operates these lines, and previous lease and operating agreements related to these assets have been terminated or restructured, simplifying NSC's operational footprint.

Yes, as part of the restructuring, PRR Newco issued unsecured debentures totaling $313,741,000 (9 3/4% due 2020) and $138,085,000 (7 7/8% due 2043). These debentures were guaranteed by NSR, representing a new debt obligation for the company.

The Tax Allocation Agreement is crucial for governing tax liabilities, refunds, and proceedings between the involved parties post-spin-off. Importantly, it includes restrictions on NSC and CSX aimed at preserving the tax-free nature of the Conrail spin-off transactions. Any breach of this agreement could result in material indemnity payments.