8-KMaterial AgreementsRegulation FDExhibits & Filings

NORFOLK SOUTHERN CORP 8-K Report, Material Agreement (May 4, 2006)

Filed May 4, 2006For Securities:NSC

Summary

Norfolk Southern Corporation (NSC) has announced the completion of a significant joint venture with Kansas City Southern (KCS) concerning the Meridian Speedway rail line. This 8-K filing details the formation of Meridian Speedway, LLC, a new entity that will own and improve the rail line segment between Meridian, Mississippi, and Shreveport, Louisiana. This strategic move involves NSC contributing $300 million in cash for a 30% equity stake, while KCS contributes the relevant rail line assets for a 70% stake. This joint venture represents a material definitive agreement and an important strategic development for NSC, potentially enhancing operational efficiency and expanding network reach. Investors should note that while NSC has a minority equity interest, the agreement includes customary protections for minority members, and NSC representatives will participate in the management committee overseeing capital projects and operations. The full terms are governed by a detailed Limited Liability Company Agreement.

Key Highlights

  • 1Norfolk Southern (NSC) and Kansas City Southern (KCS) have finalized a joint venture to own and improve the Meridian Speedway rail line segment between Meridian, MS, and Shreveport, LA.
  • 2The joint venture is structured as a limited liability company named Meridian Speedway, LLC.
  • 3NSC contributed $300 million in cash for a 30% equity interest in the new venture.
  • 4KCS contributed the assets comprising the JV Line in exchange for a 70% equity interest.
  • 5A joint press release was issued on May 1, 2006, announcing the completion of this transaction.
  • 6The joint venture agreement includes customary protections for NSC as a minority member.
  • 7NSC representatives will be part of the management committee overseeing capital projects and operations of the JV Line.

Frequently Asked Questions

The primary purpose of the joint venture is to jointly own and improve the rail line segment between Meridian, Mississippi, and Shreveport, Louisiana, known as the Meridian Speedway. This strategic partnership aims to enhance the operational efficiency and potentially expand the network capabilities of this critical rail corridor.

Norfolk Southern Corporation (NSC) committed $300 million in cash to the joint venture and holds a 30% equity interest. Kansas City Southern (KCS) holds the remaining 70% equity interest in exchange for contributing the relevant rail line assets.

Meridian Speedway, LLC, the newly formed joint venture company, will be managed by a management committee composed of representatives from both KCS and NSC. This committee will be responsible for determining future capital projects and overseeing the operations of the JV Line.

While NSC holds a minority equity interest (30%), the agreement provides for customary protections for minority members. Furthermore, NSC representatives will participate in the management committee, which dictates capital projects and operational oversight, suggesting a role in strategic decision-making.