Agreement establishes long-term health
monitoring and mental health services for residents and first
responders, codifies rail safety improvements, and
recognizes Norfolk Southern's extensive community
investments
ATLANTA, May 23, 2024
/PRNewswire/ -- Norfolk Southern Corporation (NYSE: NSC) has
reached an agreement on a consent decree with the U.S. Department
of Justice (DOJ), U.S. Environmental Protection Agency (EPA), and
U.S. Department of the Interior (DOI) to resolve all their claims
and investigations arising from the derailment in East Palestine, Ohio.
The agreement, which is subject to court approval, builds on the
significant financial commitments that the company has already made
toward environmental remediation, community-based programs, and
safety-related enhancements.
"From day one, it was important for Norfolk Southern to make
things right for the residents of East
Palestine and the surrounding areas," said Alan H. Shaw, president and CEO of Norfolk
Southern. "We are pleased we were able to reach a timely resolution
of these investigations that recognizes our comprehensive response
to the community's needs and our mission to be the gold standard of
safety in the rail industry. We will continue keeping our promises
and are invested in the community's future for the long-haul."
Consent Decree Terms
Under the agreement, Norfolk
Southern will formalize several commitments to address
environmental remediation, health monitoring, and rail safety.
Those include:
- Paying a $15 million civil
penalty and reimbursing the EPA for its full response expenses,
which are approximately $57 million
through November 30, 2023, as well as
subsequent response costs.
- In addition to completing clean-up of the derailment site,
implementing several environmental remediation projects to address
pre-existing pollution and to improve water quality in the region.
This is estimated to cost $7
million.
- Continuing monitoring of groundwater and surface water bodies
estimated to cost $10 to $15 million. Additionally, a drinking water
monitoring program will be established, which is estimated to cost
$15 million over 10 years.
- Establishing a $25 million
Community Health Program that will provide medical exams and mental
health services for the community and first responders for up to 20
years.
- $244 million to be spent on
safety initiatives through 2025, as part of the company's Six Point
Safety Plan and investments in safety infrastructure, technology,
and training.
The financial impacts associated with the above have either been
previously estimated as part of the total $1.7 billion recognized in response to the
incident through March 31, 2024, or
are included as part of the company's ongoing financial outlook,
including those surrounding capital expenditures and overall 2024
outlook. The company continues to pursue insurance reimbursements
and third-party claims.
Comprehensive Response to Date
As detailed by the DOJ
and EPA in the consent decree, Norfolk Southern has developed,
coordinated, and performed one of the most comprehensive incident
responses in recent history. At the core of that response are
significant investments that have been realized to date,
including:
- Approximately $780 million in
environmental response and remediation costs.
- A recently announced $600 million
class action settlement, which along with the community health
program under the consent decree with DOJ and EPA, fulfills Norfolk
Southern's promise to address long-term healthcare for residents of
East Palestine and surrounding
areas.
- Direct financial support and commitments of $107 million to the community through its Family
Assistance Center and investments in the citizens, businesses, and
life of the East Palestine and
surrounding Ohio and Pennsylvania communities.
To learn more about Norfolk Southern's commitment and ongoing
remediation efforts in East
Palestine visit NSMakingItRight.com.
About Norfolk Southern
Since 1827, Norfolk Southern Corporation (NYSE: NSC) and its
predecessor companies have safely moved the goods and materials
that drive the U.S. economy. Today, it operates a customer-centric
and operations-driven freight transportation network. Committed to
furthering sustainability, Norfolk Southern helps its customers
avoid approximately 15 million tons of yearly carbon emissions by
shipping via rail. Its dedicated team members deliver more than 7
million carloads annually, from agriculture to consumer goods, and
Norfolk Southern originates more automotive traffic than any other
Class I Railroad. Norfolk Southern also has the most extensive
intermodal network in the eastern U.S. It serves a majority of the
country's population and manufacturing base, with connections to
every major container port on the Atlantic coast as well as to
major ports in the Gulf of Mexico
and Great Lakes. Learn more by visiting
www.NorfolkSouthern.com.
Cautionary Statement on Forward-Looking
Statements
Certain statements in this communication are
"forward-looking statements" within the meaning of the "safe
harbor" provisions of the Private Securities Litigation Reform Act
of 1995, as amended. These statements relate to future events and
involve known and unknown risks, uncertainties, and other factors
that may cause our actual results, costs, levels of activity, or
performance to be materially different from those expressed or
implied by any forward-looking statements. In some cases,
forward-looking statements may be identified by the use of words
like "may," "will," "could," "would," "should," "expect," "plan,"
"anticipate," "intend," "believe," "estimate," "project,"
"consider," "predict," "potential," "feel," or other comparable
terminology. The Company has based these forward-looking statements
on its current expectations, assumptions, estimates, beliefs, and
projections. While the Company believes these expectations,
assumptions, estimates, and projections are reasonable, such
forward-looking statements are only predictions and involve known
and unknown risks and uncertainties, many of which involve factors
or circumstances that are beyond the Company's control. These and
other important factors, including those discussed under "Risk
Factors" in our Annual Report on Form 10-K for the year ended
December 31, 2023, as well as the
Company's subsequent filings with the SEC, may cause actual
results, performance, or achievements to differ materially from
those expressed or implied by these forward-looking statements. The
forward-looking statements herein are made only as of the date they
were first issued, and unless otherwise required by applicable
securities laws, the Company disclaims any intention or obligation
to update or revise any forward-looking statements, whether as a
result of new information, future events, or otherwise.
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SOURCE Norfolk Southern Corporation