Standard&Poor's Ratings Services' ratings on Norfolk, Va.-based Norfolk Southern Corp. reflect its solid competitive position as one of the two large eastern freight railroads, its strong liquidity position, and the favorable industry risk characteristics of the U.S. freight railroad industry. Price competition from other railroads and trucking companies and the capital intensity of the industry partly offset these strengths. Despite weaker-than-expected economic growth and soft utility coal volumes, we expect Norfolk Southern to generate satisfactory credit metrics and stable free cash flow thanks to generally favorable pricing trends and ongoing productivity improvements. Our base case anticipates a ratio of funds from operations (FFO) to total debt in the low- to mid-30% area in 2012. We characterize the company's
