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 partially offset these strengths. Given improving freight volumes and stable pricing trends, we expect Norfolk Southern to maintain satisfactory operating profitability and generate funds from operations (FFO) to total debt in the 30% to 35% range in 2011. We characterize the company's business risk as strong, its financial risk as intermediate, and its liquidity as strong. Norfolk Southern enjoys healthy competitive positions in
