...February 8, 2024 Weaker revenue and significant derailment costs weighed on Norfolk Southern Corp.'s (NSC) 2023 funds from operations (FFO), but we expect improvement over the next two years. NSC's revenue declined 4.6% in 2023 (negative 2.2% excluding fuel surcharge). The primary drivers were a 16% decline in its intermodal segment offset by 9% growth in automotive. We expect revenue growth of about 1%-2% in 2024 (2%-3% excluding fuel surcharge) from low- single-digit percent growth in both carloads and revenue per carload. In addition to lower revenue in 2023, its FFO also faced $1.12 billion of net expenses related to the Feb. 3, 2023, eastern Ohio derailment (about $250 million higher than our prior forecast). The lower revenue and higher costs led to a decline in FFO of around $1.85 billion to $4.06 billion, though we expect this to improve in 2024 to $4.22 billion from derailment expenses rolling off offset by $160 million in higher cash interest costs. We expect reported cash from...
