CSX Corporate Social Responsibility Report 2012
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CSX Corporate Social Responsibility Report 2012

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Our vision is to be the safest, most progressive North American railroad. Our commitment to ...

Our vision is to be the safest, most progressive North American railroad. Our commitment to
corporate social responsibility is moving the company closer to this goal. This report highlights
milestones in safety, environment and community engagement achieved in 2012.

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CSX Corporate Social Responsibility Report 2012 CSX Corporate Social Responsibility Report 2012 Document Transcript

  • 2012 Corporate SocialResponsibility Report
  • Overview markets Governance community workforce safety Environment value chainCOPYRIGHT ©2013 CSX CORPORATION90  GRI Index 99 Appendix2 Overview10  Markets24  Governance34  Community44  Workforce56  Safety68  EnvironmentCustomers and Suppliers:Our Value Chain821 Chairman’s Message
  • 1CSX 2012 Corporate Social Responsibilit y ReportChairman’s MessageOverview markets Governance community workforce safety Environment value chainDear Stakeholders:For more than 180 years, CSX has offered a competitive advantage to customers, value forshareholders, rewarding careers for employees and a vital transportation service to America. Weunderstand that succeeding as a business requires a relentless commitment to promoting safety,protecting the environment and engaging with local communities.Our vision is to be the safest, most progressive North American railroad. Our commitment tocorporate social responsibility is moving the company closer to this goal. This report highlightsmilestones in safety, environment and community engagement achieved in 2012.The culture of safety at CSX is built upon continuous improvement, training, strong communication,community engagement and industry collaboration. In 2012, we achieved the best personal injuryrate in our history and a near-best train accident rate.CSX is committed to reducing greenhouse gas emissions intensity by 6 to 8 percent by 2020. Wehave made progress toward this goal through fleet upgrades and technological advancements. Inaddition, the company’s fuel efficiency improved by 2 percent from 2011 to 2012. This means that aCSX train can move freight 466 miles on a single gallon of fuel, up from 456 miles in 2011.The company also acts “Beyond Our Rails” (beyondourrails.org) through community investmentand partnerships. CSX provided more than $14 million in community investments and nearly$230,000 via in-kind transportation donations in 2012. We exceeded our goal of increasingcommunity investment spend to $10 million. Furthermore, CSX strengthened partnerships thatdevelop tomorrow’s leaders, in particular with CityYear and Future Farmers of America.We are proud of our 2012 performance and remain committed to the uncompromising pursuit ofexcellence. Our future success will rely on continuous improvement in safety, environmental andsocial performance that also meets customer and financial expectations.It is my pleasure to share the 2012 Corporate Social Responsibility report with you. Thank you foryour interest in CSX.Sincerely,Michael J. WardMichael J. WardChairman, President and CEO
  • 2The 2012 Corporate Social Responsibility (CSR) reportprovides an overview of CSX’s initiatives and partnershipsthat promote sustainability across its 21,000-mile railnetwork. This annual CSR report aligns with CSX’score values and describes the company’s sustainabilitycommitments. Measuring and disclosing its sustainabilityefforts allows the company to engage with and learn fromits many stakeholders. CSX strives to promote safety, protectthe environment, develop and retain employees and activelyengage in the communities where we operate.This report was prepared in accordance with the GlobalReporting Initiative (GRI) G3.1 Sustainability ReportingGuidelines. CSX also had a GRI check of our self-declaredapplication Level B report. We are committed to producinga report annually and our 2012 CSR report follows the 2011report. Please see the GRI Index on page 90 for a list of alldisclosures and indicators referenced in this report.All of the information contained in this report is fullyrepresentative of the company’s principal operatingsubsidiary, CSX Transportation, as well as its othersubsidiaries, including CSX Intermodal Terminals, Inc.(“CSX Intermodal Terminals”); Total Distribution Services,Inc. (“TDSI”); Transflo Terminal Services, Inc. (“Transflo”); andCSX Technology, Inc. (“CSX Technology”). Information in thisreport covers 2010 through 2012, with a focus on fiscal year2012 activities (from December 31, 2011 to December 28,2012). There are no significant changes in the boundary orscope of this report compared to the 2011 report.Any restatements of prior years’ data are noted throughoutthe report where appropriate. Units are metric wherenoted. CSX’s greenhouse gas (GHG) emissions wereverified by a third party as part of the company’sparticipation in the Carbon Disclosure Project investorand supply chain surveys.Overview markets Governance community workforce safety Environment value chainOverview
  • 3CSX at a GlanceHeadquartered in Jacksonville, Fla., CSX is one of the nation’sleading transportation companies. The company providesrail-based transportation services, including traditional railservice and the transport of intermodal containers andtrailers in 23 states east of the Mississippi, the District ofColumbia and the Canadian provinces of Ontario andQuebec. Our network reaches more than 70 ocean, riverand lake ports along the Atlantic and Gulf Coasts, theMississippi River, the Great Lakes and the St. LawrenceSeaway. CSX also connects thousands of production anddistribution facilities through approximately 240 short-lineand regional railroads.CSX’s 21,000-mile network is essential to America’scontinued economic growth. We help make it possible toefficiently transport a broad portfolio of products for ournation’s farmers and manufacturers, energy producers andusers, ports, retailers, plants, mills and more. CSX’s networkis positioned to reach nearly two-thirds of the nation’sconsumers. We serve major markets east of the Mississippi,including NewYork, Philadelphia, Boston, Baltimore, Atlanta,Miami, New Orleans, St. Louis, Memphis and Chicago.Business StrategyAt CSX, our vision, purpose and core values are thefoundation for how we operate. CSX aspires to be thesafest, most progressive North American railroad, relentlessin the pursuit of customer and employee excellence.Overview markets Governance community workforce safety Environment value chain21,000 miles of track across 23 states, serving major markets eastof the Mississippi including New York, Philadelphia, Boston, Baltimore,Atlanta, Miami, New Orleans, St. Louis, Memphis and ChicagoWe strive for all CSX employees to practice ourguiding principles:• It starts with the customer.• People make the difference.• Safety is a way of life.• Fact-based.• Right results, right way.When all employees are aligned with these core values,CSX can better serve our customers, shareholdersand other stakeholders. Please see page 26 for a moredetailed description of CSX’s core values.Public-private partnerships. Expanding capacity onU.S. rail networks will provide substantial public benefits,including job creation, increased business activity at ports,reduced highway congestion and lower air emissions.Therefore, CSX and its government partners areworking jointly to invest in multiyear rail infrastructureprojects such as the National Gateway, a public-privatepartnership that will increase intermodal capacity onkey corridors between Mid-Atlantic ports and theMidwest. Such partnerships provide a foundation forvolume growth, productivity improvement, enhancedcustomer service, increased market access potentialand continued advancements in the reliability ofoperations. We include examples of some of ourpublic-private partnerships throughout this report.
  • 4CSX 2012 Corporate Social Responsibilit y ReportMontgomeryWillardCurtis BayNew OrleansMobileLocust PointChicagoColumbusRussellCincinnatiEvansvilleHamletRichmondBaldwin JacksonvilleTampaE. SavannahCharlestonErwinRocky MountCumberlandSyracuseSelkirkNashvilleBirminghamLouisvilleBuffaloDetroitStanleyFlorenceAtlantaWalbridgeClevelandGreenwichAvonWaycrossMajor TerminalI-90 CorridorI-95 CorridorSoutheastern CorridorCoal NetworkCSX Rail NetworkCSX Network GeographyWith 21,000 miles of track, access to 70 portsand nationwide transloading and warehousingservices, CSX serves America’s transportationneeds through the major transportationnetworks defined below.Interstate 90 (I-90) Corridor. This CSXcorridor links Chicago and the Midwest tometropolitan areas in NewYork and New England.It serves as a primary route for import traffic comingfrom Asia through western ports.Interstate 95 (I-95) Corridor. The CSX I-95 corridorconnects Charleston, Jacksonville, Miami and many othercities throughout the Southeast with the heavily populatedNortheastern cities of Baltimore, Philadelphia and NewYork.Southeastern Corridor. This portion of the CSX networkconnects CSX’s western gateways of Chicago, St. Louis andMemphis to the cities of Nashville, Birmingham, and Atlanta andmarkets in the Southeast.Coal Network. The CSX coal network connects the coal miningoperations in the Appalachian mountain regions and Illinois Basin withutilities and industrial areas in the Northeast, Mid-Atlantic and Southeast,as well as many river, lake and deepwater port facilities.CSX Moving Through HistoryThe railroad industry has always been anintegral contributor to America’s progressand continues to evolve to meet thedemands of today’s markets. CSX operationsdate back to 1827 when the Baltimore& Ohio (B&O) became the nation’s firstcommon carrier. Within a decade, the B&Owas joined by the Chesapeake & Ohio(C&O) and the Richmond, Fredericksburg& Potomac Railroad. Each of the railroadsthat combined into the CSX family broughtnew geographical reach to valuable markets,gateways, cities, ports and transportationcorridors. CSX was incorporated in 1978under Virginia law.In 1980, the company completed the mergerof the Chessie System and Seaboard CoastLine Industries into CSX. The mergerallowed the company to connect northernpopulation centers to growing southeasternmarkets. Later, the company’s acquisitionof key portions of Conrail, Inc. permittedCSX to link the Northeast, including NewEngland and the NewYork metropolitan area,with Chicago and midwestern markets aswell as the growing areas in the Southeastalready served by CSX. This current railnetwork allows CSX to directly serve everymajor market in the eastern U.S. with safe,dependable, environmentally responsibleand fuel-efficient freight transportation andintermodal service.Overview markets Governance community workforce safety Environment value chainH E A R T
  • 5CSX 2012 Corporate Social Responsibilit y ReportLocomotives Number Percentof FleetFreight  3,650 87%Switching  319 8%Auxiliary Units  209 5%Total Locomotives 4,178 100%Railcar Type Number Percentof FleetGondolas  26,432 38%Open-Top Hoppers  12,226 18%Covered Hoppers  10,668 15%Multilevel Flat Cars  10,456 15%Boxcars  8,268 12%Flat Cars  1,082 2%Other  287 <1%Subtotal Railcar 69,419 100%Containers  17,927Total Equipment 87,346Our FleetCSX operates an extensive fleet of locomotives andfreight cars capable of meeting the growing customerdemand for rail-based transportation. In addition, aportion of our customers own or lease their own railcars.LocomotivesA CSX locomotive has the power to pull freight cars thattogether stretch more than a mile long. The image of theCSX locomotive embodies our company brand.CSX currently operates more than 4,000 locomotives.More than 97 percent are owned by the company andthe rest are long-term leased. The fleet consists of 3,650freight locomotives, 319 switching locomotives used in railyards and 209 auxiliary units that are used to produceextra traction for heavy trains in hilly terrain.Ongoing investment in new, technologically advancedand fuel-efficient locomotives is critical to the company’sfuture success. CSX has started to invest in low-emissionlocomotives like the GE Evolution®Series, which generatesless particulate emissions and offers fuel efficiencyimprovements compared with an average fleet locomotive.Freight Car FleetOn any given day, approximately 190,000 freight carsand containers travel the CSX network. In 2012, CSXtransported 6.4 million carloads of products and rawmaterials to valued customers. More than half of therailcars on the CSX system are not owned or leased bythe company. These cars include railcars owned by otherrailroads, shipper-furnished or private cars, and multilevelrailcars shared among railroads to transport automobiles.Financial Performance HighlightsFostering profitable growth and providing healthy returnsfor shareholders are key priorities for our business.In 2012, CSX delivered earnings growth and marginexpansion despite challenging economic conditions. Forfull-year 2012, net earnings were $1.9 billion, or $1.79 pershare – up from $1.8 billion, or $1.67 per share, in 2011.Overview markets Governance community workforce safety Environment value chain
  • 6CSX 2012 Corporate Social Responsibilit y ReportOperating income increased 1 percent to $3.5 billion andoperating ratio improved 30 basis points to 70.6 percentduring the same period.CSX remains highly committed to delivering value toshareholders through a balanced approach to deploying cashthat includes investments in the business, dividend growthand share repurchases. In 2012, the company invested $2.3billion(1)to further enhance the capacity, quality, safety andflexibility of its network. In addition, CSX continues toreturn value to its shareholders in the form of dividends andshare repurchases. As of year-end 2012, the company hasincreased its quarterly cash dividend 10 times over a seven-year period, which represents a 33 percent compoundedannual growth rate. In 2012, CSX completed a $2 billionshare repurchase authority that was announced in 2011.While delivering shareholder value through this balancedapproach to cash deployment, the company remainscommitted to an improving investment-grade credit profile.Key Financials (dollars in millions)FiscalYear2010 2011 2012Volume(thousands of units)6,384 6,476 6,409Revenue $10,636 $11,743 $11,756Expense $7,565 $8,325 $8,299Operating Income $3,071 $3,418 $3,457Operating Ratio 71.1% 70.9% 70.6%For additional information, refer to the Results of Operationssection of CSX’s 2012 Annual Report on Form 10-K.Overview markets Governance community workforce safety Environment value chain1. Included in this amount is $166 million of investments related toreimbursable public-private partnerships where reimbursements maynot be fully received in a given year.
  • 7CSX 2012 Corporate Social Responsibilit y ReportOverview markets Governance community workforce safety Environment value chainCommitted to SustainabilityCSX aspires to be a leader in sustainability. We are committed to the relentless pursuit of excellence – as a businesspartner, an employer, a community member, an environmental steward and a value creator for shareholders.Prioritizing sustainability and innovation is crucial to delivering excellent customer service and strong financial results,which helps position the company for a strong future. CSX is committed to transparency and accountability andreviews the company’s sustainability strategy on a periodic basis.CSX Sustainability StatementAt CSX, sustainability is the way we manage and operate our business to best serveour customers, care for the environment, secure profits and drive long-term prosperity.Sustainability is a business method that ensures safety, efficiency and responsibility in amanner that protects CSX employees, communities, shareholders and the environment,now and in the future.Our daily operations align business performance with a commitment to environmental,social and community stewardship encompassing three elements:Reduce the environmental footprint of our operations.• Transport goods in a manner that minimizes community and environmental impacts.• Reduce fuel, energy, water and other resources needed to move each ton-mile of freight.• Increase recycling and reuse efforts through waste minimization.• Strive to manage the CSX supply chain in consideration of environmental effects andgood governance.Engage openly on sustainability issues.• Communicate regularly with customers, employees and external stakeholders on sustainability issues,goals and efforts.• Provide opportunities to customers, suppliers, employees and communities to actively participate insustainability programs.• Increase transparency and disclosure of our sustainability performance through our annualCorporate Social Responsibility report and related sustainability disclosures.Support sustainable development.• Collaborate with customers and communities to grow sustainably, considering social, economic andenvironmental effects.• Build innovative infrastructure to support operations and minimize resource use.
  • 8CSX 2012 Corporate Social Responsibilit y ReportOverview markets Governance community workforce safety Environment value chainUnderstanding Material IssuesCSX is committed to addressing stakeholder concerns andreporting on our progress. To determine the content forthe 2012 CSR report and ongoing sustainability efforts, CSXperformed a materiality analysis.The materiality analysis helps CSX understand the issuesthat are of the greatest importance to our stakeholders.In particular, the process examines internal and externalstakeholder concerns, enabling CSX to understand andmanage areas of risk and opportunity. This analysis involvedinterviews with key stakeholders, a media review andfeedback on the 2011 CSR report. In addition, investorquestionnaires, sustainability ratings and rankings, GRIguidelines, industry trends, peer reports and customerinquiries helped further prioritize the issues.Each of the broad issues shown in the materiality list belowis composed of sub-issues. CSX does not include thesesub-issues on our materiality matrix. Issues that fall in theupper-right corner of the example materiality grid representthe most pertinent issues for CSX and have the mostcoverage in the report. The company recognizes that bothstakeholder and business priorities change over time, and wewill continue to refine and evolve our materiality process.IMPORTANCE TOSTAKEHOLDERSIMPORTANCE TO CSXMaterialIssues forStakeholdersMATERIALISSUES FOR BOTHSTAKEHOLDERSAND CSXMaterialIssues for CSXMaterial Issues FOR CSX (in alphabetical order):Economic Executive compensation; Local economic contributions;Operations and infrastructure; Shareholder returns;Supply chain managementGovernance Core values; Corporate governance; Risk management;Sustainability integration; Transparency (advertising,reporting and company communications)Environment Air quality; Biodiversity and land management;Carbon management and climate change;Environmental benefits of rail transport;Waste reduction; Water conservationSocial Benefits and training; Community engagement and collaboration;Community safety and security; Diversity; Employee safety; External stakeholderengagement; Government engagement; Health and wellness; Human rights;Labor management practices; Talent acquisition and retention; Workforce planning
  • 9CSX 2012 Corporate Social Responsibilit y ReportStakeholder Group Engagement Approach TopicsEmployees Awareness campaigns; Ethics helpline;Intranet sites; Leadership meetings;Newsletters; Town hall meetings;Training; Voice of the Employee surveyBenefits; Environment; Safety andwellness; Satisfaction surveys;Service excellence; Training;Volunteer opportunitiesCustomers CSX National Partner ServiceDays; Customer events and tradeshows; E-business tools; Voice ofthe Customer survey; WebsiteCustomer service; Environmentalbenefits of rail transport; Safe handlingof freight; Service reliabilityInvestors Annual shareholder meeting;Earnings conference calls andinvestor conferences; Quarterlyand annual SEC reportsCapital investments; Corporategovernance; Financial and operatingresults; Safety; Shareholder returnsCommunities and Non-Governmental OrganizationsEmployee volunteerism; Publicmeetings; Safety educationcampaigns; TellCSX helplineCollaboration and partnerships;Economic benefits in localcommunities; Environment; Networksafety and security; SafetyPublic and RegulatoryOfficialsCSX Environmental ManagementSystem; CSX Police; Publicpolicy advocacy; TrainingCollaboration and partnerships;Compliance with laws andregulations; Environment; SafetySuppliers CSX supplier web-portal;Supplier diversity initiatives;Supplier quality programContractor management; Safety;Supplier development;Supplier diversityMedia Company website;Press releases; Social mediaCommunity; Emergencyresponse; Environment; Financialhighlights; Safety; WorkforceOverview markets Governance community workforce safety Environment value chainEngaging with StakeholdersActive engagement with all of CSX’s stakeholdersis a business imperative for the company. Two-waycommunication allows us to gain and maintain our license tooperate. CSX regularly engages with each stakeholder grouplisted in the table below through a variety of mechanisms.Key topics and concerns raised by each stakeholder groupare then addressed by CSX as appropriate. We realize thatour stakeholders care about a variety of different issues –this is our method of ensuring we are addressing the mostrelevant topics.Markets Governance community workforce safety Environment value chainC S X resp o nse
  • 10CSX Rail NetworkLow HighNumber of CarsOverview markets Governance community workforce safety Environment value chainCSX serves three primary lines of business:Merchandise, Intermodal and Coal.Merchandise:The merchandise business includes eightmarkets in three sectors.Agricultural Sector:• Agricultural Products• Phosphates and Fertilizers• Food and ConsumerIndustrial Sector:• Chemicals• Automotive• MetalsHousing and Construction Sector:• Emerging Markets• Forest ProductsIntermodalCoalMarketsMerchandiseTop 10MerchandiseCustomers(in alphabetical order)• AK Steel Corp• Chrysler Group• Ford Motor Co• General Motors Co• Honda Motor Co• International Paper Co• Koch Industries• Mosaic Co• Nucor Corp• United States SteelCorp
  • 11CSX 2012 Corporate Social Responsibilit y ReportAgricultural Products MarketCSX moved a total of 394,000 carloads of agriculturalproducts in 2012 for revenues of more than $1 billion – a4 percent decrease from 2011.Volume decreased due to reduced shipments of corn andethanol. Corn shipments for animal feed declined as droughtconditions in the Midwest impacted harvest levels anddrove corn prices higher. Further contributing to this decline,customers in the Southeast took advantage of lower-costimported grains and a strong local crop, both of which aretransported by truck. Ethanol shipments declined as a resultof higher corn prices and reduced gasoline demand.The majority of CSX’s agricultural traffic is domesticshipments that fit into two distinct markets:• Whole grain product market, consisting of corn, soybeansand wheat.• Processed grains, consisting of feed ingredients, flour,edible oils, corn sweeteners and ethanol.Market StrengthsOur network is well-positioned to meet the growing needsand demands of the country’s agricultural sector. Wecurrently serve:• More than 300 grain elevators across the greaterMidwest, transporting 23 million tons of grain and feedingredients annually.• 97 feed mills in the Southeast, 42 of which are unit train-capable facilities.• 47 grain-processing facilities, as well as a number ofbakeries and soft drink production facilities throughout theeastern U.S.• Five export grain facilities to support a growingexport environment.• 18 ethanol unit-train unloading stations throughout theeastern U.S.CSX continues to focus on improving efficiency andmaximizing asset utilization within the grain markets.During the fourth quarter of 2012, 40 percent of ourgrain train business moved in our most efficient 90-car trainproduct. CSX also continues to emphasize our Express Loadand Unload program, which offers additional savings ontrains that our customers load, or unload, within 15 hours.CSX continues to improve the efficiency of our ethanolnetwork, as 10 of our 18 unit train ethanol facilities canunload directly into storage tanks, thereby improving theutilization of equipment and improving terminal efficiency.Both of these improvements reflect a continued focus onasset utilization in addition to larger unit size, and havehelped CSX improve customer efficiencies within theagricultural market of our business.Moving ForwardCSX continues to develop new and more efficient facilitiesto serve our customers, including feed mills, ethanol unit-train unloading stations and grain terminals. With globaldemand for food and grain continuing to grow and U.S. cropyields increasing, CSX expects the agricultural business toremain a consistent, long-term strength for the company.Feed MillFlour MillGrain ElevatorSoy ProcessingEthanol Distribution Train TerminalCSX Rail NetworkAgricultural ProductsOverview markets Governance community workforce safety Environment value chain
  • 12CSX 2012 Corporate Social Responsibilit y ReportOverview markets Governance community workforce safety Environment value chainPhosphates and Fertilizers MarketIn 2012, CSX’s phosphate and fertilizer business moved321,000 carloads for revenues of $512 million – a 4 percentincrease over 2011.Volume was flat year-over-year. Fertilizer shipments werelower in the first half of the year as the expectation ofmoderating prices resulted in delayed purchases by farmers.This decline in the first half was offset by growth in fertilizerin the second half resulting from low river levels thatshifted business that traditionally moves via barge to rail.Additionally, producers advanced shipments of fertilizer inthe fourth quarter in anticipation of an expected increasedapplication by farmers in 2013.With strategic access to one of the world’s largestphosphate reserves, combined with valuable importand domestic nitrogen production facilities, CSX plays avital role in meeting the world’s fertilizer needs. CSX isthe steady leader in nitrogen, phosphate and potashfertilizer transportation with unmatched access to keyproduct resources.Market StrengthsA central asset in CSX’s fertilizer market is the 1,977-square-mile “BoneValley,” located in central Florida’s phosphatemining area. About 55 percent of the North Americanphosphate market and 10 percent of the global marketis served from central Florida production. Shipmentsdepart from Tampa Bay area terminals and arrive at globaldestinations like India, Pakistan, South America, Chinaand Australia. The company also dispatches shipments ofprocessed phosphates and fertilizers to other railroadsrouted with Midwestern and Canadian receivers. In total,CSX serves four phosphate mines and four processing plantsin the BoneValley, plus six port facilities. In addition, CSX hasaccess to phosphate production facilities in North Carolinaand Mississippi and nitrogen production plants in Georgia,Ohio,Virginia and Ontario. Key strengths include:• Service to six Tampa Bay port facilities providing wateraccess for exports and trans-Gulf shipments, includingCSX’s Rockport facility at the Port of Tampa. Rockport has100,000 tons of storage capacity and handled more than770,000 tons of phosphate exports in 2012. This facility hasthe capacity to handle more than 1 million tons per year.• Shuttle train operations that moved almost 18.5 milliontons of phosphate rock, other outputs and finishedphosphate product within the BoneValley, with much ofthe equipment in this service cycling within 36 hours.• Domestic phosphate unit-train service that travels fromthe BoneValley to the Midwest within four days andhas the ability to handle four truckloads of dry or liquidfertilizer product with one railcar.• Access to 95 domestic fertilizer warehouses capable ofhandling unit trains and five nitrogen production facilitieswith both liquid and dry nitrogen for direct shipment.• Access to 18 East Coast and Gulf Coast import terminalsfor handling foreign-produced liquid nitrogen fertilizer, drynitrogen fertilizer, phosphate and potash.• Excellent connections at western gateways, which allowCSX to deliver potash originating in Saskatchewan,New Mexico and Utah to fertilizer receivers in theMidwest, Northeast and Southeast via unit-train andcarload service.• Service to two deepwater nitrogen solution importterminals in Wilmington, N.C., and Theodore, Ala.Moving ForwardThe outlook for fertilizer is positive, thanks to an increase inglobal crop demand, rising commodity prices and the needto replenish nutrient levels of potash and phosphates in soil.Domestic and export phosphates will continue to grow asglobal demand increases for corn and grain consumption.In addition, low natural gas prices in the U.S. have resultedin a resurgence of interest in domestic nitrogen production.Several nitrogen production expansion projects have beenannounced in 2013, spurred by the shale gas boom. While inthe early stages, the increase in production could contributeto significant growth opportunities for CSX. Going forward,this could also result in the U.S. becoming a net exporterof some nitrogen fertilizer commodities. Continued marketfundamentals that support nitrogen and phosphate importopportunities, combined with new product offerings basedon government regulations, will provide additional railopportunities for urea-based solutions.We will continue positioning the company for future growthby actively developing additional port and inland facilitiesin response to projected demand, efficiency and marketexpansion improvements. As a result, the overall marketoutlook for phosphate is moderately strong, with expectedgrowth in the nitrogen, potash and phosphate markets.
  • 13CSX 2012 Corporate Social Responsibilit y ReportFood and Consumer MarketCSX’s food and consumer business moved a total of100,000 carloads in 2012 for revenues of $273 million –a 4 percent increase over 2011.Volume declined year-over-year as a result of lower applianceshipments due to intermodal conversions, lower salesincentives by manufacturers and a moderating economy.The decline in appliances was partially offset by growth inrefrigerated products due to highway-to-rail conversions.Market StrengthsCSX serves our customers through thereach and reliability of our network, and withstrategic partnerships with other transportationproviders that help increase our speed ofservice and market reach. In addition, we offer:• Direct lines to processing plants that producefood and beverage products, appliances andother consumer products.• A large network of CSX-served warehousesthat provide rail-to-truck transfers for non-rail-served receivers.• Links to beverage producers and appliance manufacturersin Mexico via interline rail connections. While much ofthe company’s food and consumer volume is domestic, agrowing portion of consumer goods originate in Mexico.• A state-of-the-art service that transports a wide varietyof cargo, primarily fruits and vegetables, from producermarkets in California and Washington to key consumermarkets in the Northeast. CSX and Union Pacificpartner with Railex, an innovative distribution platform,to provide five-day service from the West to East Coast.The refrigerated boxcars used for Railex service featureenhanced insulation, energy-efficient cooling systems andGPS monitoring to ensure that customer goods remainproperly stored throughout their entire journey. Thisservice is expanding to Southeast markets in 2013.• In late 2013, CSX will expand other expedited serviceofferings to include Central Florida and the Chicago area.The platform will handle a variety of food commoditiesproviding round-trip service to and from these metropol-itan regions. The nonstop temperature-controlled servicewill provide 2.5-day service twice a week.Moving ForwardCSX’s food and consumer network is well-positioned toserve the food, beverage and appliance industry’s growingdemand for rail service. Imports from Mexico are expectedto increase “on-shoring” in the appliance manufacturingsector and are expected to continue through 2013. As ourfood network extends into the Southeast and Midwest in2013, we will also offer additional service lanes in key growthmarkets throughout 2014 and 2015. Overall, volume of thecompany’s food and consumer shipments is steady, and ispoised for long-term growth.Chemicals MarketCSX moved a total of 471,000 carloads of chemicalcommodities in 2012 for revenues of nearly $1.7 billion – a 5percent increase over 2011.Volume growth was driven by an increase in energy-relatedmarkets – including fracturing sand, liquid petroleum gas(LPG) and crude oil – that was mainly due to the nationwideincrease in shale drilling activity. Additionally, plasticsshipments grew in response to increased demand in theautomotive, housing and packaging markets.The strength of CSX’s chemicals market lies in our abilityto safely move thousands of carloads of chemicals each dayover the breadth and location of the company’s network.We serve hundreds of chemical consumers, plasticsconverters, glass manufacturing plants, chemical plants andrefineries. In recent years, shale drilling has had a positiveimpact on the market, representing a growth opportunity forchemical-related transportation at CSX, given our networkaccess to the Marcellus and Utica shale regions.Overview markets Governance community workforce safety Environment value chainThe main ingredients of CSX’s food and consumer market are:• Dry grocery goods, which include alcoholic and non-alcoholic beverages,canned goods and dry packaged goods, accounting for half of consumerunit shipments.• Temperature-controlled products, representing more than one-thirdof shipments.• Consumer products, including manufactured goods and appliances, makingup the balance.
  • 14CSX 2012 Corporate Social Responsibilit y ReportOverview markets Governance community workforce safety Environment value chainMarket StrengthsCSXT is a major transportation service provider to theNorth American chemical and petroleum industries. Thebusiness is highly diversified, with dozens of customersshipping hundreds of different commodities.Chemical-related shipments primarily move in CSX’s single-car merchandise network. A significant amount of the trafficoriginates on other railroads, due to the largeconcentration of chemical production located inthe Gulf states, with CSX serving the chemicalreceiver market in the eastern U.S.While many of the traditional chemical andpetroleum markets that CSX serves have beengrowth-challenged over the last decade, severalnew emerging markets have developed over the last coupleof years, driven by a surge in natural gas and oil drillingactivity in the U.S. The key commodities – crude oil, naturalgas liquids and fracturing sand – present an opportunity forabove-average growth over the next few years. And, overthe long term, the improved energy supply outlook for theU.S. creates a sustainable competitive advantage for domesticchemical producers.Shale drilling activity is driving a significant level of industrialdevelopment activity in the Marcellus and Utica shale regionsas customers seek strategic locations to handle drilling-related raw materials. In support of that activity, CSX’sfracturing sand business has grown four-fold over the last fiveyears. The beneficial impact of increased natural gas supplyis also drawing potential new chemical plants to the area forthe first time in several decades.CSX is in a strong position to compete for opportunitiespresented by eastern U.S. refineries interested in receivingcrude oil from the Bakken shale region in the west.Historically, crude oil has been supplied to East Coastrefineries via vessels, but the abundance of low-cost oil inthe Bakken region and the lack of pipeline infrastructureto the east have changed that supply model. Rail service isnow essential to quickly bridging the gap from oil field torefinery. CSX can move a unit train of crude oil from theChicago gateway to the Northeast market in less than 48hours, making this the premier rail route to the east. Severalcrude-by-rail opportunities are expected to come to fruitionin 2013 and 2014, as the infrastructure required to handlethese large-volume movements is completed.In addition to CSX’s network strengths, the company alsoprovides the most comprehensive access to bulk rail-to-truck transloading sites in North America through ourTRANSFLO subsidiary. TRANSFLO enables chemicalshippers to leverage the economic and productivity benefitsof bulk transloading to reach customers that are not directlyserved by rail or that lack the volume to justify rail carloads.Moving ForwardDue to the shale gas boom that is sweeping the country,the proliferation of natural gas supply in the U.S. has pushedprices down to the lowest level in over a decade. Sincenatural gas is a primary basic component in the productionof a wide range of petrochemicals, the U.S. is now amongthe lowest-cost production regions in the world.ChemicalPlasticGlass/SandRefineryChemicalsCSX Rail NetworkCSX’s chemical market:• 38% Plastics and plastic feedstocks (chemicals used to make plastics).• 35% Industrial chemicals, silica sand.• 27% Petroleum products, liquefied petroleum gases.
  • 15CSX 2012 Corporate Social Responsibilit y ReportOverview markets Governance community workforce safety Environment value chainU.S. chemical companies are capitalizing on this newlyimproved competitive position by investing billions ofdollars in domestic production capacity. For example,recent announcements suggest that U.S. ethylenecapacity could increase by 30 percent or more overthe next five years. Though U.S. demand for ethylene-derived petrochemicals is expected to grow at near-grossdomestic product growth rates, the capacity additionsthat will take place over the next severalyears will far outstrip increases in U.S.demand. As a result, it is likely that U.S.exports of many of these petrochemicals,especially polyethylene, will see significantgrowth in the latter part of this decade.All of this activity suggests that thetransportation of chemicals and energy-related commoditiespresents a growth opportunity for the company.Automotive MarketCSX’s automotive business generated 425,000 carloads in2012 for revenues of $1.2 billion – a 23 percent increaseover 2011.Volume grew with North American light vehicle (NALV)production, increasing 18 percent year-over-year. The averagevehicle age in the U.S. reached a record high of 11.4 years,and currency exchange rates contributed to increasingNorth American production. In addition, inventory shortagesfollowing the tragic Japanese tsunami and Thai floodsescalated U.S. production levels in 2012.The general U.S. economic recovery and structural changeswithin the auto industry are contributing to the revival of thedomestic auto business, increasing demand for CSX services.The company’s automotive market is benefiting from theindustry’s overall recovery, improved credit availability, newvehicle launches and plant expansions.Market StrengthsCSX serves automotive manufacturing plants and assemblycenters in eight states, and provides a network of world-classvehicle distribution centers with cutting-edge inventory andfacility management technology. Total Distribution Services,Inc., a CSX subsidiary, manages vehicle distribution centersin 15 states. These attributes – in conjunction with industry-leading quality performance, operational excellence andongoing investments in its multilevel fleet – distinguishesCSX and creates value by accelerating its customers’ productto market. CSX has developed strong relationships withtraditional domestic manufacturers General Motors, Fordand Chrysler, as well as “New Domestics” Honda, Nissan,Toyota, Kia, Hyundai andVolkswagen.CSX partners with automotive manufacturers:Ford. Reopened the CSX-served Louisville, Ky.,assembly center following re-tooling for the 2012Ford Escape.GM. Reopened the CSX-served Spring Hill, Tenn.,assembly center building the Chevrolet Equinox.Toyota. Opened a new assembly center, manu-facturing the Corolla, in December 2011 in Tupelo,Miss., served by BNSF in partnership with CSX.Volkswagen. In September 2011, began productionat its new Chattanooga, Tenn., assembly center,which CSX serves via a shortline railroad partner.Kia. Completed an expansion in late 2011 toaccommodate production of the KIA Optima,increasing annual production capacity and addedincremental railcar loading capacity.Moving ForwardThe automotive market outlook for 2013 and beyondremains bright for CSX. While sensitivities to fuel prices,jobs and U.S. fiscal policy may moderate progress, U.S.auto sales are projected to grow 5 percent in 2013. Creditavailability has led to the resurgence of both new vehiclesales and vehicle leasing and will continue to positivelyimpact production. This, in conjunction with growth in the• CSX transports 30% of all North American light vehicles produced.• The auto industry enjoyed three consecutive years of double-digit growthin U.S. vehicle sales, and is projecting 5% year-over-year growth in 2013.
  • 16CSX 2012 Corporate Social Responsibilit y ReportOverview markets Governance community workforce safety Environment value chainU.S. vehicle population for the first time since 2007, andthe increasing average vehicle age in the U.S., underscoresour confidence in the forward-looking NALV productionprojections.Vibrant year-over-year growth projections areexpected to result in NALV production surpassing thehistoric highs set in 2000 by calendar year 2016.In addition, labor costs and favorable exchange rates areencouraging manufacturers to expand or move productionback to the U.S., resulting in increased exportation ofU.S.-assembled vehicles. This “on-shoring” of manufacturingextends to Mexico, where the next North Americanassembly centers for Honda, Mazda, Nissan and Audi areunder construction. The CSX franchise – in conjunctionwith capital investments in multilevel equipment andvehicle distribution centers, and its commitment to quality,operational excellence and applied technology – constitutesa strong, long-term value proposition that differentiatesthe company.Metals MarketCSX’s metals business moved a total of 263,000 carloadsin 2012 for revenues of $635 million – a 4 percent increaseover 2011.Volume in 2012 was slightly lower, primarily due to thedecline in ferrous scrap shipments as a result of depressedsteel mill utilization rates and lower ferrous scrap exportsdriven by moderating global demand.CSX’s metals market is closely tied to the performance ofthe steel industry. Since the 2009 recession, economic andfiscal uncertainty in the U.S. and abroad has limited the paceand scope of the steel industry’s recovery.CSX-Served Assembly Plants• Detroit, Mich.: Dodge Durango, Jeep Grand Cherokee• Sterling Heights, Mich.: Dodge Avenger, Chrysler 200• Warren, Mich.: Chrysler Ram• Dearborn, Mich.: Ford F-150, Lincoln Mark LT• Louisville, Ky.: Ford Escape, Lincoln MKC• O’bannon, Ky.: Ford Super Duty, Expedition, Navigator• Wayne, Mich.: Ford Focus, Ford C-Max• Bowling Green, Ky.: Chevrolet Corvette• Lordstown, Ohio: Chevrolet Cruze• East Liberty, Ohio: Honda CR-V, Honda Crosstour, Acura RDX• Greensburg, Ind. (via short line): Honda Civic, Acura ILX• Marysville, Ohio: Honda Accord, Acura TL• Montgomery, Ala.: Hyundai Sonata, Hyundai Elantra• West Point, Ga.: KIA Sorento, Hyundai Santa Fe, KIA Optima• Normal, Ill.: Mitsubishi Outlander Sport• Smyrna, Tenn.: Pathfinder, Rogue, Altima, Maxima, LEAF, Infiniti JX• Lafayette, Ind.: Toyota Camry, Subaru Legacy, Tribeca, Outback• Princeton, Ind.: Highlander, Sequoia, Sienna• Chattanooga, Tenn. (via short line): Passat• Spring Hill, Tenn.: Chevrolet EquinoxDistribution CenterAssembly PlantCSX Rail NetworkAutomotive
  • 17CSX 2012 Corporate Social Responsibilit y ReportOverview markets Governance community workforce safety Environment value chainMarket StrengthsSteel has long played a crucial role in the U.S. and globaleconomies, so it is no surprise that the international steelmarketplace has a direct impact on our domestic production,demand and transportation needs. Overall, CSX has morethan 700 metals customers in its network and serves moremetal-producing states east of the Mississippi than any othercarrier. We transport:• More ferrous scrap than any other North Americanrailroad.• Sheet steel from every major producer to processingfacilities and key end-use markets.• Millions of tons of bar, coiled rod and structural steelannually for the construction industry.• Hundreds of thousands of tons per year of alumina,ferroalloy and other raw materials to aluminum andsteel producers.In fact, 87 percent of U.S. steel is produced within thefootprint of CSX’s network. Our traffic is heaviest inthe Indiana-Ohio region and along the East Coast, butthe market is also expanding globally. Our service andcompetitive pricing help steel customers expand theirmarket reach. CSX de Mexico, for example, has been akey part of both import and export solutions and growthopportunities for CSX customers. The CSX metals marketalso benefits customers who are not directly served by railwith MetalNet, a specialized logistics service that connectsour customers with a system of metal warehouses andtransloading facilities.Moving ForwardCSX’s metals franchise is strategically positioned forgrowth in the coming years as domestic steel productionmakes steady improvements, with automotive, energyand construction end-markets driving growth. With ourvaluable customer network, strength in U.S. steel productionand position in the steel market, CSX expects to deliversustainable growth, not only as the economic environmentcontinues to improve, but also in the form of share gainsfrom modal conversions and new product development.Emerging MarketsCSX’s emerging markets business moved a total of 408,000carloads in 2012 for revenues of $671 million – relatively flatcompared to 2011.Volume declined due to reduced aggregate shipments(which include crushed stone, sand and gravel) resultingfrom the completion of several road construction andgovernment stimulus projects versus the prior year. Also,there was a decline in salt shipments for road application, asinventories remained high due to the mild winter.Overall, this business generated flat revenues in 2012 ona moderate decline in volume. These markets representminerals, waste, machinery and transportation equipment –all critical bellwether industries in the U.S. economy.• 55% of metal products moved by CSXare ferrous scrap and sheet steel.• 45% includes semi-finished products, steel plate, pipe,nonferrous products and long products like rebar and beams.Steel FacilitiesCSX Rail NetworkMetals
  • 18CSX 2012 Corporate Social Responsibilit y ReportOverview markets Governance community workforce safety Environment value chainAggregates are among the major minerals shipped overthe CSX network and are used in producing asphalt andconcrete for the construction of homes, retail and officebuildings, and roads.Key DriversThree key drivers in our emerging markets business areminerals, waste and machinery.• Volumes were depressed in 2012 across all segments inminerals. The completion of several stimulus projects, themild winter and low steel capacity utilization were themajor factors impacting the business unit.• The company also saw a small decrease in municipal,construction and remediation waste shipments in 2012,driven by less construction and demolition debris.Revenues, however, were up versus 2011due to a favorable mix change with additionalremediation shipments.• With respect to the machinery market, shipmentsincreased in the first half of 2012, but softened in thesecond half. This was primarilyattributed to less wind energycomponent traffic due to theuncertainty as to whetherCongress would extend acrucial industry productiontax credit. Other segments ofthe market – including boilersand turbines, as well as farmand construction machinery –performed well, the result of which had themachinery market flat compared to 2011.Market StrengthsEach of the businesses affords opportunities for CSX towork with customers to identify new rail movements.There are many opportunities to grow rail volume for themajor commodities within this portfolio, such as minerals(aggregates, cement, lime, clay), waste (industrial, municipal,remediation) and machinery (agricultural, construction,power generation).• CSX has a number of quarries, distribution yards andlime kilns along its network that serve large power plants,steel mills and mining operations. Our presence in theSoutheast, especially in Florida, puts us in a favorableposition in one of the fastest-growing regions as the U.S.economy recovers.• The CSX system makes it possible to move wastestreams long distances to large regional landfills with morecompetitive pricing than local disposal facilities. We servea diverse set of customers, including metal processing,steel, paper, chemicals and waste-hauling companies.• Machinery shipments typically consist of heavy agriculturaland power-generation equipment. CSX is a low-costalternative to trucking, especially when moving domesticshipments, as well as those headed for export throughvarious ports along the Eastern seaboard.Moving ForwardResidential and commercial construction markets aregradually recovering. In addition, CSX is increasinglyoptimistic about greater highway construction spendingTop Origination PointsEmerging MarketsAggregateLimeCementWasteMachineryCSX Rail NetworkEmerging markets forCSX consist of:• Minerals• Waste• Machinery• Transportationequipment
  • 19CSX 2012 Corporate Social Responsibilit y ReportOverview markets Governance community workforce safety Environment value chainin 2013. CSX is expected to benefit from the demand forcement and aggregate materials. An increase in steel capacityutilization will aid lime volume growth. Additionally, anexpected increase in commercial activity in the Northeastshould result in more opportunities to handle constructionand demolition debris shipments by rail. The sustainedrevival of the construction market will be a key growthdriver, as will our continuing efforts to stimulate demandfor our service by selling the value of rail and CSX’seconomically and environmentally friendly supplychain solution.In addition, CSX has many long-term opportunities inmunicipal solid waste disposal projects, as well as severalmajor remediation ventures that will keep waste movingon our lines for many years to come. Power generation isalso poised to rebound as major infrastructure replacementprojects are developed in the future. The renewal of thewind energy production tax credit in early 2013 will supportfurther development and provide additional transportationopportunities for CSX.Forest Products MarketsCSX’s forest products business moved a total of 286,000carloads in 2012 for revenues of $722 million – a 6 percentimprovement over 2011.In 2012, an improvement in carload volumes was primarilyrelated to the strengthening home construction market.While consumption of packaging paper and woodpulpremained stable, expanded use of electronic media createdless demand for printing paper and related products. Despitethis overall market shift, forest products remain an integralpart of CSX’s portfolio.Moving ForwardAs the construction sector and the general economycontinue to gain momentum, we expect concurrent growthto follow in the building products, packaging products andwoodpulp markets. CSX also sees potential biomass growthin Europe, where regulations are demanding the increasedconsumption of renewable fuels.Packaging Paper MillPrinting Paper MillPulp MillCSX Rail NetworkForest ProductsCSX and the North AmericanForest Products MarketCSX plays a critical role in the North American forest productsindustry. To better dedicate our services to meet customerand market requirements, CSX’s forest products business isseparated into two primary groups:Paper Products. Consists of packaging products(containerboard, linerboard and corrugated medium), printingpaper, newsprint, magazine and catalog paper, woodpulpand scrap paper. CSX has access to 67 paper and woodpulpmills, along with numerous box plants and printing facilitiesthroughout our network.Building Products. Includes lumber, panel products,wallboard, bricks, roofing products and other materials relatedto the residential and commercial construction industries.Other important commodities include biomass (wood pellets)as a sustainable fuel source, and woodchips, used as a feedstockfor both paper and biomass production.
  • 20CSX 2012 Corporate Social Responsibilit y ReportIntermodal MarketCSX’s intermodal business delivered 2.5 million units in2012 for revenues of $1.6 billion – an 11 percent increaseover 2011.In 2012, intermodal volume increased due to growth in bothdomestic and international markets. Domestic shipmentgrowth resulted from highway-to-rail conversions andincreased demand from bothnew and existing customers.International growth was drivenby new customers and expandedservice offerings primarily enabledby the Northwest Ohio terminal.Intermodal provides key benefits to shippers looking tooptimize their transportation networks and supply chains:Scalable Capacity. Intermodal solutions provide accessto a large and growing fleet of both rail-owned and privatelyowned containers, easing shippers’ capacity concerns year-round, including during peak seasons. Intermodal scales tomeet shipping needs efficiently, with the ability to move theload of 280 trucks on one train.Sustainable Savings. Intermodal advantages, such aslower fuel consumption and freight density through thedouble-stacking of containers, produce cost savings forshippers and their customers. Additionally,the environmental favorability of intermodalprovides a responsible growth engine forsustainable freight transport (see page 85).Flexibility. With the most intermodal lanesin the Eastern U.S. and nationwide connectivity,CSX meets the dynamic needs of today’s freight flows.Public-Private PartnershipsExpanding capacity on U.S. rail networks provides substantialpublic benefits, including job creation, increased businessactivity at U.S. ports, reduced highway congestion and lowerair emissions. This is why CSX and its government partnersare working jointly to invest in multiyear rail infrastructureprojects such as the National Gateway. Spanning multiplestates, this approximately $850 million public-privatepartnership will increase intermodal capacity and createsubstantial environmental and efficiency advantages byclearing key corridors between Mid-Atlantic ports and theMidwest for double-stack intermodal trains.The company’s Northwest Ohio intermodal terminal,which became operational in 2011, is the cornerstone ofthe National Gateway and the company’s long-term growthinitiatives. This high-capacity terminal expands serviceofferings to customers, improves market access to and fromEast Coast ports and consumption centers, and enhancesthe fluidity of the network.During 2012, the company completed construction of a newintermodal terminal in Louisville, Ky., and completed majorCSX Rail NetworkLow HighNumber of CarsIntermodal• 52% Domesticintermodal traffic• 48% Internationalintermodal trafficCSX provides intermodal service to major marketseast of the Mississippi, scheduling more than600 trains per week through the 48 terminals it serves.Overview markets Governance community workforce safety Environment value chain
  • 21CSX 2012 Corporate Social Responsibilit y Reportterminal expansion projects in Worcester, Mass.; Charlotte,N.C.; and Columbus, Ohio. In addition, the company beganconstruction on a new intermodal terminal in Winter Haven,Fla., during 2012. These projects further enhance CSX’sintermodal offering and will support future growth inthis market.Additional Market StrengthsIntermodal continues to gain momentum as a go-to transpor-tation mode for a variety of products across highly complexsupply chains, including consumer goods, appliances, manu-facturing, packaging products, electronics, food and beverageitems, furniture and more. The need for intermodal transpor-tation in the U.S. is on the rise. At CSX, we are positioned tocapitalize on that growing demand with:• A strong presence in key population centers, including 48directly served terminal locations predominantly east ofthe Mississippi River.• Access to all major ports on the Atlantic and Gulf coasts.• Seamless network interchange with other rail carriers toenable efficient intermodal solutions with truck-like servicelevels across the U.S. and into both Mexico and Canada.• Superior service connectivity between markets – not onlyin major freight corridors, butalso in traditionally difficult toserve, lower-density, second- andthird-tier markets due to CSX’shub and spoke network.• Cutting-edge technologiesthat increase operational andservice efficiencies and promotesustainable supply chains, whileenhancing safety and security.• Continued success stimulatingHighway-to-Rail (H2R)conversions, thanks to increasinglycompetitive and reliable service,a focus on customer needs, andefforts to educate the BeneficialCargo Owners directly on thevalue of intermodal.Intermodal Top 10Customers(in alphabetical order)• APL• CMA CGM• Hapag Lloyd• Hyundai• J.B.Hunt• Maersk• MediterraneanShipping• Pacer• Schneider National• UPSIntermodal TerminalsCSX directly serves 48 intermodal terminals on its network in 19 states and in one Canadian province. Theseterminals serve as transfer points between rail and trucks. Cities with more than one terminal are listed with a number.(in alphabetical order by state/province)• Bessemer, Ala.• Mobile, Ala.• Jacksonville, Fla. (2)• Orlando, Fla.• Tampa, Fla.• Atlanta, Ga.• Fairburn, Ga.• Savannah, Ga. (2)• Chicago, Ill. (2)• East St. Louis, Ill.• Evansville, Ind.• Indianapolis, Ind.• Louisville, Ky.• New Orleans, La.• Baltimore, Md.• Springfield, Mass.• Worcester, Mass. (2)• Detroit, Mich.• Kansas City, Mo.• Kearny, N.J.• North Bergen, N.J. (2)• NewYork/New Jersey Port (3)• Buffalo, N.Y.• Syracuse, N.Y.• Charlotte, N.C.• Wilmington, N.C.• Cincinnati, Ohio• Cleveland, Ohio• Columbus, Ohio• Marion, Ohio• Marysville, Ohio• Northwest Ohio• Chambersburg, Pa.• Philadelphia, Pa.• Montreal, Quebec• Charleston, S.C.• Memphis, Tenn.• Nashville, Tenn.• Portsmouth,Va. (3)Overview markets Governance community workforce safety Environment value chain
  • 22CSX 2012 Corporate Social Responsibilit y ReportMoving ForwardThe company expects steady intermodal growth, andinternational growth in this area will be guided by continuingeconomic recovery, expansion in international trade, asustained intermodal service product and the strongrelationships CSX has with the port and ocean carriercommunities. CSX’s domestic intermodal business has grownseven years in a row – a trend we expect to continue.CSX will pursue incremental growth opportunities throughnew market and service expansion and accelerated H2Rconversion by working with shippers to realize supply chainoptimization. These efforts target the roughly 9 millionaddressable loads in the eastern freight market.Coal MarketCSX’s coal business moved 1.3 million carloads in 2012 forrevenues of $3.2 billion – a 14 percent decrease from 2011.Demand for utility coal declined due to low natural gasprices, reordering the priority in which coal-fired plants aredispatched. In addition, the 2011 to 2012 heating season wasextremely mild, reducing the demand for electricity. As aresult, utility coal stockpiles remain well above target levels.Utility coal declines were partially offset by higher exportshipments driven by increased shipments of thermal coal. In2012, CSX shipped a record 47.8 million tons of export coal.The company has made great strides in carload productivityby expanding coal car capacity and improving loadingeffectiveness. In 2012, we improved lading-per-car by 1,700pounds through initiatives to replace smaller, older carswith higher-capacity cars, and to use higher-technologybatch-weigh loading systems and computer support toolsto aid the customer loading process. The improved lading,combined with pricing, produced a 2 percent increase inrevenue per car versus 2011.Market StrengthsCSX serves approximately 120 active mining operations.We participate in the delivery of coal to nearly 170 differentdestinations. The vast majority of the coal we move originatesin the Appalachian and Illinois Basin coal fields that lie withinour 21,000-mile network. We take great care to ensure thatthe value of our network, as measured by our customers,continues to grow and evolve with their changing needs.The CSX network:• Runs through the heart of the Appalachian coal fields.• Serves the growing Illinois Basin coal fields and majorinterline connections to railroads originating Western coal.• Reaches major coal export terminals at Newport News,Va., Baltimore, Md., and Mobile, Ala.; as well as Great Lakescoal terminals at Ashtabula and Toledo, Ohio, and severalterminals along the inland river system.Moving ForwardDuring 2013, coal-fired generation is expected to increase asnatural gas prices rise.Volume increases will follow as inven-tories return to normal by year-end. In the longer term, CSXexpects coal-fired generation to remain an integral sourceof electricity given its low cost and the utility industry’s abilityto adapt to regulatory changes. While the industrial marketswill likely remain challenging, the integrated steel market forcoal is forecasted to be positive through 2017.CSX Rail NetworkLow HighNumber of CarsCoal Network FlowOverview markets Governance community workforce safety Environment value chain
  • 23CSX 2012 Corporate Social Responsibilit y ReportThe export coal market is a growth segment for CSX.Volumes in 2013 are expected to be strong by historicstandards, but less than the record tonnage of 2012. Overthe long term, CSX expects its export business to continueto grow, benefiting from increasing coal demand in Europe,Asia and South America. CSX is well-positioned to capitalizeon international market growth through our access to largeU.S. coal suppliers and multiple port facilities.Coal Utility LocationCoal Port LocationCoal ReservesCCX Rail NetworkCoalCoal Top 10 Customers(in alphabetical order)PRODUCERS• Alliance Resource Partners• Alpha Natural Resources• Arch Coal• CONSOL Energy• Eagle Industries• James River Coal• Patriot Coal• Peabody• TECO Coal• Walter Energy, Inc.RECEIVERS• AK Steel• Alpha Coal Sales• Consumers Energy• EDF Trading North America LLC• Georgia Power• Jim Walter Resources Inc.• South Carolina Electric & Gas• South Carolina Public Service Authority• TennesseeValley Authority• XCoal Energy & ResourcesOverview markets Governance community workforce safety Environment value chain
  • 24Successes:• Updating and training employees on the CSX Code ofEthics in 2012, for which we received an A rating fromCorpedia.• 100 percent of management employees completedethics training and 100 percent of supervisorsreceived Ethical Leadership Training in 2012.• Proactively engaging with shareholders ongovernance issues.Challenges:• Ensuring that all of our union employees aretrained annually on ethics.• Providing updates and easy access to informationabout company policies to employees, suppliersand other key stakeholders.Overview markets Governance community workforce safety Environment value chainGovernanceIn This Section:ExecutiveLeadershipBoard ofDirectorsLeadershipStructureBoardCommitteesGovernancePoliciesPolitical Activitiesand Lobbying
  • 25Management Approach and Plans AheadAt CSX, our vision to be the safest, most progressive North American railroad begins with good corporate governance.To be a company that consistently demonstrates integrity, we live by a set of core values that every employee at CSX isresponsible for adopting, and we embed these values into our daily work practices. Looking ahead, CSX plans to expandthe company’s risk management approach to continue increasing awareness on ethics topics.Overview markets Governance community workforce safety Environment value chainMichael J. Ward, chairman, president and chief executiveofficer (CEO) of CSX since January 2003, has been amember of the CSX team for 35 years. Mr. Ward’s railroadcareer has included key executive positions in nearly allaspects of CSX’s business, including sales and marketing,operations and finance.Fredrik I. Eliasson has served as executive vice presidentand chief financial officer (CFO) since January 2012 and isresponsible for the management and oversight of all financialstrategic planning activities. He previously served in avariety of leadership roles at CSX during his 17-year tenure,including vice president of sales and marketing for CSX’schemicals and fertilizer business, vice president of emergingmarkets, vice president of commercial finance and vicepresident of financial planning and analysis.Oscar Munoz was named executive vice presidentand chief operating officer (COO) in January 2012. He isresponsible for managing all aspects of CSX’s operations,including transportation, service design, customer service,engineering, mechanical and technology. Prior to this role, Mr.Munoz served as executive vice president and CFO from2003 to 2012.Clarence W. Gooden has been CSX’s executive vicepresident and chief commercial officer since April 2004. Mr.Gooden is responsible for generating customer revenue,forecasting business trends and developing CSX’s modelfor future revenue growth. He has been with CSX for 42years and previously held numerous executive positions inoperations and sales and marketing.Ellen M. Fitzsimmons currently serves as executivevice president of law and public affairs, general counsel andcorporate secretary. Ms. Fitzsimmons has been CSX’s chieflegal officer and has overseen all government relations andpublic affairs activities since December 2003. During her21-year tenure with the company, her broad responsibilitieshave included key roles in major risk and corporategovernance-related areas.Lisa A. Mancini was named senior vice president inJanuary 2009 and currently serves as the company’s chiefadministrative officer. Her responsibilities include employeecompensation and benefits, labor relations, employee staffingand development, purchasing, real estate, aviation andfacilities. Previously, Ms. Mancini served as vice presidentof strategic infrastructure initiatives and vice president oflabor relations.Executive LeadershipThe CSX Executive Team works to guide the company in the pursuit of long-term business success and the creation ofshareholder value. Our Executive Team includes the following members:Opposite page: Executive Leadership Team at Earnings Live event. From left to right:Michael Ward, Lisa Mancini, Oscar Munoz, Ellen Fitzsimmons, Fredrik Eliasson and Clarence Gooden.
  • 26CSX 2012 Corporate Social Responsibilit y ReportBoard of DirectorsCSX’s Board of Directors is composed of a diverse group ofexperienced individuals who ensure the company is makinggood decisions to support long-term growth. With theexception of Michael Ward, chairman of the board, all of ourdirectors are independent.Donna M. Alvarado has served as a CSX director sinceSeptember 2006. Ms. Alvarado is the founder and currentpresident of Aguila International, a business consulting firm.She has extensive experience in both the public and privatesector and brings workforce planning expertise.Senator John B. Breaux has served as a director sincehis retirement from the U.S. Senate in 2005. He has heldnumerous leadership positions during his 18-year tenurein the Senate and his 14-year tenure in the U.S. House ofRepresentatives. Mr. Breaux brings comprehensive publicpolicy and regulatory experience to the Board.Pamela L. Carter joined the Board in June 2010. Ms.Carter is president of Cummins Distribution, a designer,manufacturer and marketer of diesel engines and relatedcomponents and power systems. She brings strongoperational experience and extensive experience ingovernment to the Board.Steven T. Halverson has served as a director of theBoard since September 2006. Mr. Halverson is the CEOof The Haskell Company, one of the largest design andconstruction firms in the country. He provides broadleadership experience, particularly with perspective on theeconomy and construction industry.Edward J. Kelly, III, has served as a director of CSX sinceJuly 2002. Mr. Kelly is currently chairman of the InstitutionalClients Group at Citigroup, Inc., where he also previouslyserved as vice chairman, CFO and head of global banking.He brings extensive financial and regulatory expertise tothe Board, including important perspective on globalfinancial markets.Overview markets Governance community workforce safety Environment value chainCSX core valuesIt starts with the customer.Reliable service to our customers is key for growth,which we will achieve through understanding and meeting their needs.People make the difference.Engaging every employee and adding value, with an emphasis on professional andpersonal growth, is imperative to differentiating ourselves as a progressive railroad.Safety is a way of life.Taking time to be safe, for ourselves, our fellow employees andour families, is entrenched in everyday life at CSX.Fact-based.Focusing on fixing the problem and not its symptoms by using a fact-basedapproach is important for both our business and our customers.Right results, right way.Rewarding our shareholders and the process through which we are a positive influencein the communities and environments in which we operate matters.
  • 27CSX 2012 Corporate Social Responsibilit y ReportSize of Board, year-end 2012 13Number of male Board members 11Number of female Board members 2Number of independent directors on the Board 12Board member term length One yearSeparate chairman of the board and CEO NoLead independent director YesBoard member training/education provided annually YesAnnual Board member elections YesReview of compensation for non-management directors At least every three yearsDirector resignation policy YesAnnual review of Board independence YesAnnual evaluation of Board functioning/performance YesOverview markets Governance community workforce safety Environment value chainGilbert H. Lamphere joined the Board in July 2008.Mr. Lamphere is currently the chairman of the board ofFlatWorld Capital, a private equity firm, and is managingdirector of Lamphere Capital Management, a privateinvestment firm that he founded in 1998. He brings broadrailroad industry experience to the Board as a previousdirector of Canadian National Railway and previouschairman of Illinois Central Railroad.John D. McPherson joined the Board in July 2008following his retirement from his position as presidentand COO of Florida East Coast Railway in 2007. Mr.McPherson also previously served as president and CEO atIllinois Central Railroad. He brings expertise in the railroadindustry to the Board.Timothy T. O’Toole has been a director of the Boardsince September 2008. Mr. O’Toole is currently the CEOof FirstGroup, plc, a leading transportation company thatprimarily provides rail and bus services. He brings 25 yearsof railroad industry experience to the Board, as well asoperational experience in crisis management.David M. Ratcliffe has served as a director since January2003. Mr. Ratcliffe previously served as chairman, presidentand CEO of Southern Company, one of the country’s largestproducers of electricity. He provides broad expertise in theregulatory environment and public policy.Donald J. Shepard has been a director of the Boardsince January 2003. Mr. Shepard was previously the chairmanof the board and CEO of AEGON, N.V., an internationallife insurance and pension company. He provides theBoard with financial and risk management expertise, alongwith significant insight into developing business trendsand opportunities.Michael J. Ward has been a part of CSX for 35 yearsand has served as chairman, president and CEO sinceJanuary 2003. Mr. Ward’s career with CSX has includedkey executive positions in nearly all aspects of the company’sbusiness, including sales and marketing, operationsand finance.Congressman J.C. Watts, Jr., joined the Board inMay 2011. Mr. Watts currently serves as the chairman andfounder of J.C. Watts Companies, a multi-industry company,and served in the U.S. House of Representatives from 1995to 2002. He brings both legislative and Class I railroadoperational experience to the Board.J. Steven Whisler has been a CSX director since May2011. Mr. Whisler is the retired chairman and CEO of PhelpsDodge Corporation, a manufacturing and mining company.He brings invaluable railroad knowledge and a broadunderstanding of one of CSX’s largest customer basesto the Board.
  • 28CSX 2012 Corporate Social Responsibilit y ReportLeadership StructureThe CSX Board of Directors supports a joint chairman ofthe board and CEO. CSX received shareholder feedbackrecommending that we consider splitting the positions.However, we believe that combining the positions providesclarity of leadership that is in the best interests of thecompany and shareholders. We believe that the use of apresiding director with carefully delineated responsibilitiesprovides appropriate independent oversight of management.The presiding director is an independent director selectedannually by the Governance Committee. Currently, Edward J.Kelly, III, serves as the presiding director.All CSX directors are re-elected each year througha majority voting process. This provides additionaltransparency for our Board of Directors and the leadershipdirection of our company.The CSX Board of Directors evaluates the independenceand performance of each director. In making the indepen-dence determination, the Board considers the NewYorkStock Exchange listing standards, as well as transactions orrelationships, if any, between each director, director nomineeor his or her immediate family and the company or its sub-sidiaries. The purpose of this review is to determine whetherany such relationships or transactions are material and wouldtherefore impair a nominee’s or director’s independence.Board activities. The CSX Board of Directors holdsat least five regularly scheduled meetings each year, withadditional meetings scheduled on an as-needed basis.During 2012, all members of the Board attended atleast 75 percent of the meetings of the Board and thecommittees on which he or she served. At every Boardmeeting, the non-management directors meet alone inexecutive sessions chaired by the presiding director. Inaddition, the Board tours sites along the network to gainfurther insight into CSX’s operations, our customers’businesses, current projects underway and growthopportunities for the company. During the past few years,Board members have visited port facilities, rail terminals,training facilities and customer manufacturing plants.The Board periodically, but at least once every three years,reviews and sets the compensation for non-managementdirectors based on the recommendation of the GovernanceCommittee. Director compensation includes both cashand stock-based components and CSX maintains a set ofguidelines for director stock-ownership. In recommendingthe amount and form of director compensation, theCommittee considers, among other factors, the level ofcompensation necessary to attract and retain qualified,independent directors.Risk management. Risk management is central to CSX’scontinued business success. During 2012, CSX revised its riskoversight process and how we communicate and discussOverview markets Governance community workforce safety Environment value chain
  • 29CSX 2012 Corporate Social Responsibilit y Reportrisk with the Board. CSX is increasing our emphasis onembedding risk assessment into our strategy developmentto facilitate quicker recognition of emerging risks. Risksare now organized into three categories: compliance risks,external risks and strategic risks. The Audit Committee ofthe Board of Directors will provide executive oversight tothis enhanced risk-management process.Board CommitteesOur Board of Directors comprises six standing committees,each of which is governed by a specific charter. Ourcommittees meet at least five times per year to addressissues related to our core business.Audit Committee. The Audit Committee is responsiblefor oversight of CSX’s financial statements; our legal andregulatory requirements; the qualifications, independenceand performance of auditors; and our internal audit function.Compensation Committee. The CompensationCommittee develops and oversees the compensationstrategy and design for CSX. This Committee is responsiblefor regularly reviewing, approving and monitoringcompensation policies and plans along with associatedfinancial impacts and risks to the business. It also conductsan annual CEO performance review and is responsible forapproving equity-based incentive awards.Executive Committee. The Executive Committee actson behalf of the full Board during intervals between regularBoard meetings. This Committee comprises the chairmanof the board, the presiding director and the chairpersons ofeach standing committee.Finance Committee. The Finance Committee providesoversight and recommendations on the company’s financialresponsibilities, which include CSX’s capital structure, cashflows, key financial ratios and credit ratings.Governance Committee. The Governance Committee’sprimary function is to identify qualified individuals forpossible election to the Board of Directors. It is alsoresponsible for evaluating the Board’s performance andrecommending potential changes in committee structure,governance policies and procedures.Public Affairs Committee. The Public AffairsCommittee assists the Board of Directors by addressingimportant and emerging public policy issues that couldpotentially affect CSX. The Committee oversees compliancewith legal requirements and internal policies relating toequal employment, diversity in the workplace, employeesafety and environmental protection. It also monitors howCSX’s activities and practices affect its public reputation andannually reviews our CSR report.Director Audit* Compensation* Executive Finance* Governance* Public Affairs*Donna M. Alvarado X XJohn B. Breaux X X ChairPamela L. Carter X XSteven T. Halverson X Chair XEdward J. Kelly, III X X ChairGilbert H. Lamphere X XJohn D. McPherson X XTimothy T. O’Toole X XDavid M. Ratcliffe X Chair XDonald J. Shepard Chair X XMichael J. Ward ChairJ.C. Watts, Jr. X XJ. Steven Whisler X XOverview markets Governance community workforce safety Environment value chain* All Board committee members are independent.
  • 30CSX 2012 Corporate Social Responsibilit y ReportExecutive compensation. A strong, dedicated andengaged Executive Leadership Team is essential to drivingperformance and delivering shareholder value. Accordingly,the Compensation Committee of the Board of Directorsdesigned the executive compensation program to motivateand reward the Executive Leadership Team and align theircompensation with the short- and long-term performanceof the company. In designing the compensation programs,the Compensation Committee considers shareholder inputthrough its annual say-on-pay vote and believes that thepositive 2012 vote – with 97 percent of shareholders votingin support of the compensation program – validates CSX’scompensation philosophy.In consideration of the Dodd-Frank Wall Street Reform andConsumer Protection Act, the Compensation Committeeadopted a clawback provision for the annual incentivecompensation program requiring executives to repayawards in the event CSX is required to restate its financialstatements due to accounting irregularities. CSX alsoadopted a policy prohibiting hedging in CSX securities byofficers and directors.Shareholder relations. CSX did not receive anyshareholder proxies in 2012. However, shareholdersare always welcome to communicate with the Boardof Directors at the address below. Shareholders mayalso request a free, printed copy of the CSX CorporateGovernance Guidelines, the CSX Code of Ethics, thecharters of each Board committee, and Board policies at theaddress below or by visiting our website.CSX Corporation
500 Water St., C160
Jacksonville, FL 32202Governance PoliciesCSX firmly believes that good governance practices arethe groundwork for a successful business for all of ourstakeholders and ensure long-term shareholder value.Our Corporate Governance Guidelines represent ourvalues and the high standards that our employees, investors,customers, suppliers, communities and regulators expect.Our Corporate Governance Guidelines are available onour website.Overview markets Governance community workforce safety Environment value chain
  • 31CSX 2012 Corporate Social Responsibilit y ReportEthics. The CSX Code of Ethics (theCode) lays out the standards that all CSXemployees must follow to put our governancecommitments into practice. In 2012, CSXupdated the Code to include guidance onsocial media, retaliation, and fraud and theftprotection. In addition, we launched a newEthical Leadership Training for Supervisors andachieved a completion rate of 100 percent.Each year, management employees receiveat least four training courses on ethicsand compliance-related topics. All of ourmanagement employees completed this trainingin 2012. CSX union employees also have theopportunity to take the ethics training, althoughit is not mandatory. In 2012, approximately 70percent of union employees voluntarily tookethics training. While this participation rate ishigh for voluntary training, the company aims toincrease this participation in future years.CSX encourages employees to speak up anytime they suspect a violation of the Code ofEthics or are unsure about undertaking certainactions. To provide guidance, the companymaintains a 24-hour CSX Ethics Helpline. ThisHelpline, along with an associated website,allows employees to report suspected misconduct andraise questions without fear of retaliation. CSX received anincrease in calls to the CSX Ethics Helpline after the launchof the new Code of Ethics, which indicates employees arecomfortable calling for advice about ethical matters andreporting unethical behavior. Management discusses Helplinecall activity, including nature of calls and substantiationpercentages, with the Audit Committee at least once a year.The updated Code of Ethics received an A rating fromCorpedia, a leading company in governance and complianceeducation, for its public availability, values and commitments,and readability and tone. This rating places CSX’s Code ofEthics in the top 2 percent of all ethics policies reviewed byCorpedia. Looking ahead, CSX plans to continue increasingawareness, engagement and training on ethics topics.Antitrust and corrupt practices policies. At CSX,we believe that competing fairly and without corruptionprovides the foundation for our license to operate. Weexpect all employees to comply with all U.S. antitrustand competition laws. As a result, we include detailedresponsibilities for each employee in the Code of Ethics,particularly in dealings with competitors.As a company that operates ethically and honestly, CSXcontinues to ensure that bribery and corruption do notoccur within the business. CSX is informed and aware ofvarious laws governing giving or offering money or anythingof value in all countries in which we conduct business. TheCode of Ethics explains to our employees and third partiesdoing business on our behalf how to act in dealings withgovernment officials, customers, competitors and suppliers.“Right results, right way is one of our core values atCSX. The company invests the time and resources tomake sure that supervisors have clear guidelines whenaddressing ethical issues. The ethics trainings reiteratewhat CSX expects of its employees and the importanceof ethical leadership at all levels.”— Janis Liotta, CSX Director of Income Tax ComplianceSpotlight: Ethical LeadershipTraining for SupervisorsWith the launch of the updated CSX Code of Ethics, all CSXmanagement employees received a printed Supervisors’ Guidespecific to ethical leadership and took a related training course. CSXexpects all managers to comply with the Code and lead by example.The course focused on advising supervisors on how to respond if anemployee comes to them with an ethical issue. Expanding the avenuesof communication beyond the CSX Ethics Helpline gives our employeesmore opportunities to discuss ethical issues.Overview markets Governance community workforce safety Environment value chain
  • 32CSX 2012 Corporate Social Responsibilit y ReportPolitical Activities and LobbyingCSX works with officials and employees of federal, state andlocal governments and regulatory organizations on a dailybasis in many aspects of our business. Our commitment is totreat them with respect and demonstrate responsibility andaccountability in our dealings. CSX complies with all laws andregulations when lobbying and making political contributions.Lobbying. CSX employs lobbyists and is subject to thefederal laws governing lobbying contacts and providing gifts,entertainment and travel to public officials. Because theserules are complex, employees are prohibited from givinganything of value to a member of Congress, their staff andofficials, and staff of the executive branch. The company con-ducts annual training sessions for all its registered lobbyistsand has made lobbying compliance part of the company’soverall ethics training for all management employees. CSXalso complies with all rules at the state and local levels, andthe Internal Audit department conducts periodic audits ofthe company’s compliance with these lobbying regulations.The company’s Ethics Helpline also serves as a resource foremployees to raise potential issues or concerns.During 2012, CSX spent $4.6 million on lobbying activitieson a variety of topics important to the company, including:• Seeking common ground on expanding passenger andhigh-speed rail systems without compromising the freightrail system.• Transportation regulation and legislation, such asprotecting limited antitrust exemptions.• The need for certainty in government regulationsand consistent funding to continually invest in railroadinfrastructure.• Lowering corporate income tax rates to encourageinvestment in U.S. rail infrastructure.Political support. Through our government relationsprograms, CSX directly engages with public policymakersat the federal, state and local levels about the potentialimplications and consequences of legislative and regulatoryactions on the business and our stakeholders. CSXrecognizes the responsibility to represent the interests ofshareholders and stakeholders in government, regardless ofthe topic. CSX uses direct lobbying, written communication,executive testimony and contributions to political candidatesand committees, where allowed.CSX is committed to transparency regarding the company’sinvolvement in government relations and political contri-butions. We make political contributions using our em-ployee-funded Political Action Committee (PAC), the CSXGood Government Fund. As a matter of company policy,CSX does not contribute to independent expenditure-onlycommittees, otherwise known as Super PACs.Many complex laws govern the use of company fundsand resources for political activity. CSX is not permittedto contribute, directly or indirectly, to any federal politicalcampaign.Various state laws permit direct corporate politicalcontributions, but often impose restrictions on the amountof contributions and on the conduct of lobbyists andgovernment contractors.Political contributions. Corporate political contributionsare permitted under certain conditions in 12 of the 23 statesin the CSX network. Those states are Alabama, Florida,Georgia, Indiana, Illinois, Louisiana, Maryland, Mississippi, NewJersey, NewYork, South Carolina andVirginia. For a detailedlisting of contributions made in those states, please see thepolitical contributions page of our website.CSX makes contributions to state and local candidatesbased on criteria such as an elected official’s location withinCSX’s service territory, committee membership, votingrecord and positions on issues of interest to the railroadindustry, with a strong emphasis on economic developmentand job creation.Individual political contributions to state and local candidatesare determined by the vice president for state governmentand community affairs, with input from the regional vicepresident responsible for the state in which the candidateresides. These decisions are based on general guidanceconsistent with the above criteria and subject to oversightby the executive vice president for law and public affairs andthe Board of Directors’ Public Affairs Committee.In 2012, CSX sponsored events at both the Republican andDemocratic National Conventions (RNC, DNC). At theRNC in Tampa, Fla., and at the DNC in Charlotte, N.C., CSXsupported the Governors’ Associations and TransportationLeadership. At the RNC, CSX also provided meals aroundthe clock to public security and emergency responsepersonnel working at the event.Overview markets Governance community workforce safety Environment value chain
  • 33CSX 2012 Corporate Social Responsibilit y ReportIndependent expenditures and ballot measures.In January 2010, the Supreme Court of the United Statesruled in Citizens United v. Federal Elections Commission thatindependent political advertising by corporations in supportof, or in opposition to, candidates may not be prohibited.As a result, corporations and unions are no longer subjectto bans on independent spending for campaign advertising,but these and other political activities continue to behighly regulated. For example, corporate contributions tocandidates are still prohibited under federal law and underthe laws of 22 states.On a semiannual basis, the company will disclose expendi-tures, including independent expenditures and expendituresrelated to electioneering communications made by the com-pany and contributions made to third-party organizationssuch as public advocacy groups organized under Section501(c)(4) of the Internal Revenue Code. For a complete listof the company’s expenditures in these areas, please see thepolitical contributions page of our website.Trade associations. CSX belongs and pays membershipdues to a number of trade associations that promote andfurther the company’s business interests, from the railroads’economic regulatory framework to corporate tax reform topolicy with the potential to impact key customer segments.We periodically evaluate the company’s participation andsupport of these trade associations to ensure continuedalignment with our business trajectory. Any portion ofthose dues and other payments used for political purposesis nondeductible under Section 162(e)(1)(B) of the InternalRevenue Code. For a list of those organizations where thecompany’s annual aggregate payments are $50,000 or more,as well as the non-deductible portion of those payments,please see the political contributions page of our website.For more information on how these organizations utilizethese dues or contributions, please contact them directly orvisit their websites.Good Government Fund. To support candidates andelected officials whose voting record and position on keyissues benefit the rail industry and CSX, we establishedthe CSX Good Government Fund (GGF). The GGF isa nonpartisan, employee-funded PAC that supports theelection campaigns of qualified state and federal candidatesfor public office. An employee-comprised board ofdirectors governs the GGF and contributions are basedon specific criteria. Federal regulations strictly prohibitCSX as a corporation from making corporate campaigncontributions to federal candidates; many state laws alsoprohibit corporate contributions to state candidates. TheGGF supports public officials who advocate public policyin the best interest of our company, specifically related toeconomic development and job creation.All contributions made to the CSX GGF go directly tosupport candidates seeking public office. Federal lawrequires CSX to make its best efforts to obtain and reportto the Federal Election Commission (FEC) the name, mailingaddress, occupation and name of employer for individualswhose aggregate contributions exceed $200 in a calendaryear. The CSX GGF must also report all aggregate receiptsand expenditures to the FEC and to Congress under theLobbying Disclosure Act. State reporting requirementsvary. For the GGF’s most recent FEC report, please see ourLobbying Contribution Report.Overview markets Governance community workforce safety Environment value chain
  • 34CommunitySuccesses:• CSX provided more than $14 million in corporategiving to communities, including more than $630,000to support disaster relief in 2012.• CSX’s collaboration with our strategic nationalpartners continued in 2012, with a 30 percentincrease in logged volunteer hours.• Employee volunteer and board service participationled to a 45 percent increase in CSX Foundationcontributions through our Dollars for Doers program.Challenges:• Providing a greater number of employees the opportunityto participate in our National Partner Service Days and otherCSX-coordinated volunteer service projects.• Developing a formal system to measure and capturecorporate giving and service-related activities.• Finding ways to encourage all volunteers to log theircommunity service hours and take advantage of the Dollarsfor Doers program to support our communities.• Refining our approach to community engagement during theproject development process to better address social needs.Overview markets Governance community workforce safety Environment value chainIn This Section:BeyondOur RailsSelection forCharitable GivingPower of theProgramNationalPartnershipsLocalPartnershipsEmployeeVolunteerismCommunityEngagement
  • 35CSX 2012 Corporate Social Responsibilit y ReportBeyond Our RailsThe Beyond Our Rails program (beyondourrails.org)encompasses company-wide initiatives such as communityinvestments, national partnership support, in-kindtransportation moves, in-kind donations of products andservices, volunteer and board service grants, and disasterrecovery assistance.CSX’s strategic community investments are structuredaround key focus areas embedded in the company’s businessstrategy and core values. We align our strategic communityinvestments around the following areas:Safety. Safety is a way of life at CSX and one of our corevalues. CSX is committed to ensuring the safety of ouremployees, customers and the communities within ourservice area. We work to prevent injuries and accidentsthrough education, training, advocacy and strategiccommunity investments, including:• Providing railroad transportation safety education toall citizens.• Keeping communities safe and providing safe havens forchildren and young adults to avoid dangers and abuse.• Providing safety, CPR and disaster-response training.• Donating equipment and other resources tofirst responders.Community. Our community engagement approachis collaborative and respectful. We assess the particularneeds of each community and provide support where it isneeded most, including:• Spearheading youth leadership education.• Helping to reduce school dropout rates.• Promoting community service.• Supporting programs identified by community leaders asvital for that community’s success.• Recognizing civic and charitable employee service.• Celebrating and rewarding leadership and service.Environment. CSX recognizes the responsibility toprotect and restore the environment in the areas in whichwe operate. We believe that improving all aspects of theenvironment is critical and we provide assistance in thefollowing areas:• Teaching environmental stewardship.• Planting trees and improving local habitats.• Leading and supporting environmental cleanups.• Recycling and minimizing waste.• Promoting energy efficiency and carbon reduction.Management Approach and Plans AheadEstablishing and maintaining our license to operate throughout our service area begins with successful community engagementand partnerships. CSX is committed to being a socially responsible company through strategic community investments andemployee volunteerism in the areas where we live and work. In 2013, the company plans to increase the level of corporatecontributions to our local communities and partner organizations. CSX also plans to coordinate National Partner Service Daysto include customer participation and collaboration.Overview markets Governance community workforce safety Environment value chain
  • 36CSX 2012 Corporate Social Responsibilit y ReportWellness. The wellness of our workforce is crucial forthe continued success of our business. We believe that ourcommitment to wellness extends beyond our workforceand into the community. CSX works to share the wellnessprogram that makes our employees healthier with thecommunity by:• Encouraging healthy lifestyles.• Promoting disease prevention.• Decreasing childhood obesity.• Driving wellness and preventive health education.• Supporting physical activity programs for children.Selection for Charitable GivingBeyond Our Rails provides CSX with a platform to engagewith many nonprofit organizations and local communities.We consider requests for grants, sponsorships, volunteersand in-kind transportation that support the above-mentioned focus areas. A set of publicly available givingguidelines govern our dealings with all organizations seekingfinancial support. We provide these guidelines, along withdetailed application instructions, in the nonprofit cornerfound at beyondourrails.org.There are four steps to our giving process: qualify, evaluate,notify and report. Requests for grants, sponsorships,volunteers and in-kind transportation must qualify and meeteligibility requirements as detailed in our giving guidelines.Next, we evaluate the organizations that meet our eligibilityrequirements to determine if theyare aligned with the CSX strategicfocus areas. We then notify grantand sponsorship applicants of thefunding decision within 90 days ofapplication. Requests for volunteersand in-kind transportation arecommunicated within 10 days ofapplication. Within one year ofreceiving CSX support, we requestthat organizations complete awritten evaluation of their keyaccomplishments tied to theresources that CSX contributed.This giving process has allowed usto more efficiently contribute toorganizations clearly aligned with our key focus areas. Fordetailed information on this program and the organizationswe have supported, please visit beyondourrails.org.Power of the ProgramMonetary contributions, inconjunction with volunteeringand collaborative partnerships,provide a vehicle for an effectiveand meaningful communityinvestment program. In 2012,CSX provided more than $14million in community investmentsand nearly $230,000 via in-kindtransportation donations. Weexceeded our goal of increasingcommunity investment spend to$10 million and continued growth is expected.As needs have grown the past few years in our servicearea, the company has evaluated and enhancedcommunity investments to have more meaningful andauthentic outreach.CSX has a decentralized regional council governancestructure that helps identify the most pressing localcommunity outreach opportunities throughout the network.In 2013, the company will continue to evaluate the portionof community investment relative to total spending andadjust charitable giving as appropriate.Overview markets Governance community workforce safety Environment value chainCSX Beyond Our RailsElements of the ProgramImplementation Mechanisms• Community Investments• EmployeeVolunteerism – CSX Foundation• National Partner Engagement• Giving Guidelines• Service Days• Dollars for Doers• Employee Disaster Relief Fund• Board ServiceTraining and Grants• Regional Councils0369121520122011201014.238.645.24Total Value of CorporateContributions($ millions)Corporate ContributionsBreakdown41%59%CommunityInvestmentsCharitableDonations
  • 37CSX 2012 Corporate Social Responsibilit y ReportNational PartnershipsThe company partners with six national organizationsaligned with our key focus areas of safety, community,environment and wellness. The CSX CorporateResponsibility team stewards these partnerships forthe company as a whole.CSX’s corporate sponsorship of the National FFAOrganization, also known as Future Farmers of America(FFA), continued for a second year in 2012. With more than$1 million in donations to the organization to date, CSX isone of the largest sponsors of FFA. We fund FFA ChapterLeadership programs in 22 states and offer leadershipscholarships in each of CSX’s 10 divisions.CSX employees also participate in communityservice, leadership and career training, and jobinterview preparation with FFA members.CSX’s sponsorship of FFA has been extremelybeneficial for our business. Connecting withFFA members has strengthened our recruitingapproach. Our rural rail networks often overlapwith active FFA communities, making the broadmembership of FFA an important audience tolearn about rail safety information. For moreinformation on how FFA aligns with our recruitingapproach and safety programs, please see page 48.CSX participated in the 2012 National FFA Convention &Expo held in Indianapolis, Ind., in October. The CSX booth atthe event provided FFA members with an overview of thecompany’s role in the transport of food products and theenvironmental benefits of rail transport. As part of CSX’sinvolvement at the convention, employees worked besidestudents at the FFA Rally to Fight Hunger. FFA members,CSX employees and community volunteers packed mealsthat were loaded onto CSX trucks and transported to localfood pantries and a Florida port for delivery to Haiti.National Safe Place, a national youth outreach program,educates hundreds of young people each year about thedangers of running away. This organization also teachesconflict resolution through a network of youth-friendlybusiness schools, fire stations, libraries and other publicbuildings. CSX serves as a sponsor and safety advocate,providing volunteer service, program funding andleadership support.Dignity U Wear is an organization that believes thatchildren, veterans, and women and girls coming out of crisissituations deserve clean, new clothing. CSX, as a nationalsponsor, provides fundraising and volunteer hours. CSXalso assists Dignity U Wear by transporting hundreds ofthousands of dollars of clothing, shoes and accessories tocommunities impacted by natural disasters.Alliance for Community Trees (ACTrees) has morethan 200 member organizations in 44 states that provideand promote urban and community tree planting, care,conservation and education. Together with ACTrees andCityYear, we have planted more than 17,000 trees as partof CSX’s Trees for Tracks program. Trees for Tracks aims toplant one tree for each of the 21,000 miles of track CSXowns. This partnership builds upon the company’s focus oncommunities and the environment.Our national partnership with CityYear is described indetail on page 39 of this report.Overview markets Governance community workforce safety Environment value chain“I think it’s really important for CSX to be out there inthe community. For many years, we were just kindof in the background. Today we have a whole newapproach. We’re proactive, we’re in the communities.We’re being good corporate citizens.”— Jason Bradt, CSX Terminal Supervisor
  • 38CSX 2012 Corporate Social Responsibilit y ReportThe Nature Conservancy, a leading conservationorganization, preserves and protects ecologically importantlands and waters. Its mission to educate and protect theenvironment is aligned with our core values. CSX is theofficial railroad sponsor of “All Hands on Earth,” a publiceducation campaign for environmental protection.In 2013, CSX initiated our newest national partnership withAction for Healthy Kids. This organization addressesthe epidemic of overweight and undernourished childrenby focusing on changes in schools to increase nutrition andphysical activity. This partnership will continue our focus onimproving the wellness of our community members.CSX hosts National Partner Service Days inconjunction with our partners. As part of CSX’s communityoutreach program, each service day is planned in an areawhere CSX has significant train operations and communityimpact. In 2012, we held 20 service days, with more than1,100 volunteers contributing 9,474 volunteer hoursthat benefited 19 organizations. Through activities suchas tree planting and landscaping, playground restoration,painting, building projects and packing essentials kits,the service days helped 19 different communities.These events have become very popular among CSXemployees, who are eager to sign up before openings arefilled. This has prompted the company to explore additionalways to accommodate employee volunteer groups beginningin 2013. We are also working to include and collaboratewith our customers on these valuable communityengagement exercises with our national partners.All of these partnerships, along with videos and picturesfrom National Partner Service Days, are highlighted ingreater detail on beyondourrails.org.Spotlight: Board Service ProgramIn 2012, in conjunction with Jacksonville University,CSX developed a Board Service Training Program foremployees who have served on boards of charitableorganizations and those who will be on boards in the future.Matching our senior leadership with nonprofit boardsleverages our charitable giving program. When a CSXrepresentative participates on the board of a charitableorganization, CSX presents the charity with a grant payment.Our vice presidents receive $5,000, associate vice presidentsreceive $2,500, and directors receive $1,000 toward theircharitable organizations. CSX provided $142,500 in boardservice grants in 2012. Our chairman and CEO Michael Wardleads by example by sitting on CityYear’s Board of Trustees.Overview markets Governance community workforce safety Environment value chain“I’m proud to serve on City Year’s Boardof Trustees.  I’ve developed a deeprespect for the organization’s values andtheir commitment to helping others. I’mparticularly impressed by their dedication toguiding young people on the path to personal,academic and professional success, and in theprocess, building important leadership skillsfor the future.”— Michael Ward, CSX Chairman, President and CEO
  • 39CSX 2012 Corporate Social Responsibilit y ReportSpotlight: Partnerships in ActionFor more than 18 years, CSX hasbeen an active partner with CityYear,a national youth service organizationfocused on reducing student dropoutrates. In 2012, CSX provided almost$3 million to CityYear to recruit andsupport 2,500 young leaders, servingin 238 schools across the country. CSXis CityYear’s largest team sponsor anddirectly sponsors 14 teams of corpsmembers. The sponsorships provideopportunities for CSX employeesto participate in high-impact serviceprojects, transform schools and con-tribute to the individual leadership andprofessional development of the corpsmembers on the teams it sponsors.CityYear and CSX co-hosted 18service days in 2012, during which wepainted murals, refurbished playgrounds,renovated schools and planted treesacross across the CSX network. Forexample, in April 2012, CSX held aservice day with CityYear and theAnacostia Watershed Society to cleanup the river in Washington, D.C. Morethan 50 CSX volunteers removedinvasive species and revitalized acommunity garden. In Charlotte, N.C.,in September 2012, CSXand CityYear held a serviceday at Fran’s Boys and GirlsCenter.Volunteers builtbleachers for the athleticfields, painted murals in thecenter’s main building andplanted trees in the park.In 2012, CSX was afounding sponsor andplayed a leading role inbringing CityYear to twonew cities in Florida –Jacksonville and Orlando.CityYear provided somethoughts on the CSX andCityYear partnership fromthe CityYear perspective.“CSX is a tremendous company. Weare incredibly proud to have CSX asnot only our largest team sponsor,but a sponsor of all three of our sitesin Florida,” said Michael Brown, CEOand Co-Founder of CityYear.“Overthe past 18 years, CSX’s support andleadership has helped us grow andgrown with us. We look forwardto continuing to work with CSX todeepen the impact both organizationshave on the communities we serve.”Throughout the year, CityYear’sCare Force division partnered withCSX to lead 18 service days tocreate inspiring, welcoming and safeenvironments in the communitieswhere CSX employees live and work.For example, the goal of the “Treesfor Tracks” initiative is to plant onetree for each of the 21,000 miles oftrack that CSX owns. CSX broughttogether ACTrees, local communitypartners and CityYear’s Care Forcedivision to create powerful servicedays for the CSX family to plant eachand every tree. In 2012, CityYearCare Force helped lead five serviceevents that planted 578 trees towardsthe goal. In 2012, CSX sponsoredteams in 13 communities across theEastern Seaboard and the Midwest.Overview markets Governance community workforce safety Environment value chain“So much of today’s youth does notbelieve in themselves or in theirpotential. It’s devastating. I servebecause not too long ago that wasme, unaware of the impact I couldhave or the limitless possibilitiesopen to me. I want to be a positiveand personal reminder that anythingis possible through hard work anddetermination.”— Katrina “Kat” Hill, 2012-2013 Corps Memberserving on the CSX team at MeadowbrookMiddle School in Orlando, Fla.
  • 40CSX 2012 Corporate Social Responsibilit y ReportLocal PartnershipsIn addition to our national partners, we also fosterpartnerships at a local level that allow our employees toget involved in their communities. For example, we held our70th annual Santa Train in November 2012. This programhas been a tradition in local communities throughout thesouthern United States. Specifically, in Kingsport, Tenn.,CSX volunteers worked with the Kingsport Chamber ofCommerce, Dignity U Wear and Food City to pack anddistribute bags filled with clothing and toys to communitymembers in need.Employee VolunteerismCSX appreciates the voluntary work our employees do inlocal communities. We have an internal system to track thepersonal time employees have committed to helping others.In 2012, CSX employees logged 26,538 hours of volunteertime, an increase of more than 6,000 hours from 2011.We are always looking for ways to expand our local- andnational-level service partnerships to fulfill the demand formore volunteer opportunitiesfor our employees.The CSX Foundation providessupport to charitable organizationsin recognition of the good workemployee volunteers are doingwithin communities throughoutour service network. CSXFoundation funding supports theDollars for Doers Program andthe Board Service Program, bothof which are designated based onemployee interest.Dollars for Doers. Dollars for Doers is a valuableprogram that provides funding to eligible communityorganizations and schools where CSX employees are activevolunteers. Dollars for Doers is CSX’s way of supportingessential services in the communities where our employeeslive and work. For every hour an employee volunteers atan eligible nonprofit organization, CSX will donate $10 toan eligible nonprofit organization of the employee’s choice.Employees must volunteer at least 15 hours and can receivea Dollars for Doers contribution for up to 40 hours ofvolunteer work per year – for a total contribution of upto a $400 per year. Employees often work together andpool their Dollars for Doers contributions to benefit oneorganization. Through this program, we donated $79,000 tomore than 150 organizations in 2012.To support this important work, the company has an internal,web-based system that allows employees to find volunteeropportunities, track hours and make Dollars for Doerscontributions. Employees have direct access to this websitethrough the CSX Employee Gateway. Organizations can alsoapply to post volunteer opportunities on this system forCSX employee participation. It includes a skills-based fieldthat allows organizations to request volunteers with specifictalents that would be of value (e.g., legal work, marketing,technology, etc.).CSXcares. CSX also matches all monetary donationsthat employees provide through our CSXcares website.CSXcares.com is activated within 24 hours of a naturaldisaster or other emergency to provide employees withOverview markets Governance community workforce safety Environment value chain“We partner with people, we comeinto communities that really needhelp and we bring a lot of joy anda lot of happiness to the littlestmembers of those communities.”— Dave Scott, Chemical Sales Group, CSX05101520253020122011201026.520.416.7Total EmployeeVolunteer Hours(thousand hours)
  • 41CSX 2012 Corporate Social Responsibilit y Reportthe opportunity to support those in need. Thiswebsite allows employees to donate fundingin support of those that have been impactedthrough either the American Red Cross orCSX’s Employee Disaster Relief Fund.Disaster relief. Disaster relief represented asignificant focus area for CSX in 2012 due toHurricane Sandy and tornadoes in the OhioValley. Our employees donated more than$34,000 for Hurricane Sandy relief efforts,leading to more than $630,000 in total dona-tions from CSX and our employees. We alsoprovided in-kind transportation for more than$1 million worth of clothing to those hardesthit by Hurricane Sandy in New Jersey and NewYork. We delivered two truckloads of ice to the AmericanRed Cross in NewYork immediately after the storm. CSXalso transported a fire truck from a Chicago suburb toUnion Beach, N.J., where an entire fleet of fire trucks waslost in the storm. In addition, CSX provided unrestrictedgifts of $5,000 to 100 American Red Cross chapters in theHurricane Sandy impact area. Following the Hurricane Sandyresponse efforts, CSX provided in-kind transportation of119 Red Cross emergency response vehicles to their homestates across the country. CSX also provided $75,000 tothe Red Cross to use in preparation for the projected GulfCoast landfall of Tropical Storm Isaac in August 2012.Employee Disaster Relief Fund. The CSX EmployeeDisaster Relief Fund is a public charity that was foundedduring Hurricane Andrew in 1992. The Fund providesshort-term financial assistance to CSX employees and theirdependents that are experiencing financial hardship due to acatastrophic natural disaster or severe medical situation. TheFund is governed by a team of directors as well as an em-ployee advisory committee. In 2012, $140,000 was distrib-uted from the Fund to help our employees in need, bringingthe total over the last three years to more than $388,000.Community EngagementAs CSX expands our rail network, the company is buildinginfrastructure in new communities. Active and earlyengagement with these communities is a business priority.CSX works with local government officials to understandthe economic and social conditions of a community andconsiders these aspects in project plans. When appropriate,the company holds community meetings and keeps residentsapprised of project developments.We partner with governments to support growth and shareresources where possible. The State of Florida is buildingthe SunRail commuter rail system on 61 miles of trackformerly owned by CSX. The company is reinvesting the$432 million transaction proceeds in building and expandingour rail network in Florida to meet the state’s growingtransportation needs. One of these projects is a state-of-the-art intermodal terminal in Winter Haven, Fla. CSX brokeground on the project in November 2012, and is workingclosely with the state and local government, communitiesand private businesses.Many residents are interested in potential jobs the terminalmay bring to the area. CSX is working with the county’semployment and training agency to identify employmentopportunities and assistance and to source local vendorsand contractors.CSX’s Northwest Ohio Terminal Facility is a 185-acre freightdistribution hub – and the center of CSX’s intermodalnetwork. This facility opened in 2011, and CSX supportscontinued engagement efforts with local communitymembers. At the terminal opening, residents were invitedto tour the site and learn about rail operations. To ensurea stable base of local employees, CSX is working withcommunity colleges to facilitate interest in transportationand logistics.Overview markets Governance community workforce safety Environment value chain
  • 42CSX 2012 Corporate Social Responsibilit y ReportCase Study: Partnering for the High LineThe history of Manhattan’s High Line dates back more thana century. In the mid-1850s, street-level trains began runningthrough central Manhattan and their close proximity topedestrians created a hazard. In an effort to improve safetyalong the line, city, state and railroad officials agreed toconstruct an elevated rail line. The High Line was activefrom 1934 to 1980.CSX acquired 1.5 miles of the abandoned High Line in1998 as part of the Conrail acquisition. Many NewYorkersconsidered the High Line an eyesore and a safety hazard.CSX faced a challenge of working with the city, communitymembers, local property owners and other key stakeholdersto find a beneficial use for the property. Aside fromdemolition, CSX determined that creative reuse of the lineshould embrace both public and private alternatives. Ideasfor possible uses included elevated parking lots, billboardspace and rail banking, a way to reuse the right-of-way ofthe defunct rail line and establish a city park. The companypresented these options at a public meeting in 1999. Themajority of stakeholders wanted to see the High Linedemolished. However, two meeting attendees – JoshuaDavid and Robert Hammond – saw the value in revitalizingthe space as a community park, and subsequently formedthe community group, Friends of the High Line.After additional research and stakeholder engagementactivities, CSX decided to move forward with the rail-banking approach and support efforts to help Friends of theHigh Line and the City of NewYork make the High Line apublic park. This became part of a larger effort to plan forthe future of the surrounding West Side neighborhood.The NewYork City Department of City Planning created aframework for the rezoning of the neighborhood to allowfor the transfer of development rights. This allowed peoplewho owned property under the High Line to sell propertyrights to neighboring landowners as if the property wereunencumbered by the line. The rezoning process createdreal estate value for these sites, giving the owners a viablealternative to demolishing the line – a true win for creativecity planning.In 2005, CSX and the City of NewYork entered into aTrail Use Agreement for the 1.5-mile-long High Line.Construction of the High Line park began in 2006. The firstand second sections opened in 2009 and 2011, respectively.The park has become much more popular than anticipated,attracting 4.5 million visitors annually. CSX donated the thirdand final section of the High Line to the City of NewYorkand construction began in 2012, with a target completiondate of 2014. The company received some tax benefitsfor this donation, but CSX is glad to have played a part intransforming the neighborhood.We are continuing our support of the High Line by servingas a Corporate Member of Friends of the High Line.Through the collaborative partnership between CSX andthe City of NewYork, this once-eyesore and safety hazard isnow a city landmark, becoming one of the biggest attractionsin Manhattan.“In the three short years since the firstsection opened as a park, the High Linehas become a treasured neighborhoodoasis, a significant generator ofeconomic activity for the entire cityand a celebrated icon for planners,designers and leaders aroundthe world.”— Michael Bloomberg,Mayor of New York City“CSX made it possible for to Joel Sternfeldto go up and photograph the High Linein its current state, which allowed theworld to see what was on top of theHigh Line. There was a mile and a half ofwildflowers running through the middleof Manhattan, with views of the EmpireState Building and Statue of Liberty.”— Joshua David and Robert Hammond,Co-Founders of Friends of the High LineOverview markets Governance community workforce safety Environment value chain
  • 43CSX 2012 Corporate Social Responsibilit y Report“It has been a great privilege to work with MayorBloomberg, his skilled administration and thethoughtful and visionary leadership at Friends of theHigh Line. We view the donation of the High Line asnot simply a transfer of ownership, but a contributionto the vitality of the area, and we are thrilled thatthe entire length of this iconic rail structure will beavailable for the public to enjoy.”— Michael Ward, CSX Chairman, President and CEOThe High Line and its Neighborhood by the Numbers:$2 billion in private investment12,000 jobs created2,558 new residential units1,000 new hotel rooms423,000 square feet of new office space85,000 square feet new of art gallery space10,000,000 visitors and growingOverview markets Governance community workforce safety Environment value chainSource: City of NewYork
  • 44WorkforceSuccesses:• CSX aligned strategic partnerships with recruitingand talent acquisition, such as hiring 630 militaryveterans in 2012.• CSX continued to enhance the company’s wellnessprograms to keep employees healthy.Challenges:• CSX continues to focus efforts on recruiting and hiringdiverse candidates for employment opportunities.• CSX is working to refine the company’s strategicworkforce planning function to build the talent pipeline.Overview markets Governance community workforce safety Environment value chainIn This Section:EmployeeEngagementTraining andDevelopmentStrategicWorkforcePlanningDiversity andInclusionWorkforceCompositionEmployeeBenefitsEmployeePoliciesLaborRelationsHealth andWellness
  • 45Employee EngagementConductors, rail yard staff, operators, engineers andadministrators – these are the people that comprise CSX’smany workforce functions. Whether they are working inthe field ensuring smooth operations, our mechanical shopsmaintaining our locomotives and railcar equipment or ouroffices to support our business processes and resolveproblems, CSX employees make it possible for us to be aleader in rail transportation.A core value at CSX is that “People make the difference.”CSX instills a company-wide culture that treats employeesfairly and respectfully, supports inclusion and providestraining opportunities while staying compliant with all laborand employment laws. This is key to driving our culture ofperformance accountability.Voice of the Employee. Following feedback from ourfirstVoice of the Employee survey in 2011, the companyfocused on identifying opportunities to improve ouremployee programs.More than 43 percent, or about 13,000 employees,participated in the 2011Voice of the Employee survey andthe company wants to expand participation in the 2013survey. We are looking into new ways of distributing thesurvey, specifically to contractor employees, to encourage agreater participation rate.CSX facilitates employee engagement, providing updates andaccess to company policies and procedures. Communicationchannels for our employees include:• Formal knowledge and learning networks with regularmeetings and staff support.• Broadcasted lunch-and-learn opportunities and formaldevelopment networking programs.• Web-based knowledge repositories and databases on thecompany intranet site.• TrainingTrax, our online learning platform.In addition, in 2012, we institutedthe following new employeeengagement mechanisms based onfeedback from the survey:• Focus groups based on feedbackfrom theVoice of the Employeesurvey led by groups of employees including supervisors.• Let’s Talk sessions led by labor relations. These sessions,held at 17 supply points in 2012, aim to drive engagementthrough increased communication and problem solving,focused on issues ranging from contract provisions andpay to training and service alternatives.• CSX Connect, an employee service center that servesas a call-in resource for employees with benefits-related questions.• Annual kick-off leadership meetings. Senior executivestravel to each division in January to meet with divisionleadership in an informal setting to level-set on companystrategy and to discuss local challenges and opportunities.These meetings are intended to drive more meaningfuldialogue and to equip the local leadership with tools toshare the same company-wide strategic messages totheir employees.Management Approach and Plans AheadCSX is committed to being a progressive workplace for our employees. In 2012, the company focused on developing ourstrategy to proactively plan and manage our workforce. CSX’s long-tenured employees are core to the company’s success.However, many of these employees are now nearing well-deserved retirements. In order for CSX to continue to growand meet market demands, it is essential to hire and develop new talent. We will continue these efforts through 2013, andconcentrate on attracting candidates in the science, technology, engineering and math fields to ensure we have the skillsneeded for future growth.Overview markets Governance community workforce safety Environment value chainCSX rolled outour secondVoice of the Employeesurvey in 2013.
  • 46CSX 2012 Corporate Social Responsibilit y ReportThese resources provide opportunities foremployees to learn about the company, askquestions and raise concerns. We strive foropen, two-way communication with employeesto ensure all issues are heard and understood.Training and DevelopmentThe company believes that every employee canbenefit from professional growth, and therefore,CSX offers a variety of training programsto employees. In 2012, each CSX employeeattended an average of 39.62 hours of training.The company utilizes several platforms todevelop and train employees, including:• The CSX Railroad Education & DevelopmentInstitute (REDI) in Atlanta, Ga., where themajority of new CSX employees receivetraining. Since its opening in 2005, thousandsof employees and contractors haveobtained professional training as conductors,locomotive engineers, management trainees,yardmasters, communications and signalworkers, track workers and more. REDI is thestarting point for training that is critical to aprofessional railroader.• Technical skill development in eachorganizational unit, such as the CommercialTraining Program and CFO University.• CSX’s Associate Development Program, amentoring program focused on matchingemployees with experienced coaches. Eachphase lasts one year, offering participants anopportunity to act on career goals and areasfor professional growth.• The Management Trainee Program atCSX, which helps develop leadership skillswhile applying academic and prior workexperiences in an actual work environment.• The Career Progression Program, designed todevelop contract employees who have a safetymindset, strong work ethic, leadership skills and a desireto build a career committed to the CSX’s core values.The program is ongoing or lasts until the employee ispromoted into management ranks.CSX managers are responsible for developing their employ-ees and ensuring that they are engaged, coached, evaluatedand rewarded for excellent performance. In addition, aleadership development road map is used to help set goalsfor future professional development and achievements.Spotlight: “Earnings Live”Town Hall MeetingsThe CSX Executive Team hosts a company-wide town hall meetingimmediately after the second and fourth quarterly earnings release andinvestor calls. The company developed these sessions as a way to improveengagement with employees and help instill increased responsibilityaround CSX’s operational and financial performance. At each session,Executive Team members are available in person at our Jacksonvilleheadquarters to talk about CSX’s performance during the quarter, tolook ahead at opportunities and challenges and to answer employees’questions. These meetings are broadcasted to all company computersand television screens, expanding the opportunity to include employeesfrom outside Jacksonville. Employees who watched live were able tosend questions via text message. Nearly 1,400 employees logged on toview the fourth quarter 2012 live earnings broadcast, and about 600employees attended the town hall meeting in person. Recorded highlightsof Earnings Live sessions are available to employees on the companyintranet site, as well.Overview markets Governance community workforce safety Environment value chain
  • 47CSX 2012 Corporate Social Responsibilit y ReportPerformance management. Calibration sessionsare conducted twice per year as part of performancemanagement. In these sessions, senior leaders review anddiscuss the performance scores of employees in theirorganizational units. Doing so helps ensure consistency ofthe rating process and create awareness of high- and low-performing employees. These calibration sessions are thenforwarded on for additional discussion at the ExecutiveTeam level.CSX makes systematic use of agreed-upon measurable goalsand targets and behavioral competencies by line supervisorsfor 100 percent of all non-union employees. Bonus levelsare determined based on performance category leveland company performance. In 2012, CSX added threetransportation unions to the Pay for Performance Plans,further aligning the contract workforce with the goalsof company management. This allows them to receiveannual bonuses and stock incentives. CSX is committed tomaintaining these plans in the future and is actively pursuingsimilar plans for other unions in the contract workforce.Employee recognition. In order to recognize employeesthat have made significant contributions to the CSX vision,the company provides an annual Chairman’s Award ofExcellence. Outstanding performance demonstrating initiative,ingenuity and strategic success by an individual or a teamrelated to areas such as safety, diversity and customer serviceare reviewed by the Executive Team. Anyone may nominate afellow employee for the award with supervisory approval. Thewinners receive a cash award and a weekend trip.CSX employees show their appreciation for the efforts theirpeers put into helping the company succeed using “ThanX”awards. These awards are given by coworkers and managersto employees who have gone above and beyond to help outand have exemplified outstanding customer focus, leadershipor teamwork. In 2012, 10,805 ThanX awards were granted,redeemable for gift cards to more than 300 regional andnational merchants. In addition, 1,035 employees whoachieved outstanding performance over a sustained periodwere recognized with Spot Awards in 2012. Spot Awardsare given to management employees and recipients receivea cash payment between $500 and $2,000. These programshave helped reward employee excellence in a meaningfulway, increasing employee engagement and job satisfaction.Strategic Workforce PlanningWorkforce demographics are changing as our many ofour valued employees are approaching retirement age. Itis a business priority to grow and develop the company’sworkforce to account for these upcoming retirements.CSX needs the right people in place today and in the yearsto come.The company is also monitoring demographic shifts acrossthe United States. For example, people are migrating awayfrom regions of the country like Upstate NewYork whereCSX has operations. The company is working to betterunderstand these shifts and how they may impact CSX’sfuture recruiting and workforce planning efforts.CSX operations require personnel with technical andengineering expertise. The United States continues to facea shortage of labor in these areas. As CSX engineers andtechnicians move into retirement age, it is crucial to fostertalent in these fields. A key aspect of our strategic workforceplanning is aligning our national partnerships and communityinvestment programs with our recruiting efforts (seepage 48).In 2012, in the greater five-county area around Jacksonville,Fla., we have provided National Merit Scholarships to fivestudents planning to study finance. Prior to receiving thescholarships, these students did not have financial supportto attend college. Engaging with local students is importantfor CSX in our recruiting strategy, as we are continuallylooking to hire qualified skilled workers to address ouraging workforce.Diversity and InclusionDeveloping and sustaining a strong, diverse organization isessential to achieving our business objectives. It underpinsour ability to stay competitive in a changing marketplaceand creates a work environment that attracts, develops andretains top talent.Inclusion at CSX means engaging all employees regardlessof age, gender, race, tenure, railroad affiliation, physicalchallenges, sexual orientation, geographic location, educationlevel, income or life experiences.Overview markets Governance community workforce safety Environment value chain
  • 48CSX 2012 Corporate Social Responsibilit y ReportOverview markets Governance community workforce safety Environment value chain“CSX emphasizes education and leadership in itscommunity programs and its daily business. FFAis dedicated to developing students’ potential forpremier leadership, personal growth and careersuccess. CSX is committed to the future of agricultureand its support of FFA is vital to the organization’sability to make a meaningful difference in the lives ofits members.”— Robert K. Cooper,Executive Director, National FFA FoundationSpotlight: Partnerships in ActionCSX is now in its third year of sponsoringthe National Future Farmers of America(FFA) Foundation and nearly 560,000 FFAmembers in grades 7 through 12 who belongto one of 7,498 local FFA chapters throughoutthe U.S., Puerto Rico andVirgin Islands.CSX and FFA are committed to developingfuture leaders and inspiring FFA membersto reach their maximum potential. CSX’sstrategic partnership with FFA supports thecompany’s recruiting efforts. Since many ofthe company’s job functions are located inrural areas, require shift work and involveoutdoor activities, FFA members are idealcandidates for potential employment at CSX.CSX’s sponsorship reaches thousands of FFAmembers through its support of the NationalFFA Organization’s annual WashingtonLeadership Conference, the FFA Job Interviewcareer development event and collegiatescholarships. The Washington LeadershipConference emphasizes civic engagementthrough leadership and draws more than2,200 students and advisors each year througha six-week course that teaches leadershipskills through transformational models. At theconference, students create community serviceprograms that they and their local FFA chapterwill enact in local communities. Events like theFFA Job Interview career development eventhelp students develop skills necessary to pursueand secure employment. CSX also supportsten $1,000 renewable scholarships for FFAmembers who attend a secondary educationinstitution to further their life skills.“Thanks to CSX’s support, FFA members throughout the country have been givenopportunities to grow as leaders and in turn use their leadership skills to serve and improvecommunities around them.”— Clay Sapp, 2012-13 NationalFFA Organization President
  • 49CSX 2012 Corporate Social Responsibilit y ReportDisability inclusion. The company is alwayslooking to expand both CSX’s reach and abilityto attract qualified disabled candidates. Effortsin 2012 included:• Supporting disability internships.• Conducting lunch-and-learns for betterawareness.• Working closely with the CSX DisabilityAffinity Group.• Participating in targeted job fairs for personswith disabilities.• Providing 24/7 access for education onpersons with disabilities.• Providing a suite of accessibility tools to viewand use the company website.CSX received a Disability Matters WorkforceAward for the second year in a row.This award considers how a company’srecruiting and training initiatives providereasonable accommodations accordingto the Americans with Disabilities Act. Italso recognizes strategies for integratingdisabled individuals into the organization.Military inclusion. As part of the WhiteHouse Joining Forces initiative, CSX committedto hiring 1,000 veterans during 2012. JoiningForces is a national partnership organized by First LadyMichelle Obama and Dr. Jill Biden to support America’s mili-tary service members and their families. CSX’s commitmentsupports an industry-wide initiative, led by the Associationof American Railroads (AAR), to hire more than 5,000veterans in 2012. CSX hired approximately 2,400 employeesin 2012, of which 630 were military veterans. While we didnot meet our goal of hiring 1,000 veterans due to businessconditions in the second half of 2012, 26 percent of our newemployees were military hires. CSX expects to maintain orimprove upon that rate going forward.Nearly one in five CSX employees has served in themilitary and the company supports employees who areNational Guard or Reserve members by extending salaryand benefits to employees called to active duty. In addition,CSX serves more military facilities than any other major U.S.railroad, handling thousands of carloads annually for overseasdeployments and training exercises. CSX also supportsthe Jacksonville-based Wounded Warrior Project, whichprovides programs and services for injured service membersSpotlight: Our Diverse WorkforceRaquel Clark, a veteran of the Navy and a computer scientist,is a CSX technical director overseeing the geographic data managementdepartment. Her team maintains geographic data on tracks and otherrailroad assets in 23 states. She manages six direct reports and 23contractors.“Signals are replaced, tracks are added or changed orremoved, or new areas of traffic are added. It’s constantly changing,” saysMs. Clark. As a manager, she coaches and develops her team, overseesprojects and coordinates business and compliance efforts.Ashley Roffe is using her mechanical engineering background as thefirst female to manage CSX’s Russell Locomotive Shop in Russell, Ky.She is responsible for ensuring the safety of everyone in the shop,meeting production goals and serving the many needs of the company’scustomers. Ms. Roffe started out in CSX’s management training program.“There I was, fresh out of college, in an industry that I didn’t know muchabout, learning about the business, traveling and working on both therailcar and locomotive sides of the mechanical department. I worked sideby side with some of the craftsmen to truly understand what it takesto keep the railroad running mechanically, as well as safely and reliably.”She believes that everyone has something to bring to the table – a freshperspective on how to do things better or an experience that’s taughtthem what not to do.“Railroads are an important part of the globaleconomy. It’s our responsibility to work together to deliver the benefits ofrail transportation to everyone.”Overview markets Governance community workforce safety Environment value chain
  • 50CSX 2012 Corporate Social Responsibilit y Reportto aid their transition from active duty to civilian lives. Inaddition, CSX offers internships through the WoundedWarrior Project. To date, 10 interns have worked for CSX,and two have stayed on the CSX team in full-time positions.Inclusion in practice. CSX employees participate inmore than 30 Inclusion Groups and Councils plus numerousemployee interest groups throughout the network. InclusionGroups are employee-driven and focused on a sharedinterest such as age, race, ethnicity or gender or supportgroups to help deal with today’s challenging times. Eachgroup’s primary purpose is to establish an open discussionfor idea exchange and fortify the connection to and withindiverse communities. Every inclusion organization must beopen to any and all employees of CSX. Groups are requiredto establish goals that align with CSX business imperatives.Some CSX inclusion groups include:• African Americans• Asian Americans• Hispanics• Young Professionals• Women’s Network• Military• Working Parents• Gay, Lesbian and Transgender Employees• Adults Caring for EldersTo support inclusion at all levels of the company, CSX creat-ed an oversight committee to set the goals and direction fordiversity efforts called the Global Inclusion Council.Volunteermembers of the company meet monthly to discuss initiativesand chart progress. All departments and company unitsare represented as part of the Global Inclusion Council. Toencourage collaboration and further support the inclusiongroups, an Inclusion Forum is held annually, with employeesfrom across the CSX network participating in a series ofexecutive and leadership panel discussions, social networkingevents, workshops and study circles.In 2012, CSX began work to link recruiting functions withmembers of inclusion groups. For example, our militaryinclusion group is a critical partner in our efforts toexpand our recruitment of individuals that have served inthe military. We plan to make formal changes within ourbusiness structure to further enhance our connections tothese inclusion groups.Overview markets Governance community workforce safety Environment value chain
  • 51CSX 2012 Corporate Social Responsibilit y ReportPromoting diversity. In addition to promoting diversitywithin the company, CSX also supports diversity in businesspractices. Since 2004, CSX has maintained a credit facilityarranged and syndicated solely by minority-owned financialinstitutions. In 2012, seven banks located within CSX’sgeographic footprint participated in this facility totaling$15 million.In 2012, CSX continued to be recognizedfor our diversity and inclusion efforts. Inseveral instances, CSX was the only namedClass I railroad. These recognitions include:• The No. 3 military-friendly employer onG.I. Jobs’ 2012 Top 100 Military FriendlyEmployers ranking out of 4,500 applicants,leading the transportation industry for thesecond consecutive year.• DiversityInc Magazine’s Top 50.• The Military Officers Association ofAmerica named CSX the recipient ofthe 2012 Distinguished Service Award,a recognition of CSX’s continuedemphasis on hiring and supporting activeduty and veteran men and women.• Named finalist in CivilianJobs.com’s 2012 MostValuableEmployer for military ranking. CivilianJobs.com is a leadingcareer resource organization dedicated to connectingAmerican employers with experiencedmilitary talent.• Diversity MBA Magazine – No. 3 of Top 50.• Department of Defense Employer Support for Guardand Reserves Freedom Award Winner – Top 3 largecompanies in U.S.• Military Officers Association of America – MostOutstanding Military Employer Award.• Enlisted Association of the National Guard of the UnitedStates – Al Schneider Memorial Award for superiorsupport to Guard and Reserve Employees.• Florida “Above and Beyond” Award – For superiorsupport to Florida Guard and Reserves by ESGR.• Florida National Guard “Ring of Honor” Member –For support of Florida “Yellow Ribbon” PostDeployment Programs.• Association of Diversity Councils Honors Award –No. 8 of Top 25.• National Disability Matters – Workforce Award Honoree.Workforce CompositionCSX employs more than 30,000 people in a variety ofmanagement and non-management, office and field, unionand non-union roles. We are committed to fairness andequal opportunity and adhere to all labor and employmentlaws wherever we operate.CSX keeps a thorough record of our employee base,including composition, compensation and annual turnoverstatistics. The rail industry has historically been a caucasian,male-dominated industry – a trend currently reflected in ouremployee composition. Through increased communicationwith the public in advertising, community outreach andrecruitment efforts, we are working to attract greaterdiversity to sustain our workforce for the long term. In 2012,of 2,370 new hires, 171 were women and 468 werediverse candidates.Overview markets Governance community workforce safety Environment value chain“I am proud of CSX’s continued efforts in bringingdiversity and inclusion to the forefront of ourrecruiting efforts. An organization’s success and abilityto compete depends largely upon its ability to openup the playing field and find great talent. These effortshave enabled us to attract individuals who mightnever have considered a career in the rail industry.Inclusion at CSX means building a culture around weand us, not you or them.”— Ron Macomb, CSX Asian Inclusion Chair Total Workforce (year-end 2012):*  30,399 Union Employees:   25,657 (84%) Management Employees:  4,742 (16%)*Excludes INRD, PAL, and CSX de Mexico.
  • 52CSX 2012 Corporate Social Responsibilit y ReportOverview markets Governance community workforce safety Environment value chainWorkforce Demographics2010 2011 2012Total Workforce 29,916 31,838 30,399Union Employees - Total 25,515 27,242 25,657Union Employees - % 86% 86% 84%Management Employees - Total 4,240 4,596 4,742Management Employees - % 14% 14% 16%Part-Time Employees 4 0 1Contract/Temporary Employees 3,221 3,707 4,060Union Employees Covered by CollectiveBargaining Agreements100% 100% 100%Female Employees - Total 1,956 2,035 2,061Female Employees - % 7% 6% 7%Minority Employees - Total 4,370 4,701 4,607Minority Employees - % 15% 15% 15%Female Managers - Total 944 1,031 1,087Female Managers - % 22% 22% 23%Minority Managers - Total 699 811 882Minority Managers - % 16% 18% 19%Employee Turnover Rate - Management 9% 6% 6%Employee Turnover Rate - Union 12% 11% 9%Managers Receiving Annual PerformanceReviews100% 100% 100%Number of Inclusion Groups 44 44 30Number of Employees/Contractors Trained 32,464 34,681 34,609Average Hours of Training per Employee 25.35 35.09 39.62For more detailed workforce information, please see page 99.
  • 53CSX 2012 Corporate Social Responsibilit y ReportOverview markets Governance community workforce safety Environment value chainEmployee BenefitsOur employees make a commitment to CSXthrough the hours of hard work they put inaway from their families. CSX aims to rewardfull-time employees for that commitmentby providing highly competitive benefits andcompensation programs, including medical anddental plans, life insurance, pension plans andmore. CSX also extends medical benefits tospouses of full-time employees in registered,same-sex domestic partnerships.If an employee works 20 to 39 hours a week,they do not receive basic accident, death anddismemberment insurance; short- and long-term disability along with the Medical Leaves ofFull-time / part-time benefit eligibility comparisonFull-Time Employees(40 hours per week)Part-Time Employees*(20 - 39 hours per week)All Medical and Dental Plans CDHP (no H.S.A.)/ No DentalBasic Life Insurance (2x salary) $10,000.00Basic AD&D (2x salary) Not EligibleBereavement Leave Bereavement LeaveCOBRA COBRACSXtra (401(k)) CSXtra (401(k))Flexible Spending Account Flexible Spending AccountHolidays HolidaysMedical LOA, STD, LTD Not EligibleMilitary Leave Military LeaveOptional AD&D Optional AD&DOptional Life Insurance Not EligiblePension PensionPrepaid Legal Plan Prepaid Legal PlanService Award Program Service Award ProgramSeverance Pay Plan Not EligibleThanX Employee Recognition ThanX Employee RecognitionTravel Accident Insurance Not EligibleTuition Reimbursement Not EligibleVacation VacationVision Plan Vision Plan* Part-time employees that work less than 20 hours per week are noteligible for the benefits listed in this table.Female Employees:  2,061 (7%)Minority Employees:  4,607 (15%)Management Turnover Rate: 6%Union Turnover Rate: 9%
  • 54CSX 2012 Corporate Social Responsibilit y ReportOverview markets Governance community workforce safety Environment value chainAbsence Policy; optional life insurance; severance pay plan;travel accident insurance; or tuition reimbursement. If theemployee works less than 20 hours per week, he or sheis not eligible for any benefits, such as 401(k), pension andhealth and group benefits. Benefits vary by craft and unionfor contract or agreement positions; please see our websitefor more information.Employee PoliciesCSX does not tolerate discrimination or retaliation and itensures that its policies against discrimination and retaliationare widely disseminated and reinforced through continuingand comprehensive training programs, mailings to eachemployee’s home, postings throughout workplaces, postingson the CSX employee services intranet homepage andperiodic company-wide e-mails. Discrimination of any type,including harassment based on race, color, religion, sex, age,national origin, sexual orientation, disability or any other basisprotected by federal or state law is prohibited and violatescompany policy. Retaliation against an individual who bringsa complaint of harassment or discrimination or against anindividual who participates in the investigation of a complaintof harassment or discrimination is strictly prohibited.CSX maintains a 24-hour confidential hotline and websiteon which employees can submit complaints or concernsabout the company, anonymously if preferred. Informationabout the hotline is widely distributed throughout thecompany. The CSX Code of Ethics also includes specificwhistle-blowing provisions. All complaints and reportsremain confidential and are thoroughly investigated.Labor RelationsCSX negotiates and administers its collectivebargaining agreements together with thecountry’s other Class I railroads. CSX andits labor organizations work collaborativelyregarding safety, with union representativesparticipating in the safety overlap processacross 100 percent of the system. We haveprograms in place for each of the 13 labororganizations. For more information on thisprogram, please see page 58.The company’s policies for working with labor organizationsare embodied in the collective bargaining agreementsnegotiated with each organization. These agreementsare enforceable by law and establish individual as well ascollective rights. The collective bargaining agreements covervirtually all aspects of the employment relationship, exceptwhere terms and conditions are covered by federal law.This includes wages, hours and all terms and conditions ofemployment, while pension, disability and unemployment arecovered by the Railroad Retirement Board.Health and WellnessAt CSX, we encourage all employees to take actionand responsibility for their health. To that end, we offera wealth of resources to promote physical activity andproper nutrition that support a healthy lifestyle, including29 programs that address nutrition, physical activity, safetyand health awareness. The CSX Health & Wellness teamis composed of licensed dietitians, health fitness specialists®,health coaches, certified diabetic educators and ergonomists.CSX’s headquarters in Jacksonville, Fla., houses a full-scaleworkout facility complete with daily fitness classes andcertified trainers. It is one of 39 on-site health and wellnesscenters in which the company has invested. CSX alsosupports a Health & Wellness Inclusion group, one of morethan 30 diversity and inclusion groups available to employees.CSX is committed to improving and sustaining the healthand well-being of all CSX employees and their families.Spouses are eligible to participate in the Weight Watchers™and Tobacco Cessation programs. The Small Steps programis designed to help individuals take charge of their health andincrease their level of physical activity. It encourages them
  • 55CSX 2012 Corporate Social Responsibilit y Reportto consciously decide to make walking part of their lifestyle.CSX also believes that a smoke-free employee is a healthyemployee. We offer tools and support for any individualwho has committed to quit smoking.CSX offers a confidential Employee Assistance Programfor employees and their family members dealing withpersonal relationship problems, alcohol or drug abuse,depression or anxiety, or any other emotional challenges.CSX counselors are trained professionals who provideassessment, counseling, guidance, information and referralservices to assist with personal problems. Counselors alsoprovide support to employees experiencing distress fromderailments or crossing-related incidents.Awareness programs. Managing health begins withprevention and CSX encourages employees to stay awareof their health through a variety of awareness programsincluding metabolic, heart health, lung function, diabetes andsleep apnea screenings. We also offer health risk appraisalsfor our employees to help identify issues before theybecome larger problems.Nutrition and fitness programs. CSX encouragesemployees to eat right and get the exercise they need tostay healthy. By offering weight management programs suchas our Eat Right and meal planning programs and WeightWatchers™, CSX provides tools to help employees makeinformed choices. The company also provides programs suchas our Small Steps pedometer programand physical fitness assessments to encourage increasedphysical activity.Health promotion. In addition to prevention, eatingright and exercising, CSX offers additional health promotionservices such as health coaching, medical self-care, tobaccocessation, flu prevention, health and wellness forums andhealthy mothers programs.Workplace safety programs. CSX believes safety isa way of life, and keeping our employees safe is our toppriority. Programs around workplace safety include medicalemergency response training, an automated externaldefibrillation (AED) program, stretching, heat-related illnessprevention, office ergonomics, physical abilities testing andphysical capabilities testing.CSX also believes in maintaining a workplace that is freefrom violence. The Infrastructure Protection (IP) teamprovided workplace violence awareness training to CSXemployees in 2012, including mailing an instructionalbrochure to all employees. Increased awareness of warningsigns and indicators allows for early intervention andprevention of workplace violence. The IP team alsotrained employees on how to keep themselves safe ifan incident occurs.Overview markets Governance community workforce safety Environment value chain
  • In This Section:Employee Safety Network Safety and Security Public Safety56SafetySuccesses:• CSX set a company record in safety and led theClass I railroads in their safest year ever.• CSX supported a labor-initiated program, “ThinkBefore You Tech,” to help deter distractive behaviorsonboard CSX locomotives.• The CSX police department achieved Commissionon Accreditation for Law EnforcementAgencies reaccreditation.Challenges:• Understanding and finding the root causes ofserious injuries and near-misses.• Continuing to educate local communities on howto be safe around CSX train tracks.Overview markets Governance community workforce safety Environment value chain
  • 57Employee Safety2012 Safety PerformanceEnsuring the safety of our workforce is a commitment thatstarts with CSX leadership and is a responsibility of eachCSX employee. The company encourages every worker totake time to be safe and to look out for others. The safetyculture fostered throughout the company helps us ensurewe are preventing and reducing accidents and injuries.In 2012, the company’s Federal Railroad Administration(FRA) personal injury rate, which measures the number ofFRA-reportable injuries per 200,000 man-hours, improvedto a record low of 0.69 – a 26 percent improvement over2011. This means that in 2012, more CSX employees wenthome safely than ever before. This accomplishment showsextraordinary employee dedication to our safety initiatives.There were no employee fatalities in 2012.CSX’s FRA train accident rate also decreased from 2011 to2012, by 18 percent to 1.98. This was due in large part tomany of the initiatives described in this section. CSX is proudto have led the railroad industry in safety in 2012, but we areaware of our responsibility to continue our focus on safety inthe years to come. We are working with the Association ofAmerican Railroads to develop forums to share best practicesthat prevent injuries and train accidents across the industry.Despite the continuous improvement of our safetyperformance, we sometimes experience derailments. CSX iscommitted to understanding the root causes of these eventsand working to implement corrective measures to preventfuture incidents.Life-Changing IndexWhile the FRA rates are a good indicator of our annualsafety performance, CSX wanted a more comprehensivemeasure of how we are truly performing. In 2012, wedeveloped an internal measure known as the Life-ChangingIndex. The index accounts for the potential risk exposurefrom specific railroad activities. This approach providesgreater clarity on behaviors that have the most impact onemployee safety, allowing for more refined and precisecorrective measures.Each injury is measured on a scale from 0 to 2:• Level 0: A non-reportable injury with no severityimplications to the employee, such as an insect bite.• Level .5: An injury with minor severity implications tothe employee, such as a strain or sprain that occurredwhile dismounting equipment.Management Approach and Plans AheadAt CSX, safety is a way of life. Ensuring the safety of our employees and the communities in which we operate is one of ourcore values. We expect all of our employees to leave work and return to their families safely each day. CSX manages safetythrough effective training programs, strong communication, community engagement and collaboration with the railroadindustry. In 2012, CSX experienced one of our safest years ever. We are proud of this achievement, but will always befocused on and committed to continuous improvement. In 2013, CSX will expand employee engagement and empowermentaround safety topics so our employees and the public continue to have fewer accidents and injuries.Overview markets Governance community workforce safety Environment value chain0.00.51.01.52.02.53.0201220112010FRA Personal Injury Rate* FRA Train Accident Rate**0.00.20.40.60.81.01.22012201120100.691.020.931.972.702.41* FRA personal injury rate: number of FRA-reportable injuries per 200,000 man-hours.** FRA train accident rate: number of FRA-reportable train accidents per million train-miles.
  • 58CSX 2012 Corporate Social Responsibilit y Report• Level 1: An injury with moderate implications, such as anemployee being struck by a sliver of metal.• Level 1.5: An injury with potentially severe injuryimplications, such as a fall from a stationary railcar.• Level 2: An injury with potentially catastrophic or fatalimplications to the employee, such as a fall from a movingrailcar or a head-on collision in a motor vehicle.After categorizing injuries, the CSX Safety team analyzesthe types and levels of injuries and from which job functionsthey originate. This allows the team to have a betterunderstanding of whether there are particular tasks orlocations within CSX that are more prone to the occurrenceof significant injuries. CSX can then implement specificcorrective measures or increase training to prevent eachinjury category. In 2013, CSX hopes to refine this index andcontinue to prevent all injuries with appropriate measures.Industrial HygieneThe CSX Industrial Hygiene team focuses on anticipating,recognizing, evaluating and controlling occupational healthhazards. In 2012, CSX conducted 54 workplace exposureassessments that included the collection of 674 samplesfor 58 different occupational health hazards. The IndustrialHygiene team monitors air quality and noise in our variedoperations to ensure that work environments are safe andemployees are utilizing proper protective equipment.The Industrial Hygiene team also responds to emergencyevents throughout our network. In the event of an incident,the team works with contractors to perform air monitoringafter hazardous materials releases. CSXensures that community responders have theappropriate personal protective equipmentand training necessary to safely and effectivelyrespond to emergencies. In 2013, the IndustrialHygiene team will continue to improve theknowledge, skills and abilities of CSX employees,customers and community respondersthrough our Health, Safety and EnvironmentalUniversity. By sharing our knowledge andexpertise with attendees, we are supportingCSX’s efforts to become the safest NorthAmerican railroad.Safety TrainingEducation and training are significant aspects of CSX’s overallsafety program. It is a priority to ensure that CSX employeesare aware of their work environment, understand potentialhazards and know how to identify and minimize risk. Thecompany has experienced an influx of new employees,increasing the need for additional training and continuededucation around safety practices. CSX provides employeeswith a variety of training programs and a safe workingenvironment. Investment in our employees’ education andtraining has been key to achieving our performance results.We have noticed particularly strong safety performancerates among employees that have been with the companyfor fewer than five years, due in part to their training at theCSX Railroad Education & Development Institute (REDI) inAtlanta, Ga.Union safety coordinators. To facilitate theimplementation of safety initiatives throughout ouroperations, the CSX Safety team employs full-time unionsafety coordinators. Each of our 10 divisions has two unionsafety coordinators that serve as “eyes and ears on theground” for the CSX Safety team. The representatives workwith other union employees, observe their daily actionsand facilitate safety meetings and trainings. The unionsafety coordinators also provide the CSX Safety team withideas for potential training sessions and valuable feedback.The union safety coordinators and the CSX Safety teamcommunicate constantly to ensure a continual focus onimportant safety issues and workplace improvementsthroughout the CSX network.“A safety coordinator’s role is to educate andcommunicate openly with all employees to make surethat everyone understands how to do their jobs safely. That could involve checking safety conditions onthe ground, reviewing new safety bulletins with ourteams or just talking freely about safety issues.  Wewant to send every employee home the same waythey came to work. That’s our goal.”— David Stayton, CSX UTU Safety Coordinator, Huntington DivisionOverview markets Governance community workforce safety Environment value chain
  • 59CSX 2012 Corporate Social Responsibilit y ReportOperation RedBlock. Operation RedBlock is a peerprevention program focused on eliminating drug andalcohol use in the workplace. This initiative is led by unionmembership and supported by CSX. Operation RedBlockprovides employees an opportunity to be released fromduty, without penalty, if they are not in condition to reportto work. This allows for a safer work environment for ouremployees and reduces the potential for severe accidents.The FRA has recognized this initiative as the leading drugand alcohol peer program in the industry.Think BeforeYou Tech. Launched in 2012, the ThinkBeforeYou Tech campaign is another peer intervention pro-gram intended to address unsafe use of electronic devices.This campaign was also initiated by union membership andsupported by CSX management. The FRA played an instru-mental role in the launch of this initiative.The goal of this program is to eliminate unsafe acts bymaking the use of cell phones and other electronic deviceswhile on duty socially unacceptable. Each employee isobligated to intervene and address an unsafe act themoment it becomes apparent. When an electronic deviceis used in an unsafe manner, all operations must ceaseimmediately. The conversation between peers shouldbe fact-based and focused on the lack of employeeattentiveness to safety-related operations. CSX was the firstClass I railroad to launch a peer intervention program forelectronic device use. We established an extensive internalmarketing campaign around this initiative and providedinformational brochures to employees.Safety innovations. Following comprehensive trainingand an everyday focus on safety at CSX, our employeeshave developed several innovative technologies to improvesafety while on the job. One such innovation was replacingthe traditional railroad lantern with a multifunctionalflashlight. This flashlight allows employees to perform jobduties hands-free and provides better functionality. Thedesign of this light was years in the making, stemming froma collaboration between the CSX Safety team and unionsafety coordinators. This flashlight underwent testing in thefield and will be deployed to our conductors in 2013.Overview markets Governance community workforce safety Environment value chain
  • 60CSX 2012 Corporate Social Responsibilit y ReportNetwork Safety and SecurityOur customers, employees and communitiesthroughout our network expect CSX tomaintain a safe and secure network. CSX hasprograms and training in place to protectinfrastructure and cargo in collaboration withlocal, regional and federal governments and lawenforcement agencies.CSX Police DepartmentThe CSX Police Department serves to protectCSX personnel, critical infrastructure, customerproperty and the public against criminal acts,including terrorism, in order to preserve thesafety and efficiency of rail transportation in America. CSXTransportation currently maintains this railroad policeforce that operates in 23 states. The officers of the CSXPolice Department are strategically deployed throughoutour network and often work with municipal, county, stateand federal law enforcement and emergency responseorganizations. Relationships with these organizations enhanceour ability to promptly and safely respond to any threats tosecurity along our network.The CSX Police Department, in conjunction with the CSXHuman Resources team and Johns Hopkins University, isdeveloping a police leadership and development educationprogram to build a department of highly skilled policeprofessionals who are forward-thinking, strategic andcommitted to our vision. This will serve CSX well goingforward with succession planning in light of the high numberof anticipated retirements at the company.In 2012, the CSX Police Department receivedreaccreditation from the Commission on Accreditationfor Law Enforcement Agencies (CALEA). The PoliceDepartment received its initial accreditation in 2009,becoming the only freight railroad police department toachieve this certification. CSX achieved this honor aftera successful on-site assessment by a CALEA team, whichreviewed all facets of CSX Police operations, includingpolicies, procedures, evidence handling and arrests. Only10 percent of law enforcement agencies nationwide haveachieved this highly regarded accreditation, and CSX isproud to be one of these agencies. The company has plansin place to train CSX police officers as hazardous materialsmanagers to build additional capacity in this area.The CSX Police Department regularly partners with FBIJoint Terrorism Task Force operations across our network.CSX receives continual updates on terrorism intelligenceand homeland security issues, which helps us ensureemployees, communities and physical infrastructure assetsare safe and secure. We collaborate with all of the Class Irailroads on this initiative, which allows us to share the mostup-to-date data and information. As part of an ongoingcommitment to assist other law enforcement agencies, theCSX Police Department conducts sophisticated training forother police departments using specialized railroad trainingcars. Recent training was provided for 55 members of theFBI SWAT team in Springfield, Mass.The CSX Police Department also has highly specialized unitsthat respond to specific threats to network security:• The Specialized Crime Unit (SCU) focuses onprevention and investigation of crimes related to cargotheft and environmental issues (see page 77).• The Rapid Response Team is responsible forrail counterterrorism, to monitor and protect all railinfrastructure from terrorists.• The Trespass Abatement Program works tomake the CSX network footprint safe and secure for allemployees, customers and local communities.Overview markets Governance community workforce safety Environment value chain
  • 61CSX 2012 Corporate Social Responsibilit y ReportSpotlight: Community Safety forNational GatewayThe National Gateway project aims to improve the flow of rail trafficthroughout the United States by increasing the use of double-stackintermodal container cars. CSX is participating in this project inWashington, D.C., working with the District of Columbia Department ofTransportation and the Federal Highway Administration to expand theVirginia Avenue Tunnel to fit double-stack cars. To ensure communitysafety during this process, CSX established two Supervisory Special Agentpositions in the neighborhood to handle community relations related tothe project. These agents live in the community and provide security anda contact base for project information.The CSX Police Department also providessecurity at special events such as the nationalconventions, the Super Bowl, the presidentialinauguration and other high-security events.Innovation and AdvancedEngineeringBy adding innovative technologies to oursafety program, we are able to more fullyunderstand and prevent potential safetyhazards. In 2012, we made the followingenhancements to our system:Web of Detectors. The Web of Detectorsuses various forms of detector technologyto proactively identify mechanical risks onthe network.Wheel Profile Detectors combine lasers andcameras to detect mechanical defects on eachtrain wheel as it rolls by the detector. CSXinstalled two innovative detector systems thispast year. In addition, Thermal Imaging Camerasmonitor heat generated during brakingoperations. Cold wheels can indicate ineffectivebraking, while hot wheels suggest stuck brakes.MachineVision Systems are also being installedon the network to automate the inspection process. Thesemachines combine highly accurate cameras with specializedalgorithms to categorize freight car components as trainspass at track speed. The systems are currently used toprovide 24/7 inspection of brake shoes in certain locationsand are being expanded to inspect coupler security inorder to prevent train separations and derailments. During2012, we began installation of these systems at eight sitesacross the network. Approximately 70 percent of CSX traincars pass through one of these systems every six weeks.This added layer of maintenance detection helps improvenetwork safety.Acoustic Fiber Detection. This technology continuouslymonitors vibrations along a track to detect train defects. Asa train passes along the fiber cable on a track, every wheelcontact creates a unique vibration and noise that can beused to identify causes of stress. These noises can identifytrain presence, flat or broken wheels, dragging equipment,broken rail or hot bearings. This technology, still in theearly concept phase, has the potential to provide us withthe ability to find and correct defects before they becomemechanical failures. This system can also help monitormaintenance along the tracks. For example, acoustic fiberscan pick up the noise associated with a tree falling on thetracks. Crews are able to easily locate the position andcorrect the problem with minimal service disruption.Rail Yard CamerasProviding reliable camera systems is essential to trainoperations. Our cameras, which comply with FRAregulations, offer complete coverage of the drill track (asegment of rail that connects to the main railway) and canOverview markets Governance community workforce safety Environment value chain“It’s very rewarding to work with members of thecommunity. People want to know that their concernsare taken seriously and that someone is there to helpif an issue arises. Placing law enforcement officersIn the communities where we operate shows CSX’scommitment to providing immediate assistance, andprotection if necessary, to our neighbors.”— Drew Ford, Supervisory Special Agent, Washington, D.C.
  • 62CSX 2012 Corporate Social Responsibilit y Reportbe viewed simultaneously by the switchman, controller andterminal supervisor. We added more than 500 cameras toour yards between 2010 and 2012.Positive Train ControlThe Rail Safety Improvement Act of 2008 includes aprovision requiring each Class I freight railroad and passengerrailroad to develop and install a positive train control (PTC)system by December 31, 2015. When fully developed, PTCis envisioned as a multifaceted computer-based systemdesigned to prevent train-to-train collisions, over-speedderailments, incursions into established work zone limits, andtrain diversions into another set of tracks caused by switchesleft in wrong positions. PTC must be installed on mainlinetracks over which passenger or commuter rail service isregularly provided and on certain mainline tracks over whichhazardous materials that are poisonous or toxic by inhalationare transported. In total, PTC will be installed on roughly60,000 miles of the railroad industry’s tracks.CSX currently estimates that the company’s total multiyearcost of PTC implementation will be at least $1.7 billion. Thecompany is working with innovative partners to developand deploy this new technology as soon as possible. Toachieve that goal, we are hiring new employees throughoutthe network to install state-of-the-art new signal systemequipment and to upgrade existing locomotives, technologysystems and other equipment. Key software and hardwarePTC components are still being developed, tested andinstalled on railroad networks.Asset Health Strategic InitiativeIn order to prevent potential accidents, CSX ispartnering with the other Class I railroads toimplement an asset health strategic initiative.CSX is using devices across our railroadnetwork to assess the condition of ourinfrastructure and railcar assets. Working withthe Class I railroads allows us to pool resourcesand share information and trends to preventasset failure and subsequent accidents.Hazardous Materials SafetyCSX and other railroads are common carriers, meaningthey have a statutory obligation to provide rates and serviceupon request by a shipper. This common carrier obligationrequires railroads to transport a wide variety of productsand merchandise, including hazardous materials. The CSXHazardous Materials team responds to emergenciesthroughout the CSX network, ranging from chemicalreleases, diesel fuel spills and other material releases. Dueto our expansive network, CSX works in conjunction withstate and federal emergency response organizations in orderto ensure prompt and effective response to hazardousmaterials emergencies.Training is an asset at CSX and we strive to partner withcustomers and local organizations to share our hazardousmaterials knowledge. Unique to CSX’s training program isdedicated equipment such as safety trains used to train localresponse organizations. Safety Train, a partnership with TheFirefighters Education and Training Foundation, providesrealistic training scenarios for first responders. CSX provides40-hour training events for emergency responders duringwhich a derailment scenario is simulated. For organizationsthat cannot attend a face-to-face training session, CSXprovides a variety of online training courses, as well asprinted materials, to assist emergency responders.CSX maintains a comprehensive prequalification process forhazardous materials response contractors, which analyzesthese potential contractors on financial, operational, safetyand training performance. A third-party review is completedfor each potential contractor to ensure they meet theSpotlight: Hands-On Training for FDNYAs NewYork City is one of the major cities along the CSXnetwork, our Hazardous Material Systems department held a week-longtraining session for the Fire Department of NewYork (FDNY). Thishands-on session involved derailment response, including using trainingequipment to simulate procedures for product transfer techniques.More than 100 FDNY members received this training in 2012. CSX alsoprovided similar training to emergency responders in Cincinnati, Nashville,Boston and a variety of other places throughout our network.Overview markets Governance community workforce safety Environment value chain
  • 63CSX 2012 Corporate Social Responsibilit y Reportstrict CSX criteria for responding to hazardous materialsemergencies. Once these contractors pass the third-partyreview, CSX coordinates with contractors on incidentresponse. To ensure CSX contractors are continuallyqualified for emergency response, CSX reviews eachcontractor periodically.Infrastructure ProtectionThe CSX Infrastructure Protection (IP) team complementsthe resources of the CSX Police Department and the CSXHazardous Materials Systems Department. IP works closelywith local, state and federal agencies on improving thesafety and security of rail transportation to help keep ouremployees, communities, and customers’ employees safe.CSX believes that partnerships and close coordination ofsecurity concerns are essential to enhancing public safety. Aspart of this effort, the IP team has established public-privatepartnerships to provide federal and state homeland securityofficials valuable, current information they can use to protectthe communities they serve. These formalized partnershipsallow CSX, state officials and first responders to effectivelyand seamlessly share information and work side-by-sideprotecting our communities and employees.CSX uses a highly specialized Secure Network OperationsWorkstation (SecureNOW) system. This system, developedby CSX, provides CSX employees and trained statehomeland security officials with a tool to promptly identifyand independently track the nearly real-time locationand status of CSX trains and railcars on our network.Access to SecureNOW also provides state and federalofficials with additional information about what is carriedon our rails. This allows state officials to more efficientlyallocate law enforcement resources, coordinate with CSXsecurity officials and integrate rail security into ongoing lawenforcement operations. CSX is the only Class I railroad thatoffers this solution to homeland security and emergencyresponse centers. In fact, CSX has entered into partnershipswith 17 states and two federal entities – the TransportationSecurity Administration’s Transportation Security OperationCenter and the Department of Transportation’s CrisisManagement Center.CSX provides annual training on the SecureNOW systemfor federal and state officials. The IP team also works directlywith the Department of Homeland Security, TransportationSecurity Administration, U.S. Customs and Border Patrol,State Intelligence Fusion Centers and Transport Canada.The IP team regularly performs assessments on CSXinfrastructure such as bridges, tunnels and major rail yards.These assessments determine the placement of bothtechnology-based and physical security enhancements atcertain critical assets. Site-specific security countermeasuresare also determined.Rail security awareness is also important for CSX employees.In 2012, the IP team trained nearly 28,000 employeesin rail security awareness in addition to hosting a railsecurity awareness week. In-depth rail security and securitycountermeasures training was provided to more than 1,000employees, primarily managers. The IP team continued toexpand its workplace violence awareness training in 2012,including mailing an informational brochure to all employees(see page 55).Overview markets Governance community workforce safety Environment value chain
  • 64CSX 2012 Corporate Social Responsibilit y ReportPublic SafetyInvesting in SafetyEnsuring that the communities in our network do notexperience unsafe conditions due to CSX infrastructureis crucial to maintaining our license to operate. About 25percent of CSX employees are dedicated to improvingCSX’s 21,000 miles of track, signals and grade crossings.Track inspections are the responsibility of approximately 500of those employees. In 2012, CSX invested more than $1.2billion to improve and maintain track, bridges, signal systemsand other infrastructure. CSX’s total capital expenditures in2012 were $2.3 billion.In July 2012, more than 900 CSX employees worked tocomplete the CSX Maintenance Jamboree on a section oftrack in the southeast portion of our network. This annualjamboree event compresses approximately a year’s worthof track, signal and bridge maintenance and upgrades intoroughly one week in order to minimize disruptions tocustomers and local communities. Nearly $34 million ofimprovements were completed in sections of Kentucky,Virginia, Tennessee, North Carolina and South Carolina.This included safely replacing or installing nearly 176,000crossties and 233,000 feet of mainline rail, along withrepairing 10 bridges and 255 road crossings.Community AffairsTo respond to concerns in the communities in which weoperate, CSX maintains a dedicated Community Affairsteam located throughout the CSX network.Public Safety Coordination Center. The CSX PublicSafety Coordination Center (PSCC) acts as the company’s911 call center. Its mission is to protect the public, CSXemployees and CSX property by fielding calls fromemployees, the public and other emergency responseagencies on safety or security conditions. This is achallenging task, considering CSX operates in 23 stateseast of the Mississippi and covers nearly 23,000 miles oftrack. The PSCC handles emergencies from vehicles on thetracks to hazardous material spills, and is staffed 24 hours aday, seven days a week, with 25 dedicated employees.We encourage the public, government agencies, employ-ees and customers to alert CSX of any potential railroadincidents. These emergencies include crossing malfunctions,blocked tracks, crossing accidents, hazardous materials releas-es, thefts and vandalism, trespassing and unsafe employeedriving. Each railroad crossing station contains signageindicating the emergency phone number. The PSCC handled131,743 events in 2012, an average of more than 360 callsper day. When necessary, the PSCC dispatches police andother trained CSX safety and security personnel to re-spond to calls as quickly as possible using a transportationcross-functional information system containing specific loca-tion information. The PSCC received CALEA accreditationin 2012, becoming the first and only freight railroad crisis andcommunication center to receive this honor.Another way that the PSCC provides valuable services is byfacilitating contact with transportation employees in case ofan emergency. CSX distributed educational material such asmagnets and pamphlets to train engineers’ and conductors’families and significant others so that they can call the PSCCnumber in the event of a family emergency. The PSCC willnotify the appropriate train dispatcher who will radio theemployee on the train to inform them of the message. Thismechanism provides train operators with an alternativeto using portable electronic devices while operatinglocomotives in emergency situations.TellCSX. To respond to questions and concerns from thecommunities in which we operate, CSX also maintains aphone and internet hotline, TellCSX. Inquiries or concernsrelated to train horn noise, rough crossings, real estate,construction projects or other issues can be submitted to alive operator during normal business hours. This hotline iswidely used and effectively provides CSX with informationOverview markets Governance community workforce safety Environment value chain
  • 65CSX 2012 Corporate Social Responsibilit y Reportto promptly address any potential safetyhazards or community concerns. CSX is theonly Class I railroad to provide a central placefor the public to call about non-emergencyissues. In 2012, TellCSX processed more than30,000 calls, generating more than 14,000issues raised by members of communities alongCSX’s network.When an issue is identified by the TellCSXteam, it is elevated to the appropriateCSX department. Community relationsrepresentatives then engage with localcommunities and members of the publicregarding the concern and work with them tofind a solution. CSX’s goal is to provide a quick,informative response to community membersusing TellCSX. In 2012, CSX provided enhancedtraining to all TellCSX representatives to ensurethe process is continuously improved and streamlined.While the phone hotline remains the most effectivecommunication device, CSX also handles inquiries throughour website at csx.com.In instances when an incident such as a derailment occurs,CSX’s Community Affairs team actively engages withcommunity members in response to specific concernsand issues. When necessary, representatives provide lodgingfor residents who have been evacuated from their homesand assist with other daily essentials such as transportation,child and pet care, medication, clothing and other needs.The Community Affairs team works not only with localofficials, but serves as a contact for the communitymembers themselves.Community Safety Programsand PartnershipsWherever possible, CSX partners with organizations onsafety programs and marketing campaigns to increaseawareness about railroad safety within communities.Operation Lifesaver. Operation Lifesaver is a national,nonprofit public information program dedicated to reducingcollisions, injuries and fatalities at highway-rail crossingsand on railroad property. This program provides free railsafety presentations to more than 1 million people eachyear, including children, community groups, law enforcementofficers and emergency responders. CSX partners withOperation Lifesaver to further safety messaging throughoutour network. Looking ahead, CSX is working with OperationLifesaver to use social media to maximize the impact of thisimportant program.Crossing safety. CSX is committed to eliminatingredundant highway-rail crossings throughout our network.By eliminating these crossings, safety is improved withinlocal communities, eliminating any possibility of a train-to-vehicle collision at those locations. In addition to improvedsafety, there are financial incentives for local governments toclose these crossings. Municipalities or states are responsiblefor maintaining public crossings, so closing these crossingseliminates annual costs. CSX and various state-levelDepartments of Transportation also offer financial incentivesfor closing public crossings. In addition, crossing closureseffectively close roadways, allowing for alternate uses of theland such as parking, culs-de-sac and potential expansionprojects.In 2012, we closed 352 crossingsacross the CSX network. Thecompany is actively workingwith the U.S. Department ofTransportation to upgrade thesafety of our remaining crossings.Spotlight: Emergency Responder TrainingSafeguarding communities where we operate is critical for CSX to retainour license to operate. Developing the necessary skills and knowledge offirst responders is one way we maintain good local relationships and im-prove safety. CSX provides training to community emergency responders,via printed materials, online training courses and in-person training at theCSX Railroad Education & Development Institute (REDI) in Atlanta, Ga.The company delivers training to community emergency responders freeof charge. More than 4,000 emergency responders received training in2012. CSX also maintains CSXSafe.com, a web-based training program tohelp local emergency responders manage incidents involving rail propertyand equipment and csxhazmat.kor-tx.com, a repository for more detailedtraining materials and guidebooks. For these initiatives, CSX was honoredwith the Transportation Community Awareness and Emergency Re-sponse (TRANSCAER) National Award in 2012.Overview markets Governance community workforce safety Environment value chainCS X h a s r em ov ed352crossings in 2012
  • 66CSX 2012 Corporate Social Responsibilit y ReportOverview markets Governance community workforce safety Environment value chainSpotlight: Eliminating Redundant CrossingsCSX works with local communities and roadway authoritiesto proactively eliminate redundant vehicle crossings throughout thecompany’s service territory for increased safety and beneficial land use.Redundant crossings are vehicle crossings in which alternate access isvery close in proximity – for example, where crossings exist at multiplepoints on the same block in a city neighborhood. The initiative to removeredundant crossings began with the FRA many years ago as a way toreduce the number of crossing incidents between trains and vehicles.Communities often have concerns about response time for emergencyvehicles with removal of crossings; however, when CSX explores optionsfor eliminating crossings, we ensure there are no response time delays orfailures for services such as fire rescue and police.In the city of Ocala, Fla., theCovenant Missionary Baptist Churchapproached CSX about potentiallyeliminating crossings near theirchurch to expand their footprint anduse the land for a community center.After receiving the request, CSXworked with the Florida Departmentof Transportation to identify thepotential crossings for closure. Thecrossing closure request was thensubmitted for public hearing andreviews by the Florida Departmentof Transportation and local roadway authorities. The crossings at FortKing Street and southwest 2nd Street were then subsequently closed,while the crossings remain open on southwest Broadway Street andsouthwest 3rd Street. The community now has improved safety in thisarea, reused the land for a community center and received a financialincentive for the local government for use in future safety improvements.RemovedCrossingsExistingCrossingSW 2ND ST.SW 3RD ST.SW BROADWAYW FORT KINGExistingCrossingPilot and Flying J. CSX began a partnershipin 2012 with Pilot gas stations and Flying J truckstops to deliver safety messaging to commercialtruck drivers. These drivers are a criticaldemographic for CSX since a significant portionof vehicle-related incidents on CSX propertyinvolve commercial drivers. Including oursafety messaging in Pilot’s monthly ChallengeMagazine, distributing bumper stickers andproviding free coffee at Flying J truck stopsallows us to reach this important group.Play It Safe. CSX partnered with NASCARin 2012 to promote CSX’s Play It Safe campaign,which stresses the importance of stayingsafe around trains and tracks. Partneringwith NASCAR allows CSX to reach a largenumber of males aged 18 to 34 years old –the demographic most likely to be at risk forrailroad crossing incidents. For the 2013racing season, CSX is teaming up with FrontRow Motorsports and driver David Raganto support the Play It Safe initiative. CSX willserve as a sponsor of Ragan’s entries at sixevents. David Ragan is a great spokespersonfor this campaign, as he has already supportededucation regarding distracted driving, as well asother safety initiatives.CSX also partnered with the University ofLouisville and the University of Central Floridato spread the Play It Safe message to youngadults in Louisville and Orlando, where CSXhas a large presence, to further target the keydemographic for railroad crossing incidents.These programs and partnerships related tocommunity safety are also highlighted on ourBeyond Our Rails website at beyondourrails.org.We were one of the first railroads in the country to adopta crossing sign program system-wide. The CSX StalledVehicle Emergency Information Sign Program ensures thatidentification signs are posted at each crossing along oursystem. This program allows local emergency respondersand drivers to quickly and accurately report stalled vehiclesdirectly to the CSX PSCC.
  • 67CSX 2012 Corporate Social Responsibilit y ReportCase Study: Human PerformanceThe strength, agility and endurance ofour employees are critical factors forcontinued business success. In 2012,CSX established a Human Performanceinitiative to begin learning new waysto monitor, analyze and improve thehealth, safety and performance of ourworkforce. Human Performance is amultidisciplinary approach applying bio-mechanics, work physiology, psychologyand engineering to identify and developstrategies and systems to improve anindividual’s performance.This new research and analysisendeavor is one of many that willhelp CSX continue learning andinnovating to meet our commitmentsto employee and community safety.In partnership with the GeorgiaInstitute of Technology, the CSXHuman Performance team is workingto analyze how workers interact withequipment and their environment. Datafrom these studies are used to developsolutions to protect our employeesand the communities we serve. Forexample, using human performanceprinciples, we analyzed the human– machine interface of an OperatorControl Unit (OCU), which is used tocontrol movement of locomotives via aremote control. We shared the resultswith our internal and external businesspartners for their consideration indeveloping potential solutions.CSX also launched a campaign in2012 to heighten employee situationalawareness. Current studies are seekingto understand how an individual re-sponds to information being gatheredfrom the work environment. The cam-paign improves awareness and alert-ness so that locomotive operators, forexample, do not miss warning signalsor communications due to distractions,confusion or complacency. An ex-panded training program for situationalawareness will be rolled out in 2013.Understanding the physical performanceof our employees is crucial to ensuringthat they are performing work activitiessafely. Together with our researchpartners, the human performanceteam studies the unique physicalcharacteristics of employees and thephysical demands of the work beingperformed.In the Human Performance lab, theteam applies scientific principles anduses technology and software suchas high-speed camera systems andthree-dimensional modeling software.This information is used to identifytechniques to enhance workerperformance and safety. For example,this team is examining the causesof slips, trips and falls. The humanperformance team is conducting severalwalking studies in both real and virtualenvironments to better understandthe impacts of walking over differentterrains. The results will be used todevelop strategies to correct unsafebehaviors.CSX’s operations run 24 hours a day,7 days a week. Therefore, many of ouremployees work in shifts. In order tohelp employees stay alert on the job,we are studying our work-schedulingpractices to reduce disruptions tothe normal sleeping patterns of ouremployees. As part of this process, thehuman performance team partners withsleep medicine researchers and utilizesfatigue management software programs.It is of the upmost importance to CSXto ensure that our employees are well-rested. This is important, not only toenhance job performance, but also toensure a healthy quality of life awayfrom work. CSX provides training toincrease awareness of the risk factorsfor sleep disorders and helps employeesundergo testing when necessary.The innovative Human Performanceinitiative will continue focusing onunderstanding and improving the healthand safety of our employees, who arethe true engine of our business.Overview markets Governance community workforce safety Environment value chain
  • 68EnvironmentSuccesses:• CSX developed a new greenhouse gas (GHG) emissionsintensity reduction goal to reduce the company’s GHGemissions intensity 6 to 8 percent from 2011 levels by 2020.• CSX fuel efficiency improved by 2 percent in 2012 from2011 performance.• CSX implemented a waste-reduction opportunity,No Spike Left Behind, that has resulted in 50,000 tonsof recycled material.Challenges:• Reducing environmental incidents on CSXproperty due to trespassing and unauthorizedthird-party dumping.• Understanding the extent of our water footprintand identifying areas to reduce the company’swater consumption.Overview markets Governance community workforce safety Environment value chainIn This Section:EnvironmentalPolicyEnvironmentalManagementSystemGreenhouseGas EmissionsPublicPolicyOperationalEfficiencyWaterUseWasteManagementBiodiversityand LandManagementEnvironmentalPerformance
  • 69CSX 2012 Corporate Social Responsibilit y ReportOur Environmental PolicyThe CSX company-wide Environmental Policy lays out aset of expectations that all employees at every level of theorganization put into practice every day. This Policy requiresemployees to follow environmental laws, regulations andCSX best practices and conduct operations safely. Wealso empower our employees to go beyond requirementswhere possible. We include guiding principles from theCSX Environmental Policy as part of the company’s Codeof Ethics, on which employees receive annual training. Wemake this Policy readily available to all employees.Employees are expected to identify, report and address anyenvironmental concerns. The Policy guides employees tocontact the CSX Public Safety Coordination Center (PSCC)for information and centralized notifications (see page 64).Employees are expected to take action in situations thatcould impact the environment.The company performs regular reviews and updates of theEnvironmental Policy. This Policy promotes best practices andunderpins the company’s approach to environmental manage-ment and responsible operations. The most recent version ofCSX’s Environmental Policy is available on our website.Environmental Management SystemThe CSX Environmental Management System (EMS)provides a framework to ensure adherence to thecompany’s Environmental Policy, maintain regulatorycompliance and minimize environmental impacts. Itestablishes a consistent set of programs, processes andprocedures for use across CSX operations.Key components of the EMS include identification oflegal compliance requirements, risk assessment processes,the assignment of roles and responsibilities, and requiredand recommended training. To facilitate consistentimplementation across the CSX network, the EMS containsapproximately 300 instructional documents that provideclear guidance on environmental requirements and CSXbest practices.Our EMS is customized for our operations. It incorporateselements from several well-recognized EMS standardssuch as International Organization for Standardization(ISO) 14001, the U.S. Environmental ProtectionAgency’s National Enforcement Investigations Center’sCompliance-Focused EMS and other industry-specificstandards. Our formal EMS verification program includesannual inspections that involve a detailed review ofprocess consistency and documentation. Additionally,we conduct independent compliance and managementsystem reviews to ensure that CSX’s environmentalperformance remains on track. We describe this processin more detail on page 79. CSX subject matter expertskeep abreast of changes in the regulatory environmentand all EMS documents are reviewed annually to includechanges in regulations, best practices and operations.Management Approach and Plans AheadCSX is committed to meeting the needs of shareholders, customers and the communities we serve in an environmentallyresponsible way. Managing CSX’s environmental footprint is a business imperative. We are focused on reducing potentialimpacts to air, land and water by improving the efficiency of our operations and remediating environmental issues ofconcern. CSX has set goals in several environmental performance areas and we are striving to achieve them.Overview markets Governance community workforce safety Environment value chain
  • 70CSX 2012 Corporate Social Responsibilit y ReportGreenhouse Gas EmissionsManaging GHG emissions is a vitally important issue andCSX is committed to reducing the environmental footprint ofour operations. The company recognizes that our locomotivefleet generates approximately 88 percent of our GHGemissions, and we are working to further improve fleetfuel efficiency.CSX set a goal during 2012 to reduce the company’s GHGemissions intensity between 6 and 8 percent from 2011levels by 2020. We have made strides towards this reductiongoal, with a 1 percent improvement over 2011 performance(see chart on page 72). CSX achieved a previous GHGemissions reduction goal, decreasing GHG emissionsintensity by 8 percent between 2006 and 2010.Since 1980, CSX has improved its fuel efficiency by 90percent, driven by cutting-edge technology and employeetraining programs. In 2012, CSX consumed approximately490 million gallons of diesel fuel. The company tracksfuel reductions through a cross-functional Fuel ProcessImprovement team. Each year, this team sets annual intensitytargets that align with CSX’s voluntary 2020 reduction goal.The company has an incentive program for division- andmanagement-level employees based on meeting certaingoals, including annual fuel-reduction targets.Shipping freight by rail is approximately four times morefuel-efficient than alternative means, as one CSX train cantransport one ton of freight approximately 466 miles on onegallon of fuel. By comparison, a typical truck can move a tonof freight 120 to 140 miles with a single gallon of fuel.Air emissions. Fuel combustion generates not only GHGemissions, but particulate matter, nitrogen oxide (NOX) andsulfur dioxide (SO2). CSX actively pursues the reduction ofair emissions throughout our operations. For example, low-emission locomotives reduce GHG emissions by nearly 25percent and nitrous oxide and particulate matter by morethan 80 percent, benefiting both the climate and local airquality. The many improvements CSX makes in locomotivefuel efficiency go hand-in-hand with reducing the company’sair emissions. Other air emissions sources at our operationalsites include locomotive repair and paint shops, locomotiveservice centers and dry material handling facilities. Theselocations are regulated either by an air permit or by federal,state and local air requirements. The company also has astandard purchasing agreement in place to purchase low-emission vehicles for the company fleet.Fuel efficiency. CSX continues to invest in fleet upgradesto improve locomotive fuel efficiency. CSX has spentmore than $1.75 billion in the last decade to update ourlocomotive fleet with newer, more fuel-efficient locomotivesand technologies. Over the past five years, we purchased30 ultra-low-emission GenSet locomotives for our fleet andwe are continuing to invest in additional fleet upgrades. Forexample, new locomotives such as the GE Evolution®Serieslocomotive offer improvement in efficiency compared to anaverage fleet locomotive, saving approximately12,600 gallonsof diesel fuel each year.Due to these continued fleetenhancements and the technologyadvancements described below,the company’s fuel efficiencyimproved by 2 percent from 2011to 2012. This means that a CSXtrain can move freight 466 mileson a single gallon of fuel, up from456 miles in 2011.Technological advancements.New technologies help thecompany track and improvetrain operations while enhancingfuel efficiency.• CSX is testing a number offriction modifiers to reducethe amount of force necessaryto pull freight cars acrossthe railroad. These devicesdeploy a lubricant on the topof the rail behind the trailinglocomotive to reduce therolling friction between thecar wheels and the track. Thistechnology could increaseannual fuel savings between 3and 5 percent.• CSX has invested in twoseparate idle-reducingOverview markets Governance community workforce safety Environment value chain01,0002,0003,0004,0005,0006,0002012201120105,7465,8415,491Total Scope 3 EmissionsTotal Scope 2 EmissionsTotal Scope 1 EmissionsGHG Emissions by Scope**(thousand metric tons CO2e)** Data reflect change in organizationalboundary (see data table on page 72).2012 Greenhouse GasEmissions by Source*Other Combustion: 2%Vehicles: 2%Employee Traveland Commuting: 3%Purchased Electricity: 5%LocomotiveFuel: 88%*Includes scope 1, 2 and 3 GHG emissions.
  • 71CSX 2012 Corporate Social Responsibilit y Reporttechnologies: Auxiliary Power Units(APUs) and Automated Engine Start Stop(AESS). APUs reduce the need to idle byproviding auxiliary power to a locomotivewhile shut down. AESS automatically shutsdown the locomotive when not in use andautomatically starts it when needed. Bothtechnologies enhance fuel efficiency andreduce GHG emissions.• CSX utilizes locomotive Event RecorderAutomated Download operations dataand provides feedback to the engineers onhow to adjust their locomotive operationto improve fuel efficiency. CSX locomotiveengineers are also trained on locomotivesimulators, developing best practices andimproving their awareness of fuel-efficienttrain handling.• CSX also anticipates saving approximately$1 million in fuel by moving to LED lightingthroughout locomotives and engine compart-ments. Making retrofits to existing infrastruc-ture is an important initiative at CSX.The company is introducing a new technologicaladvancement called Trip Optimizer. Developedin conjunction with GE, this sophisticated locomotivetechnology assists engineers in controlling the locomotive.The software creates a trip plan to optimize fuel usebased on locomotive horsepower, trailing tonnage andthe topography of the network along a given route. Thisinformation can assist the engineer in making sound train-handling decisions.The implementation of Trip Optimizer has provided CSXmany benefits, including:• Safety – It minimizes end-of-train forces whilecresting grades, thus reducing coupler damage andtrain separations, in addition to staying below theauthorized speed.• Efficiency – It automatically calculates and adjusts speeds,reducing delays in response to speed changes andincreasing fuel efficiency, which currently leads to anaverage fuel savings of more than 7 percent.• Environment – It controls the power output, reducingemissions of particulates and noxious gases, yieldingan average 174,000-ton reduction in GHGs annually.Currently, 1,150 of our 2,400 road fleet locomotives havebeen equipped with Trip Optimizer and we will continueto roll out this technology over the next five years.Trainers are working to familiarize experienced locomotiveengineers with the technology, supplemented by programsbeing developed for CSX’s locomotive simulators. OnceOverview markets Governance community workforce safety Environment value chainSpotlight: Technology toImprove Air QualityCSX, the U.S. Environmental Protection Agency and the Regional PlanningCommission (RPC) for the New Orleans metropolitan area collaboratedto help improve local air quality through a jointly funded, GenSet ultra-low-emission locomotive retrofit at CSX’s GentillyYard in New Orleans.The GenSet retrofitting process was partially funded through a grantawarded to the RPC by the U.S. Environmental Protection Agency’sNational Clean Diesel Funding Assistance Program as part of the DieselEmission Reduction Act. CSX funded the remainder of the project tosupport local environmental protection measures.“Continuing to invest in sustainable technology iscritical as we continue to rebuild the city of NewOrleans. Supporting this initiative with CSX willimprove air quality in our region, and in turn, servethe people of the New Orleans metropolitan area.”— Rebecca Otte, RPC’s Southeast LouisianaClean Fuel Partnership Coordinator2012 Emissions byKyoto Gas Type*(metric tons)CO2 . . . . . . . . . . 5,688,902CH4 . . . . . . . . . . . . . . 629N2O . . . . . . . . . . . . . . 143HFCs . . . . . . . . . . . . . 0.0672012 EnergyConsumption(million BTU)Direct Energy ConsumptionDiesel . . . . . . . . 69,664,385Gasoline . . . . . . . 1,124,085Natural Gas . . . . . . 303,272Propane . . . . . . . . . 238,762Jet Fuel . . . . . . . . . . . 36,002Indirect Energy ConsumptionElectricityPurchased . . . . . . 1,838,100* CSX does not generate PFC orSF6emissions.
  • 72CSX 2012 Corporate Social Responsibilit y Reportthe technology is fully operational across thenetwork, Trip Optimizer is expected to reduceCSX’s company-wide locomotive fuel usagebetween 5 and 7 percent.Employee training. CSX’s employees takea comprehensive approach to fuel efficiencyimprovements, discovering new ways to reducethe energy required to pull trains. Locomotiveengineers receive training on locomotivesimulators, developing best practices andimproving their awareness of fuel-efficient trainhandling. CSX also trains our employees onproper locomotive shutdown rules to eliminateunnecessary idling.Overview markets Governance community workforce safety Environment value chainEnvironmental performance summaryEmissions 2010 2011 2012Scope 1 (metric tons CO2e) (1)5,214,936 5,400,086 5,268,905Scope 2 (metric tons CO2e) (2)255,738 295,354 300,170Scope 3 (metric tons CO2e) (3)20,608 145,362 177,381Total Scope 1, 2 and 3 (metric tons CO2e) 5,491,282 5,840,802 5,746,456Normalized Scope 1 and 2, GHG Intensity (metric tons CO2eper million revenue ton-mile) (4) - 24.94 24.68NOXEmissions (metric tons) (5)96,238 97,316 81,039SO2Emissions (metric tons) (5)1,701 1,398 946Consumption 2010 2011 2012Annual Locomotive Fuel Use (gallons diesel fuel) (6)491,384,085 503,208,348 490,902,017Indirect Energy Consumed (electricity in megawatt-hours) 435,606 539,221 538,694Water Consumed (thousand gallons) (7)1,010,919 1,412,637 1,127,001Locomotive Fuel Efficiency 2010 2011 2012Fuel Efficiency (revenue ton-mile per gallon diesel consumed) 468 456 4661. In 2011, CSX expanded its operational boundary to reflect inclusion of all major CSX subsidiaries - this includes CSX Intermodal Terminals, Inc., Total DistributionServices, Inc., CSX Technology, Inc., Transflo Terminal Services, Inc., and CSX Real Property, Inc. in addition to CSX Transportation, Inc. The 2010 value includes onlyCSX Transportation.2. In 2012, CSX completed the expansion of its operational boundary to reflect inclusion of Canadian operations. Emission factors for purchased electricity were obtainedfrom the U.S. Environmental Protection Agency’s Emissions & Generation Resource Integrated Database (eGRID2012 Version 1.0) and used in the recalculation of both2011 and 2012 Scope 2 emissions.3. The 2010 value includes emissions from employee business travel in personal and rented vehicles. The 2011 value includes these sources along with air travel andemployee commuting. The 2012 value includes all above-mentioned sources and contracted taxi service.4. A figure for 2010 normalized emissions is not included due to the changes in operational boundary.5. Reported emissions of NOXand SO2include direct, or Scope 1, emissions.6. Annual locomotive diesel fuel consumption is reported in the Annual Report to the Surface Transportation Board. A detailed breakdown of other direct energy sources isavailable on page 71.7. Water consumed (in thousands of gallons) is estimated from total cost of water and from actual water usage data when available at certain facilities.
  • 73CSX 2012 Corporate Social Responsibilit y ReportPublic PolicyCSX understands that improving energy efficiency andmaximizing clean and affordable domestic energy resourcesare crucial to continued economic growth, improved qualityof life and environmental stewardship, and can help addressthe complex global challenge of climate change. Railroadsplay an essential role in moving this objective forward. Formore information on the company’s position, please see ourCarbon Disclosure Project investor and supply chain surveyresponses and climate statement.Responding to a changing climate. CSX considerspotential climate change impacts as part of the company’soverall process for risk management. The company maintainsstrategic plans in order to maximize responsiveness toevents that could include those resulting from extremeweather, a changing climate or shifting populations. Thevast majority of CSX employees work in an outdoorenvironment and planning for potential weather-relatedshifts is a priority. CSX’s business continuity plansaddress extreme weather and are adaptable acrossour 23-state network. CSX also maintains site-specificoperating plans and continues to invest heavily in trackinfrastructure, which will help protect assetsfrom the impacts of extreme weather. In2013, we plan to raise a portion of ourtrack along the Gulf Coast in preparationfor potential severe weather in the area.By far, railroads are the most environmentallyfriendly and energy-efficient way to movegoods on land. By moving freight by rail,our customers reduce GHG emissions byapproximately 75 percent, which allows forcleaner air and helps the United States reduceits dependence on foreign oil. CSX is takingsignificant voluntary actions – going beyondour legal requirements – to reduce locomotiveemissions (including GHGs) and fuel use tomake even greater strides in fuel efficiency.Please see page 85 for more information onhow rail transport is benefiting our customers’product carbon footprints.Operational EfficiencyCSX has improvement teams focused on finding new waysto reduce the environmental footprint of our buildings.As a company, we have nearly 4,800 buildings across ouroperations. We periodically upgrade the infrastructure andinteriors of these buildings. We incorporate Leadershipin Energy and Environmental Design (LEED) standards tonew construction projects that meet specific criteria. Asthe CSX network grows, particularly in our intermodalbusiness, we are implementing a set of best practices forefficient, sustainable construction projects. For example,at the Jacksonville Intermodal Terminal, CSX installedenergy-efficient LED fixtures on high-mast light poles, theadministration building and the gate canopy that reduceenergy consumption at the facility by nearly 25 percent.The company purchased carbon offsets for 2012 and 2013electricity use at our headquarters building in Jacksonville,Fla., totaling nearly 1,363 metric tons in carbon offsets –equivalent to planting nearly 245,000 trees or removingmore than 1,800 passenger cars from the road for oneyear. CSX has set a target to increase the mix of renewablysourced electricity from 6 percent to 8 percent by 2020.Spotlight: Innovation inWorcester, MassachusettsCSX is partnering with the Commonwealth of Massachusetts toincrease freight and commuter rail service within the state. Specifically,the company is expanding our Worcester, Mass., terminal into a state-of-the-art terminal for the safe and efficient distribution and transferof goods around the New England region. CSX collaborated with theMassachusetts Department of Environmental Protection to integratesustainable elements into the terminal design. The site’s administrationbuilding is powered by on-site solar panels and has a solar hot waterheater. CSX identified and procured hybrid diesel-electric cranes, whichare 40 percent more fuel-efficient than the standard diesel equipmentbeing replaced. These hybrid cranes use a small diesel engine brieflyduring start-up and run on batteries when operating. This minimizesthe amount of emissions and noise disturbances on site and in thesurrounding community. We will continue to look for innovativetechnologies and practices to enhance the Worcester terminal andothers throughout our network.Overview markets Governance community workforce safety Environment value chain
  • 74CSX 2012 Corporate Social Responsibilit y ReportEnergy efficiency. CSX continues to seek ways to reducethe company’s energy usage. In 2012, CSX participatedin Environmental Defense Fund’s (EDF) Climate Corpsprogram for the third time. An EDF fellow workedwith CSX environmental management personnel toidentify and implement energy efficiency improvements.Recommendations included a lighting retrofit project andinstalling power factor correction equipment on the aircompressors at CSX rail yards – a total of 33 compressors.Together, these projects could save CSX $1.7 million in netoperating costs, reduce annual energy usage by 5,900,000kilowatt-hours and reduce GHG emissions by 4,200 metrictons per year.Renewable energy. CSX is evaluating the potentialfor renewable energy applications across the networkas an additional means to improve energy efficiency. Thecompany installed a 53-kilowatt solar photovoltaic arrayat the Queensgate yard in Cincinnati, Ohio. The systemconnects with the local electricity grid and any excesspower generated is sold back to the area’s electric utilityas an offset. The renewable power generated in one yearis equivalent to burning 4,000 gallons of diesel. Sinceinstallation in April 2012, the solar-powered system hasproduced more than 63 megawatt-hours of renewableenergy. In Worcester, Mass., two new CSX buildings featuresolar panels to heat water and power the building. Thecompany also utilizes solar power for signaling systems inremote field locations across the network.Technology applications. CSX engineers have begunutilizing hydrogen fuel cells for use as power sources duringcommercial power outages for crossing and signal systems.During natural disasters, the company deploys hundreds ofelectricity generators to power crossing signals and otherequipment. Hydrogen fuel cells are a safer and cleaneralternative to gasoline backup generators. The company isgradually rolling out this technology.Wide-span electric cranes are another new applicationthat reduces energy consumption, improves efficiencyand reduces diesel particulate and carbon dioxide (CO2)emissions. These cranes, which transfer cargo containersbetween trains and trucks, emit fewer emissions than dieselcranes and operate more quietly. Electric cranes are alsomore efficient, as they have the ability to store the brakingenergy when lowering loads similar to regenerative brakingsystems on hybrid automobiles. To learn how our customersare benefiting from these efficiency initiatives, please seepage 85.Employee engagement. The company looks foropportunities to engage employees and create behavioralchanges around environmental performance. For example,CSX subsidizes transportation expenses for employees whotake public transit to work at CSX corporate headquartersin Jacksonville. The company also provides reduced parkingfees for carpoolers and individuals at the Jacksonvilleheadquarters who drive low-emission or hybrid vehiclesOverview markets Governance community workforce safety Environment value chain
  • 75CSX 2012 Corporate Social Responsibilit y Report03006009001,2001,5002012201120101,1271,4131,011Water Consumed(million gallons)(meeting the requirements of the U.S. EnvironmentalProtection Agency’s National Low EmissionVehicleProgram) to work.Raising awareness around sustainability issues at every levelof the company continues to be a priority at CSX. Eachyear, we hold Earth Day events throughout our networkto engage employees. In Jacksonville, CSX hosts a seriesof environmental education sessions and an expo foremployees. In addition, CSX partners with the AnacostiaWatershed Society’s annual Earth Day Cleanup andCelebration, where more than 2,000 volunteers removetrash from sites around the Anacostia Watershed inWashington, D.C. and Maryland. For other examples ofemployee engagement on environmental management andsustainability, please see page 40 and the Beyond Our Railswebsite at beyondourrails.org.Water UseWater is an essential natural resource. CSX is workingto understand the company’s water footprint by lookingfor source reductions and recycling and reuse optionsthroughout our network. In 2012, CSX consumedapproximately 1.13 billion gallons of water, a decrease from2011, primarily due to improved measurement techniques.Of that total, 15.5 million gallons were recycled, whichincludes collected rainwater.CSX is aware of potential water scarcity issues in areas ofour network, primarily in the Southeast. During 2013, CSXplans to conduct surveys focused on freshwaterusage at our larger facilities to understandwater consumption patterns and identifyopportunities for improvement. These initiativeswill allow CSX to establish a comprehensivewater baseline from which to set goals andmanagement priorities for reducing water use.At the Curtis Bay Piers site near Baltimore,Md., CSX implemented water managementpractices, which we are also in the process ofimplementing at other locations throughoutour network. For example, the Curtis Bay sitehas a rainwater-harvesting system that willhelp the site reach near-zero water discharge.The collected water is used fordust control for the material pileson site, reducing the need forpurchased water. The company iscompiling a set of best practices inwater management for applicationat new and existing projects. Forthe first time, CSX also respondedto the Carbon DisclosureProject water survey for 2012performance.The company is focused onreducing exceedances inwastewater discharges throughenhanced treatment and water quality measures. In 2012,CSX developed a wastewater treatment facility centralizedcontrol system that allows for remote monitoring andcontrol of our treatment facilities. This system automaticallyrecords data such as pH and flow rate and can graph trends.Implementing this system allows CSX to accurately manageour wastewater to ensure compliance with all appropriateregulations. As of the end of 2012, eight sites are operationaland 15 sites will receive the system in 2013. The companyis also reviewing enterprise-wide wastewater treatmentinfrastructure to identify places where wastewater chemicalscan be minimized. For example, CSX maintains state-of-the-art wastewater treatment systems at our Euclid, Ohio,and Corbin, Ky., facilities that greatly reduce the need forwastewater treatment chemicals.Overview markets Governance community workforce safety Environment value chain
  • 76CSX 2012 Corporate Social Responsibilit y ReportWaste ManagementManaging our materials use, reuse and recycling, and ensuringproper disposal, are key focus areas for the company. CSXgenerates both hazardous and non-hazardous waste andwe work to strategically manage waste generation andreduction. This approach, in turn, helps the companyreduce environmental risks and identify opportunitiesfor cost savings.At the beginning of 2012, CSX set a goal to reducehazardous waste generated through ongoing operationsby 5 percent by year end. In 2012, we reduced hazardouswaste by 7 percent compared with 2011 performance. Sinceexceeding our reduction goal, we are striving to furtherreduce hazardous waste generation from our ongoingoperations. CSX also generates some hazardous waste fromremediation and emergency response activities. While wetrack and report these values (see table below), there isoften variation that is difficult to predict from year to year.CSX continually looks to replace chemicals, paints andcleaners with safer and more sustainable products. As wefind ways to reduce our use of substances and processesthat produce hazardous waste, we are striving to reducethe U.S. Environmental Protection Agency designatedgenerator status of each operating facility to the lowestpossible level. Our goal is toreduce the generator status of25 percent of our facilities by2020. We anticipate this goal willassist the company in reducingrisk related to material-purchasingdecisions, chemical use and waste-management practices.CSX is also committed to reducingnon-hazardous waste throughoutour operations. We have identifiedthe major waste streams from ourongoing operations and continuallylook for new ways to reuse andrecycle all waste. For example, used lubricating oil from CSXlocomotives is reused in some facilities to heat buildings .In addition, a third party also reprocesses portions of thisused oil into vacuum gas oil, an important feedstock in themanufacture of unleaded gasoline and low-sulfur diesel fuel.CSX also recycles batteries, steel and crossties from ouroperations. We have set a goal to increase recycling andreuse of crossties from 95 to 99 percent by 2015.In 2012, CSX continued the effort of recycling constructiondebris such as asphalt, concrete and brick.The companyis developing an enterprise-wide program to achieve aOverview markets Governance community workforce safety Environment value chainWaste and Recycling Performance2010 2011 2012Hazardous Waste from Ongoing Operations (tons) (1)80.14 49.69 45.82Hazardous Waste from Remediation and Emergency ResponseActivities (tons) (1)10,474.96 1,661.56 71.12Non-Hazardous Waste from Ongoing Operations (tons) (2)- - 51,575Non-Hazardous Waste from Remediation and Emergency ResponseActivities (tons) (2)- - 51,287Used Oil Recycled (million gallons) 2.16 2.30 2.25Batteries Recycled (tons) 427.44 354.67 337.10Steel Recycled (tons) 389,685 348,388 245,087Crossties Recycled (millions) 3.24 2.88 2.401. CSX is displaying hazardous waste data from ongoing operations and remediation and emergency response as two separate values to better reflect the distinctionbetween fixed facility generation and waste that is generated from one-time cleanups. In the 2011 CSR report, hazardous waste generated from emergency responsework was included as part of fixed facility hazardous waste data. This has been restated for the 2012 CSR report.2. CSX continues to streamline and improve its data-collection system for non-hazardous waste. Non-hazardous waste data is included starting in 2012 and is consideredan estimated value.02040608010020122011201045.8249.6980.14Hazardous Waste fromOngoing Operations*(tons)* Includes hazardous waste from fixed-facilitywaste generation (see data table below).
  • 77CSX 2012 Corporate Social Responsibilit y ReportSpotlight: Specialized Crimes UnitThe CSX Police Department utilizes several highly specializedunits, including the Specialized Crimes Unit (SCU), that respond tospecific criminal activities or threats to network security. One of thoseunits, the SCU, focuses on both cargo theft and environmental crimesas one cohesive unit led by a Special Agent in Charge. As one of its keyresponsibilities, the SCU works to protect air, land and water throughoutthe CSX network by investigating incidents and prosecuting violators forcrimes against the environment committed on CSX property. With manyportions of CSX track designed to be open, railroad property is often atarget for the unauthorized dumping of construction debris, householdtrash and hazardous materials by third parties. To help combat thisproblem, CSX established the environmental crimes unit of the SCU in2007, which has had a positive impact on combating environmental crimessuch as illegal dumping, while protecting land, water and biodiversity.The SCU has conducted joint investigations with other environmentalinvestigators at the local, state and federal levels. In addition, increasedawareness efforts throughout CSX have led to a rise in vigilant employees’reporting of illegal dumping. These results have proven that a relativelysmall unit of police specialists can have a sizable impact on a big problem.Overview markets Governance community workforce safety Environment value chain99 percent recycling rate for constructiondebris generated from these building productsby 2020. One current program, No SpikeLeft Behind, developed in 2010, is a successfulexample of CSX’s extensive recycling efforts.This program conducts extensive cleanups ofour rail yards to reduce the amount of unusedproduct and recyclable material stored onsite. Since 2010, CSX has generated morethan 50,000 tons of recycled material fromthis large-scale recycling program that is nowrunning system-wide.Biodiversity and LandManagementLimiting impacts to land and biodiversitythroughout our network is another importantaspect of CSX’s environmental managementapproach. The company is the only Class Irailroad to be a member of the Wildlife HabitatCouncil (see page 81). CSX also engageswith state and federal regulatory agencies toremediate sites when appropriate. In somecases, real estate acquisitions are necessary
  • 78CSX 2012 Corporate Social Responsibilit y Reportto complete remediation and network expansion projects.CSX works with property owners to ensure that thesetransactions are completed fairly and respectfully.In 2012, CSX partnered with regulatory agencies and localcommunities on key remediation projects. Activities at theintermodal expansion project in Cleveland, Ohio, are anexample of how creative development and assessment ofoptions can lead to sustainable solutions. CSX relocatedand reused soil from a large mixed-debris stockpile inthe expansion area to restore nearby CSX property.This initiative contributed to the company’s goals ofGHG emissions reduction, beneficial land reuse, positivecommunity impact and reduced financial expenditure.As part of our commitment to protecting the environment,CSX performs detailed assessments of property impactedby railroad operations. We remediate contaminatedproperty and work with appropriate environmental agenciesand qualified contractors to ensure protection of humanhealth and the environment. We apply this approach whenderailments or other incidents occur that may necessitatecleanup or remediation.Spotlight: Environmental Management at the Facility LevelWhile CSX has a corporateEnvironmental Policy andgoals, individual facilities havethe responsibility to maintainenvironmental compliance andimplement sustainable initiativesand programs. As plant managerof work equipment at CSX’s BryanPark Work Equipment Shop inRichmond,Va., Mr. Keith Ebbeskotteleads a team that maintains anoutstanding record of compliancewith environmental regulationscovering hazardous and non-hazardous waste handling, recyclingand wastewater treatment. TheBryan Park Shop is the largestof its type in North America.In this position, Mr. Ebbeskottehas introduced environmentallyconscious initiatives includinga waste-reduction plan andspecific programs to recyclediesel fuel, hydraulic oil, engineoil, antifreeze and batteries.Employee engagement is animportant aspect of the site’sexemplary environmentalperformance. In addition to hisleadership, Mr. Ebbeskotte is aninnovator who initiated a widevariety of improvements that raisedproductivity and provided a moreenvironmentally friendly workplace.Among his many accomplishments,he assisted in reducingCSX’s carbon footprint and airemissions by helping to installlow-emission engines in allnew and rebuilt equipment.In recognition of Mr. Ebbeskotte’sefforts to strive for highenvironmental performance, hewas nominated for the John.H. Chafee Environmental ExcellenceAward in 2012. Presented bythe Association of AmericanRailroads, this award recognizesmembers of the railroad industrywho have demonstratedoutstanding environmentalawareness and responsibility.“Receiving the Chafee Award nomination is ahuge honor, but caring for the environment isjust a normal way of life for us. We take pridein our work space and realize that a clean workarea is a safer work area. How we treat MotherEarth on a daily basis now determines how shewill treat generations to come down the line.”— Keith Ebbeskotte, CSX Plant Manager - EngineeringOverview markets Governance community workforce safety Environment value chain
  • 79CSX 2012 Corporate Social Responsibilit y ReportEnvironmental PerformanceCSX has a dedicated team of environmental profession-als who monitor environmental compliance activities andperform regulatory-required inspections of fueling systems,wastewater treatment facilities, hazardous waste storage areas,emergency generators and other facilities and equipment.Each year, CSX conducts thousands of specific inspectionsto remain in compliance with all environmental regulations.When environmental incidents do occur, CSX personnelrespond promptly to minimize impacts to the environment.In 2012, CSX received 16 notices of violation and paid$6,600 in fines.Compliance assurance reviews. To maintain consistentenvironmental compliance, CSX established a series ofcompliance assurance reviews to verify our environmentaland hazardous materials compliance. The environmentalcompliance assurance reviews include different tiersof evaluation, ranging from internal “peer” reviews tocomprehensive external reviews performed by CSXemployees alongside qualified environmental consultants.Each year, CSX performs reviews at approximately 75sites using this tiered evaluation structure. The companymaintains a program that supports accurate trackingand timely corrective actions for any non-conformancesidentified during these reviews. Additionally, CSX createdthe Compliance Assistance team, which is assigned tolocations to mentor and support corrective action plans andthe timely resolutions of non-conformances. The goal of thisprogram, and the associated Hazardous Materials ConfidentCampaign, is to ensure we are maintaining a high level ofcompliance assurance and remain focused on pursuingopportunities for continuous improvement.Training. Ensuring that our employees are trainedon technologies and best practices that contribute toreducing our environmental impact is a key aspect of ourEnvironmental Policy. For example, our locomotive engineersare trained using simulators where they learn best practicesin fuel-efficient train-handling. In 2012, CSX EnvironmentalField Services personnel received advanced training ininspection protocols to improve the program we use toevaluate compliance.CSX annually provides both hazardous materials sentineland environmental sentinel training programs at the RailroadEducation & Development Institute (REDI) in Atlanta, Ga.These state-of-the-art, in-depth trainings are intended tobroaden the knowledge of operations personnel and equipwith them with the skills to serve as field-level experts or“sentinels” on training subject matter. In addition, the CSXHazardous Materials and Chemical Safety team hosteda chemical shipper training event at the REDI. Chemicalshippers received training on regulatory compliance, safeloading and unloading practices, tank car awareness and railaccident prevention and response.Other environmental trainings offered in 2012 included:• Facilitated, classroom-based environmental training forengineering and mechanical employees.• Computer-based environmental training for transportationand non-operating employees.CSX’s environmental training programs reached nearly30,000 employees and contractors during 2012.Overview markets Governance community workforce safety Environment value chain
  • 80CSX 2012 Corporate Social Responsibilit y Report2012 EnvironmentalPerformance Recognition• CSX was named to the Dow Jones SustainabilityIndex (DJSI) for North America for the secondconsecutive year and was the only U.S. railroadincluded in 2012.• CSX earned a place on the Carbon DisclosureProject (CDP) S&P 500 Carbon DisclosureLeadership Index (CDLI) for the third consecutiveyear, and recognized for the second time on theCDP Global 500 CDLI.• CSX was named to the Maplecroft ClimateInnovation Leader Index, one of three MaplecroftClimate Innovation Indices that rank U.S. companieson their leadership in climate change mitigationand management. CSX was the highest-rankedClass I railroad included on the 2012 index, andthe only railroad featured on the top 100 ClimateInnovation Leaders list.• CSX was included in Corporate ResponsibilityMagazine’s 100 Best Corporate Citizens for the firsttime in 2012.Spotlight: Supporting the CREATEProgramCSX is collaborating with the U.S. Department of Transportation,the State of Illinois, the City of Chicago, Metra, Amtrak and otherfreight railroads to support the Chicago Region Environmental andTransportation Efficiency (CREATE) Program. Initiated in 2003,CREATE is a first-of-its-kind public-private partnership that aimsto increase the capacity and fluidity of the region’s freight andpassenger rail infrastructure. The program will improve passengerrail service, reduce freight rail congestion and motorist delay,and enhance public safety in the country’s busiest rail hub. TheCREATE program reduces environmental impacts to air and landand promotes economic development by creating and retainingjobs in the region. The investment of billions of dollars to constructnew overpasses and underpasses; upgrade tracks, switches andsignals; and improve existing railroad grade crossings will benefitthe community, customers and railroads that use this infrastructure.CSX has committed to significant capital funding and resourcesto support CREATE. For more information about this uniquepartnership, visit createprogram.org.Overview markets Governance community workforce safety Environment value chain
  • 81CSX 2012 Corporate Social Responsibilit y ReportCase Study: Gautier Remediation ProjectIn conjunction with the Mississippi Departmentof Environmental Quality (MDEQ), CSXutilized state-of-the-art remedial techniquesand exceeded restoration requirements duringthe remediation of the former Gautier Oilsite in Gautier, Miss. As stated on the historicmarker located at the site, the West PascagoulaCreosote Works began operations in 1874 andit is known as the first continuously operatedcreosote treatment plant in the nation. Many ofthe treated pilings from the site were utilizedin building the Panama Canal. Creosote hasbeen used for decades in many applicationsas a wood treatment compound. When applied, creosoteprevents rot in bridge timbers and other materials likerailroad ties. The long operational history of this sitepreceded the development of U.S. environmental regulations,resulting in residual creosote contamination.The remediation has been a long-term project for CSX withnearly $20 million invested to date. CSX worked closelywith MDEQ to evaluate environmental impacts associatedwith the site and adjacent West Pascagoula River and BayouPierre. Studies determined that there were environmentalimpacts at the site including soil and groundwatercontamination, as well as at near-shore sediments of theRiver and Bayou. A remediation plan was developed andapproved by MDEQ in 2010. Remediation activities began in2011 and resulted in the safe disposal of more than 22,000tons of contaminated soil and sediment from the site andadjacent Bayou. CSX also installed a containment cap, madewith multiple layers, on approximately 6 acres of near-shoresediments in the River and Bayou.Stakeholder engagement was a key success factor in theremediation process. Before any physical remedial actionsstarted, CSX held a public information event for localresidents and city officials. The community raised questionsabout increased truck traffic, closure of the Bayou andthe end use of the property. CSX used the knowledgegained from this meeting and other communications withthe community to conduct pre-construction inspectionsof roadways and ensure dedicated traffic control was inplace in sensitive areas. CSX and our project partnerscommunicated bayou closures to affected residents andprovided temporary boat storage at the local marina.Since the third-largest magnolia tree in Mississippi was nearthe site, we installed fencing to provide protection fromconstruction vehicles and other project-related traffic.To restore the West Pascagoula River and the BayouPierre shoreline, CSX placed stone and installed more than3,000 cubic yards of sand. Additionally, hundreds of tonsof submerged logs, concrete, poles and other debris wereremoved from the site. Once stable, the company replantedmore than 100,000 native tidal wetland plants, improvingthe overall estuarine habitat and aquatic ecosystem. Thesite now offers more than 2.5 acres of shoreline habitat forseveral state species of concern, including the MississippiDiamondback Terrapin and Gulf Saltmarsh Snake.CSX is partnering with the Land Trust for the MississippiCoastal Plain, a chapter of the Land Trust Alliance, to puta conservation easement on the site to conserve theland in perpetuity. The Wildlife Habitat Council grantedthe site Wildlife at Work Certification, which recognizesCSX’s stakeholder-centric approach to create, conserveand restore wildlife habitat at the site. Land that was oncean eyesore is now a thriving green space with ecosystemstypical of natural undeveloped lands in this watershed.This space enhances local ecotourism opportunities viathe surrounding waterways and educational opportunitiesassociated with habitat and wildlife monitoring.CSX’s commitment to the Gautier site will continue foryears to come. We will continue to monitor groundwater toensure further remediation activities are not necessary. Thisproject illustrates CSX’s willingness to put our sustainabilitycommitments into practice across our service area.Overview markets Governance community workforce safety Environment value chain
  • In This Section:Customers Suppliers82Customers andsuppliers: OurValue ChainSuccesses:• More customers participated in our Voice of theCustomer survey than ever before, and CSX receivedan all-time high customer satisfaction score.• Continuing to deliver service that provides customerswith the most efficient form of product transport.• Working with suppliers to ensure CSX is using thehighest-quality and most cost-efficient materials.Challenges:• Finding diverse and locally based suppliers withinthe CSX network.• Continuing to identify new ways to maximizecustomer service efficiencies.Overview markets Governance community workforce safety Environment value chain
  • 83CustomersAt CSX,“It starts with the customer.” CSX’s operationalsuccess is built on our employees’ commitment to providecustomer service at the highest levels. This means providingsafe, efficient and reliable freight transportation solutions forour customers while creating value for shareholders.Commitment to Customer ServiceCSX serves a broad array of transportation marketswith freight rail and intermodal services (see page 10).The company strives to create competitive advantagefor customers regardless of market conditions and hasaccomplished this consistently through the ebbs and flowsof the economy over the past several years.Our commitment to customer service and engagementextends across a variety of sectors, from large, multinationalcompanies to small, local businesses. We connect withcustomers regularly through one-on-one meetings, industryconferences, formal surveys, customer councils, dailycommunications, ShipCSX e-tools and more as part of our“Voice of the Customer” initiative.Voice of the Customer SurveyIn 2002, CSX launched a customer satisfaction assessmentprogram where customers can share their feedback andprovide improvement suggestions. The company uses anindependent firm to survey customers on a wide rangeof factors that influence their sense of satisfaction. Thesefactors include speed and consistency of service, problemresolution and ease of order placement.The survey asks customers to evaluate CSX’s performanceacross three main areas:• Planning: account management, rate inquiry and ordermanagement.• Service: shipping instructions, local service, order fulfillmentand equipment quality.• Customer Assistance: damage prevention, trackinginformation, customer service and financial settlement.In 2012, CSX received its highest score ever from customers,highlighting sustained operating success. The main driver ofthe increase in total score was the progress CSX has madein local service delivery. We also had a significant increasein survey participation, with 2,900 respondents in 2012compared to 1,600 in 2011.Management approach and plans aheadCSX customers and suppliers are integral components of the CSX value chain. Working with customers and suppliers tofind service solutions and efficiencies throughout the supply chain yields collaborative results. We engage with our customersfrequently to understand their needs and priorities. We partner directly with suppliers and expect them to uphold CSXvalues and policies. Going forward, we will maintain open communication with our customers and suppliers to ensure thatthe CSX value chain remains focused on sustainable solutions.Overview markets Governance community workforce safety Environment value chainVoice of the Customer Survey ResultsOverall Satisfaction Score, CSX Proprietary Survey02040608010012020122011201020092008110106102105100
  • 84CSX 2012 Corporate Social Responsibilit y ReportCSX sales and marketing personnel,accompanied by front-line operationsmanagers, visited nearly 5,000 customersites located throughout the CSX networkduring 2012. These personal visits provide abetter understanding of customers’ serviceneeds, the design of their facilities and providemore accurate data to the CSX CustomerRelationship Management database. CSXexpanded this effort in 2012, to include 274short-line interchanges and 400 additionalcustomers jointly served with Conrail.CSX offers many forums for customers toshare their ideas, focused on topics such asrailroad operations and electronic commerce.Two Customer Advisory Councils enableintermodal and merchandise customers toprovide insights to CSX regarding rail solutionsand service improvements, especially in the firstand last mile. Council events are held two tothree times per year, creating an opportunityfor CSX to listen to customers’ perspectivesand provide them with an update on initiativesunderway as a result of their feedback.Customer interaction is an integral part of the CSX cultureand in line with our core value,“It starts with the customer.”We recognize that CSX serves many different markets,and that our customers each have their own needs.Understanding the “Voice of the Customer” helps thecompany better serve them. CSX is committed tocontinuous customer service improvement going forward.Supporting customer product efficiencyTo demonstrate the efficiencies of CSX’s network, thecompany developed an online carbon calculator thatcompares the emissions generated by freight rail to thoseof long-haul trucks over similar routes. Customers are ableto choose from a number of variables – from the type andvolume of goods transported to the length of the route – toestimate the average carbon emissions reduced by shippingvia rail. The tool also plays an important role in helpingcustomers optimize their supply chains as they bring goodsto market more sustainably. The calculator provides shippersan opportunity to better understand the environmentalbenefits of transporting their goods via rail. The tool alsoshows how intermodal shipments – combining both truckand rail transport to maximize efficiency – can drasticallyOverview markets Governance community workforce safety Environment value chainSpotlight: Reducing Transport-Related EmissionsAs companies begin to look at the environmental impact of their supplychains, particularly related to product transport, CSX anticipates growthin freight rail. A typical CSX freight train is approximately four timesmore fuel efficient than highway freight transportation and can carry thecargo load of 280 trucks. As a result of this efficiency, CSX enables ourcustomers to reduce transport-related GHG emissions. This equates to a60 to 80 percent reduction in GHG emissions when shippers switch fromtruck to rail. This has the same environmental impact as taking 1 millionpassenger vehicles off the road. These actions help CSX customersrealize efficiencies in product environmental footprints. Rail also providessignificant cost efficiencies relative to truck transport.The company is also investing in major infrastructure projects, such as theNational Gateway public-private partnership, which will further improvenetwork efficiency and reduce overall transportation industry emissionsby making existing rail routes accessible to double-stack freight trains. Byimproving the efficiency of intermodal transport, the project will avoid therelease of 20 million tons of GHG emissions during its first 30 yearsof operation.“There’s no greater feeling than hearing acustomer say they value their relationshipwith you and your company, and thatyou add value to their supply chain.Those moments create the energy for ourcontinued improvements in training, processand technology, and those enhancementslead to more positive experiences for ourcustomers.”— Susan Arko, CSX Assistant Vice President,Customer Service Operations
  • 85CSX 2012 Corporate Social Responsibilit y ReportOverview markets Governance community workforce safety Environment value chainSpotlight: Realizing the Environmental Benefits of RailCSX collaborates with shippers in order to achieveefficiencies throughout their own supply chains. One ofour rail customers, General Electric Company (GE), isa diversified technology and financial services companywith products that range from aircraft engines andhousehold appliances to business and consumer financing.Transportation and logistics are a crucial link in GE’s globalsupply chain. CSX’s intermodal business – the movementof containerized freight via rail for the long-haul portion ofa move and truck for the local pick-up and delivery – helpsGE meet some of its transportation needs in a cost andenvironmentally efficient manner. For example, at the GEAppliances business, intermodal transportstrikes a balance between cost and reliableservice while providing consistency andpredictability.GE recognizes that intermodal can handleadditional capacity as the economy continuesto expand. The same capacity options do notexist in the U.S. trucking industry. GE views thegrowing transition to intermodal as a strategic,long-term commitment. CSX has a suite of ana-lytical tools that have helped GE utilize addition-al intermodal lanes. For example, the Highwayto Rail (H2R) Optimizer – a proprietary CSXtool – has identified GE truck freightthat is a good fit to move by intermodal rail service.Recently, GE expanded its intermodal usage at both theGE Appliances and Lighting businesses, demonstratingits commitment to energy efficiency throughout theproduct life cycle, including manufacturingand transportation. CSX’s focus on customercentricity to profile shippers’ supply chains andwork through H2R conversion opportunitiesmake intermodal an easy transition.GE and CSX share common values aroundsustainability and collaboration, and recognizethe greater use of intermodal rail service as an opportunityto advance sustainability efforts. GE tracks the overallenvironmental impacts associated with its operations.Through GE’s ecomaginationSMinitiative, GE has alreadyreduced GHG emissions and energy use, and invested inproduct research and development. In the future, GE plansadditional improvements to reduce the energy intensity ofits operations by 50 percent and its water consumption by25 percent by 2015. GE is also in the early stages of trackingits environmental footprint or Scope 3 emissions related toproduct transport.GE continually seeks opportunities to enhance operationalexcellence, improve the quality of its products and services,reduce costs and drive competitive advantage. Theenvironmental, economic and service efficiencies GE realizesby collaborating with CSX on intermodal rail service helpGE support these key business objectives.“CSX says that they want to be the most progressiverailroad and they are demonstrating that in theirintermodal business. The service that CSX offers toGE aligns cost, service, scalability and sustainabilityobjectives. This is an excellent value propositionfor GE.”— Laurie Davis, GE Transportation
  • 86CSX 2012 Corporate Social Responsibilit y Reportreduce carbon emissions. CSX helpscustomers reduce or avoid transportation-related carbon emissions that would otherwisebe generated from more carbon-intensivemodes of transportation. CSX was the firstClass I railroad to build a publicly availablecarbon calculator.Customer Service InnovationCSX customers require reliability andconsistency in the logistics chain. CSX has anumber of other initiatives underway to betteranticipate and respond to customers’ needs,including monitoring of customer satisfactiontargets and goals. In 2012, we revised the set ofmetrics used to assess the customer experiencein order to identify inefficiencies and improveservice reliability.Service Excellence is another new initiative,modeled after our successful safety overlapprogram. By focusing on service excellenceacross all operating departments, CSX isworking to proactively address customerissues and respond quickly to their concerns. In2012, we started giving full-day training sessions to front-line employees to help them understand how their workimpacts customers and empower them to support customerservice at the local level. For example, in Michigan, one ofour terminal operators learned of a customer who wasfrustrated by frequent delays of weekly lumber deliveriesfrom CSX. The employee visited the business and workedwith them to correct the problem using CSX e-businesstools. This enabled the customer to track the order fromshipment to delivery.CSX’s Total Service Integration (TSI) initiative, launched in2006, supports growth by improving service, optimizing trainsize and increasing asset utilization for unit-train shipmentsfrom origin to destination. CSX is now advancing thisinitiative to enhance service quality for customers who shipby the carload. TSI Carload focuses where the customer isimpacted most – during the first and last mile of service.These enhancements aim to improve service levels andthe reliability of rail transportation over other modesof transportation. These improvements to operationalprocesses, customer communication and service will betteralign CSX’s operating capabilities with customers’ needs.Safely handling and transporting customers’ products isof utmost importance at CSX. Certain products we ship,such as chemicals or other liquid products, require specialhandling. On occasion, a minor release from a customer’sshipment may occur. As a value-added service, CSXhazardous materials management specialists will go tothe customer site to help correct the problem. CSX alsopartners with customers regarding chemical shipping andhazardous materials management training events. In 2012,CSX recognized 69 customers with the Chemical SafetyExcellence Award. To qualify for the award, customers mustship more than 600 carloads of hazardous materials during acalendar year without a non-accident release. This year, 107customers qualified for the award, representing more than298,000 carloads shipped.CSX proactively plans for potential natural disasters andcommunicates early and often with customers on potentialdelays. For example, in 2012, we experienced a temporaryOverview markets Governance community workforce safety Environment value chainSpotlight: Supporting Regional DevelopmentAs the economic and ecological benefits of rail are becomingmore widely known, many businesses want to identify potential operatingsites along rail lines. However, the process to locate a site with viablerail access can be complicated and time-consuming. CSX’s Select Siteprogram reviews potential manufacturing and distribution developmentsites along its network that could easily utilize freight rail service. Thisdesignation confirms that standard land-use issues, utilities andenvironmental concerns have been addressed and that the site is readyfor development. This program helps local communities to identify sitesthat can effectively compete for new jobs and capital investment.CSX developed the Select Site program to offer customers potentiallocations for expansion opportunities that are ready for rail service.To receive Select Site certification, the location must meet a rigorouslist of criteria. Once certified, the sites are featured on a web portal,csxselectsite.com, which features press releases, promotional materialsand direct marketing to site-selection professionals. As of the end of 2012,CSX has certified 10 sites located in Ohio, Illinois, Indiana, Kentucky andSouth Carolina.
  • 87CSX 2012 Corporate Social Responsibilit y ReportOverview markets Governance community workforce safety Environment value chainshutdown due to Hurricane Sandy. The storm washed outsegments of the network and impacted port operations.Employees responded quickly, and service was restoredto ensure prompt delivery to customers. The companyprovided regular updates to customers via e-mail andnotifications using our e-business tools.Technology solutionsCSX works to constantly refine procedures and resourcesto create faster and more efficient service. Technologysolutions, such as Customer Relationship Managementapplications and Customer Relationship Integrated Systems,help us to collect and analyze customer feedback.CSX maintains ShipCSX.com, an e-business websitewith tools to help customers plan, ship, trace and pay forshipments quickly and efficiently. CSX e-business has adedicated Marketing and Implementation team to helptransition customers to our electronic tools. The companyholds annual two-day training events for customers thatwant a detailed understanding of these tools. Since 2006, theE-business team has hosted six workshops across the CSXnetwork, training more than 700 customers.Other customer-focused technology includes iPhone andAndroid mobile applications for real-time shipment andtrain tracking information, and on-board workorder devices to provide proactive, transparent,real-time notifications of customer requests andexpectations. In 2012, we updated ShipCSX toinclude enhanced data-management tools.Service solutionsCSX has introduced a number of services tohelp customers utilize our rail services:• Regional Development helps customerslooking to build or expand a rail-servedfacility or find a property with rail access.Each year, CSX supports 100 to 150companies in locating or expanding alongour network.• Start Up & Integration helps new and existingcustomers expanding to new locations completecritical pre-movement activities for a smooth, error-free experience.• Load Engineering & Design Services helps shippersdesign loading patterns that maximize capacity andminimize the potential for damage.• CSX de Mexico is a specialized service that offerscoordinated, consistent cross-border service between theU.S. and Mexico.• International Sales & Marketing assists with allareas of international logistics, container stripping/stuffing,warehousing, distribution services, industrial developmentoptions, port contacts and more.SuppliersReliable, efficient, ethical suppliers are essential to CSX’scontinued business success. Our suppliers are ourpartners – we treat them with the same respect, fairnessand accountability that we extend to and expect from ourown employees.Supplier ExpectationsTo meet CSX’s core value of “Right results, right way,” wehave a set of guidelines and expectations used to manage
  • 88CSX 2012 Corporate Social Responsibilit y Reportour supplier relationships. The company expects all businesstransactions to be fair, ethical and honest. All suppliers mustabide by the CSX Code of Ethics. The company distributesthe Code of Ethics every few years to ensure they have themost up-to-date version available. In addition, CSX suppliersthat spend more than six weeks a year on CSX sites mustundergo annual rail safety training.A specially trained team of auditors reviews supplier policiesand procedures for both product and service quality todetermine the extent to which they reflect CSX values.These auditors undergo extensive training on a regularbasis to ensure they stay abreast of the changing regulatoryenvironment. The company focuses these audits on supplierswith larger CSX contracts in place. In particular, CSX willaudit suppliers in situations where there are product qualityconcerns or where a supplier may have a new locationor product line. A part of the audit involves physicalwalkthroughs of facilities to gauge safety, environmentaland quality factors. When instances of non-compliance areidentified, CSX provides a five-step corrective action planto the supplier. In 2012, CSX performed audits at nearly 30suppliers. The company’s contract language requires thatour suppliers uphold all laws and regulations, respect humanrights and maintain corporate policies that support diversityand non-discrimination.Supplier SelectionCSX procures all materials, supplies and services througha centralized, competitive supplier selection process. Thecompany’s procurement function uses a team-orientedand cross-functional approach that maximizes savings froma total cost perspective. At the start of the procurementprocess, which applies to purchases or contracts that areabove a specified financial threshold, the CSX Procurementteam establishes goals and a timeline for the project,conducts research and benchmarking, solicits supplier input,accepts supplier qualifications statements, and after carefulevaluation, awards the contract. CSX makes purchasingdecisions according to the following criteria:• Value pricing resulting from efficient production facilities,sound engineering and research.• Quality and logistics of materials and services.• Health and safety programs and performance.• Environmental performance.• Labor policies and programs relating to diversity andnon-discrimination.• Service that meets the needs of our customers.We weigh the cost of a product or service along with theseother considerations and maintain very high standards forsafety and quality. For example, CSX considered purchasing areconditioned railcar component, but realized the product’spackaging posed a safety hazard to CSX employees. As aresult, we instead opted to purchase new components at ahigher cost because it allowed for safer handling.Supplier EngagementCSX collaborates with suppliers and other partners toidentify process efficiencies, to implement cost reductionsand develop innovative technological solutions. For example,Steel Dynamics, Inc. (SDI) provides rail products to severalCanadian- and U.S.-based railroads. Several Class I railroads,including CSX, worked with SDI to expand product offeringsto include construction of extra-long rails using a specializedmanufacturing process. SDI customers can now purchase320-foot-long rails instead of traditional 80-foot-long rails,providing both cost and long-term maintenance efficienciesto customers. CSX procurement managers also continue toassess a wide range of other new technologies to supportits fuel-efficiency goals. Keeping pace with technologicaladvancements in the rail industry is a business imperativefor CSX.Considering Supplier SustainabilityCSX faces growing expectations around sustainabilityperformance and disclosure on environmental, social andeconomic impacts, including those of CSX suppliers. Tohelp CSX better understand how suppliers are addressingthese issues, we developed a series of sustainability-relatedquestions as a part of our annual supplier quality assessment.We review supplier responses to these questions and planto include these considerations in our supplier evaluationprocess in 2013. To help our own customers understandthis information, we submitted responses to the CarbonDisclosure Project’s supply chain survey for the first time in2012 and plan to continue this practice in 2013.Overview markets Governance community workforce safety Environment value chain
  • 89CSX 2012 Corporate Social Responsibilit y ReportOverview markets Governance community workforce safety Environment value chainSupporting DiversityCSX extends our commitment to diversity toour suppliers and procurement processes. Tothat end, the company offers opportunitiesfor all suppliers, regardless of any social oreconomic distinction, such as age, race, creed,color, sex, ancestry or national origin. The CSXSupplier Diversity Program ensures that allbusiness enterprises have an equal opportunityto supply the required services and com-modities. Through this policy, we implementprocesses to:• Actively seek out and establish businessrelationships with diverse suppliers.• Support and participate in the workof public and private organizations thatpromote purchases from diverse firms.The company’s current diversity-related spending includes160 qualified minority-, veteran- and women-ownedbusinesses, which accounted for $138 million in spending in2012.The company maintains a relationship with a third-party firm that reviews and confirms the qualifications ofthese diverse suppliers. CSX furthers our commitment inthis area by serving as a corporate member of the NationalMinority Supplier Development Council (NMSDC) and theWomen’s Business Enterprise Network Council (WBENC).Representatives from our Procurement team participate innumerous NMSDC and WBENC national events each year.The company is always looking for opportunities to developrelationships with new diverse suppliers.Business ContinuityWhile the railroad industry currently has a relatively smallpool of suppliers that can meet our ongoing demandfor steel-based products and with few new entrants intothe market, we are working to improve the sustainabilitybehaviors of our existing suppliers and develop newsuppliers consistent with our expectations. The CSXProcurement team plays a strategic role to ensure thecompany always has the materials needed to run ouroperations. Wherever there is a sensitivity or supply risk,the Procurement team actively works to mitigate that risk.A key strategy to ensure availability of product inputs issupporting the development of our suppliers. After a seriesof business consolidations in our supplier base, we identifieda need for additional suppliers of railroad tieplates. CSXsearched the globe for an appropriate supplier, and did notlocate any. Instead, CSX found a used tieplate machine nolonger in service. CSX purchased this machine and had it re-furbished. Procurement managers are engaging with existingsuppliers to identify a supplier willing to produce tieplateswith this machine.Spotlight: Supporting Field-level EmployeesThe CSX procurement department constantly looks fornew technologies to support field-level employees. For example, CSXhas thousands of switches across our network. These switches areused to direct a train onto one set of tracks or another and necessitateapplication of grease, sometimes multiple times per day. Field-levelemployees raised concerns to the Purchasing team that this process wasmaintenance-intensive. As a solution, the team identified alternatives,including biodegradable grease, then found a newer product called theEkoslide that eliminated the need for grease altogether. The Ekoslidereduces the amount of force required to operate a switch, which reducespotential for injury. Another benefit is improved switching speed, whichreduces potential for misrouted cars and associated maintenance. CSXhas installed this product at several yards, and employees prefer the easeof maintenance that Ekoslide offers. It is a precedent for the Procurementteam to listen to employee concerns and help identify solutions.
  • 90CSX 2012 Corporate Social Responsibilit y ReportPlease download our 2012 Corporate Social Responsibility report at csxcsr.com.GRIIndicator*Indicator Description Where ReportedStandard Disclosures1.1 Statement from the most senior decisionmaker ofthe organization about the relevance of sustainabilityto the organization and its strategy.Page 1, Chairman’s Message1.2 Description of key impacts, risks, and opportunities. Page 1, Chairman’s Message2.1 Name of the organization. Page 3, CSX at a Glance2.2 Primary brands, products and/or services. Page 3, CSX at a Glance2.3 Operational structure of the organization. Page 3, CSX 2012 Form 10-K2.4 Location of organization’s headquarters. Page 3, CSX at a Glance2.5 Number of countries where the organizationoperates.Page 4, CSX Network Geography2.6 Nature of ownership and legal form. Page 3, CSX 2012 Form 10-K2.7 Markets served. Back Cover; Pages 10-23, Markets2.8 Scale of the reporting organization. Page 6, Key Financials; Page 52, WorkforceDemographics2.9 Significant changes during the reporting periodregarding size, structure, or ownership.Page 2, Overview2.10 Awards received. Page 31, Ethics; Page 51, Promoting Diversity; Page65, Emergency Responder Training; Page 80, 2012Environmental Performance Recognition3.1 Reporting period. Page 2, Overview3.2 Date of most recent previous report. Page 2, Overview3.3 Reporting cycle. Page 2, Overview3.4 Contact point for questions regarding the report. Back Cover3.5 Process for defining report content. Page 8, Understanding Material Issues3.6 Boundary of the report. Page 2, Overview3.7 Limitations on scope or boundary. Page 2, Overview3.8 Basis for reporting on joint ventures, subsidiaries,leased facilities, outsourced operations, and otherentities.Page 2, Overview3.9 Data measurement techniques and basis ofcalculations.Page 57, Employee Safety; Page 72, EnvironmentalPerformance Summary; Page 76, Waste andRecycling PerformanceCSX 2012 GRI Index
  • 91CSX 2012 Corporate Social Responsibilit y ReportGRIIndicator*Indicator Description Where Reported3.10 Explanation of any restatements of informationprovided in earlier reports.Page 57, Employee Safety; Page 72, EnvironmentalPerformance Summary; Page 76, Waste andRecycling Performance3.11 Significant changes from previous reporting periodsin the scope, boundary, or measurement methods.Page 2, Overview3.12 Table identifying the location of standard disclosuresin the report.Pages 90-97, GRI Index3.13 External assurance. Page 2, Overview4.1 Governance structure of the organization. Pages 25-29, Executive Leadership, Board ofDirectors, Leadership Structure4.2 Indicate whether the chair of the highest governancebody is also an executive officer.Pages 28-29, Leadership Structure4.3 Number and gender of members of the highestgovernance body that are independent and/or non-executive members.Pages 26-27, Board of Directors4.4 Mechanisms for shareholders and employees toprovide recommendations or direction to thehighest governance body.Pages 29-30, Board Committees; Page 6, CSX 2013Proxy Statement4.5 Linkage between compensation for members ofthe highest governance body, senior managers, andexecutives and the organization’s performance.Pages 29-30, Board Committees; Pages 28-39, CSX2013 Proxy Statement4.6 Processes in place for the highest governance bodyto ensure conflicts of interest are avoided.Pages 30-31, Governance Policies; Page 21, CSX2013 Proxy Statement4.7 Process for determining the composition,qualifications, and expertise of the members of thehighest governance body.Pages 29-30, Board Committees; Pages 13-20, CSX2013 Proxy Statement4.8 Internally developed statements of mission orvalues, codes of conduct, and principles relevant toeconomic, environmental, and social performance.Page 7, Committed to Sustainability; Pages 30-31,Governance Policies; Page 69, Our EnvironmentalPolicy; Page 6, CSX 2012 Form 10-K4.9 Procedures of the highest governance body foroverseeing the organization’s identification andmanagement of economic, environmental, andsocial performance, including relevant risks andopportunities.Pages 28-30, Leadership Structure, BoardCommittees; Pages 22-24, CSX 2013 ProxyStatement4.10 Processes for evaluating the highest governancebody’s own performance.Pages 29-30, Board Committees; Page 24, CSX 2013Proxy Statement4.11 Explanation of whether and how the precautionaryapproach or principle is addressed by theorganization.Pages 6-11, CSX 2012 Form 10-K4.12 Externally developed economic, environmental,and social charters, principles or other initiatives towhich the organization subscribes.Pages 58-59, Safety Training; Page 69, EnvironmentalManagement System
  • 92CSX 2012 Corporate Social Responsibilit y ReportGRIIndicator*Indicator Description Where Reported4.13 Memberships in associations and/or advocacyorganizations.Page 38, Board Service Program; Page 39,Partnerships in Action; Page 57, 2012 SafetyPerformance4.14 List of stakeholder groups engaged by theorganization.Page 9, Engaging with Stakeholders4.15 Basis for identification and selection of stakeholderswith whom to engage.Page 9, Engaging with Stakeholders4.16 Approaches to stakeholder engagement, includingfrequency of engagement by type and group.Page 9, Engaging with StakeholdersFrequency of engagement as noted in the table onpage 9 ranges by activity and stakeholder from everyday to once a year.4.17 Key topics and concerns that have been raisedthrough stakeholder engagement and how theorganization has responded.Page 9, Engaging with StakeholdersPerformance Indicators: EconomicDMA EC All DMA EC The CSX executive leadership team has ultimateorganizational responsibility, overseen by the Boardof Directors. We monitor performance and developaction plans in situations where we want to improveperformance.DMA EC Economic performance Pages 2-9, Overview; Pages 10-23, MarketsDMA EC Market presence Pages 2-9, Overview; Pages 10-23, MarketsDMA EC Indirect economic impacts Pages 2-9, Overview; Pages 10-23, Markets; Pages34-43, CommunityEC1 Direct economic value generated and distributed. Pages 5-6, Financial Performance Highlights; Pages56-58, CSX 2012 Form 10-K (Income Statement onpage 56, Balance Sheet on page 58).EC2 Financial implications and other risks andopportunities for the organization’s activities due toclimate change.Pages 6-11, CSX 2012 Form 10-KEC4(partial)Significant financial assistance received from thegovernment.Page 6, Key Financials; Page 42, Partnering for theHigh Line; Page 71, Technology to Improve AirQualityEC6(partial)Policy, practices, and proportion of spending onlocally-based suppliers at significant locations ofoperation.Page 41, Community EngagementEC7(partial)Procedures for local hiring and proportion of seniormanagement hired from the local community.Page 47, Strategic Workforce PlanningEC8 Development and impact of infrastructureinvestments and services provided primarily forpublic benefit through commercial, in kind, or probono engagement.Page 36, Selection for Charitable Giving, Power ofthe Program; Page 41, Community Engagement
  • 93CSX 2012 Corporate Social Responsibilit y ReportGRIIndicator*Indicator Description Where ReportedEC9(partial)Understanding and describing significant indirecteconomic impacts, including the extent of impacts.Pages 10-23, Markets; Page 80, Supporting theCREATE Program; Page 86, Supporting RegionalDevelopmentPerformance Indicators: EnvironmentalDMA EN All DMA EN The CSX executive leadership team has ultimateorganizational responsibility, overseen by the Boardof Directors. We monitor performance and developaction plans in situations where we want to improveperformance.DMA EN Materials Pages 68-81, EnvironmentDMA EN Energy Pages 68-81, EnvironmentDMA EN Water Pages 68-81, EnvironmentDMA EN Biodiversity Pages 68-81, EnvironmentDMA EN Emissions, effluents and waste Pages 68-81, EnvironmentDMA EN Products and services Pages 68-81, EnvironmentDMA EN Compliance Pages 68-81, EnvironmentDMA EN Transport Pages 68-81, EnvironmentDMA EN Overall Pages 68-81, EnvironmentEN1(partial)Materials used by weight or volume. Pages 70-72, Fuel EfficiencyEN2(partial)Percentage of materials used that are recycled inputmaterials.Pages 76-77, Waste ManagementEN3 Direct energy consumption by primary energysource.Pages 70-72, Fuel EfficiencyDiesel: 73,499,817 GJGasoline: 1,185,972 GJNatural Gas: 319,969 GJPropane: 251,907 GJJet Fuel: 37,984 GJEN4 Indirect energy consumption by primary source. Pages 73-74, Operational EfficiencyEN5 Energy saved due to conservation and efficiencyimprovements.Pages 70-74, Fuel Efficiency, Operational EfficiencyEN6 Initiatives to provide energy-efficient or renewableenergy based products and services, and reductionsin energy requirements as a result of these initiatives.Pages 73-74, Operational EfficiencyEN7 Initiatives to reduce indirect energy consumptionand reductions achieved.Pages 73-74, Operational EfficiencyEN8 Total water withdrawal by source. Page 75, Water Use. Sources of water includesurface water, collected rainwater and, at certainsites, well water.
  • 94CSX 2012 Corporate Social Responsibilit y ReportGRIIndicator*Indicator Description Where ReportedEN10 Percentage and total volume of water recycled andreused.Page 75, Water UseEN13(partial)Habitats protected or restored. Pages 77-78, Biodiversity and Land Management;Page 81, Gautier Remediation Project EN14(partial)Strategies, current actions, and future plans formanaging impacts on biodiversity.Page 81, Gautier Remediation ProjectEN16 Total direct and indirect greenhouse gas emissionsby weight.Pages 70-72, Greenhouse Gas EmissionsEN17 Other relevant indirect greenhouse gas emissions byweight.Pages 70-72, Greenhouse Gas EmissionsEN18 Initiatives to reduce greenhouse gas emissions andreductions achieved.Pages 70-72, Greenhouse Gas Emissions, FuelEfficiencyEN20 NO, SO, and other significant air emissions by typeand weight.Pages 70-72, Air Emissions. NOx and SOx emissionsare the only types of significant emissions generatedby CSX.EN22(partial)Total weight of waste by type and disposal method. Pages 76-77, Waste ManagementEN26 Initiatives to mitigate environmental impactsof products and services, and extent of impactmitigation.Pages 77-78, Biodiversity and Land ManagementEN28 Monetary value of significant fines and total numberof non-monetary sanctions for noncompliance withenvironmental laws and regulations.Page 79, Environmental PerformanceEN29(partial)Significant environmental impacts of transportingproducts and other goods and materials used forthe organization’s operations and transportingmembers of the workforce.Pages 62-63, Hazardous Materials Safety; Pages 70-72, Greenhouse Gas EmissionsPerformance Indicators: Labor Practices and Decent WorkDMA LA All DMA LA The CSX executive leadership team has ultimateorganizational responsibility, overseen by the Boardof Directors. We monitor performance and developaction plans in situations where we want to improveperformance.DMA LA Employment Pages 44-55, WorkforceDMA LA Labor/management relations Pages 44-55, WorkforceDMA LA Occupational health and safety Pages 56-67, SafetyDMA LA Training and education Pages 44-55, WorkforceDMA LA Diversity and equal opportunity Pages 44-55, Workforce
  • 95CSX 2012 Corporate Social Responsibilit y ReportGRIIndicator*Indicator Description Where ReportedDMA LA Equal remuneration for women and men Pages 44-55, WorkforceCSX supports a work environment focused onequal opportunities for all employees.LA1 Total workforce by employment type, employmentcontract, and region, broken down by gender.Pages 51-53, Workforce Composition; Pages 99-100,AppendixLA2(partial)Total number and rate of new employee hires andemployee turnover by age group, gender, and region.Pages 51-53, Workforce Composition; Pages 99-100,AppendixLA3 Benefits provided to full-time employees that arenot provided to temporary or part-time employees.Pages 53-54, Employee BenefitsLA4 Percentage of employees covered by collectivebargaining agreements.Page 52, Workforce Demographics; Page 54, LaborRelationsLA7(partial)Rates of injury, occupational diseases, lost days, andabsenteeism, and number of work-related fatalitiesby region and by gender.Pages 57-58, 2012 Safety PerformanceLA8 Education, training, counseling, prevention, andrisk-control programs in place to assist workforcemembers, their families, or community membersregarding serious diseases.Pages 54-55, Health and Wellness; Page 67, HumanPerformanceLA10 Average hours of training per year per employee bygender, and by employee category.Page 46, Training and Development. Average hoursof training by gender are reflective of our workforcecomposition. CSX provides training to all employeesbased on the specific requirements of the position.39.62 hours of training per employee is average peremployee category and by gender.LA12 Percentage of employees receiving regularperformance and career development reviews, bygender.Pages 46-47, Performance ManagementLA13 Composition of governance bodies and breakdownof employees per employee category according togender, age group, minority group membership, andother indicators of diversity.Pages 26-27, Board of Directors; Pages 47-51,Diversity and InclusionPerformance Indicators: Human RightsDMA HR All DMA HR CSX only operates in North America and follows allNorth American labor laws and regulations.The CSX executive leadership team has ultimateorganizational responsibility, overseen by the Boardof Directors. We monitor performance and developaction plans in situations where we want to improveperformance.DMA HR Investment and procurement practices -DMA HR Non-discrimination -
  • 96CSX 2012 Corporate Social Responsibilit y ReportGRIIndicator*Indicator Description Where ReportedDMA HR Freedom of association and collective bargaining Page 54, Labor RelationsDMA HR Child labor -DMA HR Prevention of forced and compulsory labor -DMA HR Security practices -DMA HR Indigenous rights -DMA HR Assessment -DMA HR Remediation -HR5 Operations and significant suppliers identified inwhich the right to exercise freedom of associationand collective bargaining may be violated or atsignificant risk, and actions taken to support theserights.CSX does not have operations in locations wherethe right to exercise freedom of association maybe violated. 100 percent of our union workforce iscovered by collective bargaining agreements.CSX does not have any knowledge of significantsuppliers whose right to exercise freedom ofassociation and collective bargaining may be violatedor at significant risk. As part of our procurementprocess, we evaluate our suppliers in severalperformance areas, including those related to laborpractices. Where risks are identified, we workwith our suppliers to correct these issues, and wemonitor continued performance through our annualsupplier quality assessment program.Performance Indicators: SocietyDMA SO All DMA SO The CSX executive leadership team has ultimateorganizational responsibility, overseen by the Boardof Directors. We monitor performance and developaction plans in situations where we want to improveperformance.DMA SO Local communities Pages 34-43, CommunityDMA SO Corruption Pages 24-33, GovernanceDMA SO Public policy Pages 24-33, GovernanceDMA SO Anti-competitive behavior Pages 24-33, GovernanceDMA SO Compliance Pages 24-33, GovernanceSO1(partial)Percentage of operations with implemented localcommunity engagement, impact assessments, anddevelopment programs.Pages 64-65, Community AffairsSO2(partial)Percentage and total number of business unitsanalyzed for risks related to corruption.Pages 30-31, Governance Policies; Pages 6-11, CSX2012 Form 10-KSO3 Percentage of employees trained in organization’santi-corruption policies and procedures.Pages 30-31, Governance Policies
  • 97CSX 2012 Corporate Social Responsibilit y ReportGRIIndicator*Indicator Description Where ReportedSO5 Public policy positions and participation in publicpolicy development and lobbying.Pages 32-33, Political Activities and LobbyingSO6 Total value of financial and in-kind contributions topolitical parties, politicians, and related institutions.Pages 32-33, Political Activities and LobbyingSO9(partial)Operations with significant potential or actualnegative impacts on local communities.Page 41, Community Engagement; Pages 64-65,Community AffairsSO10(partial)Prevention and mitigation measures implementedin operations with significant potential or actualnegative impacts on local communities.Page 41, Community Engagement; Pages 64-65,Community AffairsPerformance Indicators: Product ResponsibilityDMA PR All DMA PR The CSX executive leadership team has ultimateorganizational responsibility, overseen by the Boardof Directors. We monitor performance and developaction plans in situations where we want to improveperformance.DMA PR Customer health and safety Pages 82-89, Customers and SuppliersDMA PR Product and service labelling Pages 82-89, Customers and SuppliersDMA PR Marketing communications Pages 82-89, Customers and SuppliersDMA PR Customer privacy Pages 82-89, Customers and SuppliersDMA PR Compliance Pages 82-89, Customers and SuppliersPR1(partial)Life cycle stages in which health and safetyimpacts of products and services are assessed forimprovement, and percentage of significant productsand services categories subject to such procedures.Page 62, Hazardous Materials SafetyPR5 Practices related to customer satisfaction, includingresults of surveys measuring customer satisfaction.Pages 83-84,Voice of the Customer SurveyPR6(partial)Programs for adherence to laws, standards,and voluntary codes related to marketingcommunications, including advertising, promotion,and sponsorship.Pages 83-84,Voice of the Customer Survey* Partially reported indicators are noted as such.
  • 98CSX 2012 Corporate Social Responsibilit y Report
  • 99CSX 2012 Corporate Social Responsibilit y ReportAppendixHeadcount DataGender Contract Non-ContractTotalFemale 974 1,087 2,061Male 24,683 3,655 28,338TOTAL 25,657 4,742 30,399Gender Contract Non-ContractTotalFemale 4% 23% 7%Male 96% 77% 93%TOTAL 100% 100% 100%Ethnicity Contract Non-ContractTotalMinority 3,725 882 4,607Non-Minority 21,932 3,860 25,792TOTAL 25,657 4,742 30,399Ethnicity Contract Non-ContractTotalMinority 15% 19% 15%Non-Minority 85% 81% 85%TOTAL 100% 100% 100%US States Contract Non-ContractTotalFloating 3,514 3,514AL 1,060 79 1,139AR - 1 1CA - 5 5CO - 1 1CT 6 1 7DC 37 13 50DE 43 5 48FL 1,998 2,647 4,645GA 2,381 299 2,680IL 810 138 948IN 1,307 111 1,418KY 1,844 186 2,030LA 135 9 144MA 238 22 260MD 1,421 164 1,585ME - 1 1MI 351 44 395MO - 1 1MS 33 1 34NC 847 76 923NJ 153 57 210NM - 1 1NY 1,853 162 2,015OH 2,588 224 2,812PA 757 63 820SC 754 74 828TN 1,313 128 1,441TX - 8 8VA 923 80 1,003WA - 5 5WI - 1 1WV 1,244 134 1,378TOTAL 25,610 4,741 30,351Canada Contract Non-ContractTotalFloating 40 - 40NY 2 - 2ON 2 1 3QC 3 - 3TOTAL 47 1 48Mexico Contract Non-ContractTotal- 7 7Hiring DataGender Mgmt Union TotalFemale 119 52 171Male 218 1,981 2,199TOTAL 337 2,033 2,370Ethnicity Mgmt Union TotalMinority 104 364 468Non-Minority 233 1,669 1,902TOTAL 337 2,033 2,370
  • 100CSX 2012 Corporate Social Responsibilit y ReportHiring Data (Continued)Age Mgmt Union Total19 - 29 140 932 1,07230 - 39 116 717 83340 - 49 57 323 38050 - 59 20 59 7960+ 4 2 6TOTAL 337 2,033 2,370US States Mgmt Union TotalAL - 148 148DC 4 - 4DE - 3 3FL 281 171 452GA 13 211 224IL 6 76 82IN 3 124 127KY 1 66 67LA - 17 17MA - 55 55MD 6 161 167MI 1 18 19MS - 1 1NC 2 40 42NJ 1 20 21NY 2 278 280OH 3 233 236PA 3 81 84QC - 5 5SC 2 72 74TN 1 101 102TX 1 - 1VA 3 73 76WA 1 - 1WV 3 58 61- 21 21TOTAL 337 2,033 2,370Turnover DataBy Gender Mgmt Union TotalFemale 68 86 154Male 209 2,330 2,539TOTAL 277 2,416 2,693By Ethnicity Mgmt Union TotalMinority 49 416 465Non-Minority 228 2,000 2,228TOTAL 277 2,416 2,693By US State Mgmt Union Total1 218 219AL 5 100 105CA 1 - 1DC 1 1 2DE - 3 3FL 166 221 387GA 17 218 235IL 5 79 84IN 13 136 149KY 8 154 162LA - 11 11MA 2 41 43MD 7 148 155MI 2 44 46MS - 3 3NC 4 59 63NJ 4 17 21NY 12 213 225OH 11 250 261PA 1 74 75QC - 1 1RI 1 - 1SC 4 61 65TN 2 117 119VA 4 115 119WV 6 132 138TOTAL 277 2,416 2,693
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  • ContactsThank you for your interest in CSX. Please use the following index to direct your inquiries and comments.Corporate CitizenshipTori KaplanAssistantVice President,Corporate Social Responsibility500 Water St., C420Jacksonville, FL 32202(904) 359-1799Tori_Kaplan@CSX.comInvestor RelationsDavid BaggsVice President,Capital Markets and Investor Relations500 Water St., C110Jacksonville, FL 32202(904) 359-4812David_Baggs@CSX.comMedia and Public RelationsGary SeaseDirectorExternal Communications500 Water St., C420Jacksonville, FL 32202(904) 359-1719Gary_Sease@CSX.comStock ListingCSXs common stock islisted on the NewYork StockExchange. The official tradingsymbol is “CSX.”CSX Direct Stock Purchase Plan. CSX Corporation offersa Direct Stock Purchase Plan for investors to purchase or sellCSX Corporation Common Stock. This plan is sponsored andadministered by Computershare, the Company’s transfer agent,and is available to both current shareholders of record as wellas to individual investors who wish to make an initial purchaseof CSX Corporation Common Stock. The CSX Direct StockPurchase Plan is a convenient and flexible way for you to invest inthe common stock of CSX Corporation.Independent AuditorsErnst &Young LLPJacksonville, FLStock Transfer AgentComputersharePO Box 43006Providence, RI 02940-30061-800-521-5571computershare.com/investorCSX Corporate Headquarters500 Water St., 15th FloorJacksonville, FL 32202(904) 359-3200www.csx.com