csx Q1_2005

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csx Q1_2005

  1. 1. CSX Corporation First-Quarter E i Fi t Q t Earnings April 28, 2005
  2. 2. Forward- Forward-looking Disclosure Statement This presentation and other statements by the Company contain forward-looking statements within the forward- meaning of the Private Securities Litigation Reform Act with respect to, among other items: projections and estimates of earnings, revenues, cost-savings, expenses, or other financial items; statements of cost- management’s plans, strategies and objectives for future operation and management’s expectations as to management s plans operation, management s future performance and operations and the time by which objectives will be achieved; statements concerning proposed new products and services; and statements regarding future economic, industry or market conditions or performance. Forward-looking statements are typically identified by words or phrases such as Forward- “believe,” “expect,” “anticipate,” “project,” and similar expressions. Forward-looking statements speak only , p, p ,pj , p Forward- g p y as of the date they are made, and the Company undertakes no obligation to update or revise any forward- forward- looking statement. If the Company does update any forward-looking statement, no inference should be drawn forward- that the Company will make additional updates with respect to that statement or any other forward-looking forward- statements. Forward- Forward-looking statements are subject to a number of risks and uncertainties, and actual performance or results could differ materially from that anticipated by these forward-looking statements. Factors that may forward- cause actual results to differ materially from those contemplated by these forward-looking statements include, forward- among others: (i) the Company’s success in implementing its financial and operational initiatives (ii) changes (i initiatives, in domestic or international economic or business conditions, including those affecting the rail industry (such as the impact of industry competition, conditions, performance and consolidation); (iii) legislative or regulatory changes; (iv) the inherent business risks associated with safety and security; and (v) the outcome of claims and litigation involving or affecting the Company. Other important assumptions and factors that could cause actual results to differ materially from those in the forward-looking statements are specified in the forward- Company’s SEC reports, accessible on the SEC’s website at www.sec.gov and the Company’s website at www.csx.com. www.csx.com.
  3. 3. CSX Corporation First-Quarter E i Fi t Q t Earnings Michael Ward Chairman, President and Chief Executive Officer
  4. 4. CSX Corporation First-Quarter E i Fi t Q t Earnings Clarence Gooden Executive Vice President Chief Commercial Officer
  5. 5. Surface Transportation revenues of $2 1 billi increased by $188 million f $2.1 billion i db illi First Quarter Year-Over-Year Change (Dollars in millions) $2,108 $1,920 First Quarter 2004 First Quarter 2005
  6. 6. Overall revenue-per-car i O ll improved by 8.6% d b 8 6% First Quarter Year-Over-Year Change • Price momentum continues 9.8% • Fuel surcharge continues to 8.6% partially offset rising oil prices • Volume was slightly favorable driven primarily by coal 1.1% Revenue Volume RPC
  7. 7. Coal revenues of $506 million increased $84 million on strong yield and volume illi t i ld d l First Quarter • Yield improvement continues in all Year-Over-Year Change lines of business 19.9% • Volume strength in many markets including export, northern utilities, industrial and coke 10.0% 9.0% 9 0% • Utility stockpiles remain below normal Revenue Volume RPC
  8. 8. Automotive revenues of $208 million increased $6 million on yield improvements i d illi i ld i t First Quarter • Yield improvement Year-Over-Year Change • Production decline • Sales favorable; inventories down, yet still at high levels 3.0% 3 0% 3.0% 3 0% 0.0% Revenue Volume RPC
  9. 9. Intermodal revenues of $329 million increased by $14 million i db illi First Quarter • Domestic volume weakness; Year-Over-Year Change Network Simplification impact 8.6% • Domestic yield strength 4.4% • International volume strength (3.8%) Revenue Volume RPC
  10. 10. Intermodal operating income improved $33 million year-over-year illi First Quarter 2005 2004 Variance Dollars in millions Linehaul Revenue $ 291 $ 309 $ ( 18) Other Revenue 38 6 32 Operating Revenue 329 315 14 Operating Expenses 277 296 19 $ 52 $ 19 $ 33 Operating Income Operating Ratio 84.2% 94.0% 9.8 pts
  11. 11. Merchandise revenues of $1.0 billion increased $80 million on stronger yield i d illi t i ld First Quarter • Strong yield across markets Year-Over-Year Change • Food and Consumer volume 8.4% strength 7.9% • Metals yield improvements • Military volume weakness 0.4% 0 4% Revenue Volume RPC
  12. 12. CSX’s outlook continues to be favorable across most markets t kt Unfavorable Flat Favorable Automotive Emerging Markets Agricultural Products Intermodal Chemicals Phosphate & Fertilizer Coal Food & Consumer Forest Products Metals
  13. 13. CSX Corporation First-Quarter E i Fi t Q t Earnings Tony Ingram Executive Vice President Chief Operating Officer
  14. 14. Consistent focus on key drivers in 2005 C i t tf k di i Safety Service Productivity • Process enhancements • Resources • Plan execution • Employee training • Terminal focus • Asset utilization • Labor partnerships • Plan execution • Process improvement
  15. 15. Safety processes produced positive results in th fi t i the first quarter t FRA Personal Injury FRA Train Accident Rate Frequency Index F Id 2.25 2.24 2.18 4.97 4 97 2.04 2 04 4.64 4.61 4.41 1.67 4.03 Q1 Q2 Q3 Q4 Q1 Q1 Q2 Q3 Q4 Q1 2004 2004 2004 2004 2005 2004 2004 2004 2004 2005
  16. 16. Train velocity declined in first quarter after increasing in consecutive quarters i ii ti t Average Overall Train Velocity (miles per hour) 20.9 20 9 20.5 20.1 19.5 19.5 Q1 2004 Q2 2004 Q3 2004 Q4 2004 Q1 2005
  17. 17. Efforts to improve network performance and service consistency are ongoing i it i • ONE Plan – Plan adjustment – Resource planning – Phase II implementation • Terminal Focus – System terminals – Process approach • Plan Execution – Increasing discipline
  18. 18. CSX Corporation First-Quarter E i Fi t Q t Earnings Oscar Munoz Executive Vice President Chief Financial Officer
  19. 19. CSX earnings from continuing operations increased $0.55 per share for the quarter i d $0 55 h f th t First Quarter Dollars i illi D ll in millions, except Earnings P Sh tE i Per Share 2005 200 2004 Variance Vi Surface Transportation Operating Income $ 351 $ 151 $ 200 Other Operating Income p g 3 1 2 Consolidated Operating Income $ 354 $ 152 $ 202 Other Income ( 2) ( 4) 2 Interest Expense 114 108 ( 6) Income Taxes 84 13 ( 71) Earnings from Continuing Operations $ 154 $ 27 $ 127 EPS from Continuing Operations $ 0.68 $ 0.13 $ 0.55 Net Earnings $ 579 $ 30 $ 549 EPS $ 2.56 $ 0.14 $ 2.42
  20. 20. CSX World Terminals Sale W ld T i l Sl • Gross proceeds $1.14 billion $1 14 • Net earnings from discontinued operations $425 million • Earnings per share from discontinued operations of $1.88
  21. 21. Surface Transportation operating income generated strong EPS growth in the quarter td t th i th t First Quarter 2005 2004 Variance Dollars in millions Surface Transportation Operating Income $ 351 $ 151 $ 200 Restructuring Charge - 53 ( 53) Surface Transportation Operating Income before Restructuring Charge $ 351 $ 204 $ 147 First Quarter 2005 2004 Variance Dollars in millions EPS from Continuing Operations $ 0.68 $ 0.13 $ 0.55 Restructuring Charge - 0.14 ( 0.14) EPS from Continuing Operations before Restructuring Charge $ 0.68 $ 0.27 $ 0.41
  22. 22. Surface transportation operating income improved significantly i d i ifi tl First- First-Quarter Variance versus 2004* Dollars in millions 2005 Variance Percent Revenue $ 2,108 $ 188 10% Operating Expense Labor and Fringe 702 ( 17) ( 2%) Materials, Supplies and Other 462 ( 46) ( 11%) Depreciation 203 ( 43) ( 27%) Fuel 179 ( 25) ( 16%) Building and Equipment Rent 135 5 4% Inland Transportation 56 18 24% Conrail R t Fees and Services C il Rents, F dS i 20 67 77% Operating Expense 1,757 ( 41) ( 2%) Operating Income 351 147 72% Operating Ratio 83.3% 6.1 pts * 2004 excludes $53 million in restructuring charges
  23. 23. Expense increase limited to 2% through operations and management productivity ti d t d ti it Surface Transportation Operating Expenses First Quarter Year-Over-Year Variance* (Dollars in millions) $19 $10 ($11) ($14) ($19) ($26) Fuel Price Volume and Train Operations Management Other Inflation Operations Productivity Reductions * 2004 excludes $53 million in restructuring charges
  24. 24. Surface transportation operating income drove a 152% i d increase i EPS in First- First-Quarter Variance versus 2004* Dollars in millions 2005 Variance Percent Revenue $ 2,108 2 108 $ 188 10% Operating Expense 1,757 ( 41) ( 2%) Operating Income 351 147 72% Operating R ti O ti Ratio 83.3% 83 3% 6.1 t 6 1 pts EPS from Continuing Operations $ 0.68 $ 0.41 152% * 2004 excludes restructuring charges of $53 million pre-tax, $0.14 per share pre-
  25. 25. Looking forward L ki f d • Tougher comparables ahead – Cycling progressively stronger 2004 results • Strong foundation is in place – Core strategies are taking hold – Financial results are improving • Focused on consistent, continuous improvement
  26. 26. CSX Corporation First-Quarter E i Fi t Q t Earnings April 28, 2005

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