csx Citigroup11.06.07

228 views

Published on

Published in: Economy & Finance, Business
0 Comments
0 Likes
Statistics
Notes
  • Be the first to comment

  • Be the first to like this

No Downloads
Views
Total views
228
On SlideShare
0
From Embeds
0
Number of Embeds
2
Actions
Shares
0
Downloads
1
Comments
0
Likes
0
Embeds 0
No embeds

No notes for slide

csx Citigroup11.06.07

  1. 1. Citigroup Transportation Conference November 2007 Forward-Looking Disclosure This presentation and other statements by the company contain forward-looking statements within the 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 management’s plans, strategies and objectives for future operation, and management’s expectations as to 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 “believe,” “expect,” “anticipate,” “project,” “estimate,” and similar expressions. Forward-looking statements speak only as of the date they are made, and the company undertakes no obligation to update or revise any forward-looking statement. If the company does update any forward-looking statement, no inference should be drawn that the company will make additional updates with respect to that statement or any other forward-looking statements. 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 cause actual results to differ materially from those contemplated by these forward-looking statements include, among others: (i) the company’s success in implementing its financial and operational initiatives, (ii) changes 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 company’s SEC reports, accessible on the SEC’s website at www.sec.gov and the company’s website at www.csx.com. 2 2
  2. 2. Fourth quarter revenue outlook is positive Favorable Neutral Unfavorable Agricultural Products Automotive Food & Consumer Chemicals Forest Products Coal, Coke & Iron Ore Intermodal Emerging Markets Metals Phosphate & Fertilizer 3 3 CSX continues to deliver strong financial results Comparable Rolling 12-Month Operating Income in Millions $2,101 $1,958 $1,549 $1,064 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 2004 2005 2005 2005 2005 2006 2006 2006 2006 2007 2007 2007 Note: 2004 excludes restructuring charges, and 2006 and 2007 exclude insurance recoveries 4 4
  3. 3. Earning power improving in softer environment Pricing/productivity more than Comparable Operating offsetting volume softness Income Growth in Millions $84 Q1 impacted by derailments $77 and difficult comparisons $63 Core 15-16% improvement in 15% (4%) 16% 16% 15% (4%) 16% 16% challenging environment ($18) Q4 2006 Q1 2007 Q2 2007 Q3 2007 Note: Results exclude insurance gains 5 5 Double-digit growth targeted on higher 2007 base 2007-2010 Guidance Operating Income 10% – 12% CAGR Earnings Per Share 15% – 17% CAGR Free Cash Flow $800M – $1B Before Dividends in 2010 Operating Ratio Mid-low 70’s in 2010 6 6
  4. 4. Key strategies driving margins and earnings growth Comparable Operating Ratio 86.7% 82.0% 79.5% 78.2% Mid-low 70’s 2004 2005 2006 2007 YTD 2010 Target Note: 2004 excludes restructuring charges, and 2006 and 2007 exclude insurance recoveries 7 7 Key strategies driving margins and earnings growth Comparable Operating Ratio 86.7% Management Restructuring 82.0% 79.5% ONE Plan ONE Plan Refinement ONE Plan Execution with 78.2% Rollout and Execution Total Service Integration Mid-low Performance Improvement Performance Improvement Process Process with Long-term Focus Long- 70’s Value Pricing with Value Pricing Strong Service Product 2004 2005 2006 2007 YTD 2010 Target Note: 2004 excludes restructuring charges, and 2006 and 2007 exclude insurance recoveries 8 8
  5. 5. Restructuring and productivity early catalyst Restructuring Productivity Nearly 20% of management Savings targeted across positions eliminated functional areas Decisions streamlined by Nearly $400 million of total reducing management layers savings produced since 2004 Accountability established Pipeline of opportunities across all functional areas support long-term targets Nearly $100 million of annual savings produced 9 9 Cost efficiency examples from process improvement Fuel Expense Car Hire Expense Gallons Per GTM Dollars Per Unit Improved Improved $52.32 1.31 15% 5% $44.52 1.25 2004 2007 LTM 2004 2007 LTM 10 10
  6. 6. Value pricing remains a key driver at CSX Year-Over-Year Change 12.6% 11.8% 11.7% 11.0% 9.0% 8.4% 8.1% 8.0% 6.9% 7.1% 6.8% 6.7% 6.6% 6.5% 6.5% 6.3% 6.2% 5.6% Q3 2005 Q4 2005 Q1 2006 Q2 2006 Q3 2006 Q4 2006 Q1 2007 Q2 2007 Q3 2007 Price Increase on 'Same Store Sales' Total Revenue per Unit Note: ‘Same Store Sales’ price increases exclude impacts from fuel and mix 11 11 ONE Plan execution producing high service levels On-Time Originations On-Time Arrivals 90% 80% 80% 70% 70% 60% 60% 50% 50% 40% 40% 30% 30% 20% 20% 10% 10% 0% 0% Q1 Q4 Q3 Q2 Q1 Q1 Q4 Q3 Q2 Q1 2004 2004 2005 2006 2007 2004 2004 2005 2006 2007 12 12
  7. 7. Moving to next level with Total Service Integration Aligns customer needs with operating capabilities Utilizes capacity and efficiency to support growth Drives strong operations for all service types 13 13 Grain business demonstrates opportunity CSX Grain Ideal Current 2010 Business Design Compliance Target Unit Train Service (%) 100% 65% 95% Train Length 90 Cars Less Than 1% 65% Loading/Unloading Time 15 Hours 20% 75% 14 14
  8. 8. Drives higher service, efficiency and margins Reduces service complexity Reliability Increases predictability of customer deliveries Increases tons per train Productivity Decreases dwell time in terminals Drives margin expansion Profitability Creates capacity for growth 15 15 Wrap-up . . . Momentum across safety, service and productivity driving strong financial performance Double-digit operating income and earnings per share growth builds off a higher 2007 base Targeting mid-low 70’s operating ratio by 2010, with strong focus on productivity and value pricing Driving towards long-term vision – Industry Leadership 16 16
  9. 9. Citigroup Transportation Conference November 2007 Appendix
  10. 10. CSX is outperforming broader indices Three-Year Stock Performance Indexed: October 2004 = 100 325 275 225 175 125 75 Oct-04 Oct-05 Oct-06 Oct-07 CSX Class I Rails S&P 500 Dow Jones Transports Note: Major Class I Rail Index includes BNI, CNI, CP, NSC and UNP 19 19 CSX leads 92% of S&P 500 companies S&P 500 Stock Performance October 2004 - October 2007 Top 36 293% 37 CSX 162% 38-100 125% 101-200 74% 201-300 39% 301-400 12% 401-500 (19%) 20 20
  11. 11. Buybacks and dividends support shareholder focus Cumulative Share Buyback Quarterly Dividends Dollars in Millions Tripled Since 2005 $0.15 $2,074 $0.12 $0.10 $882 $1,192 $0.07 $0.05 $644 $465 $422 $149 Q2 Q3 Q4 Q1 Q2 Q3 Q3 Q4 Q3 Q1 Q3 2006 2006 2006 2007 2007 2007 2005 2005 2006 2007 2007 21 21 Citigroup Transportation Conference November 2007

×