Csx Corporation · NASDAQ:CSX
Csx — Stifel Nicolaus Transportation & Logistics Conference 2010
26 slides from Csx's conference presentation, Feb 11, 2010
Slide 1: How tomorrow moves – Stifel Nicolaus Transportation & Logistics Conference
[ How tomorrow moves ] ee eo" 9010 STIFEL NICOLAUS TRANSPORTATION & LOGISTICS CONFERENCE
Slide 2: Forward-Looking Statements
Forward-Looking Statements This information and other statements by the company may 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, volumes, rates, cost-savings,
Slide 3: The year 2009 in review
The year 2009 in review . . . Challenges abound . . . . . . and CSX responded Worst industrial economy in Maintained strong core past half century pricing discipline — Industrial production down 10% — Same store sales prices up 6% Double-digit volume declines Produced strong safety across th
Slide 4: Strong response produced strong financial results
Strong response produced strong financial results Operating Continuing Operating Margin Income in Millions Earnings Per Share $3.66 $2,768 25.3% 24.6% $2.77 $2.87 $2,260 $2,285 22.5% $1,981 $2.24 20.7% 7,358 7,358 7,358 7,116 7,116 7,116 6,827 6,827 6,827 5,793 5,793 5,793 Volume Volume (000) (000)
Slide 5: CSX ranks among the leaders within the S&P 500
CSX ranks among the leaders within the S&P 500 Operating Continuing Operating Margin Income Growth EPS Growth Improvement (bps) 2006-2009 2006-2009 2006-2009 460 15% 28% (4%) 140 (1%) (55%) (21%) (130) CSX S&P S&P 500 CSX S&P S&P 500 CSX S&P S&P 500 Rails Rails Rails CSX CSX ranks ranks among among
Slide 6: Strong service and value of rail drives pricing gains
Strong service and value of rail drives pricing gains On-Time Originations Same Store Sales Price Increase 81% 6.6% 6.7% 79% 79% 6.5% 6.2% 76% 2006 2007 2008 2009 2006 2007 2008 2009 66
Slide 7: Helping to lead one of the Nation's safest industries
Helping to lead one of the Nation’s safest industries FRA Personal Injury Rate FRA Train Accident Rate 1.47 3.66 3.06 1.24 2.92 1.22 2.77 1.19 2006 2007 2008 2009 2006 2007 2008 2009 77
Slide 8: Productivity and rightsizing drive costs lower
Productivity and rightsizing drive costs lower Full-year Cost Structure in Millions 2009 2008 % Change Volume 5,793 6,827 (15%) Fuel Short-term Car Hire $ 1,766 $ 2,774 (36%) Variable Costs Unit Train Crews Third Party Services Terminal Operations Long-term Scheduled Network Crews 1,891
Slide 9: Results in-line with volume by Q3 and better by Q4
Results in-line with volume by Q3 and better by Q4 2009 Quarterly Cost Structure Year-Over-Year Change (11%) (8%) (13%) (11%) (12%) (16%) (16%) (16%) (15%) (17%) (17%) (24%) (26%) (27%) (30%) (35%) First Quarter Second Quarter Third Quarter Fourth Quarter Volume Fuel Price-adjusted Variable Costs Fu
Slide 10: Recovering economy is favorable 2010 backdrop
Recovering economy is favorable 2010 backdrop Gross Domestic Product and Industrial Production Year-Over-Year Change 3.6% 2.1% 2.6% 1.5% 0.4% (2.2%) (2.5%) (9.8%) 2007 2008 2009 2010P Gross Domestic Product Industrial Production Source: Global Insight 10 10
Slide 11: Volume growth expected in 2010
Volume growth expected in 2010 The U.S. economy is expected to grow at a Economic modest rate of 2.6% off a low base Outlook Outlook Economies for the U.S.’s major trading partners are expected to grow 4.5%, led by China The inventory cycle remains strong for 2010 and Inventory is expected to
Slide 12: Second half utility coal volumes are less challenged
Second half utility coal volumes are less challenged Weekly 2009 Utility Coal Shipments Weekly Volume Quarterly Average Weekly Volume Recent Four-week 2010 Run-rate 3.5M 3.0M 2.5M 2.0M 1.5M 1.0M First Second Third Fourth Quarter Quarter Quarter Quarter Note: The recent run-rate for 2010 has been ext
Slide 13: Historically, U.S. coal exports to China were minimal
Historically, U.S. coal exports to China were minimal Total U.S. Seaborne Coal Exports Tons in Millions 50 40 30 U.S. U.S. exports exports to to China China 20 are are likely likely in in the the range range of of 10 10 million million tons tons for for 2010 2010 10 0 ‘00 ‘09 ‘00 ‘09 ‘00 ‘09 ‘00 ‘09
Slide 14: Change in China coal demand creates opportunity
Change in China coal demand creates opportunity China Coal Trade Top Coal-exporting Countries Tons in Millions Net Exports Net Imports Tons in Millions 2007 2008 2009 103 Australia 278 288 275 China China has has transitioned transitioned from from Indonesia 221 226 223 being being a net exporter of
Slide 15: CSX's 2010 export coal could approach 30M tons
CSX’s 2010 export coal could approach 30M tons Volume Estimates through CSX-served Ports Newport News – 17 million tons — Source: Central Appalachia Baltimore Northern Appalachia Newport News Baltimore – 7 million tons — Source: Northern Appalachia Mobile – 5 million tons Mobile — Source: Sout
Slide 16: Revenue growth expected in 2010
Revenue growth expected in 2010 Growth in Automotive, Merchandise, Intermodal and Coal markets expected Volume Domestic coal impacted through first half by high stockpiles; export coal will drive overall growth Core pricing expected to remain above inflation Same Store on strong service and va
Slide 17: Margin expansion expected in 2010
Margin expansion expected in 2010 Labor and fringe inflation is expected to reach $160 million in 2010 Inflation Higher union wages, management salaries and health care costs drive inflationary pressures Stronger growth in lower margin businesses, Intermodal and Automotive, is expected in 2010
Slide 18: Operating leverage will drive margin expansion
Operating leverage will drive margin expansion Volume is up 5% year-to-date, with crew starts down . . . Weekly Weekly Road Weekly Local Weekly Yard Volume(000) Crew Starts Crew Starts Crew Starts 107 8,831 2,724 5,245 102 Up Up 5% 5% 8,699 2,592 5,051 Down Down 1% 1% Down Down 5% 5% Down Down 4% 4%
Slide 19: CSX is well prepared as volume continues to build
CSX is well prepared as volume continues to build Furloughed employees Resources Available — Generally available within a few weeks T&E Employees furloughed 1,760 Newly-hired employees Percent of total 17% — Training of new employees takes four to six months Locomotives stored 485 Percent of tot
Slide 20: Capital investment remains strong in 2010
Capital investment remains strong in 2010 2010 Capital Spending Plan Nearly 70% targeted for $1.7 Billion infrastructure investment 10% Strategic capital largely 10% driven by National Gateway Equipment capital maintains 12% capacity and gains efficiency 68% Regulatory totals $200 million wi
Slide 21: Wrap up
Wrap up . . . The economic environment continues to improve — Macro and industrial economy expected to grow 2.6% and 3.6% respectively CSX is emerging as a stronger company — Delivered record operating margins despite 15% volume decline in 2009 Double-digit earnings growth expected for 2010 —
Slide 22: How tomorrow moves – Stifel Nicolaus Transportation & Logistics Conference
[ How tomorrow moves ] ee eo" 9010 STIFEL NICOLAUS TRANSPORTATION & LOGISTICS CONFERENCE
Slide 23: Appendix
Appendix
Slide 24: GAAP Reconciliation Disclosure
GAAP Reconciliation Disclosure CSX reports its financial results in accordance with generally accepted accounting principles (“GAAP”). However, management believes that certain non-GAAP financial measures used to manage the company’s business that fall within the meaning of Regulation G (Disclosure
Slide 25: GAAP Reconciliation
GAAP Reconciliation Full-year Results Dollars in millions 2006 2007 2008 2009 Operating Income $ 2,149 $ 2,260 $ 2,768 $ 2,285 Gain on Insurance Recoveries (168) - - - Comparable Operating Income $ 1,981 $ 2,260 $ 2,768 $ 2,285 Operating Margin 22.5% 22.5% 24.6% 25.3% Gain on Insurance Recoveries 1.
Slide 26: How tomorrow moves – Stifel Nicolaus Transportation & Logistics Conference
[ How tomorrow moves ] ee eo" 9010 STIFEL NICOLAUS TRANSPORTATION & LOGISTICS CONFERENCE
CSX — Stifel Nicolaus Transportation & Logistics Conference 2010 on 6ix