Slide 1: 2023 Fourth Quarter Conference Call
2023 FOURTH QUARTER CONFERENCE CALL 1.24.2024
Slide 2: Forward Looking Disclosure
Forward Looking Disclosure 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, margins, volumes, rates, cost
Slide 3: Non-GAAP Measures Disclosure
Non-GAAP Measures Disclosure CSX reports its financial results in accordance with accounting principles generally accepted in the United States of America (U.S. GAAP). CSX also uses certain non-GAAP measures that fall within the meaning of Securities and Exchange Commission Regulation G and Regulati
Slide 4: Executive Summary
EXECUTIVE SUMMARY Joe Hinrichs President and Chief Executive Officer
Slide 5: Building a foundation for long-term, profitable growth: Key 2023 ONE CSX Achievements
Building a foundation for long-term, profitable growth Key 2023 ONE CSX Achievements Improved safety performance through the year Consistent, industry-leading service metrics with improving cycle times and efficiency Merchandise volume growth ahead of industrial production, solid coal volume growth,
Slide 6: Fourth Quarter Financial and Operational Highlights
Fourth Quarter Financial and Operational Highlights Total Volume Total Revenue 1,560k $3,730M 1,539k $3,680M 1% Increase 1% Decrease Q4 22 Q4 23 Q4 22 Q4 23 Merchandise Volume Earnings Per Share 648k $0.49 632k $0.45 3% Increase 8% Decrease Q4 22 Q4 23 Q4 22 Q4 23 2023 FOURTH QUARTER EARNINGS CONFER
Slide 7: Operations Review
OPERATIONS REVIEW Mike Cory Executive Vice President and Chief Operating Officer
Slide 8: Fourth Quarter and Full Year Safety Results
Fourth Quarter and Full Year Safety Results FRA Personal Injury Frequency Index Quarterly Annual Safety remains a core principle at CSX 1.01 Implementation of unionized mentors 1.13 1.09 0.89 1.01 and risk-based safety strategies have 0.89 0.57 helped drive substantial improvement Injury frequency a
Slide 9: Key Fourth Quarter Service Metrics Improved vs. 2022
Key Fourth Quarter Service Metrics Improved vs. 2022 MPH Train Velocity Hours Dwell 20 13 12 18 4Q23 11 4Q23 4Q22 Avg: 18.3 Avg: 9.6 16 Avg: 17.5 10 4Q22 9 Avg: 10.3 14 8 12 7 4Q22 1Q23 2Q23 3Q23 4Q23 4Q22 1Q23 2Q23 3Q23 4Q23 Intermodal Trip Plan Performance Carload Trip Plan Performance 100% 100% 4
Slide 10: Operations Initiatives Driving Impactful Change
Operations Initiatives Driving Impactful Change Operational Highlights Achieved year-over-year improvement for key service metrics through 2023 Q4 average train tonnage reached the highest levels of the year Substantially reduced cycle times for grain and coal unit trains through year-end Leveraging
Slide 11: Sales & Marketing Review
SALES & MARKETING REVIEW Kevin Boone Executive Vice President and Chief Commercial Officer
Slide 12: Merchandise Volume & Revenue Summary
Merchandise Volume & Revenue Summary Q4 Merchandise Revenue FY Merchandise Revenue 2024 Expectations Total merchandise volume $2,182M $8,653M growth supported by service $2,074M $8,239M leadership, recent business wins, +5% +5% and modal share gains Promising trends emerging in Chemicals, Forest Pro
Slide 13: Coal Volume & Revenue Summary
Coal Volume & Revenue Summary Q4 Coal Revenue FY Coal Revenue 2024 Expectations $626M Robust export coal demand, with $620M $2,484M $2,434M volumes supported by unit train performance and new mine ramp-up (1%) 2% – Current spot global met coal benchmarks remain elevated – Export thermal prices have
Slide 14: Intermodal Volume & Revenue Summary
Intermodal Volume & Revenue Summary Q4 Intermodal Revenue FY Intermodal Revenue 2024 Expectations $573M $2,306M Continued momentum for $552M domestic volumes $2,060M – Anticipate solid growth led by (4%) (11%) strong channel partner relationships, direct partnerships, truck conversion Q4 22 Q4 23 FY
Slide 15: Financial Review
FINANCIAL REVIEW Sean Pelkey Executive Vice President and Chief Financial Officer
Slide 16: Fourth Quarter & Full Year Earnings Summary
Fourth Quarter & Full Year Earnings Summary Fourth Quarter Full Year Income Statement Income Statement Dollars in Millions Q4 2023 Q4 2022 Variance FY 2023 FY 2022 Variance Revenue $3,680 $3,730 (1%) $14,657 $14,853 (1%) Expense 2,360 2,271 (4%) 9,096 8,830 (3%) Operating Income $1,320 $1,459 (10%)
Slide 17: Fourth Quarter Expense
Fourth Quarter Expense Q4 23 Labor increase driven by inflation, higher Change in Expense Q4 22 headcount, and increased union employee vacation and sick benefits Labor & $808 Labor & Fringe Fringe $726 PS&O expenses stable, with inflation mostly Purchased Purchased $703 offset by efficiency gains S
Slide 18: Full Year Cash Flow and Distributions
Full Year Cash Flow and Distributions Free Cash Flow Shareholder Economic Profit* Before Dividends* Distributions In Millions In Millions In Millions Buybacks Dividends $3,732 $3,320 $852 $2,962 $4,731 $2,658 $882 $3,482 FY 22 FY 23 FY 22 FY 23 FY 22 FY 23 * See Appendix for Non-GAAP reconciliation
Slide 19: Closing Remarks
CLOSING REMARKS Joe Hinrichs President and Chief Executive Officer
Slide 20: 2024 Guidance Led by Solid Volume Growth
2024 Guidance Led by Solid Volume Growth ▪ Low to mid-single digit total volume and revenue growth – Solid momentum across Merchandise, Intermodal, and Export Coal ▪ Profitability supported by solid pricing, improving efficiency, and lower cost inflation ▪ Capex of approximately $2.5 billion – Safet
Slide 21: Appendix: Non-GAAP Reconciliations
APPENDIX Non-GAAP Reconciliations
Slide 22: Non-GAAP Free Cash Flow Reconciliation
Non-GAAP Free Cash Flow Reconciliation Free Cash Flow Twelve Months Ended Dollars in millions Dec 31, 2023 Dec 31, 2022 Net Cash Provided by Operating Activities $ 5,549 $ 5,619 Property Additions (2,281) (2,133) Proceeds and Advances from Property Dispositions 52 246 Free Cash Flow Before Dividends
Slide 23: Non-GAAP Economic Profit Reconciliation
Non-GAAP Economic Profit Reconciliation Economic Profit Twelve Months Ended Dollars in millions Dec 31, 2023 Dec 31, 2022 Net Income $ 3,715 $ 4,166 Add: Income Tax Expense 1,176 1,248 Remove: Other Income - Net (139) (133) Add: Interest Expense 809 742 Add: Depreciation, Amortization, and Operating
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