Slide 1: 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, margins, volumes, rates, cost
Slide 2: Executive Summary
Executive Summary Michael Ward Chairman, President and Chief Executive Officer Third quarter performance . . . Volume 1,758K Revenue $3,221M Operating Income $976M Operating Ratio 69.7% EPS $0.51 Earnings Per Share Revenue increases 8% — Driven by broad-based strength across nearly all markets $0.
Slide 3: Sales and Marketing Review
Sales and Marketing Review Clarence Gooden Executive Vice President Chief Sales and Marketing Officer Economy continues to expand in the third quarter ISM Manufacturing ISM Manufacturing Purchasing Managers Index Customer Inventory Index 59 57 57 57 57 57 55 55 55 54 53 51 Above 50 = Expansion Below
Slide 4: Sales and Marketing summary
Sales and Marketing summary . . . Volume (000) Revenue (millions) Revenue per Unit All-in Core Pricing 1,758 $3,221 $1,817 $1,832 1,643 $2,985 1.0% 0.2% Q3 2013 Q3 2014 Q3 2013 Q3 2014 Q3 2013 Q3 2014 Q3 2013 Q3 2014 Market Split Market Split Market Split Core Merchandise Merchandise Coal Merchandis
Slide 5: Intermodal revenue increases 6%
Intermodal revenue increases 6% Revenue $455M Volume 691K RPU $658 Third Quarter Third Quarter Summary Year-Over-Year Change Second consecutive record quarter Revenue 6% — Domestic volume driven by H2R Volume 5% conversion and organic growth — International volume up as economy RPU 0% continues to
Slide 6: Overall outlook for the Fourth quarter is favorable
Overall outlook for the Fourth quarter is favorable Outlook Markets Drivers Chemicals Strength in oil and gas related markets continues Food & Consumer Increase in food and beverage shipments Metals Growth in steel production expected to continue Favorable Minerals Replenishing salt
Slide 7: CSX a leader in one of the nation's safest industries
CSX a leader in one of the nation’s safest industries FRA Personal Injury Rate FRA Train Accident Rate 1.09 1.05 2.41 2.25 0.93 1.99 1.87 0.77 Q3 2011 Q3 2012 Q3 2013 Q3 2014 Q3 2011 Q3 2012 Q3 2013 Q3 2014 13 Network performance stable on strong demand On-time On-time 2014 Weekly Originations Arriv
Slide 8: Operating team focused on recovery and growth
Operating team focused on recovery and growth CSX Resource – Service Framework Active T&E crews up by a net 300 Crews 1,300 crews in training by year-end Chicago interline planning Continue to hire for attrition and growth in 2015 Winter 2014-15 preparations Ongoing customer communicatio
Slide 9: Third quarter earnings summary
Financial Review Fredrik Eliasson Executive Vice President Chief Financial Officer Third quarter earnings summary . . . Third Quarter Results Dollars in millions, except EPS 2014 2013 Variance Revenue $ 3,221 $ 2,985 8% Expense 2,245 2,145 (5%) Operating Income $ 976 $ 840 16% Interest Expense (137)
Slide 10: Fuel lag tailwind is $14 million year-over-year
Fuel lag tailwind is $14 million year-over-year Fuel Surcharge Lag Impact Weekly Highway Diesel Monthly Highway Diesel (two-month lag) Negative Impact Positive Impact $14 million year-over-year positive lag impact ($6) Million $7 Million ($9) Million $4 Million $8 Million Q3 2013 Q4 2013 Q1 2014 Q2
Slide 11: Third quarter expense analysis
Third quarter expense analysis . . . Labor Analysis in Millions MS&O Analysis in Millions Fuel Analysis in Millions 2013 Labor Expense $ 791 2013 MS&O Expense $ 576 2013 Fuel Expense $ 407 Volume (25) Volume (23) Volume (32) Inflation (18) Casualty and Other (16) Price 20 Insourcing Agreement (15) I
Slide 12: Financial wrap-up
Financial wrap-up . . . Core earnings improvement more apparent — Broad-based strength across nearly all markets drives earnings growth Fourth quarter EPS growth expected to be roughly similar — Reflects stable operations and continued strong volume growth Still expect modest earnings growth f
Slide 13: Relentless pursuit of excellence
Relentless pursuit of excellence . . . 25