Csx Corporation · NASDAQ:CSX
Csx — Q1 2023 Earnings Presentation
24 slides from Csx's earnings presentation, Apr 20, 2023
Slide 1: 2023 First Quarter Earnings Conference Call
2023 FIRST QUARTER EARNINGS CONFERENCE CALL 4.20.2023
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 Regulat
Slide 4: Executive Summary
EXECUTIVE SUMMARY Joe Hinrichs President and Chief Executive Officer
Slide 5: First Quarter Financial Highlights
First Quarter Financial Highlights 1,486K $3,706M $1,464M 60.5% Volume Revenue Op. Income Op. Ratio Revenue Operating Income Earnings Per Share $3,706M $0.48 $1,464M $3,413M $0.39 $1,282M Q1 22 Q1 23 Q1 22 Q1 23 Q1 22 Q1 23 9% Increase 14% Increase 23% Increase ONE CSX drives employee engagement and
Slide 6: Operations Review
OPERATIONS REVIEW Jamie Boychuk Executive Vice President of Operations
Slide 7: Leading with a Proactive Approach to Safe Operations
Leading with a Proactive Approach to Safe Operations Hot Bearing Craft Employee Autonomous Track First Responder Detectors Training Assessment Cars Training Bearing temperature alerts Robust classroom and ATACs operate on existing Utilizes customized train based on both trends and field-base
Slide 8: First Quarter Safety Highlights
First Quarter Safety Highlights FRA Personal Injury Frequency Index Safety is a guiding principle at CSX 1.07 1.11 1.04 0.97 0.82 Remain focused on instilling safety culture, especially in new hires, and eliminating life- changing events Q1 22 Q2 22 Q3 22 Q4 22 Q1 23 Confident in ability to improve
Slide 9: First Quarter Operating Highlights
First Quarter Operating Highlights MPH Train Velocity Dwell Hours 20 13 ‘23 Avg: 18.5 12 ‘22 Avg: 11.3 18 11 16 10 ‘22 Avg: 16.1 9 14 ‘23 Avg: 9.0 8 12 7 1Q22 2Q22 3Q22 4Q22 1Q23 1Q22 2Q22 3Q22 4Q22 1Q23 Intermodal Trip Plan Performance Carload Trip Plan Performance 100% 100% ‘23 Avg: 96% 95% ‘23 Av
Slide 10: Sales & Marketing Review
SALES & MARKETING REVIEW Kevin Boone Executive Vice President of Sales and Marketing
Slide 11: Merchandise Volume & Revenue Summary
Merchandise Volume & Revenue Summary Q1 Merchandise Revenue 2023 Commentary $2,163M Supportive pricing environment underscored by strength of recent contract renewals $1,921M +13% Volumes supported by: – Increasing auto production, strong aggregates Q1 22 Q1 23 demand, truck conversions, and new cus
Slide 12: Coal Volume & Revenue Summary
Coal Volume & Revenue Summary Q1 Coal Revenue 2023 Commentary $633M Export coal volume growth in both metallurgical and thermal markets $533M +19% – International met benchmarks reflect persistent demand – New four million ton mine ramping up in second Q1 22 Q1 23 half of the year Domestic coal supp
Slide 13: Intermodal Volume & Revenue Summary
Intermodal Volume & Revenue Summary Q1 Intermodal Revenue 2023 Commentary Soft international demand reflects declining $527M imports and full inventories $499M – International intermodal remains a significant (5%) headwind to total volumes – Customers, channel partners remain optimistic Q1 22 Q1 23
Slide 14: Expanding our Growth Profile through Industrial Development
Expanding our Growth Profile through Industrial Development Strong local connectivity: Increasing Customer Active engagement with Investment local developers feeds a pipeline of new investments $8.2 billion ~90 new facilities on-line in 2022 onto our network Enhanced Select Sites Growing Portfolio o
Slide 15: Financial Review
FINANCIAL REVIEW Sean Pelkey Executive Vice President and Chief Financial Officer
Slide 16: First Quarter Earnings Summary
First Quarter Earnings Summary First Quarter Income Statement Dollars in Millions 2023 2022 Variance x Revenue $ 3,706 $ 3,413 9% Expense 2,242 2,131 (5%) Operating Income $ 1,464 $ 1,282 14% Interest Expense & Other Income – Net (160) (153) (5%) Income Tax Expense (317) (270) (17%) Net Earnings $ 9
Slide 17: First Quarter Expense Up $111M
First Quarter Expense Up $111M Q1 23 Higher headcount and labor inflation partly Change in Expense Q1 22 offset by lower incentive compensation Labor & $723 Labor & Fringe Fringe $692 Insurance recovery more than offset by PS&O inflation, scheduled maintenance Purchased Purchased $688 Services costs
Slide 18: First Quarter Cash Flow and Distributions
First Quarter Cash Flow and Distributions Free Cash Flow CSX Cash Shareholder Before Dividends* Earnings (CCE)* Distributions In Millions In Millions In Millions Retroactive Payouts Buybacks Dividends $1,234 $1,293 $976 $232 $733 $218 $226 $816 $1,067 $568 $1,016 Q1 22 YTD Q1 23 YTD Q1 22 YTD Q1 23
Slide 19: Closing Remarks
CLOSING REMARKS Joe Hinrichs President and Chief Executive Officer
Slide 20: 2023 Guidance Update
2023 Guidance Update Low single digit revenue ton-mile growth for the full year, driven by merchandise and export coal – Merchandise volume growth supported by service recovery, strength in automotive and minerals, customer wins – Coal volume up on higher export shipments with Curtis Bay recovery an
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 Three Months Ended Dollars in millions Mar 31, 2023 Mar 31, 2022 Net Cash Provided by Operating Activities(a) $ 1,251 $ 1,299 Property Additions (443) (331) Proceeds and Advances from Property Dispositions 8 8 Free Cash Flow Before Dividends (non
Slide 23: Non-GAAP CSX Cash Earnings Reconciliation
Non-GAAP CSX Cash Earnings Reconciliation CSX Cash Earnings (CCE) Three Months Ended Dollars in millions Mar 31, 2023 Mar 31, 2022 Operating Income $ 1,464 $ 1,282 Adjustments: Depreciation, Operating Leases, Extraordinary Items(a) 419 365 Earnings before Interest, Taxes, Depreciation, Amortization
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