Slide 1: 2023 Third Quarter Conference Call
2023 THIRD QUARTER CONFERENCE CALL 10.19.2023
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 Regulati
Slide 4: Executive Summary
EXECUTIVE SUMMARY Joe Hinrichs President and Chief Executive Officer
Slide 5: Third Quarter Financial Highlights
Third Quarter Financial Highlights 1,550K Flat +9% 63.8% Total Volume Merch. Volume Coal Volume Operating Ratio Revenue Operating Income Earnings Per Share $3,895M $3,572M $1,579M $0.52 $1,295M $0.42 Q3 22 Q3 23 Q3 22 Q3 23 Q3 22 Q3 23 8% Decrease 18% Decrease 19% Decrease Maintaining focus on servi
Slide 6: Operations Review
OPERATIONS REVIEW Mike Cory Executive Vice President and Chief Operating Officer
Slide 7: Third Quarter Safety Highlights
Third Quarter Safety Highlights FRA Personal Injury Frequency Index Safety remains a guiding principle at CSX 1.11 1.07 0.97 0.87 0.98 Injury frequency and accident rate both increased sequentially and year-over-year Reduction of human factor and track-caused derailments are key focus points Q3 22 Q
Slide 8: Third Quarter Operating Highlights
Third Quarter Operating Highlights MPH Train Velocity Hours Dwell 20 13 3Q23 Avg: 17.6 12 18 11 3Q22 3Q23 Avg: 11.8 Avg: 9.6 16 10 3Q22 9 14 Avg: 15.8 8 12 7 3Q22 4Q22 1Q23 2Q23 3Q23 3Q22 4Q22 1Q23 2Q23 3Q23 Intermodal Trip Plan Performance Carload Trip Plan Performance 100% 100% 3Q23 3Q23 95% Avg:
Slide 9: Sales & Marketing Review
SALES & MARKETING REVIEW Kevin Boone Executive Vice President and Chief Commercial Officer
Slide 10: Merchandise Volume & Revenue Summary
Merchandise Volume & Revenue Summary Q3 Merchandise Revenue 4Q23 Expectations $2,143M Improving sequential trends in select key end $2,112M markets – Strong Midwestern harvest to benefit Ag and Food (1%) performance – Stable demand across automotive, minerals, metals Q3 22 Q3 23 Continued accumulati
Slide 11: Coal Volume & Revenue Summary
Coal Volume & Revenue Summary Q3 Coal Revenue 4Q23 Expectations $624M Continued strength in export coal volume in $594M both metallurgical and thermal markets – International met and thermal benchmarks increasing (5%) from mid-year levels – New mine on network expected to ramp up in late 2023 Q3 22
Slide 12: Intermodal Volume & Revenue Summary
Intermodal Volume & Revenue Summary Q3 Intermodal Revenue 4Q23 Expectations $604M Domestic volumes up mid-single digit $517M – Growth continuing from strong channel partner relationships, direct partnerships, truck conversion (14%) – Ample truck capacity remains a headwind International intermodal v
Slide 13: Domestic intermodal volume growth has turned positive
Domestic intermodal volume growth has turned positive Intermodal Volume Y/Y % Change by Market Rolling 4-week average International Domestic 2022 2023 0% 27 33 39 45 51 5 11 17 23 29 35 41 Week 13
Slide 14: Financial Review
FINANCIAL REVIEW Sean Pelkey Executive Vice President and Chief Financial Officer
Slide 15: Third Quarter Earnings Summary
Third Quarter Earnings Summary Third Quarter Income Statement Dollars in Millions 2023 2022 Variance Revenue $3,572 $3,895 (8%) Expense 2,277 2,316 2% Operating Income 1,295 $1,579 (18%) Interest Expense & Other Income - Net (169) (156) (8%) Income Tax Expense (280) (312) 10% Net Earnings $846 $1,11
Slide 16: Third Quarter Expense
Third Quarter Expense Q3 23 Q3 Y/Y Expense Comparison Q3 22 Sequential PS&O Comparison Labor & Fringe $752 $759 $684 ($23) $689 Purchased $689 Services & Other $18 $664 Depreciation $399 & Amortization $378 Q2 $349 Fuel $438 Equipment & $94 Other Rents $104 Gains on Property ($6) Q2 2023 Operations
Slide 17: Third Quarter Cash Flow and Distributions
Third Quarter Cash Flow and Distributions Free Cash Flow Shareholder Economic Profit Before Dividends* Distributions (CSX Cash Earnings)* In Millions In Millions In Millions Buybacks Dividends $2,869 $645 $2,222 $2,060 $2,494 $3,710 $666 $2,901 Q3 22 YTD Q3 23 YTD Q3 22 YTD Q3 23 YTD Q3 22 YTD Q3 23
Slide 18: Closing Remarks
CLOSING REMARKS Joe Hinrichs President and Chief Executive Officer
Slide 19: 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 – Full year coal volume up on higher export shipments; domestic coal
Slide 20: Appendix: Non-GAAP Reconciliations
APPENDIX Non-GAAP Reconciliations
Slide 21: Non-GAAP Free Cash Flow Reconciliation
Non-GAAP Free Cash Flow Reconciliation Free Cash Flow Nine Months Ended Dollars in millions Sep 30, 2023 Sep 30, 2022 Net Cash Provided by Operating Activities(a) $ 4,049 $ 4,255 Property Additions (1,590) (1,437) Proceeds and Advances from Property Dispositions 35 51 Free Cash Flow Before Dividends
Slide 22: Non-GAAP CSX Cash Earnings Reconciliation
Non-GAAP CSX Cash Earnings Reconciliation CSX Cash Earnings (CCE) Nine Months Ended Dollars in millions Sep 30, 2023 Sep 30, 2022 Operating Income $ 4,241 $ 4,564 Add: Depreciation, Amortization, and Operating Lease Expense 1,275 1,185 Remove: Unusual Items(a) - (142) Earnings before Interest, Taxes
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