Slide 1: 2024 Third Quarter Conference Call
2024 THIRD QUARTER CONFERENCE CALL 10.16.2024
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: Third Quarter Financial and Operational Highlights
Third Quarter Financial and Operational Highlights +3% +6% 37.4% +180 bps Total Volume Merchandise Revenue Operating Margin Y/Y Op Margin Revenue Operating Income Earnings Per Share $3,572M $3,619M $1,354M $0.46 $1,271M $0.41 +1% Y/Y increase +7% Y/Y increase +12% Y/Y increase Q3 23 Q3 24 Q3 23 Q3 2
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 1.31 Safety is a core principle at CSX 1.20 1.22 1.05 0.71 New “SAFE CSX” program underway, driving ONE CSX forward through safety leadership Taking tangible steps to strengthen our Q3 23 Q4 23 Q1 24 Q2 24 Q3 24 fundamental safety c
Slide 8: Focus on Fluidity as Network Design Initiatives Take Shape
Focus on Fluidity as Network Design Initiatives Take Shape MPH Train Velocity 20 Velocity trending favorably compared to last year, 3Q23 Avg: 17.6 reflecting purposeful changes 18 3Q24 Avg: 18.6 ̶ Improved track maintenance efficiency 16 ̶ Effective, continuous train plan reviews 14 3Q23 4Q23 1Q24 2
Slide 9: Q3 Service Metrics Affected by Weather
Q3 Service Metrics Affected by Weather Intermodal Trip Plan Performance Carload Trip Plan Performance 100% 100% 3Q23 3Q24 Avg: 93.6% 3Q23 3Q24 95% Avg: 92.2% 90% Avg: 82.2% Avg: 80.0% 80% 90% 70% 85% 60% 80% 50% 3Q23 4Q23 1Q24 2Q24 3Q24 3Q23 4Q23 1Q24 2Q24 3Q24 Customer Switch Data 100% 95% 3Q23 Avg
Slide 10: Sales & Marketing Review
SALES & MARKETING REVIEW Kevin Boone Executive Vice President and Chief Commercial Officer
Slide 11: Merchandise Volume & Revenue Summary
Merchandise Volume & Revenue Summary Q3 Merchandise Revenue 4Q24 Expectations Merchandise volume supported by consistent $2,231M operational performance, new business wins, and $2,112M stability in key markets, partially offset by lingering +6% hurricane effects ‒ Positives include favorable demand
Slide 12: Coal Volume & Revenue Summary
Coal Volume & Revenue Summary Q3 Coal Revenue 4Q24 Expectations $594M $553M Export coal volumes remaining steady, supported by consistent terminal execution and solid demand in Asia, Europe (7%) ‒ Global benchmark prices have rebounded from recent lows, remain below year-ago Q3 23 Q3 24 levels Domes
Slide 13: Intermodal Volume & Revenue Summary
Intermodal Volume & Revenue Summary Q3 Intermodal Revenue 4Q24 Expectations $517M $509M Slowing y/y growth for International volumes, reflecting seasonality (2%) – Continued benefits from new service lanes and customer alignments – Effects of ILA strike not material to overall Q3 23 Q3 24 business Q
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 2024 2023 Variance Revenue $3,619 $3,572 1% Expense 2,265 2,301 2% Operating Income $1,354 $1,271 7% Interest Expense & Other Income - Net (170) (169) (1%) Income Tax Expense (290) (274) (6%) Net Earnings $894 $828 8%
Slide 16: Third Quarter Expense Comparisons
Third Quarter Expense Comparisons Q3 24 Labor increase driven by inflation and higher Quarterly Expense Comparison Q3 23 headcount Labor & Fringe $806 PS&O down due to lower casualty costs, an $761 inventory adjustment, and efficiency savings, Purchased $675 partly offset by inflation Services & Oth
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 Q3 Q1-Q2 Buybacks Dividends Q3 Q1-Q2 $2,519 $1,993 $2,218 $1,865 $666 $2,901 $700 $1,212 Q3 23 YTD Q3 24 YTD Q3 23 YTD Q3 24 Y
Slide 18: Closing Remarks
CLOSING REMARKS Joe Hinrichs President and Chief Executive Officer
Slide 19: 2024 Guidance Update
2024 Guidance Update ▪ Delivered meaningful growth and margin expansion in Q3, though external factors make Q4 more challenging – Q4 volume expected to grow modestly, with continued strength in Chemicals, Ag & Food, and other Merchandise markets offset by softer-than-expected Metals and Automotive c
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