Slide 1: Forward-Looking Statements
11 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, volumes, rates, cost-savin
Slide 2: Executive Summary: Fourth quarter performance
Executive Summary Michael Ward Chairman, President and Chief Executive Officer Fourth quarter performance . . . Volume 1,691K Revenue $2,816M Operating Income $846M Operating Ratio 70.0% EPS $1.14 Earnings Per Share Revenue growth — Driven by volume growth, core $1.14 pricing and fuel surcharge
Slide 3: Full-year performance
Full-year performance . . . Volume 6,384K Revenue $10,636M Operating Income $3,071M Operating Ratio 71.1% EPS $4.06 Operating Operating Earnings Income in Billions Ratio Per Share $3.1 $4.06 74.9% $2.3 $2.89 71.1% Improves Improves 35% 35% Improves Improves 380 380 bps bps Improves Improves 40% 40%
Slide 4: Revenue, volume and RPU include an extra week
Revenue, volume and RPU include an extra week Revenue in Millions Volume (000) 1,691 (93) 1,598 1,498 $2,816 ($171) Improves Improves 7% 7% on on comparable comparable basis basis $2,645 Q4 2009 Q4 2010 Extra Comparable $2,320 Week Q4 2010 Revenue Per Unit $1,665 ($10) $1,655 Improves Improves 14% 1
Slide 5: Improving economy drives 7% volume increase
Improving economy drives 7% volume increase Revenue $2,645M Volume 1,598K RPU $1,655 Year-Over-Year Change in Volume 11% 7% 5% 4% Intermodal Merchandise Coal Total Note: All data expressed on a comparable 13-week basis; see reconciliation to GAAP in appendix 99 Revenue per unit increases 7% Revenue
Slide 6: Coal revenue increases 26%
Coal revenue increases 26% Revenue $807M Volume 384K RPU $2,102 Fourth Quarter Fourth quarter summary Year-Over-Year Change — Increased exports driven by Asian and European markets Revenue 26% — Higher utility burn and industrial Volume 5% output drive domestic demand RPU 20% — Weather impacted vo
Slide 7: Merchandise markets show broad-based growth
Merchandise markets show broad-based growth Revenue $1,439M Volume 633K RPU $2,273 Housing and Agriculture Sector Industrial Sector Construction Sector Revenue 9% Revenue 16% Revenue 6% Volume (3%) Volume 10% Volume 4% RPU 12% RPU 6% RPU 2% 12% 34% 42% 39% 54% 36% 22% 61% Agricultural Products Autom
Slide 8: Sales and Marketing wrap-up
Sales and Marketing wrap-up . . . Economic backdrop remains favorable for 2011 — All major economic indicators point to sustainable growth Overall volume growth expected to exceed GDP and IDP — Intermodal, Merchandise and Coal markets expected to register growth Core pricing expected to exceed
Slide 9: Building on operating performance excellence
Building on operating performance excellence Culture of commitment driving enhanced performance Safety — Safety Continuing to deliver strong performance — Customer Service Mutual Customer Operations Driving more customer-focused railroad Accountability Service Reliability — Operations Reliability
Slide 10: Operations reliability remains at strong levels
Operations reliability remains at strong levels Train Performance Network Performance On-time Originations Average Velocity (mph) 81% 85% 79% 22.0 75% 21.2 21.2 21.3 Q4 2007 Q4 2008 Q4 2009 Q4 2010 Q4 2007 Q4 2008 Q4 2009 Q4 2010 On-time Arrivals Terminal Dwell (hours) 73% 77% 79% 25.5 70% 24.3 23.2
Slide 11: Productivity helping offset non-fuel inflation
Productivity helping offset non-fuel inflation Productivity Savings Process Improvement Teams Dollars in Millions Locomotives $264 Infrastructure $193 $151 $138 $142 Cars & Terminals $86 Train & Engine 2005 2006 2007 2008 2009 2010 21 21 Contributing to record fourth quarter operating ratio Fourth Q
Slide 12: Network positioned for continued growth
Network positioned for continued growth Network capacity — Southeastern Corridor expansion — I-90 Corridor expansion Chicago — Chicago CREATE project New York Intermodal terminals — New terminals in key markets — Expansions support further growth Strategic investments — National Gateway Jackso
Slide 13: Hiring plans in place to sustain momentum
. . . and hiring plans in place to sustain momentum Hiring over 2,900 across all major crafts Plan offsets anticipated attrition of over 2,500 Increase in headcount supports business growth Training time requires hiring ahead of attrition PTC-related hiring ramps up during year 25 25 Opera
Slide 14: Fourth quarter earnings summary
Financial Review Oscar Munoz Executive Vice President Chief Financial Officer Fourth quarter earnings summary . . . Fourth Quarter Results Dollars in millions, except EPS 2010 2009 Variance Revenue $ 2,816 $ 2,320 21% Expense 1,970 1,741 (13%) Operating Income $ 846 $ 579 46% Interest Expense (149)
Slide 15: Fuel lag was a headwind in the fourth quarter
Fuel lag was a headwind in the fourth quarter Fuel Surcharge Lag Impact Positive Impact Negative Impact ($5) ($4) $2 ($20) Million Million Million Million Q1 2010 Q2 2010 Q3 2010 Q4 2010 Weekly Highway Diesel Fuel Monthly Highway Diesel Fuel (two-month lag) Note: Fourth quarter 2010 results include
Slide 16: MS&O expense declines 4%
MS&O expense declines 4% MS&O Expense Fourth Quarter Dollars in Millions MS&O Analysis in Millions $609 2009 MS&O Expense $ 517 $506 $517 $496 Variance Inland Transportation 45 Casualty Reserve 20 Volume and Other (44) Subtotal 21 2010 MS&O Expense $ 496 Q4 2007 Q4 2008 Q4 2009 Q4 2010 Note: Fourth
Slide 17: Depreciation increases 14% and rents increase 8%
Depreciation increases 14% and rents increase 8% Depreciation Rent Expense Dollars in Millions Dollars in Millions $257 $110 $227 $226 $96 $95 $219 $88 Q4 2007 Q4 2008 Q4 2009 Q4 2010 Q4 2007 Q4 2008 Q4 2009 Q4 2010 Note: Fourth quarter 2010 results include the extra week 33 33 Full-year earnings su
Slide 18: Free Cash Flow supporting balanced approach
Free Cash Flow supporting balanced approach Generated $1.5 billion of Free Cash Flow in 2010 Capital Investment Dividends Share Buybacks Dollars in Billions Per Share Cumulative Buybacks Dollars in Billions $1.8 $5.6 $1.7 $1.7 $1.6 $0.98 $0.88 $1.4 $4.2 $4.2 $0.77 $0.54 $2.6 $0.33 $0.22 $0.5 '06 '
Slide 19: Financial wrap-up
Financial wrap-up . . . Enter 2011 with strong financial foundation in place — Across the board strength in liquidity, earning power and cash flow generation Top-line drivers strong with favorable economic backdrop — Expect to grow above GDP and IDP, with core pricing gains above rail inflation
Slide 20: Appendix
Relentless pursuit of excellence . . . 39 39 Appendix
Slide 21: Non-GAAP Reconciliation
Non-GAAP Reconciliation CSX reports its financial results in accordance with generally accepted accounting principles (GAAP). However, management believes that certain non-GAAP financial measures used to manage the company’s business that fall within the meaning of Regulation G (Disclosure of Non-GA
Slide 22: Non-GAAP Reconciliation – Fourth Quarter Volume
Non-GAAP Reconciliation – Fourth Quarter Volume Less Comparable Units in thousands As Reported Extra Week 13- 13-week Basis Chemicals 117 8 109 Phosphates and Fertilizers 76 5 71 Automotive 96 4 92 Emerging Markets 107 4 103 Agricultural Products 121 8 113 Forest Products 70 5 65 Metals 60 4 56 Food
Slide 23: Non-GAAP Reconciliation – Full-year 2010 Free Cash Flow
Non-GAAP Reconciliation – Full-year 2010 Free Cash Flow Dollars in millions 2010 Net cash provided by operating activities $ 3,246 Property additions (1,825) Other investing activities 69 Free Cash Flow $ 1,490 45 45 Fuel Surcharge Disclosure Fourth Quarter Dollars in millions 2010 2009 Variance Tot
Slide 24: 2010 Fourth Quarter Earnings Conference Call
2010 FOURTH QUARTER EARNINGS CONFERENCE CALL