Slide 1: 2020 Fourth Quarter Earnings Conference Call
2020 FOURTH QUARTER EARNINGS CONFERENCE CALL 01.21.2021
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 James M. Foote President and Chief Executive Officer
Slide 5: Fourth Quarter Highlights
FOURTH QUARTER HIGHLIGHTS 1,599K $2,825M $1,215M Volume Revenue Op. Income Operating Income increased 5% Operating Income Operating Ratio Earnings Per Share year over year $1,215M 60.0% $0.99 $0.99 $1,154M Operating Ratio improved 300 57.0% bps to new Q4 record EPS of $0.99, includes $0.05 of early
Slide 6: Fourth Quarter Revenue Highlights
FOURTH QUARTER REVENUE HIGHLIGHTS Intermodal Volume and Revenue Growth Fourth Quarter Revenue Offset by Declines in Coal Down 2% Year Over Year Chemicals increased due to higher shipments of plastics, waste and crude oil, partially offset by lower shipments of frac sand and natural gas liquids Chemi
Slide 7: Fourth Quarter and Full Year Safety Highlights
FOURTH QUARTER AND FULL YEAR SAFETY HIGHLIGHTS FRA Personal Injury Frequency Index Safety is a guiding principle at CSX Quarterly Annual 1.15 1.04 0.90 Record Q4 low number of injuries 0.76 0.76 0.81 0.61 Full year injuries and train accidents at record low levels Q1 20 Q2 20 Q3 20 Q4 20 FY 18 FY19
Slide 8: Successfully Leveraging New Technologies
SUCCESSFULLY LEVERAGING NEW TECHNOLOGIES Continued Expanding investment in autonomous train and track inspection Investment in Safety & Inspection Piloting new drone-based yard and track inspection programs Creating smarter, more autonomous intermodal yards Realizing Efficiencies Across Extending be
Slide 9: Committed to Sustainable Operations
COMMITTED TO SUSTAINABLE OPERATIONS CSX is expanding the sustainability benefits CSX’s fuel efficiency advantage vs. trucks allowed our customers to avoid CO2 of rail by focusing on fuel efficiency and emissions equivalent to: customer service Improved fuel efficiency by 16% compared to CSX’s pre-PS
Slide 10: Fourth Quarter Operating Highlights
FOURTH QUARTER OPERATING HIGHLIGHTS Train Velocity Fuel Efficiency Miles per Hour Gallons per kGTM 21.3 21.2 21.2 19.6 18.9 1.01 0.99 0.96 0.93 0.94 Q4 19 Q1 20 Q2 20 Q3 20 Q4 20 Q4 19 Q1 20 Q2 20 Q3 20 Q4 20 Terminal Car Dwell Locomotive Efficiency Average Hours per Car GTM’s per Available HP 9.7 1
Slide 11: Maintaining Strong Operating Leverage
MAINTAINING STRONG OPERATING LEVERAGE Volume and Resources vs. February YoY Change in Volume and Resources Indexed (February = 100) YoY % Change 115 10% Volume Active T&E Train Starts Volume Active T&E Train Starts 110 5% 105 0% 100 95 (5%) 90 (10%) 85 (15%) 80 (20%) 75 70 (25%) Feb Apr Jun Aug Oct
Slide 12: Fourth Quarter Service Highlights
FOURTH QUARTER SERVICE HIGHLIGHTS Carload Trip Plan Performance Intermodal Trip Plan Performance 100% 100% 95% 96% 94% 90% 90% 87% 83% 84% 81% 80% 80% 80% 73% 75% 70% 70% 60% 60% 50% 50% 40% 40% Q4 19 Q1 20 Q2 20 Q3 20 Q4 20 Q4 19 Q1 20 Q2 20 Q3 20 Q4 20 Trip Plan Performance measures success in mee
Slide 13: Financial Review
FINANCIAL REVIEW Kevin S. Boone EVP and Chief Financial Officer
Slide 14: Fourth Quarter Earnings Summary
FOURTH QUARTER EARNINGS SUMMARY Fourth Quarter Income Statement Dollars in millions 2020 2019 Variance Revenue $ 2,825 $ 2,885 (2%) Expense Labor and Fringe 588 658 11% Materials, Supplies and Other 445 426 (4%) Depreciation 347 344 (1%) Fuel 139 216 36% Equipment and Other Rents 91 87 (5%) Total Ex
Slide 15: Full Year Cash and Free Cash Flow
FULL YEAR CASH AND FREE CASH FLOW Free Cash Flow Cash and Short-Term Capital Investments Before Dividends* Investments Balance In Millions In Millions In Millions $1,657 $1,626 $3,478 $3,131 $2,646 $1,954 FY 2019 FY 2020 FY 2019 FY 2020 Dec 31, 2019 Dec 31, 2020 * See Appendix for Non-GAAP reconcili
Slide 16: Closing Remarks
CLOSING REMARKS James M. Foote President and Chief Executive Officer
Slide 17: Looking Forward
LOOKING FORWARD Expect volumes to outpace GDP growth ‒ Merchandise volume growth exceeds Industrial Production ‒ Intermodal volumes grow faster than Merchandise ‒ Coal market improving from 2020 trough levels Improving service levels while controlling costs Targeting capital expenditures in the $1.7
Slide 18: Appendix
APPENDIX Non-GAAP Free Cash Flow Reconciliation
Slide 19: Non-GAAP Free Cash Flow Reconciliation
NON-GAAP FREE CASH FLOW RECONCILIATION Free Cash Flow Twelve Months Ended Dollars in millions Dec 31, 2020 Dec 31, 2019 Net Cash Provided by Operating Activities $ 4,263 $ 4,850 Property Additions (1,626) (1,657) Other Investing Activities 9 285 Free Cash Flow Before Dividends (non-GAAP) $ 2,646 $ 3
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