Slide 1: 2022 Fourth Quarter Earnings Conference Call
2022 FOURTH QUARTER EARNINGS CONFERENCE CALL 1.25.2023
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: Fourth Quarter & Full Year Financial Highlights
Fourth Quarter & Full Year Financial Highlights Revenue Operating Income Earnings Per Share $3,730M $0.49 $1,459M $0.42 $3,427M $1,366M 9% Increase 7% Increase 17% Increase Q4 21 Q4 22 Q4 21 Q4 22 Q4 21 Q4 22 $1.95 $14,853M $6,023M $5,594M $1.68 $12,522M 19% Increase 8% Increase 16% Increase FY 21 F
Slide 6: Sales & Marketing Review
SALES & MARKETING REVIEW Kevin Boone Executive Vice President of Sales and Marketing
Slide 7: Merchandise Volume & Revenue Summary
Merchandise Volume & Revenue Summary Q4 Merchandise Revenue FY Merchandise Revenue 2023 Commentary $2,074M $8,239M Supportive pricing $1,937M environment underscored by $7,539M strength of recent contract +7% +9% renewals Volumes supported by: Q4 21 Q4 22 FY 21 FY 22 – Automotive inventory replenish
Slide 8: Coal Volume & Revenue Summary
Coal Volume & Revenue Summary Q4 Coal Revenue FY Coal Revenue 2023 Commentary $2,434M $626M Export coal volume growth expected in both metallurgical $523M $1,790M +36% and thermal markets +20% – New 4 million ton capacity mine to ramp up starting 2H Q4 21 Q4 22 FY 21 FY 22 – Lapping issues at Curtis
Slide 9: Intermodal Volume & Revenue Summary
Intermodal Volume & Revenue Summary Q4 Intermodal Revenue FY Intermodal Revenue 2023 Commentary $2,306M $573M Softening international demand $551M $2,039M reflects slowing imports and full +13% inventories +4% Developing strategic opportunities for domestic Q4 21 Q4 22 FY 21 FY 22 intermodal – Conti
Slide 10: Expanding Environmental Leadership
Expanding Environmental Leadership 2022 CSX ESG Awards & Recognition Developing awareness that rail’s efficiency advantage reduces supply chain emissions Fortune: World’s Most Admired Companies ‒ CSX customers avoided 10 million tons of CO2 S&P Global: Corporate Sustainability Top emissions in 2022
Slide 11: Operations Review
OPERATIONS REVIEW Jamie Boychuk Executive Vice President of Operations
Slide 12: Fourth Quarter & Full Year Safety Highlights
Fourth Quarter & Full Year Safety Highlights FRA Personal Injury Frequency Index Quarterly Annual Safety is a guiding principle at CSX 1.07 0.91 0.82 0.97 0.97 0.96 0.96 Focus on instilling safety culture in new hires and eliminating life-changing events Q4 21 Q1 22 Q2 22 Q3 22 Q4 22 FY 21 FY 22 Red
Slide 13: Operating Highlights
Operating Highlights MPH Train Velocity Dwell Hours 2021 2022 2021 2022 20 14 13 13% 18 Improved vs. 3Q 12 16 11 10 14 11% 9 Improved vs. 3Q 12 8 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Intermodal Trip Plan Performance Carload Trip Plan Performance 2021 2022 2021 2022 100% 100% 90% 90% +20 pts Improved vs. 3Q 80% 8
Slide 14: Fourth Quarter T&E Hiring Highlights
Fourth Quarter T&E Hiring Highlights Employees in Training Conductor Promotions Active T&E Employees Average Daily Employees Total Employees Average Daily Employees 778 367 6,886 6,759 303 311 6,667 561 565 254 509 6,397 6,422 436 156 Current In Current Active Training: 659 T&E: 7,067 Q4 21 Q1 22 Q2
Slide 15: Financial Review
FINANCIAL REVIEW Sean Pelkey Executive Vice President and Chief Financial Officer
Slide 16: Fourth Quarter & Full Year Earnings Summary
Fourth Quarter & Full Year Earnings Summary Fourth Quarter Full Year Income Statement Income Statement Dollars in Millions Q4 2022 Q4 2021 Variance FY 2022 FY 2021 Variance x Revenue $ 3,730 $ 3,427 9% $ 14,853 $ 12,522 19% Expense 2,271 2,061 (10%) 8,830 6,928 (27%) Operating Income $ 1,459 $ 1,366
Slide 17: Fourth Quarter Expense Up $210M On Fuel and Inflation
Fourth Quarter Expense Up $210M On Fuel and Inflation Q4 22 Higher fuel price was the largest driver of Change in Expense Q4 21 the expense increase Labor & $726 Labor & Fringe Fringe $703 Labor inflation and additional headcount Purchased Purchased $699 were partially offset by lower incentive Serv
Slide 18: Full Year Cash Flow and Distributions
Full Year Cash Flow and Distributions Free Cash Flow Capital Shareholder Before Dividends* Expenditures Distributions In Millions In Millions In Millions Proceeds from Property Dispositions Buybacks Dividends $3,833 $5,583 $3,732 $2,133 $852 $3,486 $4,731 $3,304 $1,791 $3,725 $839 $2,886 FY 21 FY 22
Slide 19: Closing Remarks
CLOSING REMARKS Joe Hinrichs President and Chief Executive Officer
Slide 20: Guiding Principles Enabled by ONE CSX
Guiding Principles Enabled by ONE CSX Optimize Asset Improve Customer Value & Develop Operate Safely Control Costs Utilization Service Employees Eliminated life-changing Maintained balanced Sustained strong core Added needed T&E Successfully on-boarded events operating plan profitability i
Slide 21: 2023 Guidance Summary
2023 Guidance Summary GDP+ volume gains, supported by solid Merchandise and Coal growth – Merchandise growth supported by service recovery, modal share gains, strength in Automotive – Coal volume up on higher export shipments with Curtis Bay recovery and increased production at CSX-served mines – Ne
Slide 22: Appendix
APPENDIX Non-GAAP Free Cash Flow Reconciliation
Slide 23: Non-GAAP Free Cash Flow Reconciliation
Non-GAAP Free Cash Flow Reconciliation Free Cash Flow Twelve Months Ended Dollars in millions Dec 31, 2022 Dec 31, 2021 Net Cash Provided by Operating Activities $ 5,619 $ 5,099 Property Additions (2,133) (1,791) Proceeds and Advances from Property Dispositions 246 529 Other Investing Activities(a)
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