Slide 1: 2019 Third Quarter Earnings Conference Call
2019 THIRD QUARTER EARNINGS CONFERENCE CALL James M. Foote President and Chief Executive Officer
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: Third Quarter Highlights
THIRD QUARTER HIGHLIGHTS Volume 1,569K Revenue $2,978M Operating Income $1,287M Operating Ratio 56.8% EPS $1.08 Earnings Per Share Operating Ratio 58.7% $1.08 $1.05 56.8% 3% Growth 190 bps Improvement 2018 2019 2018 2019 5 2019 CSX THIRD QUARTER EARNINGS CONFERENCE CALL
Slide 6: Third Quarter Revenue Highlights
THIRD QUARTER REVENUE HIGHLIGHTS Merchandise Revenue Growth More Than Third Quarter Revenue Offset By Coal and Intermodal Declines Down 5% Percent Year over Year Chemicals declined as lower natural gas liquids and fly ash shipments were partially offset by industrial chemicals and waste growth Che
Slide 7: Third Quarter Safety Highlights
THIRD QUARTER SAFETY HIGHLIGHTS FRA Personal Injury Frequency Index Safety remains a key guiding principle at CSX 0.98 0.89 0.84 0.76 0.81 Continue to lead industry with lowest personal injury rate 3Q18 4Q18 1Q19 2Q19 3Q19 Set new company records for lowest train accident FRA Train Accident Ra
Slide 8: Third Quarter Operating Highlights
THIRD QUARTER OPERATING HIGHLIGHTS Train Velocity Gallons of Fuel per kGTM (miles per hour) 20.5 1.08 20.0 20.3 18.0 19.0 1.05 1.03 0.99 0.98 3Q18 4Q18 1Q19 2Q19 3Q19 3Q18 4Q18 1Q19 2Q19 3Q19 Terminal Car Dwell Distributed Power Trains per Day* (hours) 9.2 9.2 81 87 8.9 8.9 9.0 50 22 12 3Q18 4Q18 1Q
Slide 9: Third Quarter Service Highlights
THIRD QUARTER SERVICE HIGHLIGHTS Carload Trip Plan Compliance* Intermodal Trip Plan Compliance* Carload Intermodal 74.6% 73.2% 94.2% 72.5% 89.8% 79.8% 78.3% 73.4% 66.1% 65.8% 3Q18 4Q18 1Q19 2Q19 3Q19 3Q18 4Q18 1Q19 2Q19 3Q19 *Trip Plan Compliance measures success in meeting end-to-end customer commi
Slide 10: Financial Review
FINANCIAL REVIEW Kevin S. Boone EVP and Chief Financial Officer
Slide 11: Third Quarter Earnings Summary
THIRD QUARTER EARNINGS SUMMARY Third Quarter Income Statement Dollars in millions 2019 2018 Variance Revenue $ 2,978 $ 3,129 (5%) Expense Labor and Fringe 638 695 8% Materials, Supplies and Other 415 474 12% Depreciation 338 334 (1%) Fuel 223 268 17% Equipment and Other Rents 104 89 (17%) Equity Ear
Slide 12: Third Quarter Financial Measures
THIRD QUARTER FINANCIAL MEASURES Adjusted Free Cash Flow Shareholder Capital Investments Before Dividends Distributions Dollars in Millions Dollars in Millions Dollars in Millions Dividends Buybacks $1,240 $2,783 $1,191 $3,386 $3,344 $2,426 $2,816 $2,767 15% Growth $570 $577 Q3 2018 Q3 2019 Q3 2018
Slide 13: Closing Remarks
CLOSING REMARKS James M. Foote President and Chief Executive Officer
Slide 14: Looking Forward
LOOKING FORWARD Full-year revenue outlook of 1 to 2 percent decline Maintain sub-60% operating ratio expectation No change to $1.6 billion to $1.7 billion capital expenditure target Significant remaining opportunities to further improve service and efficiency 14 2019 CSX THIRD QUARTER EARNIN
Slide 15: Appendix
APPENDIX Non-GAAP Adjusted Free Cash Flow Reconciliation
Slide 16: Non-GAAP Adjusted Free Cash Flow Reconciliation
NON-GAAP ADJUSTED FREE CASH FLOW RECONCILIATION Adjusted Free Cash Flow Nine Months Ended Dollars in millions September 30, 2019 September 30, 2018 Net Cash Provided by Operating Activities $ 3,737 $ 3,406 Property Additions (1,191) (1,240) Other Investing Activities 237 249 Free Cash Flow (before p
Slide 17: CSX.com / Investors
|, osx ] CSX.COM / INVESTORS