Slide 1: Relentless Pursuit of Excellence
Relentless Pursuit of Excellence May 2008 Exhibit 99.1
Slide 2: Presentation Outline
Presentation Outline 2 Executive Summary Safety and Service Performance Financial Performance Corporate Governance GAAP Reconciliation Appendix
Slide 3: Executive Summary
Executive Summary
Slide 4: CSX Corporation is a high-performance company
CSX Corporation is a high-performance company 4 Delivering superior value for all shareholders Leads industry and S&P 500 over one, three and five years Fastest growing company in an attractive industry An industry leader in safety, service and financial performance Driving exceptional long-term fin
Slide 5: CSX leads in value creation
CSX leads in value creation 5 Our record speaks for itself Delivering strong operating and financial performance Driving fastest rate of growth in an attractive industry Returning capital to shareholders at most aggressive rate among our peers Proof is in shareholder returns – stock appreciation and
Slide 6: CSX delivering industry-leading shareholder value
CSX delivering industry-leading shareholder value 6 Note: Stock price performance as of April 25, 2008; adjusted for splits One-Year Stock Performance
Slide 7: CSX ranks in top 4% of S&P over three years
CSX ranks in top 4% of S&P 500 over three years 7 Note: Stock price performance as of April 25, 2008; adjusted for splits
Slide 8: CSX is also market leader over one and five years
CSX is also market leader over one and five years 8 Note: Stock price performance as of April 25, 2008; adjusted for splits
Slide 9: Industry-leading improvements drive performance
Industry-leading improvements drive performance 9 Earnings Per Share Operating Margin Operating Income Terminal Dwell Network Velocity Train Accidents Personal Injuries CP CNI UNP BNI NSC CSX Key Measures 2004 – 2007 Growth/Improvement Rankings
Slide 10: First quarter confirms industry-leading momentum
First quarter confirms industry-leading momentum 420 760 410 1,240 270 10 (30)
Slide 11: Controlling costs through productivity
Controlling costs through productivity 11 1Q04–1Q08 CAGR 4.9% 1.4% 2.3% 2.2% 0.5% 0.1% Excluding Fuel 8.7% NSC 6.8% BNI 6.6% UNP 5.4% CNI 3.9% CSX 3.6% CP Expense per RTM Rank/Company Note: See GAAP Reconciliation for CSX data; peer comparisons based on railroad financial reports and CSX analysis We
Slide 12: CSX's capitalization has quadrupled since 2004
CSX’s capitalization has quadrupled since 2004 12 Note: Market capitalization as of April 25, 2008; comparable earnings based on GAAP Reconciliation and First Call data Comparable Q1 2008 Net Earnings Dollars in Millions Q1 2008 Revenues in Billions
Slide 13: Superior financial performance to continue
Superior financial performance to continue 13 Exceed $1B in 2010 Free Cash Flow Before Dividends Near 30% By 2010 Operating Margin 18%–21% CAGR Earnings Per Share 13%–15% CAGR Operating Income 2008–2010 Targets Note: CAGR’s are off comparable 2007 results; EPS targets are stated before the impact of
Slide 14: Driving value through strategic capital deployment
Driving value through strategic capital deployment Capital Investment Share Buybacks Dividends 14 Investing $5B through 2010 to support long-term growth Repurchased nearly $3B since 2006 Targeting another $3B by year-end 2009 Nearly tripled the quarterly dividend since 2005 . . . While maintaining a
Slide 15: TCI Group's attacks ignore reality
TCI Group’s attacks ignore reality 15 Under this management team, CSX’s earnings and margins have been the fastest growing in an attractive industry Stock performance over the last one, three and five years is industry leading and top-tier across the broader S&P 500 CSX is recognized by RiskMetrics
Slide 16: TCI Group's demands would impair value
TCI Group’s demands would impair value 16 Current Board has presided over industry-leading performance Replace current Board of Directors Investing for long-term growth and value creation Freeze expansion capital spending Managing regulatory concerns; pricing to the market reflecting value of servic
Slide 17: Red flags surround TCI Group's candidates
Red flags surround TCI Group’s candidates The choice between director slates is clear 17 Tim O’Toole Gary Wilson Alex Behring Chris Hohn Chaired a publicly traded company sold through a distressed sale, and has a career characterized by buyouts Gil Lamphere Led Northwest Airlines into bankruptcy and
Slide 18: Red flags surround TCI's governance approach
Red flags surround TCI’s governance approach The choice between director slates is clear 18 Chris Hohn alleges TCI is only seeking a “shareholder voice” Yet, Hohn and TCI representatives have provided insight into how the group would use the Board voting block it is seeking TCI has said it will “go
Slide 19: CSX Board expert, diverse and performance driven
CSX Board expert, diverse and performance driven Compelling Transportation Experience Blue Chip Business Experience Governance and Policy Expertise The choice between director slates is clear 19 Over 100 years of Board experience in rail, financial and industrial companies CSX, Honeywell, Altria, Ha
Slide 20: Incumbents targeted by TCI provide strong expertise
Incumbents targeted by TCI provide strong expertise The choice between director slates is clear 20 As a medical and healthcare expert, he has served as Chairman of the National Medical Association. His diverse Board experience includes Fortune-500 companies in the transportation, energy, banking, he
Slide 21: CSX's governance ranks among best-in-class
CSX’s governance ranks among best-in-class “Holy Trinity” of Takeover Defenses Does Not Apply at CSX Other Provisions Are Key to a Strong Governance Foundation 21 No poison pill Board is elected annually; majority vote in uncontested elections Special shareholder meetings can be called by investors
Slide 22: Board and management driving proactive changes
Board and management driving proactive changes Corporate Restructuring New Management Operational Improvement Balance Sheet Optimization 22 Most aggressive capital structure among its peers Repurchased nearly $3 billion of stock since 2006 Targeting further $3 billion buyback through 2009 Nearly tri
Slide 23: CSX is building lasting shareholder value
CSX is building lasting shareholder value 23 CSX is driving superior performance for all shareholders Safety, service, financial and value creation Significant momentum is expected to continue Striving for industry leadership across full spectrum This Board of Directors and management team have pres
Slide 24: Safety and Service Performance
Safety and Service Performance
Slide 25: Recognized industry leader in safety and service
Recognized industry leader in safety and service 25 Safety performance has improved significantly CSX ranks among leaders in one of nation’s safest industries On-time performance at all-time highs On-time originations up 61% and arrivals up 71% Network reliability driving greater efficiency Shipment
Slide 26: Safety measures improved significantly since 2004
Safety measures improved significantly since 2004 26 41% Improvement 47% Improvement Source: Federal Railroad Administration Data
Slide 27: Improvements position CSX as an industry leader
Improvements position CSX as an industry leader . . . 27 Source: 2007 Federal Railroad Administration Data
Slide 28: In one of the nation's safest industries
. . . in one of the nation’s safest industries 28 Note: Incidence rates of total recordable cases of nonfatal occupational injuries and illnesses are per 100 full-time workers
Slide 29: On-time performance at all-time highs
On-time performance at all-time highs 29 61% Increase 71% Increase
Slide 30: Network efficiency approaching all-time best levels
Network efficiency approaching all-time best levels 30 21% Improvement 5% Increase
Slide 31: Customers recognize CSX's excellent performance
Customers recognize CSX’s excellent performance 31 CSX ranks among industry leaders in overall satisfaction Correlates to internal operating measure gains Strong service supports pricing initiatives Source: Survey of CSX customers by a leading independent third-party surveyor
Slide 32: Customer awards are numerous and diverse
Customer awards are numerous and diverse 32 Schneider National names CSX carrier of the year (2007) Ford names CSX carrier of the year (2007) Landstar Global Logistics names CSX carrier of the year (2006) C.H. Robinson names CSX carrier of the year (2007) Hyundai recognizes CSX with Club Elite award
Slide 33: Financial Performance
Financial Performance
Slide 34: Producing superior financial performance
Producing superior financial performance 34 Significantly increasing core earning power More than doubled operating income; nearly tripled earnings per share from continuing operations since 2004 Driving margin expansion through price and productivity Comparable operating margins nearly doubled sinc
Slide 35: Operating income more than doubled since 2004
Operating income more than doubled since 2004 35 28% CAGR 11% S&P 500 15% NSC 17% CNI 18% BNI 22% CP 28% CSX 30% UNP 2004-2007 CAGR Rank/Company Note: See GAAP Reconciliation for CSX data; peer comparisons based on First Call data
Slide 36: Operating margins nearly doubled since 2004
Operating margins nearly doubled since 2004 36 900 bps (90) bps S&P 500 290 bps BNI 330 bps CNI 410 bps NSC 450 bps CP 810 bps UNP 900 bps CSX 2004-2007 Improvement Rank/Company Note: See GAAP Reconciliation for CSX data; peer comparisons based on First Call data
Slide 37: Targeting margins among industry leaders by 2010
Targeting margins among industry leaders by 2010 37 Near 30% 900 bps 500 – 800 bps Note: See GAAP Reconciliation for CSX data; peer comparisons based on First Call data
Slide 38: Earnings per share nearly tripled since 2004
Earnings per share nearly tripled since 2004 38 39% CAGR 8% S&P 500 20% NSC 22% BNI 24% CNI 32% CP 34% UNP 39% CSX 2004-2007 CAGR Rank/Company Note: See GAAP Reconciliation for CSX data; peer comparisons based on First Call data
Slide 39: Continued strong financial performance expected
Continued strong financial performance expected 39 Exceed $1B in 2010 Free Cash Flow Before Dividends Near 30% By 2010 Operating Margin 18%–21% CAGR Earnings Per Share 13%–15% CAGR Operating Income 2008–2010 Targets Note: CAGR’s are off comparable 2007 results; EPS targets are stated before the impa
Slide 40: Key investments will support long-term growth
Key investments will support long-term growth 40 Infrastructure 60% Track Structures Equipment 20% Locomotives Freight cars Strategic 20% Technology Network capacity Terminal capacity Note: Capital spending excludes capital related to Hurricane Katrina and The Greenbrier
Slide 41: Recent actions reflect strong confidence in CSX
Recent actions reflect strong confidence in CSX 41 $3.0 Billion Share Buyback Program Builds on nearly $3 billion repurchased since 2006 Consistent with BBB-/Baa3 capital structure objectives Targeting completion by year-end 2009 20% Increase Quarterly Dividend Nearly Tripled Since 2005
Slide 42: Corporate Governance
Corporate Governance
Slide 43: Board presides over nation-critical business
Board presides over nation-critical business 43 New Orleans Chicago St Louis Memphis Network serves all major eastern U.S. markets Two-thirds of U.S. population Three-fourths of U.S. consumption Ships life-essential goods that: Build and power homes Feed and clothe families Support economic growth S
Slide 44: CSX Board expert, diverse and performance driven
CSX Board expert, diverse and performance driven Compelling Transportation Experience Blue Chip Business Experience Governance and Policy Expertise Mgmt Independence And Performance Driven 44 No social relationships exist between Board members and management The Board has rigorous succession plannin
Slide 45: CSX's Board is a leader in governance
CSX’s Board is a leader in governance 45 CSX has presiding independent director with delineated duties Consistent with prevailing practice in the United States CSX has a strong independent board CEO is the only management director, with eleven outside directors Best practices already in place at CSX
Slide 46: TCI does not meet business or shareholder needs
TCI does not meet business or shareholder needs TCI Group CSX Corporation 46 Advocated proposals that create an “event” and sacrifice results Certain proposals have drawn negative rating agency and congressional reaction Lacks understanding of CSX’s business model and the rail industry in general Ha
Slide 47: CSX Board and management delivering value
CSX Board and management delivering value 47 Proven record of delivering value to shareholders Superior stock performance, investing for long-term growth, nearly tripled dividends, targeting nearly $6 billion of buybacks between 2006 and 2009 Presiding over fastest growing company in an attractive i
Slide 48: GAAP Reconciliation
GAAP Reconciliation
Slide 49: GAAP Reconciliation
GAAP Reconciliation 49 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-G
Slide 50: GAAP reconciliation to comparable results
GAAP reconciliation to comparable results 50 $ 2.70 $ 2.22 $ 1.70 $ 1.00 Comparable EPS From Continuing Operations ) $ 2.74 (0.04 - - - - ) ) ) $ 2.82 (0.22 (0.06 (0.32 - - ) $ 1.59 - - (0.16 0.27 - ) $ 0.94 - (0.04 - - 0.10 EPS From Continuing Operations Less Gain on Insurance Recoveries Less Gain
Slide 51: Appendix
Appendix
Slide 52: Comparison of capital spending relative to revenue
Comparison of capital spending relative to revenue 52 Note: Capital spending based on CSX analysis
Slide 53: CSX demonstrates environmental leadership
CSX demonstrates environmental leadership 53 First railroad to join EPA’s Climate Leaders program Charter member of SmartWay Transport Partnership EPA SmartWay Excellent Award winner in 2007 Association of American Railroads environmental leader AAR Chafee Environmental Excellence Award for five of
Slide 54: CSX recognized as progressive employer
CSX recognized as progressive employer 54 City Year National Sponsor – Supporting eight major cities DiversityInc – Top 50 Company for Diversity G.I. Jobs Magazine – Top 50 Company Black MBA Magazine – Top Company for Black MBA’s to Work CollegeGrad.com – Top 500 Entry Level Company Hispanic Busines
Slide 55: Proxy Statement Disclosure
Proxy Statement Disclosure 55 Important Information In connection with the solicitation of proxies, CSX Corporation ("CSX") has filed with the SEC and mailed to shareholders a definitive proxy statement dated April 25, 2008 in connection with its 2008 Annual Meeting. Security holders are strongly ad
Slide 56: Forward-Looking Disclosure
Forward-Looking Disclosure 56 This presentation and other statements by the company 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, cost-savings, expenses, or ot