Csx Corporation · NASDAQ:CSX

Csx — Dahlman Rose & Co. Global Transportation Conference 2010

23 slides from Csx's conference presentation, Sep 8, 2010

  1. Slide 1: How tomorrow moves – Dahlman Rose Global Transportation Conference

    [ How tomorrow moves ] ee eo" 201 DAHLMAN ROSE & CO. GLOBAL TRANSPORATION CONFERENCE

  2. Slide 2: Forward-Looking Statements

    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-savings,

  3. Slide 3: Current environment

    Current environment . . . „ Our focus on fundamentals continues to yield results — Strong earnings growth and expanding margins in first half of 2010 to continue „ Economic recovery continues — Growth sustainable, even with Europe and China potentially slowing „ Operating leverage fundamentals remai

  4. Slide 4: Strong financial results at record levels

    Strong financial results at record levels Operating Continuing Operating Margin Income in Millions Earnings Per Share $1,400 27.2% $1,335 $1.81 $1.84 24.8% 23.8% 21.3% 22.0% $1,091 $1,097 $1,011 $1.35 $1.24 $1.10 3,696 3,696 3,582 3,492 3,696 3,582 3,582 3,492 3,492 3,084 3,084 2,830 3,084 2,830 2,8

  5. Slide 5: While macro-economy appears less certain

    While macro-economy appears less certain . . . Economic growth has slowed . . . . . . and unemployment still high Real Gross Domestic Product Unemployment Rate Year-Over-Year Change 8% 12% 4% 9% 0% 6% (4%) 3% (8%) 0% 2006 2007 2008 2009 2010 2006 2007 2008 2009 2010 Source: Global Insight 55

  6. Slide 6: Industry expanding without inventory buildup

    . . . industry expanding without inventory buildup . . . Manufacturing still growing. . . . . . and inventories remain low ISM Manufacturing ISM Manufacturing Purchasing Managers Index Customer Inventories Index 70 70 60 60 50 50 40 40 30 30 ‘00 ‘01 ‘02 ‘03 ‘04 ‘05 ‘06 ‘07 ‘08 ‘09 ‘10 ‘00 ‘01 ‘02 ‘0

  7. Slide 7: Key rail drivers indicate further expansion

    . . . and key rail drivers indicate further expansion Coal Mining Production (YOY Change) Imports (YOY Change) 2.6% 1.7% 11.9% 0.5% 6.1% 2.7% (1.6%) (2.6%) (7.1%) (13.8%) 2006 2007 2008 2009 2010 2006 2007 2008 2009 2010 NA Light Vehicle Production (millions) Consumer Spending (YOY Change) 15.3 15.0

  8. Slide 8: Volume returning after prolonged freight recession

    Volume returning after prolonged freight recession Year-Over-Year Volume Growth 13% 11% 5% (7%) (15%) (17%) (21%) Q1 2009 Q2 2009 Q3 2009 Q4 2009 Q1 2010 Q2 2010 Q3-to-Date Note: Q3 2010 represents volume levels as of August 20, 2010 88

  9. Slide 9: Growth versus 2009 occurring in all major markets

    Growth versus 2009 occurring in all major markets Year-Over-Year Volume Growth First Quarter Second Quarter Third Quarter-to-Date 20% Intermodal 18% 14% 8% Merchandise 14% 12% 3% Coal 7% (13%) 11% Total 13% 5% Note: Third quarter reflects data through August 20, 2010 99

  10. Slide 10: Energy demand and weather driving coal volumes

    Energy demand and weather driving coal volumes „ Eastern U.S. averaging inventory of 60 days — Down nearly 30% from peak 45 Days „ Industrial energy demand recovering 70 - 75 Days — CSX volume up 24% from 2009 „ CSX remains confident on 65 Days export coal shipments — About 30 million tons for 2010

  11. Slide 11: Second half utility coal volume now at 2009 levels

    Second half utility coal volume now at 2009 levels Weekly Utility Coal Shipments (tons) 2009 Weekly Volume 2009 Quarterly Average Weekly Volume 2010-to-Date Weekly Volume 3.5M 3.0M 2.5M 2.0M 1.5M 1.0M First Second Third Fourth Quarter Quarter Quarter Quarter Note: Third quarter reflects data through

  12. Slide 12: Automotive volume driving metals and chemicals

    Automotive volume driving metals and chemicals First Half 2010 Volume „ Near-term NALV annual (516K Carloads) production at 11.5 million — Inventories remain stable Automotive Chemicals Metals „ Longer-term, NALV production 25% expected to grow 31% — Close to 14 million by 2012 „ Chemicals and Metal

  13. Slide 13: A variety of factors drive intermodal gains

    A variety of factors drive intermodal gains Durable Goods Consumption (YOY Change) „ Demand remains strong 8% 7% — Durable consumption increasing — Consumer sentiment improving (5%) (4%) „ Capacity tightening 2008 2009 2010 2011 — Domestic container availability low — Driver shortages in trucking in

  14. Slide 14: CSX's double-stack network nearly in place

    CSX’s double-stack network nearly in place „ Key routes double-stacked — Midwest to New York — Midwest to Florida „ Western connectivity in place — Strong western partnerships — Enhances competitive position „ Eastern connectivity improving — National Gateway to Midwest — Massachusetts corridor — No

  15. Slide 15: Operating leverage continues to drive efficiencies

    Operating leverage continues to drive efficiencies Year-Over-Year Change in Volume and Crew Starts First Quarter Second Quarter Third Quarter-to-Date 7% Road Crew Starts 9% (1%) 3% Local & Yard Crew 3% Starts (3%) 5% Total Crew Starts 6% (2%) 11% Volume 13% 5% Note: Third quarter reflects data throu

  16. Slide 16: Summary market outlook nearly 90% favorable

    Summary market outlook nearly 90% favorable First Half 2010 Volume „ Energy, consumer driven, and (3.1 Million Carloads) industrial outlook favorable — Both near and long-term Energy, Consumer Driven, and Industrial Agricultural Sector Housing Sector „ Agriculture sector benefiting from key volume d

  17. Slide 17: The formula for success evolves in 2010 and beyond

    The formula for success evolves in 2010 and beyond H1 Volume H1 Operating Income R3R=2 P= +P V + v+ P In Thousands In Millions Growth in Charted „ Competitive pricing above Waters inflation sustainable long-term 3,696 $1,335 2010 Growth in $303 Growth 612 Charted Waters „ Productivity is making CSX

  18. Slide 18: Wrap up

    Wrap up . . . „ While macro-indicators remain less certain near-term, rail industry factors remain generally strong „ CSX’s operating leverage expected to continue throughout 2010, leading to further margin expansion „ Growth over next few years through “charted waters” provides CSX with strong earn

  19. Slide 19: How tomorrow moves

    [ How tomorrow moves ] ee eo" 201 DAHLMAN ROSE & CO. GLOBAL TRANSPORATION CONFERENCE

  20. Slide 20: Appendix

    Appendix

  21. Slide 21: GAAP Reconciliation Disclosure

    GAAP Reconciliation Disclosure 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

  22. Slide 22: GAAP Reconciliation

    GAAP Reconciliation First Half Results Dollars in millions 2006 2007 2008 2009 2010 Operating Income $ 1,137 $ 1,091 $ 1,335 $ 1,097 $ 1,400 Gain on Insurance Recoveries (126) - - - - Comparable Operating Income $ 1,011 $ 1,091 $ 1,335 $ 1,097 $ 1,400 Operating Margin 23.9% 22.0% 23.8% 24.8% 27.2% G

  23. Slide 23: How tomorrow moves

    [ How tomorrow moves ] ee eo" 201 DAHLMAN ROSE & CO. GLOBAL TRANSPORATION CONFERENCE

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