Csx Corporation · NASDAQ:CSX
Csx — UBS Fourth Annual Best of Americas Conference 2009
22 slides from Csx's conference presentation, Sep 10, 2009
Slide 1: UBS Fourth Annual Best of Americas Conference September 2009
UBS Fourth Annual Best of Americas Conference September 2009 11
Slide 2: Forward-Looking Disclosure
Forward-Looking Disclosure This information 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 other
Slide 3: Core shareholder value drivers
Core shareholder value drivers . . . Industry fundamentals are strong long-term — Growing population, congested highways, environment focus favors railroads Company competitively positioned among peers — Network serves all major markets in the eastern United States Management team driven to pr
Slide 4: Long-term fundamentals drive Rail Renaissance
Long-term fundamentals drive Rail Renaissance Over Over time, time, .. .. .. will will consume consume .. .. .. and and those those things things more more people people .. .. .. more more things things .. .. .. need need to to be be moved moved U.S. Population U.S. Consumption U.S. Transportation i
Slide 5: Highway congestion drives long-term opportunity
Highway congestion drives long-term opportunity Surface Transportation U.S. Highway Congestion Tonnage Market Share Today Barge 8% Rail 15% 2020 Truck 77% CSX Territory Sources: Transearch and USDOT FHWA Freight Analysis Framework 55
Slide 6: Competitive environment shifting in favor of rails
Competitive environment shifting in favor of rails Trucking Industry Railroad Industry Highway congestion increasing Service quality improving Structural changes occurring Supply chains are expanding Regulatory restrictions continue Focus on “green” is increasing Overall capacity decli
Slide 7: Inflation-plus price increases expected long-term
Inflation-plus price increases expected long-term Inflation-Adjusted Pricing Indexed: 1981 = $100 Pre-deregulation, rail pricing kept pace with inflation During the first 23 years after the passage of the Staggers Act, rail pricing declined by 60% R2 $100 $51 $40 1968 1972 1976 1980 1984 1988 1992 1
Slide 8: CSX's competitive position is strong among peers
CSX’s competitive position is strong among peers Serves all major markets in the eastern United States — Markets account for over 65% of U.S. population and 75% of consumption Links all major industry and natural resource centers — Strong presence in coal, phosphates, and aggregates support key
Slide 9: CSX has a diverse and balanced business portfolio
CSX has a diverse and balanced business portfolio Percent of First Half 2009 Revenues Coal Energy Energy Group 5 Production 33% Production Life-essential Life-essential Needs Needs Agriculture, Phosphates, Food & Consumer Agriculture Agriculture Group 4 Related 18% 51% Related Intermodal, Automotive
Slide 10: Diverse portfolio lessens current economic impact
Diverse portfolio lessens current economic impact Year-Over-Year Volume Decline (16.5%) (18.4%) (20.0%) (20.2%) (20.5%) (22.3%) BNI CSX CNI UNP CP NSC Note: Reflects data through August 2009 10 10
Slide 11: Productivity/rightsizing helping offset volume decline
Productivity/rightsizing helping offset volume decline First Half 2009 First Half 2009 CSX Cost Structure Year-Over-Year Change 46% (10%) Fixed and (14%) Indirect (19%) Long-term Short-term Variable Variable (43%) 29% 25% Volume ST LT Fixed Variable Variable 11 11
Slide 12: First half results resilient despite volume decline
First half results resilient despite volume decline Comparable Operating Comparable Operating Income and Volume Margin and Volume 24.9% $1,343 23.9% 21.4% 21.8% $1,079 $1,104 $1,016 3,696 3,582 3,492 3,696 3,582 3,492 2,830 2,830 1H 2006 1H 2007 1H 2008 1H 2009 1H 2006 1H 2007 1H 2008 1H 2009 Op. In
Slide 13: Management actions driving margin expansion
Management actions driving margin expansion First Half Comparable Operating Margins 24.9% 23.9% 21.4% 21.8% Rightsized resources 18.4% Rolled out TSI initiative 12.7% Realigned network with disciplined investment Focused on process excellence teams and value pricing Rolled out ONE Plan Aligned resou
Slide 14: First-half confirms industry-leading momentum
First-half confirms industry-leading momentum First Half 2009 Comparable Operating Margin and Improvment First Half 2009 Improvement versus First Half 2004 (bps) 30.5% 24.9% 22.8% 22.4% 21.2% 1,220 17.4% 980 510 40 (40) (80) CNI CSX BNI NSC UNP CP Note: See GAAP Reconciliation; peer railroad data ba
Slide 15: Performance top-tier across key business drivers
Performance top-tier across key business drivers 2004 – LTM Growth/Improvement Rankings CSX NSC BNI UNP CNI CP Safety/Service Personal Injury 1 5 6 4 3 2 Train Accidents 1 5 3 2 6 4 Customer Satisfaction 2 5 6 1 4 3 Operating Income 1 4 3 2 5 6 Operating Margin 1 3 4 2 5 6 Financial Earnings Per Sha
Slide 16: Performance supports balanced capital deployment
Performance supports balanced capital deployment Growing Growing Free Free Cash Cash Flow Flow and and Improving Improving Return Return on on Invested Invested Capital Capital .. .. .. Capital Capital Share Share Dividends Dividends Investment Investment Buybacks Buybacks 9 Invested $7B since 9 Mor
Slide 17: Strengthening position for long-term value creation
Strengthening position for long-term value creation Core earning power is resilient in current economy — First half results represent second highest earnings in company history Margins remain stable despite volume decline — Positions CSX to emerge stronger when the economy returns to growth Ma
Slide 18: UBS Fourth Annual Best of Americas Conference September 2009
UBS Fourth Annual Best of Americas Conference September 2009 18 18
Slide 19: Appendix
Appendix
Slide 20: 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
Slide 21: GAAP Reconciliation
GAAP Reconciliation First Half Results Dollars in millions 2004 2005 2006 2007 2008 2009 Operating Income $ 431 $ 788 $ 1,142 $ 1,097 $ 1,343 $ 1,104 Gain on Insurance Recoveries - - (126) (18) - - Management Restructuring Charge 68 - - - - - Comparable Operating Income $ 499 $ 788 $ 1,016 $ 1,079 $
Slide 22: UBS Fourth Annual Best of Americas Conference September 2009
UBS Fourth Annual Best of Americas Conference September 2009 22 22
CSX — UBS Fourth Annual Best of Americas Conference 2009 on 6ix