Csx Corporation · NASDAQ:CSX
Csx — Goldman Sachs Global Industrials Conference 2009
20 slides from Csx's conference presentation, Nov 4, 2009
Slide 1: Goldman Sachs Global Industrials Conference November 2009
Goldman Sachs Global Industrials Conference November 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: Current CSX environment
Current CSX environment . . . Worst economic recession in past half century abating — Volumes continue to moderate going into the back half of the fourth quarter Company emerging from recession stronger — Earning power and margins have been resilient in current environment Value of rail transp
Slide 4: Economic environment continues to moderate
Economic environment continues to moderate Year-Over-Year Volume Change First Quarter Second Quarter Third Quarter Fourth Quarter-to-Date (1%) (7%) (12%) (13%) (14%) (10%) (17%) (16%) (23%) (22%) (21%) (18%) (23%) (28%) (41%) (53%) Percent of Total Volume Q1 Q4 Q1 Q4 Q1 Q4 Q1 Q4 3% 5% 36% 35% 31% 35
Slide 5: Utility stock piles likely remain high well into 2010
Utility stock piles likely remain high well into 2010 Eastern Power Sector 76 76 days days Tons in Millions of of inventory inventory 67 67 days days 62 62 days days 100 of of inventory inventory of of inventory inventory 90 80 70 60 50 40 30 2001 2002 2003 2004 2005 2006 2007 2008 2009 Coal Consump
Slide 6: Core earning power resilient during recession
Core earning power resilient during recession Results Through First Three Quarters Comparable Operating Comparable Operating Income and Volume Margin and Volume 25.3% $2,076 24.2% $1,636 $1,702 22.0% $1,494 20.8% 5,548 5,548 5,355 5,224 5,355 5,224 4,295 4,295 2006 2007 2008 2009 2006 2007 2008 2009
Slide 7: Sustained cost focus yields sequential improvement
Sustained cost focus yields sequential improvement 2009 Quarterly Cost Structure Year-Over-Year Variance (6%) (8%) (11%) (14%) (17%) (17%) (16%) (16%) (16%) (16%) (24%) (26%) (27%) (30%) (35%) First Quarter Second Quarter Third Quarter Volume Adjusted Variable Costs Fixed Costs Adjusted Total Costs
Slide 8: Core pricing has remained firm in this environment
Core pricing has remained firm in this environment Year-Over-Year Change Same Store Sales Price Increase Total Revenue per Unit 21.2% 18.3% 14.5% 14.0% 10.5% 8.0% 6.5% 6.7% 6.8% 6.4% 6.2% 6.5% 6.5% 6.6% 6.3% 0.2% (5.4%) (8.7%) Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 2007 2007 2008 2008 2008 2008 2009 2009 2009 N
Slide 9: Strong service and market environment driving price
Strong service and market environment driving price Strong Strong Service Service + Evolving Evolving Marketplace Marketplace Pricing Pricing Opportunity Opportunity On-Time Rail Industry “Same Store Sales” Originations Advantages Price Increase 6.6% 6.7% 6.5% 6.5% 82% Highway congestion increasin
Slide 10: Inflation-plus price increases expected long-term
Inflation-plus price increases expected long-term Inflation-Adjusted Pricing Indexed: 1981 = $100 Pre-deregulation, rail pricing During the first 23 years after the passage kept pace with inflation of the Staggers Act, rail pricing declined by 50% $100 $51 1968 1972 1976 1980 1984 1988 1992 1996 200
Slide 11: Inflation-plus pricing supports other key industries
Inflation-plus pricing supports other key industries Compound Annual Rate Increases Between 1990 and 2008 7.5% 4.8% 2.3% 1.2% Rail Electricity Grain Chemical Source: UBS Investment Research 11 11
Slide 12: 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 13: Competitive advantages driving market share shift
Competitive advantages driving market share shift Surface Transportation Rail Industry Advantages Tonnage Market Share Barge 8% Highway congestion increasing Rail 15% Supply chains are expanding Rail service is improving Focus on “green” intensifying Truck 77% Extreme regulatory change unl
Slide 14: CSX's network leverages long-term fundamentals
CSX’s network leverages long-term fundamentals Mega-regions Serves all major markets in the eastern United States Served by CSX — Markets account for over 65% of Midwest population and 75% of consumption Links all major industry and Northeast natural resource centers — Strong presence in coal, a
Slide 15: Strengthening position for long-term value creation
Strengthening position for long-term value creation CSX emerging from recession as a stronger company — Earning power and margins have been resilient in current environment Pricing the value of rail transportation is long-term focus — Expect core price increases above rail inflation for 2010 and
Slide 16: Goldman Sachs Global Industrials Conference November 2009
Goldman Sachs Global Industrials Conference November 2009 16 16
Slide 17: Appendix
Appendix
Slide 18: 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 19: GAAP Reconciliation
GAAP Reconciliation Results Through First Three Quarters Dollars in millions 2006 2007 2008 2009 Operating Income $ 1,635 $ 1,655 $ 2,076 $ 1,702 Gain on Insurance Recoveries (141) (19) - - Comparable Operating Income $ 1,494 $ 1,636 $ 2,076 $ 1,702 Operating Margin 22.8% 22.2% 24.2% 25.3% Gain on I
Slide 20: Goldman Sachs Global Industrials Conference November 2009
Goldman Sachs Global Industrials Conference November 2009 20 20
CSX — Goldman Sachs Global Industrials Conference 2009 on 6ix