Slide 1: CSX Corporation 2017 Fourth Quarter Earnings Conference Call
CSX CORPORATION 2017 FOURTH QUARTER EARNINGS CONFERENCE CALL
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: Fourth Quarter Highlights
FOURTH QUARTER HIGHLIGHTS Volume 1,601K Revenue $2,863M Operating Income $1,121M Operating Ratio 60.9% EPS $4.62 Earnings Per Share Operating Ratio $4.62 67.0% 64.8% $0.64 60.9% $0.49 31% Growth 220 bps Improvement 2016 2017 2017 Adjusted 2016 2017 2017 Adjusted Note: Adjusted financials exclude imp
Slide 6: Fourth Quarter Revenue Highlights
FOURTH QUARTER REVENUE HIGHLIGHTS Chemicals supported by stable core Fourth Quarter Adjusted Revenue markets Flat Year over Year(a) ― Steady plastics and other chemicals offset by reduced waste moves Chemicals 3% Automotive revenue declined as North Automotive (10%) American vehicle production f
Slide 7: Fourth Quarter Operating Highlights
FOURTH QUARTER OPERATING HIGHLIGHTS Service Efficiency Train Velocity Train Length (miles per hour) (feet) 6,833 6,780 16.2 16.2 6,660 14.2 14.2 14.0 6,560 6,430 4Q16 1Q17 2Q17 3Q17 4Q17 4Q16 1Q17 2Q17 3Q17 4Q17 Terminal Car Dwell Average Total Employees (hours) 27,178 26,504 11.4 11.6 12.1 25,785 1
Slide 8: Financial Review
FINANCIAL REVIEW Frank A. Lonegro EVP and Chief Financial Officer
Slide 9: Fourth Quarter Earnings Summary
FOURTH QUARTER EARNINGS SUMMARY Fourth Quarter Income Statement Dollars in millions 2017 2016 Variance Revenue $ 2,863 $ 3,037 (6%) Expense Labor and Fringe 665 852 22% Materials, Supplies and Other 524 497 (5%) Depreciation 337 348 3% Fuel 243 217 (12%) Equipment and Other Rents 116 132 12% Restruc
Slide 10: Non-GAAP Adjusted Operating Results
NON-GAAP ADJUSTED OPERATING RESULTS Fourth Quarter Adjusted Operating Results Operating Net Earnings Per Income Operating Net Earnings Share, Assuming (millions) Ratio (millions) Dilution GAAP Operating Results $ 1,121 60.9% $ 4,140 $ 4.62 Restructuring Charge 29 (1.0%) 10 0.01 Tax Reform Benefit (n
Slide 11: Key 2017 Financial Measures
KEY 2017 FINANCIAL MEASURES Adjusted Free Cash Flow Capital Investments(a) Before Dividends(b) Distributions Dollars in Millions Dollars in Millions Dollars in Millions Dividends Buybacks $2,705 $2,678 $1,701 $2,040 $1,736 $1,970 $847 $1,056 25% Reduction 101% Growth 54% Growth $680 $708 FY 2016 FY
Slide 12: 2017 Full-Year Targets Achieved
2017 FULL-YEAR TARGETS ACHIEVED 2017 Targets(a) Efficiency Achieve record efficiency gains (previous record $430 million) $460 million Operating Ratio Operating ratio to be around the high end of the mid-60s 66.3%(b) Earnings Growth Earnings per share growth of 20- 25%, off 2016 reported b
Slide 13: Closing Remarks
CLOSING REMARKS James M. Foote President and Chief Executive Officer
Slide 14: 2018 Financial Outlook
2018 FINANCIAL OUTLOOK . . . Expect revenue up slightly Continued improvement in operating ratio ― No change to focused implementation and execution of scheduled railroading Capital expense of ~$1.6 billion ― Asset utilization and refined network approach driving decline Expect full-year eff
Slide 15: CSX Corporation 2017 Fourth Quarter Earnings Conference Call
CSX CORPORATION 2017 FOURTH QUARTER EARNINGS CONFERENCE CALL
Slide 16: Appendix: Non-GAAP Reconciliations
APPENDIX Non-GAAP Reconciliations
Slide 17: Fourth Quarter Earnings Summary
FOURTH QUARTER EARNINGS SUMMARY Fourth Quarter Income Statement Dollars in millions GAAP Adjustments Non-GAAP Revenue $ 2,863 $ - $ 2,863 Expense Labor and Fringe 665 - 665 Materials, Supplies and Other 524 - 524 Depreciation 337 - 337 Fuel 243 - 243 Equipment and Other Rents 116 - 116 Restructuring
Slide 18: CSX Corporation 2017 Fourth Quarter Earnings Conference Call
CSX CORPORATION 2017 FOURTH QUARTER EARNINGS CONFERENCE CALL