Csx Corporation · NASDAQ:CSX
Csx — Investor Presentation (November 2007)
28 slides from Csx's investor presentation, Nov 16, 2007
Slide 1: How tomorrow moves CSX Corporation Discussion Materials
How tomorrow moves CSX Corporation Discussion Materials
Slide 2: Forward-Looking Disclosure
Forward-Looking Disclosure 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 other
Slide 3: Agenda
Agenda Executive Summary Safety and Service Performance Financial Performance Capital Spending Appendix: Expense Measures GAAP Reconciliation to Non-GAAP Measures
Slide 4: Executive Summary
Executive Summary
Slide 5: CSX leads 89% of S&P in stock performance
CSX leads 89% of S&P 500 in stock performance S&P 500 Stock Performance 3-year Performance Top 51 247% 52 CSX 145% 53-100 112% 101-200 72% 201-300 35% 301-400 11% 401-500 (22%) Note: October 2004 – October 2007
Slide 6: Stock performance for 1, 3 and 5-years
Stock performance for 1, 3 and 5-years 1-year 3-year 5-year Return Rank Return Rank Return Rank CSX 26% 2 145% 1 224% 3 NS (2%) 5 52% 5 156% 4 BNSF 12% 4 108% 2 239% 2 UP 41% 1 103% 4 117% 5 CN 18% 3 107% 3 294% 1 Note: Stock performance, or returns, versus October 31, 2007 share price, adjusted for
Slide 7: CSX continues strong turnaround momentum…
CSX continues strong turnaround momentum… Financial Measures Service Safety Improvement versus 2004 Key Measures CSX ’07 Ranking CSX NS BNSF UP CN Personal Injuries 2 1 3 4 2 Train Accidents 2 1 2 4 3 Velocity 4 1 4 2 3 Dwell 2 1 4 2 3 Operating Income 5 2 5 3 1 4 Operating Ratio 4 1 (tied) 3 (tied)
Slide 8: …and with more to come: 2007-2010 Guidance
…and with more to come 2007-2010 Guidance Operating Income* 10% – 12% Earnings Per Share* 15% – 17% Free Cash Flow Before Dividends $800M – $1B in 2010 Operating Ratio Mid-low 70’s ROIC Exceed COC Note: Operating income and earnings per share reflect four-year CAGR’s
Slide 9: Safety and Service Performance
Safety and Service Performance
Slide 10: Safety improvement since '04
Safety improvement since ‘04 FRA Personal Injury Frequency YTD August 2007 CSX Most Improved Since ‘04 CSX 1.14 51% better NS 1.12 BNSF 1.73 UP 1.75 Note: Injuries per 200,000 man hours FRA Train Accident Frequency YTD August 2007 CSX Most Improved Since ‘04 CSX 2.67 45% better NS 2.16 BNSF 2.95 UP
Slide 11: Service improvement since '04
Service improvement since ‘04 AAR Velocity Q3 2007 CSX Most Improved Since ‘04 CSX 21.4 6% Better NS 22.0 BNSF 22.9 UP 21.5 AAR Dwell Q3 2007 CSX Most Improved Since ‘04 CSX 21.4 24% Better NS 21.3 BNSF 24.6 UP 25.2
Slide 12: Financial Performance
Financial Performance
Slide 13: CSX View: Financial Performance
CSX View: Financial Performance Financial Performance Operating Income Operating Ratio EPS Free Cash Flow ROIC Volume Revenue per Unit Expense
Slide 14: Operating Income versus '04
Operating Income versus ‘04 Operating Income Adjusted for non-recurring items FY 2004 Operating Income Rolling 12 mos. Operating Income Percent Change Ranking versus peers in millions CSX $1,064 $2,101 97% 2 NS $1,702 $2,513 48% 5 BNSF $2,151 $3,559 65% 3 UP $1,542 $3,321 115% 1 CN $1,669 $2,614 57%
Slide 15: Operating Ratio versus '04
Operating Ratio versus ’04 Operating Ratio Adjusted for non-recurring items FY 2004 Operating Ratio Rolling 12 mos. Operating RatioChange (in pts) Ranking versus peers CSX 86.8% 78.7% 8.1 1 (tied) NS 76.7% 73.0% 3.7 3 (tied) BNSF 80.3% 76.9% 3.4 5 UP 87.4% 79.3% 8.1 1 (tied) CN 66.9% 63.2% 3.7 3 (ti
Slide 16: EPS versus '04
EPS versus ’04 Earnings Per Share Adjusted for non-recurring items 2004 EPS Rolling 12 months EPS % Improvement Ranking relative to peers CSX $ 1.00 $2.45 145% 1 NS $ 2.18 $ 3.66 68% 5 BNSF $ 2.87 $ 5.20 80% 3 UP $ 2.88 $ 6.84 138% 2 CN $ 1.67 $3.08 84% 4 Note: See GAAP reconciliation to EPS; Peer c
Slide 17: CSX Free Cash Flow before dividends
CSX Free Cash Flow before dividends $547M $1,123M $506M $350M $800M-$1B $606M 2004 2005 2006 2007E 2010 Guidance Net proceeds from divestitures and debt repurchase expense Note: See GAAP reconciliation to Free Cash Flow
Slide 18: CSX Return on Invested Capital
CSX Return on Invested Capital Improving ROIC 7.4% 8.7% Exceed COC 2005 2006 2007 2008 2009 2010 · CSX, like all major industries, measures aggregate internal returns on historical cost · Returns approaching cost of capital in 2007 · All future investments are based on returns on replacement costs
Slide 19: Capital Spending
Capital Spending
Slide 20: CSX Capital Planning Process
CSX Capital Planning Process Capital Requests Submitted · Bottoms-up requests · Fact-based approach Prioritize Capital Needs · Cross-functional team · Safety and reliability 2007-2010 Capital Plan Align with Stakeholders · Shareholders · Regulatory and public Evaluate Project Returns · Demonstrate r
Slide 21: Capital spend versus peers—per Dollar of Revenue
Capital spend versus peers—per Dollar of Revenue CSX NS BNSF UP Note: BNSF and UP capital spend include estimated impact of locomotive leases. CSX excludes non-transportation and Katrina related capital spending.
Slide 22: Capital spend versus peers—per KGTM
Capital spend versus peers—per KGTM CSX NS BNSF UP Note: BNSF and UP capital spend include estimated impact of locomotive leases. CSX excludes non-transportation and Katrina related capital spending.
Slide 23: Appendix: Expense Measures
Appendix: Expense Measures
Slide 24: Expense per unit: 2004-2007 YTD September
Expense per unit: 2004-2007 YTD September Expense (less fuel) per Unit CSX NS BNSF UP CN Rolling 12 mos. CAGR vs. ’04: % IncreaseRanking vs peers CSX 3.6% 4 (tied) NS 3.6% 4 (tied) BNSF 3.5% 3 UP 2.6% 2 CN 1.0% 1 · Traffic mix and length of haul can significantly impact the expense per unit measure
Slide 25: Expense per RTM: 2004-2007 YTD September
Expense per RTM: 2004-2007 YTD September Expense (less fuel) per KRTM CSXNS BNSF UP CN Rolling 12 mos. CAGR vs. ’04: % Increase Ranking vs peers CSX 1.3 % 2 NS 4.7% 5 BNSF 1.9% 3 UP 2.8% 4 CN 0.1% 1 Note: KRTM = Thousand Revenue Ton Miles; CN results reported in Canadian dollars
Slide 26: 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 27: GAAP Reconciliation to Comparable Operating Income and EPS
GAAP Reconciliation to Comparable Operating Income and EPS Dollars in millions, except per share amounts 2004 Rolling 12 months 2007* Surface Transportation Operating Revenue $ 8,040 $ 9,849 Surface Transportation Operating Expense 7,047 7,702 Surface Transportation Operating Income $ 993 $ 2,147 Le
Slide 28: GAAP reconciliation to free cash flow
GAAP reconciliation to free cash flow Dollars in Millions 2004 2005 2006 Net Cash Provided by Operating Activities $1,446 $1,110 $2,058 Property Additions (1,030) (1,136) (1,639) Other Investing Activities 37 69 151 Proceeds From Sale - 998 - Other Deposits (21) (21) (68) Conrail Free Cash Flow 115