Slide 1: First Quarter 2008 Earnings Conference Call
First Quarter 2008 Earnings Conference Call Exhibit 99.1
Slide 2: Proxy Statement Disclosure
Proxy Statement Disclosure 2 On February 22, 2008, CSX Corporation ("CSX") filed with the SEC a revised preliminary proxy statement in connection with its 2008 Annual Meeting. CSX plans to file with the SEC and furnish to its shareholders a definitive Proxy Statement in connection with its 2008 Annu
Slide 3: Executive Summary
Executive Summary Michael Ward Chairman, President and Chief Executive Officer
Slide 4: Forward-Looking Disclosure
Forward-Looking Disclosure 4 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 othe
Slide 5: First quarter overview
First quarter overview . . . 5 Delivered record Q1 revenues, operating income and EPS Raised safety and customer service to record levels Produced best-ever Q1 operating ratio of 77% Increased dividend, buyback and financial targets First Quarter Earnings Per Share 60% Increase Note: Comparable resu
Slide 6: Operations Review
Operations Review Tony Ingram Executive Vice President Chief Operating Officer
Slide 7: Leadership, discipline and execution
Leadership, discipline and execution Leadership Discipline Execution 7 Safety performance improves to record levels Productivity helping drive the operating ratio lower Customer service improves to record levels Safety Productivity Service Performance Excellence
Slide 8: Helping lead one of the nation's safest industries
Helping lead one of the nation’s safest industries 8 Rolling 12-Month Averages 13 Week Average 1.10 13 Week Average 3.04
Slide 9: On-time performance at all-time highs
On-time performance at all-time highs 9 Rolling 12-Month Averages 13 Week Average 79% 13 Week Average 69%
Slide 10: Network efficiency provides strong service product
Network efficiency provides strong service product 10 Rolling 12-Month Averages 13 Week Average 20.8 mph 13 Week Average 22.7 hrs
Slide 11: Operations wrap-up
Operations wrap-up . . . 11 Driving safety momentum to record levels Rightsizing resources to current business levels On-track with Total Service Integration roll-out Taking service and productivity to the next level
Slide 12: Sales and Marketing Review
Sales and Marketing Review Clarence Gooden Executive Vice President Sales and Marketing
Slide 13: Revenues increased 12% to over $2.7 billion
Revenues increased 12% to over $2.7 billion 13 Record first quarter revenues Strong service continues to drive revenue growth Yield management and fuel recovery offset softer volume
Slide 14: Revenue growth is strong across most markets
Revenue growth is strong across most markets 14 Revenues impacted by the continued softness in the housing and automotive sectors of the economy
Slide 15: Price continues to drive RPU growth
Price continues to drive RPU growth 15 Note: ‘Same Store Sales’ price increases exclude impacts from fuel and mix
Slide 16: Merchandise revenue increases 11%
Merchandise revenue increases 11% 16 Yield management continues to offset softer volumes Continued softness in housing and auto sectors All-time record revenue in agriculture products Further strength in fertilizer, chemicals and metals 2007 Change 2008 RPU $ 1,791 $ 274 $ 2,065 Volume (thousands) (
Slide 17: Coal revenue increases 20%
Coal revenue increases 20% 17 Strength in exports offset decline in utility market Tons shipped increase 1% on flat carload volume Price, fuel recovery and mix drove strong revenue growth Overall pricing environment remains favorable 2007 Change 2008 RPU $ 1,370 $ 276 $ 1,646 Volume (thousands) Reve
Slide 18: Automotive revenue flat
Automotive revenue flat 18 Softer demand and tight credit impacting auto sales Lower production at CSX plants impacted volumes Revenues flat on higher prices and fuel recovery 2007 Change 2008 RPU $ 1,862 $ 242 $ 2,104 Volume (thousands) (13) Revenue (millions) $ 203 ($ 1) $ 202
Slide 19: Intermodal revenue increases 9%
Intermodal revenue increases 9% 19 RPU increase driven by fuel recovery and mix Domestic traffic gains offset International weakness Domestic revenue increased on Transcontinental growth 2007 Change 2008 RPU $ 625 $ 60 $ 685 Volume (thousands) (1) Revenue (millions) $ 318 $ 30 $ 348
Slide 20: Intermodal reports strong first quarter profit
Intermodal reports strong first quarter profit 20 Bottom-line focus increases operating income nearly 25% Operating initiatives continue to offset rising fuel costs Operating ratio improves 210 bps to 82.5%
Slide 21: Second quarter revenue outlook is positive
Second quarter revenue outlook is positive Agricultural Products Chemicals Coal, Coke & Iron Ore Metals Phosphate & Fertilizer Automotive Forest Products 21 Favorable Neutral Unfavorable Emerging Markets Food & Consumer Intermodal
Slide 22: Financial Results
Financial Results Oscar Munoz Executive Vice President Chief Financial Officer
Slide 23: Double-digit growth in operating income and EPS
Double-digit growth in operating income and EPS 23 Variance 2007 2008 Dollars in millions, except EPS $ 141 $ 485 $ 626 Operating Income 48.0 $ 0.33 463.2 $ 0.52 415.2 $ 0.85 Fully Diluted Shares in Millions Earnings Per Share $ 111 $ 240 $ 351 Net Income ) ) (20 (73 ) ) ) (8 (99 (138 ) ) (119 (211
Slide 24: Comparable earnings per share increase 60%
Comparable earnings per share increase 60% 24 Variance 2007 2008 Dollars in millions, except EPS $ 0.30 $ 0.50 $ 0.80 Comparable Earnings Per Share $ 157 $ 467 $ 624 Comparable Operating Income $ 141 ) $ 485 (18 ) $ 626 (2 Operating Income Less Gain on Insurance Recoveries ) $ 0.33 0.02 (0.05 ) $ 0.
Slide 25: Core earning power increases 25%
Core earning power increases 25% 25 Note: Comparable operating income excludes gains from insurance recoveries
Slide 26: Operating ratio improves basis points
Operating ratio improves 370 basis points 26 Margin expansion driven by: Yield management Operating efficiencies Diversity of portfolio helps overcome softer economy 370 bps Improvement Note: Comparable operating ratio excludes gains from insurance recoveries
Slide 27: Expenses up 7% overall; down 1% excluding fuel
Expenses up 7% overall; down 1% excluding fuel 27 Note: Results exclude gains from insurance recoveries
Slide 28: Fuel price more than offsets efficiency and volume
Fuel price more than offsets efficiency and volume 28 $ 441 2008 Fuel Expense ) ) (1 (10 Increase in Price Change in Volume/Mix Fuel Efficiency Net Non-locomotive Fuel $ 284 2007 Fuel Expense First Quarter Fuel Analysis in Millions
Slide 29: Labor and Fringe held to 1% increase
Labor and Fringe held to 1% increase 29 Note: Headcount reflects the company’s transportation businesses only $ 745 2008 Labor Expense ) (23 Wage & Benefit Inflation Incentive Compensation Labor Productivity, Other $ 734 2007 Labor Expense First Quarter Labor Analysis in Millions
Slide 30: MS&O declines 6% on lower derailment costs
MS&O declines 6% on lower derailment costs 30
Slide 31: Rent expenses decline 8%
Rent expenses decline 8% 31 Note: Reflects equipment utilization in the carload network on freight cars where CSX incurs rent $ 111 2008 Rent Expense ) (12 Inflation Volume/Other Equipment Utilization $ 120 2007 Rent Expense First Quarter Rents Analysis in Millions
Slide 32: Other expenses increase 3%
Other expenses increase 3% 32 Higher capital base increased depreciation expense Mostly offset by lower rates from asset life studies Inland Transportation driven by transcontinental volumes
Slide 33: Nearly $3 billion of stock repurchased since 2006
Nearly $3 billion of stock repurchased since 2006 33 $2,939 Note: Includes $2.4B purchased under the $3.0 billion program authorized in 2007 and $0.5B under prior programs
Slide 34: Recent actions reflect long-term confidence
Recent actions reflect long-term confidence 34 $3.0 Billion Share Buyback Program Targeting completion by fiscal year-end 2009 Builds on nearly $3 billion repurchased since 2006 Consistent with BBB-/Baa3 capital structure objectives 20% Increase Quarterly Dividend Nearly Tripled Since 2005
Slide 35: Update on full-year 2008 earnings guidance
Update on full-year 2008 earnings guidance . . . 35 Full-year earnings per share guidance driven by: Same store sales price growth of 6%+ Continued productivity gains Diverse portfolio of business Targeting high-end of $3.40 – $3.60 EPS range on a comparable basis
Slide 36: Long-term financial targets through 2010
Long-term financial targets through 2010 . . . 36 Exceed $1B in 2010 $800M– $1B in 2010 Free Cash Flow Before Dividends Low 70’s By 2010 Mid-Low 70’s by 2010 Operating Ratio 18%–21% CAGR 15%–17% CAGR Earnings Per Share 13%–15% CAGR 10%–12% CAGR Operating Income Current 2008–2010 Targets Previous 200
Slide 37: Concluding Remarks
Concluding Remarks Michael Ward Chairman, President and Chief Executive Officer
Slide 38: Relentless pursuit of excellence
Relentless pursuit of excellence . . . 38
Slide 39: Appendix
Appendix
Slide 40: GAAP Reconciliation Disclosure
GAAP Reconciliation Disclosure 40 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 (Disclosu
Slide 41: GAAP reconciliation to comparable results
GAAP reconciliation to comparable results 41 ) $ 291 (150 $ 2,422 1,937 $ 2,713 2,087 Revenue Expense $ 0.30 $ 0.50 $ 0.80 Comparable Earnings Per Share ) $ 0.33 0.02 (0.05 ) $ 0.52 (0.02 - ) $ 0.85 - (0.05 Earnings Per Share Less Gain on Insurance Recoveries Less Equity Earnings Adjustment $ 157 3.
Slide 42: First Quarter 2008 Earnings Conference Call
First Quarter 2008 Earnings Conference Call