Slide 1: Forward-Looking Disclosure
11 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, cost-savings, expenses, or
Slide 2: Executive Summary: Fourth quarter performance
Executive Summary Michael Ward Chairman, President and Chief Executive Officer Fourth quarter performance . . . Earnings Per Share From Macro-economy recovering Continuing Operations — Year-over-year comparisons stabilized post-Thanksgiving $0.92 $0.86 Revenue declines 13% $0.77 — Lower volume a
Slide 3: Full-year performance; Sales and Marketing Review
Full-year performance . . . Record operating ratio . . . . . . Strong core earning power Operating Income (millions) 79.3% $2,768 $2,260 $2,285 $1,981 77.5% 75.4% 74.7% 2006 2007 2008 2009 EPS - Continuing Operations $3.66 $2.77 $2.87 $2.24 2006 2007 2008 2009 2006 2007 2008 2009 Note: Data for 2006
Slide 4: Revenue declines 13% to $2.3 billion
Revenue declines 13% to $2.3 billion Revenue $2,320M Volume 1,498K RPU $1,549 Revenue in Millions $2,674 ($182) ($175) $3 $2,320 Core Core pricing pricing intact, intact, but but offset offset by by mix mix Q4 2008 Fuel Price Volume Rate/Mix Q4 2009 Note: See Fuel Surcharge Reconciliation 77 Economi
Slide 5: Core pricing stable; RPU lower on fuel surcharge
Core pricing stable; RPU lower on fuel surcharge Revenue $2,320M Volume 1,498K RPU $1,549 Year-Over-Year Change Same Store Sales Price Increase Total Revenue per Unit 21.2% 18.3% 14.5% 14.0% 10.5% 6.7% 6.8% 6.4% 6.2% 6.5% 6.5% 6.6% 6.3% 5.3% 0.2% (5.4%) (8.7%) (7.1%) Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 2007
Slide 6: Utility inventory levels a headwind well into 2010
Utility inventory levels a headwind well into 2010 Eastern Power Sector Tons in Millions 100 90 80 70 60 50 40 30 2001 2002 2003 2004 2005 2006 2007 2008 2009 Coal Consumption Coal Inventory Typical Inventory Level Source: Coal consumption and inventory numbers from PIRA Energy Group 11 11 Merchandi
Slide 7: Automotive revenue declines 3%; Intermodal revenue increases 2%
Automotive revenue declines 3% Revenue $176M Volume 78K RPU $2,256 Fourth Quarter Fourth quarter summary Year-Over-Year Change — Volume strength due to inventory replenishment Revenue (3%) — Volume also improved slightly Volume 3% due to higher vehicle sales RPU (6%) Ongoing drivers — Inventorie
Slide 8: Sales and Marketing wrap-up; Operations Review
Sales and Marketing wrap-up . . . Economic Forecast Macro-economic environment is now recovering GDP IDP — Forecasts reflect moderate growth 3.6% Linehaul revenue growth 2.1% 2.6% expected in first quarter 1.5% 0.4% — Nine of ten markets are favorable; coal remains a headwind (2.2%) (2.5%) Mai
Slide 9: Delivering under challenging business conditions
Delivering under challenging business conditions Culture of leadership, discipline and execution continues to produce strong results — Leadership: Safety performance remained strong in the fourth quarter — Discipline: Cost control and productivity Performance are helping to improve operating margi
Slide 10: Train network stable as volume increases
Train network stable as volume increases . . . Year-Over-Year Change in Volume and Crew Starts Q1 2009 Q2 2009 Q3 2009 Q4 2009 20% Operating 10% Leverage Created (0%) (10%) (20%) (30%) (40%) Volume Volume 17% 17% Volume Volume 21% 21% Volume Volume 15% 15% Volume Volume 7%7% (50%) Crew Crew starts15
Slide 11: Service levels strong on stable network operations
Service levels strong on stable network operations Service Reliability Network Performance On-time Originations Train Velocity (mph) 85% 22.0 81% 79% 21.2 21.2 76% 20.0 Q4 2006 Q4 2007 Q4 2008 Q4 2009 Q4 2006 Q4 2007 Q4 2008 Q4 2009 On-time Arrivals Terminal Dwell (hours) 77% 79% 24.2 24.3 73% 23.2
Slide 12: CSX is well prepared as volume builds
CSX is well prepared as volume builds Furloughed employees Resources Available — Generally available within a few weeks T&E Employees furloughed 1,882 Newly-hired employees Percent of total 18% — Training of new employees takes four to six months Locomotives stored 564 Percent of total 14% Sto
Slide 13: Financial Review: Fourth quarter earnings summary
Financial Review Oscar Munoz Executive Vice President Chief Financial Officer Fourth quarter earnings summary . . . Fourth Quarter Results Dollars in millions, except EPS 2009 2008 Variance Revenue $ 2,320 $ 2,674 (13%) Expense 1,737 1,982 12% Operating Income $ 583 $ 692 (16%) Interest Expense (138
Slide 14: Cycling significant fuel surcharge benefit in 2008
Cycling significant fuel surcharge benefit in 2008 Fuel Surcharge Lag Impact Positive Impact Negative Impact $150 ($162) ($162) Million Million Million YOY YOY Impact Impact $38 Million ($33) ($19) ($12) Million Million Million Q4 2008 Q1 2009 Q2 2009 Q3 2009 Q4 2009 Weekly Highway Diesel Fuel Month
Slide 15: MS&O expense declines 19%; Fuel expense declines 24%
MS&O expense declines 19% MS&O Expense Fourth Quarter Dollars in Millions MS&O Analysis in Millions $547 2008 MS&O Expense $ 547 $434 $436 $442 Variance Volume 47 Net Reserve Adjustment 25 Bad Debt 10 Other 23 Subtotal 105 2009 MS&O Expense $ 442 Q4 2006 Q4 2007 Q4 2008 Q4 2009 29 29 Fuel expense de
Slide 16: Other expenses collectively increase 1%
Other expenses collectively increase 1% Other Costs in Millions Inland Transportation up on off-core volume increase Depreciation Rents Inland Transportation $398 $393 $385 Rents decrease on better $381 $61 $63 utilization and volume decline $57 $70 $120 $96 $110 $88 Life study adjustment offs
Slide 17: Sustained cost focus yields sequential improvement
Sustained cost focus yields sequential improvement 2009 Quarterly Cost Structure Year-Over-Year Change (6%) (11%) (8%) (13%) (9%) (11%) (12%) (14%) (15%) (17%) (17%) (16%) (16%) (16%) (16%) (24%) (26%) (27%) (30%) (35%) First Quarter Second Quarter Third Quarter Fourth Quarter Volume Fuel Price-adju
Slide 18: Cash flow remains positive with strong investment
Cash flow remains positive with strong investment Free Cash Flow Before 2009 free cash flow resilient Dividends in Millions versus historic norms $1,221 Strong liquidity supports investment grade rating Commitment to balanced $670 capital deployment continues $506 $376 2006 2007 2008 2009 Note
Slide 19: Looking ahead; Concluding Remarks
Looking ahead . . . Drivers of success in 2010 remain the same — Yield management, safety, service, and productivity will produce positive results Economic recovery will drive overall volume growth — Although coal inventory levels will represent a headwind for much of 2010 Focused on offsettin
Slide 20: Appendix
Relentless pursuit of excellence . . . 39 39 Appendix
Slide 21: 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 22: GAAP Reconciliation (continued); Fuel Surcharge Reconciliation
GAAP Reconciliation (continued) Full-year Results Dollars in millions 2006 2007 2008 2009 Net Cash Provided by Operating Activities $ 2,058 $ 2,184 $ 2,914 $2,060 Property Additions (1,639) (1,773) (1,740) (1,447) Other Investing Activities 151 (41) 36 54 Other Deposits and Conrail Free Cash Flow (6
Slide 23: 2009 Fourth Quarter Earnings Conference Call
2009 FOURTH QUARTER EARNINGS CONFERENCE CALL |