CSX Corporation · NASDAQ:CSX
CSX — UBS Fifth Annual Best of Americas Conference 2010
22 slides from CSX's conference presentation, Sep 9, 2010
Slide 1: How tomorrow moves – UBS Fifth Annual Best of Americas Conference
[ How tomorrow moves ] ee eo" 201 UBS FIFTH ANNUAL BEST OF AMERICAS CONFERENCE
Slide 2: Forward-Looking Statements
Forward-Looking Statements 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, volumes, rates, cost-savings,
Slide 3: CSX is an industry leader across many fronts
CSX is an industry leader across many fronts North American network well-positioned for growth — Serves two-thirds of population which supports three-quarters of consumption Providing thought leadership in an evolving industry — Presenting investors with leading indicators of future trends and t
Slide 4: CSX's competitive position is strong
CSX’s competitive position is strong Cascadia Midwest Northeast Northern California Arizona Sun Southern Corridor California Piedmont Atlantic Texas Triangle Florida Gulf Coast CSX Network Alliances 44
Slide 5: CSX network serves all eastern mega-regions
CSX network serves all eastern mega-regions Eastern markets account for two-thirds of U.S. population Chicago Markets drive three-fourths of New York total U.S. consumption Access to all major ports St Louis Florida and New England Memphis markets differentiate CSX Charleston Jacksonville 20
Slide 6: Evolving market provides long-term growth potential
Evolving market provides long-term growth potential Trucking Industry Faces Challenges Ground Transportation Highway congestion increasing $695 Billion Market Driver shortages growing 12% Hours of Service laws constraining Fuel costs rising Rails Provide Solutions Access fluid rail network
Slide 7: CSX has a diverse business portfolio
CSX has a diverse business portfolio First Half 2010 Revenue Metals Automotive 5% 7% Chemicals Intermodal and Other 14% . 15% Phosphates 5% Agriculture 10% Food & Consumer Coal 2% 30% Forest Emerging Markets 6% 6% 77
Slide 8: CSX provides thought leadership and transparency
CSX provides thought leadership and transparency Pricing Paradigm 2004 Pricing Pricing rail rail transportation transportation services services above above inflation inflation Rail Renaissance 2005 Emphasis Emphasis on on organic organic volume volume growth growth R2 = P + v 2006-2008 Price Price
Slide 9: Pricing paradigm shift expected to continue
Pricing paradigm shift expected to continue Inflation-Adjusted Pricing Indexed: 1981 = $100 Pre-deregulation, rail pricing kept pace with inflation During the first 23 years after the passage of the Staggers Act, rail pricing declined by 60% R2 $100 $51 $40 1968 1972 1976 1980 1984 1988 1992 1996 20
Slide 10: Rail Renaissance driven by key market forces
Rail Renaissance driven by key market forces 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 in
Slide 11: R2 = P+v proved correct through 2008
R 2= P+v proved correct through 2008 Operating Operating Margin Continuing Earnings Income in Millions Per Share $2,751 24.4% $3.64 22.4% $2,246 20.6% $2.75 $1,969 $2.20 7,358 7,358 7,358 7,116 7,116 7,116 6,827 6,827 6,827 Volume Volume (000) (000) down down 7% 7% from from 2006 2006 2006 2007 2008
Slide 12: Rail resiliency was about variablizing our costs
Rail resiliency was about variablizing our costs Cost Structure Operating Margin (11%) 25.1% (8%) 24.4% (12%) 22.4% (17%) 20.6% (16%) (16%) (24%) (27%) Fuel Price-adjusted Total Costs Total Costs (Unadjusted) Volume Q1 2009 Q2 2009 Q3 2009 Q4 2009 2006 2007 2008 2009 12 12
Slide 13: Focus has provided industry leading results
Focus has provided industry leading results Operating Operating Margin Continuing Income in Millions Earnings Per Share $2,751 $2,573 26.4% $3.64 24.4% $3.34 $1,969 20.6% $2.20 12.2% $982 $0.91 CAGR CAGR of of 19% 19% 1420 1420 basis basis points points increase increase CAGR CAGR of of 27% 27% 2004
Slide 14: The formula for success evolves in 2010 and beyond
The formula for success evolves in 2010 and beyond H1 Volume H1 Operating Income R3R=2 P= +P V + v+ P In Thousands In Millions Growth in Charted Competitive pricing above Waters inflation sustainable long-term 3,696 $1,335 2010 Growth in $303 Growth 612 Charted Waters Productivity is making CSX
Slide 15: CSX and rail industry have become less cyclical
CSX and rail industry have become less cyclical Operating Continuing Operating Margin Income Growth EPS Growth Improvement (bps) 2006-2009 2006-2009 2006-2009 450 15% 30% (4%) 140 (1%) (55%) (21%) (130) CSX S&P S&P 500 CSX S&P S&P 500 CSX S&P S&P 500 Rails Rails Rails CSX CSX ranks ranks among among
Slide 16: Yet rail industry P/E ratios still reflect cyclical view
Yet rail industry P/E ratios still reflect cyclical view Price/Earnings Ratios of Price/Earnings Ratios of North Selected Industries American Railroads Business Equipment 26.3 Canadian Pacific 16.2 Business Services 25.3 Canadian National 15.7 Specialty Chemicals 21.7 Regional Airlines 20.2 Union Pa
Slide 17: Wrap up
Wrap up Strength of network provides competitive advantage — CSX is a key component of America’s transportation solutions Formula for success continues to evolve — Pricing, volume growth, and productivity will drive value CSX is well positioned for the future — Growth over next few years throu
Slide 18: How tomorrow moves – UBS Fifth Annual Best of Americas Conference
[ How tomorrow moves ] ee eo" 201 UBS FIFTH ANNUAL BEST OF AMERICAS CONFERENCE
Slide 19: Appendix
Appendix
Slide 20: 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 21: GAAP Reconciliation
GAAP Reconciliation Full-year Results Dollars in millions 2006 2007 2008 2009 Operating Income $ 2,137 $ 2,246 $ 2,751 $ 2,270 Gain on Insurance Recoveries (168) - - - Comparable Operating Income $ 1,969 $ 2,246 $ 2,751 $ 2,270 Operating Margin 22.3% 22.4% 24.4% 25.1% Gain on Insurance Recoveries (1
Slide 22: How tomorrow moves – UBS Fifth Annual Best of Americas Conference
[ How tomorrow moves ] ee eo" 201 UBS FIFTH ANNUAL BEST OF AMERICAS CONFERENCE
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