2020 BAIRD
GLOBAL INDUSTRIALS CONFERENCE
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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-savings, expenses, taxes, liquidity, capital expenditures, dividends, share repurchases or other financial items, statements of management's plans, strategies and objectives for future operations, and management's expectations as to future performance and operations and the time by which objectives will be achieved, statements concerning proposed new services, and statements regarding future economic, industry or market conditions or performance. Forward-looking statements are typically identified by words or phrases such as "will," "should," "believe," "expect," "anticipate," "project," "estimate," "preliminary" and similar expressions. Forward-looking statements speak only as of the date they are made, and the company undertakes no obligation to update or revise any forward-looking statement. If the company updates any forward-looking statement, no inference should be drawn that the company will make additional updates with respect to that statement or any other forward- looking statements.
Forward-looking statements are subject to a number of risks and uncertainties, and actual performance or results could differ materially from that anticipated by any forward-looking statements. Factors that may cause actual results to differ materially from those contemplated by any forward-looking statements include, among others; (i) the company's success in implementing its financial and operational initiatives; (ii) changes in domestic or international economic, political or business conditions, including those affecting the transportation industry (such as the impact of industry competition, conditions, performance and consolidation);
- legislative or regulatory changes; (iv) the inherent business risks associated with safety and security; (v) the outcome of claims and litigation involving or affecting the company; (vi) natural events such as severe weather conditions or pandemic health crises; and (vii) the inherent uncertainty associated with projecting economic and business conditions.
Other important assumptions and factors that could cause actual results to differ materially from those in the forward-looking statements are specified in the company's SEC reports, accessible on the SEC's website at www.sec.gov and the company's website at www.csx.com.
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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 Regulation S-K Item 10(e), which may provide users of the financial information with additional meaningful comparison to prior reported results.
Non-GAAP measures do not have standardized definitions and are not defined by U.S. GAAP. Therefore, CSX's non-GAAP measures are unlikely to be comparable to similar measures presented by other companies. The presentation of these non-GAAP measures should not be considered in isolation from, as a substitute for, or as superior to the financial information presented in accordance with GAAP. Reconciliations of non-GAAP measures to corresponding GAAP measures are attached hereto in the Appendix of this presentation.
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FAR-REACHING NETWORK AND DIVERSE REVENUE BASE
CSX network reaches nearly
two-thirds of the U.S. Population
2019 Revenue Totals ~$12B
% Revenue by Market*
Merchandise 64%
Coal 17%
Intermodal 15%
*Excludes Other Revenue
Chemicals 20%
Ag & Food 12%
Automotive 10%
Forest Products 7%
Metal & Equip. 6%
Minerals 5%
Fertilizers 4%
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LEADER IN BOTH OPERATING RATIO & CASH CONVERSION
Q3 Operating Ratio
62.5% | |||||
59.9% | |||||
58.2% | 58.7% | 58.8% | |||
56.9% | |||||
CSX | CP | UNP | KSU | CNI | NSC |
FCF Conversion % of Net Income
97% | 104% | ||||
95% | |||||
81% | |||||
50% | 49% | ||||
2015 | 2016 | 2017* | 2018* | 2019 | 2020 |
LTM |
*Non-GAAP results exclude restructuring charges and tax reform benefit.
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Q3 RESULTS REFLECT CONTINUED OPERATING EFFICIENCY
Revenue
Millions $
$2,978 | |
$2,648 | |
11% Decline | |
2019 | 2020 |
Earnings Per Share
$1.08 | |
$0.96 | |
11% Decline | |
2019 | 2020 |
Operating Ratio
56.8% | 56.9% |
10 bps Increase | |
2019 | 2020 |
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PERFORMING WELL IN VOLATILE ECONOMIC ENVIRONMENT
- 2020 has been year of historic volatility across all end markets
- Entered year with positive merchandise and intermodal volume growth
- Rapid decline and recovery in Q2 / Q3
- Beginning Q4 with positive volume growth
- Strong relative volume performance trends throughout the year
- Focused on driving absolute volume growth
YoY % Volume Change | |||||||
% Change vs 2019 | 3% | 5% | |||||
1% | 1% | ||||||
(1%) | (3%) | ||||||
Total | |||||||
(20%)(17%) | Total, ex. Coal | ||||||
Q1 20 | Q2 20 | Q3 20 | Q4 QTD | ||||
YoY % Volume Change
Weekly AAR Volumes
Coal Intermodal Merchandise
30%
20%
10%
0%
(10%)
(20%)
(30%)
(40%)
(50%)
(60%)
1 3 5 7 9 11 13 15 17 19 21 23 25 27 29 31 33 35 37 39 41 43 45
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TARGETING LARGE TRUCK CONVERSION OPPORTUNITY
- Enhanced marketing capabilities, a leading service product, and an improved customer experience are winning share in challenging environment
- Working closely with customers to identify truck conversion opportunities
- Expanding CSX's reach through customers' supply chains to win additional wallet share
U.S. Freight Revenue: ~$980B
Water | Air | Pipeline | |
1% | 4% | ||
5% | |||
Rail |
8%
Truck
82%
CSX currently ~1% of U.S. Freight Spend
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I N V E S TO R S . C S X . C O M
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CSX Corporation published this content on 12 November 2020 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 12 November 2020 15:00:06 UTC