csx Q3_2005

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<ul><li> 1. CSX Corporation Third-Quarter EarningsOctober 26, 2005 </li></ul> <p> 2. Forward-looking Disclosure Statement This presentation and other statements by the Company contain forward looking statements within the forward-looking 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 financial items; statements of managements plans, strategies and objectives for future operation, and managements expectations as to future performance and operations and the time by which objectives will be achieved; statements concerning proposed new products and services; and statements regarding future economic, industry or market conditions or performance. Forward-looking statements are typically identified by words or phrases such as believe, expect, anticipate, project, and similar expressions. Forward-looking statements speak only as of the date they are made and the Company undertakes no obligation to made, update or revise any forward-looking statement. If the Company does update 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 these forward-looking statements. Factors that may cause actual results to differ materially from those contemplated by these forward-looking statements include, among others: (i) the Companys success in implementing its financial and g()py p g operational initiatives, (ii) changes in domestic or international economic or business conditions, including those affecting the rail industry (such as the impact of industry competition, conditions, performance and consolidation); (iii) legislative or regulatory changes; (iv) the inherent business risks associated with safety and security; and ( ) the outcome of claims and litigation involving or affectingy y (v)g g g the Company. Other important assumptions and factors that could cause actual results to differ materially from those in the forward-looking statements are specified in the Companys SEC reports, accessible on the SECs website at www.sec.gov and the Companys website at www.csx.com. 3. Michael Ward Chairman, President andChief Executive Officer 4. Clarence Gooden Executive Vice President Chief Commercial Officer 5. The t Th strong economic outlook continues itl k ti Transportation Services Index Overall transportationIndexed: 2000 = 100 demand near record levels120110 GDP remains strong100 Manufacturing index reflects 90 continued growth 807060199019931996 199920022005Source: Bureau of Transportation Statistics5 6. Surface Transportation revenue increased $182 million or 9.4% in the third quarterilli9 4% i th thi d t Third QuarterSurface Transportation Revenue Dollars in millions $2,125 $1,943 20042005 6 7. Surface Transportation revenue per car increased 9.3% in the third quarter i d 9 3% i th thi d t Yields improved acrossThird Quarter all marketsYear-Over-Year Change 9.4% 9.3% More than half of the RPU improvement is from price F l surcharge h l d offset Fuelhhelped ff t rising fuel costs 0.1% RevenueVolume RPU 7 8. Coal revenues of $512 million increased $74 million on strong yield and volume illiti ld d l Strong demand acrossThird Quarter all marketsYear-Over-Year Change 16.9% Favorable pricing environment 11.9% Stockpiles remain below target 4.5% Outlook remains favorableRevenueVolume RPU 8 9. Automotive revenues of $200 million increased $15 million on strong yield and volumeilli ti ld d l Price and fuel surcharge Third Quarter increases Year-Over-Year Change8.1% Production increase and 6.2% reduced downtime Overall inventory levels at target levels 1.8% Outlook is unfavorable RevenueVolume RPU9 10. Intermodal revenues of $337 million increased $10 million on improved yield illi i d i ld Elimination of low margin trafficThird Quarter Year-Over-Year Change Reduction in off-core volumesoff- 5.8% Continued yield management 3.1% success Outlook remains favorable(2.7%)RevenueVolume RPU10 11. Intermodal operating income more than doubled; d bl d operating ratio improved to 79.8% ti ti i d t 79 8% Third QuarterThird QuarterIntermodal Operating Income Intermodal Operating Ratio (Dollars in Millions)90.5% $68 79.8%$312004 2005 20042005 11 12. Merchandise revenues exceed $1 billion, increasing $78 million on stronger yield iiilli ti ld Third Quarter Revenue gains in all markets gYear-Over-Year Change Volume impact mixed8.6% 8.0% 8 0% Chemicals volume down Outlook favorable across most markets(0.6%)RevenueVolume RPU 12 13. Merchandise i ld i i ll M h di yield gains in all marketskt Third QuarterYear-Over-Year Change 18.9% 12.6%11.2%7.5% 7.3%5.9% 7.3% 6.7% 5.1%4.8% 3.7% (5.8%)(7.0%)(7.4%) Metals Food &amp; Forest Emerging Chemicals Phosphates Agricultural Consumer Products Markets &amp; Fertilizers Products RPU Volume 13 14. Looking f L ki forward . . .d Demand remains strong Favorable pricing environment continues Yield management focus will continue Contract renewals are steadyy Continued emphasis on fuel efficiency and surcharge coverage14 15. Tony Ingram Executive Vice PresidentChief Operating Officer 16. Infrastructure damaged by Hurricane Katrina will be largely repaired by year-end ill b lli db d Gautier Bridge Bay St. Louis BridgeTarget Date: Q4, 2005 Q4Target Date: Q1, 2006Tt D t Q1Mobile Gulfport PascagoulaNew OrleansBiloxi Bay Bridge Target Date: Q4, 2005 Rigolets Pass BridgeLittle Rigolets BridgeTarget Date: Q4, 2005Target Date: Q4, 200516 17. New Orleans interchange volumes continue to b t be routed through alternative gateways t d thh lt ti t ChicagoNew YorkEast St Louis Southeastern CorridorMemphisBirminghamg MontgomeryJacksonville MobileNew O l N OrleansMiami 17 18. Service levels have stabilized, while safety continues to improvehilft titi Third Quarter2005 2004FRA Personal Injury Frequency Index1.911 91 2.42 2 42 FRA Train Accident Rate3.85 4.43Velocity (miles per hour) 19.7 20.1 Terminal Dwell Time (hours) 29.0 28.8 Cars-on- Cars-on-line232,324 232 324233,469233 469On- On-time Originations51.1%50.9% On- On-time Arrivals43.1%40.6%18 19. Steady progress is id t i i evident in safety performanceftfFRA Personal InjuryFRA Train Accident Twelve Month Rolling Average Twelve Month Rolling AverageInjuries / 200,000 Man HoursAccidents / Million Train Miles4.83 4 83 4.804 802.37 4.71 2.292.13 2.044.391.911 91 4.26 4 26 Q3 Q4 Q1 Q2 Q3 Q3 Q4 Q1Q2 Q32004 2004 2005 2005 2005 2004 2004 20052005 2005 19 20. Looking f L ki forward . . .d S f t momentum continuestti Safety Productivity gains evident ReliableR li blPerformance Service has stabilized ServiceExecution Productivity DisciplineSafetyLeadership20 21. Oscar Munoz Executive Vice PresidentChief Financial Officer 22. Hurricane Katrina impacts . . . HiK ti i t Hurricane Katrina impact assessment of $250 million includes: Capital costs of rebuilding the rail infrastructure Lost profits from business interruption Other expenses associated with storm damage Self insured retention is $25 million Timing of insurance recoveries will impact income recognition Third quarter pre-tax impact was approximately $19 million pre- Fourth quarter pre-tax impact is estimated at $15 millionpre-22 23. CSX earnings per share increased 31% to $0.72 despite H i d it Hurricane Katrina impactK ti it Third Quarter Dollars i illi D ll in millions, except Earnings per SharetE i Sh2005 2004 Variance ViSurface Transportation Operating Income$ 361$ 247 $ 114 Other Operating I Oth O ti Income( 8) 3 ( 11)Consolidated Operating Income353250103All Other Income11 41 ( 30) Interest Expense 100106 6 Income Taxes 100 62 ( 38)Net Earnings $ 164$ 123 $ 41Earnings per Share $ 0.72 $ 0.55$ 0.17 23 24. Surface Transportation earnings increased 46% and operating ratio improved 4.3 points dti ti i d43 i t Surface TransportationSurface TransportationOperating R tiO ti RatioOperating IOti Income i Milliin Millions $361 87.3%4.3 46% Pts83.0%$247 2004 Q3 2005 Q32004 Q32005 Q3 24 25. Expenses increased 4% over prior year Ei d i Surface Transportation Operating Expenses Third Q t Year-Over-Year Variance Thi d Quarter Y O Y V i (Dollars in Millions)$$9 ($2) ($8)($28)($39) Fuel PriceVolume and TrainOperations All Other Inflation Operations Productivity25 26. CSX raised its dividend 30%, reflecting strong earnings and cash flow expectationst idh fl t ti Core earning pg power has improvedp Double digit growth rates expected over the next five years Operating Income Earnings per share Core Free Cash Flow Yi ld i now comparable to peers Yield is bl t26 27. Looking f L ki forward . . .d Full year guidance raised to a range of $3.20 $3.30 On a consistent basis with previous guidance Includes the third and fourth quarter hurricane impact Fourth quarter o 2004 included 53rd week for Fiscal Calendarou t qua te of 00 c udedee o sca Ca e da On track to achieve full-year core Free Cash Flow of $450 million full-27 28. CSX Corporation Third-Quarter EarningsOctober 26, 2005 </p>