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
management’s plans, strategies and objectives for future operation, and management’s 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 Company’s 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 affecting
y 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 Company’s SEC reports,
accessible on the SEC’s website at www.sec.gov and the Company’s website at www.csx.com.
5. The t
Th strong economic outlook continues
i tl k ti
Transportation Services Index
• Overall transportation Indexed: 2000 = 100
demand near record levels
120
110
• GDP remains strong
100
• Manufacturing index reflects 90
continued growth 80
70
60
1990 1993 1996 1999 2002 2005
Source: Bureau of Transportation Statistics
5
6. Surface Transportation revenue increased $182
million or 9.4% in the third quarter
illi 9 4% i th thi d t
Third Quarter
Surface Transportation Revenue
Dollars in millions
$2,125
$1,943
2004 2005
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 across Third Quarter
all markets Year-Over-Year Change
9.4% 9.3%
• More than half of the RPU
improvement is from price
• F l surcharge h l d offset
Fuel h helped ff t
rising fuel costs
0.1%
Revenue Volume RPU
7
8. Coal revenues of $512 million increased
$74 million on strong yield and volume
illi t i ld d l
• Strong demand across Third Quarter
all markets Year-Over-Year Change
16.9%
• Favorable pricing environment
11.9%
• Stockpiles remain below target
4.5%
• Outlook remains favorable
Revenue Volume RPU
8
9. Automotive revenues of $200 million increased
$15 million on strong yield and volume
illi t i ld d l
• Price and fuel surcharge Third Quarter
increases Year-Over-Year Change
8.1%
• Production increase and
6.2%
reduced downtime
• Overall inventory levels at
target levels 1.8%
• Outlook is unfavorable
Revenue Volume RPU
9
10. Intermodal revenues of $337 million increased
$10 million on improved yield
illi i d i ld
• Elimination of low margin traffic Third Quarter
Year-Over-Year Change
• Reduction in off-core volumes
off-
5.8%
• Continued yield management 3.1%
success
• Outlook remains favorable
(2.7%)
Revenue Volume RPU
10
11. Intermodal operating income more than
doubled;
d bl d operating ratio improved to 79.8%
ti ti i d t 79 8%
Third Quarter Third Quarter
Intermodal Operating Income Intermodal Operating Ratio
(Dollars in Millions) 90.5%
$68 79.8%
$31
2004 2005 2004 2005
11
12. Merchandise revenues exceed $1 billion,
increasing $78 million on stronger yield
i i illi t i ld
Third Quarter
• Revenue gains in all markets
g
Year-Over-Year Change
• Volume impact mixed 8.6%
8.0%
8 0%
• Chemicals volume down
• Outlook favorable across
most markets
(0.6%)
Revenue Volume RPU
12
13. Merchandise i ld i i ll
M h di yield gains in all markets
kt
Third Quarter
Year-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 & Forest Emerging Chemicals Phosphates Agricultural
Consumer Products Markets & 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 steady
y
• Continued emphasis on fuel efficiency and surcharge coverage
14
16. Infrastructure damaged by Hurricane Katrina
will be largely repaired by year-end
ill b l l i db d
Gautier Bridge
Bay St. Louis Bridge
Target Date: Q4, 2005
Q4
Target Date: Q1, 2006
T t D t Q1
Mobile
Gulfport
Pascagoula
New Orleans Biloxi Bay Bridge
Target Date: Q4, 2005
Rigolets Pass Bridge
Little Rigolets Bridge
Target Date: Q4, 2005
Target Date: Q4, 2005
16
17. New Orleans interchange volumes continue
to b
t be routed through alternative gateways
t d th h lt ti t
Chicago
New York
East St Louis
Southeastern
Corridor
Memphis
Birmingham
g
Montgomery
Jacksonville
Mobile
New O l
N Orleans
Miami
17
18. Service levels have stabilized,
while safety continues to improve
hil ft ti ti
Third Quarter
2005 2004
FRA Personal Injury Frequency Index 1.91
1 91 2.42
2 42
FRA Train Accident Rate 3.85 4.43
Velocity (miles per hour) 19.7 20.1
Terminal Dwell Time (hours) 29.0 28.8
Cars-on-
Cars-on-line 232,324
232 324 233,469
233 469
On-
On-time Originations 51.1% 50.9%
On-
On-time Arrivals 43.1% 40.6%
18
19. Steady progress
is id t i
i evident in safety performance
ft f
FRA Personal Injury FRA Train Accident
Twelve Month Rolling Average Twelve Month Rolling Average
Injuries / 200,000 Man Hours Accidents / Million Train Miles
4.83
4 83 4.80
4 80
2.37
4.71
2.29
2.13
2.04 4.39
1.91
1 91 4.26
4 26
Q3 Q4 Q1 Q2 Q3 Q3 Q4 Q1 Q2 Q3
2004 2004 2005 2005 2005 2004 2004 2005 2005 2005
19
20. Looking f
L ki forward . . .
d
• S f t momentum continues
t ti
Safety
• Productivity gains evident Reliable
R li bl
Performance
• Service has stabilized Service Execution
Productivity Discipline
Safety Leadership
20
22. Hurricane Katrina impacts . . .
Hi K 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 million
pre-
22
23. CSX earnings per share increased 31% to $0.72
despite H i
d it Hurricane Katrina impact
K ti i t
Third Quarter
Dollars i illi
D ll in millions, except Earnings per Share
tE i Sh 2005 2004 Variance
Vi
Surface Transportation Operating Income $ 361 $ 247 $ 114
Other Operating I
Oth O ti Income ( 8) 3 ( 11)
Consolidated Operating Income 353 250 103
All Other Income 11 41 ( 30)
Interest Expense 100 106 6
Income Taxes 100 62 ( 38)
Net Earnings $ 164 $ 123 $ 41
Earnings per Share $ 0.72 $ 0.55 $ 0.17
23
24. Surface Transportation earnings increased 46%
and operating ratio improved 4.3 points
d ti ti i d43 i t
Surface Transportation
Surface Transportation
Operating R ti
O ti Ratio
Operating I
O ti Income i Milli
in Millions
$361 87.3%
4.3
46%
Pts 83.0%
$247
2004 Q3 2005 Q3 2004 Q3 2005 Q3
24
25. Expenses increased 4% over prior year
E i 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 Price Volume and Train Operations All Other
Inflation Operations Productivity
25
26. CSX raised its dividend 30%, reflecting
strong earnings and cash flow expectations
t i d h fl t ti
• Core earning p
g power has improved
p
• 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 t
26
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 Calendar
ou t qua te of 00 c uded ee o sca Ca e da
• On track to achieve full-year core Free Cash Flow of $450 million
full-
27