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CSX Corporation
Third-Quarter Earnings
   October 26, 2005
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.
Michael Ward
Chairman, President and
 Chief Executive Officer
Clarence Gooden
Executive Vice President
Chief Commercial Officer
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
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
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
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
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
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
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
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
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
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
Tony Ingram
Executive Vice President
 Chief Operating Officer
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
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
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
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
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
Oscar Munoz
Executive Vice President
 Chief Financial Officer
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
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
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
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
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
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
CSX Corporation
Third-Quarter Earnings
   October 26, 2005

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csx Q3_2005

  • 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.
  • 3. Michael Ward Chairman, President and Chief Executive Officer
  • 4. Clarence Gooden Executive Vice President Chief Commercial Officer
  • 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
  • 15. Tony Ingram Executive Vice President Chief Operating Officer
  • 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
  • 21. Oscar Munoz Executive Vice President Chief Financial Officer
  • 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