Exhibit 99.2
CSX Announces Second Quarter Results
Second Quarter Highlights:
• Earnings per share at 78 cents; 72 cents from continuing operations
• Productivity and cost cutting efforts continue
• Operating income at $582 million and operating ratio at 73.4%
• Safety levels strong, contributing to favorable casualty reserve adjustment
JACKSONVILLE, Fla., (July 13, 2009) – CSX Corporation [NYSE: CSX] today announced second quarter earnings of $308 million, or 78 cents a share, versus $385 million, or 93 cents a share, last year. Excluding the impact of discontinued operations related to The Greenbrier resort, earnings per share from continuing operations declined 24 percent from 95 cents to 72 cents.
Second quarter revenues of $2.2 billion were down 25 percent from the prior year, primarily due to a 21 percent decline in volume and lower fuel surcharge recovery. Volumes continued to decline across the board, although the rate of decline in the coal market accelerated in the second quarter.
“While the economy continues to significantly impact our business, there are some signs that we may be seeing the bottom in many markets,” said Michael Ward, president, chairman and CEO. “Even in this difficult business environment, we are still strengthening our operations, optimizing our resources and making the right investments to prepare our network for the future.”
CSX continued to improve its safety performance, contributing to a further reduction in its casualty reserves of $70 million compared to last year. Combined with the company’s cost management efforts and increased network efficiency, operating expenses declined 27%, allowing the company to produce operating income of $582 million and an operating ratio of 73.4 percent for the quarter.
“By improving safety, reducing costs and increasing productivity we lessened the impact of the struggling global economy on our business,” said Tony Ingram, executive vice president and chief operating officer. “We remained aggressive in right-sizing our train network while still providing reliable service for our customers.”
Table of Contents | The accompanying unaudited | CSX CORPORATION | CONTACTS: |
| financial information should be | 500 Water Street, C900 | |
| read in conjunction with the | Jacksonville, FL | INVESTOR RELATIONS |
| Company’s most recent | 32202 | David Baggs |
| Annual Report on Form 10-K, | http://www.csx.com | (904) 359-4812 |
| Quarterly Reports on Form | | MEDIA |
| 10-Q, and any Current | | Garrick Francis |
| Reports on Form 8-K. | | (877) 835-5279 |
![](https://capedge.com/proxy/8-K/0000277948-09-000110/banner.jpg)
CSX Corporation, based in Jacksonville, Fla., is a leading transportation company providing rail, intermodal and rail-to-truck transload services. The company’s transportation network spans approximately 21,000 miles with service to 23 eastern states and the District of Columbia, and connects to more than 70 ocean, river and lake ports.
This earnings announcement, as well as a package of detailed financial information, is contained in the CSX Quarterly Financial Report available on the company's website at http://investors.csx.com in the Investors section and on Form 8-K with the Securities and Exchange Commission (“SEC”).
CSX executives will conduct a quarterly earnings conference call with the investment community on July 14, 2009 at 8:30 a.m. ET. Investors, media and the public may listen to the conference call by dialing 888-327-6279 (888-EARN-CSX) and asking for the CSX earnings call. (Callers outside the U.S., dial 773-756-0199). Participants should dial in 10 minutes prior to the call. In conjunction with the call, a live webcast will be accessible and presentation materials will be posted on the company’s website at http://investors.csx.com. Following the earnings call, an internet replay of the presentation will be archived on the company website.
##
Forward-looking statements
This information and other statements by the company 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, 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,” “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 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 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 (v) the outcome of claims and litigation involving or affecting 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.
|
CONSOLIDATED INCOME STATEMENTS (Unaudited) |
(Dollars in Millions, Except Per Share Amounts) |
| | | | | | | |
| Quarters Ended | | Six Months Ended |
| Jun. 26, | Jun. 27, | | | Jun. 26, | Jun. 27, | |
| 2009 | 2008 | $ Change | | 2009 | 2008 | $ Change |
Revenue | $2,185 | $2,907 | $(722) | | $4,432 | $5,620 | $(1,188) |
Expense | | | | | | | |
Labor and Fringe | 654 | 733 | 79 | | 1,316 | 1,478 | 162 |
Materials, Supplies and Other | 368 | 513 | 145 | | 845 | 1,018 | 173 |
Fuel | 185 | 537 | 352 | | 376 | 978 | 602 |
Depreciation | 229 | 227 | (2) | | 453 | 449 | (4) |
Equipment and Other Rents | 98 | 112 | 14 | | 211 | 223 | 12 |
Inland Transportation | 69 | 68 | (1) | | 127 | 131 | 4 |
Total Expense | 1,603 | 2,190 | 587 | | 3,328 | 4,277 | 949 |
| | | | | | | |
Operating Income | 582 | 717 | (135) | | 1,104 | 1,343 | (239) |
| | | | | | | |
Interest Expense | (139) | (133) | (6) | | (280) | (252) | (28) |
Other Income - Net | 10 | 17 | (7) | | 13 | 89 | (76) |
Earnings From Continuing Operations | | | | | | | |
Before Income Taxes | 453 | 601 | (148) | | 837 | 1,180 | (343) |
| | | | | | | |
Income Tax Expense (a) | (168) | (209) | 41 | | (298) | (426) | 128 |
Earnings from Continuing Operations | 285 | 392 | (107) | | 539 | 754 | (215) |
| | | | | | | |
Discontinued Operations (b) | 23 | (7) | 30 | | 15 | (18) | 33 |
Net Earnings | $308 | $385 | $(77) | | $554 | $736 | $(182) |
| | | | | | | |
Per Common Share | | | | | | | |
Net Earnings Per Share, Assuming Dilution | | | | | | | |
Continuing Operations | $0.72 | $0.95 | $(0.23) | | $1.36 | $1.82 | $(0.46) |
Discontinued Operations | 0.06 | (0.02) | 0.08 | | 0.04 | (0.04) | 0.08 |
Net Earnings | $0.78 | $0.93 | $(0.15) | | $1.40 | $1.78 | $(0.38) |
| | | | | | | |
Average Shares Outstanding, | | | | | | | |
Assuming Dilution (Thousands) | 395,370 | 415,112 | | | 394,735 | 415,161 | |
| | | | | | | |
Cash Dividends Paid Per Common Share | $0.22 | $0.18 | | | $0.44 | $0.33 | |
CSX Corporation |
CONSOLIDATED BALANCE SHEETS |
(Dollars in Millions) |
| (Unaudited) | |
| Jun. 26, | Dec. 26, |
| 2009 | 2008 |
ASSETS |
| | |
Current Assets | | |
Cash and Cash Equivalents | $1,108 | $669 |
Short-term Investments | 70 | 76 |
Accounts Receivable - Net | 885 | 1,107 |
Materials and Supplies | 254 | 217 |
Deferred Income Taxes | 159 | 203 |
Other Current Assets | 160 | 119 |
Total Current Assets | 2,636 | 2,391 |
| | |
Properties | 30,584 | 30,208 |
Accumulated Depreciation | (7,697) | (7,520) |
Properties - Net | 22,887 | 22,688 |
| | |
Investment in Conrail | 622 | 609 |
Affiliates and Other Companies | 405 | 406 |
Other Long-term Assets | 185 | 194 |
Total Assets | $26,735 | $26,288 |
| | |
LIABILITIES AND SHAREHOLDERS' EQUITY |
| | |
Current Liabilities | | |
Accounts Payable | $904 | $973 |
Labor and Fringe Benefits Payable | 349 | 465 |
Casualty, Environmental and Other Reserves | 181 | 236 |
Current Maturities of Long-term Debt | 318 | 319 |
Income and Other Taxes Payable | 110 | 125 |
Other Current Liabilities | 99 | 286 |
Total Current Liabilities | 1,961 | 2,404 |
| | |
Casualty, Environmental and Other Reserves | 579 | 643 |
Long-term Debt | 7,933 | 7,512 |
Deferred Income Taxes | 6,417 | 6,235 |
Other Long-term Liabilities | 1,389 | 1,426 |
Total Liabilities | 18,279 | 18,220 |
| | |
Common Stock, $1 Par Value | 392 | 391 |
Other Capital | 29 | - |
Retained Earnings | 8,757 | 8,398 |
Accumulated Other Comprehensive Loss | (735) | (741) |
Noncontrolling Minority Interest | 13 | 20 |
Total Shareholders' Equity | 8,456 | 8,068 |
Total Liabilities and Shareholders' Equity | $26,735 | $26,288 |
CSX Corporation |
CONSOLIDATED CASH FLOW STATEMENTS (Unaudited) |
(Dollars in Millions) |
| | |
| Six Months Ended |
| Jun. 26, | Jun. 27, |
| 2009 | 2008 |
OPERATING ACTIVITIES | | |
Net Earnings | $554 | $736 |
Adjustments to Reconcile Net Earnings to Net Cash Provided | | |
by Operating Activities: | | |
Depreciation | 454 | 456 |
Deferred Income Taxes | 212 | 201 |
Other Operating Activities | (172) | (30) |
Changes in Operating Assets and Liabilities: | | |
Accounts Receivable | 202 | (44) |
Other Current Assets | (83) | (16) |
Accounts Payable | (56) | 35 |
Income and Other Taxes Payable | (13) | 9 |
Other Current Liabilities | (117) | (4) |
Net Cash Provided by Operating Activities | 981 | 1,343 |
| | |
INVESTING ACTIVITIES | | |
Property Additions | (667) | (912) |
Purchases of Short-term Investments | - | (25) |
Proceeds from Sales of Short-term Investments | - | 280 |
Other Investing Activities | 49 | (1) |
Net Cash Used in Investing Activities | (618) | (658) |
| | |
FINANCING ACTIVITIES | | |
Long-term Debt Issued | 500 | 1,000 |
Long-term Debt Repaid | (83) | (176) |
Dividends Paid | (176) | (134) |
Stock Options Exercised | 12 | 65 |
Shares Repurchased | - | (453) |
Other Financing Activities | (177) | 43 |
Net Cash Provided by Financing Activities | 76 | 345 |
| | |
Net Increase in Cash and Cash Equivalents | 439 | 1,030 |
| | |
CASH AND CASH EQUIVALENTS | | |
Cash and Cash Equivalents at Beginning of Period | 669 | 368 |
Cash and Cash Equivalents at End of Period | $1,108 | $1,398 |
CSX Corporation
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited)
(a) Income Tax Expense: In the second quarter of 2008, CSX recognized a tax benefit of $18 million, or $0.04 per share, principally related to the settlement of federal income tax audits and certain other tax matters.
(b) Discontinued Operations: In May 2009, CSX sold the Company’s resort, The Greenbrier, and recognized a gain of $25 million after tax (also included in the second quarter amount is $2 million of losses from operations). Previously, all amounts associated with the operations of The Greenbrier were included in Other Income. Because of the sale, The Greenbrier’s results of operations and the second quarter 2009 gain will be reported as Discontinued Operations in the Company’s Consolidated Income Statements. All prior periods have been reclassified to reflect this change.
OTHER INCOME - NET (Unaudited) |
(Dollars in Millions) |
| | | | | | | |
| Quarters Ended | | Six Months Ended |
| Jun. 26, | Jun. 27, | | | Jun. 26, | Jun. 27, | |
| 2009 | 2008 | $ Change | | 2009 | 2008 | $ Change |
Interest Income (a) | $3 | $13 | $(10) | | $7 | $21 | $(14) |
Income from Real Estate Operations (b) | 6 | 3 | 3 | | 7 | 33 | (26) |
Miscellaneous (c) | 1 | 1 | - | | (1) | 35 | (36) |
Total Other Income - Net | $10 | $17 | $(7) | | $13 | $89 | $(76) |
Note: In May 2009, CSX sold the stock of The Greenbrier Hotel Corporation, owner of The Greenbrier resort. The results of The Greenbrier’s operations are presented in discontinued operations on the consolidated income statements and all prior periods have been reclassified.
(a) | Interest income fluctuates as a result of interest rates and balances that earn interest based on CSX’s cash, cash equivalents and short-term investments. |
(b) | Income from real estate includes the results of operations of the Company’s non-operating real estate sales, leasing, acquisition and management and development activities. Income may fluctuate as a function of timing of real estate sales. |
(c) | Miscellaneous income includes a number of items which can be income or expense. Examples of these items are equity earnings and/or losses, noncontrolling minority interest expense, investment gains and losses and other non-operating activities. In first quarter 2008, CSX recorded additional income of $30 million for an adjustment to correct equity earnings from a non-consolidated subsidiary. |
|
RESULTS OF OPERATIONS (Unaudited) |
(Dollars in Millions) |
| | | | | | | | | |
Quarters Ended June 26, 2009 and June 27, 2008 |
| | | | | | | | | |
| | | | CSX | | | |
| Rail (a) | Intermodal | Consolidated | | | |
| 2009 | 2008 | 2009 | 2008 | 2009 | 2008 | $ Change | % Change |
Revenue | $1,894 | $2,522 | $291 | $385 | $2,185 | $2,907 | $(722) | (25) | % |
Expense | | | | | | | | | |
Labor and Fringe | 638 | 714 | 16 | 19 | 654 | 733 | 79 | 11 | |
Materials, Supplies and Other | 324 | 462 | 44 | 51 | 368 | 513 | 145 | 28 | |
Fuel | 184 | 536 | 1 | 1 | 185 | 537 | 352 | 66 | |
Depreciation | 222 | 220 | 7 | 7 | 229 | 227 | (2) | (1) | |
Equipment and Other Rents | 74 | 86 | 24 | 26 | 98 | 112 | 14 | 13 | |
Inland Transportation | (94) | (137) | 163 | 205 | 69 | 68 | (1) | (1) | |
Total Expense | 1,348 | 1,881 | 255 | 309 | 1,603 | 2,190 | 587 | 27 | |
Operating Income | $546 | $641 | $36 | $76 | $582 | $717 | $(135) | (19) | % |
| | | | | | | | | |
Operating Ratio | 71.2% | 74.6% | 87.6% | 80.3% | 73.4% | 75.3% | | | |
| | | | | | | | | |
| | | | | | | | | |
Six Months Ended June 26, 2009 and June 27, 2008 |
| | | | | | | | | |
| | | | CSX | | | |
| Rail (a) | Intermodal | Consolidated | | | |
| 2009 | 2008 | 2009 | 2008 | 2009 | 2008 | $ Change | % Change |
Revenue | $3,871 | $4,887 | $561 | $733 | $4,432 | $5,620 | $(1,188) | (21) | % |
Expense | | | | | | | | | |
Labor and Fringe | 1,282 | 1,440 | 34 | 38 | 1,316 | 1,478 | 162 | 11 | |
Materials, Supplies and Other | 756 | 918 | 89 | 100 | 845 | 1,018 | 173 | 17 | |
Fuel | 374 | 975 | 2 | 3 | 376 | 978 | 602 | 62 | |
Depreciation | 440 | 437 | 13 | 12 | 453 | 449 | (4) | (1) | |
Equipment and Other Rents | 162 | 170 | 49 | 53 | 211 | 223 | 12 | 5 | |
Inland Transportation | (187) | (259) | 314 | 390 | 127 | 131 | 4 | 3 | |
Total Expense | 2,827 | 3,681 | 501 | 596 | 3,328 | 4,277 | 949 | 22 | |
Operating Income | $1,044 | $1,206 | $60 | $137 | $1,104 | $1,343 | $(239) | (18) | % |
| | | | | | | | | |
Operating Ratio | 73.0% | 75.3% | 89.3% | 81.3% | 75.1% | 76.1% | | | |
(a) | In addition to CSX Transportation, Inc., the Rail segment includes non-railroad subsidiaries such as Total Distribution Services, Inc., Transflo Terminal Services, Inc., CSX Technology, Inc. and other subsidiaries. |
|
VOLUME AND REVENUE (Unaudited) |
Volume (Thousands of Units); Revenue (Dollars in Millions); Revenue Per Unit (Dollars) |
| | | | | | | | | | | | | | |
Quarters Ended June 26, 2009 and June 27, 2008 |
| | | | | | | | | | | | | | |
| Volume | | Revenue | | Revenue Per Unit |
| 2009 | 2008 | % Change | | 2009 | 2008 | % Change | | 2009 | 2008 | % Change |
Chemicals | 105 | 131 | (20) | % | | $308 | $381 | (19) | % | | $2,933 | $2,908 | 1 | % |
Emerging Markets | 106 | 133 | (20) | | | 147 | 191 | (23) | | | 1,387 | 1,436 | (3) | |
Forest Products | 64 | 90 | (29) | | | 133 | 205 | (35) | | | 2,078 | 2,278 | (9) | |
Agricultural Products | 106 | 108 | (2) | | | 233 | 246 | (5) | | | 2,198 | 2,278 | (4) | |
Metals | 45 | 96 | (53) | | | 87 | 211 | (59) | | | 1,933 | 2,198 | (12) | |
Phosphates and Fertilizers | 74 | 90 | (18) | | | 94 | 128 | (27) | | | 1,270 | 1,422 | (11) | |
Food and Consumer | 25 | 28 | (11) | | | 59 | 70 | (16) | | | 2,360 | 2,500 | (6) | |
Total Merchandise | 525 | 676 | (22) | | | 1,061 | 1,432 | (26) | | | 2,021 | 2,118 | (5) | |
| | | | | | | | | | | | | | |
Coal | 361 | 450 | (20) | | | 639 | 777 | (18) | | | 1,770 | 1,727 | 2 | |
Coke and Iron Ore | 14 | 27 | (48) | | | 23 | 47 | (51) | | | 1,643 | 1,741 | (6) | |
Total Coal | 375 | 477 | (21) | | | 662 | 824 | (20) | | | 1,765 | 1,727 | 2 | |
| | | | | | | | | | | | | | |
Automotive | 54 | 92 | (41) | | | 113 | 205 | (45) | | | 2,093 | 2,228 | (6) | |
| | | | | | | | | | | | | | |
Other | - | - | - | | | 58 | 61 | (5) | | | - | - | - | |
Total Rail | 954 | 1,245 | (23) | | | 1,894 | 2,522 | (25) | | | 1,985 | 2,026 | (2) | |
| | | | | | | | | | | | | | |
International | 183 | 262 | (30) | | | 81 | 137 | (41) | | | 443 | 523 | (15) | |
Domestic | 274 | 268 | 2 | | | 204 | 242 | (16) | | | 745 | 903 | (17) | |
Other | - | - | - | | | 6 | 6 | - | | | - | - | - | |
Total Intermodal | 457 | 530 | (14) | | | 291 | 385 | (24) | | | 637 | 726 | (12) | |
| | | | | | | | | | | | | | |
Total | 1,411 | 1,775 | (21) | % | | $2,185 | $2,907 | (25) | % | | $1,549 | $1,638 | (5) | % |
| | | | | | | | | | | | | | |
Six Months Ended June 26, 2009 and June 27, 2008 |
| | | | | | | | | | | | | | |
| Volume | | Revenue | | Revenue Per Unit |
| 2009 | 2008 | % Change | | 2009 | 2008 | % Change | | 2009 | 2008 | % Change |
Chemicals | 210 | 260 | (19) | % | | $616 | $743 | (17) | % | | $2,933 | $2,858 | 3 | % |
Emerging Markets | 197 | 248 | (21) | | | 281 | 352 | (20) | | | 1,426 | 1,419 | - | |
Forest Products | 129 | 177 | (27) | | | 273 | 397 | (31) | | | 2,116 | 2,243 | (6) | |
Agricultural Products | 215 | 217 | (1) | | | 482 | 481 | - | | | 2,242 | 2,217 | 1 | |
Metals | 93 | 188 | (51) | | | 184 | 408 | (55) | | | 1,978 | 2,170 | (9) | |
Phosphates and Fertilizers | 134 | 181 | (26) | | | 181 | 258 | (30) | | | 1,351 | 1,425 | (5) | |
Food and Consumer | 50 | 55 | (9) | | | 119 | 135 | (12) | | | 2,380 | 2,455 | (3) | |
Total Merchandise | 1,028 | 1,326 | (22) | | | 2,136 | 2,774 | (23) | | | 2,078 | 2,092 | (1) | |
| | | | | | | | | | | | | | |
Coal | 776 | 890 | (13) | | | 1,352 | 1,497 | (10) | | | 1,742 | 1,682 | 4 | |
Coke and Iron Ore | 30 | 50 | (40) | | | 54 | 89 | (39) | | | 1,800 | 1,780 | 1 | |
Total Coal | 806 | 940 | (14) | | | 1,406 | 1,586 | (11) | | | 1,744 | 1,687 | 3 | |
| | | | | | | | | | | | | | |
Automotive | 99 | 188 | (47) | | | 208 | 407 | (49) | | | 2,101 | 2,165 | (3) | |
| | | | | | | | | | | | | | |
Other | - | - | - | | | 121 | 120 | 1 | | | - | - | - | |
Total Rail | 1,933 | 2,454 | (21) | | | 3,871 | 4,887 | (21) | | | 2,003 | 1,991 | 1 | |
| | | | | | | | | | | | | | |
International | 369 | 515 | (28) | | | 164 | 260 | (37) | | | 444 | 505 | (12) | |
Domestic | 528 | 523 | 1 | | | 388 | 460 | (16) | | | 735 | 880 | (16) | |
Other | - | - | - | | | 9 | 13 | (31) | | | - | - | - | |
Total Intermodal | 897 | 1,038 | (14) | | | 561 | 733 | (23) | | | 625 | 706 | (11) | |
| | | | | | | | | | | | | | |
Total | 2,830 | 3,492 | (19) | % | | $4,432 | $5,620 | (21) | % | | $1,566 | $1,609 | (3) | % |
Certain data within Merchandise categories have been reclassified to conform to the current year presentation.
CSX Corporation
REVENUE
CSX experienced significant year-over-year volume and revenue declines caused by the broad-based weakness in the economy. The greatest impacts were felt in coal, automotive, construction and consumer-related markets. Lower fuel recovery associated with the sharp decline in fuel prices more than offset the Company’s ongoing yield management initiatives.
Rail
Merchandise
Chemicals – Continued weakness in the housing, automotive and consumer goods markets has significantly reduced demand for chemical products related to those markets.
Emerging Markets – Aggregates (which include crushed stone, sand and gravel) volume declined due to continued softness in residential construction.
Forest Products – A weak housing market has driven the continued decline in lumber and building products. Paper volume continued to be soft due to electronic media substitution and less packaging being used as a result of lower consumer spending.
Agricultural Products – Volume was down slightly as the continuing growth in ethanol was more than offset by lower consumption of poultry and fewer east coast grain exports due to a stronger global supply.
Metals – Volume declines were driven by weak global and domestic steel demand in the automotive and construction industries. This weak demand caused steel producers to continue idling capacity in an attempt to balance supply with demand.
Phosphates and Fertilizers – Phosphate production was down due to weak international and domestic demand. Additionally, farmers are continuing to cut back on levels of phosphate and potash application in reaction to lower commodity prices.
Food and Consumer – Weakness in residential construction caused reduced shipments of appliances and other consumer goods. Yet, basic needs markets such as food products were less severely impacted by the current economic conditions.
Coal
Volume declines were driven by a weaker export market and lower demand from electric utilities. The export market decline is a result of both lower steel production in Europe reducing the need for metallurgical coal (coal used to produce steel), and cheaper alternative global sources for European utilities. The demand for domestic electrical generation from coal was down because of low natural gas prices and lower industrial production.
Automotive
Revenue and volume were down as lower consumer demands, inventory corrections, and bankruptcy filings within the auto industry reduced new car production.
Intermodal
International – Volume continues to be down significantly on weak imports and exports due to the global economic recession. Revenue-per-unit was lower on significantly decreased fuel recovery, partially offset by long-term contract price increases.
Domestic – Volume was up slightly as truckload conversion and expanded service offerings helped offset the decline in other segments of the domestic market. Revenue-per-unit was lower on decreased fuel recovery and a competitive truck pricing environment.
CSX Corporation
Expenses decreased $587 million from last year’s quarter. Significant variances are described below.
Labor and Fringe expense decreased $79 million. This decrease was primarily driven by labor productivity initiatives, such as employee furloughs and reduced crew overtime, and lower incentive compensation. These decreases were partially offset by inflation.
Materials, Supplies and Other expense decreased $145 million due to several items including a year over year change in casualty reserves of $70 million. Casualty reserves are reviewed by management and an outside party twice a year. As safety trends have continued to improve, benefits were taken in both years’ second quarters - $85 million in 2009 and $15 million in the prior year quarter. These benefits were a result of the continuing downward trend in the number and the severity of injuries. Additionally, there were volume-related expense decreases, prior year proxy-related items (not repeated in the current year) and other items.
Fuel expense decreased $352 million due to lower fuel prices and lower volume.
____________________________________________________________________________________________________________________________________________
EMPLOYEE COUNTS (Estimated) |
| | | | | | | | | |
| | | | 2009 | | | | 2008 | |
| Apr | May | Jun | Q2 | Apr | May | Jun | Q2 | Average |
| 2009 | 2009 | 2009 | Average | 2008 | 2008 | 2008 | Average | Change |
Rail | 28,755 | 28,149 | 28,134 | 28,346 | 31,432 | 31,626 | 31,470 | 31,509 | (3,163) |
Intermodal | 935 | 922 | 917 | 925 | 970 | 960 | 953 | 961 | (36) |
Technology, Corporate, and Other | 611 | 610 | 600 | 607 | 610 | 613 | 612 | 612 | (5) |
Total | 30,301 | 29,681 | 29,651 | 29,878 | 33,012 | 33,199 | 33,035 | 33,082 | (3,204) |
NOTE: Employee counts for The Greenbrier are no longer included due to the sale.
FUEL STATISTICS |
| | | | | | | |
| Quarters Ended | | Six Months Ended |
| Jun. 26, | Jun. 27, | | | Jun. 26, | Jun. 27, | |
| 2009 | 2008 | Change | | 2009 | 2008 | Change |
Estimated Locomotive Fuel Consumption (Millions of gallons) | 106.3 | 137.6 | 31.3 | | 225.9 | 281.2 | 55.3 |
Price Per Gallon (Dollars) | $1.56 | $3.62 | $2.06 | | $1.47 | $3.21 | $1.74 |
Total Locomotive Fuel Expense (Dollars in millions) | $166 | $498 | $332 | | $332 | $903 | $571 |
Total Non-Locomotive Fuel Expense (Dollars in millions) | 19 | 39 | 20 | | 44 | 75 | 31 |
Total Fuel Expense (Dollars in millions) | $185 | $537 | $352 | | $376 | $978 | $602 |
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RAIL OPERATING STATISTICS (Estimated) |
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| Quarters Ended | | Six Months Ended | |
| Jun. 26, | Jun. 27, | Improvement | | Jun. 26, | Jun. 27, | Improvement | |
Coal (Millions of Tons) | 2009 | 2008 | (Decline) % | | 2009 | 2008 | (Decline) % | |
Domestic | | | | | | | | | | |
Utility | 32.6 | 36.5 | (11) | % | | 69.6 | 73.2 | (5) | % | |
Other | 3.0 | 4.6 | (35) | | | 5.7 | 8.5 | (33) | | |
Total Domestic | 35.6 | 41.1 | (13) | | | 75.3 | 81.7 | (8) | | |
Export | 4.8 | 8.4 | (43) | | | 10.9 | 16.0 | (32) | | |
Total Coal | 40.4 | 49.5 | (18) | | | 86.2 | 97.7 | (12) | | |
Coke and Iron Ore | 1.3 | 2.3 | (43) | | | 2.5 | 4.2 | (40) | | |
Total Coal, Coke and Iron Ore | 41.7 | 51.8 | (19) | | | 88.7 | 101.9 | (13) | | |
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Revenue Ton-Miles (Billions) | | | | | | | | | | |
Merchandise | 28.2 | 34.9 | (19) | | | 56.0 | 69.2 | (19) | | |
Coal | 18.5 | 22.9 | (19) | | | 39.0 | 45.0 | (13) | | |
Automotive | 1.0 | 1.5 | (33) | | | 1.8 | 3.2 | (44) | | |
Intermodal | 4.3 | 4.9 | (12) | | | 8.3 | 9.5 | (13) | | |
Total | 52.0 | 64.2 | (19) | | | 105.1 | 126.9 | (17) | | |
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Gross Ton-Miles (Billions) | | | | | | | | | | |
Total Gross Ton-Miles | 94.3 | 116.2 | (19) | | | 190.1 | 229.8 | (17) | | |
(Excludes locomotive gross ton-miles) | | | | | | | | | | |
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Safety and Service Measurements | | | | | | | | | | |
FRA Personal Injuries Frequency Index | 1.22 | 1.30 | 6 | | | 1.26 | 1.19 | (6) | | |
Number of FRA-reportable injuries per 200,000 man-hours | | | | | | | | | | |
FRA Train Accident Rate | 2.22 | 2.63 | 16 | | | 2.60 | 2.83 | 8 | | |
Number of FRA-reportable train accidents per million train miles | | | | | | | | | |
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On-Time Train Originations | 83% | 75% | 11 | | | 83% | 77% | 8 | | |
On-Time Destination Arrivals | 81% | 65% | 25 | | | 80% | 67% | 19 | | |
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Dwell (Hours) | 24.1 | 23.3 | (3) | | | 24.1 | 23.0 | (5) | | |
Cars-On-Line | 218,313 | 224,460 | 3 | | | 218,586 | 222,826 | 2 | | |
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System Train Velocity (Miles per hour) | 21.7 | 20.0 | 9 | | | 21.7 | 20.4 | 6 | | |
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| | | Increase | | | | | |
Resources | | | (Decrease) % | | | | | |
Route Miles | 21,190 | 21,224 | - | | | | | | | |
Locomotives (Owned and long-term leased) | 4,108 | 4,098 | - | | | | | | | |
Freight Cars (Owned and long-term leased) | 86,300 | 92,083 | (6) | % | | | | | | |