Exhibit 99.2
CSX Announces Fourth Quarter and Full-Year 2009 Earnings
Highlights:
§ | Fourth quarter EPS from continuing operations of 77 cents |
§ | Continued strong safety, service and productivity |
§ | Full-year operating ratio of 74.7 percent |
Jacksonville, Fla. – January 19, 2010 – CSX Corporation (NYSE: CSX) today announced fourth quarter earnings from continuing operations of $305 million, or 77 cents a share, versus $361 million, or 92 cents a share, in the same period last year.
Fourth quarter revenue of $2.3 billion was 13 percent down from the prior year. This was driven by a 7 percent overall decline in volume as growth in the intermodal and automotive sectors was more than offset by declines in coal and merchandise. In addition, lower fuel prices led to decreased fuel surcharge recovery. Despite these factors, core pricing remained strong, reflecting high service levels and the overall value of freight rail transportation.
Total operating expense for the quarter was $1.7 billion, down 12 percent from the prior year. These savings, driven primarily by strong safety, service and productivity, contributed to operating income of $583 million for the quarter.
“The economy continued to show modest, sequential improvement in the quarter,” said Michael J. Ward, chairman, president and chief executive officer. “CSX worked aggressively on gaining operating leverage and further strengthening the fundamentals of our business for the future.”
CSX also announced full year 2009 earnings from continuing operations of $1.14 billion, or $2.87 a share, versus $1.5 billion, or $3.66 a share, for 2008.
The company continued to improve its network efficiency and safety in 2009, while reducing full-year operating costs by 20 percent compared to 2008. As a result, CSX posted a record annual operating ratio of 74.7 percent.
“In 2009, CSX put forth a decisive and effective response to the challenging economy while simultaneously building for the future,” said Ward. “Our performance is a clear demonstration of the resolve of our organization and the talents of our people.”
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 | Lauren Rueger | ||
Reports on Form 8-K. | (877) 835-5279 |
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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 January 20, 2010 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 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, 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 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 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; (v) the outcome of claims and litigation involving or affecting the company; and (vi) natural events such as severe weather conditions or pandemic health crises.
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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CONSOLIDATED INCOME STATEMENTS | |||||||||||
(Dollars in Millions, Except Per Share Amounts) | |||||||||||
(Unaudited) | (Unaudited) | ||||||||||
Quarters Ended | Years Ended | ||||||||||
Dec. 25, | Dec. 26, | Dec. 25, | Dec. 26, | ||||||||
2009 | 2008 | $ Change | % Change | 2009 | 2008 | $ Change | % Change | ||||
Revenue | $2,320 | $2,674 | $(354) | (13) | % | $9,041 | $11,255 | $(2,214) | (20) | % | |
Expense | |||||||||||
Labor and Fringe | 660 | 723 | 63 | 9 | 2,629 | 2,955 | 326 | 11 | |||
Materials, Supplies and Other | 442 | 547 | 105 | 19 | 1,715 | 2,133 | 418 | 20 | |||
Fuel | 250 | 331 | 81 | 24 | 849 | 1,817 | 968 | 53 | |||
Depreciation | 227 | 228 | 1 | - | 908 | 904 | (4) | - | |||
Equipment and Other Rents | 88 | 96 | 8 | 8 | 391 | 425 | 34 | 8 | |||
Inland Transportation | 70 | 57 | (13) | (23) | 264 | 253 | (11) | (4) | |||
Total Expense | 1,737 | 1,982 | 245 | 12 | 6,756 | 8,487 | 1,731 | 20 | |||
Operating Income | 583 | 692 | (109) | (16) | 2,285 | 2,768 | (483) | (17) | |||
Interest Expense | (138) | (136) | (2) | (1) | (558) | (519) | (39) | (8) | |||
Other Income - Net | 15 | 6 | 9 | 150 | 34 | 100 | (66) | (66) | |||
Earnings From Continuing Operations | |||||||||||
Before Income Taxes | 460 | 562 | (102) | (18) | 1,761 | 2,349 | (588) | (25) | |||
Income Tax Expense (a) | (155) | (201) | 46 | 23 | (624) | (854) | 230 | 27 | |||
Earnings from Continuing Operations | 305 | 361 | (56) | (16) | 1,137 | 1,495 | (358) | (24) | |||
Discontinued Operations (b) | - | (114) | 114 | 100 | 15 | (130) | 145 | 112 | |||
Net Earnings | $305 | $247 | $58 | 23 | % | $1,152 | $1,365 | $(213) | (16) | % | |
Per Common Share | |||||||||||
Net Earnings Per Share, Assuming Dilution | |||||||||||
Continuing Operations | $0.77 | $0.92 | $(0.15) | (16) | % | $2.87 | $3.66 | $(0.79) | (22) | % | |
Discontinued Operations (b) | - | (0.29) | 0.29 | 100 | 0.04 | (0.32) | 0.36 | 113 | |||
Net Earnings | $0.77 | $0.63 | $0.14 | 22 | % | $2.91 | $3.34 | $(0.43) | (13) | % | |
Average Shares Outstanding, | |||||||||||
Assuming Dilution (Thousands) | 396,939 | 395,675 | 395,686 | 408,620 | |||||||
Cash Dividends Paid Per Common Share | $0.22 | $0.22 | $0.88 | $0.77 |
(a) | In fourth quarter 2009, CSX recognized a tax benefit of $15 million, primarily related to a change in the apportionment of state taxes. |
(b) | In second quarter 2009, CSX sold the stock of a subsidiary that indirectly owned Greenbrier Hotel Corporation, owner of The Greenbrier resort. Previously, all amounts associated with the operations of The Greenbrier were included in other income – net. Because of the sale, The Greenbrier’s results of operations are reported as discontinued operations in the Company’s consolidated income statements and all prior periods have been reclassified. |
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CSX Corporation | ||
CONSOLIDATED BALANCE SHEETS | ||
(Dollars in Millions) | ||
(Unaudited) | ||
Dec. 25, | Dec. 26, | |
2009 | 2008 | |
ASSETS | ||
Current Assets | ||
Cash and Cash Equivalents | $1,029 | $669 |
Short-term Investments | 61 | 76 |
Accounts Receivable - Net | 995 | 1,107 |
Materials and Supplies | 203 | 217 |
Deferred Income Taxes | 158 | 203 |
Other Current Assets | 124 | 119 |
Total Current Assets | 2,570 | 2,391 |
Properties | 31,081 | 30,208 |
Accumulated Depreciation | (7,868) | (7,520) |
Properties - Net | 23,213 | 22,688 |
Investment in Conrail | 650 | 609 |
Affiliates and Other Companies | 438 | 406 |
Other Long-term Assets | 165 | 194 |
Total Assets | $27,036 | $26,288 |
LIABILITIES AND SHAREHOLDERS' EQUITY | ||
Current Liabilities | ||
Accounts Payable | $967 | $973 |
Labor and Fringe Benefits Payable | 383 | 465 |
Casualty, Environmental and Other Reserves | 190 | 236 |
Current Maturities of Long-term Debt | 113 | 319 |
Income and Other Taxes Payable | 112 | 125 |
Other Current Liabilities | 100 | 286 |
Total Current Liabilities | 1,865 | 2,404 |
Casualty, Environmental and Other Reserves | 547 | 643 |
Long-term Debt | 7,895 | 7,512 |
Deferred Income Taxes | 6,585 | 6,235 |
Other Long-term Liabilities | 1,284 | 1,426 |
Total Liabilities | 18,176 | 18,220 |
Common Stock, $1 Par Value | 393 | 391 |
Other Capital | 80 | - |
Retained Earnings | 9,182 | 8,398 |
Accumulated Other Comprehensive Loss | (809) | (741) |
Noncontrolling Minority Interest | 14 | 20 |
Total Shareholders' Equity | 8,860 | 8,068 |
Total Liabilities and Shareholders' Equity | $27,036 | $26,288 |
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CSX Corporation | ||
CONSOLIDATED CASH FLOW STATEMENTS | ||
(Dollars in Millions) | ||
(Unaudited) | ||
Years Ended | ||
Dec. 25, | Dec. 26, | |
2009 | 2008 | |
OPERATING ACTIVITIES | ||
Net Earnings | $1,152 | $1,365 |
Adjustments to Reconcile Net Earnings to Net Cash Provided | ||
by Operating Activities: | ||
Depreciation | 908 | 918 |
Deferred Income Taxes | 436 | 435 |
Non-cash Discontinued Operations | - | 166 |
Contributions to Qualified Pension Plans | (250) | (102) |
Other Operating Activities | (182) | 65 |
Changes in Operating Assets and Liabilities: | ||
Accounts Receivable | 92 | 74 |
Other Current Assets | 28 | 37 |
Accounts Payable | (4) | (3) |
Income and Other Taxes Payable | (9) | (46) |
Other Current Liabilities | (111) | 5 |
Net Cash Provided by Operating Activities | 2,060 | 2,914 |
INVESTING ACTIVITIES | ||
Property Additions (a) | (1,447) | (1,740) |
Purchases of Short-term Investments | - | (25) |
Proceeds from Sales of Short-term Investments | - | 280 |
Other Investing Activities | 54 | 36 |
Net Cash Used in Investing Activities | (1,393) | (1,449) |
FINANCING ACTIVITIES | ||
Long-term Debt Issued | 500 | 1,351 |
Long-term Debt Repaid | (323) | (642) |
Dividends Paid | (345) | (308) |
Stock Options Exercised | 34 | 83 |
Shares Repurchased | - | (1,570) |
Other Financing Activities (a) | (173) | (78) |
Net Cash Provided by Financing Activities | (307) | (1,164) |
Net Increase in Cash and Cash Equivalents | 360 | 301 |
CASH AND CASH EQUIVALENTS | ||
Cash and Cash Equivalents at Beginning of Period | 669 | 368 |
Cash and Cash Equivalents at End of Period | $1,029 | $669 |
(a) Property additions, which are classified as investing activities on the consolidated cash flow statements, consisted of $1.4 billion and $1.7 billion for years ended 2009 and 2008, respectively. In addition, capital expenditures for 2009 include purchases of new assets using seller financing, approximately $160 million, which are included in other financing activities on the consolidated cash flow statements. There were $54 million in purchases of new assets under seller financing agreements during 2008.
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CSX Corporation
OTHER INCOME – NET (Unaudited)
The Company derives income from items that are not considered operating activities. Income from these items is reported net of related expense. Miscellaneous income (expense) includes equity earnings or losses, investment gains and losses, and other non-operating activities, which can be income or expense. Other income – net consisted of the following:
Quarters Ended | Years Ended | ||||||
Dec. 25, | Dec. 26, | Dec. 25, | Dec. 26, | ||||
(Dollars in Millions) | 2009 | 2008 | $ Change | 2009 | 2008 | $ Change | |
Interest Income | $2 | $6 | $(4) | $11 | $37 | $(26) | |
Income from Real Estate Operations | 13 | 3 | 10 | 31 | 39 | (8) | |
Miscellaneous Income (Expense) (a) | - | (3) | 3 | (8) | 24 | (32) | |
Total Other Income - Net | $15 | $6 | $9 | $34 | $100 | $(66) |
(a) | In 2008, CSX recorded additional income of $30 million for an adjustment to correct equity earnings from a non-consolidated subsidiary. |
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RESULTS OF OPERATIONS (Unaudited) | |||||||||
(Dollars in Millions) | |||||||||
Quarters Ended December 25, 2009 and December 26, 2008 | |||||||||
CSX | |||||||||
Rail (a) | Intermodal | Consolidated | |||||||
2009 | 2008 | 2009 | 2008 | 2009 | 2008 | $ Change | % Change | ||
Revenue | $1,980 | $2,340 | $340 | $334 | $2,320 | $2,674 | $(354) | (13) | % |
Expense | |||||||||
Labor and Fringe | 644 | 704 | 16 | 19 | 660 | 723 | 63 | 9 | |
Materials, Supplies and Other | 393 | 494 | 49 | 53 | 442 | 547 | 105 | 19 | |
Fuel | 248 | 329 | 2 | 2 | 250 | 331 | 81 | 24 | |
Depreciation | 221 | 221 | 6 | 7 | 227 | 228 | 1 | - | |
Equipment and Other Rents | 61 | 69 | 27 | 27 | 88 | 96 | 8 | 8 | |
Inland Transportation | (107) | (113) | 177 | 170 | 70 | 57 | (13) | (23) | |
Total Expense | 1,460 | 1,704 | 277 | 278 | 1,737 | 1,982 | 245 | 12 | |
Operating Income | $520 | $636 | $63 | $56 | $583 | $692 | $(109) | (16) | % |
Operating Ratio | 73.7% | 72.8% | 81.5% | 83.2% | 74.9% | 74.1% | |||
Years Ended December 25, 2009 and December 26, 2008 | |||||||||
CSX | |||||||||
Rail (a) | Intermodal | Consolidated | |||||||
2009 | 2008 | 2009 | 2008 | 2009 | 2008 | $ Change | % Change | ||
Revenue | $7,837 | $9,789 | $1,204 | $1,466 | $9,041 | $11,255 | $(2,214) | (20) | % |
Expense | |||||||||
Labor and Fringe | 2,561 | 2,879 | 68 | 76 | 2,629 | 2,955 | 326 | 11 | |
Materials, Supplies and Other | 1,530 | 1,933 | 185 | 200 | 1,715 | 2,133 | 418 | 20 | |
Fuel | 845 | 1,810 | 4 | 7 | 849 | 1,817 | 968 | 53 | |
Depreciation | 883 | 879 | 25 | 25 | 908 | 904 | (4) | - | |
Equipment and Other Rents | 289 | 317 | 102 | 108 | 391 | 425 | 34 | 8 | |
Inland Transportation | (394) | (507) | 658 | 760 | 264 | 253 | (11) | (4) | |
Total Expense | 5,714 | 7,311 | 1,042 | 1,176 | 6,756 | 8,487 | 1,731 | 20 | |
Operating Income | $2,123 | $2,478 | $162 | $290 | $2,285 | $2,768 | $(483) | (17) | % |
Operating Ratio | 72.9% | 74.7% | 86.5% | 80.2% | 74.7% | 75.4% |
(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. |
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VOLUME AND REVENUE (Unaudited) | ||||||||||||||
Volume (Thousands of Units); Revenue (Dollars in Millions); Revenue Per Unit (Dollars) | ||||||||||||||
Quarters Ended December 25, 2009 and December 26, 2008 | ||||||||||||||
Volume | Revenue | Revenue Per Unit | ||||||||||||
2009 | 2008 | % Change | 2009 | 2008 | % Change | 2009 | 2008 | % Change | ||||||
Chemicals | 104 | 108 | (4) | % | $319 | $326 | (2) | % | $3,067 | $3,019 | 2 | % | ||
Emerging Markets | 99 | 113 | (12) | 145 | 169 | (14) | 1,465 | 1,496 | (2) | |||||
Forest Products | 62 | 77 | (19) | 134 | 180 | (26) | 2,161 | 2,338 | (8) | |||||
Agricultural Products | 112 | 109 | 3 | 255 | 271 | (6) | 2,277 | 2,486 | (8) | |||||
Metals | 52 | 57 | (9) | 104 | 129 | (19) | 2,000 | 2,263 | (12) | |||||
Phosphates and Fertilizers | 78 | 66 | 18 | 98 | 86 | 14 | 1,256 | 1,303 | (4) | |||||
Food and Consumer | 24 | 27 | (11) | 57 | 73 | (22) | 2,375 | 2,704 | (12) | |||||
Total Merchandise | 531 | 557 | (5) | 1,112 | 1,234 | (10) | 2,094 | 2,215 | (5) | |||||
Coal | 346 | 449 | (23) | 610 | 811 | (25) | 1,763 | 1,806 | (2) | |||||
Coke and Iron Ore | 19 | 22 | (14) | 31 | 38 | (18) | 1,632 | 1,727 | (6) | |||||
Total Coal | 365 | 471 | (23) | 641 | 849 | (24) | 1,756 | 1,803 | (3) | |||||
Automotive | 78 | 76 | 3 | 176 | 182 | (3) | 2,256 | 2,395 | (6) | |||||
Other | - | - | - | 51 | 75 | (32) | - | - | - | |||||
Total Rail | 974 | 1,104 | (12) | 1,980 | 2,340 | (15) | 2,033 | 2,120 | (4) | |||||
International | 210 | 227 | (7) | 97 | 112 | (13) | 462 | 493 | (6) | |||||
Domestic | 314 | 272 | 15 | 236 | 212 | 11 | 752 | 779 | (3) | |||||
Other | - | - | - | 7 | 10 | (30) | - | - | - | |||||
Total Intermodal | 524 | 499 | 5 | 340 | 334 | 2 | 649 | 669 | (3) | |||||
Total | 1,498 | 1,603 | (7) | % | $2,320 | $2,674 | (13) | % | $1,549 | $1,668 | (7) | % | ||
Years Ended December 25, 2009 and December 26, 2008 | ||||||||||||||
Volume | Revenue | Revenue Per Unit | ||||||||||||
2009 | 2008 | % Change | 2009 | 2008 | % Change | 2009 | 2008 | % Change | ||||||
Chemicals | 424 | 493 | (14) | % | $1,267 | $1,454 | (13) | % | $2,988 | $2,949 | 1 | % | ||
Emerging Markets | 405 | 487 | (17) | 585 | 714 | (18) | 1,444 | 1,466 | (2) | |||||
Forest Products | 258 | 344 | (25) | 547 | 793 | (31) | 2,120 | 2,305 | (8) | |||||
Agricultural Products | 428 | 432 | (1) | 960 | 1,010 | (5) | 2,243 | 2,338 | (4) | |||||
Metals | 200 | 337 | (41) | 399 | 752 | (47) | 1,995 | 2,231 | (11) | |||||
Phosphates and Fertilizers | 289 | 334 | (13) | 373 | 461 | (19) | 1,291 | 1,380 | (6) | |||||
Food and Consumer | 100 | 109 | (8) | 233 | 281 | (17) | 2,330 | 2,578 | (10) | |||||
Total Merchandise | 2,104 | 2,536 | (17) | 4,364 | 5,465 | (20) | 2,074 | 2,155 | (4) | |||||
Coal | 1,487 | 1,779 | (16) | 2,615 | 3,110 | (16) | 1,759 | 1,748 | 1 | |||||
Coke and Iron Ore | 66 | 100 | (34) | 112 | 175 | (36) | 1,697 | 1,750 | (3) | |||||
Total Coal | 1,553 | 1,879 | (17) | 2,727 | 3,285 | (17) | 1,756 | 1,748 | - | |||||
Automotive | 234 | 343 | (32) | 511 | 784 | (35) | 2,184 | 2,286 | (4) | |||||
Other | - | - | - | 235 | 255 | (8) | - | - | - | |||||
Total Rail | 3,891 | 4,758 | (18) | 7,837 | 9,789 | (20) | 2,014 | 2,057 | (2) | |||||
International | 780 | 1,000 | (22) | 353 | 509 | (31) | 453 | 509 | (11) | |||||
Domestic | 1,122 | 1,069 | 5 | 831 | 927 | (10) | 741 | 867 | (15) | |||||
Other | - | - | - | 20 | 30 | (33) | - | - | - | |||||
Total Intermodal | 1,902 | 2,069 | (8) | 1,204 | 1,466 | (18) | 633 | 709 | (11) | |||||
Total | 5,793 | 6,827 | (15) | % | $9,041 | $11,255 | (20) | % | $1,561 | $1,649 | (5) | % |
Certain data within Merchandise categories have been reclassified to conform to the current year presentation.
8
CSX Corporation
REVENUE
CSX experienced another quarter of volume and revenue decline caused by the weak economy. The greatest volume declines occurred in coal, construction and consumer-related markets. However, the overall rate of year-over-year volume decline continued to moderate with the slight improvement in the economy. Lower fuel recovery associated with the sharp decline in fuel prices more than offset the Company’s ongoing yield management initiatives.
Rail
Merchandise
The merchandise business is the most diverse market and includes aggregates, metal, phosphate, fertilizer, food, consumer, agricultural, paper and chemical products. Continued weakness in the construction and consumer goods markets has significantly reduced demand for most merchandise markets. Additional information on other drivers is provided below.
Agricultural Products - - Volume was up slightly with continuing growth in ethanol and exports mostly offset by lower poultry production which negatively impacted the feed grain and ingredient markets.
Phosphates and Fertilizers – Volume was up due to strong demand for both export and domestic phosphate shipments as low inventories are replenished.
Coal
Volume declines were driven by lower demand from electric utilities and a weaker export market. Domestic coal demand for generating electricity was down due to natural gas substitution and lower industrial production, resulting in continued high stockpile levels. As a result, utility coal demand is expected to remain weak well into 2010. The export market decline was a result of both lower steel production in Europe reducing the need for metallurgical coal (coal used to produce steel) and less expensive alternative global sources for European utilities.
Automotive
Volume increased due to a slight improvement in auto sales and the need for manufacturers to replenish inventories depleted by the Cash for Clunkers program. Revenue per unit was negatively impacted by lower fuel recovery associated with the sharp decline in fuel prices.
Intermodal
International – Volume continues to be down due to both weak imports and exports, however weakness in global trade is beginning to ease. Volume improved sequentially due to new service offerings and a slight fall peak in shipping in advance of the holiday season. Revenue-per-unit was lower due to decreased fuel recovery, partially offset by contract price increases.
Domestic – Volume increased as continued truckload conversions, expanded service offerings and a slight fall peak in shipping in advance of the holiday season offset the decline in other market segments. Revenue-per-unit was lower due to decreased fuel recovery and a continued competitive truck pricing environment.
9
CSX Corporation
EXPENSE |
Expenses decreased $245 million from last year’s quarter. Significant variances are described below.
Labor and Fringe expense decreased $63 million. This decrease was primarily driven by labor expense reductions, such as employee furloughs (temporary layoffs) and reduced crew overtime. These decreases were partially offset by inflation and other items.
Materials, Supplies and Other expense decreased $105 million. This decrease was driven by the current year decline in volume-related expenses and a decrease in a number of occupational injury claims, which primarily drove a net favorable adjustment to casualty reserves. Casualty reserves are reviewed by management and an independent expert during the second and fourth quarter of each year. Also, bad debt expense decreased due to improved collection and a stabilizing economic environment. Various other costs also decreased, such as ongoing benefits from the casualty reserve adjustments and other items from last year that were not repeated in this quarter.
Fuel expense decreased $81 million primarily due to lower volume, lower prices, and increased efficiency in locomotive fuel use.
Depreciation expense decreased $1 million due to lower depreciation rates resulting from a periodic review of asset useful lives partially offset by a larger asset base related to higher capital spending.
Equipment and Other Rents expense decreased $8 million primarily due to cost savings associated with improved asset utilization and lower volume.
Inland Transportation expense increased $13 million primarily due to higher foreign linehaul traffic.
EMPLOYEE COUNTS (Estimated) (a) | |||||||||
2009 | 2008 | ||||||||
Oct | Nov | Dec | Q4 | Oct | Nov | Dec | Q4 | Average | |
2009 | 2009 | 2009 | Average | 2008 | 2008 | 2008 | Average | Change | |
Rail | 28,094 | 27,912 | 27,828 | 27,945 | 31,857 | 31,924 | 31,598 | 31,793 | (3,848) |
Intermodal | 891 | 878 | 895 | 888 | 954 | 957 | 978 | 963 | (75) |
Technology, Corporate, and Other | 582 | 585 | 585 | 584 | 604 | 608 | 609 | 607 | (23) |
Total | 29,567 | 29,375 | 29,308 | 29,417 | 33,415 | 33,489 | 33,185 | 33,363 | (3,946) |
(a) | Employee counts above do not include The Greenbrier employees in any period as the resort was sold in the second quarter of 2009. |
FUEL STATISTICS | |||||||
Quarters Ended | Years Ended | ||||||
Dec. 25, | Dec. 26, | Dec. 25, | Dec. 26, | ||||
2009 | 2008 | Change | 2009 | 2008 | Change | ||
Estimated Locomotive Fuel Consumption (Millions of gallons) | 112.2 | 133.0 | 20.8 | 445.7 | 544.8 | 99.1 | |
Price Per Gallon (Dollars) | $2.03 | $2.22 | $0.19 | $1.71 | $3.06 | $1.35 | |
Total Locomotive Fuel Expense (Dollars in millions) | $228 | $295 | $67 | $762 | $1,667 | $905 | |
Total Non-Locomotive Fuel Expense (Dollars in millions) | 22 | 36 | 14 | 87 | 150 | 63 | |
Total Fuel Expense (Dollars in millions) | $250 | $331 | $81 | $849 | $1,817 | $968 |
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RAIL OPERATING STATISTICS (Estimated) | |||||||||
Quarters Ended | Years Ended | ||||||||
Dec. 25, | Dec. 26, | Improvement | Dec. 25, | Dec. 26, | Improvement | ||||
Coal (Millions of Tons) | 2009 | 2008 | (Decline) % | 2009 | 2008 | (Decline) % | |||
Domestic | |||||||||
Utility | 28.8 | 38.4 | (25) | % | 129.8 | 148.8 | (13) | % | |
Other | 3.9 | 4.1 | (5) | 13.5 | 17.0 | (21) | |||
Total Domestic | 32.7 | 42.5 | (23) | 143.3 | 165.8 | (14) | |||
Export | 6.1 | 7.1 | (14) | 22.5 | 30.0 | (25) | |||
Total Coal | 38.8 | 49.6 | (22) | 165.8 | 195.8 | (15) | |||
Coke and Iron Ore | 1.7 | 1.9 | (11) | 5.8 | 8.3 | (30) | |||
Total Coal, Coke and Iron Ore | 40.5 | 51.5 | (21) | % | 171.6 | 204.1 | (16) | % | |
Revenue Ton-Miles (Billions) | |||||||||
Merchandise | 28.4 | 29.5 | (4) | % | 112.9 | 131.9 | (14) | % | |
Coal | 17.1 | 22.6 | (24) | 75.3 | 89.5 | (16) | |||
Automotive | 1.4 | 1.3 | 8 | 4.2 | 5.9 | (29) | |||
Intermodal | 4.7 | 4.5 | 4 | 17.3 | 18.8 | (8) | |||
Total | 51.6 | 57.9 | (11) | % | 209.7 | 246.1 | (15) | % | |
Gross Ton-Miles (Billions) | |||||||||
Total Gross Ton-Miles | 95.0 | 106.5 | (11) | % | 381.0 | 449.6 | (15) | % | |
(Excludes locomotive gross ton-miles) | |||||||||
Safety and Service Measurements | |||||||||
FRA Personal Injuries Frequency Index | 0.99 | 1.19 | 17 | % | 1.19 | 1.22 | 2 | % | |
Number of FRA-reportable injuries per 200,000 man-hours | |||||||||
FRA Train Accident Rate | 2.65 | 2.78 | 5 | % | 2.77 | 2.92 | 5 | % | |
Number of FRA-reportable train accidents per million train miles | |||||||||
On-Time Train Originations | 79% | 85% | (7) | % | 81% | 79% | 3 | % | |
On-Time Destination Arrivals | 79% | 77% | 3 | % | 80% | 70% | 14 | % | |
Dwell (Hours) | 24.3 | 23.2 | (5) | % | 24.1 | 23.3 | (3) | % | |
Cars-On-Line | 211,975 | 222,195 | 5 | % | 216,013 | 223,577 | 3 | % | |
Train Velocity (Miles per hour) | 22.0 | 21.2 | 4 | % | 21.8 | 20.5 | 6 | % | |
Resources | Decrease % | ||||||||
Route Miles | 21,190 | 21,205 | - | % | |||||
Locomotives (Owned and long-term leased) | 4,071 | 4,143 | (2) | % | |||||
Freight Cars (Owned and long-term leased) | 84,282 | 91,350 | (8) | % |
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