10-KPeriod: FY2010

CSX CORP Annual Report, Year Ended Dec 31, 2010

Filed February 18, 2011For Securities:CSX

Summary

CSX Corporation's 2010 10-K filing indicates a strong recovery from the 2009 economic downturn, with revenue increasing by 18% to $10.6 billion, primarily driven by increased volumes and core pricing gains across all major markets, particularly automotive and metals. The company achieved record operating income of $3.1 billion and an improved operating ratio of 71.1%, reflecting disciplined cost control and productivity initiatives. CSX also demonstrated a strong commitment to shareholder returns through increased dividends and an active share repurchase program. The company continued to invest in its infrastructure, with capital expenditures rising to $1.8 billion, including significant outlays for Positive Train Control (PTC) implementation, which is estimated to cost at least $1.2 billion. Despite the positive performance, CSX faces potential risks including regulatory changes, competition, and the ongoing need for significant capital investment in infrastructure and technology. The company is actively involved in legal proceedings, notably an antitrust lawsuit regarding fuel surcharges, though management believes these matters will not have a material adverse effect on its financial condition.

Financial Highlights

49 data points
Beta

Revenue

$10.64B

Net Income

$1.56B

14.7% Net Margin

EPS (Diluted)

$0.45

Total Assets

$28.14B

Cash & Equivalents

$1.29B

Free Cash Flow

$1.42B

Financial Statements
Beta
Revenue$10.64B
Operating Expenses$7.57B
Operating Income$3.07B
Interest Expense$557.00M
Net Income$1.56B
EPS (Basic)$0.46
EPS (Diluted)$0.45
Shares Outstanding (Basic)3.43B
Shares Outstanding (Diluted)3.46B

Key Highlights

  • 1Revenue increased 18% to $10.6 billion in 2010, driven by volume growth and pricing gains, particularly in automotive and metals.
  • 2Operating income reached a record $3.1 billion, with an improved operating ratio of 71.1%.
  • 3Capital expenditures increased to $1.8 billion, with significant investment planned for Positive Train Control (PTC) implementation, estimated at over $1.2 billion.
  • 4The company returned capital to shareholders through dividends, increasing the quarterly dividend and completing a significant portion of its share repurchase program.
  • 5Safety performance improved, with a 17% decrease in the FRA personal injury rate to 1.01 and a 9% improvement in the FRA train accident frequency rate.
  • 6Key service metrics like on-time train originations and arrivals slightly declined due to increased volume, but remained within historical ranges.
  • 7CSX is a major transportation supplier with approximately 21,000 route miles east of the Mississippi River, serving 23 states and two Canadian provinces.

Frequently Asked Questions

CSX's revenue growth in 2010 was primarily driven by an 18% increase in revenue to $10.6 billion. This was fueled by a 10% increase in shipment volume and core pricing gains across all markets, with notable strength in the automotive and metals sectors. Higher fuel recovery associated with increased fuel prices also contributed to the revenue growth.

CSX plans to invest $2.0 billion in 2011 to sustain core infrastructure and rolling stock, support strategic investments, and fund Positive Train Control (PTC) implementation. Key initiatives include terminal expansions, infrastructure projects like the National Gateway initiative, and upgrades to enhance transit times and service. The company views these long-term investments as crucial for future volume growth, productivity, and operational safety.

CSX faces several risks including potential adverse impacts from new legislation or regulatory changes that could restrict pricing power. Government regulations related to safety and operations, climate change legislation impacting emissions, capacity constraints on its network, general economic conditions affecting freight demand, and the legal obligation to transport hazardous materials are also noted risks. Additionally, the company is subject to potential disruptions from terrorism, severe weather, lawsuits, and labor disputes.

CSX experienced a significant rebound in 2010 compared to 2009. Revenue grew by 18% ($1.6 billion), while operating income more than doubled, increasing by 35% ($801 million) to a record $3.1 billion. This improvement was accompanied by a reduction in the operating ratio from 74.9% to 71.1%. Net earnings also increased substantially from $1.1 billion in 2009 to $1.6 billion in 2010.