01—Abstract
Summary
Summary of the 10-K filed February 15, 2023. Cited figures are marked; the original filing is the authoritative source.
CSX Corporation reported solid financial performance in 2022, with revenue increasing by 19% to $14.9 billiona, primarily driven by higher fuel recovery and pricing gains, alongside the full-year inclusion of Quality Carriers.
Despite a significant 27% increase in expenses, largely due to higher fuel, labor, and purchased services costs, operating income grew by 8% to $6.0 billionb. Diluted earnings per share rose by 16% to $1.95. The company completed the strategic acquisition of Pan Am Systems, Inc. in June 2022, expanding its network reach in the Northeast.
CSX continues its focus on operational efficiency, safety, and returning capital to shareholders, announcing a 10%c increase in its quarterly dividend. While facing challenges such as inflationary pressures, supply chain constraints, and a decline in train velocity, CSX maintains a strong liquidity position and an investment-grade credit profile.
02—Key points
Key Highlights
- Revenue increased 19% to $14.9 billion in 2022, driven by higher fuel recovery, pricing, and the inclusion of Quality Carriers.
- Operating income grew 8% to $6.0 billion, despite a 27% increase in total expenses.
- Diluted Earnings Per Share (EPS) rose 16% to $1.95.
- Acquisition of Pan Am Systems, Inc. completed on June 1, 2022, expanding network reach in the Northeast.
- The company announced a 10% increase in its quarterly cash dividend, effective March 2023.
- Free cash flow before dividends was $3.7 billion, a decrease from the prior year, mainly due to higher property additions.
- Train velocity decreased by 10% year-over-year, while on-time originations and arrivals also declined, though service metrics improved in the last quarter of 2022.
03—One dollar
04—Financials
Financial Highlights
Figures from 10-KFY2022filed February 15, 2023Financial Statements
FY2022 against FY2021
| Line item | FY2022FY2021 | Change |
|---|---|---|
| Revenue | $14.85B$12.52B | +18.6% |
| Operating Income | $5.95B$5.59B | +6.4% |
| Net Income | $4.11B$3.78B | +8.8% |
| EPS (Basic) | $1.93$1.68 | +14.9% |
| EPS (Diluted) | $1.92$1.68 | +14.3% |
| Shares Outstanding (Basic) | 2.14B2.25B | −5.1% |
| Shares Outstanding (Diluted) | 2.14B2.25B | −5.1% |
05—Questions
Frequently Asked Questions
What were the main drivers of CSX's revenue growth in 2022?
CSX's revenue increased by 19% to $14.9 billion in 2022. The primary drivers included higher fuel recovery, favorable pricing which benefited from increased export coal benchmark rates, and the full-year impact of the Quality Carriers acquisition.
How did CSX's acquisitions in 2021 and 2022 impact its performance?
The acquisition of Quality Carriers in July 2021 and Pan Am Systems, Inc. in June 2022 significantly contributed to CSX's 2022 results. Quality Carriers added to labor and purchased services expenses, while Pan Am expanded CSX's network in the Northeast. Both acquisitions contributed to increased revenues and expenses.
What is CSX's outlook on operational performance and capital allocation?
CSX is focused on improving operational efficiency and safety. While 2022 saw a decline in key service metrics like train velocity, the company noted improvements in the final quarter and expects this trend to continue. CSX remains committed to returning capital to shareholders through dividends and share repurchases, as evidenced by the recent dividend increase.
What are the main risks CSX highlighted in its 10-K filing?
CSX highlighted several risks including regulatory and legislative changes, competition from other transportation modes, economic conditions affecting freight demand, cybersecurity threats, operational disruptions due to weather or labor issues, and the common carrier mandate to transport hazardous materials, which carries inherent safety risks.
06—Continue