01—Abstract
Summary
Summary of the 10-Q filed July 15, 2009. Cited figures are marked; the original filing is the authoritative source.
CSX Corporation reported its financial results for the second quarter ended June 25, 2009, reflecting the significant impact of the ongoing global recession.
Revenue for the quarter declined by 25% to $2.2 billiona, primarily driven by a 21% decrease in volume and lower fuel surcharge revenue due to declining fuel prices. Despite the revenue drop, CSX managed to reduce expenses by 27% to $1.6 billion, largely due to productivity initiatives, cost-cutting measures, and a favorable casualty reserve adjustment. Operating income saw a decrease of 19% to $582 million.
The company also realized a $25 millionb after-tax gain from the sale of The Greenbrier resort, which was categorized as discontinued operations. CSX highlighted improvements in safety metrics and service performance during the quarter, including a reduction in FRA personal injuries and train accidents. The company ended the quarter with a strong liquidity position, holding $1.2 billion in cash, cash equivalents, and short-term investments, with an undrawn $1.25 billion credit facility available.
02—Key points
Key Highlights
- Revenue decreased by 25% to $2.2 billion in Q2 2009 compared to Q2 2008, driven by a 21% volume decline and lower fuel surcharge revenue.
- Expenses were reduced by 27% to $1.6 billion, attributed to cost-cutting, productivity initiatives, and a favorable casualty reserve adjustment.
- Operating income fell by 19% to $582 million.
- CSX recognized a $25 million after-tax gain from the sale of The Greenbrier resort.
- Safety performance improved with a 6% decrease in the FRA Personal Injuries Frequency Index and a 16% decline in FRA Train Accident Rate.
- Key service metrics like On-Time Train Originations and Arrivals showed significant improvement.
- The company maintained a strong liquidity position with $1.2 billion in cash, cash equivalents, and short-term investments, and an undrawn $1.25 billion credit facility.
03—One dollar
04—Financials
Financial Highlights
Figures from 10-QQ2 FY2009filed July 15, 2009Financial Statements
Q2 FY2009 against Q2 FY2008
| Line item | Q2 FY2009Q2 FY2008 | Change |
|---|---|---|
| Revenue | $2.19B$2.91B | −24.8% |
| Operating Expenses | $1.61B$2.19B | −26.6% |
| Operating Income | $577.00M$717.00M | −19.5% |
| Interest Expense | $139.00M-$133.00M | +204.5% |
| Net Income | $305.00M$385.00M | −20.8% |
| EPS (Basic) | $0.09$0.11 | −17.9% |
| EPS (Diluted) | $0.09$0.10 | −17.2% |
| Shares Outstanding (Basic) | 3.53B3.66M | +96409.6% |
| Shares Outstanding (Diluted) | 3.56B3.74M | +95144.2% |
05—Questions
Frequently Asked Questions
What was the primary driver of the revenue decline in the second quarter?
The primary driver of the revenue decline was a significant decrease in volume (21%) across most of CSX's business segments, coupled with lower fuel surcharge revenue resulting from the sharp decline in fuel prices.
How did CSX manage to reduce expenses despite lower revenues?
CSX implemented aggressive cost management strategies, including labor productivity initiatives (e.g., furloughs, reduced overtime), other cost-cutting efforts, and benefited from a favorable casualty reserve adjustment due to improved safety trends. Lower fuel prices also significantly reduced fuel expenses.
What is the impact of the sale of The Greenbrier resort on the financial results?
CSX sold The Greenbrier resort in May 2009 and recognized a $25 million after-tax gain. This transaction is reported as discontinued operations and contributed positively to net earnings for the quarter.
What is the company's liquidity situation?
CSX reported a strong liquidity position with $1.2 billion in cash, cash equivalents, and short-term investments as of June 26, 2009. Additionally, the company has access to an undrawn $1.25 billion revolving credit facility, providing ample financial flexibility.
06—Continue