8-KRegulation FD

CSX CORP 8-K Report, Regulation FD Disclosure (Mar 10, 2010)

Filed March 10, 2010For Securities:CSX

Summary

CSX Corporation (CSX) announced at the J.P. Morgan Aviation, Transportation and Defense Conference on March 9, 2010, that it anticipates strong double-digit earnings per share growth for 2010. This positive outlook is driven by expected robust volume and revenue increases, particularly in export coal shipments projected at 30 million tons for the year, coupled with anticipated improvements in operating ratio. Additionally, CSX Intermodal, a subsidiary, has entered into a new jointly-marketed domestic interline container program called UMAX with Union Pacific Corporation. While this agreement is expected to cause a revenue reduction of $40-$50 million quarterly for CSX Intermodal starting in the second quarter of 2010, the company anticipates a neutral near-term impact on operating income, with a positive long-term effect. Financial consideration was also provided, which will be amortized over the agreement's term. Investors should note these statements are forward-looking and subject to various risks and uncertainties.

Key Highlights

  • 1CSX expects strong double-digit EPS growth for 2010.
  • 2Projected export coal shipments of approximately 30 million tons in 2010.
  • 3Anticipated strong volume and revenue growth contributing to EPS outlook.
  • 4Expected improvement in operating ratio for 2010.
  • 5CSX Intermodal launches new UMAX program with Union Pacific.
  • 6UMAX program expected to cause $40-$50 million quarterly revenue loss for CSX Intermodal starting Q2 2010.
  • 7Near-term operating income impact from UMAX program expected to be neutral, with positive long-term effects.

Frequently Asked Questions

CSX's positive outlook for 2010 is driven by expectations of strong volume and revenue growth, particularly in export coal shipments, and anticipated improvements in the company's operating ratio.

The UMAX program is a new jointly-marketed domestic interline container program launched by CSX Intermodal with Union Pacific Corporation. It is expected to result in a quarterly revenue loss of $40-$50 million for CSX Intermodal beginning in the second quarter of 2010. The company anticipates a neutral near-term impact on operating income, with positive long-term effects.

Yes, the forward-looking statements made by CSX are subject to numerous risks and uncertainties, including changes in economic conditions, competition, regulatory changes, safety and security issues, litigation outcomes, natural events, and the inherent difficulty in projecting economic conditions early in the year. Actual results could differ materially from those anticipated.

While the UMAX agreement will cause a quarterly revenue loss for CSX Intermodal, the company has received financial consideration that will be amortized over the term of the agreement. The near-term impact on operating income is expected to be neutral, with positive long-term benefits anticipated.