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CSX Announces First Quarter Results

4/14/2009 4:04:00 PM
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--First Quarter Highlights: - Safety and service levels remain strong - Productivity and right-sizing actions delivering cost savings - Earnings per share of 62 cents, operating income of $522 million

JACKSONVILLE, Fla., April 14, 2009 /PRNewswire-FirstCall via COMTEX/ -- CSX Corporation (NYSE: CSX) today announced first quarter earnings of $246 million, or 62 cents a share, versus $351 million, or 85 cents per share, last year. Excluding 5 cents per share from an equity earnings adjustment in the first quarter of 2008, comparable earnings per share declined 23 percent. (See table below for reconciliation of quarter items to reported numbers.)

"In this economic downturn, CSX is focusing sharply on the things that are more within our control -- safety, customer service and productivity," said Michael Ward, chairman, president and CEO. "We are taking tough actions to right-size our operations in this challenging environment."

First quarter revenues of $2.2 billion were down 17 percent from the prior year, primarily due to a 17 percent decline in volume. The volume declines were driven by significant weakness in industrial production, housing starts, and consumer spending, as well as in the agriculture and energy sectors.

In response to these conditions, CSX right-sized its train network and implemented a wide range of productivity initiatives. As a result, operating expenses declined 17%, allowing the company to produce operating income of $522 million and an operating ratio of 76.8 percent for the quarter.

"Our nation will continue to rely heavily on rail transportation to move vital goods, relieve traffic congestion, protect the environment and support American businesses," said Ward. "We can meet those needs with discipline in our operations, strategic investments in our system and sound public policy."

    (Dollars in millions, except per share amounts)

                                                 First Quarter
                                           2009      2008    % Change

    Earnings Per Share                     $0.62     $0.85     (27)%

    Less Equity Earnings Adjustment            -     (0.05)

    Comparable Earnings Per Share          $0.62     $0.80     (23)%

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 Apr. 15, 2009 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.

(1) GAAP Reconciliation

CSX reports its financial results in accordance with generally accepted accounting principles ("GAAP"). However, management believes that certain non-GAAP financial measures used to manage the company's business that fall within the meaning of Regulation G (Disclosure of Non-GAAP Financial Measures) by the SEC may provide users of the financial information with additional meaningful comparisons to prior reported results.

In press releases and presentation slides for stock analysts, CSX has provided financial information adjusted for certain items, which are non-GAAP financial measures. The company's management evaluates its business and makes certain operating decisions (e.g., budgeting, forecasting, employee compensation, asset management and resource allocation) using these adjusted numbers.

Likewise, this information facilitates comparisons to financial results that are directly associated with ongoing business operations as well as provides comparable historical information. Lastly, earnings forecasts prepared by stock analysts and other third parties generally exclude the effects of items that are difficult to predict or measure in advance and are not directly related to CSX's ongoing operations. A reconciliation between GAAP and the non-GAAP measure is provided above. These non-GAAP measures should not be considered a substitute for GAAP measures.

Forward-looking statements

This information and other statements by the company 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 these forward-looking statements. Factors that may cause actual results to differ materially from those contemplated by these 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; and (v) the outcome of claims and litigation involving or affecting the company.

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.

SOURCE CSX Corporation