A press release from CSX:
NEW YORK, March 01, 2018 (GLOBE NEWSWIRE) — CSX Corporation (NASDAQ:CSX) President and CEO James M. Foote today will outline CSX’s plans to build upon the foundation of the company’s scheduled railroading model, increase efficiency, control costs, grow the business and target a 60 percent operating ratio by 2020.
“Our continued focus on service and efficiency improvements have helped generate momentum in our effort to create a better product offering for customers and strong financial returns for shareholders,” said Foote. “While our scheduled operating model has already produced significant operational and financial benefits, substantial opportunities exist to further optimize the network, leverage excess capital, create savings and grow our franchise.”
Highlights of CSX’s Financial Targets
- Full-year operating ratio of 60 percent by 2020
- Revenue growth at a compound annual rate of 4% in 2019 and 2020
- Average annual capital expenditures of $1.6 billion through 2020
- Cumulative free cash flow of $8.5 billion from 2018 to 2020
- Share re-purchase of $5 billion to be complete by Q1 2019
“Today marks the beginning of a new chapter for CSX, and we’re confident we have the right plan and the right team in place to achieve our goal of becoming the best railroad in North America,” said Foote. “The foundation of scheduled railroading has been set, and we expect to identify real growth opportunities that will benefit shareholders as our changes take hold.”
Since implementation of scheduled railroading began at CSX in March 2017, the company has taken significant strides to streamline the organization and to make CSX more competitive, including the following:
- New executive leadership committee in place with mandate to centralize planning and decentralize execution to eliminate bureaucracy, facilitate decision-making and enhance process improvement.
- Evolved the disparate regional operating cultures into a single CSX culture, driven by a flatter and more streamlined reporting structure – converting 9 operating divisions into 4 operating regions and initiating consolidation of 9 dispatching offices to a central location.
- Reduced the number of hump yards from 12 to 4 (Avon, Cincinnati, Selkirk and Waycross) to reduce freight handlings and transit times.
- Altered the network design to create a more balanced train plan focused on long haul, higher density lanes with faster transit times and fewer delays.
- Produced six consecutive months of performance improvement, hitting record levels for dwell and velocity in 2018.
“The growth and success of CSX today is a testament to the leadership of our management team, which will deliver on the potential of our extraordinary rail network and market reach,” said Foote. “The performance improvements of CSX’s new operating model create a virtuous cycle of capacity and utilization, reducing congestion through asset utilization and trip plan compliance.”
Management presentations from the CSX Investor and Analyst Conference will be accessible on the company’s website at http://investors.csx.com. An internet replay of the presentation will be archived on the company’s website.
About CSX and its Disclosures
CSX, based in Jacksonville, Florida, is a premier transportation company. It provides rail, intermodal and rail-to-truck transload services and solutions to customers across a broad array of markets, including energy, industrial, construction, agricultural, and consumer products. For over 190 years, CSX has played a critical role in the nation’s economic expansion and industrial development. Its network connects every major metropolitan area in the eastern United States, where nearly two-thirds of the nation’s population resides. It also links more than 240 short-line railroads and more than 70 ocean, river and lake ports with major population centers and farming towns alike.
This announcement, as well as additional financial information, is available on the company’s website at http://investors.csx.com. CSX also uses social media channels to communicate information about the company. Although social media channels are not intended to be the primary method of disclosure for material information, it is possible that certain information CSX posts on social media could be deemed to be material. Therefore, we encourage investors, the media, and others interested in the company to review the information we post on Twitter (http://twitter.com/CSX) and on Slideshare (http://www.slideshare.net/HowTomorrowMoves). The social media channels used by CSX may be updated from time to time.
More information about CSX Corporation and its subsidiaries is available at www.csx.com and on Facebook (http://www.facebook.com/OfficialCSX).
Non-GAAP Disclosure
CSX reports its financial results in accordance with accounting principles generally accepted in the United States of America (U.S. GAAP). CSX also uses certain non-GAAP measures that fall within the meaning of Securities and Exchange Commission Regulation G and Regulation S-K Item 10(e), which may provide users of the financial information with additional meaningful comparison to prior reported results. Non-GAAP measures do not have standardized definitions and are not defined by U.S. GAAP. Therefore, CSX’s non-GAAP measures are unlikely to be comparable to similar measures presented by other companies. The presentation of these non-GAAP measures should not be considered in isolation from, as a substitute for, or as superior to the financial information presented in accordance with GAAP. Reconciliations of non-GAAP measures to corresponding GAAP measures are above.
Forward-looking Statements
This information and other statements by the company may 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, margins, volumes, rates, cost-savings, expenses, taxes, liquidity, capital expenditures, dividends, share repurchases or other financial items, statements of management’s plans, strategies and objectives for future operations, and management’s expectations as to future performance and operations and the time by which objectives will be achieved, statements concerning proposed new services, and statements regarding future economic, industry or market conditions or performance. Forward-looking statements are typically identified by words or phrases such as “will,” “should,” “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 updates 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 any forward-looking statements. Factors that may cause actual results to differ materially from those contemplated by any 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, political or business conditions, including those affecting the transportation 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; (v) the outcome of claims and litigation involving or affecting the company; (vi) natural events such as severe weather conditions or pandemic health crises; and (vii) the inherent uncertainty associated with projecting economic and business conditions.
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.