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North Carolina and CSX: Partnering to deliver economic opportunity
Executive Summary
CSX is a Fortune 250 company with a record of success— Leading North American transportation company with strong eastern network
CSX is redefining logistics/distribution networks— Enhancing competiveness of U.S. businesses, while providing public benefits,
such as reduced highway congestion and cleaner air
North Carolina and CSX have partnered for 150+ years— CSX is eager to play an even larger role in N.C. economy in the coming years
New $272M investment in N.C.’s critical infrastructure is
transformational opportunity— This state-of-the-art facility would improve North Carolina’s economic
competitiveness and bring over 1,500 jobs to the state
2
CSX is a premier transportation company
3
Company Profile
Revenue* $11.8B
Capital Investment** $2.4B
Miles of Track 21,000 miles
Employees 28,000
500+ trains online at any point in time
*2015
**2016 projected
CSX Rail Network and Major Terminals
A partnership spanning 150+ years
4
Serving N.C. since the mid-
1830’s
Nearly a dozen CSX facilities in
the state including a hump yard
and a major flat switching yard
10,000 carloads through Port of
Wilmington
Company Profile in N.C. (2015)
Capital Investment $47.9M
Miles of Track 1,800 miles
Customers Served 450+
Employees 1,050
Business diversified across broad market base
2015 Volume by Market: 6.9 Million Rail Car Loads
Merchandise: 42%(Agriculture, Construction &
Industrial)
Intermodal: 41%(Domestic & International)
Coal: 17%(Domestic & Export)
5
Coal market decline driven by natural gas prices
6
$3.5
$3.0 $2.7 $2.7
$2.2 1.5
1.3 1.2 1.3
1.1
2011 2012 2013 2014 2015
Revenue in Billions Carloads in Millions
Coal Revenue and Volume
Source: Global Insight Economic Forecast January 2016
$1.5
$2.5
$3.5
$4.5
$5.5
2011 2012 2013 2014 2015 2016
Henry Hub Natural Gas Prices$ / mm BTU
$35
$55
$75
$95
$115
$135
2011 2012 2013 2014 2015 2016
Thermal Spot Prices (API2)$ / ton
Merchandise improves amidst mixed indicators
7
Merchandise Revenue and Volume
$5.7 $6.0 $6.4
$6.9 $7.0
2.7 2.7 2.82.9 2.9
2011 2012 2013 2014 2015
Revenue in Billions Carloads in Millions
Source: Global Insight Economic Forecast January 2016; U.S. Dollar Inflation adjusted Broad Index
3.00
3.50
4.00
4.50
5.00
2011 2012 2013 2014 2015 2016
NALVPMillions of Vehicles per Quarter
0.80
0.85
0.90
0.95
1.00
1.05
1.10
2011 2012 2013 2014 2015 2016
Iron & Steel Production IndexJan. `11 = 1.00
Future of logistics moving from highway to rail (H2R)
75
100
125
150
175
200
225
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Indexed: January 2006 = 100ATA Truck Tonnage CSX Average Weekly Domestic Intermodal Volume
Source: CSX Corporation and ATA
Domestic Intermodal Volume versus ATA Truck Tonnage
Up
~120%
Up
~15%
8
Intermodal benefits from truck conversions, rising GDP
9
Intermodal Revenue and Volume
$1.2 $1.3
$1.4 $1.5
$1.6
2.32.5
2.62.7
2.8
2011 2012 2013 2014 2015
Revenue in Billions Containers in Millions
Economic DriversQuarterly Index, Q1 2011 = 100
Source: IHS Global Insight, International Monetary Fund; Fed. Reserve
80
85
90
95
100
105
110
115
2011 2012 2013 2014 2015 2016
Import Price Index GDP
Intermodal transforming movement of goods
10
Intermodal offers national transportation solutions
11
The most environmentally friendly
mode of land transportation— One ton of freight moves 483
miles on a single gallon of fuel
Reduces highway congestion— Each train can take up to 280
trucks off the road
Enhances competitiveness of
U.S. companies— Up to 40% savings when
converting from truck to rail
Addresses ongoing challenges in
trucking industry
NorfolkSt Louis
Memphis
Philadelphia
Wilmington
Chicago
Baltimore
Tampa
MobileNew Orleans
Jacksonville
SavannahCharleston
NY/NJ
Boston
Gulf Coast
Midwest
Montreal
Northeast
PiedmontAtlantic
Montreal
NW Ohio hub enhances network connectivity
Hub and spoke coupled with
corridor lanes key differentiator
— Does for freight what Charlotte
does for American Airlines
Innovative approach plus superior
service has proven successful
— Over 200 new markets served
(e.g. Montreal and Pittsburgh)
— NW Ohio has driven 25% of
Intermodal growth since 2011
Competitive advantage for
manufacturing and distribution
centers near facility
— E.g. Whirlpool, Campbell’s Soup
12
13
CCX positions N.C. for future success
Carolina Connector (CCX) adds
second hub to Intermodal network
CCX will serve rapidly growing
Raleigh metro market and N.C.
ports
Total estimated investment of
$272 million— Innovative state funding program
essential to enabling investment
Most state-of-the-art rail terminal
in the world— Zero emission electric cranes
— “X-gate” reduces truck idling
Philadelphia
St. Louis
Montreal
Northwest Ohio
Jacksonville
South FloridaNew Orleans
Mobile
Charlotte
Atlanta
Nashville
Memphis
Chicago
Portsmouth
Carolina
Connector
Hub and Spoke Network
Technology transforming logistics efficiencies
14
CCX could be a “game changer” for North Carolina
15
Existing Business Cheaper, more efficient access to global markets enhances
competitiveness for existing N.C. businesses and ports
New Business
Terminal will attract warehousing and distribution centers
Cheaper, more efficient access to global markets will help
attract new businesses
Other
Public/Economic
Benefits
1,500+ jobs statewide over time
Reduced traffic congestion from 272K trucks off N.C. roads
Reduced emissions equivalent to removing nearly 1B
passenger car miles
Wrap-up
CSX has built a track record of investing sustainably in
infrastructure and communities
CCX hub would further strengthen partnership between
the state and CSX
Intermodal enables greater market reach for North
Carolina businesses
CCX would improve the state’s economy and quality of
life for North Carolinians
16
North Carolina and CSX: Partnering to deliver economic opportunity