CSX CorporationCSX Corporation

Bear SternsBear SternsGlobal Transportation ConferenceGlobal Transportation Conference

Clarence GoodenClarence GoodenExecutive Vice PresidentExecutive Vice PresidentChief Commercial OfficerChief Commercial Officer

CSX operates the largest rail network in the eastern United StatesCSX operates the largest rail network in CSX operates the largest rail network in the eastern United Statesthe eastern United States

• Covers 23,400 route miles in 23 states, the District of Columbia, and two Canadian Provinces

• Serves all major eastern markets and more ports than any other railroad

• Operates 144 terminals

• Operates over 100,000 freight cars and over 4,000 locomotives

• Employs 34,000 dedicated individuals

•• Covers 23,400 route miles in 23 Covers 23,400 route miles in 23 states, the District of Columbia, states, the District of Columbia, and two Canadian Provincesand two Canadian Provinces

•• Serves all major eastern Serves all major eastern markets and more ports than markets and more ports than any other railroadany other railroad

•• Operates 144 terminalsOperates 144 terminals

•• Operates over 100,000 freight Operates over 100,000 freight cars and over 4,000 locomotivescars and over 4,000 locomotives

•• Employs 34,000 dedicated Employs 34,000 dedicated individualsindividuals

CumberlandCumberland

PensacolaPensacola

DetroitDetroit

PhiladelphiaPhiladelphia

NorfolkNorfolk

CharlestonCharleston

SavannahSavannah

JacksonvilleJacksonville

NewarkNewark

CincinnatiCincinnati

TampaTampaOrlandoOrlando

MiamiMiami

BostonBoston

West Palm BeachWest Palm Beach

New OrleansNew Orleans

Washington D.C.Washington D.C.

New York CityNew York City

MontrealMontreal

ToledoToledo HarrisburgHarrisburg

MontgomeryMontgomeryWaycrossWaycross

CharlotteCharlotteHamletHamlet

MemphisMemphis

LouisvilleLouisvilleHuntingtonHuntington

IndianapolisIndianapolis

ChicagoChicago

ColumbusColumbus

WillardWillard

BuffaloBuffaloSyracuseSyracuse

SelkirkSelkirk

CharlestonCharleston

PittsburghPittsburghBaltimoreBaltimore

KnoxvilleKnoxville

NashvilleNashville

Rocky MountRocky Mount

East St. LouisEast St. Louis

AtlantaAtlantaBirminghamBirmingham

Rail Operating Ratio

90%

87%

86%

88%

2000 2001 2002 2003

Rail Operating Ratio

90%

87%

86%

88%

2000 2001 2002 2003

Rail Operating IncomeDollars in millions

$713

$907

$995

$902

2000 2001 2002 2003

Rail Operating IncomeDollars in millions

$713

$907

$995

$902

2000 2001 2002 2003

Earnings improvement stalled in 2003, as the operating ratio reached 88%Earnings improvement stalled in 2003, as Earnings improvement stalled in 2003, as the operating ratio reached 88%the operating ratio reached 88%

Note: Operating income and operating ratio exclude oneNote: Operating income and operating ratio exclude one--time chargestime charges

Revenue Revenue ImpactsImpacts

Operating Operating ImprovementsImprovements

Organizational Organizational EffectivenessEffectiveness

•Price Leadership

•Profitable Growth

•Offset Inflation

•• Price LeadershipPrice Leadership

•• Profitable GrowthProfitable Growth

•• Offset InflationOffset Inflation

•Safety

•Zero-based Plan

•Asset Utilization

•Productivity

•• SafetySafety

•• ZeroZero--based Planbased Plan

•• Asset UtilizationAsset Utilization

•• ProductivityProductivity

•Organizational EffectivenessInitiative

•Process Improvement Teams

•• Organizational Organizational EffectivenessEffectivenessInitiativeInitiative

•• Process Process Improvement Improvement TeamsTeams

Restoring the company’s earnings power is being driven in three key areas Restoring the company’s earnings power Restoring the company’s earnings power is being driven in three key areas is being driven in three key areas

The Surface Transportation management reorganization is now completeThe Surface Transportation management The Surface Transportation management reorganization is now completereorganization is now complete

• Management reductions total approximately 900

• Annual savings estimated at $90 million

• Increased accountability across the organization

• Enhanced communication and speed of decision making

•• Management reductions total approximately 900 Management reductions total approximately 900

•• Annual savings estimated at $90 millionAnnual savings estimated at $90 million

•• Increased accountability across the organizationIncreased accountability across the organization

•• Enhanced communication and speed of decision makingEnhanced communication and speed of decision making

The CSX One Plan is being developed to drive productivityThe CSX One Plan is being developed The CSX One Plan is being developed to drive productivityto drive productivity

• Why a new operating plan

• What is involved

• The power of ONE

•• Why a new operating planWhy a new operating plan

•• What is involvedWhat is involved

•• The power of ONEThe power of ONE

Process improvement will leverage best Process improvement will leverage best practices with greater accountabilitypractices with greater accountability

CSX will improve yield by leveraging our network and an improving economy CSX will improve yield by leveraging our CSX will improve yield by leveraging our network and an improving economy network and an improving economy

Year-over-year Change in RevenueDollars in millions

($29)

$31

$85

$53$37

$81 $82

$5$7

($54)($7)

($60)

($30)

$0

$30

$60

$90

Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1

Year-over-year Change in RevenueDollars in millions

($29)

$31

$85

$53$37

$81 $82

$5$7

($54)($7)

($60)

($30)

$0

$30

$60

$90

Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1

20012001 20022002 20032003 20042004

CSX’s intermodal network provides coast to coast serviceCSX’s CSX’s intermodal intermodal network provides network provides coast to coast servicecoast to coast service

MiamiMiami

OrlandoOrlandoTampaTampa

JacksonvilleJacksonvilleSavannahSavannah

CharlestonCharleston

PortsmouthPortsmouthBaltimoreBaltimorePhiladelphiaPhiladelphia

New YorkNew York

MassachusettsMassachusettsSyracuseSyracuse

BuffaloBuffalo

CincinnatiCincinnati

New OrleansNew Orleans

OaklandOaklandLathropLathrop

PortlandPortland

VancouverVancouver

MontrealMontreal

MonterreyMonterrey

QueretaroQueretaro

Mexico CityMexico City

CSXI Rail Service LocationsCSXI Rail Service Locations

CSXI Trucking ServiceCSXI Trucking Service

MemphisMemphis

ColumbusColumbus

SeattleSeattle

LaredoLaredo

GuadalajaraGuadalajara

IndianapolisIndianapolis

ChicagoChicago

NashvilleNashville

MobileMobile

GreensboroGreensboro

GreenvilleGreenville

TacomaTacoma

Los AngelesLos Angeles

DetroitDetroit

E. St. LouisE. St. Louis

TorontoToronto

DallasDallas

HoustonHouston

Kansas CityKansas City

EvansvilleEvansville

ClevelandCleveland

CharlotteCharlotte

AtlantaAtlanta

We continue to expand our market reach with TRANSFLOWe continue to expand our market We continue to expand our market reach with TRANSFLOreach with TRANSFLO

We are developing new markets and converting traffic from other modesWe are developing new markets and We are developing new markets and converting traffic from other modesconverting traffic from other modes

CSX’s focus on increasing price has never been strongerCSX’s focus on increasing price has CSX’s focus on increasing price has never been strongernever been stronger

• Service improvement is underway

• Rail-truck economics have never been better

• The economy is rebounding

• Favorable STB rulings enhance pricing opportunities

• Revenue growth will offset inflation

•• Service improvement is underwayService improvement is underway

•• RailRail--truck economics have never been bettertruck economics have never been better

•• The economy is reboundingThe economy is rebounding

•• Favorable STB rulings enhance pricing opportunitiesFavorable STB rulings enhance pricing opportunities

•• Revenue growth will offset inflationRevenue growth will offset inflation