csx BBT_White_background-REF22571

CSX Corporation

BB&T Transportation ConferenceFebruary 15, 2006

CSX Corporation


2

Forward Looking Disclosure StatementThis presentation 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,” 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.

3

For 2006, our core strategies remain intact as the foundation for delivering value

Shareholder Value CreationShareholder Value Creation

Profitable GrowthProfitable Growth Margin ExpansionMargin Expansion

Core StrategiesCore Strategies

RevenueRevenueImpactImpact

OperationalOperationalDisciplineDiscipline

PerformancePerformanceCultureCulture

4

Those strategies have improved the company’s earning power significantly

Note: Excludes 2003 provision for casualty claims, and 2003 andNote: Excludes 2003 provision for casualty claims, and 2003 and 2004 management restructuring charge2004 management restructuring charge

Surface Transportation Operating Income in BillionsRolling Twelve Months

$0.9 $1.0 $1.0$1.1

$1.2$1.3

$1.4$1.5

Q1 2004 Q2 2004 Q3 2004 Q4 2004 Q1 2005 Q2 2005 Q3 2005 Q4 2005

5

The strong pricing environment andcontribution focus have improved yields

Revenue Per UnitYear-Over-Year Improvement

0.1%

2.4%

6.6%7.8%

8.6%9.7% 9.3%

11.1%

Q1 2004 Q2 2004 Q3 2004 Q4 2004 Q1 2005 Q2 2005 Q3 2005 Q4 2005

Note: Second quarter 2005 excludes a benefit from a rate case sNote: Second quarter 2005 excludes a benefit from a rate case settlementettlement

6

Yields, productivity and an improvingculture have driven the operating ratio

Surface TransportationOperating Ratio

89.3%

85.2%87.1%

85.5%

83.3%

80.5%

83.0%81.3%

Q1 2004 Q2 2004 Q3 2004 Q4 2004 Q1 2005 Q2 2005 Q3 2005 Q4 2005

Note: The first three quarters of 2004 exclude management restrNote: The first three quarters of 2004 exclude management restructuring chargesucturing charges

7

2006 – 2010 CAGR

Operating Income 10% – 12%

Earnings 12% – 14%

Free Cash Flow

Operating Ratio

Return on Invested Capital

10% – 12%

Mid 70’s

Meet or Exceed COC

Going forward, CSX expects steadydouble-digit growth through 2010

8

Safety momentum remains strongFRA Train Accident

Rolling 12-Month AverageAccidents / MM Train Miles

4.79 4.724.43 4.32

3.993.78

Q42004

Q12005

Q22005

Q32005

Q42005

1QTD2006

FRA Personal Injury Rolling 12-Month Average

Injuries / 200,000 Man Hours

2.292.13 2.04

1.911.71 1.65

Q42004

Q12005

Q22005

Q32005

Q42005

1QTD2006

1.161.16Six WeekSix WeekAverageAverage


9

ONE Plan is gaining traction; on-time performance is improving

On-Time OriginationsRolling 12-Month Average

49.0%48.2%

50.3% 50.3%51.1%

54.3%

Q42004

Q12005

Q22005

Q32005

Q42005

1QTD2006

On-Time ArrivalsRolling 12-Month Average

40.9%

38.4% 38.9% 39.6% 40.1%

43.0%

Q42004

Q12005

Q22005

Q32005

Q42005

1QTD2006

75%75%Six WeekSix WeekAverageAverage

62%62%Six WeekSix WeekAverageAverage

10

ONE Plan is gaining traction; Dwell and cars-on-line are stable

Dwell Time (Hours)Rolling 12-Month Average

28.7 29.3 29.6 29.7 29.7 29.4

Q42004

Q12005

Q22005

Q32005

Q42005

1QTD2006

Cars-On-LineRolling 12-Month Average

232,172

233,271 233,118

233,876

234,165

234,132

Q42004

Q12005

Q22005

Q32005

Q42005

1QTD2006


225K225KSix WeekSix WeekAverageAverage

11

ONE Plan is gaining traction;velocity to improve with Gulf restored

Velocity (mph)Rolling Twelve Months

20.319.9 19.8 19.7

19.2 19.3

Q4 2004 Q1 2005 Q2 2005 Q3 2005 Q4 2005 1QTD 2006


12

Competitor yields are accelerating, implying continued opportunity

Year-Over-Year Growth in Revenue Per Unit

11%13%

16%

11%

0%

3%

6%

9%

12%

15%

18%

CSX NSC BNI UNP

3Q 2004 4Q 2004 1Q 2005 2Q 2005 3Q 2005 Q4 2005

13

Volume growth will reflect continuedfocus on higher margin traffic

2006 Volume Growth and Contribution

Intermodal Coal Merchandise Auto

Volume Growth Long-term Contribution

14

That focus drove a 63% increase inintermodal operating income in 2005

2003-2005 Intermodal ProfitabilityDollars in Millions

$152

$248

$110

88.7%

81.8%

91.2%

2003 2004 2005

Operating Income Operating Ratio

15

Intermodal volume growth will be concentrated in key service lanes

• On-time performance provides foundation for growth

– Chicago-Florida 80%– Chicago-Northeast 90%– Northeast-Florida 90%

• Key service lanes have train capacity to handle growth

• Trucking capacity is expected to remain tight

MiamiMiami

New OrleansNew Orleans

New YorkNew YorkChicagoChicago

PortsmouthPortsmouth

BostonBoston

SavannahSavannahCharlestonCharleston

BaltimoreBaltimorePhiladelphiaPhiladelphia

St LouisSt Louis

MemphisMemphis

CharlotteCharlotte

MobileMobile

NashvilleNashville

AtlantaAtlanta

DetroitDetroit

JacksonvilleJacksonville

TampaTampa

BuffaloBuffaloSyracuseSyracuse

ClevelandCleveland

ColumbiaColumbiaCincinnatiCincinnati

EvansvilleEvansville

IntermodalIntermodal TerminalsTerminalsPriority Priority IntermodalIntermodal CorridorsCorridors

16

Coal volume growth is expectedto remain strong

• Stockpiles remain low

• Utility demand remains strong

• Car utilization is improving

• New plants being served

• Western coal use to increase

CoalCoal--fired Utilitiesfired UtilitiesCoal ReservesCoal ReservesMiamiMiami




BostonBoston


PhiladelphiaPhiladelphia

St LouisSt Louis

MemphisMemphis


TampaTampa

BuffaloBuffalo

ClevelandCleveland

BaltimoreBaltimore

SyracuseSyracuse

17

The strong economy is expectedto drive Merchandise growth

• Manufacturing remains strong

• Plastics production increasing

• Customer service is improving

– Supports long-term growth– Drives increased utilization

Merchandise Revenue$4.2 Billion

8%17%

10%

12%12%14%14%

ChemicalsChemicals

Food & ConsumerFood & ConsumerAgricultureAgriculture

MetalsMetals

Phosphates & FertilizersPhosphates & FertilizersForest ProductsForest Products

Emerging MarketsEmerging Markets

13%13%26%26%

18

Automotive volume growth willbe limited near-term

• Light vehicle production expected to be flat

• Traditional Big-3 expected to continue losing market share

• Production at the CSX-served Hyundai plant is increasing

• Long-term strategy continues to focus on “new domestics”

BigBig--3 Assembly Plants3 Assembly Plants““New DomesticsNew Domestics”” Assembly PlantsAssembly PlantsDistribution CentersDistribution CentersMiamiMiami




BostonBoston



St LouisSt Louis

MemphisMemphis

CharlotteCharlotteNashvilleNashville

AtlantaAtlanta

DetroitDetroit


TampaTampa


ClevelandCleveland

ColumbiaColumbia

EvansvilleEvansville

BaltimoreBaltimoreCincinnatiCincinnati

19

Industrial development will further drive long-term growth

CoalCoalNew projectsNew projects

AutomotiveAutomotiveAssembly plantAssembly plantSupplier facilitySupplier facility

MerchandiseMerchandiseEthanol facilitiesEthanol facilitiesFeed millsFeed millsAggregates facilitiesAggregates facilitiesPlastics plantsPlastics plants

IntermodalIntermodalPort developmentsPort developmentsLogistics centersLogistics centers

MiamiMiami




BostonBoston



St LouisSt Louis

MemphisMemphisNashvilleNashville

AtlantaAtlanta

DetroitDetroit


TampaTampa


ClevelandCleveland

ColumbiaColumbia BaltimoreBaltimore

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To support growth, increased capitalexpands capacity along key corridors

Surface TransportationCapital Spending in Millions

$960$1,055

$1,420

2004 2005* 2006*

2006 Capital Spending

53%

18%14%

15%

InfrastructureInfrastructure New CapacityNew Capacity

LocomotiveLocomotive Cars & OtherCars & Other

Note: 2005 and 2006 excludes capital spending relating to KatriNote: 2005 and 2006 excludes capital spending relating to Katrinana

21

The investment will leverage the richnortheast and growing southeast markets

Source: Bureau of Economic AnalysisSource: Bureau of Economic Analysis


ChicagoChicagoNew YorkNew York

19941994--2004 Income Growth2004 Income Growth

LT 5%LT 5%5.0% 5.0% –– 5.5%5.5%5.6% 5.6% –– 6.0%6.0%GT 6.0%GT 6.0%


MiamiMiami

2004 Income2004 Income

LT $50BLT $50B$51B $51B –– $150B$150B$151 $151 –– $250B$250BGT $250BGT $250B


New OrleansNew OrleansMiamiMiami

ChicagoChicagoNew YorkNew York

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Sixty projects are scheduled through 2007; first twenty are already underway

MiamiMiami



AtlantaAtlanta

NashvilleNashville

Terre HauteTerre Haute

WaycrossWaycross

Albany toNew York

2 Locations

Albany toAlbany toNew YorkNew York

2 Locations2 Locations

WaycrossTo Atlanta

8 Locations

WaycrossWaycrossTo AtlantaTo Atlanta

8 Locations8 Locations

Terre HauteTo Nashville10 Locations

Terre HauteTerre HauteTo NashvilleTo Nashville10 Locations10 Locations

AlbanyAlbany

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Of the first twenty, eight are focusedbetween Atlanta and Waycross


Capacity Expansion ProjectsCapacity Expansion ProjectsAtlanta, GA Atlanta, GA –– Waycross, GAWaycross, GA

Third Quarter 2006Third Quarter 2006

Fourth Quarter 2006Fourth Quarter 2006Woodbury, GAWoodbury, GAWoodbury, GA

Upton, GAUpton, GAUpton, GARock Spur, GARock Spur, GARock Spur, GA

Bartlett, GABartlett, GABartlett, GA

Lily, GALily, GALily, GA

Ambrose, GAAmbrose, GAAmbrose, GA

Haywood, GAHaywood, GAHaywood, GAWaycross, GAWaycross, GAWaycross, GA

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Another ten will be completed this year between Terre Haute and Nashville

Capacity Expansion ProjectsCapacity Expansion ProjectsTerre Haute, IN Terre Haute, IN –– Nashville, TNNashville, TN


Fourth Quarter 2006Fourth Quarter 2006Rankin, KYRankin, KYRankin, KY

ChicagoChicago

Carlisle, INCarlisle, INCarlisle, IN Smith, INSmith, INSmith, IN

Hazelton, INHazelton, INHazelton, IN

Staughters, KYStaughtersStaughters, KY, KY

Casky, KYCaskyCasky, KY, KY

Trenton, KYTrenton, KYTrenton, KY Cedar Hill, TNCedar Hill, TNCedar Hill, TN

Goodlettsville, TNGoodlettsville, TNGoodlettsville, TN

Rankin, KYRankin, KYRankin, KY

25

In addition, two projects will be completed between Albany and New York

Capacity Expansion ProjectsCapacity Expansion ProjectsAlbany, NY Albany, NY –– New York, NYNew York, NY


Fourth Quarter 2006Fourth Quarter 2006AlbanyAlbany

Newark / New YorkNewark / New York

West Park, NYWest Park, NY

Fort Montgomery, NYFort Montgomery, NY

26

Transportation demand is at recordlevels, with further growth expected

Transportation Services IndexIndexed: 2000=100

60

70

80

90

100

110

120

1990 1993 1996 1999 2002 2005

Transportation DemandIndexed: 2000=100

65

75

85

95

105

115

125

2000 2002 2004 2006 2008 2010

Sources: Bureau of Transportation Statistics and Association of State Highway and Transportation Officials

27

More consumption is being sourced through imports, extending the supply chain

U.S. Consumption2000 Dollars in Trillions

$4

$5

$6

$7

$8

$9

$10

2000 2002 2004 2006 2008 2010

U.S. Production and ImportsIndexed: 2000=100

60

80

100

120

140

160

180

2000 2002 2004 2006 2008 2010

U.S. ImportsU.S. Industrial Production

Source: Global Insights

28

The competitive environmentsupports the Rail Renaissance

• The trucking industry is faced with several challenges

– Congested highways– Labor shortages– New hour of service laws– Rising fuel costs

• Rail-truck partnerships bridge those challenges, creating value for both

Intercity Freight RevenueDollars in Billions

$0$75

$150$225$300$375$450$525

'60 '70 '75 '80 '85 '90 '95 '00 '05Est

Rail TruckSource: Source: EnoEno TransportationTransportation

29

Yet rail stocks continue to tradeat a discount to the S&P 500

Price-to-Earnings Ratios by Industry

15.9

17.0

17.4

17.9

18.7

19.4

23.1

Railroads

Telecom

Utilities

S&P 500

Transportation

Industrials

Healthcare

Note: Reflects closing January stock prices and LTM earnings peNote: Reflects closing January stock prices and LTM earnings per sharer share

30

CSX’s price-to-earnings ratio has room for improvement

Price-to-Earnings Ratios

14.4 15.2 15.316.7 16.9

18.4

CSX NSC CP CNI BNI UNP

Note: Reflects closing January stock prices and 2006 First CallNote: Reflects closing January stock prices and 2006 First Call earnings estimateearnings estimate

31

CSX’s commitment towards achieving its targets will drive that improvementEvolving Investment Thesis

• Operating ratio

• Economic cycle

• Cost of capital

• Long-term growth

•• Mid Mid –– 7070’’ssCommitmentCommitment

•• Grow through the cycleGrow through the cycleCommitmentCommitment

•• Meet or exceed COCMeet or exceed COCCommitmentCommitment

•• DoubleDouble--digit growthdigit growthCommitmentCommitment

20062006--2010 Targets2010 Targets

CSX Corporation


CSX Corporation


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