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CSX Corporation (CSX)’s Fourth Quarter 2014 Earnings Conference Call Transcript

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Below is the transcript of the CSX Corporation (NYSE:CSX)’s Fourth Quarter 2014 Earnings conference call, held on January 14th, 2015 at 08:30 a.m. ET.




CSX Corporation (NYSE:CSX), together with its subsidiaries based in Jacksonville, Fla., is one of the nation’s leading transportation suppliers. The company’s rail and intermodal businesses provide rail-based transportation services including traditional rail service and the transport of intermodal containers and trailers.


Company Executives:

David Baggs, Vice President, Capital Markets, Investor Relations, CSX Corporation.
Michael Ward, Chairman, President, Chief Executive Officer, CSX Corporation.
Fredrik Eliasson, Chief Financial Officer, CSX Corporation.
Clarence Gooden, Chief Sales and Marketing Officer, CSX Corporation.
Oscar Munoz, Chief Operations Officer, CSX Corporation.



Tom Wadewitz, UBS
Allison Landry, Credit Suisse
Rob Salmon, Deutsche Bank
Keith Mori, Barclays
Thomas Kim, Goldman Sachs
Bill Greene, Morgan Stanley
Ken Hoexter, Merrill Lynch
Ben Hartford, Robert W. Baird
Cherilyn Radbourne, TD Securities
David Vernon, Bernstein
Chris Wetherbee, Citi Research
John Larkin, Stifel Nicolaus
Baskin Majors, Susquehanna Financial
Jeff Kauffman, Buckingham Research
Scott Group, Wolfe Research
Jason Seidl, Cowen & Co
Matt Troy, Nomura
Cleo Zagrean, Macquarie Capital
Keith Schoonmaker, Morningstar
Justin Long, Stephens
Donald Broughton, Avondale Partners
John Mims, FBR Capital Markets



Good morning, ladies and gentlemen, and welcome to the CSX Corporation Fourth Quarter 2014 Earnings Call. As a reminder, today’s call is being recorded. During this call, all participants will be in a listen-only mode.For opening remarks and introduction, I would with like to turn the call over to Mr. David Baggs, Vice President of Capital Markets and Investor Relations for CSX Corporation.


David Baggs, Vice President of Capital Markets and Investor Relations, CSX Corporation.

Thank you, Wendy, and good morning everyone. And again, welcome to CSX Corporation’s Fourth Quarter 2014 Earnings Presentation. The presentation material that we’ll review this morning, along with our Expanded Financial Quarterly Report and our Safety and Service Measurements, are available on our website, at under the Investors Section. In addition, following the presentation this morning, a webcast and podcast replay will be available on the same website.

This morning, our presentation will be led by Michael Ward, the Company’s Chairman, President and Chief Executive Officer, and Fredrik Eliasson, our Chief Financial Officer. In addition, Clarence Gooden, our Chief Sales and Marketing Officer, and Oscar Munoz, our Chief Operating Officer, will be available during the question and answer session. Let me remind everyone that the presentation and other statements made by the company contain forward-looking statements. You are encouraged to review the company’s disclosure on the accompanying presentation on slide 2. The disclosure identifies forward-looking statements as well as the uncertainties and risks that could cause actual performance to differ materially from the results anticipated by these statements. In addition, at the end of the presentation, we will conduct a question and answer session with the research analysts. With about 30 analysts now covering CSX , I would ask, as a courtesy for everyone, to please limit your inquiries to one primary and one follow-up question.

And with that, let me turn the presentation over to CSX Corporation’s Chairman, President and Chief Executive Officer, Michael Ward. Michael?


Michael Ward, Chairman, President and Chief Executive Officer

Well, thank you, David, and good morning everyone. Yesterday, CSX reported fourth quarter earnings per share of $0.49, up 17% from $0.42 in the same period last year. This represents a new fourth quarter record for the company. Revenue grew 5% in the quarter to $3.2 billion, also a fourth quarter record, with broad based growth across nearly all of our markets, reflecting continued economic momentum. Furthermore, the timely addition of operating resources enhancements through the fall peak have supported strong volume growth. As a result, operating income increased 11%, to a new fourth quarter record of $901 million, and the operating ratio improved 140 basis points, to 71.8%. This quarter’s performance is further evidence of CSX’s ability to capitalize on economic growth that is helping to drive strength across the Company’s diverse markets.

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