Forward-Looking Statements

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2 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. Forwardlooking 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 forwardlooking statements are specified in the company s SEC reports, accessible on the SEC s website at and the company s website at 2

3 CSX has a solid foundation of improving results Safety FRA Personal Injury Service On-time Originations 89% 90% 72% Network Train Velocity (mph) YTD YTD YTD 2013 FRA Train Accidents On-time Arrivals Terminal Dwell (Hours) % 80% 83% YTD 2013 * YTD 2013 numbers are through Q YTD YTD

4 delivered in a dynamic business environment 1,533 CSX Coal Volume Units in 000 s 1,290 Down 21% 1,211 Up 6% CSX Merchandise and Intermodal Volume Units in 000 s 4,943 5,119 5, TTM TTM Changing profile supports growth in service-sensitive commodities 4

5 CSX is variabilizing coal resources with volumes Change in Coal Volume and Resources 2013 versus 2011 Using furlough, retention boards and transfers Helps variabilize employee holding cost with coal down Carloads GTM s Road Crew Starts Locomotives in Coal Service Engineering Track Employees (22%) (16%) (26%) (31%) (14%) Eliminated over 6,500 annual coal road starts Managing demand with spot movements Actively working to increase train size, density Tons per car and cars per train both trending up T&E Overtime (39%) Also reduced Engineering and Mechanical workforce Maintaining safety standards 5

6 Dynamic resource planning drives asset utilization 3,500 3,450 3,400 3,350 CSX Active Locomotives Increased for Spring Peak Up for Grain and Intermodal peak; down for holidays Locomotive planning flexibility is a key productivity driver Nearly $20M of savings in 2013 Ability to flex 100 units in/out of storage within two weeks Strong coordination between Transportation and Mechanical 3,300 3,250 Reduced due to annual Coal and Auto shutdown Fleet adjustments maximize savings, protect service Units can be returned quickly for service needs 3,200 Q1 Q2 Q3 Q4 6

7 and helps drive new efficiency opportunities $145 Productivity Savings Dollars in Millions $193 $142 $264 $151 $79 $197 $150+ Productivity identification is an ongoing process Occurs across Operations Innovation takes many forms Can take many years to develop CSX has consistently executed on its productivity goals Team is energized around potential of initiatives It is an expectation at CSX for continuous improvement '06 '07 '08 '09 '10 '11 '12 '13 Est CSX is also creating value beyond productivity with Service Excellence 7

8 Service Excellence process provides additional value Service Excellence Increased Customer Commitment Business Retention Price Sustainability Asset Utilization Service Excellence initiative improves the customer experience and allows CSX to grow the business 8

9 It starts with the customer and CSX is listening Listening Over 2,500 third-party independent customer surveys annually Executing Frequent cross-functional Service Excellence meetings across the network Customer Advisory Councils for all markets Customer Focused Culture: All employees, every day Over 4,000 annual customer site visits Customers tell us: Service is paramount 9

10 Service Excellence strives to duplicate safety culture Engagement Collaboration System Customer Service Concerns Terminal Region Division Line of Road Ideas Network Operations Transportation Engineering Mechanical Service Design Employees Commercial CSX s culture is changing to be more focused on customers 10

11 Collaboration is leading to improvement Network Operations Collaboration Customer Service Transportation Engineering Mechanical Service Design Agricultural growth driven by population and increasing crop yields Diverse portfolio of commodities Focus on asset utilization through unit train conversion, faster car cycles Single car product still vital Feed mill in Georgia Receives single grain cars and unit trains Existing service was challenged Commercial New service model saves $1.1M Allows for investment in more track to increase service and grow business 11

12 CSX is responding to the voice of the customer Service Predictability Consistency of service is a top priority Improving transit times and service reliability Enhanced Efficiency and Asset Utilization As cars sit, we lose money Driving improved railcar utilization for customers & CSX Improved Communication and Coordination Proactive notification for planning and results Providing information for customers to plan resources 12

13 Customer satisfaction at all-time high levels CSX Customer Satisfaction Indexed: 2008 = CSX customer satisfaction at all-time high levels Internal and third party shipper surveys confirm results Local service improvements were primary driver First and last mile significantly impacts customer satisfaction Superior service is foundation for long-term growth

14 Wrap-up... CSX has a long-term proven track record of success Performance has been sustained through challenging business conditions Committed to being safest, most progressive railroad Collaborative, customer-focused approach is a key to success Responding to customer needs with strong service Driving sustainable savings through focus on asset utilization 14

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