Team Joe Leppert
Business Dimensions - 2001 Revenue $1.9 Billion CSXI 8% Revenue Premium 6% International 51% Pacer 28% IMC / Truckload 24% Steamship 34% Domestic 49%
Organizational Structure Commercial Network Design Finance Operations
Revenue and Contribution Contribution CAGR = 13% Revenue CAGR = 4% 1999 1999 1999 2000 2000 2000 2001 2001 2001 2002 2002 2002 Total Revenue Total Contribution
Business Drivers Market Strong International Trade Price Domestic Economic Growth Premium Products Capture Asset Value Penetration New Chicago Facility Premium & Domestic Major Growth Lanes
Business Development Initiatives Strategic Partnerships Mexico Market Market Research Initiatives Lane Balance Opportunities Non-Seasonal Baseload Customers Non-Peak Vs. Peak Growth in Major Lanes
Major Growth Lanes Major Lanes L.A. to Memphis Market Size ($ Billions) Cost Advantage vs. Truck L.A. to New Orleans Oakland to Chicago Chicago to Portland Chicago to L.A. Chicago to Mexico $0 $1.5 0% 50%
Major Lanes Portland Chicago Oakland Los Angeles Dallas Memphis Houston New Orleans Mexico
Margin Improvement Target (%) 100 75 50 +60% from Productivity & Asset Utilization 25 0 +40% from Revenue Growth Price Volume & Mix Double Stack Train Length HP/TT Other Drivers
Team John Newman
Contribution Margin Improvement 57% Volume Price Productivity Productivity Volume Price 2000 2001 2002
L.A. to Houston/New Orleans Margin Improvement +82% Day-of-Week Rationalization Price Improvement Double Stack Efficiency So. Calif Network Redesign 2000 2001 2002 New Orleans Houston
Lane Contribution Lane by Lane Analysis
Lane Contribution Trains by Lane Detail
Lane Contribution Day-of-Week Demand
Lane Contribution Customer Detail
Scorecard - L.A. to Houston/New Orleans 2002 versus 2001 Lane Evaluation Change in Contribution Unfavorable Favorable Description Units +4% Revenue +5% Revenue Per Car +1% - Decrease / + Increase Margin Improvement + 21% Revenue Avg. Revenue / Car Volume Traffic (% of Lane) Domestic 31% International 69% Operating Statistics Train Starts +3% Loads Per Train +7% Double Stack Percent +9% Horsepower/Trailing Ton -7% Train Length +2% Costs Productivity & Asset Utilization Fuel Price Wage Inflation Others C-Rate Slot Utilization Double Stack Horsepower/TT Train Length Others
Profitability Management Lane Organizational Structure Tactical Working Team Quarterly Lane Reviews Monthly Business Team Reviews Quarterly Senior Management Reviews
Team Barry Michaels
Operating Initiatives Line-of-Road Train Frequency Train Size Slot & Stack Utilization Horsepower per Trailing Ton Terminal Lift Productivity Dwell Time Gate Processing
Productivity / Efficiency Measures Train Length Feet 5,500 5,000 4,500 4,000 3,500 Operational Drivers Network Redesign Day of Week Volume Customer Commitment Rationalization Business Rules - Annulments/Consolidations 3,000 1999 2000 2001 2002
Productivity / Efficiency Measures Double Stack Percent 79% +13% 89% Operational Drivers Terminal Management Asset Utilization Containerization Car Type 1999 2002
Productivity / Efficiency Measures Lifts Per Unit 1.75 1.70 Operational Drivers On-Dock Operations Interchange Partners 1.65 1.60 1999 2000 2001 2002
Productivity / Efficiency Measures Terminal Dwell Days 2.77-14% 2.37 Operational Drivers Customer - Data Sharing Assessorial Collection Reduced Free Time Increased Storage Rates 1999 2002
L.A. to Dallas/Memphis Margin Improvement +64% Differentiated Product Interchange Partnerships Line-of-Road Productivity 2000 2001 2002 Memphis So. Calif Dallas
Scorecard - L.A. to Dallas/Memphis 2002 versus 2001 Lane Evaluation Change in Contribution Unfavorable Favorable Description Units +24% Revenue +20% Revenue Per Car -3% Traffic (% of Lane) - Decrease / + Increase Domestic 35% International 65% Operating Statistics Train Starts +12% Loads Per Train +11% Double Stack Percent +4% Horsepower/Trailing Ton -3% Train Length +11% Margin Improvement + 13% Revenue Costs Productivity & Asset Utilization Avg. Revenue / Car Volume Fuel Price Wage Inflation Others C-Rate Slot Utilization Double Stack Horsepower/TT Train Length Others
Future Margin Initiatives Increase Train Length Reduce Terminal Gate Processing Time Reduce Lifts per Unit Handled Price Improvement Truck-Like Fuel Price Recovery
Revenue Growth Potential Ag Products Autos Chemicals Energy Industrial Products TOTAL GDP 0% 1% 2% 3% 4% 5% 6% 7%
Union Pacific