Summary of CSX FY Conference Call - February 19, 2026 Company Overview - **Company**: CSX Corporation (NasdaqGS:CSX) - **Industry**: Railroad and Transportation Key Points and Arguments Industry Insights - **AI and Automation**: The railroad industry is expected to benefit from AI and automation, particularly in proposal preparation, customer service, and asset management. Traditional industries may gain the most from these technologies [7][8][9] - **Global Growth Outlook**: The speaker expressed skepticism about growth in major global markets, noting that China is no longer a growth engine and Europe has historically not contributed significantly to growth. The U.S. is viewed as the best bet for sustained growth despite current tariff uncertainties [10][11][12] - **Reindustrialization**: There is potential for reindustrialization in the U.S., but it is not expected to manifest significantly in 2026. The speaker remains cautiously optimistic about long-term prospects [12] Company Performance and Strategy - **Cultural Insights**: The new CEO, Steve, highlighted the strong culture at CSX, characterized by long-tenured employees who are passionate about their work. This culture is seen as a positive for leadership and operational stability [20][21] - **Operational Challenges**: CSX faced significant operational challenges due to natural disasters, including the loss of a 60-mile rail corridor. Recovery efforts have been successful, with major infrastructure projects completed, leading to improved operational fluidity [23][25] - **Leadership Changes**: The CEO has made thoughtful changes to the executive leadership team, focusing on leadership skills and the ability to drive results. The importance of having the right people in critical positions was emphasized [26][28] M&A and Industry Dynamics - **M&A Landscape**: The CEO supports M&A in the industry, citing his experience with the Praxair and Linde merger. He acknowledged that consolidation can create both risks and opportunities for existing players like CSX [31][32] - **Regulatory Environment**: The merger process is lengthy and complex, with significant regulatory scrutiny. The CEO emphasized the need to focus on running CSX effectively while navigating these challenges [33][36] Financial Metrics and Performance Goals - **Financial Guidance**: CSX is targeting low single-digit revenue growth, with a focus on increasing operating margins by 200-300 basis points and free cash flow by 50%. The CEO emphasized the importance of cost management over aggressive revenue growth [51][52] - **Key Performance Metrics**: The CEO highlighted operating income growth, operating margin percentage, and safety as critical metrics for accountability. Return on capital and total shareholder return are also emphasized for long-term performance [62][65][68] Customer Feedback and Service Improvement - **Customer Engagement**: Customers are keeping their options open regarding service providers, indicating a cautious approach to commitments amid industry changes. Consistency in service is identified as a key area for improvement [42][48] - **Service Challenges**: The CEO acknowledged that while improvements have been made, there is still significant room for growth in service consistency and operational performance [46][47] Conclusion - The CEO expressed confidence in CSX's ability to navigate current challenges and capitalize on future opportunities, emphasizing a balanced approach to growth, operational excellence, and employee engagement [75][76]

Summary of Union Pacific Conference Call Company Overview - **Company**: Union Pacific (UNP) - **Industry**: Railroad Transportation Key Points and Arguments Merger with Norfolk Southern - Union Pacific plans to refile its merger application with Norfolk Southern by April 30, 2023, which is a slight delay from previous expectations of March [8][10] - The merger is expected to enhance competition and provide benefits such as reduced inventory costs for customers by improving service efficiency [10][11] - Union Pacific believes that the merger will allow them to gain 24-48 hours in transit time by optimizing operations and reducing touchpoints [12][21] - The company emphasizes that the merger is in the public interest and will enhance competition, despite concerns from other railroads [14][23] Regulatory Process - The regulatory process for the merger is acknowledged as lengthy, with expectations for hearings and responses from constituents [17][18] - Union Pacific is confident in the merger's benefits and believes that the Surface Transportation Board (STB) will recognize these advantages [22][23] Environmental Impact - Union Pacific claims that the merger will be environmentally beneficial, as rail transport is 70% more greenhouse gas efficient than trucking [21][22] - The company aims to reduce truck traffic on highways, contributing to lower emissions [21] Revenue Synergies and Market Position - Union Pacific has reassessed the need for concessions initially estimated at $750 million, concluding they are unnecessary due to the merger's end-to-end service model [37][40] - The company anticipates that 75% of the business growth will come from shifting freight from highways to rail, rather than from competing railroads [38][40] - Union Pacific operates 27% of the total goods movement on U.S. railroads, positioning itself competitively against Burlington Northern's 39% [34] Operational Performance - The company reported a rebound in operational metrics, with car miles per day returning to 230-240 and dwell times under 20 hours [66][67] - Carloads are down 2% overall for the quarter, but there is year-over-year growth in specific sectors like grain and coal [67][68] - Union Pacific is focusing on expanding its market share in intermodal and carload segments, with new contracts and facilities expected to drive growth [73][76] Strategic Focus - Union Pacific's strategy emphasizes safety, service, and operational excellence, which are seen as critical to winning customer trust and market share [79][82] - The leadership expresses a forward-looking approach, focusing on potential growth and competition against trucks and barges [82] Additional Important Content - The call highlighted the competitive landscape, with other railroads expressing concerns about Union Pacific's merger, indicating that they view it as a threat to their market position [35][36] - Union Pacific's leadership is confident in their operational capabilities and technological integration, dismissing competitor concerns as defensive reactions [55][56] This summary encapsulates the key discussions and insights from the Union Pacific conference call, focusing on the merger, operational performance, and strategic direction of the company.

Financial Performance - Total railway operating revenues reached $12.2 billion in 2025, with merchandise carloads accounting for 63% of revenues [22]. - Intermodal units handled in 2025 were 4.1 million, contributing 25% to total railway operating revenues [24]. - Coal revenues represented 12% of total railway operating revenues, with 78.0 million tons handled [25]. - The railway operating ratio improved to 64.2% in 2025, down from 66.4% in 2024 and 76.5% in 2023 [21]. - Capital expenditures totaled $2.2 billion in 2025, with property additions including $1.8 billion for road and other property [27]. Infrastructure and Operations - The average age of locomotives in service was 30.5 years, with 27 units retired in 2025 [30]. - The company maintained 28,200 miles of track, with 40% carrying over 20 million gross tons per track mile in 2025 [31]. - Approximately 90% of revenues come from exempt shipments or those under transportation contracts, minimizing regulatory impact [44]. - The workforce averaged 19,400 employees in 2025, with 80% covered by collective bargaining agreements [34]. Safety and Security - The company emphasizes safety, with a focus on risk management and compliance with safety programs [35]. - The company continues to enhance the security of its rail system, following a comprehensive security plan developed in conjunction with the Association of American Railroads (AAR) post September 11, 2001 [51]. - In 2025, the company provided rail accident response training to over 5,800 emergency responders through its Operation Awareness and Response Program [55]. - The company operates four facilities under U.S. Coast Guard Maritime Security Regulations, with security plans approved by the applicable Captain of the Port [53]. - The company engages in regular coordination with federal and state agencies, including the DHS, TSA, and FBI, to enhance operational security [54]. - The company has ongoing programs to sponsor local emergency responders at the Security and Emergency Response Training Center [55]. - The company continually evaluates its business continuity and disaster recovery planning, including scenarios for cybersecurity attacks [56]. - The company’s risk-based information security program is designed to align defenses and resources against potential attacks [56]. Competition and Marketing - The company competes primarily with CSX Corporation and other railroads, as well as motor and water carriers [49]. - Marketing strategies are being implemented to expand reach and shipping options among railroads and between railroads and motor carriers [50]. - The company’s security plan includes specific measures for hazardous materials transportation, particularly in High Threat Urban Areas [52].

Group 1 - Union Pacific Corporation (NYSE:UNP) is recognized as one of the 12 Best Stocks to Buy for the Long Term [1] - TD Cowen has adjusted its price target for Union Pacific to $255 from $257 while maintaining a Buy rating, following the company's Q4 results [2] - The Q4 earnings report showed adjusted earnings of $2.86 per share, slightly below the expected $2.87, and operating revenue of $6.09 billion, also below the forecast of $6.12 billion [3][4] Group 2 - The company is facing challenges due to uneven freight demand and macroeconomic pressures, which have impacted performance [3] - Union Pacific's proposed acquisition of Norfolk Southern, valued at $85 billion, is under regulatory review and has faced opposition from rail unions concerned about job security and shipping costs [3] - Looking ahead, Union Pacific is guiding for mid-single-digit earnings growth in 2026 [4]

Group 1 - The article does not provide any relevant content regarding the company or industry [1]

分组1 - Norfolk Southern reported quarterly earnings of $3.22 per share, exceeding the Zacks Consensus Estimate of $2.78 per share, and showing an increase from $3.04 per share a year ago, resulting in an earnings surprise of +15.92% [1] - The company posted revenues of $2.97 billion for the quarter ended December 2025, which was below the Zacks Consensus Estimate by 0.87%, and a decrease from $3.02 billion in the same quarter last year [2] - Over the last four quarters, Norfolk Southern has surpassed consensus EPS estimates three times and topped consensus revenue estimates two times [2] 分组2 - The stock has underperformed the market, losing about 1.5% since the beginning of the year compared to the S&P 500's gain of 1.9% [3] - The current consensus EPS estimate for the upcoming quarter is $2.78 on revenues of $3.03 billion, and for the current fiscal year, it is $12.77 on revenues of $12.55 billion [7] - The Transportation - Rail industry, to which Norfolk Southern belongs, is currently ranked in the bottom 17% of over 250 Zacks industries, indicating potential challenges for stock performance [8]

Financial Data and Key Metrics Changes - In Q4 2025, total revenue decreased by 2% due to a 4% decline in overall volume, partially offset by a 2% increase in revenue per unit (RPU) [17][24] - The operating ratio for the quarter was reported at 65.3, reflecting a degradation due to top-line headwinds [24][25] - Free cash flow increased to $2.2 billion, up nearly $500 million from the previous year, with the highest conversion rate since 2021 [28] Business Line Data and Key Metrics Changes - Merchandise volume increased by 1%, driven by the automotive and chemicals markets, with merchandise revenue (less fuel) growing by 2% year-over-year [17][19] - Intermodal business experienced a 7% decline in volume, leading to a 6% decrease in revenue, despite a slight RPU increase of 1% [18] - Coal volume increased due to higher electricity demand, but revenue decreased by 11% due to lower seaborne coal prices [18][21] Market Data and Key Metrics Changes - The overall market outlook remains uncertain, with mixed expectations for vehicle production and manufacturing activity [21][22] - Elevated natural gas activity is driving demand in non-crude chemical sectors, while intermodal markets are expected to remain soft due to tariff volatility [22] - Utility coal demand is expected to remain strong, but seaborne coal prices face significant pressure [22] Company Strategy and Development Direction - The company is focused on safety, service reliability, and cost control as it navigates a challenging demand environment and prepares for a merger [29][30] - Capital spending is being reduced to $1.9 billion for 2026, reflecting a prudent approach while maintaining network reliability and safety [30] - The merger is viewed as a necessary catalyst for growth, aiming to enhance competition and provide better service options for customers [31] Management's Comments on Operating Environment and Future Outlook - Management acknowledged a tough demand environment and competitive pressures impacting revenue, particularly in intermodal [36][38] - The company is committed to maintaining cost discipline and is prepared to handle various volume growth scenarios [30][36] - There is a focus on fighting for quality revenue and optimizing service offerings to retain and grow customer relationships [70][71] Other Important Information - The company achieved a record year in merchandise revenue, with significant improvements in safety performance, including zero reportable mainline derailments in Q4 [6][10] - The PSR 2.0 transformation has led to improved operational efficiency, with a 7% productivity increase despite a 4% reduction in workforce [7][12] Q&A Session Summary Question: How is the company thinking about volume and revenue strategy in a weak freight backdrop? - Management indicated a tough demand environment and acknowledged a revenue headwind from enhanced competition, but expressed confidence in maintaining performance in merchandise while addressing challenges in intermodal [36][38] Question: What is the perspective on the merger and its impact on competition? - Management emphasized that the merger would enhance competition and provide customers with more options, countering claims from competitors [43][45] Question: What steps are being taken to stem freight leakage due to competition? - The company is actively offering new services and optimizing revenue lines to combat competitive pressures, with a focus on quality revenue [50][51] Question: Can you elaborate on the operational expense guidance and its implications for earnings growth? - Management outlined that operational expenses are influenced by inflation, land sales, and productivity initiatives, with a focus on achieving year-over-year earnings growth despite challenges [60][62]

Financial Data and Key Metrics Changes - In Q4 2025, overall volume decreased by 4%, leading to a 2% reduction in total revenue [17][24] - The operating ratio for the quarter was reported at 65.3, with EPS at $3.22 per share [24] - Full-year results showed a 5% increase in net income compared to the previous year, despite a revenue growth projection of 3% that did not materialize [28] Business Line Data and Key Metrics Changes - Merchandise volume increased by 1%, driven by the automotive and chemicals markets, with merchandise revenue (less fuel) growing by 2% year-over-year [17][19] - Intermodal business experienced a 7% decline in volume, with revenue down by 6% due to challenging market conditions [18] - Coal volume increased due to higher electricity demand, but revenue decreased by 11% due to lower seaborne coal prices [18][21] Market Data and Key Metrics Changes - The outlook for merchandise markets remains mixed, with expectations of modest manufacturing activity growth amid economic uncertainty [21] - Intermodal markets are expected to remain soft due to tariff volatility and oversupply in truck capacity [22] - Utility coal demand is expected to remain strong, while seaborne coal prices face significant pressure [22] Company Strategy and Development Direction - The company is focused on safety, service reliability, and cost control as it navigates a challenging demand environment [29][30] - A reduction in capital spending to $1.9 billion for 2026 reflects a prudent approach while maintaining network reliability and safety [30] - The ongoing merger is viewed as a necessary catalyst for growth, enhancing competition and providing better service options for customers [31] Management's Comments on Operating Environment and Future Outlook - Management acknowledged a tough demand environment and competitive pressures impacting revenue [36][50] - The company is committed to maintaining cost discipline and is prepared to handle various volume growth scenarios [30][62] - There is a focus on delivering quality revenue and optimizing service performance to retain customers [70] Other Important Information - The company achieved a record year in merchandise revenue, with significant improvements in safety performance, including zero reportable mainline derailments in Q4 [6][10] - The PSR 2.0 transformation has led to improved operational efficiency, with a 7% productivity increase despite a 4% reduction in workforce [7][12] Q&A Session Summary Question: How is the company thinking about volume and revenue strategy? - Management indicated a tough demand environment and acknowledged a revenue headwind from enhanced competition, focusing on maintaining cost within guidance [35][36] Question: What is the perspective on the merger and its impact on competition? - Management responded that competing railroads are opposed to the merger for self-serving reasons, emphasizing that the merger will enhance competition and provide better service options for customers [42][45] Question: What steps are being taken to stem freight leakage due to competition? - Management highlighted new service offerings and a commitment to fight for quality revenue, indicating readiness to adapt to competitive pressures [50][51] Question: Can you elaborate on the operational expense guidance and year-over-year earnings growth? - Management outlined that operational expenses are influenced by inflation, land sales, and productivity initiatives, with a focus on achieving year-over-year earnings growth despite challenges [57][62]

Financial Data and Key Metrics Changes - In Q4 2025, overall volume decreased by 4%, leading to a 2% reduction in total revenue [16][24] - The operating ratio for the quarter was reported at 65.3, with adjusted EPS of $3.22 per share [23][24] - Free cash flow generated was $2.2 billion, an increase of nearly $500 million compared to the previous year [26] Business Line Data and Key Metrics Changes - Merchandise volume increased by 1%, driven by the automotive and chemicals markets, with merchandise revenue (less fuel) growing by 2% year-over-year [16][18] - Intermodal business experienced a 7% decline in volume, with revenue down by 6% due to challenging market conditions [16][19] - Coal volume increased due to higher electricity demand, but revenue decreased by 11% as lower seaborne coal prices impacted RPU [16][19] Market Data and Key Metrics Changes - The outlook for merchandise markets remains mixed, with expectations of modest manufacturing activity growth amid economic uncertainty [19] - Intermodal markets are expected to remain soft due to tariff volatility and oversupplied truck capacity [20] - Utility coal demand is expected to remain strong, while seaborne coal prices face significant pressure [21] Company Strategy and Development Direction - The company is focused on safety, service reliability, and cost control as part of its operational strategy for 2026 [27][30] - A reduction in capital spending to approximately $1.9 billion for 2026 reflects a prudent approach while maintaining network safety and reliability [29][26] - The company is committed to enhancing its competitive position through the merger, which aims to create a transcontinental rail network [30] Management's Comments on Operating Environment and Future Outlook - Management acknowledged a challenging demand environment and competitive landscape, particularly in the intermodal sector [34][37] - The company is prepared to fight for quality revenue and maintain strong service performance despite external pressures [36][62] - There is a focus on maintaining cost discipline while accommodating various volume growth scenarios [27][29] Other Important Information - The company achieved a record year in its merchandise business, with significant revenue growth and improved service performance [18][19] - Safety performance improved, with a 15% reduction in the FRA reportable injury ratio and a 71% improvement in the mainline accident rate year-over-year [9][10] Q&A Session Summary Question: How is the company thinking about volume and revenue strategy? - Management indicated a tough demand environment and acknowledged a revenue headwind from enhanced competition, focusing on maintaining cost within guidance while accommodating various volume scenarios [33][34] Question: What is the perspective on the merger and its impact on competition? - Management responded that competing railroads are opposing the merger for their own business interests, asserting that the merger will enhance competition and provide customers with more options [40][41] Question: What steps are being taken to stem freight leakage due to competition? - Management emphasized the importance of fighting for quality revenue and highlighted new service offerings to enhance competitiveness [46][47] Question: Can you elaborate on the operational expense guidance for 2026? - Management outlined that operational expenses are influenced by inflation, land sales, and productivity initiatives, with a focus on controlling costs while preparing for various revenue scenarios [54][56]

Q4 2025 EARNINGS CALL January 29, 2026 FORWARD-LOOKING STATEMENTS / NON-GAAP MEASURES This presentation and the related materials contain "forward-looking statements" within the meaning of the "safe harbor" provisions of the Private Securities Litigation Reform Act of 1995, as amended. These statements relate to future events or future performance of Norfolk Southern Corporation (NYSE: NSC) ("Norfolk Southern," "NS," the "Company," "we," "our," or "us") and involve known and unknown risks, uncertainties, an ...