Financial Data and Key Metrics Changes - Total revenue for Q2 2025 was $3.6 billion, down 3% year-over-year, primarily due to lower coal and fuel prices, but up 4% sequentially [12][32] - Earnings per share decreased by 10% year-over-year but increased by 29% quarter-over-quarter [12][32] - Reported operating margin declined by 320 basis points year-over-year but improved by 550 basis points sequentially [12][32] Business Line Data and Key Metrics Changes - Merchandise revenue and volume declined by 2%, while the metals market saw a 3% increase in volume but a 3% decrease in revenue [23] - The Minerals segment experienced a 5% revenue growth due to continued infrastructure demand [24] - Coal revenue declined by 15% despite a 1% increase in volume, with coal RPU down 16% year-over-year [27] - Intermodal revenue decreased by 3% on a 2% volume increase, affected by lower diesel prices [29] Market Data and Key Metrics Changes - The automotive sector saw a 2% decline in volume, with production challenges offsetting gains from new contracts [24] - Chemical volumes decreased due to lower shipments of export plastics and a decline in chlor alkali shipments [25] - Fertilizer shipments declined by 6%, but revenues remained flat due to positive core pricing [25] Company Strategy and Development Direction - The company is focused on improving operational efficiency and customer service, with ongoing projects like the Howard Street Tunnel and Blue Ridge rebuild expected to enhance network capacity [10][21][44] - Management has reorganized resources to improve alignment with business needs and accelerate decision-making [14][73] - The company aims to drive profitable growth through strategic partnerships and industrial development projects [26][44] Management's Comments on Operating Environment and Future Outlook - Management acknowledged mixed market conditions, with some areas showing strength while others are slowing [11][41] - The company is optimistic about future growth opportunities despite economic uncertainties, emphasizing a proactive approach to customer engagement [30][96] - Management expects overall volume growth for the full year, with a focus on efficiency and labor productivity [41][66] Other Important Information - The company is investing in emerging technologies to deliver further savings and support strong incremental margins in the future [39] - Free cash flow is expected to improve in the second half of the year, supported by permanent bonus depreciation [40] Q&A Session Summary Question: Thoughts on potential rail consolidation - Management emphasized the importance of improved customer service and ease of doing business, while remaining open to discussions about potential consolidation opportunities [50][52] Question: Factors driving service improvement - Management highlighted proactive measures taken before weather improvements, including better management of cars online and enhanced communication across teams [55][56] Question: Guidance on volume improvement - Management indicated that improvements in core customer production issues and easier comparisons from the previous year are expected to drive volume growth in the third quarter [62][66] Question: Commentary on coal market - Management noted positive trends in domestic coal utilization and potential extensions of life for coal plants previously targeted for closure [80] Question: Other revenue run rate expectations - Management projected other revenue to trend between $115 million to $120 million per quarter, with potential unique items affecting this [99]

Summary of CSX Conference Call Company and Industry Overview - **Company**: CSX Corporation - **Industry**: Rail Transportation Key Points and Arguments 1. **Operational Challenges**: CSX faced significant headwinds in 2025 due to the Blue Ridge subdivision rebuild and the Howard Street Tunnel project, impacting performance in the first quarter [19][22][27] 2. **Volume Recovery**: Despite challenges, CSX reported some of the highest volume levels of the year, with improvements in operations and network fluidity [19][23][28] 3. **Revenue Miss**: In the first quarter, CSX missed approximately $100 million in revenue opportunities due to operational inefficiencies [30] 4. **Capacity and Growth**: CSX anticipates low to mid-single-digit volume growth over the next three years without significant new infrastructure investments [32][89] 5. **Tariff Impacts**: The recent pause in reciprocal tariffs with China is expected to lead to a surge in preshipping, although an air pocket in freight volumes is anticipated in the short term [8][34][36] 6. **Market Outlook**: CSX remains optimistic about the second half of 2025 and 2026, driven by strong industrial development opportunities and new business wins [26][38] 7. **Coal and Fertilizer Demand**: Coal volumes increased by 6% quarter-to-date, driven by both domestic demand and export opportunities, while fertilizer volumes rose by 12% due to recovery from previous disruptions [53][60] 8. **Intermodal Growth**: Intermodal services have shown double-digit growth year-to-date, attributed to international demand and strong service performance [62][64] 9. **Employee Efficiency**: CSX is focusing on maintaining flat employee levels while improving efficiency, with a current workforce of 23,000 [93] 10. **Cost Management**: The company is managing labor inflation effectively, with overall labor costs running below 3% due to cost-sharing models in health benefits [47][71] Additional Important Insights 1. **Service Improvements**: CSX has improved trip plan compliance to over 80%, up from the 60% range earlier in the year, indicating better operational performance [25] 2. **Technology Investments**: The company is investing in advanced analytics and AI to enhance operational efficiency and decision-making capabilities [81] 3. **Long-term Projects**: The Howard Street Tunnel and Blue Ridge projects are on track, with expected completion in late 2025, which will enhance capacity and operational efficiency [66][68] 4. **Pricing Environment**: CSX is experiencing stable pricing dynamics, with pricing growth exceeding inflation, particularly in the chemicals and merchandise sectors [71][73] 5. **Future Projections**: CSX anticipates a significant reduction in costs related to rerouting and weather impacts as projects are completed, setting the stage for improved margins and earnings growth in 2026 [95][96]

Core Insights - CSX Corporation has designated eighteen properties across twelve states as CSX Select Sites, which are rated gold, silver, or bronze based on site characteristics evaluation [1][3] - The Select Site program aims to connect expanding companies with desirable rail-served properties, enhancing economic growth opportunities [2][3] - Four existing Select Sites have improved their readiness and received upgraded designations since the last awards in 2024 [3] Company Overview - CSX is a leading transportation company based in Jacksonville, Florida, providing rail, intermodal, and rail-to-truck transload services across various markets [7] - The company has been integral to the economic expansion and industrial development of the United States for nearly 200 years, connecting major metropolitan areas and numerous short-line railroads [7] Select Sites Details - The Select Sites include various locations such as South Coast Logistics Park in Massachusetts, Montgomery Inland Logistics in Alabama, and Eastport Logistics Park in Florida, among others [8] - The program reflects collaboration with landowners, counties, and utility partners to facilitate faster investment and job creation in local communities [3][8]

Financial Data and Key Metrics Changes - Total revenue for the quarter was $3.4 billion, down 7% from the same period last year, primarily due to lower benchmark coal prices and reduced fuel surcharge [10][44] - Earnings per share decreased by 24%, reflecting the impact of reduced revenues and network performance challenges [10][44] - Total volume decreased by 1% compared to last year, with intermodal volumes increasing by 2% [9][10] Business Line Data and Key Metrics Changes - Merchandise business saw both revenue and volume decline by 2%, while revenue per unit (RPU) increased by 1% year-over-year [30] - Coal revenue declined by 27% on a 9% lower volume, with all-in coal RPU down 20% year-over-year [36] - Intermodal revenue was down 3% despite a 2% increase in volume, with RPU lower by 5% due to lower fuel surcharge [39] Market Data and Key Metrics Changes - Fertilizer volume was up 2% compared to last year, while minerals volume decreased by 1% due to weather impacts [31][32] - Automotive production was slow to start the year, with volume and revenue declining by 7% and 8% respectively [34] - The overall market demand remained stable, with some areas showing strength, but operational challenges limited the ability to meet demand [28][31] Company Strategy and Development Direction - The company is focused on improving operational efficiency and stabilizing network performance amid ongoing infrastructure projects [6][14] - There is a commitment to enhancing customer service and maintaining strong relationships with customers to drive growth [8][28] - The company is optimistic about future growth opportunities, particularly in U.S. manufacturing, as it continues to attract new customers [42][56] Management's Comments on Operating Environment and Future Outlook - Management acknowledged that the first quarter represented an earnings trough, with expectations for improvement as operational challenges are addressed [45][57] - The company is committed to running a safer, faster, and more reliable railroad, recognizing the need for better outcomes moving forward [58] - Management expressed confidence in the potential for sequential improvement in performance as the year progresses [57][58] Other Important Information - The company is investing heavily in infrastructure projects, with expectations for capital expenditures to exceed $400 million for the Blue Ridge rebuild [52] - Free cash flow was stable in the first quarter, with a commitment to returning cash to shareholders [54] Q&A Session Summary Question: Can you break down the operational challenges? - Management indicated that the challenges stem from a series of significant compounding events, including severe weather and infrastructure projects, which have affected capacity [65][70] Question: Will Q2 show typical margin improvement? - Management expects Q2 results to be better than Q1, but the pace of margin improvement will depend on macro conditions and operational improvements [76][79] Question: What about lost customer contracts? - Management clarified that there have been no lost contracts, but there were missed opportunities due to operational disruptions [89][90] Question: Can you quantify the revenue opportunities? - Management noted that some revenue opportunities were perishable, but there is a significant chance to capture demand in Q2 as operations improve [102] Question: What is the outlook for coal contracts? - Management stated that coal contracts have unique pricing structures with embedded floors, and they are currently above those levels [136] Question: What is the run rate for other revenues? - Management indicated that the current run rate for other revenues is around $115 million, with some variability expected [137]

Financial Data and Key Metrics Changes - Total revenue for the quarter was $3.4 billion, down 7% from the same period last year, primarily due to lower benchmark coal prices and reduced fuel surcharge [10][44] - Earnings per share decreased by 24%, reflecting the impact of reduced revenues and network performance challenges [10][44] - Total volume decreased by 1% compared to last year, with intermodal volumes increasing by 2% [9][10] Business Line Data and Key Metrics Changes - Merchandise business saw both revenue and volume decline by 2%, while revenue per unit (RPU) increased by 1% year-over-year [30] - Coal revenue declined by 27% on a 9% lower volume, with RPU down 20% year-over-year [36] - Intermodal revenue decreased by 3% despite a 2% increase in volume, with RPU lower by 5% [39] Market Data and Key Metrics Changes - Fertilizer volume increased by 2%, but revenue remained flat due to a negative mix shift [31] - Automotive production was slow, with volume and revenue declining by 7% and 8% respectively [34] - Minerals volume decreased by 1%, while cement volume increased by 4% due to new production ramp-up [32] Company Strategy and Development Direction - The company is focused on improving operational efficiency and stabilizing network performance amid ongoing infrastructure projects [6][21] - There is a commitment to enhancing customer service and maintaining strong relationships with clients [8][24] - The company aims to capitalize on the long-term trend toward the expansion of U.S. manufacturing capacity [56] Management's Comments on Operating Environment and Future Outlook - Management acknowledged that the first quarter represented an earnings trough, with expectations for improvement as operational challenges are addressed [45][57] - The company is closely monitoring macroeconomic conditions and trade policies, which are impacting demand and operational performance [27][28] - There is confidence in the potential for improved network performance to capture more demand in key markets [35][56] Other Important Information - The company is investing in infrastructure projects, with significant capital expenditures planned for the Blue Ridge rebuild [52][57] - Free cash flow remained stable, with nearly a billion dollars returned to shareholders in the first quarter [54] Q&A Session Summary Question: Can you break down the operational challenges? - Management indicated that the challenges stem from a series of compounding events, including severe weather and infrastructure projects, which have affected capacity [65][70] Question: Will Q2 see a typical margin improvement? - Management expects Q2 results to be better than Q1, but the pace of improvement will depend on macro conditions and operational enhancements [76][79] Question: What about lost customer contracts? - Management clarified that there have been no lost contracts, but missed opportunities due to operational disruptions [89] Question: Can you quantify the revenue opportunities? - Management noted that some revenue opportunities were perishable, but there is potential for recovery in Q2 as demand stabilizes [102] Question: What is the outlook for coal contracts? - Management stated that coal contracts have unique pricing structures, with current prices above floor levels [136] Question: What is the run rate for other revenues? - Management indicated that the current run rate for other revenues is around $115 million, with some variability expected [137]