CSX Corp CSX
Q4 2011 Earnings Call Transcript
Now with this as background, the stage is set for CSX to deliver strong margin improvement in 2012. With resources in place today for growth, over the course of the year we expect to deliver improving incremental margin. Our progress in 2011 gives us confidence that we will again deliver record results in 2012, which keeps us on track to grow to 65% operating ratio no later than 2015.
So with that, let me turn that back to Michael for his remarks.
Michael J. Ward - Chairman, President and CEO: Well, thank you, Oscar. When we stand back and look at 2012, it helps to think about the opportunity for our company against three criteria. First, what does the business environment look like? As Clarence noted, there are favorable conditions in nearly every major market we serve. CSX provides service to a diverse portfolio of businesses and through them we see an economy that continues to be favorable for growth.
Second, are we able to grow in this environment? Yes. As stated earlier, we believe we'll be able to grow faster than the economy overall. In the merchandise business, which makes up more than 40% of volume, we expect to achieve solid growth in line with the macro economy. We are also expecting strong growth in intermodal, which makes up more than 35% of our volumes. We have a significant head start coming into the year with the onboarding of Maersk, and there is every indication that highway conversions to rail will continue to drive further growth in intermodal.
Third can CSX grow profitably in this environment? Here again the answer is yes. It is important to note that CSX was able to generate record earnings in 2011, at a time when we were making strategic resource investments, that will position the company for future and drive long-term growth. Now we have a network that is more capable than it was a year ago, and a workforce that still has a relentless focus on safety, service, and productivity. In 2012, it's our job to leverage that capability of our network and our organization to deliver outstanding results for our customers, and for you, our shareholders. As we do this, I'm confident CSX will once again deliver record financial performance in 2012, and continue to progress towards a 65% operating ratio, by no later than 2015.
Thank you for joining us this morning and we look forward to taking your questions at this time.
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