Q2 2013 Earnings Call Transcript

Transcript Call Date 07/17/2013

Operator: Good morning, ladies and gentlemen and welcome to the CSX Corporation Second Quarter 2013 Earnings Call. As a reminder, today's call is being recorded. During the call, all participants will be in a listen-only mode.

For opening remarks and introduction, I'd like to turn the call over to Mr. David Baggs, Vice President of Capital Markets and Investor Relations for CSX Corporation. Sir, you may begin.

David Baggs - VP Capital Markets and IR: Thank you, Gwen, and good morning, everyone, and welcome again to CSX Corporation's second quarter 2013 earnings presentation. The presentation material that we will review this morning along with our quarterly financial report and our safety and service measurements, are available on our website at under the Investors Section. In addition, following the presentation a webcast and podcast replay will be available on that same website.

Here, representing CSX Corporation this morning are Michael Ward, the Company's Chairman, President and Chief Executive Officer; Clarence Gooden, Chief Sales and Marketing Officer; Oscar Munoz, Chief Operating Officer; and Fredrik Eliasson, Chief Financial Officer.

Now before we begin the formal part of our program, let me remind everyone that the presentation and other statements made by the Company contain forward-looking statements. You're encouraged to review the Company's disclosure in the accompanying presentation on Slide 2. This disclosure identifies forward-looking statements as well as risks and uncertainties that could cause actual performance to differ materially from the results anticipated by these statements.

In addition, let me also remind everyone that at the end of the presentation, we will conduct a question-and-answer session with the research analysts. With now 31 analysts covering CSX, I would ask as a courtesy to everyone to please limit your enquiries to one primary and one follow-up question.

With that let me turn the presentation over to CSX Corporation's Chairman, President and Chief Executive Officer, Michael Ward. Michael?

Michael J. Ward - Chairman, President and CEO: Well, thank you, Dave and good morning everyone. Last evening, CSX reported second quarter earnings per share of $0.52, a 6% increase from the same period last year. The financials benefitted from overall revenue growth, excellent operating results and a few items that Fredrik will outline later in the presentation.

On the revenue side, we were encouraged by the solid growth across many of our markets offsetting the ongoing challenges in coal. Overall revenue was up slightly on 1% volume growth combined with the team's ability to drive solid core pricing for the service value CSX is providing. At the same time, we continued to deliver consistently high performances and safety, service and efficiency in the face of a broad range of economic and market conditions that continue to be dynamic.

Those results helped increase the operating income to a record $963 million for the quarter and improved the operating ratio to a record 68.7%. As you've view the presentation today, you will see a company that is capable of consistently delivering value by leveraging the diversity and value of its product offering and maintaining a relentless focus on running an excellent railroad.

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