CSX Corp (NASDAQ:CSX) Q4 2019 Earnings Conference Call - Final Transcript

Jan 16, 2020 • 04:30 pm ET


CSX Corp (NASDAQ:CSX) Q4 2019 Earnings Conference Call - Final Transcript


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James M. Foote

intermodal facilities and lower demurrage charges.

Moving to Slide 7. Let's review our safety performance. The full-year personal injury rate declined 15%, and we reduced the full-year train accident rate by 41%, including setting another company record in the fourth quarter for the lowest accident rate. This progress is a result of concerted daily effort on the part of the employees performing the work. At the same time, we still see areas where additional improvement is needed. In 2020, we will maintain our rigorous safety program focused on continuing education of our workforce, further strengthening rules compliance and empowering employees to have the courage to act if they see something unsafe. As I have said before, we will never be satisfied with our performance if just one of our employees gets injured while at work.

Moving to Slide 8. Let's review our operating performance for the quarter. CSX set new all-time Company records for both velocity and dwell achieving significant year-over-year improvements, as well as strong sequential momentum. The combination of these improved metrics helped significantly increase car miles per day as we continue to translate incremental operating efficiencies into higher asset utilization across the network. We also continue to set fuel efficiency records operating below 1 gallon of fuel per 1,000 GTM despite typical seasonal headwinds in this quarter. CSX is the only US Class 1 railroad to have crossed this threshold. Fuel efficiency remains a key focus for the team, given the combination of financial as well as significant environmental benefits from reducing fuel consumption, and we believe opportunities remain to get even better going forward. Reducing emissions is important to us, our customers and the communities we serve. And we are proud to have been recognized by various institutions as leaders in sustainability for the transportation space.

On Slide 9, most importantly, we are translating these operational improvements into more reliable service for our customers. Trip plan performance set new records again this quarter with 83% of our merchandise cars and 95% of intermodal containers hitting their hourly trip plan targets. Additionally, we successfully completed the roll-out of individualized trip plan performance data to our merchandise and intermodal customers. Feedback on the tool has been very positive, and we believe providing this unique level of transparency to our customers will continue to differentiate CSX's best-in-class service.

I'll now turn it over to Kevin, who will review the financial results.

Kevin S. Boone

Thank you, Jim, and good afternoon, everyone. Turning to Slide 11, I'll walk you through the highlights of the summary income statement. As Jim mentioned, total revenue was down 8% in the fourth quarter as the impact of lower intermodal and coal volume, as well as reduced fuel recovery, lower other revenue and unfavorable mix more than offset the benefit of pricing gains and merchandise and intermodal.

Moving to expenses. Total operating expenses were 9% lower in the fourth quarter, a significant achievement that reflects CSX's ability to react to changing markets, while delivering record service levels. Overall,