CSX Announces Fourth Quarter and Full Year 2018 Financial Results,
Authorizes $5 Billion Share Buyback
JACKSONVILLE, Fla. - January 16, 2019 - CSX Corporation (NASDAQ: CSX) today announced fourth quarter 2018 net earnings of $843 million, or $1.01 per share, versus $4,140 million, or $4.62 per share on a GAAP basis ($0.64 on an adjusted basis) in the same period last year. Fourth quarter 2017 net earnings included a tax reform benefit resulting from the Tax Cuts and Jobs Act of 2017 and a restructuring charge that accounted for $3.98 per share (see table below for details). CSX's operating ratio set a company fourth quarter record of 60.3 percent from 60.7 percent in the prior year or 65.1 percent on an adjusted basis.
CSX's full year 2018 operating ratio of 60.3% is a U.S. Class I railroad record.
Reconciliation of GAAP to Non-GAAP Measures
For the Quarter ended December 31, 2017
Operating OperatingNetNet Earnings Per Share, Assuming
(in millions, except operating ratio and EPS) | |||
GAAP Operating Results | $1,126 | 60.7% | |
Restructuring Charge | 14 | (0.5%) | |
Tax Reform Benefit (net) | (142) | 4.9% | |
Adjusted Operating Results (non-GAAP) | $ | 998 | 65.1% |
Income Ratio | Earnings | Dilution |
$ 4,140 | $ 4.62 | |
10 | 0.01 | |
(3,577) | (3.99) | |
$ 573 | $ 0.64 |
CSX also announced the Board has authorized $5 billion in share repurchases following the early completion of the existing $5 billion authorization.
"As I reflect back on this past year, this team of railroaders has proven they are capable of accomplishing amazing things," said James M. Foote, president and chief executive officer. "We are entering 2019 on a new trajectory with significant opportunity to improve across all aspects of our business. I expect CSX to deliver even better service to our customers and drive significant shareholder value."
Revenue for the fourth quarter increased 10 percent over the prior year to $3.14 billion, supported by increases in fuel recovery, broad-based volume growth, pricing gains, higher supplemental revenue and favorable mix. Expenses increased 9 percent year over year to $1.89 billion, or 2 percent when 2017 results are adjusted for the impacts of restructuring and tax reform benefits. This combination yielded adjusted operating income growth of 25 percent for the quarter to $1.25 billion compared to $998 million in the same period last year.
Table of Contents
The accompanying unaudited
CSX CORPORATIONCONTACTS:
financial information should beConsolidated Financial Statements ....... p.3
Operating Statistics .............................. p. 12
Non-GAAP Measures ........................... p. 13
read in conjunction with the Company's most recent Annual Report on Form 10-K,
500 Water Street, C900 Jacksonville, FL 32202www.csx.com
INVESTOR RELATIONS Kevin Boone
(904) 359-1090
MEDIA
Quarterly Reports on Form 10-Q, andBryan Tuckerany Current Reports on Form 8-K.
(855) 955-6397
CSX executives will conduct a conference call with the investment community this afternoon, January 16, at 4:30 p.m. Eastern Time. Investors, media and the public may listen to the conference call by dialing 1-888-327-6279 (1-888-EARN-CSX). For callers outside the U.S., dial 1-773-756-0199. Participants should dial in 10 minutes prior to the call and enter in 3276279 as the passcode.
In conjunction with the call, a live webcast will be accessible and presentation materials will be posted on the company's website athttp://investors.csx.com. Following the earnings call, an internet replay of the presentation will be archived on the company website.
This earnings announcement, as well as additional detailed financial information, is contained in the CSX Quarterly Financial Report available through the company's website athttp://investors.csx.com and on Form 8-K with the Securities and Exchange Commission.
About CSX and its Disclosures
CSX, based in Jacksonville, Florida, is a premier transportation company. It provides rail, intermodal and rail-to-truck transload services and solutions to customers across a broad array of markets, including energy, industrial, construction, agricultural, and consumer products. For nearly 200 years, CSX has played a critical role in the nation's economic expansion and industrial development. Its network connects every major metropolitan area in the eastern United States, where nearly two-thirds of the nation's population resides. It also links more than 230 short-line railroads and more than 70 ocean, river and lake ports with major population centers and farming towns alike.
This announcement, as well as additional financial information, is available on the company's website athttp://investors.csx.com. CSX also uses social media channels to communicate information about the company. Although social media channels are not intended to be the primary method of disclosure for material information, it is possible that certain information CSX posts on social media could be deemed to be material. Therefore, we encourage investors, the media, and others interested in the company to review the information we post on Twitter (http://twitter.com/CSX) and on Slideshare (http://www.slideshare.net/HowTomorrowMoves). The social media channels used by CSX may be updated from time to time.
More information about CSX Corporation and its subsidiaries is available atwww.csx.comand on Facebook (http://www.facebook.com/OfficialCSX).
Non-GAAP Disclosure
CSX reports its financial results in accordance with accounting principles generally accepted in the United States of America (U.S. GAAP). CSX also uses certain non-GAAP measures that fall within the meaning of Securities and Exchange Commission Regulation G and Regulation S-K Item 10(e), which may provide users of the financial information with additional meaningful comparison to prior reported results. Non-GAAP measures do not have standardized definitions and are not defined by U.S. GAAP. Therefore, CSX's non-GAAP measures are unlikely to be comparable to similar measures presented by other companies. The presentation of these non-GAAP measures should not be considered in isolation from, as a substitute for, or as superior to the financial information presented in accordance with GAAP. Reconciliations of non-GAAP measures to corresponding GAAP measures are above.
Forward-looking Statements
This information and other statements by the company may contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act with respect to, among other items: projections and estimates of earnings, revenues, margins, volumes, rates, cost-savings, expenses, taxes, liquidity, capital expenditures, dividends, share repurchases or other financial items, statements of management's plans, strategies and objectives for future operations, and management's expectations as to future performance and operations and the time by which objectives will be achieved, statements concerning proposed new services, and statements regarding future economic, industry or market conditions or performance. Forward-looking statements are typically identified by words or phrases such as "will," "should," "believe," "expect," "anticipate," "project," "estimate," "preliminary" and similar expressions. Forward-looking statements speak only as of the date they are made, and the company undertakes no obligation to update or revise any forward-looking statement. If the company updates any forward-looking statement, no inference should be drawn that the company will make additional updates with respect to that statement or any other forward-looking statements.
Forward-looking statements are subject to a number of risks and uncertainties, and actual performance or results could differ materially from that anticipated by any forward-looking statements. Factors that may cause actual results to differ materially from those contemplated by any forward- looking statements include, among others; (i) the company's success in implementing its financial and operational initiatives; (ii) changes in domestic or international economic, political or business conditions, including those affecting the transportation industry (such as the impact of industry competition, conditions, performance and consolidation); (iii) legislative or regulatory changes; (iv) the inherent business risks associated with safety and security; (v) the outcome of claims and litigation involving or affecting the company; (vi) natural events such as severe weather conditions or pandemic health crises; and (vii) the inherent uncertainty associated with projecting economic and business conditions.
Other important assumptions and factors that could cause actual results to differ materially from those in the forward-looking statements are specified in the company's SEC reports, accessible on the SEC's website atwww.sec.govand the company's website at www.csx.com.
CSX Corporation
CONSOLIDATED INCOME STATEMENTS
(Dollars in millions, except per share amounts)
(Unaudited)
Quarters Ended (a)
Dec. 31, Dec. 31,
2018
2017
Revenue Expense
$ 3,143
$ 2,863
Labor and Fringe (b) 678 675
Materials, Supplies and Other 542 524
Depreciation 345 337
Fuel 253 243
Equipment and Other Rents 93 116
Restructuring Charge (b)(c)
Equity Earnings of Affiliates (d)
Total Expense
Operating Income
Interest Expense Restructuring Charge - Non-Operating (b)(c)
Other Income - Net (b)
- 14 (17) (172)
(Unaudited)
Years Ended (a)
$ | 280 |
(3) | |
(18) | |
(8) | |
(10) | |
23 | |
14 | |
(155) |
$ | % | Dec. 31, |
Change | Change | 2017 |
10 % | $ 12,250 | $11,408 |
- | 2,738 | 2,946 |
(3) | 1,967 | 2,113 |
(2) | 1,331 | 1,315 |
(4) | 1,046 | 864 |
20 | 395 | 429 |
100 | - | 240 |
(90) | (96) | (219) |
Dec. 31, 2018
% | ||
Change | ||
$ | 842 | 7 % |
208 | 7 | |
146 | 7 | |
(16) | (1) | |
(182) | (21) | |
34 | 8 | |
240 | 100 | |
(123) | (56) |
$ Change
1,894
1,737
(157)
(9)
7,381
7,688
307
4
Earnings Before Income Taxes
1,249 | 1,126 | 123 | 11 | 4,869 | 3,720 | 1,149 | 31 |
(171) | (140) | (31) | (22) | (639) | (546) | (93) | (17) |
- | (15) | 15 | 100 | - | (85) | 85 | 100 |
20 | 12 | 8 | 67 | 74 | 53 | 21 | 40 |
1,098
983 3,157
115
12
4,304
Income Tax (Expense) Benefit (e)
Net Earnings
(255)
3,142 1,162
(3,412)
(108)
(995)
2,329 (3,324)
$ 4,140
37
(143)
$ 843$ (3,297)$ 5,471
(80)% $ (40)%
3,309$ (2,162)
Operating Ratio 60.3% 60.7%
Per Common Share
Net Earnings Per Share, Assuming Dilution
60.3% 67.4%
$
1.01
$ 4.62
$
(3.61)
(78)% $
3.84 $ 5.99 $
(2.15) (36)%
Average Shares Outstanding,
Assuming Dilution (Millions) 833 896
861 914
Cash Dividends Paid Per Common Share
$
0.22
$ 0.20
$
0.88 $ 0.78
Certain prior year data has been reclassified to conform to the current presentation.
CSX Corporation
CONDENSED CONSOLIDATED BALANCE SHEETS
(Dollars in millions)
(Unaudited)
Dec. 31, 2018 (a)
Dec. 31, 2017 (a)
ASSETS
Cash and Cash Equivalents | 858 | $ | 401 |
Short-Term Investments | 253 | 18 | |
Other Current Assets | 1,454 | 1,496 | |
Properties - Net | 31,998 | 31,764 | |
Investment in Affiliates and Other Companies | 1,779 | 1,686 | |
Other Long-Term Assets | 387 | 374 | |
Total Assets |
$
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Maturities of Long-Term Debt
$
$
36,729
35,739
$
18 $ 19
Other Current Liabilities 1,897 1,875
Long-Term Debt 14,739 11,790
Deferred Income Taxes - Net 6,690 6,418
Other Long-Term Liabilities
805 916
Total Liabilities 24,149
21,018
Total Shareholders' Equity 12,580 14,721
Total Liabilities and Shareholders' Equity
$
36,729 $ 35,739
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CSX Corporation published this content on 16 January 2019 and is solely responsible for the information contained herein. Distributed by Public, unedited and unaltered, on 16 January 2019 21:13:03 UTC