CSX Corporation

Good day, everyone, and welcome to the first quarter 2023 CSX Corporations Earnings Conference call. Today's call is being recorded, and I would now like to turn the conference over to Matthew Korn, Head of Investor Relations. Please go ahead, sir.

Thank you, Operator. Hello, everyone, and welcome to our first quarter call. Joining me this afternoon are Joe Hendricks, President and Chief Executive Officer, Jamie Boychuk, Executive Vice President of Operations, Kevin Boone, Executive Vice President of Sales and Marketing, and Sean Pelkey, Executive Vice President and Chief Financial Officer. In the presentation accompanying this call, you will find our forward-looking disclosure on slide two, followed by our non-GAAP disclosure on slide three. And with that, it's my pleasure to introduce our President and Chief Executive Officer, Mr. Joe Hendricks.

All right. Good evening, everyone. Thank you, Matthew, and thank you all for joining our conference call. Working together, the OneCSX team delivered a strong first quarter, driven by solid pricing as well as volume growth in our merchandise and coal businesses. With sufficient resources in place, we are able to use the benefits of our scale railroad model to deliver improvement in our customer service performance that are driving real, tangible financial results. Our network is running well. And we intend to do even better and show that CSX can sustain reliable service over time, which is essential for us to profitably grow our railroad. 2023 has already proven to be a very active year. One of our top priorities after the National Union Agreements were finalized last December was to address the matter of paid sick leave for our union employees. I am very pleased that CSX demonstrated important leadership here. Starting in February, we were the first U.S. Class 1 railroad to reach new sick leave agreements with many of our local unions that will meaningfully improve our railroaders' quality of life. Our view is simple. We are a service business, and we need our employees to be positively engaged in order to provide our customers with the excellent service that attracts them to our railroad. Building a work environment where employees feel respected and valued is not just the right thing to do, it's also very good for business, benefiting our shareholders as well. Another serious matter that has attracted a lot of attention to our industry over this past quarter has been the issue of safety. Statistics are clear that when measured by the number of accidents or injuries relative to the enormous number of ton miles that our trains travel, freight railroads are very safe when compared to other forms of transportation. We are very proud of our excellent safety record at CSX, but we know that we cannot be complacent. We owe it to all of our stakeholders to push ourselves to be even better. Later on this call, Jamie will give more details about the specific proactive steps we have been taking to make CSX safer. I have also been actively involved in discussions with our leaders in Washington and the states across our network about some of the legislation that has recently been proposed. They know that it is better for our economy, our environment, and our communities for railroads to move a greater share of the nation's freight. They also know that CSX is eager to be part of solutions that are effective, data-driven, and will make our whole industry safer. We do not want safety performance to be a competitive advantage for CSX. We want it to be something our entire industry is proud of. We have been encouraged by our conversations with senior policy leaders and will continue to engage with them in the months ahead, sharing best practices and building on our common ground. We are confident that the industry will emerge from this period stronger, more aligned, and better at sharing safety best practices. Now, let's turn to our presentation to review the highlights of the first quarter. We moved nearly 1.5 million carloads in the first quarter and generated over $3.7 billion in revenue, which was 9% higher than the previous year. Operating income increased 14% year-over-year to $1.46 billion, And our operating ratio is 60.5%, which includes the OR impact of the quality carriers truck keeping business as we've discussed in the past. Finally, earnings per share increased 23% to 48 cents. When I came to CSX last fall, we were very clear with our intention to build on this company's excellent operating model by strengthening our relationships with our employees and serving our customers better.