CSX Corporation

Hello and thank you for standing by. My name is Tiffany and I will be your conference operator today. At this time, I would like to welcome everyone to the Q2 2025 CSX Corporation Earnings Call. All lines have been placed on mute to prevent any background noise. After the speaker's remarks, there will be a question and answer session. If you would like to ask a question during that time, simply press star then the number one on your telephone keypad. I would now like to turn the call over to Head of Investor Relations and Strategy, Matthew Korn. Mr. Korn, please go ahead.

Thank you, Tiffany. Good afternoon, everyone. We're very pleased to welcome you to our second quarter conference call. Joining me from the leadership team are Joe Hendricks, President and Chief Executive Officer, Mike Corey, EVP and Chief EVP and Chief Commercial Officer, and Sean Pelkey, EVP and Chief Financial Officer. In the presentation accompanying this call, which is available on our website, you will find slides with our forward-looking disclosures and our non-GAAP disclosures for your review. With that, it is my pleasure to introduce Mr. Joe Henrichs.

All right. Thank you, Matthew, and hello, everyone, and thank you for joining us for our second corner call. When we last spoke, we acknowledged the challenges we were facing on our network, and we made a commitment to act decisively to turn it around. What you'll see in the numbers and the momentum behind them is a result of deliberate and effective actions taken to return our network back to the efficient, well-run operation needed to provide superior service to our customers. This quarter shows what is possible when you pair clear priorities with decisive action, and the results are a testament to the one CSX culture we've been instilling across the business. Now turning to slide one, as we think about what we accomplished in the quarter and what we see out in front of us, four things come to mind. First, as I've already highlighted, we are proud of how our network performance has bounced back from the challenges of the first quarter. As Mike will cover later on, our velocity, dwell, trip plan compliance, and other metrics have steadily trended upward. In some areas, we are approaching or surpassing some of the best levels we've seen in recent history. This recovery reflects the strength of our operations and the team's ability to overcome challenges. We have to keep pushing, but this has been a great result. Second, the entire CSX team's commitment to working efficiently helps us deliver improved cost performance that supported meaningful sequential margin expansion. We will continue this focus throughout the year. Third, we are very pleased with the progress being made at our Howard Street Tunnel and Blue Ridge rebuild projects. We expect completion in the fourth quarter, which will remove two key constraints from our network. Finishing these two projects will open back up two of our four north-south routes, and as you know, we're excited about removing the last impediment to double-stack intermodal on the N95 corridor. Finally, as Kevin will discuss, we know that our customers are facing mixed markets, with activity holding strong in certain areas and slowing in others. That said, at CSX, we will continue to drive forward across all of our initiatives. We will not sit back and wait for the markets to turn. Now let's turn to slide two, where we feature some of the most important results from our second quarter. Total volume was flat compared to last year, and we saw a 4% sequential increase in the quarter, driven by merchandise and improvement in total coal shipments. Total revenue was $3.6 billion for the quarter, down 3% from the same period last year, largely due to lower coal and fuel prices. Quarter over quarter, total revenue improved 4%, in line with the increase in volume. Our reported operating margin, which includes our trucking business, declined by 320 basis points compared to the second quarter of 2024, but increased by 550 basis points sequentially, supported by the solid cost performance that accompanied our operational improvement. Earnings per share decreased by 10% year over year, but grew by 29% quarter over quarter. After a difficult start to the year, I am proud of all that we have accomplished, but we also cannot let our foot off the gas. We are committed to maintaining this momentum. Now that our network has stabilized, we are positioned to pursue more opportunities to grow the business. To do that, we will run safer, faster, and more consistently. We will provide attractive, profitable solutions for our customers, even when economic conditions are uncertain. As we move forward, we will make sure that our execution remains effective and efficient. As an example, as part of our normal business review process, we recently reorganized management resources across several areas to improve alignment with the businesses and accelerate decision-making. These are positive steps toward our goal of sustainable, profitable growth. With that, I'm going to turn the call over to Mike to discuss our operational performance.