Megan

Megan from Deutsche Bank asked EVP and CFO Kevin Boone to bridge the 200-300 basis points operating ratio (OR) improvement outlook from 2025, clarifying how much is attributable to identified cost savings, how much is market-dependent, and how much is within CSX's direct control.

Answer

EVP and CFO Kevin Boone emphasized that the plan is based on factors within CSX's control, not relying on market improvements. He highlighted the goal of creating operating leverage for higher incremental margins when markets do improve, driven by a diverse portfolio of over 100 savings initiatives across various areas like vehicle spend, overtime, rental equipment, and travel. He expressed confidence in building momentum through the year.

Megan inquired about the bridge from 2025 to the 200-300 basis points of OR improvement, specifically asking how much of the identified cost savings are considered and how much is dependent on market conditions versus CSX's control.

Answer

Kevin Boone, EVP and CFO, CSX Corporation, emphasized that the plan is based on controllable factors, not market dependence, aiming for high incremental margins when markets improve. He detailed diverse savings initiatives across various expense categories and the focus on accountability and providing better tools to operating teams.