CSX DEFA14A 2008
Documents found in this filing:
May 15, 2008
PROTECT YOUR INVESTMENT IN CSX!
RE-ELECT YOUR BOARD OF DIRECTORS
VOTE THE WHITE PROXY CARD
Dear Fellow Shareholder,
CSX has delivered stock price returns of 38%, 208%, and 299% over the past one, three and five years,* respectively. CSX strongly urges you to examine the TCI Group’s “analysis” of our company.
A close look reveals a concerning mix of bad math, flawed assumptions and half truths. Given that this group is attempting to replace five members of the CSX Board with its own block of nominees and has made numerous suggestions to reduce CSX’s investment-grade debt rating to “junk” status, it is important to set the record straight.
As the chart above shows, CSX is an industry leader across well-recognized critical performance measures>. What’s more, the company is improving faster than its rail peers, has presented the most aggressive financial guidance in the industry and has a proven plan to achieve that guidance.
On the other hand, the TCI Group has offered ideas that would either destroy value or are already under way at CSX. It is no wonder that they have tried to keep you focused on loosely knit and flawed comparisons to other railroads.
First Quarter 2008
Comparable Operating Ratio and Improvement
Note: See GAAP reconciliation for CSX data; peer comparisons based on First Call data
In addition to its bad comparisons to other railroads, the TCI Group has also gone out of its way to minimize CSX’s well-documented success by wrongly attributing recent financial improvements almost entirely to pricing. The correct math actually shows CSX’s industry-leading improvement in operating income is derived from not only pricing but also from productivity and a strategic shift to higher margin business. Contrary to the TCI Group’s portrayal of CSX’s productivity improvements, productivity gains at CSX have exceeded $500 million since 2003, with at least an additional $400 million in productivity targeted through 2010.
In making your decision about your CSX investment, it is essential that you have a true picture of the company’s performance and future potential>. A more detailed analysis of the TCI Group’s many misleading claims is available on CSX’s website: http://2008annualmeeting.csx.com.
CSX is a great company. It has made its shareholders a lot of money>. Its record and its guidance show that the company is progressing toward excellence in every category of operating and financial performance.
WHO WOULD YOU RATHER HAVE OVERSEEING
YOUR INVESTMENT IN CSX?
THE CSX BOARD, WHICH HAS DELIVERED:
THE TCI GROUP, WHICH HAS DELIVERED:
RE-ELECT THE BOARD THAT DELIVERS VALUE, NOT ARTIFICIAL CLAIMS.
VOTE THE WHITE PROXY CARD TODAY!
We urge all shareholders to vote for the election of all nominees proposed by the CSX Board, on the WHITE proxy card. Your Board is unanimous in its opposition to the TCI Group’s agenda and requests that you discard any blue proxy cards you may receive.>
As the 2008 CSX annual meeting of shareholders approaches, please remember that your vote is extremely important no matter how many shares of CSX stock you own. Please sign, date and return your WHITE proxy card today. >We also encourage you to vote by Internet or phone by following the instructions on the WHITE proxy card.
On behalf of the CSX Corporation Board of Directors,
Michael J. Ward, Chairman, President and Chief Executive Officer
* All stock price performance as of April 25, 2008
This information and other statements by the company 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, cost-savings, expenses, or other financial items; statements of management’s plans, strategies and objectives for future operation, and management’s expectations as to future performance and operations and the time by which objectives will be achieved; statements concerning proposed new products and services; and statements regarding future economic, industry or market conditions or performance. Forward-looking statements are typically identified by words or phrases such as “believe,” “expect,” “anticipate,” “project,” “estimate” 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 does update 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 these forward-looking statements. Factors that may cause actual results to differ materially from those contemplated by these 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 or business conditions, including those affecting the rail 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; and (v) the outcome of claims and litigation involving or affecting the company.
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 at www.sec.gov and the company’s website at www.csx.com.
In connection with the solicitation of proxies, CSX Corporation ("CSX") has filed with the SEC and mailed to shareholders a definitive proxy statement dated April 25, 2008 in connection with its 2008 Annual Meeting. Security holders are strongly advised to read the definitive Proxy Statement because it contains important information. Security holders may obtain a free copy of the definitive Proxy Statement and any other documents filed by CSX with the SEC at the SEC’s website at www.sec.gov. The definitive Proxy Statement and these other documents may also be obtained for free from CSX by directing a request to CSX Corporation, Attn: Investor Relations, David Baggs, 500 Water Street C110, Jacksonville, FL 32202.
CSX, its directors, director nominee and certain named executive officers and employees may be deemed to be participants in the solicitation of CSX’s security holders in connection with its 2008 Annual Meeting. Security holders may obtain information regarding the names, affiliations and interests of such individuals in CSX’s definitive Proxy Statement. In addition to the individuals named in the definitive Proxy Statement, Stephen E. Crable, Vice President – Labor Relations, and Nathan D. Goldman, General Counsel – Business & Governance, may also be deemed to be participants in the solicitation. As of April 21, 2008, Mr. Crable and Mr. Goldman beneficially owned 16,680 and 15,320 shares of CSX common stock, respectively. Information regarding Mr. Crable’s and Mr. Goldman’s transactions in CSX securities for the two years ended April 21, 2008 is set forth below.
CSX reports its financial results in accordance with generally accepted accounting principles (“GAAP”). However, management believes that certain non-GAAP financial measures used to manage the company’s business that fall within the meaning of Regulation G (Disclosure of Non-GAAP Financial Measures) by the SEC may provide users of the financial information with additional meaningful comparisons to prior reported results.
CSX has provided operating income, ratio and earnings per share adjusted for certain items, which are non-GAAP financial measures. The company’s management evaluates its business and makes certain operating decisions (e.g., budgeting, forecasting, employee compensation, asset management and resource allocation) using these adjusted numbers
Likewise, this information facilitates comparisons to financial results that are directly associated with ongoing business operations as well as provides comparable historical information. Lastly, earnings forecasts prepared by stock analysts and other third parties generally exclude the effects of items that are difficult to predict or measure in advance and are not directly related to CSX’s ongoing operations. A reconciliation between GAAP and the non-GAAP measure is provided. These non-GAAP measures should not be considered a substitute for GAAP measures.