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CSX Updates Storm Impact on Gulf Coast
CSX Updates Storm Impact on Gulf Coast
JACKSONVILLE, Fla., Sept. 15, 2005 - CSX Corporation (NYSE: CSX) said today it is continuing to effectively provide rail service to its customers through the previously announced rerouting of traffic around storm-affected areas of the Gulf Coast.
"The flexibility of our network has enabled us to respond quickly to the needs of our customers whose freight normally travels across the affected area," said Tony Ingram, executive vice president and chief operating officer. "Service to local customers will also be restored as repairs are made in phases over an estimated six-month period. The rerouted trains will be brought back to the original lines when all major repairs are completed."
The company's limits for insurance coverage exceed the expenses anticipated from the storm, which are currently estimated to be $250 million. These estimated expenses include the capital costs of rebuilding the rail infrastructure, losses from business interruption, and other costs associated with the storm damage. As previously announced, CSX has a $25 million self-insured retention.
The company currently estimates third-quarter losses associated with business interruption and other costs will negatively impact operating income by around $25 million. While management expects losses above the retention will be covered, certain insurance recoveries related to business interruption losses will not be recognized in the company's operating results until cash is received over the next several months.
The company continues to assess the operating and financial impacts of Hurricane Katrina and will outline these in more detail in its third-quarter earnings announcement in late October.
CSX Corporation, based in Jacksonville, Fla., owns companies providing rail, intermodal and rail-to-truck transload services that are among the nation's leading transportation companies, connecting more than 70 river, ocean and lake ports, as well as more than 230 short line railroads. Its principal operating company, CSX Transportation Inc., operates the largest railroad in the eastern United States with a 22,000-mile rail network linking commercial markets in 23 states, the District of Columbia, and two Canadian provinces. CSX Intermodal is a stand-alone integrated intermodal company, serving customers with its own truck and terminal operations plus a dedicated domestic container fleet.
This press release contains statements about the company's future that are not statements of historical fact. The words "believe," "expect," "anticipate," and similar expressions signify forward-looking statements. These statements are "forward looking statements" for purposes of applicable securities laws, and are based on current information and/or management's good faith belief as to future events. Forward-looking statements are subject to risks and uncertainties, which change over time. Actual performance or results could differ materially from that anticipated by the forward-looking statement, and future results could differ materially from historical performance. Important factors resulting from Hurricane Katrina that could cause such differences include: the ability to restore service in affected areas of the company's rail network; further assessments of the extent of storm-related losses; the price and availability of continued supplies of fuel; the effect of inefficiencies in company operations and increased operating expenses resulting from storm-related disruptions; loss of customers to competitors that have not been impacted by the storm to the same degree in the same locales; and the extent and availability of insurance coverage for the company's losses. For a description of additional factors that can affect forward-looking statements, please refer to the company's filings with the Securities and Exchange Commission. Forward-looking statements speak only as of the date the statement was made. The company assumes no obligation to update forward-looking information to reflect actual results, changes in assumptions or changes in other factors affecting forward-looking information. 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.
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