“As our markets continue to expand, CSX is delivering outstanding results for shareholders,” said Michael J. Ward, chairman, president and chief executive officer.  ”At the same time, we are taking a number of actions to position the operations for greater customer demand, now and over the long-term.”

Revenue in the quarter improved 13 percent from the prior year to $3.0 billion, with increases across all major markets – merchandise, intermodal and coal.  Overall revenues were driven by volume growth, pricing that reflects the value of freight rail transportation, and recoveries that offset higher fuel prices.

The higher revenue, coupled with the company’s focus on profitable growth, drove a 21 percent increase in operating income to a record$926 million, and an operating ratio of 69.3 percent, a 190 basis point improvement year-over-year.

As previously announced, CSX expects to make 2011 capital investments of $2.2 billion.  That is consistent with its intentions to reinvest an average of 18 percent of its revenues into its business through 2015 to further enhance the capacity, quality and flexibility of its rail network.  The company remains on target to achieve its current near- and long-term financial guidance, including a high-sixties operating ratio in 2011 and a 65 percent operating ratio by no later than 2015.

As a result, the company now expects to make 2011 capital investments of $2.2 billion, up from the previously announced $2 billion.

The increase is consistent with CSX’s previously announced intention to reinvest an average of 18 percent of its revenues back into its business through 2015. It also supports the company’s near- and long-term financial guidance.

Also today, the Board of Directors approved a $0.12 per share quarterly dividend on the company’s common stock. The dividend is payable on September 15, 2011, to shareholders of record at the close of business on August 31, 2011.

Baggs directs the company’s interaction with the investment community through earnings reports, analyst meetings, conferences and other channels. In addition, he leads CSX’s banking relationships and capital markets activities associated with a debt portfolio of more than $8 billion.

“David is a veteran leader of CSX and an outstanding resource for our investors and partners in the financial community,” said Oscar Munoz, executive vice president and chief financial officer. “Through his leadership, creativity and commitment to transparency, CSX’s investor relations program now ranks as a leader in the broader transportation sector.”

In 25 years with CSX, Baggs has held positions in finance, economic analysis, corporate strategy, treasury and investor relations. He earned a bachelor’s degree from the University of Arizona and a master’s of business administration from the College of William and Mary. He is a member of the National Investor Relations Institute and the Association for Financial Professionals.

• Dean Piacente, currently vice president of chemicals and fertilizer, has been named vice president of finance.  In this role he will be directly responsible for the overall financial management of the corporation, which includes budgeting, capital planning, forecasting, financial analysis and interfacing with business partners. Piacente holds a bachelor’s degree from Florida State University and earned a Certificate in Business Excellence at Columbia University.

• Fredrik Eliasson, currently vice president of emerging markets, has been named vice president of chemicals and fertilizer, responsible for CSX’s commercial activities in the chemicals, phosphates and fertilizers markets.  Eliasson holds a bachelor’s degree and an MBA from Virginia Commonwealth University.

• Derrick Smith, currently vice president of finance, returns to the sales and marketing department as vice president of emerging markets.  In this role he will be responsible for CSX’s commercial activities in the aggregates, processed materials, waste, military and machinery markets. He also will have responsibility for TRANSFLO, CSX de Mexico, regional development, inside sales and international traffic through eastern and Gulf Coast ports.  Smith holds a bachelor’s degree from Carnegie-Mellon University and an MBA from Columbia University.  His is also a graduate of the Advanced Management Program at the Harvard Business School.

“These changes are consistent with our tradition of building a strong, broad-based leadership organization focused on customer and employee excellence,” said Michael J. Ward, CSX chairman, president and chief executive officer.  ”Dean, Fredrik and Derrick are exemplary leaders of CSX. Each brings a variety of experiences and strengths to his role.”

Piacente will report to Oscar Munoz, executive vice president and chief financial officer.  Eliasson and Smith will report to Clarence Gooden, executive vice president and chief commercial officer.

“Commitment to transparency and accountability is at the core of CSX’s identity,” said Michael Ward, president, chairman and CEO, CSX. “This integrated report gives our stakeholders a holistic view of the company – we’ve delivered great performance, responsibly, across the board.”

The CPR Report, informed by the Global Reporting Initiative’s Global Sustainability Reporting guidelines, highlights CSX’s performance during 2010 across financial, environmental, safety and community activities. CSX achieved major milestones in each area, from meeting its voluntary commitment to reduce greenhouse gas emissions intensity by 8 percent nearly a year ahead of schedule, to reducing personal injuries by nearly 45 percent, to improving the company’s operating ratio to a record 71.1 percent.

“We are committed to the relentless pursuit of excellence,” said Mr. Ward. “This report highlights our continued focus on delivering excellent customer service and strong financial results by ensuring that safety, sustainability, innovation, and community involvement remain top priorities.”

CSX is helping to stimulate economic recovery and job growth with substantial infrastructure investments, including $8.3 billion in the past five years alone. These investments support thousands of jobs, protect the environment and provide a competitive advantage for American business in the global marketplace.

The publication of the 2010 CPR Report comes as the freight rail industry faces some of the most transformative opportunities of the deregulated era. As the American population grows exponentially, demand for everyday goods is skyrocketing and freight rail is poised to handle a major portion of that increase. CSX is well-positioned and committed to being an efficient, environmentally-friendly part of the global supply chain, delivering the goods America needs in a way that protects the planet for the future.

The achievement, expected by the end of 2011 but accomplished in late 2010, involved reducing greenhouse gas emissions by 1.5 million metric tons – the equivalent of taking 296,000 cars off the road for one year, or consuming more than 3.5 million fewer barrels of oil.

“This effort demonstrates CSX’s unyielding commitment to environmental excellence and its ability to set and meet aggressive goals,” saidMichael J. Ward, chairman, president, and CEO, CSX. “Transporting freight by rail is already the most environmentally-friendly way to move goods around the country, and we are proud to be an industry leader, developing sustainable solutions that have a positive impact on the environment.”

CSX’s emissions reduction goal, part of its participation in the United States Environmental Protection Agency’s (EPA) Climate Leaders program, was the first ever emissions reduction commitment by a major transportation provider. This commitment is just one part of CSX’s environmental stewardship plan, designed to continuously reduce the environmental footprint of freight transportation in the nation. In addition to employing ultra-low emission GenSet locomotives, CSX has dedicated significant resources to its National Gateway initiative, modernizing transportation infrastructure to allow for more efficient double-stacked intermodal trains. New facilities, like the one the company recently opened in North Baltimore, Ohio, include innovations such as electric cranes and optical cargo scanners to improve efficiency, lower emissions, and decrease truck idling times.

Infrastructure enhancements like the National Gateway are critical to mitigating challenges the nation faces associated with rising fuel costs, crowded highways, and greenhouse gas emissions. The American population continues to grow exponentially, driving increased demand for the basic goods that fuel our everyday lives, many of which are shipped via freight rail. Current estimates from the Federal Highway Administration predict that total U.S. freight shipments will increase more than 60 percent over the next 30 years.

“With expectations of massive increases in freight demand in the coming decades, it is increasingly important that all modes of transportation work together to make the global supply chain as efficient and environmentally-friendly as possible,” Ward said. “Improving the efficiency of our operations helps CSX do its part to ‘green’ the global supply chain to the benefit of our customers, consumers and the environment.”

The award, given by the Employer Support of the Guard and Reserve (ESGR) agency, is the Department of Defense’s highest recognition for companies that provide exceptional support for employees serving the Guard and Reserves. In addition to being the only Class I railroad to receive the award this year, CSX is the only company to ever win the award twice, having first received it in 1998.

As one of 15 award recipients, CSX stood out from the more than 4,000 nominees as an employer that actively supports employees who serve both the Guard and Reserves. The honorees distinguished themselves by going to extraordinary lengths to support military employees and their families, through both formal and informal initiatives.

“We are proud to be a major employer of America’s servicemen and women, whose superior training, experience in logistics and ability to work safely in demanding, team-based environments makes them uniquely qualified for railroading. We thank the members of our Guard and Reserves for volunteering to protect our country and its citizens, and as their employer, we remain committed to supporting them,” saidMichael J. Ward, chairman, president, and chief executive officer, CSX.

In addition to programs supporting active members of the Guard and Reserves, CSX has made a strong commitment to employing and supporting veterans. Nearly one in five CSX employees has served in the military and many continue to participate in the Guard and Reserves. CSX has been recognized as one of the top 100 military-friendly employers since 2006 – ranked third in 2011 – by G.I. Jobs magazine. In addition, CSX supports the Jacksonville, Florida-based Wounded Warrior Project, which provides programs and services for injured service members to aid their transition from active duty to civilian lives.

CSX was nominated by Guard and Reserve service members or their families, and selected by a national board comprised of senior defense officials, business leaders and prior awardees. CSX will be recognized along with the other award recipients September 22 at an annual ceremony in Washington, D.C.

The Freedom Award was established in 1996, and employers are only eligible to win the award once every ten years. The ESGR was established in 1972 in order to coordinate efforts to promote employer awareness and engagement of issues faced by employees who are members of the Guard and Reserve.

“Through the National Gateway, CSX and its public partners are working together to vastly improve the quality and flexibility of the eastern rail network,” said Michael J. Ward, CSX chairman, president and chief executive officer. “With today’s new $160 million commitment, CSX will have obligated a total of about $575 million over several years to better meet the needs of our customers, our states and our ports.”

Total project costs are approximately $850 million, and state and federal partners are investing more than $280 million to help secure the substantial public benefits of the National Gateway. These public partners recognize that investing in the quality of the transportation infrastructure is essential for American competitiveness.

The National Gateway investment will be made over several years and, taken together, represent one of the largest project investments in company history. The amounts are included in the company’s long-term capital plans.

Most of the $160 million investment announced today will expand and improve the century-old Virginia Avenue Tunnel in Washington, D.C.and provide double-stack train clearances in Maryland, West Virginia and the District of Columbia.

CSX is targeting a compound annual growth rate in earnings per share of 18 to 20 percent through 2015, supported by a compound annual growth rate for operating income of 12 to 14 percent over the same time period. Both measures use 2010 results as the base year and reflect the company’s belief in its ability to grow its business at levels that outpace general economic growth. The company also reaffirmed its goal of achieving a 65 percent operating ratio by no later than 2015.

“CSX is ideally positioned to meet the growing transportation demand in this country,” said Michael J. Ward, chairman, president and chief executive officer. “Expansion in the U.S. economy, global trade and CSX’s substantial investments in its infrastructure mean more things will move on our highly efficient freight rail network.”

At the conference, CSX said it expects to reinvest an average of 18 percent of its revenues back into its business through 2015. The company invested $8.3 billion in the five years between 2006 and 2010.

The company also said it intends to base future dividends on a payout ratio of 30 to 35 percent of earnings per share as measured on a trailing 12-month basis. CSX said it is targeting share repurchases of about $1 billion annually after its current $2 billion program is completed, which is expected to be by the end of 2012.

“Our high expectations for CSX are grounded in what we clearly see happening in the marketplace and what we know about the capability of our people, our infrastructure and our ability to bring value to customers,” said Oscar Munoz, executive vice president and chief financial officer. “We see significant opportunity to create value and are working to build on that opportunity through the balanced deployment of capital and a focus on strengthening our credit profile.”

The award was presented to OADA in ceremonies today, prior to the grand opening of the Georgia BioMass, LLC, facility in Waycross, Ga.CSX unit trains will transport as much as 750,000 tons of wood products annually from the plant to the Port of Savannah for export to produce electricity.

“OADA did an outstanding job working with CSX Regional Development, European customers, the State of Georgia, and Ware Countyofficials to make this significant economic development happen,” said Clark Robertson, CSX assistant vice president-regional development. “It will bring needed jobs to Ware County, and help position Georgia as a leader in the renewable fuels business.

“CSX was very pleased to be selected as the rail carrier for this new venture,” Robertson said. “Given the abundant forest assets in the region, we are hopeful that other firms may be encouraged to join in the production of wood products for renewable energy and take advantage of our excellent rail network. We offer considerable expertise in the transportation of renewable fuels, including bio-diesel and ethanol.”