Domain: Finance
Question:
In preparation for the 3Q25 earnings call, the CEO of CSX is looking for some comparative analytics regarding utilization of their locomotive fleet versus peers. In particular, he is looking to know:
	1.	Using the company’s latest 2024 Annual Reports, approximately how many locomotives are available for CSX (use “freight” locomotives and apply the 67% active service rate as of 12/31/24) and NS (use “Multipurpose” locomotives, all active) for merchandise movement assuming uniform distribution among active or stored locomotives.
	2.	How much revenue would both CSX and NS earn in 3Q25 if they devoted 10% of their appropriate fleet to their coal business? Assume each locomotive only makes one trip for the quarter, 100 cars per train, 3% RPU growth from 2Q25 coal RPU levels in their quarterly financial disclosures, and use fleet totals as of 12/31/2024 from the latest Annual Reports.
	3.	How many RTMs would be produced from the above scenario assuming that the distance from coal mine to terminal for CSX is 256 miles and for NS it is 345 miles and the weight of each filled car is uniform at 12,000 lbs (6 tons per car).
	4.	Do CSX and NS have enough owned equipment, assuming cars can be re-used, to handle the above scenario and provide the calculation to prove it? Use Open Top Hopper counts for CSX (90% in service) and Hopper counts for NS from the 2024 Annual Reports.
	5.	Assuming CSX and NS wanted to return the empty cars to the mine, how many GTMs would be produced in total from both trips to and from the coal mine, and what was the percentage split between revenue and non-revenue producing movement? Assume the base weight of one car is 2,000 lbs (1 ton), empty cars produce no revenue, and apply the RTM and GTM definitions provided in the companies’ QFRs.

Expected points in a correct answer:
Identifies that CSX has 3,129 freight locomotives as of 12/31/24.
States that for CSX, 67% of locomotives were in active service as of 12/31/24.
Calculates the number of available CSX freight locomotives as 2,096.
Identifies that NS has 3,101 Multipurpose locomotives as of 12/31/24.
Calculates the number of CSX trains devoted to coal as 210.
Calculates the number of CSX cars moved as 21,000.
Calculates the 3Q25 RPU for CSX as 2,714.
Calculates the 3Q25 revenue for CSX as $57.0 million.
Calculates the number of NS trains devoted to coal as 310.
Calculates the number of NS cars moved as 31,000.
Calculates the 3Q25 RPU for NS as 2,238.
Calculates the 3Q25 revenue for NS as $69.4 million.
Calculates the total tons for CSX as 126,000 tons (or 252,000lbs)
Calculates the CSX RTMs as 32,256,000 RTMs.
Calculates the total tons for NS as 186,000 tons.
Calculates the NS RTMs as 64,170,000 RTMs.
Calculates the number of available Open Top Hopper cars for CSX as 5,498.
Identifies that NS has 6,875 Hoppers owned.
Calculates the number of required open top hoppers for CSX as 21,000.
Calculates the number of required Hopper cars for NS as 31,000.
Concludes for CSX that the company has enough owned equipment.
Concludes for NS that the company has enough owned equipment.
Calculates the total tons of empty cars for CSX as 21,000 tons (or 42,000lbs)
Calculates the total tons of empty cars for CSX as 21,000 tons (or 42,000lbs) x 256 miles, which is 5,376,000 tons
Adds 32,256,000 CSX RTMs + 5,376,000 tons = 37,632,000 GTMs
Calculates the total tons of empty cars for NS as 31,000 tons (or 62,000lbs)
Calculates the total tons of empty cars for NS as 31,000 tons (or 62,000lbs) x 345 miles, which is 10,695,000 tons
Calculates NS GTMs as 64,170,000 RTMs + 10,695,000 tons = 74,865,000 GTMs (acceptable range 74,864,000 to 74,865,000)
Percentage split for CSX was 14.3% non-revenue producing and 85.7% revenue producing
Percentage split for NS was 14.3% non-revenue producing and 85.7% revenue producing