Children's Investment Fund Sends Letter To CSX Urging Improvement in Governance and Biz Performance

This morning, The Children's Investment Master Fund, a 4.1% holder of CSX Corp. (NYSE: CSX), delivered a letter to the CSX Board of Directors urging it to act immediately and voluntarily to improve the company's corporate governance and business performance.

The fund called on the CSX Board to: separate the Chairman and CEO roles, add new independent directors, allow shareholders to call special meetings, align management compensation with shareholder interests, present a detailed operating plan with specific long-term operational and cost targets to address under-performance, Justify 2007-2010 capital spending plan, and improve relations with labor, shippers and shareholders.

A Copy of the Press Release:



The Children's Investment Master Fund ("TCI"), a long-term value investor which owns 17.8 million shares, or approximately 4.1%, of CSX Corporation (NYSE: CSX), today sent a letter to the CSX Board of Directors urging it to act immediately and voluntarily to improve CSX's corporate governance and business performance. Specifically, TCI called on the CSX Board to:

-- Separate Chairman and CEO roles. TCI believes, and it is widely recognized, that this is best practice in corporate governance. TCI is concerned that Chairman and CEO Michael Ward's interests are not aligned with those of CSX shareholders.

-- Refresh Board with new independent directors. The CSX Board has many longstanding directors and virtually no railroad management experience, which leaves the Board effectively unable to challenge management and provide appropriate oversight. CSX's Board should be refreshed with new independent directors with the experience and courage to do so.

-- Allow shareholders to call special meetings. The Board should amend CSX's bylaws to allow shareholders to call special meetings, a shareholder proposal that was approved overwhelmingly by shareholders at CSX's last annual meeting.

-- Align management compensation with shareholder interests. Michael Ward has been the highest compensated CEO in the rail industry over the past two years, despite CSX being operationally outperformed by its peers. TCI urges the Board to align management compensation with shareholder interests. This includes tying long-term compensation to returns on capital rather than to the operating ratio, which can be easily manipulated.

-- Present plan to improve operations. CSX is last or near last among the five major North American railroads on virtually every important operational and financial metric. CSX must present to shareholders a detailed operating plan with specific long-term operational and cost targets to address this under-performance. The existing operating ratio targets can be achieved with no operational improvements.

-- Justify 2007-2010 capital spending plan. TCI believes shareholder value is created through sustainable investment in maintenance, infrastructure and training. TCI is concerned that management's current illogical and undisciplined capital spending plan puts at risk CSX's ability to invest long-term because it undermines shareholder confidence and therefore access to capital.

-- Improve relations with labor, shippers and shareholders. TCI believes the Board and management have taken an unnecessarily adversarial approach to these key constituencies, resulting in strained relations instead of collaborative solutions. TCI believes the interests of the major stakeholders are largely aligned, and success is best achieved through open and constructive relations with them.

For further information and graphics included in the letter sent today to the Board of Directors of CSX, please visit www.strongerCSX.com.