(X)
|
ANNUAL
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
|
( )
|
TRANSITION
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF
1934
|
|
For
the transition period from __________ to
__________
|
CSX
CORPORATION
|
||||
FORM
10-K
|
||||
TABLE
OF CONTENTS
|
||||
Item No.
|
Page
|
|||
PART
I
|
||||
1.
|
3
|
|||
8
|
||||
12
|
||||
2.
|
12
|
|||
3.
|
17
|
|||
4.
|
18
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|||
PART
II
|
||||
5.
|
||||
21
|
||||
6.
|
24
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|||
7.
|
||||
26
|
||||
26
|
||||
27
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||||
30
|
||||
33
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||||
35
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||||
48
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||||
50
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||||
51
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||||
51
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||||
7A.
|
61
|
|||
8.
|
64
|
|||
9.
|
||||
131
|
||||
9A.
|
131
|
|||
9B.
|
134
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|||
PART
III
|
||||
10.
|
135
|
|||
11.
|
135
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|||
12.
|
135
|
|||
13.
|
135
|
|||
14.
|
135
|
|||
PART
IV
|
||||
15.
|
136
|
|||
142
|
|
·
|
The
merchandise business is the most diverse market with nearly 2.7 million
carloads per year of aggregates, which includes crushed stone, sand and
gravel, metal, phosphate, fertilizer, food, consumer, agricultural, paper
and chemical products. The merchandise business generated
approximately 50% of the Company’s revenue in 2007 and 38% of
volume.
|
|
·
|
Coal,
which delivered approximately 1.9 million carloads of coal, coke and iron
ore to electricity generating power plants, ocean, river and lake piers
and terminals, steel makers and industrial plants, accounted for
approximately 26% of the Company’s revenue and volume in 2007. The
Company transports almost one-third of every ton of coal used for
generating electricity in the areas served by
CSX.
|
|
·
|
Automotive,
which delivers both finished vehicles and auto parts, generated 8% of the
Company’s revenue and 6% of the Company’s volume in 2007. The
Company delivers approximately one-third of North America’s light
vehicles, serving both traditional manufacturers and the increasing number
of global manufacturers.
|
|
·
|
Intermodal
offers a competitive cost advantage over long-haul trucking by combining
the superior economics of rail transportation with the short-haul
flexibility of trucks. Through its network of more than 50
terminals, Intermodal serves all major markets east of the Mississippi
River and transports mainly manufactured consumer goods in containers,
providing customers with truck-like service for longer
shipments. For 2007, Intermodal accounted for approximately 14%
of the Company’s total revenue and 30% of
volume.
|
Track
|
|
Miles
|
|
Mainline
track
|
26,712
|
Terminals
and switching yards
|
9,626
|
Passing
sidings and turnouts
|
1,037
|
Total
|
37,375
|
Rail
Yards or Terminals
|
|
Birmingham,
AL
|
Detroit,
MI
|
Mobile,
AL
|
Hamlet,
NC
|
Montgomery,
AL
|
Rocky
Mount, NC
|
Baldwin,
FL
|
Buffalo,
NY
|
Moncrief
(Jacksonville), FL
|
Selkirk,
NY
|
Tampa,
FL
|
Syracuse,
NY
|
Atlanta,
GA
|
Cincinnati,
OH
|
East
Savannah, GA
|
Cleveland,
OH
|
Waycross,
GA
|
Columbus,
OH
|
Avon
(Indianapolis), IN
|
Stanley
(Toledo), OH
|
Chicago,
IL
|
Walbridge
(Toledo), OH
|
Evansville,
IN
|
Willard,
OH
|
Louisville,
KY
|
Greenwich
(Philadelphia), PA
|
Russell,
KY
|
Charleston,
SC
|
New
Orleans, LA
|
Florence,
SC
|
Cumberland,
MD
|
Erwin,
TN
|
Curtis
Bay (Baltimore), MD
|
Nashville,
TN
|
Locust
Point (Baltimore), MD
|
Richmond,
VA
|
Locomotives
|
%
|
||
Freight
|
3,495
|
87%
|
|
Switching
|
324
|
8%
|
|
Auxiliary
Units
|
188
|
5%
|
|
Total
|
4,007
|
100%
|
Freight
Cars
|
%
|
||
Gondolas
|
26,490
|
28%
|
|
Open-top
hoppers
|
19,604
|
21%
|
|
Box
cars
|
13,911
|
15%
|
|
Covered
hoppers
|
13,555
|
14%
|
|
Multi-level
flat cars
|
12,340
|
13%
|
|
Flat
cars
|
7,189
|
8%
|
|
Other
cars
|
1,275
|
1%
|
|
Total
|
94,364
|
100%
|
Intermodal
Terminals
|
|
Mobile,
AL
|
Kansas
City, MO
|
Lathrop,
CA
|
Charlotte,
NC
|
Los
Angeles/Long Beach, CA (3)
|
North
Bergen, NJ
|
Oakland,
CA
|
Blasdell,
NY
|
Jacksonville,
FL (2)
|
Syracuse,
NY
|
Orlando,
FL
|
New
York, NY/NJ (5)
|
Tampa,
FL
|
Cincinnati,
OH
|
Atlanta,
GA (2)
|
Cleveland,
OH
|
Savannah,
GA (2)
|
Columbus,
OH (2)
|
Chicago,
IL (2)
|
Marion,
OH
|
East
St. Louis, IL
|
Portland,
OR
|
Avon,
IN
|
Chambersburg,
PA
|
Evansville,
IN
|
Philadelphia,
PA
|
New
Orleans, LA
|
Charleston,
SC
|
Boston,
MA
|
Memphis,
TN
|
Springfield,
MA
|
Nashville,
TN
|
Worcester,
MA (3)
|
Mesquite,
TX
|
Baltimore,
MD
|
Portsmouth,
VA
|
Detroit,
MI
|
Seattle,
WA
|
Equipment
|
%
|
||
Chassis
|
25,980
|
67%
|
|
Containers
|
12,503
|
32%
|
|
Other
|
433
|
1%
|
|
Total
|
38,916
|
100%
|
Name and Age
|
Business Experience During Past 5
Years
|
Michael
J. Ward, 57
Chairman,
President and Chief Executive Officer
|
A
30-year veteran of the Company, Ward has served as Chairman, President and
Chief Executive Officer since January 2003. In 2000, he was
named President of CSXT, and he was later appointed President of CSX and
elected to the Board of Directors in 2002.
His
distinguished railroad career has included key executive positions in
nearly all aspects of the Company’s business, including sales and
marketing, operations and finance.
|
Oscar
Munoz, 48
Executive
Vice President and Chief Financial Officer
|
Munoz
has served as Executive Vice President and Chief Financial Officer of CSX
and CSXT since May 2003 and is responsible for management and oversight of
all financial, strategic planning, information technology, purchasing and
real estate activities of CSX.
He
brings to the Company years of experience from a variety of
industries. Before joining CSX in 2003, Munoz served as Chief
Financial Officer and Vice President of AT&T Consumer
Services. He has also held key executive positions within the
telecommunication and beverage
industries.
|
Name and Age
|
Business Experience During Past 5
Years
|
Tony
L. Ingram, 61
Executive
Vice President and Chief Operating Officer
|
Ingram
has served as Executive Vice President and Chief Operating Officer of CSXT
since March 2004 and manages all aspects of the Company’s operations
across its 21,000-mile network, including transportation, service design,
customer service, engineering and mechanical.
Prior
to joining CSX in 2004, Ingram spent more than 30 years at Norfolk
Southern where he served as Senior Vice President – Transportation,
Network and Mechanical from February 2003 to March 2004 and Vice
President, Transportation – Operations from March 2000 to February
2003.
|
Clarence
W. Gooden, 56
Executive
Vice President of Sales and Marketing
and
Chief Commercial Officer
|
Gooden
has been the Executive Vice President and Chief Commercial Officer of CSX
and CSXT since April 2004 and is responsible for generating customer
revenue, forecasting business trends and developing CSX’s model for future
revenue growth.
A
member of the CSX family for more than 35 years, Gooden has held key
executive positions in both operations and sales and marketing, including
being appointed President of CSX Intermodal in 2001 and Senior Vice
President of the Merchandise Service Group in 2002.
|
Ellen
M. Fitzsimmons, 47
Senior
Vice President of Law and Public Affairs,
General
Counsel and Corporate Secretary
|
Fitzsimmons
has been the Senior Vice President of Law and Public Affairs, General
Counsel, and Corporate Secretary since December 2003. She
serves as the Company’s chief legal officer and oversees all government
relations and public affairs activities.
During
her 16-year tenure with the Company, her broad responsibilities have
included key roles in major risk and corporate governance-related areas
such as Senior Vice President – Law and Corporate Secretary from May to
December 2003 and as Senior Vice President – Law from February 2001 to May
2003.
|
Name and Age
|
Business Experience During Past 5
Years
|
Robert
J. Haulter, 54
Senior
Vice President of Human Resources and Labor Relations
|
Haulter
has served as Senior Vice President – Human Resources and Labor Relations
of CSX and CSXT since December 2003 and is responsible for employee
compensation and benefits, labor relations, organizational development and
transformation, recruitment, training and various administrative
activities.
His
30-year career with the Company has included key executive positions in
operations, finance and human resources before being appointed Vice
President of Human Resources in 2000.
|
Carolyn
T. Sizemore, 44
Vice
President and Controller
|
Sizemore
has served as Vice President and Controller of CSX and CSXT since April
2002 and is responsible for financial and regulatory reporting, paying the
Company’s 35,000 employees, accounts payable and billing and collections
for outside party expenditures along with various other accounting
processes.
Her
responsibilities during her 18-year tenure with the Company have included
roles in finance and audit-related areas including a variety of positions
in accounting, finance strategies, budgets and performance
analysis.
|
Quarter
|
||||||||
1st
|
2nd
|
3rd
|
4th
|
Year
|
||||
2007
|
||||||||
Dividends
|
$0.12
|
$0.12
|
$0.15
|
$0.15
|
$0.54
|
|||
Common
Stock Price
|
||||||||
High
|
$42.53
|
$47.38
|
$51.88
|
$46.49
|
$51.88
|
|||
Low
|
$33.50
|
$39.36
|
$38.09
|
$40.17
|
$33.50
|
|||
2006
|
||||||||
Dividends
|
$0.065
|
$0.065
|
$0.10
|
$0.10
|
$0.33
|
|||
Common
Stock Price
|
||||||||
High
|
$30.20
|
$37.33
|
$35.58
|
$38.30
|
$38.30
|
|||
Low
|
$24.29
|
$30.05
|
$28.60
|
$32.51
|
$24.29
|
CSX
Purchases of Equity Securities
for
the Quarter
|
||||||
Fourth
Quarter
|
Total
Number of Shares Purchased
|
Average
Price Paid per Share
|
Total
Number of Shares Purchased as Part of Publicly Announced Plans or
Programs
|
Approximate
Dollar Value of Shares that May Yet Be Purchased Under the Plans or
Programs
|
||
Beginning
Fourth Quarter Balance
|
$
1,439,716,780
|
|||||
October
|
||||||
(September
29, 2007 - October 26, 2007)
|
5,724,300
|
$ 43.11
|
5,724,300
|
$
1,192,930,945
|
||
November
|
||||||
(October
27, 2007 - November 23, 2007)
|
4,933,700
|
$ 43.60
|
4,933,700
|
$ 977,804,729
|
||
December
|
||||||
(November
24, 2007 - December 28, 2007)
|
2,510,900
|
$ 41.20
|
2,510,900
|
$ 874,363,982
|
||
Total/Ending
Balance
|
13,168,900
|
$ 42.93
|
13,168,900
|
$ 874,363,982
|
Fiscal
Years
|
||||||
(Dollars
in Millions, Except Per Share Amounts)
|
2007
|
2006
|
2005
|
2004
|
2003
|
|
Earnings
From Continuing Operations
|
||||||
Operating
Revenue
|
$ 10,030
|
$
9,566
|
$
8,618
|
$
8,040
|
$
7,573
|
|
Operating
Expense
|
7,774
|
7,428
|
7,068
|
7,040
|
7,053
|
|
Operating
Income
|
$
2,256
|
$
2,138
|
$
1,550
|
$
1,000
|
$ 520
|
|
Earnings
from Continuing Operations
|
$ 1,226
|
$ 1,310
|
$
720
|
$ 418
|
$ 137
|
|
Earnings
Per Share:
|
||||||
From
Continuing Operations
|
$ 2.85
|
$ 2.98
|
$
1.67
|
$
0.97
|
$ 0.32
|
|
From
Continuing Operations, Assuming Dilution
|
2.74
|
2.82
|
1.59
|
0.94
|
0.31
|
|
Financial
Position
|
||||||
Cash,
Cash Equivalents and Short-term Investments
|
$
714
|
$ 900
|
$ 602
|
$ 859
|
$ 368
|
|
Total
Assets
|
25,534
|
25,129
|
24,232
|
24,605
|
21,760
|
|
Long-term
Debt
|
6,470
|
5,362
|
5,093
|
6,248
|
6,886
|
|
Shareholders'
Equity
|
8,685
|
8,942
|
7,954
|
6,811
|
6,448
|
|
Other
Data Per Common Share
|
||||||
Dividend
Per Share
|
$ .54
|
$ 0.33
|
$ 0.215
|
$ 0.20
|
$ 0.20
|
|
Employees
-- Annual Averages
|
||||||
Rail
|
32,477
|
32,987
|
32,033
|
32,074
|
32,892
|
|
Other
|
2,966
|
3,018
|
3,076
|
3,833
|
4,624
|
|
Total
|
35,443
|
36,005
|
35,109
|
35,907
|
37,516
|
|
2007
|
--
|
Recognized
gains of $27 million before tax, or $17 million after tax, on insurance
recoveries from claims related to Hurricane Katrina. (See Note
5, Hurricane Katrina.)
|
|
2006
|
--
|
Two-for-one
split of the Company’s common stock effective 2006. All periods
have been retroactively restated to reflect the stock
split.
|
|
--
|
Recognized
gains of $168 million before tax, or $104 million after tax, on insurance
recoveries from claims related to Hurricane Katrina. (See Note
5, Hurricane Katrina.)
|
|
--
|
Recognized
an income tax benefit of $151 million primarily related to the resolution
of certain tax matters, including resolution of ordinary course
federal income tax audits for 1994 –
1998.
|
|
--
|
Recognized
a $26 million after-tax non-cash gain on additional Conrail property
received.
|
Significant
events, continued:
|
|
2005
|
--
|
Recognized
a charge of $192 million pretax, $123 million after tax, to repurchase
$1.0 billion of outstanding debt, for costs of the increase in current
market value above original issue value. (See Note 9, Debt and
Credit Agreements.)
|
|
--
|
Recognized
an income tax benefit of $71 million for the Ohio legislative change to
gradually eliminate its corporate franchise
tax.
|
|
2004
|
--
|
Recognized
a charge of $71 million pretax, $44 million after tax, for separation
expenses related to management
restructuring.
|
|
--
|
Recognized
a $16 million after-tax non-cash gain on the Conrail spin-off
transaction.
|
|
--
|
Completed
a corporate reorganization of Conrail that resulted in the direct
ownership of certain Conrail assets by CSXT and caused a significant
increase in total assets.
|
|
2003
|
--
|
Recognized
a charge of $232 million pretax, $145 million after tax, in conjunction
with the change in estimate of casualty reserves to include an estimate of
incurred but not reported claims for asbestos and other occupational
injuries to be received over the next seven
years.
|
|
--
|
Recognized
a charge of $108 million pretax, $67 million after tax, for two settlement
agreements with Maersk that resolved all material disputes pending between
the companies arising out of the 1999 sale of the international
container-shipping assets.
|
|
--
|
Recognized
a net charge of $22 million pretax, $13 million after tax. This
includes a charge of $44 million pretax, $26 million after tax, which is
comprised of the initial charge for separation expenses related to the
management restructuring announced in 2003 of $34 million pretax and an
additional separation charge of $10 million pretax included in the
Company’s third quarter results. These amounts were offset by a
net credit of $22 million pretax, $13 million after tax, related to
revised estimates for railroad retirement taxes and the amount of benefits
that will be paid to individuals under the 1991 and 1992 separation
plans.
|
|
·
|
Revenue
grew $464 million or 5% to over $10
billion.
|
|
·
|
Expenses
increased $339 million or 5% to $7.8 billion, which included $141 million
of higher prior year gains on insurance recoveries (which reduced
operating expenses) and $98 million of higher fuel
costs.
|
|
·
|
Surface
Transportation Operating Income, which excludes other operating income,
increased $125 million to $2.3
billion.
|
|
·
|
Service
and safety measurements improved in all
categories.
|
RAIL
OPERATING STATISTICS (Estimated)
|
Fiscal
Years
|
||||
2007
|
2006
|
Improvement
|
%
|
||
Service
|
|||||
Measurements
|
FRA
Personal Injuries Frequency Index
|
1.21
|
1.46
|
17
|
%
|
FRA
Train Accident Rate
|
2.83
|
3.54
|
20
|
||
On-Time
Train Originations
|
79.3%
|
76.0%
|
4
|
||
On-Time
Destination Arrivals
|
70.4%
|
62.7%
|
12
|
||
Dwell
(hours)
|
23.2
|
25.1
|
8
|
||
Cars-On-Line
|
221,943
|
224,680
|
1
|
||
System
Train Velocity (miles per hour)
|
20.8
|
19.9
|
5
|
||
Recrews
(per day)
|
57
|
59
|
3
|
%
|
|
Increase/
|
|||||
(Decrease)
|
|||||
Resources
|
Route
Miles
|
21,166
|
21,114
|
-
|
%
|
Locomotives
(owned and long-term leased)
|
4,007
|
3,851
|
4
|
||
Freight
Cars (owned and long-term leased)
|
94,364
|
101,602
|
(7)
|
%
|
Fiscal
Years
|
||||
2007
|
2006
|
Change
|
||
(Dollars
in Millions)
|
||||
Net
cash provided by operating activities
|
$
2,184
|
$
2,058
|
$
126
|
|
Property
additions
|
(1,773)
|
(1,639)
|
(134)
|
|
Insurance
proceeds within investing activities
|
16
|
147
|
(131)
|
|
Other
investing activities
|
(57)
|
4
|
(61)
|
|
Dividends
|
(231)
|
(145)
|
(86)
|
|
Other
deposits and Conrail free cash flow
|
6
|
(64)
|
70
|
|
Free
Cash Flow (after payment of dividends)
|
$
145
|
$
361
|
$ (216)
|
|
·
|
Expectations
as to results of operations and operational
improvements;
|
|
·
|
Expectations
as to the effect of claims, lawsuits, environmental costs, commitments,
contingent liabilities, labor negotiations or agreements on the Company’s
financial condition;
|
|
·
|
Management’s
plans, goals, strategies and objectives for future operations and other
similar expressions concerning matters that are not historical facts, and
management’s expectations as to future performance and operations and the
time by which objectives will be achieved;
and
|
|
·
|
Future
economic, industry or market conditions or performance, including, but not
limited to, the discussion regarding Expectations on page
30.
|
|
·
|
Legislative, regulatory or legal developments involving
transportation, including rail or intermodal transportation, the
environment, hazardous materials, taxation, including the
outcome of tax claims and litigation, the potential enactment of
initiatives to re-regulate the rail industry and the ultimate outcome of
shipper and rate claims subject to
adjudication;
|
|
·
|
The
outcome of litigation and claims, including, but not limited to, those
related to fuel surcharge, environmental contamination, personal injuries
and occupational illnesses;
|
|
·
|
Material
changes in domestic or international economic or business conditions,
including those affecting the transportation industry such as access to
capital markets, ability to revise debt arrangements as contemplated,
customer demand, customer acceptance of price increases, effects of
adverse economic conditions affecting shippers and adverse economic
conditions in the industries and geographic areas that consume and produce
freight;
|
|
·
|
Changes
in fuel prices, surcharges for fuel and the availability of
fuel;
|
|
·
|
The
impact of increased passenger activities in capacity-constrained areas or
regulatory changes affecting when CSXT can transport freight or service
routes;
|
|
·
|
Natural
events such as severe weather conditions, including floods, fire,
hurricanes and earthquakes, a pandemic crisis affecting the health of the
Company’s employees, its shippers or the consumers of goods, or other
unforeseen disruptions of the Company’s operations, systems, property or
equipment;
|
|
·
|
An
unintentional failure to comply with applicable laws or
regulations;
|
|
·
|
The
inherent risks associated with safety and security, including the
availability and cost of insurance, the availability and vulnerability of
information technology, adverse economic or operational effects from
actual or threatened war or terrorist activities and any governmental
response;
|
|
·
|
Labor
costs and labor difficulties, including stoppages affecting either the
Company’s operations or the customers’ ability to deliver goods to the
Company for shipment;
|
|
·
|
Competition
from other modes of freight transportation, such as trucking and
competition and consolidation within the transportation industry
generally;
|
|
·
|
The
Company’s success in implementing its strategic plans and operational
objectives and improving Surface Transportation operating efficiency;
and
|
|
·
|
Changes
in operating conditions and costs or commodity
concentrations.
|
CONSOLIDATED
(a)
|
|||||||||
Includes
Surface Transportation and Other Operating Income
|
|||||||||
(Dollars
in Millions)
|
2007
|
2006
|
$
Change
|
%
Change
|
|||||
Operating
Revenue
|
$
10,030
|
$ 9,566
|
$ 464
|
5
|
%
|
||||
Operating
Expense
|
7,774
|
7,428
|
346
|
5
|
|||||
Operating
Income
|
2,256
|
2,138
|
118
|
6
|
|||||
Other
Income
|
93
|
95
|
(2)
|
(2)
|
|||||
Interest
Expense
|
(417)
|
(392)
|
(25)
|
6
|
|||||
Income
Tax Expense
|
(706)
|
(531)
|
(175)
|
33
|
|||||
Earnings
from Continuing Operations
|
1,226
|
|
1,310
|
(84)
|
(6)
|
||||
Discontinued
Operations
|
110
|
-
|
110
|
NM
|
|||||
Net
Earnings
|
$
1,336
|
$ 1,310
|
$ 26
|
2
|
%
|
||||
Earnings
Per Diluted Share
|
|||||||||
From
Continuing Operations
|
$ 2
.74
|
$ 2.82
|
$ (0.08)
|
(3)
|
%
|
||||
Discontinued
Operations
|
0.25
|
-
|
0.25
|
NM
|
|||||
Net
Earnings
|
$
2.99
|
$ 2.82
|
$ 0.17
|
6
|
%
|
|
·
|
Operating
income increased $118 million driven by strong Surface Transportation
results. These strong results were more than offset by $151
million of prior year income tax benefits that were not
repeated. The net of these and other items decreased earnings
from continuing operations by $84 million or $.08 per diluted
share.
|
|
·
|
The
$110 million or $.25 per diluted share gain in discontinued operations on
the Company’s consolidated income statement in 2007 related to the
resolution of certain tax matters associated with previously discontinued
operations.
|
CONSOLIDATED
(a)
|
|||||||||
Includes
Surface Transportation and Other Operating Income
|
|||||||||
(Dollars
in Millions)
|
2006
|
2005
|
$
Change
|
%
Change
|
|||||
Operating
Revenue
|
$ 9,566
|
$ 8,618
|
$ 948
|
11
|
%
|
||||
Operating
Expense
|
7,428
|
7,068
|
360
|
5
|
|||||
Operating
Income
|
2,138
|
1,550
|
588
|
38
|
|||||
Other
Income
|
95
|
101
|
(6)
|
(6)
|
|||||
Debt
Repurchase
|
-
|
(192)
|
192
|
(100)
|
|||||
Interest
Expense
|
(392)
|
(423)
|
31
|
(7)
|
|||||
Income
Tax Expense
|
(531)
|
(316)
|
(215)
|
68
|
|||||
Earnings
from Continuing Operations
|
1,310
|
|
720
|
590
|
82
|
||||
Discontinued
Operations - Net of Tax
|
-
|
425
|
(425)
|
(100)
|
|||||
Net
Earnings
|
$ 1,310
|
$ 1,145
|
$ 165
|
14
|
%
|
||||
Earnings
Per Diluted Share
|
|||||||||
From
Continuing Operations
|
$ 2.82
|
$ 1.59
|
$ 1.23
|
77
|
%
|
||||
Discontinued
Operations
|
-
|
0.93
|
(0.93)
|
(100)
|
|||||
Net
Earnings
|
$ 2.82
|
$ 2.52
|
$ 0.30
|
12
|
%
|
(a)
|
Other
operating income was $12 million and $1 million in 2006 and 2005,
respectively.
|
|
·
|
Driven
by Surface Transportation results, earnings from continuing operations
were up $590 million, or $1.23 per diluted
share;
|
|
·
|
Offsetting
this increase was income from discontinued operations, net of tax, of $425
million, or $.93 per diluted share, as a result of the sale of CSX’s
International Terminals business in
2005.
|
SURFACE TRANSPORTATION
DETAIL
(Unaudited)
|
||||||||||
(Dollars
in Millions)
|
||||||||||
Fiscal
Year
|
||||||||||
Surface
|
||||||||||
Rail
|
Intermodal
|
Transportation
|
||||||||
2007
|
2006
|
2007
|
2006
|
2007
|
2006
|
$
Change
|
||||
Revenue
|
$ 8,674
|
$ 8,154
|
$ 1,356
|
$ 1,412
|
$ 10,030
|
$ 9,566
|
$ 464
|
|||
Operating
Expense:
|
||||||||||
Labor
and Fringe
|
2,897
|
2,840
|
81
|
82
|
2,978
|
2,922
|
(56)
|
|||
Materials,
Supplies and Other
|
1,857
|
1,772
|
183
|
192
|
2,040
|
1,964
|
(76)
|
|||
Fuel
|
1,210
|
1,112
|
-
|
-
|
1,210
|
1,112
|
(98)
|
|||
Depreciation
|
848
|
818
|
34
|
38
|
882
|
856
|
(26)
|
|||
Equipment
and Other Rents
|
346
|
382
|
110
|
130
|
456
|
512
|
56
|
|||
Inland
Transportation
|
(448)
|
(462)
|
688
|
704
|
240
|
242
|
2
|
|||
Gain
on Insurance Recoveries
|
(27)
|
(166)
|
-
|
(2)
|
(27)
|
(168)
|
(141)
|
|||
Total
Expense
|
6,683
|
6,296
|
1,096
|
1,144
|
7,779
|
7,440
|
(339)
|
|||
Operating
Income
|
$ 1,991
|
$ 1,858
|
$ 260
|
$ 268
|
$ 2,251
|
$ 2,126
|
$ 125
|
|||
Operating
Ratio
|
77.0%
|
77.2%
|
80.8%
|
81.0%
|
77.6%
|
77.8%
|
||||
Total
Assets
|
$
24,179
|
$
24,077
|
$
283
|
$
276
|
Volume
(Thousands); Revenue (Dollars in Millions); Revenue Per Unit
(Dollars)
|
|||||||||||||||
Fiscal
Year
|
|||||||||||||||
Volume
|
Revenue
|
Revenue
Per Unit
|
|||||||||||||
2007
|
2006
|
%
Change
|
2007
|
2006
|
%
Change
|
2007
|
2006
|
%
Change
|
|||||||
Chemicals
|
522
|
528
|
(1)
|
%
|
$ 1,313
|
$ 1,210
|
9
|
%
|
$ 2,515
|
$ 2,292
|
10
|
%
|
|||
Emerging
Markets
|
491
|
524
|
(6)
|
605
|
580
|
4
|
1,232
|
1,107
|
11
|
||||||
Forest
Products
|
352
|
404
|
(13)
|
722
|
773
|
(7)
|
2,051
|
1,913
|
7
|
||||||
Agricultural
Products
|
410
|
397
|
3
|
786
|
681
|
15
|
1,917
|
1,715
|
12
|
||||||
Metals
|
355
|
364
|
(2)
|
702
|
673
|
4
|
1,977
|
1,849
|
7
|
||||||
Phosphates
and Fertilizers
|
362
|
362
|
-
|
421
|
354
|
19
|
1,163
|
978
|
19
|
||||||
Food
and Consumer
|
212
|
245
|
(13)
|
441
|
477
|
(8)
|
2,080
|
1,947
|
7
|
||||||
Total
Merchandise
|
2,704
|
2,824
|
(4)
|
4,990
|
4,748
|
5
|
1,845
|
1,681
|
10
|
||||||
Coal
|
1,771
|
1,798
|
(2)
|
2,483
|
2,259
|
10
|
1,402
|
1,256
|
12
|
||||||
Coke
and Iron Ore
|
91
|
94
|
(3)
|
120
|
119
|
1
|
1,319
|
1,266
|
4
|
||||||
Total
Coal
|
1,862
|
1,892
|
(2)
|
2,603
|
2,378
|
9
|
1,398
|
1,257
|
11
|
||||||
Automotive
|
439
|
463
|
(5)
|
839
|
847
|
(1)
|
1,911
|
1,829
|
4
|
||||||
Other
|
-
|
-
|
-
|
242
|
181
|
34
|
-
|
-
|
-
|
||||||
Total
Rail
|
5,005
|
5,179
|
(3)
|
8,674
|
8,154
|
6
|
1,733
|
1,574
|
10
|
||||||
International
|
1,132
|
1,281
|
(12)
|
525
|
580
|
(9)
|
464
|
453
|
2
|
||||||
Domestic
|
979
|
898
|
9
|
807
|
786
|
3
|
824
|
875
|
(6)
|
||||||
Other
|
-
|
-
|
-
|
24
|
46
|
(48)
|
-
|
-
|
-
|
||||||
Total
Intermodal
|
2,111
|
2,179
|
(3)
|
1,356
|
1,412
|
(4)
|
642
|
648
|
(1)
|
||||||
Total
Surface Transportation
|
7,116
|
7,358
|
(3)
|
%
|
$ 10,030
|
$ 9,566
|
5
|
%
|
$ 1,409
|
$ 1,300
|
8
|
%
|
SURFACE TRANSPORTATION
DETAIL
(Unaudited)
|
||||||||||
(Dollars
in Millions)
|
||||||||||
Fiscal
Year
|
||||||||||
Surface
|
||||||||||
Rail
|
Intermodal
|
Transportation
|
||||||||
2006
|
2005
|
2006
|
2005
|
2006
|
2005
|
$
Change
|
||||
Revenue
|
$ 8,154
|
$ 7,256
|
$ 1,412
|
$ 1,362
|
$ 9,566
|
$ 8,618
|
$ 948
|
|||
Operating
Expense:
|
||||||||||
Labor
and Fringe
|
2,840
|
2,777
|
82
|
79
|
2,922
|
2,856
|
(66)
|
|||
Materials,
Supplies and Other
|
1,772
|
1,649
|
192
|
200
|
1,964
|
1,849
|
(115)
|
|||
Fuel
|
1,112
|
783
|
-
|
-
|
1,112
|
783
|
(329)
|
|||
Depreciation
|
818
|
779
|
38
|
39
|
856
|
818
|
(38)
|
|||
Equipment
and Other Rents
|
382
|
400
|
130
|
133
|
512
|
533
|
21
|
|||
Inland
Transportation
|
(462)
|
(433)
|
704
|
663
|
242
|
230
|
(12)
|
|||
Gain
on Insurance Recoveries
|
(166)
|
-
|
(2)
|
-
|
(168)
|
-
|
168
|
|||
Total
Expense
|
6,296
|
5,955
|
1,144
|
1,114
|
7,440
|
7,069
|
(371)
|
|||
Operating
Income
|
$ 1,858
|
$ 1,301
|
$ 268
|
$ 248
|
$ 2,126
|
$ 1,549
|
$ 577
|
|||
Operating
Ratio
|
77.2%
|
82.1%
|
81.0%
|
81.8%
|
77.8%
|
82.0%
|
||||
Total
Assets
|
$
24,077
|
$
23,182
|
$
276
|
$
305
|
SURFACE TRANSPORTATION VOLUME
AND REVENUE
(Unaudited)
|
|||||||||||||||
Volume
(Thousands); Revenue (Dollars in Millions); Revenue Per Unit
(Dollars)
|
|||||||||||||||
Fiscal
Year
|
|||||||||||||||
Volume
|
Revenue
|
Revenue
Per Unit
|
|||||||||||||
2006
|
2005
|
%
Change
|
2006
|
2005
|
%
Change
|
2006
|
2005
|
%
Change
|
|||||||
Chemicals
|
528
|
533
|
(1)
|
%
|
$ 1,210
|
$ 1,089
|
11
|
%
|
$
2,292
|
$ 2,043
|
12
|
%
|
|||
Emerging
Markets
|
524
|
505
|
4
|
580
|
513
|
13
|
1,107
|
1,016
|
9
|
||||||
Forest
Products
|
404
|
439
|
(8)
|
773
|
717
|
8
|
1,913
|
1,633
|
17
|
||||||
Agricultural
Products
|
397
|
357
|
11
|
681
|
550
|
24
|
1,715
|
1,541
|
11
|
||||||
Metals
|
364
|
361
|
1
|
673
|
570
|
18
|
1,849
|
1,579
|
17
|
||||||
Phosphates
and Fertilizers
|
362
|
444
|
(18)
|
354
|
351
|
1
|
978
|
791
|
24
|
||||||
Food
and Consumer
|
245
|
249
|
(2)
|
477
|
438
|
9
|
1,947
|
1,759
|
11
|
||||||
Total
Merchandise
|
2,824
|
2,888
|
(2)
|
4,748
|
4,228
|
12
|
1,681
|
1,464
|
15
|
||||||
Coal
|
1,798
|
1,726
|
4
|
2,259
|
1,992
|
13
|
1,256
|
1,154
|
9
|
||||||
Coke
and Iron Ore
|
94
|
83
|
13
|
119
|
88
|
35
|
1,266
|
1,060
|
19
|
||||||
Total
Coal
|
1,892
|
1,809
|
5
|
2,378
|
2,080
|
14
|
1,257
|
1,150
|
9
|
||||||
Automotive
|
463
|
488
|
(5)
|
847
|
844
|
-
|
1,829
|
1,730
|
6
|
||||||
Other
|
-
|
-
|
-
|
181
|
104
|
74
|
-
|
-
|
-
|
||||||
Total
Rail
|
5,179
|
5,185
|
-
|
8,154
|
7,256
|
12
|
1,574
|
1,399
|
13
|
||||||
International
|
1,281
|
1,274
|
1
|
580
|
545
|
6
|
453
|
428
|
6
|
||||||
Domestic
|
898
|
891
|
1
|
786
|
766
|
3
|
875
|
860
|
2
|
||||||
Other
|
-
|
-
|
-
|
46
|
51
|
(10)
|
-
|
-
|
-
|
||||||
Total
Intermodal
|
2,179
|
2,165
|
1
|
1,412
|
1,362
|
4
|
648
|
629
|
3
|
||||||
Total
Surface Transportation
|
7,358
|
7,350
|
-
|
%
|
$ 9,566
|
$ 8,618
|
11
|
%
|
$
1,300
|
$ 1,173
|
11
|
%
|
Type
of Obligation
|
2008
|
2009
|
2010
|
2011
|
2012
|
Thereafter
|
Total
|
|
(Dollars
in Millions) (Unaudited)
|
||||||||
Contractual
Obligations:
|
||||||||
Long-term
Debt (See Note 9)
|
$
785
|
$
305
|
$
92
|
$
591
|
$
493
|
$
4,989
|
$ 7,255
|
|
Operating
Leases - Net (See Note 7)
|
98
|
90
|
79
|
69
|
51
|
181
|
568
|
|
Agreements
with Conrail
(a)
|
14
|
13
|
9
|
4
|
3
|
9
|
52
|
|
Purchase
Obligations (See Note 7)
|
621
|
549
|
326
|
285
|
288
|
4,773
|
6,842
|
|
Total
Contractual Obligations
|
$ 1,518
|
$ 957
|
$ 506
|
$ 949
|
$ 835
|
$ 9,952
|
$ 14,717
|
|
Other Commitments: | ||||||||
Guarantees
(See Note 7)
|
15
|
16
|
16
|
13
|
12
|
-
|
72
|
|
Other
|
53
|
2
|
-
|
-
|
-
|
41
|
96
|
|
Total
Other Commitments
|
$ 68
|
$ 18
|
$ 16
|
$ 13
|
$ 12
|
$ 41
|
$ 168
|
(a) Represents minimum future
lease payments for freight cars and locomotives and is included in total
lease commitments disclosed in Note 7, Commitments and
Contingencies.
|
|
·
|
casualty,
environmental and legal reserves;
|
|
·
|
pension
and post-retirement medical plan
accounting;
|
|
·
|
depreciation
policies for assets under the group-life method;
and
|
|
·
|
income taxes
|
|
·
|
An
estimate is computed using a ratio of Company employee data to national
employment for select years during the period 1938-2001. The
Company uses railroad industry historical census data because it does not
have detailed employment records in order to compute the population of
potentially exposed employees.
|
|
·
|
The
projected incidence of disease is estimated based on epidemiological
studies using employees’ age and the duration and intensity of potential
exposure while employed. Epidemiology is the medical science
that deals with the incidence, distribution and control of diseases in a
population.
|
|
·
|
An
estimate of the future anticipated claims filing rate by type of disease
(non-malignant, cancer and mesothelioma) is computed using the Company’s
average historical claim filing rates for a three-year calibration period,
excluding a surge in claims originating in West Virginia. In
2006, the Company received 852 asbestos claims in West Virginia in which
the claimants were neither exposed in West Virginia nor residents of the
state. CSX believes these claims will
not have merit as
no medical evidence has been provided to substantiate the claims and
therefore CSX has excluded them from the calibration
period. Claim levels in 2007 returned to expected levels and
management feels this calibration period represents the best estimate of
future filing rates.
|
|
·
|
An
estimate of the future anticipated dismissal rate by type of claim is
computed using the Company’s historical average dismissal rates observed
during the current calibration period noted
above.
|
|
·
|
An
estimate of the future anticipated settlement by type of disease is
computed using the Company’s historical average of dollars paid per claim
for pending and future claims using the average settlement by type of
incident observed during the current calibration period noted
above.
|
|
·
|
An
estimate of the potentially exposed population for other occupational
diseases is calculated by projecting active versus retired workforce from
2002 to 2010 using a growth rate projection for overall railroad
employment made by the Railroad Retirement Board in its June 2003
report.
|
|
·
|
An
estimate of the future anticipated claims filing rate by type of injury,
employee type, and active versus retired employee is computed using the
Company’s average historical claim filing rates for the calibration
periods management felt were representative of future filing
rates. For carpal tunnel and repetitive stress injuries, the
current calibration period is a 1-year average of claim
filings. Hearing loss uses a 3-year calibration period, and all
other diseases or injuries use a 2-year calibration period. An
estimate is made to forecast future claims by using the filing rates by
disease and the active and retired CSX population each
year.
|
|
·
|
An
estimate of the future anticipated settlement by type of injury is
computed using the Company’s historical average of dollars paid per claim
for pending and future claims using the average settlement by type of
injury observed during a period that management feels is representative of
future settlement amounts.
|
|
·
|
type
of clean-up required;
|
|
·
|
nature
of the Company’s alleged connection to the location (e.g. generator of
waste sent to the site or owner or operator of the
site);
|
|
·
|
extent
of the Company’s alleged connection (e.g. volume of waste sent to the
location and other relevant factors);
and
|
|
·
|
number,
connection and financial viability of other named and unnamed PRPs at the
location.
|
|
·
|
long-term
rate of return on plan assets;
|
|
·
|
discount
rates used to measure future obligations and interest
expense;
|
|
·
|
salary
scale inflation rates;
|
|
·
|
health
care cost trend rates; and
|
|
·
|
other
assumptions.
|
(Dollars
in Millions)
|
Pension
|
OPEB
|
|
Discount
Rate 0.25% change
|
$ 4
|
$ 1
|
|
Salary
Inflation 0.25% change
|
2
|
-
|
|
Health
Care Cost 1% change
|
N/A
|
2
|
|
·
|
Statistical
analysis of historical retirements for each group of
property;
|
|
·
|
Evaluation
of current operations;
|
|
·
|
Evaluation
of technological advances and maintenance
schedules;
|
|
·
|
Previous
assessment of the condition of the assets and outlook for their continued
use;
|
|
·
|
Expected
net salvage to be received upon retirement;
and
|
|
·
|
Comparison
of assets to the same asset groups with other
companies.
|
INDEX
TO CONSOLIDATED FINANCIAL STATEMENTS
|
||||
Page
|
||||
63
|
||||
CSX
Corporation
|
||||
Consolidated
Financial Statements and Notes to Consolidated Financial
Statements
|
||||
Herewith:
|
||||
64
|
||||
December
28, 2007
|
||||
December
29, 2006
|
||||
December
30, 2005
|
||||
65
|
||||
December
28, 2007
|
||||
December
29, 2006
|
||||
66
|
||||
December
28, 2007
|
||||
December
29, 2006
|
||||
December
30, 2005
|
||||
67
|
||||
December
28, 2007
|
||||
December
29, 2006
|
||||
December
30, 2005
|
||||
68
|
Fiscal
Years
|
||||||
2007
|
2006
|
2005
|
||||
Operating
Revenue
|
$
10,030
|
$
9,566
|
$
8,618
|
|||
Operating
Expense
|
||||||
Labor
and Fringe
|
2,986
|
2,930
|
2,864
|
|||
Materials,
Supplies and Other
|
2,031
|
1,948
|
1,855
|
|||
Fuel
|
1,210
|
1,112
|
783
|
|||
Depreciation
|
883
|
857
|
826
|
|||
Equipment
and Other Rents
|
451
|
507
|
510
|
|||
Inland
Transportation
|
240
|
242
|
230
|
|||
Gain
on Insurance Recoveries (Note 5)
|
(27)
|
(168)
|
-
|
|||
Total
Operating Expense
|
7,774
|
7,428
|
7,068
|
|||
Operating
Income
|
2,256
|
2,138
|
1,550
|
|||
Other
Income and Expense
|
||||||
Other
Income - Net (Note 10)
|
93
|
95
|
101
|
|||
Debt
Repurchase Expense (Note 9)
|
-
|
-
|
(192)
|
|||
Interest
Expense
|
(417)
|
(392)
|
(423)
|
|||
Earnings
From Continuing Operations before Income Taxes
|
1,932
|
1,841
|
1,036
|
|||
Income
Tax Expense (Note 13)
|
(706)
|
(531)
|
(316)
|
|||
Earnings
From Continuing Operations
|
1,226
|
1,310
|
720
|
|||
Discontinued
Operations (Note 17)
|
110
|
-
|
425
|
|||
Net
Earnings
|
$
1,336
|
$
1,310
|
$
1,145
|
|||
Per
Common Share (Note 2)
|
||||||
Basic
Earnings Per Share
|
||||||
From
Continuing Operations
|
$
2.85
|
$
2.98
|
$
1.67
|
|||
Discontinued
Operations
|
0.26
|
-
|
0.98
|
|||
Net
Earnings
|
$
3.11
|
$
2.98
|
$
2.65
|
|||
Earnings
Per Common Share, Assuming Dilution
|
||||||
From
Continuing Operations
|
$
2.74
|
$ 2.82
|
$
1.59
|
|||
Discontinued
Operations
|
0.25
|
-
|
0.93
|
|||
Net
Earnings
|
$
2.99
|
$
2.82
|
$
2.52
|
|||
Average
Common Shares Outstanding (Thousands)
|
430,270
|
440,084
|
432,851
|
|||
Average
Common Shares Outstanding,
|
448,280
|
465,934
|
456,047
|
|||
Assuming
Dilution (Thousands)
|
||||||
Cash
Dividends Paid Per Common Share
|
$
0.54
|
$
0.33
|
$
0.215
|
|
||||
December
28,
|
December
29,
|
|||
2007
|
2006
|
|||
ASSETS
|
||||
Current
Assets:
|
||||
Cash
and Cash Equivalents (Note 1)
|
$
368
|
$ 461
|
||
Short-term
Investments
|
346
|
439
|
||
Accounts
Receivable, net of allowance for doubtful
|
||||
accounts
of $74 and $82, respectively
|
1,174
|
1,174
|
||
Materials
and Supplies
|
240
|
204
|
||
Deferred
Income Taxes
|
254
|
251
|
||
Other
Current Assets
|
109
|
143
|
||
Total
Current Assets
|
2,491
|
2,672
|
||
Properties
|
28,999
|
27,715
|
||
Accumulated
Depreciation
|
(7,219)
|
(6,792)
|
||
Properties
- Net (Note 11)
|
21,780
|
20,923
|
||
Investment
in Conrail (Note 16)
|
639
|
607
|
||
Affiliates
and Other Companies
|
365
|
336
|
||
Other
Long-term Assets (Note 12)
|
259
|
591
|
||
Total
Assets
|
$ 25,534
|
$ 25,129
|
||
LIABILITIES
AND SHAREHOLDERS' EQUITY
|
||||
Current
Liabilities:
|
||||
Accounts
Payable
|
$ 976
|
$ 974
|
||
Labor
and Fringe Benefits Payable
|
461
|
495
|
||
Casualty,
Environmental and Other Reserves (Note 6)
|
247
|
253
|
||
Current
Maturities of Long-term Debt (Note 9)
|
785
|
592
|
||
Short-term
Debt (Note 9)
|
2
|
8
|
||
Income
and Other Taxes Payable
|
113
|
114
|
||
Other
Current Liabilities
|
87
|
86
|
||
Total
Current Liabilities
|
2,671
|
2,522
|
||
Casualty,
Environmental and Other Reserves (Note 6)
|
624
|
668
|
||
Long-term
Debt (Note 9)
|
6,470
|
5,362
|
||
Deferred
Income Taxes
|
6,096
|
6,110
|
||
Other
Long-term Liabilities (Note 12)
|
988
|
1,525
|
||
Total
Liabilities
|
16,849
|
16,187
|
||
Shareholders'
Equity:
|
||||
Common
Stock, $1 Par Value (Note 3)
|
408
|
438
|
||
Other
Capital
|
37
|
1,469
|
||
Retained
Earnings (Note 13)
|
8,565
|
7,427
|
||
Accumulated
Other Comprehensive Loss
|
(325)
|
(392)
|
||
Total
Shareholders' Equity
|
8,685
|
8,942
|
||
Total
Liabilities and Shareholders' Equity
|
$
25,534
|
$
25,129
|
Fiscal
Years
|
|||||||
2007
|
2006
|
2005
|
|||||
OPERATING
ACTIVITIES
|
|||||||
Net
Earnings
|
$
1,336
|
$ 1,310
|
$ 1,145
|
||||
Adjustments
to Reconcile Net Earnings to Net Cash Provided
|
|||||||
by
Operating Activities:
|
|||||||
Depreciation
|
890
|
867
|
833
|
||||
Deferred
Income Taxes
|
272
|
42
|
(46)
|
||||
Gain
on Sale of International Terminals - Net of Tax (Note 17)
|
-
|
-
|
(428)
|
||||
Non-cash
Discontinued Operations (Note 17)
|
(110)
|
-
|
-
|
||||
Gain
on Insurance Recoveries (Note 5)
|
(27)
|
(168)
|
-
|
||||
Insurance
Proceeds (Note 5)
|
13
|
121
|
29
|
||||
Net
Gain on Conrail spin-off - after tax
|
-
|
(26)
|
-
|
||||
Contributions
to Qualified Pension Plans (Note 8)
|
(266)
|
(28)
|
(3)
|
||||
Other
Operating Activities
|
(77)
|
33
|
(138)
|
||||
Changes
in Operating Assets and Liabilities:
|
|||||||
Accounts
Receivable
|
(50)
|
(33)
|
(44)
|
||||
Other
Current Assets
|
(41)
|
96
|
(29)
|
||||
Accounts
Payable
|
48
|
51
|
54
|
||||
Income
and Other Taxes Payable
|
234
|
(103)
|
(402)
|
||||
Other
Current Liabilities
|
(38)
|
(104)
|
139
|
||||
Net
Cash Provided by Operating Activities
|
2,184
|
2,058
|
1,110
|
||||
INVESTING
ACTIVITIES
|
|||||||
Property
Additions
|
(1,773)
|
(1,639)
|
(1,136)
|
||||
Insurance
Proceeds (Note 5)
|
16
|
147
|
41
|
||||
Net
Proceeds from Sale of International Terminals (Note 17)
|
-
|
-
|
1,108
|
||||
Purchase
of Minority Interest in an International Terminals'
|
|||||||
Subsidiary
(Note 17)
|
-
|
-
|
(110)
|
||||
Purchases
of Short-term Investments
|
(2,338)
|
(1,412)
|
(2,601)
|
||||
Proceeds
from Sales of Short-term Investments
|
2,459
|
1,290
|
2,634
|
||||
Other
Investing Activities
|
(57)
|
4
|
28
|
||||
Net
Cash Used in Investing Activities
|
(1,693)
|
(1,610)
|
(36)
|
||||
FINANCING
ACTIVITIES
|
|||||||
Short-term
Debt - Net
|
(6)
|
7
|
(99)
|
||||
Long-term
Debt Issued (Note 9)
|
2,381
|
471
|
105
|
||||
Long-term
Debt Repaid (Note 9)
|
(785)
|
(546)
|
(1,283)
|
||||
Dividends
Paid
|
(231)
|
(145)
|
(93)
|
||||
Stock
Options Exercised (Note 4)
|
153
|
319
|
98
|
||||
Shares
Repurchased (Note 1)
|
(2,174)
|
(465)
|
-
|
||||
Other
Financing Activities
|
78
|
63
|
(15)
|
||||
Net
Cash Used in Financing Activities
|
(584)
|
(296)
|
(1,287)
|
||||
Net
(Decrease) Increase in Cash and Cash Equivalents
|
(93)
|
152
|
(213)
|
||||
CASH
AND CASH EQUIVALENTS
|
|||||||
Cash
and Cash Equivalents at Beginning of Period
|
461
|
309
|
522
|
||||
Cash
and Cash Equivalents at End of Period
|
$
368
|
$ 461
|
$ 309
|
||||
SUPPLEMENTAL
CASH FLOW INFORMATION
|
|||||||
Interest
Paid - Net of Amounts Capitalized
|
$
411
|
$ 387
|
$ 444
|
||||
Income
Taxes Paid
|
$
235
|
$ 531
|
$ 798
|
Accumulated
Other
|
|||||||||||
Common
|
Comprehensive
Income (Loss)
|
||||||||||
Shares
|
Pension
|
||||||||||
Outstanding
|
Common
|
Other
|
Retained
|
and
OPEB
|
Fuel
|
||||||
(Thousands)
|
Stock
|
Capital
|
Earnings
|
Adjustments
(a)
|
Hedge
(b)
|
Other
|
Total
|
||||
Balance
December 31, 2004
|
431,058
|
$ 431
|
$ 1,390
|
$ 5,210
|
$ (292)
|
$ 72
|
$ -
|
$ 6,811
|
|||
Comprehensive
Earnings:
|
|||||||||||
Net
Earnings
|
-
|
-
|
-
|
1,145
|
-
|
-
|
-
|
1,145
|
|||
Other
Comprehensive Income
|
|||||||||||
(Loss)
|
-
|
-
|
-
|
-
|
(15)
|
(42)
|
-
|
(57)
|
|||
Comprehensive
Earnings
|
1,088
|
||||||||||
Dividends
|
-
|
-
|
-
|
(93)
|
-
|
-
|
-
|
(93)
|
|||
Stock
Option Exercises and Other
|
5,348
|
5
|
143
|
-
|
-
|
-
|
-
|
148
|
|||
Balance
December 30, 2005
|
436,406
|
436
|
1,533
|
6,262
|
(307)
|
30
|
-
|
7,954
|
|||
Comprehensive
Earnings:
|
|||||||||||
Net
Earnings
|
-
|
-
|
-
|
1,310
|
-
|
-
|
-
|
1,310
|
|||
Other
Comprehensive Income
|
|||||||||||
(Loss)
|
-
|
-
|
-
|
-
|
(2)
|
(30)
|
- |
(32)
|
|||
Comprehensive
Earnings
|
1,278
|
||||||||||
Adjustment
for Initial Adoption
|
|||||||||||
of
SFAS 158, net of tax
(c)
|
-
|
-
|
-
|
-
|
(83)
|
-
|
-
|
(83)
|
|||
Dividends
|
-
|
-
|
-
|
(145)
|
-
|
-
|
-
|
(145)
|
|||
Share
Repurchases
|
(14,533)
|
(14)
|
(451)
|
-
|
-
|
-
|
-
|
(465)
|
|||
Stock
Option Exercises and Other
|
15,891
|
16
|
387
|
-
|
-
|
-
|
-
|
403
|
|||
Balance
December 29, 2006
|
437,764
|
438
|
1,469
|
7,427
|
(392)
|
-
|
-
|
8,942
|
|||
Comprehensive
Earnings:
|
|||||||||||
Net
Earnings
|
-
|
-
|
-
|
1,336
|
-
|
-
|
-
|
1,336
|
|||
Other
Comprehensive Income
|
|||||||||||
(Loss)
|
-
|
-
|
-
|
-
|
63
|
- |
4
|
67
|
|||
Comprehensive
Earnings
|
1,403
|
||||||||||
Adjustment
for Initial Adoption
|
|||||||||||
of
FIN 48
(d)
|
-
|
-
|
-
|
33
|
-
|
-
|
-
|
33
|
|||
Dividends
|
-
|
-
|
-
|
(231)
|
-
|
-
|
-
|
(231)
|
|||
Share
Repurchases
(e)
|
(50,917)
|
(51)
|
(2,123)
|
-
|
-
|
-
|
-
|
(2,174)
|
|||
Bond
Conversions
(f)
|
13,296
|
13
|
339
|
-
|
-
|
-
|
-
|
352
|
|||
Subsidiary
Equity Restructuring
(g)
|
-
|
-
|
72
|
-
|
-
|
-
|
-
|
72
|
|||
Stock
Option Exercises and Other
|
7,721
|
8
|
280
|
-
|
-
|
-
|
-
|
288
|
|||
Balance
December 28, 2007
|
407,864
|
$ 408
|
$ 37
|
$ 8,565
|
$ (329)
|
$ -
|
$ 4
|
$ 8,685
|
(a)
|
Pension
and Other Postretirement Benefits balances are net of taxes of $146
million, $197 million and $166 million for 2005, 2006 and 2007,
respectively.
|
(b)
|
Fuel
hedge activity is net of taxes of $21 million for 2005 and
2006.
|
(c)
|
See
Note 1, Nature of Operations and Significant Accounting Policies under
caption New Accounting Pronouncements and Changes in Accounting
Policy.
|
(d)
|
See
Note 13, Income Taxes.
|
(e)
|
See
Note 1, Nature of Operations and Significant Accounting Policies under
caption Other Items – Share
Repurchases.
|
(
f
)
|
See
Note 2, Earnings Per Share and Note 9, Debt and Credit
Agreements.
|
(g)
|
See
Note 12, Other Long-term Assets and Other Long-term
Liabilities.
|
|
·
|
The
merchandise business is the most diverse market with nearly 2.7 million
carloads per year of aggregate, which includes crushed stone, sand and
gravel, metal, phosphate, fertilizer, food, consumer, agricultural, paper
and chemical products. The merchandise business generated
approximately 50% of the Company’s revenue in 2007 and 38% of
volume.
|
|
·
|
Coal,
which delivered approximately 1.9 million carloads of coal, coke and iron
ore to electricity generating power plants, ocean, river and lake piers
and terminals, steel makers and industrial plants, accounted for
approximately 26% of the Company’s revenue and volume in
2007. The Company transports almost one-third of every ton of
coal used for generating electricity in the areas served by
CSX.
|
|
·
|
Automotive,
which delivers both finished vehicles and auto parts, generated 8% of the
Company’s revenue in 2007 and 6% of the Company’s volume. The
Company delivers approximately one-third of North America’s light
vehicles, serving both traditional manufacturers and the increasing number
of global manufacturers.
|
|
·
|
Intermodal
offers a competitive cost advantage over long-haul trucking by combining
the superior economics of rail transportation with the short-haul
flexibility of trucks. Through its network of more than 50
terminals, Intermodal serves all major markets east of the Mississippi and
transports mainly manufactured consumer goods in containers, providing
customers with truck-like service for longer shipments. For
2007, Intermodal accounted for approximately 14% of the Company’s total
revenue and 30% of volume.
|
|
·
|
statistical
analysis of historical retirements for each group of
property;
|
|
·
|
evaluation
of current operations;
|
|
·
|
evaluation
of technological advances and maintenance
schedules;
|
|
·
|
previous
assessment of the condition of the assets and outlook for their continued
use;
|
|
·
|
net
salvage expected to be received upon retirement;
and
|
|
·
|
comparison
of assets to the same asset groups with other
companies.
|
|
·
|
revenue
associated with shipments in transit, which are based on historical
freight car movement data as well as average cycle times to move
commodities from their origin to their final destination or
interchange;
|
|
·
|
future
adjustments to revenue or accounts receivable for billing corrections,
billing discounts, bad debts and allowances for doubtful
accounts;
|
|
·
|
future
adjustments to revenue for overcharge claims filed by customers, which are
based on historical cash paid to customers for rate overcharges as a
percentage of total billing; and
|
|
·
|
incentive-based
refunds to customers, which are primarily based on customers achieving
certain volume thresholds and are recorded as a reduction to revenue on
the basis of management’s best estimate of the projected
liability. This estimate is based on historical activity,
current volume levels and a forecast of future
volume.
|
|
·
|
casualty,
environmental and legal reserves (see Note 6, Casualty, Environmental and
Other Reserves);
|
|
·
|
pension
and post-retirement medical plan accounting (see Note 8, Employee Benefit
Plans);
|
|
·
|
depreciation
policies for assets under the group-life method (see “Properties” in this
note); and
|
|
·
|
income
taxes (see Note 13, Income Taxes).
|
(In
Millions)
|
2007
|
2006
|
|
Number
of Shares Repurchased
|
51
|
15
|
|
Value
of Shares Repurchased
|
$ 2,174
|
$ 465
|
Fiscal
Years
|
||||
2007
|
2006
|
2005
|
||
Numerator
(Millions):
|
||||
Earnings
from Continuing Operations
|
$ 1,226
|
$ 1,310
|
$ 720
|
|
Interest
Expense on Convertible Debt - Net of Tax
|
2
|
4
|
4
|
|
Net
Earnings from Continuing Operations, If-Converted
|
1,228
|
1,314
|
724
|
|
Discontinued
Operations - Net of Tax
|
110
|
-
|
425
|
|
Net
Earnings, If-Converted
|
1,338
|
1,314
|
1,149
|
|
Interest
Expense on Convertible Debt - Net of Tax
|
(2)
|
(4)
|
(4)
|
|
Net
Earnings
|
$ 1,336
|
$ 1,310
|
$ 1,145
|
|
Denominator
(Thousands):
|
||||
Average
Common Shares Outstanding
|
430,270
|
440,084
|
432,851
|
|
Convertible
Debt
|
11,469
|
19,456
|
19,456
|
|
Stock
Options
(a)
|
5,010
|
6,057
|
2,811
|
|
Other
Potentially Dilutive Common Shares
|
1,531
|
337
|
929
|
|
Average
Common Shares Outstanding, Assuming Dilution
|
448,280
|
465,934
|
456,047
|
|
Earnings
Per Share:
|
||||
Income
from Continuing Operations
|
$ 2.85
|
$ 2.98
|
$ 1.67
|
|
Discontinued
Operations
|
0.26
|
-
|
0.98
|
|
Net
Earnings
|
$ 3.11
|
$ 2.98
|
$ 2.65
|
|
Earnings
Per Share, Assuming Dilution:
|
||||
Income
from Continuing Operations
|
$ 2.74
|
$ 2.82
|
$ 1.59
|
|
Discontinued
Operations
|
0.25
|
-
|
0.93
|
|
Net Earnings |
$
2.99
|
$
2.82
|
$
2.52
|
(a)
|
In calculating diluted
earnings per share, SFAS 128, Earnings Per Share requires the Company to
include the potential shares that would be outstanding if all outstanding
stock options were exercised. This is offset by shares the
Company could repurchase using the proceeds from these hypothetical
exercises. This number is different from outstanding stock
options, which is included in Note 4, Stock Plans and Share-Based
Compensation
.
|
|
·
|
convertible
debt;
|
|
·
|
employee
stock options; and
|
|
·
|
other
equity awards, which include unvested restricted stock and long-term
incentive awards.
|
December
28,
|
||
Common
Stock, $1 Par Value
|
2007
|
|
(in
Thousands)
|
||
Common
shares authorized
|
600,000
|
|
Common
shares issued and outstanding
|
407,864
|
|
Preferred
Stock
|
||
Preferred
shares authorized
|
25,000
|
|
Preferred
shares issued and outstanding
|
-
|
Fiscal
Years
|
||||
(Dollars
in Millions)
|
2007
|
2006
|
2005
|
|
Share-Based
Compensation Expense
|
$ 73
|
$ 45
|
$ 39
|
|
Income
Tax Benefit
|
27
|
17
|
14
|
Fiscal
Year
|
||
(Dollars
in Millions, Except Per Share Amounts)
|
2005
|
|
Net
Earnings - As Reported
|
$ 1,145
|
|
Add: Stock-Based
Employee Compensation Expense
|
||
Included
in Reported Net Income - Net of Tax
|
25
|
|
Deduct: Total
Stock-Based Employee Compensation
|
||
Expense
Determined under the Fair Value Based Method
|
||
for
all Awards - Net of Tax
|
(29)
|
|
Pro
Forma Net Earnings
|
$ 1,141
|
|
Interest
Expense on Convertible Debt - Net of Tax
|
4
|
|
Pro
Forma Net Earnings, If-Converted
|
$ 1,145
|
|
Earnings
Per Share:
|
||
Basic
- As Reported
|
$ 2.65
|
|
Basic
- Pro Forma
|
$ 2.64
|
|
Diluted
- As Reported
|
$ 2.52
|
|
Diluted
- Pro Forma
|
$ 2.51
|
Fiscal
Years
|
|||||||||||
2007
|
2006
|
2005
|
|||||||||
Weighted-
|
Weighted-
|
Weighted- | |||||||||
Options
|
Average
|
Options
|
Average
|
Options
|
Average
|
||||||
Outstanding
|
Exercise
|
Outstanding
|
Exercise
|
Outstanding
|
Exercise
|
||||||
(000s)
|
Price
|
(000s)
|
Price
|
(000s)
|
Price
|
||||||
Outstanding
at Beginning of
Year
|
19,420
|
$ 18.96
|
34,151
|
$ 20.13
|
41,445
|
$ 19.81
|
|||||
Granted
|
-
|
$ -
|
-
|
$
-
|
-
|
$
-
|
|||||
Expired
or Canceled
|
(44)
|
$ 18.05
|
(101)
|
$ 21.71
|
(1,766)
|
$ 19.99
|
|||||
Exercised
|
(7,605)
|
$ 20.08
|
(14,630)
|
$ 21.76
|
(5,528)
|
$ 17.78
|
|||||
Outstanding
at End of Year
|
11,771
|
$ 18.25
|
19,420
|
$ 18.96
|
34,151
|
$ 20.13
|
|||||
Exercisable
at End of Year
|
9,612
|
$ 18.73
|
12,670
|
$ 19.78
|
15,746
|
$ 21.00
|
Weighted-
|
|||||||
Average
|
Weighted-
|
Aggregate
|
|||||
Number
|
Remaining
|
Average
|
Intrinsic
|
||||
Outstanding
|
Contractual
|
Exercise
|
Value
(a)
|
||||
Exercise
Price
|
(000s)
|
Life
(Years)
|
Price
|
(Millions)
|
|||
Options
Outstanding:
|
|||||||
$10
to $15
|
526
|
2.31
|
$ 12.47
|
$ 16
|
|||
$15
to $20
(b)
|
9,359
|
4.54
|
$ 17.78
|
$ 240
|
|||
$20
to $25
|
1,789
|
1.26
|
$ 21.92
|
$ 38
|
|||
$25
to $30
|
97
|
0.33
|
$ 26.33
|
$ 2
|
|||
Total
|
11,771
|
3.90
|
$ 18.25
|
$ 296
|
|||
Options
Exercisable:
|
|||||||
$10
to $15
|
526
|
2.31
|
$ 12.47
|
$ 16
|
|||
$15
to $20
(b)
|
7,200
|
4.29
|
$ 18.30
|
$ 181
|
|||
$20
to $25
|
1,789
|
1.26
|
$ 21.92
|
$ 38
|
|||
$25
to $30
|
97
|
0.33
|
$ 26.33
|
$ 2
|
|||
Total |
9,612
|
3.58
|
$ 18.73 | $ 237 |
(a)
Aggregate intrinsic value represents the amount employees would have
received if the options were exercised as of December
2007.
|
(b)
The difference between options outstanding and options exercisable is that
a portion of options granted in 2003 have not yet
vested.
|
Fiscal
Years
|
|||
2007
|
2006
|
2005
|
|
Number
of Restricted Stock Awards Outstanding
(Thousands)
|
92
|
220
|
550
|
Weighted
Average Fair Value at Grant Date
|
$ 24.26
|
$ 19.44
|
$ 16.36
|
Restricted
Stock Award Expense
(Millions)
|
$ 1
|
$ 2
|
$
2
|
Fiscal
Years
|
|||
2007
|
2006
|
2005
|
|
Long-term
Incentive Plan Compensation Expense
|
$ 67
|
$ 35
|
$ 75
|
2006
- 2008
|
2007
- 2009
|
|
Plan
Units
|
Plan
Units
|
|
Outstanding
|
Outstanding
|
|
(000s)
|
(000s)
|
|
Unvested
at December 30, 2005
|
-
|
-
|
Granted
in 2006
|
697
|
-
|
Forfeited
in 2006
|
(7)
|
-
|
Unvested
at December 29, 2006
|
690
|
-
|
Granted
in 2007
|
26
|
526
|
Forfeited
in 2007
|
(25)
|
(11)
|
Unvested
at December 28, 2007
|
691
|
515
|
Fiscal
Years
|
||||
2007
|
2006
|
2005
|
||
Shares
Issued to Directors
(Thousands)
|
68
|
70
|
74
|
|
Expense
(Millions)
|
$ 3
|
$ 3
|
$ 2
|
Fiscal
Years
|
||||
2007
|
2006
|
2005
|
||
Number
of Shares Available for Issuance
(Thousands)
|
10,906
|
10,642
|
10,295
|
|
·
|
Fixed Assets
Damages
- CSX is entitled to the current replacement cost of the
damaged assets. The Company’s bridges and track damaged by
Hurricane Katrina comprised the majority of these types of
losses.
|
|
·
|
Business
Interruption
- The Company is entitled to recover the increased
costs incurred to allow the Company to continue operations and to minimize
the overall business impact to the Company during the period of
indemnity. These increased costs include rerouting and other
costs.
|
|
·
|
Lost Profit
-
The Company is entitled to recover lost profits, net of associated
expenses, during the period of indemnity. The period of indemnity is
defined in the relevant policies of insurance and extends not only through
the date upon which the railroad network was restored to its original
operations, but for such additional time as may be required to
restore revenue to the same level as would have existed had no loss
occurred.
|
NOTE 5. Hurricane
Katrina, continued
|
|
·
|
Fixed Asset
Damages
- The cost estimate was based on the replacement value of
approximately 39 miles of continuous track, six major bridges, numerous
small bridges, signal and communication damage, locomotive repair and
facilities damaged throughout the
region.
|
|
·
|
Incremental
Expenses
- The Company’s incremental expenses relate primarily to
rerouting and other costs. Rerouting costs are costs to move
traffic either through alternative locations on the Company’s network or
on other railroad lines. Other costs include debris removal,
maintenance on equipment damaged by water, supplies, environmental
expenses, maintenance labor and other various
items.
|
|
·
|
Lost Profit
-
The Company estimated the impact on revenue at a location and
customer-specific level.
|
Fiscal
Years
|
||||
(Dollars
in Millions)
|
2007
|
2006
|
2005
|
|
Total
Insurance Proceeds
|
$ 29
|
$ 268
|
$ 70
|
|
Less
Recoverable Losses:
|
||||
Net
book value of fixed asset damage
|
-
|
1
|
41
|
|
Incremental
expense
|
2
|
56
|
72
|
|
Prior
year receivable
|
-
|
43
|
-
|
|
Gain/(Receivable)
|
$ 27
|
$ 168
|
$ (43)
|
Casualty
|
Separation
|
Environmental
|
Other
|
||
(Dollars
in Millions)
|
Reserves
|
Liabilities
|
Reserves
|
Reserves
|
Total
|
Balance
December 31, 2004
|
$ 705
|
$ 155
|
$ 59
|
$ 128
|
$ 1,047
|
Charged
to Expense
|
181
|
-
|
32
|
47
|
260
|
Change
in Estimate
|
(38)
|
-
|
-
|
-
|
(38)
|
Payments
|
(173)
|
(34)
|
(20)
|
(78)
|
(305)
|
Balance
December 30, 2005
|
$ 675
|
$ 121
|
$ 71
|
$ 97
|
$ 964
|
Charged
to Expense
|
143
|
-
|
20
|
48
|
211
|
Payments
|
(181)
|
(16)
|
(20)
|
(52)
|
(269)
|
Reclassifications
(a)
|
-
|
15
|
-
|
-
|
15
|
Balance
December 29, 2006
|
$ 637
|
$ 120
|
$ 71
|
$ 93
|
$ 921
|
Charged
to Expense
(b)
|
141
|
-
|
76
|
79
|
296
|
Change
in Estimate
|
(99)
|
-
|
-
|
-
|
(99)
|
Payments
(b)
|
(133)
|
(17)
|
(47)
|
(50)
|
(247)
|
Balance
December 28, 2007
|
$ 546
|
$ 103
|
$ 100
|
$ 122
|
$ 871
|
(a)
|
The
reclassifications in 2006 were reclassified from Labor and Fringe Benefits
Payable.
|
(b)
|
Charges
to expense and payments for environmental reserves were higher in 2007
primarily due to clean-up costs associated with an increase in significant
train accidents.
|
December
28, 2007
|
December
29, 2006
|
|||||||
(Dollars
in Millions)
|
Current
|
Long-term
|
Total
|
Current
|
Long-term
|
Total
|
||
Casualty
|
$ 157
|
$ 389
|
$ 546
|
$ 172
|
$ 465
|
$ 637
|
||
Separation
|
16
|
87
|
103
|
20
|
100
|
120
|
||
Environmental
|
42
|
58
|
100
|
26
|
45
|
71
|
||
Other
|
32
|
90
|
122
|
35
|
58
|
93
|
||
Total
|
$ 247
|
$ 624
|
$ 871
|
$ 253
|
$ 668
|
$ 921
|
|
·
|
An
estimate is computed using a ratio of Company employee data to national
employment for select years during the period 1938-2001. The
Company uses railroad industry historical census data because it does not
have detailed employment records in order to compute the population of
potentially exposed employees.
|
|
·
|
The
projected incidence of disease is estimated based on epidemiological
studies using employees’ age and the duration and intensity of potential
exposure while employed. Epidemiology is the medical science
that deals with the incidence, distribution and control of diseases in a
population.
|
|
·
|
An
estimate of the future anticipated claims filing rate by type of disease
(non-malignant, cancer and mesothelioma) is computed using the Company’s
average historical claim filing rates for a three-year calibration period,
excluding a surge in claims originating in West Virginia. In
2006, the Company received 852 asbestos claims in West Virginia in which
the claimants were neither exposed in West Virginia nor residents of the
state. CSX believes these claims will
not have merit as
no medical evidence has been provided to substantiate the claims and
therefore CSX has excluded them from the calibration
period. Claim levels in 2007 returned to expected levels and
management feels this calibration period represents the best estimate of
future filing rates.
|
|
·
|
An
estimate of the future anticipated dismissal rate by type of claim is
computed using the Company’s historical average dismissal rates observed
during the current calibration period noted
above.
|
|
·
|
An
estimate of the future anticipated settlement by type of disease is
computed using the Company’s historical average of dollars paid per claim
for pending and future claims using the average settlement by type of
incident observed during the current calibration period noted
above.
|
December
28,
|
December
29,
|
||
(Dollars
in Millions)
|
2007
|
2006
|
|
Asbestos:
|
|||
Incurred
but not reported claims
|
54
|
52
|
|
Asserted
claims
|
75
|
69
|
|
Total
liability
|
129
|
121
|
|
Current
liability
|
15
|
30
|
|
·
|
An
estimate of the potentially exposed population for other occupational
diseases is calculated by projecting active versus retired workforce from
2002 to 2010 using a growth rate projection for overall railroad
employment made by the Railroad Retirement Board in its June 2003
report.
|
|
·
|
An
estimate of the future anticipated claims filing rate by type of injury,
employee type and active versus retired employee is computed using the
Company’s average historical claim filing rates for the calibration
periods management felt were representative of future filing
rates. For carpal tunnel and repetitive stress injuries, the
current calibration period is a 1-year average of claim
filings. Hearing loss uses a 3-year calibration period, and all
other diseases or injuries use a 2-year calibration period. An
estimate is made to forecast future claims by using the filing rates by
disease and the active and retired Company population each
year.
|
|
·
|
An
estimate of the future anticipated settlement by type of injury is
computed using the Company’s historical average of dollars paid per claim
for pending and future claims using the average settlement by type of
injury observed during a period that management feels is representative of
future settlement amounts.
|
December
28,
|
December
29,
|
||
(Dollars
in Millions)
|
2007
|
2006
|
|
Other
Occupational:
|
|||
Incurred
but not reported claims
|
47
|
53
|
|
Asserted
claims
|
32
|
39
|
|
Total
liability
|
79
|
92
|
|
Current
liability
|
29
|
30
|
Fiscal
Years
|
||
2007
|
2006
|
|
Asserted
Claims
|
||
Open
Claims - Beginning of Year
|
11,116
|
10,639
|
New
Claims Filed
|
930
|
1,504
|
Claims
Settled
|
(553)
|
(767)
|
Claims
Dismissed
|
(505)
|
(260)
|
Open
Claims - End of Year
|
10,988
|
11,116
|
(Dollars
in millions)
|
|||
Operating
|
Sublease
|
Net
Lease
|
|
Years
|
Leases
|
Income
|
Commitments
|
2008
|
$ 160
|
$ 48
|
$ 112
|
2009
|
140
|
37
|
103
|
2010
|
119
|
31
|
88
|
2011
|
90
|
17
|
73
|
2012
|
75
|
21
|
54
|
Thereafter
|
264
|
74
|
190
|
Total
|
$ 848
|
$ 228
|
$ 620
|
Fiscal
Years
|
|||
(Dollars
in Millions)
|
2007
|
2006
|
2005
|
Rent
Expense on Operating Leases
|
$ 451
|
$ 514
|
$ 523
|
Fiscal
Years
|
|||
(Dollars
in Millions)
|
2007
|
2006
|
2005
|
Amounts
Paid
|
$ 217
|
$ 183
|
$ 170
|
Payments
|
|
(Dollars
in Millions)
|
|
2008
|
446
|
2009
|
423
|
2010
|
258
|
2011
|
266
|
2012
|
275
|
Thereafter
|
4,773
|
Total
|
$ 6,441
|
Payments
|
|
(Dollars
in Millions)
|
|
2008
|
$ 175
|
2009
|
126
|
2010
|
68
|
2011
|
19
|
2012
|
13
|
2013
- 2031
|
-
|
Total
|
$ 401
|
|
·
|
Guarantee
of approximately $61 million of obligations of a former subsidiary, CSX
Energy, in connection with a sale-leaseback transaction. CSX is, in
turn, indemnified by several subsequent owners of the subsidiary against
payments made with respect to this guarantee. Management does not
expect that the Company will be required to make any payments under this
guarantee for which CSX will not be reimbursed. CSX’s obligation for this
guarantee will be completed in
2012.
|
|
·
|
Guarantee
of approximately $11 million of lease commitments assumed by A.P.
Moller-Maersk (“Maersk”) for which CSX is contingently liable. CSX
believes Maersk will fulfill its contractual commitments with respect to
such lease commitments and CSX will have no further liability for those
obligations. CSX’s obligation under this guarantee will be
completed in 2011.
|
Summary
of Participants
|
|||
as
of January 1, 2007
|
|||
Pension
Plans
|
Post-retirement
Medical Plan
|
||
Active
Employees
|
7,228
|
3,675
|
|
Retirees
and Beneficiaries
|
10,943
|
10,412
|
|
Other
(a)
|
5,182
|
270
|
|
Total
|
23,353
|
14,357
|
|
(a)
For pension plans, the other category consists of terminated but vested
former employees. For post-retirement plans, the other category
consists of employees on long-term disability that have not yet
retired.
|
|
·
|
service
cost (benefits attributed to employee service during the
period);
|
|
·
|
interest
cost (interest on the liability due to the passage of
time);
|
|
·
|
actuarial
gains/losses (experience during the year different from that assumed and
changes in plan assumptions); and
|
|
·
|
benefits
paid to participants.
|
Expected
Cash Flows
|
|||
(Dollars
in Millions)
|
Pension Benefits
|
Post-retirement
Benefits
(a)
|
|
2008
|
$
146
|
$
45
|
|
2009
|
145
|
44
|
|
2010
|
148
|
42
|
|
2011
|
150
|
41
|
|
2012
|
152
|
39
|
|
Thereafter
|
789
|
169
|
|
Total
|
$
1,530
|
$
380
|
(a)
The post-retirement benefit payments include an estimated annual reduction
of $6 million due to the Medicare Part D
Subsidy.
|
September
30, 2007
|
September
30, 2006
|
||||||
Percent
of
|
Percent
of
|
||||||
(Dollars
in Millions)
|
Amount
|
Total
Assets
|
Amount
|
Total
Assets
|
|||
Common
Stocks
|
$ 964
|
60
|
%
|
$ 900
|
60
|
%
|
|
Fixed
Income
|
626
|
39
|
598
|
39
|
|||
Cash
and Cash Equivalents
|
17
|
1
|
13
|
1
|
|||
Total
|
$ 1,607
|
100
|
%
|
$ 1,511
|
100
|
%
|
Pension
Benefits
|
Post-retirement
Benefits
|
|||||
Plan
Year
|
Plan
Year
|
Plan
Year
|
Plan
Year
|
|||
(Dollars
in Millions)
|
2007
|
2006
|
2007
|
2006
|
||
Actuarial
Present Value of Benefit Obligation
|
||||||
Accumulated
Benefit Obligation
|
$ 1,935
|
$ 1,946
|
N/A
|
N/A
|
||
Projected
Benefit Obligation
|
2,067
|
2,078
|
$ 404
|
$ 398
|
||
Change
in Projected Benefit Obligation
|
||||||
Projected
Benefit Obligation at
Beginning of the
Plan Year
|
$ 2078 | $ 2082 | $ 398 | $ 444 | ||
Service
Cost
|
33
|
36
|
6
|
7
|
||
Interest
Cost
|
115
|
105
|
21
|
21
|
||
Plan
Participants' Contributions
|
-
|
-
|
16
|
16
|
||
Actuarial
(Gain)/Loss
|
(13)
|
1
|
22
|
(35)
|
||
Benefits
Paid
|
(146)
|
(146)
|
(59)
|
(55)
|
||
Benefit
Obligation at End of Plan Year
|
$ 2,067
|
$ 2,078
|
$ 404
|
$ 398
|
||
Change
in Plan Assets:
|
||||||
Fair
Value of Plan Assets at Beginning of the Plan Year
|
$ 1,511 | $ 1,536 | $ - | $ - | ||
Actual
Return on Plan Assets
|
186
|
99
|
-
|
-
|
||
Qualified
Employer Contributions
|
42
|
9
|
-
|
-
|
||
Non-qualified
Employer Contributions
|
14
|
13
|
43
|
39
|
||
Plan
Participants' Contributions
|
-
|
-
|
16
|
16
|
||
Benefits
Paid
|
(146)
|
(146)
|
(59)
|
(55)
|
||
Fair
Value of Plan Assets at End of Plan Year
|
$ 1,607
|
$ 1,511
|
$
-
|
$ -
|
||
|
||||||
Funded
Status at September 30, 2007
|
$
(460)
|
$ (567)
|
$
(404)
|
$
(398)
|
Pension
Benefits
|
Post-retirement
Benefits
|
|||||
December
28,
|
December
29,
|
December
28,
|
December
29,
|
|||
(Dollars
in Millions)
|
2007
|
2006
|
2007
|
2006
|
||
Funded
Status at September 30, 2007
|
$ (460)
|
$ (567)
|
$ (404)
|
$ (398)
|
||
Fourth
Quarter Activity:
|
||||||
Qualified
Employer Contributions
(a)
|
245
|
21
|
-
|
-
|
||
Non-qualified
Employer Contributions
|
4
|
3
|
-
|
-
|
||
Net
Post-retirement Benefits Paid
|
-
|
-
|
10
|
10
|
||
Ending
Net Funded Status
|
$ (211)
|
$ (543)
|
$ (394)
|
$ (388)
|
(a)
|
During
fiscal 2007, CSX made contributions of $266 million to its qualified
defined benefit pension plans. The components of this include
the $245 million of contributions made in fourth quarter 2007 plus $42
million of contributions made during the 2007 plan year (October 1, 2006
through September 30, 2007) as noted on page 104 less $21 million of
contributions made during fourth quarter
2006.
|
Pension
Benefits
|
Post-retirement
Benefits
|
|||||
December
28,
|
December
29,
|
December
28,
|
December
29,
|
|||
(Dollars
in Millions)
|
2007
|
2006
|
2007
|
2006
|
||
Amounts
Recorded in Consolidated Balance Sheets:
|
||||||
Pension
Assets
|
$ 4
|
$ -
|
$ -
|
$ -
|
||
Current
Liability
|
(12)
|
(14)
|
(45)
|
(43)
|
||
Long-term
Liability
|
(203)
|
(529)
|
(349)
|
(345)
|
||
Net
Amount Recognized in
|
||||||
Consolidated
Balance Sheet
|
$ (211)
|
$ (543)
|
$ (394)
|
$ (388)
|
Aggregate
|
Aggregate
|
|
Fair
Value
|
Projected
|
|
Benefit
Obligations in Excess of Plan Assets
|
of
Plan Assets
|
Benefit
Obligation
|
Projected
benefit obligation
|
$1.8
billion
|
($2
billion)
|
Accumulated
benefit obligation
|
$51
million
|
($219
million)
|
Pension
Benefits
|
Post-retirement
Benefits
|
||||||
Fiscal
Years
|
Fiscal
Years
|
||||||
(Dollars
in Millions)
|
2007
|
2006
|
2005
|
2007
|
2006
|
2005
|
|
Service
Cost
|
$ 33
|
$ 36
|
$ 34
|
$ 6
|
$ 7
|
$ 8
|
|
Interest
Cost
|
115
|
105
|
107
|
21
|
21
|
24
|
|
Expected
Return on Plan Assets
|
(118)
|
(117)
|
(120)
|
-
|
-
|
-
|
|
Amortization
of Prior Service Cost
|
3
|
4
|
4
|
(5)
|
(5)
|
(5)
|
|
Amortization
of Net Loss
|
31
|
34
|
21
|
3
|
7
|
13
|
|
Net
Periodic Benefit Expense
|
$ 64
|
$ 62
|
$ 46
|
$ 25
|
$ 30
|
$ 40
|
Pension
Benefits
|
Post-retirement
Benefits
|
||||||||
Components
of Other
|
December
|
December
|
December
|
December
|
|||||
Comprehensive
Income (Loss)
|
2007
|
2006
|
2007
|
2006
|
|||||
(Dollars
in Millions)
|
|||||||||
Recognized
in the balance sheet
|
|||||||||
Gains
(Losses)
(a)
|
$ 111
|
$ (62)
|
$ (18)
|
$ (71)
|
|||||
Prior
service costs
|
4
|
19
|
5
|
(8)
|
|||||
(Income)
Expense recognized in the income statement
|
|||||||||
Amortization
of net loss
(b)
|
31
|
34
|
3
|
7
|
|||||
Amortization
of prior service cost
(c)
|
3
|
4
|
(5)
|
(5)
|
(a)
|
Prior
year losses are primarily due to the adoption of SFAS 158. For
additional information, see Note 1, Nature of Operations and Significant
Accounting Policies.
|
(b)
|
The
estimated amount to be expensed for 2008 is $23 million and $6 million for
pension benefits and post- retirement benefits,
respectively.
|
(c)
|
The
estimated amount to be expensed for prior service costs for 2008 is $3
million and $(3) million for pension benefits and post-retirement
benefits, respectively.
|
Post-retirement
|
|||
Pension
Benefits
|
Benefits
|
||
(Gains)/Losses
|
$ 351
|
$ 89
|
|
Prior
Service Costs
|
16
|
(3)
|
|
Total
|
$ 367
|
$ 86
|
Pension
Benefits
|
Post-retirement
Benefits
|
|||||
2007
|
2006
|
2007
|
2006
|
|||
Expected
Long-term Return on Plan Assets:
|
||||||
Benefit
Cost for Plan Year
|
8.50%
|
8.50%
|
N/A
|
N/A
|
||
Benefit
Obligation at End of Plan Year
|
8.50%
|
8.50%
|
N/A
|
N/A
|
||
Discount
Rates:
|
||||||
Benefit
Cost for Plan Year
|
5.75%
|
5.25%
|
5.50%
|
5.00%
|
||
Benefit
Obligation at End of Plan Year
|
6.00%
|
5.75%
|
5.75%
|
5.50%
|
||
Salary
Scale Inflation
|
4.10%
|
4.10%
|
4.10%
|
4.10%
|
Post-retirement
Benefits
|
||||
2007
|
2006
|
|||
Health
Care Cost Trend Rate
|
||||
Components
of Benefit Cost: Non-Medicare Eligible
|
10%
|
11%
|
||
Components
of Benefit Cost: Medicare Eligible
|
11%
|
12%
|
||
Benefit
Obligations: Non-Medicare Eligible
|
9%
|
10%
|
||
Benefit
Obligations: Medicare Eligible
|
10%
|
11%
|
Average
|
|||||
Interest
|
|||||
Rates
at
|
|||||
December
28,
|
December
28,
|
December
29,
|
|||
(Dollars
in Millions)
|
Maturity
|
2007
|
2007
|
2006
|
|
Notes
|
2008-2043
|
6.5%
|
$ 6,291
|
$ 4,924
|
|
Convertible
Debentures, net of $23 and
|
|||||
$75
discount, respectively
|
2021
|
2.1%
|
151
|
473
|
|
Equipment
Obligations
|
2008-2023
|
6.6%
|
738
|
446
|
|
Other
Obligations, Including Capital Leases
|
2008-2015
|
6.4%
|
75
|
111
|
|
Total
Long-term Debt (including current portion)
|
7,255
|
5,954
|
|||
Less
Debt Due within One Year
|
(785)
|
(592)
|
|||
Total
Long-term Debt (excluding current portion)
|
$ 6,470
|
$ 5,362
|
Notes
|
Principal
Amount Issued
|
(Dollars
in Millions)
|
|
CSXT
6.251% Notes due 2023 (See Note 19)
(a)
|
$
381
|
CSX
5.75% Notes due 2013
|
400
|
CSX
6.25% Notes due 2018
|
600
|
CSX
5.60% Notes due 2017
|
300
|
CSX
6.15% Notes due 2037
|
700
|
$
2,381
|
December
|
December
|
|||
(Dollars
in Millions)
|
2007
|
2006
|
||
Short-term
Debt
|
$
2
|
$
8
|
||
Weighted
Average Interest Rates
|
5.57%
|
6.07%
|
Maturities
as
|
||||
(Dollars
in Millions)
|
of
December
|
|||
Fiscal Years Ending
|
2007
|
|||
2008
|
$ 785
|
|||
2009
|
305
|
|||
2010
|
92
|
|||
2011
|
591
|
|||
2012
|
493
|
|||
2013
and Thereafter
|
4,989
|
|||
Total
Long-term Debt Maturities (including current portion)
|
$ 7,255
|
December
28,
|
December
29,
|
|||||||
(Dollars
in Billions)
|
2007
|
2006
|
||||||
Long-term
Debt Including Current Maturities:
|
||||||||
Fair
Value
|
$ 7.4
|
$ 6.6
|
||||||
Carrying
Value
|
$ 7.3
|
$ 6.0
|
Fiscal
Years
|
||||
(Dollars
in Millions)
|
2007
|
2006
|
2005
|
|
Interest
Income
(a)
|
$ 55
|
$ 41
|
$ 38
|
|
Income
from Real Estate and Resort Operations
(b)
|
42
|
24
|
85
|
|
Gain
on Conrail Property (After Tax)
(c)
|
-
|
26
|
-
|
|
Miscellaneous
(d)
|
(4)
|
4
|
(22)
|
|
Total
Other Income - Net
|
$ 93
|
$ 95
|
$ 101
|
|
Gross
revenue from Real Estate and Resort
|
||||
Operations
included above
|
$ 211
|
$ 193
|
$ 262
|
(a)
|
Interest
income includes amounts earned from CSX’s cash, cash equivalents and
short-term investments.
|
(b)
|
Income
from real estate and resort operations includes the results of operations
of the Company’s real estate sales, leasing, acquisition and management
and development activities as well as the results of operations from CSX
Hotels, Inc., a resort doing business as The Greenbrier, located in White
Sulphur Springs, West Virginia. Results of these operations may
fluctuate as a function of timing of real estate sales and resort
seasonality.
|
(c)
|
Gain
on Conrail property represents a non-cash gain on additional Conrail
property value received in 2006.
|
(d)
|
Miscellaneous
income is comprised of equity earnings, minority interest, investment
gains and losses and other non-operating
activities.
|
December
28, 2007
|
December
29, 2006
|
||||||
Accumulated
|
Accumulated
|
||||||
(Dollars
in Millions)
|
Cost
|
Depreciation
|
Net
|
Cost
|
Depreciation
|
Net
|
|
Road
|
$ 20,522
|
$ 3,564
|
$ 16,958
|
$ 19,741
|
$ 3,342
|
$ 16,399
|
|
Equipment
|
6,951
|
2,829
|
4,122
|
6,567
|
2,666
|
3,901
|
|
Intermodal
|
612
|
349
|
263
|
559
|
321
|
238
|
|
Other
|
914
|
477
|
437
|
848
|
463
|
385
|
|
Total
Properties
|
$ 28,999
|
$ 7,219
|
$ 21,780
|
$ 27,715
|
$ 6,792
|
$ 20,923
|
December
28,
|
December
29,
|
|||
(Dollars
in Millions)
|
2007
|
2006
|
||
Available
for Sale Securities
(a)
|
$ 75
|
$ 44
|
||
Goodwill
(b)
|
64
|
73
|
||
Real
Estate Development Costs
|
42
|
39
|
||
Other
Long-term Assets
|
39
|
54
|
||
Debt
Issuance Costs
|
34
|
30
|
||
Pension
Plan Assets
|
4
|
-
|
||
Deposits
|
1
|
3
|
||
Income
Taxes Receivable
(c)
|
-
|
348
|
||
Total
Other Long-term Assets
|
$ 259
|
$ 591
|
(a)
|
Available
for Sale Securities include investments in marketable
securities.
|
(b)
|
Goodwill
represents the purchase price in excess of fair value of identifiable
tangible and intangible assets.
|
(c)
|
Income
Taxes Receivable in 2006 included amounts on deposit with the Internal
Revenue Service (“IRS”), bonds and other unpaid claims of income
taxes.
In
2007, the decrease was due to the Company applying its amounts on deposit
with the IRS towards its 2007 tax
obligations.
|
December
28,
|
December
29,
|
|||
(Dollars
in Millions)
|
2007
|
2006
|
||
Post-retirement
Benefit Liability
(a)
|
$ 349
|
$ 345
|
||
Pension
Plan Liability
(a)
|
203
|
529
|
||
Deferred
Gains
|
181
|
200
|
||
Accrued
Deferred Compensation
|
90
|
90
|
||
Other
Long-term Liabilities
|
81
|
95
|
||
Deferred
Lease Payments
|
40
|
53
|
||
Minority
Interest
(b)
|
21
|
89
|
||
Accrued
Sick Leave
|
16
|
19
|
||
Income
Taxes Payable
(c)
|
7
|
105
|
||
Total
Other Long-term Liabilities
|
$ 988
|
$ 1,525
|
(a) See
Note 8, Employee Benefit Plans, for a discussion on changes in pension and
post-retirement benefit
liabilities.
|
(b)
Minority Interest decreased as a result of a change to a shareholder
agreement at one of CSXT’s partially owned subsidiaries. CSXT
now has greater participation in the subsidiary’s earnings resulting in a
decrease to the minority interest liability and an increase in additional
paid in capital.
|
(c) Income
taxes payable decreased primarily due to amounts being reclassified to
current.
|
2007
|
2006
|
|||||
(Dollars
in Millions)
|
Assets
|
Liabilities
|
Assets
|
Liabilities
|
||
Employee
Benefit Plans
|
$ 404
|
$ -
|
$ 498
|
$ -
|
||
Accelerated
Depreciation
|
-
|
6,541
|
-
|
6,464
|
||
Other
|
447
|
152
|
580
|
473
|
||
Total
|
$ 851
|
$
6,693
|
$ 1,078
|
$ 6,937
|
||
Net
Deferred Tax Liabilities
|
$
5,842
|
$ 5,859
|
|
·
|
Annual
provision for deferred income tax
expense;
|
|
·
|
Accumulated
other comprehensive loss and other capital adjustments;
and
|
|
·
|
The
reclassification of income taxes payable balances as required by FIN
48.
|
(Dollars
in Millions)
|
Fiscal
Years
|
|||
Current:
|
2007
|
2006
|
2005
|
|
Federal
|
$ 388
|
$ 458
|
$ 350
|
|
State
|
46
|
31
|
12
|
|
Total
Current
|
434
|
489
|
362
|
|
Deferred:
|
||||
Federal
|
237
|
15
|
33
|
|
State
|
35
|
27
|
(79)
|
|
Total
Current
|
272
|
42
|
(46)
|
|
Total
|
$ 706
|
$ 531
|
$ 316
|
Fiscal
Years
|
||||||||||
(Dollars
In Millions)
|
2007
|
2006
|
2005
|
|||||||
Federal
Income Taxes
|
$ 676
|
35
|
%
|
$ 644
|
35
|
%
|
$ 362
|
35
|
%
|
|
State
Income Taxes
|
50
|
3
|
37
|
2
|
(44)
|
(4)
|
||||
Prior
Year Audit Resolutions
|
5
|
-
|
(132)
|
(7)
|
(1)
|
-
|
||||
Other
Items
(a)
|
(25)
|
( 1)
|
(18)
|
(1)
|
(1)
|
(1)
|
||||
Income
Tax Expense/Rate
|
$ 706
|
37
|
%
|
$ 531
|
29
|
%
|
$ 316
|
30
|
%
|
(a)
Other items primarily include tax impacts from equity in Conrail and other
partially owned subsidiaries’
earnings.
|
Uncertain
Tax Positions:
|
Fiscal
Year
|
(Dollars
in Millions)
|
2007
|
Beginning
Balance
|
$
207
|
Additions
based on tax positions related to current year
|
1
|
Settlements
with IRS
|
(148)
|
Lapse
of statute of limitations
|
(2)
|
Balance
at December 28, 2007
|
$
58
|
Fiscal
Years
|
|||||
(Dollars
in Millions)
|
2007
|
2006
|
2005
|
||
Revenue
from External Customers:
|
|||||
Rail
|
$ 8,674
|
$ 8,154
|
$ 7,256
|
||
Intermodal
|
1,356
|
1,412
|
1,362
|
||
Consolidated
|
$ 10,030
|
$ 9,566
|
$ 8,618
|
||
Operating
Income:
|
|||||
Rail
|
$ 1,991
|
$ 1,858
|
$ 1,301
|
||
Intermodal
|
260
|
268
|
248
|
||
Other
|
5
|
12
|
1
|
||
Consolidated
|
$ 2,256
|
$ 2,138
|
$ 1,550
|
||
Assets:
|
|||||
Rail
|
$ 24,179
|
$ 24,077
|
$ 23,182
|
||
Intermodal
|
283
|
276
|
305
|
||
Other
|
25
|
43
|
123
|
||
Investment
in Conrail
|
639
|
607
|
603
|
||
Elimination
of Intersegment Payables (Receivables)
|
(62)
|
(78)
|
(77)
|
||
Non-segment
Assets
|
470
|
204
|
96
|
||
Consolidated
|
$ 25,534
|
$ 25,129
|
$ 24,232
|
||
Depreciation
Expense:
|
|||||
Rail
|
$ 848
|
$ 818
|
$ 779
|
||
Intermodal
|
34
|
38
|
39
|
||
Other
|
1
|
1
|
8
|
||
Consolidated
|
$ 883
|
$ 857
|
$ 826
|
||
Property
Additions:
|
|||||
Rail
|
$ 1,678
|
$ 1,592
|
$ 1,091
|
||
Intermodal
|
60
|
28
|
25
|
||
Other
|
-
|
-
|
5
|
||
Non-Segment
|
35
|
19
|
15
|
||
Consolidated
|
$ 1,773
|
$ 1,639
|
$ 1,136
|
Fiscal
Years
|
||||||
(Dollars
in Millions)
|
2007
|
2006
|
2005
|
|||
Rents,
Fees and Services
|
$ 97
|
$ 91
|
$ 97
|
|||
Purchase
Price Amortization and Other
|
4
|
4
|
4
|
|||
Equity
in Income of Conrail
|
(35)
|
(20)
|
(36)
|
|||
Total
Conrail Rents, Fees and Services
|
$ 66
|
$ 75
|
$ 65
|
Fiscal
Year
|
||
(Dollars
in Millions)
|
2005
|
|
Income
Statement Information:
|
||
Revenues
|
$ 14
|
|
Expenses
|
21
|
|
Operating
Income (Loss)
|
$ (7)
|
|
Income
Tax Benefit
|
4
|
|
Net
Income
|
$ (3)
|
2007
|
||||||
Quarters
|
||||||
(Dollars
in Millions, Except Per Share Amounts)
|
1st
(a)
|
2nd
|
3rd
(b)
|
4th
(c)
|
Full
Year
|
|
Operating
Revenue
|
$ 2,422
|
$ 2,530
|
$ 2,501
|
$ 2,577
|
$ 10,030
|
|
Operating
Income
|
488
|
604
|
555
|
609
|
2,256
|
|
Earnings
from Continuing Operations
|
240
|
324
|
297
|
365
|
1,226
|
|
Discontinued
Operations
|
-
|
-
|
110
|
-
|
110
|
|
Net
Earnings
|
$ 240
|
$ 324
|
$ 407
|
$ 365
|
$ 1,336
|
|
Earnings
Per Share:
|
||||||
From
Continuing Operations
|
$ 0.55
|
$ 0.74
|
$ 0.69
|
$ 0.89
|
$ 2.85
|
|
Discontinued
Operations
|
-
|
-
|
0.25
|
-
|
0.26
|
|
Net
Earnings
|
$ 0.55
|
$ 0.74
|
$ 0.94
|
$ 0.89
|
$ 3.11
|
|
Earnings
Per Share Assuming Dilution:
|
||||||
From
Continuing Operations
|
$ 0.52
|
$ 0.71
|
$ 0.67
|
$ 0.86
|
$ 2.74
|
|
Discontinued
Operations
|
-
|
-
|
0.24
|
-
|
0.25
|
|
Net
Earnings
|
$ 0.52
|
$ 0.71
|
$ 0.91
|
$ 0.86
|
$ 2.99
|
|
Dividend
Per Share
|
$ 0.12
|
$ 0.12
|
$ 0.15
|
$ 0.15
|
$ 0.54
|
|
2006
|
||||||
Quarters
|
||||||
(Dollars
in Millions, Except Per Share Amounts)
|
1st
|
2nd
(d)
|
3rd
(e)
|
4th
(f)
|
Full
Year
|
|
Operating
Revenue
|
$ 2,331
|
$ 2,421
|
$ 2,418
|
$ 2,396
|
$ 9,566
|
|
Operating
Income
|
496
|
646
|
489
|
507
|
2,138
|
|
Net
Earnings
|
$ 245
|
$ 390
|
$ 328
|
$ 347
|
$ 1,310
|
|
Earnings
Per Share:
|
||||||
Net
Earnings
|
$ 0.56
|
$ 0.88
|
$ 0.75
|
$ 0.79
|
$ 2.98
|
|
Earnings
Per Share Assuming Dilution:
|
||||||
Net
Earnings
|
$ 0.53
|
$ 0.83
|
$ 0.71
|
$ 0.75
|
$ 2.82
|
|
Dividend
Per Share
|
$ 0.065
|
$ 0.065
|
$ 0.10
|
$ 0.10
|
$ 0.33
|
(a)
|
CSX
recognized an $18 million pre-tax benefit on insurance recoveries from
gains related to Hurricane Katrina (See Note 5, Hurricane
Katrina).
|
(b)
|
CSX
recognized an income tax benefit of $110 million principally associated
with the resolution of certain tax matters related to former activities of
the container shipping and marine service businesses (See Note 17,
Discontinued Operations). Additionally, CSX recognized a $1
million pre-tax benefit on insurance recoveries from gains related to
Hurricane Katrina.
|
(c)
|
CSX
recognized an $8 million pre-tax benefit on insurance recoveries from
gains related to Hurricane Katrina.
|
(d)
|
CSX
recognized an income tax benefit of $41 million principally related to the
resolution of certain tax matters. Additionally, CSX recognized
a $126 million pre-tax benefit on insurance recoveries from gains related
to Hurricane Katrina.
|
(e)
|
CSX
recognized an income tax benefit of $69 million, principally related to
the resolution of federal income tax audits for 1994 –
1996. Additionally, CSX recognized a $15 million pre-tax
benefit on insurance recoveries from gains related to Hurricane
Katrina.
|
(f)
|
CSX
recognized an income tax benefit of $41 million, principally related to
the resolution of federal income tax audits for 1997 -
1998. Additionally, CSX recognized a $27 million pre-tax
benefit on insurance recoveries from gains related to Hurricane Katrina
and a $26 million after-tax non-cash gain on additional Conrail property
received.
|
CSX
|
CSX
|
||||
Fiscal
Year Ended December 28, 2007
|
Corporation
|
Transportation
|
Other
|
Eliminations
|
Consolidated
|
Operating
Revenue
|
$ -
|
$ 8,591
|
$ 1,546
|
$ (107)
|
$ 10,030
|
Operating
Expense
|
(203)
|
6,894
|
1,180
|
(97)
|
7,774
|
Operating
Income
|
203
|
1,697
|
366
|
(10)
|
2,256
|
Equity
in Earnings of Subsidiaries
|
1,363
|
-
|
-
|
(1,363)
|
-
|
Other
Income (Expense)
|
166
|
154
|
198
|
(425)
|
93
|
Interest
Expense
|
(568)
|
(238)
|
(46)
|
435
|
(417)
|
Earnings
from Continuing Operations before Income Taxes
|
1,164
|
1,613
|
518
|
(1,363)
|
1,932
|
Income
Tax Benefit (Expense)
|
62
|
(614)
|
(154)
|
-
|
(706)
|
Earnings
from Continuing Operations
|
1,226
|
999
|
364
|
(1,363)
|
1,226
|
Discontinued
Operations - Net of Tax
|
110
|
-
|
-
|
-
|
110
|
Net
Earnings
|
$ 1,336
|
$ 999
|
$ 364
|
$ (1,363)
|
$ 1,336
|
CSX
|
CSX
|
||||
Fiscal
Year Ended December 29, 2006
|
Corporation
|
Transportation
|
Other
|
Eliminations
|
Consolidated
|
Operating
Revenue
|
$ -
|
$ 8,140
|
$ 1,426
|
$ -
|
$ 9,566
|
Operating
Expense
|
(195)
|
6,542
|
1,081
|
-
|
7,428
|
Operating
Income
|
195
|
1,598
|
345
|
-
|
2,138
|
Equity
in Earnings of Subsidiaries
|
1,281
|
-
|
-
|
(1,281)
|
-
|
Other
Income (Expense)
|
283
|
87
|
142
|
(417)
|
95
|
Interest
Expense
|
(536)
|
(217)
|
(56)
|
417
|
(392)
|
Earnings
from Continuing Operations before Income Taxes
|
1,223
|
1,468
|
431
|
(1,281)
|
1,841
|
Income
Tax Benefit (Expense)
|
87
|
(489)
|
(129)
|
-
|
(531)
|
Net
Earnings
|
$ 1,310
|
$ 979
|
$ 302
|
$ (1,281)
|
$ 1,310
|
Fiscal
Year Ended December 30, 2005
|
CSX
Corporation
|
CSX
Transportation
|
Other
|
Eliminations
|
Consolidated
|
Operating
Revenue
|
$ -
|
$ 7,256
|
$ 1,362
|
$ -
|
$ 8,618
|
Operating
Expense
|
(125)
|
6,170
|
1,023
|
-
|
7,068
|
Operating
Income
|
125
|
1,086
|
339
|
-
|
1,550
|
Equity
in Earnings of Subsidiaries
|
946
|
-
|
-
|
(946)
|
-
|
Other
Income (Expense)
|
141
|
56
|
112
|
(208)
|
101
|
Debt
Repurchase Expense
|
(192)
|
-
|
-
|
-
|
(192)
|
Interest
Expense
|
(430)
|
(166)
|
(35)
|
208
|
(423)
|
Earnings
from Continuing Operations before Income Taxes
|
590
|
976
|
416
|
(946)
|
1,036
|
Income
Tax Benefit (Expense)
|
127
|
(289)
|
(154)
|
-
|
(316)
|
Earnings
from Continuing Operations
|
717
|
687
|
262
|
(946)
|
720
|
Discontinued
Operations - Net of Tax
|
428
|
-
|
(3)
|
-
|
425
|
Net
Earnings
|
$ 1,145
|
$ 687
|
$ 259
|
$ (946)
|
$ 1,145
|
CSX
|
CSX
|
||||||
December
28, 2007
|
Corporation
|
Transportation
|
Other
|
Eliminations
|
Consolidated
|
||
ASSETS
|
|||||||
Current
Assets:
|
|||||||
Cash
and Cash Equivalents
|
$ (594)
|
$ 12
|
$ 950
|
$ -
|
$ 368
|
||
Short-term
Investments
|
270
|
-
|
76
|
-
|
346
|
||
Accounts
Receivable - Net
|
155
|
1,069
|
(25)
|
(25)
|
1,174
|
||
Materials
and Supplies
|
-
|
230
|
10
|
-
|
240
|
||
Deferred
Income Taxes
|
23
|
232
|
(1)
|
-
|
254
|
||
Other
Current Assets
|
25
|
103
|
53
|
(72)
|
109
|
||
Total
Current Assets
|
(121)
|
1,646
|
1,063
|
(97)
|
2,491
|
||
Properties
|
6
|
27,606
|
1,387
|
-
|
28,999
|
||
Accumulated
Depreciation
|
(9)
|
(6,400)
|
(810)
|
-
|
(7,219)
|
||
Properties
- Net
|
(3)
|
21,206
|
577
|
-
|
21,780
|
||
Investment
in Conrail
|
-
|
-
|
639
|
-
|
639
|
||
Affiliates
and Other Companies
|
-
|
470
|
(105)
|
-
|
365
|
||
Investment
in Consolidated Subsidiaries
|
14,524
|
-
|
34
|
(14,558)
|
-
|
||
Other
Long-term Assets
|
(330)
|
203
|
442
|
(56)
|
259
|
||
Total
Assets
|
$ 14,070
|
$ 23,525
|
$ 2,650
|
$ (14,711)
|
$ 25,534
|
||
LIABILITIES
AND SHAREHOLDERS' EQUITY
|
|||||||
Current
Liabilities:
|
|||||||
Accounts
Payable
|
$ 90
|
$ 799
|
$ 112
|
$ (25)
|
$ 976
|
||
Labor
and Fringe Benefits Payable
|
36
|
374
|
51
|
-
|
461
|
||
Payable
to Affiliates
|
-
|
1,325
|
(1,253)
|
(72)
|
-
|
||
Casualty,
Environmental and Other Reserves
|
-
|
226
|
21
|
-
|
247
|
||
Current
Maturities of Long-term Debt
|
669
|
111
|
5
|
-
|
785
|
||
Short-term
Debt
|
-
|
2
|
-
|
-
|
2
|
||
Income
and Other Taxes Payable
|
(761)
|
572
|
302
|
-
|
113
|
||
Other
Current Liabilities
|
8
|
72
|
7
|
-
|
87
|
||
Total
Current Liabilities
|
42
|
3,481
|
(755)
|
(97)
|
2,671
|
||
Casualty,
Environmental and Other Reserves
|
-
|
540
|
84
|
-
|
624
|
||
Long-term
Debt
|
5,229
|
1,230
|
11
|
-
|
6,470
|
||
Deferred
Income Taxes
|
(176)
|
6,291
|
(19)
|
-
|
6,096
|
||
Long-term
Payable to Affiliates
|
-
|
-
|
56
|
(56)
|
-
|
||
Other
Long-term Liabilities
|
290
|
541
|
195
|
(38)
|
988
|
||
Total
Liabilities
|
5,385
|
12,083
|
(428)
|
(191)
|
16,849
|
||
Shareholders'
Equity:
|
|||||||
Common
Stock
|
408
|
181
|
-
|
(181)
|
408
|
||
Other
Capital
|
37
|
5,525
|
2,705
|
(8,230)
|
37
|
||
Retained
Earnings
|
8,565
|
5,768
|
421
|
(6,189)
|
8,565
|
||
Accumulated
Other Comprehensive Loss
|
(325)
|
(32)
|
(48)
|
80
|
(325)
|
||
Total
Shareholders' Equity
|
8,685
|
11,442
|
3,078
|
(14,520)
|
8,685
|
||
Total
Liabilities and Shareholders' Equity
|
$ 14,070
|
$ 23,525
|
$ 2,650
|
$ (14,711)
|
$ 25,534
|
CSX
|
CSX
|
||||||
December
29, 2006
|
Corporation
|
Transportation
|
Other
|
Eliminations
|
Consolidated
|
||
ASSETS
|
|||||||
Current
Assets:
|
|||||||
Cash
and Cash Equivalents
|
$ 419
|
$ 17
|
$ 25
|
$ -
|
$ 461
|
||
Short-term
Investments
|
391
|
-
|
48
|
-
|
439
|
||
Accounts
Receivable - Net
|
121
|
1,058
|
27
|
(32)
|
1,174
|
||
Materials
and Supplies
|
-
|
195
|
9
|
-
|
204
|
||
Deferred
Income Taxes
|
(103)
|
225
|
129
|
-
|
251
|
||
Other
Current Assets
|
1
|
50
|
204
|
(112)
|
143
|
||
Total
Current Assets
|
829
|
1,545
|
442
|
(144)
|
2,672
|
||
Properties
|
19
|
26,447
|
1,249
|
-
|
27,715
|
||
Accumulated
Depreciation
|
(24)
|
(6,032)
|
(736)
|
-
|
(6,792)
|
||
Properties
- Net
|
(5)
|
20,415
|
513
|
-
|
20,923
|
||
Investment
in Conrail
|
-
|
-
|
607
|
-
|
607
|
||
Affiliates
and Other Companies
|
-
|
434
|
(71)
|
(27)
|
336
|
||
Investment
in Consolidated Subsidiaries
|
13,199
|
-
|
-
|
(13,199)
|
-
|
||
Other
Long-term Assets
|
2,023
|
415
|
(1,776)
|
(71)
|
591
|
||
Total
Assets
|
$ 16,046
|
$ 22,809
|
$ (285)
|
$ (13,441)
|
$ 25,129
|
||
LIABILITIES
AND SHAREHOLDERS' EQUITY
|
|||||||
Current
Liabilities:
|
|||||||
Accounts
Payable
|
$ 78
|
$ 770
|
$ 157
|
$ (31)
|
$ 974
|
||
Labor
and Fringe Benefits Payable
|
44
|
396
|
55
|
-
|
495
|
||
Payable
to Affiliates
|
-
|
2,019
|
(1,907)
|
(112)
|
-
|
||
Casualty,
Environmental and Other Reserves
|
-
|
226
|
27
|
-
|
253
|
||
Current
Maturities of Long-term Debt
|
467
|
120
|
5
|
-
|
592
|
||
Short-term
Debt
|
-
|
8
|
-
|
-
|
8
|
||
Income
and Other Taxes Payable
|
1,308
|
245
|
(1,439)
|
-
|
114
|
||
Other
Current Liabilities
|
16
|
62
|
9
|
(1)
|
86
|
||
Total
Current Liabilities
|
1,913
|
3,846
|
(3,093)
|
(144)
|
2,522
|
||
Casualty,
Environmental and Other Reserves
|
-
|
599
|
69
|
-
|
668
|
||
Long-term
Debt
|
4,377
|
970
|
15
|
-
|
5,362
|
||
Deferred
Income Taxes
|
(255)
|
6,297
|
68
|
-
|
6,110
|
||
Long-term
Payable to Affiliates
|
-
|
-
|
72
|
(72)
|
-
|
||
Other
Long-term Liabilities
|
1,069
|
636
|
(150)
|
(30)
|
1,525
|
||
Total
Liabilities
|
$ 7,104
|
$ 12,348
|
$ (3,019)
|
$ (246)
|
$ 16,187
|
||
Shareholders'
Equity:
|
|||||||
Common
Stock
|
438
|
181
|
-
|
(181)
|
438
|
||
Other
Capital
|
1,469
|
5,420
|
2,696
|
(8,116)
|
1,469
|
||
Retained
Earnings
|
7,427
|
4,879
|
93
|
(4,972)
|
7,427
|
||
Accumulated
Other Comprehensive Loss
|
(392)
|
(19)
|
(55)
|
74
|
(392)
|
||
Total
Shareholders' Equity
|
8,942
|
10,461
|
2,734
|
(13,195)
|
8,942
|
||
Total
Liabilities and Shareholders' Equity
|
$ 16,046
|
$ 22,809
|
$ (285)
|
$ (13,441)
|
$ 25,129
|
CSX
|
CSX
|
|||||
Fiscal
Year Ended December 28, 2007
|
Corporation
|
Transportation
|
Other
|
Eliminations
|
Consolidated
|
|
Operating
Activities
|
||||||
Net
Cash (Used in) Provided by Operating Activities
|
$ (871)
|
$ 2,278
|
$ 930
|
$ (153)
|
$ 2,184
|
|
Investing
Activities
|
||||||
Property
Additions
|
-
|
(1,632)
|
(141)
|
-
|
(1,773)
|
|
Insurance
Proceeds
|
-
|
16
|
-
|
-
|
16
|
|
Purchases
of Short-term Investments
|
(2,338)
|
-
|
-
|
-
|
(2,338)
|
|
Proceeds
from Sales of Short-term Investments
|
2,459
|
-
|
-
|
-
|
2,459
|
|
Other
Investing Activities
|
512
|
219
|
(780)
|
(8)
|
(57)
|
|
Net
Cash Provided by (Used in) Investing Activities
|
633
|
(1,397)
|
(921)
|
(8)
|
(1,693)
|
|
Financing
Activities
|
||||||
Short-term
Debt - Net
|
-
|
(6)
|
-
|
-
|
(6)
|
|
Long-term
Debt Issued
|
2,000
|
381
|
-
|
-
|
2,381
|
|
Long-term
Debt Repaid
|
(617)
|
(142)
|
(26)
|
-
|
(785)
|
|
Dividends
Paid
|
(236)
|
(120)
|
(27)
|
152
|
(231)
|
|
Stock
Options Exercised
|
153
|
-
|
-
|
-
|
153
|
|
Shares
Repurchased
|
(2,174)
|
-
|
(2,174)
|
|||
Other
Financing Activities
|
99
|
(999)
|
969
|
9
|
78
|
|
Net
Cash (Used in) Provided by Financing Activities
|
(775)
|
(886)
|
916
|
161
|
(584)
|
|
Net
(Decrease) Increase in Cash and Cash Equivalents
|
(1,013)
|
(5)
|
925
|
-
|
(93)
|
|
Cash
and Cash Equivalents at Beginning of Period
|
419
|
17
|
25
|
-
|
461
|
|
Cash
and Cash Equivalents at End of Period
|
$ (594)
|
$ 12
|
$ 950
|
$ -
|
$ 368
|
CSX
|
CSX
|
|||||
Fiscal
Year Ended December 29, 2006
|
Corporation
|
Transportation
|
Other
|
Eliminations
|
Consolidated
|
|
Operating
Activities
|
||||||
Net
Cash Provided by (Used in) Operating Activities
|
$ 789
|
$ 1,794
|
$ 213
|
$ (738)
|
$ 2,058
|
|
Investing
Activities
|
||||||
Property
Additions
|
-
|
(1,554)
|
(85)
|
-
|
(1,639)
|
|
Insurance
Proceeds
|
-
|
144
|
3
|
-
|
147
|
|
Purchases
of Short-term Investments
|
(1,412)
|
-
|
-
|
-
|
(1,412)
|
|
Proceeds
from Sales of Short-term Investments
|
1,290
|
-
|
-
|
-
|
1,290
|
|
Other
Investing Activities
|
(38)
|
(16)
|
45
|
13
|
4
|
|
Net
Cash (Used in) Provided by Investing Activities
|
(160)
|
(1,426)
|
(37)
|
13
|
(1,610)
|
|
Financing
Activities
|
||||||
Short-term
Debt - Net
|
-
|
8
|
(1)
|
-
|
7
|
|
Long-term
Debt Issued
|
400
|
73
|
(2)
|
-
|
471
|
|
Long-term
Debt Repaid
|
(351)
|
(128)
|
(67)
|
-
|
(546)
|
|
Dividends
Paid
|
(148)
|
(130)
|
(30)
|
163
|
(145)
|
|
Stock
Options Exercised
|
319
|
-
|
-
|
-
|
319
|
|
Shares
Repurchased
|
(465)
|
-
|
-
|
-
|
(465)
|
|
Other
Financing Activities
|
11
|
(174)
|
(336)
|
562
|
63
|
|
Net
Cash (Used in) Provided by Financing Activities
|
(234)
|
(351)
|
(436)
|
725
|
(296)
|
|
Net
Increase (Decrease) in Cash and Cash Equivalents
|
395
|
17
|
(260)
|
-
|
152
|
|
Cash
and Cash Equivalents at Beginning of Period
|
24
|
-
|
285
|
-
|
309
|
|
Cash
and Cash Equivalents at End of Period
|
$ 419
|
$ 17
|
$ 25
|
$ -
|
$ 461
|
CSX
|
CSX
|
|||||
Fiscal
Year Ended December 30, 2005
|
Corporation
|
Transportation
|
Other
|
Eliminations
|
Consolidated
|
|
Operating
Activities
|
||||||
Net
Cash (Used in) Provided by Operating Activities
|
$ (637)
|
$ 1,509
|
$ 474
|
$ (236)
|
$ 1,110
|
|
Investing
Activities
|
||||||
Property
Additions
|
-
|
(1,066)
|
(70)
|
-
|
(1,136)
|
|
Insurance
Proceeds
|
-
|
40
|
1
|
-
|
41
|
|
Net
Proceeds from Sale of International Terminals
|
-
|
-
|
1,108
|
-
|
1,108
|
|
Purchase
of Minority Interest in an International
|
||||||
Terminals'
Subsidiary
|
-
|
-
|
(110)
|
-
|
(110)
|
|
Purchases
of Short-term Investments
|
(2,601)
|
-
|
-
|
-
|
(2,601)
|
|
Proceeds
from Sales of Short-term Investments
|
2,634
|
-
|
-
|
-
|
2,634
|
|
Other
Investing Activities
|
1,066
|
(19)
|
(684)
|
(335)
|
28
|
|
Net
Cash Provided by (Used in) Investing Activities
|
1,099
|
(1,045)
|
245
|
(335)
|
(36)
|
|
Financing
Activities
|
||||||
Short-term
Debt - Net
|
(100)
|
-
|
1
|
-
|
(99)
|
|
Long-term
Debt Issued
|
73
|
32
|
-
|
-
|
105
|
|
Long-term
Debt Repaid
|
(1,125)
|
(135)
|
(23)
|
-
|
(1,283)
|
|
Dividends
Paid
|
(95)
|
(200)
|
(33)
|
235
|
(93)
|
|
Stock
Options Exercised
|
98
|
-
|
-
|
-
|
98
|
|
Other
Financing Activities
|
(105)
|
(180)
|
(66)
|
336
|
(15)
|
|
Net
Cash (Used in) Provided by Financing Activities
|
(1,254)
|
(483)
|
(121)
|
571
|
(1,287)
|
|
Net
Increase (Decrease) in Cash and Cash Equivalents
|
(792)
|
(19)
|
598
|
-
|
(213)
|
|
Cash
and Cash Equivalents at Beginning of Period
|
816
|
19
|
(313)
|
-
|
522
|
|
Cash
and Cash Equivalents at End of Period
|
$ 24
|
$ -
|
$ 285
|
$ -
|
$ 309
|
2.1
|
Distribution
Agreement, dated as of July 26, 2004, by and among CSX Corporation, CSX
Transportation, Inc., CSX Rail Holding Corporation, CSX Northeast Holding
Corporation, Norfolk Southern Corporation, Norfolk Southern Railway
Company, CRR Holdings LLC, Green Acquisition Corp., Conrail Inc.,
Consolidated Rail Corporation, New York Central Lines LLC, Pennsylvania
Lines LLC, NYC Newco, Inc. and PRR Newco, Inc. (incorporated herein by
reference to Exhibit 2.1 to the Registrant’s Current Report on Form 8-K
filed with the Commission on September 2,
2004)
|
3.1
|
Amended
and Restated Articles of Incorporation of the Registrant (incorporated
herein by reference to Exhibit 3.1 to the Registrant's Current Report on
Form 8-K filed with the Commission on December 14,
2004)
|
3.1(a)
|
Articles
of Amendment to CSX Corporation’s Amended and Restated Articles of
Incorporation of the Registrant (incorporated herein by reference to
Exhibit 5.03 to the Registrant's Current Report on Form 8-K filed with the
Commission on July 18, 2006)
|
3.2
|
Bylaws
of the Registrant, amended effective as of February 4, 2008 (incorporated
herein by reference to Exhibit 3.2 of the Registrant's Current Report on
Form 8-K filed with the Commission on February 6,
2008)
|
4.1(a)
|
Indenture,
dated August 1, 1990, between the Registrant and The Chase Manhattan Bank,
as Trustee (incorporated herein by reference to the Registrant's Form SE,
dated September 7, 1990, filed with the
Commission)
|
4.1(b)
|
First
Supplemental Indenture, dated as of June 15, 1991, between the Registrant
and The Chase Manhattan Bank, as Trustee (incorporated herein by reference
to Exhibit 4(c) to the Registrant's Form SE, dated May 28, 1992, filed
with the Commission)
|
4.1(c)
|
Second
Supplemental Indenture, dated as of May 6, 1997, between the Registrant
and The Chase Manhattan Bank, as Trustee (incorporated herein by reference
to Exhibit 4.3 to the Registrant's Registration Statement on Form S-4
(Registration No. 333-28523) filed with the Commission on June 5,
1997)
|
4.1(d)
|
Third
Supplemental Indenture, dated as of April 22, 1998, between the Registrant
and The Chase Manhattan Bank, as Trustee (incorporated herein by reference
to Exhibit 4.2 to the Registrant's Current Report on Form 8-K filed with
the Commission on May 12, 1998)
|
4.1(e)
|
Fourth
Supplemental Indenture, dated as of October 30, 2001, between the
Registrant and The Chase Manhattan Bank, as Trustee (incorporated herein
by reference to Exhibit 4.1 to the Registrant's Report on Form 10-Q filed
with the Commission on November 7,
2001)
|
4.1(f)
|
Fifth
Supplemental Indenture, dated as of October 27, 2003 between the
Registrant and The Chase Manhattan Bank, as Trustee (incorporated herein
by reference to Exhibit 4.1 to the Registrant's Report on Form 8-K filed
with the Commission on October 27,
2003)
|
4.1(g)
|
Sixth
Supplemental Indenture, dated as of September 23, 2004 between the
Registrant and JP Morgan Chase Bank, formerly The
Chase Manhattan Bank, as Trustee (incorporated herein by
reference to Exhibit 4.1 to the Registrant’s Report on Form 10-Q filed
with the Commission on November 3,
2004)
|
4.1(h)
|
Seventh
Supplemental Indenture, dated as of April 25, 2007, between the Registrant
and The Bank of New York (as successor to JP Morgan Chase Bank), as
Trustee (incorporated herein by reference to Exhibit 4.4 to the
Registrant's Report on Form 8-K filed with the Commission on April 26,
2007).
|
10.1**
|
CSX
Stock Plan for Directors (as amended through January 1, 2004)
(incorporated herein by reference to Exhibit 10.1 to the Registrant's
Annual Report on Form 10-K filed with the Commission on March 10,
2004)
|
10.2*
**
|
CSX
Directors’ Pre-2005 Deferred Compensation Plan (as amended through January
8, 2008)
|
10.3*
**
|
CSX
Directors’ Deferred Compensation Plan effective January 1,
2005
|
10.4**
|
CSX
Directors' Charitable Gift Plan, as amended (incorporated herein by
reference to Exhibit 10.4 to the Registrant's Annual Report on Form 10-K
filed with the Commission on March 4,
1994)
|
10.5**
|
CSX
Directors' Matching Gift Plan (as amended through December 31, 2003)
(incorporated herein by reference to Exhibit 10.5 to the Registrant's
Annual Report on Form 10-K filed with the Commission on March 10,
2004)
|
10.6**
|
Railroad
Retirement Benefits Agreement with M. J. Ward (incorporated herein by
reference to Exhibit 10.13 to the Registrant's Report on Form 10-K filed
with the Commission on February 26,
2003)
|
10.7**
|
Employment
Agreement with O. Munoz (incorporated herein by reference to Exhibit 10.1
to the Registrant's Report on Form 10-Q filed with the Commission on July
30, 2003)
|
10.8**
|
Form
of Employment Agreement with executive officers (incorporated herein by
reference to Exhibit 10.1 of the Registrant's Current Report on Form 8-K
filed with the Commission on January 6,
2005)
|
10.9**
|
Form
of Stock Option Agreement (incorporated herein by reference to Exhibit
10.17 of the Registrant's Report on Form 10-K filed with the Commission on
March 4, 2002)
|
10.10**
|
1987
Long-term Performance Stock Plan, as Amended and Restated effective April
25, 1996 (as amended through February 7, 2003) (incorporated herein by
reference to Exhibit 10.24 to the Registrant's Annual Report on Form 10-K
filed with the Commission on March 10,
2004)
|
10.11**
|
Deferred
Compensation Program for Executives of CSX Corporation and Affiliated
Companies (as amended through January 1, 1998) (incorporated herein by
reference to Exhibit 10.25 to the Registrant's Annual Report on Form 10-K
filed with the Commission on March 10,
2004)
|
10.12**
|
2002
Deferred Compensation Plan of CSX Corporation and Affiliated Corporations
(as amended through February 7, 2003) (incorporated herein by reference to
Exhibit 10.26 to the Registrant's Annual Report on Form 10-K filed with
the Commission on March 10, 2004)
|
10.13**
|
Supplementary
Savings Plan and Incentive Award Deferral Plan for Eligible Executives of
CSX Corporation and Affiliated Companies (as Amended through February 7,
2003) (incorporated herein by reference to Exhibit 10.27 to the
Registrant's Annual Report on Form 10-K filed with the Commission on March
10, 2004)
|
10.14**
|
Special
Retirement Plan of CSX Corporation and Affiliated Companies (as amended
through February 14, 2001) (incorporated herein by reference to Exhibit
10.23 to the Registrant's Report on Form 10-K filed with the Commission on
March 4, 2002)
|
10.15**
|
Supplemental
Retirement Benefit Plan of CSX Corporation and Affiliated Companies (as
amended through February 14, 2001) (incorporated herein by reference to
Exhibit 10.24 of the Registrant's Report on Form 10-K filed with the
Commission on March 4, 2002)
|
10.16**
|
Senior
Executive Incentive Compensation Plan (incorporated herein by reference to
Appendix B to the Registrant's Definitive Proxy Statement filed with the
Commission on March 17, 2000)
|
10.17*
**
|
CSX
Omnibus Incentive Plan (as Amended through December 12,
2007)
|
10.18**
|
1990
Stock Award Plan as Amended and Restated Effective February 14, 1996 (as
amended through September 8, 1999) (incorporated herein by reference to
Exhibit 10.24 to the Registrant's Annual Report on Form 10-K filed with
the Commission on March 7, 2000)
|
10.19
|
Transaction
Agreement, dated as of June 10, 1997, by and among CSX Corporation, CSX
Transportation, Inc., Norfolk Southern Corporation, Norfolk Southern
Railway Company, Conrail Inc., Consolidated Rail Corporation and CRR
Holdings LLC, with certain schedules thereto (incorporated herein by
reference to Exhibit 10 to the Registrant’s Current Report on Form 8-K
filed with the Commission on July 8,
1997)
|
10.20
|
Amendment
No. 1, dated as of August 22, 1998, to the Transaction Agreement, dated as
of June 10, 1997, by and among CSX Corporation, CSX Transportation, Inc.,
Norfolk Southern Corporation, Norfolk Southern Railway Company, Conrail
Inc., Consolidated Rail Corporation and CRR Holdings LLC (incorporated
herein by reference to Exhibit 10.1 to the Registrant's Current Report on
Form 8-K filed with the Commission on June 11,
1999)
|
10.21
|
Amendment
No. 2, dated as of June 1, 1999, to the Transaction Agreement, dated as of
June 10, 1997, by and among CSX Corporation, CSX Transportation, Inc.,
Norfolk Southern Corporation, Norfolk Southern Railway Company, Conrail
Inc., Consolidated Rail Corporation and CRR Holdings, LLC (incorporated
herein by reference to Exhibit 10.2 to the Registrant's Current Report on
Form 8-K filed with the Commission on June 11,
1999)
|
10.22
|
Shared
Assets Area Operating Agreement for Detroit, dated as of June 1, 1999, by
and among Consolidated Rail Corporation, CSX Transportation, Inc. and
Norfolk Southern Railway Corporation, with exhibit thereto (incorporated
herein by reference to Exhibit 10.6 to the Registrant's Current Report on
Form 8-K filed with the Commission on June 11,
1999)
|
10.23
|
Monongahela
Usage Agreement, dated as of June 1, 1999, by and among CSX
Transportation, Inc., Norfolk Southern Railway Company, Pennsylvania Lines
LLC and New York Central Lines LLC, with exhibit thereto (incorporated
herein by reference to Exhibit 10.7 to the Registrant's Current Report on
Form 8-K filed with the Commission on June 11,
1999)
|
10.24
|
Tax
Allocation Agreement, dated as of August 27, 2004, by and among CSX
Corporation, Norfolk Southern Corporation, Green Acquisition Corp.,
Conrail Inc., Consolidated Rail Corporation, New York Central Lines LLC
and Pennsylvania Lines LLC (incorporated herein by reference to Exhibit
10.2 to the Registrant's Current Report on Form 8-K filed with the
Commission on September 2, 2004)
|
10.25**
|
Employment
Agreement with T. L. Ingram, dated as of March 15, 2004 (incorporated
herein by reference to Exhibit 10.1 to the Registrant's Report on Form
10-Q filed with the Commission on April 30,
2004)
|
10.26**
|
Restricted
Stock Award Agreement with T. L. Ingram (incorporated herein by reference
to Exhibit 10.1 to the Registrant's Report on Form 10-Q filed with the
Commission on July 29, 2004)
|
10.27**
|
Amendment
No. 1, dated as of December 13, 2004, to Employment Agreement with T. L.
Ingram, dated as of March 15, 2004 (incorporated herein by reference to
Exhibit 10.2 to the Registrant's Current Report on Form 8-K filed with the
Commission on December 14, 2004)
|
10.28**
|
Restricted
Stock Award Agreement with Ellen M. Fitzsimmons (incorporated herein by
reference to Exhibit 10.41 of the Registrant's Annual Report on Form 10-K
filed with the Commission on February 24,
2006)
|
10.29
|
Revolving
Credit Agreement, dated May 4, 2006 (incorporated herein by reference to
Exhibit 99.1 to the Registrant's Current Report on Form 8-K filed with the
Commission on May 9, 2006)
|
10.30
|
Underwriting
agreement, dated April 20, 2007 (incorporated herein by reference to
Exhibit 1.1 to the Registrant's Current Report on Form 8-K filed with the
Commission on April 26, 2007)
|
10.31**
|
Long-term
Incentive Plan, dated May 1, 2007 (incorporated herein by reference to
Exhibit 10.1 to the Registrant's Current Report on Form 8-K filed with the
Commission on May 7, 2007)
|
10.32
|
Underwriting
agreement dated September 4, 2007 (incorporated herein by reference to
Exhibit 1.1 to the Registrant's Current Report on Form 8-K filed with the
Commission on September 10, 2007)
|
10.33
|
Underwriting
agreement dated December 10, 2007 (incorporated herein by reference to
Exhibit 1.1 to the Registrant's Current Report on Form 8-K filed with the
Commission on December 17, 2007)
|
21*
|
Subsidiaries
of the Registrant
|
23*
|
Consent
of Ernst & Young LLP
|
24*
|
Powers
of Attorney
|
31.1*
|
Rule 13a-14(a) Certification of
Principal
Executive Officer
|
31.2*
|
Rule 13a-14(a) Certification of
Principal
Financial Officer
|
32.1*
|
Rule 13a-14(b) Certification of
Principal
Executive Officer
|
32.2*
|
Rule 13a-14(b) Certification of
Principal
Financial Officer
|
|
|
* Filed
herewith
|
|
**
Management Contract or Compensatory Plan or
Arrangement
|
|
Carolyn T. Sizemore
|
|
Vice
President and Controller
|
|
(Principal
Accounting Officer)
|
Signature
|
Title
|
|
Chairman
of the Board, President,
|
||
Chief
Executive Officer and Director
|
||
/s/ MICHAEL
J. WARD
|
(Principal
Executive Officer)
|
|
Michael
J. Ward
|
||
Executive
Vice President and
|
||
/s/ OSCAR
MUNOZ
|
Chief
Financial Officer (Principle Financial Officer)
|
|
Oscar
Munoz
|
||
Vice
President and Controller
|
||
/s/ CAROLYN
T. SIZEMORE
|
(Principle
Accounting Officer)
|
|
Carolyn
T. Sizemore
|
||
Senior
Vice President - Law and Public Affairs
|
||
*By: /s/
ELLEN M. FITZSIMMONS
|
*Attorney-in-Fact
|
|
Ellen
M. Fitzsimmons
|
Signature
|
Title
|
|
|
||
*
|
Director
|
|
Donna
M. Alvarado
|
||
*
|
Director
|
|
Elizabeth
E. Bailey
|
||
*
|
Director
|
|
John
B. Breaux
|
||
*
|
Director
|
|
Steven
T. Halverson
|
||
*
|
Director
|
|
Edward
J. Kelly III
|
||
*
|
Director
|
|
Robert
D. Kunisch
|
||
*
|
Director
|
|
Southwood
J. Morcott
|
||
*
|
Director
|
|
David
M. Ratcliffe
|
||
*
|
Director
|
|
William
C. Richardson
|
||
*
|
Director
|
|
Frank
S. Royal M.D.
|
||
*
|
Director
|
|
Donald
J. Shepard
|
1.
|
Definitions
|
(a)
|
“
Account
” or
“
Accounts
” --
means the bookkeeping account(s) maintained for each Participant to record
the amount of Director’s fees he has elected to defer and other deferrals,
as adjusted pursuant to Section
3
.
|
(b)
|
“
Administrator
”
-- means the Senior Human Resources Officer of CSX Corporation or such
Officer’s designee.
|
(i)
|
The
Administrator shall be responsible for the general administration of the
Plan, claims review, and for carrying out its
provisions. Administration of the Plan shall be carried out
consistent with the terms of the
Plan.
|
(ii)
|
The
Administrator shall have sole and absolute discretion to interpret the
Plan and determine eligibility for and benefits
hereunder. Decisions of the Administrator regarding
participation in and the calculation of benefits under the Plan shall at
all times be binding and conclusive on Participants, their beneficiaries,
heirs and assigns.
|
(c)
|
“
Average Price
”
-- means the average of the high and low price for CSX common stock as
reported on the New York Stock Exchange - Composite Listing (“NYSE”) on
the date of the applicable deferral or dividend
payment.
|
(d)
|
“
Board
” -- means
the Board of Directors of CSX.
|
(e)
|
“
Change of
Control
” -- means any of the
following:
|
(i)
|
Stock
Acquisition
. The acquisition, by any individual, entity
or group within the meaning of Section 13(d)(3) or 14(d)(2) of the
Securities Exchange Act of 1934, as amended (the "Exchange Act")(a
"Person") of beneficial ownership (within the meaning of Rule 13d(3)
promulgated under the Exchange Act) of 20% or more of either (A) the then
outstanding shares of common stock of the Corporation (the "Outstanding
Corporation Common Stock"), or (B) the combined voting power of the then
outstanding voting securities of the Corporation entitled to vote
generally in the election of directors (the "Outstanding Corporation
Voting Securities");
provided
,
however
, that
for purposes of this subsection (i), the following acquisitions shall not
constitute a Change of Control: (A) any acquisition directly
from the Corporation; (B) any acquisition by the Corporation; (C) any
acquisition by any employee benefit plan (or related trust) sponsored or
maintained by the Corporation or any corporation controlled by the
Corporation; or (D) any acquisition by any corporation pursuant to a
transaction which complies with clauses (A), (B) and (C) of subsection
(iii) of this Section
1(e)
;
or
|
(ii)
|
Board
Composition
. Individuals who, as of the date hereof,
constitute the Board of Directors (the "Incumbent Board") cease for any
reason to constitute at least a majority of the Board of Directors;
provided, however, that any individual becoming a director subsequent to
such date whose election or nomination for election by the Corporation's
shareholders, was approved by a vote of at least a majority of the
directors then comprising the Incumbent Board shall be considered as
though such individual were a member of the Incumbent Board, but
excluding, for this purpose, any such individual whose initial assumption
of office occurs as a result of an actual or threatened election contest
with respect to the election or removal of directors or other actual or
threatened solicitation of proxies or consents by or on behalf of a Person
other than the Board of Directors;
or
|
(iii)
|
Business
Combination
. Consummation of a reorganization, merger,
consolidation or sale or other disposition of all or substantially all of
the assets of the Corporation or its principal subsidiary that is not
subject, as a matter of law or contract, to approval by the Interstate
Commerce Commission or any successor agency or regulatory body having
jurisdiction over such transactions (the “Agency”) (a “Business
Combination”), in each case, unless, following such Business
Combination:
|
(A)
|
all
or substantially all of the individuals and entities who were the
beneficial owners, respectively, of the Outstanding Corporation Common
Stock and Outstanding Corporation Voting Securities immediately prior to
such Business Combination beneficially own, directly or indirectly, more
than 50% of, respectively, the then outstanding shares of common stock and
the combined voting power of the then outstanding voting securities
entitled to vote generally in the election of directors, as the case may
be, of the corporation resulting from such Business Combination
(including, without limitation, a corporation which as a result of such
transaction owns the Corporation or its principal subsidiary or all or
substantially all of the assets of the Corporation or its principal
subsidiary either directly or through one or more subsidiaries) in
substantially the same proportions as their ownership, immediately prior
to such Business Combination of the Outstanding Corporation Common Stock
and Outstanding Corporation Voting Securities, as the case may
be;
|
(B)
|
no
Person (excluding any corporation resulting from such Business Combination
or any employee benefit plan (or related trust) of the Corporation or such
corporation resulting from such Business Combination) beneficially owns,
directly or indirectly, 20% or more of, respectively, the then outstanding
shares of common stock of the corporation resulting from such Business
Combination or the combined voting power of the then outstanding voting
securities of such corporation except to the extent that such ownership
existed prior to the Business Combination;
and
|
(C)
|
at
least a majority of the members of the board of directors resulting from
such Business Combination were members of the Incumbent Board at the time
of the execution of the initial agreement, or of the action of the Board
of Directors, providing for such Business Combination;
or
|
(iv)
|
Regulated Business
Combination
. Consummation of a Business Combination that
is subject, as a matter of law or contract, to approval by the Agency (a
“Regulated Business Combination”) unless such Business Combination
complies with clauses (A), (B) and (C) of subsection (iii) of this Section
1(e)
;
or
|
(v)
|
Liquidation or
Dissolution
. Consummation of a complete liquidation or
dissolution of the Corporation or its principal subsidiary approved by the
Corporation’s shareholders.
|
(f)
|
“
Closing
Price
”-- means the closing price for CSX common stock as
reported on the New York Stock Exchange - Composite Listing (“NYSE”) on
the date of the applicable deferral or dividend
payment.
|
(g)
|
“
CSX
” or “
Corporation
” --
means CSX Corporation
|
(h)
|
"
Independent
Advisor
" -- means an independent accountant, actuary, benefits
consulting firm or other entity engaged by CSX to provide Participant
accounting and other services on behalf of the
Plan.
|
(i)
|
“
Distribution
Event
” -- means the occurrence of any event listed in Section
1(e)
, “Change of Control”; provided that for
purposes of Sections
1(e)(iii)
,
1(e)(iv)
and
1(e)(v)
, “Consummation” means an actual change
in ownership of Outstanding Corporation Common Stock, Outstanding
Corporation Voting Securities, and/or assets of the Corporation or its
principal subsidiary.
|
(j)
|
“
Effective Date
”
-- means initially January 1, 2003. Subsequent amendments shall
be effective as of the indicated effective
dates.
|
(k)
|
“
Form of Payment
Election
” -- means the election by the Participant of the form of
distribution (lump sum or installments) he will receive from his Account
pursuant to Section
5
.
|
(l)
|
“
Member
” --
means any person duly elected to the
Board.
|
(m)
|
“
Partial Distribution
Election
” -- means a Distribution Election for a portion of a
Participant’s Account under Section
4
.
|
(n)
|
“
Participant
” --
means any Member who elected to participate in the Plan so long as he or
she is entitled to a benefit under the
Plan.
|
(o)
|
“
Plan
” -- means
the CSX Directors’ Pre-2005 Deferred Compensation
Plan.
|
(p)
|
“
Trust
” -- means
a grantor trust or trusts established by CSX which will substantially
conform to the terms of the Internal Revenue Service model trust as
described in Revenue Procedure 92-64, 1992-2 C.B. 422. CSX is
not obligated to make any contribution a
Trust.
|
(q)
|
“
Valuation
Date
” -- means each June and December 31 and such other
dates as the Administrator deems necessary or appropriate to value
Participants' benefits under this
Plan.
|
2.
|
Participation
|
3.
|
Participant’s
Accounts
|
(a)
|
So
long as he or she is a Member, a Participant may elect, pursuant to forms
provided by the Administrator, to have all or any portion of his or her
elective and other deferrals, not required to be credited or actually
credited to the affected Participant’s stock account pursuant to the terms
of the CSX Corporation Stock Plan for Directors (“Stock Account”),
credited as follows:
|
(b)
|
Deferrals
of Director’s fees in CSX common stock pursuant to the CSX Corporation
Stock Plan for Directors and other CSX deferred common stock awards were
credited to the affected Participant’s Stock
Account.
|
(c)
|
Through
December 31, 2005, interest accrued on a Participant’s Interest Account
from the first day of the month following the date the deferred director’s
fee would otherwise have been paid to the Participant until it is actually
paid, such interest to be credited to an affected Participant’s Account
and compounded quarterly at the end of each calendar quarter. Interest
will be credited quarterly based on the annual rate of 10-year U.S.
Treasury bonds as published by the
Wall Street Journal
as
of the first business day of October in the preceding calendar
year. The value of a Participant’s Interest Account shall be
the sum of amounts deferred and all interest accrued
thereon. Interest Accounts ceased to exist as of December 31,
2005. All undistributed amounts credited to such accounts were
credited to a Benchmark Account, effective January 1,
2006.
|
(d)
|
Credits
(including both deferrals of directors’ fees and dividends) to and the
value of Phantom Stock Accounts were based upon Average Price. Credits to
and the value of Stock Accounts (other than deferred CSX common stock
share awards declared by the Company), are based upon Average Price
through December 31, 2007, and Closing Price
thereafter. Notwithstanding the preceding, full and fractional
shares credited to Stock Accounts pertaining to dividends on CSX common
stock held by the trustee of the Directors’ Stock Trust or a successor
trust shall be credited based on the actual purchase price of the CSX
common stock acquired by the trustee with such
dividends.
|
(e)
|
Through
December 31, 2005, a Participant, while a Member, could elect at any time
to transfer all or any portion of amounts deferred, including all earnings
thereon, between his or her Interest Account and Phantom Stock
Account. After December 31, 2005, a Participant may elect, on
forms provided by and pursuant to rules established by the Administrator,
to transfer all or any portion of amounts held in a Benchmark Account
among such accounts. No transfers may be made into the Stock
Account. Transfers out of the Stock Account may only be made
when a Participant is no longer a
Member.
|
(f)
|
Notwithstanding
Sections 3(a), (c), and (e) to the contrary, with respect to Participants
in pay status on December 31, 2004, the undistributed portion of their
Accounts shall continue to be credited with earnings in accordance with
the provisions of the Plan as an Interest Account, Phantom Stock Account
or Stock Account, as applicable (assuming such provisions had continued in
effect), until the affected Participant’s distribution is
complete.
|
4.
|
Distribution of
Accounts
|
(a)
|
Amounts
deferred under the Plan and credited to an Account shall be distributed to
a Participant from such Account in a lump sum one year following the date
in which a Participant ceases to be a Member, unless he shall file a
Distribution Election as provided in this Section
4
or a Form of Payment Election as provided in
Section
5
.
|
(b)
|
A
Participant may file with the Administrator a Distribution Election for
the distribution from an Account
upon:
|
(i)
|
attainment
of a designated age, however, he shall not elect an age that he will
attain less than one year subsequent to his Distribution Election;
or
|
(ii)
|
retirement
from the Board.
|
(c)
|
A
Participant may file a Distribution Election or change a Distribution
Election at any time prior to:
|
(i)
|
a
date that is 30 days subsequent to the date of his retirement from the
Board in the case of his initial Distribution Election;
or
|
(ii)
|
one
year prior to the date distribution is to commence under his Distribution
Election then in effect,
|
(d)
|
A
Participant may make a Partial Distribution Election with respect to any
portion of a Participant’s Account, provided no Distribution Election
shall be made for a portion of an Account less than $2,000, as determined
as of the date the election is made. No Participant shall have
more than two Distribution Elections in effect for an Account at any
time.
|
(e)
|
Except
in the event of retirement from the Board, a distribution made pursuant to
a Distribution Election shall not commence prior to a date that is three
years subsequent to the date the Participant first makes a Deferral under
either this Plan or a predecessor plan which provides for the deferral of
director’s fees
|
(f)
|
Any
Distribution Election made in proper form by a Participant shall be
effective and distribution shall commence pursuant to such Distribution
Election. Any Distribution Election not made in proper form
shall be void. Distributions from a Participant’s Stock Account shall be
made only in shares of CSX common
stock.
|
(g)
|
A
Participant may request and receive a withdrawal from his Account at any
time without filing a Distribution Election under this Section
4
. Any such withdrawal shall result
in the forfeiture of an amount equal to the portion of the Participant's
Account that is withdrawn, multiplied by the Mid-term Applicable Federal
Rate determined as of the Valuation Date upon which the withdrawal is
effective.
|
(h)
|
A
Participant may make one additional election to defer (but not accelerate)
commencement of payment under the Plan at any time six months before
payments are to have commenced (“Re-deferral Election
”
). Such
Re-deferral Election shall be made in a form prescribed by the
Administrator. If such Re-deferral Election is to a designated
age the re-deferral shall be for a period not less than one year from the
date the Re-deferral Election is
made.
|
5.
|
Form of
Payment
|
6.
|
Death of a
Participant
|
(a)
|
In
the event a Participant dies while a Member, the balance of his Accounts
shall be paid in either a lump sum or installments (consistent with the
Form of Payment Elections made by the Participant as described in Section
5
) to his Designated
Beneficiary. Each Participant may file with the Administrator a
Designation of Beneficiary for this
purpose.
|
(b)
|
In
the event a Participant shall die after he ceases to be a Member and
before he has received complete distribution from his Account, the balance
credited to his Account shall be paid to his Designated Beneficiary
consistent with the Form of Payment Elections made by the Participant as
described in Section
5
.
|
(c)
|
In
the event a Participant shall not file a Designation of Beneficiary, or
his Designated Beneficiary is not living at the Participant's death, the
balance credited to his Accounts shall be paid in full to his estate not
later than the tenth day of the calendar year following his date of
death.
|
7.
|
Obligation of
CSX
|
8.
|
Change of
Control
|
(a)
|
Within
45 days of a Distribution Event, each Participant not making an election
under
8(c)
below, shall be paid a lump sum
payment equal to the amount the Participant would have been entitled to
receive determined under Section
5
had he
ceased to be a Member and selected an immediate lump sum
payment. The amount of each Participant's lump sum payment
shall be determined by the Independent
Advisor.
|
(b)
|
A
Participant who elected, within 90 days after becoming a Participant, to
have amounts and benefits determined and payable under the terms of the
Plan as if a Distribution Event had not occurred, may, at any time and
from time to time, change that election; provided, however, a change of
election that is made within one year of a Distribution Event shall be
invalid.
|
(c)
|
Notwithstanding
anything in the Plan to the contrary, each Participant who made an
election under Section
8(b)
, may elect within
90 days following a Distribution Event, in a time and manner determined by
the Administrator, to receive a lump sum payment calculated under the
provisions of Section
8(a)
, determined as of
the Valuation Date next preceding such payment, except that such
calculated amount shall be reduced by 5% and such reduction shall be
irrevocably forfeited to CSX by the Participant. Furthermore,
as a result of such election, the Participant shall no longer be eligible
to participate or otherwise benefit from the Plan. Payments
under this Section
8(c)
shall be made not
later than 7 days following receipt by CSX of the Participant's
election. The Administrator shall, no later than 7 days after a
Distribution Event has occurred, give written notification to each
Participant eligible to make an election under this Section
8(c)
, that a Distribution Event has occurred and
informing such Participant of the availability of the
election.
|
9.
|
Claims Against
Participant's Account
|
10.
|
Competition by
Participant
|
11.
|
Payment of Credit
Balance to Participant's
Account
|
12.
|
Amendment or
Termination
|
13.
|
Impact of Future
Legislation or Regulation
|
(a)
|
This
Section
13
shall become operative upon the
enactment of any change in applicable statutory law or the promulgation by
the Internal Revenue Service of a final regulation or other pronouncement
having the force of law, which statutory law, as changed, or final
regulation or pronouncement, as promulgated, would cause any Participant
to include in his federal gross income amounts accrued by the
Participant under the Plan on a date (an “Early Taxation Event”) prior to
the date on which such amounts are made available to him or her
hereunder.
|
(b)
|
Notwithstanding
any other Section of this Plan to the contrary (but subject to subsection
(c), below), as of an Early Taxation Event, the feature or features of
this Plan, or the election by a Participant that would cause the Early
Taxation Event shall be null and void, to the extent, and only to the
extent, required to prevent the Participant from being required to include
in his federal gross income amounts accrued by the Participant under the
Plan prior to the date on which such amounts are made available to him
hereunder. By way of example, but not by way of limiting the
generality of the foregoing, if a statute is enacted that would require a
Participant to include in his or her federal gross income amounts accrued
by the Participant under the Plan prior to the date on which such amounts
are made available to him or her because of the Participant’s right to
receive a distribution of a portion of his Account under Section
4(h)
, the right of all Participants to receive
distributions under Section
4(h)
shall be
null and void as of the effective date of that statute. If only
a portion of a Participant's Account is impacted by the change in the law,
then only such portion shall be subject to this Section, with the
remainder of the Account not so affected being subject to such rights and
features as if the law were not changed. If the law only
impacts Participants who have a certain status with respect to the
Company, then only such Participants shall be subject to this
Section.
|
(c)
|
Notwithstanding
Section
13(b)
above, if an Early Taxation
Event occurs (
e.g.
, if a
change in law is retroactive), the amounts that become taxable on the
Early Taxation Event shall be distributed to each Participant as soon as
practicable following such Early Taxation Event or, if later, the date of
enactment or promulgation.
|
34253.000052
RICHMOND 986338v7
|
1.
|
Definitions
|
(a)
|
“
Account
” or
“
Accounts
” --
means the bookkeeping account(s) maintained for each Participant to record
the amount of Director’s Fees the Member has elected to defer and other
deferrals, as adjusted pursuant to Section
4.
|
(b)
|
“
Administrator
”
-- means the Senior Human Resources Officer of CSX Corporation or such
officer’s designee.
|
(i)
|
The
Administrator shall be responsible for the general administration of the
Plan, claims review, and for carrying out its
provisions. Administration of the Plan shall be carried out
consistent with the terms of the
Plan.
|
(ii)
|
The
Administrator shall have sole and absolute discretion to interpret the
Plan and determine eligibility for and benefits
hereunder. Decisions of the Administrator regarding
participation in and the calculation of benefits under the Plan shall at
all times be binding and conclusive on Participants, their beneficiaries,
heirs and assigns.
|
(c)
|
“Average
Price” -- means the average of the high and low price for CSX common stock
as reported on the New York Stock Exchange - Composite Listing (“NYSE”) on
the date of the applicable deferral or dividend
payment.
|
(d)
|
“
Board
” -- means
the Board of Directors of CSX.
|
(e)
|
“
Change of
Control
” -- means any of the
following:
|
(i)
|
Stock
Acquisition
. One or more acquisitions, by any
individual, entity or group (within the meanings of Treas. Reg.
§§ 1.409A-3(i)(5)(v)(B) and (vi)(D)) (a “Person”), of (A) 30% or
more of the then outstanding voting securities of the Corporation (the
“Outstanding Voting Securities”), during any 12-month period ending on the
date of the most recent acquisition; or (B) an acquisition that
results in ownership by a Person of more than 50% of either (a) shares
representing more than 50% of the total fair market value of the
Corporation’s then outstanding stock (the “Outstanding Stock”) or (b) the
then Outstanding Voting Securities;
provided
,
however
, that
for purposes of this subsection (i), the following acquisitions of shares
of the Corporation shall not be taken into account in the determination of
whether a Change of Control has occurred: (A) any acquisition
directly from the Corporation; (B) any cash acquisition by the
Corporation; (C) any acquisition by any employee benefit plan (or related
trust) sponsored or maintained by the Corporation or any corporation
controlled by the Corporation; or (D) an acquisition by a Person that
prior to the acquisition had already acquired more shares than necessary
to satisfy the applicable 30% or 50% threshold. Notwithstanding
the foregoing, an acquisition of its stock by the Corporation in exchange
for property which increases the percentage of stock owned by a Person
shall be treated as an acquisition for purposes of this subsection;
or
|
(ii)
|
Board
Composition
. Individuals who, as of the date hereof,
constitute the Board (the “Incumbent Board”) cease, within a
12-month period, for any reason to constitute at least a majority of the
Board;
provided
,
however
, that
any individual becoming a director subsequent to such date whose
appointment, election, or nomination for election by the Corporation’s
shareholders, was endorsed by at least a majority of the directors then
comprising the Incumbent Board shall be considered as though such
individual were a member of the Incumbent Board;
or
|
(iii)
|
Business
Combination
. Consummation of a reorganization, merger or
consolidation of the Corporation (a “Business Combination”), in each case,
that results in either a change in ownership contemplated in subsection
(i)(B) of this Section 1(e) or a change in the Incumbent Board
contemplated by subsection (ii) of Section 1(e);
or
|
(iv)
|
Sale or Disposition of
Assets
. One or more Persons acquires (or has acquired
during the 12-month period ending on the date of the most recent
acquisition by such Persons) assets from the Corporation that have a total
gross fair market value equal to more than 40 percent of the total gross
fair market value of all of the assets of the Corporation (without regard
to liabilities of the Corporation or associated with such assets)
immediately before such acquisition or acquisitions; provided that such
sale or disposition is not to:
|
(A)
|
a
shareholder of the Corporation (immediately before the asset transfer) in
exchange for or with respect to the Corporation’s Outstanding
Stock;
|
(B)
|
an
entity, 50% or more of the total value or voting power of which is owned,
directly or indirectly, by the
Corporation;
|
(C)
|
a
Person that owns, directly or indirectly, 50% or more of the total value
or voting power of all the outstanding stock of the Corporation;
or
|
(D)
|
an
entity, at least 50% of the total value or voting power of which is owned,
directly or indirectly, by a Person described in subsection
(iv)(C).
|
(f)
|
“Closing
Price”-- means the closing price for CSX common stock as
reported on the New York Stock Exchange - Composite Listing (“NYSE”) on
the date of the applicable deferral or dividend
payment.
|
(g)
|
“Code”
-- means the Internal Revenue Code of 1986, as
amended.
|
(h)
|
“
CSX
” or “
Corporation
” --
means CSX Corporation
|
(i)
|
“
Deferral
Agreement
” -- means an agreement between a Participant and CSX
under which the Participant agrees to defer Director’s Fees under the
Plan. The Deferral Agreement shall be on a form prescribed by
the Administrator and shall include any amendments, attachments or
appendices.
|
(j)
|
“
Designated
Beneficiary
” -- means the person or persons entitled to receive the
balance of a Participant’s Accounts upon the Participant’s
death. The Participant may file with the Administrator a
written Designation of Beneficiary for this purpose. Such
designation may name one or more individuals, trusts and/or organizations
as the primary or contingent beneficiary(ies) to receive all or a
specified portion of the balance of the Participant’s Accounts remaining
at the Participant’s death. Unless otherwise specifically
directed in the Participant’s Designation of Beneficiary form, in the
event a designated primary beneficiary is not living or existing at the
Participant’s death or declines to accept any distribution from the
Accounts, the share otherwise distributable to such beneficiary shall be
distributed, first, to the other designated primary beneficiaries, if any,
in accordance with their relative designated shares of the Accounts; and
second, to the contingent beneficiary(ies), if
any.
|
(k)
|
“
Director’s
Fees
” -- means any compensation, whether a retainer, or a fee for
meeting attendance, membership on a committee, chairing a committee, or
otherwise, payable either in cash or in stock, earned by a Member for
services rendered as a Member.
|
(l)
|
“
Effective Date
”
-- means January 1, 2005.
|
(m)
|
“
Fiscal Year
” --
means the Corporation’s taxable year ending on the last Friday in
December.
|
(n)
|
“
Form of Payment
Election
” -- means the election by the Participant of the form of
distribution (lump sum or installments) he or she will receive from his or
her Account pursuant to Section 6.
|
(o)
|
“
Independent
Advisor
” -- means an independent accountant, actuary, benefits
consulting firm or other entity engaged by CSX to provide Participant
accounting or other services on behalf of the
Plan.
|
(p)
|
“
Member
” --
means any person duly elected to the
Board.
|
(q)
|
“
Participant
” --
means any Member who elects to participate in the Plan so long as he or
she is entitled to a benefit under the
Plan.
|
(r)
|
“
Plan
” -- means
the CSX Directors Deferred Compensation
Plan.
|
(s)
|
“
Trust
” -- means
a grantor trust or trusts established by CSX which substantially conforms
to the terms of the Internal Revenue Service model trust as described in
Revenue Procedure 92-64, 1992-2 C.B. 422. CSX is not obligated
to make any contribution to the
Trust.
|
2.
|
Participation
|
3.
|
Deferral of Directors’
Fees
|
(a)
|
CSX
shall, during any calendar year with respect to which a Participant has
made a timely Deferral Election, withhold and defer payment of all or any
specified part of Participant’s Director’s Fees in accordance with the
Director’s Deferral Election. A Participant may elect to change
the amount of Director’s Fees he or she elects to defer, modify a Deferral
Agreement or revoke a Deferral Agreement by filing a new Deferral
Agreement pursuant to procedures established by the Administrator with the
Administrator not later than the last day of the Fiscal Year immediately
prior to the calendar year in which Director’s Fees are to be earned and
paid, and such revised Deferral Agreement shall be effective with respect
to Director’s Fees earned for all future calendar years until changed or
rescinded in accordance with the
Plan.
|
(b)
|
Notwithstanding
Sections 2 and 3(a), when any person first becomes a Member, he or she may
file an initial Deferral Agreement during the first thirty (30) days he or
she is a Member, and such Deferral Agreement shall be effective solely
with respect to Director’s Fees paid for services to be performed after
such election. For Director’s Fees that are earned based upon a
specified performance period (for example, an annual bonus), where a
Member’s Deferral Election is made in the first year of eligibility but
after the beginning of the performance period, the Deferral Election must
apply only to the Director’s Fees paid for services performed after such
election. For this purpose, a Deferral Election will be deemed
to apply to Director’s Fees paid for services performed after the election
if the Deferral Election applies to no more than an amount equal to the
total amount of the Director’s Fees for the performance period multiplied
by the ratio of the number of days remaining in the performance period
after the Deferral Election over the total number of days in the
performance period.
|
(c)
|
Notwithstanding
any provision of the Plan to the contrary, on or prior to December 31,
2005, a Participant may cancel his or her participation in the Plan, may
cancel an existing Deferral Agreement, or may reduce the amount of
Directors’ Fees deferred under an existing Deferral
Agreement.
|
4.
|
Participants’
Accounts
|
(a)
|
So
long as he or she is a Member, a Participant may elect pursuant to a
Deferral Agreement or other forms or procedures provided or established by
the Administrator to have all or any portion of his or her eligible
Director’s Fees, not required to be credited or actually credited to his
or her Stock Account under the Plan pursuant to the terms of the CSX
Corporation Stock Plan for Directors or otherwise, credited as
follows:
|
(b)
|
Elective
Deferrals of CSX common stock shall be effected pursuant to Deferral
Agreements filed with the Administrator. A Participant’s Stock
Account (“Stock Account”) will be credited with such
deferrals.
|
(c)
|
Through
December 31, 2005, interest shall accrue on a Participant’s Interest
Account from the first day of the month following the date the deferred
Director’s Fee would otherwise have been paid to the Participant until it
is actually paid, such interest to be credited to an affected
Participant’s Account and compounded quarterly at the end of each calendar
quarter. Interest will be credited quarterly based
on the annual rate of 10-year U.S. Treasury bonds as published by the
Wall Street
Journal
as of the first business day of October in the preceding
calendar year. The value of a Participant’s Interest Account
shall be the sum of amounts deferred and all interest accrued
thereon. Interest Accounts ceased to exist as of December 31,
2005. All undistributed amounts credited to such accounts were
credited to a Benchmark Account, effective January 1,
2006.
|
(d)
|
Credits
(including both deferrals of Directors’ Fees and dividends) to and the
value of Phantom Stock Accounts are based upon Average Price. Credits to
and the value of Stock Accounts (other than deferred CSX common stock
share awards declared by the Company), are based upon Average Price
through December 31, 2007, and Closing Price
thereafter. Notwithstanding the preceding, full and fractional
shares credited to Stock Accounts pertaining to dividends on CSX common
stock held by the trustee of the Directors’ Stock Trust or a successor
trust shall be credited based on the actual purchase price of the CSX
common stock acquired by the trustee with such
dividends.
|
(e)
|
Through
December 31, 2005, a Participant, while a Member, could elect at any time
to transfer all or any portion of amounts deferred, including all earnings
thereon, between his or her Interest Account and Phantom Stock
Account. After December 31, 2005, a participant may elect, on
forms provided by and pursuant to rules established by the Administrator,
to transfer all or any portion of amounts held in a Benchmark Account
among such Accounts. No transfers may be made into the Stock
Account. Transfers out of the Stock Account may only be made
when a Participant is no longer a
Member.
|
5.
|
Distribution of
Deferred Directors’ Fees
|
(a)
|
Amounts
deferred under the Plan and/or credited to an Account shall be distributed
to a Participant from such Account in a lump sum one year following the
date in which a Participant ceases to be a Member, unless he or she shall
file a Distribution and Form of Payment Election as provided in Sections 5
and 6.
|
(b)
|
A
Participant may file with the Administrator a Distribution Election, in
accordance with Section 5(c), for the distribution from an Account
upon:
|
(i)
|
attainment
of a designated age; or
|
(ii)
|
separation
from the Board.
|
(c)
|
A
Participant shall file a Distribution Election with respect to Director’s
Fees deferred pursuant to a Deferral Agreement and other deferrals at the
same time that such Deferral Agreement is filed as provided in Sections 2
or 3. A Participant may change a Distribution Election with
respect to future elective deferrals at any time on or prior to the date
by which any new or revised Deferral Agreement would have to be filed
under Section 3(a). Such revised Distribution Election shall be
effective only with respect to Director’s Fees earned and deferred in
calendar years commencing subsequent to such revised Distribution
Election.
|
(d)
|
Notwithstanding
the foregoing, on or prior to December 31, 2005, a Participant may file a
new Distribution Election with respect to amounts deferred under the Plan
prior to such new Distribution
Election.
|
(e)
|
Any
Distribution Election made in proper form and at the proper time by a
Participant shall be effective and distribution shall commence pursuant to
such Distribution Election. Any Distribution Election not made
in proper form or at the proper time shall be void. Distributions from a
Participant’s Stock Account shall be made only in shares of CSX common
stock.
|
(f)
|
Non-elective
deferred cash or stock awards declared by the Corporation shall be
credited to a Participant’s Benchmark or Stock Account as
applicable. Unless a Participant has made a different timely
election, any such award shall be distributed at the same time and in the
same form as the Participant’s last effective election prior to each such
declaration or, if none, pursuant to Sections 5(a) and
(e).
|
(g)
|
A
Participant may make additional elections to defer (but not accelerate)
commencement of a payment elected pursuant to a prior Distribution
Election (including a default election) under the Plan (a “Re-deferral
Election”), provided that (A) such Re-deferral Election may not be
effective for at least 12 months after the date on which it is filed; (B)
the additional deferral with respect to which such Re-deferral Election is
made may not be less than five years from the date such distribution would
otherwise have been made, except in the case of elections relating to
distributions on account of death; and (C) if such Re-deferral Election is
to a designated age, such Re-deferral Election may not be made less than
12 months prior to the date of the first scheduled payment under the
Distribution Election then in effect. Such Re-deferral Election
shall be made on forms prescribed by the
Administrator.
|
(h)
|
Notwithstanding
any provision of the Plan to the contrary, the Administrator shall, in a
manner compliant with Code § 409A, make a lump sum distribution to a
Participant to the extent necessary to comply with a certificate of
divestiture, as defined in Code § 1043(b)(2), or, to the extent
amounts deferred hereunder have become taxable as a result of Code
§ 409A.
|
(i)
|
A
Participant may elect with respect to any elective deferral to have the
deferral paid in a lump sum within 45 days of a Change of
Control.
|
6.
|
Form of
Payment
|
7.
|
Death of a
Participant
|
(a)
|
In
the event a Participant shall die while he or she is a Member, the balance
of his or her Accounts shall be paid in either a lump sum or installments
(consistent with the Form of Payment Elections made by the Participant as
described in Section 6) to his or her Designated
Beneficiary.
|
(b)
|
In
the event a Participant shall die after he or she ceases to be a Member
and before he or she has received complete distribution from his or her
Account, the balance credited to his or her Account shall be paid to his
or her Designated Beneficiary consistent with the Form of Payment
Elections made by the Participant as described in Section
6.
|
(c)
|
In
the event a Participant shall not file a Designation of Beneficiary, or no
Designated Beneficiary is living or existing at the Participant’s death,
the balance credited to the Participant’s Accounts shall be paid in full
to the Participant’s estate not later than the tenth day of the calendar
year following his or her date of
death.
|
8.
|
Obligation of
CSX
|
9.
|
Funding of
Trusts
|
10.
|
Claims Against
Participant’s Account
|
11.
|
Co-ordination with
Payments from Trust or Similar
Vehicle
|
12.
|
Amendment or
Termination
|
13.
|
Impact of Future
Legislation or Regulation
|
(a)
|
This
Section 14 shall become operative upon the enactment of any change in
applicable statutory law or the promulgation by the Internal Revenue
Service of a final regulation or other pronouncement having the force of
law, which statutory law, as changed, or final regulation or
pronouncement, as promulgated, would cause any Participant to include in
his or her federal gross income amounts accrued by the Participant under
the Plan on a date (an “Early Taxation Event”) prior to the date on which
such amounts are made available to him or her
hereunder.
|
(b)
|
Notwithstanding
any other Section of this Plan to the contrary (but subject to Section
14(c), below), as of an Early Taxation Event, the feature or features of
this Plan, or the election by a Participant that would cause the Early
Taxation Event shall be null and void, to the extent, and only to the
extent, required to prevent the Participant from being required to include
in his or her federal gross income amounts accrued by the Participant
under the Plan prior to the date on which such amounts are made available
to him or her hereunder. If only a portion of a Participant’s
Account is impacted by the change in the law, then only such portion shall
be subject to this Section, with the remainder of the Account not so
affected being subject to such rights and features as if the law were not
changed. If the law impacts only Participants who have a
certain status with respect to the Company, then only such Participants
shall be subject to this Section.
|
(c)
|
Notwithstanding
Section 14(b) above, if an Early Taxation Event occurs, the amount that is
required to be included in income as a result of a compliance failure
under Code § 409A and the regulations promulgated thereunder, shall
be distributed to the affected Participant as soon as practicable
following such Early Taxation
Event.
|
(d)
|
Notwithstanding
Section 14(b) above, if an Early Taxation Event occurs, to the extent an
amount is includable in income as a result of a compliance failure under
Code § 409A or otherwise before such amount is distributable under
the Plan, an amount equal to the total employment taxes on the Early
Taxation Event and any applicable federal, state, local or foreign income
tax withholding attributable to the payment of such amounts required to be
withheld or paid and the income taxes required to be withheld thereon,
shall be distributed to the affected Participant or paid to the
appropriate taxing authority as soon as practicable following such Early
Taxation Event in accordance with Code
§ 409A.
|
34253.000052
RICHMOND 1368524v14
|
1.
|
Purpose
. The
purpose of this CSX Omnibus Incentive Plan (the “Plan”) is to further the
long term stability and financial success of CSX, its Subsidiaries,
Foreign Affiliates and Affiliates by rewarding selected meritorious
employees. The Board of Directors believes that such awards
will provide incentives for employees to remain with CSX, will encourage
continued work of superior quality and will further the identification of
those employees’ interests with those of CSX’s
shareholders.
|
2.
|
Definitions
. As
used in the Plan, the following terms have the meanings
indicated:
|
(a)
|
“Affiliate”
means a corporation, partnership or other entity other than a Subsidiary
or Foreign Affiliate in which CSX or a Subsidiary owns, directly or
indirectly, a substantial interest. The employees of an
Affiliate shall be eligible to participate in the Plan only if the Board
or the Committee approves the participation of the Affiliate in the
Plan.
|
(b)
|
“Applicable
Withholding Taxes” means the aggregate minimum amount of federal, state,
local and foreign income, payroll and other taxes that an Employer is
required to withhold in connection with any Incentive
Award.
|
(c)
|
“Beneficiary”
means the person or entity designated by the Participant, in a form
approved by CSX, to exercise the Participant’s rights with respect to an
Incentive Award after the Participant’s
death.
|
(d)
|
Board”
means the Board of Directors of CSX
Corporation.
|
(e)
|
“Cause”
means: (i) an act or acts of personal dishonesty of a
Participant intended to result in substantial personal enrichment of the
Participant at the expense of the Company or any of its Subsidiaries,
Foreign Affiliates or Affiliates; (ii) a violation of the management
responsibilities by the Participant which is demonstrably willful and
deliberate on the Participant’s part and which is not remedied in a
reasonable period of time after receipt of written notice from the
Employer; or, (iii) the conviction of the Participant of a felony
involving moral turpitude.
|
(f)
|
“Change
in Control” means the occurrence of any of the following
events:
|
(i)
|
Stock
Acquisition
. The acquisition by any individual, entity
or group (within the meaning of Section 13(d)(3) or 14(d)(2) of the
Securities Exchange Act of 1934, as amended (the “Exchange Act”)) (a
“Person”) of beneficial ownership (within the meaning of Rule 13d-3
promulgated under the Exchange Act) of 20 percent or more of either (A)
the then outstanding shares of common stock of CSX (the “Outstanding
Company Common Stock”), or (B) the combined voting power of the then
outstanding voting securities of CSX entitled to vote generally in the
election of directors (the “Outstanding Company Voting Securities”);
provided, however, that for purposes of this subsection (i), the following
acquisitions shall not constitute a change in control: (A) any acquisition
directly from CSX; (B) any acquisition by CSX; (C) any acquisition by any
employee benefit plan (or related trust) sponsored or maintained by CSX or
any corporation controlled by CSX; or (D) any acquisition by any
corporation pursuant to a transaction which complies with clauses (A), (B)
and (C) of subsection (iii) of this Section 2(f);
or
|
(ii)
|
Board
Composition
. Individuals who, as of the date hereof,
constitute the Board (the “Incumbent Board”) cease for any reason to
constitute at least a majority of the Board; provided, however, that any
individual becoming a director subsequent to such date whose election or
nomination for election by CSX’s shareholders was approved by a vote of at
least a majority of the directors then comprising the Incumbent Board
shall be considered as though such individual were a member of the
Incumbent Board, but excluding, for this purpose, any such individuals
whose initial assumption of office occurs as a result of an actual or
threatened election contest with respect to the election or removal of
directors or other actual or threatened solicitation of proxies or
consents by or on behalf of a Person other than the Board;
or
|
(iii)
|
Business
Combination
. Approval by the shareholders of CSX of a
reorganization, merger, consolidation, or sale or other disposition of all
or substantially all of the assets of CSX or its principal Subsidiary that
is not subject, as a matter of law or contract, to approval by the Surface
Transportation Board or any successor agency or regulatory body having
jurisdiction over such transactions (the “STB”) (a “Business
Combination”), in each case, unless, following such Business
Combination:
|
(A)
|
all
or substantially all of the individuals and entities who were the
beneficial owners, respectively, of the Outstanding Company Common Stock
and Outstanding Company Voting Securities immediately prior to such
Business Combination beneficially own, directly or indirectly, more than
50 percent of, respectively, the then outstanding shares of common stock
and the combined voting power of the then outstanding voting securities
entitled to vote generally in the election of directors, as the case may
be, of the corporation resulting from such Business Combination
(including, without limitation, a corporation which as a result of such
transaction owns CSX or its principal Subsidiary or all or substantially
all of the assets of CSX or its principal Subsidiary either directly or
through one or more subsidiaries) in substantially the same proportions as
their ownership immediately prior to such Business Combination of the
Outstanding Company Common Stock and Outstanding Company Voting
Securities, as the case may be;
|
(B)
|
no
Person (excluding any corporation resulting from such Business Combination
or any employee benefit plan (or related trust) of CSX or such corporation
resulting from such Business Combination) beneficially owns, directly or
indirectly, 20 percent or more of, respectively, the then outstanding
shares of common stock of the corporation resulting from such Business
Combination or the combined voting power of the then outstanding voting
securities of such corporation except to the extent that such ownership
existed prior to the Business Combination;
and
|
(C)
|
at
least a majority of the members of the board of directors resulting from
such Business Combination were members of the Incumbent Board at the time
of the execution of the initial agreement, or of the action of the Board
providing for such Business Combination;
or
|
(iv)
|
Regulated Business
Combination
. Approval by the shareholders of CSX of a
Business Combination that is subject, as a matter of law or contract, to
approval by the STB (a “Regulated Business Combination”) unless such
Business Combination complies with clauses (A), (B) and (C) of subsection
(iii) of this Section 2(f); or
|
(v)
|
Liquidation or
Dissolution
. Approval by the shareholders of CSX of a
complete liquidation or dissolution of CSX or its principal
Subsidiary.
|
(g)
|
“Code”
means the Internal Revenue Code of 1986, as
amended.
|
(h)
|
“Committee”
means the Compensation Committee of the Board or its successor, provided
that, if any member of the Compensation Committee does not qualify as both
an outside director for purposes of Code Section 162(m) and a non-employee
director for purposes of Rule 16b-3, the remaining members of the
Compensation Committee (but not less than two members) shall be
constituted as a subcommittee of the Compensation Committee to act as the
Committee for purposes of the Plan.
|
(i)
|
“Company
Stock” means common stock, $1.00 par value, of CSX. In the
event of a change in the capital structure of CSX affecting the common
stock (as provided in Section 18), the shares resulting from such a change
in the common stock shall be deemed to be Company Stock within the meaning
of the Plan.
|
(j)
|
“Covered
Employee” means a Participant who the Committee determines is or may
become a covered employee within the meaning of Code Section 162(m) during
the performance period for a Performance
Grant.
|
(k)
|
“CSX”
means CSX Corporation.
|
(l)
|
“Date
of Grant” means the date on which the Committee grants an Incentive
Award.
|
(m)
|
“Disability”
or “Disabled” means, as to an Incentive Stock Option, a Disability within
the meaning of Code Section 22(e)(3). As to all other Incentive
Awards, a Disability shall occur when the Participant is eligible for
benefits under the CSX Salary Continuance and Long-Term Disability Plan or
another long-term disability plan of CSX applicable to the
Participant.
|
(n)
|
“Divisive
Transaction” means a transaction in which the Participant’s Employer
ceases to be a Subsidiary, Foreign Affiliate or Affiliate or a sale of
substantially all of the assets of a Subsidiary, Foreign Affiliate or
Affiliate.
|
(o)
|
“Employer”
means CSX and each Subsidiary, Foreign Affiliate or Affiliate that employs
one or more Participants.
|
(p)
|
“Fair
Market Value” means the mean between the highest and lowest registered
sales prices of a share of Company Stock on the New York Stock Exchange,
as reported in the Wall Street Journal (or other authoritative source
approved by the Committee) on the day of
reference.
|
(q)
|
“Foreign
Affiliate” means an entity that is not organized under the laws of the
United States, or any state thereof or any political subdivision of any
state, and in which CSX has, directly or indirectly, a substantial
interest.
|
(r)
|
“Good
Reason,” as to any Participant, means (i) the Participant’s compensation
or employment related benefits are reduced (other than across-the-board
reductions that affect management employees generally); (ii) the
Participant’s status, title(s), office(s), working conditions, or
management responsibilities are diminished (other than changes in
reporting or management responsibilities required by applicable federal or
state law); or (iii) the location of Participant’s place of employment is
changed by more than 30 miles without the Participant’s
consent.
|
(s)
|
“Incentive
Award” means, collectively, a Performance Grant or the award of Restricted
Stock, an Option, a Restricted Stock Unit, a Stock Appreciation Right, or
a Dividend Right under the Plan.
|
(t)
|
“Incentive
Stock Option” means an Option that qualifies for favorable federal income
tax treatment under Code Section
422.
|
(u)
|
“Mature
Shares” means shares of Company Stock for which the holder has good title,
free and clear of all liens and encumbrances and which the holder either
(i) has held for at least six months or (ii) has purchased on the open
market.
|
(v)
|
“Nonqualified
Stock Option” means an Option that is not an Incentive Stock
Option.
|
(w)
|
“Option”
means a right to purchase Company Stock granted under the Plan, at a price
determined in accordance with the
Plan.
|
(x)
|
“Participant”
means any employee of CSX, a Subsidiary, a Foreign Affiliate or an
Affiliate who receives an Incentive Award under the
Plan.
|
(y)
|
“Performance
Criteria” means any of the following areas of performance of CSX, any
Subsidiary, any Foreign Affiliate, or any
Affiliate:
|
(z)
|
“Performance
Goal” means an objectively determinable performance goal established by
the Committee with respect to a given Performance Grant that relates to
one or more Performance Criteria.
|
(aa)
|
“Performance
Grant” means an Incentive Award payable in Company Stock, cash, or a
combination of Company Stock and cash that is made pursuant to Section
8.
|
(bb)
|
“Restricted
Stock” means Company Stock awarded under Section
6.
|
(cc)
|
“Restricted
Stock Unit” means a right granted to a Participant to receive Company
Stock or cash awarded under Section
7.
|
(dd)
|
“Retirement”
means attainment of retirement under the CSX Pension Plan or Special
Retirement Plan for CSX Corp. and Affiliated Corporations (nonqualified
retirement plan) and immediately commencing your retirement
benefits.
|
(ee)
|
“Rule
16b-3” means Rule 16b-3 of the Securities and Exchange Commission
promulgated under the Securities Exchange Act of 1934, as
amended. A reference in the Plan to Rule 16b-3 shall include a
reference to any corresponding rule (or number redesignation) of any
amendments to Rule 16b-3 enacted after the effective date of the Plan’s
adoption.
|
(ff)
|
“Senior
Executive Incentive Award” means an award made to a Participant under the
terms of the Senior Executive Incentive
Plan.
|
(gg)
|
“Senior
Executive Incentive Plan” means the CSX Senior Executive Incentive
Plan.
|
(hh)
|
“Stock
Appreciation Right” means a right to receive amounts awarded under Section
10.
|
(ii)
|
“Subsidiary”
means any corporation in which CSX owns stock possessing more than 50
percent of the combined voting power of all classes of stock or which is
in a chain of corporations with CSX in which stock possessing more than 50
percent of the combined voting power of all classes of stock is owned by
one or more other corporations in the
chain.
|
(jj)
|
“Vesting
Event” means the occurrence of any event listed in Section 2(f), with the
following modification: the words, “Approval by the
shareholders of CSX of,” in the first line of Sections 2(f)(iii) and
2(f)(iv) are replaced for purposes of this Section 2(jj) with the words,
“Consummation of,
i.e.
, actual
change in ownership of Outstanding Corporation Common Stock, Outstanding
Corporation Voting Stock, and/or assets of CSX or its principal Subsidiary
by reason of ,”.
|
3.
|
Stock.
|
(a)
|
Subject
to Section 18 of the Plan, there shall be reserved for issuance under the
Plan an aggregate of 6 million (6,000,000) shares of Company Stock, which
shall be authorized, but unissued shares, plus any shares of Company Stock
that are represented by awards granted under any prior plan of the
Company, which are forfeited, expire or are cancelled without the delivery
of shares or which result in the forfeiture of shares back to
CSX. Shares allocable to Incentive Awards granted under the
Plan that expire, are forfeited, otherwise terminate unexercised, or are
settled in cash may again be subjected to an Incentive Award under the
Plan. For purposes of determining the number of shares that are
available for Incentive Awards under the Plan, the number shall include
the number of shares surrendered by a Participant actually or by
attestation or retained by CSX in payment of Applicable Withholding Taxes
and any Mature Shares surrendered by a Participant upon exercise of an
Option or in payment of Applicable Withholding Taxes. Shares
issued under the Plan through the settlement, assumption of substitution
of outstanding awards or obligations to grant future awards as a condition
of an Employer acquiring another entity shall not reduce the maximum
number of shares available for delivery under the Plan. Shares
issued under the Senior Executive Incentive Plan shall reduce the maximum
number of shares available for delivery under the
Plan.
|
(b)
|
No
more than 1,200,000 shares may be allocated to the Incentive Awards,
including the maximum amounts payable under a Performance Grant, that are
granted to any individual Participant during any 36-month
period. The maximum number of shares that may be issued as
Restricted Stock, Restricted Stock Units, Dividend Equivalents and under
Performance Grants, Stock Awards or Senior Executive Incentive Plan Grants
shall be 1,200,000 shares, provided that any shares of Restricted Stock,
Restricted Stock Units, Dividend Equivalents, Performance Grants or Stock
Awards that are forfeited shall not count against this
limit. The maximum cash payment that can be made for all
Incentive Awards granted to any one individual shall be $3,000,000 times
the number of 12-month periods in any performance cycle for any single or
combined performance goals. Any amount that is deferred by a Participant
shall be subject to the previous limit on the maximum cash payment in the
year in which the deferral is made and not in any later year in which
payment is made.
|
4.
|
Eligibility.
|
(a)
|
All
present and future employees of CSX, a Subsidiary, or a Foreign Affiliate
at the time of grant shall be eligible to receive Incentive Awards under
the Plan. If an Affiliate is approved to participate in the
Plan, all present and future employees of an Affiliate at the time of
grant shall be eligible to receive Incentive Awards under the
Plan. The Committee shall have the power and complete
discretion, as provided in Section 19, to select eligible employees to
receive Incentive Awards and to determine for each employee the nature of
the award and the terms and conditions of each Incentive
Award.
|
(b)
|
The
grant of an Incentive Award shall not obligate an Employer to pay an
employee any particular amount of remuneration, to continue the employment
of the employee after the grant or to make further grants to the employee
at any time thereafter.
|
5.
|
Stock
Options.
|
(a)
|
The
Committee may make grants of Options to Participants. The
Committee shall determine the number of shares for which Options are
granted, the Option exercise price per share, whether the Options are
Incentive Stock Options or Nonqualified Stock Options, and any other terms
and conditions to which the Options are
subject.
|
(b)
|
The
exercise price of shares of Company Stock covered by an Option shall be
not less than 100 percent of the Fair Market Value of the Company Stock on
the Date of Grant. Except as provided in Section 18, the
exercise price of an Option may not be decreased after the Date of
Grant. Except as provided in Section 18, a Participant may not
surrender an Option in consideration for the grant of a new Option with a
lower exercise price. If a Participant’s Option is cancelled
before its termination date, the Participant may not receive another
Option within 6 months of the cancellation unless the exercise price of
such Option is no less than the exercise price of the cancelled
Option.
|
(c)
|
An
Option shall not be exercisable more than 10 years after the Date of
Grant. The aggregate Fair Market Value, determined at the Date
of Grant, of shares for which Incentive Stock Options become exercisable
by a Participant during any calendar year shall not exceed
$100,000.
|
6.
|
Restricted Stock
Awards
.
|
(a)
|
The
Committee may make grants of Restricted Stock to
Participants. The Committee shall establish as to each award of
Restricted Stock the terms and conditions to which the Restricted Stock is
subject, including the period of time before which all restrictions shall
lapse and the Participant shall have full ownership of the Company Stock
(the “Restriction Period”). The Committee in its discretion may
award Restricted Stock without cash
consideration.
|
(b)
|
Except
as provided below in Section 6(c), the minimum Restriction Period
applicable to any award of Restricted Stock that is not subject to
performance standards restricting transfer shall be three years from the
Date of Grant. Except as provided below in Section 6(c), the
minimum Restriction Period applicable to any award of Restricted Stock
that is subject to performance standards shall be one year from the Date
of Grant.
|
(c)
|
Restriction
Periods of shorter duration than provided in Section 6(b) and Section 7(b)
may be approved for awards of Restricted Stock or Restricted Stock Units
combined with respect to up to 600,000 shares of Company Stock under the
Plan.
|
(d)
|
Restricted
Stock may not be sold, assigned, transferred, pledged, hypothecated, or
otherwise encumbered or disposed of until the restrictions have lapsed or
been removed. Certificates representing Restricted Stock shall
be held by CSX until the restrictions lapse and the Participant shall
provide CSX with appropriate stock powers endorsed in
blank.
|
7.
|
Restricted
Stock Units.
|
(a)
|
The
Committee may make grants of Restricted Stock Units to
Participants. The Committee shall establish as to each award of
Restricted Stock Units the terms and conditions to which the Restricted
Stock Units are subject. Upon lapse of the restrictions, a
Restricted Stock Unit shall entitle the Participant to receive from CSX a
share of Company Stock or a cash amount equal to the Fair Market Value of
the Company Stock on the date that the restrictions
lapse.
|
(b)
|
Except
as provided in Section 6(c), the minimum Restriction Period applicable to
any award of Restricted Stock Units that is not subject to performance
standards restricting transfer shall be three years from the Date of
Grant. Except as provided in Section 6(c), the minimum
Restriction Period applicable to any award of Restricted Stock Units that
is subject to performance standards shall be one year from the Date of
Grant.
|
8.
|
Performance
Grants.
|
(a)
|
The
Committee may make Performance Grants to any Participant. Each
Performance Grant shall contain the Performance Goals for the award,
including the Performance Criteria, the target and maximum amounts payable
and such other terms and conditions of the Performance
Grant. As to each Covered Employee, each Performance Grant
shall be granted and administered to comply with the requirements of Code
Section 162(m).
|
(b)
|
The
Committee shall establish the Performance Goals for Performance
Grants. The Committee shall determine the extent to which any
Performance Criteria shall be used and weighted in determining Performance
Grants. The Committee may increase, but not decrease, any
Performance Goal during a performance period for a Covered
Employee. The Performance Goals for any Performance Grant for a
Covered Employee shall be made not later than 90 days after the start of
the period for which the Performance Grant relates and shall be made prior
to the completion of 25 percent of such
period.
|
(c)
|
The
Committee shall establish for each Performance Grant the amount of Company
Stock or cash payable at specified levels of performance, based on the
Performance Goal for each Performance Criteria. The Committee
shall make all determinations regarding the achievement of any Performance
Goals. The Committee may not increase the amount of cash or
Common Stock that would otherwise be payable upon achievement of the
Performance Goal or Goals but may reduce or eliminate the payments except
as provided in a Performance Grant.
|
(d)
|
The
actual payments to a Participant under a Performance Grant will be
calculated by applying the achievement of Performance Criteria to the
Performance Goal. The Committee shall make all calculations of
actual payments and shall certify in writing the extent, if any, to which
the Performance Goals have been
met.
|
9.
|
Stock
Awards
. The Committee may make Stock Awards to any
Participant. The Committee shall establish the number of shares
of Common Stock to be awarded and the terms and conditions applicable to
each Stock Award. The Committee will make all determinations
regarding the achievement of any performance restrictions on a Stock
Award. The Common Stock under a Stock Award shall be issued by
CSX upon the satisfaction of the terms and conditions of a Stock
Award. No more than 1,200,000 shares of Company Stock (reduced
by shares issued under Restricted Stock or Restricted Stock Units subject
to Section 6(c)) may be granted under Stock Awards without performance
restrictions.
|
10.
|
Stock Appreciation
Rights
. The Committee may make grants of Stock
Appreciation Rights to Participants. The Committee shall
establish as to each award of Stock Appreciation Rights the terms and
conditions to which the Stock Appreciation Rights are
subject. The following provisions apply to all Stock
Appreciation Rights:
|
(a)
|
A
Stock Appreciation Right shall entitle the Participant, upon exercise of
the Stock Appreciation Right, to receive in exchange an amount equal to
the excess of (x) the Fair Market Value on the date of exercise of the
Company Stock covered by the surrendered Stock Appreciation Right over (y)
an amount not less than 100 percent of the Fair Market Value of the
Company Stock on the Date of Grant of the Stock Appreciation
Right. The Committee may limit the amount that the Participant
will be entitled to receive upon exercise of Stock Appreciation
Rights.
|
(b)
|
A
Stock Appreciation Right may not be exercisable more than 10 years after
the Date of Grant. A Stock Appreciation Right may only be
exercised at a time when the Fair Market Value of the Company Stock
covered by the Stock Appreciation Right exceeds the Fair Market Value of
the Company Stock on the Date of Grant of the Stock Appreciation
Right. The Stock Appreciation Right may provide for payment in
Company Stock or cash, or a fixed combination of Company Stock or cash, or
the Committee may reserve the right to determine the manner of payment at
the time the Stock Appreciation Right is
exercised.
|
11.
|
Dividend
Equivalents
. The Committee may make grants of Dividend
Equivalents to any Participant. The Committee shall establish
the terms and conditions to which the Dividend Equivalents are
subject. Dividend Equivalents may be granted in connection with
any other Incentive Award or separately. Under a Dividend
Equivalent, a Participant shall be entitled to receive currently or in the
future payments equivalent to the amount of dividends paid by CSX to
holders of Company Stock with respect to the number of Dividend
Equivalents held by the Participant. The Dividend Equivalent
may provide for payment in Company Stock or cash, or a fixed combination
of Company Stock or cash, or the Committee may reserve the right to
determine the manner of payment at the time the Dividend Equivalent is
payable.
|
12.
|
Method of Exercise of
Options.
Options may be exercised by the Participant (or
his guardian or personal representative) giving notice to the Corporate
Secretary of CSX or his delegate pursuant to procedures established by CSX
of the exercise stating the number of shares the Participant has elected
to purchase under the Option. The exercise price may be paid in
cash; or if the terms of an Option permit, (i) delivery or attestation of
Mature Shares (valued at their Fair Market Value) in satisfaction of all
or any part of the exercise price, (ii) delivery of a properly executed
exercise notice with irrevocable instructions to a broker to deliver to
CSX the amount necessary to pay the exercise price from the sale or
proceeds of a loan from the broker with respect to the sale of Company
Stock or a broker loan secured by Company Stock, or (iii) a combination of
(i) and (ii).
|
13.
|
Tax
Withholding
. Whenever payment under an Incentive Award
is made in cash, the Employer will withhold an amount sufficient to
satisfy any Applicable Withholding Taxes. Each Participant
shall agree as a condition of receiving an Incentive Award payable in the
form of Company Stock, to pay to the Employer, or make arrangements
satisfactory to the Employer regarding the payment to the Employer of,
Applicable Withholding Taxes. To satisfy Applicable Withholding
Taxes and under procedures established by the Committee or its delegate, a
Participant may elect to (i) make a cash payment or authorize additional
withholding from cash compensation, (ii) deliver Mature Shares (valued at
their Fair Market Value) or (iii) have CSX retain that number of shares of
Company Stock (valued at their Fair Market Value) that would satisfy all
or a specified portion of the Applicable Withholding
Taxes.
|
14.
|
Transferability of Incentive
Awards.
Incentive Awards other than Incentive Stock
Options shall not be transferable by a Participant and exercisable by a
person other than the Participant, except as expressly provided in the
Incentive Award. Incentive Stock Options, by their terms, shall
not be transferable except by will or by the laws of descent and
distribution and shall be exercisable, during the Participant’s lifetime,
only by the Participant.
|
15.
|
Deferral
Elections
. Effective January 1, 2005, the Committee may
permit Participants to elect to defer any gains realized or the issuance
or right to Company Stock relating to Incentive Awards, other than Options
or Stock Appreciation Rights, vested, earned or granted after December 31,
2004, under the CSX Executives’ Deferred Compensation Plan or any
successor plan.
|
16.
|
Effective Date of the
Plan.
The effective date of the Plan is April 27,
2000. The Plan shall be submitted to the shareholders of CSX
for approval. Until (i) the Plan has been approved by CSX’s
shareholders, and (ii) the requirements of any applicable federal or state
securities laws have been met, no Restricted Stock shall be awarded that
is not contingent on these events and no Option granted shall be
exercisable.
|
17.
|
Termination, Modification,
Change.
If not sooner terminated by the Board, this Plan
shall terminate at the close of business on April 26, 2010. No
Incentive Awards shall be made under the Plan after its
termination. The Board may amend or terminate the Plan as it
shall deem advisable; provided that no change shall be made that increases
the total number of shares of Company Stock reserved for issuance pursuant
to Incentive Awards granted under the Plan (except pursuant to Section
18), or reduces the minimum exercise price for Options unless such change
is authorized by the shareholders of CSX. A termination or
amendment of the Plan shall not, without the consent of the Participant,
adversely affect a Participant’s rights under an Incentive Award
previously granted to him or her.
|
18.
|
Change in Capital
Structure
.
|
(a)
|
In
the event of a stock dividend, stock split or combination of shares, share
exchange, recapitalization or merger in which CSX is the surviving
corporation or other change in CSX capital stock (including, but not
limited to, the creation or issuance to shareholders generally of rights,
options or warrants for the purchase of common stock or preferred stock of
CSX), the number and kind of shares of stock or securities of CSX to be
subject to the Plan and to Incentive Awards then outstanding or to be
granted, the maximum number of shares or securities which may be delivered
under the Plan under Sections 3(a), 3(b), 6(b) or 9, the exercise price,
the terms of Incentive Awards and other relevant provisions shall be
adjusted by the Committee in its discretion, whose determination shall be
binding on all persons. If the adjustment would produce
fractional shares with respect to any unexercised Option, the Committee
may adjust appropriately the number of shares covered by the Option so as
to eliminate the fractional shares.
|
(b)
|
If
CSX is a party to a consolidation or a merger in which CSX is not the
surviving corporation, a transaction that results in the acquisition of
substantially all of CSR’s outstanding stock by a single person or entity,
or a sale or transfer of substantially all of CSX’s assets, the Committee
may take such actions with respect to outstanding Incentive Awards as the
Committee deems appropriate.
|
(c)
|
Notwithstanding
anything in the Plan to the contrary, the Committee may take the foregoing
actions without the consent of any Participant, and the Committee’s
determination shall be conclusive and binding on all persons for all
purposes.
|
19.
|
Administration
of the Plan.
|
(a)
|
Prior
to a Change in Control, the Committee shall administer the
Plan. The Committee shall have general authority to impose any
term, limitation or condition upon an Incentive Award that the Committee
deems appropriate to achieve the objectives of the Incentive
Award. The Committee may adopt rules and regulations for
carrying out the Plan with respect to Participants. The
interpretation and construction of any provision of the Plan by the
Committee shall be final and conclusive as to any
Participant.
|
(b)
|
Except
as provided in Section 5(b), the Committee shall have the power to amend
the terms of previously granted Incentive Awards that were granted by that
Committee so long as the terms as amended are consistent with the terms of
the Plan and provided that the consent of the Participant is obtained with
respect to any amendment that would be detrimental to him or her, except
that such consent will not be required if such amendment is for the
purpose of complying with Rule 16b-3 or any requirement of the Code
applicable to the Incentive Award.
|
(c)
|
The
Committee shall have the power and complete discretion (i) to delegate to
any individual, or to any group of individuals employed by the Company or
any Subsidiary, the authority to grant Stock Awards under the Plan and
(ii) to determine the terms and limitations of any delegation of
authority; provided that no individual Stock Award granted under a
delegation by the Committee may exceed a Fair Market Value of $100,000 on
the Date of Grant.
|
(d)
|
If
the Participant’s Employer is involved in a Divisive Transaction, the
Committee may take such actions with respect to outstanding Incentive
Awards as the Committee deems
appropriate.
|
(e)
|
If
a Participant or former Participant (1) becomes associated with, recruits
or solicits customers or other employees of an Employer, is employed by,
renders services to, or owns any interest in (other than any
nonsubstantial interest, as determined by the Committee) any business that
is in competition with CSX, its Subsidiaries, Foreign Affiliates or
Affiliates, (2) has his employment terminated by his Employer on account
of actions by the Participant which are detrimental to the interests of
CSX, its Subsidiaries, Foreign Affiliates or Affiliates, or (3) engages
in, or has engaged in, conduct which the Committee determines to be
detrimental to the interests of CSX, the Committee may, in its sole
discretion, cancel all outstanding Incentive Awards, including immediately
terminating any options held by the Participant, regardless of whether
then exercisable.
|
(f)
|
In
the event of the death of a Participant, any outstanding Incentive Awards
that are otherwise exercisable may be exercised by the Participant’s
Beneficiary or, if no Beneficiary is designated, by the personal
representative of the Participant’s estate or by the person to whom rights
under the Incentive Award shall pass by will or the laws of descent and
distribution.
|
(g)
|
In
the event of the death of a Participant, any outstanding Incentive Awards
that are otherwise exercisable may be exercised by the Participant’s
Beneficiary. If no Beneficiary is designated and the
Participant dies testate, any outstanding Incentive Awards that are
otherwise exercisable may be exercised by the person to whom such rights
under an Incentive Award or such Incentive Awards are specifically
bequeathed, or if there is no such specific bequest, by the personal
representative of the Participant’s estate. If no Beneficiary
is designated and the Participant dies intestate, any outstanding
Incentive Award that is otherwise exercisable may be exercised by the
persons to whom such rights pass under the laws of descent and
distribution of the state in which the Participant was domiciled at his or
her death.
|
20.
|
Change in
Control
.
|
(a)
|
Notwithstanding
any provision of the Plan or any Incentive Award to the
contrary:
|
(i)
|
upon
the occurrence of the date of a Change in Control, (i) all Options and
Stock Appreciation Rights granted before February 13, 2001 shall become
fully exercisable, (ii) all terms and conditions on Restricted Stock and
Restricted Stock Units granted before February 13, 2001 shall be deemed
satisfied, and (iii) all Performance Grants, Stock Awards and Dividend
Equivalents granted before February 13, 2001 shall be deemed to be fully
earned and be immediately payable in
cash;
|
(ii)
|
upon
the occurrence of the date of a Vesting Event, (i) all Options and Stock
Appreciation Rights granted on or after February 13, 2001 shall become
fully exercisable, (ii) all terms and conditions on Restricted Stock and
Restricted Stock Units granted on or after February 13, 2001 shall be
deemed satisfied, and (iii) all Performance Grants, Stock Awards and
Dividend Equivalents granted on or after February 13, 2001 shall be deemed
to be fully earned and be immediately payable in
cash;
|
(iii)
|
all
Options and Stock Appreciation Rights held by a Participant (A) who
resigns within three months after an event constituting Good Reason or (B)
whose employment is terminated without Cause by the Company or an
Affiliate, in either case upon or after an event described in Section
2(f)(iii) or 2(f)(iv) and prior to the earlier of (x) the consummation of
such event,
i.e.
, actual
change in ownership of Outstanding Corporation Common Stock, Outstanding
Corporation Voting Stock, and/or assets of CSX or its principal Subsidiary
and (y) the determination by the Board of Directors that such event has
been unwound or reversed or is no longer expected to be consummated, which
Options and Stock Appreciation Rights were not fully exercisable at the
time of such termination of employment, shall become fully exercisable
upon the consummation of the event described in Section 2(f)(iii) or
2(f)(iv), as applicable. Such Options and Stock Appreciation
Rights shall be exercisable following the consummation of such event for
the period specified in the Incentive Award for exercise following
termination of employment other than due to death or Disability or until
the expiration of the original option term, if sooner; provided, that
prior to consummation of such event or a Board of Directors determination,
as referenced above, such Options and Stock Appreciation Rights shall
remain outstanding and be exercisable only at the time and to the extent
set forth in the Incentive Award;
|
(iv)
|
any
terms and conditions of all Restricted Stock and Restricted Stock Units
held by a Participant (A) who resigns within three months if an event
constituting Good Reason or (B) whose employment is terminated without
Cause by the Company or an Affiliate, in either case upon or after an
event described in Section 2(f)(iii) or 2(f)(iv) and prior to the earlier
of (x) the consummation of such event,
i.e.
, actual
change in ownership of Outstanding Corporation Common Stock, Outstanding
Corporation Voting Stock, and/or assets of CSX or its principal Subsidiary
and (y) the determination by the Board of Directors that such event has
been unwound or reversed or is no longer expected to be consummated, which
terms and conditions had not been satisfied at the time of such
termination of employment, shall be deemed satisfied upon the consummation
of the event described in Section 2(f)(iii) or 2(f)(iv), as applicable;
provided, that prior to the consummation of such event or a Board of
Directors determination, as referenced above, such Restricted Stock and
Restricted Stock Units shall remain outstanding and be subject to the
terms and conditions set forth in the Incentive Award;
and
|
(v)
|
all
Performance Grants, Stock Awards and Dividend Equivalents held by a
Participant (A) who resigns within three months of an event constituting
Good Reason or (B) whose employment is terminated without Cause by the
Company or an Affiliate, in either case upon or after an event described
in Section 2(f)(iii) or 2(f)(iv) and prior to a the earlier of (x) the
consummation of such event,
i.e.
, actual
change in ownership of Outstanding Corporation Common Stock, Outstanding
Corporation Voting Stock, and/or assets of CSX or its principal Subsidiary
and (y) the determination by the Board of Directors that such event has
been unwound, reversed, or is no longer expected to be consummated, which
had not been fully earned at the time of such termination of employment,
shall be deemed to be fully earned and immediately payable in cash upon
the consummation of the event described in Section 2(f)(iii) or 2(f)(iv),
as applicable; provided, that prior to the consummation of such event or a
Board of Directors determination, as referenced above, such Performance
Grants, Stock Awards and Dividend Equivalents shall remain outstanding and
be subject to the terms and conditions set forth in the Incentive
Award.
|
21.
|
Interpretation.
The
terms of this Plan shall be governed by the laws of the Commonwealth of
Virginia without regard to its conflict of laws
rules.
|
34253.000052
RICHMOND 1218135v4
|
•
|
Registration
Statement (Form S-3
No. 33-2084)
|
•
|
Registration
Statement (Form S-3
No. 333-113637)
|
•
|
Registration
Statement (Form S-3ASR. 333-132051)
|
•
|
Registration
Statement (Form S-8
No. 33-16230)
|
•
|
Registration
Statement (Form S-8
No. 33-25537)
|
•
|
Registration
Statement (Form S-8
No. 33-29136)
|
•
|
Registration
Statement (Form S-8
No. 33-33853)
|
•
|
Registration
Statement (Form S-8
No. 33-33854)
|
•
|
Registration
Statement (Form S-8
No. 33-37449)
|
•
|
Registration
Statement (Form S-8
No. 33-41498)
|
•
|
Registration
Statement (Form S-8
No. 33-41499)
|
•
|
Registration
Statement (Form S-8
No. 33-41735)
|
•
|
Registration
Statement (Form S-8
No. 33-47655)
|
•
|
Registration
Statement (Form S-8
No. 33-57029)
|
•
|
Registration
Statement (Form S-8
No. 333-09213)
|
•
|
Registration
Statement (Form S-8
No. 333-73429)
|
•
|
Registration
Statement (Form S-8
No. 333-32008)
|
•
|
Registration
Statement (Form S-8
No. 333-43382)
|
•
|
Registration
Statement (Form S-8
No. 333-48896)
|
•
|
Registration
Statement (Form S-8
No. 333-66604)
|
•
|
Registration
Statement (Form S-8
No. 333-110589)
|
/s/
Donna M. Alvarado
|
/s/
Southwood J. Morcott
|
||||||
Donna
M. Alvarado
|
Southwood
J. Morcott
|
||||||
|
|||||||
/s/
Elizabeth E. Bailey
|
/s/
David M. Ratcliffe
|
||||||
Elizabeth
E. Bailey
|
David
M. Ratcliffe
|
||||||
|
|||||||
/s/
John B. Breaux
|
/s/
William C. Richardson
|
||||||
John
B. Breaux
|
William
C. Richardson
|
||||||
|
|||||||
/s/
Steven T. Halverson
|
/s/
Frank S. Royal
|
||||||
Steven
T. Halverson
|
Frank
S. Royal
|
||||||
|
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/s/
Edward J. Kelly III
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/s/
Donald J. Shepard
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Edward
J. Kelly III
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Donald
J. Shepard
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/s/
Robert D. Kunisch
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Robert
D. Kunisch
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1.
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I
have reviewed this Annual Report on Form 10-K of CSX
Corporation;
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2.
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Based
on my knowledge, this report does not contain any untrue statement of a
material fact or omit to state a material fact necessary to make the
statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this
report;
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3.
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Based
on my knowledge, the financial statements, and other financial information
included in this report, fairly present in all material respects the
financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this
report;
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4.
|
The
registrant's other certifying officer and I are responsible for
establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal
control over financial reporting (as defined in Exchange Act Rules
13a-15(f) and 15d-15(f)) for the registrant and
have:
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a)
|
Designed
such disclosure controls and procedures, or caused such disclosure
controls and procedures to be designed under our supervision, to ensure
that material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within those
entities, particularly during the period in which this report is being
prepared;
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b)
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Designed
such internal control over financial reporting, or caused such internal
control over financial reporting to be designed under our supervision, to
provide reasonable assurance regarding the reliability of financial
reporting and the preparation of financial statements for external
purposes in accordance with generally accepted accounting
principles;
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c)
|
Evaluated
the effectiveness of the registrant's disclosure controls and procedures
and presented in this report our conclusions about the effectiveness of
the disclosure controls and procedures, as of the end of the period
covered by this report based on such evaluation;
and
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d)
|
Disclosed
in this report any change in the registrant's internal control over
financial reporting that occurred during the registrant's most recent
fiscal quarter (the registrant's fourth fiscal quarter in the case of an
annual report) that has materially affected, or is reasonably likely to
materially affect, the registrant's internal control over financial
reporting; and
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5.
|
The
registrant's other certifying officer and I have disclosed, based on our
most recent evaluation of internal control over financial reporting, to
the registrant's auditors and the audit committee of the registrant's
board of directors (or persons performing the equivalent
functions):
|
a)
|
All
significant deficiencies and material weaknesses in the design or
operation of internal control over financial reporting which are
reasonably likely to adversely affect the registrant's ability to record,
process, summarize and report financial information;
and
|
b)
|
Any
fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal control
over financial reporting.
|
|
Date: February
13, 2008
|
1.
|
I
have reviewed this Annual Report on Form 10-K of CSX
Corporation;
|
2.
|
Based
on my knowledge, this report does not contain any untrue statement of a
material fact or omit to state a material fact necessary to make the
statements made, in light of the circumstances under which such statements
were made, not misleading with respect to the period covered by this
report;
|
3.
|
Based
on my knowledge, the financial statements, and other financial information
included in this report, fairly present in all material respects the
financial condition, results of operations and cash flows of the
registrant as of, and for, the periods presented in this
report;
|
4.
|
The
registrant's other certifying officer and I are responsible for
establishing and maintaining disclosure controls and procedures (as
defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal
control over financial reporting (as defined in Exchange Act Rules
13a-15(f) and 15d-15(f)) for the registrant and
have:
|
a)
|
Designed
such disclosure controls and procedures, or caused such disclosure
controls and procedures to be designed under our supervision, to ensure
that material information relating to the registrant, including its
consolidated subsidiaries, is made known to us by others within those
entities, particularly during the period in which this report is being
prepared;
|
b)
|
Designed
such internal control over financial reporting, or caused such internal
control over financial reporting to be designed under our supervision, to
provide reasonable assurance regarding the reliability of financial
reporting and the preparation of financial statements for external
purposes in accordance with generally accepted accounting
principles;
|
c)
|
Evaluated
the effectiveness of the registrant's disclosure controls and procedures
and presented in this report our conclusions about the effectiveness of
the disclosure controls and procedures, as of the end of the period
covered by this report based on such evaluation;
and
|
d)
|
Disclosed
in this report any change in the registrant's internal control over
financial reporting that occurred during the registrant's most recent
fiscal quarter (the registrant's fourth fiscal quarter in the case of an
annual report) that has materially affected, or is reasonably likely to
materially affect, the registrant's internal control over financial
reporting; and
|
5.
|
The
registrant's other certifying officer and I have disclosed, based on our
most recent evaluation of internal control over financial reporting, to
the registrant's auditors and the audit committee of the registrant's
board of directors (or persons performing the equivalent
functions):
|
a)
|
All
significant deficiencies and material weaknesses in the design or
operation of internal control over financial reporting which are
reasonably likely to adversely affect the registrant's ability to record,
process, summarize and report financial information;
and
|
b)
|
Any
fraud, whether or not material, that involves management or other
employees who have a significant role in the registrant's internal control
over financial reporting.
|
|
Date: February
19, 2008
|
1.
|
The
Report fully complies with the requirements of section 13(a) or 15(d) of
the Securities Exchange Act of 1934;
and
|
2.
|
The
information contained in the Report fairly presents, in all material
respects, the financial condition and results of operations of the
registrant.
|
1.
|
The
Report fully complies with the requirements of section 13(a) or 15(d) of
the Securities Exchange Act of 1934;
and
|
2.
|
The
information contained in the Report fairly presents, in all material
respects, the financial condition and results of operations of the
issuer.
|