(X)
|
QUARTERLY
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
|
CSX
CORPORATION
|
|||
FORM
10-Q
|
|||
FOR
THE QUARTERLY PERIOD ENDED MARCH 26, 2010
|
|||
Page
|
|||
PART
I.
|
FINANCIAL
INFORMATION
|
||
Item
1.
|
Financial
Statements
|
||
3
|
|||
Quarters
Ended March 26, 2010 and March 27, 2009
|
|||
4
|
|||
At
March 26, 2010 (Unaudited) and December 25, 2009
|
|||
5
|
|||
Quarters
Ended March 26, 2010 and March 27, 2009
|
|||
6
|
|||
Item
2.
|
28
|
||
Item
3.
|
40
|
||
Item
4.
|
40
|
||
PART
II.
|
OTHER
INFORMATION
|
||
Item
1.
|
40
|
||
Item
1A.
|
40
|
||
Item
2.
|
41
|
||
Item
3.
|
42
|
||
Item
4.
|
42
|
||
Item
5.
|
42
|
||
Item
6.
|
42
|
||
43
|
First
Quarters
|
||||
2010
|
2009
|
|||
Revenue
|
$2,491
|
$2,247
|
||
Expense
|
||||
Labor
and Fringe
|
729
|
662
|
||
Materials,
Supplies and Other
|
453
|
477
|
||
Fuel
|
283
|
191
|
||
Depreciation
|
229
|
224
|
||
Equipment
and Other Rents
|
100
|
113
|
||
Inland
Transportation
|
63
|
58
|
||
Total
Expense
|
1,857
|
1,725
|
||
Operating
Income
|
634
|
522
|
||
Interest
Expense
|
(142)
|
(141)
|
||
Other
Income - Net (Note 8)
|
11
|
3
|
||
Earnings
From Continuing Operations
|
||||
Before
Income Taxes
|
503
|
384
|
||
Income
Tax Expense (Note 9)
|
(197)
|
(130)
|
||
Earnings
From Continuing Operations
|
306
|
254
|
||
Discontinued
Operations (Note 10)
|
-
|
(8)
|
||
Net
Earnings
|
$306
|
$246
|
||
Per
Common Share (Note 2)
|
||||
Net
Earnings Per Share, Basic
|
||||
Continuing
Operations
|
$0.78
|
$0.65
|
||
Discontinued
Operations
|
-
|
(0.02)
|
||
Net
Earnings
|
$0.78
|
$0.63
|
||
Net
Earnings Per Share, Assuming Dilution
|
||||
Continuing
Operations
|
$0.78
|
$0.64
|
||
Discontinued
Operations
|
-
|
(0.02)
|
||
Net
Earnings
|
$0.78
|
$0.62
|
||
Average
Shares Outstanding
(Thousands)
|
391,079
|
391,160
|
||
Average
Shares Outstanding,
|
||||
Assuming
Dilution
(Thousands)
|
394,323
|
394,101
|
||
Cash
Dividends Paid Per Common Share
|
$0.24
|
$0.22
|
·
|
Consolidated
income statements for the quarters ended March 26, 2010 and March 27,
2009;
|
·
|
Consolidated
balance sheets at March 26, 2010 and December 25, 2009;
and
|
·
|
Consolidated
cash flow statements for the quarters ended March 26, 2010 and March 27,
2009.
|
·
|
The
first fiscal quarter of 2010 and 2009 consisted of 13 weeks ending on
March 26, 2010 and March 27, 2009,
respectively.
|
·
|
Fiscal
year 2009 consisted of 52 weeks ending on December 25,
2009.
|
·
|
Please
note that fiscal year 2010 consists of 53 weeks ending on December 31,
2010.
|
First
Quarters
|
|||
2010
|
2009
|
||
Numerator
(Dollars in
millions)
:
|
|||
Earnings
from Continuing Operations
|
$306
|
$254
|
|
Discontinued
Operations - Net of Tax
(a)
|
-
|
(8)
|
|
Net
Earnings
|
306
|
246
|
|
Denominator
(Units in
thousands)
:
|
|||
Average
Common Shares Outstanding
|
391,079
|
391,160
|
|
Convertible
Debt
|
1,042
|
1,118
|
|
Stock
Option Common Stock Equivalents
(b)
|
2,131
|
1,823
|
|
Other
Potentially Dilutive Common Shares
|
71
|
-
|
|
Average
Common Shares Outstanding, Assuming Dilution
|
394,323
|
394,101
|
|
Net
Earnings Per Share, Basic:
|
|||
Continuing
Operations
|
$0.78
|
$0.65
|
|
Discontinued
Operations
(a)
|
-
|
(0.02)
|
|
Net
Earnings
|
$0.78
|
$0.63
|
|
Net
Earnings Per Share, Assuming Dilution:
|
|||
Continuing
Operations
|
$0.78
|
$0.64
|
|
Discontinued
Operations
(a)
|
-
|
(0.02)
|
|
Net
Earnings
|
$0.78
|
$0.62
|
(a)
|
For
additional information regarding discontinued operations, see Note 10,
Discontinued Operations.
|
(b)
|
When calculating diluted
earnings per share for stock option common stock equivalents, the Earnings
Per Share Topic in the ASC requires CSX to include the potential shares
that would be outstanding if all outstanding stock options were
exercised. This is offset by shares CSX could repurchase
using the proceeds from these hypothetical exercises to obtain the common
stock equivalent. This number is different from outstanding
stock options, which is included in Note 3, Share-Based
Compensation
.
All stock options were
dilutive for the periods presented; therefore, no stock options were
excluded from the diluted earnings per share
calculation.
|
·
|
convertible
debt;
|
·
|
employee
stock options; and
|
·
|
other
equity awards, which include long-term incentive
awards.
|
First
Quarters
|
||
(Dollars
in millions)
|
2010
|
2009
|
Share-Based
Compensation Expense
(a)
|
$23
|
$(8)
|
Income
Tax Benefit / (Expense)
|
9
|
(3)
|
(a)
Share-based compensation expense may fluctuate with estimates of the
number of performance-based awards that are expected to be awarded in
future periods.
|
First
Quarters
|
||
(In
thousands)
|
2010
|
2009
|
Number
of Stock Options Exercised
|
359
|
74
|
March
2010
|
December
25, 2009
|
|||||||
(Dollars
in millions)
|
Current
|
Long-term
|
Total
|
Current
|
Long-term
|
Total
|
||
Casualty:
|
||||||||
Personal
Injury
|
$78
|
$220
|
$298
|
$85
|
$215
|
$300
|
||
Occupational
|
28
|
132
|
160
|
27
|
132
|
159
|
||
Total
Casualty
|
106
|
352
|
458
|
112
|
347
|
459
|
||
Separation
|
15
|
54
|
69
|
16
|
57
|
73
|
||
Environmental
|
37
|
60
|
97
|
37
|
60
|
97
|
||
Other
|
27
|
87
|
114
|
25
|
83
|
108
|
||
Total
|
$185
|
$553
|
$738
|
$190
|
$547
|
$737
|
·
|
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 potentially
responsible parties at the
location.
|
·
|
Guarantee
of approximately $37 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 CSX 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 $4 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 liabilities for those
obligations. CSX’s obligation under this guarantee will be
completed in 2011.
|
Pension
Benefits
|
Other
Post-retirement Benefits
|
|||||
(Dollars
in millions)
|
First
Quarters
|
First
Quarters
|
||||
2010
|
2009
|
2010
|
2009
|
|||
Service
Cost
|
$10
|
$8
|
$1
|
$1
|
||
Interest
Cost
|
31
|
32
|
5
|
6
|
||
Expected
Return on Plan Assets
|
(41)
|
(37)
|
-
|
-
|
||
Amortization
of Prior Service Cost
|
1
|
1
|
-
|
-
|
||
Amortization
of Net Loss
|
15
|
7
|
2
|
1
|
||
Net
Periodic Benefit Cost
|
$16
|
$11
|
$8
|
$8
|
(Dollars
in millions)
|
Current
Portion
|
Long-term
Portion
|
Total
Long-term Debt Activity
|
Total
long-term debt at December 2009
|
$113
|
$7,895
|
$8,008
|
2010
activity:
|
|||
Issued
|
-
|
-
|
-
|
Repaid
|
(17)
|
-
|
(17)
|
Reclassifications
|
523
|
(523)
|
-
|
Converted
into CSX stock
|
(2)
|
-
|
(2)
|
Total
long-term debt at March 2010
|
$617
|
$7,372
|
$7,989
|
First
Quarters
|
|||
(Dollars
in Millions)
|
2010
|
2009
|
|
Interest
Income
|
$1
|
$4
|
|
Income
from Real Estate
|
7
|
1
|
|
Miscellaneous
Income (Expense)
|
3
|
(2)
|
|
Total
Other Income - Net
|
$11
|
$3
|
·
|
Level
1 – observable market inputs that are unadjusted quoted prices for
identical assets or liabilities in active
markets
|
·
|
Level
2 – other significant observable inputs (including quoted prices for
similar securities, interest rates, credit risk,
etc.)
|
·
|
Level
3 – significant unobservable inputs (including the Company’s own
assumptions in determining the fair value of
investments)
|
(Dollars
in Millions)
|
March
2010
|
December
2009
|
||||||
Fair
Value
|
$91
|
$96
|
||||||
Amortized
Cost
|
$88
|
$91
|
(Dollars
in Millions)
|
March
2010
|
December
2009
|
||||||
Long-term
Debt Including Current Maturities:
|
||||||||
Fair
Value
|
$8,720
|
$8,780
|
||||||
Carrying
Value
|
$7,989
|
$8,008
|
First
Quarters
|
|||||||
CSX
|
|||||||
(Dollars
in millions)
|
Rail
(a)
|
Intermodal
|
Consolidated
|
||||
2010
|
2009
|
2010
|
2009
|
2010
|
2009
|
$
Change
|
|
Revenues
from External Customers
|
$2,168
|
$1,977
|
$323
|
$270
|
$2,491
|
$2,247
|
$244
|
Segment
Operating Income
|
595
|
498
|
39
|
24
|
634
|
522
|
112
|
(a)
|
In
addition to CSXT, the rail segment includes non-railroad subsidiaries
TDSI, Transflo, CSX Technology and other
subsidiaries.
|
Consolidating
Income Statements
|
||||||
(Dollars
in Millions)
|
||||||
Quarter
Ended March 2010
|
CSX
Corporation
|
CSX
Transportation
|
Other
|
Eliminations
|
Consolidated
|
|
Operating
Revenue
|
$-
|
$2,152
|
$365
|
$(26)
|
$2,491
|
|
Operating
Expense
|
(37)
|
1,605
|
315
|
(26)
|
1,857
|
|
Operating
Income
|
$37
|
$547
|
$50
|
$-
|
$634
|
|
Equity
in Earnings of Subsidiaries
|
398
|
-
|
(36)
|
(362)
|
-
|
|
Interest
Expense
|
(126)
|
(28)
|
(6)
|
18
|
(142)
|
|
Other
Income - Net
|
6
|
18
|
5
|
(18)
|
11
|
|
Earnings
From Continuing Operations
|
||||||
Before
Income Taxes
|
$315
|
$537
|
$13
|
$(362)
|
$503
|
|
Income
Tax Benefit (Expense)
|
(9)
|
(210)
|
22
|
-
|
(197)
|
|
Earnings
From Continuing Operations
|
$306
|
$327
|
$35
|
$(362)
|
$306
|
|
Discontinued
Operations
|
-
|
-
|
-
|
-
|
-
|
|
Net
Earnings
|
$306
|
$327
|
$35
|
$(362)
|
$306
|
|
Quarter
Ended March 2009
|
CSX
Corporation
|
CSX
Transportation
|
Other
|
Eliminations
|
Consolidated
|
|
Operating
Revenue
|
$-
|
$1,960
|
$313
|
$(26)
|
$2,247
|
|
Operating
Expense
|
(79)
|
1,563
|
265
|
(24)
|
1,725
|
|
Operating
Income
|
$79
|
$397
|
$48
|
$(2)
|
$522
|
|
Equity
in Earnings of Subsidiaries
|
549
|
-
|
(294)
|
(255)
|
-
|
|
Interest
Expense
|
(124)
|
(31)
|
(1)
|
15
|
(141)
|
|
Other
Income - Net
|
8
|
6
|
2
|
(13)
|
3
|
|
Earnings
From Continuing Operations
|
||||||
Before
Income Taxes
|
$512
|
$372
|
$(245)
|
$(255)
|
$384
|
|
Income
Tax Benefit (Expense)
|
(266)
|
(140)
|
276
|
-
|
(130)
|
|
Earnings
From Continuing Operations
|
$246
|
$232
|
$31
|
$(255)
|
$254
|
|
Discontinued
Operations
|
-
|
-
|
(8)
|
-
|
(8)
|
|
Net
Earnings
|
$246
|
$232
|
$23
|
$(255)
|
$246
|
Consolidating
Balance Sheet
|
|||||||
(Dollars
in Millions)
|
|||||||
CSX
|
CSX
|
||||||
As
of March 2010
|
Corporation
|
Transportation
|
Other
|
Eliminations
|
Consolidated
|
||
ASSETS
|
|||||||
Current
Assets
|
|||||||
Cash
and Cash Equivalents
|
$839
|
$61
|
$93
|
$-
|
$993
|
||
Short-term
Investments
|
-
|
-
|
57
|
-
|
57
|
||
Accounts
Receivable - Net
|
152
|
896
|
(77)
|
-
|
971
|
||
Materials
and Supplies
|
-
|
219
|
(1)
|
-
|
218
|
||
Deferred
Income Taxes
|
15
|
154
|
15
|
-
|
184
|
||
Other
Current Assets
|
20
|
62
|
569
|
(573)
|
78
|
||
Total
Current Assets
|
$1,026
|
$1,392
|
$656
|
$(573)
|
$2,501
|
||
Properties
|
4
|
29,916
|
1,356
|
-
|
31,276
|
||
Accumulated
Depreciation
|
(6)
|
(7,137)
|
(843)
|
-
|
(7,986)
|
||
Properties
- Net
|
$(2)
|
$22,779
|
$513
|
$-
|
$23,290
|
||
Investments
in Conrail
|
-
|
-
|
654
|
-
|
654
|
||
Affiliates
and Other Companies
|
-
|
572
|
(130)
|
-
|
442
|
||
Investments
in Consolidated Subsidiaries
|
15,700
|
-
|
47
|
(15,747)
|
-
|
||
Other
Long-term Assets
|
183
|
75
|
91
|
(43)
|
306
|
||
Total
Assets
|
$16,907
|
$24,818
|
$1,831
|
$(16,363)
|
$27,193
|
||
LIABILITIES
AND SHAREHOLDERS' EQUITY
|
|||||||
Current
Liabilities
|
|||||||
Accounts
Payable
|
$99
|
$933
|
$(101)
|
$-
|
$931
|
||
Labor
and Fringe Benefits Payable
|
34
|
314
|
28
|
-
|
376
|
||
Payable
to Affiliates
|
952
|
358
|
(774)
|
(536)
|
-
|
||
Casualty,
Environmental and Other Reserves
|
-
|
170
|
15
|
-
|
185
|
||
Current
Maturities of Long-term Debt
|
507
|
107
|
3
|
-
|
617
|
||
Income
and Other Taxes Payable
|
143
|
247
|
(228)
|
-
|
162
|
||
Other
Current Liabilities
|
2
|
107
|
44
|
(36)
|
117
|
||
Total
Current Liabilities
|
$1,737
|
$2,236
|
$(1,013)
|
$(572)
|
$2,388
|
||
Casualty,
Environmental and Other Reserves
|
-
|
451
|
102
|
-
|
553
|
||
Long-term
Debt
|
6,048
|
1,320
|
4
|
-
|
7,372
|
||
Deferred
Income Taxes
|
(317)
|
6,928
|
57
|
-
|
6,668
|
||
Long-term
Payable to Affiliates
|
-
|
-
|
44
|
(44)
|
-
|
||
Other
Long-term Liabilities
|
570
|
516
|
241
|
-
|
1,327
|
||
Total
Liabilities
|
$8,038
|
$11,451
|
$(565)
|
$(616)
|
$18,308
|
||
Shareholders'
Equity
|
|||||||
Common
Stock, $1 Par Value
|
$389
|
$181
|
$-
|
$(181)
|
$389
|
||
Other
Capital
|
-
|
5,572
|
1,968
|
(7,540)
|
-
|
||
Retained
Earnings
|
9,278
|
7,666
|
448
|
(8,113)
|
9,279
|
||
Accumulated
Other Comprehensive Loss
|
(798)
|
(75)
|
(63)
|
138
|
(798)
|
||
Noncontrolling
Interest
|
-
|
23
|
43
|
(51)
|
15
|
||
Total
Shareholders' Equity
|
$8,869
|
$13,367
|
$2,396
|
$(15,747)
|
$8,885
|
||
Total
Liabilities and Shareholders' Equity
|
$16,907
|
$24,818
|
$1,831
|
$(16,363)
|
$27,193
|
Consolidating
Balance Sheet
|
|||||||
(Dollars
in Millions)
|
|||||||
CSX
|
CSX
|
||||||
As
of December 2009
|
Corporation
|
Transportation
|
Other
|
Eliminations
|
Consolidated
|
||
ASSETS
|
|||||||
Current
Assets
|
|||||||
Cash
and Cash Equivalents
|
$918
|
$30
|
$81
|
$-
|
$1,029
|
||
Short-term
Investments
|
-
|
-
|
61
|
-
|
61
|
||
Accounts
Receivable - Net
|
4
|
888
|
103
|
-
|
995
|
||
Materials
and Supplies
|
-
|
203
|
-
|
-
|
203
|
||
Deferred
Income Taxes
|
13
|
137
|
8
|
-
|
158
|
||
Other
Current Assets
|
19
|
32
|
533
|
(460)
|
124
|
||
Total
Current Assets
|
$954
|
$1,290
|
$786
|
$(460)
|
$2,570
|
||
Properties
|
4
|
29,739
|
1,338
|
-
|
31,081
|
||
Accumulated
Depreciation
|
(6)
|
(7,036)
|
(826)
|
-
|
(7,868)
|
||
Properties
- Net
|
$(2)
|
$22,703
|
$512
|
-
|
$23,213
|
||
Investments
in Conrail
|
-
|
-
|
650
|
-
|
650
|
||
Affiliates
and Other Companies
|
-
|
566
|
(128)
|
-
|
438
|
||
Investments
in Consolidated Subsidiaries
|
15,474
|
-
|
47
|
(15,521)
|
-
|
||
Other
Long-term Assets
|
46
|
75
|
87
|
(43)
|
165
|
||
Total
Assets
|
$16,472
|
$24,634
|
$1,954
|
$(16,024)
|
$27,036
|
||
LIABILITIES
AND SHAREHOLDERS' EQUITY
|
|||||||
Current
Liabilities
|
|||||||
Accounts
Payable
|
$111
|
$628
|
$228
|
$-
|
$967
|
||
Labor
and Fringe Benefits Payable
|
37
|
307
|
39
|
-
|
383
|
||
Payable
to Affiliates
|
625
|
786
|
(962)
|
(449)
|
-
|
||
Casualty,
Environmental and Other Reserves
|
-
|
168
|
22
|
-
|
190
|
||
Current
Maturities of Long-term Debt
|
-
|
110
|
3
|
-
|
113
|
||
Income
and Other Taxes Payable
|
32
|
182
|
(102)
|
-
|
112
|
||
Other
Current Liabilities
|
1
|
97
|
13
|
(11)
|
100
|
||
Total
Current Liabilities
|
$806
|
$2,278
|
$(759)
|
$(460)
|
$1,865
|
||
Casualty,
Environmental and Other Reserves
|
-
|
449
|
98
|
-
|
547
|
||
Long-term
Debt
|
6,557
|
1,334
|
4
|
-
|
7,895
|
||
Deferred
Income Taxes
|
(337)
|
6,871
|
51
|
-
|
6,585
|
||
Long-term
Payable to Affiliates
|
-
|
-
|
44
|
(44)
|
-
|
||
Other
Long-term Liabilities
|
600
|
522
|
162
|
-
|
1,284
|
||
Total
Liabilities
|
$7,626
|
$11,454
|
$(400)
|
$(504)
|
$18,176
|
||
Shareholders'
Equity
|
|||||||
Common
Stock, $1 Par Value
|
$393
|
$181
|
$ -
|
$(181)
|
$393
|
||
Other
Capital
|
80
|
5,569
|
1,951
|
(7,520)
|
80
|
||
Retained
Earnings
|
9,182
|
7,485
|
415
|
(7,900)
|
9,182
|
||
Accumulated
Other Comprehensive Loss
|
(809)
|
(77)
|
(54)
|
131
|
(809)
|
||
Noncontrolling Interest
|
-
|
22
|
42
|
(50)
|
14
|
||
Total
Shareholders' Equity
|
$8,846
|
$13,180
|
$2,354
|
$(15,520)
|
$8,860
|
||
Total
Liabilities and Shareholders' Equity
|
$16,472
|
$24,634
|
$1,954
|
$(16,024)
|
$27,036
|
Consolidating
Cash Flow Statements
|
||||||
(Dollars
in Millions)
|
||||||
CSX
|
CSX
|
|||||
Quarter
Ended March 2010
|
Corporation
|
Transportation
|
Other
|
Eliminations
|
Consolidated
|
|
Operating
Activities
|
||||||
Net
Cash Provided by Operating Activities
|
$98
|
$597
|
$52
|
$-
|
$747
|
|
Investing
Activities
|
||||||
Property
Additions
|
$ -
|
$(311)
|
$(20)
|
$-
|
$(331)
|
|
Other
Investing Activities
|
2
|
(79)
|
7
|
88
|
18
|
|
Net
Cash Provided by (Used in) Investing Activities
|
$2
|
$(390)
|
$(13)
|
$88
|
$(313)
|
|
Financing
Activities
|
||||||
Long-term
Debt Repaid
|
$ -
|
$(16)
|
$(1)
|
$-
|
$(17)
|
|
Dividends
Paid
|
(95)
|
-
|
2
|
-
|
(93)
|
|
Stock
Options Exercised
|
6
|
-
|
-
|
-
|
6
|
|
Shares
Repurchased
|
(229)
|
-
|
-
|
-
|
(229)
|
|
Other
Financing Activities
|
139
|
(160)
|
(28)
|
(88)
|
(137)
|
|
Net
Cash Used in Financing Activities
|
$(179)
|
$(176)
|
$(27)
|
$(88)
|
$(470)
|
|
Net
Increase (Decrease) in Cash and Cash Equivalents
|
$(79)
|
$31
|
$12
|
$-
|
$(36)
|
|
Cash
and Cash Equivalents at Beginning of Period
|
918
|
30
|
81
|
-
|
1,029
|
|
Cash
and Cash Equivalents at End of Period
|
$839
|
$61
|
$93
|
$-
|
$993
|
|
CSX
|
CSX
|
|||||
Quarter
Ended March 2009
|
Corporation
|
Transportation
|
Other
|
Eliminations
|
Consolidated
|
|
Operating
Activities
|
||||||
Net
Cash Provided by (Used in) Operating Activities
|
$(162)
|
$370
|
$241
|
$-
|
$449
|
|
Investing
Activities
|
||||||
Property
Additions
|
$(1)
|
$(299)
|
$(9)
|
$-
|
$(309)
|
|
Purchases
of Short-term Investments
|
-
|
-
|
-
|
-
|
-
|
|
Proceeds
from Sales of Short-term Investments
|
-
|
-
|
-
|
-
|
-
|
|
Other
Investing Activities
|
11
|
28
|
5
|
(7)
|
37
|
|
Net
Cash Provided by (Used in) Investing Activities
|
$10
|
$(271)
|
$(4)
|
$(7)
|
$(272)
|
|
Financing
Activities
|
||||||
Long-term
Debt Issued
|
$500
|
$-
|
$-
|
$-
|
$500
|
|
Long-term
Debt Repaid
|
-
|
(25)
|
(1)
|
-
|
(26)
|
|
Dividends
Paid
|
(88)
|
-
|
2
|
-
|
(86)
|
|
Stock
Options Exercised
|
2
|
-
|
-
|
-
|
2
|
|
Shares
Repurchased
|
-
|
-
|
-
|
-
|
-
|
|
Other
Financing Activities
|
107
|
(67)
|
(227)
|
7
|
(180)
|
|
Net
Cash Provided by (Used in) Financing Activities
|
$521
|
$(92)
|
$(226)
|
$7
|
$210
|
|
Net
Increase (Decrease) in Cash and Cash Equivalents
|
$369
|
$7
|
$11
|
$-
|
$387
|
|
Cash
and Cash Equivalents at Beginning of Period
|
559
|
63
|
47
|
-
|
669
|
|
Cash
and Cash Equivalents at End of Period
|
$928
|
$70
|
$58
|
$-
|
$1,056
|
·
|
Revenue
increased $244 million or 11% to $2.5 billion driven by increases in
volume and core pricing gains.
|
·
|
Expenses
increased $132 million or 8% to $1.9 billion driven by higher fuel prices
and labor-related costs.
|
·
|
Operating
income increased $112 million or 21% to $634 million and o
perating
ratio improved to 74.5%, a first quarter
record.
|
·
|
Employee
safety drives a record in the personal injuries frequency index of
0.81.
|
First
Quarters
|
||||||
2010
|
2009
|
Improvement/
(Decline)
|
%
|
|||
Safety
and
|
FRA
Personal Injuries Frequency Index
|
0.81
|
1.30
|
38
|
%
|
|
Service
|
||||||
Measurements
|
FRA
Train Accident Rate
|
3.13
|
3.62
|
14
|
%
|
|
On-Time
Train Originations
|
69%
|
83%
|
(17)
|
%
|
||
On-Time
Destination Arrivals
|
67%
|
79%
|
(15)
|
%
|
||
Dwell
|
25.8
|
24.1
|
(7)
|
%
|
||
Cars-On-Line
|
214,845
|
218,863
|
2
|
%
|
||
System
Train Velocity
|
20.9
|
21.6
|
(3)
|
%
|
||
Increase/
|
||||||
(Decrease)
|
||||||
Resources
|
Route
Miles
|
21,189
|
21,178
|
-
|
%
|
|
Locomotives
(owned and long-term leased)
|
4,067
|
4,129
|
(2)
|
%
|
||
Freight
Cars (owned and long-term leased)
|
82,452
|
90,027
|
(8)
|
%
|
Results of
Operations
(Unaudited)
|
|||||||||||
(Dollars
in Millions)
|
|||||||||||
First
Quarters
|
|||||||||||
CSX
|
|||||||||||
Rail
(a)
|
Intermodal
|
Consolidated
|
|||||||||
2010
|
2009
|
2010
|
2009
|
2010
|
2009
|
$
Change
|
%
Change
|
||||
Revenue
|
$2,168
|
$1,977
|
$323
|
$270
|
$2,491
|
$2,247
|
$244
|
11
|
%
|
||
Expense
|
|||||||||||
Labor
and Fringe
|
710
|
644
|
19
|
18
|
729
|
662
|
(67)
|
(10)
|
|||
Materials,
Supplies and Other
|
403
|
432
|
50
|
45
|
453
|
477
|
24
|
5
|
|||
Fuel
|
282
|
190
|
1
|
1
|
283
|
191
|
(92)
|
(48)
|
|||
Depreciation
|
223
|
218
|
6
|
6
|
229
|
224
|
(5)
|
(2)
|
|||
Equipment
and Other Rents
|
71
|
88
|
29
|
25
|
100
|
113
|
13
|
12
|
|||
Inland
Transportation
|
(116)
|
(93)
|
179
|
151
|
63
|
58
|
(5)
|
(9)
|
|||
Total
Expense
|
1,573
|
1,479
|
284
|
246
|
1,857
|
1,725
|
(132)
|
(8)
|
|||
Operating
Income
|
$595
|
$498
|
$39
|
$24
|
$634
|
$522
|
$112
|
21
|
%
|
||
Operating
Ratio
|
72.6%
|
74.8%
|
87.9%
|
91.1%
|
74.5%
|
76.8%
|
|
(a)
In addition to CSXT, the rail segment includes non-railroad subsidiaries
TDSI, Transflo, CSX Technology and other
subsidiaries.
|
·
|
projections
and estimates of earnings, revenues, volumes, rates, cost-savings,
expenses, taxes or other financial
items;
|
·
|
expectations
as to results of operations and operational
initiatives;
|
·
|
expectations
as to the effect of claims, lawsuits, environmental costs, commitments,
contingent liabilities, labor negotiations or agreements on the Company’s
financial condition, results of operations or
liquidity;
|
·
|
management’s
plans, strategies and objectives for future operations, capital
expenditures, proposed new services 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 and their effect on
the Company’s financial condition, results of operations or
liquidity.
|
·
|
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 further 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;
|
·
|
changes
in domestic or international economic, political or business conditions,
including those affecting the transportation industry (such as the impact
of industry competition, conditions, performance and
consolidation);
|
·
|
worsening
conditions in the financial markets that may affect timely access to
capital markets, as well as the cost of
capital;
|
·
|
availability
of insurance coverage at commercially reasonable rates or insufficient
insurance coverage to cover claims or
damages;
|
·
|
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;
|
·
|
noncompliance
with applicable laws or
regulations;
|
·
|
the
inherent business 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
and benefit 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, financial and operational
initiatives;
|
·
|
changes
in operating conditions and costs or commodity concentrations;
and
|
·
|
the
inherent uncertainty associated with projecting full year 2010 economic
and business conditions.
|
CSX
Purchases of Equity Securities
for
the Quarter
|
||||||
First
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
Balance
|
$1,750,065,626
|
|||||
January
|
||||||
(December
26, 2009 - January 22, 2010)
|
-
|
$-
|
-
|
1,750,065,626
|
||
February
|
||||||
(January
23, 2010 - February 19, 2010)
|
4,483,955
|
45.21
|
4,483,955
|
1,547,355,648
|
||
March
|
||||||
(February
20, 2010 - March 26, 2010)
|
572,274
|
45.86
|
572,274
|
1,521,108,801
|
||
Total/Ending
Balance
|
5,056,229
|
$45.28
|
5,056,229
|
$1,521,108,801
|
|
None
|
|
4.1*
|
Eighth
Supplemental Indenture, dated as of March 24, 2010 between the Registrant
and The Bank of New York Mellon Trust Company, N.A. (as successor to JP
Morgan Chase Bank), as Trustee.
|
|
101*
|
The
following financial information from CSX Corporation’s Quarterly Report on
Form 10-Q for the quarter ended March 26, 2010 filed with the SEC on
April 19, 2010, formatted in XBRL includes: (i) Consolidated Income
Statements for the fiscal periods ended March 26, 2010 and March 27, 2009,
(ii) Consolidated Balance Sheets at March 26, 2010 and December
25, 2009, (iii) Consolidated Cash Flow Statements for the fiscal periods
ended March 26, 2010 and March 27, 2009, and (iv) the Notes to
Consolidated Financial Statements, tagged as blocks of
text.
|
|
Section
1.1.
Relation to
Indenture
………………………………………………………………….....................................2
|
|
Section
1.2.
Definitions
……………………………………………………………..……………….....................................2
|
|
Section
2.1.
Applicability of this Eighth Supplemental
Indenture
…………………………....................................…..3
|
|
Section
2.2.
Change in
Law
……………………………………...……………………………....................................…....3
|
|
Section
2.3.
Eighth
Supplemental Indenture Shall
Govern
…………...………………………........................................3
|
|
Section
3.1.
Forms
Generally
…………………………………………….……………………..................................…....3
|
|
Section
3.2.
Restrictive
Legends
………………………………………………………………........................................4
|
|
Section
3.3.
Form of
Certificate to be Delivered upon Termination of Restricted
Period
…......................................7
|
|
Section
3.4.
Form of
Security
……………………………………………………………………......................................8
|
|
Section
3.5.
Special
Transfer
Provisions
……………………………………………………..........................................8
|
|
Section
3.6.
Form of
Certificate to Be Delivered in Connection with Transfers to
Non-QIB Institutional
Accredited
Investors
……………………………………………….........................................12
|
|
Section
3.7.
Form of
Certificate to Delivered in Connection with Transfers
Pursuant to
Regulation S
……………………………………………………………....……..........................................15
|
|
Section
4.1.
Resignation
of Prior
Trustee
……………………………………………….................................……...16
|
|
Section
4.2.
Assignment
by Prior
Trustee
………………………...…………………………....................................16
|
|
Section
4.3.
Acceptance
of
Resignation
…..…………………………………….................................………….…..16
|
|
Section
4.4.
Satisfaction of Conditions to
Resignation
……………………...…………..........................................16
|
|
Section
4.5.
No
Disqualification as Successor
Trustee
…………………………….................................………....16
|
|
Section
4.6.
Appointment
of Successor
Trustee
………………………………….……….................................…..16
|
|
Section
4.7.
Effectiveness of
Appointment
……………………………………………….................................…....16
|
|
Section
5.1.
Incorporation of
Indenture
………………………………………………….................................…….17
|
|
Section
5.2.
Governing
Law
…………………………………………………………………......................................17
|
|
Section
5.3.
Counterparts
………………………………………………………………….................................….....17
|
|
Section
5.4.
Separability
Clause
…………………………………………………………...................................…....17
|
|
Section
5.5.
Successors
and
Assigns
………………………………………….……………................................…17
|
|
Section
5.6.
Benefits of
Eighth Supplemental
Indenture
………………………………...............................……..17
|
Very
truly yours,
|
|
[Name
of Holder]
|
|
By:
|
|
Authorized
Signature
|
Very
truly yours,
|
|
(Name
of Purchaser
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|
By:
|
|
Date:
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Very
truly yours,
[Name
of Transferor]
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By
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Authorized
Signature
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CSX
CORPORATION,
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By:
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/s/
David A. Boor
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THE
BANK OF NEW YORK MELLON, as Prior Trustee,
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By:
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/s/
Rafael E. Miranda
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Name: Rafael
E. Miranda
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Title:
Vice
President
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THE
BANK OF NEW YORK MELLON TRUST COMPANY, N.A., as Trustee and Successor
Trustee,
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By:
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/s/
Geraldine Creswell
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Name: Geraldine
Creswell
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Title:
Vice
President
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·
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100%
of the principal amount of such Securities;
or
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·
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As
determined by the Independent Investment Banker (as defined below), the
sum of the present values of the remaining scheduled payments of principal
and interest on the Securities (not including any portion of any payments
of interest accrued from the most recent Interest Payment Date to which
interest has been paid to the Redemption Date) discounted to the
Redemption Date on a semiannual basis at the Adjusted Treasury Rate (as
defined below) plus 25 basis
points.
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·
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the
yield, under the heading which represents the average for the immediately
preceding week, appearing in the most recently published statistical
release designated “H.15(519)” or any successor publication which is
published weekly by the Board of Governors of the Federal Reserve System
and which establishes yields on actively traded U.S. Treasury securities
adjusted to constant maturity under the caption “Treasury Constant
Maturities,” for the maturity corresponding to the Comparable Treasury
Issue (if no maturity is within three months before or after the remaining
term of the Securities, yields for the two published maturities most
closely corresponding to the Comparable Treasury Issue will be determined
and the Adjusted Treasury Rate will be interpolated or extrapolated from
such yields on a straight line basis, rounding to the nearest month);
or
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·
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If
such release (or any successor release) is not published during the week
preceding the calculation date or does not contain such yields, the rate
per annum equal to the semiannual equivalent yield to maturity of the
Comparable Treasury Issue, assuming a price for the Comparable Treasury
Issue (expressed as a percentage of its principal amount) equal to the
Comparable Treasury Price for such Redemption
Date.
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·
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Credit
Suisse Securities (USA) LLC and its successors; provided that, if they
cease to be a primary U.S. Government securities dealer in the United
States (“Primary Treasury Dealer”), the Company will substitute another
Primary Treasury Dealer; and
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·
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Up
to four other Primary Treasury Dealers selected by the
Company.
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By:_____________________________
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Name:
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Title:
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Date:
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||
NOTICE:
The signature to this assignment must correspond with the name as written
upon the face of the within-mentioned instrument in every particular,
without alteration or any change
whatsoever.
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Date:
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||
NOTICE: To
be executed by an executive officer
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1.
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I
have reviewed this Quarterly Report on Form 10-Q 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.
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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)
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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)
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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)
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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.
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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)
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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:
April 16, 2010
|
1.
|
I
have reviewed this Quarterly Report on Form 10-Q 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: April
16, 2010
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1.
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The
Report fully complies with the requirements of section 13(a) or 15(d) of
the Securities Exchange Act of 1934;
and
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2.
|
The
information contained in the Report fairly presents, in all material
respects, the financial condition and results of operations of the
issuer.
|
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.
|