(X)
|
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
|
Commission File Number 1-8022
|
CSX CORPORATION
|
||||||||||
(Exact name of registrant as specified in its charter)
|
||||||||||
Virginia
|
|
|
|
|
|
|
|
62-1051971
|
|
|
(State or other jurisdiction of incorporation or organization)
|
|
|
|
|
|
|
|
(I.R.S. Employer Identification No.)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
500 Water Street, 15th Floor, Jacksonville, FL
|
|
|
|
|
|
32202
|
|
(904) 359-3200
|
|
|
(Address of principal executive offices)
|
|
|
|
|
|
(Zip Code)
|
|
(Telephone number, including area code)
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
No Change
|
|
|
|
|
|
|
(Former name, former address and former fiscal year, if changed since last report.)
|
Large Accelerated Filer (X)
|
|
Accelerated Filer ( )
|
Non-accelerated Filer ( )
|
|
Smaller Reporting Company ( )
|
|
CSX Q1 2017 Form 10-Q p.1
|
|
|
|
|
Page
|
PART I.
|
FINANCIAL INFORMATION
|
|
|
Item 1.
|
|
||
|
|
|
|
|
Quarters Ended March 31, 2017 and March 25, 2016
|
|
|
|
|
|
|
|
Quarters Ended March 31, 2017 and March 25, 2016
|
|
|
|
|
|
|
|
At March 31, 2017 (Unaudited) and December 30, 2016
|
|
|
|
|
|
|
|
Three Months Ended March 31, 2017 and March 25, 2016
|
|
|
|
|
|
|
|
|
||
|
|
|
|
Item 2.
|
|
||
|
|
|
|
Item 3.
|
|
||
|
|
|
|
Item 4.
|
|
||
|
|
|
|
PART II.
|
OTHER INFORMATION
|
|
|
Item 1.
|
|
||
|
|
|
|
Item 1A.
|
|
||
|
|
|
|
Item 2.
|
|
||
|
|
|
|
Item 3.
|
|
||
|
|
|
|
Item 4.
|
|
||
|
|
|
|
Item 5.
|
|
||
|
|
|
|
Item 6.
|
|
||
|
|
|
|
|
|
|
CSX Q1 2017 Form 10-Q p.2
|
|
|
First Quarters
|
|||||
|
2017
|
2016
|
||||
|
|
|
||||
Revenue
|
$
|
2,869
|
|
$
|
2,618
|
|
Expense
|
|
|
||||
Labor and Fringe
|
789
|
|
796
|
|
||
Materials, Supplies and Other
|
567
|
|
550
|
|
||
Fuel
|
218
|
|
150
|
|
||
Depreciation
|
320
|
|
313
|
|
||
Equipment and Other Rents
|
90
|
|
105
|
|
||
Restructuring Charge (Note 1)
|
173
|
|
—
|
|
||
Total Expense
|
2,157
|
|
1,914
|
|
||
|
|
|
||||
Operating Income
|
712
|
|
704
|
|
||
|
|
|
||||
Interest Expense
|
(137
|
)
|
(143
|
)
|
||
Other Income - Net
|
7
|
|
7
|
|
||
Earnings Before Income Taxes
|
582
|
|
568
|
|
||
|
|
|
||||
Income Tax Expense
|
(220
|
)
|
(212
|
)
|
||
Net Earnings
|
$
|
362
|
|
$
|
356
|
|
|
|
|
||||
Per Common Share (Note 2)
|
|
|
||||
Net Earnings Per Share, Basic
|
$
|
0.39
|
|
$
|
0.37
|
|
Net Earnings Per Share, Assuming Dilution
|
$
|
0.39
|
|
$
|
0.37
|
|
|
|
|
||||
|
|
|
||||
Average Shares Outstanding
(In millions)
|
927
|
|
962
|
|
||
Average Shares Outstanding, Assuming Dilution
(In millions)
|
929
|
|
963
|
|
||
|
|
|
||||
|
|
|
||||
Cash Dividends Paid Per Common Share
|
$
|
0.18
|
|
$
|
0.18
|
|
|
First Quarters
|
|||||
|
2017
|
2016
|
||||
Total Comprehensive Earnings (Note 10)
|
$
|
368
|
|
$
|
363
|
|
|
CSX Q1 2017 Form 10-Q p.3
|
|
|
(Unaudited)
|
|
||||
|
March 31,
2017 |
December 30,
2016 |
||||
ASSETS
|
||||||
Current Assets:
|
|
|
||||
Cash and Cash Equivalents
|
$
|
930
|
|
$
|
603
|
|
Short-term Investments
|
287
|
|
417
|
|
||
Accounts Receivable - Net (Note 1)
|
943
|
|
938
|
|
||
Materials and Supplies
|
415
|
|
407
|
|
||
Other Current Assets
|
85
|
|
122
|
|
||
Total Current Assets
|
2,660
|
|
2,487
|
|
||
|
|
|
||||
Properties
|
43,399
|
|
43,227
|
|
||
Accumulated Depreciation
|
(12,140
|
)
|
(12,077
|
)
|
||
Properties - Net
|
31,259
|
|
31,150
|
|
||
|
|
|
||||
Investment in Conrail
|
847
|
|
840
|
|
||
Affiliates and Other Companies
|
622
|
|
619
|
|
||
Other Long-term Assets
|
324
|
|
318
|
|
||
Total Assets
|
$
|
35,712
|
|
$
|
35,414
|
|
|
|
|
||||
LIABILITIES AND SHAREHOLDERS' EQUITY
|
||||||
Current Liabilities:
|
|
|
||||
Accounts Payable
|
$
|
898
|
|
$
|
806
|
|
Labor and Fringe Benefits Payable
|
445
|
|
545
|
|
||
Casualty, Environmental and Other Reserves (Note 4)
|
114
|
|
115
|
|
||
Current Maturities of Long-term Debt (Note 7)
|
331
|
|
331
|
|
||
Income and Other Taxes Payable
|
302
|
|
129
|
|
||
Other Current Liabilities
|
187
|
|
114
|
|
||
Total Current Liabilities
|
2,277
|
|
2,040
|
|
||
|
|
|
||||
Casualty, Environmental and Other Reserves (Note 4)
|
252
|
|
259
|
|
||
Long-term Debt (Note 7)
|
10,963
|
|
10,962
|
|
||
Deferred Income Taxes - Net
|
9,648
|
|
9,596
|
|
||
Other Long-term Liabilities
|
903
|
|
863
|
|
||
Total Liabilities
|
24,043
|
|
23,720
|
|
||
|
|
|
||||
Shareholders' Equity:
|
|
|
||||
Common Stock, $1 Par Value
|
923
|
|
928
|
|
||
Other Capital
|
170
|
|
138
|
|
||
Retained Earnings
|
11,197
|
|
11,253
|
|
||
Accumulated Other Comprehensive Loss (Note 10)
|
(634
|
)
|
(640
|
)
|
||
Noncontrolling Interest
|
13
|
|
15
|
|
||
Total Shareholders' Equity
|
11,669
|
|
11,694
|
|
||
Total Liabilities and Shareholders' Equity
|
$
|
35,712
|
|
$
|
35,414
|
|
|
CSX Q1 2017 Form 10-Q p.4
|
|
|
Three Months
|
|||||
|
2017
|
2016
|
||||
|
|
|
||||
OPERATING ACTIVITIES
|
|
|
||||
Net Earnings
|
$
|
362
|
|
$
|
356
|
|
Adjustments to Reconcile Net Earnings to Net Cash Provided by Operating Activities:
|
|
|
||||
Depreciation
|
320
|
|
313
|
|
||
Restructuring Charge
|
161
|
|
—
|
|
||
Deferred Income Taxes
|
59
|
|
80
|
|
||
Other Operating Activities
|
2
|
|
(29
|
)
|
||
Changes in Operating Assets and Liabilities:
|
|
|
||||
Accounts Receivable
|
(30
|
)
|
57
|
|
||
Other Current Assets
|
33
|
|
(30
|
)
|
||
Accounts Payable
|
91
|
|
50
|
|
||
Income and Other Taxes Payable
|
162
|
|
59
|
|
||
Other Current Liabilities
|
(117
|
)
|
(102
|
)
|
||
Net Cash Provided by Operating Activities
|
1,043
|
|
754
|
|
||
|
|
|
||||
INVESTING ACTIVITIES
|
|
|
||||
Property Additions
|
(441
|
)
|
(425
|
)
|
||
Purchase of Short-term Investments
|
(75
|
)
|
(235
|
)
|
||
Proceeds from Sales of Short-term Investments
|
205
|
|
670
|
|
||
Other Investing Activities
|
25
|
|
31
|
|
||
Net Cash (Used in) Provided by Investing Activities
|
(286
|
)
|
41
|
|
||
|
|
|
||||
FINANCING ACTIVITIES
|
|
|
||||
Dividends Paid
|
(166
|
)
|
(173
|
)
|
||
Shares Repurchased
|
(258
|
)
|
(249
|
)
|
||
Other Financing Activities
|
(6
|
)
|
(270
|
)
|
||
Net Cash Used in Financing Activities
|
(430
|
)
|
(692
|
)
|
||
|
|
|
||||
Net Increase in Cash and Cash Equivalents
|
327
|
|
103
|
|
||
|
|
|
||||
CASH AND CASH EQUIVALENTS
|
|
|
||||
Cash and Cash Equivalents at Beginning of Period
|
603
|
|
628
|
|
||
Cash and Cash Equivalents at End of Period
|
$
|
930
|
|
$
|
731
|
|
|
|
|
|
CSX Q1 2017 Form 10-Q p.5
|
|
NOTE 1.
|
Nature of Operations and Significant Accounting Policies
|
•
|
Consolidated income statements for the
three
months ended
March 31, 2017
and
March 25, 2016
;
|
•
|
Consolidated comprehensive income statements for the
three
months ended
March 31, 2017
and
March 25, 2016
;
|
•
|
Consolidated balance sheets at
March 31, 2017
and
December 30, 2016
; and
|
•
|
Consolidated cash flow statements for the
three
months ended
March 31, 2017
and
March 25, 2016
.
|
|
CSX Q1 2017 Form 10-Q p.6
|
|
•
|
The
first
fiscal quarters of
2017
and
2016
consisted of
13
weeks ending on
March 31, 2017
and
March 25, 2016
, respectively.
|
•
|
Fiscal year
2017
will consist of
52
weeks ending on
December 29, 2017
.
|
•
|
Fiscal year
2016
consisted of
53
weeks ending on
December 30, 2016
.
|
|
CSX Q1 2017 Form 10-Q p.7
|
|
|
First Quarters
|
|||||
(Dollars in millions)
|
2017
|
2016
|
||||
Severance and Pension
|
$
|
131
|
|
$
|
—
|
|
Other Post-retirement Benefits Curtailment
|
13
|
|
—
|
|
||
Employee Equity Awards Proration and Other
|
11
|
|
—
|
|
||
Subtotal Management Workforce Reduction
|
$
|
155
|
|
—
|
|
|
Executive Equity Awards Proration
|
8
|
|
—
|
|
||
Advisory Fees Related to Shareholder Matters
|
10
|
|
—
|
|
||
Total Restructuring Charge
|
$
|
173
|
|
—
|
|
|
CSX Q1 2017 Form 10-Q p.8
|
|
|
First Quarters
|
|||||
|
2017
|
2016
|
||||
Numerator
(Dollars in millions)
:
|
|
|
||||
Net Earnings
|
$
|
362
|
|
$
|
356
|
|
|
|
|
||||
Denominator
(Units in millions)
:
|
|
|
||||
Average Common Shares Outstanding
|
927
|
|
962
|
|
||
Other Potentially Dilutive Common Shares
|
2
|
|
1
|
|
||
Average Common Shares Outstanding, Assuming Dilution
|
929
|
|
963
|
|
||
|
|
|
||||
Net Earnings Per Share, Basic
|
$
|
0.39
|
|
$
|
0.37
|
|
Net Earnings Per Share, Assuming Dilution
|
$
|
0.39
|
|
$
|
0.37
|
|
|
CSX Q1 2017 Form 10-Q p.9
|
|
|
First Quarters
|
|||||
(Dollars in millions)
|
2017
|
2016
|
||||
|
|
|
||||
Share-Based Compensation Expense
|
|
|
||||
Performance Units
|
$
|
20
|
|
$
|
1
|
|
Stock Options
|
12
|
|
2
|
|
||
Restricted Stock Units and Awards
|
4
|
|
3
|
|
||
Stock Awards for Directors
|
2
|
|
2
|
|
||
Total Share-Based Compensation Expense
|
$
|
38
|
|
$
|
8
|
|
Income Tax Benefit
|
13
|
|
3
|
|
|
CSX Q1 2017 Form 10-Q p.10
|
|
|
First Quarters
|
|||||
|
2017
|
2016
|
||||
Weighted-average grant date fair value
|
$
|
12.83
|
|
$
|
4.68
|
|
|
|
|
||||
Stock options valuation assumptions:
|
|
|
||||
Annual dividend yield
|
1.5
|
%
|
3.0
|
%
|
||
Risk-free interest rate
|
2.2
|
%
|
1.4
|
%
|
||
Annualized volatility
|
27.1
|
%
|
27.3
|
%
|
||
Expected life (in years)
|
6.3
|
|
6.5
|
|
||
|
|
|
||||
Other pricing model inputs:
|
|
|
||||
Weighted-average grant-date market price of CSX stock (strike price)
|
$
|
49.61
|
|
$
|
24.13
|
|
|
CSX Q1 2017 Form 10-Q p.11
|
|
NOTE 4.
|
Casualty, Environmental and Other Reserves
|
|
March 31,
2017 |
|
December 30,
2016 |
||||||||||||||||
(Dollars in millions)
|
Current
|
Long-term
|
Total
|
|
Current
|
Long-term
|
Total
|
||||||||||||
|
|
|
|
|
|
|
|
||||||||||||
Casualty:
|
|
|
|
|
|
|
|
||||||||||||
Personal Injury
|
$
|
46
|
|
$
|
122
|
|
$
|
168
|
|
|
$
|
46
|
|
$
|
124
|
|
$
|
170
|
|
Occupational
(a)
|
7
|
|
51
|
|
58
|
|
|
7
|
|
52
|
|
59
|
|
||||||
Total Casualty
|
53
|
|
173
|
|
226
|
|
|
53
|
|
176
|
|
229
|
|
||||||
Environmental
|
42
|
|
51
|
|
93
|
|
|
42
|
|
53
|
|
95
|
|
||||||
Other
|
19
|
|
28
|
|
47
|
|
|
20
|
|
30
|
|
50
|
|
||||||
Total
|
$
|
114
|
|
$
|
252
|
|
$
|
366
|
|
|
$
|
115
|
|
$
|
259
|
|
$
|
374
|
|
(a)
|
Occupational reserves include asbestos-related diseases and occupational injuries.
|
|
CSX Q1 2017 Form 10-Q p.12
|
|
|
CSX Q1 2017 Form 10-Q p.13
|
|
•
|
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.
|
|
CSX Q1 2017 Form 10-Q p.14
|
|
|
CSX Q1 2017 Form 10-Q p.15
|
|
|
CSX Q1 2017 Form 10-Q p.16
|
|
|
CSX Q1 2017 Form 10-Q p.17
|
|
(Dollars in millions)
|
Current Portion
|
Long-term Portion
|
Total
|
||||||
Long-term debt as of December 30, 2016
|
$
|
331
|
|
$
|
10,962
|
|
$
|
11,293
|
|
2017 activity:
|
|
|
|
||||||
Discount, premium and other activity
|
—
|
|
(1
|
)
|
(1
|
)
|
|||
Debt issue cost activity
|
—
|
|
2
|
|
2
|
|
|||
Long-term debt as of March 31, 2017
|
$
|
331
|
|
$
|
10,963
|
|
$
|
11,294
|
|
|
CSX Q1 2017 Form 10-Q p.18
|
|
•
|
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.); and
|
•
|
Level 3 - significant unobservable inputs (including the Company's own assumptions about the assumptions market participants would use in determining the fair value of investments).
|
•
|
Certificates of Deposit and Commercial Paper (Level 2)
: Valued at amortized cost, which approximates fair value; and
|
•
|
Corporate Bonds and Government Securities (Level 2)
: Valued using broker quotes that utilize observable market inputs.
|
|
CSX Q1 2017 Form 10-Q p.19
|
|
(Dollars in Millions)
|
March 31,
2017 |
|
December 30,
2016 |
||||
Certificates of Deposit and Commercial Paper
|
$
|
285
|
|
|
$
|
415
|
|
Corporate Bonds
|
64
|
|
|
63
|
|
||
Government Securities
|
22
|
|
|
22
|
|
||
Total investments at fair value
|
$
|
371
|
|
|
$
|
500
|
|
(Dollars in millions)
|
March 31,
2017 |
|
December 30,
2016 |
||||
Less than 1 year
|
$
|
287
|
|
|
$
|
417
|
|
1 - 2 years
|
12
|
|
|
12
|
|
||
2 - 5 years
|
6
|
|
|
4
|
|
||
Greater than 5 years
|
66
|
|
|
67
|
|
||
Total investments at fair value
|
$
|
371
|
|
|
$
|
500
|
|
(Dollars in millions)
|
March 31,
2017 |
|
December 30, 2016
|
||||
Long-term Debt (Including Current Maturities):
|
|
|
|
||||
Fair Value
|
$
|
12,055
|
|
|
$
|
12,096
|
|
Carrying Value
|
11,294
|
|
|
11,293
|
|
|
CSX Q1 2017 Form 10-Q p.20
|
|
|
Pension and Other Post-Employment Benefits
|
Other
|
Accumulated Other Comprehensive Income (Loss)
|
||||||
(Dollars in millions)
|
|
|
|
||||||
Balance December 30, 2016, Net of Tax
|
$
|
(580
|
)
|
$
|
(60
|
)
|
$
|
(640
|
)
|
Other Comprehensive Income (Loss)
|
|
|
|
||||||
Loss Before Reclassifications
|
—
|
|
(1
|
)
|
(1
|
)
|
|||
Amounts Reclassified to Net Earnings
|
11
|
|
—
|
|
11
|
|
|||
Tax Expense
|
(4
|
)
|
—
|
|
(4
|
)
|
|||
Total Other Comprehensive Income (Loss)
|
7
|
|
(1
|
)
|
6
|
|
|||
Balance March 31, 2017, Net of Tax
|
$
|
(573
|
)
|
$
|
(61
|
)
|
$
|
(634
|
)
|
|
CSX Q1 2017 Form 10-Q p.21
|
|
Consolidating Income Statements
|
||||||||||||
(Dollars in millions)
|
||||||||||||
First Quarter 2017
|
CSX Corporation
|
CSX Transportation
|
Eliminations and Other
|
Consolidated
|
||||||||
Revenue
|
$
|
—
|
|
$
|
2,851
|
|
$
|
18
|
|
$
|
2,869
|
|
Expense
|
(48
|
)
|
2,228
|
|
(23
|
)
|
2,157
|
|
||||
Operating Income
|
48
|
|
623
|
|
41
|
|
712
|
|
||||
|
|
|
|
|
||||||||
Equity in Earnings of Subsidiaries
|
422
|
|
—
|
|
(422
|
)
|
—
|
|
||||
Interest (Expense) / Benefit
|
(142
|
)
|
(10
|
)
|
15
|
|
(137
|
)
|
||||
Other Income / (Expense) - Net
|
3
|
|
11
|
|
(7
|
)
|
7
|
|
||||
|
|
|
|
|
||||||||
Earnings Before Income Taxes
|
331
|
|
624
|
|
(373
|
)
|
582
|
|
||||
Income Tax Benefit / (Expense)
|
31
|
|
(235
|
)
|
(16
|
)
|
(220
|
)
|
||||
Net Earnings
|
$
|
362
|
|
$
|
389
|
|
$
|
(389
|
)
|
$
|
362
|
|
|
|
|
|
|
||||||||
Total Comprehensive Earnings
|
$
|
368
|
|
$
|
387
|
|
$
|
(387
|
)
|
$
|
368
|
|
|
|
|
|
|
||||||||
First Quarter 2016
|
CSX Corporation
|
CSX Transportation
|
Eliminations and Other
|
Consolidated
|
||||||||
Revenue
|
$
|
—
|
|
$
|
2,598
|
|
$
|
20
|
|
$
|
2,618
|
|
Expense
|
(72
|
)
|
2,064
|
|
(78
|
)
|
1,914
|
|
||||
Operating Income
|
72
|
|
534
|
|
98
|
|
704
|
|
||||
|
|
|
|
|
||||||||
Equity in Earnings of Subsidiaries
|
401
|
|
—
|
|
(401
|
)
|
—
|
|
||||
Interest (Expense) / Benefit
|
(143
|
)
|
(10
|
)
|
10
|
|
(143
|
)
|
||||
Other Income / (Expense) - Net
|
1
|
|
7
|
|
(1
|
)
|
7
|
|
||||
|
|
|
|
|
||||||||
Earnings Before Income Taxes
|
331
|
|
531
|
|
(294
|
)
|
568
|
|
||||
Income Tax (Expense) / Benefit
|
25
|
|
(198
|
)
|
(39
|
)
|
(212
|
)
|
||||
Net Earnings
|
$
|
356
|
|
$
|
333
|
|
$
|
(333
|
)
|
$
|
356
|
|
|
|
|
|
|
||||||||
Total Comprehensive Earnings
|
$
|
363
|
|
$
|
332
|
|
$
|
(332
|
)
|
$
|
363
|
|
|
CSX Q1 2017 Form 10-Q p.22
|
|
Consolidating Balance Sheet
|
||||||||||||
(Dollars in millions)
|
||||||||||||
March 31, 2017
|
CSX Corporation
|
CSX Transportation
|
Eliminations and Other
|
Consolidated
|
||||||||
|
|
|
|
|
||||||||
ASSETS
|
||||||||||||
Current Assets
|
|
|
|
|
||||||||
Cash and Cash Equivalents
|
$
|
648
|
|
$
|
272
|
|
$
|
10
|
|
$
|
930
|
|
Short-term Investments
|
285
|
|
—
|
|
2
|
|
287
|
|
||||
Accounts Receivable - Net
|
2
|
|
198
|
|
743
|
|
943
|
|
||||
Receivable from Affiliates
|
1,122
|
|
2,397
|
|
(3,519
|
)
|
—
|
|
||||
Materials and Supplies
|
—
|
|
415
|
|
—
|
|
415
|
|
||||
Other Current Assets
|
—
|
|
74
|
|
11
|
|
85
|
|
||||
Total Current Assets
|
2,057
|
|
3,356
|
|
(2,753
|
)
|
2,660
|
|
||||
|
|
|
|
|
||||||||
Properties
|
1
|
|
40,670
|
|
2,728
|
|
43,399
|
|
||||
Accumulated Depreciation
|
(1
|
)
|
(10,662
|
)
|
(1,477
|
)
|
(12,140
|
)
|
||||
Properties - Net
|
—
|
|
30,008
|
|
1,251
|
|
31,259
|
|
||||
|
|
|
|
|
||||||||
Investments in Conrail
|
—
|
|
—
|
|
847
|
|
847
|
|
||||
Affiliates and Other Companies
|
(39
|
)
|
646
|
|
15
|
|
622
|
|
||||
Investments in Consolidated Subsidiaries
|
24,434
|
|
—
|
|
(24,434
|
)
|
—
|
|
||||
Other Long-term Assets
|
2
|
|
603
|
|
(281
|
)
|
324
|
|
||||
Total Assets
|
$
|
26,454
|
|
$
|
34,613
|
|
$
|
(25,355
|
)
|
$
|
35,712
|
|
|
|
|
|
|
||||||||
LIABILITIES AND SHAREHOLDERS' EQUITY
|
|
|
||||||||||
Current Liabilities
|
|
|
|
|
||||||||
Accounts Payable
|
$
|
171
|
|
$
|
698
|
|
$
|
29
|
|
$
|
898
|
|
Labor and Fringe Benefits Payable
|
34
|
|
383
|
|
28
|
|
445
|
|
||||
Payable to Affiliates
|
3,478
|
|
475
|
|
(3,953
|
)
|
—
|
|
||||
Casualty, Environmental and Other Reserves
|
—
|
|
102
|
|
12
|
|
114
|
|
||||
Current Maturities of Long-term Debt
|
313
|
|
19
|
|
(1
|
)
|
331
|
|
||||
Income and Other Taxes Payable
|
(29
|
)
|
310
|
|
21
|
|
302
|
|
||||
Other Current Liabilities
|
—
|
|
178
|
|
9
|
|
187
|
|
||||
Total Current Liabilities
|
3,967
|
|
2,165
|
|
(3,855
|
)
|
2,277
|
|
||||
|
|
|
|
|
||||||||
Casualty, Environmental and Other Reserves
|
—
|
|
203
|
|
49
|
|
252
|
|
||||
Long-term Debt
|
10,206
|
|
757
|
|
—
|
|
10,963
|
|
||||
Deferred Income Taxes - Net
|
(207
|
)
|
9,592
|
|
263
|
|
9,648
|
|
||||
Other Long-term Liabilities
|
832
|
|
396
|
|
(325
|
)
|
903
|
|
||||
Total Liabilities
|
$
|
14,798
|
|
$
|
13,113
|
|
$
|
(3,868
|
)
|
$
|
24,043
|
|
|
|
|
|
|
||||||||
Shareholders' Equity
|
|
|
|
|
||||||||
Common Stock, $1 Par Value
|
$
|
923
|
|
$
|
181
|
|
$
|
(181
|
)
|
$
|
923
|
|
Other Capital
|
170
|
|
5,095
|
|
(5,095
|
)
|
170
|
|
||||
Retained Earnings
|
11,197
|
|
16,232
|
|
(16,232
|
)
|
11,197
|
|
||||
Accumulated Other Comprehensive Loss
|
(634
|
)
|
(21
|
)
|
21
|
|
(634
|
)
|
||||
Noncontrolling Interest
|
—
|
|
13
|
|
—
|
|
13
|
|
||||
Total Shareholders' Equity
|
$
|
11,656
|
|
$
|
21,500
|
|
$
|
(21,487
|
)
|
$
|
11,669
|
|
Total Liabilities and Shareholders' Equity
|
$
|
26,454
|
|
$
|
34,613
|
|
$
|
(25,355
|
)
|
$
|
35,712
|
|
|
CSX Q1 2017 Form 10-Q p.23
|
|
Consolidating Balance Sheet
(Dollars in millions)
|
||||||||||||
December 30, 2016
|
CSX Corporation
|
CSX Transportation
|
Eliminations and Other
|
Consolidated
|
||||||||
ASSETS
|
||||||||||||
Current Assets
|
|
|
|
|
||||||||
Cash and Cash Equivalents
|
$
|
305
|
|
$
|
281
|
|
$
|
17
|
|
$
|
603
|
|
Short-term Investments
|
415
|
|
—
|
|
2
|
|
417
|
|
||||
Accounts Receivable - Net
|
2
|
|
215
|
|
721
|
|
938
|
|
||||
Receivable from Affiliates
|
1,157
|
|
2,351
|
|
(3,508
|
)
|
—
|
|
||||
Materials and Supplies
|
—
|
|
407
|
|
—
|
|
407
|
|
||||
Other Current Assets
|
—
|
|
106
|
|
16
|
|
122
|
|
||||
Total Current Assets
|
1,879
|
|
3,360
|
|
(2,752
|
)
|
2,487
|
|
||||
|
|
|
|
|
||||||||
Properties
|
1
|
|
40,518
|
|
2,708
|
|
43,227
|
|
||||
Accumulated Depreciation
|
(1
|
)
|
(10,634
|
)
|
(1,442
|
)
|
(12,077
|
)
|
||||
Properties - Net
|
—
|
|
29,884
|
|
1,266
|
|
31,150
|
|
||||
|
|
|
|
|
||||||||
Investments in Conrail
|
—
|
|
—
|
|
840
|
|
840
|
|
||||
Affiliates and Other Companies
|
(39
|
)
|
643
|
|
15
|
|
619
|
|
||||
Investment in Consolidated Subsidiaries
|
24,179
|
|
—
|
|
(24,179
|
)
|
—
|
|
||||
Other Long-term Assets
|
2
|
|
607
|
|
(291
|
)
|
318
|
|
||||
Total Assets
|
$
|
26,021
|
|
$
|
34,494
|
|
$
|
(25,101
|
)
|
$
|
35,414
|
|
|
|
|
|
|
||||||||
LIABILITIES AND SHAREHOLDERS' EQUITY
|
|
|
||||||||||
Current Liabilities
|
|
|
|
|
||||||||
Accounts Payable
|
$
|
95
|
|
$
|
678
|
|
$
|
33
|
|
$
|
806
|
|
Labor and Fringe Benefits Payable
|
40
|
|
440
|
|
65
|
|
545
|
|
||||
Payable to Affiliates
|
3,457
|
|
500
|
|
(3,957
|
)
|
—
|
|
||||
Casualty, Environmental and Other Reserves
|
—
|
|
102
|
|
13
|
|
115
|
|
||||
Current Maturities of Long-term Debt
|
313
|
|
19
|
|
(1
|
)
|
331
|
|
||||
Income and Other Taxes Payable
|
(346
|
)
|
459
|
|
16
|
|
129
|
|
||||
Other Current Liabilities
|
—
|
|
112
|
|
2
|
|
114
|
|
||||
Total Current Liabilities
|
3,559
|
|
2,310
|
|
(3,829
|
)
|
2,040
|
|
||||
|
|
|
|
|
||||||||
Casualty, Environmental and Other Reserves
|
—
|
|
208
|
|
51
|
|
259
|
|
||||
Long-term Debt
|
10,203
|
|
759
|
|
—
|
|
10,962
|
|
||||
Deferred Income Taxes - Net
|
(203
|
)
|
9,541
|
|
258
|
|
9,596
|
|
||||
Other Long-term Liabilities
|
783
|
|
410
|
|
(330
|
)
|
863
|
|
||||
Total Liabilities
|
$
|
14,342
|
|
$
|
13,228
|
|
$
|
(3,850
|
)
|
$
|
23,720
|
|
|
|
|
|
|
||||||||
Shareholders' Equity
|
|
|
|
|
||||||||
Common Stock, $1 Par Value
|
$
|
928
|
|
$
|
181
|
|
$
|
(181
|
)
|
$
|
928
|
|
Other Capital
|
138
|
|
5,095
|
|
(5,095
|
)
|
138
|
|
||||
Retained Earnings
|
11,253
|
|
15,994
|
|
(15,994
|
)
|
11,253
|
|
||||
Accumulated Other Comprehensive Loss
|
(640
|
)
|
(19
|
)
|
19
|
|
(640
|
)
|
||||
Noncontrolling Minority Interest
|
—
|
|
15
|
|
—
|
|
15
|
|
||||
Total Shareholders' Equity
|
$
|
11,679
|
|
$
|
21,266
|
|
$
|
(21,251
|
)
|
$
|
11,694
|
|
Total Liabilities and Shareholders' Equity
|
$
|
26,021
|
|
$
|
34,494
|
|
$
|
(25,101
|
)
|
$
|
35,414
|
|
|
CSX Q1 2017 Form 10-Q p.24
|
|
Consolidating Cash Flow Statements
|
||||||||||||
(Dollars in millions)
|
||||||||||||
Three Months 2017
|
CSX
Corporation
|
CSX
Transportation
|
Eliminations and Other
|
Consolidated
|
||||||||
Operating Activities
|
|
|
|
|
||||||||
Net Cash Provided by (Used in) Operating Activities
|
$
|
644
|
|
$
|
566
|
|
$
|
(167
|
)
|
$
|
1,043
|
|
Investing Activities
|
|
|
|
|
||||||||
Property Additions
|
—
|
|
(397
|
)
|
(44
|
)
|
(441
|
)
|
||||
Purchases of Short-term Investments
|
(75
|
)
|
—
|
|
—
|
|
(75
|
)
|
||||
Proceeds from Sales of Short-term Investments
|
205
|
|
—
|
|
—
|
|
205
|
|
||||
Other Investing Activities
|
(1
|
)
|
(24
|
)
|
50
|
|
25
|
|
||||
Net Cash Provided by (Used in) Investing Activities
|
129
|
|
(421
|
)
|
6
|
|
(286
|
)
|
||||
Financing Activities
|
|
|
|
|
||||||||
Dividends Paid
|
(166
|
)
|
(150
|
)
|
150
|
|
(166
|
)
|
||||
Shares Repurchased
|
(258
|
)
|
—
|
|
—
|
|
(258
|
)
|
||||
Other Financing Activities
|
(6
|
)
|
(4
|
)
|
4
|
|
(6
|
)
|
||||
Net Cash Provided by (Used in) Financing Activities
|
(430
|
)
|
(154
|
)
|
154
|
|
(430
|
)
|
||||
Net Increase (Decrease) in Cash and Cash Equivalents
|
343
|
|
(9
|
)
|
(7
|
)
|
327
|
|
||||
Cash and Cash Equivalents at Beginning of Period
|
305
|
|
281
|
|
17
|
|
603
|
|
||||
Cash and Cash Equivalents at End of Period
|
$
|
648
|
|
$
|
272
|
|
$
|
10
|
|
$
|
930
|
|
|
CSX Q1 2017 Form 10-Q p.25
|
|
Consolidating Cash Flow Statements
|
||||||||||||
(Dollars in millions)
|
||||||||||||
Three Months 2016
|
CSX
Corporation
|
CSX
Transportation
|
Eliminations and Other
|
Consolidated
|
||||||||
Operating Activities
|
|
|
|
|
||||||||
Net Cash Provided by (Used in) Operating Activities
|
$
|
36
|
|
$
|
834
|
|
$
|
(116
|
)
|
$
|
754
|
|
Investing Activities
|
|
|
|
|
||||||||
Property Additions
|
—
|
|
(391
|
)
|
(34
|
)
|
(425
|
)
|
||||
Purchases of Short-term Investments
|
(235
|
)
|
—
|
|
—
|
|
(235
|
)
|
||||
Proceeds from Sales of Short-term Investments
|
670
|
|
—
|
|
—
|
|
670
|
|
||||
Other Investing Activities
|
(1
|
)
|
26
|
|
6
|
|
31
|
|
||||
Net Cash Provided by (Used in) Investing Activities
|
434
|
|
(365
|
)
|
(28
|
)
|
41
|
|
||||
Financing Activities
|
|
|
|
|
||||||||
Dividends Paid
|
(173
|
)
|
(150
|
)
|
150
|
|
(173
|
)
|
||||
Shares Repurchased
|
(249
|
)
|
—
|
|
—
|
|
(249
|
)
|
||||
Other Financing Activities
|
1
|
|
(271
|
)
|
—
|
|
(270
|
)
|
||||
Net Cash Provided by (Used in) Financing Activities
|
(421
|
)
|
(421
|
)
|
150
|
|
(692
|
)
|
||||
Net Increase (Decrease) in Cash and Cash Equivalents
|
49
|
|
48
|
|
6
|
|
103
|
|
||||
Cash and Cash Equivalents at Beginning of Period
|
444
|
|
175
|
|
9
|
|
628
|
|
||||
Cash and Cash Equivalents at End of Period
|
$
|
493
|
|
$
|
223
|
|
$
|
15
|
|
$
|
731
|
|
|
CSX Q1 2017 Form 10-Q p.26
|
|
•
|
The Company named E. Hunter Harrison CEO and began implementing Precision Scheduled Railroading.
|
•
|
The Company reduced the management workforce and completed other restructuring activities that resulted in a restructuring charge of $173 million.
|
|
First Quarters
|
|||||||||
|
2017
|
2016
|
Fav /
(Unfav)
|
% Change
|
||||||
Volume
(in thousands)
|
1,592
|
|
1,551
|
|
41
|
|
3%
|
|||
|
|
|
|
|
||||||
(in millions)
|
|
|
|
|
||||||
Revenue
|
$
|
2,869
|
|
$
|
2,618
|
|
$
|
251
|
|
10%
|
Expense
|
2,157
|
|
1,914
|
|
(243
|
)
|
(13)%
|
|||
Operating Income
|
$
|
712
|
|
$
|
704
|
|
$
|
8
|
|
1%
|
|
|
|
|
|
||||||
Operating Ratio
|
75.2
|
%
|
73.1
|
%
|
(210
|
)
|
bps
|
|||
|
|
|
|
|
||||||
Earnings Per Diluted Share
|
$
|
0.39
|
|
$
|
0.37
|
|
$
|
0.02
|
|
5%
|
|
CSX Q1 2017 Form 10-Q p.27
|
|
Volume and Revenue
(Unaudited)
|
||||||||||||||||||||||||||||||
Volume (Thousands of units); Revenue (Dollars in Millions); Revenue Per Unit (Dollars)
|
||||||||||||||||||||||||||||||
First Quarters
|
||||||||||||||||||||||||||||||
|
Volume
|
|
Revenue
|
|
Revenue Per Unit
|
|||||||||||||||||||||||||
|
2017
|
|
2016
|
|
% Change
|
|
2017
|
|
2016
|
|
% Change
|
|
2017
|
|
2016
|
|
% Change
|
|||||||||||||
Agricultural
|
|
|
|
|
|
|
|
|
|
|||||||||||||||||||||
Agricultural and Food Products
(a)
|
121
|
|
|
121
|
|
|
—
|
%
|
|
$
|
332
|
|
|
$
|
323
|
|
|
3
|
%
|
|
$
|
2,744
|
|
|
$
|
2,669
|
|
|
3
|
%
|
Fertilizers
(a)
|
77
|
|
|
76
|
|
|
1
|
|
|
129
|
|
|
127
|
|
|
2
|
|
|
1,675
|
|
|
1,671
|
|
|
—
|
|
||||
Industrial
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Chemicals
(a)
|
175
|
|
|
175
|
|
|
—
|
|
|
566
|
|
|
546
|
|
|
4
|
|
|
3,234
|
|
|
3,120
|
|
|
4
|
|
||||
Automotive
|
119
|
|
|
113
|
|
|
5
|
|
|
316
|
|
|
290
|
|
|
9
|
|
|
2,655
|
|
|
2,566
|
|
|
3
|
|
||||
Metals and Equipment
(a)
|
70
|
|
|
62
|
|
|
13
|
|
|
190
|
|
|
165
|
|
|
15
|
|
|
2,714
|
|
|
2,661
|
|
|
2
|
|
||||
Housing and Construction
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|||||||||||||
Minerals
(a)
|
70
|
|
|
58
|
|
|
21
|
|
|
114
|
|
|
94
|
|
|
21
|
|
|
1,629
|
|
|
1,621
|
|
|
—
|
|
||||
Forest Products
|
67
|
|
|
68
|
|
|
(1
|
)
|
|
192
|
|
|
189
|
|
|
2
|
|
|
2,866
|
|
|
2,779
|
|
|
3
|
|
||||
Total Merchandise
|
699
|
|
|
673
|
|
|
4
|
|
|
1,839
|
|
|
1,734
|
|
|
6
|
|
|
2,631
|
|
|
2,577
|
|
|
2
|
|
||||
Coal
|
205
|
|
|
200
|
|
|
3
|
|
|
522
|
|
|
399
|
|
|
31
|
|
|
2,546
|
|
|
1,995
|
|
|
28
|
|
||||
Intermodal
|
688
|
|
|
678
|
|
|
1
|
|
|
434
|
|
|
405
|
|
|
7
|
|
|
631
|
|
|
597
|
|
|
6
|
|
||||
Other
|
—
|
|
|
|
|
|
—
|
|
|
74
|
|
|
80
|
|
|
(8
|
)
|
|
—
|
|
|
—
|
|
|
—
|
|
||||
Total
|
1,592
|
|
|
1,551
|
|
|
3
|
%
|
|
$
|
2,869
|
|
|
$
|
2,618
|
|
|
10
|
%
|
|
$
|
1,802
|
|
|
$
|
1,688
|
|
|
7
|
%
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
|
•
|
Agricultural and Food Products includes the combination of the previous Agricultural Products and Food and Consumer markets.
|
•
|
Fertilizers was previously named Phosphates and Fertilizers.
|
•
|
Metals and Equipment includes the Equipment portion of the previous Waste and Equipment market.
|
•
|
Chemicals includes the Waste portion of the previous Waste and Equipment market. Chemicals also includes fly ash for remediation purposes (a form of waste) which was previously included within the Minerals market.
|
|
CSX Q1 2017 Form 10-Q p.28
|
|
|
CSX Q1 2017 Form 10-Q p.29
|
|
•
|
Inflation of $36 million was driven primarily by increased health and welfare costs.
|
•
|
Incentive compensation was $30 million higher reflecting the expected award payouts on existing plans.
|
•
|
Volume-related costs were $21 million higher.
|
•
|
Efficiency savings of $74 million were driven by lower T&E and operating support costs.
|
•
|
Other costs decreased by $20 million primarily due to a $14 million decrease in pension expense.
|
•
|
Inflation resulted in $9 million of additional cost.
|
•
|
Volume-related costs were $15 million higher.
|
•
|
Efficiency savings of $41 million were primarily related to lower operating support costs.
|
•
|
Other costs increased $34 million due to $14 million in prior year favorable adjustments that did not repeat in the current quarter and several other items.
|
•
|
A 45 percent price increase drove $67 million in additional fuel expense.
|
•
|
Volume-related costs were $6 million higher due to a five percent year-over-year increase in gross ton miles.
|
•
|
Efficiency savings of $5 million were related to process improvement and locomotive fuel reduction initiatives.
|
|
CSX Q1 2017 Form 10-Q p.30
|
|
•
|
Inflation resulted in $3 million of additional cost due to higher rates on automotive freight cars.
|
•
|
Volume-related costs decreased by $4 million, despite an overall year-over-year volume increase, due to lower rents on certain boxcars primarily attributable to demand decreases in paper products.
|
•
|
Efficiency savings of $3 million were due to improved miles per car.
|
•
|
Other costs decreased $11 million primarily due to rental income that was previously classified as other income in the prior years being reclassified to operating expense in the current year.
|
|
CSX Q1 2017 Form 10-Q p.31
|
|
|
For the Quarter ended March 31, 2017
|
|||||||||||||
(in millions, except operating ratio and net earnings per share, assuming dilution)
|
Operating Income
|
|
Operating Ratio
|
|
Net Earnings
|
|
Net Earnings Per Share, Assuming Dilution
|
|||||||
|
|
|
|
|
|
|
|
|||||||
GAAP Operating Results
|
$
|
712
|
|
|
75.2
|
%
|
|
$
|
362
|
|
|
$
|
0.39
|
|
Restructuring Charge
|
173
|
|
|
(6.0
|
)%
|
|
108
|
|
|
0.12
|
|
|||
Adjusted Operating Results (non-GAAP)
|
$
|
885
|
|
|
69.2
|
%
|
|
$
|
470
|
|
|
$
|
0.51
|
|
|
|
|
|
|
|
|
|
|
Quarter Ended
|
|||||
(Dollars in millions)
|
March 31, 2017
|
March 25, 2016
|
||||
Net cash provided by operating activities
|
1,043
|
|
754
|
|
||
Property additions
|
(441
|
)
|
(425
|
)
|
||
Other investing activities
|
25
|
|
31
|
|
||
Free Cash Flow (before payment of dividends)
|
627
|
|
360
|
|
||
Add back: Cash paid related to Restructuring Charge (after-tax)
|
7
|
|
—
|
|
||
Adjusted Free Cash Flow Before Dividends (non-GAAP)
|
$
|
634
|
|
$
|
360
|
|
|
CSX Q1 2017 Form 10-Q p.32
|
|
|
First Quarters
|
|||||
|
2017
|
2016
|
Improvement/
(Deterioration)
|
|||
Safety and Service Measurements
|
|
|
|
|||
FRA Personal Injury Frequency Index
|
0.99
|
|
0.91
|
|
(9
|
)%
|
FRA Train Accident Rate
|
2.37
|
|
3.14
|
|
25
|
%
|
|
|
|
|
|||
On-Time Originations
|
81
|
%
|
81
|
%
|
—
|
%
|
On-Time Arrivals
|
61
|
%
|
64
|
%
|
(5
|
)%
|
|
|
|
|
|||
Train Velocity
|
20.2
|
|
21.1
|
|
(4
|
)%
|
Dwell
|
26.1
|
|
26.0
|
|
—
|
%
|
|
|
|
|
|||
Cars-On-Line
|
210,589
|
|
207,357
|
|
(2
|
)%
|
|
CSX Q1 2017 Form 10-Q p.33
|
|
•
|
Cash provided by operating activities increased
$289 million
primarily driven by higher collections of freight accounts receivable and the timing of tax, payroll and interest payments.
|
•
|
Cash used in investing activities increased
$327 million
primarily driven by lower net sales of short-term investments.
|
•
|
Cash used in financing activities decreased
$262 million
as a repayment of seller-financed assets that occurred in the prior year did not repeat in the current year.
|
|
CSX Q1 2017 Form 10-Q p.34
|
|
|
CSX Q1 2017 Form 10-Q p.35
|
|
•
|
casualty, environmental and legal reserves;
|
•
|
pension and post-retirement medical plan accounting;
|
•
|
depreciation policies for assets under the group-life method; and
|
•
|
income taxes.
|
•
|
projections and estimates of earnings, revenues, margins, 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, dividends, share repurchases, safety and service performance, proposed new services and other 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.
|
|
CSX Q1 2017 Form 10-Q p.36
|
|
•
|
legislative, regulatory or legal developments involving transportation, including rail or intermodal transportation, the environment, hazardous materials, taxation and initiatives to further regulate the rail industry;
|
•
|
the outcome of litigation, claims and other contingent liabilities, including, but not limited to, those related to fuel surcharge, environmental matters, taxes, shipper and rate claims subject to adjudication, 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) and the level of demand for products carried by CSXT;
|
•
|
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;
|
•
|
competition from other modes of freight transportation, such as trucking and competition and consolidation or financial distress within the transportation industry generally;
|
•
|
the cost of compliance with laws and regulations that differ from expectations (including those associated with PTC implementation), as well as costs, penalties and operational and liquidity impacts associated with noncompliance with applicable laws or regulations;
|
•
|
the impact of increased passenger activities in capacity-constrained areas, including potential effects of high speed rail initiatives, or regulatory changes affecting when CSXT can transport freight or service routes;
|
•
|
unanticipated conditions in the financial markets that may affect timely access to capital markets and the cost of capital, as well as management's decisions regarding share repurchases;
|
•
|
changes in fuel prices, surcharges for fuel and the availability of fuel;
|
•
|
the impact of natural gas prices on coal-fired electricity generation;
|
•
|
availability of insurance coverage at commercially reasonable rates or insufficient insurance coverage to cover claims or damages;
|
•
|
the inherent business risks associated with safety and security, including the transportation of hazardous materials or a cybersecurity attack which would threaten the availability and vulnerability of information technology;
|
|
CSX Q1 2017 Form 10-Q p.37
|
|
•
|
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 customers' ability to deliver goods to the Company for shipment;
|
•
|
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 economic and business conditions.
|
|
CSX Q1 2017 Form 10-Q p.38
|
|
|
CSX Purchases of Equity Securities
for the Quarter
|
|
||||||||
First Quarter
(a)
|
Total Number of Shares Purchased
|
Average Price Paid per Share
|
Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs
(b)
|
Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs
|
||||||
Beginning Balance
|
|
|
|
$
|
270,270,134
|
|
||||
January
|
2,044,818
|
|
$
|
38.93
|
|
1,938,768
|
|
195,428,197
|
|
|
February
|
1,660,565
|
|
47.58
|
|
1,660,500
|
|
116,424,432
|
|
||
March
|
2,175,500
|
|
47.78
|
|
2,175,500
|
|
12,474,350
|
|
||
Ending Balance
|
5,880,883
|
|
$
|
44.65
|
|
5,774,768
|
|
$
|
12,474,350
|
|
|
CSX Q1 2017 Form 10-Q p.39
|
|
|
CSX Q1 2017 Form 10-Q p.40
|
|
|
CSX Q1 2017 Form 10-Q p.41
|
|
1.
|
Starting Date; Term; Place of Employment
|
2.
|
Exclusivity
|
3.
|
Base Salary
|
4.
|
Annual Incentive Compensation
|
5.
|
Stock Option Award
|
6.
|
Incentive, Savings and Retirement Plans
|
7.
|
Welfare Benefit Plans
|
8.
|
Fringe Benefits
|
9.
|
Expenses
|
10.
|
Vacation
|
11.
|
Termination of Employment
|
12.
|
Consequences of Termination
|
13.
|
Change of Control
|
14.
|
Limitations on Payments by the Company
|
15.
|
Full Settlement
|
16.
|
Confidential Information and Restrictive Covenants
|
17.
|
Other Agreements/Prior Employment
|
18.
|
No Mitigation or Offset
|
19.
|
Withholding
|
20.
|
Indemnification
|
21.
|
D&O Insurance
|
22.
|
Severability
|
23.
|
Notices
|
24.
|
Code Section 409A
|
25.
|
Governing Law
|
26.
|
Arbitration
|
27.
|
Assignment
|
28.
|
Amendments/No Waiver/Entire Agreement
|
Sincerely,
CSX CORPORATION
|
|
By:
|
|
|
|
|
|
|
|
|
E. Hunter Harrison
|
|
(Date)
|
Options:
|
1,000,000
|
Grant Date:
|
March 6, 2017
|
Option Exercise Price:
|
$49.79
|
Expiration Date:
|
March 5, 2027, except as set forth in the Option Agreement
|
Section 4.
|
Termination of Employment.
|
(a)
|
Termination Prior to March 6, 2021.
The provisions of this Section 4(a) shall govern the treatment of the Options in the event of the termination of Optionee’s employment prior to March 6, 2021 as specified in subsections (i) through (iii) below.
|
(i)
|
Termination Without Cause or Resignation for Good Reason Prior to March 6, 2021
. If Optionee’s employment is terminated prior to March 6, 2021 by the Company without Cause or Optionee resigns Optionee’s employment with the Company for Good Reason:
|
(A)
|
any Options that are vested as of the Termination Date shall remain outstanding until the Expiration Date; and
|
(B)
|
any Options that are unvested as of the Termination Date shall vest in full and become exercisable and shall remain outstanding until the Expiration Date.
|
(ii)
|
Resignation or Retirement without Good Reason Prior to March 6, 2021
. If Optionee resigns Optionee’s employment without Good Reason, including due to Optionee’s retirement, prior to March 6, 2021:
|
(A)
|
all Options that are unvested as of the Termination Date shall be forfeited and cancelled as of the Termination Date; and
|
(B)
|
any Options that are vested as the Termination Date shall remain outstanding for one (1) year following Optionee’s Termination Date and shall be forfeited and cancelled as of the day following the end of such one (1) year period, to the extent not exercised prior to that date.
|
(iii)
|
Death or Disability Prior to March 6, 2021.
If Optionee terminates employment due to his death or Disability prior to March 6, 2021:
|
(A)
|
if Optionee’s termination of employment occurs due to Optionee’s death or Disability on or after the first anniversary of the Grant Date, (1) any Options that are vested as of the Termination Date shall remain outstanding until the Expiration Date and (2) if the Termination Date (x) occurs between the second and third anniversaries of the Grant Date, any unvested Options shall immediately vest and shall remain outstanding for two years thereafter and (y) occurs prior to the second anniversary of the Grant Date, all unvested Options shall be forfeited and cancelled as of the Termination Date.
|
(b)
|
Termination Other than for Cause On or After March 6, 2021.
If Optionee separates from employment on or after March 6, 2021 other than upon a termination of Optionee’s employment by the Company for Cause, any Options that are vested as the Termination Date shall remain outstanding until the Expiration Date.
|
(c)
|
Termination for Cause
. Notwithstanding anything to the contrary, if Optionee’s employment is terminated for Cause at any time all rights under any outstanding Options (whether vested or unvested) shall be forfeited and cancelled immediately.
|
Section 5.
|
Exercise.
|
(a)
|
Manner of Exercise
. Optionee may exercise vested Options, in whole or in part, to purchase a whole number of shares of Company Stock at any time following the date on which such vested Options become vested by following the exercise procedures below. If Optionee wishes to exercise a vested Option, Optionee shall notify the Company of the number of shares as to which Optionee wishes to exercise (the “
Exercised Option
”) and within 24 hours of such notice the Company shall notify Optionee whether or not the Company elects to apply a net exercise of exercise price and withholding. If the Company elects not to apply a net exercise, Optionee may exercise the
|
(b)
|
Expiration
. All exercises must take place before the Expiration Date or any outstanding and unexercised Options shall lapse and terminate on the Expiration Date.
|
(c)
|
Delivery of Shares
. No shares of Company Stock shall be delivered pursuant to any exercise of an Option until payment in full of the Exercise Price and the related withholding taxes for federal, state or local jurisdictions, or adequate provision therefor (in the discretion of the Committee), is received by the Company. Optionee shall not have any rights as a shareholder with respect to any Company Stock underlying any Options until the Option has been exercised and Optionee has been issued such Company Stock.
|
Section 6.
|
Non-Transferability.
|
Section 7.
|
Adjustments; Change in Control.
|
(a)
|
Adjustments.
In the event that any corporate transaction or distribution (including, without limitation, any stock split, stock dividend, extraordinary cash dividend, recapitalization, reorganization, merger, consolidation, split up, spin off, repurchase, combination or exchange of Company Stock or other securities of the Company, but not including ordinary dividends) affects the Company Stock such that an adjustment is appropriate in order to prevent dilution or enlargement of the benefits or potential benefits intended to be made available under the Options, then (a) the Committee shall, in such manner as it may deem equitable, adjust any or all of (i) the number of shares of Company Stock or other securities of the Company (or number and kind of other securities and property) subject to the Options; and (ii) the Exercise Price of the Options or, (b) if deemed appropriate, the Committee may make provision for a cash payment to Optionee in full or partial satisfaction of the
|
(b)
|
Change in Control
. In the event of a Change in Control in which the Company is not the successor or acquiring company or a direct or indirect parent entity of the successor or acquiring company (the “Surviving Company”) and the Surviving Company does not arrange to continue or convert the Option or grant a Substitute Award, as provided under Section 20 of the Plan, the Company may, without Optionee’s consent, elect to provide any one or more of the following:
|
(i)
|
The Option shall be terminated as of the Change in Control in exchange for a payment in cash and/or securities equal to the amount, if any, by which the Fair Market Value of the shares of Company Stock underlying the Option exceeds the Option Exercise Price;
|
(ii)
|
The Option shall become immediately and fully exercisable as of a date prior to the Change in Control, to the extent not previously exercised or terminated, and shall be terminated as of the Change in Control; or
|
(iii)
|
To the extent that the Option Exercise Price exceeds the Fair Market Value of the shares of Company Stock underlying the Option as of the Change in Control, the Option shall lapse and terminate as of the Change in Control.
|
Section 8.
|
Severability.
|
Section 9.
|
Choice of Law; Jurisdiction.
|
Section 10.
|
Registration and Resales of Shares Acquired Pursuant to Option Exercise.
|
(a)
|
Registration
. The Company shall register the shares of Company Stock underlying the Options under the Securities Act of 1933 on a Form S-8
|
(b)
|
Resale
. The Company may impose such reasonable restrictions, conditions or limitations as it in good faith deems appropriate as to the timing and manner of any resales by Optionee or other subsequent transfers by Optionee of any Common Stock issued as a result of the exercise of the Option, including without limitation (a) restrictions under an insider trading policy, (b) restrictions designed to delay and/or coordinate the timing and manner of sales by Optionee and other option-holders and (c) restrictions as to the use of a specified brokerage firm for such resales or other transfers so long as similar provisions are implemented to apply to all executive officers of the Company and does not cause the Option to expire without being able to be exercised.
|
Section 11.
|
Nonqualified Stock Option.
|
Section 12.
|
Income Taxes.
|
Time Options:
|
3,500,000
|
[Performance] Options:
|
[4,500,000]
|
Total Options:
|
8,000,000
|
Grant Date:
|
March 6, 2017
|
Option Exercise Price:
|
$49.79
|
Expiration Date:
|
March 5, 2027, except as set forth in the Option Agreement
|
(a)
|
Time Options
. A portion of the Time Options shall vest and become exercisable on each of the first four anniversaries of the Grant Date as described below, subject to your continued employment with the Company as of the applicable anniversary date
,
provided that the “Fourth Anniversary” in the table below shall be the day before the actual fourth anniversary of the Grant Date.
|
(b)
|
Performance Options
. A portion of the [Performance] Options shall be eligible to vest and become exercisable
as of each Audit Report Date as provided below, subject to your continued employment with the Company as of the applicable Audit Report Date except as otherwise provided herein, and provided that for the Audit Report Date for fiscal year 2020, Optionee shall only need to be employed on the day before the fourth anniversary of the Grant Date.
|
(i)
|
[Tranche One Performance] Options
. 500,000 [Performance] Options shall vest and become exercisable as of the Audit Report Date for each Fiscal Year [2017 through 2020 based on prescribed performance targets, subject to prescribed performance catchups].
|
(ii)
|
[Tranche Two Performance] Options
. 62,500 [Performance] Options shall vest and become exercisable as of the Audit Report Date for each Fiscal Year [2017 through 2020 based on prescribed performance targets, subject to prescribed performance catchups].
|
(iii)
|
[Tranche Three Performance] Options
. 500,000 [Performance] Options shall vest and become exercisable as of the Audit Report Date each Fiscal Year [2017 through 2020 based on prescribed performance targets, subject to prescribed performance catchups].
|
(iv)
|
[Tranche Four Performance] Options
. 62,500 [Performance] Options shall vest and become exercisable as of the Audit Report Date each Fiscal Year [2017 through 2020 based on prescribed performance targets, subject to prescribed performance catchups].
|
(v)
|
Vesting End Date
. Any Performance Options that have not vested and become exercisable as of the Audit Report Date for the Fiscal Year ending in 2020 shall be forfeited and cancelled as of such Audit Report Date.
|
Section 4.
|
Termination of Employment.
|
(a)
|
Termination Prior to March 6, 2021.
The provisions of this Section 4(a) shall govern the treatment of the Options in the event of the termination of Optionee’s employment prior to March 6, 2021 as specified in subsections (i) through (iii) below.
|
(i)
|
Termination Without Cause or Resignation for Good Reason Prior to March 6, 2021
. If Optionee’s employment is terminated prior to March 6, 2021 by the Company without Cause or Optionee resigns Optionee’s employment with the Company for Good Reason:
|
(A)
|
any Options that are vested as of the Termination Date shall remain outstanding until the Expiration Date;
|
(B)
|
any Time Options that are unvested as of the Termination Date shall vest in full and become exercisable and shall remain outstanding until the Expiration Date; and
|
(C)
|
the Service-Based Vesting Condition applicable to any unvested Performance Options shall be satisfied in full and such Performance Options shall remain outstanding and eligible to vest subject to satisfaction of the applicable Performance-Based Vesting Conditions applied as if Optionee continued to be employed by the Company through each of the remaining Audit Report Dates. Any Performance Options that become vested upon satisfaction of the applicable Performance-Based Vesting Condition in accordance with this Section 4(a)(i)(C), shall remain exercisable until the Expiration Date. Any such Performance Options that have not become vested and exercisable as of the Audit Report Date for the Fiscal Year ending in 2020 shall be forfeited and cancelled as of such Audit Report Date.
|
(ii)
|
Resignation or Retirement without Good Reason Prior to March 6, 2021
. If Optionee resigns Optionee’s employment without Good Reason, including due to Optionee’s retirement, prior to March 6, 2021:
|
(A)
|
all Options that are unvested as of the Termination Date shall be forfeited and cancelled as of the Termination Date; and
|
(B)
|
any Options that are vested as the Termination Date shall remain outstanding for one (1) year following Optionee’s Termination Date and
|
(iii)
|
Death or Disability Prior to March 6, 2021.
If Optionee terminates employment due to his death or Disability prior to March 6, 2021:
|
(A)
|
if Optionee’s termination of employment occurs due to Optionee’s death or Disability prior to the first anniversary of the Grant Date all Options shall be forfeited and cancelled as of the Termination Date; and
|
(B)
|
if Optionee’s termination of employment occurs due to Optionee’s death or Disability on or after the first anniversary of the Grant Date, (1) any Options that are vested as of the Termination Date shall remain outstanding until the Expiration Date, (2) the unvested Time Options that would vest on the next vesting date shall immediately vest and any other unvested Time Options shall be forfeited and cancelled as of the Termination Date, (3) any vested [Performance] Options shall remain outstanding until the Expiration Date, (4) any unvested [Performance] Options for which the Service-Vesting Condition has been satisfied prior to the Termination Date and a pro rata portion of those due to vest on the next vesting date based on the relative period of service during the vesting year prior to the Termination Date (which service period shall be deemed satisfied) shall remain outstanding and eligible to vest subject to satisfaction of the applicable Performance-Based Vesting Conditions applied as if Optionee continued to be employed by the Company through each of the remaining Audit Report Dates and (5) any unvested [Performance] Options for which the Service-Vesting Condition has not been satisfied prior to or at the Termination Date shall be forfeited and cancelled as of the Termination Date. Any Performance Options that vest in accordance with clause (4) of the preceding sentence shall remain outstanding until the Expiration Date. Any such Performance Options that have not become vested and exercisable as of the Audit Report Date for the Fiscal Year ending in 2020 shall be forfeited and cancelled as of such Audit Report Date. Notwithstanding the foregoing, if the termination is a First Year Disability after the first anniversary of the Grant Date, then there shall be no additional vesting of Time-Based Options not then vested or of Performance-Based Options for which the Service-Based Vesting Conditions had not been satisfied and any such Time-Based Options that are vested as of such Termination Date shall remain outstanding for two years thereafter and any such Performance-Based Options for which the Service-Based Vesting Conditions have been satisfied that vest upon satisfaction of applicable Performance-Based Vesting Conditions shall remain outstanding for two years after
|
(b)
|
Termination Other than for Cause On or After March 6, 2021.
If Optionee separates from employment on or after March 6, 2021 other than upon a termination of Optionee’s employment by the Company for Cause, any Options that are vested as the Termination Date shall remain outstanding until the Expiration Date.
|
(c)
|
Termination for Cause
. Notwithstanding anything to the contrary, if Optionee’s employment is terminated for Cause at any time all rights under any outstanding Options (whether vested or unvested) shall be forfeited and cancelled immediately.
|
Section 5.
|
Exercise.
|
(a)
|
Manner of Exercise
. Optionee may exercise vested Options, in whole or in part, to purchase a whole number of shares of Company Stock at any time following the date on which such vested Options become vested by following the exercise procedures below. If Optionee wishes to exercise a vested Option, Optionee shall notify the Company of the number of shares as to which Optionee wishes to exercise (the “
Exercised Option
”) and within 24 hours of such notice the Company shall notify Optionee whether or not the Company elects to apply a net exercise of exercise price and withholding. If the Company elects not to apply a net exercise, Optionee may exercise the Exercised Option pursuant to any procedures applicable under the Company’s employee option program at the time of such exercise, including by tendering the full exercise price and applicable tax withholding or by executing a market-based cashless exercise to cover the exercise price and applicable tax withholding through the Company’s stock plan administrator. If the Company elects to apply a net exercise, the Company shall arrange to cancel a portion of the Exercised Option covering shares of Company Stock with a Fair Market Value equal to the sum of the exercise price and applicable tax withholding and issue the net number of shares of Company Stock to Optionee, pursuant to procedures mutually agreed between Optionee and the Company. In the case of a net exercise the applicable withholding shall be at the rate applied by the Company to option holders resident in Florida.
|
(b)
|
Expiration
. All exercises must take place before the Expiration Date or any outstanding and unexercised Options shall lapse and terminate on the Expiration Date.
|
(c)
|
Delivery of Shares
. No shares of Company Stock shall be delivered pursuant to any exercise of an Option until payment in full of the Exercise Price and the related withholding taxes for federal, state or local jurisdictions, or adequate provision therefor (in the discretion of the Committee), is received by the Company. Optionee shall not have any rights as a shareholder with respect to any Company Stock underlying any Options until the Option has been exercised and Optionee has been issued such Company Stock.
|
Section 6.
|
Non-Transferability.
|
Section 7.
|
Adjustments; Change in Control.
|
(a)
|
Adjustments.
In the event that any corporate transaction or distribution (including, without limitation, any stock split, stock dividend, extraordinary cash dividend, recapitalization, reorganization, merger, consolidation, split up, spin off, repurchase, combination or exchange of Company Stock or other securities of the Company, but not including ordinary dividends) affects the Company Stock such that an adjustment is appropriate in order to prevent dilution or enlargement of the benefits or potential benefits intended to be made available under the Options, then (a) the Committee shall, in such manner as it may deem equitable, adjust any or all of (i) the number of shares of Company Stock or other securities of the Company (or number and kind of other securities and property) subject to the Options; and (ii) the Exercise Price of the Options or, (b) if deemed appropriate, the Committee may make provision for a cash payment to Optionee in full or partial satisfaction of the any of the Options, provided that such Committee action shall be consistent with what it does for other outstanding options.
|
(b)
|
Change in Control
. In the event of a Change in Control in which the Company is not the successor or acquiring company or a direct or indirect parent entity of the successor or acquiring company (the “Surviving Company”) and the Surviving Company does not arrange to continue or convert the Option or grant a Substitute Award, as provided under Section 20 of the Plan, the Company may, without Optionee’s consent, elect to provide any one or more of the following:
|
(i)
|
The Option shall be terminated as of the Change in Control in exchange for a payment in cash and/or securities equal to the amount, if any, by which the Fair Market Value of the shares of Company Stock underlying the Option exceeds the Option Exercise Price;
|
(ii)
|
The Option shall become immediately and fully exercisable as of a date prior to the Change in Control, to the extent not previously exercised or terminated, and shall be terminated as of the Change in Control; or
|
(iii)
|
To the extent that the Option Exercise Price exceeds the Fair Market Value of the shares of Company Stock underlying the Option as of the Change in Control, the Option shall lapse and terminate as of the Change in Control.
|
Section 8.
|
Severability.
|
Section 9.
|
Choice of Law; Jurisdiction.
|
Section 10.
|
Registration and Resales of Shares Acquired Pursuant to Option Exercise.
|
(a)
|
Registration
. The Company shall register the shares of Company Stock underlying the Options under the Securities Act of 1933 on a Form S-8 registration statement prior to the date on which the Options become exercisable within respect to such shares and shall maintain that registration statement in effect until the date that such Options have been exercised or cease to be exercisable with respect such shares.
|
(b)
|
Resale
. The Company may impose such reasonable restrictions, conditions or limitations as it in good faith deems appropriate as to the timing and manner of any resales by Optionee or other subsequent transfers by Optionee of any Common Stock issued as a result of the exercise of the Option, including without limitation (a) restrictions under an insider trading policy, (b) restrictions designed to delay and/or coordinate the timing and manner of sales by Optionee and other option-holders and (c) restrictions as to the use of a specified brokerage firm for such resales or other transfers so long as similar provisions are implemented to apply to all executive officers of the Company and does not cause the Option to expire without being able to be exercised.
|
Section 11.
|
Nonqualified Stock Option.
|
Section 12.
|
Income Taxes.
|
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.
|
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.
|
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.
|