PAGE 1
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 11-K
[X] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
or
[ ] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the fiscal year ended September 30, 1996
Commission file number 1-8022
CSX CORPORATION
CAPITAL BUILDER PLAN
CSX CORPORATION
A Virginia Corporation
IRS Employer Identification Number 62-1051971
One James Center
901 East Cary Street
Richmond, Virginia 23219
Telephone (804) 782-1400
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CSX CORPORATION
CAPITAL BUILDER PLAN
INDEX TO FINANCIAL STATEMENTS
Audited Financial Statements Page No.
Report of Independent Auditors 3
Statement of Net Assets Available for Plan Benefits
- September 30, 1996 4
Statement of Net Assets Available for Plan Benefits
- September 30, 1995 5
Statement of Changes in Net Assets Available for Plan
Benefits - Fiscal Year Ended September 30, 1996 6
Statement of Changes in Net Assets Available for Plan
Benefits - Fiscal Year Ended September 30, 1995 7
Notes to Financial Statements 8-12
Supplemental Schedules
Schedule of Assets Held for Investment Purposes -
September 30, 1996 14
Schedule of Reportable Transactions 15
Signature 16
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REPORT OF INDEPENDENT AUDITORS
The Pension Committee
CSX Corporation Capital Builder Plan
CSX Corporation
Richmond, Virginia
We have audited the accompanying statements of net assets available
for plan benefits of the CSX Corporation Capital Builder Plan ("Plan") as of
September 30, 1996 and 1995, and the related statements of changes in net
assets available for plan benefits for the fiscal years then ended. These
financial statements are the responsibility of the Plan's management. Our
responsibility is to express an opinion on these financial statements based on
our audits.
We conducted our audits in accordance with generally accepted
auditing standards. Those standards require that we plan and perform the
audit to obtain reasonable assurance about whether the financial statements
are free of material misstatement. An audit includes examining, on a test
basis, evidence supporting the amounts and disclosures in the financial
statements. An audit also includes assessing the accounting principles used
and significant estimates made by management, as well as evaluating the
overall financial statement presentation. We believe that our audits provide
a reasonable basis for our opinion.
In our opinion, the financial statements referred to above present
fairly, in all material respects, the net assets available for plan benefits
of the Plan at September 30, 1996 and 1995, and the changes in its net assets
available for plan benefits for the years then ended, in conformity with
generally accepted accounting principles.
Our audits were performed for the purpose of forming an opinion on
the basic financial statements taken as a whole. The supplemental schedules
of assets held for investment purposes as of September 30, 1996 and reportable
transactions for the fiscal year then ended, are presented for the purpose of
additional analysis and are not a required part of the basic financial
statements but are supplementary information required by the Department of
Labor's Rules and Regulations for Reporting and Disclosure under the Employee
Retirement Income Security Act of 1974. The supplemental schedules are the
responsibility of the Plan's management. The supplemental schedules have been
subjected to the auditing procedures applied in our audits of the basic
financial statements and, in our opinion, are fairly stated in all material
respects in relation to the basic financial statements taken as a whole.
/s/ ERNST & YOUNG LLP
---------------------
Ernst & Young LLP
Jacksonville, Florida
March 24, 1997
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PAGE 4
CSX CORPORATION
CAPITAL BUILDER PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR PLAN BENEFITS
SEPTEMBER 30, 1996
(Dollars in Thousands)
Non-
Participant
Participant Directed Directed
---------------------------------- --------
S&P CSX
Guaranteed 500 Aggressive CSX ESOP
Interest Index Growth Stock Stock
Fund Fund Fund Fund Fund Total
---------------------------------- -------- --------
ASSETS
Investments
Common Stock of CSX
Corporation $ --- $ --- $ --- $40,210 $170,106 $210,316
Collective Trust Fund 15,463 --- --- --- --- 15,463
Mutual Funds --- 14,991 9,310 --- --- 24,301
Cash and Cash
Equivalents 73 3 2 182 305 565
------- ------- ------- ------- -------- --------
15,536 14,994 9,312 40,392 170,411 250,645
Accrued Investment Income --- --- --- 1 3 4
------- ------- ------- ------- -------- --------
TOTAL ASSETS 15,536 14,994 9,312 40,393 170,414 250,649
------- ------- ------- ------- -------- --------
LIABILITIES
Due to Brokers for
Securities Purchased --- --- --- 176 --- 176
Accrued Expenses 24 10 7 24 88 153
------- ------- ------- ------- -------- --------
TOTAL LIABILITIES 24 10 7 200 88 329
------- ------- ------- ------- -------- --------
NET ASSETS AVAILABLE FOR
PLAN BENEFITS $15,512 $14,984 $ 9,305 $40,193 $170,326 $250,320
======= ======= ======= ======= ======== ========
See Notes to Financial Statements.
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PAGE 5
CSX CORPORATION
CAPITAL BUILDER PLAN
STATEMENT OF NET ASSETS AVAILABLE FOR PLAN BENEFITS
SEPTEMBER 30, 1995
(Dollars in Thousands)
Non-
Participant
Participant Directed Directed
---------------------------------- --------
S&P CSX
Guaranteed 500 Aggressive CSX ESOP
Interest Index Growth Stock Stock
Fund Fund Fund Fund Fund Total
---------------------------------- -------- --------
ASSETS
Investments
Common Stock of CSX
Corporation $ --- $ --- $ --- $29,376 $118,337 $147,713
Collective Trust Fund 14,470 --- --- --- --- 14,470
Mutual Funds --- 9,599 7,580 --- --- 17,179
Cash and Cash
Equivalents --- 179 --- 130 270 579
------- ------- ------- ------- -------- --------
14,470 9,778 7,580 29,506 118,607 179,941
Employer Contributions
Receivable --- --- --- --- 14,661 14,661
Accrued Investment Income --- --- --- 1 2 3
------- ------- ------- ------- -------- --------
TOTAL ASSETS 14,470 9,778 7,580 29,507 133,270 194,605
------- ------- ------- ------- -------- --------
LIABILITIES
Due to Brokers for
Securities Purchased 94 --- 6 372 465 937
Accrued Expenses 45 12 10 37 147 251
------- ------- ------- ------- -------- --------
TOTAL LIABILITIES 139 12 16 409 612 1,188
------- ------- ------- ------- -------- --------
NET ASSETS AVAILABLE FOR
PLAN BENEFITS $14,331 $ 9,766 $ 7,564 $29,098 $132,658 $193,417
======= ======= ======= ======= ======== ========
See Notes to Financial Statements.
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PAGE 6
CSX CORPORATION
CAPITAL BUILDER PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS
FISCAL YEAR ENDED SEPTEMBER 30, 1996
(Dollars in Thousands)
Non-
Participant
Participant Directed Directed
---------------------------------- --------
S&P CSX
Guaranteed 500 Aggressive CSX ESOP
Interest Index Growth Stock Stock
Fund Fund Fund Fund Fund Total
---------------------------------- -------- --------
ADDITIONS
Investment Income:
Dividends and
Interest $ 947 $ 248 $ 52 $ 779 $ 3,324 $ 5,350
Employer Contributions --- --- --- 102 11,844 11,946
Participant Contributions 1,994 2,547 1,468 4,298 --- 10,307
Net Realized and
Unrealized Appreciation
in Fair Value of
Investments --- 1,985 1,011 6,216 26,991 36,203
------- ------- ------- ------- -------- --------
2,941 4,780 2,531 11,395 42,159 63,806
DEDUCTIONS
Distributions to
Participants 515 297 215 1,197 4,232 6,456
Fees and Expenses 82 25 16 65 259 447
------- ------- ------- ------- -------- --------
597 322 231 1,262 4,491 6,903
INTERFUND TRANSFERS (1,163) 760 (559) 962 --- ---
------- ------- ------- ------- -------- --------
NET INCREASE IN NET ASSETS 1,181 5,218 1,741 11,095 37,668 56,903
Net Assets Available for
Plan Benefits at
Beginning of Year 14,331 9,766 7,564 29,098 132,658 193,417
------- ------- ------- ------- -------- --------
NET ASSETS AVAILABLE FOR
PLAN BENEFITS AT
END OF YEAR $15,512 $14,984 $ 9,305 $40,193 $170,326 $250,320
======= ======= ======= ======= ======== ========
See Notes to Financial Statements.
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PAGE 7
CSX CORPORATION
CAPITAL BUILDER PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS
FISCAL YEAR ENDED SEPTEMBER 30, 1995
(Dollars in Thousands)
Non-
Participant
Participant Directed Directed
---------------------------------- --------
S&P CSX
Guaranteed 500 Aggressive CSX ESOP
Interest Index Growth Stock Stock
Fund Fund Fund Fund Fund Total
---------------------------------- -------- --------
ADDITIONS
Investment Income:
Dividends and
Interest $ 837 $ 183 $ 44 $ 581 $ 2,458 $ 4,103
Employer Contributions --- --- 15 93 16,549 16,657
Participant Contributions 2,498 1,812 1,512 4,117 --- 9,939
Net Realized and
Unrealized Appreciation
in Fair Value of
Investments --- 1,852 1,141 5,169 21,785 29,947
------- ------- ------- ------- -------- --------
3,335 3,847 2,712 9,960 40,792 60,646
DEDUCTIONS
Distributions to
Participants 618 171 133 1,317 3,685 5,924
Fees and Expenses 83 18 15 61 241 418
------- ------- ------- ------- -------- --------
701 189 148 1,378 3,926 6,342
INTERFUND TRANSFERS 62 265 (391) 64 --- ---
------- ------- ------- ------- -------- --------
NET INCREASE IN NET ASSETS 2,696 3,923 2,173 8,646 36,866 54,304
Net Assets Available for
Plan Benefits at
Beginning of Year 11,635 5,843 5,391 20,452 95,792 139,113
------- ------- ------- ------- -------- --------
NET ASSETS AVAILABLE FOR
PLAN BENEFITS AT
END OF YEAR $14,331 $ 9,766 $ 7,564 $29,098 $132,658 $193,417
======= ======= ======= ======= ======== ========
See Notes to Financial Statements.
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PAGE 8
CSX CORPORATION
CAPITAL BUILDER PLAN
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 1996
(Dollars in Thousands)
NOTE 1. SIGNIFICANT ACCOUNTING POLICIES
The accounting records of the CSX Corporation Capital Builder Plan ("the
Plan") are maintained on the accrual basis. All securities transactions of
the Plan are recorded as of the trade date.
Investments in CSX Corporation ("CSX") common stock and mutual funds are
presented at fair value. Fair value is based upon the last reported sales
price on the last business day of the Plan year. Collective trust fund
participation units are carried at cost plus accrued interest as determined by
the fund manager, which is contract value. Contract value approximates fair
value.
On October 1, 1995, the Plan adopted the provisions of Statement of Position
94-4 (SOP 94-4), "Reporting of Investment Contracts Held by Health and Welfare
Benefit Plans and Defined Contribution Pension Plans". SOP 94-4 requires a
defined contribution plan to report fully-benefit responsive investment
contracts at contract value and non-benefit responsive contracts at fair
value. Benefit responsiveness is defined as the extent to which a contract's
terms and the Plan permit or require participant-initiated withdrawals at
contract value. The Plan's contracts, included in the Guaranteed Interest
Fund, are fully-benefit responsive. Accordingly, net assets available for
benefits is not affected by the adoption of SOP 94-4.
The preparation of financial statements in conformity with generally accepted
accounting principles requires management to make estimates and assumptions
that affect the reported amounts of assets, liabilities, income, expenses, and
other additions to and deductions from net assets. Actual results may differ
from those estimates.
NOTE 2. DESCRIPTION OF THE PLAN
A complete description of Plan provisions including those relating to
contributions, vesting, withdrawals and distributions is contained in the
Summary Plan Description and the Plan document. The prospectus relating to
the Plan, which includes the Summary Plan Description, was filed with the
Securities and Exchange Commission on June 9, 1989. Copies of these documents
are available from the CSX Benefits Department. The following summary should
be read in conjunction with the aforementioned documents.
General: The Plan is a defined contribution plan subject to the provisions of
the Employee Retirement Income Security Act of 1974, as amended ("ERISA").
The Plan was established effective August 1, 1989 and qualifies as a "cash or
deferred" arrangement under Section 401(k) of the Internal Revenue Code of
1986, as amended ("IRC"), as a combination profit sharing and stock bonus
plan. Plan participation is limited to certain union employees of CSX and
affiliated companies (the "Employer").
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PAGE 9
CSX CORPORATION
CAPITAL BUILDER PLAN
NOTES TO FINANCIAL STATEMENTS, CONTINUED
(Dollars in Thousands)
NOTE 2. DESCRIPTION OF THE PLAN, Continued
Under the stock bonus portion of the Plan ("ESOP"), CSX contributes a
specified number of shares of CSX common stock on an annual basis to the
accounts of participants who have met service requirements for the preceding
calendar year and remain employed on specified dates as defined in the
applicable Summary Plan Description. These shares may be purchased throughout
the year and are classified as "unallocated" shares until credited to the
participants' accounts. The CSX ESOP Stock Fund held 220,797 shares valued at
$11,150 and 38,759 shares valued at $3,261 representing unallocated shares at
September 30, 1996 and 1995, respectively.
Investment Alternatives: Participant contributions may be invested in one or
more of the following investment funds: (1) the Guaranteed Interest Fund,
consisting of a collective trust fund that primarily invests in guaranteed
investment contracts with insurance companies; (2) the S&P 500 Index Fund,
consisting of a mutual fund that invests in common stocks selected primarily
to duplicate the performance of the stock market as a whole; (3) the
Aggressive Growth Fund, consisting of a mutual fund that invests in various
securities selected primarily for capital growth potential; and (4) the CSX
Stock Fund, consisting of investments in CSX common stock.
Amounts allocated to any of these funds may be temporarily retained as cash or
invested in cash equivalents to facilitate the investment or reinvestment of
Plan assets and the distribution of account balances to participants.
Participant Contributions: A participant may contribute from 1% to 15% of his
or her annual compensation, in 1% multiples, to the Plan. In addition, the
Plan permits certain eligible participants to contribute other compensatory
awards to the Plan. All participant contributions may be made on a before- or
after-tax basis within the limits imposed by the Internal Revenue Code and may
be invested in any combination of the four investment alternatives.
Investment direction may be revised by participants as often as four times per
year.
Employer Contributions: Contributions to the profit sharing and stock bonus
portion of the Plan are made by the Employer in the number of shares of CSX
common stock at least equal to the Company Stock Multiple (as defined in the
Summary Plan Description) applicable to the participating group or an amount
of cash which would permit the acquisition of that number of shares on the
open market at the then available market prices. Such employer contributions,
if applicable, are funded as defined by the Summary Plan Description each
calendar year.
The Plan also provides for Employer matching contributions for certain
eligible employees in an amount equal to the lesser of 50% of those
participants' capital savings contributions or 3% of their annual base
compensation. All employer matching contributions are invested in CSX common
stock, with the exception of certain eligible employees who may direct up to
50% of the company contribution in 25% multiples in any of the four investment
funds.
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PAGE 10
CSX CORPORATION
CAPITAL BUILDER PLAN
NOTES TO FINANCIAL STATEMENTS, CONTINUED
(Dollars in Thousands)
NOTE 2. DESCRIPTION OF THE PLAN, Continued
Vesting, Withdrawals, Distributions and Forfeitures: Participants are
immediately vested in their voluntary contributions plus actual earnings
thereon. Vesting in the remainder of their accounts is based on years of
service. A participant is 100% vested after five years of credited service,
or upon death, disability or retirement. Withdrawals and distributions are
controlled in accordance with the provisions of the Plan. Amounts not fully
vested at the time of withdrawal are redistributed to the individual
participant accounts of those participants remaining in the Plan.
Participant Accounts: Each participant's account is credited with the
participant's contributions, the appropriate portion of the Employer's
contribution and an allocation of Plan earnings and forfeitures of terminated
participants' nonvested accounts. The benefit to which a participant is
entitled is the benefit that can be provided from the participant's account.
Plan Termination: Although it has not expressed any intent to do so, the
Employer has the right under the Plan to discontinue its contributions at any
time and to terminate the Plan subject to the provisions of ERISA. In the
event of plan termination, participants will become 100% vested in their
accounts.
Administrative Expenses: The administrative expenses of the Plan are payable
by CSX or from Plan funds as the Plan Administrative Committee from time to
time directs. CSX paid a portion of the administrative expenses of the Plan
in 1996 and 1995.
NOTE 3. INVESTMENTS
The Plan's investments are held by a bank administered trust fund. These
investments are more fully described below:
Collective Trust Fund: Substantially all of the assets held in the Guaranteed
Interest Fund as of September 30, 1996 and 1995 are invested in the American
Express Trust Collective Income Fund, which primarily invests in guaranteed
investment contracts with insurance companies. The fund is managed by
American Express Financial Services.
Mutual Funds: Substantially all of the assets held in the S&P 500 Index Fund
as of September 30, 1996 and 1995 are invested in Vanguard Index Trust-500
Portfolio, a mutual fund managed by Vanguard.
Agressive Growth Fund: Substantially all of the assets held in the Aggressive
Growth Fund as of September 30, 1996 and 1995 are invested in Twentieth
Century Select Fund, a mutual fund managed by Twentieth Century Investors,
Inc.
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PAGE 11
CSX CORPORATION
CAPITAL BUILDER PLAN
NOTES TO FINANCIAL STATEMENTS, CONTINUED
(Dollars in Thousands)
NOTE 3. INVESTMENTS, Continued
CSX Stock Fund and CSX ESOP Stock Fund: Substantially all of the assets held
in these funds as of September 30, 1996 and 1995 are invested in CSX common
stock.
NOTE 4. STOCK SPLIT
On October 11, 1995, CSX's board of directors declared a 2-for-1 common stock
split distributed on December 21, 1995, to shareholders of record at the close
of business on December 4, 1995.
NOTE 5. INCOME TAX STATUS
The Internal Revenue Service ruled March 7, 1996, that the Plan qualifies
under Section 401(a) of the Internal Revenue Code (IRC) and, therefore, is not
subject to tax under present income tax law. Once qualified, the Plan is
required to operate in conformity with the IRC to maintain its qualification
(see Note 7). No provision for income taxes has been included in the Plan's
financial statements.
NOTE 6. RELATED PARTY TRANSACTIONS
CSX and its subsidiaries provide the Plan with certain management and
accounting services which are considered ordinary and customary expenses of
the Plan. During fiscal 1996 and 1995, the Plan reimbursed CSX and its
subsidiaries $59 and $63, respectively, for these services. During fiscal
1996 and 1995, the Plan received $4,075 and $3,013, respectively, representing
cash dividends from CSX common stock.
The trustee, The Northern Trust Company, invests Plan assets in the Collective
Short-Term Investment Fund of The Northern Trust Company. For the fiscal year
ended September 30, 1996, transactions involving this account included 466
purchases at a total cost of $20,416 and 264 sales with a fair value of
$20,510. For the fiscal year ended September 30, 1995 transactions involving
this account included 451 purchases at a total cost of $15,660 and 267 sales
with a fair value of $16,092.
NOTE 7. PLAN AMENDMENT
The Plan was amended and restated in 1995, retroactive to January 1, 1989, to
conform to the provisions of the Tax Reform Act of 1986, as amended, and
subsequent statutory and regulatory changes. There was no significant impact
on the Plan due to these changes and amendments. The Plan is intended to meet
all of the requirements of the Internal Revenue Code of 1986, as amended, and
the Employee Retirement Income Security Act of 1974, as amended.
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PAGE 12
CSX CORPORATION
CAPITAL BUILDER PLAN
NOTES TO FINANCIAL STATEMENTS, CONTINUED
(Dollars in Thousands)
NOTE 8. COMPARISON TO FORM 5500
Form 5500 requires the recording of a liability for participant distributions
processed prior to year-end but not yet paid. In financial statements
prepared in accordance with generally accepted accounting principles, such
amounts remain net assets available for plan benefits until paid.
The following is a reconciliation of net assets available for plan benefits
per the financial statements to the Form 5500:
September 30, 1996
------------------
Net assets available for plan benefits
per the financial statements $250,320
Distributions due but unpaid (2,015)
--------
Net assets available for plan benefits
per the Form 5500 $248,305
========
The following is a reconciliation of distributions made to participants per
the financial statements to the Form 5500:
Fiscal Year Ended
September 30, 1996
------------------
Distributions to participants per the
financial statements $6,456
Add: Distributions due but unpaid
at September 30, 1996 2,015
Less: Distributions due but unpaid
at September 30, 1995 (556)
------
Distributions to participants per the Form 5500 $7,915
======
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PAGE 13
SUPPLEMENTAL SCHEDULES
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PAGE 14
SCHEDULE 27a
CSX CORPORATION
CAPITAL BUILDER PLAN
SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
SEPTEMBER 30, 1996
(Dollars in Thousands)
Current
Issuer Description of Investment Cost Value
------ ------------------------- ---- -------
Common Stock
- ------------
* CSX Corporation
Common Stock 4,161,228 shares $136,672 $210,316
Collective Trust Fund
- ---------------------
American Express Trust
Collective Income Fund 369,859 shares 13,987 15,463
Mutual Funds
- ------------
Vanguard Index Trust
- 500 Portfolio 232,088 shares 10,917 14,991
Twentieth Century Select Fund 231,886 shares 8,835 9,310
Cash and Cash Equivalents
- -------------------------
* Collective Short-Term
Investment Fund of The
Northern Trust Company 565,000 shares 565 565
-------- --------
TOTAL $170,976 $250,645
======== ========
* Parties-in-Interest.
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PAGE 15
SCHEDULE 27d
CSX CORPORATION
CAPITAL BUILDER PLAN
SCHEDULE OF REPORTABLE TRANSACTIONS
FISCAL YEAR ENDED SEPTEMBER 30, 1996
(Dollars in Thousands)
Purchases Sales
------------ ------------------------------------
Value of Cost Net
Assets Sold on of Gain
Description of Asset Number Cost Number Transaction Date Asset (Loss)
- -------------------- ------ ---- ------ ---------------- ----- ------
Category (iii) - series of securities transactions in excess of 5% of plan
assets
- ----------------------------------------------------------------------------
CSX Corporation Common
Stock 139 $35,808 26 $ 4,728 $ 3,059 $1,669
Collective Short-Term
Investment Fund of The
Northern Trust Company 466 20,416 264 20,510 20,510 ---
There were no category (i), (ii) or (iv) reportable transactions during the
fiscal year ended September 30, 1996.
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PAGE 16
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
administrative committee members have duly caused this annual report to be
signed on its behalf by the undersigned hereunto duly authorized.
CSX CORPORATION CAPITAL BUILDER PLAN
By: /s/ JAMES L. ROSS
-------------------------------------------
James L. Ross
Vice President and Controller
CSX Corporation
(Plan Sponsor)
Date: March 26, 1997
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PAGE 1
EXHIBIT 23
Consent of Ernst & Young LLP, Independent Auditors
--------------------------------------------------
We consent to the incorporation by reference in the Registration
Statement (Form S-8 No. 33-29136) pertaining to the CSX Corporation Capital
Builder Plan of our report dated March 24, 1997, with respect to the financial
statements and schedules of the CSX Corporation Capital Builder Plan included
in this Annual Report (Form 11-K) for the fiscal year ended September 30,
1996.
/s/ ERNST & YOUNG LLP
---------------------
Ernst & Young LLP
Jacksonville, Florida
March 26, 1997
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