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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
For the fiscal year ended December 31, 1996
or
[ ] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
Commission file number 1-8022
CSX CORPORATION
1991 EMPLOYEES STOCK PURCHASE AND DIVIDEND REINVESTMENT 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
1991 EMPLOYEES STOCK PURCHASE AND DIVIDEND REINVESTMENT PLAN
INDEX TO FINANCIAL STATEMENTS
Audited Financial Statements Page No.
Report of Independent Auditors 3
Statement of Financial Condition - December 31, 1996
and 1995 4
Statement of Operations and Changes in Plan Equity -
Years Ended December 31, 1996, 1995 and 1994 5
Notes to Financial Statements 6-9
Signature 10
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Report of Independent Auditors
Board of Directors
CSX Corporation 1991 Employees Stock Purchase and Dividend Reinvestment Plan
CSX Corporation
Richmond, Virginia
We have audited the accompanying statements of financial condition of
the CSX Corporation 1991 Employees Stock Purchase and Dividend Reinvestment Plan
("Plan") as of December 31, 1996 and 1995, and the related statements of
operations and changes in plan equity for each of the three years in the period
ended December 31, 1996. 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 financial condition of the Plan at
December 31, 1996 and 1995, and the results of its operations and changes in its
plan equity for each of the three years in the period ended December 31, 1996,
in conformity with generally accepted accounting principles.
/s/ ERNST & YOUNG LLP
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Ernst & Young LLP
Jacksonville, Florida
March 24, 1997
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CSX CORPORATION
1991 EMPLOYEES STOCK PURCHASE AND DIVIDEND REINVESTMENT PLAN
STATEMENT OF FINANCIAL CONDITION
December 31
-----------------------
1996 1995
---------- ----------
ASSETS
Investments
Common Stock of CSX Corporation $9,174,757 $9,203,201
(At December 31, 1996 - 217,154
Shares; Cost - $8,534,309; at
December 31, 1995 - 201,714
Shares; Cost - $7,458,418
Cash 62,579 33,939
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9,237,336 9,237,140
Participant Contributions Receivable 71,134 121,818
Employer Contributions Receivable 12,543 20,661
Other Receivables 2,600 9,082
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TOTAL ASSETS $9,323,613 $9,388,701
========== ==========
LIABILITIES AND PLAN EQUITY
Other Liabilities $ 83,786 $ 31,822
Plan Equity 9,239,827 9,356,879
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TOTAL LIABILITIES AND PLAN EQUITY $9,323,613 $9,388,701
========== ==========
See Notes to Financial Statements.
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CSX CORPORATION
1991 EMPLOYEES STOCK PURCHASE AND DIVIDEND REINVESTMENT PLAN
STATEMENT OF OPERATIONS AND CHANGES IN PLAN EQUITY
Years Ended December 31,
------------------------------------
1996 1995 1994
---------- ---------- ----------
INCOME
Investment Income -
Dividends and Interest $ 216,982 $ 182,842 $ 119,338
Participant Contributions 1,792,360 1,868,093 1,892,991
Employer Contributions 356,390 347,100 335,944
Net Realized Appreciation in Fair
Value of Common Stock of CSX
Corporation 377,553 81,722 99,615
Net Unrealized Appreciation
(Depreciation) in Fair Value
of Common Stock of CSX Corporation (1,119,336) 1,869,860 (938,078)
---------- ---------- ----------
1,623,949 4,349,617 1,509,810
EXPENSES
Participant Distributions (1,741,001) (905,219) (343,360)
---------- ---------- ----------
NET INCREASE (DECREASE) IN
PLAN ASSETS (117,052) 3,444,398 1,166,450
Plan Equity at Beginning of Year 9,356,879 5,912,481 4,746,031
---------- ---------- ----------
PLAN EQUITY AT END OF YEAR $9,239,827 $9,356,879 $5,912,481
========== ========== ==========
See Notes to Financial Statements.
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CSX CORPORATION
1991 EMPLOYEES STOCK PURCHASE AND DIVIDEND REINVESTMENT PLAN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1996
NOTE 1. SIGNIFICANT ACCOUNTING POLICIES
The accounts of the Plan are maintained on the accrual basis.
Investments in CSX Corporation ("CSX") common stock are presented at fair value.
Fair value is based upon the last reported sales price on the last business day
of the Plan year. All security transactions are recorded as of the trade date.
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 and expenses. 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 Plan document, which
includes the Summary Plan Description, was filed with the Securities and
Exchange Commission on July 15, 1991. 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 common stock purchase plan and was
established effective September 1, 1991. The Plan is not a qualified Plan under
the definitions of the Internal Revenue Code of 1986, as amended ("IRC") and is
not subject to the provisions of the Employee Retirement Income Security Act of
1974, as amended ("ERISA"). Plan participation is limited to certain employees,
other than officers and key employees, of CSX and affiliated companies (the
"Employer").
Investment Alternatives: Participant and Employer contributions are invested in
one investment fund that purchases shares of CSX common stock in open market
transactions.
Amounts deposited to the investment fund 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: Upon enrollment, each participant directs that an
aggregate monthly amount (together with amounts invested in any other employee
stock purchase plan of CSX or its subsidiaries) neither less than $25 nor more
than $1,500 be contributed on his or her behalf by payroll withholding and be
deposited in the investment fund. All cash dividends are used to purchase
additional shares of CSX common stock for participants' accounts. The Employer
may make special contributions on behalf of selected participants at any time
which are not subject to the $1,500 monthly limitation.
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CSX CORPORATION
1991 EMPLOYEES STOCK PURCHASE AND DIVIDEND REINVESTMENT PLAN
NOTES TO FINANCIAL STATEMENTS, CONTINUED
NOTE 2. DESCRIPTION OF THE PLAN, Continued
Employer Contributions: Cash contributions are made by the Employer in an
amount equal to 17.65% of participant contributions and 17.65% of reinvested
dividends.
Vesting, Withdrawals and Distributions: Participants are immediately vested in
their voluntary contributions plus actual earnings thereon. Vesting in Employer
contributions is subject to a rolling two-year holding period (as defined in the
Summary Plan Description). The holding period begins on the purchase date of
CSX common stock with Employer contributions and ends on the second anniversary
of that purchase date. After the second anniversary date, the participant is
100% vested in the subject Employer contribution. The Plan provides that any
participants terminated involuntarily under the Employer's severance plan are
not subject to the two-year holding period. 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 contribution, the appropriate portion of the Employer's
contribution and Plan earnings, including reinvested dividends. 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. In the event of plan termination, participants
will become 100% vested in their unvested Employer contributions.
Administrative Expenses: A portion of the administrative expenses of the Plan
are paid by CSX. However, a participant bears the cost of any sale of CSX
common stock from his or her Plan account.
NOTE 3. INVESTMENTS
The Plan's investments are held by a bank administered trust fund.
Substantially all of the assets held in this trust fund at December 31, 1996 and
1995 are invested in CSX common stock.
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CSX CORPORATION
1991 EMPLOYEES STOCK PURCHASE AND DIVIDEND REINVESTMENT PLAN
NOTES TO FINANCIAL STATEMENTS, CONTINUED
NOTE 3. INVESTMENTS, Continued
Net unrealized appreciation (depreciation) in fair value of CSX common stock is
as follows:
Years Ended December 31,
---------------------------------------
1996 1995 1994
----------- ---------- ---------
Beginning of Year $ 1,744,782 $ (125,078) $ 813,000
End of Year 625,446 1,744,782 (125,078)
----------- ---------- ---------
Net Unrealized Appreciation
(Depreciation) of Fair Value
During the Year $(1,119,336) $1,869,860 $(938,078)
=========== ========== =========
Net realized appreciation of investments represents the difference between the
fair value of CSX common stock allocated to participants at the dates of sale or
distribution and the cost of such stock determined on the basis of the "first-
in", "first-out" cost applicable to each participant. Fair value and the
related cost associated with such sales or distributions were $1,837,821 and
$1,460,268 for the year ended December 31, 1996, respectively. Related amounts
for the year ended December 31, 1995 were $927,478 and $845,756, respectively,
and for the year ended December 31, 1994, $339,223 and $239,608, respectively.
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 Plan is not qualified under Section 401 of the IRC and therefore income
earned by the trust holding the Plan's assets is not exempt from federal income
taxes. As a non-qualified plan, the Plan has not applied for or received an IRS
determination letter.
Participant contributions to the Plan are made on an after-tax basis. However,
Employer contributions and certain earnings, including dividends and gain or
loss from the sale of securities realized by the Plan, must be reported as
income by participants annually. The participants' Employer and/or the Plan
trustee will notify each participant as to the annual amount to be reported as
taxable income. Therefore, no provision for income taxes is included in the
accompanying financial statements.
Shares of CSX common stock, which are purchased by the Trustee and which are
required to be held in the Plan for not less than two years during which the
participant is continuously employed by the company, are considered to be
property subject to a substantial risk of forfeiture under Section 83(a) of the
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CSX CORPORATION
1991 EMPLOYEES STOCK PURCHASE AND DIVIDEND REINVESTMENT PLAN
NOTES TO FINANCIAL STATEMENTS, CONTINUED
NOTE 5. INCOME TAX STATUS, Continued
IRC. In the first taxable year in which the rights of a participant to receive
a distribution of stock are no longer subject to a substantial risk of
forfeiture, an amount equal to the fair value of the stock at that time is
included in gross income as additional compensation to the participant. A
participant whose employment terminates for any reason other than under the
Employer's severance plan and who is not disabled, retired, or has died,
forfeits rights to all shares that have not been held for two years and which
were purchased under the Plan by the Trustee with Employer matching
contributions.
Alternatively, a participant may elect to treat as compensation and to include
as gross income under Section 83(b) of the Internal Revenue Code of 1986,
amounts of Employer matching contributions paid during the year to the Trustee.
In such event, later appreciation, if any, in Common Stock is not treated as
compensation and any dividends received on such shares are taxable as they are
paid. In determining gain or loss from the sale or exchange of the stock if a
Section 83(b) election is properly made and no forfeiture occurs, the basis of
the stock is determined with reference to the amounts included in gross income
as a result of any election or elections made under Section 83(b), and the
holding period commences when the stock is purchased under the Plan by the
Trustee.
NOTE 6. RELATED PARTY TRANSACTIONS
CSX provides the Plan with certain management and accounting services for which
no fees are charged. During the years ended December 31, 1996, 1995 and 1994
the Plan received $213,519, $170,556 and $119,338, respectively, in common stock
dividends from CSX.
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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
1991 EMPLOYEES STOCK PURCHASE AND DIVIDEND
REINVESTMENT 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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EXHIBIT 23
Consent of Ernst & Young LLP, Independent Auditors
--------------------------------------------------
We consent to the incorporation by reference in the Registration
Statement (Form S-8 No. 33-41736) pertaining to the CSX Corporation 1991
Employees Stock Purchase and Dividend Reinvestment Plan of our report dated
March 24, 1997, with respect to the financial statements of the CSX Corporation
1991 Employees Stock Purchase and Dividend Reinvestment Plan included in this
Annual Report (Form 11-K) for the year ended December 31, 1996.
/s/ ERNST & YOUNG LLP
---------------------
Ernst & Young LLP
Jacksonville, Florida
March 26, 1997
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