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, 1998
Commission file number 1-8022
TAX SAVINGS THRIFT PLAN FOR EMPLOYEES OF
CSX CORPORATION
AND AFFILIATED COMPANIES
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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<PAGE>
TAX SAVINGS THRIFT PLAN FOR EMPLOYEES OF CSX CORPORATION
AND AFFILIATED COMPANIES
INDEX TO FINANCIAL STATEMENTS
Audited Financial Statements Page No.
Report of Independent Auditors 3
Statement of Net Assets Available for Plan Benefits,
With Fund Information - September 30, 1998 4
Statement of Net Assets Available for Plan Benefits,
With Fund Information - September 30, 1997 5
Statement of Changes in Net Assets Available for Plan
Benefits, With Fund Information - Fiscal Year Ended
September 30, 1998 6
Statement of Changes in Net Assets Available for Plan
Benefits, With Fund Information - Fiscal Year Ended
September 30, 1997 7
Notes to Financial Statements 8-13
Supplemental Schedules
Schedule of Assets Held for Investment Purposes
- September 30, 1998 15-16
Schedule of Reportable Transactions 17
Signature 18
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<PAGE>
Report of Independent Auditors
The Pension Committee
Tax Savings Thrift Plan for Employees of CSX Corporation and Affiliated
Companies
CSX Corporation
Richmond, Virginia
We have audited the accompanying statements of net assets available for plan
benefits, with fund information, of the Tax Savings Thrift Plan for Employees of
CSX Corporation and Affiliated Companies (the "Plan") as of September 30, 1998
and 1997, and the related statements of changes in net assets available for plan
benefits, with fund information, 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, 1998 and 1997, and the changes in its net assets available for
plan benefits for the fiscal 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, 1998 and reportable transactions for
the fiscal year then ended, are presented for purposes of complying with the
Department of Labor's Rules and Regulations for Reporting and Disclosure under
the Employee Retirement Income Security Act of 1974, and are not a required part
of the basic financial statements. The Fund Information in the statements of net
assets available for plan benefits and the statements of changes in net assets
available for plan benefits is presented for purposes of additional analysis
rather than to present the net assets available for benefits and changes in net
assets available for benefits of each fund. The supplemental schedules and Fund
Information have been subjected to the auditing procedures applied in our audits
of the financial statements and, in our opinion, are fairly stated in all
material respects in relation to the financial statements taken as a whole.
/s/ ERNST & YOUNG LLP
Jacksonville, Florida
March 26, 1999
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<PAGE>
<TABLE>
TAX SAVINGS THRIFT PLAN FOR EMPLOYEES OF CSX CORPORATION
AND AFFILIATED COMPANIES
STATEMENT OF NET ASSETS AVAILABLE FOR PLAN BENEFITS, WITH FUND INFORMATION
SEPTEMBER 30, 1998
(Dollars in Thousands)
<CAPTION>
Non-
Participant
Participant Directed Directed
---------------------------------------------------------------------------- -----------
Vanguard Morgan
Fidelity Institu- Twentieth Twentieth Stanley CSX CSX
Stable Equity- tional Century Century International Common Common
Interest Income Index Select Vista Equity Stock Stock Loan
Fund Fund Fund Fund Fund Fund Fund Fund Fund Total
--------------------------------------------------------------------------- ----------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
ASSETS
Investments
Mutual Funds $ - $107,380 $117,688 $89,642 $10,445 $20,112 $ - $ - $ - $345,267
Common Stock
of CSX
Corporation - - - - - - 50,623 160,304 - 210,927
Guaranteed
Investment
Contracts 182,254 - - - - - - - - 182,254
Collective Trust
Fund 25,566 - - - - - - - - 25,566
Loans to
Participants - - - - - - - - 27,600 27,600
Cash and Cash
Equivalents 1,298 40 46 32 6 11 223 708 - 2,364
-------- -------- --------- --------- --------- ----------- ------- ---------- ------- ---------
209,118 107,420 117,734 89,674 10,451 20,123 50,846 161,012 27,600 793,978
Contributions
Receivable 662 491 676 402 133 143 264 834 - 3,605
-------- -------- --------- --------- --------- ----------- ------- ----------- ------- ---------
TOTAL ASSETS 209,780 107,911 118,410 90,076 10,584 20,266 51,110 161,846 27,600 797,583
LIABILITIES
Accrued Expenses 80 41 45 34 4 8 19 60 - 291
-------- -------- --------- --------- --------- ----------- ------- ---------- ------- ---------
TOTAL LIABILITIES 80 41 45 34 4 8 19 60 - 291
NET ASSETS
AVAILABLE FOR
PLAN BENEFITS $209,700 $107,870 $118,365 $90,042 $10,580 $20,258 $51,091 $161,786 $27,600 $797,292
======== ======== ========= ========= ========= ========== ======== =========== ======= =========
</TABLE>
See Notes to Financial Statements.
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<PAGE>
<TABLE>
TAX SAVINGS THRIFT PLAN FOR EMPLOYEES OF CSX CORPORATION
AND AFFILIATED COMPANIES
STATEMENT OF NET ASSETS AVAILABLE FOR PLAN BENEFITS, WITH FUND INFORMATION
SEPTEMBER 30, 1997
(Dollars in Thousands)
<CAPTION>
Non-
Participant
Participant Directed Directed
----------------------------------------------------------------------------- -----------
Vanguard Morgan
Fidelity Institu- Twentieth Twentieth Stanley CSX CSX
Stable Equity- tional Century Century International Common Common
Interest Income Index Select Vista Equity Stock Stock Loan
Fund Fund Fund Fund Fund Fund Fund Fund Fund Total
----------------------------------------------------------------------------- -------- ------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
ASSETS
Investments
Mutual Funds $ - $113,180 $100,202 $74,952 $21,990 $20,926 $ - $ - $ - $331,250
Common Stock
of CSX
Corporation - - - - - - 51,197 218,262 - 269,459
Guaranteed
Investment
Contracts 187,163 - - - - - - - - $187,163
Collective Trust
Fund 16,866 - - - - - - - - 16,866
Loans to
Participants - - - - - - - - 28,123 28,123
Cash and Cash
Equivalents 9 5 4 3 1 1 196 833 - 1,052
-------- -------- --------- --------- --------- ------------- ------- ----------- -------- --------
204,038 113,185 100,206 74,955 21,991 20,927 51,393 219,095 28,123 833,913
Contributions
Receivable 609 463 537 336 170 134 368 881 - 3,498
-------- -------- --------- --------- --------- ------------- ------- ----------- -------- --------
TOTAL ASSETS 204,647 113,648 100,743 75,291 22,161 21,061 51,761 219,976 28,123 837,411
LIABILITIES
Accrued Expenses 433 35 30 23 6 6 16 67 - 616
-------- -------- --------- --------- --------- ------------- ------- ----------- -------- --------
TOTAL LIABILITIES 433 35 30 23 6 6 16 67 - 616
NET ASSETS
AVAILABLE FOR
PLAN BENEFITS $204,214 $113,613 $100,713 $75,268 $22,155 $21,055 $51,745 $219,909 $28,123 $836,795
======== ======== ========= ========= ========= ============= ======= =========== ======== ========
</TABLE>
See Notes to Financial Statements.
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<PAGE>
<TABLE>
TAX SAVINGS THRIFT PLAN FOR EMPLOYEES OF CSX CORPORATION
AND AFFILIATED COMPANIES
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS, WITH FUND INFORMATION
FISCAL YEAR ENDED SEPTEMBER 30, 1998
(Dollars in Thousands)
<CAPTION>
Non-
Participant
Participant Directed Directed
------------------------------------------------------------------------- -----------
Vanguard Morgan
Fidelity Institu- Twentieth Twentieth Stanley CSX CSX
Stable Equity- tional Century Century Internationa Common Common
Interest Income Index Select Vista Equity Stock Stock Loan
Fund Fund Fund Fund Fund Fund Fund Fund Fund Total
------------------------------------------------------------------------- ------- -------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
ADDITIONS
Investment Income:
Dividends and
Interest $12,719 $1,919 $2,059 $ 301 $ - $ 468 $ 1,390 $ 4,402 $2,352 $25,610
Employer
Contributions 105 50 61 36 18 17 - 10,714 - 11,001
Participant
Contributions 7,700 6,712 8,725 5,160 2,084 1,866 4,744 - - 36,991
Net Realized and
Unrealized
Appreciation
(Depreciation) in
Fair Value of
Investments 844 (2,548) 6,727 9,419 (7,032) (1,237) (18,661) (59,095) - (71,583)
--------- --------- -------- --------- ---------- ------------ -------- ----------- ------- --------
21,368 6,133 17,572 14,916 (4,930) 1,114 (12,527) (43,979) 2,352 2,019
DEDUCTIONS
Distributions to
Participants 16,237 5,056 4,610 3,273 608 626 2,218 7,024 1,502 41,154
Fees and Expenses 93 57 59 42 6 11 22 78 - 368
--------- --------- -------- --------- ---------- ------------ -------- ----------- ------- --------
16,330 5,113 4,669 3,315 614 637 2,240 7,102 1,502 41,522
INTERFUNDTRANSFERS 448 (6,763) 4,749 3,173 (6,031) (1,274) 14,113 (7,042) (1,373) -
--------- --------- -------- --------- ---------- ------------ -------- ----------- ------- --------
NET INCREASE
(DECREASE) IN NET
ASSETS 5,486 (5,743) 17,652 14,774 (11,575) (797) (654) (58,123) (523) (39,503)
Net Assets Available
for Plan Benefits
at Beginning of
Year 204,214 113,613 100,713 75,268 22,155 21,055 51,745 219,909 28,123 836,795
-------- --------- -------- --------- ---------- ------------ -------- ----------- ------- --------
NET ASSETS
AVAILABLE FOR
PLAN BENEFITS AT
END OF YEAR $209,700 $107,870 $118,365 $90,042 $10,580 $20,258 $51,091 $161,786 $27,600 $797,292
======== ========= ======== ========= ========== ============ ======== =========== ======= ========
</TABLE>
See Notes to Financial Statements.
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<PAGE>
<TABLE>
TAX SAVINGS THRIFT PLAN FOR EMPLOYEES OF CSX CORPORATION
AND AFFILIATED COMPANIES
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS, WITH FUND INFORMATION
FISCAL YEAR ENDED SEPTEMBER 30, 1997
(Dollars in Thousands)
<CAPTION>
Non-
Participant
Participant Directed Directed
--------------------------------------------------------------------------- -----------
Vanguard Morgan
Fidelity Institu- Twentieth Twentieth Stanley CSX CSX
Stable Equity- tional Century Century International Common Common
Interest Income Index Select Vista Equity Stock Stock Loan
Fund Fund Fund Fund Fund Fund Fund Fund Fund Total
--------------------------------------------------------------------------- ----------- -------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
ADDITIONS
Investment Income:
Dividends and
Interest $13,091 $ 3,152 $ 1,501 $ 415 $ - $ 317 $ 939 $ 3,928 $2,209 $25,552
Employer
Contributions - - - - - - - 10,940 - 10,940
Participant
Contributions 8,793 6,318 7,480 4,458 2,832 1,928 4,722 - - 36,531
Net Realized and
Unrealized
Appreciation in
Fair Value of
Investments - 27,551 25,439 18,815 11 4,190 8,328 29,889 - 114,223
Affiliated Plan
Merger 6,411 - 938 1,269 - - - - - 8,618
-------- -------- -------- --------- --------- ------------ ------- ----------- ------- --------
28,295 37,021 35,358 24,957 2,843 6,435 13,989 44,757 2,209 195,864
DEDUCTIONS
Distributions to
Participants 13,345 3,886 3,422 2,437 802 1,049 1,679 6,728 1,752 35,100
Fees and Expenses 288 104 91 69 20 19 47 198 - 836
-------- -------- -------- ---------- --------- ------------- ------- ----------- ------- --------
13,633 3,990 3,513 2,506 822 1,068 1,726 6,926 1,752 35,936
INTERFUND TRANSFERS (3,070) 28 7,910 3,274 (5,039) (941) 969 (3,513) 382 -
-------- -------- -------- ---------- --------- ------------- ------- ----------- ------- --------
NET INCREASE
(DECREASE) IN NET
ASSETS 11,592 33,059 39,755 25,725 (3,018) 4,426 13,232 34,318 839 159,928
Net Assets
Available for
Plan Benefits at
Beginning of Year 192,622 80,554 60,958 49,543 25,173 16,629 38,513 185,591 27,284 676,867
-------- -------- -------- ---------- --------- ------------- ------- ----------- ------- --------
NET ASSETS
AVAILABLE FOR
PLAN BENEFITS AT
END OF YEAR $204,214 $113,613 $100,713 $75,268 $22,155 $21,055 $51,745 $219,909 $28,123 $836,795
======== ======== ======== ========== ========= ============= ======= =========== ======= ========
</TABLE>
See Notes to Financial Statements.
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<PAGE>
TAX SAVINGS THRIFT PLAN FOR EMPLOYEES OF CSX CORPORATION
AND AFFILIATED COMPANIES
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 1998
(Dollars in Thousands)
NOTE 1--SIGNIFICANT ACCOUNTING POLICIES
The accounting records of the Tax Savings Thrift Plan for Employees of CSX
Corporation and Affiliated Companies ("the Plan") are maintained on the accrual
basis. All securities transactions of the Plan are recorded as of the trade
date.
Investments in guaranteed investment contracts and collective trust
participation units included in the Stable Interest Fund are fully benefit
responsive and, accordingly, are reported at cost plus accrued interest, which
is contract value. Contract value approximates fair value. At September 30, 1998
and September 30, 1997, interest rates on guaranteed investment contracts of the
Stable Interest Fund ranged from 5.37% to 8.35% and 5.37% to 8.35%,
respectively. The average yield on the Plan's investments in the Stable Interest
Fund for the years ended September 30, 1998 and September 30, 1997 was 6.16% and
6.09%, respectively. Investments in mutual funds and 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. Investments in
loans to participants are carried at their outstanding principal balances, which
approximates fair value. Such loans bear interest at the prime rate in effect at
the beginning of the quarter in which each loan originated.
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 or deductions from net assets. Actual results may differ from those
estimates.
Certain amounts have been reclassified from the 1997 financial statements to be
consistent with the presentation in the 1998 financial statements.
During 1998, the Plan became a multi-employer Plan as a result of the change in
participation of American Commercial Barge Line LLC (see Note 5).
NOTE 2--DESCRIPTION OF THE PLAN
A complete description of Plan provisions, including those relating to
contributions, vesting, withdrawals, loans 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. 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 multi-employer defined contribution plan subject to the
- -------
provisions of the Employee Retirement Income Security Act of 1974, as amended
("ERISA"). The Plan qualifies as a "cash or deferred" arrangement under Section
401(k) of the Internal Revenue Code of 1986, as amended ("IRC"). Plan
participation is voluntary and is limited to full-time salaried employees
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<PAGE>
TAX SAVINGS THRIFT PLAN FOR EMPLOYEES OF CSX CORPORATION
AND AFFILIATED COMPANIES
NOTES TO FINANCIAL STATEMENTS,CONTINUED
(Dollars in Thousands)
NOTE 2--DESCRIPTION OF THE PLAN--Continued
and certain non-union hourly employees of CSX Corporation and adopting
affiliated companies (the "Employer").
Investment Alternatives: Participant contributions may be invested in one or
- ------------------------
more of the following investment funds: (1) the Stable Interest Fund, consisting
primarily of guaranteed investment contracts issued by highly-rated insurance
companies; (2) the Fidelity Equity-Income and Growth Fund, consisting of a
mutual fund that invests in various securities selected primarily for a
combination of income and capital growth potential; (3) the Vanguard S&P 500
Index Fund, consisting of a mutual fund that invests in common and capital
stocks selected primarily to duplicate the performance of the stock market as a
whole; (4) the Twentieth Century Select Fund, consisting of a mutual fund that
invests in various securities selected primarily for capital growth potential;
(5) the Twentieth Century Vista Fund, consisting of a mutual fund that invests
in the common stocks of small to medium-sized companies selected primarily for
capital growth over time; (6) the Morgan Stanley International Equity Fund,
consisting of a mutual fund that invests in the stocks of companies located
outside the United States selected primarily to achieve long-term growth by
participating in the growth of foreign economies; and (7) the CSX Common Stock
Fund, consisting of investments in CSX Corporation 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 base compensation, in 1% multiples, to the Plan (the "basic contributions").
In addition, the Plan permits participants to contribute up to 20% of any
incentive compensation to the Plan. All participant contributions may be made on
a before- or after-tax basis within the limits imposed by the IRC and may be
invested in any combination of the seven investment alternatives. Investment
direction may be revised by participants daily.
Subject to certain limitations, a participant may also reinvest distributions
received from another qualified plan into the Plan.
Employer Contributions: The Employer matches a participant's basic contributions
- ----------------------
in an amount equal to the lesser of 50% of those contributions or 3% of his or
her base compensation. Employer matching contributions are made in the form of
cash deposits to the CSX Stock Fund, which are reported in the non-participant
directed portion of the CSX Stock Fund in the accompanying financial statements.
A participant's incentive compensation contributions are not matched.
Profit-sharing contributions may also be made at the discretion of the Board of
Directors of CSX. Participants of the Plan who have attained age 55 may
reallocate their interest in the non-participant directed CSX Common Stock Fund,
in multiples of 10%, to other investment alternatives offered under the Plan.
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<PAGE>
TAX SAVINGS THRIFT PLAN FOR EMPLOYEES OF CSX CORPORATION
AND AFFILIATED COMPANIES
NOTES TO FINANCIAL STATEMENTS,CONTINUED
(Dollars in Thousands)
NOTE 2--DESCRIPTION OF THE PLAN--Continued
Vesting, Withdrawals, Loans and Distributions: Participants are immediately
- ------------------------------------------------
vested in all contributions made to their accounts plus investment earnings
thereon. Withdrawals, loans and distributions are controlled in accordance with
the provisions of the Plan.
Participant Accounts: Each participant's account is credited or charged with the
- --------------------
participant's contributions, the employer's contributions, and an allocation of
the Plan's earnings, losses and administrative expenses. The benefit to which a
participant is entitled is the benefit that can be provided from his or her
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 termination or partial termination, the total amount in each participant's
account will be distributed to the participant or continue to be held in trust
for his or her benefit.
Administrative Expenses: The administrative expenses of the Plan are paid 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 fiscal
years 1998 and 1997.
NOTE 3--INVESTMENTS
The Plan's investments are held by a bank administered trust fund. These
investments are more fully described below:
Guaranteed Investment Contracts: Substantially all of the assets held in the
- ---------------------------------
Stable Interest Fund are invested in guaranteed investment contracts issued by
various insurance companies. These contracts contain provisions which may impose
penalties for withdrawals prior to the scheduled maturity dates. In addition,
this Fund invests in the American Express Trust Collective Income Fund, a
collective trust fund which invests primarily in guaranteed investment contracts
issued by insurance companies. The collective trust fund is managed by American
Express Financial Services. At September 30, 1998 and 1997, there were no
individual investment contracts that represented 5% or more of the Plan's net
assets available for plan benefits.
Mutual Funds: Substantially all of the assets held in the Fidelity Equity-
- -------------
Income and Growth Fund at September 30, 1998 and 1997, are invested in the
Fidelity Equity-Income and Growth Fund, a mutual fund managed by Fidelity
Management & Research Company.
Substantially all of the assets held in the Vanguard S&P 500 Index Fund at
September 30, 1998 and 1997 are invested in the Vanguard Institutional Index
Trust Fund, a mutual fund managed by the Vanguard Group.
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<PAGE>
TAX SAVINGS THRIFT PLAN FOR EMPLOYEES OF CSX CORPORATION
AND AFFILIATED COMPANIES
NOTES TO FINANCIAL STATEMENTS, CONTINUED
(Dollars in Thousands)
NOTE 3--INVESTMENTS--Continued
Substantially all of the assets held in the Twentieth Century Select Fund at
September 30, 1998 and 1997, are invested in the Twentieth Century Select
Investors Fund, a mutual fund managed by American Century Investments.
Substantially all of the assets held in the Twentieth Century Vista Fund at
September 30, 1998 and 1997, are invested in the Twentieth Century Vista Fund, a
mutual fund managed by American Century Investments.
Substantially all of the assets held in the Morgan Stanley International Equity
Fund at September 30, 1998 and 1997, are invested in the Morgan Stanley
International Equity Fund, a mutual fund managed by Morgan Stanley.
CSX Common Stock Fund: Substantially all of the assets held in this fund at
- ---------------------
September 30, 1998 and 1997, are invested in CSX common stock.
Loan Fund: Substantially all of the assets held in this fund at September 30,
- ---------
1998 and 1997, consist of loans made to Plan participants from their accounts.
NOTE 4--PLAN MERGER
Effective October 1, 1996, the RF&P Railway Company Employee Thrift and
Investment Plan was merged into the Plan. The merger resulted in a transfer of
approximately $8,600 of net assets to the Plan.
NOTE 5--CHANGE IN PARTICIPATION OF AMERICAN COMMERCIAL BARGE LINE COMPANY LLC
On June 30, 1998, CSX conveyed its wholly-owned subsidiary, American Commercial
Lines LLC (ACL), to a joint venture in which CSX holds a 32% interest. Employees
of American Commercial Barge Line Company LLC (ACBLC), a wholly owned subsidiary
of ACL, previously participated in the Plan. Pursuant to an Adoption Agreement
signed June 30, 1998, ACBLC's eligible employees may continue to participate in
the Plan.
Only persons employed by ACBLC on June 29, 1998, or employees hired by the newly
formed venture after June 30, 1998, are eligible to participate in the Plan.
ACBLC participants may not invest in the CSX Common Stock Fund and may
reallocate amounts previously invested in the CSX Common Stock Fund to other
investment alternatives.
NOTE 6--INCOME TAX STATUS
The Internal Revenue Service ruled on March 15, 1996, that the Plan qualifies
under Sections 401(a) of the Internal Revenue Code ("IRC") and, therefore, the
related trust 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. The CSX Administrative Committee is not aware of any
course of action or series of events that have occurred that might adversely
affect the Plan's qualified status. No provision for income taxes has been
included in the Plan's financial statements.
- 11 -
<PAGE>
TAX SAVINGS THRIFT PLAN FOR EMPLOYEES OF CSX CORPORATION
AND AFFILIATED COMPANIES
NOTES TO FINANCIAL STATEMENTS, CONTINUED
(Dollars in Thousands)
NOTE 6--INCOME TAX STATUS--Continued
The Plan Administrator is not aware of any course of action or series of events
that have occurred that might adversely affect the Plan's continued qualified
status.
NOTE 7--RELATED PARTY TRANSACTIONS
CSX and its subsidiaries provide the Plan with certain management and accounting
services. During fiscal years 1998 and 1997, the Plan reimbursed CSX and
subsidiaries approximately $149 and $121, respectively, for those services which
are considered reasonable and customary expenses of the Plan. During fiscal
years 1998 and 1997, the Plan received $5,695 and $4,788, respectively,
representing cash dividends from CSX common stock.
The trustee, The Northern Trust Company, routinely invests Plan assets in the
Collective Short-Term Investment Fund of The Northern Trust Company. For the
fiscal year ended September 30, 1998, transactions involving this account
included 360 purchases with a total cost of $297,215 and 352 sales with a fair
value of $297,147. For the fiscal year ended September 30, 1997, transactions
involving this account included 213 purchases with a total cost of $211,919 and
218 sales with a fair value of $215,604.
NOTE 8--CONRAIL TRANSACTION
Due to the joint acquisition of Conrail Inc. by CSX and Norfolk Southern
Corporation, approximately 790 former Conrail employees will become eligible for
the Plan on or about June 1, 1999.
NOTE 9--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, 1998
-------------------------
Net assets available for plan benefits per the
financial statements $797,292
Distributions due but unpaid (198)
-------------------------
Net assets available for plan benefits per the
Form 5500 $797,094
=========================
-12-
<PAGE>
TAX SAVINGS THRIFT PLAN FOR EMPLOYEES OF CSX CORPORATION
AND AFFILIATED COMPANIES
NOTES TO FINANCIAL STATEMENTS, CONTINUED
(Dollars in Thousands)
NOTE 9--COMPARISON TO FORM 5500--Continued
The following is a reconciliation of distributions made to participants per the
financial statements to the Form 5500:
Fiscal Year Ended
September 30, 1998
=======================
Distributions to participants per the
financial statements $41,154
Add: Distributions due but unpaid
at September 30, 1998 198
Less: Distributions due but unpaid
at September 30, 1997 (142)
-----------------------
Distributions to participants per the
Form 5500 $41,210
=======================
-13-
<PAGE>
SUPPLEMENTAL SCHEDULES
- 14 -
<PAGE>
<TABLE>
SCHEDULE 27a
TAX SAVINGS THRIFT PLAN FOR EMPLOYEES OF CSX CORPORATION
AND AFFILIATED COMPANIES
SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
SEPTEMBER 30, 1998
(Dollars in Thousands)
<CAPTION>
Current
Issuer Description of Investment Cost Value
- ------------------------------- ------------------------------- ---------- ------------
Guaranteed Investment Contracts
- -------------------------------
<S> <S> <C> <C>
AIG Life Insurance Co. 1-78042 Guaranteed Investment
Contract $ 20,591 $ 20,591
Allstate Life Insurance Co. GA-5867 Guaranteed Investment
Contract 6,018 6,018
Allstate Life Insurance Co. GA-5547 Guaranteed Investment
Contract 8,895 8,895
Allstate Life Insurance Co. GA-5797 Guaranteed Investment
Contract 5,443 5,443
Commonwealth Life Insurance ADA-00614 - FR Guaranteed
Co. Investment Contract 5,450 5,450
Hartford Life Insurance Co. GA-10131 Guaranteed Investment
Contract 10,801 10,801
J. P Morgan Synthetic Guaranteed Investment
Contract 74,048 74,048
Lincoln National Life GA #9736 Guaranteed Investment
Insurance Co. Contract 7,302 7,302
Metropolitan Life Insurance GA #13920 Guaranteed Investment
Co. Contract 13,508 13,508
New York Life Insurance Co. GA #06699002 Guaranteed
Investment Contract 5,304 5,304
New York Life Insurance Co. GA #06699004 Guaranteed
Investment Contract 6,619 6,619
New York Life Insurance Co. GA #06699005 Guaranteed
Investment Contract 6,738 6,738
New York Life Insurance Co. GA #06699006 Guaranteed
Investment Contract 4,783 4,783
Prudential Life Insurance GA #6497-503 Guaranteed
Co. Investment Contract 6,754 6,754
---------- ------------
182,254 182,254
</TABLE>
-15-
<PAGE>
<TABLE>
SCHEDULE 27a
TAX SAVINGS THRIFT PLAN FOR EMPLOYEES OF CSX CORPORATION
AND AFFILIATED COMPANIES
SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES - Continued
SEPTEMBER 30, 1998
(Dollars in Thousands)
<CAPTION>
Current
Issuer Description of Investment Cost Value
- ---------------------------------- ---------------------------- ------------- ---------
<S> <S> <C> <C>
Mutual Funds
- ------------
Fidelity Equity-Income Fund 2,164,917 Shares 82,779 107,380
Vanguard Institutional Index Fund 1,252,669 Shares 83,419 117,688
Twentieth Century Select
Investors Fund 1,897,586 Shares 76,886 89,642
Twentieth Century Vista Fund 1,107,636 Shares 15,108 10,445
Morgan Stanley International
Equity Fund 1,138,862 Shares 19,984 20,112
------------- ---------
278,176 345,267
Common Stock
- ------------
*CSX Corporation 5,016,396 Shares 170,615 210,927
Collective Trust Fund
- ---------------------
American Express Trust
Managed Stable Capital Income
Fund 1,947,172 units 25,349 25,566
Loans to Participants
- ---------------------
* Tax Savings Thrift Plan for
Employees of CSX Corporation and Range of interest rates charged
Affiliated Companies 6% to 10% - 27,600
Cash Equivalents
- ----------------
* Collective Short-Term Investment
Fund of the Northern Trust Company 2,364,000 Shares 2,364 2,364
------------- ---------
TOTAL $658,758 $793,978
============= =========
* Parties-in-Interest
</TABLE>
- 16 -
<PAGE>
<TABLE>
SCHEDULE 27d
TAX SAVINGS THRIFT PLAN FOR EMPLOYEES OF CSX CORPORATION
AND AFFILIATED COMPANIES
SCHEDULE OF REPORTABLE TRANSACTIONS
FISCAL YEAR ENDED SEPTEMBER 30, 1998
(Dollars in Thousands)
<CAPTION>
Purchases Sales
------------------ ----------------------------------------------
Value of
Assets
Sold on Cost Net
Transaction of Gain
Description of Assets Number Cost Number Date Asset (Loss)
- ---------------------------- ------- -------- ------- ----------- --------- --------
<S> <C> <C> <C> <C> <C> <C>
Category (iii) - series of securities transactions in excess of 5% of plan assets
- ----------------------------------------------------------------------------------------------------
CSX Corporation Common
Stock Fund 47 $ 50,156 30 $ 29,729 $ 18,020 $11,709
Collective Short-Term
Investment Fund of the
Northern Trust Company 360 297,215 352 297,147 297,147 -
Vanguard Index Trust - 500
Portfolio 139 32,943 119 21,460 14,051 7,409
Twentieth Century Select
Investment Fund 150 31,069 106 13,842 11,454 2,388
Fidelity Equity - Income 116 22,918 140 21,398 14,731 6,667
Fund
There were no category (i), (ii), or (iv) transactions during the fiscal year
ended September 30, 1998.
</TABLE>
- 17 -
<PAGE>
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.
TAX SAVINGS THRIFT PLAN FOR EMPLOYEES
OF CSX CORPORATION AND AFFILIATED
COMPANIES
By: /s/ JAMES L. ROSS
----------------------------------------
James L. Ross
Vice President and Controller
CSX Corporation
(Plan Sponsor)
Date: March 29, 1999
- 18 -
CONSENT OF INDEPENDENT AUDITORS
EXHIBIT 23
Consent of Ernst & Young LLP, Independent Auditors
--------------------------------------------------
We consent to the incorporation by reference in the Registration
Statement (Form S-8 No. 33-41735) pertaining to the Tax Savings Thrift Plan for
Employees of CSX Corporation and Affiliated Companies of our report dated March
26, 1999, with respect to the financial statements and schedules of the Tax
Savings Thrift Plan for Employees of CSX Corporation and Affiliated Companies
included in this Annual Report (Form 11-K) for the fiscal year ended September
30, 1998.
/s/ ERNST & YOUNG LLP
Jacksonville, Florida
March 26, 1999
I-1
