UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 11-K
[ ] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
or
[x] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF
THE SECURITIES EXCHANGE ACT OF 1934
For the three months ended December 31, 1999
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
<PAGE>
CSX CORPORATION
CAPITAL BUILDER PLAN
FINANCIAL STATEMENTS
AS OF DECEMBER 31, 1999 AND SEPTEMBER 30, 1999, AND
FOR THE THREE MONTHS ENDED DECEMBER 31, 1999
Contents
Report of Independent Auditors 3
Statements of Net Assets Available for Benefits 4
Statement of Changes in Net Assets Available for Benefits 5
Notes to Financial Statements 6-13
Signature 14
Exhibit 23 - Consent of Ernst & Young LLP, Independent Auditors I-1
<PAGE>
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 benefits
of the CSX Corporation Capital Builder Plan (the Plan) as of December 31, 1999
and September 30, 1999, and the related statement of changes in net assets
available for benefits for the three months ended December 31, 1999. 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 auditing standards generally accepted
in the United States. 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 benefits of the Plan as of
December 31, 1999 and September 30, 1999, and the changes in its net assets
available for benefits for the three months ended December 31, 1999, in
conformity with accounting principles generally accepted in the United States.
/s/ ERNST & YOUNG LLP
Jacksonville, Florida
June 23, 2000
3
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CSX CORPORATION
CAPITAL BUILDER PLAN
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
(Dollars in Thousands)
<TABLE>
<CAPTION>
December 31, September 30,
1999 1999
---------------- ------------------
<S> <C> <C>
ASSETS
Investment in Master Trust, at fair value (see Note 3) $280,804 $ -
Investments, at fair value (see Note 4) - 319,203
Receivables:
Employer contributions 4 54
Participant contributions 130 1,073
---------------- ------------------
TOTAL ASSETS 280,938 320,330
LIABILITIES
Accrued expenses 448 365
---------------- ------------------
TOTAL LIABILITIES 448 365
---------------- ------------------
NET ASSETS AVAILABLE FOR BENEFITS $280,490 $319,965
================ ==================
</TABLE>
See Notes to Financial Statements.
4
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CSX CORPORATION
CAPITAL BUILDER PLAN
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
For the THREE MONTHS ENDED DECEMBER 31, 1999
(Dollars in Thousands)
ADDITIONS
Investment income:
Net loss on investment in Master Trust $ (45,410)
Dividends and interest 108
Net appreciation in fair value of investments 95
Employer contributions 748
Participant contributions 7,344
--------------
(37,115)
DEDUCTIONS
Distributions to participants 1,868
Fees and expenses 492
--------------
2,360
--------------
NET DECREASE (39,475)
Net Assets Available for Benefits at Beginning of Period 319,965
--------------
Net Assets Available for Benefits at End of Period $280,490
==============
See Notes to Financial Statements.
5
<PAGE>
CSX CORPORATION
CAPITAL BUILDER PLAN
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 1999
(Dollars in Thousands)
NOTE 1 - DESCRIPTION OF THE PLAN
The following description of the CSX Corporation Capital Builder Plan (the Plan)
provides only general information. Participants should refer to the Summary Plan
Description and the Plan document for a more complete description of the Plan's
provisions.
General: The Plan is a defined contribution plan covering certain union
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employees of CSX Corporation (CSX) and affiliated companies (collectively, the
Company or Plan Sponsor). The Plan is subject to the provisions of the Employee
Retirement Income Security Act of 1974 (ERISA).
Change in Year End: Effective November 1, 1999, the Plan changed its year end
------------------
from September 30 to December 31.
Establishment of Master Trust: Effective November 1, 1999, all the investments
-----------------------------
of the Plan were transferred to a Master Trust which was established for the
investment of assets of the Plan and the Tax Savings Thrift Plan for Employees
of CSX Corporation and Affiliated Companies, another Company sponsored
retirement plan. The assets of the Master Trust are held by The Northern Trust
Company (the Trustee). Each participating retirement plan has an undivided
interest in the Master Trust. Investment income and expenses are allocated to
each plan based upon its pro-rata share in the net assets of the Master Trust.
Contributions: Each year, participants may contribute, in 1% multiples, up to
-------------
15% of annual compensation, as defined in the Plan. Certain eligible
participants may also contribute other compensatory awards to the Plan. Subject
to certain limitations, participants may reinvest distributions received from
another qualified plan. Participants may revise investment direction daily.
The Company contributes a specified number of shares of CSX common stock on an
annual basis to certain participant accounts of the eligible groups, as defined
in the Plan. These shares may be purchased throughout the year and are held by
CSX Corporation in a rabbi trust until they are contributed to the Plan and
credited to the participants' accounts.
6
<PAGE>
CSX CORPORATION
CAPITAL BUILDER PLAN
NOTES TO FINANCIAL STATEMENTS (continued)
DECEMBER 31, 1999
(Dollars in Thousands)
NOTE 1 - DESCRIPTION OF THE PLAN, Continued
The Plan also provides for a Company matching contribution to certain eligible
participant accounts in an amount equal to the lesser of 50% of the
participants' contributions or 3% of the participants' annual base compensation.
All employer matching contributions are invested in CSX common stock, except for
certain amounts which can be directed by certain eligible groups as defined in
the Plan.
Participant Accounts: Each participant's account is credited with the
----------------------
participant's contributions and allocations of (a) the Company's contributions
and (b) Plan earnings, and is charged with an allocation of administrative
expenses. Allocations are based on participant earnings or account balances, as
defined. Forfeited balances of terminated participants' nonvested accounts are
allocated to active participants' accounts. The benefit to which a participant
is entitled is the benefit that can be provided from the participant's account.
Vesting: Participants are immediately vested in their contributions plus actual
-------
earnings thereon. Vesting in the Company contribution portion of their accounts
plus actual earnings thereon is based on years of continuous service. A
participant is 100% vested after five years of credited service, or upon death,
disability or retirement.
Loans: Participants may borrow from their fund account in amounts equal to no
-----
more than the lesser of $50,000 in an aggregate amount of all loans from the
Plan or 50% of their vested account balance. Loan terms range from one to five
years unless the loan is to be used in conjunction with the purchase of a
primary residence. The loans are secured by the balance in the participant's
account and bear interest at the prime rate in effect at the beginning of the
quarter in which the loan originated. Principal and interest are paid ratably
through monthly payroll deductions.
Payment of Benefits: Upon termination of service, a participant may receive a
-------------------
lump-sum amount equal to the vested value of his or her account, or upon death,
disability or retirement, elect to receive monthly installments over a 240-month
period. A participant with an account balance of $5,000 or less shall be paid in
lump sum.
7
<PAGE>
CSX CORPORATION
CAPITAL BUILDER PLAN
NOTES TO FINANCIAL STATEMENTS (continued)
DECEMBER 31, 1999
(Dollars in Thousands)
NOTE 1 - DESCRIPTION OF THE PLAN, Continued
Plan Termination: Although it has not expressed any intent to do so, the Company
----------------
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 paid by the
-----------------------
Company or from Plan funds as the Plan Sponsor directs. All of the
administrative expenses of the Plan during the three months ended December 31,
1999 were paid from Plan funds.
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation: The financial statements have been prepared on the
---------------------
accrual method of accounting.
Investment Valuation and Income Recognition: The Plan's investments in the
----------------------------------------------
Master Trust at December 31, 1999 and investments at September 30, 1999 are
stated at fair value. Fair value is based upon the reported sales price on the
last business day of the period. The participant loans are valued at their
outstanding principal balances, which approximate fair value.
Purchases and sales of securities are recorded on a trade-date basis. Interest
income is recorded on the accrual basis. Dividends are recorded on the
ex-dividend date.
Use of Estimates: The preparation of financial statements in conformity with
----------------
accounting principles generally accepted in the United States requires
management to make estimates that affect the amounts reported in the financial
statements and accompanying notes. Actual results could differ from those
estimates.
8
<PAGE>
CSX CORPORATION
CAPITAL BUILDER PLAN
NOTES TO FINANCIAL STATEMENTS (continued)
DECEMBER 31, 1999
(Dollars in Thousands)
NOTE 3 - INVESTMENT IN MASTER TRUST
Effective November 1, 1999, a Master Trust was established for the investment of
assets of the Plan and another Company sponsored retirement plan. At December
31, 1999, the Plan's interest in the net assets of the Master Trust was
approximately 25%.
Summarized financial information of the Master Trust is presented below:
December 31,
1999
------------------
Total Master Trust net assets
Assets:
Accrued income $ 36
Receivables:
Employer contributions 4
Participant contributions 130
Investments at fair value:
Cash and cash equivalents 12,880
Mutual funds 551,030
CSX Corporation common stock 316,516
Guaranteed investment contracts 202,901
Collective trust fund 34,609
Loans to participants 24,423
------------------
Total assets 1,142,529
Liabilities:
Due to brokers for securities purchased 1,092
Accrued expenses 1,168
------------------
Total Master Trust net assets $1,140,269
==================
9
<PAGE>
CSX CORPORATION
CAPITAL BUILDER PLAN
NOTES TO FINANCIAL STATEMENTS (continued)
DECEMBER 31, 1999
(Dollars in Thousands)
NOTE 3 - INVESTMENT IN MASTER TRUST, Continued
Investment income and expenses are allocated to each plan based upon its
pro-rata share in the net assets of the Master Trust. Investment income for the
Master Trust is as follows:
November 1, 1999 to
December 31, 1999
-------------------------
Net appreciation (depreciation) in fair value
of investments determined by quoted market prices:
Mutual funds $ 3,639
CSX Corporation common stock (94,616)
Collective trust fund 51
-----------------
(90,926)
Interest and dividend income 9,140
-----------------
$(81,786)
=================
NOTE 4 - INVESTMENTS
At September 30, 1999, the Plan's investments were held by the Trustee in a bank
administered trust fund. The following investments represent 5% or more of the
Plan's net assets.
September 30, 1999
------------------
Investments, at fair value as
determined by quoted market prices:
MFO IDS managed Stable Capital Income Fund $ 21,213
Vanguard Institutional Index Fund 46,809
Twentieth Century Select Fund 26,416
CSX Corporation common stock 210,901*
*Includes nonparticipant-directed (see Note 5)
At December 31, 1999, the Plan's investments were held in a master trust (see
Note 3).
10
<PAGE>
CSX CORPORATION
CAPITAL BUILDER PLAN
NOTES TO FINANCIAL STATEMENTS (continued)
DECEMBER 31, 1999
(Dollars in Thousands)
NOTE 5 - NONPARTICIPANT-DIRECTED INVESTMENTS
Information about the net assets and the significant components of the changes
in net assets relating to the nonparticipant-directed investments is as follows:
December 31, September 30,
1999 1999
----------------- -----------------
Net Assets:
CSX Corporation common stock $157,794 $170,566
Three Months Ended
December 31, 1999
----------------------------
Changes in Net Assets:
Additions
Contributions $ 680
Net depreciation in fair value of CSX
Corporation common stock (13,142)
Distributions to participants (310)
--------------
$ (12,772)
==============
NOTE 6 - RELATED PARTY TRANSACTIONS
CSX and its subsidiaries provide the Plan with certain management and accounting
services. During the three months ended December 31, 1999, the Plan incurred
expenses of $81 for these services.
During the period November 1, 1999 to December 31, 1999, the Master Trust
received cash dividends from investments in CSX common stock of $2,934, a
portion of which was allocated to the Plan based upon the Plan's pro-rata share
in the net assets of the Master Trust and included in the net loss on
investment in Master Trust in the statement of changes in net assets available
for benefits.
11
<PAGE>
CSX CORPORATION
CAPITAL BUILDER PLAN
NOTES TO FINANCIAL STATEMENTS (continued)
DECEMBER 31, 1999
(Dollars in Thousands)
NOTE 6 - RELATED PARTY TRANSACTIONS, Continued
The Trustee routinely invests assets in the Collective Short-Term Investment
Fund of The Northern Trust Company. During the period November 1, 1999 to
December 31, 1999, the Master Trust earned interest of $67 for transactions with
this fund, a portion of which was allocated to the Plan based upon the Plan's
pro-rata share in the net assets of the Master Trust and included in net gain in
investment in Master Trust in the statement of changes in net assets available
for benefits.
NOTE 7 - INCOME TAX STATUS
The Plan has received a determination letter from the Internal Revenue Service
dated March 7, 1996, stating that the Plan is qualified under Section 401(a) of
the Internal Revenue Code (the Code) and, therefore, the related trust is exempt
from taxation. Once qualified, the Plan is required to operate in conformity
with the Code to maintain its qualification. The Plan Sponsor believes the Plan
is being operated in compliance with the applicable requirements of the Code
and, therefore, believes that the Plan is qualified and the related trust is tax
exempt.
On September 15, 1999, the Plan applied for a new determination letter regarding
a restatement of the Plan, principally to incorporate recent modifications to
the Plan described in Note 1. The Plan Sponsor believes that the Plan remains
qualified and therefore, the related trust is exempt from taxation.
12
<PAGE>
CSX CORPORATION
CAPITAL BUILDER PLAN
NOTES TO FINANCIAL STATEMENTS (continued)
DECEMBER 31, 1999
(Dollars in Thousands)
NOTE 8 - RECONCILIATION OF FINANCIAL STATEMENTS TO FORM 5500
The following is a reconciliation of benefits paid to participants reported in
the financial statements to Form 5500:
Three Months Ended
December 31, 1999
------------------------
Benefits paid to participants per the
financial statements $1,868
Add: Amounts allocated to withdrawing
participants at December 31, 1999 -
Less: Amounts allocated to withdrawing
participants at September 30, 1999 454
------------------------
Benefits paid to participants per
Form 5500 $1,414
========================
Amounts allocated to withdrawing participants are recorded on the Form 5500 for
benefit claims that have been processed and approved for payment prior to the of
the period, but not yet paid as of that date.
13
<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.
CSX CORPORATION CAPITAL BUILDER PLAN
By: /s/ JAMES L. ROSS
-----------------
James L. Ross
Vice President and Controller
CSX Corporation
(Plan Sponsor)
Date: June 28, 2000
14
