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 year ended December 31, 1999
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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<PAGE>
CSX CORPORATION
1991 EMPLOYEES STOCK PURCHASE AND DIVIDEND REINVESTMENT PLAN
INDEX TO FINANCIAL STATEMENTS
Audited Financial Statements Page No.
Report of Independent Auditors 3
Statements of Financial Condition - December 31,
1999 and 1998 4
Statements of Operations and Changes in Plan Equity -
Years Ended December 31, 1999, 1998 and 1997 5
Notes to Financial Statements 6-10
Signature 11
Exhibit 23 - Consent of Ernst & Young LLP, Independent
Auditors I-1
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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
CSX Corporation 1991 Employees Stock Purchase and Dividend Reinvestment Plan as
of December 31, 1999 and 1998, and the related statements of operations and
changes in plan equity for each of the three years in the period 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 financial condition of the Plan at
December 31, 1999 and 1998, and the operations and changes in plan equity for
each of the three years in the period ended December 31, 1999, in conformity
with accounting principles generally accepted in the United States.
/s/ ERNST & YOUNG LLP
Jacksonville, Florida
March 21, 2000
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CSX CORPORATION
1991 EMPLOYEES STOCK PURCHASE AND DIVIDEND REINVESTMENT PLAN
STATEMENTS OF FINANCIAL CONDITION
<TABLE>
<CAPTION>
December 31,
1999 1998
----------------- -----------------
<S> <C> <C>
ASSETS
Investments
CSX Corporation Common Stock (Cost at
December 31, 1999 - $12,677,202; Cost
at December 31, 1998 - $11,755,124)
$9,367,571 $11,393,203
Cash and Cash Equivalents 24,254 153,287
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Total Investments 9,391,825 11,546,490
Receivables:
Employer Contributions 21,086 -
Participant Contributions 115,651 -
Other Receivables 36,449 678
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TOTAL ASSETS $9,565,011 $11,547,168
================= =================
LIABILITIES AND PLAN EQUITY
Other Liabilities $ 96,255 $ 96,255
Plan Equity 9,468,756 11,450,913
----------------- -----------------
TOTAL LIABILITIES AND PLAN EQUITY $9,565,011 $11,547,168
================= =================
</TABLE>
See Notes to Financial Statements.
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CSX CORPORATION
1991 EMPLOYEES STOCK PURCHASE AND DIVIDEND REINVESTMENT PLAN
STATEMENTS OF OPERATIONS AND CHANGES IN PLAN EQUITY
<TABLE>
<CAPTION>
Years Ended December 31,
----------------------------------------------------
1999 1998 1997
-------------- ---------------- --------------
<S> <C> <C> <C>
Additions
Investment Income - Dividends and Interest $ 344,023 $ 302,448 $ 244,377
Participant Contributions 1,774,751 1,955,734 1,979,542
Employer Contributions 369,737 391,324 382,558
Net Realized Appreciation in Fair Value of
CSX Corporation Common Stock 5,665 149,197 406,350
Net Unrealized Appreciation
(Depreciation) in Fair Value of CSX
Corporation Common Stock (2,947,713) (3,226,693) 2,239,326
-------------- ---------------- --------------
(453,537) (427,990) 5,252,153
Deductions
Distributions to Participants (1,528,620) (999,883) (1,613,194)
-------------- ---------------- --------------
NET INCREASE (DECREASE) IN
PLAN ASSETS (1,982,157) (1,427,873) 3,638,959
Plan Equity at Beginning of Year 11,450,913 12,878,786 9,239,827
-------------- ---------------- --------------
PLAN EQUITY AT END OF YEAR $9,468,756 $11,450,913 $12,878,786
============== ================ ==============
</TABLE>
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, 1999
NOTE 1. Summary of SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation:
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The financial statements of the 1991 Employees Stock Purchase and Dividend
Reinvestment Plan (the Plan) have been prepared on the accrual basis of
accounting.
Investment Valuation:
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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.
Use of Estimates:
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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.
NOTE 2. DESCRIPTION OF THE PLAN
The following description of 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. Copies of these
documents are available from the CSX Benefits Department.
General: The Plan is a defined contribution common stock purchase plan and was
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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 ("ERISA"), as amended. Plan participation is limited to certain employees,
other than officers and key employees, of CSX and affiliated companies
(collectively, the "Employer").
Investment Alternatives: Participant and Employer contributions are invested in
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one investment fund that purchases only shares of CSX common stock in open
market transactions, which is a concentration of risk.
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.
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CSX CORPORATION
1991 EMPLOYEES STOCK PURCHASE AND DIVIDEND REINVESTMENT PLAN
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1999
NOTE 2. DESCRIPTION OF THE PLAN, Continued
Participant Contributions: Upon enrollment, each participant directs that an
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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.
Employer Contributions: Cash contributions are made by the Employer in an amount
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equal to 17.65% of participants contributions and 17.65% of reinvested
dividends. In addition, the Employer may make special contributions on behalf of
selected participants at any time which are not subject to the $1,500 monthly
limitation in participant contributions described above.
Vesting, Withdrawals and Distributions: Participants are immediately vested in
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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. Non-vested amounts at
the time of withdrawal are reallocated to active participant accounts.
Participants Accounts: Each participant's account is credited with the
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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
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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.
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CSX CORPORATION
1991 EMPLOYEES STOCK PURCHASE AND DIVIDEND REINVESTMENT PLAN
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1999
NOTE 2. DESCRIPTION OF THE PLAN, Continued
Administrative Expenses: A portion of the administrative expenses of the Plan a
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are paid by CSX. However, 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 in a bank administered trust fund. Substantially
all of the assets held in this trust fund at December 31, 1999 and 1998 are
invested in CSX common stock.
Net unrealized appreciation (depreciation) in fair value of CSX common stock is
as follows:
<TABLE>
<CAPTION>
Years Ended December 31,
----------------------------------------------------------
1999 1998 1997
------------------ ------------------- --------------
<S> <C> <C> <C>
Unrealized Appreciation
(Depreciation) in Fair Value
Beginning of Year $ (361,921) $2,864,772 $ 625,446
End of Year (3,309,634) (361,921) 2,864,772
----------------- ------------------- --------------
Net Unrealized Appreciation
(Depreciation in Fair Value
During the Year $(2,947,713) $(3,226,693) $2,239,326
================= =================== ==============
</TABLE>
Net realized appreciation in fair value of common stock of CSX Corporation is
the difference between the fair value of CSX common stock 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 $1,565,836 and
$1,560,171 for the year ended December 31, 1999, respectively. Related amounts
for the year ended December 31, 1998 were $1,095,027 and $945,830, respectively,
and for the year ended December 31, 1997 were $1,617,562 and $1,211,212
respectively.
NOTE 4. 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
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CSX CORPORATION
1991 EMPLOYEES STOCK PURCHASE AND DIVIDEND REINVESTMENT PLAN
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1999
NOTE 4. INCOME TAX STATUS, Continued
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. Employer
contributions and certain earnings, including dividends and gain or loss from
the sale of securities realized by the Plan, are reported as income by
participants annually. The Employer and/or the Plan Trustee notifies 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 are purchased by the Trustee and are required to be
held in the Plan for not less than two years during which the participant is
continuously employed by the Employer. During this period, the shares are
considered to be property subject to a substantial risk of forfeiture under
Section 83(a) of the 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 purchased under the Plan by the Trustee with
Employer matching contributions that have not been held for two years.
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
by timely filing a Section 83(b) election with the Internal Revenue Service and
the Employer. 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.
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CSX CORPORATION
1991 EMPLOYEES STOCK PURCHASE AND DIVIDEND REINVESTMENT PLAN
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 1999
NOTE 5. 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, 1999, 1998 and 1997 the
Plan received $336,251, $297,220, and $239,848, 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 27, 2000
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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. 33-41736) pertaining to the CSX Corporation 1991
Employees Stock Purchase and Dividend Reinvestment Plan of our report dated
March 21, 2000, 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, 1999.
/s/ ERNST & YOUNG LLP
Jacksonville, Florida
March 21, 2000
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