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 year ended September 30, 1999
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
1
<PAGE>
TAX SAVINGS THRIFT PLAN FOR EMPLOYEES OF CSX CORPORATION
AND AFFILIATED COMPANIES
FINANCIAL STATEMENTS AND SCHEDULES
As of September 30, 1999 and 1998, and for the year ended September 30, 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
Supplemental Schedules
Line 27a-Schedule of Assets Held for Investment Purposes 15
Line 27d-Schedule of Reportable Transactions 16
Signature 17
Exhibit 23-Consent of Ernst & Young LLP, Independent Auditors I-1
2
<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 benefits
of the Tax Savings Thrift Plan for Employees of CSX Corporation and Affiliated
Companies as of September 30, 1999 and 1998, and the related statement of
changes in net assets available for benefits for the year ended September 30,
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 at
September 30, 1999 and 1998, and the changes in its net assets available for
benefits for the year ended September 30, 1999, in conformity with accounting
principles generally accepted in the United States.
Our audits were performed for the purpose of forming an opinion on the financial
statements taken as a whole. The accompanying supplemental schedules of assets
held for investment purposes as of September 30, 1999 and reportable
transactions for the year then ended, are presented for purposes of additional
analysis and are not a required part of the 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. These 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 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 21, 2000
3
<PAGE>
TAX SAVINGS THRIFT PLAN FOR EMPLOYEES OF CSX CORPORATION
AND AFFILIATED COMPANIES
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
(Dollars in Thousands)
<TABLE>
<CAPTION>
September 30,
1999 1998
-----------------------------
<S> <C> <C>
ASSETS
Investments, at fair value (see Note 3) $702,561 $611,724
Investments, at contract value (see Note 2) 199,688 182,254
-----------------------------
Total Investments 902,249 793,978
Receivables:
Employer contributions 915 903
Participant contributions 2,733 2,702
-----------------------------
TOTAL ASSETS 905,897 797,583
LIABILITIES
Accrued expenses 372 291
Transfer due to American Commercial Lines
LLC Plan (see Note 6) 51,109 -
-----------------------------
TOTAL LIABILITIES 51,481 291
-----------------------------
NET ASSETS AVAILABLE FOR BENEFITS $854,416 $797,292
=============================
</TABLE>
See Notes to Financial Statements.
4
<PAGE>
TAX SAVINGS THRIFT PLAN FOR EMPLOYEES OF CSX CORPORATION
AND AFFILIATED COMPANIES
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
FOR THE YEAR ENDED SEPTEMBER 30, 1999
(Dollars in Thousands)
ADDITIONS
Investment income:
Dividends and interest $ 26,524
Net appreciation in fair value of investments 89,274
Employer contributions 11,678
Participant contributions 38,981
---------------
166,457
DEDUCTIONS
Distributions to participants 57,440
Fees and expenses 784
Transfer to American Commercial Lines LLC Plan
(see Note 6) 51,109
---------------
109,333
NET INCREASE 57,124
Net Assets Available for Benefits at Beginning of Year 797,292
---------------
Net Assets Available for Benefits at End of Year $854,416
===============
See Notes to Financial Statements.
5
<PAGE>
TAX SAVINGS THRIFT PLAN FOR EMPLOYEES OF CSX CORPORATION
AND AFFILIATED COMPANIES
NOTES TO FINANCIAL STATEMENTS
SEPTEMBER 30, 1999
(Dollars in Thousands)
NOTE 1 - DESCRIPTION OF THE PLAN
The following description of the Tax Savings Thrift Plan for Employees of CSX
Corporation and affiliated companies (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 multiple employer defined contribution plan covering all
- -------
full-time salaried employees and certain non-union hourly employees of CSX
Corporation (CSX) and adopting 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).
Contributions: Each year, participants may contribute, in 1% increments, up to
- -------------
15% of pre-tax annual compensation, as defined in the Plan. Participants who are
not eligible to participate in the Company's Supplementary Savings and Incentive
Award Deferral Plan, may also contribute up to 25% of any incentive compensation
to the Plan. Subject to certain limitations, participant may reinvest
distributions received from another qualified plan. Participants may change
investment options daily.
The Company contributes amounts equal to 50% of the first 6% of the
participant's pre-tax annual contributions, as defined in the Plan. Company
contributions are made in the form of cash deposits to the CSX Common Stock
Fund. Participant incentive compensation contributions are not matched.
Additional amounts may be contributed at the option of the Company's board of
directors.
Participants 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.
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. The benefit to which a participant is entitled is the benefit that can
be provided from the account.
6
<PAGE>
TAX SAVINGS THRIFT PLAN FOR EMPLOYEES OF CSX CORPORATION
AND AFFILIATED COMPANIES
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
SEPTEMBER 30, 1999
(Dollars in Thousands)
NOTE 1 - DESCRIPTION OF THE PLAN (Continued)
Vesting: Participants are immediately vested in contributions plus actual
- -------
earnings thereon.
Loans: Participants may borrow from their account 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 a rate commensurate with local prevailing rates as determined by the
Plan administrator. 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.
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 or partial 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. The Company paid a
portion of the administrative expenses of the Plan in fiscal years 1999 and
1998.
NOTE 2 - Summary of SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation: The financial statements have been prepared on the
- ---------------------
accrual method of accounting.
7
<PAGE>
TAX SAVINGS THRIFT PLAN FOR EMPLOYEES OF CSX CORPORATION
AND AFFILIATED COMPANIES
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
SEPTEMBER 30, 1999
(Dollars in Thousands)
NOTE 2 - Summary of SIGNIFICANT ACCOUNTING POLICIES, (Continued)
Investment Valuation and Income Recognition: Except for the investments in
- ----------------------------------------------
guaranteed investment contracts included in the Stable Interest Fund, the Plan's
investments are stated at fair value. The shares of registered investment
companies and collective trust participation units are valued at quoted market
prices which represent the net asset values of shares held by the Plan at
year-end. The participant loans are valued at their outstanding principal
balances, which approximate fair value.
The guaranteed investment contracts are recorded at their contract values, which
is cost plus accrued interest, because these investments have fully
benefit-responsive features. There are no reserves against contract values for
credit risk of contract issues or otherwise. At September 30, 1999 and 1998,
interest rates on guaranteed investment contracts of the Stable Interest Fund
ranged from 5.75% to 8.35% and 5.37% to 8.35%, respectively. The average yield
on the Plan's investments of guaranteed investment contracts in the Stable
Interest Fund for the years ended September 30, 1999 and 1998 was 6.59% and
6.16%, respectively.
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.
Reclassification: Certain amounts in the 1998 financial statements have been
- ----------------
reclassified to conform to the 1999 financial statement presentation.
8
<PAGE>
TAX SAVINGS THRIFT PLAN FOR EMPLOYEES OF CSX CORPORATION
AND AFFILIATED COMPANIES
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
SEPTEMBER 30, 1999
(Dollars in Thousands)
NOTE 3 - INVESTMENTS
The Plan's investments are held by The Northern Trust Company (the Trustee) in a
bank administered trust fund. The following investments represent 5% or more of
the Plan's net assets.
September 30,
1999 1998
---------------- --------------
Investments, at contract value:
Guaranteed Investment Contracts $199,688 $182,254
Investments, at fair value as
determined by quoted market prices:
Fidelity Equity-Income Fund 118,767 107,380
Vanguard Institutional Index Fund 155,082 117,688
Twentieth Century Select Fund 118,040 89,642
CSX Corporation common stock 218,039* 210,927*
*Includes nonparticipant-directed (see Note 4)
During 1999, the Plan's investments (including gains and losses on investments
bought and sold, as well as held during the year) appreciated in value by
$89,274 as follows:
Mutual funds $85,717
CSX Corporation common stock 2,419
Collective trust units 1,138
--------------
Total Appreciation $89,274
==============
9
<PAGE>
TAX SAVINGS THRIFT PLAN FOR EMPLOYEES OF CSX CORPORATION
AND AFFILIATED COMPANIES
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
SEPTEMBER 30, 1999
(Dollars in Thousands)
NOTE 4 - 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:
September 30,
1999 1998
--------------- --------------
Net Assets:
CSX Corporation common stock $166,945 $161,786
Year ended
September 30, 1999
------------------
Changes in Net Assets:
Additions
Contributions $10,506
Dividends 4,200
Net appreciation in fair value of CSX
Corporation common stock 1,839
Deductions
Benefits paid to participants (7,595)
Transfers to participant-directed funds (3,653)
Fees and expenses (138)
---------------
Net Increase in Net assets $ 5,159
===============
Note 5 - Conrail Transaction
As a result of the joint acquisition of Conrail Inc. by the Company and Norfolk
Southern Corporation, approximately 790 former Conrail employees became eligible
to participate in the Plan on June 1, 1999.
NOTE 6 - 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
10
<PAGE>
TAX SAVINGS THRIFT PLAN FOR EMPLOYEES OF CSX CORPORATION
AND AFFILIATED COMPANIES
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
SEPTEMBER 30, 1999
(Dollars in Thousands)
NOTE 6 - CHANGE IN PARTICIPATION OF AMERICAN COMMERCIAL BARGE LINE COMPANY LLC,
Continued
signed June 30, 1998, ACBLC's eligible employees were permitted to continue to
participate in the Plan until a similar plan could be established by ACL.
Only persons employed by ACBLC on June 29, 1998, or employees hired by the newly
formed venture after June 30, 1998, were eligible to participate in the Plan.
ACBLC participants were not permitted to invest in the CSX Common Stock Fund and
any amounts previously invested in the CSX Common Stock Fund were reallocated to
other investment alternatives.
On September 30, 1999, ACBLC participants authorized transfers of accounts from
the Plan totaling $51,109 to a retirement plan offered by ACL. The transfer is
reflected in the accompanying financial statements.
NOTE 7 - RELATED PARTY TRANSACTIONS
CSX and its subsidiaries provide the Plan with certain management and accounting
services. During 1999 and 1998, the Plan reimbursed CSX and its subsidiaries
approximately $149 during each plan year for these services.
The Plan received cash dividends from investments in CSX common stock in amounts
of $5,467 and $5,695 during 1999 and 1998, respectively.
The Trustee routinely invests assets in the Collective Short-Term Investment
Fund of The Northern Trust Company. For the year ended September 30, 1999,
transactions with this fund included 357 purchases with a total cost of $304,319
and 333 sales with a fair value of $295,718. For the year ended September 30,
1998, transactions with this fund included 360 purchases with a total cost of
$297,215 and 352 sales with a fair value of $297,147.
NOTE 8 - INCOME TAX STATUS
The Plan has received a determination letter from the Internal Revenue Service
dated March 15, 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
11
<PAGE>
TAX SAVINGS THRIFT PLAN FOR EMPLOYEES OF CSX CORPORATION
AND AFFILIATED COMPANIES
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
SEPTEMBER 30, 1999
(Dollars in Thousands)
NOTE 8 - INCOME TAX STATUS, Continued
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. The Plan Sponsor believes that the Plan remains
qualified and therefore, the related trust is exempt from taxation.
NOTE 9 - RECONCILIATION OF FINANCIAL STATEMENTS TO FORM 5500
The following is a reconciliation of net assets available for benefits reported
in the financial statements to Form 5500:
September 30, 1999
------------------------
Net assets available for benefits per the
financial statements $854,416
Amounts allocated to withdrawing participants (320)
------------------------
Net assets available for benefits per Form 5500 $854,096
========================
The following is a reconciliation of benefits paid to participants reported in
the financial statements to Form 5500:
Year Ended
September 30, 1999
------------------------
Benefits paid to participants per the
financial statements $57,440
Add: Amounts allocated to withdrawing
participants at September 30, 1999 320
Less: Amounts allocated to withdrawing
participants at September 30, 1998 (198)
------------------------
Benefits paid to participants per
Form 5500 $57,562
========================
12
<PAGE>
TAX SAVINGS THRIFT PLAN FOR EMPLOYEES OF CSX CORPORATION
AND AFFILIATED COMPANIES
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
SEPTEMBER 30, 1999
(Dollars in Thousands)
NOTE 9 - RECONCILIATION OF FINANCIAL STATEMENTS TO FORM 5500, Continued
Amounts allocated to withdrawing participants are recorded on the Form 5500 for
benefit claims that have been processed and approved for payment prior to
September 30, but not yet paid as of that date.
NOTE 10 - SUBSEQUENT EVENTS
Plan Year End: Effective November 1, 1999, the Plan changed its fiscal year end
- -------------
from September 30 to December 31.
Plan Amendment and Establishment of Master Trust: Effective November 1, 1999,
- -------------------------------------------------
the Plan was amended and restated to reflect various design or administrative
changes, including changes to investment alternatives. A Master Trust was also
established for the investment of assets of the Plan and the CSX Corporation
Capital Builder Plan, another Company-sponsored retirement plan. The assets of
the Master Trust are held by The Northern Trust Company. Each participating
retirement plan has an undivided interest in the Master Trust. Investment income
and expenses will be allocated to each plan based upon its pro-rata share in the
net assets of the Master Trust.
Change in Participation of Sea-Land: On December 10, 1999, the Company completed
- -----------------------------------
the sale of some of the foreign and domestic assets of its wholly-owned
container-shipping subsidiary, Sea-Land Service, Inc. (Sea-Land), to A. P.
Moller-Maersk Line (Maersk). Terminated Sea-Land employees participating in the
Plan were permitted to make an elective rollover from the Plan. On February 1,
2000, 882 participants elected to rollover their accounts totaling $30,821 to a
plan sponsored by Maersk.
13
<PAGE>
SUPPLEMENTAL SCHEDULES
14
<PAGE>
<TABLE>
<CAPTION>
TAX SAVINGS THRIFT PLAN FOR EMPLOYEES OF CSX CORPORATION
AND AFFILIATED COMPANIES
(Plan Number 003)
(Employer Identification Number 62-1051971)
LINE 27a-SCHEDULE OF ASSETS HELD FOR INVESTMENT PURPOSES
SEPTEMBER 30, 1999
(Dollars in Thousands)
(c)
Description of Investment
Including Maturity Date,
(a) (b) Rate of Interest, Par, (e)
Parties- Identity of Issuer, Borrower, Collateral (d) Current
In-Interest Lessor or Similar Party or Maturity Value Cost Value
- ----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Guaranteed Investment Contracts
AIG Life Insurance Co. 5.92%, Due 4/1/00 $ 71,796 $ 71,796
Allstate Life Insurance Co. 5.75%, Due 1/13/00 6,403 6,403
Allstate Life Insurance Co. 5.75%, Due 1/13/00 5,832 5,832
JP Morgan 6.67%, No stipulated maturity 86,438 86,438
Lincoln National Life Insurance 7.74%, Due 3/8/00 7,302 7,302
Co.
Metropolitan Life Insurance Co. 8.20%, Due 11/15/99 14,616 14,616
New York Life Insurance Co. 8.35%, Due 1/11/00 7,301 7,301
------------------------
199,688 199,688
Collective Trust Fund
MFO IDS Managed Stable Capital
Income Fund 12,400 12,625
Mutual Funds
Fidelity Equity-Income Fund 87,360 118,767
Vanguard Institutional Index Fund 164,153 155,082
Twentieth Century Select Fund 101,479 118,040
Twentieth Century Vista Fund 19,551 20,459
Morgan Stanley International Equity Fund 20,488 22,883
------------------------
393,031 435,231
Common Stock
* CSX Corporation Corporate common stock 185,193 218,039
Loans to Participants
* The Plan Interest rates range from
7.75% to 8.50% - 25,405
Cash Equivalents
* The Northern Trust Company Collective Short-Term
Investment Fund 11,261 11,261
------------------------
TOTAL $801,573 $902,249
========================
</TABLE>
*Indicates party-in-interest
15
<PAGE>
<TABLE>
<CAPTION>
TAX SAVINGS THRIFT PLAN FOR EMPLOYEES OF CSX CORPORATION
AND AFFILIATED COMPANIES
(Plan Number 003) (Employer
Identification Number 62-1051971) Line
27d-SCHEDULE OF REPORTABLE TRANSACTIONS
FISCAL YEAR ENDED SEPTEMBER 30, 1999
(Dollars in Thousands)
(h)
Current Value
(b) (c) of Asset on (i)
(a) Description of Asset Including Purchase (d) (g) Transaction Net
Identity of Party Involved Maturity Date and Interest Rate Price Selling Price Cost of Asset Date Gain/(Loss)
- ------------------------------------------------------------------------------------------------------------------------------------
Category (iii) -series of transactions in excess of 5% of plan assets:
- ---------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
AIG Life Insurance Co. Guaranteed Investment Contracts 51,205 - 51,205 51,205 -
JP Morgan Guaranteed Investment Contract 12,391 - 12,391 12,391 -
- 949 949 949 -
MFO IDS Managed Stable Capital Income 36,792 - 36,792 36,792
Fund -
- 50,460 49,741 50,460 719
Twentieth Century Select Fund 43,687 - 43,687 43,687
-
22,867 19,094 22,867 3,773
CSX Corporation Corporate common stock 51,857 - 51,857 51,857
-
- 45,277 35,784 45,277 9,493
Fidelity Equity Income Fund 21,294 - 21,294 21,294 -
- 29,245 16,713 29,245 12,532
The Northern Trust Company Collective Short Term 304,319 - 304,319 304,319
Investment Fund -
- 295,718 295,718 295,718
-
</TABLE>
Columns (e) and (f) have not been presented as this information is not
applicable. There were no category (i), (ii) or (iv) transactions during the
fiscal year ended September 30, 1999.
16
<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 27, 2000
17
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
21, 2000, 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, 1999.
/s/ ERNST & YOUNG LLP
Jacksonville, Florida
March 21, 2000
I-1
