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
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
<PAGE>
TAX SAVINGS THRIFT PLAN FOR EMPLOYEES OF CSX CORPORATION
AND AFFILIATED COMPANIES
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 6-14
Signature 15
Exhibit 23-Consent of Ernst & Young LLP, Independent Auditors I-1
<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 (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
<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>
December 31, September 30,
1999 1999
---------------------------------
<S> <C> <C>
ASSETS
Investment in Master Trust, at fair value
(see Note 3) $860,499 $ -
Investments, at fair value (see Note 4) - 702,561
Investments, at contract value (see Note 4) - 199,688
---------------------------------
Total Investments 860,499 902,249
Receivables:
Employer contributions - 915
Participant contributions - 2,733
---------------------------------
TOTAL ASSETS 860,499 905,897
LIABILITIES
Accrued expenses 720 372
Transfer due to American Commercial Lines
LLC Plan (see Note 6) - 51,109
---------------------------------
TOTAL LIABILITIES 720 51,481
---------------------------------
NET ASSETS AVAILABLE FOR BENEFITS $859,779 $854,416
=================================
</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 THREE MONTHS ENDED DECEMBER 31, 1999
(Dollars in Thousands)
ADDITIONS
Investment income:
Net loss on investment in Master Trust $ (319)
Dividends and interest 1,391
Net appreciation in fair value of investments 3,046
Employer contributions 2,665
Participant contributions 8,297
---------------
15,080
DEDUCTIONS
Distributions to participants 8,866
Fees and expenses 851
---------------
9,717
---------------
NET INCREASE 5,363
Net Assets Available for Benefits at Beginning of Period 854,416
---------------
Net Assets Available for Benefits at End of Period $859,779
===============
See Notes to Financial Statements.
5
<PAGE>
TAX SAVINGS THRIFT PLAN FOR EMPLOYEES OF CSX CORPORATION
AND AFFILIATED COMPANIES
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 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).
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 CSX Corporation Capital Builder Plan,
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% 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, participants 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.
6
<PAGE>
TAX SAVINGS THRIFT PLAN FOR EMPLOYEES OF CSX CORPORATION
AND AFFILIATED COMPANIES
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
December 31, 1999
(Dollars in Thousands)
NOTE 1 - DESCRIPTION OF THE PLAN, Continued
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.
Vesting: Participants are immediately vested in contributions plus actual
-------
earnings thereon.
Loans: Participants may borrow from their 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 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 remain 100% vested in
their accounts.
7
<PAGE>
TAX SAVINGS THRIFT PLAN FOR EMPLOYEES OF CSX CORPORATION
AND AFFILIATED COMPANIES
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
December 31, 1999
(Dollars in Thousands)
NOTE 1 - DESCRIPTION OF THE PLAN, Continued
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 are stated at fair value. Fair value is based
upon the reported sales price on the last business day of the period. Except for
the investments in guaranteed investment contracts included in the Stable
Interest Fund, the Plan's investments at September 30, 1999 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 September 30, 1999. 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,
crediting interest rates on guaranteed investment contracts of the Stable
Interest Fund ranged from 5.75% to 8.35%.
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.
8
<PAGE>
TAX SAVINGS THRIFT PLAN FOR EMPLOYEES OF CSX CORPORATION
AND AFFILIATED COMPANIES
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
December 31, 1999
(Dollars in Thousands)
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES, Continued
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.
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 75%.
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>
TAX SAVINGS THRIFT PLAN FOR EMPLOYEES OF CSX CORPORATION
AND AFFILIATED COMPANIES
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 contract value:
Guaranteed Investment Contracts $199,688
Investments, at fair value as
determined by quoted market prices:
Fidelity Equity-Income Fund 118,767
Vanguard Institutional Index Fund 155,082
Twentieth Century Select Fund 118,040
CSX Corporation common stock 218,039*
*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>
TAX SAVINGS THRIFT PLAN FOR EMPLOYEES OF CSX CORPORATION
AND AFFILIATED COMPANIES
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 $131,054 $166,945
Three Months Ended December
31, 1999
------------------------------
Changes in Net Assets:
Additions
Contributions $ 3,967
Net depreciation in fair value of CSX
Corporation common stock (38,463)
Distributions to participants (1,395)
------------------
$(35,891)
==================
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
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.
11
<PAGE>
TAX SAVINGS THRIFT PLAN FOR EMPLOYEES OF CSX CORPORATION
AND AFFILIATED COMPANIES
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
December 31, 1999
(Dollars in Thousands)
NOTE 6 - CHANGE IN PARTICIPATION OF AMERICAN COMMERCIAL BARGE LINE COMPANY LLC,
Continued
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 as a liability in the accompanying statement of net assets available
for benefits at September 30, 1999.
NOTE 7 - 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 reimbursed
CSX and its subsidiaries approximately $89 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 net gain in investment
in Master Trust in the statement of changes in net assets available for
benefits.
The Trustee routinely invests assets in the Collective Short-Term Investment
Fund of The Northern Trust Company. During October 1999, the Plan earned
interest of $20 for transactions with this fund which is included in investment
income in the statement of changes in net assets available for benefits. 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 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
12
<PAGE>
TAX SAVINGS THRIFT PLAN FOR EMPLOYEES OF CSX CORPORATION
AND AFFILIATED COMPANIES
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
December 31, 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, principally to incorporate recent modifications to
the Plan described in Note 2. 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 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 $8,866
Add: Amounts allocated to withdrawing
participants at December 31, 1999 -
Less: Amounts allocated to withdrawing
participants at September 30, 1999 320
------------------------
Benefits paid to participants per
Form 5500 $8,546
========================
13
<PAGE>
TAX SAVINGS THRIFT PLAN FOR EMPLOYEES OF CSX CORPORATION
AND AFFILIATED COMPANIES
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
December 31, 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 the
end of the period, but not yet paid as of that date.
NOTE 10 - SUBSEQUENT EVENTS
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 approximately
$25,400 to a plan sponsored by Maersk.
14
<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: June 28, 2000
15
