UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM 10-K
Annual Report Pursuant to Section 13 or 15(d) of
the Securities Exchange Act of 1934
For the fiscal year ended: December 25, 1998 Commission file number: 0-25567
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CSX Trade Receivables Corporation on behalf of the
CSXT Trade Receivables Master Trust
(Issuer in respect of the CSXT Trade Receivables Master Trust
5.05% Trade Receivables Participation Certificates, Series 1993-1
and issuer in respect of the CSXT Trade Receivables Master Trust
6.00% Trade Receivables Participation Certificates, Series 1998-1)
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(Exact name of registrant as specified in its charter)
Delaware 59-3168541
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(State or other jurisdiction of (I.R.S. Employer
incorporation or organization) Identification No.)
Route 688
P. O. Box 87
Doswell, Virginia 23047
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(Address of principal executive offices) (Zip Code)
Registrant's telephone number, including area code: (804) 876-3220
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Securities registered pursuant to Section 12(b) of the Act: None
Securities registered pursuant to Section 12(g) of the Act:
CSXT Trade Receivables Master Trust 5.05% Trade Receivables
Participation Certificates, Series 1993-1 and
CSXT Trade Receivables Master Trust 6.00% Trade Receivables
Participation Certificates, Series 1998-1
Indicate by check mark whether the Registrant (1) has filed all reports required
to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during
the preceding 12 months (or for such shorter period that the registrant was
required to file such reports), and (2) has been subject to such filing
requirements for the past 90 days. Yes (X) No ( )
Indicate by check mark if disclosure of delinquent filers pursuant to Item 405
of Regulation S-K is not contained herein, and will not be contained, to the
best of registrant's knowledge, in definitive proxy or information statements
incorporated by reference in Part III of this Form 10-K or any amendment to this
Form 10-K. (X)
State the aggregate market value of the voting stock held by non-affiliates of
the Registrant. Not Applicable.
<PAGE>
PART I
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Item 1. Business.
Omitted pursuant to a no-action letter dated February 4, 1994 (the
"No-Action Letter"), issued by the Commission staff with respect to certain of
the Registrant's reporting requirements pursuant to Section 13 or 15(d) of the
Act.
Item 2. Properties.
Pursuant to the No-Action Letter, reference is made to the Annual
Certificates of Servicer referred to in Items 8 and 14 hereof.
Item 3. Legal Proceedings.
In September 1997, a state court jury in New Orleans returned a $2.5
billion punitive damages award against CSX Transportation, Inc. ("CSXT"). The
award was made in a class-action lawsuit against a group of nine companies based
on personal injuries alleged to have arisen from a 1987 fire. The fire was
caused by a leaking chemical tank car parked on CSXT tracks and resulted in the
36-hour evacuation of a New Orleans neighborhood. In the same case, the court
awarded a group of 20 plaintiffs compensatory damages of approximately $2
million against the defendants, including CSXT, to which the jury assigned 15%
of the responsibility for the incident. CSXT's liability under that compensatory
damages award is not material and adequate provision was made for the award in a
prior year.
In October 1997, the Louisiana Supreme Court set aside the punitive
damages judgment, ruling the judgment should not have been entered until all
liability issues were resolved. In February 1999, the Louisiana Supreme Court
issued a further decision, authorizing and instructing the trial court to enter
individual punitive damages judgments in favor of the 20 plaintiffs who had
received awards of compensatory damages, in amounts representing an appropriate
share of the jury's award. While the trial court has not yet taken action under
this decision, the amounts of such punitive damages judgments, if any, are not
expected to be material. CSXT believes that this February 1999 decision will
expedite the process of full appellate review of the 1997 trial. The claims of
20 additional plaintiffs for compensatory damages are scheduled to be tried
beginning in March 1999.
CSXT is pursuing an aggressive legal strategy. Management believes
that any adverse outcome will not be material to CSXT's overall results of
operations or financial position, although it could be material to results of
operations in a particular quarterly accounting period.
The Registrant knows of no additional material pending legal
proceedings involving any of the CSXT Trade Receivables Master Trust (the
"Trust"), CSX Trade Receivables Corporation, CSXT, or The Chase Manhattan Bank,
formerly known as Chemical Bank, as trustee (the "Trustee") with respect to the
Trust.
Item 4. Submission of Matters to a Vote of Security Holders.
None.
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<PAGE>
PART II
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Item 5. Market for Registrant's Common Equity and Related Stockholder Matters.
(a) To the best knowledge of the Registrant, there was no established
public trading market for the CSX Trade Receivables Master Trust
5.05% Trade Receivables Participation Certificates, Series 1993-1
while the certificates were outstanding and there is no
established public trading market for the CSX Trade Receivables
Master Trust 6.00% Trade Receivables Participation Certificates,
Series 1998-1. Series 1993-1 and Series 1998-1 together are
referred to as the "Certificates".
(b) The Certificates are represented by one or more certificates
registered in the name of Cede & Co. ("Cede"), the nominee of The
Depository Trust Company ("DTC").
(c) Omitted pursuant to the No-Action Letter.
Item 6. Selected Financial Data.
Omitted pursuant to the No-Action Letter.
Item 7. Management's Discussion and Analysis of Financial Condition and
Results of Operation.
Omitted pursuant to the No-Action Letter.
Item 8. Financial Statements and Supplementary Data.
CSXT, as servicer (in such capacity, the "Servicer") has delivered the
Annual Certificates of Servicer to the Trustee, copies of which are attached
hereto as Exhibits 99.1 and 99.2. These certificates were provided pursuant to
Section 3.06 of the Amended and Restated Pooling and Servicing Agreement dated
as of October 27, 1993, as such Agreement has been amended and supplemented (the
"Agreement").
Pursuant to Section 3.07 of the Agreement, Ernst & Young LLP has
furnished reports on the compliance of the Servicer with the Agreement and on
the comparison of mathematical calculations of amounts set forth in the
Certificateholders' Distribution Date Statements with the Servicer's computer
records, with respect to the Certificates. Copies of the reports are attached
hereto as Exhibits 99.3 and 99.4.
Item 9. Changes in and Disagreements with Accountants on Accounting and
Financial Disclosure.
None.
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<PAGE>
PART III
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Item 10. Directors, Executive Officers, Promoters and Control Persons of the
Registrant.
Omitted pursuant to the No-Action Letter.
Item 11. Executive Compensation.
Omitted pursuant to the No-Action Letter.
<TABLE>
Item 12. Security Ownership of Certain Beneficial Owners and Management.
(a) As of December 25, 1998:
<CAPTION>
Amount and
Nature of
Name and Address of Beneficial Percent
Note Security Beneficial Owner Ownership of Class
- ------- ----------------------------------- --------------------- ------------- ---------
<S> <C> <C> <C> <C>
(1) 5.05% Trade Receivables N/A N/A N/A
Participation Certificates,
Series 1993-1
(2) 6.00% Trade Receivables Cede & Co. 100% 100%
Participation Certificates, c/o The Depository Nominee of
Series 1998-1 Trust Company The
55 Water Street Depository
New York, NY 10041 Trust
Company
</TABLE>
(1) Series 1993-1 was redeemed on September 25, 1998.
(2) The Certificates are represented by one or more certificates registered in
the name of Cede, the nominee of DTC. An investor holding an interest in the
Trust is not entitled to receive a certificate representing such interest
except in limited circumstances. Accordingly, Cede is the sole holder of
record of Certificates, which it holds on behalf of brokers, dealers, banks,
and other direct participants in the DTC system. Such direct participants
may hold Certificates for their own accounts or for the accounts of their
customers.
(b) Omitted pursuant to the No-Action Letter.
(c) Omitted pursuant to the No-Action Letter.
Item 13. Certain Relationships and Related Transactions.
There have not been, and there are not currently proposed, any
transactions or series of transactions, to which either the Registrant, CSXT, as
Servicer, or the Trustee, on behalf of the Trust, is a party with any
Certificateholder who owns of record or beneficially more than five percent of
the Certificates. Information regarding servicing compensation received by CSXT
is set forth in the Certificateholders' Distribution Date Statements filed on
Form 8-K, as referenced under Item 14 hereof.
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<PAGE>
PART IV
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Item 14. Exhibits, Financial Statement Schedules, and Reports on Form 8-K.
(a) Exhibits.
24.1 Powers of Attorney of Messrs. Weber, Owen, Boor,
Goolsby, and Grandis as Directors and/or Officers
of CSX Trade Receivables Corporation.
99.1 Annual Certificate of Servicer with respect to the
CSXT Trade Receivables Master Trust 5.05% Trade
Receivables Participation Certificates, Series 1993-1,
prepared by CSXT pursuant to Section
3.06 of the Agreement.
99.2 Annual Certificate of Servicer with respect to the
CSXT Trade Receivables Master Trust 6.00% Trade
Receivables Participation Certificates, Series 1998-1,
prepared by CSXT pursuant to Section
3.06 of the Agreement.
99.3 Report of independent auditors with respect to the
CSXT Trade Receivables Master Trust 5.05% Trade
Receivables Participation Certificates, Series 1993-1,
prepared by Ernst & Young LLP pursuant
to Section 3.07 of the Agreement.
99.4 Report of independent auditors with respect to the
CSXT Trade Receivables Master Trust 6.00% Trade
Receivables Participation Certificates, Series 1998-1,
prepared by Ernst & Young LLP pursuant
to Section 3.07 of the Agreement.
(b) Reports on Form 8-K.
Date of Form 8-K Description of Form 8-K
---------------- -----------------------
January 26, 1998 Submitted a copy of Certificateholders'
Distribution Date Statement dated
January 26, 1998 for the CSXT Trade
Receivables Master Trust 5.05%
Trade Receivables Participation
Certificates, Series 1993-1.
February 25, 1998 Submitted a copy of Certificateholders'
Distribution Date Statement dated
February 25, 1998 for the CSXT Trade
Receivables Master Trust 5.05%
Trade Receivables Participation
Certificates, Series 1993-1.
March 25, 1998 Submitted a copy of Certificateholders'
Distribution Date Statement dated
March 25, 1998 for the CSXT Trade
Receivables Master Trust 5.05%
Trade Receivables Participation
Certificates, Series 1993-1.
April 27, 1998 Submitted a copy of Certificateholders'
Distribution Date Statement dated
April 27, 1998 for the CSXT Trade
Receivables Master Trust 5.05%
Trade Receivables Participation
Certificates, Series 1993-1.
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<PAGE>
May 26, 1998 Submitted a copy of Certificateholders'
Distribution Date Statement dated May
26, 1998 for the CSXT Trade Receivables
Master Trust 5.05% Trade Receivables
Participation Certificates, Series
1993-1.
June 25, 1998 Submitted a copy of Certificateholders'
Distribution Date Statement dated
June 25, 1998 for the CSXT Trade
Receivables Master Trust 5.05%
Trade Receivables Participation
Certificates, Series 1993-1.
July 27, 1998 Submitted a copy of Certificateholders'
Distribution Date Statement dated
July 27, 1998 for the CSXT Trade
Receivables Master Trust 5.05%
Trade Receivables Participation
Certificates, Series 1993-1.
July 27, 1998 Submitted a copy of Certificateholders'
Distribution Date Statement dated
July 27, 1998 for the CSXT Trade
Receivables Master Trust 6.00%
Trade Receivables Participation
Certificates, Series 1998-1.
July 27, 1998 Submitted a copy of the amended
Certificateholders' Distribution Date
Statement dated July 27, 1998 for the
CSXT Trade Receivables Master Trust
6.00% Trade Receivables Participation
Certificates, Series 1998-1.
August 25, 1998 Submitted a copy of Certificateholders'
Distribution Date Statement dated
August 25, 1998 for the CSXT Trade
Receivables Master Trust 5.05%
Trade Receivables Participation
Certificates, Series 1993-1.
August 25, 1998 Submitted a copy of Certificateholders'
Distribution Date Statement dated
August 25, 1998 for the CSXT Trade
Receivables Master Trust 6.00%
Trade Receivables Participation
Certificates, Series 1998-1.
September 25, 1998 Submitted a copy of Certificateholders'
Distribution Date Statement dated
September 25, 1998 for the CSXT Trade
Receivables Master Trust 5.05%
Trade Receivables Participation
Certificates, Series 1993-1.
September 25, 1998 Submitted a copy of Certificateholders'
Distribution Date Statement dated
September 25, 1998 for the CSXT Trade
Receivables Master Trust 6.00%
Trade Receivables Participation
Certificates, Series 1998-1.
October 26, 1998 Submitted a copy of Certificateholders'
Distribution Date Statement dated
October 26, 1998 for the CSXT Trade
Receivables Master Trust 6.00%
Trade Receivables Participation
Certificates, Series 1998-1.
-6-
<PAGE>
November 25, 1998 Submitted a copy of Certificateholders'
Distribution Date Statement dated
November 25, 1998 for the CSXT Trade
Receivables Master Trust 6.00%
Trade Receivables Participation
Certificates, Series 1998-1.
December 28, 1998 Submitted a copy of Certificateholders'
Distribution Date Statement dated
December 28, 1998 for the CSXT Trade
Receivables Master Trust 6.00%
Trade Receivables Participation
Certificates, Series 1998-1.
(c) Omitted pursuant to the No-Action Letter.
(d) Omitted pursuant to the No-Action Letter.
-7-
<PAGE>
SIGNATURES
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Pursuant to the requirements of the Securities Exchange Act of 1934,
the Registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
CSXT TRADE RECEIVABLES MASTER TRUST
By: CSX TRADE RECEIVABLES CORPORATION
/s/ ROBERT M. PEEBLES
----------------------
Robert M. Peebles
Vice President - Accounting
(Principal Accounting Officer)
Date: March 16, 1999
Pursuant to the requirements of the Securities Exchange Act of 1934,
this report has been signed below by the following persons on behalf of the
registrant and in the capacities and on the dates indicated.
Signatures Title
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Gregory R. Weber Chairman of the Board, President,
Treasurer, and Director (Principal
Executive Officer) (a)
David D. Owen Vice President-Finance and
Director (Principal Finance
Officer) (a)
David A. Boor Director (a)
Allen C. Goolsby, III Director (a)
Leslie A. Grandis Director (a)
(a) /s/ ELLEN M. FITZSIMMONS
-------------------------
Ellen M. Fitzsimmons, Attorney-in-Fact
March 16, 1999
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<PAGE>
EXHIBIT INDEX
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Exhibit
- -------
24.1 Powers of Attorney of Messrs. Weber, Owen, Boor, Goolsby, and Grandis
as Directors and/or Officers of CSX Trade Receivables Corporation.
99.1 Annual Certificate of Servicer with respect to the CSXT Trade
Receivables Master Trust 5.05% Trade Receivables Participation
Certificates, Series 1993-1, prepared by CSXT pursuant to Section 3.06
of the Agreement.
99.2 Annual Certificate of Servicer with respect to the CSXT Trade
Receivables Master Trust 6.00% Trade Receivables Participation
Certificates, Series 1998-1, prepared by CSXT pursuant to Section 3.06
of the Agreement.
99.3 Report of independent auditors with respect to the CSXT Trade
Receivables Master Trust 5.05% Trade Receivables Participation
Certificates, Series 1993-1, prepared by Ernst & Young LLP pursuant to
Section 3.07 of the Agreement.
99.4 Report of independent auditors with respect to the CSXT Trade
Receivables Master Trust 6.00% Trade Receivables Participation
Certificates, Series 1998-1, prepared by Ernst & Young LLP pursuant to
Section 3.07 of the Agreement.
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<PAGE>
EXHIBIT 24.1
POWER OF ATTORNEY
KNOW ALL MEN BY THESE PRESENTS that each of the undersigned officers
and directors of CSX Trade Receivables Corporation, a Delaware Corporation,
which is to file with the Securities and Exchange Commission, Washington, D.C.,
a Form 10-K (Annual Report) on behalf of the CSXT Trade Receivables Master Trust
(issuer in respect of the CSXT Trade Receivables Master Trust 5.05% Trade
Receivables Participation Certificates, Series 1993-1 and issuer in respect of
the CSXT Trade Receivables Master Trust 6.00% Trade Receivables Participation
Certificates, Series 1998-1), hereby constitutes and appoints Ellen M.
Fitzsimmons his true and lawful attorney-in-fact and agent, for him and in his
name, place and stead to sign said Form 10-K, and any and all amendments
thereto, with power where appropriate to affix the corporate seal of CSX Trade
Receivables Corporation thereto and to attest said seal, and to file said Form
10-K, and any and all other documents in connection therewith, with the
Securities and Exchange Commission, hereby granting unto said attorney-in-fact
and agent full power and authority to do and perform any and all acts and things
requisite and necessary to be done in and about the premises as fully to all
intents and purposes as he might or could do in person, hereby ratifying and
confirming all that said attorney-in-fact and agent may lawfully do or cause to
be done by virtue hereof.
IN WITNESS WHEREOF, the undersigned have hereunto set their hands this
15th day of March, 1999.
/s/ GREGORY R. WEBER
---------------------
Gregory R. Weber
/s/ DAVID D. OWEN
------------------
David D. Owen
/s/ DAVID A. BOOR
------------------
David A. Boor
/s/ ALLEN C. GOOLSBY, III
--------------------------
Allen C. Goolsby, III
/s/ LESLIE A. GRANDIS
----------------------
Leslie A. Grandis
-1-
EXHIBIT 99.1
ANNUAL SERVICER'S CERTIFICATE
CSX TRANSPORTATION, INC.
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CSXT TRADE RECEIVABLES MASTER TRUST
Issuer in respect of the CSXT Trade Receivables Master Trust
5.05% Trade Receivables Participation Certificates, Series 1993-1
--------------------------------------------------------------------
The undersigned, a duly authorized representative of CSX
Transportation, Inc., as Servicer ("CSXT"), pursuant to the Amended and Restated
Pooling and Servicing Agreement dated as of October 27, 1993, as amended and
supplemented, (the "Agreement") among CSX Trade Receivables Corporation, as
Seller, CSX Transportation, Inc., as Servicer, and The Chase Manhattan Bank
(formerly known as Chemical Bank), as Trustee, does hereby certify that:
1. CSXT is, as of the date hereof, the Servicer under the Agreement.
Capitalized terms used in this Certificate have their respective
meanings as set forth in the Agreement.
2. The undersigned is a Servicer Officer who is duly authorized
pursuant to the Agreement to execute and deliver this Certificate
to the Trustee.
3. A review of the activities of the Servicer during the fiscal year
ended December 25, 1998, and of its performance under the
Agreement was conducted under my supervision.
4. Based on such review, the Servicer has, to the best of my
knowledge, performed in all material respects its obligations
under the Agreement throughout such year, and no default in the
performance of such obligations has occurred or is continuing
except as set forth in paragraph 5 below.
5. The following is a description of each default in the performance
of the Servicer's obligations under the provisions of the
Agreement known to me to have been made by the Servicer during
the fiscal year ended December 25, 1998, which sets forth in
detail (i) the nature of such default, (ii) the action taken by
the Servicer, if any, to remedy each such default and (iii) the
current status of each such default: None.
In WITNESS WHEREOF, the undersigned has duly executed this certificate
this 5th day of March, 1999.
CSX TRANSPORTATION, INC., Servicer
By: /s/ JAMES M. TILLEY
-------------------
James M. Tilley
Assistant Treasurer
-1-
EXHIBIT 99.2
ANNUAL SERVICER'S CERTIFICATE
CSX TRANSPORTATION, INC.
----------------------------------------------------------------------
CSXT TRADE RECEIVABLES MASTER TRUST
Issuer in respect of the CSXT Trade Receivables Master Trust
6.00% Trade Receivables Participation Certificates, Series 1998-1
----------------------------------------------------------------------
The undersigned, a duly authorized representative of CSX
Transportation, Inc., as Servicer ("CSXT"), pursuant to the Amended and Restated
Pooling and Servicing Agreement dated as of October 27, 1993, as amended and
supplemented, (the "Agreement") among CSX Trade Receivables Corporation, as
Seller, CSX Transportation, Inc., as Servicer, and The Chase Manhattan Bank, as
Trustee, does hereby certify that:
1. CSXT is, as of the date hereof, the Servicer under the Agreement.
Capitalized terms used in this Certificate have their respective
meanings as set forth in the Agreement.
2. The undersigned is a Servicer Officer who is duly authorized
pursuant to the Agreement to execute and deliver this Certificate
to the Trustee.
3. A review of the activities of the Servicer during the fiscal year
ended December 25, 1998, and of its performance under the
Agreement was conducted under my supervision.
4. Based on such review, the Servicer has, to the best of my
knowledge, performed in all material respects its obligations
under the Agreement throughout such year, and no default in the
performance of such obligations has occurred or is continuing
except as set forth in paragraph 5 below.
5. The following is a description of each default in the performance
of the Servicer's obligations under the provisions of the
Agreement known to me to have been made by the Servicer during
the fiscal year ended December 25, 1998, which sets forth in
detail (i) the nature of such default, (ii) the action taken by
the Servicer, if any, to remedy each such default and (iii) the
current status of each such default: None.
In WITNESS WHEREOF, the undersigned has duly executed this certificate
this 5th day of March, 1999.
CSX TRANSPORTATION, INC., Servicer
By: /s/ JAMES M. TILLEY
-------------------
James M. Tilley
Assistant Treasurer
-1-
EXHIBIT 99.3
REPORT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
CSXT Trade Receivables Master Trust
c/o The Chase Manhattan Bank, as Trustee
We have examined the nine monthly CSXT Trade Receivables Master Trust
Certificateholders' Distribution Date Statements filed on Forms 8-K with the
Securities and Exchange Commission during the nine-month period ended September
25, 1998 with respect to the 5.05% Trade Receivables Participation Certificates,
Series 1993-1 (the "Statements") prepared by CSX Transportation, Inc. as
Servicer, in compliance with Section 5.02(a) of the Series 1993-1 Supplement
dated as of October 28, 1993, as amended (the "Supplement"), to the Amended and
Restated Pooling and Servicing Agreement dated as of October 27, 1993, as
amended (the "Agreement"), among CSX Trade Receivables Corporation, Seller, CSX
Transportation, Inc., Servicer, and The Chase Manhattan Bank (formerly known as
Chemical Bank), Trustee. We have also examined CSX Transportation, Inc.'s
management's assertion, included in its representation letter dated March 15,
1999 that the servicing has been conducted in compliance with the terms and
conditions as set forth in Article III, Article IV and Section 8.08 of the
Agreement. CSX Transportation, Inc.'s management is responsible for preparing
the Statements in compliance with the applicable section of the Supplement and
also for the Servicer's compliance with the applicable requirements of the
Agreement. Our responsibility is to express an opinion on the Statements and on
management's assertion about the Servicer's compliance based on our examination.
Our examination was made in accordance with standards established by the
American Institute of Certified Public Accountants and, accordingly, included
examining, on a test basis, evidence about the Statements and the Servicer's
compliance with the applicable requirements of the Agreement, and performing
such other procedures as we considered necessary in the circumstances. We
believe that our examination provides a reasonable basis for our opinion. Our
examination does not provide a legal determination on the Servicer's compliance
with applicable requirements of the Agreement.
In our opinion, the Statements referred to above are presented fairly, in all
material respects, in accordance with Section 5.02(a) of the Supplement, and
management's assertion that the servicing has been conducted by the Servicer in
compliance with the terms and conditions as set forth in Article III, Article IV
and Section 8.08 of the Agreement during the nine month period ended September
25, 1998 is fairly stated, in all material respects.
We have also compared the mathematical calculations of each amount set forth in
the Statements referred to above with the Servicer's computer reports which were
the source of such amounts and found them to be in agreement pursuant to Section
3.07(b) of the Agreement.
This report is intended solely for the information and use of CSX Trade
Receivables Corporation, Seller, CSX Transportation, Inc., Servicer, and The
Chase Manhattan Bank, Trustee, and is not intended to be and should not be used
by anyone other than these specified parties.
/s/ ERNST & YOUNG, LLP
-----------------------
Ernst & Young LLP
March 15, 1999
Jacksonville, Florida
-1-
EXHIBIT 99.4
REPORT OF ERNST & YOUNG LLP, INDEPENDENT AUDITORS
CSXT Trade Receivables Master Trust
c/o The Chase Manhattan Bank, as Trustee
We have examined the six monthly CSXT Trade Receivables Master Trust
Certificateholders' Distribution Date Statements filed on Forms 8-K with the
Securities and Exchange Commission during the six-month period ended December
25, 1998 with respect to the 6.00% Trade Receivables Participation Certificates,
Series 1998-1 (the "Statements") prepared by CSX Transportation, Inc. as
Servicer, in compliance with Section 5.02(a) of the Series 1998-1 Supplement
dated as of June 17, 1998 (the "Supplement"), to the Amended and Restated
Pooling and Servicing Agreement dated as of October 27, 1993, as amended (the
"Agreement"), among CSX Trade Receivables Corporation, Seller, CSX
Transportation, Inc., Servicer, and The Chase Manhattan Bank, Trustee. We have
also examined CSX Transportation, Inc.'s management's assertion, included in its
representation letter dated March 15, 1999 that the servicing has been conducted
in compliance with the terms and conditions as set forth in Article III, Article
IV and Section 8.08 of the Agreement. CSX Transportation, Inc.'s management is
responsible for preparing the Statements in compliance with the applicable
section of the Supplement and also for the Servicer's compliance with the
applicable requirements of the Agreement. Our responsibility is to express an
opinion on the Statements and on management's assertion about the Servicer's
compliance based on our examination.
Our examination was made in accordance with standards established by the
American Institute of Certified Public Accountants and, accordingly, included
examining, on a test basis, evidence about the Statements and the Servicer's
compliance with the applicable requirements of the Agreement, and performing
such other procedures as we considered necessary in the circumstances. We
believe that our examination provides a reasonable basis for our opinion. Our
examination does not provide a legal determination on the Servicer's compliance
with applicable requirements of the Agreement.
In our opinion, the Statements referred to above are presented fairly, in all
material respects, in accordance with Section 5.02(a) of the Supplement, and
management's assertion that the servicing has been conducted by the Servicer in
compliance with the terms and conditions as set forth in Article III, Article IV
and Section 8.08 of the Agreement during the six month period ended December 25,
1998 is fairly stated, in all material respects.
We have also compared the mathematical calculations of each amount set forth in
the Statements referred to above with the Servicer's computer reports which were
the source of such amounts and found them to be in agreement pursuant to Section
3.07(b) of the Agreement.
This report is intended solely for the information and use of CSX Trade
Receivables Corporation, Seller, CSX Transportation, Inc., Servicer, and The
Chase Manhattan Bank, Trustee, and is not intended to be and should not be used
by anyone other than these specified parties.
/s/ ERNST & YOUNG, LLP
-----------------------
Ernst & Young LLP
March 15, 1999
Jacksonville, Florida
-1-
