-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, WmB/arnR83O/xrB2bk8E+qwuraONqEwVp1ydTw0qWeB1H+66Yfm+8wbIB0EOLWIH JHau1jN/snVbKINoNwdMuQ== 0000277948-94-000009.txt : 19940513 0000277948-94-000009.hdr.sgml : 19940513 ACCESSION NUMBER: 0000277948-94-000009 CONFORMED SUBMISSION TYPE: 10-Q PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19940401 FILED AS OF DATE: 19940428 FILER: COMPANY DATA: COMPANY CONFORMED NAME: CSX CORP CENTRAL INDEX KEY: 0000277948 STANDARD INDUSTRIAL CLASSIFICATION: 4011 IRS NUMBER: 621051971 STATE OF INCORPORATION: VA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 10-Q SEC ACT: 1934 Act SEC FILE NUMBER: 001-08022 FILM NUMBER: 94525008 BUSINESS ADDRESS: STREET 1: ONE JAMES CNTR STREET 2: 901 E CARY ST CITY: RICHMOND STATE: VA ZIP: 23219 BUSINESS PHONE: 8047821400 10-Q 1 1994 CSX 1ST QTR 10Q PAGE 1 FORM 10-Q SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 (X) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the quarter ended April 1, 1994 OR ( ) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the transition period from to ----------------- ---------------- Commission File Number 1-8022 CSX CORPORATION (Exact name of registrant as specified in its charter) Virginia 62-1051971 (State or other jurisdiction of (I.R.S. Employer incorporation or organization) Identification No.) 901 East Cary Street, Richmond, Virginia 23219-4031 (Address of principal executive offices) (Zip Code) (804) 782-1400 (Registrant's telephone number, including area code) No Change (Former name, former address and former fiscal year, if changed since last report.) 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 the number of shares outstanding of each of the issuer's classes of common stock, as of April 1, 1994: 104,683,674 shares. - 1 - PAGE 2 CSX CORPORATION FORM 10-Q INDEX PART I. FINANCIAL INFORMATION Page Number Item 1: Financial Statements 1. Consolidated Statement of Earnings- Quarters Ended April 1, 1994 and March 31, 1993 3 2. Consolidated Statement of Cash Flows- Quarters Ended April 1, 1994 and March 31, 1993 4 3. Consolidated Statement of Financial Position- At April 1, 1994 and December 31, 1993 5 Notes to Consolidated Financial Statements 6 Item 2: Management's Discussion and Analysis of Results of Operations and Financial Condition 10 PART II. OTHER INFORMATION Item 6. Exhibits and Reports on Form 8-K 15 Signature 15 - 2 - PAGE 3 CSX CORPORATION AND SUBSIDIARIES Consolidated Statement of Earnings (Millions of Dollars, Except Per Share Amounts) Quarter Ended ----------------------- April 1, March 31, 1994 1993 -------- --------- Operating Revenue Transportation $ 2,211 $ 2,108 Non-Transportation 16 15 ------- ------- Total 2,227 2,123 ------- ------- Operating Expense Transportation 2,015 1,947 Non-Transportation 26 20 Restructuring Charge --- 93 ------- ------- Total 2,041 2,060 ------- ------- Operating Income 186 63 Other Income (Expense) (1) (1) Interest Expense 67 74 ------- ------- Earnings (Loss) before Income Taxes 118 (12) Income Tax Expense (Benefit) 44 (3) ------- ------- Net Earnings (Loss) $ 74 $ (9) ======= ======= Earnings (Loss) Per Share $ .71 $ (.09) ======= ======= Average Common Shares Outstanding (Thousands) 104,452 103,664 ======= ======= Common Shares Outstanding (Thousands) 104,684 103,822 ======= ======= Cash Dividends Paid Per Common Share $ .44 $ .38 ======= ======= See accompanying Notes to Consolidated Financial Statements. - 3 - PAGE 4 CSX CORPORATION AND SUBSIDIARIES Consolidated Statement of Cash Flows (Millions of Dollars) Quarter Ended ----------------------- April 1, March 31, 1994 1993 -------- --------- OPERATING ACTIVITIES Net Earnings (Loss) $ 74 $ (9) Adjustments to Reconcile Earnings (Loss) to Cash Provided Depreciation 143 143 Deferred Income Taxes 22 6 Restructuring Charge -- Provision --- 93 Productivity/Restructuring Charge -- Payments (34) (26) Other Operating Activities 18 1 Changes in Operating Assets and Liabilities Accounts Receivable (33) 8 Materials and Supplies (14) (22) Other Current Assets (3) (9) Accounts Payable and Other Current Liabilities (180) (152) ----- ----- Cash (Used) Provided by Operating Activities (7) 33 ----- ----- INVESTING ACTIVITIES Property Additions (143) (125) Short-Term Investments - Net 80 68 Purchases of Long-Term Marketable Securities (11) (49) Other Investing Activities (5) (35) ----- ----- Cash Used by Investing Activities (79) (141) ----- ----- FINANCING ACTIVITIES Short-Term Debt - Net 242 7 Long-Term Debt Issued 53 81 Long-Term Debt Repaid (85) (36) Dividends Paid (47) (39) Other Financing Activities (9) 13 ----- ----- Cash Provided by Financing Activities 154 26 ----- ----- CASH, CASH EQUIVALENTS AND SHORT-TERM INVESTMENTS Increase (Decrease) in Cash and Cash Equivalents 68 (82) Cash and Cash Equivalents at Beginning of Period 298 374 ----- ----- Cash and Cash Equivalents at End of Period 366 292 Short-Term Investments at End of Period 130 87 ----- ----- Cash, Cash Equivalents and Short-Term Investments at End of Period $ 496 $ 379 ===== ===== See accompanying Notes to Consolidated Financial Statements. -4- PAGE 5 CSX CORPORATION AND SUBSIDIARIES Consolidated Statement of Financial Position (Millions of Dollars) April 1, December 31, 1994 1993 -------- ----------- ASSETS Current Assets Cash, Cash Equivalents and Short-Term Investments $ 496 $ 499 Accounts Receivable 709 668 Materials and Supplies 213 199 Deferred Income Taxes 109 108 Other Current Assets 100 97 ------- ------- Total Current Assets 1,627 1,571 ------- ------- Properties and Other Assets Properties 15,933 15,853 Less Accumulated Depreciation 5,151 5,065 ------- ------- Properties - Net 10,782 10,788 Affiliates and Other Companies 262 268 Other Assets 792 793 ------- ------- Total Properties and Other Assets 11,836 11,849 ------- ------- Total Assets $13,463 $13,420 ======= ======= LIABILITIES AND SHAREHOLDERS' EQUITY Current Liabilities Accounts Payable and Other Current Liabilities $ 1,760 $ 1,965 Current Maturities of Long-Term Debt 141 146 Short-Term Debt 406 164 ------- ------- Total Current Liabilities 2,307 2,275 ------- ------- Long-Term Debt 3,107 3,133 ------- ------- Long-Term Liabilities and Deferred Gains 2,434 2,491 ------- ------- Deferred Income Taxes 2,364 2,341 ------- ------- Shareholders' Equity Common Stock 105 104 Other Capital 1,351 1,307 Retained Earnings 1,953 1,927 Minimum Pension Liability Adjustment (158) (158) ------- ------- Total Shareholders' Equity 3,251 3,180 ------- ------- Total Liabilities and Shareholders' Equity $13,463 $13,420 ======= ======= See accompanying Notes to Consolidated Financial Statements. - 5 - PAGE 6 CSX CORPORATION AND SUBSIDIARIES -------------------------------- Notes to Consolidated Financial Statements (All Tables in Millions of Dollars, Except Per Share Amounts) NOTE 1. BASIS OF PRESENTATION In the opinion of management, the accompanying consolidated financial statements contain all adjustments necessary to present fairly the company's financial position as of April 1, 1994, and December 31, 1993, and the results of operations and cash flows for the quarters ended April 1, 1994, and March 31, 1993, such adjustments being of a normal recurring nature. Earnings per share are based on the weighted average of common shares outstanding for the quarters ended April 1, 1994, and March 31, 1993. Dilution for the quarters ended April 1, 1994 and March 31, 1993, which could result if all outstanding common stock equivalents were exercised, is not significant. While the company believes that the disclosures presented are adequate to make the information not misleading, it is suggested that these financial statements be read in conjunction with the financial statements and the notes included in the company's latest Annual Report and Form 10-K. Certain prior-year data have been reclassified to conform to the 1994 presentation. NOTE 2. CHANGE IN FISCAL REPORTING PERIODS Effective January 1, 1994, the company changed its fiscal reporting periods from four calendar quarters to four 13-week quarters. Fiscal 1994 began on January 1, 1994, and will include 52 weeks. The four 13-week quarters will end on April 1, July 1, September 30 and December 30, 1994. NOTE 3. ACCOUNTING AND REPORTING CHANGES Effective January 1, 1994, the company adopted Statement of Financial Accounting Standards ("SFAS") No. 112, "Employers' Accounting for Post- employment Benefits." SFAS No. 112 requires that certain benefits provided to former or inactive employees, after employment but before retirement, such as workers' compensation and disability benefits, be accrued if attributable to employees' service already rendered. The financial statement impact of adopting SFAS No. 112 was not significant. Effective January 1, 1994, the company adopted SFAS No. 115, "Accounting for Certain Investments in Debt and Equity Securities." SFAS No. 115 requires that investments that have readily determinable fair values be classified as "held-to-maturity," "trading," or "available-for-sale" securities. Investments in debt securities have been classified as "held-to- maturity," or "available-for-sale," and reported at amortized cost, which approximates fair value, in the consolidated statement of financial position. - 6 - PAGE 7 CSX CORPORATION AND SUBSIDIARIES -------------------------------- Notes to Consolidated Financial Statements, Continued (All Tables in Millions of Dollars, Except Per Share Amounts) NOTE 4. RESTRUCTURING CHARGE The company recorded a $93 million pretax charge in the first quarter of 1993 to recognize the estimated costs of restructuring certain operations and functions at its container-shipping unit. The restructuring charge reduced net earnings for the first quarter of 1993 by $61 million, 59 cents per share. As of April 1, 1994, payments totaling $42 million have been recorded as a reduction of the liability for the restructuring charge. NOTE 5. ACCOUNTS RECEIVABLE During 1993, the company issued $200 million of Trade Receivable Participation Certificates ("Certificates"), at 5.05%, due September 1998. The Certificates are collateralized by $234 million of accounts receivable held in a master trust. The proceeds from the issuance of the Certificates were used to reduce the amount of accounts receivable sold under a previous agreement. In addition, the company has a five-year revolving agreement with a financial institution to sell with recourse on a monthly basis an undivided percentage ownership interest in designated pools of accounts receivable up to a maximum of $200 million. CSX has retained the collection and servicing responsibility with respect to accounts receivable held in trust or sold. At April 1, 1994 and December 31, 1993, accounts receivable have been reduced by $372 million and $380 million, respectively, representing Certificates and accounts receivable sold. NOTE 6. OPERATING EXPENSE Quarter Ended ----------------------- April 1, March 31, 1994 1993 -------- --------- Labor and Fringe Benefits $ 783 $ 768 Materials, Supplies and Other 544 506 Building and Equipment Rent 280 274 Inland Transportation 190 166 Depreciation 143 143 Fuel 101 110 Restructuring Charge --- 93 ------ ------ Total $2,041 $2,060 ====== ====== - 7 - PAGE 8 CSX CORPORATION AND SUBSIDIARIES -------------------------------- Notes to Consolidated Financial Statements, Continued (All Tables in Millions of Dollars, Except Per Share Amounts) NOTE 7. OTHER INCOME (EXPENSE) Quarter Ended ----------------------- April 1, March 31, 1994 1993 -------- --------- Interest Income $ 12 $ 12 Fees Related to Accounts Receivable Sold (7) (4) Minority Interest (4) (2) Miscellaneous (2) (7) ------ ------ Total Expense $ (1) $ (1) ====== ====== NOTE 8. INCOME TAXES The effective income tax rate for the first quarter of 1994 reflects the federal statutory rate of 35 percent. The federal statutory rate for the first quarter of 1993 was 34 percent. NOTE 9. ACCOUNTS PAYABLE AND OTHER CURRENT LIABILITIES April 1, December 31, 1994 1993 --------- ------------ Trade Accounts Payable $ 852 $ 917 Labor and Fringe Benefits (a) 467 523 Income Taxes and Other 243 332 Casualty Reserves 198 193 ------ ------ Total $1,760 $1,965 ====== ====== (a) Labor and Fringe Benefits includes separation liabilities of $62 million at April 1, 1994 and $46 million at December 31, 1993. NOTE 10. COMMITMENTS AND CONTINGENCIES Sea-Land Service, Inc. ("Sea-Land"), the container-shipping unit of CSX, has entered into agreements for the construction of four high- performance, fuel-efficient container vessels and the modification of three Atlantic Class vessels in its current fleet. Estimated capital expenditures for the total program are approximately $250 million over the next three years. Although the company obtains substantial amounts of commercial insurance for potential losses for third-party liability and property damage, reasonable levels of risk are retained on a self-insurance basis. A substantial portion of the insurance coverage, up to $250 million from rail operations and up to $175 million from certain other operations, is provided by insurance companies owned or partially owned by CSX. CSX Transportation, Inc. ("CSXT") is a party to various proceedings brought both by private parties and regulatory agencies related to - 8 - PAGE 9 CSX CORPORATION AND SUBSIDIARIES -------------------------------- Notes to Consolidated Financial Statements, Continued (All Tables in Millions of Dollars, Except Per Share Amounts) NOTE 10. COMMITMENTS AND CONTINGENCIES, Continued environmental issues. CSXT has been identified as a potentially responsible party in a number of governmental investigations and actions relating to environmentally impaired sites that are or may be subject to remedial action under the Federal Superfund Statute ("Superfund") or corresponding state statutes. The majority of these proceedings are based on allegations that CSXT, or its railroad predecessors, sent hazardous substances to the facilities in question for disposal. Such proceedings arising under Superfund typically involve numerous other waste generators and disposal companies and seek to allocate or recover costs associated with site investigation and cleanup, which could be substantial. The assessment of the required response and remedial costs associated with these sites is extremely complex. Among the variables that management must assess are imprecise and changing remedial cost estimates and continually evolving governmental standards. CSXT frequently reviews its role, if any, with respect to each such location, giving consideration to the nature of CSXT's alleged connection to the location (e.g., generator, owner or operator), the extent of CSXT's alleged connection (e.g., volume of waste sent to the location and other relevant factors), the accuracy and strength of evidence connecting CSXT to the location, and the number, connection and financial position of other named and unnamed potentially responsible parties at the location. Further, CSXT periodically reviews its exposure in all non-Superfund environmental proceedings with which it is involved. Based upon such reviews and updates of the sites with which it is involved, CSXT has recorded, and periodically reviews for adequacy, reserves to cover estimated contingent future environmental costs with respect to such sites. Liabilities are recorded when the company's responsibility for environmental remedial efforts is deemed probable, and the costs can be reasonably estimated. Generally, the timing of these accruals coincides with the completion of a feasibility study or the company's commitment to a formal plan of action. The company does not currently possess sufficient information to reasonably estimate the amounts of additional liabilities, if any, on some sites until completion of future environmental studies. Such additional liabilities could be significant to future consolidated results of operations and cash flows. Based upon information currently available, however, the company believes that its environmental reserves are adequate to accomplish remedial actions to comply with present laws and regulations. A number of legal actions, other than environmental, are pending against CSX and certain subsidiaries in which claims are made in substantial amounts. While the ultimate results of environmental investigations, lawsuits and claims involving the company cannot be predicted with certainty, management does not currently expect that these matters will have a material adverse effect on the consolidated financial position, results of operations and cash flows of the company. - 9 - PAGE 10 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND FINANCIAL CONDITION RESULTS OF OPERATIONS - - --------------------- First-Quarter 1994 Compared With 1993 - - ------------------------------------- The company reported net earnings for the first quarter ended April 1, 1994, of $74 million, 71 cents per share, versus a net loss of $9 million, 9 cents per share for the first quarter ended March 31, 1993. The 1993 first- quarter results included a pretax charge of $93 million, $61 million after tax, 59 cents per share, which solely related to the restructuring of certain operations and functions at Sea-Land Service Inc., CSX's wholly owned container-shipping subsidiary. Excluding the charge, earnings for the first quarter of 1993 would have been $52 million, 50 cents per share. Operating revenue for the first quarter of 1994 was $2.2 billion, 5 percent above the prior-year quarter of $2.1 billion. Operating expense was $2 billion for the first quarter of 1994, compared to $2.1 billion for the first quarter of 1993, which includes the Sea-Land restructuring charge. Operating income for the first quarter of 1994 was $186 million versus $63 million in the first quarter of 1993. Excluding the 1993 charge, operating income rose $30 million above the 1993 first-quarter results of $156 million. Rail Unit Results - - ----------------- Operating income at the rail unit rose $27 million or 18 percent, to $180 million for the first quarter of 1994, from $153 million in the prior- year quarter. The results were driven by a 3 percent increase in revenue, continued commitment to cost reductions and close attention to safety. Rail traffic surged late in the first quarter of 1994 as industries began recovering from the severe winter conditions. For the first quarter of 1994, a 4 percent increase in traffic boosted rail operating revenue 3 percent versus the 1993 prior-year quarter. Metals, minerals and automotive shipments for the first quarter of 1994 jumped 21 percent, 16 percent and 14 percent, respectively, over 1993's first-quarter levels, reflecting the underlying strength of the industrial sector of the U.S. economy. Coal originations strengthened late in the first quarter of 1994 as weather conditions improved, reaching a total of 36.1 million tons versus 36.5 million tons in the first quarter of 1993. Shipments to utilities, which are anticipated to show gains through the rest of the year, edged up 1 percent from 1993's first quarter, to 24.9 million tons. Export traffic for the first quarter of 1994 was 4.2 million tons, 1.2 million tons below the prior-year level. Coal shipments to other users climbed 9 percent to 7 million tons for the first quarter of 1994 from the 1993 first quarter. Rail operating expense was $940 million in the quarter compared with $933 million in the first quarter of 1993. First quarter 1994 expense included train crew overtime, relief train crews and damage to track and - 10 - PAGE 11 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND FINANCIAL CONDITION, CONTINUED RESULTS OF OPERATIONS, Continued - - -------------------------------- Rail Unit Results, Continued - - ---------------------------- signal systems directly attributable to the severe weather conditions. Without these items, first quarter 1994 operating expense would have been lower than the prior-year amount. RAIL OPERATING INCOME (Millions of Dollars) ------------------------------ Quarter Ended -------------------- April 1, March 31, Percent 1994 1993 Change -------- --------- ------- Operating Revenue Merchandise $ 758 $ 720 5 % Coal 339 340 -- % Other 23 26 (12)% ------ ------ Total 1,120 1,086 3 % Operating Expense 940 933 1 % ------ ------ Operating Income $ 180 $ 153 18 % ====== ====== Container Shipping Unit Results - - ------------------------------- First-quarter 1994 operating revenue was $800 million, 6 percent above 1993's level of $752 million. Operating income for the quarter was $19 million compared to an operating loss of $88 million in the prior-year quarter. Excluding the charge in 1993, operating income improved $14 million on a quarter-to-quarter basis from $5 million in the 1993 quarter. Volumes advanced 5 percent for the first quarter of 1994 with large gains recorded in all Pacific trade lanes, Asia/Middle East/Europe routes, southbound Americas traffic and westbound shipments in the Atlantic. U.S. consumer spending and increased trade with the fast-growing economies of Latin America and southeast Asia drove the traffic improvements. With the increased volume, operating expense for the first quarter of 1994 rose $34 million to $781 million, exclusive of the 1993 restructuring charge. - 11 - PAGE 12 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND FINANCIAL CONDITION, CONTINUED RESULTS OF OPERATIONS, Continued - - -------------------------------- Intermodal Unit Results - - ----------------------- CSX's intermodal unit reported operating income for the first quarter of 1994 of $9 million, the same as in the prior-year quarter, as higher costs associated with the adverse weather offset revenue from increased volumes. Operating revenue for the unit was $210 million versus $184 million in the first quarter of 1993 as volumes grew 12 percent above 1993 first-quarter levels. Shipments were strong in all market areas, particularly containers moving domestically and those from international container-shipping lines. Barge Unit Results - - ------------------ The barge unit reported operating income of $2 million, compared to $8 million in the first quarter of 1993. Operating revenue declined to $92 million, largely reflecting the weak grain market. However, shipments of metal products, fertilizer and bulk salt showed sizeable gains in the quarter. FINANCIAL CONDITION - - ------------------- Cash, cash equivalents and short-term investments totaled $496 million at April 1, 1994, a decrease of $3 million since December 31, 1993. Primary uses of cash and cash equivalents were property additions, repayment of long-term debt, payment of dividends and payments relating to productivity/restructuring charge liabilities. Primary sources of cash and cash equivalents were issuance of short-term debt and net short-term investments. During the first quarter of 1994, net investing activities consumed $79 million of cash and cash equivalents compared with $141 million consumed in the first quarter of 1993. The changes in investing activities were primarily due to increased property additions, offset by an increase in cash proceeds from net short-term investment activity and reduction in purchases of long-term marketable securities compared to the quarter ended March 31, 1993. Financing activities provided $154 million of cash and cash equivalents for the quarter ended April 1, 1994, a $128 million increase from 1993. The change was primarily due to an increase in proceeds from net short- term borrowings, offset by reductions in long-term debt issued, and an increase in long-term debt repayments. The working capital deficit decreased $24 million during the quarter ended April 1, 1994. The decrease in the working capital deficit was primarily due to increased revenue during the end of the first quarter of 1994 - 12 - PAGE 13 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND FINANCIAL CONDITION, CONTINUED FINANCIAL CONDITION, Continued - - ------------------------------ and related customer accounts receivables. A working capital deficit is not unusual for CSX and does not indicate a lack of liquidity. CSX continues to maintain adequate current assets to satisfy current liabilities when they are due and has sufficient liquidity and financial resources to manage its day-to- day cash needs. FINANCIAL DATA - - -------------- (Millions of Dollars) ----------------------------- April 1, December 31, 1994 1993 --------- ------------ Cash, Cash Equivalents and Short-Term Investments $ 496 $ 499 Commercial Paper Outstanding - Short-Term $ 406 $ 164 Commercial Paper Outstanding - Long-Term $ 300 $ 300 Working Capital (Deficit) $(680) $(704) Current Ratio .71 .69 Debt Ratio 48% 49% Ratio of Earnings to Fixed Charges 2.0x 2.3x OUTLOOK - - ------- During the remainder of 1994, CSX will continue its ongoing commitment to improve productivity and lower the cost base at each of its transportation units. CSXT faced severe winter related problems during the early part of 1994, which negatively affected coal loadings and increased operating expense. However, the unit has seen a rebound in coal traffic as customers began restoring stockpiles following the extended United Mine Workers' strikes of 1993 and record low temperatures during the first quarter of 1994. Export coal tonnage, although depressed due to slow economies abroad, is expected to exceed 1993 levels. CSXT merchandise traffic, reflecting the underlying strength of the industrial sector of the U.S. economy, is expected to trend up with the economy. Management continues to monitor the strike talks between the International Brotherhood of Teamsters union and trucking companies. The current job action has affected the three West Coast terminals of Sea-Land. Sea-Land continues to participate in efforts to end the current job action and has implemented contingency plans to continue to deliver cargo to its customers. The strike could significantly affect the company's second-quarter operating results. - 13 - PAGE 14 ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS AND FINANCIAL CONDITION, CONTINUED OUTLOOK, Continued - - ------------------ On the maritime reform front, management remains hopeful that current legislation will pass. With passage, Sea-Land will see a benefit of approximately $2 million per ship per year in the program, which is estimated at 15-20 ships. In addition, Sea-Land would have the right to reflag those ships not enrolled in the program. - 14 - PAGE 15 PART II. OTHER INFORMATION Item 6. Exhibits and Reports on Form 8-K (b) Reports on Form 8-K 1. None. Signature --------- 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. CSX CORPORATION (Registrant) By: GREGORY R. WEBER ------------------------------ Gregory R. Weber Vice President and Controller (Principal Accounting Officer) Dated: April 28, 1994 - 15 - -----END PRIVACY-ENHANCED MESSAGE-----