-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: webmaster@www.sec.gov Originator-Key-Asymmetric: MFgwCgYEVQgBAQICAf8DSgAwRwJAW2sNKK9AVtBzYZmr6aGjlWyK3XmZv3dTINen TWSM7vrzLADbmYQaionwg5sDW3P6oaM5D3tdezXMm7z1T+B+twIDAQAB MIC-Info: RSA-MD5,RSA, PQVHDS1jG0tQj1l9xSMyCqSUh7wDt8nq9nL7iCi4Cy6Tpc6eVEF9Jyze4BYfvUV7 pyXBlGk4QfVKUBxojN+xQg== 0000277948-98-000005.txt : 19980330 0000277948-98-000005.hdr.sgml : 19980330 ACCESSION NUMBER: 0000277948-98-000005 CONFORMED SUBMISSION TYPE: 11-K PUBLIC DOCUMENT COUNT: 2 CONFORMED PERIOD OF REPORT: 19971231 FILED AS OF DATE: 19980327 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: CSX CORP CENTRAL INDEX KEY: 0000277948 STANDARD INDUSTRIAL CLASSIFICATION: RAILROADS, LINE-HAUL OPERATING [4011] IRS NUMBER: 621051971 STATE OF INCORPORATION: VA FISCAL YEAR END: 1231 FILING VALUES: FORM TYPE: 11-K SEC ACT: SEC FILE NUMBER: 333-28523 FILM NUMBER: 98575260 BUSINESS ADDRESS: STREET 1: ONE JAMES CNTR STREET 2: 901 E CARY ST CITY: RICHMOND STATE: VA ZIP: 23219 BUSINESS PHONE: 8047821400 11-K 1 PAGE 1 UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 11-K [X] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended December 31, 1997 or [ ] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 Commission file number 1-8022 CSX CORPORATION 1991 EMPLOYEES STOCK PURCHASE AND DIVIDEND REINVESTMENT PLAN CSX CORPORATION A Virginia Corporation IRS Employer Identification Number 62-1051971 One James Center 901 East Cary Street Richmond, Virginia 23219 Telephone (804) 782-1400 - 1 - PAGE 2 CSX CORPORATION 1991 EMPLOYEES STOCK PURCHASE AND DIVIDEND REINVESTMENT PLAN INDEX TO FINANCIAL STATEMENTS Audited Financial Statements Page No. Report of Independent Auditors 3 Statement of Financial Condition - December 31, 1997 and 1996 4 Statement of Operations and Changes in Plan Equity - Years Ended December 31, 1997, 1996 and 1995 5 Notes to Financial Statements 6-9 Signature 10 -2- PAGE 3 Report of Independent Auditors Board of Directors CSX Corporation 1991 Employees Stock Purchase and Dividend Reinvestment Plan CSX Corporation Richmond, Virginia We have audited the accompanying statements of financial condition of the CSX Corporation 1991 Employees Stock Purchase and Dividend Reinvestment Plan ("Plan") as of December 31, 1997 and 1996, and the related statements of operations and changes in plan equity for each of the three years in the period ended December 31, 1997. 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 generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the financial condition of the Plan at December 31, 1997 and 1996, and the results of its operations and changes in its plan equity for each of the three years in the period ended December 31, 1997, in conformity with generally accepted accounting principles. /s/ ERNST & YOUNG LLP --------------------- Ernst & Young LLP Jacksonville, Florida March 24, 1998 - 3 - PAGE 4 CSX CORPORATION 1991 EMPLOYEES STOCK PURCHASE AND DIVIDEND REINVESTMENT PLAN STATEMENT OF FINANCIAL CONDITION December 31, ------------------------------------ 1997 1996 ----------------- ---------------- ASSETS Investments Common Stock of CSX Corporation $12,980,412 $9,174,757 (At December 31, 1997 - 240,378 Shares; Cost -$10,100,638; at December 31, 1996 - 217,154 Shares; Cost - $8,534,309) Cash 219,035 62,579 ----------------- ---------------- 13,199,447 9,237,336 Participants Contributions Receivable - 71,134 Employer Contributions Receivable - 12,543 Other Receivables 605 2,600 ----------------- ---------------- TOTAL ASSETS $13,200,052 $9,323,613 ================= ================ LIABILITIES AND PLAN EQUITY Other Liabilities $321,266 $83,786 Plan Equity 12,878,786 9,239,827 ----------------- ---------------- TOTAL LIABILITIES AND PLAN EQUITY $13,200,052 $9,323,613 ================= ================ See Notes to Financial Statements. - 4 - PAGE 5 CSX CORPORATION 1991 EMPLOYEES STOCK PURCHASE AND DIVIDEND REINVESTMENT PLAN STATEMENT OF OPERATIONS AND CHANGES IN PLAN EQUITY
Years Ended December 31, --------------------------------------------------- 1997 1996 1995 -------------- ----------------- ------------- INCOME Investment Income - Dividends and Interest $ 244,377 $ 216,982 $ 182,842 Participants Contributions 1,979,542 1,792,360 1,868,093 Employer Contributions 382,558 356,390 347,100 Net Realized Appreciation in Fair Value of Common Stock of CSX Corporation 406,350 377,553 81,722 Net Unrealized Appreciation (Depreciation) in Fair Value of Common Stock of CSX Corporation 2,239,326 (1,119,336) 1,869,860 -------------- ----------------- ------------- 5,252,153 1,623,949 4,349,617 EXPENSES Participants Distributions (1,613,194) (1,741,001) (905,219) -------------- ----------------- ------------- NET INCREASE (DECREASE) IN PLAN ASSETS 3,638,959 (117,052) 3,444,398 Plan Equity at Beginning of Year 9,239,827 9,356,879 5,912,481 -------------- ----------------- ------------- PLAN EQUITY AT END OF YEAR $12,878,786 $9,239,827 $9,356,879 ============== ================= =============
See Notes to Financial Statements. - 5 - PAGE 6 CSX CORPORATION 1991 EMPLOYEES STOCK PURCHASE AND DIVIDEND REINVESTMENT PLAN NOTES TO FINANCIAL STATEMENTS DECEMBER 31, 1997 NOTE 1. SIGNIFICANT ACCOUNTING POLICIES The accounts of the Plan are maintained on the accrual basis. Investments in CSX Corporation ("CSX") common stock are presented at fair value. Fair value is based upon the last reported sales price on the last business day of the Plan year. All security transactions are recorded as of the trade date. The preparation of financial statements in conformity with generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets, liabilities, income and expenses. Actual results may differ from those estimates. NOTE 2. DESCRIPTION OF THE PLAN A complete description of Plan provisions including those relating to contributions, vesting, withdrawals and distributions is contained in the Summary Plan Description and the Plan document. The Plan document, which includes the Summary Plan Description, was filed with the Securities and Exchange Commission on July 15, 1991. Copies of these documents are available from the CSX Benefits Department. The following summary should be read in conjunction with the aforementioned documents. General: The Plan is a defined contribution common stock purchase plan and was - ------- established effective September 1, 1991. The Plan is not a qualified Plan under the definitions of the Internal Revenue Code of 1986, as amended ("IRC") and is not subject to the provisions of the Employee Retirement Income Security Act of 1974, as amended ("ERISA"). Plan participation is limited to certain employees, other than officers and key employees, of CSX and affiliated companies (the "Employer"). Investment Alternatives: Participants and Employer contributions are invested in - ----------------------- one investment fund that purchases only shares of CSX common stock in open market transactions, which is a concentration of risk. Amounts deposited to the investment fund may be temporarily retained as cash or invested in cash equivalents to facilitate the investment or reinvestment of Plan assets and the distribution of account balances to participants. Participants Contributions: Upon enrollment, each participant directs that an - --------------------------- aggregate monthly amount (together with amounts invested in any other employee stock purchase plan of CSX or its subsidiaries), neither less than $25 nor more than $1,500, be contributed on his or her behalf by payroll withholding and be deposited in the investment fund. All cash dividends are used to purchase additional shares of CSX common stock for participants' accounts. The Employer may make special contributions on behalf of selected participants at any time which are not subject to the $1,500 monthly limitation. - 6 - PAGE 7 CSX CORPORATION 1991 EMPLOYEES STOCK PURCHASE AND DIVIDEND REINVESTMENT PLAN NOTES TO FINANCIAL STATEMENTS, CONTINUED NOTE 2. DESCRIPTION OF THE PLAN, Continued Employer Contributions: Cash contributions are made by the Employer in an - ---------------------- amount equal to 17.65% of participants contributions and 17.65% of reinvested dividends. Vesting, Withdrawals and Distributions: Participants are immediately vested in - --------------------------------------- their voluntary contributions plus actual earnings thereon. Vesting in Employer contributions is subject to a rolling two-year holding period (as defined in the Summary Plan Description). The holding period begins on the purchase date of CSX common stock with Employer contributions and ends on the second anniversary of that purchase date. After the second anniversary date, the participant is 100% vested in the subject Employer contribution. The Plan provides that any participants terminated involuntarily under the Employer's severance plan are not subject to the two-year holding period. Withdrawals and distributions are controlled in accordance with the provisions of the Plan. Amounts not fully vested at the time of withdrawal are redistributed to the individual participant accounts of those participants remaining in the Plan. Participants Accounts: Each participant's account is credited with the - ----------------------- participant's contribution, the appropriate portion of the Employer's contribution and Plan earnings, including reinvested dividends. The benefit to which a participant is entitled is the benefit that can be provided from the participant's account. Plan Termination: Although it has not expressed any intent to do so, the - ----------------- Employer has the right under the Plan to discontinue its contributions at any time and to terminate the Plan. In the event of plan termination, participants will become 100% vested in their unvested Employer contributions. Administrative Expenses: A portion of the administrative expenses of the Plan - ------------------------ are paid by CSX. However, a participant bears the cost of any sale of CSX common stock from his or her Plan account. NOTE 3. INVESTMENTS The Plan's investments are held by a bank administered trust fund. Substantially all of the assets held in this trust fund at December 31, 1997 and 1996 are invested in CSX common stock. - 7 - PAGE 8 CSX CORPORATION 1991 EMPLOYEES STOCK PURCHASE AND DIVIDEND REINVESTMENT PLAN NOTES TO FINANCIAL STATEMENTS, CONTINUED NOTE 3. INVESTMENTS, Continued Net unrealized appreciation (depreciation) in fair value of CSX common stock is as follows:
Years Ended December 31, --------------------------------------------------------------- 1997 1996 1995 ------------------- ------------------- ----------------- Beginning of Year $ 625,446 $ 1,744,782 $ (125,078) End of Year 2,864,772 625,446 1,744,782 ------------------- ------------------- ----------------- Net Unrealized Appreciation (Depreciation) in Fair Value During the Year $2,239,326 $(1,119,336) $1,869,860 =================== =================== =================
Net realized appreciation of investments represents the difference between the fair value of CSX common stock allocated to participants at the dates of sale or distribution and the cost of such stock determined on the basis of the "first-in", "first-out" cost applicable to each participant. Fair value and the related cost associated with such sales or distributions were $1,617,562 and $1,211,212 for the year ended December 31, 1997, respectively. Related amounts for the year ended December 31, 1996 were $1,837,821 and $1,460,268, respectively, and for the year ended December 31, 1995 were $927,478 and $845,756, respectively. NOTE 4. INCOME TAX STATUS The Plan is not qualified under Section 401 of the IRC and therefore income earned by the trust holding the Plan's assets is not exempt from federal income taxes. As a non-qualified plan, the Plan has not applied for or received an IRS determination letter. Participant contributions to the Plan are made on an after-tax basis. However, Employer contributions and certain earnings, including dividends and gain or loss from the sale of securities realized by the Plan, must be reported as income by participants annually. The participants' Employer and/or the Plan trustee will notify each participant as to the annual amount to be reported as taxable income. Therefore, no provision for income taxes is included in the accompanying financial statements. Shares of CSX common stock, which are purchased by the Trustee and which are required to be held in the Plan for not less than two years during which the participant is continuously employed by the company, are considered to be property subject to a substantial risk of forfeiture under Section 83(a) of the - 8 - PAGE 9 CSX CORPORATION 1991 EMPLOYEES STOCK PURCHASE AND DIVIDEND REINVESTMENT PLAN NOTES TO FINANCIAL STATEMENTS, CONTINUED NOTE 4. INCOME TAX STATUS, Continued IRC. In the first taxable year in which the rights of a participant to receive a distribution of stock are no longer subject to a substantial risk of forfeiture, an amount equal to the fair value of the stock at that time is included in gross income as additional compensation to the participant. A participant whose employment terminates for any reason other than under the Employer's severance plan and who is not disabled, retired, or has died, forfeits rights to all shares that have not been held for two years and which were purchased under the Plan by the Trustee with Employer matching contributions. Alternatively, a participant may elect to treat as compensation and to include as gross income under Section 83(b) of the Internal Revenue Code of 1986, amounts of Employer matching contributions paid during the year to the Trustee. In such event, later appreciation, if any, in Common Stock is not treated as compensation and any dividends received on such shares are taxable as they are paid. In determining gain or loss from the sale or exchange of the stock if a Section 83(b) election is properly made and no forfeiture occurs, the basis of the stock is determined with reference to the amounts included in gross income as a result of any election or elections made under Section 83(b), and the holding period commences when the stock is purchased under the Plan by the Trustee. NOTE 5. RELATED PARTY TRANSACTIONS CSX provides the Plan with certain management and accounting services for which no fees are charged. During the years ended December 31, 1997, 1996 and 1995 the Plan received $239,848, $213,519, and $170,556, respectively, in common stock dividends from CSX. - 9 - PAGE 10 SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the administrative committee members have duly caused this annual report to be signed on its behalf by the undersigned hereunto duly authorized. CSX CORPORATION 1991 EMPLOYEES STOCK PURCHASE AND DIVIDEND REINVESTMENT PLAN By: /s/ JAMES L. ROSS --------------------------------------- James L. Ross Vice President and Controller CSX Corporation (Plan Sponsor) Date: March 27, 1998 - 10 - EX-23 2 PAGE 1 EXHIBIT 23 Consent of Ernst & Young LLP, Independent Auditors -------------------------------------------------- We consent to the incorporation by reference in the Registration Statement (Form S-8 No. 33-41736) pertaining to the CSX Corporation 1991 Employees Stock Purchase and Dividend Reinvestment Plan of our report dated March 24, 1998, with respect to the financial statements of the CSX Corporation 1991 Employees Stock Purchase and Dividend Reinvestment Plan included in this Annual Report (Form 11-K) for the year ended December 31, 1997. /s/ ERNST & YOUNG LLP --------------------- Ernst & Young LLP Jacksonville, Florida March 24, 1998 - I-1 - -----END PRIVACY-ENHANCED MESSAGE-----