EX-99.1 3 dex991.htm 2002 FINANCIAL SUPPLEMENT 2002 Financial Supplement

EXHIBIT 99.1

 

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2002 Financial Supplement

 

The Financial Supplement provides additional explanatory information for CSX Corporation and its business components and additional data for analysis that may not be available in the Company’s annual report. This information is derived from the Company’s audited financial statements and other books and records of the Company, but should not be considered audited. The data provided is not considered to be better than that available in the Company’s publicly available reports filed with the Securities and Exchange Commission (“SEC”), but rather is supplemental information that may be of use to investors, creditors, analysts and other users of CSX’s financial reports.

 

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Contents

 

2

  

Financial Highlights

3

  

Surface Transportation

11

  

Marine Services

15

  

CSX Consolidating Statements

18

  

Supplemental Financial Information

 

CSX 2002 FINANCIAL SUPPLEMENT


CSX Corporation

 

The organizational structure of CSX Corporation (“CSX”) has changed significantly over the past several years. In 1998, a majority interest in American Commercial Lines, CSX’s wholly-owned barge subsidiary, was conveyed to a joint venture. In December 1999, CSX sold the international liner portion of Sea-Land Service Inc., its wholly-owned world wide container-shipping business, to A.P. Moller-Maersk Line (“Maersk”), retaining two marine service businesses, domestic container-shipping and terminal services. CSX Lines LLC and CSX World Terminals LLC were formed to operate these two retained businesses. In September 2000, CSX sold CTI Logistix, CSX’s wholly-owned logistics subsidiary, to TNT Post Group N.V. In December 2002, CSX reached an agreement to convey most of its interest in its domestic container-shipping company, CSX Lines, to a new venture formed with The Carlyle Group for $300 million ($240 million in cash and $60 million in securities issued by the new venture). This transaction closed on February 27, 2003 and the company now operates under the name Horizon Lines LLC (“Horizon”). Beginning in fiscal year 2003, CSX will no longer report the domestic container-shipping company as a reporting segment, but will instead reflect its share of earnings in the new venture.

 

At December 27, 2002, CSX consists primarily of two main business segments, the Surface Transportation group and the Marine Services group. The Surface Transportation group consists of the operations of CSX Transportation Inc., CSX Intermodal Inc. and CSX’s share of the operations of Conrail Inc. (“Conrail”). CSX Technology, which supports the operations of these businesses, as well as other CSX businesses, is combined with Surface Transportation for presentation purposes. The Marine Services group consists of CSX Lines LLC and CSX World Terminals LLC. Descriptions of each business follows along with a description of the non-transportation businesses owned by CSX.

 

Surface Transportation

 

CSX Transportation Inc.

 

CSX Transportation Inc. (“CSXT”) is the largest rail network in the eastern United States, providing rail freight transportation over a network of more than 23,000 route miles in 23 states, the District of Columbia and two Canadian provinces. Headquartered in Jacksonville, Florida, CSXT accounted for 74% of CSX’s operating revenue and 76% of operating income in 2002.

 

CSX Intermodal Inc.

 

CSX Intermodal Inc. (“CSXI”) is the nation’s only transcontinental intermodal transportation service provider, operating a network of dedicated intermodal facilities across North America. The CSXI network uses approximately 450 purchased dedicated trains between its 45 terminals weekly. CSXI accounted for 14% of CSX’s operating revenue and 13% of operating income in 2002. Its headquarters are located in Jacksonville, Florida.

 

CSX Technology

 

CSX Technology provides computer and software services to CSX’s affiliates and to outside parties. Since its major customers are CSXT and CSXI, its results from operations are combined with Surface Transportation in this document.

 

Marine Services

 

CSX Lines LLC

 

CSX Lines LLC (“CSX Lines”) operates a domestic container-shipping business consisting of a fleet of 17 vessels and approximately 21,500 containers serving the trade between the continental United States and Alaska, Hawaii/Guam and Puerto Rico. As previously noted, in December 2002, CSX reached an agreement to convey most of its interest in CSX Lines to a new venture formed with The Carlyle Group for $300 million. CSX Lines accounted for 9% of CSX’s operating revenues and 3% of operating income in 2002.

 

CSX World Terminals LLC

 

CSX World Terminals LLC (“CSX World Terminals”) operates container-freight terminal facilities in Asia, Europe, Australia, Latin America and the United States. CSX World Terminals accounted for 3% of CSX’s operating revenues and 6% of operating income in 2002. CSX World Terminals is headquartered in Charlotte, North Carolina.

 

Non-Transportation

 

CSX owns the historic Greenbrier resort in White Sulphur Springs, West Virginia. The Greenbrier was awarded the coveted AAA Five-Diamond award for the 27th consecutive year in 2002.

 

CSX Real Property Inc. (“RPI”) creates shareholder value through the efficient provision of real estate management and real estate services to all CSX companies. Activities include development, sales, leasing and management of assets ranging from stand-alone properties to surplus railroad corridors. RPI is headquartered in Jacksonville, Florida.

 

BridgePoint provides logistics information technology tools to help customers monitor, measure and manage their operations through high-level data quality and connectivity. BridgePoint’s headquarters are located in the Research Triangle, North Carolina.

 

CSX 2002 FINANCIAL SUPPLEMENT   1


Financial Highlights

 

(Millions of Dollars, Except Per Share Amounts)

 

     2002

    2001

    2000

    1999

    1998

 

Earnings from Continuing Operations

                                        

Operating Revenue

   $ 8,152     $ 8,110     $ 8,191     $ 10,375     $ 9,490  

Operating Expense

     7,025       7,153       7,386       9,802       8,359  
    


 


 


 


 


Operating Income

   $ 1,127     $ 957     $ 805     $ 573     $ 1,131  
    


 


 


 


 


Net Earnings from Continuing Operations

   $ 424     $ 293     $ 186     $ 32     $ 520  
    


 


 


 


 


Earnings Per Share from Continuing Operations

   $ 2.00     $ 1.39     $ .88     $ .15     $ 2.47  

Earnings Per Share from Continuing Operations, Assuming Dilution

   $ 1.99     $ 1.38     $ .88     $ .15     $ 2.43  
    


 


 


 


 


Financial Position

                                        

Cash, Cash Equivalents and Short-term Investments

   $ 264     $ 618     $ 686     $ 974     $ 533  

Working Capital Deficit

   $ (665 )   $ (1,023 )   $ (1,231 )   $ (910 )   $ (616 )

Total Assets

   $ 20,951     $ 20,801     $ 20,548     $ 20,828     $ 20,535  

Long-term Debt

   $ 6,519     $ 5,839     $ 5,896     $ 6,304     $ 6,540  

Shareholders’ Equity

   $ 6,241     $ 6,120     $ 6,017     $ 5,756     $ 5,880  
    


 


 


 


 


Other Data Per Common Share

                                        

Cash Dividends

   $ .40     $ .80     $ 1.20     $ 1.20     $ 1.20  

Book Value

   $ 29.07     $ 28.64     $ 28.28     $ 26.35     $ 27.08  

Market Price

                                        

High

   $ 41.40     $ 41.30     $ 33.44     $ 53.94     $ 60.75  

Low

   $ 25.09     $ 24.81     $ 19.50     $ 28.81     $ 36.50  
    


 


 


 


 


Employees—Annual Averages

                                        

Rail

     33,464       35,014       35,496       31,952       28,358  

Other

     6,464       6,446       9,955       16,998       17,789  
    


 


 


 


 


Total

     39,928       41,460       45,451       48,950       46,147  
    


 


 


 


 


 

See accompanying Consolidated Financial Statements (All periods reflect contract logistics as a discontinued operation).

 

Significant events include the following:

 

2002

      A charge to write-down indefinite lived intangible assets as a cumulative effect of accounting change, which reduced earnings $83 million before tax, $43 million after tax and consideration of minority interest, 20 cents per share (See Note 1 of the Annual Report, Significant Accounting Policies).

2001

      A charge in the fourth quarter of 2001 to account for the settlement of the 1987 New Orleans tank car fire litigation. This charge reduced earnings by $60 million before tax, $37 million after tax, 17 cents per share.

1999

      A loss on the sale of international container-shipping assets net of a related benefit from discontinuing depreciation of those assets from the date they were classified as “held for disposition.” The net effect of the loss and the depreciation benefit reduced earnings by $360 million before tax, $271 million after tax, $1.27 per share.
        A charge to recognize the cost of a workforce reduction program at the Company’s rail and intermodal units that reduced earnings by $55 million before tax, $34 million after tax, 16 cents per share.
        A gain on the sale of the Company’s Grand Teton Lodge resort subsidiary that increased earnings by $27 million before tax, $17 million after tax, 8 cents per share.

1998

      A net investment gain, primarily from the conveyance of American Commercial Lines LLC, the Company’s wholly-owned barge subsidiary, to a joint venture. The gain increased earnings by $154 million before tax, $90 million after tax, 42 cents per share.
        A restructuring credit to reverse certain separation and labor protection reserves established by the Company’s rail unit as part of a 1995 restructuring charge. The restructuring credit increased earnings by $30 million before tax, $19 million after tax, 9 cents per share.

 

2   CSX 2002 FINANCIAL SUPPLEMENT


Surface Transportation

 

The Surface Transportation group at CSX reflects the operations of CSX Transportation and CSX Intermodal. Also, CSX Technology’s operations are combined in this group for presentation purposes. Surface Transportation operating revenue includes revenue from traffic previously moving on Conrail. Operating expenses include costs incurred to handle that traffic and operate the former Conrail lines. Conrail continues to operate the shared service areas for the benefit of both CSX and Norfolk Southern. The 2002 consolidating statements of income, financial position, cash flows and lease commitments that follow are intended to show this group’s entire contribution to CSX Corporation’s net income. They include CSX’s revenue and expenses relating to operations in the former Conrail territories, plus rental fees and certain adjustments relating to CSX’s accounting for the purchase of Conrail. CSX’s 42% interest in Conrail is reported in CSX’s financial statements using the equity method of accounting. Conrail’s financial statements are included in this Supplement. In addition, various operating statistics that may be used to analyze the Surface Transportation segment’s operations are included.

 

CSX Transportation Inc.

 

CSXT contributed $785 million and $743 million to Surface Transportation operating income in 2002 and 2001, respectively. Revenue for 2002 and 2001 totaled $6.0 billion and $6.1 billion, respectively, and operating expenses totaled $5.2 billion and $5.3 billion, respectively.

 

CSX Intermodal Inc.

 

CSXI contributed $141 million and $104 million to Surface Transportation operating income in 2002 and 2001, respectively. Revenue for 2002 and 2001 totaled $1.2 billion and $1.1 billion, respectively. Operating expenses totaled $1.0 billion in both years.

 

Consolidating Statement of Income

(Millions of Dollars)

 

     Fiscal Years Ended

 
     Dec. 27, 2002

    Dec. 28, 2001

 
     Rail

    Intermodal

   Technology

    Total Surface
Transportation


    Total Surface
Transportation


 

Operating Revenue

   $ 6,003     $ 1,180    $ —       $ 7,183     $ 7,194  

Operating Expense

                                       

Labor and Fringe

     2,473       67      68       2,608       2,650  

Materials, Supplies and Other

     1,385       179      (184 )     1,380       1,385  

Conrail Operating Fees, Rents and Services (Note 3)

     322       —        —         322       336  

Building and Equipment Rent

     409       131      16       556       565  

Inland Transportation

     (365 )     633      —         268       245  

Depreciation

     545       29      31       605       581  

Fuel

     449       —        —         449       525  

New Orleans Litigation Provision

     —         —        —         —         60  
    


 

  


 


 


Total Operating Expense

     5,218       1,039      (69 )     6,188       6,347  

Rail Operating Income Before Fees and Special Items

     785       141      69       995       847  

Management Services Fees

     (155 )     —        —         (155 )     (168 )

Conrail-related Items Recorded at Parent—Net

     (53 )     —        —         (53 )     (51 )
    


 

  


 


 


Operating Income

     577       141      69       787       628  

Other Income (Expense)

     15       4      —         19       (2 )

Interest Expense

     113       11      3       127       147  
    


 

  


 


 


Earnings Before Income Tax

     479       134      66       679       479  

Income Tax Expense

     183       55      25       263       181  
    


 

  


 


 


Net Earnings

   $ 296     $ 79    $ 41     $ 416     $ 298  
    


 

  


 


 


 

CSX 2002 FINANCIAL SUPPLEMENT   3


Surface Transportation

 

Consolidating Statement of Cash Flows

(Millions of Dollars)

 

     Fiscal Years Ended

 
     Dec. 27, 2002

    Dec. 28, 2001

 
     Rail

    Intermodal

    Technology

    Total Surface
Transportation


    Total Surface
Transportation


 

Operating Activities

                                        

Net Earnings

   $ 296     $ 79     $ 41     $ 416     $ 298  

Adjustments to Reconcile Net Earnings to Net Cash Provided:

                                        

Depreciation

     543       29       31       603       580  

Deferred Taxes

     205       3       (4 )     204       135  

Other Operating Activities

     (67 )     1       3       (63 )     (1 )

Redemption of Accounts Receivable

     (52 )     —         —         (52 )     (28 )

Changes in Operating Assets and Liabilities

     7       3       18       28       8  
    


 


 


 


 


Net Cash Provided by Operating Activities

     932       115       89       1,136       992  
    


 


 


 


 


Investing Activities

                                        

Property Additions

     (981 )     (29 )     (26 )     (1,036 )     (879 )

Short-term Investments—Net(b)

     220       —         —         220       (220 )

Other Investing Activities

     (3 )     —         —         (3 )     (2 )
    


 


 


 


 


Net Cash Used by Investing Activities

     (764 )     (29 )     (26 )     (819 )     (1,101 )
    


 


 


 


 


Financing Activities

                                        

Long-term Debt Repaid

     (196 )     —         —         (196 )     (185 )

Dividends Paid to Affiliate

     (200 )     —         (42 )     (242 )     (257 )

Other Financing Activities

     201       (86 )     (21 )     94       550  
    


 


 


 


 


Net Cash (Used) Provided by Financing Activities

     (195 )     (86 )     (63 )     (344 )     108  
    


 


 


 


 


Net Decrease in Cash and Cash Equivalents

     (27 )     —         —         (27 )     (1 )

Cash, Cash Equivalents and Short-term Investments

                                        

Cash and Cash Equivalents at Beginning of Year

     27       —         —         27       28  
    


 


 


 


 


Cash and Cash Equivalents at End of Year(a)

     —         —         —         —         27  

Short-term Investments at End of Year(b)

     —         —         —         —         220  
    


 


 


 


 


Cash, Cash Equivalents and Short-term

                                        

Investments at End of Year

   $ —       $ —       $ —       $ —       $ 247  
    


 


 


 


 



(a)   Surface Transportation units participate in the CSX cash management plan, under which excess cash is advanced to CSX for investment. CSX then makes cash available to the units as needed.
(b)   The 2001 short-term investment of $220 million represents deposits relating to the New Orleans tank car fire litigation.

 

4   CSX 2002 FINANCIAL SUPPLEMENT


Surface Transportation

 

Consolidating Statement of Financial Position

(Millions of Dollars)

 

     Fiscal Years Ended

 
     Dec. 27, 2002

    Dec. 28, 2001

 
     Rail

    Intermodal

    Technology

   

Other/

Eliminations


    Total Surface
Transportation


    Total Surface
Transportation


 

Assets

                                                

Current Assets

                                                

Cash, Cash Equivalents and Short-term Investments

   $ —       $ —       $ —       $ —       $ —       $ 247  

Accounts and Notes Receivable (Note 4)

     235       57       —         —         292       381  

Receivable from Affiliates

     —         201       56       (249 )     8       7  

Materials and Supplies

     171       —         —         —         171       181  

Deferred Income Taxes

     110       —         —         —         110       142  

Other Current Assets

     18       2       —         —         20       115  
    


 


 


 


 


 


Total Current Assets

     534       260       56       (249 )     601       1,073  

Properties

     17,354       442       271       —         18,067       17,288  

Accumulated Depreciation

     (4,730 )     (173 )     (148 )     —         (5,051 )     (4,690 )
    


 


 


 


 


 


Properties—Net

     12,624       269       123       —         13,016       12,598  

Affiliates and Other Companies

     217       4       —         (5 )     216       197  

Other Long-term Assets

     627       14       —         —         641       580  
    


 


 


 


 


 


Total Assets

   $ 14,002     $ 547     $ 179     $ (254 )   $ 14,474     $ 14,448  
    


 


 


 


 


 


Liabilities

                                                

Current Liabilities

                                                

Accounts Payable

   $ 618     $ 75     $ 17     $ —       $ 710     $ 800  

Labor and Fringe Benefits Payable

     319       4       47       —         370       361  

Payable to Affiliates

     1,497       36       118       (249 )     1,402       1,284  

Casualty, Environmental and Other Reserves

     173       3       —         —         176       181  

Current Maturities of Long-term Debt

     213       1       —         —         214       170  

Income and Other Taxes Payable

     98       14       9       —         121       207  

Other Current Liabilities

     132       —         —         —         132       197  
    


 


 


 


 


 


Total Current Liabilities

     3,050       133       191       (249 )     3,125       3,200  

Casualty, Environmental and Other Reserves

     467       —         —         —         467       532  

Long-term Debt

     873       17       —         —         890       1,036  

Deferred Income Taxes

     3,424       16       33       —         3,473       3,299  

Long-term Payable to Affiliates

     4       101       —         (5 )     100       143  

Other Long-term Liabilities

     575       5       26       —         606       599  
    


 


 


 


 


 


Total Liabilities

     8,393       272       250       (254 )     8,661       8,809  
    


 


 


 


 


 


Shareholder’s Equity

     5,609       275       (71 )     —         5,813       5,639  
    


 


 


 


 


 


Total Liabilities and Shareholder’s Equity

   $ 14,002     $ 547     $ 179     $ (254 )   $ 14,474     $ 14,448  
    


 


 


 


 


 


 

CSX 2002 FINANCIAL SUPPLEMENT   5


Surface Transportation

 

Notes to Surface Transportation

 

Note 1. Lease Commitments

 

Net lease obligations at December 27, 2002 are as follows:

 

(Millions of Dollars)


   Rail

   Intermodal

   Technology

  

Total Surface

Transportation


2003

   $ 133    $ 3    $ 18    $ 154

2004

     129      2      14      145

2005

     126      1      —        127

2006

     102      1      —        103

2007

     102      1      —        103

Thereafter

     451      4      —        455
    

  

  

  

Total

   $ 1,043    $ 12    $ 32    $ 1,087
    

  

  

  

 

Note 2. Related Party Transactions

 

CSXI purchases rail transportation services from CSXT. CSXT and CSXI purchase computer and software services from CSX Technology. The majority of the Payable to Affiliate balance relates to CSXT’s, CSXI’s and CSX Technology’s participation in the CSX cash management plan. Under this plan, excess cash is advanced to CSX for investment and CSX makes cash funds available to its subsidiaries as needed for use in their operations. CSX and its subsidiaries are committed to repay all amounts due each other on demand should circumstances require.

 

Note 3. Conrail Operating Fees, Rents and Services

 

CSX’s rail and intermodal operating revenue includes revenue from traffic previously moving on Conrail. Operating expenses include costs incurred to handle that traffic and operate the former Conrail lines. Rail operating expense includes an expense category, “Conrail Operating Fees, Rents and Services,” which reflects:

 

  1.   Right of way usage fees and equipment rental payments to Conrail

 

  2.   Transportation, switching, and terminal service charges provided by Conrail in the Shared Asset Areas that Conrail operates for the joint benefit of CSX and Norfolk Southern

 

  3.   Amortization of the fair value write-up arising from the acquisition of Conrail

 

  4.   CSX’s 42% share of Conrail’s net income recognized under the equity method of accounting.

 

The detail of Conrail Operating Fees, Rents, and Services is as follows:

 

     Fiscal Years Ended

 

(Millions of Dollars)


   2002

    2001

 

Rents and Services (See page 9)

   $ 346     $ 353  

Purchase Price Amortization and Other

     52       56  

Equity Income (See page 9)

     (76 )     (73 )
    


 


Total

   $ 322     $ 336  
    


 


 

Note 4. Accounts Receivable

 

Rail accounts receivable reported on the Statement of Financial Position exclude receivables sold of $380 million and $500 million in 2002 and 2001, respectively, to a bankruptcy-protected subsidiary of CSX.

 

6   CSX 2002 FINANCIAL SUPPLEMENT


Surface Transportation

 

Operating Statistics(a)

 

Traffic and Revenue

 

     Carloads
(Thousands)


     Revenue
(Millions of Dollars)


     2002

   2001

   2000

     2002

   2001

   2000

Rail

                                     

Merchandise

                                     

Phosphates and Fertilizer

   463    441    486      $ 324    $ 306    $ 316

Metals

   319    319    344        401      395      407

Food and Consumer

   162    163    157        217      218      206

Paper and Forest

   477    478    523        637      633      657

Agricultural

   358    372    361        489      501      483

Chemicals

   500    499    523        907      883      922

Minerals

   88    92    101        135      140      154

Emerging Markets

   424    435    430        397      384      368
    
  
  
    

  

  

Total Merchandise

   2,791    2,799    2,925        3,507      3,460      3,513

Automotive

   538    516    586        845      794      869

Coal, Coke and Iron Ore

                                     

Coal

   1,573    1,722    1,660        1,528      1,671      1,546

Coke

   34    39    46        49      46      47

Iron Ore

   36    38    49        20      22      30
    
  
  
    

  

  

Total Coal, Coke and Iron Ore

   1,643    1,799    1,755        1,597      1,739      1,623

Other Revenue

   —      —      —          54      89      70
    
  
  
    

  

  

Total Rail

   4,972    5,114    5,266        6,003      6,082      6,075
    
  
  
    

  

  

Intermodal

                                     

Domestic

   982    901    931        696      625      645

International

   1,137    1,103    1,121        476      470      492

Other

   —      —      —          8      17      31
    
  
  
    

  

  

Total Intermodal

   2,119    2,004    2,052        1,180      1,112      1,168
    
  
  
    

  

  

Total Surface Transportation

   7,091    7,118    7,318      $ 7,183    $ 7,194    $ 7,243
    
  
  
    

  

  

 

Revenue Ton Miles

 

     Revenue Ton Miles (Billions)

     2002

   2001

   2000

Merchandise

   125.5    125.6    130.1

Automotive

   9.3    8.7    9.6

Coal, Coke and Iron Ore

   72.4    79.8    77.5

Intermodal(b)

   21.0    20.4    21.5
    
  
  

Total Surface Transportation

   228.2    234.5    238.7
    
  
  

 

Gross Ton Miles(b)(c)

 

     (Billions)

     2002

   2001

   2000

Gross Ton Miles

   438.1    447.9    457.6
    
  
  

(a)   Certain prior year amounts have been reclassified to conform to the 2002 presentation.
(b)   Intermodal Revenue Ton Miles and Gross Ton Miles excludes ton miles for moves outside of CSXT’s territory.
(c)   Gross Ton Miles excludes locomotive ton miles.

 

CSX 2002 FINANCIAL SUPPLEMENT   7


Surface Transportation

 

Capital Expenditures (Millions of Dollars)

 

     2002

   2001

   2000

Track

   $ 613    $ 572    $ 579

Locomotives

     238      86      84

Facilities and Other

     141      98      33

Technology

     26      19      19

Freight Cars

     18      104      144
    

  

  

Total Capital Expenditures

   $ 1,036    $ 879    $ 859
    

  

  

 

Locomotives and Rolling Stock Owned or Leased at Year End

 

     2002

   2001

   2000

Locomotives

   3,573    3,552    3,533

Freight Cars

              

Gondolas

   31,370    32,574    36,599

Open Top Hoppers

   22,215    25,166    26,392

Box Cars

   18,017    18,830    19,975

Covered Hoppers

   17,729    18,123    20,116

Multi-level Racks

   13,777    13,904    13,941

Other

   6,707    6,852    6,524
    
  
  

Total Freight Cars

   109,815    115,449    123,547
    
  
  

 

Track Information

 

     2002

   2001

   2000

Track Miles

              

Main Line (Route Miles)

   23,160    23,297    23,320

Branch Line

   5,506    5,518    5,513

Yards, Sidings and Other Main Line

   11,633    11,705    11,725
    
  
  

Total Track Miles

   40,299    40,520    40,558
    
  
  

 

Employees (Annual Averages)

 

     2002

   2001

   2000

Rail

   33,464    35,014    35,496

Intermodal

   1,093    1,116    1,230

Other (Technology & Corp.)

   823    807    899

Total Surface Transportation

   35,380    36,937    37,625
    
  
  

 

Fuel

 

     2002

   2001

   2000

Estimated Fuel Consumption
(Millions of Gallons)

     572.2      580.4      607.6

Average Price Per Gallon

   $ 0.78    $ 0.90    $ 0.95

Gross Ton Miles Per Gallon

     766      772      753

 

Productivity

 

     2002

   2001

   2000

Revenue Per Route Mile

   $ 310,147    $ 308,795    $ 310,592

Revenue Per Employee

   $ 203,024    $ 194,764    $ 192,505

GTM Per Route Mile (Millions)

     18.9      19.2      19.6

GTM Per Employee (Millions)

     12.4      12.1      12.1

GTM Per Carload (Thousand)

     61.8      62.9      62.5

Operating Expense Per Carload(a)

   $ 873    $ 883    $ 892

Operating Expense Per GTM (cents)(a)

     1.41      1.40      1.43

Labor Expense Per Employee

   $ 73,714    $ 71,744    $ 70,007

 

Service Performance Measurements

 

     2002

    2001

    2000

 

Cars on Line (Average)

   229,609     240,054     246,739  

Average System Dwell Time (Hours)

   23.2     24.5     30.8  

Velocity—All Trains

   22.5     21.7     19.1  

On-Time (+2) Originations

   91 %   88 %   69 %

On-Time (+2) Destination Arrivals

   77 %   76 %   51 %

 

Safety

 

     2002

   2001

   2000

FRA Train Accidents Frequency

   3.00    3.50    4.90

(Per Million Train Miles)

              

Personal Injury Frequency Index

   1.94    2.64    2.87

(Per 100 Employees)

              

(a)   Excludes effect of New Orleans tank car fire litigation in 2001.

 

8   CSX 2002 FINANCIAL SUPPLEMENT


Surface Transportation

 

Conrail

 

CSX and Norfolk Southern Corporation (“Norfolk Southern”) completed the acquisition of Conrail Inc. (“Conrail”) in May 1997. CSX and Norfolk Southern, through a jointly owned acquisition entity, hold economic interests in Conrail of 42% and 58%, respectively, and voting interests of 50% each.

 

In June 1999, CSX and Norfolk Southern each began operations over a portion of the Conrail rail system under the terms of an operating agreement. Under the operating agreement, CSXT has the right to operate over 4,400 route miles of track in the Northeastern and Midwestern United States and Canada. CSXT now operates a network of more than 23,000 route miles in 23 states, the District of Columbia, and two Canadian provinces.

 

Consolidated Statements of Income

 

(Millions of Dollars)


   Year ended

 
     Dec. 31, 2002

    Dec. 31, 2001

 

Revenues—NSC/CSX(a)

   $ 813     $ 823  

Revenues—Third Parties

     80       80  
    


 


Total Operating Revenues

     893       903  

Operating Expense

                

Compensation and Benefits

     151       158  

Fuel

     6       7  

Material, Services and Rents

     125       143  

Depreciation and Amortization

     322       325  

Casualties and Insurance

     2       (13 )

Other

     17       19  
    


 


Total Operating Expense

     623       639  

Operating Income

     270       264  

Other Income—Net

     94       103  

Interest Expense

     (104 )     (109 )
    


 


Earnings Before Income Taxes

     260       258  

Income Tax Expense

     80       84  
    


 


Net Income(b)

   $ 180     $ 174  
    


 



(a)   CSX’s Rents and Services was $346 million in 2002 and $353 million in 2001.
(b)   CSX’s 42% Equity in Net Income of Conrail was $76 million in 2002 and $73 million in 2001.

 

Conrail revenues consist primarily of operating fees and equipment rents from CSX (attributable to operation over the portion of Conrail’s network known as the New York Central) and Norfolk Southern (attributable to operations over the portion of Conrail’s network known as Pennsylvania Railroad Systems). Expenses consist of salaries and wages, rents, depreciation and other costs of operations. Conrail also earns usage fees relating to the portions of the network that they continue to operate for the benefit of both companies (“Shared Asset Areas”). Purchase accounting amortization recorded by CSX and Norfolk Southern remains on the financial statements of those entities and is not reflected in Conrail’s financial statements.

 

Consolidated Statement of Cash Flows

 

(Millions of Dollars)


   Year ended

 
     Dec. 31, 2002

    Dec. 31, 2001

 

Operating Activities

                

Net Income

                

Adjustments to Reconcile Net Income to

   $ 180     $ 174  

Net Cash Provided by Operating Activities:

                

Depreciation and Amortization

     322       325  

Deferred Income Tax

     (9 )     (18 )

Gains from Sales of Property

     (3 )     (2 )

Pension Credit

     (17 )     (19 )

Changes in Operating Assets and Liabilities:

                

Accounts Receivable

     (3 )     1  

Accounts and Wages Payable

     (14 )     (32 )

Due from NSC/CSX

     14       60  

Due to NSC/CSX

     (3 )     (19 )

Other

     (44 )     32  
    


 


Net Cash Provided by Operating Activities

     423       502  
    


 


Investing Activities

                

Property and Equipment Acquisitions

     (23 )     (47 )

Notes Receivable from NSC/CSX

     (377 )     (424 )

Proceeds from Disposals of Properties

     14       14  

Other

     11       —    
    


 


Net Cash Used in Investing Activities

     (375 )     (457 )
    


 


Financing Activities

                

Payment of Long-term Debt

     (59 )     (61 )
    


 


Net Cash Used in Financing Activities

     (59 )     (61 )
    


 


Decrease in Cash and Cash Equivalents

     (11 )     (16 )

Cash and Cash Equivalents

                

Beginning of Year

     34       50  
    


 


End of Year

   $ 23     $ 34  
    


 


 

CSX 2002 FINANCIAL SUPPLEMENT   9


Surface Transportation

 

Conrail,—(Continued)

 

Consolidated Balance Sheet

(Millions of Dollars)

 

     Dec. 31, 2002

    Dec. 31, 2001

 

Assets

                

Current Assets

                

Cash and Cash Equivalents

   $ 23     $ 34  

Accounts Receivable—Net

     35       32  

Due from NSC/CSX

     158       172  

Notes Receivable from NSC/CSX

     —         515  

Material and Supplies

     8       9  

Deferred Income Taxes

     65       76  

Other Current Assets

     11       8  
    


 


Total Current Assets

     300       846  

Property and Equipment—Net

     6,382       6,688  

Notes Receivable from NSC/CSX

     892       —    

Other Assets

     583       548  
    


 


Total Assets

   $ 8,157     $ 8,082  
    


 


Liabilities

                

Current Liabilities

                

Current Maturities of Long-term Debt

   $ 57     $ 60  

Accounts Payable

     33       41  

Due to NSC/CSX

     9       12  

Wages and Employee Benefits

     31       37  

Casualty Reserves

     69       101  

Accrued and Other Current Liabilities

     130       157  
    


 


Total Current Liabilities

     329       408  

Long-term Debt

     1,123       1,156  

Casualty Reserves

     119       134  

Deferred Income Taxes

     1,822       1,833  

Other Liabilities

     538       446  
    


 


Total Liabilities

     3,931       3,977  
    


 


Shareholders’ Equity

                

Common Stock ($1 par value; 100 shares authorized, issued and outstanding)

     —         —    

Additional Paid-In-Capital

     2,221       2,221  

Retained Earnings

     2,134       1,954  

Accumulated Other Comprehensive Loss

     (129 )     (70 )
    


 


Total Shareholders’ Equity

     4,226       4,105  
    


 


Total Liabilities and Shareholders’ Equity

   $ 8,157     $ 8,082  
    


 


 

Notes to Conrail Statements

 

Note 1. Lease Commitments

(Millions of Dollars)

 

     Dec. 31, 2002

     Capital
Leases


   Operating
Leases


   Total
Conrail


2003

   $ 51    $ 56    $ 107

2004

     53      56      109

2005

     38      55      93

2006

     24      54      78

2007

     28      53      81

Thereafter

     52      289      341
    

  

  

Total

   $ 246    $ 563    $ 809
    

  

  

 

Note 2. Properties

 

Improvements and additions are leasehold improvements that are recorded on CSX and Norfolk Southern’s financial statements.

 

Note 3. Related Party Transactions

 

As noted throughout this document, Conrail has numerous transactions with both CSX and Norfolk Southern representing lease payments, usage fees and borrowings between the companies.

 

10   CSX 2002 FINANCIAL SUPPLEMENT


Marine Services

 

CSX Lines LLC

 

CSX Lines LLC (“CSX Lines”) operates a domestic container-shipping business consisting of a fleet of 17 vessels and approximately 21,500 containers serving the trade between the continental United States and Alaska, Hawaii/Guam, and Puerto Rico. CSX Lines also operates port terminals in Anchorage, Kodiak, and Dutch Harbor, Alaska; Honolulu, Hawaii; San Juan, Puerto Rico; and Apra, Guam. In December 2002, CSX Corporation reached an agreement to convey most of its interest in CSX Lines to a new venture formed with The Carlyle Group for $300 million ($240 million in cash and $60 million in securities issued by the new venture). This transaction closed on February 27, 2003 and the company now operates under the name Horizon Lines LLC (“Horizon”). The company is headquartered in Charlotte, North Carolina, with 20 offices throughout the continental United States, Alaska, Hawaii, Guam and Puerto Rico. Beginning in fiscal year 2003, CSX will no longer report the domestic container-shipping company as a reporting segment, but will instead have a preferred interest in the new venture.

 

CSX Lines reported operating income of $38 million in 2002 compared to $32 million in the prior year. Improvements came primarily from continued expense reductions as well as improvement in revenues in the Hawaii/Guam service and Puerto Rico service.

 

CSX World Terminals LLC

 

Headquartered in Charlotte, North Carolina, CSX World Terminals LLC (“CSX World Terminals”) operates container-freight terminal facilities in Asia, Europe, Australia, Latin America and the United States.

 

CSX World Terminals’ operating revenues were flat at $236 million in 2002 and 2001. Operating expenses were up $2 million in 2002 over 2001 due to lower earnings from equity investees. Miscellaneous operating expenses in 2002 and 2001 include $6 million and $3 million gains, respectively, from transactions relating to equity investments. Operating income was $69 million for 2002, a $2 million decrease from $71 million in 2001.

 

Consolidating Statement of Income

(Millions of Dollars)

 

     Fiscal Years Ended

     Dec. 27, 2002

   Dec. 28, 2001

     CSX Lines

  

CSX World

Terminals


   Total

   CSX Lines

  

CSX World

Terminals


   Total

Operating Revenue

   $ 758    $ 236    $ 994    $ 681    $ 236    $ 917

Operating Expense

                                         

Labor and Fringe

     229      57      286      213      62      275

Materials, Supplies and Other

     244      77      321      203      70      273

Building and Equipment Rent

     45      9      54      51      9      60

Inland Transportation

     119      7      126      98      7      105

Depreciation

     17      9      26      24      8      32

Fuel

     66      —        66      60      —        60

Miscellaneous(a)

     —        8      8      —        9      9
    

  

  

  

  

  

Total Operating Expense

     720      167      887      649      165      814

Operating Income

     38      69      107      32      71      103

Other Income

     5      31      36      10      31      41

Interest Expense

     7      —        7      14      —        14
    

  

  

  

  

  

Earnings Before Income Tax

     36      100      136      28      102      130

Income Tax Expense

     14      25      39      11      27      38
    

  

  

  

  

  

Net Earnings

   $ 22    $ 75    $ 97    $ 17    $ 75    $ 92
    

  

  

  

  

  


(a)   Miscellaneous expense includes minority interest expense of $39 million and $36 million in 2002 and 2001, respectively, offset by equity earnings in unconsolidated subsidiaries of $31 million and $27 million, respectively.

 

CSX 2002 FINANCIAL SUPPLEMENT   11


Marine Services

 

Consolidating Statement of Cash Flows

(Millions of Dollars)

 

     Fiscal Years Ended

 
     Dec. 27, 2002

    Dec. 28, 2001

 
     CSX Lines

    CSX World
Terminals


    Total

    CSX Lines

    CSX World
Terminals


    Total

 

Operating Activities

                                                

Net Earnings

   $ 22     $ 75     $ 97     $ 17     $ 75     $ 92  

Adjustments to Reconcile Net Earnings to Net Cash Provided:

                                                

Depreciation

     18       9       27       24       8       32  

Deferred Taxes

     (18 )     6       (12 )     (1 )     11       10  

Other Operating Activities

     —         (13 )     (13 )     —         (21 )     (21 )

Changes in Operating Assets and Liabilities

     (7 )     18       11       92       (15 )     77  
    


 


 


 


 


 


Net Cash Provided by Operating Activities

     15       95       110       132       58       190  
    


 


 


 


 


 


Investing Activities

                                                

Property Additions

     (19 )     (11 )     (30 )     (11 )     (19 )     (30 )

Short-term Investments—Net

     (26 )     —         (26 )     —         —         —    

Other Investing Activities

     15       (35 )     (20 )     1       (14 )     (13 )
    


 


 


 


 


 


Net Cash Used by Investing Activities

     (30 )     (46 )     (76 )     (10 )     (33 )     (43 )
    


 


 


 


 


 


Financing Activities

                                                

Long-term Debt Repaid

     —         —         —         (21 )     —         (21 )

Other Financing Activities

     —         (50 )     (50 )     (49 )     (16 )     (65 )
    


 


 


 


 


 


Net Cash Used by Financing Activities

     —         (50 )     (50 )     (70 )     (16 )     (86 )
    


 


 


 


 


 


Net (Decrease) Increase in Cash and Cash Equivalents

     (15 )     (1 )     (16 )     52       9       61  

Cash and Cash Equivalents at Beginning of Year

     52       88       140       —         79       79  
    


 


 


 


 


 


Cash and Cash Equivalents at End of Year

     37       87       124       52       88       140  

Short-term Investments at End of Year

     —         —         —         3       —         3  
    


 


 


 


 


 


Cash, Cash Equivalents and Short-term Investments at End of Year

   $ 37     $ 87     $ 124     $ 55     $ 88     $ 143  
    


 


 


 


 


 


 

12   CSX 2002 FINANCIAL SUPPLEMENT


Marine Services

 

Consolidating Statement of Financial Position

(Millions of Dollars)

 

     Fiscal Years Ended

 
     Dec. 27, 2002

    Dec. 28, 2001

 
     CSX Lines

    CSX World
Terminals


    Total

    CSX Lines

    CSX World
Terminals


    Total

 

Assets

                                                

Current Assets

                                                

Cash, Cash Equivalents and Short-term Investments

   $ 37     $ 87     $ 124     $ 55     $ 88     $ 143  

Accounts Receivable—Net

     —         49       49       —         49       49  

Receivables from Affiliates

     —         —         —         —         10       10  

Materials and Supplies

     —         2       2       —         2       2  

Assets Held for Disposition

     263       —         263       244       —         244  

Other Current Assets

     —         2       2       24       2       26  
    


 


 


 


 


 


Total Current Assets

     300       140       440       323       151       474  

Properties

     11       183       194       62       185       247  

Accumulated Depreciation

     (2 )     (83 )     (85 )     (20 )     (83 )     (103 )
    


 


 


 


 


 


Properties—Net

     9       100       109       42       102       144  

Affiliates and Other Companies

     —         630       630       —         560       560  

Other Long-term Assets

     —         89       89       139       52       191  
    


 


 


 


 


 


Total Assets

   $ 309     $ 959     $ 1,268     $ 504     $ 865     $ 1,369  
    


 


 


 


 


 


Liabilities

                                                

Current Liabilities

                                                

Accounts Payable

   $ 19     $ 7     $ 26     $ 20     $ 11     $ 31  

Labor and Fringe Benefits Payable

     11       8       19       4       8       12  

Payable to Affiliates

     1       1       2       2       1       3  

Casualty, Environmental and Other Reserves

     —         —         —         1       —         1  

Current Maturities of Long-term Debt

     —         —         —         21       —         21  

Income and Other Taxes Payable

     9       9       18       24       3       27  

Liabilities Held for Disposition

     104       —         104       92       —         92  

Other Current Liabilities

     3       10       13       5       4       9  
    


 


 


 


 


 


Total Current Liabilities

     147       35       182       169       27       196  

Casualty, Environmental and Other Reserves

     1       —         1       1       —         1  

Long-term Debt

     —         —         —         132       —         132  

Deferred Income Taxes

     3       35       38       25       27       52  

Long-term Payable to Affiliates

     —         33       33       —         31       31  

Other Long-term Liabilities

     50       137       187       49       117       166  
    


 


 


 


 


 


Total Liabilities

     201       240       441       376       202       578  
    


 


 


 


 


 


Shareholder’s Equity

     108       719       827       128       663       791  
    


 


 


 


 


 


Total Liabilities and Shareholder’s Equity

   $ 309     $ 959     $ 1,268     $ 504     $ 865     $ 1,369  
    


 


 


 


 


 


 

CSX 2002 FINANCIAL SUPPLEMENT   13


Marine Services

 

Notes to Marine Services Statements

 

Note 1. Lease Commitments

 

Net lease obligations at December 27, 2002 are as follows:

 

(Millions of Dollars)


   Fiscal Year Ended Dec. 27, 2002

     CSX Lines

   CSX World
Terminals


   Total Marine
Services


2003

   $ 65    $ 7    $ 72

2004

     72      5      77

2005

     30      4      34

2006

     35      4      39

2007

     54      4      58

Thereafter

     189      136      325
    

  

  

Total

   $ 445    $ 160    $ 605
    

  

  

 

Note 2. Related Party Transactions

 

CSX Lines purchases transportation services from CSX Intermodal, CSX Lines and CSX World Terminals purchase computer and software services from CSX Technology.

 

14   CSX 2002 FINANCIAL SUPPLEMENT


CSX Consolidating Statements

 

The following schedules combine the Surface Transportation group and the Marine Services group with all of the Company’s additional subsidiaries and the parent company, which are included in the Eliminations/Other column.

 

Consolidating Statement of Income

(Millions of Dollars)

 

     Fiscal Years Ended

 
     Dec. 27, 2002

    Dec. 28, 2001

 
     Surface
Transportation


    Marine
Services


   Eliminations/
Other


    Total

    Total

 

Operating Revenue

   $ 7,183     $ 994    $ (25 )   $ 8,152     $ 8,110  

Operating Expense

                                       

Labor and Fringe

     2,608       286      3       2,897       2,934  

Materials, Supplies and Other

     1,380       321      12       1,713       1,689  

Conrail Operating Fees, Rents and Services

     322       —        —         322       336  

Building and Equipment Rent

     556       54      (9 )     601       626  

Inland Transportation

     268       126      (24 )     370       337  

Depreciation

     605       26      7       638       613  

Fuel

     449       66      —         515       585  

Miscellaneous

     —         8      (39 )     (31 )     (27 )

New Orleans Litigation Provision

     —         —        —         —         60  
    


 

  


 


 


Total Operating Expense

     6,188       887      (50 )     7,025       7,153  

Operating Income Before Fees and Special Items

     995       107      25       1,127       957  

Management Service Fees

     (155 )     —        155       —         —    

Conrail-Related Items Recorded at Parent—Net

     (53 )     —        53       —         —    
    


 

  


 


 


Operating Income

     787       107      233       1,127       957  

Other Income (Expense)

     19       36      (14 )     41       9  

Interest Expense

     127       7      311       445       518  
    


 

  


 


 


Earnings (Loss) Before Income Taxes

     679       136      (92 )     723       448  

Income Tax Expense (Benefit)

     263       39      (46 )     256       155  
    


 

  


 


 


Earnings (Loss) Before Cumulative Effect of Accounting Change

     416       97      (46 )     467       293  

Cumulative Effect of Accounting Change—Net of Tax

     —         —        (43 )     (43 )     —    
    


 

  


 


 


Net Earnings (Loss)

   $ 416     $ 97    $ (89 )   $ 424     $ 293  
    


 

  


 


 


 

CSX 2002 FINANCIAL SUPPLEMENT   15


CSX Consolidating Statements

 

Consolidating Statement of Cash Flows

(Millions of Dollars)

 

     Fiscal Years Ended

 
     Dec. 27, 2002

    Dec. 28, 2001

 
     Surface
Transportation


    Marine
Services


   

Eliminations/

Other


    Total

    Total

 

Operating Activities

                                        

Net Earnings

   $ 416     $ 97     $ (89 )   $ 424     $ 293  

Adjustments to Reconcile Net Earnings to Net Cash Provided:

                                        

Depreciation

     603       27       19       649       622  

Deferred Income Taxes

     204       (12 )     (20 )     172       197  

Cumulative Effect of Accounting Change

     —         —         43       43       —    

Other Operating Activities

     (63 )     (13 )     (32 )     (108 )     (13 )

Changes in Operating Assets and Liabilities

     28       11       28       67       (225 )

Sale (Redemption) of Accounts Receivable

     (52 )     —         (68 )     (120 )     (47 )
    


 


 


 


 


Net Cash Provided (Used) by Operating Activities

     1,136       110       (119 )     1,127       827  
    


 


 


 


 


Investing Activities

                                        

Property Additions

     (1,036 )     (30 )     (14 )     (1,080 )     (930 )

Short-term Investments—Net

     220       (26 )     156       350       (51 )

Other Investing Activities

     (3 )     (20 )     (22 )     (45 )     16  
    


 


 


 


 


Net Cash (Used) Provided by Investing Activities

     (819 )     (76 )     120       (775 )     (965 )
    


 


 


 


 


Financing Activities

                                        

Short-term Debt—Net

     —         —         140       140       (524 )

Long-term Debt Issued

     —         —         748       748       962  

Long-term Debt Repaid

     (196 )     —         (963 )     (1,159 )     (266 )

Dividends Paid

     (242 )     —         156       (86 )     (171 )

Other Financing Activities

     94       (50 )     (49 )     (5 )     14  
    


 


 


 


 


Net Cash (Used) Provided by Financing Activities

     (344 )     (50 )     32       (362 )     15  
    


 


 


 


 


Net (Decrease) Increase in Cash and Cash Equivalents

     (27 )     (16 )     33       (10 )     (123 )

Cash, Cash Equivalents, and Short-term Investments

                                        

Cash and Cash Equivalents at Beginning of Year

     27       140       (30 )     137       260  
    


 


 


 


 


Cash and Cash Equivalents at End of Year

     —         124       3       127       137  

Short-term Investments at End of Year

     —         —         137       137       481  
    


 


 


 


 


Cash, Cash Equivalents, and Short-term Investments at End of Year

   $ —       $ 124     $ 140     $ 264     $ 618  
    


 


 


 


 


 

16   CSX 2002 FINANCIAL SUPPLEMENT


CSX Consolidating Statements

 

Consolidating Statement of Financial Position

(Millions of Dollars)

 

     Fiscal Years Ended

 
     Dec. 27, 2002

    Dec. 28, 2001

 
     Surface
Transportation


    Marine
Services


    Eliminations/
Other


    Total

    Total

 

Assets

                                        

Current Assets

                                        

Cash, Cash Equivalents and Short-term Investments

   $ —       $ 124     $ 140     $ 264     $ 618  

Accounts Receivable—Net

     292       49       458       799       871  

Receivables from Affiliates

     8       —         (8 )     —         —    

Materials and Supplies

     171       2       7       180       191  

Deferred Income Taxes

     110       —         18       128       162  

Assets Held for Disposition(a)

     —         263       —         263       244  

Other Current Assets

     20       2       133       155       198  
    


 


 


 


 


Total Current Assets

     601       440       748       1,789       2,284  

Properties

     18,067       194       299       18,560       17,760  

Accumulated Depreciation

     (5,051 )     (85 )     (138 )     (5,274 )     (4,913 )
    


 


 


 


 


Properties—Net

     13,016       109       161       13,286       12,847  

Investment in Conrail

     —         —         4,653       4,653       4,655  

Affiliates and Other Companies

     216       630       (465 )     381       297  

Other Long-term Assets

     641       89       112       842       718  
    


 


 


 


 


Total Assets

   $ 14,474     $ 1,268     $ 5,209     $ 20,951     $ 20,801  
    


 


 


 


 


Liabilities

                                        

Current Liabilities

                                        

Accounts Payable

   $ 710     $ 26     $ 66     $ 802     $ 905  

Labor and Fringe Benefits Payable

     370       19       68       457       409  

Payable to Affiliates

     1,402       2       (1,404 )     —         —    

Casualty, Environmental and Other Reserves

     176       —         70       246       248  

Current Maturities of Long-term Debt

     214       —         177       391       1,044  

Short-term Debt

     —         —         143       143       225  

Income and Other Taxes Payable

     121       18       5       144       100  

Liabilities Held for Disposition(a)

     —         104       —         104       92  

Other Current Liabilities

     132       13       22       167       284  
    


 


 


 


 


Total Current Liabilities

     3,125       182       (853 )     2,454       3,307  

Casualty, Environmental and Other Reserves

     467       1       136       604       687  

Long-term Debt

     890       —         5,629       6,519       5,839  

Deferred Income Taxes

     3,473       38       56       3,567       3,621  

Long-term Payable to Affiliates

     100       33       (133 )     —         —    

Other Long-term Liabilities

     606       187       773       1,566       1,227  
    


 


 


 


 


Total Liabilities

     8,661       441       5,608       14,710       14,681  
    


 


 


 


 


Shareholders’ Equity

     5,813       827       (399 )     6,241       6,120  
    


 


 


 


 


Total Liabilities and Shareholders’ Equity

   $ 14,474     $ 1,268     $ 5,209     $ 20,951     $ 20,801  
    


 


 


 


 



(a)   Assets and Liabilities Held for Disposition represent amounts associated with the conveyance of CSX Lines to Horizon Lines. This agreement was entered into in December 2002, and the transaction completed in February 2003.

 

CSX 2002 FINANCIAL SUPPLEMENT   17


Supplemental Financial Information

 

The information on pages 18 and 19 is included for analytical purposes only. This is not considered to be better information than is available in the Company’s publicly available reports filed with the Securities and Exchange Commission and does not conform with generally accepted accounting principles. This computation of Earnings Before Interest, Taxes, Depreciation and Amortization (EBITDA) is presented because management believes it is a widely accepted financial indicator used by investors and analysts to evaluate companies on the basis of operating performance. CSX owns a 42 percent undivided interest in Conrail Inc., and operates over a portion of the Conrail territory under the terms of an operating agreement. Conrail loans its excess cash to its owners under loan agreements at market interest rates. The calculations of EBITDA and other financial ratios combine CSX and Conrail financial data for analytical purposes only and are not intended to suggest that CSX has control over Conrail’s operations.

 

Analysis of Economic Earnings CSX + 42% of Conrail

(Millions of Dollars)

 

     Fiscal Year ended

 
     Dec. 27, 2002

    Dec. 28, 2001

 
     CSX
Consolidated


    42% of
Conrail


    Purchase Price
Amortization


    Eliminations

    Combined
Total


    Combined
Total


 

Operating Revenue

   $ 8,152     $ 375     $ —       $ (345 )   $ 8,182     $ 8,136  

Operating Expense

                                                

Labor and Fringe

     2,897       63       —         —         2,960       3,000  

Materials, Supplies and Other

     1,713       60       —         (4 )     1,769       1,752  

Conrail Operating Fee, Rent and Services

     322       —         —         (322 )     —         —    

Building and Equipment Rent

     601       —         —         —         601       626  

Inland Transportation

     370       —         —         —         370       337  

Depreciation and Amortization

     638       135       80       11       864       838  

Fuel

     515       3       —         —         518       588  

Miscellaneous

     (31 )     —         —         —         (31 )     (27 )

New Orleans Litigation Provision

     —         —         —         —         —         60  
    


 


 


 


 


 


Total Operating Expense

     7,025       261       80       (315 )     7,051       7,174  
    


 


 


 


 


 


Operating Income

     1,127       114       (80 )     (30 )     1,131       962  

New Orleans Litigation Provision

     —         —         —         —         —         60  
    


 


 


 


 


 


Adjusted Operating Income

     1,127       114       (80 )     (30 )     1,131       1,022  
    


 


 


 


 


 


Other Income (Expense)

                                                

Interest Income

     27       10       —         (8 )     29       51  

Discounts on Sales of Accounts Receivable

     (26 )     —         —         —         (26 )     (42 )

Other—Net

     40       30       —         11       81       47  

Interest Expense

     445       44       —         (8 )     481       559  
    


 


 


 


 


 


Earnings Before Income Taxes

     723       110       (80 )     (19 )     734       459  

Income Tax Expense

     256       34       (23 )     —         267       166  
    


 


 


 


 


 


Net Earnings (Loss)

   $ 467     $ 76     $ (57 )   $ (19 )   $ 467     $ 293  
    


 


 


 


 


 


EBITDA Calculations(a)

                                                

Net Earnings (Loss)

   $ 467     $ 76     $ (57 )   $ (19 )   $ 467     $ 293  

Depreciation and Amortization

     638       135       80       11       864       838  

Interest Income

     (27 )     (10 )     —         8       (29 )     (51 )

Discounts on Sales of Accounts Receivable

     26       —         —         —         26       42  

Interest Expense

     445       44       —         (8 )     481       559  

Income Tax Expense

     256       34       (23 )     —         267       166  

New Orleans Litigation Provision

     —         —         —         —         —         60  
    


 


 


 


 


 


EBITDA

   $ 1,805     $ 279     $ —       $ (8 )   $ 2,076     $ 1,907  
    


 


 


 


 


 



(a)   2001 excludes New Orleans tank car fire litigation provision of $60 million before tax, $37 million after tax.

 

18   CSX 2002 FINANCIAL SUPPLEMENT


Supplemental Financial Information

 

Analysis of Economic Earnings CSX + 42% of Conrail

 

The information on this page is presented for analytical purposes only. See the top of page 18.

 

(Millions of Dollars)

 

     Fiscal Years Ended

 
     Dec. 27, 2002

    Dec. 28, 2001

 
     CSX

    42%
Conrail


    Eliminations

    Combined
Total


    Combined
Total


 

Debt Ratios

                                        

Short-term Debt

   $ 143     $ —       $ —       $ 143     $ —    

Long-term Debt

     6,910       496       (371 )     7,035       7,394  

Less: Cash, Cash Equiv. and Short-term Investments

     264       10       —         274       632  

Less: Offsetting Deposits

     226       —         —         226       52  
    


 


 


 


 


Net Debt

     6,563       486       (371 )     6,678       6,710  

Shareholders’ Equity

     6,241       1,775       (1,775 )     6,241       6,120  
    


 


 


 


 


Basic Capitalization

     12,804       2,261       (2,146 )     12,919       12,830  

Accounts Receivable Sold

     380       —         —         380       500  

Present Value of Operating Leases

     1,097       141       —         1,238       1,268  
    


 


 


 


 


Other Debt

     1,477       141       —         1,618       1,768  

“All-in” Debt

   $ 8,040     $ 627     $ (371 )   $ 8,296     $ 8,478  
    


 


 


 


 


“All-in” Capitalization

   $ 14,281     $ 2,402     $ (2,146 )   $ 14,537     $ 14,598  

Net Debt

     6,563       486       (371 )     6,678       6,710  

Divided by Basic Capitalization

     12,804       2,261       (2,146 )     12,919       12,830  
    


 


 


 


 


Debt Ratio

     51 %                     52 %     52 %

“All-in” Debt

     8,040       627       (371 )     8,296       8,478  

“All-in” Capitalization

     14,281       2,402       (2,146 )     14,537       14,598  
    


 


 


 


 


“All-in” Debt Ratio

     56 %                     57 %     58 %

EBITDA (from page 18)

   $ 1,805     $ 279     $ (8 )     2,076     $ 1,907  

Interest Expense—As Reported

     445       44       (8 )     481       559  

Less: Interest Income

     (27 )     (10 )     8       (29 )     (51 )

Plus: Accounts Receivable Sales Expense

     26       —         —         26       42  
    


 


 


 


 


Interest Expense for EBITDA Coverage

   $ 444     $ 34     $ —       $ 478     $ 550  
    


 


 


 


 


EBITDA Coverage

     4.1                       4.3       3.5  

EBITDA (from page 18)

   $ 1,805     $ 279     $ (8 )   $ 2,076     $ 1,907  

Lease Payments

     205       26       —         231       274  
    


 


 


 


 


EBITDA Including Lease Payments

     2,010       305       (8 )     2,307       2,181  
    


 


 


 


 


Interest Expense for EBITDA Coverage

     444       34       —         478       550  

Lease Interest

     88       11       —         99       101  
    


 


 


 


 


Interest Expense Including Lease Interest

   $ 532     $ 45     $ —       $ 577     $ 651  
    


 


 


 


 


EBITDA Coverage (including leases)

     3.8                       4.0       3.4  
    


 


 


 


 


 

CSX 2002 FINANCIAL SUPPLEMENT   19


   

CSX Corporation

   

500 Water Street, 15th floor

   

Jacksonville, FL 32202

   

904/359-3200

   

www.csx.com

   

CSX Transportation Inc.

   

500 Water Street

   

Jacksonville, FL 32202

   

904/359-3100

   

www.csxt.com

   

CSX Intermodal Inc.

   

301 West Bay Street

   

Jacksonville, FL 32202

   

904/633-1000

   

www.csxi.com

   

CSX Lines LLC

   

2101 Rexford Road

   

Suite 350 West

   

Charlotte, NC 28211

   

704/973-7000

   

www.csxlines.com

   

CSX World Terminals LLC

   

2101 Rexford Road

   

Suite 250 West

   

Charlotte, NC 28211

   

704/973-7200

   

www.csxworldterminals.com

   

The Greenbrier

   

300 West Main Street

   

White Sulphur Springs, WV 24986

   

304/536-1110

   

www.greenbrier.com


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