SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 10-Q
| x | QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 |
For the quarter ended June 27, 2003
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 incorporation or organization) |
(I.R.S. Employer Identification No.) | |
| 500 Water Street, 15th Floor, Jacksonville, FL | 32202 | |
| (Address of principal executive offices) | (Zip Code) | |
(904) 359-3200
(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 June 27, 2003: 213,964,090 shares.
FORM 10-Q
FOR THE QUARTERLY PERIOD ENDED JUNE 27, 2003
INDEX
| Page Number | ||||
| PART I: |
FINANCIAL INFORMATION | |||
| Item 1: |
Financial Statements | |||
| Consolidated Income Statements (Unaudited)-Quarters and Six Months Ended June 27, 2003 and June 28, 2002 | 3 | |||
| Consolidated Balance Sheets-At June 27, 2003 (Unaudited) and December 27, 2002 | 4 | |||
| Consolidated Cash Flow Statements (Unaudited)-Six Months Ended June 27, 2003 and June 28, 2002 | 5 | |||
| Notes to Consolidated Financial Statements (Unaudited) | 6 | |||
| Item 2: |
Management’s Discussion and Analysis of Results of Operations and Financial Condition | 28 | ||
| Item 3: |
Quantitative and Qualitative Disclosures About Market Risk | 40 | ||
| Item 4: |
Disclosure Controls and Procedures | 40 | ||
| PART II: |
OTHER INFORMATION | |||
| Item 5: |
Submission of Matters to a Vote of Security Holders | 41 | ||
| Item 6: |
Exhibits and Reports on Form 8-K | 42 | ||
| 43 | ||||
2
CSX CORPORATION AND SUBSIDIARIES
ITEM 1: FINANCIAL STATEMENTS
Consolidated Income Statements
| (Unaudited) | |||||||||||||
| (Dollars in Millions, Except Per Share Amounts) |
Quarter Ended |
Six Months Ended |
|||||||||||
| June 27, 2003 |
June 28, 2002 |
June 27, 2003 |
June 28, 2002 |
||||||||||
| Operating Revenue |
$ | 1,942 | $ | 2,073 | $ | 3,958 | $ | 4,037 | |||||
| Operating Expense |
1,657 | 1,752 | 3,496 | 3,504 | |||||||||
| Operating Income |
285 | 321 | 462 | 533 | |||||||||
| Other Income |
19 | 4 | 9 | 13 | |||||||||
| Interest Expense |
105 | 116 | 208 | 230 | |||||||||
| Earnings before Income Taxes and Cumulative Effect of Accounting Change |
199 | 209 | 263 | 316 | |||||||||
| Income Tax Expense |
72 | 74 | 94 | 113 | |||||||||
| Earnings before Cumulative Effect of Accounting Change |
127 | 135 | 169 | 203 | |||||||||
| Cumulative Effect of Accounting Change-Net of Tax |
— | — | 57 | (43 | ) | ||||||||
| Net Earnings |
$ | 127 | $ | 135 | $ | 226 | $ | 160 | |||||
| Earnings Per Share: |
|||||||||||||
| Before Cumulative Effect of Accounting Change |
$ | 0.59 | $ | 0.63 | $ | 0.79 | $ | 0.95 | |||||
| Cumulative Effect of Accounting Change |
— | — | 0.26 | (0.20 | ) | ||||||||
| Including Cumulative Effect of Accounting Change |
$ | 0.59 | $ | 0.63 | $ | 1.05 | $ | 0.75 | |||||
| Earnings Per Share, Assuming Dilution: |
|||||||||||||
| Before Cumulative Effect of Accounting Change |
$ | 0.59 | $ | 0.63 | $ | 0.79 | $ | 0.95 | |||||
| Cumulative Effect of Accounting Change |
— | — | 0.26 | (0.20 | ) | ||||||||
| Including Cumulative Effect of Accounting Change |
$ | 0.59 | $ | 0.63 | $ | 1.05 | $ | 0.75 | |||||
| Average Common Shares Outstanding (Thousands) |
213,849 | 212,555 | 213,857 | 212,303 | |||||||||
| Average Common Shares Outstanding, Assuming Dilution (Thousands) |
214,297 | 213,541 | 214,230 | 213,364 | |||||||||
| Cash Dividends Paid Per Common Share |
$ | 0.10 | $ | 0.10 | $ | 0.20 | $ | 0.20 | |||||
See accompanying Notes to Consolidated Financial Statements.
3
CSX CORPORATION AND SUBSIDIARIES
ITEM 1: FINANCIAL STATEMENTS
| (Dollars in Millions) |
(Unaudited) June 27, 2003 |
December 27, 2002 |
||||||
| ASSETS |
||||||||
| Current Assets: |
||||||||
| Cash, Cash Equivalents and Short-term Investments |
$ | 311 | $ | 264 | ||||
| Accounts Receivable-Net |
1,219 | 799 | ||||||
| Materials and Supplies |
178 | 180 | ||||||
| Deferred Income Taxes |
139 | 128 | ||||||
| Other Current Assets |
185 | 155 | ||||||
| Domestic Container-Shipping Assets Held for Disposition |
— | 263 | ||||||
| Total Current Assets |
2,032 | 1,789 | ||||||
| Properties |
18,892 | 18,560 | ||||||
| Accumulated Depreciation |
5,388 | 5,274 | ||||||
| Properties-Net |
13,504 | 13,286 | ||||||
| Investment in Conrail |
4,658 | 4,653 | ||||||
| Affiliates and Other Companies |
487 | 381 | ||||||
| Other Long-term Assets |
858 | 842 | ||||||
| Total Assets |
$ | 21,539 | $ | 20,951 | ||||
| LIABILITIES |
||||||||
| Current Liabilities: |
||||||||
| Accounts Payable |
$ | 768 | $ | 802 | ||||
| Labor and Fringe Benefits Payable |
402 | 457 | ||||||
| Casualty, Environmental and Other Reserves |
223 | 246 | ||||||
| Current Maturities of Long-term Debt |
586 | 391 | ||||||
| Short-term Debt |
704 | 143 | ||||||
| Income and Other Taxes Payable |
102 | 144 | ||||||
| Other Current Liabilities |
135 | 167 | ||||||
| Domestic Container-Shipping Liabilities Held for Disposition |
— | 104 | ||||||
| Total Current Liabilities |
2,920 | 2,454 | ||||||
| Long-term Debt |
6,204 | 6,519 | ||||||
| Deferred Income Taxes |
3,715 | 3,567 | ||||||
| Casualty, Environmental and Other Reserves |
629 | 604 | ||||||
| Other Long-term Liabilities |
1,635 | 1,566 | ||||||
| Total Liabilities |
15,103 | 14,710 | ||||||
| SHAREHOLDERS’ EQUITY |
||||||||
| Common Stock, $1 Par Value |
215 | 215 | ||||||
| Other Capital |
1,554 | 1,547 | ||||||
| Retained Earnings |
4,981 | 4,797 | ||||||
| Accumulated Other Comprehensive Loss |
(314 | ) | (318 | ) | ||||
| Total Shareholders’ Equity |
6,436 | 6,241 | ||||||
| Total Liabilities and Shareholders’ Equity |
$ | 21,539 | $ | 20,951 | ||||
See accompanying Notes to Consolidated Financial Statements.
4
CSX CORPORATION AND SUBSIDIARIES
ITEM 1: FINANCIAL STATEMENTS
Consolidated Cash Flow Statements
| (Dollars in Millions) |
(Unaudited) Six Months Ended |
|||||||
| June 27, 2003 |
June 28, 2002 |
|||||||
| OPERATING ACTIVITIES |
||||||||
| Net Earnings |
$ | 226 | $ | 160 | ||||
| Adjustments to Reconcile Net Earnings to Net Cash Provided: |
||||||||
| Depreciation |
322 | 312 | ||||||
| Deferred Income Taxes |
98 | 50 | ||||||
| Cumulative Effect of Accounting Change-Net of Tax |
(57 | ) | 43 | |||||
| Other Operating Activities |
16 | (13 | ) | |||||
| Changes in Operating Assets and Liabilities: |
||||||||
| Accounts Receivable |
(65 | ) | 17 | |||||
| Termination of Sale of Receivables |
(380 | ) | — | |||||
| Other Current Assets |
(42 | ) | (34 | ) | ||||
| Accounts Payable |
(15 | ) | (54 | ) | ||||
| Other Current Liabilities |
(138 | ) | 30 | |||||
| Net Cash (Used) Provided by Operating Activities |
(35 | ) | 511 | |||||
| INVESTING ACTIVITIES |
||||||||
| Property Additions |
(479 | ) | (431 | ) | ||||
| Net Proceeds from Divestitures |
214 | — | ||||||
| Other Investing Activities |
(20 | ) | 2 | |||||
| Net Cash Used by Investing Activities |
(285 | ) | (429 | ) | ||||
| FINANCING ACTIVITIES |
||||||||
| Short-term Debt – Net |
561 | 576 | ||||||
| Long-term Debt Issued |
83 | 474 | ||||||
| Long-term Debt Repaid |
(218 | ) | (991 | ) | ||||
| Dividends Paid |
(43 | ) | (43 | ) | ||||
| Other Financing Activities |
(16 | ) | 16 | |||||
| Net Cash Provided by Financing Activities |
||||||||