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
OR
[_] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE
SECURITIES EXCHANGE ACT OF 1934
For the year ended December 31, 2001
Commission file number 1-8022
TAX SAVINGS THRIFT PLAN FOR EMPLOYEES OF
CSX CORPORATION
AND AFFILIATED COMPANIES
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
TAX SAVINGS THRIFT PLAN FOR EMPLOYEES OF CSX CORPORATION
AND AFFILIATED COMPANIES
FINANCIAL STATEMENTS
AS OF DECEMBER 31, 2001 AND 2000
CONTENTS
Report of Independent Certified Public Accountants ....................... 3
Statements of Net Assets Available for Benefits .......................... 4
Statement of Changes in Net Assets Available for Benefits ................ 5
Notes to Financial Statements ............................................ 6-12
Signature ................................................................ 13
Exhibit 23-Consent of Ernst & Young LLP,
Independent Certified Public Accountants ........................ I-1
Report of Independent Certified Public Accountants
The Pension Committee
Tax Savings Thrift Plan for Employees of
CSX Corporation and Affiliated Companies
CSX Corporation
Richmond, Virginia
We have audited the accompanying statements of net assets available for benefits
of the Tax Savings Thrift Plan for Employees of CSX Corporation and Affiliated
Companies (the Plan) as of December 31, 2001 and 2000, and the related statement
of changes in net assets available for benefits for the year ended December 31,
2001. 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 auditing standards generally accepted
in the United States. 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 net assets available for benefits of the Plan as of
December 31, 2001 and 2000, and the changes in its net assets available for
benefits for the year ended December 31, 2001, in conformity with accounting
principles generally accepted in the United States.
/s/ ERNST & YOUNG LLP
Jacksonville, Florida
June 24, 2002
3
TAX SAVINGS THRIFT PLAN FOR EMPLOYEES OF CSX CORPORATION
AND AFFILIATED COMPANIES
STATEMENTS OF NET ASSETS AVAILABLE FOR BENEFITS
(Dollars in Thousands)
December 31,
2001 2000
-------------------------------------
ASSETS
Investment in Master Trust, at fair
value (see Note 3) $723,476 $715,611
Receivables:
Employer contributions 658 610
Member contributions 1,984 1,778
-------------------------------------
TOTAL ASSETS 726,118 717,999
LIABILITY
Accrued expenses 333 305
-------------------------------------
NET ASSETS AVAILABLE FOR BENEFITS $725,785 $717,694
=====================================
See Notes to Financial Statements.
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TAX SAVINGS THRIFT PLAN FOR EMPLOYEES OF CSX CORPORATION
AND AFFILIATED COMPANIES
STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR BENEFITS
FOR THE YEAR ENDED DECEMBER 31, 2001
(Dollars in Thousands)
ADDITIONS
Net gain on investment in Master Trust $ 31,139
Employer contributions 8,094
Member contributions 25,251
--------------
64,484
DEDUCTIONS
Distributions to members 47,767
Fees and expenses 1,335
Transfer to other plan 7,291
--------------
56,393
--------------
NET INCREASE 8,091
Net Assets Available for Benefits at Beginning of
Period 717,694
--------------
Net Assets Available for Benefits at End of
Period $725,785
==============
See Notes to Financial Statements.
5
TAX SAVINGS THRIFT PLAN FOR EMPLOYEES OF CSX CORPORATION
AND AFFILIATED COMPANIES
NOTES TO FINANCIAL STATEMENTS
DECEMBER 31, 2001
(Dollars in Thousands)
NOTE 1 - DESCRIPTION OF THE PLAN
The following description of the Tax Savings Thrift Plan for Employees of CSX
Corporation and affiliated companies (the Plan) provides only general
information. Members should refer to the Summary Plan Description and the Plan
Document for a more complete description of the Plan's provisions.
General: The Plan is a controlled and affiliated services group defined
contribution plan covering all full-time salaried employees and certain
non-union hourly employees of CSX Corporation (CSX) and adopting affiliated
companies (collectively, the Company or Plan Sponsor). Effective January 1,
2002, CSX established the Plan as an Employee Stock Ownership Plan (ESOP)
designed to comply with Section 4975(e)(7) of the Internal Revenue Code of 1986,
as amended (Code) and be subject to the provisions of the Employee Retirement
Income Security Act of 1974 (ERISA), as amended. The designation of the Plan as
an ESOP had no material impact on the Plan provisions except as noted below.
Contributions: Each year, members may contribute, in 1% increments, up to 15% of
pre-tax or after-tax annual compensation, as defined by the Plan. Members who
are not eligible to participate in the Company's Supplementary Savings and
Incentive Award Deferral Plan may also contribute up to 25% of any incentive
compensation to the Plan. Subject to certain limitations, members may reinvest
distributions received from another qualified plan. Members may change
investment options daily. After December 31, 2001, a member may defer up to 50%
of his or her eligible compensation instead of 15%.
The Company contributes amounts equal to 50% of the first 6% of the member's
pre-tax or after-tax annual contributions, as defined by the Plan. Company
contributions are made in the form of cash deposits to the CSX Common Stock
Fund. Member incentive compensation contributions are not matched. Additional
amounts may be contributed at the option of the Company's Board of Directors.
Members who have attained age 55 may reallocate their interest in the non-member
directed CSX Common Stock Fund, in multiples of 1%, to other investment
alternatives offered under the Plan. The Plan was amended on May 1, 2002 to
allow all members diversification of the non-member directed contributions to
the CSX Stock Fund.
6
TAX SAVINGS THRIFT PLAN FOR EMPLOYEES OF CSX CORPORATION
AND AFFILIATED COMPANIES
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 2001
(Dollars in Thousands)
NOTE 1 - DESCRIPTION OF THE PLAN, Continued
Member Accounts: Each member's account is credited with the member's
contributions and allocations of (a) the Company's contributions and (b) Plan
earnings, and is charged with an allocation of administrative expenses. The
benefit to which a member is entitled is the benefit that can be provided from
the account.
Vesting: Members are 100% vested in their accounts.
Loans: Members may borrow from their account in amounts equal to no more than
the lesser of $50,000 in an aggregate amount of all loans from the Plan or 50%
of their vested account balance. Loan terms range from one to five years unless
the loan is to be used in conjunction with the purchase of a primary residence.
The loans are secured by the balance in the member's account and bear interest
at a rate commensurate with local prevailing rates as determined by the Plan
administrator. Principal and interest are paid ratably through payroll
deductions.
Payment of Benefits: Upon termination of service, a member may receive a
lump-sum amount equal to the vested value of his or her account, or upon
disability or retirement, elect to receive monthly installments over a 240-month
period. Surviving spouses of retired or disabled members may elect to continue
monthly installments or to initiate monthly installments. A member with an
account balance of $5,000 or less shall be paid in lump sum.
Plan Termination: Although it has not expressed any intent to do so, the Company
has the right under the Plan to discontinue its contributions at any time and to
terminate the Plan subject to the provisions of ERISA. In the event of Plan
termination or partial termination, members will remain 100% vested in their
accounts.
Administrative expenses: The administrative expenses of the Plan are paid by the
Company or from Plan funds as the Plan Sponsor directs. All of the
administrative expenses of the Plan during the year ended December 31, 2001 were
paid from Plan funds.
7
TAX SAVINGS THRIFT PLAN FOR EMPLOYEES OF CSX CORPORATION
AND AFFILIATED COMPANIES
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 2001
(Dollars in Thousands)
NOTE 1 - DESCRIPTION OF THE PLAN, Continued
Diversification: Investment diversification is offered to members close to
retirement so that they may have the opportunity to move part of the value of
their investment in Company stock into investments which are more diversified.
Members who are at least age 55 may elect to diversify their company match
contributions. Effective May 1, 2002, all restrictions were removed and members
may diversify their accounts immediately.
Dividends: Dividends paid on shares of Company stock held in a member's account
are reinvested in shares of Company stock. Effective January 1, 2002, a member
may elect to have dividends paid in cash to the member or his or her
beneficiaries. Any change in an election will apply only to ex-dividend dates
occurring after the date such election is received. A member who does not make a
timely election will have the dividends paid to their account and reinvested in
shares of Company stock.
NOTE 2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Basis of Presentation: The financial statements have been prepared under the
accrual method of accounting in accordance with accounting principles generally
accepted in the United States.
Use of Estimates: The preparation of financial statements in conformity with
accounting principles generally accepted in the United States requires
management to make estimates that affect the amounts reported in the financial
statements and accompanying notes. Actual results could differ from those
estimates.
NOTE 3 - INVESTMENT IN MASTER TRUST
Investments in CSX Common Stock (stated at fair value) are valued at the last
reported sales price on the last business day of the year. Investments in mutual
funds are measured by quoted market prices and are reported at aggregate fair
value at year-end. Synthetic guaranteed investment contracts are reported at
fair value, which in the case of such contracts approximates contract value.
Member loans are valued at their outstanding balances, which approximates fair
value.
8
TAX SAVINGS THRIFT PLAN FOR EMPLOYEES OF CSX CORPORATION
AND AFFILIATED COMPANIES
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 2001
(Dollars in Thousands)
NOTE 3 - INVESTMENT IN MASTER TRUST (continued)
Purchases and sales of securities are recorded on a trade-date basis. Interest
income is recorded on the accrual basis. Dividends are recorded on the
ex-dividend date.
At December 31, 2001, the Plan's interest in the net assets of the Master Trust
was approximately 69%.
Summarized financial information of the Master Trust is presented below:
December 31,
2001
--------------------
Assets:
Accrued income $ 15
Receivables:
Employer contributions 658
Member contributions 1,984
Investments at fair value:
Cash and cash equivalents 6,327
Mutual funds:
Fidelity Equity Income Fund 90,403
Vanguard Institutional Index Fund 140,309
Twentieth Century Select Fund 91,642
Other 58,760
CSX Corporation common stock 399,644*
Synthetic guaranteed investment
contracts:
AIG Life Contract 108,038
JP Morgan 100,403
Collective trust fund 36,313
Loans to members 24,761
--------------------
Total assets 1,059,257
Liabilities:
Accrued expenses 485
--------------------
Total Master Trust net assets $1,058,772
====================
*Includes nonmember-directed (see Note 4)
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TAX SAVINGS THRIFT PLAN FOR EMPLOYEES OF CSX CORPORATION
AND AFFILIATED COMPANIES
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 2001
(Dollars in Thousands)
NOTE 3 - INVESTMENT IN MASTER TRUST, Continued
Investment income and expenses are allocated to each plan based upon its
pro-rata share in the net assets of the Master Trust. Investment income (loss)
for the Master Trust is as follows:
Year Ended
December 31,
2001
---------------
Net appreciation (depreciation) in fair
value of investments determined by
quoted market prices:
Mutual funds $(52,394)
CSX Corporation common stock 101,935
Collective trust fund 1,666
---------------
51,207
Interest and dividend income 24,826
---------------
$ 76,033
===============
Synthetic guaranteed investment contracts (SICs) represent a diversified
portfolio of high quality bonds held in the name of the Master Trust in
conjunction with a corresponding contract with the issuer of the SIC to provide
a variable rate of return (based on investment experience and reset quarterly)
on the cost of the investment. The crediting rate for the AIG Life Contract and
the JP Morgan Contract at December 31, 2001 was 6.17% and 6.19%, respectively
(6.76% and 6.89%, respectively, at December 31, 2000). The average crediting
rate during 2001 was 6.54% for the AIG Life Contract and 6.61% for the J.P.
Morgan Contract.
10
TAX SAVINGS THRIFT PLAN FOR EMPLOYEES OF CSX CORPORATION
AND AFFILIATED COMPANIES
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 2001
(Dollars in Thousands)
NOTE 4 - NONMEMBER-DIRECTED INVESTMENTS
Information about the net assets and the significant components of the changes
in net assets relating to the nonmember-directed investments is as follows:
December 31,
2001 2000
-----------------------------
Net Assets:
CSX Corporation common stock $125,629 $92,219
Year Ended
December 31, 2001
----------------------
Changes in Net Assets:
Contributions $ 8,094
Dividends and Interest 2,779
Transfers to other funds (2,410)
Net appreciation in fair value of CSX
Corporation common stock 32,032
Distributions to members (6,082)
Transfer to other Plan (1,003)
------------------
$33,410
==================
NOTE 5 - RELATED PARTY TRANSACTIONS
CSX and its subsidiaries provide the Plan with certain management and accounting
services. During the year ended December 31, 2001, the Master Trust reimbursed
CSX and its subsidiaries approximately $148 for these services.
During the year ended December 31, 2001, the Master Trust received cash
dividends from investments in CSX common stock of $8,772. The Plan's share of
these dividends was $4,291.
11
TAX SAVINGS THRIFT PLAN FOR EMPLOYEES OF CSX CORPORATION
AND AFFILIATED COMPANIES
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
DECEMBER 31, 2001
(Dollars in Thousands)
NOTE 5 - RELATED PARTY TRANSACTIONS, Continued
The Trustee, Northern Trust Company, routinely invests assets in its Collective
Short-Term Investment Fund. During the year ended December 31, 2001, the Master
Trust earned interest of $264 for transactions with this fund, a portion of
which was allocated to the Plan based upon the Plan's pro-rata share in the net
assets of the Master Trust and included in net gain in investment in Master
Trust in the statement of changes in net assets available for benefits.
NOTE 6 - INCOME TAX STATUS
The Plan has received a determination letter from the Internal Revenue Service
dated December 5, 2000, stating that the Plan is qualified under Section 401(a)
of the Internal Revenue Code (the Code) and, therefore, the related trust is
exempt from taxation. Once qualified, the Plan is required to operate in
conformity with the Code to maintain its qualification. The Plan Sponsor
believes the Plan is being operated in compliance with the applicable
requirements of the Code and, therefore, believes that the Plan is qualified and
the related trust is tax exempt.
NOTE 7 - TRANSFER TO OTHER PLAN
In connection with a sale of CTI Logistx, a subsidiary of the Plan Sponsor,
$7,291 was transferred on March 2, 2001 to the Vanguard Group Purchase account
for the establishment of the CTI 401(k) Plan. This amount represented the
account balances of all members employed by CTI Logistx.
Note 8 - SUBSEQUENT EVENT
January 1, 2002, the Plan was amended and restated to comply with rules and
regulations contained in the Economic Growth and Tax Relief Reconciliation Act
of 2001 (EGTRRA). The Plan has received a determination letter from the Internal
Revenue Service dated March 12, 2002 for the amended and restated plan effective
January 1, 2002, stating that the Plan is qualified under 401(a) of the Code
and, therefore, the related trust is exempt from taxation. The Plan restatement
had no material effect on the Plan provisions except as noted in Note 1.
12
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.
TAX SAVINGS THRIFT PLAN FOR
EMPLOYEES OF CSX CORPORATION AND
AFFILIATED COMPANIES
By: /s/ Carolyn T. Sizemore
Carolyn T. Sizemore
Vice President and Controller
CSX Corporation
(Plan Sponsor)
Date: June 24, 2002
13