Related Party Transactions

12 Months Ended

Dec. 25, 2015

Related Party Transactions [Abstract]

Related Party Transactions

Related Party Transactions

Conrail

Through a limited liability company, CSX and Norfolk Southern Corporation (“NS”) jointly own Conrail. CSX has a 42% economic interest and 50% voting interest in the jointly-owned entity, and NS has the remainder of the economic and voting interests.  Pursuant to the Investments-Equity Method and Joint Venture Topic in the ASC, CSX applies the equity method of accounting to its investment in Conrail.

Conrail owns rail infrastructure and operates for the joint benefit of CSX and NS.  This is known as the shared asset area. Conrail charges fees for right-of-way usage, equipment rentals and transportation, switching and terminal service charges in the shared asset area.  These expenses are included in materials, supplies and other on the consolidated income statements. Future minimum lease payments due to Conrail under the shared asset area agreements are shown in the table below.

(Dollars in Millions)	Conrail Shared
Years	Asset Agreement
2016	$	26
2017	26
2018	26
2019	26
2020	26
Thereafter	98
Total	$	228

Also, included in materials, supplies and other are CSX’s 42% share of Conrail’s income and its amortization of the fair value write-up arising from the acquisition of Conrail and certain other adjustments.  The amortization primarily represents the additional after-tax depreciation expense related to the write-up of Conrail’s fixed assets when the original purchase price, from the 1997 acquisition of Conrail, was allocated based on fair value. This write-up of fixed assets resulted in a difference between CSX's investment in Conrail and its share of Conrail's underlying net equity, which is $353 million as of December 2015.

The following table details the related Conrail amounts included in materials, supplies and other in the Company’s consolidated income statements:

	Fiscal Years
(Dollars in Millions)	2015			2014			2013
Rents, fees and services	$	123		$	124		$	115
Purchase price amortization and other	4			4			4
Equity earnings of Conrail	(33		)	(31		)	(35		)
Total Conrail Expense	$	94		$	97		$	84

NOTE 12.  Related Party Transactions,continued

As required by the Related Party Disclosures Topic in the ASC, the Company has identified amounts below owed to Conrail, or its subsidiaries, representing liabilities under the operating, equipment and shared area agreements with Conrail.  The Company also executed two promissory notes with a subsidiary of Conrail which were included in long-term debt on the consolidated balance sheets. Interest expense from these promissory notes was $6 million, $3 million and $4 million for 2015, 2014 and 2013, respectively.

	December		December
(Dollars in Millions)	2015		2014
Balance Sheet Information:
CSX payable to Conrail	$	65	$	54
Promissory notes payable to Conrail subsidiary
2.89% CSX promissory note due October 2044	73		73
2.89% CSXT promissory note due October 2044	151		151

In October 2014, the Company converted its existing short term payable balance of approximately $125 million for operation of the shared asset area as well as its $23 million, 4.52% note due 2035 and its $73 million, 4.40% note due 2035 plus accrued interest of $3 million, into $224 million, 2.89% notes due 2044.  The transaction was non-cash in nature.

TTX Company

TTX Company ("TTX") is a privately-held corporation engaged in the business of providing its owner-railroads with standardized fleets of intermodal, automotive and general use railcars at time and mileage rates. CSX owns about 20% of TTX's common stock, and the remaining is owned by the other leading North American railroads and their affiliates. CSX's investment in TTX is $443 million and is included in affiliates and other companies in the consolidated balance sheet. Pursuant to the Investments-Equity Method topic in the ASC, CSX applies the equity method of accounting to its investment in TTX.

As required by the Related Party Disclosures Topic in the ASC, the following table discloses amounts related to TTX that are included in equipment and other rents in the Company’s consolidated income statements. Also included below is balance sheet information related to CSX's payable to TTX, which represents car rental liabilities.

	Fiscal Years
(Dollars in Millions)	2015			2014			2013
Income statement information:
Car hire rents	$	218		$	207		$	180
Equity earnings of TTX	(20		)	(21		)	(13		)
Total TTX expense	$	198		$	186		$	167

	December		December
Balance sheet information:	2015		2014
CSX payable to TTX	$	40	$	35