EX-99.2 4 dex992.htm QUARTERLY FLASH DOCUMENT Quarterly Flash Document

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CSX REPORTS HIGHER FOURTH-QUARTER EARNINGS
 
RICHMOND, Va., Jan. 30, 2003—CSX Corporation (NYSE: CSX) today reported fourth quarter net income of $137 million, or 64 cents per share, up from $65 million, or 31 cents a year ago. Fourth quarter 2001 earnings included a litigation provision, which reduced earnings by $37 million, or 17 cents per share.
 
Stronger operating results from surface transportation, which includes CSX’s rail and intermodal units, account for much of the year-over-year quarterly improvement. Surface transportation operating income was $281 million compared to $186 million in 2001, which included the $60 million litigation provision. Adjusting for this provision, operating income would have been $246 million in 2001. The 2002 fourth-quarter operating income has $11 million of net benefits primarily from state and local tax adjustments.
 
In the fourth quarter, solid merchandise, automotive and intermodal revenue gains more than offset an 8% year-to-year decline in coal revenues. Labor expenses were flat compared to a year ago, while lower material and supply costs and Conrail expenses for the quarter more than offset higher depreciation and fuel expenses. Purchased inland transportation costs increased in proportion with the continued success of CSX’s truck to rail modal conversion program.
 
Michael J. Ward, CSX president, noted: “The company regained earnings momentum in the fourth quarter. Our people are providing customers with better service, productivity is rising and costs are lower, and employee safety continues to improve.
 
“We are looking for solid gains in 2003. Our productivity gains and cost reduction efforts throughout the company will continue,” Ward said. “With our pricing programs and modal conversion initiatives, we are looking for revenue gains even in a flat economy. Here in the first quarter, fuel and weather are challenges, but I am confident that we can lessen their impact.”
 
On a consolidated basis, CSX fourth-quarter operating income totaled $318 million versus $221 million, including the litigation provision. Revenues were $2.06 billion compared to $2.01 billion in 2001. These results include CSX Lines, which is being conveyed to the Carlyle Group, and CSX World Terminals.
 
For the full year 2002, CSX net income was $424 million, or $1.99 per share, compared to $293 million, or $1.38 per share in the prior year. 2002 results include the cumulative effect of adopting Statement of Financial Accounting Standards No. 142, “Goodwill and Other Intangible Assets,” in the first quarter which reduced net earnings by $43 million, or 20 cents per share. 2001 results include the litigation provision taken in the fourth quarter, which lowered net earnings by $37 million, or 17 cents per share.
 
CSX Corporation, based in Richmond, Va., operates one of the largest rail networks in the United States and also provides intermodal, container-shipping and international terminal management services. More information about the company is available at its Internet address: www.csx.com.
 
This press release and other statements by the Company contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act with respect to, among other items: projections and estimates of earnings, revenues, cost-savings, expenses, or other financial items; statements of management’s plans, strategies and objectives for future operation, and management’s expectations as to future performance and operations and the time by which objectives will be achieved; statements concerning proposed new products and services; and statements regarding future economic, industry or market conditions or performance. Forward-looking statements are typically identified by words or phrases such as “believe,” “expect,” “anticipate,” “project,” and similar expressions. Forward-looking statements speak only as of the date they are made, and the Company undertakes no obligation to update or revise any forward-looking statement. If the Company does update any forward-looking statement, no inference should be drawn that the Company will make additional updates with respect to that statement or any other forward-looking statements.
 
Forward-looking statements are subject to a number of risks and uncertainties, and actual performance or results could differ materially from that anticipated by these forward-looking statements. Factors that may cause actual results to differ materially from those contemplated by these forward-looking statements include, among others: (i) the Company’s success in implementing its financial and operational initiatives, (ii) changes in domestic or international economic or business conditions, including those affecting the rail industry (such as the impact of industry competition, conditions, performance and consolidation); (iii) legislative or regulatory changes; and (iv) the outcome of claims and litigation involving or affecting the Company. Other important assumptions and factors that could cause actual results to differ materially from those in the forward-looking statements are specified in the Company’s SEC reports, accessible on the SEC’s website at www.sec.gov and the Company’s website at www.csx.com.

CSX CORPORATION AND SUBSIDIARIES
     
CONSOLIDATED STATEMENT OF EARNINGS
   
Quarterly Flash
(Millions of Dollars, Except Per Share Amounts)
     

 
    
Quarters Ended
     
Years Ended
    
Dec. 27, 2002
   
Dec. 28, 2001
     
Dec. 27, 2002
     
Dec. 28, 2001
    
(Unaudited)
Revenue and Expense
                                
Operating Revenue
   
$
2,060
   
$
2,009
 
   
$
8,152
 
   
$
8,110
Operating Expense
   
 
1,742
   
 
1,728
 
   
 
7,025
 
   
 
7,093
New Orleans Litigation Provision
   
 
—  
   
 
60
 
   
 
—  
 
   
 
60
    
  
  
  
Total Operating Expense
   
 
1,742
   
 
1,788
 
   
 
7,025
 
   
 
7,153
    
  
  
  
Operating Income
   
 
318
   
 
221
 
   
 
1,127
 
   
 
957
Other Income (Expense)
   
 
—  
   
 
(3
)
   
 
41
 
   
 
9
Interest Expense
   
 
107
   
 
121
 
   
 
445
 
   
 
518
    
  
  
  
Earnings
                                
Earnings Before Income Taxes and Cumulative Effect of Accounting Change
   
 
211
   
 
97
 
   
 
723
 
   
 
448
Income Tax Expense
   
 
74
   
 
32
 
   
 
256
 
   
 
155
    
  
  
  
Earnings Before Cumulative Effect of Accounting Change
   
 
137
   
 
65
 
   
 
467
 
   
 
293
Cumulative Effect of Accounting Change—Net of Tax
   
 
—  
   
 
—  
 
   
 
(43
)
   
 
—  
    
  
  
  
Net Earnings
   
$
137
   
$
65
 
   
$
424
 
   
$
293
    
  
  
  
Per Common Share
                                
Earnings Per Share, Assuming Dilution:
                                
Before Cumulative Effect of Accounting Change
   
$
0.64
   
$
0.31
 
   
$
2.19
 
   
$
1.38
Cumulative Effect of Accounting Change
   
 
—  
   
 
—  
 
   
 
(0.20
)
   
 
—  
    
  
  
  
Net Earnings
   
$
0.64
   
$
0.31
 
   
$
1.99
 
   
$
1.38
    
  
  
  
Average Diluted Common Shares Outstanding (Thousands)
   
 
213,690
   
 
212,699
 
   
 
213,512
 
   
 
212,409
    
  
  
  
Cash Dividends Paid Per Common Share
   
$
0.10
   
$
0.10
 
   
$
0.40
 
   
$
0.80
    
  
  
  
 
Notes to Consolidated Financial Statements
 
(1)
 
In 2001, Statement of Financial Accounting Standard No. 142 (SFAS 142), “Goodwill and Other Intangible Assets” was issued. Under the provisions of SFAS 142, goodwill and other indefinite lived intangible assets are no longer amortized but are reviewed for impairment on a periodic basis. The Company adopted this standard in the first quarter of 2002 and incurred a charge of $83 million, $43 million after tax and consideration of minority interest, 20 cents per share, as a cumulative effect of an accounting change, which represents the difference between book value and the fair value of indefinite lived intangible assets. The indefinite lived intangible assets are permits and licenses that the company holds relating to a proposed pipeline to transfer natural gas from Alaska’s north slope to the port in Valdez, Alaska. Adoption of SFAS 142 will not have a material effect on future earnings.
(2)
 
CSX recorded a provision 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, $37 million after tax, 17 cents per share.
(3)
 
On Dec. 17, 2002, CSX announced that it had reached an agreement to convey its domestic container-shipping subsidiary, CSX Lines, LLC, to a venture for $300 million ($240 million of cash and $60 million of securities). CSX expects this transaction to close in the first quarter of 2003. The assets and liabilities of CSX Lines, LLC, that are to be conveyed under this agreement are classified as domestic container assets and liabilities held for disposition on the statement of financial position as of Dec. 27, 2002, in accordance with the provisions of SFAS 144, “Accounting for the Impairment or Disposal of Long-Lived Assets.”

2

CSX CORPORATION AND SUBSIDIARIES
     
CONSOLIDATED STATEMENT OF CASH FLOWS
   
Quarterly Flash
(Millions of Dollars)
     

 
    
Years Ended
  
    
Dec. 27, 2002
     
Dec. 28, 2001
  
    
(Unaudited)
         
Operating Activities
                  
Net Earnings
   
$
424
 
   
$
293
 
Adjustments to Reconcile Net Earnings to Net Cash Provided:
                  
Depreciation
   
 
649
 
   
 
622
 
Deferred Income Taxes
   
 
172
 
   
 
197
 
Cumulative Effect of Accounting Change—Net of Tax
   
 
43
 
   
 
—  
 
Equity in Conrail Earnings—Net
   
 
(23
)
   
 
(17
)
Other Operating Activities
   
 
(85
)
   
 
4
 
Changes in Operating Assets and Liabilities:
                  
Accounts Receivable
   
 
30
 
   
 
7
 
Other Current Assets
   
 
23
 
   
 
(17
)
Accounts Payable
   
 
(83
)
   
 
(51
)
Other Current Liabilities
   
 
(23
)
   
 
(211
)
    
  
Net Cash Provided by Operating Activities
   
 
1,127
 
   
 
827
 
    
  
Investing Activities
                  
Property Additions
   
 
(1,080
)
   
 
(930
)
Short-term Investments—Net
   
 
350
 
   
 
(51
)
Other Investing Activities
   
 
(45
)
   
 
16
 
    
  
Net Cash Used by Investing Activities
   
 
(775
)
   
 
(965
)
    
  
Financing Activities
                  
Short-term Debt—Net
   
 
140
 
   
 
(524
)
Long-term Debt Issued
   
 
748
 
   
 
962
 
Long-term Debt Repaid
   
 
(1,159
)
   
 
(266
)
Dividends Paid
   
 
(86
)
   
 
(171
)
Other Financing Activities
   
 
(5
)
   
 
14
 
    
  
Net Cash (Used) Provided by Financing Activities
   
 
(362
)
   
 
15
 
    
  
Cash, Cash Equivalents and Short-Term Investments
                  
Net Decrease in Cash and Cash Equivalents
   
 
(10
)
   
 
(123
)
Cash and Cash Equivalents at Beginning of Period
   
 
137
 
   
 
260
 
    
  
Cash and Cash Equivalents at End of Period
   
 
127
 
   
 
137
 
Short-Term Investments at End of Period
   
 
137
 
   
 
481
 
    
  
Cash, Cash Equivalents and Short-Term Investments at End of Period
   
$
264
 
   
$
618
 
    
  

3

CSX CORPORATION AND SUBSIDIARIES
     
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
   
Quarterly Flash
(Millions of Dollars)
     

 
    
Dec. 27, 2002
     
Dec. 28, 2001
  
    
(Unaudited)
         
Assets
                  
Current Assets
                  
Cash, Cash Equivalents and Short-term Investments
   
$
264
 
   
$
618
 
Accounts Receivable, Net
   
 
799
 
   
 
871
 
Materials and Supplies
   
 
180
 
   
 
191
 
Deferred Income Taxes
   
 
128
 
   
 
162
 
Other Current Assets
   
 
155
 
   
 
198
 
Domestic Container Assets Held for Disposition
   
 
263
 
   
 
244
 
    
  
Total Current Assets
   
 
1,789
 
   
 
2,284
 
Properties—Net
   
 
13,286
 
   
 
12,847
 
Investment in Conrail
   
 
4,653
 
   
 
4,655
 
Affiliates and Other Companies
   
 
381
 
   
 
297
 
Other Long-term Assets
   
 
842
 
   
 
718
 
    
  
Total Assets
   
$
20,951
 
   
$
20,801
 
    
  
Liabilities
                  
Current Liabilities
                  
Accounts Payable
   
$
802
 
   
$
905
 
Labor and Fringe Benefits Payable
   
 
457
 
   
 
409
 
Casualty, Environmental and Other Reserves
   
 
246
 
   
 
248
 
Current Maturities of Long-term Debt
   
 
391
 
   
 
1,044
 
Short-term Debt
   
 
143
 
   
 
225
 
Income and Other Taxes Payable
   
 
144
 
   
 
100
 
Other Current Liabilities
   
 
167
 
   
 
284
 
Domestic Container Liabilities Held for Disposition
   
 
104
 
   
 
92
 
    
  
Total Current Liabilities
   
 
2,454
 
   
 
3,307
 
Casualty, Environmental and Other Reserves
   
 
604
 
   
 
687
 
Long-term Debt
   
 
6,519
 
   
 
5,839
 
Deferred Income Taxes
   
 
3,567
 
   
 
3,621
 
Other Long-term Liabilities
   
 
1,566
 
   
 
1,227
 
    
  
Total Liabilities
   
 
14,710
 
   
 
14,681
 
    
  
Shareholders’ Equity
                  
Common Stock, $1 Par Value
   
 
215
 
   
 
214
 
Other Capital
   
 
1,547
 
   
 
1,492
 
Retained Earnings
   
 
4,797
 
   
 
4,459
 
Accumulated Other Comprehensive Loss
   
 
(318
)
   
 
(45
)
    
  
Total Shareholders’ Equity
   
 
6,241
 
   
 
6,120
 
    
  
Total Liabilities and Shareholders’ Equity
   
$
20,951
 
   
$
20,801
 
    
  

4

CSX CORPORATION AND SUBSIDIARIES
     
CONSOLIDATED FINANCIAL HIGHLIGHTS FROM CONTINUING OPERATIONS (Unaudited)
   
Quarterly Flash
(Millions of Dollars, Except Per Share Amounts) (All Per Share Amounts Assume Dilution)
     
    
Revenue
   
Operating Income
   
Earnings Per Share
    
2002
   
2001
   
2000
   
2002
   
2001(2)
   
2000
   
2002(1)
   
2001(2)
   
2000
First Quarter
   
$
1,964
   
$
2,025
   
$
2,034
   
$
212
   
$
189
   
$
174
   
$
.12
   
$
.10
   
$
.12
Second Quarter
   
 
2,073
   
 
2,057
   
 
2,071
   
 
321
   
 
265
   
 
189
   
 
.63
   
 
.51
   
 
.23
Third Quarter
   
 
2,055
   
 
2,019
   
 
2,039
   
 
276
   
 
282
   
 
224
   
 
.60
   
 
.47
   
 
.28
Fourth Quarter
   
 
2,060
   
 
2,009
   
 
2,047
   
 
318
   
 
221
   
 
218
   
 
.64
   
 
.31
   
 
.26
    
  
  
  
  
  
                    
Year
   
$
8,152
   
$
8,110
   
$
8,191
   
$
1,127
   
$
957
   
$
805
   
$
1.99
   
$
1.38
   
$
0.88
    
  
  
  
  
  
  
  
  
(1)
 
First quarter 2002 includes a reduction of $43 million after tax, 20 cents per share, as a result of the cumulative effect of an accounting change for indefinite lived intangible assets.
(2)
 
Fourth quarter 2001 includes a charge of $60 million, $37 million after tax, 17 cents per share, for the settlement of the New Orleans litigation.
 
EBITDA FROM CONTINUING OPERATIONS(1) (Unaudited)
(Millions of Dollars)
 
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. This is not considered to be better information than is available in the Company’s publicly available reports filed with the SEC and does not conform with generally accepted accounting principles. CSX owns a 42% 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 calculation of EBITDA combines CSX and Conrail financial data for analytical purposes only and is not intended to suggest that CSX has control over Conrail’s operations.
 
    
CSX Consolidated
     
Conrail (42%)
   
Purchase Price Amortization, Eliminations & Reclassifications
     
Combined EBITDA
    
2002
   
2001
     
2002
   
2001
   
2002
     
2001
     
2002
   
2001
    
Quarters Ended Dec. 27, 2002, and Dec. 28, 2001
Operating Income(1)
   
$
318
   
$
281
 
   
$
26
   
$
32
   
$
(35
)
   
$
(30
)
   
$
309
   
$
283
Depreciation and Amortization
   
 
168
   
 
151
 
   
 
33
   
 
34
   
 
28
 
   
 
23
 
   
 
229
   
 
208
Other Income(2)
   
 
1
   
 
(6
)
   
 
7
   
 
12
   
 
4
 
   
 
2
 
   
 
12
   
 
8
    
  
  
  
  
  
  
  
Combined EBITDA
   
$
487
   
$
426
 
   
$
66
   
$
78
   
$
(3
)
   
$
(5
)
   
$
550
   
$
499
    
  
  
  
  
  
  
  
    
Years Ended Dec. 27, 2002, and Dec. 28, 2001
Operating Income(1)
   
$
1,127
   
$
1,017
 
   
$
114
   
$
111
   
$
(110
)
   
$
(106
)
   
$
1,131
   
$
1,022
Depreciation and Amortization
   
 
638
   
 
613
 
   
 
135
   
 
136
   
 
91
 
   
 
89
 
   
 
864
   
 
838
Other Income(2)
   
 
40
   
 
(4
)
   
 
30
   
 
34
   
 
11
 
   
 
9
 
   
 
81
   
 
39
    
  
  
  
  
  
  
  
Combined EBITDA
   
$
1,805
   
$
1,626
 
   
$
279
   
$
281
   
$
(8
)
   
$
(8
)
   
$
2,076
   
$
1,899
    
  
  
  
  
  
  
  
(1)
 
CSX Consolidated operating income for 2001 excludes the New Orleans litigation provision of $60 million.
(2)
 
Other income excludes interest income and losses from accounts receivable sold.

5

CSX CORPORATION AND SUBSIDIARIES
     
FINANCIAL MEASURES (Unaudited)
   
Quarterly Flash
      
      
Years Ended
  
      
Dec. 27, 2002
       
Dec. 28,
2001
  
Working Capital Deficit (Millions of Dollars)
     
$
665
 
     
$
1,023
 
Current Ratio
     
 
0.7
 
     
 
0.7
 
Commercial Paper and Equivalents—Short-Term (Millions of Dollars)
     
$
143
 
     
$
225
 
Debt Ratio(1)
     
 
52
%
     
 
52
%
All-in Debt Ratio(2)
     
 
57
%
     
 
58
%
12-Month Rolling Return on Assets
     
 
2.0
%
     
 
1.4
%
12-Month Rolling Return on Equity
     
 
6.9
%
     
 
4.8
%
(1)
 
Adjusted to include 42% of Conrail obligations.
(2)
 
Adjusted to include off-balance sheet financing, leases, and 42% of Conrail obligations.
 
OTHER INCOME (EXPENSE)(1) (Unaudited)
 
      
Quarters Ended
       
Years Ended
  
      
Dec. 27,
2002
       
Dec. 28,
2001
       
Dec. 27,
2002
       
Dec. 28,
2001
  
      
(Millions of Dollars)
  
Interest Income
     
$
5
 
     
$
10
 
     
$
27
 
     
$
47
 
Income from Real Estate and Resort Operations(2)
     
 
20
 
     
 
27
 
     
 
108
 
     
 
101
 
Net Losses from Accounts Receivable Sold
     
 
(6
)
     
 
(7
)
     
 
(26
)
     
 
(34
)
Minority Interest
     
 
(11
)
     
 
(12
)
     
 
(42
)
     
 
(39
)
Equity Income (Loss) of Other Affiliates
     
 
2
 
     
 
(7
)
     
 
(3
)
     
 
(27
)
Miscellaneous
     
 
(10
)
     
 
(14
)
     
 
(23
)
     
 
(39
)
      
    
    
    
Total
     
$
—
 
     
$
(3
)
     
$
41
 
     
$
9
 
      
    
    
    
(1)
 
Prior periods have been reclassified to conform to current presentation.
(2)
 
Gross revenue from real estate and resort operations was $56 million and $261 million for the quarter and year ended Dec. 27, 2002, respectively, and $67 million and $254 million for the quarter and year ended Dec. 28, 2001, respectively.
 
EMPLOYEE COUNTS BY SEGMENT—ESTIMATED
 
    
2002
   
2001
    
Nov.
   
Aug.
   
May
   
Feb.
   
Nov.
   
Aug.
   
May
   
Feb.
Surface Transportation
                                        
Rail
   
33,271
   
33,912
   
33,878
   
32,953
   
34,207
   
34,850
   
35,569
   
35,529
Intermodal
   
1,124
   
1,110
   
1,077
   
1,087
   
1,110
   
1,124
   
1,122
   
1,121
Technology and Corporate
   
895
   
899
   
883
   
867
   
884
   
878
   
869
   
860
    
  
  
  
  
  
  
  
Total Surface Transportation
   
35,290
   
35,921
   
35,838
   
34,907
   
36,201
   
36,852
   
37,560
   
37,510
    
  
  
  
  
  
  
  
Marine Services
                                        
Domestic Container Shipping
   
1,625
   
1,621
   
1,614
   
1,603
   
1,601
   
1,601
   
1,605
   
1,600
International Terminals
   
1,238
   
1,242
   
1,264
   
1,275
   
1,290
   
1,307
   
1,304
   
1,312
    
  
  
  
  
  
  
  
Total Marine Services
   
2,863
   
2,863
   
2,878
   
2,878
   
2,891
   
2,908
   
2,909
   
2,912
    
  
  
  
  
  
  
  
Other
   
1,640
   
1,868
   
1,639
   
1,131
   
1,621
   
1,799
   
1,679
   
1,113
    
  
  
  
  
  
  
  
Total
   
39,793
   
40,652
   
40,355
   
38,916
   
40,713
   
41,559
   
42,148
   
41,535
    
  
  
  
  
  
  
  

6

CSX CORPORATION AND SUBSIDIARIES
     
BUSINESS SEGMENTS (Unaudited)
   
Quarterly Flash
(Millions of Dollars)
     

 
    
Surface Transportation
     
Marine Services
     
Eliminations/Other(1)
     
Total
  
    
2002
     
2001
     
2002
     
2002(2)
     
2002
     
2001(2)
     
2002
     
2001
  
    
Quarters Ended Dec. 27, 2002, and Dec. 28, 2001
  
Operating Revenue
   
$
1,815
 
   
$
1,784
 
   
$
249
 
   
$
229
 
   
$
(4
)
   
$
(4
)
   
$
2,060
 
   
$
2,009
 
Operating Expense
                                                                        
Labor and Fringe
   
 
659
 
   
 
661
 
   
 
72
 
   
 
69
 
   
 
1
 
   
 
2
 
   
 
732
 
   
 
732
 
Materials, Supplies and Other
   
 
311
 
   
 
336
 
   
 
83
 
   
 
63
 
   
 
4
 
   
 
5
 
   
 
398
 
   
 
404
 
Conrail Operating Fees, Rents and Services
   
 
74
 
   
 
85
 
   
 
—  
 
   
 
—  
 
   
 
—  
 
   
 
—  
 
   
 
74
 
   
 
85
 
Building and Equipment Rent
   
 
132
 
   
 
134
 
   
 
9
 
   
 
14
 
   
 
(3
)
   
 
1
 
   
 
138
 
   
 
149
 
Inland Transportation
   
 
73
 
   
 
63
 
   
 
34
 
   
 
26
 
   
 
(4
)
   
 
(4
)
   
 
103
 
   
 
85
 
Depreciation
   
 
161
 
   
 
142
 
   
 
5
 
   
 
9
 
   
 
2
 
   
 
—  
 
   
 
168
 
   
 
151
 
Fuel
   
 
124
 
   
 
117
 
   
 
19
 
   
 
14
 
   
 
—  
 
   
 
—  
 
   
 
143
 
   
 
131
 
Miscellaneous
   
 
—  
 
   
 
—  
 
   
 
(3
)
   
 
2
 
   
 
(11
)
   
 
(11
)
   
 
(14
)
   
 
(9
)
New Orleans Litigation Provision
   
 
—  
 
   
 
60
 
   
 
—  
 
   
 
—  
 
   
 
—  
 
   
 
—  
 
            
 
60
 
    
  
  
  
  
  
  
  
Total Operating Expense
   
 
1,534
 
   
 
1,598
 
   
 
219
 
   
 
197
 
   
 
(11
)
   
 
(7
)
   
 
1,742
 
   
 
1,788
 
    
  
  
  
  
  
  
  
Operating Income
   
$
281
 
   
$
186
 
   
$
30
 
   
$
32
 
   
$
7
 
   
$
3
 
   
$
318
 
   
$
221
 
Operating Ratio
   
 
84.5
%
   
 
89.6
%
   
 
88.0
%
   
 
86.0
%
                                    
Adjusted Operating Income(3)
   
$
281
 
   
$
246
 
   
$
30
 
   
$
32
 
   
$
7
 
   
$
3
 
   
$
318
 
   
$
281
 
Adjusted Operating Ratio(3)
   
 
84.5
%
   
 
86.2
%
   
 
88.0
%
   
 
86.0
%
                                    
    
  
  
  
  
  
  
  
    
Years Ended Dec. 27, 2002, and Dec. 28, 2001
  
Operating Revenue
   
$
7,183
 
   
$
7,194
 
   
$
993
 
   
$
915
 
   
$
(24
)
   
$
1
 
   
$
8,152
 
   
$
8,110
 
Operating Expense
                                                                        
Labor and Fringe
   
 
2,608
 
   
 
2,650
 
   
 
286
 
   
 
275
 
   
 
3
 
   
 
9
 
   
 
2,897
 
   
 
2,934
 
Materials, Supplies and Other
   
 
1,380
 
   
 
1,385
 
   
 
320
 
   
 
271
 
   
 
13
 
   
 
33
 
   
 
1,713
 
   
 
1,689
 
Conrail Operating Fee, Rent and Services
   
 
322
 
   
 
336
 
   
 
—  
 
   
 
—  
 
   
 
—  
 
   
 
—  
 
   
 
322
 
   
 
336
 
Building and Equipment Rent
   
 
556
 
   
 
565
 
   
 
54
 
   
 
60
 
   
 
(9
)
   
 
1
 
   
 
601
 
   
 
626
 
Inland Transportation
   
 
268
 
   
 
245
 
   
 
126
 
   
 
105
 
   
 
(24
)
   
 
(13
)
   
 
370
 
   
 
337
 
Depreciation
   
 
605
 
   
 
581
 
   
 
26
 
   
 
32
 
   
 
7
 
   
 
—  
 
   
 
638
 
   
 
613
 
Fuel
   
 
449
 
   
 
525
 
   
 
66
 
   
 
60
 
   
 
—  
 
   
 
—  
 
   
 
515
 
   
 
585
 
Miscellaneous
   
 
—  
 
   
 
—  
 
   
 
8
 
   
 
9
 
   
 
(39
)
   
 
(36
)
   
 
(31
)
   
 
(27
)
New Orleans Litigation Provision
   
 
—  
 
   
 
60
 
   
 
—  
 
   
 
—  
 
   
 
—  
 
   
 
—  
 
   
 
—  
 
   
 
60
 
    
  
  
  
  
  
  
  
Total Operating Expense
   
 
6,188
 
   
 
6,347
 
   
 
886
 
   
 
812
 
   
 
(49
)
   
 
(6
)
   
 
7,025
 
   
 
7,153
 
    
  
  
  
  
  
  
  
Operating Income
   
$
995
 
   
$
847
 
   
$
107
 
   
$
103
 
   
$
25
 
   
$
7
 
   
$
1,127
 
   
$
957
 
Operating Ratio
   
 
86.1
%
   
 
88.2
%
   
 
89.2
%
   
 
88.7
%
                                    
Adjusted Operating Income(3)
   
$
995
 
   
$
907
 
   
$
107
 
   
$
103
 
   
$
25
 
   
$
7
 
   
$
1,127
 
   
$
1,017
 
Adjusted Operating Ratio(3)
   
 
86.1
%
   
 
87.4
%
   
 
89.2
%
   
 
88.7
%
                                    
    
  
  
  
  
  
  
  
(1)
 
Eliminations/Other consists of the following: (a) the elimination of intercompany revenue and expense between Surface Transportation and Marine Services, (b) the reclassification of Marine Services minority interest expense and (c) other unallocated items.
(2)
 
Prior periods have been reclassified to conform to the current presentation.
(3)
 
Adjusted to exclude the New Orleans litigation provision of $60 million in 2001 in the Surface Transportation segment.

7

CSX CORPORATION AND SUBSIDIARIES
     
SURFACE TRANSPORTATION OPERATING RESULTS (Unaudited)
   
Quarterly Flash
(Millions of Dollars)
     
    
Rail
     
Intermodal
     
Surface Transportation
  
    
2002
     
2001
     
2002
     
2001
     
2002
     
2001
  
    
Quarters Ended Dec. 27, 2002, and Dec. 28, 2001
  
Operating Revenue
   
$
1,506
 
   
$
1,499
 
   
$
309
 
   
$
285
 
   
$
1,815
 
   
$
1,784
 
Operating Expense
                                                      
Labor and Fringe
   
 
641
 
   
 
644
 
   
 
18
 
   
 
17
 
   
 
659
 
   
 
661
 
Materials, Supplies and Other
   
 
263
 
   
 
291
 
   
 
48
 
   
 
45
 
   
 
311
 
   
 
336
 
Conrail Operating Fees, Rents and Services
   
 
74
 
   
 
85
 
   
 
—  
 
   
 
—  
 
   
 
74
 
   
 
85
 
Building and Equipment Rent
   
 
99
 
   
 
101
 
   
 
33
 
   
 
33
 
   
 
132
 
   
 
134
 
Inland Transportation
   
 
(94
)
   
 
(91
)
   
 
167
 
   
 
154
 
   
 
73
 
   
 
63
 
Depreciation
   
 
154
 
   
 
134
 
   
 
7
 
   
 
8
 
   
 
161
 
   
 
142
 
Fuel
   
 
124
 
   
 
117
 
   
 
—  
 
   
 
—  
 
   
 
124
 
   
 
117
 
New Orleans Litigation Provision
   
 
—  
 
   
 
60
 
   
 
—  
 
   
 
—  
 
   
 
—  
 
   
 
60
 
    
  
  
  
  
  
Total Operating Expense
   
 
1,261
 
   
 
1,341
 
   
 
273
 
   
 
257
 
   
 
1,534
 
   
 
1,598
 
    
  
  
  
  
  
Operating Income
   
$
245
 
   
$
158
 
   
$
36
 
   
$
28
 
   
$
281
 
   
$
186
 
Operating Ratio
   
 
83.7
%
   
 
89.5
%
   
 
88.3
%
   
 
90.2
%
   
 
84.5
%
   
 
89.6
%
Adjusted Operating Income(1)
   
$
245
 
   
$
218
 
   
$
36
 
   
$
28
 
   
$
281
 
   
$
246
 
Adjusted Operating Ratio(1)
   
 
83.7
%
   
 
85.5
%
   
 
88.3
%
   
 
90.2
%
   
 
84.5
%
   
 
86.2
%
    
  
  
  
  
  
    
Years Ended Dec. 27, 2002, and Dec. 28, 2001
  
Operating Revenue
   
$
6,003
 
   
$
6,082
 
   
$
1,180
 
   
$
1,112
 
   
$
7,183
 
   
$
7,194
 
Operating Expense
                                                      
Labor and Fringe
   
 
2,541
 
   
 
2,585
 
   
 
67
 
   
 
65
 
   
 
2,608
 
   
 
2,650
 
Materials, Supplies and Other
   
 
1,201
 
   
 
1,212
 
   
 
179
 
   
 
173
 
   
 
1,380
 
   
 
1,385
 
Conrail Operating Fees, Rents and Services
   
 
322
 
   
 
336
 
   
 
—  
 
   
 
—  
 
   
 
322
 
   
 
336
 
Building and Equipment Rent
   
 
425
 
   
 
442
 
   
 
131
 
   
 
123
 
   
 
556
 
   
 
565
 
Inland Transportation
   
 
(365
)
   
 
(371
)
   
 
633
 
   
 
616
 
   
 
268
 
   
 
245
 
Depreciation
   
 
576
 
   
 
550
 
   
 
29
 
   
 
31
 
   
 
605
 
   
 
581
 
Fuel
   
 
449
 
   
 
525
 
   
 
—  
 
   
 
—  
 
   
 
449
 
   
 
525
 
New Orleans Litigation Provision
   
 
—  
 
   
 
60
 
   
 
—  
 
   
 
—  
 
   
 
—  
 
   
 
60
 
    
  
  
  
  
  
Total Operating Expense
   
 
5,149
 
   
 
5,339
 
   
 
1,039
 
   
 
1,008
 
   
 
6,188
 
   
 
6,347
 
    
  
  
  
  
  
Operating Income
   
$
854
 
   
$
743
 
   
$
141
 
   
$
104
 
   
$
995
 
   
$
847
 
Operating Ratio
   
 
85.8
%
   
 
87.8
%
   
 
88.1
%
   
 
90.6
%
   
 
86.1
%
   
 
88.2
%
Adjusted Operating Income(1)
   
$
854
 
   
$
803
 
   
$
141
 
   
$
104
 
   
$
995
 
   
$
907
 
Adjusted Operating Ratio(1)
   
 
85.8
%
   
 
86.8
%
   
 
88.1
%
   
 
90.6
%
   
 
86.1
%
   
 
87.4
%
    
  
  
  
  
  
(1)
 
Adjusted to exclude the New Orleans litigation provision of $60 million in 2001 in the Rail segment.

8

CSX CORPORATION AND SUBSIDIARIES
     
SURFACE TRANSPORTATION OPERATING RESULTS (continued)
   
Quarterly Flash
      

Surface Transportation operating expenses decreased by $4 million compared to the fourth quarter of 2001 (excluding 2001 litigation provision of $60 million).
 
•
 
Labor and Fringe decreased by $2 million versus a year ago, which includes $6 million of severance and other costs primarily related to the December 2002 workforce reductions. General wage and benefit inflation was more than offset by reduction in overall employment levels of approximately 900 employees compared to prior year.
•
 
Materials, Supplies and Other decreased by $25 million compared to prior year. The driving force behind the improvement was $17 million of state and local tax adjustments to reduce estimated liabilities to actual assessments. In addition, freight loss and damage expenses and other safety-related costs were reduced, as were other expenses as a result of improved cost control.
•
 
Conrail Operating Fee, Rent and Services improved by $11 million year-over-year due primarily to continued cost and activity reductions.
•
 
Building & Equipment Rent in the fourth quarter decreased by $2 million versus prior year period primarily due to a further reduction in car hire expense.
•
 
Inland Transportation increased by $10 million versus prior year fourth quarter, which is a direct result of increased intermodal volumes. Foreign linehaul expenses increased by $4 million as transcontinental Intermodal traffic volumes improved. In addition, Intermodal trucking expense increased by $5 million also due to increased intermodal volumes.
•
 
Depreciation increased by $19 million versus fourth quarter 2001 primarily related to increased capital expenditures in the second half of the year.
•
 
Fuel expenses increased by $7 million for the quarter. Average price per gallon increased by 3 cents, or $5 million in total.
 
RAIL OPERATING STATISTICS(1)
 
    
Fourth Quarter
     
Year
  
    
2002
     
2001
       
%Change
     
2002
     
2001
     
%Change
  
Coal (Millions of Tons)
                                            
Domestic:
                                            
Utility
   
34.0
 
   
34.9
 
     
(3
)%
   
133.4
 
   
137.2
 
   
(3
)%
Other
   
6.5
 
   
7.9
 
     
(18
)
   
24.6
 
   
30.6
 
   
(20
)
    
  
    
  
  
  
Total Domestic
   
40.5
 
   
42.8
 
     
(5
)
   
158.0
 
   
167.8
 
   
(6
)
Export
   
1.6
 
   
2.6
 
     
(38
)
   
9.3
 
   
12.7
 
   
(27
)
    
  
    
  
  
  
Total
   
42.1
 
   
45.4
 
     
(7
)
   
167.3
 
   
180.5
 
   
(7
)
    
  
    
  
  
  
Revenue Ton-Miles (Billions)
                                            
Merchandise
   
31.2
 
   
30.2
 
     
3
 
   
125.5
 
   
125.6
 
   
—  
 
Automotive
   
2.5
 
   
2.3
 
     
9
 
   
9.3
 
   
8.7
 
   
7
 
Coal
   
18.0
 
   
20.3
 
     
(11
)
   
72.4
 
   
79.8
 
   
(9
)
Intermodal
   
5.3
 
   
5.2
 
     
2
 
   
21.0
 
   
20.4
 
   
3
 
    
  
    
  
  
  
Total
   
57.0
 
   
58.0
 
     
(2
)
   
228.2
 
   
234.5
 
   
(3
)
    
  
    
  
  
  
Gross Ton-Miles(2) (Billions)
                                            
Total
   
119.2
 
   
117.0
 
     
2
 
   
469.4
 
   
473.1
 
   
(1
)
    
  
    
  
  
  
Safety Statistics
                                            
FRA Reportable Injuries
   
138
 
   
175
 
     
21
 
   
620
 
   
804
 
   
23
 
Cumulative FRA Injury Frequency (Per 100 Employees)
   
1.82
 
   
2.26
 
     
19
 
   
1.94
 
   
2.44
 
   
20
 
FRA Train Derailments
   
97
 
   
84
 
     
(15
)
   
319
 
   
380
 
   
16
 
    
  
    
  
  
  
Inventory
                                            
Average Total Cars-On-Line
   
227,492
 
   
234,770
 
     
3
 
   
229,609
 
   
240,054
 
   
4
 
    
  
    
  
  
  
Velocity
                                            
Average, All Trains (Miles Per Hour)
   
22.4
 
   
22.6
 
     
(1
)
   
22.5
 
   
21.7
 
   
4
 
    
  
    
  
  
  
Crews
                                            
Average Recrews (Per Day)
   
31
 
   
23
 
     
(35
)
   
26
 
   
28
 
   
7
 
    
  
    
  
  
  
Yard/Terminal
                                            
Average System Dwell Time (Hours)
   
24.2
 
   
23.6
 
     
(3
)
   
23.2
 
   
24.5
 
   
5
 
On -Time Originations (Plus 2 Hours)
   
89.6
%
   
91.4
%
     
(2
)
   
91.2
%
   
88.1
%
   
4
 
    
  
    
  
  
  
Locomotives
                                            
Average Setback Hours (Per Day)
   
13
 
   
20
 
     
35
%
   
11
 
   
39
 
   
72
%
    
  
    
  
  
  
(1)
 
Amounts for 2002 are estimated.
(2)
 
Amounts include locomotive gross ton-miles.
 
SURFACE TRANSPORTATION FUEL STATISTICS
 
    
Fourth Quarter
   
Year
    
2002
     
2001
   
2002
   
2001
Diesel No. 2:
                              
Estimated Fuel Consumption (Millions of Gallons)
   
 
146.2
 
   
 
144.7
   
 
572.2
   
 
580.4
Price Per Gallon (Dollars)
   
$
0.8416
 
   
$
0.8074
   
$
0.7838
   
$
0.9042
Impact of Year-to-Year Price Variance on Operating Expense (Millions of Dollars)
   
$
(5
)
          
$
69
       
    
  
  
  

9

CSX CORPORATION AND SUBSIDIARIES
     
SURFACE TRANSPORTATION TRAFFIC AND REVENUE(1)
   
Quarterly Flash
Loads (Thousands); Revenue (Millions of Dollars)
     
    
Fourth Quarter Loads
     
Fourth Quarter Revenue
  
    
2002
   
2001
     
% Change
     
2002
   
2001
     
% Change
  
Merchandise
                                          
Phosphates and Fertilizers
   
112
   
116
     
(3
)%
   
$
79
   
$
79
     
—  
%
Metals
   
79
   
74
     
7
 
   
 
99
   
 
91
     
9
 
Food and Consumer
   
40
   
41
     
(2
)
   
 
56
   
 
55
     
2
 
Paper and Forest
   
117
   
115
     
2
 
   
 
158
   
 
151
     
5
 
Agricultural
   
93
   
92
     
1
 
   
 
127
   
 
124
     
2
 
Chemicals
   
122
   
119
     
3
 
   
 
226
   
 
210
     
8
 
Minerals
   
22
   
22
     
—  
 
   
 
34
   
 
33
     
3
 
Emerging Markets
   
101
   
108
     
(6
)
   
 
96
   
 
94
     
2
 
    
  
    
  
  
    
    
686
   
687
     
—  
 
   
 
875
   
 
837
     
5
 
Automotive
   
137
   
131
     
5
 
   
 
219
   
 
203
     
8
 
Coal, Coke and Iron Ore
                                          
Coal
   
395
   
431
     
(8
)
   
 
386
   
 
423
     
(9
)
Coke
   
8
   
8
     
—  
 
   
 
10
   
 
10
     
—  
 
Iron Ore
   
10
   
8
     
25
 
   
 
5
   
 
5
     
—  
 
    
  
    
  
  
    
    
413
   
447
     
(8
)
   
 
401
   
 
438
     
(8
)
Other
   
—  
   
—  
     
—  
 
   
 
11
   
 
21
     
(48
)
    
  
    
  
  
    
Total Rail
   
1,236
   
1,265
     
(2
)
   
 
1,506
   
 
1,499
     
—  
 
    
  
    
  
  
    
Intermodal
                                          
Domestic
   
268
   
241
     
11
 
   
 
198
   
 
168
     
18
 
International
   
267
   
268
     
—  
 
   
 
109
   
 
112
     
(3
)
Other
   
—  
   
—  
     
—  
 
   
 
2
   
 
5
     
(60
)
    
  
    
  
  
    
Total Intermodal
   
535
   
509
     
5
 
   
 
309
   
 
285
     
8
 
    
  
    
  
  
    
Total Surface Transportation
   
1,771
   
1,774
     
—  
%
   
$
1,815
   
$
1,784
     
2
%
    
  
    
  
  
    
    
Year Loads
     
Year Revenue
  
    
2002
   
2001
     
% Change
     
2002
   
2001
     
% Change
  
Merchandise
                                          
Phosphates and Fertilizer
   
463
   
441
     
5
%
   
$
324
   
$
306
     
6
%
Metals
   
319
   
319
     
—  
 
   
 
401
   
 
395
     
2
 
Food and Consumer
   
162
   
163
     
(1
)
   
 
217
   
 
218
     
—  
 
Paper and Forest
   
477
   
478
     
—  
 
   
 
637
   
 
633
     
1
 
Agricultural
   
358
   
372
     
(4
)
   
 
489
   
 
501
     
(2
)
Chemicals
   
500
   
499
     
—  
 
   
 
907
   
 
883
     
3
 
Minerals
   
88
   
92
     
(4
)
   
 
135
   
 
140
     
(4
)
Emerging Markets
   
424
   
435
     
(3
)
   
 
397
   
 
384
     
3
 
    
  
    
  
  
    
    
2,791
   
2,799
     
—  
 
   
 
3,507
   
 
3,460
     
1
 
Automotive
   
538
   
516
     
4
 
   
 
845
   
 
794
     
6
 
Coal, Coke and Iron Ore
                                          
Coal
   
1,573
   
1,722
     
(9
)
   
 
1,528
   
 
1,671
     
(9
)
Coke
   
34
   
39
     
(13
)
   
 
49
   
 
46
     
7
 
Iron Ore
   
36
   
38
     
(5
)
   
 
20
   
 
22
     
(9
)
    
  
    
  
  
    
    
1,643
   
1,799
     
(9
)
   
 
1,597
   
 
1,739
     
(8
)
Other
   
—  
   
—  
     
—  
 
   
 
54
   
 
89
     
(39
)
    
  
    
  
  
    
Total Rail
   
4,972
   
5,114
     
(3
)
   
 
6,003
   
 
6,082
     
(1
)
    
  
    
  
  
    
Intermodal
                                          
Domestic
   
982
   
901
     
9
 
   
 
696
   
 
625
     
11
 
International
   
1,137
   
1,103
     
3
 
   
 
476
   
 
470
     
1
 
Other
   
—  
   
—  
     
—  
 
   
 
8
   
 
17
     
(53
)
    
  
    
  
  
    
Total Intermodal
   
2,119
   
2,004
     
6
 
   
 
1,180
   
 
1,112
     
6
 
    
  
    
  
  
    
Total Surface Transportation
   
7,091
   
7,118
     
—  
%
   
$
7,183
   
$
7,194
     
—  
%
    
  
    
  
  
    
(1)
 
Certain prior period traffic has been reclassified to Emerging Markets to conform to the current presentation.

10

CSX CORPORATION AND SUBSIDIARIES
     
SURFACE TRANSPORTATION TRAFFIC AND REVENUE (continued)
   
Quarterly Flash
      

 
MERCHANDISE
 
Merchandise revenues in the fourth quarter were up 5% on flat year-over-year volumes. With the exception of phosphate and fertilizer revenues, which were flat, all merchandise markets showed year-over-year revenue improvement.
 
Phosphates and Fertilizers—Weakness in lower revenue per car movements of phosphate rock, potash and ammonia shipments was more than offset by strength in higher revenue-per-car movements of domestic phosphate chemicals and sulfur.
 
Metals—Favorable variance was driven by strong import and domestic slab shipments, along with increased coil, plate and structural shipments.
 
Food and Consumer—Gains in higher revenue-per-car movements of canned goods, alcohol and Express Lane shipments more than offset weakness in lower revenue per car shipments of appliances and transportation equipment.
 
Paper and Forest—Weak prior year comparisons resulted in volume gains primarily due to pulp board shipments and low box plant inventories. Year-over-year comparisons for printing paper shipments were also positive, driven primarily by depressed post Sept. 11 shipments last year.
 
Agricultural—Weakness in feed ingredients and export grain was offset by increase in wheat flour and domestic grain movements.
 
Chemicals—Positive performance was driven by strength in plastics, textile chemicals and liquid petroleum gas. Rate increases continue to drive revenue yield improvements.
 
Minerals—Strength in industrial sand more than offset weakness in roofing granules, industrial sand and ores.
 
Emerging Markets—Strength in high revenue-per-car military movements more than offset weakness in low revenue per car movements of aggregates and salt.
 
AUTOMOTIVE
 
Automotive volumes were up 5% and revenue was up 8% in the fourth quarter. Yield improvement continues to be driven primarily by favorable mix and extended linehauls. Year-over-year volume comparisons continued to be favorable due to continued growth in light truck production.
 
COAL, COKE AND IRON ORE
 
Fourth quarter coal volumes and revenues were down 8%. Utility volumes were down as a result of reduced trans-load shipments to Lake Erie and to Southern utilities. Export movements were down significantly as a result of reduced competitive standing of U.S. coal in the international market. Metallurgical and industrial markets were down due to general economic conditions affecting end use markets. Tons per car continue to increase as a result of mix and car type utilization but the resulting yield improvement is offset by increased short-haul shipments.
 
INTERMODAL
 
Domestic—Significant strength in transcontinental domestic container traffic offset continued weakness in U.S. mail and parcels in the fourth quarter. Revenue per unit improved due to increased length of haul, a favorable pricing environment and growth in higher priced door-to-door traffic.
 
International—The labor disruptions at West Coast ports had a negative impact on volume and revenue. Diversions of Pacific Rim traffic to East Coast ports offset some of this impact but had a negative impact on revenue per unit.

11

CSX CORPORATION AND SUBSIDIARIES
     
MARINE SERVICES OPERATING RESULTS (Unaudited)
   
Quarterly Flash
(Millions of Dollars)
     
    
Domestic Container Shipping
     
International Terminals
     
Eliminations
     
Marine Services
  
    
2002
     
2001
     
2002
     
2001(1)
     
2002
     
2001
     
2002
     
2001(1)
  
    
Quarters Ended Dec. 27, 2002, and Dec. 28, 2001
  
Operating Revenue
   
$
193
 
   
$
171
 
   
$
56
 
   
$
58
 
   
$
—  
 
   
$
—  
 
   
$
249
 
   
$
229
 
Operating Expense
                                                                        
Labor and Fringe
   
 
60
 
   
 
54
 
   
 
12
 
   
 
15
 
   
 
—  
 
   
 
—  
 
   
 
72
 
   
 
69
 
Materials, Supplies and Other
   
 
65
 
   
 
50
 
   
 
18
 
   
 
13
 
   
 
—  
 
   
 
—  
 
   
 
83
 
   
 
63
 
Building and Equipment Rent
   
 
7
 
   
 
12
 
   
 
2
 
   
 
2
 
   
 
—  
 
   
 
—  
 
   
 
9
 
   
 
14
 
Inland Transportation
   
 
33
 
   
 
24
 
   
 
1
 
   
 
2
 
   
 
—  
 
   
 
—  
 
   
 
34
 
   
 
26
 
Depreciation
   
 
3
 
   
 
6
 
   
 
2
 
   
 
3
 
   
 
—  
 
   
 
—  
 
   
 
5
 
   
 
9
 
Fuel
   
 
19
 
   
 
14
 
   
 
—  
 
   
 
—  
 
   
 
—  
 
   
 
—  
 
   
 
19
 
   
 
14
 
Miscellaneous
   
 
—  
 
   
 
—  
 
   
 
(3
)
   
 
2
 
   
 
—  
 
   
 
—  
 
   
 
(3
)
   
 
2
 
    
  
  
  
  
  
  
  
Total Operating Expense
   
 
187
 
   
 
160
 
   
 
32
 
   
 
37
 
   
 
—  
 
   
 
—  
 
   
 
219
 
   
 
197
 
    
  
  
  
  
  
  
  
Operating Income
   
$
6
 
   
$
11
 
   
$
24
 
   
$
21
 
   
$
—  
 
   
$
—  
 
   
$
30
 
   
$
32
 
Operating Ratio
   
 
96.9
%
   
 
93.6
%
   
 
57.1
%
   
 
63.8
%
                     
 
88.0
%
   
 
86.0
%
    
  
  
  
  
  
  
  
    
Years Ended Dec. 27, 2002, and Dec. 28, 2001
  
Operating Revenue
   
$
758
 
   
$
681
 
   
$
236
 
   
$
236
 
   
$
(1
)
   
$
(2
)
   
$
993
 
   
$
915
 
Operating Expense
                                                                        
Labor and Fringe
   
 
229
 
   
 
213
 
   
 
57
 
   
 
62
 
   
 
—  
 
   
 
—  
 
   
 
286
 
   
 
275
 
Materials, Supplies and Other
   
 
244
 
   
 
203
 
   
 
77
 
   
 
70
 
   
 
(1
)
   
 
(2
)
   
 
320
 
   
 
271
 
Building and Equipment Rent
   
 
45
 
   
 
51
 
   
 
9
 
   
 
9
 
   
 
—  
 
   
 
—  
 
   
 
54
 
   
 
60
 
Inland Transportation
   
 
119
 
   
 
98
 
   
 
7
 
   
 
7
 
   
 
—  
 
   
 
—  
 
   
 
126
 
   
 
105
 
Depreciation
   
 
17
 
   
 
24
 
   
 
9
 
   
 
8
 
   
 
—  
 
   
 
—  
 
   
 
26
 
   
 
32
 
Fuel
   
 
66
 
   
 
60
 
   
 
—  
 
   
 
—  
 
   
 
—  
 
   
 
—  
 
   
 
66
 
   
 
60
 
Miscellaneous
   
 
—  
 
   
 
—  
 
   
 
8
 
   
 
9
 
   
 
—  
 
   
 
—  
 
   
 
8
 
   
 
9
 
    
  
  
  
  
  
  
  
Total Operating Expense
   
 
720
 
   
 
649
 
   
 
167
 
   
 
165
 
   
 
(1
)
   
 
(2
)
   
 
886
 
   
 
812
 
    
  
  
  
  
  
  
  
Operating Income
   
$
38
 
   
$
32
 
   
$
69
 
   
$
71
 
   
$
—  
 
   
$
—  
 
   
$
107
 
   
$
103
 
Operating Ratio
   
 
95.0
%
   
 
95.3
%
   
 
70.8
%
   
 
69.9
%
                     
 
89.2
%
   
 
88.7
%
    
  
  
  
  
  
  
  
(1)
 
Prior periods have been reclassified to conform to the current presentation.
 
DOMESTIC CONTAINER SHIPPING
 
Operating income was $6 million in the fourth quarter of 2002 compared to $11 million in the prior year. Fourth quarter 2002 earnings were affected by approximately $7 million as a result of the ten-day labor disruptions at West Coast ports. CSX Lines’ revenue was up by $22 million over the prior year. Strong market share gains in the Hawaii and Puerto Rico tradelanes were offset by a loss of $12 million in revenue in the Hawaii and Alaska tradelanes from the labor disruptions. Operating expenses have increased by $27 million over the prior year as a result of the increased volume being carried, which includes the deployment of an additional vessel in the Puerto Rico trade, and a $5 million impact from higher fuel prices.
 
On Dec. 17, 2002, CSX announced that it had reached an agreement to convey its domestic container-shipping subsidiary, CSX Lines, LLC to a venture for $300 million ($240 million of cash and $60 million of securities). CSX expects this transaction to close in the first quarter of 2003.
 
INTERNATIONAL TERMINALS
 
Operating income for the fourth quarter was $24 million compared to $21 million in the prior year, an improvement of 14%. Revenue was down $2 million as a direct result of the global economic conditions and the impact from the labor disruptions on the West Coast. Several cost-cutting initiatives and a $6 million gain on the divestiture of a portion of the Caucedo terminal ownership interest, which is included in miscellaneous, more than offset the lower revenue.

12

CSX CORPORATION AND SUBSIDIARIES
     
DOMESTIC CONTAINER SHIPPING OPERATING STATISTICS(1)
   
Quarterly Flash
      

 
    
Fourth Quarter
     
Year
  
    
2002
     
2001
     
2002
     
2001
  
    
(Unaudited)
  
Loads
   
 
70,319
 
   
 
61,155
 
   
 
277,370
 
   
 
241,998
 
Average Revenue Per Box
   
$
2,640
 
   
$
2,728
 
   
$
2,658
 
   
$
2,767
 
Vessel Utilization
   
 
73.3
%
   
 
72.1
%
   
 
75.5
%
   
 
68.3
%
Equipment Turns Per Year
   
 
7.9
 
   
 
8.1
 
   
 
8.1
 
   
 
7.7
 
Vessel On Time Arrival(2)
   
 
—  
 
   
 
90
%
   
 
92
%
   
 
93
%
Marine Productivity (Lifts Per Hour)
   
 
24.5
 
   
 
24.3
 
   
 
25.3
 
   
 
25.6
 
Diesel No. 380/Bunker Sea:
                                    
Estimated Fuel Consumption (Millions of Gallons)
   
 
30.7
 
   
 
29.2
 
   
 
123.3
 
   
 
121.8
 
Fuel Price Per Gallon (Dollars)
   
$
0.6207
 
   
$
0.4680
 
   
$
0.5302
 
   
$
0.4898
 
Impact of Year-to-Year Price Variance on Operating Expense (Millions of Dollars)
   
$
(5
)
            
$
(5
)
         
    
  
  
  
(1)
 
Amounts for 2002 are estimated.
(2)
 
Fourth quarter not measured due to the West Coast labor disruptions.
 
INTERNATIONAL TERMINALS OPERATING STATISTICS(1)
 
    
Fourth Quarter
   
Year
    
2002
   
2001
   
2002
   
2001
    
(Unaudited)
Gross Revenue (Millions of Dollars)
   
$
97
   
$
94
   
$
387
   
$
376
Gross Lifts
   
 
528,843
   
 
505,404
   
 
2,106,762
   
 
2,046,204
Average Port Productivity (Port Moves Per Crane Per Hour)
   
 
30.7
   
 
32.9
   
 
31.5
   
 
32.4
    
  
  
  
(1)
 
Includes all consolidated and unconsolidated subsidiaries of CSX World Terminals.

13