The Carlyle Group Acquires Majority Stake in CSX Lines for $300 Million; Ocean Transport and Logistics System Is Largest In Nation.

Business Editors

WASHINGTON--(BUSINESS WIRE)--Dec. 17, 2002

Global private equity firm The Carlyle Group today announced that it has agreed to acquire a majority stake in CSX Lines, LLC from the CSX Corp. (NYSE: CSX) in a transaction valued at $300 million. Current CSX Lines President and CEO Charles G. (Chuck) Raymond and his management team will remain in place and the new entity will be called Horizon Lines, LLC. Mr. Raymond will also serve as Chairman of the company's board.

CSX Lines, with 17 U.S. flag vessels and 22,000 containers, is the nation's largest ocean transport company, providing ocean transportation and logistics services to and from the continental United States, Alaska, Hawaii, Guam, and Puerto Rico.

Carlyle Managing Director Greg Ledford said, "CSX Lines is a well-managed company that has a bright future. We look forward to working with Chuck Raymond and his seasoned team in the coming years to further unlock CSX Lines' great potential. CSX Lines complements Carlyle's growing transportation portfolio."

CSX Corp. President Michael J. Ward, said, "This is a terrific transaction for all parties. Completion of this transaction is consistent with our oft and long-stated strategy of becoming a more rail-based organization."

Charles G. Raymond said, "We are excited about working with The Carlyle Group and benefiting from its transportation experience and financial expertise and support. We expect to grow profitably and maintain our position as the nation's largest and most successful ocean shipping company."

The equity for this transaction will come from Carlyle Partners III, L.P., Carlyle's flagship U.S. Buyout Fund. Financing for the transaction has been provided by ABN AMRO Bank. The transaction is subject to customary conditions and regulatory approval and is expected to close in the first quarter of 2003.

About The Carlyle Group

The Carlyle Group is a global private equity firm with more than $13.9 billion under management. Carlyle generates extraordinary returns for its investors by employing a conservative, proven, and disciplined approach. Carlyle invests in buyouts, real estate, high yield, and venture in the United States, Europe, Japan, and Asia, focusing on aerospace and defense, consumer, industrial, energy, healthcare, technology, and telecommunications and media. Since 1987, the firm has invested $7.2 billion and achieved a realized internal rate of return of 36 percent. The Carlyle Group employs 510 people in 21 offices in 11 countries. Visit www.carlyle.com for additional information.

About CSX Lines

Based in Charlotte, N.C., CSX Lines has 20 offices in the United States, Puerto Rico, and Guam and has approximately 1,600 employees. The company provides domestic ocean liner services and operates 17 U.S. Flag vessels and 22,000 containers along six service routes between the continental United States and Alaska, Guam, Hawaii, and Puerto Rico. CSX Lines also operates terminals in Anchorage, Kodiak and Dutch Harbor, Alaska; Honolulu; San Juan, Puerto Rico, and Apra, Guam. CSX Lines also owns Horizon Services Group, a diversified offering of cargo management and tracking services being marketed to shippers, carriers and other supply chain participants. Following its acquisition by The Carlyle Group, CSX Lines will begin phasing in its new name, Horizon Lines, LLC.

About CSX

CSX Corp., based in Richmond, Va., operates a major rail network covering the eastern half of the United States. It also owns CSX World Terminals, which manages and has substantial interests in container terminals in Asia, Europe, and Latin America.