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CSX EARNINGS REFLECT LABOR CHARGE; WITHOUT CHARGE, EARNINGS WOULD HAVE INCREASED 41 PERCENT

 CSX EARNINGS REFLECT LABOR CHARGE;
 WITHOUT CHARGE, EARNINGS WOULD HAVE INCREASED 41 PERCENT
 RICHMOND, Va., July 23, 1992 -- CSX Corporation (NYSE: CSX) today reported a net loss of $322 million, $3.13 per share, for the second quarter, reflecting a previously announced labor-related charge of $699 million, $450 million after tax, or $4.38 per share.
 Second-quarter net earnings would have improved 41 percent, to $128 million, or $1.25 per share, compared with the prior-year's quarter, exclusive of the 1992 charge and net investment gains reported in the 1991 quarter. In the second quarter of 1991, CSX reported net earnings of $115 million, $1.15 per share, which included gains of $24 million, or 24 cents per share, primarily from the sale of a one- third interest in Sea-Land Orient Terminals (SLOT), which operates a container terminal in Hong Kong. Without those investment transactions, CSX would have reported net earnings of $91 million, 91 cents per share, for the 1991 quarter.
 Excluding the charge, operating income for the quarter would have been $254 million, 23 percent above the prior-year's quarter of $206 million. Including the charge, the company reported an operating loss of $445 million.
 John W. Snow, chairman and chief executive officer of CSX, said, "Our results for the second quarter are very encouraging, particularly given the fact we incurred a two-day rail strike and continued to experience weakness in the domestic coal market. We outperformed the prior-year quarter that included net investment gains and strong container-shipping revenue associated with Operation Desert Storm.
 "Over the past year and a half, management teams at each of our transportation units have shown they can perform even in the face of weak economic growth. Without the charge, all of our key transportation units showed improved results because of their continued attention to the cost structure. This kind of performance will yield solid results for our shareholders, despite the slow pace of the economic recovery."
 Total operating revenue for the second quarter rose 3 percent, to $2.2 billion, compared with $2.1 billion in the year-ago quarter, reflecting yield initiatives and the strengthening national economy. Operating expense was $2.6 billion for the quarter. Operating expense, without the charge, would have been $1.9 billion, virtually flat compared with the same 1991 quarter.
 QUARTERLY SEGMENT RESULTS
 The rail unit reported an operating loss of $460 million for the quarter, including its $664 million portion of the charge. Excluding this charge, rail operating income for the quarter would have been $204 million, 31 percent above year-ago results. These results reflect the ongoing commitment of the rail unit to control costs across the system.
 Rail revenue up $59 million despite strike:
 Despite a two-day rail strike at the end of the 1992 quarter, rail revenue increased $59 million to $1.3 billion, on the strength of solid gains in traffic in most commodity groups as well as improved yields. Showing signs of the improved economy, metals, automotive and chemicals carloads increased 27 percent, 8 percent and 6 percent, respectively. Coal originations slipped to 39.7 million tons vs. 40.4 million tons in the same quarter last year, reflecting weak utility demand resulting from moderate spring weather. However, export coal movements continued to be strong, rising 6 percent, or 400,000 tons, to 6.9 million tons for the quarter.
 Rail operating expense, including the charge, totaled $1.8 billion. Excluding the charge, operating expense rose $11 million, or 1 percent, to $1.1 billion. This tight control of operating expense reflects the success of an ongoing program to benchmark operations against top industry standards. On a quarter-to-quarter basis, these programs have been responsible for a 44 percent reduction in reportable employee injuries, a 33 percent reduction in train accidents and a 6 percent increase in the average time between failures of locomotives on the system.
 Cost reductions benefit container shipping:
 Container-shipping's operating revenue was $798 million, less than 1 percent below last year's revenue of $801 million, which was buoyed by shipments supporting Operation Desert Storm and Middle East relief efforts. Reflecting the unit's intense focus on reducing overhead costs and controlling operating expense, operating income, exclusive of its $17 million portion of the charge, would have been $44 million, 13 percent above the prior-year quarter. Including container-shipping's portion of the charge, operating income fell to $27 million vs. $39 million in the 1991 quarter. Operating expense was $771 million; excluding the charge, operating expense would have been $754 million, down slightly from the 1991 quarter.
 Barge income rises 56 percent:
 Strong grain and liquids volumes drove the 56 percent improvement in operating income for the barge unit to $14 million from $9 million in last year's second quarter. The barge unit also benefited from several cost control initiatives, particularly safety, which reduced employee injuries 22 percent so far this year.
 The non-transportation group reported an operating loss of $8 million for the second quarter, compared with operating income of $18 million in the prior-year quarter. Without this group's $18 million portion of the charge, operating income would have been $10 million. The results reflect the continued weakness in real estate sales.
 Other income for the quarter decreased to $3 million compared with $57 million in the 1991 quarter. The prior year included the gain from the sale of the one-third interest in SLOT and higher interest income. Reflecting lower rates, interest expense declined to $66 million vs. $79 million in last year's quarter.
 SIX MONTHS RESULTS
 For the first six months of the year, the company reported a net loss of $260 million, $2.53 per share, compared with a net loss of $24 million, 24 cents per share, for the same prior-year period. Excluding the charge, net earnings would have been $190 million, $1.85 per share.
 The year-ago first-half results reflected the early adoption of Statement of Financial Accounting Standards (SFAS) No. 106, which reduced net earnings by $196 million, or $1.97 per share, for years prior to 1991 that were not restated. Excluding adoption of SFAS No. 106, net earnings for the first six months of 1991 would have been $172 million, or $1.73 per share.
 Results for the first six months of 1991 also included net investment after-tax gains of $24 million, 24 cents per share, primarily from the sale of the one-third interest in SLOT.
 CSX Corporation, headquartered in Richmond, is an international transportation company offering a variety of rail, container-shipping, intermodal, trucking and barge services.
 Note: On July 15, 1992, CSX Corporation reported that its results for the second quarter of 1992 would include a charge estimated to be $699 million, $450 million after tax. The charge principally would recognize the additional costs of buying out trip-based compensation paid to train crew employees at CSX Transportation (CSXT). This compensation package provides for buying out productivity funds and short crew allowances paid to United Transportation Union members as well as a severance program for employees leaving CSXT as a result of the reduction from three to two person train crews.
 CSX CORPORATION AND SUBSIDIARIES
 Consolidated Statement of Earnings
 (Millions of Dollars, Except Per-Share Amounts)
 Periods ended Quarter Six Months
 June 30 1992 1991 1992 1991
 Operating Revenue
 Transportation $2,145 $2,069 $4,210 $4,078
 Non-Transportation 44 56 65 77
 Total 2,189 2,125 4,275 4,155
 Operating Expense
 Transportation 1,901 1,881 3,805 3,740
 Non-Transportation 34 38 59 64
 Productivity Charge 699 --- 699 ---
 Total 2,634 1,919 4,563 3,804
 Operating Income (Loss) (445) 206 (288) 351
 Other Income 3 57 7 76
 Interest Expense 66 79 134 157
 Earnings (Loss) before
 Income Taxes (508) 184 (415) 270
 Income Tax Expense (Benefit) (186) 69 (155) 98
 Earnings (Loss) before
 Cumulative Effect of
 Change in Accounting (322) 115 (260) 172
 Cumulative Effect on Years
 Prior to 1991 of Change in
 Accounting for Post-retirement
 Benefits Other than
 Pensions --- --- --- (196)
 Net Earnings (Loss) $(322) $115 $(260) $(24)
 Earnings (Loss) Per Share
 before Cumulative Effect
 of Change in Accounting $(3.13) $1.15 $(2.53) $1.73
 Cumulative Effect on Years
 Prior to 1991 of Change in
 Accounting for Post-retirement
 Benefits Other than
 Pensions --- --- --- (1.97)
 Earnings (Loss) Per Share $(3.13) $1.15 $(2.53) $(.24)
 Average Common Shares
 Outstanding (Thousands) 102,883 99,578 102,743 99,190
 Common Shares Outstanding
 at End of Period
 (Thousands) 102,914 99,790 102,914 99,790
 Cash Dividends Paid Per
 Common Share $.38 $.35 $.76 $.70
 See accompanying Notes to Consolidated Financial Statements.
 CSX CORPORATION AND SUBSIDIARIES
 Consolidated Statement of Cash Flows
 (Millions of Dollars)
 Six Months Ended June 30 1992 1991
 Operating Activities:
 Earnings (Loss) before Cumulative
 Effect of Change in Accounting $(260) $172
 Adjustments to Reconcile Earnings
 to Cash Provided:
 Depreciation 264 242
 Deferred Income Taxes (106) 67
 Productivity/Restructuring Charge-Provision 699 ---
 Productivity/Restructuring Charge-Payments (181) (43)
 Net Gain on Investment Transactions --- (49)
 Other Operating Activities (19) (86)
 Changes in Operating Assets and Liabilities:
 Accounts Receivable 83 59
 Materials and Supplies (25) 23
 Other Current Assets 36 1
 Accounts Payable and
 Other Current Liabilities (155) (18)
 Cash Provided by Operating Activities 336 368
 Investing Activities:
 Property Additions (413) (340)
 Proceeds from Sale of Affiliates 7 97
 Short-Term Investments - Net 112 52
 Other Investing Activities 16 (69)
 Cash Used by Investing Activities (278) (260)
 Financing Activities
 Short-Term Debt - Net (114) (31)
 Long-Term Debt Issued 256 205
 Long-Term Debt Repaid (114) (270)
 Cash Dividends Paid (78) (70)
 Other Financing Activities 31 45
 Cash Used by Financing Activities (19) (121)
 Cash, Cash Equivalents and Short-Term Investments:
 Increase (Decrease) in Cash and Cash Equivalents 39 (13)
 Cash and Cash Equivalents at Beginning of Period 290 296
 Cash and Cash Equivalents at End of Period 329 283
 Short-Term Investments at End of Period 52 261
 Cash, Cash Equivalents and Short-Term
 Investments at End of Period $ 381 $ 544
 See accompanying Notes to Consolidated Financial Statements.
 CSX CORPORATION AND SUBSIDIARIES
 Consolidated Statement of Financial Position
 (Millions of Dollars)
 June 30, 1992 Dec. 31, 1991
 Assets:
 Current Assets:
 Cash, Cash Equivalents and
 Short-Term Investments $ 381 $ 465
 Accounts Receivable 654 728
 Materials and Supplies 231 206
 Other Current Assets 96 136
 Total Current Assets 1,362 1,535
 Properties and Other Assets:
 Properties 15,428 15,176
 Less Accumulated Depreciation 5,115 4,999
 Properties - Net 10,313 10,177
 Affiliates and Other Companies 244 238
 Other Assets 848 848
 Total Properties and
 Other Assets 11,405 11,263
 Total Assets $ 12,767 $ 12,798
 Liabilities and Shareholders' Equity:
 Current Liabilities:
 Accounts Payable and Other
 Current Liabilities $ 2,183 $ 2,079
 Current Maturities of Long-Term Debt 198 230
 Short-Term Debt 54 168
 Total Current Liabilities 2,435 2,477
 Long-Term Debt 2,978 2,804
 Deferred Income Taxes 2,117 2,221
 Long-Term Liabilities and
 Deferred Gains 2,369 2,114
 Shareholders' Equity:
 Common Stock 103 102
 Other Capital 1,241 1,217
 Retained Earnings 1,524 1,863
 Total Shareholders' Equity 2,868 3,182
 Total Liabilities and
 Shareholders' Equity $ 12,767 $ 12,798
 See accompanying Notes to Consolidated Financial Statements
 NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
 (1) In the fourth quarter of 1991, the company recorded a pretax charge to provide for the estimated costs of implementing work-force reductions, improvements in productivity and other cost reductions at its major transportation units. The pretax charge amounted to $755 million and reduced 1991 net earnings by $490 million, $4.88 per share. In the second quarter of 1992, the company recorded a pretax charge to recognize the estimated additional costs of implementing work- force reductions and productivity improvements announced in the fourth quarter of 1991. The additional pretax charge amounted to $699 million and reduced net earnings for the second quarter and first six months of 1992 by $450 million, $4.38 per share. Of the combined charges, $1.3 billion related to provisions for employee separations and associated liabilities and $151 million related to various costs and claims expected to result from consolidation of terminal operations, litigation and other negotiated settlements.
 As of June 30, 1992, payments totaling $181 million have been recorded as a reduction of the combined productivity charge liability.
 (2) The company adopted, effective Jan. 1, 1991, Statement of Financial Accounting Standards (SFAS) No. 106, "Employers' Accounting for Post-retirement Benefits Other than Pensions," issued in December 1990. Under the accrual method specified by SFAS No. 106, the total future cost of providing other post-retirement employment benefits (OPEBs) is estimated and recognized as expense over the employees' requisite service period.
 The change to the accrual method of expense accounting for OPEBs decreased net earnings for the six months of 1991 by $196 million (net of the related income tax benefit of $116 million), $1.97 per share, reflecting the cumulative effect of the change in accounting related to years prior to 1991, which were not restated.
 (3) Earnings per share are based on the weighted average of 102,882,899 shares outstanding for the second quarter of 1992 and 99,577,830 shares for 1991, and 102,742,871 shares for the first six months of 1992 and 99,190,303 shares for 1991. Dilution, which could result if all outstanding common stock equivalents were exercised, is not significant.
 -0- 7/23/92
 /CONTACT: Thomas E. Hoppin or Suzanne S. Walston of CSX, 804-782-1406/
 (CSX) CO: CSX Corporation ST: Virginia IN: TRN SU: ERN


LJ -- PH043 -- 2709 07/23/92 16:28 EDT
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