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CSX THIRD-QUARTER EARNINGS UP 19 PERCENT; LONG-TERM COST REDUCTIONS DRIVE RESULTS

 CSX THIRD-QUARTER EARNINGS UP 19 PERCENT;
 LONG-TERM COST REDUCTIONS DRIVE RESULTS
 RICHMOND, Va., Oct. 21 /PRNewswire/ -- CSX Corporation (NYSE: CSX) today reported net earnings rose 19 percent, to $128 million or $1.25 per share, in the third quarter of 1992. In the third quarter of 1991, the company earned $108 million, $1.07 per share.
 John W. Snow, chairman and chief executive officer of CSX, said: "We are very pleased with these results as they demonstrate the company's continuing ability to generate strong earnings despite difficult worldwide economic conditions. This performance is the direct result of our strategy to improve operating efficiencies and reduce the long-term cost base at all of our transportation units. This strategy enables the company to perform well in a weak economy, but, more importantly, it positions CSX to take advantage of the economic upturn when it comes."
 For the quarter, operating income was $262 million, up 9 percent, compared with $241 million in the prior-year quarter. Total operating revenue for the third quarter equalled the prior year's $2.21 billion, despite lagging coal shipments and slow economic growth both domestically and abroad. Operating expense was held to the 1991 level of about $1.95 billion.
 QUARTERLY SEGMENT RESULTS
 Rail Operating Income Jumps 14 Percent
 The rail unit reported operating income of $182 million, a 14 percent improvement over the same quarter in 1991, as continued cost reduction efforts offset lackluster rail operating revenue. Rail loadings declined 2 percent vs. the same prior-year quarter, primarily as a result of a 5 percent drop in coal originations from 42.8 million tons to 40.7 million tons. Demand for domestic utility coal remained flat because of continued mild weather, and export coal shipments weakened due to similar weather patterns and reduced steel production in European countries. However, revenue yield and mix improvement efforts offset the traffic decline, resulting in total rail operating revenue of $1.3 billion, identical to the third quarter of 1991.
 Implementation of labor reduction programs and efforts to improve productivity and efficiency successfully lowered rail operating expense to 3 percent below 1991 levels, or $1.1 billion. Container- shipping results reflect long-term productivity and cost improvements
 The core earning power of the container-shipping unit remained strong. Operating revenue was $810 million, compared with $812 million in the same quarter last year. Improvements in the Pacific, Puerto Rico and South America trades countered lower revenue in the Asia/Middle East/Europe trade, which had benefited from post- Desert Storm military traffic in 1991. In the quarter, the container-shipping unit continued to demonstrate the success of its programs to increase productivity and reduce its cost base as operating expense was held to $755 million, the same level as the 1991 quarter. As a result, operating income declined only $2 million to $55 million.
 "We are very pleased with the results of the rail and the container-shipping units as they reflect substantial improvements in management of the cost base of the business, which significantly strengthens the long-term, core earning power of the company," Snow said.
 Operating income for the barge unit rose substantially, reflecting the first full quarter of the recently acquired Valley Line operations as well as improved grain shipments. Grain tonnage handled more than doubled as this fall's bumper grain crop began moving to market. The unit's operating income for the quarter was $14 million, 27 percent above 1991.
 The non-transportation group reported operating income of $26 million, compared with $31 million in the prior-year quarter, resulting from lower real estate sales.
 NINE-MONTH RESULTS
 Year-to-Date Earnings Improve, Absent Productivity Charge
 As a result of the productivity charge reported in the second quarter, the company reported a net loss of $132 million, $1.28 per share, for the first nine months of the year, compared with net earnings of $84 million, 84 cents per share, for the same prior-year period. Without the charge, 1992 year-to-date earnings would have been $318 million, $3.10 per share.
 The 1991 nine-month results reflected the early adoption of Statement of Financial Accounting Standards (SFAS) No. 106, which reduced net earnings by $196 million, or $1.96 per share, for years prior to 1991 that were not restated. Excluding adoption of SFAS No. 106, net earnings for the first nine months of 1991 would have been $280 million, $2.80 per share.
 The 1991 results also included net investment gains after tax of $24 million, 24 cents per share, primarily from the sale of a one- third interest in a Sea-Land subsidiary that operates a container terminal in Hong Kong.
 CSX Corporation, headquartered in Richmond, is an international transportation company offering a variety of rail, container- shipping, intermodal, trucking and barge services.
 CSX CORPORATION AND SUBSIDIARIES
 Consolidated Statement of Earnings
 (Millions of Dollars, Except Per Share Amounts)
 Quarter Ended Nine Months Ended
 Sept. 30, Sept. 30,
 1992 1991 1992 1991
 Operating Revenue
 Transportation $2,149 $2,127 $ 6,359 $ 6,205
 Non-Transportation 65 78 130 155
 Total 2,214 2,205 6,489 6,360
 Operating Expense
 Transportation 1,913 1,917 5,718 5,657
 Non-Transportation 39 47 98 111
 Productivity Charge --- --- 699 ---
 Total 1,952 1,964 6,515 5,768
 Operating Income (Loss) 262 241 (26) 592
 Other Income (Expense) 1 (6) 8 70
 Interest Expense 71 75 205 232
 Earnings (Loss)
 before Income Taxes 192 160 (223) 430
 Income Tax Expense
 (Benefit) 64 52 (91) 150
 Earnings (Loss) before
 Cumulative Effect of
 Change in Accounting 128 108 (132) 280
 Cumulative Effect on
 Years Prior to 1991 of
 Change in Accounting for
 Post-retirement Benefits
 Other than Pensions --- --- --- (196)
 Net Earnings (Loss) $ 128 $ 108 $ (132) $ 84
 Earnings (Loss) Per Share
 before Cumulative
 Effect of Change
 in Accounting $ 1.25 $ 1.07 $ (1.28) $ 2.80
 Cumulative Effect on
 Years Prior to 1991 of
 Change in Accounting
 for Post-retirement
 Benefits Other
 than Pensions --- --- --- (1.96)
 Earnings (Loss) Per
 Share $ 1.25 $ 1.07 $ (1.28) $ .84
 Average Common Shares
 Outstanding
 (Thousands) 102,991 101,245 102,826 99,883
 Common Shares
 Outstanding at
 End of Period
 (Thousands) 103,053 102,100 103,053 102,100
 Cash Dividends Paid
 Per Common Share $ .38 $ .35 $ 1.14 $ 1.05
 See Accompanying Notes to Consolidated Financial Statements.
 CSX CORPORATION AND SUBSIDIARIES
 Consolidated Statement of Cash Flows
 (Millions of Dollars)
 Nine Months Ended
 Sept. 30,
 1992 1991
 Operating Activities
 Earnings (Loss) before Cumulative Effect
 of Change in Accounting $(132) $ 280
 Adjustments to Reconcile Earnings to
 Cash Provided
 Depreciation 400 368
 Deferred Income Taxes (77) 110
 Productivity/Restructuring Charge
 - Provision 699 ---
 Productivity/Restructuring Charge
 - Payments (374) (60)
 Net Gain on Investment Transactions --- (49)
 Other Operating Activities 36 (47)
 Changes in Operating Assets
 and Liabilities
 Accounts Receivable 81 (1)
 Materials and Supplies (12) 44
 Other Current Assets --- (3)
 Accounts Payable
 and Other Current Liabilities (226) (165)
 Cash Provided by Operating Activities 395 477
 Investing Activities
 Property Additions (654) (596)
 Proceeds from Sale of Affiliates 7 97
 Short-Term Investments - Net 81 54
 Other Investing Activities 26 (15)
 Cash Used by Investing Activities (540) (460)
 Financing Activities
 Short-Term Debt - Net (152) 53
 Long-Term Debt Issued 563 275
 Long-Term Debt Repaid (157) (353)
 Cash Dividends Paid (117) (105)
 Other Financing Activities 36 37
 Cash Provided (Used)
 by Financing Activities 173 (93)
 Cash, Cash Equivalents and Short-Term Investments
 Increase (Decrease) in Cash
 and Cash Equivalents 28 (76)
 Cash and Cash Equivalents
 at Beginning of Period 290 296
 Cash and Cash Equivalents at End of Period 318 220
 Short-Term Investments at End of Period 83 259
 Cash, Cash Equivalents and Short-Term
 Investments at End of Period $ 401 $ 479
 See Accompanying Notes to Consolidated Financial Statements.
 CSX CORPORATION AND SUBSIDIARIES
 Consolidated Statement of Financial Position
 (Millions of Dollars)
 Sept. 30, Dec. 31,
 1992 1991
 Assets
 Current Assets
 Cash, Cash Equivalents and Short-Term
 Investments $ 401 $ 465
 Accounts Receivable 655 728
 Materials and Supplies 218 206
 Other Current Assets 133 136
 Total Current Assets 1,407 1,535
 Properties and Other Assets
 Properties 15,480 5,176
 Less Accumulated Depreciation 5,074 4,999
 Properties - Net 10,406 10,177
 Affiliates and Other Companies 257 238
 Other Assets 798 848
 Total Properties and Other Assets 11,461 11,263
 Total Assets $ 12,868 $ 12,798
 Liabilities and Shareholders' Equity
 Current Liabilities
 Accounts Payable
 and Other Current Liabilities $ 1,923 $ 2,079
 Current Maturities of Long-Term Debt 236 230
 Short-Term Debt 16 168
 Total Current Liabilities 2,175 2,477
 Long-Term Debt 3,204 2,804
 Deferred Income Taxes 2,146 2,221
 Long-Term Liabilities
 and Deferred Gains 2,381 2,114
 Shareholders' Equity
 Common Stock 103 102
 Other Capital 1,246 1,217
 Retained Earnings 1,613 1,863
 Total Shareholders' Equity 2,962 3,182
 Total Liabilities
 and Shareholders' Equity $ 12,868 $ 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 first nine 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 Sept. 30, 1992, payments totaling $351 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 nine months of 1991 by $196 million (net of the related income tax benefit of $116 million), $1.96 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 102,991,328 shares outstanding for the third quarter of 1992 and 101,245,100 shares for 1991, and 102,826,294 shares for the first nine months of 1992 and 99,882,762 shares for 1991. Dilution, which could result if all outstanding common stock equivalents were exercised, is not significant.
 -0- 10/21/92
 /CONTACT: Thomas E. Hoppin or Suzanne S. Walston of CSX Corporation, 804-782-1406/
 (CSX) CO: CSX Corporation ST: Virginia IN: TRN SU: ERN


TW -- DC010 -- 2862 10/21/92 12:00 EDT
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