Printer Friendly

RAIL UNIT LEADS CSX EARNINGS INCREASE

 RAIL UNIT LEADS CSX EARNINGS INCREASE
 RICHMOND, Va., April 21 /PRNewswire/ -- CSX Corporation (NYSE: CSX)


today reported net earnings for the 1992 first quarter of $62 million, or 60 cents per share, vs. a loss of $139 million, or $1.40 per share, for last year's first quarter.
 The year-ago results reflected the early adoption of Statement of Financial Accounting Standards No. 106, which reduced net earnings for that quarter by $196 million, or $1.98 per share for years prior to 1991. Excluding the adoption of SFAS No. 106, earnings for the first quarter of 1991 would have been $57 million, 58 cents per share.
 John W. Snow, chairman and chief executive officer of CSX, said, "We saw signs of an economic upturn in the quarter, most notably in March when traffic levels strengthened at CSX Transportation, our rail unit.
 "We are increasingly optimistic about the balance of the year for all of our units, and are especially pleased with the railroad's performance this quarter. Rail revenue was up $74 million, and 35 percent of that increase was brought to the rail unit's bottom line. That is a solid performance reflecting the inherent leverage of the business and the ability of CSXT's management team to effectively control costs, both of which will benefit the company to an even greater extent if the economy continues to strengthen throughout the remainder of the year," he said.
 Total operating revenue for the first quarter of 1992, driven by stronger rail traffic, was $2.1 billion vs. $2 billion for the same quarter of 1991. Operating expense, reflecting increased traffic levels at CSXT, grew $44 million over the year-ago period. Overall, first- quarter 1992 operating income rose to $157 million, up from $145 million in the 1991 quarter.
 QUARTERLY SEGMENT RESULTS
 Due to increased merchandise freight shipments, continued yield improvements and the company's expense reduction programs, rail operating income reached $164 million, up $26 million, or 19 percent, from the year-ago period. Operating revenue rebounded with the upturn in economic activity as several commodity groups posted significant increases. Automotive shipments led the way, up 22 percent. Traffic from other commodity groups benefiting from the upswing in the economy and increased industrial production included metals, chemicals and forest products, which rose 9, 4 and 2 percent, respectively. Coal originations totaled 40.7 million tons, equivalent to the year-ago quarter, as both periods reflect below-normal utility consumption due to mild winter weather. However, export coal continued to show signs of strength, rising to a record quarterly volume of 8.4 million tons, 8 percent, or 600,000 tons, above the prior-year quarter.
 While rail revenue increased $74 million, rail operating expense rose $48 million to $1.1 billion, reflecting higher traffic levels. However, CSXT said it continues to focus on a number of expense reduction initiatives, principally in the areas of fuel conservation and safety. Employee injuries continued to decline, dropping 32 percent, while reportable accidents were 40 percent below this same period last year.
 During the quarter and in April, CSXT reached important crew consist agreements on two segments of its system. The agreements with employees on the former Georgia Road and the former Seaboard Coast Line reduce train crews from three to two employees, an engineer and a conductor. The agreements do not include any train length, car limit or work-event restrictions. Negotiations also are under way on agreements covering the remainder of CSXT's system. The costs of these agreements were provided for in 1991.
 Container-shipping's operating revenue was $735 million, 2 percent below the $747 million in the year-ago period, when the unit was moving significant amounts of military shipments in support of Operation Desert Storm. Despite this decline in revenue, the unit experienced growth in a number of its core commercial trades, especially shipments to Hawaii/Guam, European Interport traffic and U.S. exports to Central America. Like the rail operations, Sea-Land experienced improved commercial shipments in March, but utilization levels and operating margins slipped in the quarter as a result of reduced military shipments. Container-shipping operating income declined to $7 million in the first quarter of 1992 vs. $21 million a year ago, when the unit experienced a sharp increase in military traffic due to Operation Desert Storm.
 During the quarter, the container-shipping unit continued its intense focus on reducing overhead costs and controlling operating expense. Two major initiatives in this program were announced in April. Early in the month, Sea-Land said it would achieve significant efficiencies by centralizing certain documentation and administrative functions from various U.S. locations to the Dallas/Ft. Worth area. Today, the company announced the consolidation of its Atlantic division headquarters in Rotterdam which will result in the elimination of a significant portion of 45 positions now located in Edison, N.J. Costs associated with these initiatives also were provided for in 1991.
 Operating income for the barge unit was $7 million, equal to the same period last year. Improved grain and coal shipments were offset by lower yields and a reserve established to account for possible losses expected to result from financial difficulties being experienced by one of the unit's shippers.
 The non-transportation group experienced an operating loss of $4 million for the first quarter, compared with a $5 million loss in the prior-year quarter. The results reflect continued low real estate sales and typically weak first quarter resort occupancy levels.
 Other income for the quarter decreased $15 million to $4 million, but was partially offset by a $10 million decline in interest expense.
 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
 (Unaudited; In Millions of Dollars, Except Per-Share Amounts)
 Quarter ended March 31 1992 1991
 Operating Revenue:
 Transportation $2,065 $2,009
 Non-Transportation 21 21
 Total 2,086 2,030
 Operating Expense:
 Transportation 1,904 1,859
 Non-Transportation 25 26
 Total 1,929 1,885
 Operating Income 157 145
 Other Income 4 19
 Interest Expense 68 78
 Earnings before Income Taxes 93 86
 Income Tax Expense 31 29
 Earnings before Cumulative
 Effect of Change in Accounting 62 57
 Cumulative Effect on Years Prior to 1991
 of Change in Accounting for Post-retirement
 Benefits Other than Pensions --- (196)
 Net Earnings (Loss) 62 (139)
 Earnings Per Share before Cumulative
 Effect of Change in Accounting $.60 $.58
 Cumulative Effect on Years Prior to 1991 of
 Change in Accounting for Post-retirement
 Benefits Other than Pensions --- (1.98)
 Earnings (Loss) Per Share .60 (1.40)
 Average Common Shares Outstanding (000) 102,603 98,798
 Common Shares Outstanding at End of Period (000) 102,780 99,271
 Cash Dividends Paid Per Common Share $.38 $.35
 CSX CORPORATION AND SUBSIDIARIES
 Consolidated Statement of Cash Flows
 (Unaudited; In Millions of Dollars)
 Quarter ended March 31 1992 1991
 Operating Activities:
 Earnings before Cumulative
 Effect of Change in Accounting $62 $57
 Adjustments to Reconcile Earnings to Cash Provided:
 Depreciation 131 126
 Productivity/Restructuring Charge Payments (41) (11)
 Other Operating Activities (25) (43)
 Changes in Operating Assets and Liabilities:
 Accounts Receivable 46 63
 Materials and Supplies (10) (4)
 Other Current Assets (1) (14)
 Accounts Payable and Other Current Liabilities (189) (169)
 Cash Provided (Used) by Operating Activities (27) 5
 Investing Activities:
 Property Additions (94) (119)
 Short-Term Investments -- Net 105 33
 Other Investing Activities (4) (21)
 Cash Provided (Used) by Investing Activities 7 (107)
 Financing Activities:
 Short-Term Debt - Net (52) (87)
 Long-Term Debt Issued 58 188
 Long-Term Debt Repaid (80) (35)
 Cash Dividends Paid (39) (35)
 Other Financing Activities 21 28
 Cash Provided (Used) by Financing Activities (92) 59
 Cash, Cash Equivalents and Short-Term Investments:
 Decrease in Cash and Cash Equivalents (112) (43)
 Cash and Cash Equivalents at Beginning of Period 290 296
 Cash and Cash Equivalents at End of Period 178 253
 Short-Term Investments at End of Period 65 280
 Cash, Cash Equivalents and Short-Term
 Investments at End of Period $243 $533
 CSX CORPORATION AND SUBSIDIARIES
 Consolidated Statement of Financial Position
 (Unaudited; In Millions of Dollars)
 March 31 Dec. 31
 1992 1991
 Assets:
 Current Assets:
 Cash, Cash Equivalents and Short-Term Investments $243 $465
 Acounts Receivable 673 728
 Materials and Supplies 216 206
 Other Current Assets 133 136
 Total Current Assets 1,265 1,535
 Properties and Other Assets:
 Properties 15,161 15,176
 Less Accumulated Depreciation 5,040 4,999
 Properties - Net 10,121 10,177
 Affiliates and Other Companies 247 238
 Other Assets 898 848
 Total Properties and Other Assets 11,266 11,263
 Total Assets $12,531 $12,798
 Liabilities and Shareholders' Equity:
 Current Liabilities:
 Accounts Payable and Other Current Liabilities $1,845 $2,079
 Current Maturities of Long-Term Debt 183 230
 Short-Term Debt 116 168
 Total Current Liabilities 2,144 2,477
 Long-Term Debt 2,829 2,804
 Deferred Income Taxes 2,239 2,221
 Long-Term Liabilities and Deferred Gains 2,098 2,114
 Shareholders' Equity:
 Common Stock 103 102
 Other Capital 1,233 1,217
 Retained Earnings 1,885 1,863
 Total Shareholders' Equity 3,221 3,182
 Total Liabilities and Shareholders' Equity $12,531 $12,798
 Notes to Consolidated Financial Statement:
 (1) 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 first quarter of 1991 by $196 million (net of the related income tax benefit of $116 million), $1.98 per share, reflecting the cumulative effect of the change in accounting related to years prior to 1991, which were not restated.
 (2) 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 charge amounted to $755 million on a pretax basis and reduced 1991 net earnings by $490 million, $4.88 per share. Of the total, $634 million relates to provisions for employee separations and related liabilities and $121 million relates to various costs and claims expected to result from consolidation of terminal operations, litigation and other negotiated settlements. As of March 31, 1992, payments totaling $55 million have been recorded as a reduction of the productivity charge liability.
 (3) Earnings per share are based on the weighted average of 102,602,842 common shares outstanding for the quarter ended March 31, 1992, and 98,798,471 for the quarter ended March 31, 1991. Dilution, which could result if all outstanding common stock equivalents were exercised, is not significant.
 -0- 4/21/92
 /CONTACT: Thomas E. Hoppin or Suzanne S. Walston of CSX, 804-782-1406/
 (CSX) CO: CSX Corporation ST: Virginia IN: TRN SU: ERN


MP-CC -- PH038 -- 0812 04/21/92 15:33 EDT
COPYRIGHT 1992 PR Newswire Association LLC
No portion of this article can be reproduced without the express written permission from the copyright holder.
Copyright 1992 Gale, Cengage Learning. All rights reserved.

Article Details
Printer friendly Cite/link Email Feedback
Publication:PR Newswire
Date:Apr 21, 1992
Words:1826
Previous Article:NEORX DECLARES DIVIDEND
Next Article:PRIME BANCSHARES REPORTS FIRST QUARTER EARNINGS


Related Articles
CSX CORPORATION ISSUES ANNOUNCEMENT
CSX EARNINGS INCLUDE ONE-TIME CHARGE
CSX TO BOOK CHARGE IN SECOND QUARTER
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
EXCLUDING CHARGE, CSX EARNS $52 MILLION IN QUARTER DESPITE STORM, STRIKE AND WEAK COAL MARKET
CSX EARNINGS INCREASE 20 PERCENT
CSX POSTS RECORD QUARTER
CSX ACHIEVES FOURTH CONSECUTIVE QUARTERLY EARNINGS RECORD; FIRST-QUARTER EARNINGS UP 64% OVER 1994
CSX Reports Second-Quarter Earnings.

Terms of use | Copyright © 2017 Farlex, Inc. | Feedback | For webmasters