PAGE 1
                                   FORM 10-Q

                      SECURITIES AND EXCHANGE COMMISSION
                            WASHINGTON, D.C.  20549


(X)      QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
         EXCHANGE ACT OF 1934

         For the quarter ended July 1,September 30, 1994

                                      OR

( )      TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES
         EXCHANGE ACT OF 1934

         For the transition period from                  to

                                        -----------------  ----------------


                        Commission File Number  1-8022


                                CSX CORPORATION
            (Exact name of registrant as specified in its charter)


         Virginia                                           62-1051971
(State or other jurisdiction of                       (I.R.S. Employer
 incorporation or organization)                        Identification No.)


901 East Cary Street, Richmond, Virginia                      23219-4031
(Address of principal executive offices)                      (Zip Code)


                                (804) 782-1400
             (Registrant's telephone number, including area code)


                                   No Change
(Former name, former address and former fiscal year, if changed since last 
report.)

Indicate by check mark whether the registrant (1) has filed all reports
required to be filed by Section 13 or 15(d) of the Securities Exchange Act of
1934 during the preceding 12 months (or for such shorter period that the
registrant was required to file such reports), and (2) has been subject to
such filing requirements for the past 90 days.  Yes (X)  No ( )

Indicate the number of shares outstanding of each of the issuer's classes of
common stock, as of July 1,September 30, 1994: 104,731,575104,743,893 shares.



                                     - 1 -



         PAGE 2


                                CSX CORPORATION
                                   FORM 10-Q
               FOR THE QUARTERLY PERIOD ENDED JULY 1,SEPTEMBER 30, 1994
                                     INDEX





PART I.  FINANCIAL INFORMATION                            Page Number
                                                                     
Item 1:

Financial Statements                                                 
                                                                     
1.  Consolidated Statement of Earnings-                              
      Quarters and SixNine Months Ended
         July 1,September 30, 1994 and June 30, 1993                            3    
                                                                     
2.  Consolidated Statement of Cash Flows-                           
      SixNine Months Ended July 1,September 30, 1994 and June 30, 1993             4    
                                                                     
3.  Consolidated Statement of Financial Position-                    
      At July 1,September 30, 1994 and December 31, 1993               5    
                                                                     
Notes to Consolidated Financial Statements                      6    
                                                                     
                                                                     
Item 2:                                                              
                                                                     
Management's Discussion and Analysis of Results of                   
Operations and Financial Condition                             1011   

                                                                     
PART II.  OTHER INFORMATION                                          

Item 4.  Submission of Matters to a Vote of Security Holders   15                                          

Item 6.  Exhibits and Reports on Form 8-K                      16
                                                                     
Signature                                                      16    















                                     - 2 -



         PAGE 3
                       CSX CORPORATION AND SUBSIDIARIES
                      Consolidated Statement of Earnings
                (Millions of Dollars, Except Per Share Amounts)

                                  Quarter Ended            SixNine Months Ended
                              ----------------------    ----------------------
                               July 1,      June---------------------      ---------------------
                                  September 30,              July 1,      JuneSeptember 30,    
                                1994         1993          1994         1993
                              --------     --------      --------     --------

Operating Revenue
  Transportation              $ 2,3242,391      $ 2,2212,176       $ 4,5356,926      $ 4,3296,505
  Non-Transportation               47            43            63           5879           62           142          120
                              -------      -------       --------     --------
     Total                      2,371         2,264         4,598        4,387
                              -------      -------
     --------     --------Total                      2,470        2,238         7,068        6,625
                              -------      -------       -------      -------
Operating Expense
  Transportation                2,032         1,952         4,047        3,8992,076        1,945         6,123        5,844
  Non-Transportation               35            34            61           5444           41           105           95
  Restructuring Charge            ---          ---           ---           93
                              -------      -------       --------     --------
     Total                      2,067         1,986         4,108        4,046
                              -------      -------
     --------     --------Total                      2,120        1,986         6,228        6,032
                              -------      -------       -------      -------
Operating Income                  304           278           490          341350          252           840          593
Other Income 18(Expense)             (6)           1            11           30            17           29
Interest Expense                   71            75           138          14969           74           207          223
                              -------      -------       --------     ---------------      -------
Earnings before 
   Income Taxes                   251           233           369          221275          179           644          400
Income Tax Expense                 89            79           133           7698          116           231          192
                              -------      -------       --------     ---------------      -------
Net Earnings                  $   162177      $    15463       $   236413      $   145208
                              =======      =======       ========     ===============      =======
Earnings Per Share            $  1.551.68      $   1.48.61       $  2.263.94      $  1.392.00
                              =======      =======       ========     ===============      =======

Average Common Shares
  Outstanding (Thousands)     104,704       103,905       104,578      103,785104,731      103,996       104,629      103,856
                              =======      =======       ========     ===============      =======
Common Shares 
  Outstanding (Thousands)     104,732       103,972       104,732      103,972104,744      104,047       104,744      104,047
                              =======      =======       ========     ===============      =======
Cash Dividends Paid Per 
  Common Share                $   .44      $   .38       $  .881.32      $  .761.14
                              =======      =======       ========     ===============      =======


See accompanying Notes to Consolidated Financial Statements.








                                     - 3 -



         PAGE 4
                       CSX CORPORATION AND SUBSIDIARIES
                     Consolidated Statement of Cash Flows
                             (Millions of Dollars)

                                                        SixNine Months Ended
                                                       ---------------------
                                                      July 1,      June-------------------
                                                          September 30,    
                                                        1994         1993 
                                                       ------       --------------
OPERATING ACTIVITIES
  Net Earnings                                         $ 236413        $ 145208
  Adjustments to Reconcile Earnings 
    to Cash Provided
      Depreciation                                       288           286431          429
      Deferred Income Taxes                              69            42115          143
      Restructuring Charge -- Provision                  ---           93
      Productivity/Restructuring Charge -- Payments     (72)          (66)(103)        (249)
      Other Operating Activities                          23           (27)42            8 
      Changes in Operating Assets and Liabilities
        Accounts Receivable                              (2)          (30)(62)         (72)
        Materials and Supplies                            (17)          (21)10          (18)
        Other Current Assets                              10           (20)15            7 
        Accounts Payable and Other Current Liabilities   (154)          (49)(37)         (52)
                                                       -----        ---------
        Cash Provided by Operating Activities            381           353824          497
                                                       -----        ---------
INVESTING ACTIVITIES                                 
  Property Additions                                    (320)         (326)(517)        (486)
  Short-Term Investments - Net                            60           (33)53           56 
  Purchases of Long-Term Marketable Securities           (22)         (100)(59)        (111)
  Other Investing Activities                              30            6677           59
                                                       -----        ---------
        Cash Used by Investing Activities               (252)         (393)(446)        (482)
                                                       -----        ---------
FINANCING ACTIVITIES
  Short-Term Debt - Net                                  144           204180          295
  Long-Term Debt Issued                                   53           81 
  Long-Term Debt Repaid                                 (216)         (143)(287)        (221)
  Dividends Paid                                        (92)          (79)(138)        (118)
  Other Financing Activities                              3             110           (2)
                                                       -----        -----
        Cash (Used) Provided by Financing Activities    (108)           64(182)          35
                                                       -----        -----
CASH, CASH EQUIVALENTS AND SHORT-TERM INVESTMENTS
  Increase in Cash and Cash Equivalents                  21            24196           50
  Cash and Cash Equivalents at Beginning of Period       298          374
                                                       -----        -----
        Cash and Cash Equivalents at End of Period       319           398494          424
        Short-Term Investments at End of Period          159           189156           99
                                                       -----        -----
        Cash, Cash Equivalents and Short-Term
          Investments at End of Period                 $ 478650        $ 587523
                                                       =====        =====

See accompanying Notes to Consolidated Financial Statements.

                                    -4-



         PAGE 5
                       CSX CORPORATION AND SUBSIDIARIES
                 Consolidated Statement of Financial Position
                             (Millions of Dollars)

                                               July 1,September 30,   December 31, 
                                                   1994           1993      
                                               ---------------------   ------------
ASSETS
  Current Assets
    Cash, Cash Equivalents and
     Short-Term Investments                       $   478650        $   499
    Accounts Receivable                               680812            668
    Materials and Supplies                            216190            199
    Deferred Income Taxes                             87122            108
    Other Current Assets                               12382             97
                                                  -------        -------
      Total Current Assets                          1,5841,856          1,571
                                                  -------        -------
  Properties and Other Assets
    Properties                                     16,01916,116         15,853
    Less Accumulated Depreciation                   5,2025,258          5,065
                                                  -------        -------
      Properties - Net                             10,81710,858         10,788
    Affiliates and Other Companies                    278313            268
    Other Assets                                      766672            793
                                                  -------        -------
      Total Properties and Other Assets            11,86111,843         11,849
                                                  -------        -------
      Total Assets                                $13,445$13,699        $13,420
                                                  =======        =======
LIABILITIES AND SHAREHOLDERS' EQUITY
  Current Liabilities
    Accounts Payable and Other 
      Current Liabilities                         $ 1,7901,990        $ 1,965
    Current Maturities of Long-Term Debt               14095            146
    Short-Term Debt                                   308344            164
                                                  -------        -------
      Total Current Liabilities                     2,2382,429          2,275
                                                  -------        -------
  Long-Term Debt                                    2,9782,953          3,133
                                                  -------        -------
  Long-Term Liabilities and Deferred Gains          2,4642,336          2,491
                                                  -------        -------
  Deferred Income Taxes                             2,3892,470          2,341
                                                  -------        -------
  Shareholders' Equity         
    Common Stock                                      105            104
    Other Capital                                   1,3591,363          1,307
    Retained Earnings                               2,0702,201          1,927
    Minimum Pension Liability Adjustment             (158)          (158)
                                                  -------        -------
      Total Shareholders' Equity                    3,3763,511          3,180
                                                  -------        -------
      Total Liabilities and Shareholders' Equity  $13,445$13,699        $13,420
                                                  =======        =======
See accompanying Notes to Consolidated Financial Statements.
                                     - 5 -



         PAGE 6
                       CSX CORPORATION AND SUBSIDIARIES
                       --------------------------------
                  Notes to Consolidated Financial Statements
         (All Tables in Millions of Dollars, Except Per Share Amounts)

NOTE 1.  BASIS OF PRESENTATION

         In the opinion of management, the accompanying consolidated financial
statements contain all adjustments necessary to present fairly the company's
financial position as of July 1,September 30, 1994, and December 31, 1993, and the
results of operations for the quarters and sixnine months ended July 1,September 30,
1994 and June 30, 1993, and its cash flows for the sixnine months ended July 1,September 30, 1994
and June 30, 1993, such adjustments being of a normal recurring nature.  

         Earnings per share are based on the weighted average of common shares
outstanding for the secondthird quarter and sixnine months ended July 1,September 30, 1994 and June
30,
1993.  Dilution for the quarters and sixnine months ended July 1,September 30, 1994 and
June 30,
1993, which could result if all outstanding common stock equivalents were
exercised, is not significant.

         While the company believes that the disclosures presented are
adequate to make the information not misleading, it is suggested that these
financial statements be read in conjunction with the financial statements and
the notes included in the company's latest Annual Report and Form 10-K.  

         Certain prior-year data have been reclassified to conform to the 1994
presentation.

NOTE 2.  CHANGE IN FISCAL REPORTING PERIODS

         Effective January 1, 1994, the company changed its fiscal reporting
periods from four calendar quarters to four 13-week quarters.  Fiscal 1994
began on January 1, 1994, and will include 52 weeks.  The four 13-week
quarters will end on April 1, July 1, September 30 and December 30, 1994.

NOTE 3.  ACCOUNTING AND REPORTING CHANGES

         Effective January 1, 1994, the company adopted Statement of Financial
Accounting Standards ("SFAS") No. 112, "Employers' Accounting for Post-
employment Benefits."  SFAS No. 112 requires that certain benefits provided to
former or inactive employees, after employment but before retirement, such as
workers' compensation and disability benefits, be accrued if attributable to
employees' service already rendered.  The financial statement impact of
adopting SFAS No. 112 was not significant.

         Effective January 1, 1994, the company adopted SFAS No. 115,
"Accounting for Certain Investments in Debt and Equity Securities."  SFAS No.
115 requires that investments that have readily determinable fair values be
classified as "held-to-maturity," "trading," or "available-for-sale"
securities.  Investments in debt securities have been classified as "held-to-
maturity," or "available-for-sale," and reported at amortized cost, which
approximates fair value, in the consolidated statement of financial position.
The financial statement impact of adopting SFAS No. 115 was not significant.



                                     - 6 -



         PAGE 7
                       CSX CORPORATION AND SUBSIDIARIES
                       --------------------------------
             Notes to Consolidated Financial Statements, Continued
         (All Tables in Millions of Dollars, Except Per Share Amounts)

NOTE 4.  RESTRUCTURING CHARGE

         The company recorded a $93 million pretax charge in the first quarter
of 1993 to recognize the estimated costs of restructuring certain operations
and functions at its container-shipping unit.  The restructuring charge 
reduced net earnings for the first sixnine months of 1993 by $61 million, 59
cents per share.  As of July 1,September 30, 1994, payments totaling $49$52 million have
been recorded as a reduction of the liability for the restructuring charge.

NOTE 5. ACCOUNTS RECEIVABLE

         During 1993, the company issued $200 million of Trade Receivable
Participation Certificates ("Certificates"), at 5.05%, due September 1998. 
The Certificates are collateralized by $234 million of accounts receivable
held in a master trust.  The proceeds from the issuance of the Certificates
were used to reduce the amount of accounts receivable sold under a previous
agreement.

         In addition, the company has a five-year revolving agreement with a
financial institution to sell with recourse on a monthly basis an undivided
percentage ownership interest in designated pools of accounts receivable up to
a maximum of $200 million.  CSX has retained the collection and servicing
responsibility with respect to accounts receivable held in trust or sold.    

         At July 1,September 30, 1994 and December 31, 1993, accounts receivable have
been reduced by $372 million and $380 million, respectively, representing
Certificates and accounts receivable sold.

NOTE 6.  OPERATING EXPENSE 

                                     Quarter Ended      SixNine Months Ended 
                                  ------------------    ------------------
                                     July 1,  JuneSeptember 30,         July 1,  JuneSeptember 30,  
                                    1994      1993        1994      1993
                                  --------  --------    --------  --------
Labor and Fringe Benefits         $  769786    $  746       $1,552    $1,514761       $2,338    $2,275
Materials, Supplies and Other        565       544        1,109     1,050571       540        1,680     1,590
Building and Equipment Rent          291       269          571       543292       268          863       811
Inland Transportation                198       178          388       344219       185          607       529
Depreciation                         145       143          288       286144       142          432       428
Fuel                                 99       106          200       216108        90          308       306
Restructuring Charge                 ---       ---          ---        93
                                  ------    ------       ------    ------
  Total                           $2,067$2,120    $1,986       $4,108    $4,046$6,228    $6,032
                                  ======    ======       ======    ======






                                     - 7 -



         PAGE 8
                       CSX CORPORATION AND SUBSIDIARIES
                       --------------------------------
             Notes to Consolidated Financial Statements, Continued
         (All Tables in Millions of Dollars, Except Per Share Amounts)

NOTE 7.  OTHER INCOME (EXPENSE)
                                       Quarter Ended      SixNine Months Ended
                                    ------------------    -----------------
                                       July 1,  JuneSeptember 30,        July 1,  JuneSeptember 30,  
                                      1994      1993       1994      1993
                                    --------  --------    -------  --------
Interest Income                      $   1612    $   13     $   2840    $   2538
Gain on South Florida Track Sale        22        20---       ---         22        20
Net Gain on Investment Transactions       2        15          21       ---          3        15 
Discount on and Servicing of
  Accounts Receivable Sold               (8)       (4)       (15)       (8)(7)       (2)       (22)      (10)
Minority Interest                        (4)       (3)        (8)       (5)       (5)       (13)      (10)
Miscellaneous                            (10)      (11)       (12)      (18)(7)       (5)       (19)      (23)
                                     ------    ------     ------    ------
  Total                              $   18(6)   $    301     $   1711    $   2930
                                     ======    ======     ======    ======
NOTE 8.  INCOME TAXES

         The effective income tax rate for the secondthird quarter and first sixnine
months of 1994 and 1993 reflects the federal statutory rate of 35 percent.  

         TheIn the third quarter of 1993, the company revised its estimated
annual effective tax rate to reflect the change in the federal statutory rate
from 34 to 35 percent.  The effect of this change was to increase income tax
expense for the secondthird quarter and first six months of 1993 was 34
percent.by $54 million, 52 cents per share.  Of
this amount, $51 million, 48 cents per share, related to applying the newly
enacted statutory income tax rate to deferred tax balances as of December 31,
1992.

NOTE 9.  ACCOUNTS PAYABLE AND OTHER CURRENT LIABILITIES

                                             July 1,September 30,   December 31,
                                                 1994            1993     
                                             --------------------   ------------
Trade Accounts Payable                           $  836883        $  917    
Labor and Fringe Benefits                           495548           523    
Income Taxes and Other                              258367           332   
Casualty Reserves                                   201192           193    
                                                 ------        ------    
  Total                                          $1,790$1,990        $1,965    
                                                 ======        ======
  
NOTE 10. COMMITMENTS AND CONTINGENCIES

         Sea-Land Service, Inc. ("Sea-Land"), the container-shipping unit of
CSX, has entered into agreements for the construction of four high-
performance, fuel-efficient container vessels and the modification of three
Atlantic Class vessels in its current fleet.  Estimated capital expenditures
for the total program are approximately $250 million over the next three
years.

                                     - 8 -



         PAGE 9        CSX CORPORATION AND SUBSIDIARIES
                       --------------------------------
             Notes to Consolidated Financial Statements, Continued
         (All Tables in Millions of Dollars, Except Per Share Amounts)

NOTE 10. COMMITMENTS AND CONTINGENCIES, Continued

         Although the company obtains substantial amounts of commercial
insurance for potential losses for third-party liability and property damage,
reasonable levels of risk are retained on a self-insurance basis.  A
substantial portion of the insurance coverage, up to $250$100 million from rail
operations and up to $175 million from certain other operations, is provided by insurance companies
owned or partially owned by CSX.


                                     - 8 -



         PAGE 9        CSX CORPORATION AND SUBSIDIARIES
                       --------------------------------
             Notes to Consolidated Financial Statements, Continued
         (All Tables in Millions of Dollars, Except Per Share Amounts)

NOTE 10. COMMITMENTS AND CONTINGENCIES, Continued

         CSX Transportation, Inc. ("CSXT") is a party to various proceedings
brought both by private parties and regulatory agencies related to
environmental issues.  CSXT has been identified as a potentially responsible
party in a number of governmental investigations and actions relating to
environmentally impaired sites that are or may be subject to remedial action
under the Federal Superfund Statute ("Superfund") or corresponding state
statutes.  The majority of these proceedings are based on allegations that
CSXT, or its railroad predecessors, sent hazardous substances to the
facilities in question for disposal.  Such proceedings arising under Superfund
typically involve numerous other waste generators and disposal companies and
seek to allocate or recover costs associated with site investigation and
cleanup, which could be substantial.

         The assessment of the required response and remedial costs associated
with these sites is extremely complex.  Among the variables that management
must assess are imprecise and changing remedial cost estimates and continually
evolving governmental standards.

         CSXT frequently reviews its role, if any, with respect to each such
location, giving consideration to the nature of CSXT's alleged connection to
the location (e.g., generator, owner or operator), the extent of CSXT's
alleged connection (e.g., volume of waste sent to the location and other
relevant factors), the accuracy and strength of evidence connecting CSXT to
the location, and the number, connection and financial position of other named
and unnamed potentially responsible parties at the location.  Further, CSXT
periodically reviews its exposure in all non-Superfund environmental
proceedings with which it is involved.

         Based upon such reviews and updates of the sites with which it is
involved, CSXT has recorded, and periodically reviews for adequacy, reserves
to cover estimated contingent future environmental costs with respect to such
sites.  Liabilities are recorded when the company's responsibility for
environmental remedial efforts is deemed probable, and the costs can be
reasonably estimated.  Generally, the timing of these accruals coincides with
the completion of a feasibility study or the company's commitment to a formal
plan of action.  The company does not currently possess sufficient information
to reasonably estimate the amounts of additional liabilities, if any, on some
sites until completion of future environmental studies.  Such additional
liabilities could be significant to future consolidated results of operations
and cash flows.  Based upon information currently available, however, the
company believes that its environmental reserves are adequate to accomplish
remedial actions to comply with present laws and regulations.  

                                     - 9 -



         PAGE 10
                       CSX CORPORATION AND SUBSIDIARIES
                       --------------------------------
             Notes to Consolidated Financial Statements, Continued
         (All Tables in Millions of Dollars, Except Per Share Amounts)

NOTE 10. COMMITMENTS AND CONTINGENCIES, Continued

         A number of legal actions, other than environmental, are pending
against CSX and certain subsidiaries in which claims are made in substantial
amounts.  While the ultimate results of environmental investigations, lawsuits
and claims involving the company cannot be predicted with certainty,
management does not currently expect that these matters will have a material
adverse effect on the consolidated financial position, results of operations
and cash flows of the company.










































                                    - 910 -



         PAGE 1011

ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS         
         AND FINANCIAL CONDITION                       

RESULTS OF OPERATIONS
- ---------------------
Second-QuarterThird-Quarter 1994 Compared With 1993
- --------------------------------------

         The company reported net earnings for the secondthird quarter ended
July
1,September 30, 1994, of $162$177 million, $1.55$1.68 per share, versus $154$63 million, $1.4861
cents per share for the secondthird quarter ended JuneSeptember 30, 1993.  In the third
quarter of 1993, the company revised its estimated annual effective tax rate
to reflect the change in the federal statutory rate from 34 to 35 percent. 
The effect of this change was to increase income tax expense for the third
quarter of 1993 by $54 million, 52 cents per share.  Excluding the effect of
the corporate income tax rate change, earnings for the third quarter of 1993
would have been $117 million, $1.13 per share.

         Operating revenue for the secondthird quarter of 1994 was $2.4$2.5 billion, 510 
percent above the prior-year quarter of $2.3$2.2 billion.  Operating expense was
$2.1 billion for the secondthird quarter of 1994, compared with $2 billion for the
secondthird quarter of 1993.  Operating income for the secondthird quarter of 1994 was
$304$350 million versus $278$252 million in the secondthird quarter of 1993.

Rail Unit Results
- -----------------

         Operating income at the rail unit rose $47$64 million or 2240 percent, to
$261$224 million for the secondthird quarter of 1994, from $214$160 million in the prior-
year quarter.  TheDriving the 1994 third-quarter results were driven by a 5 percent increase in revenue and
continued commitment to cost-cutting programs.

         For the second quarter of 1994, merchandisedouble-digit
traffic grew 7 percent,
with gains in metals, minerals, autos,several commodity groups and foodthe continued success of the
unit's cost-control and consumer products.expense-reduction programs.  

         Rail revenue, at $1.2$1.1 billion for the secondthird quarter of 1994, rose $54$85
million, or 58 percent, from the prior-year quarter.  Domestic coal demand offsetEchoing the continued
weaknessstrength of the U.S. industrial sector, merchandise carloadings rose 6 percent
for the third quarter of 1994 overall and revenue increased a like amount. 
The strongest revenue gains were achieved by a 20 percent increase in export coalmetals,
12 percent increase in minerals and an 11 percent increase in auto's over the
1993 third quarter.  

         Coal shipments rose 10 percent from the 1993 third quarter level to
raise volume to 38.639.5 million tons, 2 percent aboveas domestic utilities continued to build stockpiles that
were depleted from 1993's second quarter
level.  CoalUnited Mine Workers strike and harsh weather
conditions of early 1994.  Utility shipments to utility, industrial and cogeneration users increased to 35.426.1 million tons in
the secondthird quarter of 1994 up from 33.324.1 million tons in the second quarter of 1993.1993's third quarter. 
Export coal totaled 3.2loadings strengthened, edging up 8 percent in 1994's third quarter
to 4 million tons, for the
second quarter of 1994, compared with 4.43.7 million tons in the prior-year quarter. 
The declineHowever, soft European demand for coal and competitive pressures continue to
limit demand for U.S. coal in export coal was due to decreased foreign demand, more
attractive domestic markets and increased foreign competition.the world market.

         Rail operating expense was $914$923 million in the secondthird quarter of 1994
compared with $907$902 million in the secondthird quarter of 1993.  Despite higher
traffic levels,an 8 percent
increase in carloads handled, rail operating expense was held nearly flat at $914 million,
just $7 million, or less than 1increased only 2 percent
over the expense level in the prior-
yearprior-year quarter.  Labor and fringe benefit expense increased about 2 percent due
to the greater numberThe control of train crews required to handle the higher traffic as
well as a modest wage increase mandated by the Presidential Emergency Board
No. 219.operating 
                                    - 1011 -



         PAGE 1112

ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS         
         AND FINANCIAL CONDITION, CONTINUED            

RESULTS OF OPERATIONS, Continued
- --------------------------------
Rail Unit Results, Continued
- ----------------------------

expense resulted in an 80.5 percent operating ratio in the third quarter of
1994, a solid improvement over the prior-year third quarter operating ratio of
84.9 percent.
                                       RAIL OPERATING INCOME
                                       (Millions of Dollars)
                                   -----------------------------
                       Quarter Ended               Year-To-Date Ended
                     ------------------            ------------------
                       July 1,   JuneSeptember 30,     Percent     July 1,   JuneSeptember 30,     Percent
                      1994      1993     Change     1994       1993    Change
                     --------  --------  -------   -------   --------  -------
Operating Revenue
  Merchandise        $  786733     $  739693     6%       $ 1,5442,277   $  1,459   6%2,152    6 %
  Coal                  363        354384        340    13%         1,086      1,034    5 %
  Other                  30         29     3%            702        694   1%
  Other                  26         28    (7%)           49         54  (9%)79         83   (5)%
                     ------     ------              -------   --------
    Total             1,175      1,121     5%         2,295      2,207   4%1,147      1,062     8%         3,442      3,269    5 %

Operating Expense       914        907     1%         1,854      1,840   1%923        902     2%         2,777      2,742    1 %
                     ------     ------              -------   --------
Operating Income     $  261224     $  214    22%160    40%       $   441665   $    367  20%527   26 %
                     ======     ======              =======   ========
Operating Ratio        77.8%      80.9%                80.9%      83.4%80.5%      84.9%                80.7%      83.9%
                     ======     ======              =======   ========

Container Shipping Unit Results
- -------------------------------

         CSX's container-shipping unit, regained momentum lateriding solid traffic gains in the secondseveral
major trade lanes and benefiting from effective expense controls, generated
operating income of $78 million, 10 percent above 1993's third quarter of 1994 to generate $15 million in operating income despite the three-
week nationwide Teamsters' strike in April, which closed Sea-Land's West Coast
operations and disrupted shipments to and from Alaska, Hawaii and Asia.$71
million.

         Operating revenue for the secondthird quarter of 1994 was $826grew 9 percent to
$920 million, compared with $815$846 million in the 1993 secondthird quarter, as the
carrier realized strong volume of
containers handled rose 2gains in all areas except Alaska.  Quarter-
over-quarter volume growth topped 20 percent to 309,000 loads.  Surging trafficin the Americas lanes and and 15
percent in the Asia/Middle East/Europe and Latin America trade lanes, coupled withPacific trades.  The average
revenue per container during the unit's
success in regaining customers' shipments in the Pacific markets after the
strike, drove the increased volume and revenue.

         Container-shipping operating expense rose to $811 million for the
secondthird quarter of 1994 an increasewas $2,355, modestly
lower than the $2,436 rate of $50 million from the 1993 secondquarter.

         The unit's operating expense tracked revenue growth, increasing 9
percent, to $842 million, in the quarter.  Labor and fringe benefit expense
grew only slightly for the 1994 third quarter as a result of handling increased volume, rerouting containersSea-Land's
reorganization and ships during the work stoppage, and repositioning equipment for normal
operations. 

Intermodal Unit Resultsrestructuring efforts of recent years.





                                    - -----------------------

         Intermodal operating income climbed 33 percent to $16 million in the
second quarter of 1994 from 1993's second-quarter level of $12 million on a 19
percent rise in operating revenue.  The unit experienced double-digit growth 

                                    - 1112 -



         PAGE 1213

ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS
         AND FINANCIAL CONDITION, CONTINUED

RESULTS OF OPERATIONS, Continued
- --------------------------------

Intermodal Unit Results
Continued
- ----------------------------------

across all types-----------------------

         CSX's intermodal unit reported operating income of traffic, including shipments from international ocean
carriers, truck partners and direct shippers.  Traffic increased to 321,000
loads$17 million in the
secondthird quarter of 1994 17compared to 1993's third-quarter level of $16 million. 
The unit posted an 11 percent above 1993's second quarter.increase in traffic during the 1994 third
quarter, and revenue grew 12 percent over the same period.  However, the
start-up expense associated with the launch of its new, direct Chicago-New
York service and additional service in a key corridor limited the unit's
operating income growth to 6 percent for the third quarter of 1994 over its
results for the third quarter of 1993.

Barge Unit Results
- ------------------

         The barge unit capitalized on strong northbound back-haul shipmentsrebounded dramatically from the flood-impacted 1993
third quarter to produce operating income of $16 million versus $3 million in
the third quarter of 1993.  Tonnage handled during the third quarter of 1994
rose 41 percent from the prior year third quarter to a more normal level of
15.7 million tons.  Scrap metal, steel products and bulk commodities to temper the impact of a weak exportother
than grain marketcontinued their solid performances.  Grain shipments remained light
in the second quarter of 1994.  These actions, coupled with ongoing
cost-control efforts, resulted in barge operating income in the secondthird quarter of 1994, of $11 million, slightly below the results of $12 million in 1993's
second quarter.

Other Income
- ------------

         Other income declined to $18 million in the second quarter of 1994
from the 1993 second-quarter level of $30 million, primarily the result of a
one-time gain on the sale of a real estate partnership interest in the 1993
period.but have since strengthened significantly as
unprecedented corn and soybean harvests have driven fourth-quarter and early
1995 barging rates higher.

First SixNine Months 1994 Compared to 1993
- -----------------------------------------------------------------------------

         For the first sixnine months ended July 1,September 30, 1994, the company
reported net earnings of $236$413 million, $2.26$3.94 per share versus $145$208 million,
$1.39$2.00 per share for the sixnine months ended JuneSeptember 30, 1993.  The six months1993
results for 1993 included a pretax charge of $93 million, $61 million after tax, 59
cents per share, which solely related to the restructuring of certain
operations and functions at Sea-Land Service Inc., CSX's wholly-owned
container-shipping subsidiary.  Excludingsubsidiary and the after-tax restructuring charge,$54 million, 52 cents per share impact
of the corporate income tax rate change.  Exclusive of these items, earnings
for the first sixnine months of 1993 would have been $206$323 million, $1.98$3.11 per
share.

         The results for the first nine months of 1994 reflect the continued
strength of the U.S. economy and the improving economic conditions abroad. 
The improving economic conditions increased the demand for CSX transportation
services.  In addition, the long-term efforts to reduce expense and improve
productivity resulted in a $154 million increase in operating income compared
to the prior period, excluding the 1993 pretax charge of $93 million.




                                    - 13 -



         PAGE 14

ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS
         AND FINANCIAL CONDITION, CONTINUED

FINANCIAL CONDITION
- -------------------

         Cash, cash equivalents and short-term investments totaled $478$650
million at July 1,September 30, 1994, a decreasean increase of $21$151 million since December 31,
1993.  Primary sources of cash, cash equivalents and short-term investments
were operations and the issuance of short-term debt.  Primary uses of cash,
cash equivalents and short-term investments were property additions, repayment
of long-term debt, payment of dividends and payments relating to
productivity/restructuring charge liabilities.  

         Primary
sources of cash, cash equivalents and short-term investments were operations,
issuance of short-term debt and a net decrease in short-term investments.


                                    - 12 -



         PAGE 13

ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF RESULTS OF OPERATIONS
         AND FINANCIAL CONDITION, CONTINUED

FINANCIAL CONDITION, Continued
- ------------------------------

         During the first sixnine months of 1994, net investing activities
consumed $252$446 million of cash and cash equivalents compared with $393$482 million
consumed in the first sixnine months of 1993.  The changes in investing
activities were primarily due to an increase in cash proceeds from net short-term
investment activity and a lower level of purchases of long-term
marketable securities compared to the sixnine months ended JuneSeptember 30, 1993.

         Financing activities used $108$182 million of cash and cash equivalents
for the sixnine months ended July 1,September 30, 1994.  This was a $172$217 million decreasechange
from the $64 million of cash provided by financing activities in the first sixnine months of 1993.  The change was primarily due to a
reduction in proceeds from net short-term borrowings, an increase in the
company's cash dividends paid per common share, a reduction in scheduled debt
repayments, and a partial redemption of the company's 9 1/2% Sinking Fund
Debentures due July 1, 2016.  The company redeemed $100 million of the $250
million principal amount outstanding on July 1, 1994.

         The working capital deficit, decreased $50 millioncurrent ratio, debt ratio, and ratio of
earnings to fixed charges all improved during the sixnine months ended July 1,September
30, 1994.  The decrease in the working capital deficit was
primarily due to increased customer accounts receivables for the first six
months of 1994, related to increased revenue.  A working capital deficit is not unusual for CSX and does not
indicate a lack of liquidity.  CSX continues to maintain adequate current
assets to satisfy current liabilities when they are due and has sufficient
liquidity and financial resources to manage its day-to-day cash needs.  For
the full year, CSX does not expect significant changes in working capital,
property additions, or debt levels from the prior year.

FINANCIAL DATA
- --------------
                                                   (Millions of Dollars)
                                               -----------------------------
                                               July 1,September 30,    December 31,
                                                   1994            1993
                                               ---------------------    ------------
Cash, Cash Equivalents and
  Short-Term Investments                           $ 478650           $ 499
Commercial Paper Outstanding -
  Short-Term                                       $ 308344           $ 164
Commercial Paper Outstanding -
  Long-Term                                        $ 300           $ 300
Working Capital (Deficit)                          $(654)$(573)          $(704)
Current Ratio                                        .71.76             .69
Debt Ratio                                           46%45%             49%
Ratio of Earnings to Fixed Charges                  2.5x2.8x            2.3x
                                    - 1314 -



         PAGE 1415

OUTLOOK
- -------

         ForIn the balancefourth quarter of 1994, each of CSX's major transportation
units anticipatescontinue to anticipate favorable revenue levels compared with 1993.  The
higher revenue levels are anticipatedexpected to result from the strong domestic economy. 
The company also plans to continue the intense focus on productivity
improvements and expense control throughout its transportation units over the next six
months.units.

         Entering the second halffourth quarter of 1994, CSXT is experiencing solid
demand for domestic coal shipments as U.S. utilities continue to rebuild
inventories depleted by 1993's United Mine Workers strikes and unusually high demand during severethe harsh
winter weather.conditions of early 1994.  Export coal shipments, however, remain weak, as a result of
depressedwill
continue to be affected by soft European demand from abroad,and foreign competition and the strong domestic
market.competition.  
CSXT merchandise traffic, reflecting the underlying strength of the U.S.
industrial sector, is expected to trend withremain strong for the economy.remainder of the  
year.

         CSXT experienced only slight interruptionswill monitor and be actively involved in industrywide labor
contract negotiations which are expected to begin in late 1994.  These
negotiations have traditionally taken place over a number of servicemonths and no structural damage
during mid-July floodinghave
not resulted in the southeastern U.S.any extended work stoppages.

         Sea-Land anticipates traffic flows in the fourth quarter of 1994 in
nearly all of its trade lanes will surpass prior year levels during the balance of the year.  While the
nationwide Teamsters' strike disrupted Sea-Land's operations during the secondprior-year fourth quarter the unit quickly regained customer confidence following the strike
and has seen no permanent traffic loss.levels. 
Strong demand for ocean transportation should allow Sea-Land to select higher-ratedhigher-
rated traffic.  A more stable rate environment is expected throughout the
industry.

         CSX Intermodal expects sustained strong levels of shipments and
revenue during the remaining months of 1994.  The unit continues to benefit
from growth in the general economy as well as market share gains.

         With the expectation of a healthy grain harvest in the second half of
the year,fourth
quarter, American Commercial Lines anticipates stronger demand for its
services and with this demand, recovery of barge rates.   

         The state of Florida has notified CSXT will monitorof its intention to redeem the
remaining amounts due on its installment purchase of 80 miles of track and
be actively involved in industrywide labor
contract negotiations which are expected to begin in late 1994.  These
negotiations have traditionally taken place over a number of months and have
not resulted in any extended work stoppages.















                                    - 14 -



         PAGE 15

PART II.  OTHER INFORMATION


   Item 4.  Submission of Matters to a Vote of Security Holders

            (a)   Annual meeting held May 3, 1994.

            (b)   Not applicable.

            (c)   There were 104,648,925 shares of CSX common stock
                  outstandingright-of-way as of March 4,December 1, 1994.  If consummated, the December 1, 1994
redemption would result in proceeds of approximately $100 million and the
record date forrecognition of a pretax deferred gain of approximately $60 million.  

OTHER MATTERS
- -------------

         Sea-Land is planning to integrate the 1994 annual meetingcorporate functions of shareholders.  A total of 88,818,478 
                  shares were voted.  All of management's nominees for
                  directorsits
global organization and has announced it will consolidate these activities in
Charlotte, North Carolina.  Activities currently based in Elizabeth and
Liberty Corner, New Jersey, Rotterdam, The Netherlands, and Seattle,
Washington would be affected.  The financial impact of the corporation were elected with the following
                  vote:

                                                       Votes      Broker
         Nominee                    Votes For        Withheld     Non-Votes
         Edward L. Addison          88,359,100        404,182     55,196
         Elizabeth E. Bailey        88,359,789        403,493     55,196
         Robert L. Burrus, Jr.      88,320,788        442,494     55,196
         Bruce C. Gottwald          88,372,498        390,784     55,196
         John R. Hall               88,367,703        395,579     55,196
         Robert D. Kunisch          88,372,642        390,640     55,196
         Hugh L. McColl, Jr.        88,344,110        419,172     55,196
         James W. McGlothlin        88,393,628        369,654     55,196
         Southwood J. Morcott       88,375,416        387,806     55,256
         Charles E. Rice            88,377,331        385,951     55,196
         William C. Richardson      88,302,868        460,414     55,196
         Frank S. Royal, M.D.       88,293,084        470,198     55,196
         John W. Snow               88,374,093        389,189     55,196
         William B. Sturgill        88,340,174        423,108     55,196consolidation has
not been determined.  The appointment of Ernst & Young as independent auditors to audit
            and report on CSX's financial statements for the year 1994 was
            ratified by the shareholders with the following vote:
                                                                  Broker
                  Votes For         Votes Against   Abstentions   Non-Votes
                  88,261,199        153,961           333,549     69,769

            Amendments to the 1987 Long-Term Performance Stock Plan were
            approved by the shareholders with the following vote:

                                                                  Broker
                  Votes For         Votes Against   Abstentions   Non-Votes
                  64,002,177        18,519,777        1,045,905   5,250,619

            The 1994 Senior Management Incentive Compensation Plan was
            approved by the shareholders with the following vote:

                                                                  Broker
                  Votes For         Votes Against   Abstentions   Non-Votes
                  84,431,961        3,211,886         1,104,860   69,771

            (d)   Not applicable.consolidation may result in a fourth quarter pretax
charge that may significantly reduce Sea-Land's operating results.


                                    - 15 -



         PAGE 16

PART II.  OTHER INFORMATION Continued


       Item 6.  Exhibits and Reports on Form 8-K

                (a)  Exhibits

                     1.  None.

                (b)  Reports on Form 8-K

                     1.  None.


                                   SIGNATURE
                                   ---------

         Pursuant to the requirements of the Securities Exchange Act of 1934,
the registrant has duly caused this report to be signed on its behalf by the
undersigned thereunto duly authorized.

                                            CSX CORPORATION
                                            (Registrant)


                                        By: GREGORY R. WEBER
                                            ------------------------------
                                            Gregory R. Weber
                                            Vice President, Controller and     
                                            Treasurer
Dated:  JulyOctober 28, 1994                    (Principal Accounting Officer)

























                                    - 16-16 -