CSX (CSX) 10-Q 20 Oct 09 2009 Q3 Quarterly report Financial data

CONSOLIDATED INCOME STATEMENTS

CONSOLIDATED INCOME STATEMENTS (USD $)
In Millions, except Share data	3 Months Ended Sep. 25, 2009	3 Months Ended Sep. 26, 2008	9 Months Ended Sep. 25, 2009	9 Months Ended Sep. 26, 2008
Revenue	$2,289	$2,961	$6,721	$8,581
Expense
Labor and Fringe	653	754	1,969	2,232
Materials, Supplies and Other	428	568	1,273	1,586
Fuel	223	508	599	1,486
Depreciation	228	227	681	676
Equipment and Other Rents	92	106	303	329
Inland Transportation	67	65	194	196
Total Expense	1,691	2,228	5,019	6,505
Operating Income	598	733	1,702	2,076
Interest Expense	(140)	(131)	(420)	(383)
Other Income - Net (Note 8)	6	5	19	94
Earnings From Continuing Operations Before Income Taxes	464	607	1,301	1,787
Income Tax Expense (Note 9)	(171)	(227)	(469)	(653)
Earnings From Continuing Operations	293	380	832	1,134
Discontinued Operations (Note 11)	0	2	15	(16)
Net Earnings	$293	$382	$847	$1,118
Net Earnings Per Share, Basic
Continuing Operations	0.75	0.94	2.12	2.81
Discontinued Operations	0	0.01	0.04	-0.04
Net Earnings	0.75	0.95	2.16	2.77
Net Earnings Per Share, Assuming Dilution
Continuing Operations	0.74	0.93	2.1	2.75
Discontinued Operations	0	0.01	0.04	-0.04
Net Earnings	0.74	0.94	2.14	2.71
Average Shares Outstanding (Thousands)	392,352	402,224	391,847	404,260
Average Shares Outstanding, Assuming Dilution (Thousands)	396,333	408,486	395,268	412,936
Cash Dividends Paid Per Common Share	0.22	0.22	0.66	0.55

CONSOLIDATED BALANCE SHEETS

CONSOLIDATED BALANCE SHEETS (USD $)
In Millions	Sep. 25, 2009	Dec. 26, 2008
Current Assets
Cash and Cash Equivalents	$1,240	$669
Short-term Investments	81	76
Accounts Receivable - Net (Note 1)	928	1,107
Materials and Supplies	239	217
Deferred Income Taxes	171	203
Other Current Assets	111	119
Total Current Assets	2,770	2,391
Properties	30,805	30,208
Accumulated Depreciation	(7,765)	(7,520)
Properties - Net	23,040	22,688
Investment in Conrail (Note 10)	626	609
Affiliates and Other Companies	411	406
Other Long-term Assets	173	194
Total Assets	27,020	26,288
Current Liabilities
Accounts Payable	963	973
Labor and Fringe Benefits Payable	402	465
Casualty, Environmental and Other Reserves (Note 4)	179	236
Current Maturities of Long-term Debt (Note 7)	316	319
Income and Other Taxes Payable	121	125
Other Current Liabilities	95	286
Total Current Liabilities	2,076	2,404
Casualty, Environmental and Other Reserves (Note 4)	580	643
Long-term Debt (Note 7)	7,906	7,512
Deferred Income Taxes	6,551	6,235
Other Long-term Liabilities	1,218	1,426
Total Liabilities	18,331	18,220
Common Stock $1 Par Value	393	391
Other Capital	48	0
Retained Earnings	8,963	8,398
Accumulated Other Comprehensive Loss (Note 1)	(728)	(741)
Noncontrolling Minority Interest	13	20
Total Shareholders' Equity	8,689	8,068
Total Liabilities and Shareholders' Equity	$27,020	$26,288

CONSOLIDATED CASH FLOW STATEMEN

CONSOLIDATED CASH FLOW STATEMENTS (USD $)
In Millions	9 Months Ended Sep. 25, 2009	9 Months Ended Sep. 26, 2008
OPERATING ACTIVITIES
Net Earnings	$847	$1,118
Adjustments to Reconcile Net Earnings to Net Cash Provided by Operating Activities:
Depreciation	679	686
Deferred Income Taxes	330	356
Contributions to Qualified Pension Plans	(166)	(50)
Other Operating Activities	(150)	(14)
Changes in Operating Assets and Liabilities:
Accounts Receivable	159	(76)
Other Current Assets	(50)	(4)
Accounts Payable	(4)	86
Income and Other Taxes Payable	39	54
Other Current Liabilities	(80)	35
Net Cash Provided by Operating Activities	1,604	2,191
INVESTING ACTIVITIES
Property Additions	(1,046)	(1,308)
Purchases of Short-term Investments	0	(25)
Proceeds from Sales of Short-term Investments	0	280
Other Investing Activities	51	27
Net Cash Used in Investing Activities	(995)	(1,026)
FINANCING ACTIVITIES
Long-term Debt Issued (Note 7)	500	1,000
Long-term Debt Repaid (Note 7)	(110)	(220)
Dividends Paid	(259)	(222)
Stock Options Exercised (Note 3)	19	75
Shares Repurchased	0	(1,307)
Other Financing Activities	(188)	36
Net Cash Used in Financing Activities	(38)	(638)
Net Increase in Cash and Cash Equivalents	571	527
Cash and Cash Equivalents
Cash and Cash Equivalents at Beginning of Period	669	368
Cash and Cash Equivalents at End of Period	$1,240	$895

Nature of Operations and Signif

Nature of Operations and Significant Accounting Policies
	3 Months Ended Sep. 25, 2009
Nature of Operations and Significant Accounting Policies [Abstract]
Nature of Operations and Significant Accounting Policies	NOTE 1.Nature of Operations and Significant Accounting Policies Background CSX Corporation (CSX) together with its subsidiaries (the Company), based in Jacksonville, Florida, is one of the nation's leading transportation suppliers.The Companys rail and intermodal businesses provide rail-based transportation services including traditional rail service and the transport of intermodal containers and trailers. CSXs principal operating subsidiary, CSX Transportation, Inc. (CSXT), provides an important link to the transportation supply chain through its approximately 21,000 route mile rail network, which serves major population centers in 23 states east of the Mississippi River, the District of Columbia and the Canadian provinces of Ontario and Quebec. CSX Intermodal, Inc. (Intermodal), one of the nations largest coast-to-coast intermodal transportation providers,is a stand-alone, integrated intermodal company linking customers to railroads via trucks and terminals. Other entities In addition to CSXT, the rail segment includes non-railroad subsidiaries Total Distribution Services, Inc. (TDSI), Transflo Terminal Services, Inc. (Transflo), CSX Technology, Inc. (CSX Technology) and other subsidiaries. TDSI serves the automotive industry with distribution centers and storage locations, while Transflo provides logistical solutions for transferring products from rail to trucks. Technology and other support services are provided by CSX Technology and other subsidiaries. CSXs other holdings include CSX Real Property, Inc., a subsidiary responsible for the Companys real estate sales, leasing, acquisition and management and development activities. These activities are classified in other income net because they are not considered by the Company to be operating activities and results may fluctuate with the timing of real estate sales. In May 2009, CSX sold the stock of a subsidiary that indirectly owned Greenbrier Hotel Corporation, owner of The Greenbrier resort. For more information, see Note 11, Discontinued Operations. Basis of Presentation In the opinion of management, the accompanying consolidated financial statements contain all normal, recurring adjustments necessary to fairly present the following: Consolidated income statements for the quarters and nine months ended September 25, 2009 and September 26, 2008; Consolidated balance sheets at September 25, 2009 and December 26, 2008; and Consolidated cash flow statements for the nine months ended September 25, 2009 and September 26, 2008. 6 Table of Contents CSX CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) NOTE 1.Nature of Operations and Significant Accounting Policies, continued In addition, management has evaluated and disclosed all material events occurring subsequent to the date of the financial statements up to the date this quarterly report is filed on Form 10-Q. Pursuant to the rules and regulations of the Securities and Exchange Commission (SEC), certain information and disclosures normally included in the notes to the annual financial statements prepared in accordance with U.S. generally accepted accounting p

Earnings Per Share

Earnings Per Share
	3 Months Ended Sep. 25, 2009
Earnings Per Share [Abstract]
Earnings Per Share	NOTE 2.Earnings Per Share The following table sets forth the computation of basic earnings per share and earnings per share, assuming dilution: Third Quarters Nine Months Ended 2009 2008 2009 2008 Numerator (Dollars in millions): Earnings from Continuing Operations $293 $380 $832 $1,134 Interest Expense on Convertible Debt - Net of Tax - - - 1 Earnings from Continuing Operations, If Converted 293 380 832 1,135 Discontinued Operations - Net of Tax(a) - 2 15 (16) Net Earnings, If Converted 293 382 847 1,119 Interest Expense on Convertible Debt - Net of Tax - - - (1) Net Earnings $293 $382 $847 $1,118 Denominator (Units in thousands): Average Common Shares Outstanding 392,352 402,224 391,847 404,260 Convertible Debt 1,116 1,390 1,117 3,612 Stock Option Common Stock Equivalents (b) 2,417 3,634 2,076 4,055 Other Potentially Dilutive Common Shares 448 1,238 228 1,009 Average Common Shares Outstanding, Assuming Dilution 396,333 408,486 395,268 412,936 Net Earnings Per Share, Basic: Continuing Operations $0.75 $0.94 $2.12 $2.81 Discontinued Operations - 0.01 0.04 (0.04) Net Earnings $0.75 $0.95 $2.16 $2.77 Net Earnings Per Share, Assuming Dilution: Continuing Operations $0.74 $0.93 $2.10 $2.75 Discontinued Operations - 0.01 0.04 (0.04) Net Earnings $0.74 $0.94 $2.14 $2.71 (a) For additional information regarding discontinued operations, see Note 11, Discontinued Operations. (b) When calculating diluted earnings per share for stock option common stock equivalents, the Earnings Per Share Topic, ASC 260, requires CSX to include the potential shares that would be outstanding if all outstanding stock options were exercised.This is offset by shares CSX could repurchase using the proceeds from these hypothetical exercises to obtain the common stock equivalent.This number is different from outstanding stock options, which is included in Note 3, Share-Based Compensation.All stock options were dilutive for the periods presented; therefore, no stock options were excluded from the diluted earnings per share calculation. 10 Table of Contents CSX CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) NOTE 2.Earnings Per Share, continued Basic earnings per share is based on the weighted-average number of shares of common stock outstanding.Earnings per share, assuming dilution, is based on the weighted-average number of shares of common stock outstanding adjusted for the effects of common stock that may be issued as a result of the following types of potentially dilutive instruments: convertible debt, employee stock options, and other equity awards, which include long-term incentive awards. Th

Share Based Compensation

Share Based Compensation
	3 Months Ended Sep. 25, 2009
[ShareBasedCompensationAbstract]
Share-Based Compensation	NOTE 3.Share-Based Compensation CSX share-based compensation plans primarily include performance grants, restricted stock awards, stock options and stock plans for directors.CSX has not granted stock options since 2003.Awards granted under the various plans are determined and approved by the Compensation Committee of the Board of Directors or, in certain circumstances, by the Chief Executive Officer for awards to management employees other than senior executives.The Board of Directors approves awards granted to the Companys non-management Directors upon recommendation of the Governance Committee. Total pre-tax expense associated with share-based compensation and its related income tax benefit is as follows: Third Quarters Nine Months Ended (Dollars in millions) 2009 2008 2009 2008 Share-Based Compensation Expense (a) $9 $24 $12 $48 Income Tax Benefit (3) (9) (4) (18) (a) Share-based compensation expense may fluctuate with estimates of the number of performance-based awards that are expected to be awarded in future periods. 11 Table of Contents CSX CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) NOTE 3.Share-Based Compensation, continued The following table provides information about stock options exercised. Third Quarters Nine Months Ended (In thousands) 2009 2008 2009 2008 Number of Stock Options Exercised 386 521 952 3,940 As of December 2008, all outstanding options are vested, and therefore, there will be no future expense related to these options. As of September 2009, CSX had approximately 6 million stock options outstanding. However, the impact of options to diluted earnings per share is much smaller (see footnote b in Note 2, Earnings Per Share for more information).

Casualty, Environmental and Oth

Casualty, Environmental and Other Reserves
	3 Months Ended Sep. 25, 2009
Casualty Environmental and Other Reserves [Abstract]
NOTE 4. Casualty, Environmental and Other Reserves	NOTE 4.Casualty, Environmental and Other Reserves Casualty, environmental and other reserves were determined to be critical accounting estimates due to the need for significant management judgments. They are provided for in the consolidated balance sheets as follows: September 2009 December 2008 (Dollars in millions) Current Long-term Total Current Long-term Total Casualty: Personal Injury $78 $223 $301 $104 $258 $362 Occupational 22 165 187 32 172 204 Total Casualty 100 388 488 136 430 566 Separation 15 61 76 16 71 87 Environmental 37 60 97 42 58 100 Other 27 71 98 42 84 126 Total $179 $580 $759 $236 $643 $879 Details with respect to each type of reserve are described below.Actual settlements and claims received could differ.The final outcome of these matters cannot be predicted with certainty.Considering the legal defenses asserted, the liabilities that have been recorded, and other factors, it is the opinion of management that none of these items, when finally resolved, will have a material effect on the Companys financial condition, results of operations or liquidity.However, should a number of these items occur in the same period, they could have a material effect on the Companys financial condition, results of operations or liquidity in that particular period. During the second quarter of 2009, the Company reduced casualty reserves by a net $85 million.The majority of this reduction is related to personal injury and asbestos claims and is described below.Also included in the net reduction is a write-off of $11 million of reinsurance receivables (expected receivables from outside insurance companies).This receivable write-off is not included in the reserve amounts disclosed above. 12 Table of Contents CSX CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) NOTE 4.Casualty, Environmental and Other Reserves, continued Casualty Casualty reserves represent accruals for personal injury and occupational injury claims.Currently, no individual claim is expected to exceed the Companys self-insured retention amount of $25 million per injury.To the extent the value of an individual claim exceeds the self-insured retention amount, the Company would present the liability on a gross basis in accordance with the Contingencies Topic, ASC 450, with a corresponding receivable for insurance recoveries.These reserves fluctuate based upon the timing of payments as well as changes in independent third party estimates, which are reviewed by management.Most of the claims relate to CSXT unless otherwise noted below.Defense and processing costs, which historically have been insignificant and are anticipated to be insignificant in the future, are not included in the recorded liabilities. Personal Injury Personal injury reserves represent liabilities for employee work-related and third-party injuries. Work-related injuries for CSXT e

Commitments and Contingencies

Commitments and Contingencies
	3 Months Ended Sep. 25, 2009
Commitments and Contingencies [Abstract]
Commitments and Contingencies	NOTE 5.Commitments and Contingencies Insurance The Company maintains numerous insurance programs with substantial limits for third-party casualty liability and Company property damage and business interruption.A certain amount of risk is retained by the Company on each of the casualty and property programs. For the first event in any given year, the Company has a $25 million deductible for each of the casualty and non-catastrophic property programs and a $50 million deductible for the catastrophic property program. 15 Table of Contents CSX CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) NOTE 5.Commitments and Contingencies, continued Guarantees CSX and certain of its subsidiaries are contingently liable, individually and jointly with others, as guarantors of approximately $42 million in obligations principally relating to leased equipment, vessels and joint facilities used by the Company in its current and former business operations.Utilizing the Companys guarantee for these obligations allows the obligor to take advantage of lower interest rates and obtain other favorable terms.Guarantees are contingent commitments issued by the Company that could require CSX or one of its affiliates to make payment to, or to perform certain actions for, the beneficiary of the guarantee based on another entitys failure to perform.These guarantees do not include CSXs guarantee of applicable CSXT secured notes because these notes are included on CSXs consolidated balance sheet. As of third quarter 2009, the Companys guarantees primarily related to the following: Guarantee of approximately $38 million of obligations of a former subsidiary, CSX Energy, in connection with a sale-leaseback transaction. CSX is, in turn, indemnified by several subsequent owners of the entity against payments made with respect to this guarantee.Management does not expect that CSX will be required to make any payments under this guarantee for which CSX will not be reimbursed.CSXs obligation under this guarantee will be completed in 2012. Guarantee of approximately $4 million of lease commitments assumed by A.P. Moller-Maersk (Maersk) for which CSX is contingently liable. CSX believes Maersk will fulfill its contractual commitments with respect to such lease commitments, and CSX will have no further liabilities for those obligations.CSXs obligation under this guarantee will be completed in 2011. As of third quarter 2009, the Company has not recognized any liabilities in its financial statements in connection with any guarantee arrangements described above.The maximum amount of future payments the Company could be required to make under these guarantees is the sum of the guaranteed amounts noted above. 16 Table of Contents CSX CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) NOTE 5.Commitments and Contingencies, continued Legal Proceedings There were no material developments during the quarter concerning the fuel surcharge anti-trust litigation or the Seminole Electric Cooperative, Inc. rate case.For further details, see Note 6, Commitments and Contingencies, in CSXs most recent Annual

Employee Benefit Plans

Employee Benefit Plans
	3 Months Ended Sep. 25, 2009
Employee Benefit Plans [Abstract]
Employee Benefit Plans	NOTE 6.Employee Benefit Plans The Company sponsors defined benefit pension plans principally for salaried, management personnel.The plans provide eligible employees with retirement benefits based predominantly on years of service and compensation rates near retirement.For employees hired after December 31, 2002, benefits are determined based on a cash balance formula, which provides benefits by utilizing interest and pays credits based upon age, service and compensation. In addition to these plans, CSX sponsors a post-retirement medical plan and a life insurance plan that provide benefits to full-time, salaried, management employees hired on or before December 31, 2002 upon their retirement if certain eligibility requirements are met.The post-retirement medical plan is contributory (partially funded by retirees), with retiree contributions adjusted annually.The life insurance plan is non-contributory. 17 Table of Contents CSX CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) NOTE 6.Employee Benefit Plans, continued The Company engages independent, external actuaries to compute the amounts of liabilities and expenses relating to these plans subject to the assumptions that the Company selects.The following table describes the components of expense/(income) related to net periodic benefit cost: Pension Benefits (Dollars in millions) Third Quarters Nine Months Ended 2009 2008 2009 2008 Service Cost $8 $8 $24 $25 Interest Cost 32 29 94 89 Expected Return on Plan Assets (37) (36) (108) (108) Amortization of Prior Service Cost 1 1 2 2 Amortization of Net Loss 6 6 19 17 Net Periodic Benefit Cost $10 $8 $31 $25 Other Post-retirement Benefits (Dollars in millions) Third Quarters Nine Months Ended 2009 2008 2009 2008 Service Cost $2 $2 $4 $5 Interest Cost 5 5 17 15 Amortization of Prior Service Cost - - - (1) Amortization of Net Loss 1 - 3 2 Net Periodic Benefit Cost $8 $7 $24 $21 In accordance with the Pension Protection Act (the Act) of 2006, companies are required to be 94% funded for their outstanding qualified pension obligations as of January 1, 2009 in order to avoid a scheduled series of required annual contributions. Recent market volatility and overall investment losses of pension assets reduced the funded status of CSXs qualified plans; however, required minimum contributions under funding rules for 2009 were approximately $5 million. The Company intends to pre-fund contributions up to $250 million pre-tax, or $160 million after-tax due to likely contribution requirements over the next several years. Through September 2009, the Company made contributions of $166 million and currently anticipates that additional contributions of up to $84 million may be made in the remainder of 2009. For further details, see Note 7, Employee Benefit Plans, in CSXs most recent Annua

Debt and Credit Agreements

Debt and Credit Agreements
	3 Months Ended Sep. 25, 2009
Debt and Credit Agreements [Abstract]
Debt and Credit Agreements	NOTE 7.Debt and Credit Agreements Debt Total activity related to long-term debt as of September 2009 was as follows: (Dollars in millions) Current Portion Long-term Portion Total Long-term Debt Activity Total long-term debt at December 2008 $319 $7,512 $7,831 2009 activity: Issued - 500 500 Repaid (110) - (110) Reclassifications 107 (107) - Other - 1 1 Total long-term debt at September 2009 $316 $7,906 $8,222 For fair value information related to the Companys long-term debt, see Note 12, Fair Value Measurements. Revolving Credit Facility CSX has a $1.25 billion unsecured revolving credit facility with a syndicate of banks. The facility allows borrowings at floating rates based on the London interbank offered rate ("LIBOR"), plus a spread depending uponratings assigned by Moody's Investors Serviceand Standard Poor's Ratings Group to CSX's senior, unsecured, long-term indebtedness for borrowed money. The facility requires CSX to maintaina ratio of total debt to total capitalization below a prescribed limit. The facilitydoes not require CSX to post collateral under any circumstances. As of September 2009, this facility was not drawn on, and CSX was in compliance with all covenant requirements under the facility.Thisfacility expires in2012. Receivables Securitization Facility On September 28, 2009, following the end of the fiscal quarter, the Company entered into a $250 million receivables securitization facility.The purpose of this facility is to provide an alternative to commercial paper and a low cost source of short-term liquidity. This facility has a 364-day term.As of the date of this filing, CSX has not drawn on this facility.Under the terms of this facility, CSX Transportation and CSX Intermodal transfer eligible third-party receivables to CSX Trade Receivables, a bankruptcy-remote special purpose subsidiary.A separate subsidiary of CSX will service the receivables.Upon transfer, the receivables become assets of CSX Trade Receivables and are not available to the creditors of CSX or any of its other subsidiaries. The cash received in exchange for these receivables when CSX Trade Receivables monetizes them by selling them to third party lenders will be recorded as debt on CSXs consolidated financial statements.

Other Income

Other Income (Expense), Net
	3 Months Ended Sep. 25, 2009
Other Income Expense Net [Abstract]
Other Income - Net	NOTE 8.Other Income - Net The Company derives income from items that are not considered operating activities.Income from these items is reported net of related expense in other income net on the consolidated income statements.Other income net consists primarily of interest income, income from real estate and miscellaneous income (expense). Interest income fluctuates as a result of interest rates and balances that earn interest based on CSXs cash, cash equivalents and short-term investments.Income from real estate includes the results of operations of the Companys non-operating real estate sales, leasing, acquisition and management and development activities.This real estate income may fluctuate as a function of timing of real estate sales.Miscellaneous income includes a number of items which can be income or expense.Examples of these items are equity earnings or losses, noncontrolling minority interest expense, investment gains and losses and other non-operating activities.Other income net consisted of the following: Third Quarters Nine Months Ended (Dollars in millions) 2009 2008 2009 2008 Interest Income $2 $10 $9 $31 Income from Real Estate 11 3 18 36 Miscellaneous Income (Expense) (a) (7) (8) (8) 27 Total Other Income - Net $6 $5 $19 $94 (a)In first quarter 2008, CSX recorded additional income of $30 million for an adjustment to correct equity earnings from a non-consolidated subsidiary. Previously, the results of operations from The Greenbrier resort were included in other income net.In May 2009, CSX sold the stock of a subsidiary that indirectly owned Greenbrier Hotel Corporation, owner of The Greenbrier resort.The results of this resort are now presented in discontinued operations on the consolidated income statements and all prior periods have been reclassified.For more information, see Note 11, Discontinued Operations.

Income Taxes

Income Taxes
	3 Months Ended Sep. 25, 2009
Income Taxes [Abstract]
Income Taxes	NOTE 9.Income Taxes As of September 2009 and December 2008, the Company had approximately $50 million and $57 million of total unrecognized tax benefits, respectively. For the same periods, after consideration of the impact of federal tax benefits, $42 million and $50 million, respectively, of net unrecognized tax benefits could favorably affect the effective income tax rate.As of September 2009, the Company estimates that approximately $13 million of the net unrecognized tax benefits for various state and federal income tax matters will be resolved over the next 12 months.Approximately $4 million of this total will be recognizable upon the expiration of various statutes of limitation.The final outcome of the remaining uncertain tax positions, however, is not yet determinable. 20 Table of Contents CSX CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) NOTE 9.Income Taxes, continued During second quarter 2008, the Internal Revenue Service (IRS) completed its examination of tax years 2004 through 2006. As a result of this examination and the resolution of other income tax matters, the Company recorded an income tax benefit of $18 million. The Company files a consolidated federal income tax return, which includes its principal domestic subsidiaries.CSX and its subsidiaries are subject to U.S. federal income tax as well as income tax of multiple state jurisdictions.During 2008, the Internal Revenue Service (IRS) completed examinations of tax years 2004 through 2006 as well as for 2007.The Company has appealed a tax adjustment proposed by the IRS with respect to the 2004 through 2006 period and a related amount is included in the uncertain tax positions above.This appeals process is expected to last more than one year.Federal examinations of original federal income tax returns for all years through 2007 are otherwise resolved.During the third quarter of 2009, the IRS began itsexamination of the 2008 federal income tax return. CSXs continuing practice is to recognize interest and penalties (net of related federal or state tax benefits or expense) associated with income tax matters in income tax expense.As of September 2009 and December 2008, the Company had a $6 million and a $2 million gross payable before the consideration of state tax impacts, respectively, accrued for interest and penalties.

Related Party Transactions

Related Party Transactions
	3 Months Ended Sep. 25, 2009
Related Party Transactions [Abstract]
Related Party Transactions	NOTE 10.Related Party Transactions Through a limited liability company,CSX and Norfolk Southern Corporation (NS) jointly own Conrail, Inc. (Conrail).CSX has a 42% economic interest and 50% voting interest in the jointly-owned entity, and NS has the remainder of the economic and voting interests.Pursuant to the Investments - Equity Method and Joint Ventures Topic, ASC 323,CSX applies the equity method of accounting to its investment in Conrail.At September 2009 and December 2008, CSXs investment in Conrail was $626 million and $609 million, respectively. CSXs income statement is impacted in several ways by the joint ownership of Conrail. First, Conrail owns and operates rail infrastructure for the joint benefit of CSX and NS. This is known as the shared asset area. Conrail charges fees for right-of way usage, equipment rentals and transportation, and switching and terminal service charges in the shared asset area. In addition, because of CSXs equity interest in Conrail, CSX also includes a share of Conrails income which is recorded as a contra-expense and reduces the total amount of expense recorded for Conrail. Also, purchase price amortization primarily represents the additional after-tax depreciation expense related to the write-up of Conrails fixed assets when the original purchase price, from the 1997 acquisition of Conrail, was allocated based on fair value. Lastly, interest expense is recorded on long-term payables to Conrail. 21 Table of Contents CSX CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) NOTE 10.Related Party Transactions, continued Dollar amounts of these items impacting the consolidated income statements were as follows: Third Quarters Nine Months Ended (Dollars in millions) 2009 2008 2009 2008 Income Statement Information: Rents, Fees and Services $26 $31 $76 $84 Equity in Income of Conrail (6) (6) (20) (18) Purchase Price Amortization and Other 1 1 3 3 Interest Expense Related to Conrail 1 1 3 3 Income Statement Impact $22 $27 $62 $72 Additional information about the investment in Conrail is included in CSXs most recent Annual Report on Form 10-K.

Discontinued Operations

Discontinued Operations
	3 Months Ended Sep. 25, 2009
Discontinued Operations [Abstract]
Discontinued Operations	NOTE 11.Discontinued Operations As previously reported in March 2009, Greenbrier Hotel Corporation (GHC), owner of The Greenbrier resort and then an indirect subsidiary of CSX, filed for Chapter 11 bankruptcy protection in the U.S. Bankruptcy Court for the Eastern District of Virginia, Richmond Division (Bankruptcy Court).In conjunction with the bankruptcy, GHC also announced an agreement to sell the resort pursuant to an asset purchase agreement (the APA) with Marriott Hotel Services, Inc. In May 2009, CSX sold the stock of a subsidiary that indirectly owned GHC to Justice Family Group, LLC (JFG) for approximately $21 million in cash.CSX recognized a gain on the sale of $25 million after tax in the second quarter of 2009.The gain was calculated using cash proceeds, net book value, deal-related costs incurred and tax benefits.The previously reported bankruptcy financing that CSX made available to The Greenbrier was paid down and no amounts were outstanding at the time of the sale.Also in May 2009, the Bankruptcy Court entered an order dismissing GHCs bankruptcy proceeding and terminating the APA.CSX has no continuing obligations to finance post-sale resort operations.CSX has retained responsibility for certain pre-closing Greenbrier pension obligations. This transaction is reportable as discontinued operations under the subsection Impairment or Disposal of Long-Lived Assets, ASC 360-10-45-2.Therefore, the gain on sale as well as results from operations are reported as discontinued operations.Previously, all amounts associated with the operations of The Greenbrier were included in Other Income - Net.All prior periods have been reclassified to reflect this change. 22 Table of Contents CSX CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) NOTE 11. Discontinued Operations, continued Income statement information: Third Quarters Nine Months Ended (Dollars in millions) 2009 2008 2009 2008 Net Income (Loss) From Operations, after tax $ - $2 $(10) $(16) Gain on Sale, after tax - - 25 - Net Income (Loss) From Discontinued Operations $ - $2 $15 $(16) Earnings per Share From Discontinued Operations, Assuming Dilution $ - $0.01 $0.04 $(0.04)

Fair Value Measurements

Fair Value Measurements
	3 Months Ended Sep. 25, 2009
Fair Value Measurements [Abstract]
Fair Value Measurements	NOTE 12.Fair Value Measurements Effective beginning second quarter 2009, the Financial Instruments Topic, ASC 825, requiresdisclosures about fair value of financial instruments in quarterly reports as well as in annual reports.For CSX, this statement applies to certain investments and long-term debt.Also, the Fair Value Measurements and Disclosures Topic, ASC 820,clarifies the definition of fair value for financial reporting, establishes a framework for measuring fair value and requires additional disclosures about the use of fair value measurements. Various inputs are considered when determining the value of the Companys investments and long-term debt.The inputs or methodologies used for valuing securities are not necessarily an indication of the risk associated with investing in these securities.These inputs are summarized in the three broad levels listed below. Level 1 observable market inputs that are unadjusted quoted prices for identical assets or liabilities in active markets Level 2 other significant observable inputs (including quoted prices for similar securities, interest rates, credit risk, etc.) Level 3 significant unobservable inputs (including the Companys own assumptions in determining the fair value of investments) The Companys investment assets are valued by a third-party trustee, consist primarily of corporate bonds and are carried at fair value on the consolidated balance sheet.As of September 2009, these bonds had a fair value of $116 million.All inputs used to determine fair value are considered level 2 inputs. Long-term debt is the Companys only financial instrument with fair values significantly different from their carrying amounts. The fair value of long-term debt has been estimated using discounted cash flow analysis based upon the Company's current incremental borrowing rates for similar types of financing arrangements which are considered level 2 inputs. 23 Table of Contents CSX CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) NOTE 12.Fair Value Measurements, continued The fair value of outstanding debt fluctuates with changes in applicable interest rates.Fair value will exceed carrying value when the current market interest rate is lower than the interest rate at which the debt was originally issued.The fair value of a companys debt is a measure of its current value under present market conditions.It does not impact the financial statements under current accounting rules.The fair value and carrying value of the Companys long-term debt is as follows: (Dollars in millions) September 2009 December 2008 Long-term Debt Including Current Maturities: Fair Value $9,192 $7,415 Carrying Value $8,222 $7,831

Business Segments

Business Segments
	3 Months Ended Sep. 25, 2009
Business Segments [Abstract]
Business Segments	NOTE 13.Business Segments The Companys consolidated operating income results are comprised of two business segments: Rail and Intermodal.The Rail segment provides rail freight transportation over a network of approximately 21,000 route miles in 23 states, the District of Columbia and the Canadian provinces of Ontario and Quebec. The Intermodal segment provides integrated rail and truck transportation services and operates a network of dedicated intermodal facilities across North America.These segments are strategic business units that offer different services and are managed separately.Performance of each segment is evaluated and resources are allocated based on several factors, of which the principal financial measures are business segment operating income and operating ratio.The accounting policies of the segments are the same as those described in Note 1, Nature of Operations and Significant Accounting Policies, in CSXs most recent Annual Report on Form 10-K.Business segment information is as follows: Third Quarters CSX (Dollars in millions) Rail (a) Intermodal Consolidated 2009 2008 2009 2008 2009 2008 $ Change Revenues from External Customers $1,986 $2,562 $303 $399 $2,289 $2,961 $(672) Segment Operating Income 559 636 39 97 598 733 (135) Nine Months Ended CSX (Dollars in millions) Rail (a) Intermodal Consolidated 2009 2008 2009 2008 2009 2008 $ Change Revenues from External Customers $5,857 $7,449 $864 $1,132 $6,721 $8,581 $(1,860) Segment Operating Income 1,603 1,842 99 234 1,702 2,076 (374) (a) In addition to CSXT, the Rail segment includes non-railroad subsidiaries such as TDSI, Transflo, CSX Technology and other subsidiaries.

Summarized Consolidating Financ

Summarized Consolidating Financial Data
	3 Months Ended Sep. 25, 2009
Summarized Consolidating Financial Data [Abstract]
Schedule of Condensed Financial Statements [Text Block]	NOTE 14.Summarized Consolidating Financial Data In December 2007, CSXT sold secured equipment notes maturing in 2023 and in October 2008, CSXT sold additional secured equipment notes maturing in 2014 in registered public offerings.CSX has fully and unconditionally guaranteed the notes. In connection with the notes, the Company is providing the following condensed consolidating financial information in accordance with SEC disclosure requirements. Each entity in the consolidating financial information follows the same accounting policies as described in the consolidated financial statements, except for the use of the equity method of accounting to reflect ownership interests in subsidiaries which are eliminated upon consolidation and the allocation of certain expenses of CSX incurred for the benefit of its subsidiaries. Condensed consolidating financial information for the obligor, CSXT, and parent guarantor, CSX, is as follows: 25 Table of Contents CSX CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) NOTE 14.Summarized Consolidating Financial Data, continued Consolidating Income Statements (Dollars in Millions) Quarter Ended September 2009 CSX Corporation CSX Transportation Other Eliminations Consolidated Operating Revenue $ - $1,971 $344 $(26) $2,289 Operating Expense (69) 1,492 291 (23) 1,691 Operating Income 69 479 53 (3) 598 Equity in Earnings of Subsidiaries 343 - - (343) - Interest Expense (126) (29) (2) 17 (140) Other Income - Net 24 10 (14) (14) 6 Earnings From Continuing Operations Before Income Taxes 310 460 37 (343) 464 Income Tax Benefit (Expense) (17) (169) 15 - (171) Earnings From Continuing Operations 293 291 52 (343) 293 Discontinued Operations - - - - - Net Earnings $293 $291 $52 $(343) $293 Quarter Ended September 2008 CSX Corporation CSX Transportation Other Eliminations Consolidated Operating Revenue $ - $2,544 $448 $(31) $2,961 Operating Expense (33) 1,963 327 (29) 2,228 Operating Income 33 581 121 (2) 733 Equity in Earnings of Subsidiaries 444 - - (444) - Interest Expense (142) (38) (5) 54 (131) Other Income - Net 62 16 (21) (52) 5 Earnings From Continuing Operations Before Income Taxes 397 559 95 (444) 607 Income Tax Benefit (Expense) (15) (192) (20) - (227) Earnings From Continuing Operations 382 367 75 (444) 380 Discontinued Operations - - 2 - 2 Net Earnings $382 $367 $77 $(444) $382 26 Table of Contents CSX CORPORATION NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (Unaudited) NOT

Document Information

Document Information
	9 Months Ended Sep. 25, 2009
Document Information [Line Items]
Document Type	10-Q
Amendment Flag	false
Document Period End Date	2009-09-25

Entity Information

Entity Information (USD $)
	3 Months Ended Sep. 25, 2009	9 Months Ended Sep. 25, 2009
Entity Information [Line Items]
Entity Registrant Name	CSX CORP
Entity Central Index Key		0000277948
Current Fiscal Year End Date		--12-25
Entity Well Known Seasoned Issuer		Yes
Entity Voluntary Filers		No
Entity Current Reporting Status		No
Entity Filer Category		Large Accelerated Filer
Entity Public Float		$373,485,849
Entity Common Stock Shares Outstanding		392,558,925