CSX (CSX) 8-K CSX Reports Fourth-quarter 2004 Earnings

Exhibit 99.2

CSX REPORTS FOURTH-QUARTER 2004 EARNINGS

          JACKSONVILLE, Fla., January 25, 2005 – CSX Corporation (NYSE: CSX) today reported its financial results for the fourth quarter of 2004.

•   Net earnings were $66 million, or 30 cents per share, including international terminal’s discontinued operations and related tax obligations, which lowered net earnings by $93 million, or 41 cents per share;

•   Net earnings from continuing operations were $159 million, or 71 cents per share, up $47 million, or 42% compared to the prior year’s quarter;

•   Surface Transportation operating income, including rail and intermodal operations, was $315 million, up $76 million, or 32% compared to the fourth quarter of 2003.

          CSX’s core Surface Transportation businesses produced operating income of $315 million in the fourth quarter of 2004 versus $239 million in the previous year’s quarter. The fourth quarter of 2004 included a $7 million positive impact from an extra week that resulted from the company’s 52/53 week fiscal reporting calendar. The 2003 quarter contained a net charge for management’s restructuring initiative of $12 million. On a comparable basis, Surface Transportation operating income for 2004 would have been $308 million, representing a 23% improvement over 2003.

          “CSX’s earnings were driven by the continued strength in the economy and by improving operations,” said Michael J. Ward, CSX Corporation chairman, president and chief executive officer. “Notably, this quarter represents the fourth straight quarter in which CSX has delivered consistent, continuous improvement in core earnings.”

          Surface Transportation revenue for the quarter was $2.17 billion including $117 million from the 53^rd accounting week. On an adjusted 52-week basis, revenue for the quarter was up 8% led by strength in the company’s merchandise, coal and intermodal markets.

          Ward added, “The continued growth in revenue was due in large part to the ongoing success in the company’s yield initiatives and represents the 11^th consecutive quarter of solid revenue growth. Long-term, CSX’s success is dependant on its ability to drive further improvements in operations for its customers. In the fourth quarter, the rail network showed signs of improving fluidity as the company worked to fine-tune the new operating plan that was put in place during the third quarter. The leadership of CSX remains optimistic about the operating plan and the opportunity it holds for the company going forward.”

          In the fourth quarter of 2004, CSX entered into a definitive agreement to sell its international terminals business for $1.15 billion in cash and other consideration. Amounts related to this business are reported as discontinued operations for all periods presented. As a result of this agreement, the company recorded additional tax expense in the quarter of $97 million related to undistributed foreign earnings.

          Commenting on the CSX World Terminals transaction, Ward said, “The company expects to close on this transaction in the first quarter of this year allowing CSX to even further sharpen its focus on core Surface Transportation businesses.”

          CSX’s detailed financial information is contained in the company’s Quarterly Flash document, which will be posted on the company’s website,www.csx.com, and filed on Form 8-K with the Securities and Exchange Commission today.

          CSX Corporation, based in Jacksonville, Fla., owns the largest rail network in the eastern United States. CSX Transportation, Inc. and its 32,000 employees provide rail transportation services over a 21,000 route-mile network in 23 states, the District of Columbia and two Canadian provinces. CSX Corporation also provides intermodal and global container terminal operations through other subsidiaries.

          This press release and other statements by the Company contain forward-looking statements within the meaning of the Private Securities Litigation Reform Act with respect to, among other items: projections and estimates of earnings, revenues, cost-savings, expenses, or other financial items; statements of management’s plans, strategies and objectives for future operation, and management’s expectations as to future performance and operations and the time by which objectives will be achieved; statements concerning proposed new products and services; and statements regarding future economic, industry or market conditions or performance. Forward-looking statements are typically identified by words or phrases such as “believe,” “expect,” “anticipate,” “project,” and similar expressions. Forward-looking statements speak only as of the date they are made, and the Company undertakes no obligation to update or revise any forward-looking statement. If the Company does update any forward-looking statement, no inference should be drawn that the Company will make additional updates with respect to that statement or any other forward-looking statements.

          Forward-looking statements are subject to a number of risks and uncertainties, and actual performance or results could differ materially from that anticipated by these forward-looking statements. Factors that may cause actual results to differ materially from those contemplated by these forward-looking statements include, among others: (i) the Company’s success in implementing its financial and operational initiatives, (ii) changes in domestic or international economic or business conditions, including those affecting the rail industry (such as the impact of industry competition, conditions, performance and consolidation); (iii) legislative or regulatory changes; (iv) the inherent business risks associated with safety and security; and (v) the outcome of claims and litigation involving or affecting the Company. Other important assumptions and factors that could cause actual results to differ materially from those in the forward-looking statements are specified in the Company’s SEC reports, accessible on the SEC’s website atwww.sec.gov and the Company’s website atwww.csx.com.

500 Water Street
15th Floor, C900
Jacksonville, FL 32202
http://www. csx .com

Contact:

David Baggs
(904) 359-4812

TABLE OF CONTENTS

Table of Contents

	Page
Consolidated Financial Statements		2
Business Segments		6
Surface Transportation Results		7
Consolidated Highlights		12

The accompanying unaudited financial information should be read in conjunction with the Company’s 2003 Annual Report on Form 10-K, 2004 Quarterly Reports on Form 10-Q, and any Current Reports on Form 8-K.

1

CSX Corporation and Subsidiaries	QuarterlyFlash
CONSOLIDATED INCOME STATEMENTS
(Dollars in Millions, Except Per Share Amounts)

		(Unaudited)
		Quarters Ended						Years Ended
		Dec. 31,			Dec. 26,			Dec. 31,			Dec. 26,
		2004			2003			2004			2003
Revenue and Expense	Surface Transportation Revenue	$	2,172		$	1,896		$	8,020		$	7,439
	Surface Transportation Expense		1,857			1,657			7,027			6,788
	Surface Transportation Operating Income		315			239			993			651
	Other Operating Income		2			(2	)		7			(131	)
	Consolidated Operating Income		317			237			1,000			520
	Other Income		38			35			72			93
	Interest Expense		112			107			435			418
Earnings	Earnings From Continuing Operations Before Income Taxes and Cumulative Effect of Accounting Change		243			165			637			195
	Income Tax Expense		84			53			219			58
	Earnings From Continuing Operations Before Cumulative Effect of Accounting Change		159			112			418			137
	Cumulative Effect of Accounting Change - Net of Tax (Note f)		—			—			—			57
	Earnings From Continuing Operations		159			112			418			194
	Discontinued Operations - Net of Tax (Note d)		(93	)		11			(79	)		52
	Net Earnings	$	66		$	123		$	339		$	246
Per Common Share	Earnings Per Share, Assuming Dilution:
	Before Discontinued Operations and Cumulative Effect ofAccounting Change	$	0.71		$	0.51		$	1.87		$	0.63
	Cumulative Effect of Accounting Change		—			—			—			0.25
	Earnings From Continuing Operations		0.71			0.51			1.87			0.88
	Discontinued Operations		(0.41	)		0.05			(0.35	)		0.23
	Net Earnings	$	0.30			0.56		$	1.52			1.11
	Average Diluted Common Shares Outstanding (Thousands)		225,373			224,470			225,030			224,328
	Cash Dividends Paid Per Common Share	$	0.10		$	0.10		$	0.40		$	0.40

See accompanying Notes to Consolidated Financial Statements.

2

CSX Corporation and Subsidiaries	QuarterlyFlash
CONSOLIDATED BALANCE SHEETS
(Dollars in Millions)

		(Unaudited)
		Dec. 31,			Dec. 26,
		2004			2003
Assets	Current Assets
	Cash, Cash Equivalents and Short-term Investments	$	840		$	368
	Accounts Receivable - Net		1,162			1,115
	Materials and Supplies		165			168
	Deferred Income Taxes		—			136
	Other Current Assets		158			61
	International Terminals Assets Held for Sale		445			446
	Total Current Assets		2,770			2,294
	Properties - Net		19,945			13,634
	Investment in Conrail		574			4,678
	Affiliates and Other Companies		296			220
	Other Long-term Assets		779			919
	Total Assets	$	24,364		$	21,745
Liabilities	Current Liabilities
	Accounts Payable	$	879		$	821
	Labor and Fringe Benefits Payable		371			388
	Casualty, Environmental and Other Reserves		229			280
	Current Maturities of Long-term Debt		983			426
	Short-term Debt		101			2
	Income and Other Taxes Payable		102			114
	Other Current Liabilities		115			153
	International Terminals Liabilities Held for Sale		191			199
	Total Current Liabilities		2,971			2,383
	Casualty, Environmental and Other Reserves		819			836
	Long-term Debt		6,234			6,886
	Deferred Income Taxes		5,985			3,697
	Other Long-term Liabilities		1,538			1,507
	Total Liabilities		17,547			15,309
Shareholders’ Equity	Common Stock, $1 Par Value		215			215
	Other Capital		1,612			1,567
	Retained Earnings		5,210			4,957
	Accumulated Other Comprehensive Loss		(220	)		(303	)
	Total Shareholders’ Equity		6,817			6,436
	Total Liabilities and Shareholders’ Equity	$	24,364		$	21,745

See accompanying Notes to Consolidated Financial Statements.

3

CSX Corporation and Subsidiaries	QuarterlyFlash
CONSOLIDATED CASH FLOW STATEMENTS
(Dollars in Millions)

		(Unaudited)
		Years Ended
		Dec. 31,			Dec. 26,
		2004			2003
Operating Activities	Net Earnings	$	339		$	246
	Adjustments to Reconcile Net Earnings to Net Cash Provided:
	Depreciation		730			643
	Deferred Income Taxes		257			119
	Cumulative Effect of Accounting Change - Net of Tax		—			(57	)
	Additional Loss on Sale		—			108
	Provision for Casualty Reserves		—			232
	Restructuring Charge		77			44
	Net Gain on Conrail Spin-off - After tax		(16	)		—
	Other Operating Activities		(30	)		(130	)
	Changes in Operating Assets and Liabilities:
	Accounts Receivable		(21	)		19
	Termination of Sale of Receivables Program		—			(380	)
	Other Current Assets		28			40
	Accounts Payable		26			49
	Other Current Liabilities		64			(129	)
	Net Cash Provided by Operating Activities		1,454			804
Investing Activities	Property Additions		(1,058	)		(1,059	)
	Net Proceeds from Divestitures		55			214
	Short-term Investments - Net		(247	)		65
	Other Investing Activities		(18	)		(27	)
	Net Cash Used by Investing Activities		(1,268	)		(807	)
Financing Activities	Short-term Debt - Net		99			(141	)
	Long-term Debt Issued		401			919
	Long-term Debt Repaid		(434	)		(500	)
	Dividends Paid		(85	)		(86	)
	Other Financing Activities		40			(20	)
	Net Cash Provided by Financing Activities		21			172
Cash, Cash Equivalents and Short-term Investments	Net Increase in Cash and Cash Equivalents		207			169
	Cash and Cash Equivalents at Beginning of Period		296			127
	Cash and Cash Equivalents at End of Period		503			296
	Short-term Investments at End of Period		337			72
	Cash, Cash Equivalents and Short-term Investments at End of Period	$	840		$	368

See accompanying Notes to Consolidated Financial Statements.

4

CSX Corporation and Subsidiaries QuarterlyFlash

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

***CSX follows a 52/53 week fiscal reporting calendar and 2004 includes 53 weeks, with the extra week in the fourth quarter.***

(a)   Prior periods have been reclassified and/or restated to conform to the current year presentation.

2004

(b)   In the first quarter of 2004, the Company adopted Financial Accounting Standards Board (“FASB”) Interpretation No. 46, “Consolidation of Variable Interest Entities.” The Company consolidated Four Rivers Transportation (“FRT”), a short-line railroad, which was previously accounted for under the equity method. The fourth quarter of 2004 includes revenues, operating expenses and after-tax income of approximately $17 million, $8 million and $2 million for FRT, respectively. The fiscal year ended December 31, 2004, includes revenues, operating expenses and after-tax income of approximately $63 million, $35 million, and $6 million, respectively. Other income for the fiscal year ended December 26, 2003, includes net equity earnings of FRT of approximately $4 million.

(c)   In the third quarter of 2004, CSX, Norfolk Southern Corporation and Conrail, Inc. completed a corporate reorganization of Conrail that resulted in the direct ownership and control by CSXT of routes and assets that had previously been operated by CSXT under operating and lease agreements with a Conrail subsidiary. As a part of the reorganization, CSXT issued new unsecured debt obligations, which were exchanged for unsecured debt obligations of Consolidated Rail Corporation (“CRC”), a Conrail subsidiary. In addition, CSXT entered into new lease and sublease arrangements with CRC to support CRC’s secured debt and lease obligations, and the long-term note due from CSX to Conrail was eliminated. The reorganization did not affect the Shared Assets Areas, which continue to be owned and operated by CRC and are reflected in CSX’s remaining Investment in Conrail as shown in the Consolidated Balance Sheets.

The distribution was accounted for at fair value, resulting in a net gain of $16 million after tax, which is included in other income in the Consolidated Income Statement.

The assets and liabilities acquired at the time of the Conrail spin-off transaction are as follows:

Current Assets	$	7
Properties – Net		6,018
Investment in Conrail		(4,130	)
Other Long-term Assets		136
Total Assets	$	2,031
Current Liabilities	$	7
Long-term Liabilities		15
Long-term Debt		(93	)
Deferred Taxes		2,086
Retained Earnings		16
Total Liabilities and Retained Earnings	$	2,031

(d)   In the fourth quarter of 2004, CSX entered into a definitive agreement to sell its international terminals business for $1.15 billion in cash and other consideration. As a result, amounts related to this business are reported as discontinued operations for all periods presented. On the income statement, this amount includes their net earnings as well as additional tax expense of $97 million related to their undistributed foreign earnings. On the balance sheet, the amounts related to this business are shown as “International Terminals Assets/Liabilities Held for Sale.”

(e)   Beginning in the fourth quarter of 2004, CSX is required by EITF Issue No. 04-8, “The Effect of Contingently Convertible Debt on Diluted Earnings Per Share,” to include approximately 10 million shares underlying its convertible debt instrument using the if-converted method in the computation of earnings per share, assuming dilution. The dilutive impact for all periods is 2%-4%. All periods presented have been restated.

2003

(f)	Statement of Financial Accounting Standard (“SFAS”) No. 143, “Accounting for Asset Retirement Obligations,” was issued in 2001. In conjunction with the group-life method of accounting for asset costs, the Company historically accrued crosstie removal costs as a component of depreciation, which is not permitted under SFAS 143. With the adoption of SFAS 143 in fiscal year 2003, CSX recorded pretax income of $93 million, $57 million after tax, as a cumulative effect of an accounting change in the first quarter, representing the reversal of the accrued liability for crosstie removal costs. The adoption of SFAS 143 did not have a material effect on prior reporting periods.
(g)	In the third quarter of 2003, the Company changed its estimate of casualty reserves to include an estimate of incurred but not reported claims for asbestos and other occupational injuries to be received over the next seven years. In conjunction with the change in estimate, the Company recorded a charge of $232 million, $145 million after tax, in the third quarter of 2003 to increase its provision for these claims.
(h)	Effective for the third quarter 2003, CSX entered into two settlement agreements with Maersk, which resolved all material disputes pending between the companies arising out of the 1999 sale of the international container-shipping assets. The effect reduced the Company’s earnings by $108 million pretax, $67 million after tax. This charge is reflected in the financial statements as the Additional Loss on Sale of the international container-shipping assets.

5

CSX Corporation and Subsidiaries	QuarterlyFlash
BUSINESS SEGMENTS (Unaudited)(a)(b)
(Dollars in Millions)
Quarters Ended Dec. 31, 2004, and Dec. 26, 2003

													Surface						Eliminations/
	Rail						Intermodal						Transportation						Other(c)						Total
	2004			2003			2004			2003			2004			2003			2004			2003			2004			2003
Operating Revenue	$	1,801		$	1,568		$	371		$	328		$	2,172		$	1,896		$	—		$	—		$	2,172		$	1,896
Operating Expense
Labor and Fringe		718			636			22			19			740			655			1			—			741			655
Materials, Supplies and Other		418			341			48			57			466			398			1			5			467			403
Conrail Rents, Fees and Services		24			83			—			—			24			83			—			—			24			83
Building and Equipment Rent		116			110			30			36			146			146			(3	)		(3	)		143			143
Inland Transportation		(113	)		(102	)		190			175			77			73			—			—			77			73
Depreciation		205			141			10			9			215			150			2			2			217			152
Fuel		189			140			—			—			189			140			—			—			189			140
Miscellaneous		—			—			—			—			—			—			(3	)		(2	)		(3	)		(2	)
Restructuring Charge		—			12			—			—			—			12			—			—			—			12
Total Operating Expense		1,557			1,361			300			296			1,857			1,657			(2	)		2			1,855			1,659
Operating Income (Loss)	$	244		$	207		$	71		$	32		$	315		$	239		$	2		$	(2	)	$	317		$	237
Operating Ratio		86.5	%		86.8	%		80.9	%		90.2	%		85.5	%		87.4	%

Years Ended Dec. 31, 2004, and Dec. 26, 2003

													Surface						Eliminations/
	Rail						Intermodal						Transportation						Other(c)						Total
	2004			2003			2004			2003			2004			2003			2004			2003			2004			2003
Operating Revenue	$	6,694		$	6,182		$	1,326		$	1,257		$	8,020		$	7,439		$	—		$	128		$	8,020		$	7,567
Operating Expense
Labor and Fringe		2,698			2,555			78			73			2,776			2,628			3			61			2,779			2,689
Materials, Supplies and Other		1,508			1,329			199			201			1,707			1,530			2			56			1,709			1,586
Conrail Rents, Fees and Services		256			342			—			—			256			342			—			—			256			342
Building and Equipment Rent		425			418			141			144			566			562			(13	)		(4	)		553			558
Inland Transportation		(421	)		(399	)		714			697			293			298			—			16			293			314
Depreciation		664			579			38			32			702			611			9			9			711			620
Fuel		656			566			—			—			656			566			—			15			656			581
Miscellaneous		—			—			—			—			—			—			(8	)		(5	)		(8	)		(5	)
Provision for Casualty Claims		—			229			—			—			—			229			—			3			—			232
Additional Loss on Sale		—			—			—			—			—			—			—			108			—			108
Restructuring Charge - Net		67			22			4			—			71			22			—			—			71			22
Total Operating Expense		5,853			5,641			1,174			1,147			7,027			6,788			(7	)		259			7,020			7,047
Operating Income (Loss)	$	841		$	541		$	152		$	110		$	993		$	651		$	7		$	(131	)	$	1,000		$	520
Operating Ratio		87.4	%		91.2	%		88.5	%		91.2	%		87.6	%		91.2	%

(a)   Prior periods have been reclassified and/or restated to conform to the current year presentation.

(b)   CSX follows a 52/53 week fiscal reporting calendar and 2004 includes 53 weeks, with the extra week in the fourth quarter.

(c)   Eliminations/Other consists of the following:

(1)	Operations of CSX Lines for 2003 and gain amortization in both years
(2)	Charge incurred upon entering into settlement agreements with Maersk in 2003
(3)	Other items

6

CSX Corporation and Subsidiaries	QuarterlyFlash
SURFACE TRANSPORTATION TRAFFIC AND REVENUE
Loads (Thousands); Revenue (Dollars in Millions)

CSX follows a 52/53 week fiscal reporting calendar and 2004 includes 53 weeks, with the extra week in the fourth quarter.

	Fourth Quarter Loads							Fourth Quarter Revenue
	14 Weeks		13 Weeks					14 Weeks		13 Weeks
	2004		2003		% Change			2004		2003			% Change
Merchandise
Phosphates and Fertilizers		123		116		6	%	$	89	$	83			7	%
Metals		96		88		9			138		110			25
Forest Products		121		114		6			185		153			21
Food and Consumer		66		61		8			105		89			18
Agricultural Products		93		95		(2	)		137		129			6
Chemicals		146		135		8			283		248			14
Emerging Markets		134		120		12			138		116			19
		779		729		7			1,075		928			16
Automotive		135		139		(3	)		228		228			-
Coal, Coke and Iron Ore
Coal		440		406		8			460		388			19
Coke and Iron Ore		20		18		11			18		15			20
		460		424		8			478		403			19
Other		—		—		—			20		9			122
Total Rail		1,374		1,292		6			1,801		1,568			15
Intermodal
Domestic		268		285		(6	)		220		214			3
International		341		290		18			137		115			19
Other		—		—		—			14		(1	)		1,500
Total Intermodal		609		575		6			371		328			13
Total Surface Transportation		1,983		1,867		6	%		2,172		1,896			15	%

	Year Loads							Year Revenue
	53 Weeks		52 Weeks					53 Weeks		52 Weeks
	2004		2003		% Change			2004		2003		% Change
Merchandise
Phosphates and Fertilizers		471		460		2	%	$	341	$	329		4	%
Metals		380		348		9			511		435		17
Forest Products		465		459		1			681		622		9
Food and Consumer		245		242		1			377		351		7
Agricultural Products		356		363		(2	)		512		497		3
Chemicals		564		541		4			1,069		989		8
Emerging Markets		506		476		6			504		471		7
		2,987		2,889		3			3,995		3,694		8
Automotive		507		529		(4	)		835		853		(2	)
Coal, Coke and Iron Ore
Coal		1,659		1,570		6			1,714		1,543		11
Coke and Iron Ore		71		65		9			66		57		16
		1,730		1,635		6			1,780		1,600		11
Other		—		—		—			84		35		140
Total Rail		5,224		5,053		3			6,694		6,182		8
Intermodal
Domestic		1,028		1,060		(3	)		795		784		1
International		1,278		1,170		9			507		469		8
Other		—		—		—			24		4		500
Total Intermodal		2,306		2,230		3			1,326		1,257		5
Total Surface Transportation		7,530		7,283		3	%		8,020		7,439		8	%

Prior periods have been reclassified and/or restated to conform to the current year presentation.

7

CSX Corporation and Subsidiaries	QuarterlyFlash
SURFACE TRANSPORTATION TRAFFIC AND REVENUE
Loads (Thousands); Revenue (Dollars in Millions)

CSX follows a 52/53 week fiscal reporting calendar and 2004 includes 53 weeks, with the extra week in the fourth quarter.
In the following discussion of quarterly comparisons, the two periods are compared as if they were of equal duration.

	13 Weeks
	Fourth Quarter Loads							Fourth Quarter Revenue
	2004		2003		% Change			2004		2003			% Change
Merchandise
Phosphates and Fertilizers		115		116		(1	)%	$	83	$	83			—	%
Metals		90		88		2			129		110			17
Forest Products		112		114		(2	)		173		153			13
Food and Consumer		62		61		2			99		89			11
Agricultural Products		88		95		(7	)		129		129			—
Chemicals		137		135		1			266		248			7
Emerging Markets		128		120		7			131		116			13
		732		729		0			1,010		928			9
Automotive		130		139		(6	)		218		228			(4	)
Coal, Coke and Iron Ore
Coal		417		406		3			438		388			13
Coke and Iron Ore		19		18		6			17		15			13
		436		424		3			455		403			13
Other		—		—		—			20		9			122
Total Rail		1,298		1,292		0			1,703		1,568			9
Intermodal
Domestic		255		285		(11	)		208		214			(3	)
International		323		290		11			130		115			13
Other		—		—		—			14		(1	)		1,500
Total Intermodal		578		575		1			352		328			7
Total Surface Transportation		1,876		1,867		—	%		2,055		1,896			8	%

	52 Weeks
	Year Loads							Year Revenue
	2004		2003		% Change			2004		2003		% Change
Merchandise
Phosphates and Fertilizers		463		460		1	%	$	335	$	329		2	%
Metals		374		348		7			502		435		15
Forest Products		456		459		(1	)		669		622		8
Food and Consumer		241		242		(0	)		371		351		6
Agricultural Products		351		363		(3	)		504		497		1
Chemicals		555		541		3			1,052		989		6
Emerging Markets		500		476		5			497		471		6
		2,940		2,889		2			3,930		3,694		6
Automotive		502		529		(5	)		825		853		(3	)
Coal, Coke and Iron Ore
Coal		1,636		1,570		4			1,692		1,543		10
Coke and Iron Ore		70		65		8			65		57		14
		1,706		1,635		4			1,757		1,600		10
Other		—		—		—			84		35		140
Total Rail		5,148		5,053		2			6,596		6,182		7
Intermodal
Domestic		1,014		1,060		(4	)		783		784		(0	)
International		1,261		1,170		8			500		469		7
Other		—		—		—			24		4		500
Total Intermodal		2,275		2,230		2			1,307		1,257		4
Total Surface Transportation		7,423		7,283		2	%		7,903		7,439		6	%

Prior periods have been reclassified and/or restated to conform to the current year presentation.

8

CSX Corporation and Subsidiaries QuarterlyFlash

SURFACE TRANSPORTATION OPERATING RESULTS

CSX follows a 52/53 week fiscal reporting calendar and 2004 includes 53 weeks, with the extra week in the fourth quarter. In the following discussion of quarterly comparisons, the two periods are compared as if they were of equal duration.

REVENUE

Merchandise

Merchandise showed strong yield improvement in the fourth quarter. On a 52-week basis, revenue was up 9% while volume remained flat. All markets showed year-over-year improvement in revenue-per-car due to continued yield management strategies and the company’s fuel surcharge program.

•   Phosphates and Fertilizers– Phosphate revenue was flat during the quarter. Strength in domestic phosphate rock, ammonia, potash and sulfur, was offset by reduced domestic phosphate demand that is a result of historically high commodity prices.

•   Metals– Metals led all merchandise units in the third quarter with 17% revenue growth. Yield management strategies played a key role in revenue strength. Strong demand continues across all commodity lines. Steel production and mill utilization rates remain at high levels driven by continued strength in domestic steel demand. This combined with increased import movements provided strong growth.

•   Forest Products– Strength in lumber and panel growth was offset by losses in paper due to aggressive pricing and a customer plant machine closure. Lumber reflected continued strength in residential construction. Yield management strategies combined with active fleet management propelled revenues substantially higher than the prior year.

•   Food and Consumer– Increased revenue was led by gains in building products, refrigerated products, canned goods, clay, and appliances. Post-hurricane rebuilding drove the building products’ gains. Revenue gains were primarily driven by the yield management success.

•   Agricultural Products– Volume weakness resulted from less participation in the export and bean markets and targeted price increases on short-haul movements of grain and meals. Despite the volume decline, revenue was flat based on the strength of soybean meal and sweetener price increases. Wheat shipments into Tampa and the Northeast also contributed to revenue growth.

•   Chemicals– Chemicals continue to experience strong demand across most commodities. Strong end-user demand and a rebound in U. S. chemical exports helped drive results. Plastics and chlor alkali experienced the strongest revenue growth, with plant utilization rates for both sectors in the mid-90% range. Several glass manufacturing plant closures adversely affected sand related revenues.

•   Emerging Markets– Volume strength was driven by growth in several markets. Military activity increased by over 200% with the continuation of overseas support efforts. Northern aggregates increased by roughly 23%. Construction and demolition debris and municipal solid waste increased by roughly 10% as traffic from new origins were developed. Lime increased by approximately 18%, with new distribution terminals serving off-rail markets. Yield management strategies contributed to revenue growth across markets.

Automotive

Overall North American light vehicle production increased by appoximately 3%, year over year. Inventory levels remain high at 66 days for most manufacturers and 78 days for the Big 3. Downtime and reduced production at CSX served plants negatively impacted growth.

Coal, Coke and Iron Ore

Coal, coke and iron ore experienced significant volume and revenue gains in export, metallurgical and utility north markets. All lines of business reflect favorable year-over-year revenue-per-car gains. Lake and river market volumes were negatively impacted by producer decisions to send tonnage to other markets.

Intermodal

•   Domestic –Reduction in trailer core moves associated with the network simplification program is the primary driver of volume change. Yields in truck brokerage are improving from system and process improvements. In the wholesale market, the company continues to extract value in a capacity constrained environment. Service levels continue to impact year-over-year comparisons.

•   International –Revenue gains were largely volume related, driven mostly by Asian markets. Westbound empty movements continue to show year-over-year increases.

9

CSX Corporation and Subsidiaries QuarterlyFlash

SURFACE TRANSPORTATION OPERATING RESULTS(continued)

CSX follows a 52/53 week fiscal reporting calendar and 2004 includes 53 weeks, with the extra week in the fourth quarter. In the following discussion of quarterly comparisons, the two periods are compared as if they were of equal duration.

EXPENSE
(Significant Variances Explained)

				Estimated			Increase (Decrease)
	14 Week Variance			Additional Week			13 Week Variance
Labor and Fringe		85			( 53	)		32
Materials, Supplies and Other		68			( 25	)		43
Conrail Rents, Fees and Services		( 59	)		—			( 59	)
Building and Equipment Rent		—			( 8	)		( 8	)
Inland Transportation		4			( 6	)		( 2	)
Depreciation		65			(10	)		55
Fuel		49			( 8	)		41
Sub-Total		212			(110	)		102
Restructuring Charge		( 12	)		—			( 12	)
Total Expense		200			(110	)		90

Labor and Fringeexpenses increased $32 million during the fourth quarter of 2004 versus the prior year comparable quarter. This increase is attributable to the effects of inflation, along with increases in the Company’s incentive compensation plan. These costs were partially offset by benefits realized from reduced staffing levels.

Materials, Supplies and Otherexpenses increased $43 million during the fourth quarter of 2004 versus the prior year comparable quarter. The increase is mostly related to higher spending on track, locomotives, car repair and other items.

Conrail Rents, Fees and Servicesdecreased $59 million for the quarter primarily due to the Conrail spin-off transaction completed in third quarter of 2004. This transaction decreased rents paid to Conrail as assets previously leased from Conrail are now owned directly by CSX.

Depreciationincreased $55 million for the fourth quarter of 2004 due to an increased depreciation base, mainly attributable to the Conrail spin-off transaction, as assets previously leased from Conrail are now owned directly by CSX.

Fuelincreased $41 million for the quarter versus the prior year due to higher fuel prices, net of hedging benefits.

10

CSX Corporation and Subsidiaries	QuarterlyFlash
RAIL OPERATING STATISTICS(a)(b)

		Fourth Quarter									Year
		2004			2003			% Change			2004			2003			% Change
Coal (Millions of Tons)	Domestic:
	Utility		38.0			35.4			7	%		141.0			134.3			5	%
	Other		5.7			5.1			12			21.7			23.7			(8	)
	Total Domestic		43.7			40.5			8			162.7			158.0			3
	Export		3.2			2.5			28			13.5			8.7			55
	Total		46.9			43.0			9			176.2			166.7			6
Revenue Ton-Miles (Billions)	Merchandise		36.7			33.7			9			139.4			133.1			5
	Automotive		2.5			2.4			4			8.8			8.9			(1	)
	Coal		21.4			17.7			21			77.9			70.3			11
	Intermodal		6.0			5.6			6			22.4			21.6			3
	Total		66.6			59.4			12			248.5			233.9			6
Gross Ton-Miles(c) (Billions)	Total Gross Ton-Miles		122.9			114.0			8	%		467.8			447.9			4	%
Service Measurements	Personal Injury Frequency Index (Per 100 Employees)		2.24			2.54			12	%		2.29			2.30			0	%
	FRA Train Accidents Frequency (Per Million Train Miles)		4.61			4.81			4			4.48			4.66			4
	Average Velocity, All Trains (Miles Per Hour)		20.5			21.4			(4	)		20.3			21.1			(4	)
	Average System Dwell Time (Hours)		29.3			26.6			(10	)		28.7			25.3			(13	)
	Average Total Cars-On-Line		233,181			230,864			(1	)		233,271			229,926			(1	)
	On -Time Originations		52.7	%		57.2	%		(8	)		49.0	%		62.0	%		(21	)
	On -Time Arrivals		41.2	%		53.2	%		(23	)		40.9	%		56.9	%		(28	)
	Average Recrews (Per Day)		55.7			51.6			(8)	%		62.6			49.7			(26)	%

(a)   Amounts for 2004 are estimated.

(b)   CSX follows a 52/53 week fiscal reporting calendar and 2004 includes 53 weeks, with the extra week in the fourth quarter.

(c)   Amounts exclude locomotive gross ton-miles.

SURFACE TRANSPORTATION FUEL STATISTICS

	Fourth Quarter					Year
	2004			2003		2004			2003
Diesel No. 2:
Estimated Fuel Consumption (Millions of Gallons)		161.7			152.5		614.5			591.5
Price Per Gallon (Dollars)	$	1.1853		$	0.9168	$	1.0950		$	0.9564
Impact of Year-to-Year Price Variance on Operating Expense (Dollars in Millions)	$	(43.4	)			$	(85.1	)

11

CSX Corporation and Subsidiaries	QuarterlyFlash
FINANCIAL MEASURES (Unaudited)(a)

	Years Ended
	Dec. 31,			Dec. 26,
	2004			2003
Working Capital (Deficit) (Dollars in Millions)	$	(201	)	$	(89	)
Current Ratio		0.9			1.0
Short-term Debt (Dollars in Millions)	$	101		$	2
Debt Ratio(b)		48	%		51	%
All-in Debt Ratio(c)		51	%		54	%
12-Month Rolling Return on Assets		1.8	%		0.6	%
12-Month Rolling Return on Equity		6.3	%		2.2	%

(a)	Prior periods have been reclassified and/or restated to conform to the current year presentation.
(b)	Adjusted to include Conrail obligations.
(c)	Adjusted to include off-balance sheet financing, leases, and Conrail obligations.

OTHER INCOME (EXPENSE)(Unaudited)

(Dollars in Millions)

	Quarters Ended						Years Ended
	Dec. 31,			Dec. 26,			Dec. 31,			Dec. 26,
	2004			2003			2004			2003
Interest Income	$	8		$	5		$	21		$	21
Income from Real Estate and Resort Operations		29			37			47			95
Discounts on Sales of Accounts Receivable		—			—			—			(10	)
Net Gain on Conrail Spin-off - After Tax		—			—			16			—
Minority Interest		(5	)		(2	)		(16	)		(6	)
Miscellaneous		6			(5	)		4			(7	)
Total	$	38		$	35		$	72		$	93
Gross Revenue from Real Estate and Resort Operations Included in Other Income	$	71		$	90		$	217		$	274

Prior periods have been reclassified and/or restated to conform to the current year presentation.

EMPLOYEE COUNTS BY SEGMENT - ESTIMATED

	2004								2003
	Nov.		Aug.		May		Feb.		Nov.		Aug.		May		Feb.
Surface Transportation
Rail		31,967		32,123		32,184		32,022		32,160		33,245		33,533		32,547
Intermodal		1,077		1,079		1,087		1,126		1,114		1,115		1,115		1,122
Technology and Corporate		547		547		550		697		810		839		858		887
Total Surface Transportation		33,591		33,749		33,821		33,845		34,084		35,199		35,506		34,556
International Terminals		631		643		778		874		1,001		1,006		1,013		1,035
Other		1,310		1,633		1,417		1,095		1,623		1,851		1,752		1,129
Total		35,532		36,025		36,016		35,814		36,708		38,056		38,271		36,720

12