PAGE 1 UNITED STATES SECURITIES AND EXCHANGE COMMISSION WASHINGTON, D.C. 20549 FORM 11-K [X] ANNUAL REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 or [ ] TRANSITION REPORT PURSUANT TO SECTION 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 For the fiscal year ended September 30, 1995 Commission file number 1-8022 CSX CORPORATION CAPITAL BUILDER PLAN CSX CORPORATION A Virginia Corporation IRS Employer Identification Number 62-1051971 One James Center 901 East Cary Street Richmond, Virginia 23219 Telephone (804) 782-1400 - 1 - PAGE 2 CSX CORPORATION CAPITAL BUILDER PLAN INDEX TO FINANCIAL STATEMENTS Audited Financial Statements Page No. Report of Independent Auditors 3 Statement of Net Assets Available for Plan Benefits - September 30, 1995 4 Statement of Net Assets Available for Plan Benefits - September 30, 1994 5 Statement of Changes in Net Assets Available for Plan Benefits - Fiscal Year Ended September 30, 1995 6 Statement of Changes in Net Assets Available for Plan Benefits - Fiscal Year Ended September 30, 1994 7 Notes to Financial Statements 8-12 Supplemental Schedules Assets Held for Investment Purposes - September 30, 1995 14 Transactions or Series of Transactions in Excess of 5% of the Current Value of Plan Assets - Fiscal Year Ended September 30, 1995 15 Signature 16 - 2 - PAGE 3 REPORT OF INDEPENDENT AUDITORS The Pension Committee CSX Corporation Capital Builder Plan CSX Corporation Richmond, Virginia We have audited the accompanying statements of net assets available for plan benefits of the CSX Corporation Capital Builder Plan ("Plan") as of September 30, 1995 and 1994, and the related statements of changes in net assets available for plan benefits for the fiscal years then ended. These financial statements are the responsibility of the Plan's management. Our responsibility is to express an opinion on these financial statements based on our audits. We conducted our audits in accordance with generally accepted auditing standards. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation. We believe that our audits provide a reasonable basis for our opinion. In our opinion, the financial statements referred to above present fairly, in all material respects, the net assets available for plan benefits of the Plan at September 30, 1995 and 1994, and the changes in its net assets available for plan benefits for the years then ended, in conformity with generally accepted accounting principles. Our audits were performed for the purpose of forming an opinion on the basic financial statements taken as a whole. The supplemental schedules of assets held for investment as of September 30, 1995, and transactions or series of transactions in excess of 5% of the current value of plan assets for the fiscal year then ended, are presented for the purpose of additional analysis and are not a required part of the basic financial statements but are supplementary information required by the Department of Labor's Rules and Regulations for Reporting and Disclosure under the Employee Retirement Income Security Act of 1974. The supplemental schedules are the responsibility of the Plan's management. The supplemental schedules have been subjected to the auditing procedures applied in our audits of the basic financial statements and, in our opinion, are fairly stated in all material respects in relation to the basic financial statements taken as a whole. /s/ ERNST & YOUNG LLP --------------------- Ernst & Young LLP Jacksonville, Florida March 18, 1996 - 3 - PAGE 4 CSX CORPORATION CAPITAL BUILDER PLAN STATEMENT OF NET ASSETS AVAILABLE FOR PLAN BENEFITS SEPTEMBER 30, 1995 (Thousands of Dollars) Non- Participant Participant Directed Directed ---------------------------------- -------- S&P CSX Guaranteed 500 Aggressive CSX ESOP Interest Index Growth Stock Stock Fund Fund Fund Fund Fund Total ---------------------------------- -------- -------- ASSETS Investments Common Stock of CSX Corporation $ --- $ --- $ --- $29,376 $118,337 $147,713 Collective Trust Fund 14,470 --- --- --- --- 14,470 Mutual Funds --- 9,599 7,580 --- --- 17,179 Cash and Cash Equivalents --- 179 --- 130 270 579 ------- ------- ------- ------- -------- -------- 14,470 9,778 7,580 29,506 118,607 179,941 Employer Contributions Receivable --- --- --- --- 14,661 14,661 Accrued Investment Income --- --- --- 1 2 3 ------- ------- ------- ------- -------- -------- TOTAL ASSETS 14,470 9,778 7,580 29,507 133,270 194,605 ------- ------- ------- ------- -------- -------- LIABILITIES Due to Brokers for Securities Purchased 94 --- 6 372 465 937 Accrued Expenses 45 12 10 37 147 251 ------- ------- ------- ------- -------- -------- TOTAL LIABILITIES 139 12 16 409 612 1,188 ------- ------- ------- ------- -------- -------- NET ASSETS AVAILABLE FOR PLAN BENEFITS $14,331 $ 9,766 $ 7,564 $29,098 $132,658 $193,417 ======= ======= ======= ======= ======== ======== See Notes to Financial Statements. - 4 - PAGE 5 CSX CORPORATION CAPITAL BUILDER PLAN STATEMENT OF NET ASSETS AVAILABLE FOR PLAN BENEFITS SEPTEMBER 30, 1994 (Thousands of Dollars) Non- Participant Participant Directed Directed ---------------------------------- -------- S&P CSX Guaranteed 500 Aggressive CSX ESOP Interest Index Growth Stock Stock Fund Fund Fund Fund Fund Total ---------------------------------- -------- -------- ASSETS Investments Common Stock of CSX Corporation $ --- $ --- $ --- $20,144 $94,525 $114,669 Collective Trust Fund 11,438 --- --- --- --- 11,438 Mutual Funds --- 5,735 5,317 --- --- 11,052 Cash and Cash Equivalents 47 10 7 142 144 350 ------- ------- ------- ------- ------- -------- 11,485 5,745 5,324 20,286 94,669 137,509 Employer Contributions Receivable --- --- --- --- 2,099 2,099 Participant Contributions Receivable 193 107 76 291 --- 667 Due From Brokers for Securities Sold --- --- --- --- 238 238 Accrued Investment Income --- --- --- --- 2 2 ------- ------- ------- ------- ------- -------- TOTAL ASSETS 11,678 5,852 5,400 20,577 97,008 140,515 ------- ------- ------- ------- ------- -------- LIABILITIES Due to Brokers for Securities Purchased --- --- --- 90 1,077 1,167 Accrued Expenses 43 9 9 35 139 235 ------- ------- ------- ------- ------- -------- TOTAL LIABILITIES 43 9 9 125 1,216 1,402 ------- ------- ------- ------- ------- -------- NET ASSETS AVAILABLE FOR PLAN BENEFITS $11,635 $ 5,843 $ 5,391 $20,452 $95,792 $139,113 ======= ======= ======= ======= ======= ======== See Notes to Financial Statements. - 5 - PAGE 6 CSX CORPORATION CAPITAL BUILDER PLAN STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS FISCAL YEAR ENDED SEPTEMBER 30, 1995 (Thousands of Dollars) Non- Participant Participant Directed Directed ---------------------------------- -------- S&P CSX Guaranteed 500 Aggressive CSX ESOP Interest Index Growth Stock Stock Fund Fund Fund Fund Fund Total ---------------------------------- -------- -------- ADDITIONS Investment Income: Dividends and Interest $ 837 $ 183 $ 44 $ 581 $ 2,458 $ 4,103 Employer Contributions --- --- 15 93 16,549 16,657 Participant Contributions 2,498 1,812 1,512 4,117 --- 9,939 Net Realized and Unrealized Appreciation in Fair Value of Investments --- 1,852 1,141 5,169 21,785 29,947 ------- ------- ------- ------- -------- -------- 3,335 3,847 2,712 9,960 40,792 60,646 DEDUCTIONS Distributions to Participants 618 171 133 1,317 3,685 5,924 Fees and Expenses 83 18 15 61 241 418 ------- ------- ------- ------- -------- -------- 701 189 148 1,378 3,926 6,342 INTERFUND TRANSFERS 62 265 (391) 64 --- --- ------- ------- ------- ------- -------- -------- NET INCREASE IN NET ASSETS 2,696 3,923 2,173 8,646 36,866 54,304 Net Assets Available for Plan Benefits at Beginning of Year 11,635 5,843 5,391 20,452 95,792 139,113 ------- ------- ------- ------- -------- -------- NET ASSETS AVAILABLE FOR PLAN BENEFITS AT END OF YEAR $14,331 $ 9,766 $ 7,564 $29,098 $132,658 $193,417 ======= ======= ======= ======= ======== ======== See Notes to Financial Statements. - 6 - PAGE 7 CSX CORPORATION CAPITAL BUILDER PLAN STATEMENT OF CHANGES IN NET ASSETS AVAILABLE FOR PLAN BENEFITS FISCAL YEAR ENDED SEPTEMBER 30, 1994 (Thousands of Dollars) Non- Participant Participant Directed Directed ---------------------------------- -------- S&P CSX Guaranteed 500 Aggressive CSX ESOP Interest Index Growth Stock Stock Fund Fund Fund Fund Fund Total ---------------------------------- -------- -------- ADDITIONS Investment Income: Dividends and Interest $ 624 $ 129 $ 44 $ 482 $ 2,077 $ 3,356 Employer Contributions --- --- --- 81 17,955 18,036 Participant Contributions 2,217 1,579 1,508 3,618 --- 8,922 Net Realized and Unrealized Appreciation (Depreciation) in Fair Value of Investments --- 36 (383) (2,830) (12,740) (15,917) ------- ------- ------- ------- ------- -------- 2,841 1,744 1,169 1,351 7,292 14,397 DEDUCTIONS Distributions to Participants 478 127 104 757 3,214 4,680 Fees and Expenses 10 18 17 73 290 408 ------- ------- ------- ------- ------- -------- 488 145 121 830 3,504 5,088 INTERFUND TRANSFERS (224) 1 (39) 214 48 --- ------- ------- ------- ------- ------- -------- NET INCREASE IN NET ASSETS 2,129 1,600 1,009 735 3,836 9,309 Net Assets Available for Plan Benefits at Beginning of Year 9,506 4,243 4,382 19,717 91,956 129,804 ------- ------- ------- ------- ------- -------- NET ASSETS AVAILABLE FOR PLAN BENEFITS AT END OF YEAR $11,635 $ 5,843 $ 5,391 $20,452 $95,792 $139,113 ======= ======= ======= ======= ======= ======== See Notes to Financial Statements. - 7 - PAGE 8 CSX CORPORATION CAPITAL BUILDER PLAN NOTES TO FINANCIAL STATEMENTS SEPTEMBER 30, 1995 (Thousands of Dollars) NOTE 1. SIGNIFICANT ACCOUNTING POLICIES The accounting records of the CSX Corporation Capital Builder Plan ("the Plan") are maintained on the accrual basis. All securities transactions of the Plan are recorded as of the trade date. Investments in CSX Corporation ("CSX") common stock and mutual funds are presented at fair value. Fair value is based upon the last reported sales price on the last business day of the Plan year. Collective trust fund participation units are carried at cost plus accrued interest as determined by the fund manager, which is contract value. Effective October 1, 1995, CSX will adopt the American Institute of Certified Public Accountants Statement of Position 94-4, "Reporting of Investment Contracts Held by Health and Welfare Benefit Plans and Defined Contribution Pension Plans". This statement specifies the accounting for investment contracts, including collective trust funds comprised of investment contracts, issued by either a insurance enterprise or other entity. The financial impact of adopting Statement of Position 94-4 is not expected to be significant. Certain amounts in the financial statements for the fiscal year ended September 30, 1994 have been reclassified to be consistent with the presentation of the related current year amounts. NOTE 2. DESCRIPTION OF THE PLAN A complete description of Plan provisions including those relating to contributions, vesting, withdrawals and distributions is contained in the Summary Plan Description and the Plan document. The prospectus relating to the Plan, which includes the Summary Plan Description, was filed with the Securities and Exchange Commission on June 9, 1989. Copies of these documents are available from the CSX Benefits Department. The following summary should be read in conjunction with the aforementioned documents. General: The Plan is a defined contribution plan subject to the provisions of the Employee Retirement Income Security Act of 1974, as amended ("ERISA"). The Plan was established effective August 1, 1989 and qualifies as a "cash or deferred" arrangement under Section 401(k) of the Internal Revenue Code of 1986, as amended ("IRC"), as a combination profit sharing and stock bonus plan. Plan participation is limited to certain employees of CSX and affiliated companies (the "Employer"). Under the stock bonus portion of the Plan ("ESOP"), CSX contributes a specified number of shares of CSX common stock on an annual basis to the accounts of participants who have met service requirements for the preceding calendar year and remain employed on specified dates as defined in the applicable Summary Plan Description. These shares may be purchased throughout the year and are classified as "unallocated" shares until credited to the participants' accounts. The CSX ESOP Stock Fund held 38,759 shares valued at $3,261 and 210,219 shares valued at $14,400 representing unallocated shares at - 8 - PAGE 9 CSX CORPORATION CAPITAL BUILDER PLAN NOTES TO FINANCIAL STATEMENTS, CONTINUED (Thousands of Dollars) NOTE 2. DESCRIPTION OF THE PLAN, Continued September 30, 1995 and 1994, respectively. Investment Alternatives: Participant contributions may be invested in one or more of the following investment funds: (1) the Guaranteed Interest Fund, consisting of a collective trust fund that primarily invests in guaranteed investment contracts with insurance companies; (2) the S&P 500 Index Fund, consisting of a mutual fund that invests in common stocks selected primarily to duplicate the performance of the stock market as a whole; (3) the Aggressive Growth Fund, consisting of a mutual fund that invests in various securities selected primarily for capital growth potential; and (4) the CSX Stock Fund, consisting of investments in CSX common stock. Amounts allocated to any of these funds may be temporarily retained as cash or invested in cash equivalents to facilitate the investment or reinvestment of Plan assets and the distribution of account balances to participants. Participant Contributions: A participant may contribute from 1% to 15% of his or her annual compensation, in 1% multiples, to the Plan. In addition, the Plan permits certain eligible participants to contribute other compensatory awards to the Plan. All participant contributions may be made on a before- or after-tax basis within the limits imposed by the Internal Revenue Code and may be invested in any combination of the four investment alternatives. Investment direction may be revised by participants as often as four times per year. Employer Contributions: Contributions to the profit sharing and stock bonus portion of the Plan are made by the Employer in the number of shares of CSX common stock at least equal to the Company Stock Multiple (as defined in the Summary Plan Description) applicable to the participating group or an amount of cash which would permit the acquisition of that number of shares on the open market at the then available market prices. Such employer contributions, if applicable, are funded as defined by the Summary Plan Description each calendar year. The Plan also provides for Employer matching contributions for certain eligible employees in an amount equal to the lesser of 50% of those participants' capital savings contributions or 3% of their annual base compensation. All employer matching contributions are invested in CSX common stock, with the exception of certain eligible employees who may direct up to 50% of the company contribution in 25% multiples in any of the four investment funds. Vesting, Withdrawals, Distributions and Forfeitures: Participants are immediately vested in their voluntary contributions plus actual earnings thereon. Vesting in the remainder of their accounts is based on years of service. A participant is 100% vested after five years of credited service, or upon death, disability or retirement. Withdrawals and distributions are controlled in accordance with the provisions of the Plan. Amounts not fully vested at the time of withdrawal are redistributed to the individual - 9 - PAGE 10 CSX CORPORATION CAPITAL BUILDER PLAN NOTES TO FINANCIAL STATEMENTS, CONTINUED (Thousands of Dollars) NOTE 2. DESCRIPTION OF THE PLAN, Continued participant accounts of those participants remaining in the Plan. Participant Accounts: Each participant's account is credited with the participant's contributions, the appropriate portion of the Employer's contribution and an allocation of Plan earnings and forfeitures of terminated participants' nonvested accounts. The benefit to which a participant is entitled is the benefit that can be provided from the participant's account. Plan Termination: Although it has not expressed any intent to do so, the Employer has the right under the Plan to discontinue its contributions at any time and to terminate the Plan subject to the provisions of ERISA. In the event of plan termination, participants will become 100% vested in their accounts. Administrative Expenses: The administrative expenses of the Plan are payable by CSX or from Plan funds as the Plan Administrative Committee from time to time directs. CSX paid a portion of the administrative expenses of the Plan in 1995 and 1994. NOTE 3. INVESTMENTS The Plan's investments are held by a bank administered trust fund. These investments are more fully described below: Collective Trust Fund: Substantially all of the assets held in the Guaranteed Interest Fund as of September 30, 1995 and 1994 are invested in the American Express Trust Collective Income Fund, which primarily invests in guaranteed investment contracts with insurance companies. The fund is managed by American Express Financial Services. Mutual Funds: Substantially all of the assets held in the S&P 500 Index Fund as of September 30, 1995 and 1994 are invested in Vanguard Index Trust-500 Portfolio, a mutual fund managed by Vanguard. Substantially all of the assets held in the Aggressive Growth Fund as of September 30, 1995 and 1994 are invested in Twentieth Century Select Fund, a mutual fund managed by Twentieth Century Investors, Inc. CSX Stock Fund and CSX ESOP Stock Fund: Substantially all of the assets held in this fund as of September 30, 1995 and 1994 are invested in CSX common stock. - 10 - PAGE 11 CSX CORPORATION CAPITAL BUILDER PLAN NOTES TO FINANCIAL STATEMENTS, CONTINUED (Thousands of Dollars) NOTE 4. INCOME TAX STATUS The Internal Revenue Service ruled March 7, 1996, that the Plan qualifies under Section 401(a) of the Internal Revenue Code (IRC) and, therefore, is not subject to tax under present income tax law. Once qualified, the Plan is required to operate in conformity with the IRC to maintain its qualification (see Note 6). Therefore, no provision for income taxes has been included in the Plan's financial statements. NOTE 5. RELATED PARTY TRANSACTIONS CSX provides the Plan with certain management and accounting services. During fiscal 1995 and 1994, the Plan reimbursed CSX $63 and $60, respectively for these services. During fiscal 1995 and 1994, the Plan received $3,013 and $2,548, respectively, representing cash dividends from CSX common stock. The trustee, The Northern Trust Company, invests Plan assets in the Collective Short-Term Investment Fund of The Northern Trust Company. For the fiscal year ended September 30, 1995, transactions involving this account included 451 purchases at a total cost of $15,660 and 267 sales with a fair value of $16,092. For the fiscal year ended September 30, 1994 transactions involving this account included 474 purchases at a total cost of $21,636 and 259 sales with a fair value of $21,438. NOTE 6. PLAN AMENDMENT The Plan was amended and restated in 1995, retroactive to January 1, 1989, to conform to the provisions of the Tax Reform Act of 1986, as amended and subsequent statutory and regulatory changes. There was no significant impact on the Plan due to these changes and amendments. The Plan is intended to meet all of the requirements of the Internal Revenue Code of 1986, as amended and the Employee Retirement Income Security Act of 1974, as amended. NOTE 7. COMPARISON TO FORM 5500 Form 5500 requires the recording of a liability for participant distributions processed prior to year-end but not yet paid. In financial statements prepared in accordance with generally accepted accounting principles, such amounts remain net assets available for plan benefits until paid. - 11 - PAGE 12 CSX CORPORATION CAPITAL BUILDER PLAN NOTES TO FINANCIAL STATEMENTS, CONTINUED (Thousands of Dollars) NOTE 7. COMPARISON TO FORM 5500, continued The following is a reconciliation of net assets available for plan benefits per the financial statements to the Form 5500: September 30, 1995 ------------------ Net assets available for plan benefits per the financial statements $193,417 Distributions due but unpaid (556) -------- Net assets available for plan benefits per the Form 5500 $192,861 ======== The following is a reconciliation of distributions made to participants per the financial statements to the Form 5500: Fiscal Year Ended September 30, 1995 ------------------ Distributions to participants per the financial statements $5,924 Add: Distributions due but unpaid at September 30, 1995 556 ------ Distributions to participants per the Form 5500 $6,480 ====== NOTE 8. SUBSEQUENT EVENTS On October 11, 1995, CSX's board of directors declared a 2-for-1 common stock split distributed on December 21, 1995, to shareholders of record at the close of business on December 4, 1995. - 12 - PAGE 13 SUPPLEMENTAL SCHEDULES - 13 - PAGE 14 SCHEDULE 27a CSX CORPORATION CAPITAL BUILDER PLAN ASSETS HELD FOR INVESTMENT PURPOSES SEPTEMBER 30, 1995 (Thousands of Dollars) Current Issuer Description of Investment Cost Value ------ ------------------------- ---- ------- Common Stock - ------------ * CSX Corporation Common Stock 1,755,876 shares $105,405 $147,713 Collective Trust Fund - --------------------- American Express Trust Collective Income Fund 368,926 shares 14,470 14,470 Mutual Funds - ------------ Vanguard Index Trust - 500 Portfolio 174,552 shares 7,471 9,599 Twentieth Century Select Fund 187,343 shares 7,235 7,580 Cash and Cash Equivalents - ------------------------- * Collective Short-Term Investment Fund of The 579,434 shares 579 579 Northern Trust Company -------- -------- TOTAL $135,160 $179,941 ======== ======== * Parties-in-Interest. - 14 - PAGE 15 SCHEDULE 27d CSX CORPORATION CAPITAL BUILDER PLAN TRANSACTIONS OR SERIES OF TRANSACTIONS IN EXCESS OF 5% OF THE CURRENT VALUE OF PLAN ASSETS FISCAL YEAR ENDED SEPTEMBER 30, 1995 (Thousands of Dollars) Purchases Sales ------------ ------------------------------------ Value of Cost Net Assets Sold on of Gain Description of Asset Number Cost Number Transaction Date Asset (Loss) - -------------------- ------ ---- ------ ---------------- ----- ------ Category (iii) - series of securities transactions in excess of 5% of plan assets - ---------------------------------------------------------------------------- CSX Corporation Common Stock 86 $12,745 27 $ 5,209 $ 3,988 $1,221 Collective Short-Term Investment Fund of The Northern Trust Company 451 15,660 267 16,092 16,092 --- There were no category (i), (ii) or (iv) reportable transactions during the fiscal year ended September 30, 1995. -15- PAGE 16 SIGNATURE Pursuant to the requirements of the Securities Exchange Act of 1934, the administrative committee members have duly caused this annual report to be signed on its behalf by the undersigned hereunto duly authorized. CSX CORPORATION CAPITAL BUILDER PLAN By: /s/ GREGORY R. WEBER ------------------------------------------- Gregory R. Weber Vice President, Controller and Treasurer CSX Corporation (Plan Sponsor) Date: March 22, 1996 - 16 -