UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 8-K
CURRENT REPORT
Pursuant to Section 13 or 15(d) of the
Securities Exchange Act of 1934
Date of report (Date of earliest event reported) August 27, 2004
(Exact Name of Registrant as (Commission (State or Other (IRS Employer
Specified in its Charter and Address File Number) Jurisdiction of Identification
of Principal Executive Offices and Incorporation) No.)
Registrant's telephone number,
including area code)
CSX Transportation, Inc. 1-3359 Virginia 54-6000720
500 Water Street
Jacksonville, FL 32202
(904) 359-3100
CSX Corporation 1-8022 Virginia 62-1051971
500 Water Street, 15th Floor
Jacksonville, FL 32202
(904) 359-3200
No Change
(Former Name or Former Address, if Changed Since Last Report)
Check the appropriate box below if the Form 8-K filing is intended to
simultaneously satisfy the filing obligation of the registrant under any of the
following provisions:
[ ] Written communications pursuant to Rule 425 under the Securities Act (17 CFR
230.425)
[ ] Soliciting material pursuant to Rule 14a-12 under the Exchange
Act (17 CFR 240.14a-12)
[ ] Pre-commencement communications pursuant to Rule
14d-2(b) under the Exchange Act (17 CFR 240.14d-2(b))
[ ] Pre-commencement communications pursuant to Rule 13e-4(c) under the Exchange
Act (17 CFR 240.13e-4(c))
SECTION 1 - REGISTRANT'S BUSINESS AND OPERATIONS
ITEM 1.01. ENTRY INTO A MATERIAL DEFINITIVE AGREEMENT.
(a) On August 27, 2004, pursuant to the consummation of the transactions
contemplated by that certain Distribution Agreement listed as Exhibit
2.1 (the "Distribution Agreement") hereto with respect to certain debt
and assets relating to Consolidated Rail Corporation ("Conrail") (such
transactions hereinafter referred to collectively as the "Conrail Spin
Off Transactions") and as described further in Item 2.01 below, CSX
Transportation, Inc. ("CSXT") and its parent CSX Corporation ("CSX")
entered into the following agreements:
(i) AMENDMENT NO. 5 TO THE TRANSACTION AGREEMENT, dated as of August
27, 2004, by and among CSX, CSXT, Norfolk Southern Corporation
("NSC"), Norfolk Southern Railway Company ("NSR"), CRR Holdings
LLC ("CRR Holdings"), Conrail Inc. ("CRR") and Conrail (such
amendment listed as Exhibit 10.1 hereto and hereinafter referred
to as "Amendment No. 5").
Conrail is a wholly-owned subsidiary of CRR. CRR in turn is a
wholly-owned subsidiary of Green Acquisition Corp. ("Green
Corp.") which in turn is wholly-owned by CRR Holdings. CSX owns,
through its wholly-owned subsidiaries CSX Rail Holding
Corporation and CSX Northeast Holding Corporation, 42% of the
economic interests of CRR Holdings and 50% of its voting
interests. NSC directly owns 58% of the economic interests of
CRR Holdings and 50% of its voting interests.
CSX and NSC jointly acquired Conrail in May 1997 and through the
Transaction Agreement entered into as of June 10, 1997 (the
"Transaction Agreement"), reallocated Conrail's assets into
three principal categories (i) assets allocated for the
exclusive use and operation of and by CSX and its wholly-owned
subsidiary, CSXT, were transferred to New York Central Lines LLC
("NYC"), a wholly-owned subsidiary of Conrail; (ii) assets
allocated for the exclusive use and operation of and by NSC and
its wholly-owned subsidiary, NSR, were transferred to
Pennsylvania Lines LLC ("PRR"), a wholly-owned subsidiary of
Conrail; and (iii) the remaining assets were designated as
"Shared Assets Areas" to be operated by Conrail for the benefit
of both CSX and NSC. The NYC and PRR properties were put under
lease to CSXT and NSR, respectively, pursuant to various
operating and lease agreements. From June 1, 1999 until August
27, 2004, CSXT and NSR paid operating fees to NYC and PRR for
the use of their assets.
As a consequence of the Conrail Spin Off Transactions, the
assets and properties of NYC were consolidated into CSXT and the
assets and properties of PRR were consolidated into NSR.
Therefore, the prior arrangements contemplated by the
Transaction Agreement whereby the NYC assets and the PRR assets
were leased to CSXT and NSR, respectively, under various lease
and operating agreements were
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terminated or restructured as part of the Conrail Spin Off
Transactions. The arrangements with respect to Conrail's Shared
Assets Areas, however, remain in place.
Amendment No. 5 therefore materially amends the Transaction
Agreement in order to (A) amend or terminate those certain
ancillary agreements entered into pursuant to the Transaction
Agreement in order to effect the Conrail Spin Off Transactions;
(B) reallocate certain operating fees, interest rentals and base
rent in order to adjust for the distribution of the NYC and PRR
assets to CSXT and NSR, respectively; and (C) effect agreements
among CSX, CSXT, NSC and NSR relating to certain lines of
railroad within the State of New Jersey or New York or the area
within 25 miles of the City of Philadelphia, Pennsylvania in
order to maintain the understandings set forth pursuant to the
Transaction Agreement.
(ii) TAX ALLOCATION AGREEMENT, dated as of August 27, 2004, by and
among CSX, NSC, Green Corp., CRR, Conrail, NYC and PRR (such
agreement listed as Exhibit 10.2 hereto and hereinafter referred
to as the "Tax Allocation Agreement"). By operation of law as a
result of the August 27, 2004 merger of NYC with and into NYC
Newco, Inc. ("NYC Newco"), a wholly-owned subsidiary of CSXT,
with NYC Newco as the surviving corporation, and the August 27,
2004 merger of NYC Newco with and into CSXT, with CSXT as the
surviving corporation, CSXT is now a direct party to the Tax
Allocation Agreement.
For a description of the material relationships between CSX and
CSXT and the other parties to the Tax Allocation Agreement,
please see (i) above.
The Tax Allocation Agreement governs the respective rights,
responsibilities and obligations of NYC, PRR, Green Corp., CSX
and NSC after the Conrail Spin Off Transactions with respect to
tax liabilities, refunds, tax proceedings and other tax matters
regarding income taxes, other taxes and related returns. The Tax
Allocation Agreement also provides restrictions on CSX and NSC
and any of their respective subsidiaries (including restrictions
on share issuance, business combinations, and sales of assets
and similar transactions) that are designed to preserve the
tax-free nature of the Conrail Spin Off Transactions. In the
event that a party to the Tax Allocation Agreement breaches its
obligations thereunder, such party would be required to make an
indemnity payment for the resulting taxes. The amount of any
such indemnity payment could be material.
ITEM 1.02. TERMINATION OF A MATERIAL DEFINITIVE AGREEMENT.
(a) On August 27, 2004, pursuant to the Conrail Spin Off Transactions, CSXT
terminated that certain Operating Agreement dated as of June 1, 1999 by
and between NYC, as owner, and CSXT, as operator (originally filed as
Exhibit 10.3 to CSX's and CSXT's Current Reports on Form 8-K filed with
the Securities and
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Exchange Commission (the "Commission") on June 11, 1999). The
termination was effected by that certain Operating Agreement Termination
Agreement, dated as of August 27, 2004, between NYC and CSXT and listed
as Exhibit 10.3 hereto. See Item 1.01(a)(i) for a brief description of
the material circumstances surrounding the termination. No material
penalties were incurred by CSX or CSXT as a result of the termination.
SECTION 2 - FINANCIAL INFORMATION
ITEM 2.01. COMPLETION OF ACQUISITION OR DISPOSITION OF ASSETS.
(a) On August 27, 2004, as more fully described above, CSXT and CSX
completed the restructuring of Conrail. As noted above, CSX and NSC have
an indirect equity interest in Conrail of 42% and 58%, respectively, and
voting interests of 50% each.
(b),(c) In connection with the restructuring of Conrail, effective as of
August 27, 2004:
(i) Conrail, through a series of transactions, caused the
distribution to CSX of 99.9% of the then-outstanding common
stock (the "NYC Shares") of NYC Newco, which at the time of the
distribution wholly-owned NYC;
(ii) CSX thereafter contributed the NYC Shares to CSXT;
(iii) NYC was then merged with and into NYC Newco, with NYC Newco as
the surviving company; and
(iv) As a final step, NYC Newco was then merged with and into CSXT,
with CSXT as the surviving company, thereby consummating the
consolidation of NYC's business, assets and operations within
CSXT.
As a result of the above transactions, CSXT became the direct owner, and
CSX, though its wholly-owned subsidiary CSXT, became the indirect owner,
of all of NYC's assets, which consist principally of former New York
Central rail system lines, including specifically those lines named in
Schedule 1 to the Transaction Agreement, and certain owned and
unencumbered rolling stock of Conrail. Pursuant to operating and lease
agreements, CSXT operated and managed NYC prior to the foregoing
restructuring.
(d),(e) In connection with the foregoing restructuring of Conrail, NYC Newco, a
wholly-owned subsidiary of CSXT prior to the restructuring, issued, and
CSXT fully and unconditionally guaranteed, an aggregate of $227,171,000
in principal amount of its 9 3/4% unsecured notes due June 15, 2020 and
an aggregate of $99,989,000 in principal amount of its 7 7/8% unsecured
notes due May 15, 2043. The forgoing notes were delivered to Conrail,
along with the NYC Shares, in partial consideration for Conrail's
membership interest in NYC. Conrail exchanged these notes and cash for
Conrail's unsecured debt securities as part of a registered exchange
offer and related consent solicitation and distributed the NYC Shares to
CSX as noted above. For further information regarding these exchanges,
please
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refer to CSXT's Current Report on Form 8-K filed with the Commission on
August 24, 2004.
SECTION 9 - FINANCIAL STATEMENTS AND EXHIBITS
ITEM 9.01. FINANCIAL STATEMENTS AND EXHIBITS.
(a) Not applicable.
(b) The required pro forma financial information for CSXT is incorporated
herein by reference to the previously filed Exhibit 99.5 to Current
Report on Form 8-K of CSXT filed on July 30, 2004 with the Commission.
The required pro forma financial information for CSX is incorporated
herein by reference to pages S-8 through S-13 of the previously filed
Prospectus Supplement to the Registration Statement on Form S-3 (File
No. 333-113637) filed pursuant to Rule 424(b)(5) on July 30, 2004 with
the Commission.
(c) Exhibits
Exhibit No. Description
- ----------- -----------
2.1 Distribution Agreement, dated as of July 26, 2004, by and
among CSX Corporation, CSX Transportation, Inc., CSX Rail
Holding Corporation, CSX Northeast Holding Corporation,
Norfolk Southern Corporation, Norfolk Southern Railway
Company, CRR Holdings LLC, Green Acquisition Corp., Conrail
Inc., Consolidated Rail Corporation, New York Central Lines
LLC, Pennsylvania Lines LLC, NYC Newco, Inc. and PRR Newco,
Inc.
10.1 Amendment No. 5 to the Transaction Agreement, dated as of
August 27, 2004, by and among CSX Corporation, CSX
Transportation, Inc., Norfolk Southern Corporation, Norfolk
Southern Railway Company, CRR Holdings LLC, Conrail Inc. and
Consolidated Rail Corporation
10.2 Tax Allocation Agreement, dated as of August 27, 2004, by
and among CSX Corporation, Norfolk Southern Corporation,
Green Acquisition Corp., Conrail Inc., Consolidated Rail
Corporation, New York Central Lines LLC and Pennsylvania
Lines LLC
10.3 Operating Agreement Termination Agreement, dated as of
August 27, 2004, between New York Central Lines LLC and CSX
Transportation, Inc.
99.1 CSX Transportation, Inc., Consolidated Rail Corporation and
Norfolk Southern Railway Company Joint Press Release, dated
August 30, 2004.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, each
registrant has duly caused this report to be signed on its behalf by the
undersigned hereunto duly authorized.
CSX TRANSPORTATION, INC.
and
CSX CORPORATION
(Registrants)
By: /s/ Carolyn T. Sizemore
---------------------------------
Name: Carolyn T. Sizemore
Title: Vice President and Controller of
CSX Transportation, Inc. and Vice
President and Controller of CSX
Corporation
Date: September 2, 2004
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EXHIBIT INDEX
Exhibit No. Description
- ----------- -----------
2.1 Distribution Agreement, dated as of July 26, 2004, by and
among CSX Corporation, CSX Transportation, Inc., CSX Rail
Holding Corporation, CSX Northeast Holding Corporation,
Norfolk Southern Corporation, Norfolk Southern Railway
Company, CRR Holdings LLC, Green Acquisition Corp., Conrail
Inc., Consolidated Rail Corporation, New York Central Lines
LLC, Pennsylvania Lines LLC, NYC Newco, Inc. and PRR Newco,
Inc.
10.1 Amendment No. 5 to the Transaction Agreement, dated as of
August 27, 2004, by and among CSX Corporation, CSX
Transportation, Inc., Norfolk Southern Corporation, Norfolk
Southern Railway Company, CRR Holdings LLC, Conrail Inc. and
Consolidated Rail Corporation
10.2 Tax Allocation Agreement, dated as of August 27, 2004, by
and among CSX Corporation, Norfolk Southern Corporation,
Green Acquisition Corp., Conrail Inc., Consolidated Rail
Corporation, New York Central Lines LLC and Pennsylvania
Lines LLC
10.3 Operating Agreement Termination Agreement, dated as of
August 27, 2004, between New York Central Lines LLC and CSX
Transportation, Inc.
99.1 CSX Transportation, Inc., Consolidated Rail Corporation and
Norfolk Southern Railway Company Joint Press Release, dated
August 30, 2004.
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