Filed by: CSX Transportation, Inc., Norfolk Southern Railway Company
and Consolidated Rail Corporation
Pursuant to Rule 425
under the Securities Act of 1933, as amended.
Subject Company: Consolidated Rail Corporation
Commission File Nos.: 1-3359, 1-743, 1-3744, 1-4793, 1-5462
On August 6, 2004, CSX Transportation, Inc., Norfolk Southern Railway Company
and Consolidated Rail Corporation issued a joint press release announcing an
increase in the cash consideration and other amended terms to their previously
announced offer to exchange new CSXT and NSR unsecured debt securities and cash
for Conrail's unsecured debt securities and the related consents. The text of
the joint press release follows:
FOR IMMEDIATE RELEASE
August 6, 2004
Contacts: Misty Skipper
904-366-2949
CSX Corp.
Bob Fort
757-629-2710
Norfolk Southern Corp.
(Media Inquiries)
Leanne Marilley
757-629-2861
Norfolk Southern Corp.
(Investor Inquiries)
Jonathan M. Broder
(215) 209-5020
Consolidated Rail Corp.
CONRAIL, CSXT AND NSR ANNOUNCE INCREASE IN CASH CONSIDERATION AND
OTHER AMENDED TERMS TO THE PREVIOUSLY ANNOUNCED EXCHANGE OFFER AND
CONSENT SOLICITATION FOR CONRAIL'S 9 3/4% DEBENTURES DUE JUNE 15, 2020 AND
CONRAIL'S 7 7/8% DEBENTURES DUE MAY 15, 2043
WASHINGTON D.C. - Consolidated Rail Corporation (Conrail), CSX Transportation,
Inc. (CSXT) and Norfolk Southern Railway Company (NSR) today announced that
they are increasing the cash consideration and amending certain other terms of
their offer to exchange new unsecured debt securities of CSXT and NSR and cash
for existing unsecured debt securities of Conrail. The exchange offer is part
of the restructuring of Conrail's indebtedness as described in the parties'
joint petition, filed June 4, 2003, with the Surface Transportation Board
(STB). In connection with the exchange offer, Conrail also is soliciting
consents from holders of its unsecured debt securities to permit the
restructuring.
Subject to the terms and conditions of the exchange offer and consent
solicitation, Conrail, CSXT and NSR have committed to increase the cash payment
for each $1,000 principal amount of Conrail's unsecured debt securities validly
tendered in the exchange offer and consent solicitation as follows:
- ----------------------------------- --------------------- ----------------------
Series Original Cash Payment Revised Cash Payment
- ----------------------------------- --------------------- ----------------------
9 3/4% Debentures Due June 15, 2020 $7.00 $15.00
- ----------------------------------- --------------------- ----------------------
7 7/8% Debentures Due May 15, 2043 $7.50 $22.25
- ----------------------------------- --------------------- ----------------------
In addition, CSXT proposes to add a new covenant to the proposed indenture for
the new unsecured debt securities of CSXT that shall require CSXT to take
reasonable steps to preserve its legal corporate existence and business,
provided that such an undertaking shall not prohibit any merger, consolidation,
conveyance, transfer or lease not otherwise prohibited by the indenture.
CSXT also proposes to amend the proposed indenture so that CSXT may not lease
its properties and assets substantially as an entirety to any person unless,
among other things, the person that acquires by lease the properties and other
assets of CSXT substantially as an entirety assumes the obligations of CSXT
under the new CSXT debt securities and the proposed indenture. This restriction
is in addition to the existing restrictions on consolidation, merger,
conveyance and transfer of CSXT's properties and assets currently set forth in
the proposed indenture.
Finally, NSR and CSXT each propose to add a covenant to their respective
proposed indentures for the new unsecured debt securities that requires them to
provide the relevant indenture trustee with any specific reports filed with the
SEC pursuant to Sections 13 and 15(d) of the Securities Exchange Act of 1934,
such as annual and quarterly reports; or if NSR or CSXT is not required to file
such reports pursuant to either of such Sections, then NSR and/or CSXT shall
file with the relevant indenture trustee audited annual and unaudited quarterly
financial statements as would have been required to be included in an annual
report on Form 10-K or a quarterly report on Form 10-Q as applicable.
All other terms of the exchange offer and consent solicitation, dated July 26,
2004, will remain unchanged. The exchange offer and unsecured debt consent
solicitation will expire at 5 p.m., New York City time, on August 23, 2004,
unless extended.
Conrail, CSXT and NSR have been in discussion with an ad hoc committee that has
advised that it represents approximately $477 million in aggregate principal
amount of Conrail's unsecured debt securities. Based on the commitment by
Conrail, CSXT and NSR to increase the cash consideration and amend the other
terms of the exchange offer and consent solicitation as noted above, the
members of the committee have committed to tender their Conrail unsecured debt
securities into the exchange offer and consent solicitation.
Morgan Stanley & Co. Incorporated is the dealer manager for the exchange
offer and unsecured debt consent solicitation.
CSX Corporation (CSX), based in Jacksonville, Fla., owns the largest rail
network in the eastern United States. CSXT and its 34,000 employees provide
rail transportation services over a 23,000 route-mile network in 23 states, the
District of Columbia and two Canadian provinces. CSX also provides intermodal
and global container terminal operations through other subsidiaries.
Norfolk Southern Corp. (NSC), through its NSR subsidiary, operates 21,500 route
miles in 22 states, the District of Columbia and Ontario, serving every major
container port in the eastern United States and providing connections to
western rail carriers. NSC operates an extensive intermodal network and is the
nation's largest rail carrier of automotive parts and finished vehicles.
Conrail is a principal freight railroad in the Northeastern United States, and
is indirectly owned 58% by NSC and 42% by CSX.
This press release contains forward-looking statements which speak only as of
the date they are made, and none of CSX, NSC or Conrail, or any of their
respective subsidiaries, undertakes any obligation to update or revise any
forward-looking statement. If CSX, NSC or Conrail do update any forward-looking
statement, no inference should be drawn that CSX, NSC or Conrail 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 other factors which are, in some cases, beyond the control
of CSX, NSC and Conrail and could materially affect actual results, performance
or achievements. Factors that may cause actual results to differ materially
from those contemplated by these forward-looking statements include, among
others: (i) 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; and (iv) the outcome of claims and litigation involving or
affecting a company. Other important assumptions and factors that could cause
actual results to differ materially from those in the forward-looking
statements made by each of NSC and CSX are specified elsewhere in NSC's and
CSX's respective documents filed with the SEC. Documents filed with the SEC by
CSX and NSC are accessible on the SEC's website at www.sec.gov, CSX's website
at www.csx.com and NSC's website at www.nscorp.com.
Registration statements relating to the new CSXT and NSR unsecured debt
securities have been filed with the SEC and were declared effective on July 26,
2004. The exchange offer and consent solicitation is made solely by the
Prospectus and Consent Solicitation Statement, dated July 26, 2004, as it may
be amended from time to time. This press release shall not constitute an offer
to sell or the solicitation of an offer to buy nor shall there be any sale of
these securities in any State in which such offer, solicitation or sale would
be unlawful prior to registration or qualification under the securities laws of
any such State.
ADDITIONAL INFORMATION AND WHERE TO FIND IT
The Prospectus and Consent Solicitation Statement and related materials have
been mailed to holders of Conrail's unsecured debt securities in connection
with the exchange offer and consent solicitation. These documents contain
important information about the proposed transaction and the exchange offer and
consent solicitation. INVESTORS AND HOLDERS OF CONRAIL'S UNSECURED DEBT
SECURITIES ARE URGED TO READ THESE DOCUMENTS CAREFULLY WHEN THEY BECOME
AVAILABLE. Investors and holders of Conrail's unsecured debt securities will be
able to obtain free copies of documents related to the exchange offer and
unsecured debt solicitation through the website maintained by the SEC at
http://www.sec.gov. In addition, free copies of any of these documents may be
obtained from Conrail by directing a request to: Consolidated Rail Corporation,
2001 Market Street, Philadelphia, PA 19103, Attention: Corporate Secretary,
(215) 209-5025. In addition to the registration statements and prospectuses,
CSX and NSC file annual, quarterly and special reports, proxy statements and
other information with the SEC. These SEC filings are available to the public
through the website maintained by the SEC at http://www.sec.gov. A written
prospectus meeting the requirements of Section 10 of the Securities Act of
1933, in connection with the exchange offer, may also be obtained from:
Innisfree M&A Incorporated, 501 Madison Avenue, 20th Floor, New York, New York
10022, phone number: (212) 750-5833.
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