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Csx Financial Evaluation Evaluating Financial Research Paper

The company's financial position is excellent, and shareholders will receive continued payoffs in dividend growth and stock appreciation. Over the coming decade the expectation will be that CSX expands into the western U.S. with mergers or acquisitions of smaller regional railroads. In so doing the company will continue its delivery of shareholder value by capitalizing on the tremendous growth in coal exports, domestic consumer demand, and intermodal connectivity. References

CNBC.com. (March 19, 2012). CSX Corporation Quote. CNBC.com. PP. 1. Retrieved

March 19, 2012 from http://data.cnbc.com/quotes/CSX

CNBC.com. (November 3, 2009). CNBC Transcript: Warren Buffett Explains His

Railroad 'All-in Bet' on America. CNBC.com. PP. 1. Retrieved March 19, 2012 from http://www.cnbc.com/id/33603477/CNBC_Transcript_Warren_Buffett_Explains_His_Railroad_All_In_Bet_on_America

CNNMoney.com. (2011). Fortune 500. CSX. CNNMoney.com. PP. 1. Retrieved March

19, 2012 from http://money.cnn.com/magazines/fortune/fortune500/2011/snapshots/2069.html

CSX Corporation. (December 30, 2011). Annual SEC 10-K Filing. CSX Corporation. PP.

1-129. Retrieved March 19, 2012 from http://investors.csx.com/phoenix.zhtml?c=92932&p=irol-reportsannual

CSX Corporation. (2009). Annual Report. CSX Corporation. PP. 1-159. Retrieved March

19, 2012 from http://investors.csx.com/phoenix.zhtml?c=92932&p=irol-reportsannual

CSX Corporation. (2010). Annual Report. CSX Corporation. PP. 1-147. Retrieved March

19, 2012 from http://investors.csx.com/phoenix.zhtml?c=92932&p=irol-reportsannual

CSX.com. (2012). Mission Statement. CSX.com. PP. 1. Retrieved March 19, 2012 from http://www.csx.com/

CSX.com. (2012). Responsibility: A Message from Our Chairman. CSX.com. PP. 1.

Retrieved March 19, 2012 from http://www.csx.com/index.cfm/responsibility/message-from-our-chairmain/

Doss, N. (March 15, 2012). .CSX Surges Most Since 2009 After Forecasting Record

Profit. Bloomberg.com. PP. 1. Retrieved March 19, 2012 from http://www.bloomberg.com/news/2012-03-15/csx-surges-most-since-2009-after-forecasting-record-profit-3-.html

Investopedia.com. (2012). Operating Ration. Investopedia.com. PP. 1. Retrieved March

19, 2012 from http://www.investopedia.com/terms/o/operatingratio.asp#axzz1pZ1K8gLG

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Appendix

Table of Contents

CSX CORPORATION

PART II

Item 8. Financial Statements and Supplementary Data

CONSOLIDATED INCOME STATEMENTS

(Dollars in Millions, Except Per Share Amounts)

Fiscal Years

2011

2010

2009

Revenue

11,743

10,636

9,041

Expense

Labor and Fringe

3,073

2,957

2,629

Materials, Supplies and Other

2,229

2,075

1,999

Fuel

1,668

1,212

Depreciation

Equipment and Other Rents

Total Expense

8,325

7,565

6,771

Operating Income

3,418

3,071

2,270

Interest Expense

(552)

(557)

(558)

Other Income - Net (Note 10)

22

32

34

Earnings From Continuing Operations

Before Income Taxes

2,888

2,546

1,746

Income Tax Expense (Note 12)

(1,066)

(983)

(618)

Earnings From Continuing Operations

1,822

1,563

1,128

Discontinued Operations (Note 14)

15

Net Earnings

1,822

1,563

1,143

Per Common Share (Note 2)

Net Earnings Per Share, Basic

Continuing Operations

1.68

1.37

0.96

Discontinued Operations

0.01

Net Earnings

1.68

1.37

0.97

Net Earnings Per Common Share, Assuming Dilution

Continuing Operations

1.67

1.35

0.95

Discontinued Operations

0.01

Net Earnings

1.67

1.35

0.96

Average Common Shares Outstanding (Millions)

1,083

1,143

1,176

Average Common Shares Outstanding,

Assuming Dilution (Millions)

1,089

1,154

1,187

Cash Dividends Paid Per Common Share

0.45

0.33

0.29

All share and per share data were retroactively restated to reflect the three-for-one stock split effective May 31, 2011.

See accompanying Notes to Consolidated Financial Statements

57

Table of Contents

CSX CORPORATION

PART II

Item 8. Financial Statements and Supplementary Data

CONSOLIDATED BALANCE SHEETS

(Dollars in Millions)

December December

2011

2010

ASSETS

Current Assets:

Cash and Cash Equivalents (Note 1)

1,292

Short-term Investments

54

Accounts Receivable - Net (Note 1)

1,129

Materials and Supplies

Deferred Income Taxes

Other Current Assets

78

Total Current Assets

2,935

2,855

Properties

33,704

32,065

Accumulated Depreciation

(8,730)

(8,266)

Properties - Net (Note 6)

24,974

23,799

Investment in Conrail (Note 13)

Affiliates and Other Companies

Other Long-term Assets (Note 11)

Total Assets

29,473

28,141

LIABILITIES and SHAREHOLDERS' EQUITY

Current Liabilities:

Accounts Payable

1,147

1,046

Labor and Fringe Benefits Payable

Casualty, Environmental and Other Reserves (Note 5)

Current Maturities of Long-term Debt (Note 9)

Income and Other Taxes Payable

85

Other Current Liabilities

97

Total Current Liabilities

2,687

2,537

Casualty,...

Financial Statements and Supplementary Data
CONSOLIDATED CASH FLOW STATEMENTS

(Dollars in Millions)

Fiscal Years

2011

2010

2009

OPERATING ACTIVITIES

Net Earnings

1,822

1,563

1,143

Adjustments to Reconcile Net Earnings to Net Cash

Provided by Operating Activities:

Depreciation

Deferred Income Taxes

Contributions to Qualified Pension Plans (Note 8)

(250)

Other Operating Activities

(35)

52

(182)

Changes in Operating Assets and Liabilities:

Accounts Receivable

(73)

17

91

Other Current Assets

(23)

(22)

28

Accounts Payable

84

79

(4)

Income and Other Taxes Payable

96

28

(9)

Other Current Liabilities

35

(111)

Net Cash Provided by Operating Activities

3,491

3,261

2,039

INVESTING ACTIVITIES

Property Additions

(2,297)

(1,840)

(1,426)

Purchase of Short-term Investments

(492)

Proceeds from Property Dispositions

45

Other Investing Activities

(38)

(39)

9

Net Cash Used in Investing Activities

(2,587)

(1,771)

(1,372)

FINANCING ACTIVITIES

Long-term Debt Issued (Note 9)

1,200

Long-term Debt Repaid (Note 9)

(605)

(113)

(323)

Dividends Paid

(480)

(372)

(345)

Stock Options Exercised (Note 4)

29

42

34

Shares Repurchased

(1,564)

(1,452)

Other Financing Activities

7

(132)

(173)

Net Cash Used in Financing Activities

(1,413)

(1,227)

(307)

Net Increase (Decrease) in Cash and Cash Equivalents

(509)

CASH and CASH EQUIVALENTS

Cash and Cash Equivalents at Beginning of Period

1,292

1,029

Cash and Cash Equivalents at End of Period

1,292

1,029

SUPPLEMENTAL CASH FLOW INFORMATION

Interest Paid - Net of Amounts Capitalized

Income Taxes Paid

See accompanying Notes to Consolidated Financial Statements

Table of Contents

CSX CORPORATION

PART II

Item 8. Financial Statements and Supplementary Data

CONSOLIDATED STATEMENTS of CHANGES

IN SHAREHOLDERS' EQUITY

(Dollars in Millions)

Common

Common

Stock

Shares

and Outstanding

Paid-in

(Thousands)

Capital

Retained

Earnings

Accumulated

Other

Comprehensive

Income

(Loss) (a)

Noncontrolling

Interest

Total

Shareholders'

Equity

Balance December 26, 2008

1,171,578

8,315

(741)

20

7,985

Comprehensive Earnings:

Net Earnings

1,143

1,143

Other Comprehensive Loss

(68)

(68)

Total Comprehensive Earnings

1,075

Common stock dividends, $0.29 per share

(345)

(1)

(346)

Bond Conversions (Notes 2 and 9)

66

1

1

Stock Option Exercises and Other

8,736

81

(23)

(5)

53

Balance December 25, 2009

1,180,380

9,090

(809)

14

8,768

Comprehensive Earnings:

Net Earnings

1,563

1,563

Other Comprehensive Income

39

39

Total Comprehensive Earnings

1,602

Common stock dividends, $0.33 per share

(372)

(372)

Share Repurchases

(80,031

(255)

(1,197)

(1,452)

Bond Conversions (Notes 2 and 9)

2,211

19

19

Stock Option Exercises and Other

8,466

3

(1)

Balance December 31, 2010

1,111,026

9,087

(771)

14

8,700

Comprehensive Earnings:

Net Earnings

1,822

1,822

Other Comprehensive Loss

(104)

(104)

Total Comprehensive Earnings

1,718

Common stock dividends, $0.45 per share

(480)

(1)

(481)

Share Repurchases

(67,406)

(2,154)

(1,564)

Bond Conversions (Notes 2 and 9)

5

5

Stock Option Exercises and Other

4,862

90

90

Balance December 30, 2011

1,049,157

1,055

8,275

(875)

13

8,468

(a) Accumulated Other Comprehensive Loss primarily includes changes in pension and other postretirement benefit adjustments. These year-end balances shown above are net of tax. The associated taxes were $426 million, $413 million and $466 million for 2009, 2010 and 2011, respectively.

See accompanying Notes to Consolidated Financial Statements

Sources used in this document:
8,468

(a) Accumulated Other Comprehensive Loss primarily includes changes in pension and other postretirement benefit adjustments. These year-end balances shown above are net of tax. The associated taxes were $426 million, $413 million and $466 million for 2009, 2010 and 2011, respectively.

See accompanying Notes to Consolidated Financial Statements
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