SECURITIESTable ANDof EXCHANGE COMMISSION Contents

~~WASHINGTON,~~SECURITIES ~~D.C.~~AND ~~20549~~EXCHANGE COMMISSION

~~FORM~~WASHINGTON, ~~10-Q~~D.C. 20549

~~x QUARTERLY~~FORM ~~REPORT~~10-Q ~~PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES~~

x QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarter ended ~~June~~ 27September 26, 2003

¨ TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

~~EXCHANGE~~For ~~ACT~~the OFtransition ~~1934~~period from to

~~For~~Commission ~~the~~File ~~transition period~~Number ~~from to~~ 1-3359

~~Commission~~CSX ~~File~~TRANSPORTATION ~~Number~~INC. ~~1-3359~~

~~CSX~~(Exact ~~TRANSPORTATION~~name ~~INC.~~of registrant as specified in its charter)

(Exact name of registrant as specified in its charter)

Virginia		54-6000720
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

500 Water Street, Jacksonville, Florida		32202
(Address of principal executive offices)		(Zip Code)

Virginia		54-6000720
(State or other jurisdiction of incorporation or organization)		(I.R.S. Employer Identification No.)

(904) 359-3100

500 Water Street, Jacksonville, Florida		32202
(Address of principal executive offices)		(Zip Code)

(Registrant’s telephone number, including area code)

~~(904)~~No ~~359-3100~~ Change

(~~Registrant’s~~Former ~~telephone~~name, ~~number~~former address and former fiscal year, ~~including~~if ~~area~~changed ~~code~~since last report.)

NoIndicate ~~Change~~by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No ¨

~~(Former~~Indicate ~~name,~~by ~~former~~check ~~address~~mark ~~and~~whether ~~former~~the ~~fiscal~~registrant ~~year,~~is ifan ~~changed~~accelerated ~~since~~filer ~~last~~(as defined ~~report.~~in Exchange Act Rule 12b-2). Yes ¨ No x

~~Indicate~~REGISTRANT byMEETS ~~check~~THE ~~mark~~CONDITIONS ~~whether~~SET ~~the~~FORTH ~~registrant~~IN ~~(1)~~GENERAL ~~has~~INSTRUCTION ~~filed~~H ~~all reports required to be filed by Section 13 or 15~~(d1) ~~of the Securities Exchange Act of 1934 during the preceding 12 months~~ (~~or for such shorter period that the registrant was required to file such reports~~a), AND ~~and~~ (2b) ~~has~~OF ~~been~~FORM ~~subject~~10-Q toAND ~~such~~IS ~~filing requirements~~THEREFORE ~~for~~FILING ~~the~~THIS ~~past~~FORM 90WITH ~~days.~~THE ~~Yes x No ¨~~REDUCED DISCLOSURE FORMAT.

REGISTRANTTable MEETSof THE CONDITIONS SET FORTH IN GENERAL INSTRUCTION H (1) (a) AND (b) OF FORM 10-Q AND IS THEREFORE FILING THIS FORM WITH THE REDUCED DISCLOSURE FORMAT. Contents

CSX TRANSPORTATION INC.

FORM 10-Q

FOR THE QUARTERLY PERIOD ENDED ~~JUNE~~SEPTEMBER 2726, 2003

INDEX

		PageNumber
		Page Number
PART I:	FINANCIAL INFORMATION
Item 1:	Financial Statements
	Consolidated Income Statements (Unaudited)—Quarters and Six Months Ended June 27, 2003 and June 28, 2002	3
	Consolidated Income Statements (Unaudited) -Quarters and Nine Months Ended September 26, 2003 and September 27, 2002	3
	Consolidated Balance Sheets—At June 27, 2003 (Unaudited) and December 27, 2002	4
	Consolidated Balance Sheets -At September 26, 2003 (Unaudited) and December 27, 2002	4
	Consolidated Cash Flow Statements (Unaudited)—Six Months Ended June 27, 2003 and June 28, 2002	5
	Consolidated Cash Flow Statements (Unaudited)-Nine Months Ended September 26, 2003 and September 27, 2002	5
	Notes to Consolidated Financial Statements (Unaudited)	6
Item 2:	Management’s Narrative Analysis of the Results of Operations	1517
Item 3:	Quantitative and Qualitative Disclosures About Market Risk	2125
Item 4:	Disclosure Controls and Procedures	2125
PART II:	OTHER INFORMATION
Item 6:	Exhibits and Reports on Form 8-K	2226
Signature		2226

CSXTable TRANSPORTATIONof INC. AND SUBSIDIARIES Contents

~~ITEM~~ CSX 1:TRANSPORTATION ~~FINANCIAL~~INC. ~~STATEMENTS~~AND SUBSIDIARIES

~~Consolidated~~ITEM ~~Income~~1: ~~Statements~~FINANCIAL STATEMENTS

	(Unaudited)
	Quarter Ended					Six Months Ended
(Dollars in Millions)	June 27, 2003		June 28, 2002			June 27, 2003		June 28, 2002
OPERATING REVENUE
Merchandise	$	927	$	892		$	1,849	$	1,760
Automotive		224		231			432		431
Coal, Coke & Iron Ore		416		399			799		796
Other		6		16			24		37
Total		1,573		1,538			3,104		3,024
OPERATING EXPENSE
Labor and Fringe		617		605			1,241		1,219
Materials, Supplies and Other		281		285			578		571
Conrail		91		86			178		174
Related Party Service Fees		47		68			93		147
Equipment Rent		88		103			192		199
Depreciation		140		131			278		261
Fuel		136		112			294		216
Total		1,400		1,390			2,854		2,787
Operating Income		173		148			250		237
Other Income (Expense)		11		(17	)		1		1
Interest Expense		30		28			56		58
Earnings Before Income Taxes and Cumulative Effect of Accounting Change		154		103			195		180
Income Tax Expense		61		39			86		69
Earnings Before Cumulative Effect of Accounting Change—Net of Tax		93		64			109		111
Cumulative Effect of Accounting Change		—		—			57		—
Net Earnings	$	93	$	64		$	166	$	111

Consolidated Income Statements

See accompanying Notes to Consolidated Financial Statements.

	(Unaudited)
(Dollars in Millions)	Quarter Ended						Nine Months Ended
	September 26, 2003			September 27, 2002			September 26, 2003		September 27, 2002
OPERATING REVENUE
Merchandise	$	917		$	871		$	2,766	$	2,631
Automotive		193			195			625		626
Coal, Coke & Iron Ore		398			401			1,197		1,197
Other		2			6			26		43

Total		1,510			1,473			4,614		4,497

OPERATING EXPENSE
Labor and Fringe		617			611			1,858		1,830
Materials, Supplies and Other		268			261			846		832
Conrail Rents, Fees and Services		90			86			268		260
Related Party Service Fees		42			(9	)		135		138
Equipment Rent		106			112			298		311
Depreciation		137			136			415		397
Fuel		132			109			426		325
Provision for Casualty Claims		229			—			229		—

Total		1,621			1,306			4,475		4,093

Operating Income (Loss)		(111	)		167			139		404

Other Income		6			16			7		17
Interest Expense		23			28			79		86

Earnings (Loss) Before Income Taxes and Cumulative Effect of Accounting Change		(128	)		155			67		335

Income Tax Expense (Benefit)		(60	)		58			26		127

Earnings (Loss) Before Cumulative Effect of Accounting Change		(68	)		97			41		208

Cumulative Effect of Accounting Change - Net of Tax		—			—			57		—

Net Earnings (Loss)	$	(68	)	$	97		$	98	$	208

3See accompanying Notes to Consolidated Financial Statements.

~~CSX~~3 ~~TRANSPORTATION INC. AND SUBSIDIARIES~~

ITEMTable 1:of FINANCIAL STATEMENTS Contents

~~Consolidated~~CSX ~~Balance~~TRANSPORTATION ~~Sheets~~INC. AND SUBSIDIARIES

(Dollars in Millions)	(Unaudited) June 27, 2003			December 27, 2002
ASSETS
Current Assets:
Cash and Cash Equivalents	$	21		$	—
Accounts Receivable—Net		1,040			235
Materials and Supplies		167			171
Deferred Income Taxes		113			110
Other Current Assets		56			18
Total Current Assets		1,397			534
Properties		17,664			17,354
Accumulated Depreciation		(4,812	)		(4,730	)
Properties—Net		12,852			12,624
Affiliates and Other Companies		237			217
Other Long-term Assets		674			627
Total Assets	$	15,160		$	14,002
LIABILITIES
Current Liabilities:
Accounts Payable	$	598		$	618
Labor and Fringe Benefits Payable		320			319
Casualty, Environmental and Other Reserves		171			173
Current Maturities of Long-term Debt		113			213
Income and Other Taxes Payable		97			98
Due to Parent Company		2,555			1,297
Due to Affiliate		194			200
Other Current Liabilities		51			132
Total Current Liabilities		4,099			3,050
Deferred Income Taxes		3,547			3,424
Long-term Debt		784			873
Casualty, Environmental and Other Reserves		477			467
Other Long-term Liabilities		592			579
Total Liabilities		9,499			8,393
SHAREHOLDER’S EQUITY
Common Stock, $20 Par Value:
Authorized 10,000,000 Shares;
Issued and Outstanding 9,061,038 Shares		181			181
Other Capital		1,380			1,380
Retained Earnings		4,100			4,048
Total Shareholder’s Equity		5,661			5,609
Total Liabilities and Shareholder’s Equity	$	15,160		$	14,002

ITEM 1: FINANCIAL STATEMENTS

~~See accompanying Notes to~~ Consolidated ~~Financial~~Balance ~~Statements.~~Sheets

(Dollars in Millions)	(Unaudited) September 26, 2003			December 27, 2002
ASSETS
Current Assets:
Cash and Cash Equivalents	$	9		$	—
Accounts Receivable - Net		1,066			246
Materials and Supplies		157			171
Deferred Income Taxes		104			110
Other Current Assets		45			18

Total Current Assets		1,381			545

Properties		17,794			17,354
Accumulated Depreciation		(4,841	)		(4,730	)

Properties - Net		12,953			12,624

Affiliates and Other Companies		242			217
Other Long-term Assets		614			627

Total Assets	$	15,190		$	14,013

LIABILITIES AND SHAREHOLDER’S EQUITY
Current Liabilities:
Accounts Payable	$	584		$	618
Labor and Fringe Benefits Payable		288			319
Casualty, Environmental and Other Reserves		165			173
Current Maturities of Long-term Debt		101			213
Income and Other Taxes Payable		100			98
Due to Parent Company		2,671			1,297
Due to Affiliate		183			200
Other Current Liabilities		82			143

Total Current Liabilities		4,174			3,061

Deferred Income Taxes		3,478			3,424
Long-term Debt		721			873
Casualty, Environmental and Other Reserves		696			467
Other Long-term Liabilities		587			579

Total Liabilities		9,656			8,404

Shareholder’s Equity
Common Stock, $20 Par Value:
Authorized 10,000,000 Shares;
Issued and Outstanding 9,061,038 Shares		181			181
Other Capital		1,380			1,380
Retained Earnings		3,973			4,048

Total Shareholder’s Equity		5,534			5,609

Total Liabilities and Shareholder’s Equity	$	15,190		$	14,013

~~CSX~~See accompanying ~~TRANSPORTATION~~Notes ~~INC.~~to ~~AND~~Consolidated ~~SUBSIDIARIES~~Financial Statements.

~~ITEM~~4 ~~1: FINANCIAL STATEMENTS~~

ConsolidatedTable Cashof Flow Statements Contents

	(Unaudited) Six Months Ended
(Dollars in Millions)	June 27, 2003			June 28, 2002
OPERATING ACTIVITIES
Net Earnings	$	166		$	111
Adjustments to Reconcile Net Earnings to Net Cash (Used) Provided:
Depreciation		278			261
Deferred Income Taxes		82			68
Cumulative Effect of Accounting Change—Net of Tax		(57	)		—
Other Operating Activities		(37	)		8
Changes in Operating Assets and Liabilities:
Accounts and Notes Receivable		(3	)		46
Sale of Accounts Receivable—Net		(819	)		19
Other Current Assets		(35	)		(34	)
Accounts Payable		(30	)		(66	)
Other Current Liabilities		(71	)		(12	)
Net Cash (Used) Provided by Operating Activities		(526	)		401
INVESTING ACTIVITIES
Property Additions		(424	)		(352	)
Short-term Investments		—			137
Other Investing Activities		9			(2	)
Net Cash Used by Investing Activities		(415	)		(217	)
FINANCING ACTIVITIES
Advances from CSX		1,264			79
Long-term Debt Repaid		(189	)		(150	)
Dividends Paid		(115	)		(100	)
Other Financing Activities		2			2
Net Cash Provided (Used) by Financing Activities		962			(169	)
Net Increase in Cash and Cash Equivalents		21			15
CASH, CASH EQUIVALENTS, AND SHORT-TERM INVESTMENTS
Cash and Cash Equivalents at Beginning of Period		—			27
Cash and Cash Equivalents at End of Period		21			42
Short-term Investments at End of Period		—			83
Cash, Cash Equivalents and Short-term Investments at End of Period	$	21		$	125

CSX TRANSPORTATION INC. AND SUBSIDIARIES

~~See accompanying~~ITEM ~~Notes~~1: toFINANCIAL ~~Consolidated~~STATEMENTS ~~Financial Statements.~~

5Consolidated Cash Flow Statements

CSX TRANSPORTATION INC. AND SUBSIDIARIES

(Dollars in Millions)	(Unaudited) Nine Months Ended
	September 26, 2003			September 27, 2002
OPERATING ACTIVITIES
Net Earnings	$	98		$	208
Adjustments to Reconcile Net Earnings to Net Cash (Used) Provided:
Depreciation		415			397
Deferred Income Taxes		30			144
Cumulative Effect of Accounting Change - Net of Tax		(57	)		—
Provision for Casualty Claims		229
Other Operating Activities		17			5
Changes in Operating Assets and Liabilities:
Accounts and Notes Receivable		20			(15	)
Termination of Sale of Receivables		(869	)		(29	)
Other Current Assets		(13	)		(39	)
Accounts Payable		(53	)		(81	)
Other Current Liabilities		(79	)		(108	)

Net Cash (Used) Provided by Operating Activities		(262	)		482


INVESTING ACTIVITIES
Property Additions		(676	)		(647	)
Short-term Investments		—			220
Other Investing Activities		5			(5	)

Net Cash Used by Investing Activities		(671	)		(432	)

FINANCING ACTIVITIES
Advances from CSX		1,377			244
Long-term Debt Repaid		(263	)		(172	)
Dividends Paid		(173	)		(150	)
Other Financing Activities		1			1

Net Cash Provided (Used) by Financing Activities		942			(77	)

Net Increase (Decrease) in Cash and Cash Equivalents		9			(27	)

CASH, CASH EQUIVALENTS, AND SHORT-TERM INVESTMENTS
Cash and Cash Equivalents at Beginning of Period		—			27

Cash and Cash Equivalents at End of Period	$	9		$	—

~~ITEM~~See accompanying 1:Notes ~~FINANCIAL~~to ~~STATEMENTS~~Consolidated Financial Statements.

~~Notes~~5 ~~to Consolidated Financial Statements (Unaudited)~~

NOTETable 1.of BASIS OF PRESENTATION Contents

~~In the opinion of management, the accompanying consolidated financial statements contain all adjustments necessary to fairly present the financial~~ ~~position of~~ CSX ~~Transportation~~TRANSPORTATION ~~Inc~~INC. ~~and~~AND ~~subsidiaries~~SUBSIDIARIES (“CSXT” or the “Company”) at June 27, 2003 and December 27, 2002, the results of its operations for the quarters and six months ended June 27, 2003 and June 28, 2002, and its cash flows for the six months ended June 27, 2003 and June 28, 2002, such adjustments being of a normal recurring nature. Certain prior-year data have been reclassified to conform to the 2003 presentation. CSXT is a wholly-owned subsidiary of CSX Corporation (“CSX”).

~~The~~ITEM ~~Company~~1: ~~believes~~FINANCIAL ~~that~~STATEMENTS the disclosures presented are accurate and not misleading, and suggests that these financial statements be read in conjunction with the financial statements and the notes included in CSXT’s most recent Form 10-K and 2003 Quarterly Reports on Form 10-Q.

~~CSXT~~Notes ~~follows~~to aConsolidated ~~52/53~~Financial ~~week~~Statements ~~fiscal~~(Unaudited) reporting calendar. Fiscal years 2003 and 2002 consist of 52 weeks ending on December 26, 2003 and December 27, 2002, respectively. The financial statements presented are for the 13-week quarters ended June 27, 2003 and June 28, 2002, the 26-week periods ended June 27, 2003 and June 28, 2002, and as of December 27, 2002.

NOTE 21. ~~CUMULATIVE~~BASIS ~~EFFECT~~ OF ~~ACCOUNTING~~PRESENTATION ~~CHANGE~~

~~Statement~~In ofthe ~~Financial~~opinion ~~Accounting~~of ~~Standard (“SFAS”) 143~~management, ~~“Accounting~~the ~~for~~accompanying ~~Asset~~consolidated ~~Retirement~~financial ~~Obligations,”~~statements ~~was~~contain ~~issued~~all inadjustments ~~2001.~~necessary ~~This~~to ~~statement~~fairly ~~addresses~~present the financial position ~~accounting~~of ~~and~~CSX ~~reporting~~Transportation ~~for~~Inc. ~~legal~~and ~~obligations~~subsidiaries ~~associated with~~(“CSXT” or the ~~retirement~~“Company”) ofat ~~tangible~~September ~~long-lived~~26, ~~assets~~2003 and ~~the~~December ~~associated~~27, ~~retirement~~2002, ~~costs. In conjunction with~~ the ~~group-life~~results ~~method~~ of ~~accounting~~its operations for ~~asset costs,~~ the ~~Company~~quarters ~~historically~~and ~~accrued~~nine ~~crosstie~~months ~~removal~~ended ~~costs~~September as26, a2003 ~~component~~and ofSeptember ~~depreciation~~27, ~~which~~2002, isand ~~not~~its ~~permitted~~cash ~~under~~flows ~~SFAS~~for ~~143. With~~ the ~~adoption~~nine ofmonths ~~SFAS~~ended ~~143~~September in26, ~~fiscal year~~ 2003, ~~CSXT~~and ~~recorded~~September ~~pretax income of $93 million~~27, ~~$57 million after tax~~2002, assuch aadjustments ~~cumulative~~being ~~effect~~ of ana ~~accounting~~normal ~~change~~recurring ~~in the first quarter, representing the reversal of the accrued liability for crosstie removal costs~~nature. ~~The~~Certain ~~adoption~~prior-year ofdata ~~SFAS 143 did not~~ have abeen ~~material~~reclassified ~~effect~~to onconform ~~prior~~to ~~reporting periods, and~~ the ~~Company~~2003 ~~does not believe it will have a material effect on future earnings~~presentation. OnCSXT anis ~~ongoing~~a ~~basis,~~wholly-owned ~~depreciation~~subsidiary ~~expense~~of ~~will~~CSX beCorporation ~~reduced, while materials, supplies and other expense will be increased~~(“CSX”).

~~NOTE~~The 3.Company ~~INTEGRATED~~suggests ~~RAIL~~that ~~OPERATIONS~~these ~~WITH~~financial ~~CONRAIL~~statements be read in conjunction with the financial statements and the notes included in CSXT’s most recent Form 10-K and 2003 Quarterly Reports on Form 10-Q.

~~Background~~CSXT follows a 52/53 week fiscal reporting calendar. Fiscal years 2003 and 2002 consist of 52 weeks ending on December 26, 2003 and December 27, 2002, respectively. The financial statements presented are for the 13-week quarters ended September 26, 2003 and September 27, 2002, the 39-week periods ended September 26, 2003 and September 27, 2002, and as of December 27, 2002.

~~CSX~~NOTE ~~and Norfolk Southern Corporation (“Norfolk Southern”) acquired Conrail Inc~~2. ~~(“Conrail”)~~CUMULATIVE inEFFECT ~~May~~OF ~~1997.~~ACCOUNTING ~~Conrail~~CHANGE owns the primary freight railroad system serving the Northeastern United States, and its rail network extends throughout several Midwestern states and into Canada. CSX and Norfolk Southern, through a jointly owned acquisition entity, hold economic interests in Conrail of 42% and 58%, respectively, and voting interests of 50% each. CSX and Norfolk Southern operate over allocated portions of the Conrail lines.

6Statement of Financial Accounting Standard (“SFAS”) 143, “Accounting for Asset Retirement Obligations,” was issued in 2001. This statement addresses financial accounting and reporting for legal obligations associated with the retirement of tangible long-lived assets and the associated retirement costs. 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, CSXT 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, and the Company does not believe it will have a material effect on future earnings. On an ongoing basis, depreciation expense will be reduced, while labor and fringe and materials, supplies and other expense will be increased.

~~CSX~~NOTE ~~TRANSPORTATION INC~~3. ~~AND~~INTEGRATED ~~SUBSIDIARIES~~RAIL OPERATIONS WITH CONRAIL

~~ITEM~~Background ~~1: FINANCIAL STATEMENTS~~

~~Notes~~CSX toand ~~Consolidated~~Norfolk ~~Financial~~Southern ~~Statements~~ Corporation (~~Unaudited~~“Norfolk Southern”) acquired Conrail Inc. (“Conrail”) in May 1997. Conrail owns the primary freight railroad system serving the Northeastern United States, and its rail network extends throughout several Midwestern states and into Canada. CSX and Norfolk Southern, through a jointly owned acquisition entity, hold economic interests in Conrail of 42% and 58%, respectively, and voting interests of 50% each. CSX and Norfolk Southern operate over allocated portions of the Conrail lines.

~~NOTE~~6 ~~3. INTEGRATED RAIL OPERATIONS WITH CONRAIL, Continued~~

CSXTTable and Norfolk Southern Railway Company (“Norfolk Southern Railway”), the rail subsidiary of Norfolk Southern, each operate separate portions of the Conrail system pursuant to various operating agreements. Under these agreements, the railroads pay operating fees to Conrail for the use of right-of-way and rent for the use of equipment. Conrail continues to provide rail services in certain shared geographic areas (“Shared Asset Areas”) for the joint benefit of CSXT and Norfolk Southern Railway, for which it is compensated on the basis of usage by the respective railroads. Contents

~~In June 2003,~~ CSX, ~~Norfolk~~TRANSPORTATION Southern and Conrail jointly filed a petition with the Surface Transportation Board (STB) to establish direct ownership and control by CSXT and Norfolk Southern Railway of their portions of the Conrail systemINC. ~~Conrail~~AND ~~would~~SUBSIDIARIES continue to own, manage and operate the Shared Assets Areas as previously approved by the STB. CSX, Norfolk Southern and Conrail also jointly filed a ruling request with the Internal Revenue Service to qualify the transaction as a non-taxable disposition. The proposed transaction is subject to a number of conditions, including, among others, STB approval and a favorable IRS ruling. If all necessary conditions are satisfied, Conrail intends to restructure its existing $800 million of unsecured public debt and $400 million of secured debt. It is currently contemplated that guaranteed debt securities of two newly formed subsidiaries of CSXT and Norfolk Southern Railway would be offered in a 42%/58% ratio in exchange for Conrail’s unsecured debentures. The debt securities would be fully and unconditionally guaranteed by CSXT and Norfolk Southern Railway. Upon completion of the proposed transaction, the new debt securities would become direct unsecured obligations of CSXT and Norfolk Southern Railway. Conrail’s secured debt and lease obligations will remain obligations of Conrail and are expected to be supported by new leases and subleases which, upon completion of the proposed transaction, would be the direct lease and sublease obligations of CSXT or Norfolk Southern Railway.

~~Accounting~~ITEM ~~and~~1: ~~Financial~~FINANCIAL ~~Reporting~~STATEMENTS ~~Effects~~

~~CSXT’s operating revenue includes revenue from traffic moving on Conrail property. Operating expenses include costs~~Notes ~~incurred~~ to ~~handle~~Consolidated ~~that~~Financial ~~traffic~~Statements ~~and~~(Unaudited) ~~operate the Conrail lines. Operating expense includes an expense category, “Conrail,” which reflects:~~

1NOTE 3. ~~Right-of-way~~INTEGRATED ~~usage~~RAIL ~~fees~~OPERATIONS toWITH ~~Conrail.~~CONRAIL, Continued

2CSXT and Norfolk Southern Railway Company (“Norfolk Southern Railway”), the rail subsidiary of Norfolk Southern, each operate separate portions of the Conrail system pursuant to various operating agreements. ~~Equipment~~Under ~~rental~~these ~~payments~~agreements, the railroads pay operating fees to Conrail for the use of right-of-way and rent for the use of equipment. Conrail continues to provide rail services in certain shared geographic areas (“Shared Asset Areas”) for the joint benefit of CSXT and Norfolk Southern Railway, for which it is compensated on the basis of usage by the respective railroads.

3.In ~~Transportation~~June 2003, ~~switching~~CSX, Norfolk Southern and ~~terminal~~Conrail ~~service~~jointly ~~charges~~filed a ~~provided~~petition with the Surface Transportation Board (STB) to establish direct ownership and control by CSXT and Norfolk Southern Railway of their portions of the Conrail insystem. Conrail would continue to own, manage and operate the Shared ~~Asset~~Assets Areas as ~~that~~previously approved by the STB. CSX, Norfolk Southern and Conrail ~~operates~~also jointly filed a ruling request with the Internal Revenue Service to qualify the transaction as a non-taxable distribution. The proposed transaction is subject to a number of conditions, including, among others, STB approval and a favorable IRS ruling. If all necessary conditions are satisfied, Conrail intends to restructure its existing $800 million of unsecured public debt and seek consents to restructure its operating leases and approximately $348 million of capitalized lease and equipment obligations. It is currently contemplated that guaranteed debt securities of two newly formed subsidiaries of CSXT and Norfolk Southern Railway would be offered in a 42%/58% ratio in exchange for Conrail’s unsecured debentures. The debt securities would be fully and unconditionally guaranteed by CSXT and Norfolk Southern Railway. Upon completion of the ~~joint~~proposed ~~benefit~~transaction, the new debt securities would become direct unsecured obligations of CSXT and Norfolk Southern Railway. Conrail’s secured debt and lease obligations will remain obligations of Conrail and are expected to be supported by new leases and subleases which, upon completion of the proposed transaction, would be the direct lease and sublease obligations of CSXT or Norfolk Southern Railway.

7Accounting and Financial Reporting Effects

~~CSX~~CSXT’s ~~TRANSPORTATION~~operating ~~INC~~revenue includes revenue from traffic moving on Conrail property. ~~AND~~Operating ~~SUBSIDIARIES~~expenses include costs incurred to handle such traffic and operate the Conrail lines. Operating expense includes an expense category, “Conrail Rents, Fees and Services,” which reflects:

~~ITEM~~ 1:. ~~FINANCIAL~~Right-of-way ~~STATEMENTS~~usage fees to Conrail.

~~Notes~~2. toEquipment ~~Consolidated~~rental ~~Financial~~payments ~~Statements (Unaudited)~~to Conrail.

~~NOTE~~ 3. ~~INTEGRATED~~Transportation, ~~RAIL OPERATIONS~~switching ~~WITH~~and ~~CONRAIL,~~terminal ~~Continued.~~service charges provided by Conrail in the Shared Asset Areas that Conrail operates for the joint benefit of CSXT and Norfolk Southern Railway.

~~Transactions~~7 ~~with Conrail~~

AsTable listedof below, CSXT has amounts payable to Conrail, representing expenses incurred under the operating, equipment and shared asset area agreements. Contents

(Dollars in Millions)		June 27, 2003			December 27,2002
Payable to Conrail		$	68		$	69

CSX TRANSPORTATION INC. AND SUBSIDIARIES

~~The~~ITEM ~~agreement~~1: ~~under which~~FINANCIAL ~~CSXT~~STATEMENTS operates its allocated portion of the Conrail route system has an initial term of 25 years and may be renewed at CSXT’s option for two five-year terms. Operating fees paid to Conrail under the agreement are subject to adjustment every six years based on the fair value of the underlying system. Lease agreements for the Conrail equipment operated by CSXT cover varying terms. CSXT is responsible for all costs of operating, maintaining, and improving the routes and equipment under these agreements.

~~NOTE~~Notes to 4.Consolidated ~~ACCOUNTS RECEIVABLE~~Financial Statements (Unaudited)

~~Sale~~NOTE of3. ~~Accounts Receivable~~INTEGRATED RAIL OPERATIONS WITH CONRAIL, Continued

AsTransactions ofwith ~~June~~Conrail 27, 2003, CSXT discontinued the sale of accounts receivable, which resulted in a $898 million increase in accounts receivable and increased borrowings from CSX. Prior to June 27, 2003, CSXT sold, without recourse, a revolving pool of accounts receivable to CSX Trade Receivables Corporation (“CTRC”), a bankruptcy-remote entity wholly-owned by CSX Corporation. CTRC transferred the accounts receivable to a master trust and caused the trust to issue two series of certificates representing undivided interests in the receivables. The certificates issued by the master trust were sold to investors, and the proceeds from those sales were paid to CSXT.

~~Outstanding~~As ~~accounts~~listed ~~receivable~~below, ~~sold~~CSXT has amounts payable to Conrail, representing expenses incurred under ~~this~~the ~~agreement~~operating, ~~are~~equipment asand ~~follows:~~shared asset area agreements.

(Dollars in Millions)	~~June 27, 2003~~		~~December 27,2002~~
Accounts Receivable Sold	$	—	$	914
	September 26, 2003		December 27, 2002
Payable to Conrail	$	49	$	69

8The agreement under which CSXT operates its allocated portion of the Conrail route system has an initial term of 25 years and may be renewed at CSXT’s option for two five-year terms. Operating fees paid to Conrail under the agreement are subject to adjustment every six years based on the fair value of the underlying system. Lease agreements for the Conrail equipment operated by CSXT cover varying terms. CSXT is responsible for all costs of operating, maintaining, and improving the routes and equipment under these agreements.

~~CSX~~NOTE ~~TRANSPORTATION INC~~4. ~~AND~~ACCOUNTS RECEIVABLE ~~SUBSIDIARIES~~

~~ITEM~~Sale 1:of ~~FINANCIAL~~Accounts Receivable ~~STATEMENTS~~

~~Notes~~As of June 27, 2003, CSXT discontinued the sale of accounts receivable, which resulted in a $898 million increase in accounts receivable and increased borrowings from CSX. Prior to ~~Consolidated~~June ~~Financial~~27, ~~Statements~~2003, CSXT sold, without recourse, a revolving pool of accounts receivable to CSX Trade Receivables Corporation (~~Unaudited~~“CTRC”), a bankruptcy-remote entity wholly-owned by CSX Corporation. CTRC transferred the accounts receivable to a master trust and caused the trust to issue two series of certificates representing undivided interests in the receivables. The certificates issued by the master trust were sold to investors, and the proceeds from those sales were paid to CSXT.

~~NOTE~~Outstanding 4.accounts ~~ACCOUNTS~~receivable ~~RECEIVABLE, Continued~~sold under this agreement are as follows:

Net losses associated with the sale of receivables are as follows:

(Dollars in Millions)

September 26,

2003

December 27,

2002

Accounts Receivable Sold

—

914

	Quarters Ended				Six Months Ended
(Dollars in Millions)	June 27, 2003		June 28, 2002		June 27, 2003		June 28, 2002
Discounts on Sales of Accounts Receivable	$	18	$	19	$	36	$	38

CSXTTable retained responsibilityof for servicing accounts receivables held by the master trust. The average servicing period was approximately one month. No servicing asset or liability was recorded since the fees CSXT received approximated its related costs. Contents

~~Allowance~~CSX ~~for~~TRANSPORTATION ~~Doubtful~~INC. ~~Accounts~~ AND SUBSIDIARIES

~~The~~ITEM ~~Company~~1: ~~maintains~~FINANCIAL anSTATEMENTS ~~allowance for doubtful accounts on receivables based on the expected collectibility of all accounts receivable. The allowance for doubtful accounts is included in the balance sheet as follows:~~

(Dollars in Millions)		June 27, 2003			December 27,2002
Allowance for Doubtful Accounts		$	34		$	36

Notes to Consolidated Financial Statements (Unaudited)

NOTE 54. ~~OTHER~~ACCOUNTS ~~INCOME~~RECEIVABLE, ~~(EXPENSE)~~Continued

~~Other~~Net ~~income~~losses ~~(expense)~~associated ~~consists~~with the sale of ~~the~~receivables ~~following~~are as follows:

	Quarters Ended								Six Months Ended
(Dollars in Millions)
(Dollars in Millions)	June 27, 2003				June 28,2002				June 27,2003			June 28,2002
	Quarters Ended						Nine Months Ended
Income from Real Estate Operations	$	28			$	—			$	37		$	43
	September 26, 2003			September 27, 2002			September 26, 2003			September 27, 2002
Discounts on Sales of Accounts Receivable	$	~~(18~~—	)	$	18	~~(19~~	)$	36		~~(36~~$	)56		~~(38~~	)
Miscellaneous		1				2				—			(4	)
Total	$	11			$	(17	)		$	1		$	1
Gross Revenue from Real Estate
Operations Included in Other Income	$	36			$	8			$	53		$	60

9CSXT retained responsibility for servicing accounts receivables held by the master trust. The average servicing period was approximately one month. No servicing asset or liability was recorded since the fees CSXT received approximated its related costs.

~~CSX~~Allowance ~~TRANSPORTATION~~for ~~INC.~~Doubtful ~~AND SUBSIDIARIES~~ Accounts

~~ITEM~~The 1:Company ~~FINANCIAL~~maintains ~~STATEMENTS~~an allowance for doubtful accounts based on the expected collectibility of all accounts receivable. The allowance for doubtful accounts is included in the balance sheet as follows:

Notes to Consolidated Financial Statements (Unaudited)

(Dollars in Millions)

September 26,

2003

December 27,

2002

Allowance for Doubtful Accounts

NOTE 6 5. ~~RELATED~~OTHER ~~PARTIES~~ INCOME

AtOther ~~June~~income ~~27,~~consists ~~2003 and December 27, 2002, CSXT had deficit balances~~ of ~~$2.5 billion and $1.3 billion, respectively, relating to its participation in~~ the ~~CSX cash management plan. This balance increased approximately $900 million on June 27, 2003 due to the termination of sales of accounts receivable. These~~following: deficit balances are included in Due to Parent Company in the balance sheet. Under this plan, excess cash is advanced to CSX for investment and CSX makes cash funds available to its subsidiaries as needed for use in their operations. CSXT and CSX are committed to repay all amounts due each other on demand should circumstances require. The companies are charged for borrowings or compensated for investments based on returns earned by the plan portfolio, which was 1.33% and 2.9% at June 27, 2003 and June 28, 2002, respectively. Interest expense related to this plan was $12 million and $22 million for the quarter and six months ended June 27, 2003, and $8 million and $17 million for the quarter and six months ended June 28, 2002.

Detail of Related Party Service Fees (as included in the Income Statement)

(Dollars in Millions)
	Quarters Ended					Nine Months Ended
	September 26, 2003		September 27, 2002			September 26, 2003			September 27, 2002
Income from Real Estate Operations	$	6	$	33		$	43		$	76
Discounts on Sales of Accounts Receivable		—		(18	)		(36	)		(56	)
Miscellaneous		—		1			—			(3	)

Total	$	6	$	16		$	7		$	17

Gross Revenue from Real Estate Operations Included in Other Income	$	13	$	42		$	66		$	102

	Quarters Ended						Six Months Ended
(Dollars in Millions)	June 27, 2003			June 28 2002			June 27, 2003			June 28 2002
CSX Intermodal	$	(98	)	$	(92	)	$	(197	)	$	(178	)
CSX Management Service Fee		60			77			120			154
CSX Technology		51			52			102			107
TDSI		13			12			27			24
TRANSFLO		21			19			41			40
Total Related Party Service Fees	$	47		$	68		$	93		$	147

RelatedTable Party Service Fees consist of amounts related to: Contents

n CSX ~~Intermodal~~TRANSPORTATION ~~Inc~~INC. ~~(“CSXI”)~~AND ~~Reimbursements—Reimbursement~~SUBSIDIARIES from CSXI under an operating agreement for costs incurred by the Company related to intermodal operations. This reimbursement is based on an amount which approximates actual costs. The Company also collects certain revenue on behalf of CSXI under the operating agreement.

nITEM ~~CSX~~1: ~~Management~~FINANCIAL ~~Service~~STATEMENTS Fee—A management service fee charged by CSX as compensation for certain corporate services provided to the Company. These services include, but are not limited to, the areas of human resources, finance, administration, benefits, legal, tax, internal audit, corporate communications, risk management and strategic management services. The fee for 2003 and 2002 is calculated as a percentage of CSXT’s revenue.

nNotes ~~CSX~~to ~~Technology~~Consolidated ~~Inc.~~Financial Statements (~~“CSX Technology”~~Unaudited) Charges—Data processing charges from CSX Technology for the development, implementation and maintenance of computer systems, software and associated documentation for the day-to-day operations of the Company. These charges are based on a mark-up of direct costs.

10NOTE 6. RELATED PARTIES

At September 26, 2003 and December 27, 2002, CSXT had deficit balances of $2.6 billion and $1.3 billion, respectively, relating to its participation in the CSX ~~TRANSPORTATION~~cash ~~INC~~management plan. ~~AND~~This ~~SUBSIDIARIES~~balance increased approximately $900 million on June 27, 2003 due to the termination of the sales of accounts receivable program. These deficit balances are included in Due to Parent Company in the balance sheet. Under this plan, excess cash is advanced to CSX for investment and CSX makes cash funds available to its subsidiaries as needed for use in their operations. CSXT and CSX are committed to repay all amounts due each other on demand should circumstances require. The companies are charged for borrowings or compensated for investments based on returns earned by the plan portfolio, which was 1.1% and 2.8% at September 26, 2003 and September 27, 2002, respectively. Interest expense related to this plan was $11 million and $33 million for the quarter and nine months ended September 26, 2003, and $8 million and $25 million for the quarter and nine months ended September 27, 2002.

~~ITEM~~Detail 1:of ~~FINANCIAL~~Related ~~STATEMENTS~~Party Service Fees (as included in the Income Statement)

Notes to Consolidated Financial Statements (Unaudited)

(Dollars in Millions)
	Quarters Ended						Nine Months Ended
	September 26, 2003			September 27 2002			September 26, 2003			September 26 2002
CSXI	$	(100	)	$	(94	)	$	(297	)	$	(272	)
CTRC		—			(53	)		—			(53	)
CSX		60			59			180			213
CSX Technology		47			52			149			159
TDSI		12			7			39			31
TRANSFLO		23			20			64			60

Total Related Party Service Fees	$	42		$	(9	)	$	135		$	138

~~NOTE~~Related 6.Party ~~RELATED PARTIES,~~Service ~~continued~~Fees consist of amounts related to:

n• ~~Total~~CSX ~~Distribution~~Intermodal ~~Services~~ Inc. (“~~TDSI~~CSXI”) ~~Charges—Charges~~Reimbursements – Reimbursement from ~~TDSI~~CSXI under an operating agreement for ~~services~~costs ~~provided~~incurred toby ~~CSXT~~the atCompany ~~automobile~~related ~~ramps.~~to ~~These~~intermodal ~~charges~~operations. ~~are~~This ~~calculated~~reimbursement is based on ~~direct~~an amount which approximates actual costs. The Company also collects certain revenue on behalf of CSXI under the operating agreement.

n• ~~TRANSFLO~~CTRC ~~Terminal~~Reimbursement ~~Services~~– ~~Inc.~~During ~~(“TRANSFLO”)~~the ~~Charges—Charges~~quarter ~~from~~and ~~TRANSFLO~~nine months ended September 27, 2002, the Company charged CTRC for ~~services~~accounts ~~provided~~receivable toreserves ~~CSXT~~recorded atby ~~bulk~~the ~~commodity~~Company ~~facilities.~~in ~~These~~current ~~charges~~and ~~are~~prior ~~calculated~~periods ~~based~~related onto ~~direct~~receivables ~~costs~~sold to CTRC.

• CSX ~~Technology~~ Management Service Fee – A management service fee charged by CSX as compensation for certain corporate services provided to the Company. These services include, ~~CSXI~~but are not limited to, ~~TDSI~~the areas of human resources, finance, administration, benefits, legal, tax, internal audit, corporate communications, risk management and ~~TRANSFLO~~strategic ~~are~~management ~~wholly-owned~~services. ~~subsidiaries~~The fee for 2003 and 2002 is calculated as a percentage of ~~CSX.~~CSXT’s revenue.

~~Detail~~• CSX Technology Inc. (“CSX Technology”) Charges – Data processing charges from CSX Technology for the development, implementation and maintenance of ~~Due~~computer tosystems, ~~Affiliate~~software ~~(as~~and ~~included~~associated indocumentation for the ~~Balance~~day-to-day ~~Sheet)~~operations of the Company. These charges are based on a mark-up of direct costs.

(Dollars in Millions)	June 27, 2003		December 27,2002
CSXI	$	28	$	25
CSX Technology		38		41
TDSI		4		5
TRANSFLO		9		8
CTRC		—		6
CSX Insurance		115		115
Total Due to Affiliate	$	194	$	200

CSXTTable and CSX Insurance Company (“CSX Insurance”), a wholly-owned subsidiary of CSX, have entered into a loan agreement whereby CSXT may borrow up to $125 million from CSX Insurance. The loan is payable in full on demand. At June 27, 2003 and December 27, 2002, $115 million was outstanding under the agreement. Interest on the loan is payable monthly at 0.45% over the LIBOR rate, which was 1.12% and 1.84% at June 27, 2003 and June 28, 2002, respectively. Contents

~~CSXT and SL Service Inc. (“SL Service”), a wholly-owned subsidiary of~~ CSX, ~~previously~~TRANSPORTATION ~~entered into certain sale-leaseback arrangements~~INC. ~~Under~~AND ~~these~~SUBSIDIARIES arrangements, SL Service sold equipment to a third party and CSXT leased the equipment and assigned the lease to SL Service. SL Service currently contemplates terminating its interest in the arrangements and assigning them to CSX Equipment Leasing, LLC (“CSXE”), a wholly-owned subsidiary of CSX. CSXE will become obligated for all lease payments and other associated equipment expenses. In the event of a default on obligations, CSXT would assume these asset lease rights and obligations of approximately $24 million at June 27, 2003. SL Service previously subleased some of the equipment subject to these sale-leaseback transactions toMaersk as part of Maersk’s purchase of the CSX international liner business. In connection with the assignment of the sale-leaseback arrangements from SL Service to CSXE, CSXE will assume all of SL Service’s interests and obligations under the subleases to Maersk. The remainder of the equipment was subleased from CSXE to Horizon Lines LLC (formerly CSX Lines) as part of its ongoing domestic shipping business. CSXT believes that Maersk and Horizon Lines will fulfill their contractual commitments with respect to such leases and that CSXT will have no further liability for those obligations.

11ITEM 1: FINANCIAL STATEMENTS

~~CSX~~Notes to ~~TRANSPORTATION~~Consolidated ~~INC.~~Financial ~~AND~~Statements ~~SUBSIDIARIES~~(Unaudited)

~~ITEM~~NOTE 1:6. ~~FINANCIAL~~RELATED ~~STATEMENTS~~PARTIES, continued

~~Notes~~• toTotal ~~Consolidated~~Distribution ~~Financial~~Services ~~Statements~~ Inc. (~~Unaudited~~“TDSI”) Charges – Charges from TDSI for services provided to CSXT at automobile ramps. These charges are calculated based on direct costs.

~~NOTE~~• 7TRANSFLO Terminal Services Inc. ~~CASUALTY, ENVIRONMENTAL~~(“TRANSFLO”) ~~AND~~Charges ~~OTHER~~– ~~RESERVES~~Charges from TRANSFLO for services provided to CSXT at bulk commodity facilities. These charges are calculated based on direct costs.

~~Casualty~~CSXI, ~~environmental~~CSX Technology, TDSI, and ~~other~~ ~~reserves~~TRANSFLO are ~~provided~~wholly-owned ~~for~~subsidiaries inof ~~the~~CSX. ~~balance sheet as follows:~~

	June 27, 2003						December 27, 2002
(Dollars in Millions)	Current		Long-term		Total		Current		Long-term		Total
Casualty and Other	$	141	$	269	$	410	$	143	$	252	$	395
Separation		15		188		203		15		195		210
Environmental		15		20		35		15		20		35
Total	$	171	$	477	$	648	$	173	$	467	$	640

Detail of Due to Affiliate (as included in the Balance Sheet)

Casualty Reserves

(Dollars in Millions)
	September 26, 2003		December 27, 2002
CSXI	$	27	$	25
CTRC		—		6
CSX Technology		27		41
TDSI		4		5
TRANSFLO		10		8
CSX Insurance		115		115

Total Due to Affiliate	$	183	$	200

~~Casualty~~CSXT ~~reserves~~and ~~represent~~CSX Insurance ~~accruals~~Company ~~for~~(“CSX ~~the uninsured portion of personal injury~~Insurance”), ~~occupational~~a ~~injury~~wholly-owned ~~(asbestos,~~subsidiary ~~carpal~~of ~~tunnel~~CSX, ~~etc.)~~have ~~and~~entered ~~accident~~into ~~claims.~~a ~~These~~loan ~~reserves~~agreement ~~are~~whereby ~~recorded~~CSXT ~~upon~~may ~~the~~borrow ~~first~~up ~~reporting~~to of$125 anmillion ~~incident,~~from ~~and~~CSX ~~estimates are updated as information develops~~Insurance. The ~~amount~~loan ofis ~~liability~~payable ~~accrued~~in isfull ~~based~~ on ~~the~~demand. ~~type~~At ~~and~~September ~~severity of claim~~26, 2003 and anDecember ~~estimate~~27, 2002, of$115 ~~future~~million ~~claims~~was ~~development~~outstanding ~~based~~under onthe ~~current trends and historical data~~agreement. ~~The~~Interest ~~Company~~on ~~believes~~the itloan ~~has~~is ~~recorded~~payable ~~liabilities~~monthly inat ~~sufficient~~0.45% ~~amounts~~over tothe ~~cover~~LIBOR ~~all identified~~rate, ~~claims~~which ~~and~~was ~~estimates~~1.1% ~~of incurred but not reported personal injury~~ and ~~accident claims~~1.8% ~~Unreported~~at ~~occupational~~September ~~injuries~~26, ~~are~~2003 ~~not~~and ~~subject~~September ~~to reasonable estimation~~27, ~~thus no provision is made for incurred~~2002, ~~but not reported occupational injuries~~respectively.

~~Environmental~~CSXT ~~Reserves~~and SL Service Inc. (“SL Service”), a wholly-owned subsidiary of CSX, previously entered into certain sale-leaseback arrangements. Under these arrangements, SL Service sold equipment to a third party and CSXT leased the equipment and assigned the lease to SL Service. SL Service currently contemplates terminating its interest in the arrangements and assigning them to CSX Equipment Leasing, LLC (“CSXE”), a wholly-owned subsidiary of CSX. CSXE will become obligated for all lease payments and other associated equipment expenses. In the event of a default on obligations, CSXT would assume these asset lease rights and obligations of approximately $24 million at September 26, 2003. SL Service previously subleased some of the equipment subject to these sale-leaseback transactions to Maersk as part of Maersk’s 1999 purchase of the CSX international liner business. In connection with the assignment of the sale-leaseback arrangements from SL Service to CSXE, CSXE has assumed all of SL Service’s interests and obligations under the subleases to Maersk. The remainder of the equipment was subleased from CSXE to Horizon Lines LLC (formerly CSX Lines) as part of its ongoing domestic shipping business. CSXT believes that Maersk and Horizon Lines will fulfill their contractual commitments with respect to such leases and that CSXT will have no further liability for those obligations.

~~CSXT~~11 is a party to various proceedings involving private parties and regulatory agencies related to environmental issues. CSXT has been identified as a potentially responsible party (“PRP”) at approximately 98 environmentally impaired sites that are, or may be, subject to remedial action under the Federal Superfund statute (“Superfund”) or similar state statutes. A number of these proceedings are based on allegations that CSXT, or its railroad predecessors, sent hazardous substances to the facilities in question for disposal. Such proceedings arising under Superfund or similar state statutes can involve numerous other waste generators and disposal companies and seek to allocate or recover costs associated with site investigation and cleanup, which could be substantial.

CSXTTable is involved in administrative and judicial proceedings, and other clean-up efforts at approximately 209 sites, which include the 98 Superfund sites noted above, where it is participating in the study or clean-up of alleged environmental contamination. At least once each quarter, CSXT reviews its role with respect to each such location, giving consideration to a number of factors, including the nature of CSXT’s alleged connection to the location (e.g., generator of waste sent to the site, or owner or operator of the site), the extent of CSXT’s alleged connection (e.g., volume of waste sent to the location and other relevant factors), the accuracy and strength of evidence connecting CSXT to the location, and the number, connection, and financial viability of other named and unnamed PRPs at the location. Contents

12CSX TRANSPORTATION INC. AND SUBSIDIARIES

~~CSX~~ITEM ~~TRANSPORTATION~~1: ~~INC.~~FINANCIAL ~~AND~~STATEMENTS ~~SUBSIDIARIES~~

~~ITEM~~Notes to 1:Consolidated ~~FINANCIAL~~Financial ~~STATEMENTS~~Statements (Unaudited)

~~Notes~~NOTE to7. ~~Consolidated~~DERIVATIVE ~~Financial~~FINANCIAL ~~Statements (Unaudited)~~ INSTRUMENTS

~~NOTE~~Fuel 7.Hedging ~~CASUALTY, ENVIRONMENTAL AND OTHER RESERVES, Continued~~

~~Based~~In on the ~~review~~ ~~process,~~third ~~CSXT~~quarter ~~has~~of ~~recorded reserves to cover estimated future environmental costs with respect to such sites. These liabilities~~2003, ~~which are undiscounted, include amounts representing~~ CSXT’s ~~estimate~~began ofa ~~unasserted~~program ~~claims, which CSXT believes~~ to behedge ~~immaterial.~~a ~~The~~portion ~~liability~~of ~~includes~~its ~~future~~2004 ~~costs for all sites where the Company’s obligation is (1) deemed probable~~ and ~~(2)~~2005 ~~where~~locomotive ~~such~~fuel ~~costs can be reasonably estimated~~purchases. ~~The~~This ~~liability~~program ~~includes~~was ~~future~~established ~~costs for remediation and~~to ~~restoration~~manage ofexposure ~~sites~~to asfuel ~~well~~price asfluctuations. ~~any~~In ~~significant~~order ~~ongoing~~to ~~monitoring~~minimize ~~costs~~this risk, ~~but~~CSXT ~~excludes~~has ~~any~~entered ~~anticipated~~into ~~insurance~~a ~~recoveries.~~series ~~The majority~~ of ~~the~~swaps ~~June~~in ~~27,~~order ~~2003 environmental liability is expected~~ to befix ~~paid~~the ~~out~~price ~~over~~of ~~the~~a ~~next~~portion ~~seven~~of ~~years,~~its ~~funded~~estimated ~~by cash~~future ~~generated~~fuel ~~from operations~~purchases.

~~The~~Following ~~Company~~is ~~does~~a ~~not~~summary ~~currently possess sufficient information to reasonably estimate the amounts~~ of ~~additional~~fuel ~~liabilities,~~swaps ifexecuted ~~any,~~during ~~on some sites until completion of future environmental studies. In addition, latent conditions at any given location could result in exposure,~~ the ~~amount~~ and materiality of which cannot presently be reliably estimated. Based upon information currently available, however, the Company believes its environmental reserves are adequate to accomplish remedial actions to comply with present laws andquarter: ~~regulations, and that the ultimate liability for these matters will not materially affect its overall results of operations and financial condition.~~

NOTE 8. COMMITMENTS AND CONTINGENCIES

	September 26, 2003
Approximate Gallons Hedged (Millions)	118
Average Price Per Gallon	$ 0.69
Swap Maturities	Feb. 2004 - Sept. 2005

	2004		2005
Estimated % of Future Fuel Consumption Hedged at September 26, 2003	11	%	9	%

~~Purchase~~The ~~Commitments~~program limits fuel hedges to a 24 month duration and a maximum of 80% of CSXT’s average monthly fuel purchased for any month within the 24 month period, and places the hedges among selected counterparties. Fuel hedging activity did not have a material affect on fuel expense for the quarter and nine months ended September 26, 2003. Ineffectiveness, or the extent to which changes in the fair values of the fuel swaps did not offset changes in the fair values of the expected fuel purchases, was immaterial.

~~The~~These ~~Company~~instruments ~~has~~qualify, aand ~~commitment~~are ~~under~~designated aby ~~long~~management, as cash-~~term~~flow ~~maintenance~~hedges ~~program~~of ~~for~~variability ~~approximately~~in ~~40%~~expected offuture ~~its~~cash ~~fleet~~flows ofattributable ~~locomotives.~~to ~~The~~fluctuations ~~agreement expires~~ in ~~2026~~fuel ~~and approximates $2~~prices.7 ~~billion.~~ The ~~long-term~~fair ~~maintenance~~values ~~program~~of ~~assures~~fuel ~~CSXT~~derivative ~~access~~instruments toare ~~efficient,~~determined ~~high-quality~~based ~~locomotive~~upon ~~maintenance~~current ~~services~~fair atmarket ~~fixed~~values ~~price~~as ~~levels~~quoted ~~through~~by ~~the~~third ~~term~~party ofdealers ~~the~~and are ~~program.~~recorded ~~Under~~on the ~~program,~~balance ~~CSX~~sheet ~~paid~~with ~~$33~~offsetting ~~million~~adjustments ~~and~~to ~~$66 million~~Accumulated inOther ~~the~~Comprehensive ~~quarter~~Income, ~~and~~a ~~six~~component ~~month~~of ~~periods~~Shareholders’ ~~ended~~Equity. ~~June~~These ~~27,~~amounts ~~2003,~~are ~~respectively.~~immaterial Inas ~~the~~of ~~quarter~~September ~~and~~26, ~~six~~2003. ~~month~~Fair ~~periods~~value ~~ended~~adjustments ~~June~~are 28noncash transactions, ~~2002~~and accordingly, ~~$31~~are ~~million~~excluded ~~and~~from ~~$62~~the ~~million,~~Cash ~~respectively~~Flow ~~was paid~~Statement.

~~Long-term~~The ~~Operating~~Company ~~Agreements~~is exposed to credit loss in the event of nonperformance by other parties to fuel swap agreements. However, the Company does not anticipate nonperformance by the counterparties.

In12 addition to its contractual arrangement to operate specified portions of Conrail’s rail system, CSXT has various long-term railroad operating agreements that allow for exclusive operating rights over various railroad lines. Under these agreements, CSXT is obligated to pay usage fees of approximately $10 million annually. The terms of these agreements range from 30 to 40 years.

13Table of Contents

CSX TRANSPORTATION INC. AND SUBSIDIARIES

ITEM 1: FINANCIAL STATEMENTS

Notes to Consolidated Financial Statements (Unaudited)

NOTE 8. ~~COMMITMENTS~~CASUALTY, ENVIRONMENTAL AND ~~CONTINGENCIES,~~ ~~Continued~~OTHER RESERVES

~~Self-Insurance~~Casualty, environmental and other reserves are provided for in the balance sheet as follows:

The Company obtains substantial amounts of commercial insurance for potential losses for third-party liability and property damages. Reasonable levels of risk ($35 million for property and $25 million for liability per occurrence) are retained on a self-insurance basis. Using a combination of third party and self-insurance allows the Company to realize savings on insurance premium costs and preserves flexibility in achieving the best insurance solutions for various categories of risks.

(Dollars in Millions)
	September 26, 2003						December 27, 2002
	Current		Long-term		Total		Current		Long-term		Total
Casualty and Other	$	135	$	490	$	625	$	143	$	252	$	395
Separation		15		185		200		15		195		210
Environmental		15		21		36		15		20		35

Total	$	165	$	696	$	861	$	173	$	467	$	640

~~Legal~~Casualty ~~Proceedings~~Reserves

ACasualty ~~number~~reserves represent ofaccruals ~~legal~~for ~~actions~~the ~~are~~uninsured ~~pending~~portion ~~against~~of ~~CSXT~~occupational ininjury ~~which~~and ~~claims~~personal ~~are~~injury ~~made in substantial amounts~~claims. ~~While~~In the ~~ultimate~~third ~~results~~quarter of ~~these~~2003, ~~legal~~the ~~actions~~Company ~~cannot~~changed beits ~~predicted~~estimate ~~with~~of ~~certainty,~~casualty ~~management~~reserves ~~does~~to ~~not~~include ~~currently~~an ~~expect~~estimate ~~that~~of ~~the~~incurred ~~resolution~~but ofnot ~~these~~reported ~~matters~~claims ~~will~~for asbestos ~~have~~and aother ~~material~~occupational ~~adverse~~injuries ~~effect~~to onbe ~~CSXT’s~~received ~~consolidated balance~~over ~~sheet,~~the ~~income~~next ~~statement~~seven oryears. ~~cash~~Other ~~flows.~~occupational ~~The~~claims ~~Company~~include isallegations ~~also~~of ~~party~~exposure to acertain ~~number~~materials ofin ~~actions,~~ the ~~resolution~~work ofplace, ~~which~~such ~~could~~as ~~result~~solvents inand ~~gain~~diesel ~~realization~~fuel, inor ~~amounts~~alleged ~~that~~physical ~~could~~injuries, besuch as ~~material~~carpal totunnel ~~results~~syndrome ofor ~~operations~~hearing ~~in the quarter received~~loss.

14In conjunction with the change in estimate, the Company recorded a charge of $229 million ($143 million after tax) in the third quarter of 2003 to increase its provision for these claims. Approximately $138 million relates to asbestos claims.

~~CSX~~Asbestos ~~TRANSPORTATION~~and ~~INC.~~Other ~~AND~~Occupational ~~SUBSIDIARIES~~Injuries

During the third quarter of 2003, the Company retained third ~~ITEM~~party ~~2: MANAGEMENT’S~~professionals ~~NARRATIVE~~to ~~ANALYSIS~~work OFwith ~~THE~~it ~~RESULTS~~to OFproject ~~OPERATIONS~~the number of asbestos and other occupational injury claims to be received over the next seven years and the related costs. Based on this analysis the Company established reserves for the probable and reasonably estimable asbestos and other occupational injury liabilities.

~~RESULTS~~The OFmethodology ~~OPERATIONS~~used by the third party to project future occupational injury claims was based largely on CSXT’s recent experience, including claim-filing and settlement rates, injury and disease mix, open claims and claim settlement costs. However, projecting future occupational injury claims and settlements costs is subject to numerous variables that are difficult to predict. In addition to the significant uncertainties surrounding the number of claims that might be received, other variables, including the type and severity of the injury or disease alleged by each claimant, the long latency period associated with exposure, dismissal rates, costs of medical treatment, uncertainties surrounding the litigation process from jurisdiction to jurisdiction and from case to case and the impact of changes in legislative or judicial standards, may cause actual results to differ significantly from estimates. Furthermore, predictions with respect to these variables are subject to greater uncertainty as the projection period lengthens. In light of these uncertainties, CSXT believes that seven years is the most reasonable period for estimating future claims, and that claims received after that period are not reasonably estimable.

CSXT follows a 52/53 week fiscal reporting calendar. Fiscal years 2003 and 2002 consist of 52 weeks ending on December 26, 2003 and December 27, 2002, respectively. The financial statements presented are for the 13~~-week~~ ~~quarters and six months ended June 27, 2003 and June 28, 2002,, and as of December 27, 2002.~~

OperatingTable Revenueof Contents

~~The following~~CSX ~~tables~~TRANSPORTATION ~~provide~~INC. ~~carload~~AND ~~and~~SUBSIDIARIES ~~revenue data by service group and commodity for the quarters ended June 27, 2003 and June 28, 2002:~~

~~Quarters~~ITEM ~~ended~~1: ~~June~~FINANCIAL ~~27,~~STATEMENTS ~~2003 and June 28, 2002~~

	Carloads (Thousands)				Revenue (Dollars in Millions)
	2003	2002	% Change		2003		2002		% Change
Merchandise
Phosphates and Fertilizer	113	119	(5	)%	$	85	$	83	2	%
Metals	87	80	9			108		100	8
Forest and Industrial Products	153	152	1			207		197	5
Agricultural and Food	113	110	3			165		159	4
Chemicals	134	140	(4	)		244		246	(1	)
Emerging Markets	125	115	9			118		107	10
Total Merchandise	725	716	1			927		892	4
Automotive	139	148	(6	)		224		231	(3	)
Coal, Coke & Iron Ore
Coal	400	391	2			401		380	6
Coke and Iron Ore	18	18	—			15		19	(21	)
Total Coal, Coke & Iron Ore	418	409	2			416		399	4
Other	—	—	—			6		16	(63	)
Total	1,282	1,273	1	%	$	1,573	$	1,538	2	%

Notes to Consolidated Financial Statements (Unaudited)

15NOTE 8. CASUALTY, ENVIRONMENTAL AND OTHER RESERVES, Continued

~~CSX~~Casualty ~~TRANSPORTATION~~Reserves, ~~INC.~~Continued ~~AND SUBSIDIARIES~~

~~ITEM~~CSXT ~~2: MANAGEMENT~~increased its reserve for asbestos and other occupational claims by a net $203 million to cover the estimate of incurred but not reported claims to be filed during the next seven years. Reflecting the additional provisions, CSXT’Ss ~~NARRATIVE~~reserve ~~ANALYSIS~~for OFasbestos ~~THE~~and ~~RESULTS~~other OFoccupational ~~OPERATIONS~~claims on an undiscounted basis amounted to $337 million at September 26, 2003, compared to $161 million at December 27, 2002.

~~Six~~A ~~Months~~summary ~~ended~~of ~~June~~existing ~~27,~~claims ~~2003~~activity ~~and~~is ~~June~~as ~~28,~~follows: ~~2002~~

	Carloads (Thousands)						Revenue (Dollars in Millions)
	Nine Months Ended September 26, 2003			Fiscal Year Ended December 27, 2002
	2003		2002		% Change		2003		2002		% Change
Asserted Claims:
Merchandise
Open Claims - Beginning of Period	8,788			9,893
Phosphates and Fertilizer	230		238		(3	)%	$	172	$	172	—	%
New Claims Filed	2,045			2,075
Metals	175		157		11			218		198	10
Claims Settled	(2,535	)		(2,875	)
Forest and Industrial Products	301		296		2			402		386	4
Claims Dismissed	(222	)		(305	)
Agricultural and Food	227		225		1			332		325	2
Open Claims - End of Period	8,076			8,788
Chemicals	272		275		(1	)		495		484	2
Emerging Markets	226		208		9			230		195	18
Total Merchandise	1,431		1,399		2			1,849		1,760	5
Automotive	270		277		(3	)		432		431
Coal, Coke & Iron Ore
Coal	773		784		(1	)		771		761	1
Coke and Iron Ore	30		30		—			28		35	(20	)
Total Coal, Coke & Iron Ore	803		814		(1	)		799		796	—
Other	—		—		—			24		37	(35	)
Total	2,504		2,490		1	%	$	3,104	$	3,024	3	%

~~Quarter~~Personal ~~ended June 27, 2003~~Injury ~~Compared to June 28, 2002~~

~~Operating~~During ~~Revenue~~the third quarter of 2003, CSXT retained an independent actuarial firm to assess the value of CSXT’s personal injury portfolio. This firm’s methods and procedures yielded a slightly higher valuation for personal injury claims than previously recognized by CSXT due to a higher estimated cost for adverse development. Utilizing the analysis provided, CSXT increased its reserves for alleged personal injury claims by $26 million.

~~Revenue~~14 ~~increased $35 million, or 2% in the quarter ended June 27, 2003, as compared to the quarter ended June 28, 2002.~~

MerchandiseTable of Contents

~~Merchandise~~CSX ~~revenue~~TRANSPORTATION ~~in the second quarter of 2003 was up 4% on 1% volume growth as compared to the 2002 quarter~~INC. ~~All~~AND ~~markets~~SUBSIDIARIES realized increased revenue except chemicals, which was negatively impacted by high oil and natural gas prices and weak demand. Emerging markets showed the greatest improvement due to continued growth in waste and military shipments. Modal conversions contributed to revenue increases in metals and forest and industrial products.

~~Automotive~~ITEM 1: FINANCIAL STATEMENTS

~~Automotive revenue decreased $7 million or 3%. Vehicle production declined 9% versus 2002. Haul extensions on existing business, and new business~~Notes ~~activities~~to ~~partially~~Consolidated ~~mitigated~~Financial ~~the~~Statements ~~impact~~(Unaudited) ~~of reduced vehicle production.~~

~~Coal~~NOTE 8. CASUALTY, ~~Coke~~ENVIRONMENTAL ~~and~~AND ~~Iron~~OTHER ~~Ore~~RESERVES, Continued

~~Coal,~~Environmental ~~coke~~Reserves and iron ore revenue increased 4% quarter-over-quarter on 2% volume growth. Strong utility demand and modal conversion initiatives drove performance. Favorable yield was due to improved mix and continued pricing success.

16CSXT is a party to various proceedings involving private parties and regulatory agencies related to environmental issues. CSXT has been identified as a potentially responsible party (“PRP”) at approximately 100 environmentally impaired sites that are, or may be, subject to remedial action under the Federal Superfund statute (“Superfund”) or similar state statutes. A number of these proceedings are based on allegations that CSXT, or its railroad predecessors, sent hazardous substances to the facilities in question for disposal. Such proceedings arising under Superfund or similar state statutes can involve numerous other waste generators and disposal companies and seek to allocate or recover costs associated with site investigation and cleanup, which could be substantial.

~~CSX~~CSXT ~~TRANSPORTATION~~is ~~INC~~involved in administrative and judicial proceedings, and other clean-up efforts at approximately 224 sites, which include the 100 Superfund sites noted above, where it is participating in the study or clean-up of alleged environmental contamination. ~~AND~~At ~~SUBSIDIARIES~~least once each quarter, CSXT reviews its role with respect to each such location, giving consideration to a number of factors, including the nature of CSXT’s alleged connection to the location (e.g., generator of waste sent to the site, or owner or operator of the site), the extent of CSXT’s alleged connection (e.g., volume of waste sent to the location and other relevant factors), the accuracy and strength of evidence connecting CSXT to the location, and the number, connection, and financial viability of other named and unnamed PRPs at the location.

~~ITEM~~Based 2:on ~~MANAGEMENT~~the review process, CSXT has recorded reserves to cover estimated contingent future environmental costs with respect to such sites. The recorded liabilities for estimated future environmental costs at September 26, 2003, and December 27, 2002 were $36 million and $35 million, respectively. These liabilities, which are undiscounted, include amounts representing CSXT’Ss ~~NARRATIVE~~estimate ~~ANALYSIS~~of OFunasserted ~~THE~~claims, ~~RESULTS~~which OFCSXT ~~OPERATIONS~~believes to be immaterial. The liability includes future costs for all sites where the Company’s obligation is (1) deemed probable and (2) where such costs can be reasonably estimated. The liability includes future costs for remediation and restoration of sites as well as any significant ongoing monitoring costs, but excludes any anticipated insurance recoveries. The majority of the September 26, 2003 environmental liability is expected to be paid out over the next seven years, funded by cash generated from operations.

~~Operating~~The ~~Expense~~Company does not currently possess sufficient information to reasonably estimate the amounts of additional liabilities, if any, on some sites until completion of future environmental studies. In addition, latent conditions at any given location could result in exposure, the amount and materiality of which cannot presently be reliably estimated. Based upon information currently available, however, the Company believes its environmental reserves are adequate to accomplish remedial actions to comply with present laws and regulations, and that the ultimate liability for these matters, if any, will not materially affect its overall results of operations and financial condition.

•15 Labor and Fringe expenses were up $12 million in the second quarter of 2003, as compared to the prior year quarter. The effects of inflation continue to drive labor and fringe expense increases, while greater labor needs associated with diminished network fluidity and volume increased expenses. Costs related to variable deferred compensation plans tied to market performance also contributed to the quarter-over-quarter increase.

•Table Materials, Supplies and Other decreased $4 million period-over-period primarily due to a favorable resolution of property tax litigation in the state of New York. A negative contract settlement that occurred last year also contributed to the decrease.Contents

•CSX ~~Conrail~~TRANSPORTATION ~~expenses~~INC. ~~increased~~AND $5SUBSIDIARIES million in the second quarter as compared to the prior year period due primarily to less favorable claims experience on personal injury and occupational reserves and increased usage charges on the Shared Asset Areas.

•ITEM ~~Related~~1: ~~party~~FINANCIAL ~~service~~STATEMENTS ~~fees decreased $21 million to $47 million in the second quarter of 2003 due to a change in the management service fee charged by CSX and higher fees received from CSXI.~~

~~• Equipment Rent decreased $15 million quarter-over-quarter because of favorable mix and due~~ Notes to ~~renegotiated~~Consolidated ~~carhire~~Financial ~~rates,~~Statements ~~which~~(Unaudited) ~~more than offset unfavorable utilization due to the network fluidity decline.~~

•NOTE ~~Depreciation expense increased $~~9 ~~million in the second quarter, as compared to the same period of 2002~~. ~~The~~COMMITMENTS ~~increase~~AND isCONTINGENCIES primarily due to property additions, but was also negatively impacted by higher depreciation rates resulting from an asset life study. These increases were somewhat offset by a decrease in the depreciation of crossties due to the adoption of SFAS 143 in the first quarter of 2003.

•Purchase ~~Fuel~~Commitments expense increased $24 million quarter-over-quarter. Fuel prices increased expense by $23 million, but the net impact on operating income was $12 million, as $11 million in fuel surcharges were billed to customers.

~~Operating~~The ~~Income~~Company has a commitment under a long-term maintenance program for approximately 40% of its fleet of locomotives. The agreement expires in 2026 and approximates $3.1 billion. The long-term maintenance program is intended to provide CSXT access to efficient, high-quality locomotive maintenance services at fixed price levels through the term of the program. Under the program, CSXT paid $32 million and $98 million in the quarter and nine month periods ended September 26, 2003, respectively. In the quarter and nine month periods ended September 27, 2002, $31 million and $93 million, respectively was paid.

~~Operating~~The ~~income increased~~Company ~~$25~~has ~~million,~~entered orinto 17fuel purchase agreements for approximately 14% ~~quarter-~~of its fuel requirements over~~-quarter~~ the next five months. These agreements amount to ~~$173~~approximately 33 million gallons in ~~the~~commitments ~~second~~at ~~quarter~~a weighted average of ~~2003,~~75 ~~compared~~cents per gallon. These contracts require the Company to ~~$148~~take ~~million~~monthly indelivery ~~2002~~of specified quantities of fuel at a fixed price. These contracts cannot be net settled.

17Long-term Operating Agreements

~~CSX~~In ~~TRANSPORTATION~~addition ~~INC~~to its contractual arrangement to operate specified portions of Conrail’s rail system, CSXT has various long-term railroad operating agreements that allow for exclusive operating rights over various railroad lines. ~~AND~~Under ~~SUBSIDIARIES~~these agreements, CSXT is obligated to pay usage fees of approximately $10 million annually. The terms of these agreements range from 30 to 40 years.

~~ITEM~~Self-Insurance ~~2: MANAGEMENT’S NARRATIVE ANALYSIS OF THE RESULTS OF OPERATIONS~~

~~Six~~The ~~Months~~Company ~~ended~~obtains ~~June~~substantial ~~27,~~amounts ~~2003~~of ~~Compared~~commercial insurance for potential losses for third-party liability and property damages. Specified levels of risk (up to ~~June~~$35 ~~28,~~million ~~2002~~for property and $25 million for liability per occurrence) are retained on a self-insurance basis. The Company uses a combination of third-party and self-insurance to realize savings on insurance premium costs.

~~Operating~~Legal ~~Revenue~~Proceedings

~~Operating~~A number ~~revenue~~of ~~increased~~legal ~~$80~~actions ~~million~~are ~~for~~pending against CSXT in which claims are made in substantial amounts. While the ~~six~~ultimate ~~months~~results ~~ended~~of ~~June~~these 27legal actions cannot be predicted with certainty, ~~2003,~~ asmanagement ~~compared~~does tonot currently expect that the ~~2002~~resolution ~~period~~of these matters will have a material effect on CSXT’s consolidated balance sheet, income statement or cash flows. The ~~increase~~Company ~~results~~is ~~from~~also ~~increased~~party ~~revenue~~to ina ~~the~~number ~~merchandise~~of ~~group~~actions, ~~where~~the ~~all~~resolution ~~units~~of ~~showed~~which ~~period-over-period~~could ~~revenue~~result ~~improvement~~in ~~except~~gain ~~phosphates~~realization ~~and~~in ~~fertilizers~~amounts ~~which~~that ~~remained~~could ~~flat~~be material to results of operations in the quarter received.

~~Operating~~16 ~~Income~~

OperatingTable income for the six months ended June 27, 2003 was up $13 million to $250 million, compared to $237 million for the same period of the prior year. This increase is a result of increased revenues and a decrease in net related party service fees. Contents

~~Other~~CSX ~~Income~~TRANSPORTATION INC. AND SUBSIDIARIES

~~Other~~ ITEM ~~income~~2: ~~remained~~MANAGEMENT’S ~~relatively~~NARRATIVE ~~flat~~ANALYSIS atOF $1THE ~~million~~RESULTS ~~for~~OF ~~the~~OPERATIONS ~~six months ended June 27, 2003 and June 28, 2002.~~

~~Interest~~RESULTS ~~Expense~~OF OPERATIONS

~~Interest~~CSXT ~~expense~~follows ~~decreased~~a $252/53-week ~~million~~fiscal toreporting ~~$56~~calendar. ~~million~~Fiscal ~~period-over-period~~years ~~due to~~2003 ~~lower~~and ~~borrowing~~2002 ~~rates~~consist of 52 weeks ending on December 26, 2003 and December 27, 2002, respectively. The financial statements presented are for the ~~CSX~~13-week ~~Cash~~quarters ~~Management~~and ~~Plan~~nine months ended September 26, 2003 and September 27, 2002, and as of December 27, 2002.

~~Net~~Quarter ~~Earnings~~ended September 26, 2003 Compared to September 27, 2002

~~Net~~Operating ~~earnings~~Revenue was $166 million for the six months ended June 27, 2003, compared to $111 million for the prior year period. The six months ended 2003 included a cumulative effect of accounting change benefit of $57 million.

~~Earnings~~The ~~before~~following ~~the~~table provides ~~cumulative~~carload ~~effect~~and ofrevenue ~~accounting~~data ~~change~~by ~~were~~service ~~$109~~group ~~million~~ and ~~$111~~commodity ~~million~~ for the ~~six~~quarters ~~months~~ ended ~~June~~September 2726, 2003 and ~~June~~September 2827, 2002,: ~~respectively.~~

Cumulative Effect of Accounting Change

	Carloads (Thousands)				Revenue (Dollars in Millions)
	2003	2002	% Change		2003		2002		% Change
Merchandise
Phosphates and Fertilizer	114	113	1	%	$	74	$	73	1	%
Metals	85	83	2			107		104	3
Forest and Industrial Products	153	151	1			205		195	5
Agricultural and Food	111	109	2			157		154	2
Chemicals	136	134	1			249		239	4
Emerging Markets	130	115	13			125		106	18

Total Merchandise	729	705	3			917		871	5

Automotive	120	124	(3	)		193		195	(1	)

Coal, Coke & Iron Ore
Coal	391	395	(1	)		384		382	1
Coke and Iron Ore	17	22	(23	)		14		19	(26	)

Total Coal, Coke & Iron Ore	408	417	(2	)		398		401	(1	)

Other	—	—	—			2		6	(67	)

Total	1,257	1,246	1	%	$	1,510	$	1,473	3	%

~~SFAS~~17 143, “Accounting for Asset Retirement Obligations” was issued in 2001. This statement addresses financial accounting and reporting for legal obligations associated with the retirement of tangible long-lived assets and the associated retirement costs. 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, and the Company does not believe it will have a material effect on future earnings. On an ongoing basis, depreciation expense will be reduced, while labor and fringe and materials, supplies and other expense will be increased.

18Table of Contents

CSX TRANSPORTATION INC. AND SUBSIDIARIES

ITEM 2: MANAGEMENT’S NARRATIVE ANALYSIS OF THE RESULTS OF OPERATIONS

~~FACTORS~~Quarter ~~EXPECTED~~ended TOSeptember ~~INFLUENCE~~26, 2003 Compared to September 27, 2002, Continued

~~Fuel~~Operating expenses fluctuate and are a significant cost of CSXT’s operations. Fuel prices can vary significantly from period to period and impact future results. Although the Company is in the implementation stage of a fuel price hedging programRevenue, itContinued will remain subject to fuel price fluctuation over the remainder of 2003. Economic factors also influence results and it is still uncertain whether significant improvements in the industrial sector will come in the second half of 2003. The Company underwent staffing reductions that were announced in mid-July. Amounts to be expensed relating to this involuntary program will be approximately $8 million in the third quarter of 2003.

~~CRITICAL~~Revenue ~~ACCOUNTING~~increased ~~ESTIMATES~~$37 million, or 3% in the quarter ended September 26, 2003, as compared to the quarter ended September 27, 2002.

~~The~~Merchandise preparation of financial statements in conformity with accounting principles generally accepted in the United States requires that management make estimates in reporting the amounts of certain assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amount of certain revenues and expenses during the reporting period. Actual results may differ from those estimates. For information regarding CSXT’s significant estimates using management judgement, see the December 27, 2002 CSXT 10-K. As of June 27, 2003, there have been no significant changes to these estimates.

19Merchandise showed strong growth in the third quarter with revenues up 5% on 3% volume growth. All markets showed year-over-year improvements in revenue and volume.

~~CSX~~• ~~TRANSPORTATION~~Phosphates ~~INC~~and Fertilizers – Strong international phosphate demand limited movements to domestic markets. ~~AND~~Weakness ~~SUBSIDIARIES~~in port phosphate rock was offset by strength in the ammonia market.

~~ITEM~~• 2:Metals ~~MANAGEMENT’S~~– ~~NARRATIVE~~Steel ~~ANALYSIS~~production OFand ~~THE~~mill ~~RESULTS~~utilization OFhave ~~OPERATIONS~~been on a downward trend due to overcapacity and softer demand. Continued strength in scrap metals due to export demand from east coast supply points, renewed strength in semi-finished metals and continued growth in modal conversions contributed to year-over-year improvement.

~~FORWARD~~• ~~LOOKING~~Forest ~~STATEMENTS~~and Industrial Products – Building products and lumber remain strong as the construction industry catches up from severe weather earlier in the year. Woodchip orders were strong as mills build sufficient inventory for fall. Strength in printing paper is being driven by import traffic.

~~This~~• ~~Quarterly~~Agricultural ~~Report contains forward-looking statements within the meaning of the Private Securities Litigation Reform Act with respect to, among other items: projections~~ and ~~estimates~~Food of– ~~earnings,~~A ~~revenues,~~large ~~cost-savings,~~southeast ~~expenses,~~crop orhas ~~other~~negatively ~~financial~~impacted ~~items;~~feed ~~statements~~grain. ofSweeteners ~~management’s~~continue ~~plans, strategies and objectives for future operations, and management’s expectations as~~ to ~~future~~be ~~performance~~negatively ~~and~~impacted ~~operations and the time~~ by ~~which~~source ~~objectives~~shifts ~~will be achieved; statements concerning proposed new products~~ and ~~services;~~a ~~and~~plant ~~statements regarding future economic, industry or market conditions or performance~~closure. ~~Forward-looking~~Strength ~~statements~~in ~~are~~refrigerated ~~typically identified by words or phrases such as “believe”~~products, ~~“expect”,~~wheat ~~“anticipate”, “project”,~~ and ~~similar expressions. Forward-looking statements speak only as of the date they are made~~flour, exports and ~~the~~grocery ~~Company~~LOBs ~~undertakes~~helped nodrive ~~obligation to update or revise any forward~~year-~~looking statement. If the Company does update any forward~~over-~~looking~~year ~~statement, no inference should be drawn that the Company will make additional updates with respect to that statement or any other forward-looking statements~~gains.

~~Forward-looking~~• ~~statements~~Chemicals ~~are~~– ~~subject~~Plastics tomarket arecently ~~number~~benefited offrom ~~risks~~lower ~~and~~feedstock ~~uncertainties,~~prices and ~~actual~~rebuilding ~~performance~~of orshipper ~~results~~inventories. ~~could~~Strength ~~differ~~exists ~~materially~~in ~~from~~all ~~that anticipated~~petroleum bycommodities, ~~these~~except ~~forward-looking statements~~alcohols. ~~Factors that may cause actual results to differ materially from those contemplated by these forward~~Year-~~looking~~over-year ~~statements~~strength ~~include, among others: (i) the Company’s success~~ in ~~implementing~~inorganic ~~its financial~~acids, ~~and~~partially ~~operational~~due ~~initiatives,~~to ~~(ii)~~a ~~changes~~strike in ~~domestic~~eastern ~~or international economic or business conditions~~Canada, ~~including~~has ~~those~~allowed ~~affecting~~CSXT ~~the~~to ~~rail~~supply ~~industry~~sulfuric ~~(such~~acid asto 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 the Company~~northeast. ~~Other~~The ~~important~~strike ~~assumptions~~was ~~and~~settled ~~factors that could cause actual results to differ materially from those~~ in ~~the forward~~mid-~~looking statements are specified elsewhere in this Quarterly Report and in the Company’s other SEC reports, accessible on the SEC’s website at www~~September.~~sec.gov and the Company’s website at www.csx.com.~~

20• Emerging Markets – Growth continued in aggregate shipments, primarily in Florida and Georgia, due to strong regional construction demand. Strength also continues across all waste markets. Modal conversions and increased demand are driving growth in cement. Redeployments are still driving growth in ammunition and general military cargo.

~~CSX~~Automotive ~~TRANSPORTATION INC. AND SUBSIDIARIES~~

Volume decline was directly attributed to flat sales and a 200,000 unit year-over-year decline in North American light vehicle production. Field ~~ITEM~~inventories 3were five days higher year-over-year. ~~QUANTITATIVE~~Haul ~~AND~~extensions ~~QUALITATIVE~~and ~~DISCLOSURES~~price ~~ABOUT~~increases ~~MARKET~~partially ~~RISK~~mitigated sales and production impact on revenue and improved yield.

~~The~~18 Company is subject to risk relating to changes in the price of diesel fuel. At June 27, 2003, the Company had not entered into any commitments for forward fuel purchases. The Company’s average annual fuel consumption is approximately 570 million gallons. A one-cent change in the price per gallon of fuel would impact annual fuel expense by approximately $6 million.

ITEMTable 4.of DISCLOSURE CONTROLS AND PROCEDURES Contents

AsCSX ofTRANSPORTATION July 27, 2003, under the supervision and with the participation of the Company’s Principal Executive Officer and the Principal Financial Officer, management has evaluated the effectiveness of the design and operation of the Company’s disclosure controls and proceduresINC. ~~Based~~AND onSUBSIDIARIES that evaluation, the Principal Executive Officer and the Principal Financial Officer, concluded that the Company’s disclosure controls and procedures were effective as of July 27, 2003. There were no significant changes in the Company’s internal controls during the fiscal quarter covered by this quarterly report that has materially affected or is reasonably likely to materially affect the Company’s internal control over financial reporting.

21ITEM 2: MANAGEMENT’S NARRATIVE ANALYSIS OF THE RESULTS OF OPERATIONS

~~CSX~~Quarter ~~TRANSPORTATION~~ended ~~INC.~~September ~~AND~~26, ~~SUBSIDIARIES~~2003 Compared to September 27, 2002, Continued

~~ITEM~~Operating 6.Revenue, ~~EXHIBITS~~Continued ~~AND REPORTS ON FORM 8-K~~

~~(a)~~Coal, ~~Exhibits~~Coke and Iron Ore

31.1	*	Principal Executive Officer Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
31.2	*	Principal Financial Officer Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002
32.1	*	Principal Executive Officer Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002
32.2	*	Principal Financial Officer Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

Reduced production levels drove year-over-year weakness in steel related traffic. Strength in export moves resulted due to high European steam coal demand for electricity generation to cooling systems. Utility revenue was favorable year-over-year due to pricing initiatives and strong long haul mix.

~~(b)~~Operating ~~Reports~~Expense ~~on Form 8-K~~

~~None~~• Labor and Fringe expenses were up $6 million in the third quarter of 2003, compared to the same period of the prior year. Benefits of reduced staffing levels and reversal of the Company’s incentive compensation accrual were offset by increased costs relating to contract wage inflation, overtime costs and severance and related costs.

*• ~~Filed~~Materials, ~~herewith~~Supplies and Other expenses increased $7 million quarter-over-quarter due to increased derailment costs, increased railway maintenance costs and decreased efficiencies. These expenses were offset, in part, by favorable environmental and other costs.

~~SIGNATURE~~• Conrail Rents, Fees & Services expense increased $4 million in the third quarter of 2003, as compared to the prior year period, as a result of increased usage of Shared Areas and a contractual increase in the rental fee for Shared Area facilities.

~~Pursuant~~• toRelated ~~the requirements~~party ofservice ~~the~~fees ~~Securities~~increased ~~Exchange~~$51 ~~Act~~million ofdue ~~1934,~~a ~~the~~credit ~~registrant~~in ~~has~~2002 ~~duly~~relating ~~caused~~to ~~this~~receivables ~~report~~sold to ~~be signed on its behalf by the undersigned thereunto duly authorized~~CTRC.

~~CSX~~• ~~TRANSPORTATION~~Equipment ~~INC.~~Rent ~~(Registrant)~~decreased ~~By:~~$6 ~~/s/~~million ~~CAROLYN~~in T.the ~~SIZEMORE~~2003 ~~Carolyn~~third T.quarter ~~Sizemore~~compared ~~(Principal~~to ~~Accounting~~the ~~Officer)~~prior year as a result of car hire reclaims in the 2002 period that did not recur in this quarter.

~~Dated:~~• ~~July~~Fuel ~~30,~~expense increased $23 million in the third quarter of 2003, as compared to the same period of the prior year. The expense increase is primarily due to $16 million in fuel price increases.

22• Provision for Casualty Claims of $229 million represents the charge recorded in conjunction with the Company’s change in estimate for its 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. (See Note 8, Casualty, Environmental and Other Reserves).

CSX TRANSPORTATION INC. AND SUBSIDIARIES

ITEM 2: MANAGEMENT’S NARRATIVE ANALYSIS OF THE RESULTS OF OPERATIONS

Quarter ended September 26, 2003 Compared to September 27, 2002, Continued

Operating Income

Operating income decreased $278 million quarter-over-quarter to a loss of $111 million in the third quarter of 2003, compared to income of $167 million in 2002 due to the $229 million provision for casualty claims and other expenses previously discussed. Excluding the provision for casualty claims, operating income would have been $118 million.

Other Income

Other income decreased $10 million to $6 million for the quarter ended September 26, 2003, compared to $16 million for the same period of the prior year. The decline primarily results from real estate gains in the 2002 period being larger than those during the 2003 period, partially offset by the elimination of discounts on the sale of accounts receivable due to the discontinuation of the sale of accounts receivable program.

Interest Expense

Interest expense decreased $5 million for the quarter ended September 26, 2003, as compared to the prior year period.

Net Earnings (Loss)

Net loss was $68 million for the quarter ended September 26, 2003, compared to income of $97 million for the same period of the prior year.

The nine months ended September 26, 2003 included a $143 million after tax charge to increase the Company’s provision for casualty reserves as discussed above.

CSX TRANSPORTATION INC. AND SUBSIDIARIES

ITEM 2: MANAGEMENT’S NARRATIVE ANALYSIS OF THE RESULTS OF OPERATIONS

Nine Months ended September 26, 2003 Compared to September 27, 2002

Operating Revenue

The following table provides carload and revenue data by service group and commodity for the nine months ended September 26, 2003 and September 27, 2002:

	Carloads (Thousands)				Revenue (Dollars in Millions)
	2003	2002	% Change		2003		2002		% Change
Merchandise
Phosphates and Fertilizer	344	351	(2	)%	$	246	$	245	—	%
Metals	260	240	8			325		302	8
Forest and Industrial Products	454	447	2			607		581	4
Agricultural and Food	338	334	1			489		479	2
Chemicals	408	409	—			744		723	3
Emerging Markets	356	323	10			355		301	18

Total Merchandise	2,160	2,104	3			2,766		2,631	5

Automotive	390	401	(3	)		625		626	—

Coal, Coke & Iron Ore
Coal	1,164	1,179	(1	)		1,155		1,143	1
Coke and Iron Ore	47	52	(10	)		42		54	(22	)

Total Coal, Coke & Iron Ore	1,211	1,231	(2	)		1,197		1,197	—

Other	—	—	—			26		43	(40	)

Total Rail	3,761	3,736	1			4,614		4,497	3

Operating revenue increased $117 million for the nine months ended September 26, 2003, as compared to the 2002 period. The increase results from increased revenue in the merchandise group, where all units showed period-over-period revenue improvement except phosphates and fertilizers which remained flat.

Operating Income

Operating income decreased $265 million to $139 million in the nine months ended September 26, 2003, compared to $404 million in 2002.

The decline is primarily the result of the Company recording a charge in conjunction with changing 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. The Company recorded a charge of $229 million in the third quarter of 2003 to increase its provision for casualty reserves. (See Note 8, Casualty, Environmental, and Other Reserves). Excluding the provision for casualty claims, operating income would have been $368 million.

Other factors contributing to the decline are increased fuel prices and abnormally harsh winter weather during the first quarter.

CSX TRANSPORTATION INC. AND SUBSIDIARIES

ITEM 2: MANAGEMENT’S NARRATIVE ANALYSIS OF THE RESULTS OF OPERATIONS

Other Income

Other income decreased $10 million to $7 million for the nine months ended September 26, 2003, compared to $17 million for the same period of the prior year. The decline primarily results from real estate gains in the 2002 nine-month period being larger than those during the 2003 period, partially offset by the elimination of discounts on the sale of accounts receivable due to the discontinuation of the sale of accounts receivable program..

Interest Expense

Interest expense decreased $7 million for the nine months ended September 26, 2003, as compared to the prior year period.

Net Earnings

Net earnings was $98 million for the nine months ended September 26, 2003, compared to $208 million for the same period of the prior year.

The nine months ended September 26, 2003 included a cumulative effect of accounting change after tax benefit of $57 million, offset by a $143 million after tax charge to increase the Company’s provision for casualty reserves.

Earnings before the cumulative effect of accounting change was $41 million and income of $208 million for the nine months ended September 26, 2003 and September 27, 2002, respectively.

CSX TRANSPORTATION INC. AND SUBSIDIARIES

ITEM 2: MANAGEMENT’S NARRATIVE ANALYSIS OF THE RESULTS OF OPERATIONS

Cumulative Effect of Accounting Change

Statement of Financial Accounting Standard (“SFAS”) 143, “Accounting for Asset Retirement Obligations” was issued in 2001. This statement addresses financial accounting and reporting for legal obligations associated with the retirement of tangible long-lived assets and the associated retirement costs. 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, CSXT 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, and the Company does not believe it will have a material effect on future earnings. On an ongoing basis, depreciation expense will be reduced, while labor and fringe and materials, supplies and other expense will be increased.

FACTORS EXPECTED TO INFLUENCE 2003

Fuel expenses fluctuate and are a significant cost of CSXT’s operations. Fuel prices can vary significantly from period to period and impact future results. Although the Company is in the implementation stage of a fuel price hedging program, it will remain subject to fuel price fluctuation over the remainder of 2003. Economic factors also influence results and it is still uncertain whether significant improvements in the industrial sector will come in the last part of 2003.

CRITICAL ACCOUNTING ESTIMATES

The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires that management make estimates in reporting the amounts of certain assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and the reported amount of certain revenues and expenses during the reporting period. Actual results may differ from those estimates. For information regarding CSXT’s significant estimates using management judgment, see the December 27, 2002 CSXT 10-K.

In the third quarter of 2003, the Company evaluated and changed its estimate for 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. (See Note 8, Casualty, Environmental and Other Reserves). As of September 26, 2003, there have been no other material changes to significant estimates as stated in the 2002 CSXT 10-K.

CSX TRANSPORTATION INC. AND SUBSIDIARIES

ITEM 2: MANAGEMENT’S NARRATIVE ANALYSIS OF THE RESULTS OF OPERATIONS

FORWARD LOOKING STATEMENTS

This Quarterly Report contains 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 operations, 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; and (iv) 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 elsewhere in this report, and in the Company’s other SEC reports, accessible on the SEC’s website at www.sec.gov and at the Company’s website at www.csx.com.

CSX TRANSPORTATION INC. AND SUBSIDIARIES

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK

During the third quarter of 2003, the Company began a program to hedge its exposure to fuel price volatility through swap transactions. As of September 26, 2003, CSXT has hedged approximately 11% and 9% of expected requirements for 2004 and 2005, respectively. At September 26, 2003, a 1% change in fuel prices would result in a $1 million increase or decrease in the liability related to the swaps.

The Company is exposed to loss in the event of non-performance by any counter-party to the fuel hedging agreements. The Company does not anticipate non-performance by such counter-parties, and no material loss would be expected from non-performance.

ITEM 4. DISCLOSURE CONTROLS AND PROCEDURES

As of September 26, 2003, under the supervision and with the participation of the Company’s Principal Executive Officer and the Principal Financial Officer, management has evaluated the effectiveness of the design and operation of the Company’s disclosure controls and procedures. Based on that evaluation, the Principal Executive Officer and the Principal Financial Officer, concluded that the Company’s disclosure controls and procedures were effective as of September 26, 2003. There were no changes in the Company’s internal controls over financial reporting during the fiscal quarter covered by this quarterly report that have materially affected or are reasonably likely to materially affect the Company’s internal control over financial reporting.

CSX TRANSPORTATION INC. AND SUBSIDIARIES

ITEM 6. EXHIBITS AND REPORTS ON FORM 8-K

(a)

Exhibits

31.1*

Principal Executive Officer Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

31.2*

Principal Financial Officer Certification Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002

32.1*

Principal Executive Officer Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

32.2*

Principal Financial Officer Certification Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002

(b)	Reports on Form 8-K

None

*	Filed herewith

SIGNATURE

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.

CSX TRANSPORTATION INC.
(Registrant)

By:		/s/ CAROLYN T. SIZEMORE
		Carolyn T. Sizemore
		(Principal Accounting Officer)

Dated: October 28, 2003

Filing Compare · CSX TRANSPORTATION INC