FOIA
CONFIDENTIAL TREATMENT REQUESTED
CONFIDENTIAL
TREATMENT REQUESTED BY CSX CORPORATION
July 8,
2009
VIA
EDGAR
(703)
813-6967
Mr. J.
Nolan McWilliams
Division
of Corporation Finance
United
State Securities and Exchange Commission
100 F.
Street, N. E.
Washington,
DC 20549
Mr.
Daniel Morris
Attorney-Advisor
United
States Securities and Exchange Commission
100 F.
Street, N. E.
Washington,
DC 20549
Re.: CSX
Corporation
Form 10-K for the fiscal year ended
December 26, 2008
Filed February 19, 2009
Schedule 14A filed March 24,
2009
File No. 001-08022
Dear Mr.
McWilliams and Mr. Morris:
CSX Corporation (“CSX” or the
“Company”) is writing in response to the Staff’s comment letter dated June 23,
2009, with respect to the above-referenced filings. CSX believes this
letter responds fully to the Staff’s comments and provides information and
analyses as requested. For the convenience of the Staff, each comment
is set forth below, followed by the Company’s response.
FOIA CONFIDENTIAL TREATMENT
REQUEST
Pursuant to Rule 83 of the Commission’s
Rules on Information and Requests, 17 C.F.R. § 200.83, I hereby request on
behalf of the Company confidential treatment with respect to certain portions of
this letter (the “Confidential Portions”), as indicated below. Two copies of
this letter are provided: (i) a redacted version with the
Confidential Portions labeled “CONFIDENTIAL TREATMENT REQUESTED BY
CSX CORPORATION” and labeled “CSX-001” through “CSX-012,” replaced with
bracketed asterisks as “(“[***]”), and (ii) a
version with the Confidential Portions in brackets and bold. The
Company is submitting only the redacted version on EDGAR, which version omits
the Confidential Portions that are included in the version delivered to the
Staff. The Company believes that the Confidential Portions contain
information that is covered by one or more exemptions in the FOIA, for reasons
of business confidentiality.
J. Nolan
McWilliams
U. S.
Securities and Exchange Commission
July 8,
2009
Page 2 of 4
Confidential
Treatment Requested by CSX Corporation
I respectfully request on behalf
of the Company that the Confidential Portions be withheld from public
disclosure, along with (a) any memoranda, notes, correspondence, or other
writings made by any member or employee of the Securities and Exchange
Commission (the “Commission”) relating to the Confidential Portions, or any
conference or telephone call with respect thereto; and (b) any copies or
extracts of any of the foregoing.
I request on behalf of the
Company that the Confidential Portions be treated as confidential, and that they
not be disclosed to any person pursuant to the Freedom of Information Act or
otherwise. In accordance with Rule 83, if any person (including any
government employee who is not a member of the Staff) should request an
opportunity to inspect or copy any of the Confidential Portions or any materials
related thereto, I request that you: (i) promptly notify me of such request in
writing or by telephone ((904) 359-1507), (ii) furnish me with a copy of all
written material pertaining to such request (including, but not limited to, the
request itself and any determination by the Staff with respect to such request),
and (iii) provide me at least ten business days advance notice of any intended
release so that the Company may, if the Company deems it necessary or
appropriate, pursue any remedies available to
us. As required by Rule 83(a)(3), our address is CSX Corporation, 500
Water Street, Jacksonville, FL 32202.
Schedule
14A
SEC
Comment:
Compensation Discussion
& Analysis, page 17
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1.
|
We
note your response to our prior comments 3; however, the causal connection
between disclosure of the safety measure improvements and a specific
customer service measure and any competitive harm is not entirely
clear. Please provide additional detailed analysis in support
of this conclusion. Please identify the measures in questions
and address, with greater specificity, how disclosure of these performance
targets might be expected to affect the particular business decision of
your competitors, and in so doing, place you at a competitive
disadvantage. We note in this regard pages 30-31 of Form 10-K,
where you disclose several safety and service related
measures. Refer to Instruction 4 of Item 402(b) of Regulation
S-K.
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CSX
Response
According
to Instruction 1 to Item 402(b), “the purpose of the Compensation Discussion and
Analysis is to provide to investors material information that is necessary to an
understanding of the registrant’s compensation policies and decisions regarding
the named executive officers.” You have requested additional information
regarding three of the eighteen strategic measures under the Company’s 2009
annual incentive compensation plan. These eighteen strategic goals
are unweighted and comprise no more than 40% of a maximum total payout of 160%.
Furthermore, no portion of the 40% is available for payout if a minimum
financial target is not reached. Accordingly, none of the eighteen strategic
measures when viewed individually are likely to have a material impact on the
ultimate payout or otherwise provide investors with material information
regarding the Company’s compensation policies and decisions.
As for
the three specific goals in question, even though we do not believe that these
goals are material to an understanding of our compensation policies and
decisions, disclosure of
J. Nolan
McWilliams
U. S.
Securities and Exchange Commission
July 8,
2009
Page 3 of
4
Confidential
Treatment Requested by CSX Corporation
these
strategic measures would result in competitive harm. The “specific
customer service measure” to which we referred is a service measure for a
specific customer. This goal requires the Company to [Confidential treatment requested by
CSX Corporation – CSX 001] [***]. There is significant
competition for this customer with other railroads and trucking
companies. Disclosure of the [Confidential treatment requested by
CSX Corporation – CSX 002] [***] could be used by this and other
customers to [Confidential
treatment requested by CSX Corporation – CSX 003] [***]. More
importantly, competitors could use this information to their advantage in
negotiations with this and other current customers or potential
customers.
We
respectfully note that the disclosures to which the Staff refers to on pages
30-31 of our Form 10-K are historical statistics, not goals, that the Company is
required to report to the Federal Railroad Administration
(“FRA”). The two strategic goals for which we have competitive harm
concerns relate to disclosure of internal, non-public safety
targets. Not only is safety a part of our culture at CSX, it is also
extremely important to our employees, customers and the communities in which we
operate. The
Company believes that it is important to continuously strive to reduce the
number of injuries and accidents. Accordingly, CSX has included
specific strategic goals in its 2009 annual incentive compensation program to
reduce FRA reportable personal injuries and train accidents during 2009. Although
we believe it is entirely appropriate to disclose the nature of the goals, we
believe disclosure of the specific [Confidential treatment requested by
CSX Corporation – CSX 004] [***] could result in significant competitive
and financial harm. [Confidential treatment requested by
CSX Corporation – CSX 005] [***], disclosure of these sensitive internal
safety goals would
allow customers and competitors to use this information to their advantage [Confidential treatment requested by
CSX Corporation – CSX 006] [***].
Disclosure
of the [Confidential treatment requested by
CSX Corporation – CSX 007] [***] could also result in competitive and
financial harm arising from use by [Confidential treatment requested by
CSX Corporation – CSX 008] [***].
SEC Comment:
|
2.
|
We
note your response to our prior comment 4. Please provide
additional detailed analysis in support of the conclusion that revealing
the targeted pricing levels for prior years would result in competitive
harm. Please address with greater specificity how disclosure of
this performance target might be expected to affect the particular
business decisions of your competitors, and in so doing, place you at a
competitive disadvantage. Refer to Instruction 4 of Item 402(b)
or Regulation S-K.
|
CSX
Response
This goal
related to pricing is only one of eleven, unweighted strategic goals that will
be considered by the Compensation Committee in deciding whether to reduce the
long-term incentive compensation payout for senior
executives. Therefore, as noted in our response to Comment Number 1
above, none of the individual strategic goals is likely to have a material
impact on the ultimate payout or otherwise be material to an investor’s
understanding of our compensation policies. Nonetheless, CSX could
suffer significant commercial and financial harm as a result of disclosure of
future or historic [Confidential treatment requested by
CSX Corporation – CSX 009] [***].
J. Nolan
McWilliams
U. S.
Securities and Exchange Commission
July 8,
2009
Page 4
of 4
Confidential
Treatment Requested by CSX Corporation
We
believe disclosure of a [Confidential treatment requested by
CSX Corporation – CSX 010] [***] which requires the Company to
achieve [Confidential treatment requested by
CSX Corporation – CSX 011] [***] will lead to competitive harm. [Confidential treatment requested by
CSX Corporation – CSX 012] [***]. If disclosed, the Company’s rail,
truck, and barge competitors will be able to leverage this information against
the Company in the competitive transportation environment.
Conclusion
CSX
believes that the above responds fully to the comments of the Staff and intends
to address all comments in future filings.
The
Company acknowledges that:
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·
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the
Company is responsible for the adequacy and accuracy of the disclosure in
its filings;
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·
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Staff
comments or changes to disclosure in response to Staff comments do not
foreclose the Commission from taking any action with respect to the
filing; and
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·
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the
Company may not assert Staff comments as a defense in any proceeding
initiated by the Commission or any person under the federal securities
laws of the United States.
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Please do
not hesitate to contact me at (904) 359-1507 if you would like additional
information or if the Staff has additional comments.
Very
truly yours,
/s/ Carolyn T.
Sizemore
Carolyn
T. Sizemore
Vice
President & Controller
CSX
Corporation
Cc:
Ellen M.
Fitzsimmons
Senior
Vice President Law & General Counsel
CSX
Corporation
Lisa
Mancini
Senior
Vice President Human Resources
CSX
Corporation
Oscar
Munoz
Executive
Vice President & Chief Financial Officer
CSX
Corporation