WASHINGTON — CSX Corp. said it expects to recognize roughly $3 million in annual savings through 2020 as a result of the settlement of a contract dispute, according to a document filed Monday with the Securities and Exchange Commission, reported Dow Jones Newswire.
The filing didn’t have specifics about the contract or the dispute leading to the settlement.
During the third quarter ended Sept. 27, the company recognized about $7 million of the settlement. The remaining $37 million will be recognized over the contract period, which ends in 2020.
In July, CSX received $44 million as the first of two payments to settle the contract dispute.
The second payment of $23 million is due in January 2003 and will also be recognized over the contract period, the filing said.
Also in the filing, CSX said it discontinued the sale of $120 million of accounts receivable included in the master trust under its securitization program, which will result in a $120 million increase in the company’s accounts receivable.
As of Sept. 27, CSX had agreements to sell up to $350 million in receivables through its securitization program and $200 million through conduit programs.
The company sells revolving interests in its rail accounts receivable to public investors through a securitization program and to financial institutions through commercial paper conduit programs.
The accounts receivable are sold to a wholly-owned, special-purpose subsidiary, which then transfers them to a master trust.
The certificates issued under the securitization program bear interest at 6% annually and mature in June 2003, the filing said.
Receivables sold under the conduit program, which expires in December, require yield payments based on prevailing commercial paper rates plus incremental fees.
CSX’s retained interest in the receivables in the master trust totaled $557 million at Sept. 27 and are included in accounts receivable, according to the filing.
The Richmond, Va., company has retained the responsibility for servicing accounts receivable transferred to the master trust.
CSX offers rail, container-shipping, trucking, barge and contract logistics management services.