The Company provides customers with access to an interconnected transportation network that links ports, production facilities and distribution centers to markets in the Northeast, Midwest and southern states. The Company serves major markets in the eastern United States and has direct access to all significant Atlantic and Gulf Coast ports, as well as the Mississippi River, the Great Lakes and the St. Lawrence Seaway. The Company also has access to Pacific ports through alliances with western railroads.

The Company transports a broad portfolio of products, such as coal, forest products, ethanol, automobiles, chemicals and consumer electronics. Those goods are transported across the country in a way that, compared to alternative modes of transportation, reduces the impact on the environment, takes traffic off an already congested highway system and reduces fuel consumption and transportation costs.

The global recession that intensified in late 2008 has continued to impact CSX's business in 2009, and rail volume will be lower for the year. Beginning in late 2008, the Company began taking aggressive actions to manage costs and right-size resources to match demand conditions. With a mix of pricing, productivity, prudent investment in train network and rail efficiency, the Company believes it is positioned to take advantage of an eventual economic recovery.

· Revenue decreased $466 million or 17% to $2.2 billion due to declines in volume.

· Expenses decreased $362 million or 17% to $1.7 billion as a result of lower fuel expense and aggressive cost-management efforts.

· Operating income decreased $104 million or 17% to $522 million.

CSX financial results reflect the impact of the ongoing recessionary environment. Revenue and volume declined 17% from first quarter 2008 driven by the broad-based weakness across most sectors of the economy. The lines of business tied to the industrial, housing construction and consumer spending markets all experienced significant volume declines, while the energy and agriculture related markets were less severely impacted by the current economic conditions.

Despite a challenging environment, CSX was able to maintain revenue per unit at levels consistent with those in first quarter 2008. The Company's ongoing yield management initiatives offset lower fuel recovery associated with the sharp decline in fuel prices. The Company was able to achieve pricing gains predominantly due to the overall cost advantages that the Company's rail based solutions provide to customers versus other modes of transportation.

For additional information, refer to Rail and Intermodal Results of Operations discussed on pages 33 through 36.

The Company's safety and train accident prevention programs rely on broad employee involvement. The programs utilize operating rules training, compliance measurement, root cause analysis and communication to create a safer environment for employees and the public. Continued capital investment in Company assets, including track, bridges, signals, equipment and detection technology, also supports safety performance.

In first quarter 2009, the Company continued its focus on safety and operating performance. Results in both FRA personal injuries and train accidents remained at historically high levels as a result of leadership and high levels of employee commitment to the Company's safety programs. The number of FRA reported personal injuries increased slightly to 94, up 4% compared to the same quarter in 2008. Reported FRA train accidents declined to 71, as the Company reported 9% fewer accidents versus prior year. However, Train Accident frequency increased, to 3.08 accidents per million train miles as sharply lower business levels drove both employee man hours and train miles lower in the quarter.

Key service metrics improved significantly in the quarter. On-time train originations and arrivals were 83% and 79%, respectively, during the quarter. Average dwell rose slightly to 24.1 hours and average cars-on-line declined to 218,863 primarily due to lower demand levels. Average train velocity improved to 21.6 miles per hour, as the network remained fluid. The Company aims to maintain key operating measures and service reliability at high-levels, while reducing resource levels in response to current business conditions.

                                CSX CORPORATION
ITEM 2.  MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS
                                 OF OPERATIONS


                     RAIL OPERATING STATISTICS (Estimated)

                                                        First Quarters
                                                                 Improvement
                                                    2009    2008  (Decline)  %
      Safety and Service Measurements
      FRA Personal Injuries Frequency Index         1.30    1.10        (18) %

      FRA Train Accident Rate                       3.08    2.92         (5)

      On-Time Train Originations                     83%     79%           5
      On-Time Destination Arrivals                   79%     69%          14

      Dwell                                         24.1    22.7         (6)
      Cars-On-Line                               218,863 221,193           1

      System Train Velocity                         21.6    20.8           4

                                                                  Increase/
      Resources                                                  (Decrease)
      Route Miles                                 21,178  21,225         (0) %
      Locomotives (owned and long-term leased)     4,129   4,049           2
      Freight Cars (owned and long-term leased)   90,027  93,351         (4) %

FRA Personal Injuries Frequency Index - Number of FRA-reportable injuries per 200,000 man-hours.

FRA Train Accident Rate - Number of FRA-reportable train accidents per million train-miles.

On-Time Train Originations - Percent of scheduled road trains that depart the origin yard on-time or ahead of schedule.

On-Time Destination Arrivals - Percent of scheduled road trains that arrive at the destination yard on-time to two hours late (30 minutes for intermodal trains).

Dwell - Amount of time in hours between car arrival at and departure from the yard. It does not include cars moving through the yard on the same train.

Cars-On-Line - A count of all cars on the network (does not include locomotives, cabooses, trailers, containers or maintenance equipment).

System Train Velocity - Average train speed between terminals in miles per hour (does not include locals, yard jobs, work trains or passenger trains).

                        FINANCIAL RESULTS OF OPERATIONS

                       Results of Operations (Unaudited)
                             (Dollars in Millions)

                                 First Quarters


                                                             CSX
                            Rail (a)      Intermodal    Consolidated
                            2009    2008   2009   2008    2009    2008 $ Change %Change
  Revenue                 $1,977  $2,365   $270   $348  $2,247  $2,713   $(466)    (17) %
  Expense
    Labor and Fringe         644     726     18     19     662     745       83      11
    Materials, Supplies
    and Other                432     456     45     49     477     505       28       6
    Fuel                     190     439      1      2     191     441      250      57
    Depreciation             218     217      6      5     224     222      (2)     (1)
    Equipment and Other
    Rents                     88      84     25     27     113     111      (2)     (2)
    Inland
    Transportation          (93)   (122)    151    185      58      63        5       8
         Total Expense     1,479   1,800    246    287   1,725   2,087      362      17
  Operating Income          $498    $565    $24    $61    $522    $626   $(104)    (17)

  Operating Ratio          74.8%   76.1%  91.1%  82.5%   76.8%   76.9%

(a) In addition to CSXT, the Rail segment includes non-railroad subsidiaries such as Total Distribution Services, Inc., Transflo Terminal Services, Inc., CSX Technology and other subsidiaries.

                                 First Quarters


                           Volume                     Revenue                Revenue Per Unit
                     2009   2008 % Change       2009    2008 % Change       2009    2008 % Change
 Chemicals            105    129    (19) %      $308    $362   (15)  %    $2,933  $2,806      5  %
 Emerging Markets      91    115    (21)         134     161   (17)        1,473   1,400      5
 Forest Products       65     87    (25)         140     192   (27)        2,154   2,207    (2)
 Agricultural
Products              109    109       -         249     235      6        2,284   2,156      6
 Metals                48     92    (48)          97     197   (51)        2,021   2,141    (6)
 Phosphates and
Fertilizers            60     91    (34)          87     130   (33)        1,450   1,429      1
 Food and Consumer     25     27     (7)          60      65    (8)        2,400   2,407      -

Total Merchandise     503    650    (23)       1,075   1,342   (20)        2,137   2,065      3

 Coal                 415    440     (6)         713     720    (1)        1,718   1,636      5
 Coke and Iron Ore     16     23    (30)          31      42   (26)        1,938   1,826      6
Total Coal            431    463     (7)         744     762    (2)        1,726   1,646      5

Automotive             45     96    (53)          95     202   (53)        2,111   2,104      -

Other                   -      -       -          63      59      7            -       -      -
Total Rail            979  1,209    (19)       1,977   2,365   (16)        2,019   1,956      3

 International        186    253    (26)          83     123   (33)          446     486    (8)
 Domestic             254    255       -         184     218   (16)          724     855   (15)
 Other                  -      -       -           3       7   (57)            -       -      -
Total Intermodal      440    508    (13)         270     348   (22)          614     685   (10)

Total               1,419  1,717    (17) %    $2,247  $2,713   (17)  %    $1,584  $1,580      -  %

Certain data within the Merchandise categories have been reclassified to conform to the current year's presentation.

First Quarter Results of Operations

CSX experienced significant year-over-year volume and revenue losses caused by the broad-based weakness in the economy. The greatest impact from the economic conditions was in construction and consumer related markets. Despite the challenging environment, the Company's ongoing yield management initiatives offset lower fuel recovery associated with the sharp decline in fuel prices.

Rail Revenue

Merchandise

Chemicals - Continued weakness in the housing, automotive and consumer goods markets has significantly reduced demand for chemical products related to those markets.

Emerging Markets - Aggregates (which include crushed stone, sand and gravel) volume declined due to continued softness in residential construction.

Forest Products - A weak housing market has driven the continued decline of lumber and building products. Paper volume continued to be soft due to electronic media substitution and less packaging being used as a result of slower consumer spending.

Agricultural Products - Volume was flat as increased shipments of ethanol and corn were offset by declines in wheat, soybeans and exports. Strength in corn and ethanol shipments positively impacted revenue and revenue per unit.

Metals - Volume declines were driven by weak global and domestic steel demand in the automotive and construction industries. This weak demand, combined with the credit crisis, caused steel producers to take capacity out of the market in an attempt to balance supply with demand.

Phosphates and Fertilizers - Phosphate production was down due to weak international and domestic demand. Additionally, farmers are cutting back on levels of phosphate and potash application in reaction to lower commodity prices.

Food and Consumer -Weakness in residential construction caused reduced shipments of appliances and other consumer goods.

Coal

Volume declines were driven by a weaker export market and lower demand from electric utilities. The demand for electrical generation from coal was down because of low natural gas prices and lower industrial production.

Automotive

Revenue and volume were down due to declining new car sales resulting from the weak economic environment and low consumer confidence.

Rail Expense

Expenses decreased $321 million from last year's quarter. Significant variances are described below.

Labor and Fringe expense decreased $82 million. This decrease was primarily driven by labor productivity initiatives, such as employee furloughs and reduced crew overtime, and lower incentive compensation. These decreases were partially offset by inflation and other items.

Materials, Supplies and Other expense decreased $24 million. This decrease was primarily due to lower volume, decreased cost of risks, lower bad debt expense related to improved collectability of receivables and other items. These decreases were partially offset by increased inflation.

Fuel expense decreased $249 million due to lower fuel prices and lower volume.

Equipment and Other Rents expense increased by $4 million. Lower volume resulted in lower car hire expense, but was offset by lower car productivity and higher settlement estimates with other railroads.

Intermodal Revenue

International - Volume was down significantly on continued import declines and slowing exports due to the global economic recession. Revenue-per-unit was lower on decreased fuel recovery, partially offset by long-term contract price increases.

Domestic - Volume was flat as continued growth in new truckload conversion and short-haul services help offset the decline in other segments of the domestic market. Revenue-per-unit was lower on decreased fuel recovery and a competitive trucking pricing environment.

Intermodal Expense

Intermodal operating expense decreased due to lower inland transportation expense as a result of lower volume and lower fuel expense during the first quarter of 2009.

Consolidated Results of Operations

Other Income

Other income decreased $64 million to a net expense of $9 million in first quarter 2009. Last year's quarter was impacted by higher income from real estate sales and a $30 million non-cash adjustment to correct equity earnings from a non-consolidated subsidiary. These items were not repeated in 2009.

Interest Expense

Interest expense increased $22 million to $141 million primarily due to higher debt balances in first quarter 2009.

Income Tax Expense

Income tax expense decreased $85 million to $126 million primarily due to lower earnings in first quarter 2009 and $13 million of certain favorable tax adjustments.

Net Earnings

Net Earnings decreased $105 million to $246 million and earnings per diluted share decreased $.23 to $.62 in first quarter 2009 as a result of lower earnings.

Material Changes in Consolidated Balance Sheets and Significant Cash Flows

The following are material changes in the consolidated balance sheets and sources of liquidity and capital, which provide an update to the discussion included in CSX's most recent Annual Report on Form 10-K.

Long-term debt increased $483 million driven by a $500 million debt issuance during first quarter 2009. This increase was partially offset by a $21 million reclassification to current maturities of long-term debt. For additional information, see Note 7, Debt and Credit Agreements of this Quarterly Report on Form 10-Q.

Cash provided by operating activities decreased to $449 million due in part to lower pre-tax earnings. Also contributing to this decrease were higher incentive compensation payouts compared to last year. Additionally, cash from investing activities decreased due to a reduction in the purchases and sales of short-term investments partially offset by lower property additions. Furthermore, cash provided by financing activities decreased $447 million as the Company issued less debt, had no share repurchases and paid for seller financed assets that were delivered in the prior year.

For 2009, CSX plans to spend $1.6 billion of capital. CSX is continually evaluating market and regulatory conditions that could affect the Company's ability to generate sufficient returns on capital investments. CSX may revise this estimate as a result of changes in business conditions, tax legislation or the enactment of new laws or regulations.

Liquidity and Working Capital

The Company ended the quarter with over $1.1 billion of cash, cash equivalents and short-term investments. CSX also has available a $1.25 billion credit facility with a diverse syndicate of banks that was not drawn on.

Working capital can also be considered a measure of a company's ability to meet its short-term needs. CSX had a working capital surplus of $530 million at March 2009 and a working capital deficit of $13 million at December 2008. The favorable change is due to increased cash balances as a result of new debt issued during the quarter.

The Company's working capital balance varies due to factors such as the timing of scheduled debt payments and changes in cash and cash equivalent balances as discussed above. As a result, the working capital balance could return to a deficit in future periods. A working capital deficit is not unusual for CSX or other companies in the industry and does not indicate a lack of liquidity. The Company continues to maintain adequate current assets to satisfy current liabilities and maturing obligations when they come due. Furthermore, CSX has sufficient financial capacity, including the credit facility and shelf registration statement, to manage its day-to-day cash requirements and any anticipated obligations. The Company maintains access to the credit markets for additional liquidity as needed. Due to the current economic and credit market environment, CSX as well as other investment grade debt issuers may be unable to access capital due to lack of market demand or may experience higher interest costs.

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 certain revenues and expenses during the reporting period. Actual results may differ from those estimates. These estimates and assumptions are discussed with the Audit Committee of the Board of Directors on a regular basis. Consistent with the prior year, significant estimates using management judgment are made for the following areas:

· casualty, environmental and legal reserves;

· pension and post-retirement medical plan accounting;

· depreciation policies for assets under the group-life method; and

· income taxes.

For further discussion of the Company's critical accounting estimates, see the Company's most recent Annual Report on Form 10-K.

Certain statements in this report and in other materials filed with the SEC, as well as information included in oral statements or other written statements made by the Company, are forward-looking statements within the meaning of the Securities Act of 1933 and the Securities Exchange Act of 1934. These forward-looking statements include, among others, statements regarding:

· expectations as to results of operations and operational initiatives;

· expectations as to the effect of claims, lawsuits, environmental costs, commitments, contingent liabilities, labor negotiations or agreements on the Company's financial condition, results of operations or liquidity;

· management's plans, goals, strategies and objectives for future operations and other similar expressions concerning matters that are not historical facts, and management's expectations as to future performance and operations and the time by which objectives will be achieved; and

· future economic, industry or market conditions or performance and their effect on the Company's financial condition, results of operations or liquidity.

Forward-looking statements are typically identified by words or phrases such as "believe," "expect," "anticipate," "project," "estimate," "preliminary" and similar expressions. The Company cautions against placing undue reliance on forward-looking statements, which reflect its good faith beliefs with respect to future events and are based on information currently available to it as of the date the forward-looking statement is made. Forward-looking statements should not be read as a guarantee of future performance or results and will not necessarily be accurate indications of the timing when, or by which, such performance or results will be achieved.

Forward-looking statements are subject to a number of risks and uncertainties and actual performance or results could differ materially from those anticipated by these forward-looking statements. 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. The following important factors, in addition to those discussed in Part II, Item 1A (Risk Factors) of this quarterly report on Form 10-Q, and elsewhere in this report, may cause actual results to differ materially from those contemplated by these forward-looking statements:

· legislative, regulatory or legal developments involving transportation, including rail or intermodal transportation, the environment, hazardous materials, taxation, including the outcome of tax claims and litigation, the potential enactment of initiatives to re-regulate the rail industry and the ultimate outcome of shipper and rate claims subject to adjudication;

· the outcome of litigation and claims, including, but not limited to, those related to fuel surcharge, environmental contamination, personal injuries and occupational illnesses;

· material changes in domestic or international economic or business conditions, including those affecting the transportation industry such as access to capital markets, ability to revise debt arrangements as contemplated, customer demand, customer acceptance of price increases, effects of adverse economic conditions affecting shippers and adverse economic conditions in the industries and geographic areas that consume and produce freight;

· worsening conditions in the financial markets that may affect timely access to capital markets, as well as the cost of capital;

· availability of insurance coverage at commercially reasonable rates or insufficient insurance coverage to cover claims or damages;

· changes in fuel prices, surcharges for fuel and the availability of fuel;

· the impact of increased passenger activities in capacity-constrained areas or regulatory changes affecting when CSXT can transport freight or service routes;

· natural events such as severe weather conditions, including floods, fire, hurricanes and earthquakes, a pandemic crisis affecting the health of the Company's employees, its shippers or the consumers of goods, or other unforeseen disruptions of the Company's operations, systems, property or equipment;

· noncompliance with applicable laws or regulations;

. . .