1. CSX CORP.
One James Center Richmond, Va. 23261 REVENUE: $7.3 billion LOSS: $118 million LOSS PER SHARE: 78 cents DIVIDEND: $1.16 ASSETS: $11.5 billion STOCKHOLDERS' EQUITY: $4.6 billion RETURN ON EQUITY: NA EXCHANGE: NYSE EMPLOYES: 52,319 TOP EXECUTIVES: Hays T. Watkins, chairman and chief executive officer; A. Paul Funkhouser, president. FOUNDED: 1980
DESCRIPTION: Formed by the merger of the Chessie System Inc. and Seaboard Coastline Industries Inc., CSX is a transportation and natural-resources company that includes rail, truck and barge services. The company's natural-resource interests include a natural-gas pipeline, oil and gas exploration and development and management of coal reserves. CSX also holds real estate, including the Greenbrier resort hotel, two Caribbean resorts, a resort hotel in Jackson Hole, Wyo., and a resort management company.
DEVELOPMENTS: CSX continued its efforts in 1985 to derail the Reagan administration's plan to sell Conrail to rival Norfolk Southern Corp. CSX has supported an alternative proposal by Morgan Stanley for a public offering of Conrail. It also announced a major restructuring in December, increasing the number of major lines of business from two to four. In addition to its traditional lines of business -- transportation and energy -- the company added properties and technology. The company also took a special one-time charge in 1985 of $954 million. The charge covered the cost of setting up a reserve from which CSX will charge labor buyouts over the next three years; a write-off of rail assets, which included the sale or abandonment of 1,000 miles of rail line in addition to rail cars and locomotives, and other write-offs in the book value of properties and investments. #3. REYNOLDS METALS CO.
6601 W. Broad St. Richmond, Va. 23261 REVENUE: $3.5 billion LOSS: $291.6 million LOSS PER SHARE: $13.65 DIVIDEND: $1.00 ASSETS: $3.6 billion STOCKHOLDERS' EQUITY: $1.2 billion RETURN ON EQUITY: NA EXCHANGE: NYSE EMPLOYES: 27,400 TOP EXECUTIVES: David P. Reynolds, chairman; William O. Bourke, president. FOUNDED: 1928
DESCRIPTION: Reynolds Metals Co. is a vertically integrated producer of aluminum and fabricated products with worldwide operations. The company is the nation's second-largest aluminum producer behind Alcoa.
It mines and refines bauxite ore, produces primary and reclaimed aluminum and makes a wide variety of semifinished and finished products. Nearly half its finished products are in packaging and containers. Other products include electrical wiring, automotive parts such as aluminum radiators and building materials. Its aluminum foil, Reynolds Wrap, is the world's best-selling foil.
Reynolds also holds 83.5 percent of Eskimo Pie Corp., which makes ice cream, and a 41 percent interest in Robertshaw Controls Co. It also has oil and gas interests in seven states and mines other minerals as well.
DEVELOPMENTS: Reynolds Metals Co., like many other firms producing basic commodities, was forced to take major steps in 1985 to reduce its costs and restructure operations. As a result of a $322 million write-down of the value of certain assets, the company ended up with a $291.6 million loss for the year. The loss was $13.65 per share, compared with earnings of $6.36 per share in 1984.
Shipments to U.S. customers were off slightly in 1985 as a result of inventory reductions. Excess supplies of aluminum worldwide kept prices low and profit margins at their lowest level in years.
Reynolds began to deemphasize the less profitable commodity side of its business and to focus on production of high value-added fabricated and finished products. It plans to produce and recycle only enough aluminum for its own fabricating needs and to cover sales to a limited number of customers.
A major expansion of the company's Canadian smelter was completed in 1985, and a long-term contract was signed covering major supplies of alumina -- an ore concentrate -- from Australia. It does not plan to exercise an option to acquire a direct interest in the Australian operation.
In line with its restructuring, it permanently closed primary aluminum production facilities in Arkansas in November and in Alabama in February. It also temporarily suspended production at a bauxite mine in Jamaica in August. Despite such cutbacks, excess producer inventories still plagued the industry at the end of 1985. #2. NORFOLK SOUTHERN CORP.
One Commercial Place Norfolk, Va. 23510 REVENUE: $3.8 billion PROFITS: $500.2 million EARNINGS PER SHARE: $7.95 DIVIDEND: $3.40 ASSETS: $9.8 billion STOCKHOLDERS' EQUITY: $4.8 billion RETURN ON EQUITY: 10.8 percent EXCHANGE: NYSE EMPLOYES: 39,794 TOP EXECUTIVES: Robert B. Claytor, chairman and chief executive officer; Harold H. Hall, president and chief operating officer. FOUNDED: 1982
DESCRIPTION: A combination of the Norfolk and Western Railway and the Southern Railway System, the diversified transportation company also includes North American Van Lines Inc. In addition, the company is involved in a joint venture with Santa Fe Southern Pacific Corp. to build and operate a transcontinental fiber-optics system along railroad rights of way. In terms of railroad operating revenue, Norfolk Southern ranks fourth nationally.
DEVELOPMENTS: The Interstate Commerce Commission approved the railroad company's acquisition of North American Van Lines in June 1985. During the year, the company also continued to lobby aggressively in Congress for approval of its plan to acquire Conrail. Norfolk Southern has proposed to buy the federal government's share in Conrail for $1.2 billion. The Senate approved the plan in January 1986, but no action has been taken by the House. At least two other groups have made counterproposals to acquire Conrail. #4. DOMINION RESOURCES INC.
1 James River Plaza P.O. Box 26532 Richmond, Va. 23261 REVENUE: $2.7 billion PROFITS: $320 million EARNINGS PER SHARE: $3.60 DIVIDEND: $2.75 ASSETS: $8.5 billion STOCKHOLDERS' EQUITY: $2.7 billion RETURN ON EQUITY: 12.4 percent EXCHANGE: NYSE EMPLOYES: 13,500 TOP EXECUTIVES: William W. Berry, chairman and chief executive officer; Jack H. Ferguson, president and chief operating officer. FOUNDED: 1983
DESCRIPTION: Dominion Resources is a holding company with one active subsidiary. Formerly known as Virginia Electric and Power Co. (Vepco), that subsidiary now comprises Virginia Power, North Carolina Power and West Virginia Power. The company provides electric service for nearly 4 million people in a 32,000-square-mile area encompassing 80 percent of the population of Virginia as well as northeastern North Carolina and five counties in West Virginia. The utility generates electricity with four nuclear, 15 coal-fired, two oil-fired and 13 small hydroelectric units. It also operates six pumped-storage hydroelectric units owned jointly with another utility. Electric operations account for 95 percent of Dominion's revenue.
A Dominion division, Virginia Natural Gas, provides natural gas to more than 1 million people in Tidewater Virginia.
A wholly owned subsidiary, Dominion Capital Inc., was formed in 1985 to invest in marketable securities and to provide specialized financial services. The company acquired Rincon Securities Inc. in December.
DEVELOPMENTS: Dominion reported another year of increased earnings for the year ended Dec 31, attributing it to key performance of nuclear and coal-fired units. Profits totaled $319.8 million ($3.60 per share) in 1985, up 9 percent from a year ago.
Dominion extended the scope of its activities in 1985 with the creation of Dominion Capital and the acquisition of Rincon Securities. The company stated that it has decided to diversify into lines of business with potential for higher returns than are possible in utilities.
As an initial plunge, the utility purchased Rincon for $40 million and gained access to a portfolio of securities in 158 U.S. corporations worth considerably more than $40 million, according to a Dominion official.
Dominion also took steps in 1985 to reshape its electric utility business. It agreed to sell the rural West Virginia service territory and buy a Northern Virginia service territory which includes the Pentagon and a thriving area of office and apartment buildings. The utility also expanded the service area of its gas distribution business beyond the southeastern corner of Virginia into the state's urban corridor. #5. JAMES RIVER CORP.
Tredegar Street P.O. Box 2218 Richmond, Va. 23217 REVENUE: $2.5 billion PROFITS: $101 million EARNINGS PER SHARE: $2.90 DIVIDEND: 56 cents ASSETS: $1.7 billion STOCKHOLDERS' EQUITY: $582 million RETURN ON EQUITY: 17.7 percent EXCHANGE: NYSE EMPLOYES: 23,300 TOP EXECUTIVES: Brenton S. Halsey, chairman; Robert C. Williams, president. FOUNDED: 1969
DESCRIPTION: James River manufactures paper and plastic products, including towel and tissue papers, disposable food and beverage items and folding cartons, communications papers and industrial packaging materials. Dixie paper cups and plates, Brawny paper towels, Vanity Fair paper napkins and Northern bathroom tissue are among its well-known brands. The company operates 71 manufacturing plants in 21 states, Canada and Scotland.
DEVELOPMENTS: In its 1984-85 annual report, James River predicted that the rapid pace of acquisitions, which have accounted for the bulk of its dramatic growth during the past decade, would slow down. In the future, growth primarily would come from internal expansion, the company said.
Then last December, it announced its biggest acquisition of all, the purchase of a major line of paper products from Crown Zellerbach Corp., which would give James River its first solid manufacturing and distribution foothold on the West Coast. Assuming shareholder approval and completion of legal and financial steps, the estimated $750 million acquisition would raise James River's annual sales from $2.5 billion to $4.5 billion, beginning in the 1986-87 fiscal years.
The agreement with British financier Sir James Goldsmith, who controls Crown Zellerbach, would be carried out through a complex exchange of stock that would not reduce James River's earnings per share or add to its debt, the company said.