Below is a summary of our committee structure and membership information. To read more about any of the committees, click on committee names in the chart below.
Ms. Donna Alvarado
Mr. Steven Halverson
Mr. David Moffett
Mr. J. Steven Whisler
Mr. Dennis Reilley
Ms. Linda Riefler
Audit Committee Charter (PDF) [PDF]
Audit Committee Charter
The Audit Committee’s (“Committee”) primary purpose is to oversee the accounting and
financial reporting processes of CSX Corporation (“Corporation”) and the audits of the financial
statements of the Corporation. The Committee shall assist the Board of Directors’ (“Board”)
oversight of: (i) the integrity of the Corporation’s financial statements and accounting methodology,
(ii) the Corporation’s compliance with legal and regulatory requirements, (iii) the independent
auditors’ qualifications and independence, and (iv)the performance of the independent auditors and
the Corporation’s internal audit function.
The Committee shall also meet for the purpose of preparing an audit committee report as
required by the rules and regulations of the Securities and Exchange Commission (“SEC”) to be
included in the Corporation’s annual proxy statement.
Membership and Operations
The Committee shall consist of no fewer than three directors. Each member shall meet
the independence requirements of the NASDAQ Stock Market (“NASDAQ”) and Rule 10A-3 under
the Securities Exchange Act of 1934, as such rules and provisions may be amended from time to
time. No member of the Committee may (i) have accepted any direct or indirect consulting, advisory
or other compensatory fee from the Corporation other than compensation for director service, (ii)
be affiliated with the Corporation or its subsidiaries or (iii) have participated in the preparation of
the financial statements of the Corporation or any of its current subsidiaries in the past three years.
Each member of the Committee shall be able to read and understand fundamental financial
statements, including the Corporation’s balance sheet, income statement and cash flow statement. In addition, at least one member of the Committee shall be an audit committee financial
expert as defined in the rules and regulations of the SEC, as such qualifications are interpreted by
the Board in its business judgment or have such other additional experience and financial
sophistication as is required under NASDAQ rules. No member of the Committee may serve
simultaneously on the audit committees of more than three public companies (including the
Members of the Committee and the Committee Chair shall be elected by the Board
annually after reviewing the recommendation of the Governance Committee. Members shall serve
until their successors have been duly elected and qualified. Any member of the Committee may
resign at any time by giving written notice of his or her intention to do so to the Chairman of the
Board or the Corporate Secretary, or may be removed, with or without cause, at any time by the
The Committee shall meet at least once every fiscal quarter, or more frequently if
circumstances dictate, and shall meet periodically without management present. The Committee
periodically shall meet separately with management, with internal auditors and with independent
auditors to discuss any matters that the Committee or any of these persons or firms believes should
be discussed privately. The Committee Chair shall prepare or approve an agenda in advance of
each meeting. Each member is free to suggest the inclusion of items not on the agenda.
A majority of the members of the Committee shall constitute a quorum for the transaction
of business, and the affirmative vote of the majority of those present shall be necessary for any
action by the Committee.
The Committee shall keep minutes, report its activities to the full Board on a regular basis
and make recommendations with respect to the matters covered by this Charter and other matters
as the Committee may deem necessary or appropriate (including reviewing with the Board any
issues that arise with respect to the quality or integrity of the Corporation’s financial statements,
the Corporation’s compliance with legal or regulatory requirements, the performance and
independence of the Corporation’s independent auditors or the performance of the internal audit
Duties and Responsibilities
The Committee’s primary responsibility is oversight. The Corporation’s management is
responsible for the preparation, presentation and integrity of the Corporation’s financial statements,
and, with the Controller’s and internal audit departments, is responsible for maintaining appropriate
accounting and financial reporting policies and internal controls and procedures that provide for
compliance with accounting standards, applicable laws and regulations relating to disclosures and
The Corporation’s independent auditors shall report directly to the Committee and are
accountable to the Committee and the Board. The independent auditors are responsible for
planning and executing a proper audit of the Corporation’s annual financial statements, reviews of
the Corporation’s quarterly financial statements prior to filing of each quarterly report and other
procedures. In this regard, the Committee members are not, and do not represent themselves as
performing the functions of, auditors or accountants.
In carrying out its oversight responsibilities, the Committee shall have the following duties
- The Committee shall pre-approve, or adopt appropriate procedures to pre-approve, all
audit and non-audit services to be provided by the Corporation’s independent auditors.
- The Committee, in its capacity as a committee of the Board, shall directly appoint,
retain, compensate and oversee the work of the independent auditors. The Committee
shall have sole authority to approve all compensation and fees paid to the independent
auditors for audit and non-audit work, and to resolve disagreements between
management and the auditor regarding financial reporting. Neither the Corporation
nor its subsidiaries shall employ the independent auditors’ firm to perform prohibited
- The Committee shall review, at least annually, the qualifications, performance and
independence of the independent auditors, including the lead partner of the
independent auditors. The Committee shall then present its conclusions to the full
Board. In conducting such a review, the Committee shall (i) take into account the
opinions of management and the internal auditors, (ii) actively engage in a dialogue
with the independent auditors with respect to any disclosed relationships or services
that may impact the objectivity and independence of the independent auditors and (iii)
obtain and review a report prepared by the independent auditors, describing: (a) the
independent auditors’ internal quality control procedures; (b) any material issues
any steps taken to deal with any such issues;
- the most recent internal quality control review, or peer review, of the
- any inquiry or investigation by governmental or professional authorities, within
the previous 5 years, respecting any independent audits conducted by the
independent auditors, and
(c) all relationships between the independent auditors, or any of their affiliates, and
the Corporation including a statement of the fees billed in each of the last two fiscal
years by category of service. The report shall also include all written disclosures
required by the Public Company Accounting Oversight Board or any other applicable
regulatory authority regarding the independent auditors’ independence.
- The Committee shall assure that rotation of the independent auditors’ audit partners
satisfies applicable regulatory requirements and Corporation policies and shall
periodically consider whether rotation of the independent auditor is necessary or
appropriate to assure continuing auditor independence.
- The Committee shall establish policies for the Corporation’s hiring of employees or
former employees of the independent auditors, including prohibitions as required by
the SEC regulations.
Financial Reporting Principles and Policies; Internal Controls and Procedures
- At least annually, the Committee shall review the performance and responsibilities, of
the internal audit department, including the proposed audit plans for the coming year
and the results of internal audits, along with any significant reports and management’s
- The Committee shall review activities, organizational structure and resources of the
internal audit function.
- At least annually, the Committee shall evaluate the performance of the Vice President – Internal Audit and Compliance and make recommendations regarding the responsibilities of such officer.
- The Committee shall make the final decision with respect to the selection and retention of the Vice President – Internal Audit and Compliance.
- The Committee shall meet with the independent auditors, internal auditors and the
Corporation’s senior management to review the scope and methodology of the
proposed audits. Independent auditors and internal auditors shall provide regular
reports to the Committee during the year on the underlying process and status of their
audits and any findings or preliminary conclusions that have been reached.
- Management and the independent auditors shall review and discuss with the
Committee the Corporation’s annual and quarterly financial statements, including the
Corporation’s disclosure under “Management’s Discussion and Analysis of Financial
Condition and Results of Operations” in its SEC reports prior to the filing of such
reports. The Committee shall recommend to the Board whether the Corporation’s
financial statements should be accepted for inclusion in the Corporation’s annual report
on Form 10-K.
- Throughout the year, the independent auditors shall review with the Committee their
assessment as to the adequacy of the Corporation’s structure of internal control over
financial accounting and reporting, and their qualitative judgments as to accounting
principles employed by the Corporation and the conclusions expressed in the
Corporation’s financial reports. The independent auditors shall review with the
Committee significant issues and judgments made by management in the preparation
of the financial statements, including a periodic review of the use of non-GAAP
- The Committee shall review significant issues regarding accounting principles and
financial statement presentations, including any material changes in the Corporation’s
selection or application of accounting principles.
- The Committee shall review significant issues related to the adequacy of the
Corporation’s internal controls and any special audit steps adopted in light of material
- The Committee shall review the effect of regulatory and accounting initiatives, as well
as off-balance sheet structures, on the financial statements of the Corporation.
- The Committee shall discuss with the independent auditors any difficulties
encountered in the course of the audit and management’s response, including any:
- restrictions on the scope of the independent auditors' activities;
- difficulties accessing requested information;
- disagreements between management and the independent auditors;
- accounting adjustments that were noted or proposed by the independent
auditors but "passed" (as immaterial or otherwise);
- communications between the independent audit team and the independent
audit firm's national office regarding auditing or accounting issues presented
by the engagement; or
- any management or internal control letter issued, or proposed to be issued,
by the independent auditors.
- The Committee shall discuss with the independent auditors the responsibilities, budget
and staffing of the Corporation’s internal audit function.
- The Committee shall discuss with the independent auditors the matters required to be
discussed by Auditing Standard No. 1301 or any successor standard thereto and the
written disclosures required by the Public Company Accounting Oversight Board
regarding the auditors’ independence.
- The independent auditors, internal auditors, and management shall identify to the
Committee significant business, financial, or legal issues that may significantly impact
the Corporation’s financial statements and internal control systems. As necessary,
management shall report to the Committee all significant litigation in which the
Corporation and its subsidiaries are engaged, as well as the anticipated impact of such
litigation on the Corporation.
- The Committee shall discuss the Corporation’s earnings press releases, as well as the
type and presentation of financial information and earnings guidance provided to
analysts and rating agencies, including the presentation of “pro-forma” or “adjusted”
- Independent auditors and internal auditors shall report as soon as possible to the
Committee any material weaknesses in internal control systems.
- The Committee shall review disclosures by the Corporation’s CEO and CFO during the
certification process for the SEC Form 10-K and Form 10-Q about any significant
deficiencies in the design or operation of internal controls over financial reporting or
material weaknesses therein and any fraud involving management or other employees
who have a significant role in the Corporation’s internal controls.
- The Committee shall review and discuss with the independent auditors (i) all critical accounting policies and practices to be used in the audit; (ii) all alternative treatments of financial information within GAAP that have been discussed with management, the ramifications of the use of such alternative treatments and the treatment preferred by the auditors; and (3) other material written communications between the auditors and management, such as any management letter or schedule of unadjusted differences.
- The Committee shall establish and maintain procedures for the receipt, retention and
treatment of complaints regarding the Corporation’s accounting, internal accounting
controls or auditing matters, including procedures for the confidential, anonymous
submission by employees of concerns regarding questionable auditing or accounting
- The Committee shall review with management the Corporation’s procedures
established for reviewing and addressing conflicts of interest and related party
transactions. In addition, the Committee shall be responsible for conducting an
appropriate review and oversight of all related party transactions for potential conflict
of interest situations on an ongoing basis and approving or ratifying, as may be
required by NASDAQ, any related party transactions.
- Management and the independent auditors shall review and discuss with the
Committee their evaluation of the Company's identification of, accounting for, and
disclosure of its relationships and transactions with related parties and other significant
matters arising from the audit regarding the Company's relationships and transactions
with related parties.
- The Committee shall discuss guidelines and policies governing the process by which
senior management of the Corporation and the relevant departments of the
Corporation assess and manage the Corporation’s exposure to risk, the Corporation’s
major risk exposures and the steps management has taken to monitor and mitigate
- The Committee shall coordinate with the Chief Compliance Officer, other members of
management and the Risk Oversight Committee to help ensure that both the
Committee and the Risk Oversight Committee have received the information
necessary to permit them to fulfill their duties and responsibilities with respect to
oversight of risk management.
- The Committee shall review reports from management on the status of and changes
to risk exposures, policies, procedures and practices.
- The Committee shall provide over the names of the Committee members the audit
committee report required to be included in the Corporation’s Proxy Statement for the
Corporation’s Annual Meeting of Shareholders.
- The Committee shall discuss with the internal auditors the Corporation’s anti-fraud program and efforts undertaken to prevent and detect fraud.
- The Chief Legal Officer shall report to the Committee on a yearly basis, in executive session, the status of all employee compliance-related training.
- As needed, the Committee shall periodically review, make recommendations regarding any modifications to, and receive reports as to material violations of the Corporation’s Code of Business Conduct and Ethics and other compliance responsibilities. At least annually, the internal auditors shall review with the Committee the Corporation’s monitoring of the Code of Business Conduct and Ethics and procedures to ensure compliance with laws and governmental regulations. Waivers to the Code of Business Conduct and Ethics for directors or executive officers must be approved by the Board and promptly disclosed to shareholders.
- The Committee shall review and assess the adequacy of this Charter on an annual basis with the advice of the Governance Committee and recommend any changes to the full Board.
- In addition to the foregoing, the Committee shall perform such other functions as may be committed to it under the resolutions and other directives of the Board.
In fulfilling his or her responsibility, each member of the Committee is entitled to rely in
good faith upon the Corporation’s records and upon information, opinions, reports or statements
presented by any of the Corporation’s officers or employees, or by any other person as to matters
the member reasonably believes are within such other persons professional or expert competence
and who has been selected with reasonable care by or on behalf of the Corporation. Each member
of the Committee also may rely in good faith upon actions taken by other committees of the Board
as committed to such committees under the resolutions and other directives of the Board.
Delegation to Subcommittee
The Committee may, as appropriate and consistent with applicable regulations, laws and
listing standards, delegate all or a portion of its duties and responsibilities to a subcommittee of the
Committee. The Committee may, in its discretion, delegate to one or more of its members the
authority to pre-approve any audit or non-audit services to be performed by the independent
auditors, provided that any such approvals are presented to the Committee at its next scheduled
meeting. Any such delegation shall be by majority vote of the Committee.
The Committee shall prepare and review with the Board an annual performance evaluation
of the Committee. The evaluation shall compare the performance of the Committee with the
requirements of this Charter. The performance evaluation by the Committee shall be conducted in
such manner as the Committee deems appropriate. The report to the Board may take the form of
an oral report by the Committee Chair or any other member of the Committee designated by the
Committee to make this report.
Resources and Authority
The Committee shall have available to it the resources and authority appropriate to
discharge its duties and responsibilities, including support from management staff, including the
Chief Financial Officer of the Corporation or such officer’s designee. The Committee shall also
have the sole authority to select, retain and terminate (and approve or ratify the fees and other
retention terms of) outside auditors, special or independent counsel, accountants, consultants and
other advisors, as it deems necessary or appropriate without seeking approval of the Board or
management. The Corporation shall provide appropriate funding to the Committee to allow the
Committee to compensate the Corporation’s independent auditors, to compensate any advisors
retained by the Committee and to pay for ordinary administrative expenses of the Committee.