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What changed in CSX Corporation's 10-K — 2022 vs 2023

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Paragraph-level year-over-year comparison of CSX Corporation's 2022 and 2023 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2023 report.

+245 added−252 removedSource: 10-K (2024-02-14) vs 10-K (2023-02-15)

Top changes in CSX Corporation's 2023 10-K

245 paragraphs added · 252 removed · 202 edited across 7 sections

Item 1. Business

Business — how the company describes what it does

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Biggest changeCSX prioritizes workplace safety for employees and is committed to continued improvement through enhanced processes, training, technology, communication, and continuous collaboration with customers and peers across the railroad industry. Training programs and processes are focused on injury and accident prevention as well as emergency preparedness. The attainment of key safety targets is a component of management's annual incentive program.
Biggest changeCollective agreements under the Railway Labor Act do not expire, but continue until amended, and formal notices to amend these agreements may be served as early as November 1, 2024. CSX prioritizes workplace safety for employees and is committed to continued improvement through enhanced processes, training, technology, communication, and continuous collaboration with customers and peers across the railroad industry.
Financial Information Information regarding the Company's results of operations and financial position can be found in Item 7. Management’s Discussion and Analysis of Financial Condition.
Financial Information Information regarding the Company's results of operations and financial position can be found in Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
(“Pan Am”) which is the parent company of Pan Am Railways, Inc. This acquisition expands CSXT’s reach in the Northeastern United States. For further details, refer to Note 17, Business Combinations . CSXT is also responsible for the Company's real estate sales, leasing, acquisition and management and development activities. Substantially all of these activities are focused on supporting railroad operations.
(“Pan Am”), which is the parent company of Pan Am Railways, Inc. This acquisition expanded CSXT’s reach in the Northeastern United States. For further details, refer to Note 17, Business Combinations. CSXT is also responsible for the Company's real estate sales, leasing, acquisition and management and development activities. Substantially all of these activities are focused on supporting railroad operations.
CSX 2022 Form 10-K p.5 CSX CORPORATION PART I Regulatory Environment The Company's operations are subject to various federal, state, provincial (Canada) and local laws and regulations generally applicable to businesses operating in the United States and Canada.
CSX 2023 Form 10-K p.5 CSX CORPORATION PART I Regulatory Environment The Company's operations are subject to various federal, state, provincial (Canada) and local laws and regulations generally applicable to businesses operating in the United States and Canada.
For additional information concerning business conducted by the Company during 2022, see Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations. CSX 2022 Form 10-K p.6 CSX CORPORATION PART I
For additional information concerning business conducted by the Company during 2023, see Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations. CSX 2023 Form 10-K p.6 CSX CORPORATION PART I
Other revenue accounted for 6% of the Company’s total revenue in 2022. This category includes revenue from regional subsidiary railroads and incidental charges, including intermodal storage and equipment usage, demurrage and switching. Revenue from regional subsidiary railroads includes shipments by railroads that the Company does not directly operate.
Other revenue accounted for 4% of the Company’s total revenue in 2023. This category includes revenue from regional subsidiary railroads and incidental charges, including intermodal storage and equipment usage, demurrage and switching. Revenue from regional subsidiary railroads includes shipments by railroads that the Company does not directly operate.
In 2022, CSX was recognized as a “Best Place to Work for Disability Inclusion” by Disability:IN and the American Association of People with Disabilities for a fourth consecutive year after receiving a top score on their disability equality index.
In 2023, CSX was recognized as a “Best Place to Work for Disability Inclusion” by Disability:IN and the American Association of People with Disabilities for a fifth consecutive year after receiving a top score on their disability equality index.
Most of the export coal the Company transports is used for steelmaking, while the majority of domestic coal the Company ships is used for electricity generation. • The trucking business generated $966 million, or 7%, of revenue in 2022. Trucking revenue includes revenue from the operations of Quality Carriers, which was acquired by CSX effective July 1, 2021.
Most of the export coal the Company transports is used for steelmaking, while the majority of domestic coal the Company ships is used for electricity generation. • The trucking business generated $882 million, or 6%, of revenue in 2023. Trucking revenue includes revenue from the operations of Quality Carriers, which was acquired by CSX effective July 1, 2021.
CSX 2022 Form 10-K p.3 CSX CORPORATION PART I Lines of Business During 2022, the Company's services generated $14.9 billion of revenue and served four primary lines of business: merchandise, intermodal, coal and trucking. • The merchandise business shipped 2.6 million carloads (41% of volume) and generated $8.2 billion in revenue (55% of revenue) in 2022.
CSX 2023 Form 10-K p.3 CSX CORPORATION PART I Lines of Business During 2023, the Company's services generated $14.7 billion of revenue and served four primary lines of business: merchandise, intermodal, coal and trucking. • The merchandise business shipped 2.6 million carloads (43% of volume) and generated $8.7 billion in revenue (59% of revenue) in 2023.
Through a network of approximately 30 terminals, the intermodal business serves all major markets east of the Mississippi River and transports mainly manufactured consumer goods in containers, providing customers with truck-like service for longer shipments. • The coal business shipped 697 thousand carloads (11% of volume) and generated $2.4 billion in revenue (16% of revenue) in 2022.
Through a network of approximately 30 terminals, the intermodal business serves all major markets east of the Mississippi River and transports mainly manufactured consumer goods in containers, providing customers with truck-like service for longer shipments. • The coal business shipped 755 thousand carloads (12% of volume) and generated $2.5 billion in revenue (17% of revenue) in 2023.
CSX's Committed Workforce Most of the Company’s employees provide or support transportation services. The Company had more than 22,500 employees as of December 2022, which includes approximately 17,100 employees that are members of a rail labor union.
CSX's Committed Workforce Most of the Company’s employees provide or support transportation services. The Company had more than 23,000 employees as of December 2023, which includes approximately 17,700 employees that are members of a rail labor union.
The Company’s merchandise business is comprised of shipments in the following diverse markets: chemicals, agricultural and food products, minerals, automotive, forest products, metals and equipment, and fertilizers. • The intermodal business shipped 3.0 million units (48% of volume) and generated $2.3 billion in revenue (16% of revenue) in 2022.
The Company’s merchandise business is comprised of shipments in the following diverse markets: chemicals, agricultural and food products, automotive, minerals, forest products, metals and equipment, and fertilizers. • The intermodal business shipped 2.8 million units (45% of volume) and generated $2.1 billion in revenue (14% of revenue) in 2023.
The Company is committed to developing a culture that promotes workforce diversity and inclusion and encourages ethical behavior. As of December 31, 2022, approximately 21% of CSX's overall workforce and 36% of management was diverse, calculated as the percentage of males of color and all females.
As of December 31, 2023, approximately 23% of CSX's overall workforce and 37% of management was diverse, calculated as the percentage of males of color and all females.
The FRA Personal Injury Frequency Index, a measure of the number of FRA-reportable injuries per 200,000 man-hours, was 0.96 in both 2022 and 2021, remaining flat year over year. CSX 2022 Form 10-K p.4 CSX CORPORATION PART I The Compensation and Talent Management Committee of the Board of Directors is charged with oversight of CSX's workforce.
CSX 2023 Form 10-K p.4 CSX CORPORATION PART I The Compensation and Talent Management Committee of the Board of Directors is charged with oversight of CSX's workforce. The Company is committed to developing a culture that promotes workforce diversity and inclusion and encourages ethical behavior.
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In the face of supply chain disruption and a tight labor market, CSX continues to focus on ensuring the hiring pipeline for frontline railroaders is adequate to meet customer needs and has implemented new recruiting and staffing measures.
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Training programs and processes are focused on injury and accident prevention as well as emergency preparedness. The attainment of key safety targets is a component of management's annual incentive program. The FRA Personal Injury Frequency Index, a measure of the number of FRA-reportable injuries per 200,000 man-hours, was 0.89 in 2023 and 1.01 in 2022, improving year over year.

Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeThere is potential for operational impacts from changing weather patterns or rising sea levels in the Company's operational territory, which could impact the Company's network or other assets. Climate change and other emissions-related laws and regulations have been proposed and, in some cases adopted, on the federal, state, provincial and local levels.
Biggest changeClimate Change and Environmental The Company’s operations and financial results could be negatively impacted by climate change and regulatory and legislative responses to climate change. There is potential for operational impacts from changing weather patterns or rising sea levels in the Company's operational territory, which could impact the Company's network or other assets.
As part of its railroad and other operations, the Company is subject to various claims and lawsuits related to disputes over commercial practices, labor and unemployment matters, occupational and personal injury claims, property damage, environmental and other matters. The Company may experience material judgments or incur significant costs to defend existing and future lawsuits.
As part of its railroad and other operations, the Company is subject to various claims and lawsuits related to disputes over commercial practices, labor and unemployment matters, occupational and personal injury claims, property damage or freight damage, environmental and other matters. The Company may experience material judgments or incur significant costs to defend existing and future lawsuits.
Changes in natural gas prices, or other factors impacting demand for electricity, could impact future power generation at coal-fired plants, which would affect the Company's domestic coal volumes and revenues. Weaknesses in the capital and credit markets could negatively impact the Company’s access to capital.
Changes in natural gas prices, or other factors impacting demand for electricity, could impact future power generation at coal-fired plants, which would affect the Company's coal volumes and revenues. Weaknesses in the capital and credit markets could negatively impact the Company’s access to capital.
Due to applicable laws and regulations or contractual obligations, CSX may be held responsible for data breaches, cyber-attacks or other similar incidents attributed to its third-party vendors as they relate to the information CSX shares with them.
Due to applicable laws, rules and regulations or contractual obligations, CSX may be held responsible for data breaches, cyber-attacks or other similar incidents attributed to its third-party vendors as they relate to the information CSX shares with them.
The security, stability and availability of the Company’s and its key third-party vendors’ technology systems are critical to its ability to operate safely and effectively and to compete within the transportation industry.
The security, stability and availability of the Company’s and its key third-party vendors’ information technology systems are critical to its ability to operate safely and effectively and to compete within the transportation industry.
Government regulation and compliance risks may adversely affect the Company's operations and financial results. The Company is subject to the jurisdiction of various regulatory agencies, including the STB, FRA, PHMSA, TSA, EPA and other state, provincial and federal regulatory agencies for a variety of economic, health, safety, labor, environmental, tax, legal and other matters.
Government regulation and compliance risks may adversely affect the Company's operations and financial results. The Company is subject to the jurisdiction of various regulatory agencies, including the STB, FRA, PHMSA, TSA, EPA and other state, provincial, local and federal regulatory agencies for a variety of economic, health, safety, labor, environmental, tax, legal, cybersecurity and other matters.
Additionally, changes to trade agreements or policies could result in reduced import and export volumes due to increased tariffs and lower consumer demand.
Additionally, embargoes or changes to trade agreements or policies could result in reduced import and export volumes due to increased tariffs and lower consumer demand.
CSX 2022 Form 10-K p.8 CSX CORPORATION PART I The Company, its third-party vendors and other companies in the rail and transportation industries have been subject to, and are likely to continue to be the target of, data breaches, cyber-attacks and other similar incidents.
CSX 2023 Form 10-K p.8 CSX CORPORATION PART I The Company, its third-party vendors and other companies in the rail and transportation industries have been subject to, and are likely to continue to be the target of, data breaches, cyber-attacks and other similar incidents.
Additional risks and uncertainties not currently known to the Company or that the Company currently does not deem to be material also may materially impact the Company's financial condition, results of operations or liquidity. Regulatory, Legislative and Legal New legislation or regulatory changes could impact the Company's earnings or restrict its ability to independently negotiate prices.
Additional risks and uncertainties not currently known to the Company or that the Company currently does not deem to be material also may materially impact the Company's financial condition, results of operations or liquidity. Regulatory, Legislative and Legal New legislation, regulatory changes or other governmental actions could impact the Company's earnings or restrict its ability to independently negotiate prices.
Any of these pending or proposed laws or regulations, including any proposed or implemented under the Biden administration, could adversely affect the Company's operations and financial results by, among other things: (i) reducing coal-fired electricity generation due to mandated emission standards; (ii) reducing the consumption of coal as a viable energy resource in the United States and Canada; (iii) increasing the Company's fuel, capital and other operating costs and negatively affecting operating and fuel efficiencies; and (iv) making it difficult for the Company's customers in the U.S. and Canada to produce products in a cost competitive manner.
Any of these pending or proposed laws or regulations, could adversely affect the Company's operations and financial results by, among other things: (i) reducing coal-fired electricity generation due to mandated emission standards; (ii) reducing the consumption of coal as a viable energy resource in the United States and Canada; (iii) increasing the Company's fuel, capital and other operating costs and negatively affecting operating and fuel efficiencies; and (iv) making it difficult for the Company's customers in the U.S. and Canada to produce products in a cost competitive manner.
CSX 2022 Form 10-K p.7 CSX CORPORATION PART I The Company may be subject to various claims and lawsuits that could result in significant expenditures.
CSX 2023 Form 10-K p.7 CSX CORPORATION PART I The Company may be subject to various claims and lawsuits that could result in significant expenditures.
Additionally, if CSX is unable to acquire, develop or implement new technology, it may suffer a competitive disadvantage within the rail industry and with companies providing other modes of transportation service. Network or supply chain constraints could have a negative impact on service, operating efficiency or volume of shipments.
Additionally, if CSX is unable to successfully acquire, develop or implement new technology, including artificial intelligence, it may suffer a competitive disadvantage within the rail industry and with companies providing other modes of transportation services. Network or supply chain constraints could have a negative impact on service, operating efficiency or volume of shipments.
A disruption or compromise of the Company’s information technology systems, even for short periods of time, and any resulting theft or compromise of Company confidential or proprietary information (including personal information), could adversely affect the Company’s business or reputation, create significant legal, regulatory or financial exposure and have a material adverse impact on CSX’s business, financial condition or operations.
A disruption or compromise of the Company’s or its key third-party vendors' information technology systems, even for short periods of time, and any resulting theft or compromise of Company confidential or proprietary information (including personal information), could adversely affect the Company’s business or reputation, create significant legal, regulatory or financial exposure and have a material adverse impact on CSX’s business, financial condition or operations.
CSXT, as a common carrier by rail, is required by law to transport hazardous materials, which could expose the Company to significant costs and claims. A train accident involving the transport of hazardous materials could result in significant claims arising from personal injury, property or natural resource damage, environmental penalties and remediation obligations.
CSXT, as a common carrier by rail, transports hazardous materials, which could expose the Company to significant costs and claims in the event of a train accident. A train accident involving the transport of hazardous materials could result in significant costs and claims arising from personal injury, property or natural resource damage, environmental penalties and remediation obligations.
Legislation passed by Congress, new regulations issued by federal agencies or executive orders issued by the President of the United States could significantly affect the revenues, costs, including income taxes, and profitability of the Company's business. In addition, statutes or regulations imposing price constraints or affecting rail-to-rail competition could adversely affect the Company's profitability.
Legislation passed by Congress, new regulations issued by federal agencies, or executive orders issued by the President of the United States could significantly affect the revenues, costs, including income taxes, and profitability of the Company's business. In addition, statutes or regulations that, among other things, impose price constraints or affecting rail-to-rail competition could adversely affect the Company's profitability.
In November 2008, the TSA issued final rules placing significant new security and safety requirements on passenger and freight railroad carriers, rail transit systems and facilities that ship hazardous materials by rail. Noncompliance with these rules can subject the Company to significant penalties and could be a factor in litigation arising out of a train accident.
Applicable rules issued by the TSA place significant security and safety requirements on passenger and freight railroad carriers, rail transit systems and facilities that ship hazardous materials by rail. Noncompliance with these rules can subject the Company to significant penalties and could be a factor in litigation arising out of a train accident.
A public health crisis could also increase the risk that the Company or its third-party vendors may experience cybersecurity incidents as a result of employees, third-party vendors and other third parties with which they interact working remotely on less secure systems and environments.
The Company or its third-party vendors may also experience cybersecurity incidents as a result of employees, third-party vendors and other third parties with which they interact working remotely on less secure systems and environments.
CSX 2022 Form 10-K p.10 CSX CORPORATION PART I Changing dynamics in the U.S. and global energy markets could negatively impact profitability. Over time, changing dynamics in the U.S. and global energy markets, including the impacts of regulation and alternative fuel sources, have resulted in lower energy production from coal-fired power plants in CSX's service territory.
Changing dynamics in the U.S. and global energy markets could negatively impact profitability. Over time, changing dynamics in the U.S. and global energy markets, including the impacts of regulation and alternative fuel sources, have resulted in lower energy production from coal-fired power plants in CSX's service territory.
Marketplace conditions for resources like locomotives as well as the availability of qualified personnel, particularly engineers and conductors, could each have a negative impact on the Company’s ability to meet demand for rail service.
Marketplace conditions for resources like locomotives as well as the availability of qualified personnel, including engineers and conductors as well as other skilled professional or technical employees, could each have a negative impact on the Company’s ability to meet demand for rail service.
Future acts of terrorism, war or regulatory changes to combat the risk of terrorism may cause significant disruptions in the Company's operations. Terrorist attacks, along with any government response to those attacks, may adversely affect the Company's financial condition, results of operations or liquidity.
CSX 2023 Form 10-K p.9 CSX CORPORATION PART I Future acts of terrorism, war or regulatory changes to combat the risk of terrorism may cause significant disruptions in the Company's operations. Terrorist attacks, along with any government response to those attacks, may adversely affect the Company's financial condition, results of operations or liquidity.
Disruption to a key railroad industry supplier could negatively affect operating efficiency and increase costs. The capital intensive and unique nature of core rail equipment (including rail, ties, freight cars and locomotives) limits the number of railroad equipment suppliers.
CSX 2023 Form 10-K p.11 CSX CORPORATION PART I Disruption to a key railroad industry supplier could negatively affect operating efficiency and increase costs. The capital intensive and unique nature of core rail equipment (including rail, ties, freight cars and locomotives) limits the number of railroad equipment suppliers.
Additionally, any future consolidation in the rail industry could materially affect the regulatory and competitive environment in which the Company operates. Global economic conditions could negatively affect demand for commodities and other freight.
Additionally, any future consolidation in the rail industry could materially affect the regulatory and competitive environment in which the Company operates. CSX 2023 Form 10-K p.10 CSX CORPORATION PART I Global economic conditions could negatively affect demand for commodities and other freight.
Any of these factors could reduce the amount of shipments the Company handles and have a material adverse effect on the Company's financial condition, results of operations or liquidity. The Company is subject to environmental laws and regulations that may result in significant costs.
Any of these factors could reduce the amount of shipments the Company handles and have a material adverse effect on the Company's financial condition, results of operations or liquidity.
These incidents may include, among other things, malware, ransomware, distributed denial of service attacks, social engineering, phishing, theft, malfeasance or improper access by employees or third-party vendors, human error, fraud, or other modes of attack or disruption. Attacks of these nature are increasing in frequency, levels of persistence, intensity and sophistication.
These incidents may include, among other things, malware, ransomware, distributed denial of service attacks, social engineering, phishing, theft, malfeasance or improper access by employees or third-party vendors, software bugs, server malfunctions, software or hardware failures, human error, fraud, or other modes of attack or disruption.
For example, the Department of Homeland Security adopted regulations that require freight railroads to implement additional security protocols when transporting hazardous materials. Complying with these or future regulations could continue to increase the Company's operating costs and reduce operating efficiencies. Severe weather or other natural occurrences could result in significant business interruptions and expenditures in excess of available insurance coverage.
Complying with these or future regulations could continue to increase the Company's operating costs and reduce operating efficiencies. Severe weather or other natural occurrences could result in significant business interruptions and expenditures in excess of available insurance coverage.
These final and proposed laws and regulations take the form of restrictions, caps, taxes or other controls on emissions. In particular, the EPA has issued various regulations and may issue additional regulations targeting emissions, including rules and standards governing emissions from certain stationary sources and from vehicles.
In particular, the EPA has issued various regulations and may issue additional regulations targeting emissions, including rules and standards governing emissions from certain stationary sources and from vehicles.
The Company regularly relies on capital markets for the issuance of long-term debt instruments, commercial paper and bank financing from time to time. Instability or disruptions of the capital markets, including credit markets, or the deterioration of the Company’s financial condition due to internal or external factors, could restrict or prohibit access and could increase financing costs.
Instability or disruptions of the capital markets, including credit markets, significant increases in interest rates, or the deterioration of the Company’s financial condition due to internal or external factors, could restrict or prohibit access and could increase financing costs.
CSX 2022 Form 10-K p.9 CSX CORPORATION PART I Furthermore, in response to the heightened risk of terrorism, federal, state and local governmental bodies are proposing and, in some cases, have adopted legislation and regulations relating to security issues that impact the transportation industry.
Furthermore, in response to the heightened risk of terrorism, federal, state and local governmental bodies are proposing and, in some cases, have adopted legislation and regulations relating to security issues that impact the transportation industry. For example, the Department of Homeland Security adopted regulations that require freight railroads to implement additional security protocols when transporting hazardous materials.
Further, the Company may be at increased risk of a cyber-attack as a result of being a component of the critical U.S. infrastructure.
Attacks of these nature are increasing in frequency, levels of persistence, intensity and sophistication, including by nation-state threat actors or those associated with nation-states. Further, the Company may be at increased risk of experiencing a cyber-attack as a result of being a component of the critical U.S. infrastructure.
Such claims, if insured, could exceed existing insurance coverage or insurance may not continue to be available at commercially reasonable rates. Under federal regulations, CSXT is required to transport hazardous materials under the legal duty referred to as the common carrier mandate. CSXT is also required to comply with regulations regarding the handling of hazardous materials.
Under federal regulations, CSXT is required to transport certain hazardous materials under the legal duty referred to as the common carrier mandate regardless of risk or potential exposure to loss.
Removed
While CSX’s security protocols have detected attempts to gain unauthorized access to the Company’s information technology systems, none of such attempts have resulted in any material breach of or disruption to the Company’s systems. For example, CSX has experienced distributed denial of service attacks that have resulted in brief system disruptions, but none have resulted in access to CSX systems.
Added
CSXT, as a common carrier by rail, is required by law to transport hazardous materials and could be adversely impacted by non-compliance with applicable regulations or from regulatory and legislative changes. CSXT is required to comply with regulations regarding the handling of hazardous materials and has a legal obligation to transport certain hazardous materials under the common carrier mandate.
Removed
Additionally, despite routine security assessment of the Company’s key third-party vendors, some vendors have experienced cyber-attacks in the past, but none of such attacks have had a material adverse impact on CSX’s business or operations.
Added
If such an event takes place, the Company may be required to incur significant expenses in excess of existing cybersecurity insurance coverage.
Removed
CSX 2022 Form 10-K p.11 CSX CORPORATION PART I Climate Change and Environmental The Company’s operations and financial results could be negatively impacted by climate change and regulatory and legislative responses to climate change.
Added
Such claims, if insured, could exceed existing insurance coverage or insurance may not continue to be available at commercially reasonable rates, which could have a material adverse effect on the Company's results of operations, financial condition, and liquidity.
Added
The Company regularly relies on capital markets for the issuance of long-term debt instruments, commercial paper and bank financing from time to time.
Added
Climate change and other emissions-related laws and regulations have been proposed and, in some cases adopted, on the federal, state, provincial and local levels. These final and proposed laws and regulations take the form of restrictions, caps, taxes or other controls on emissions as well as requirements to disclose information relating to climate change.
Added
In addition, CSX may become subject to legal requirements to disclose climate change related information and may become subject to demands or expectations by its supply chain partners, customers or other stakeholders to disclose information relating to climate risk or set related targets or goals.
Added
The Company's current practices with respect to climate risk disclosure may fail to meet these developing legal requirements or stakeholder demands or expectations. In addition, legislative or regulatory uncertainties and change regarding climate-related risks, including inconsistent perspectives or requirements, are likely to result in higher regulatory, compliance, credit, reputational and other risks and costs.
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CSX 2023 Form 10-K p.12 CSX CORPORATION PART I The Company is subject to environmental laws and regulations that may result in significant costs.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeIntermodal Terminal 308,421 CSX 2022 Form 10-K p.13 CSX CORPORATION PART I Network Geography CSXT’s operations are primarily focused on four major transportation networks and corridors that are defined geographically and by commodity flows below. Interstate 90 (I-90) Corridor – This CSXT corridor links Chicago and the Midwest to metropolitan areas in New York and New England.
Biggest changeYards and Terminals Annual Volume Waycross, GA 930,651 Bedford Park Intermodal Terminal (Chicago) 926,845 Nashville, TN 645,352 Cincinnati, OH 644,478 Selkirk, NY 625,308 Avon, IN (Indianapolis) 597,169 Walbridge, OH (Toledo) 378,869 Fairburn, GA Intermodal Terminal (Atlanta) 362,767 Louisville, KY 356,740 Chicago, IL 307,588 CSX 2023 Form 10-K p.16 CSX CORPORATION PART I Network Geography CSXT’s operations are primarily focused on four major transportation networks and corridors that are defined geographically and by commodity flows below.
These serve as points of connectivity between the Company and its local customers and as sorting facilities where railcars and intermodal containers are received, classed for destination and placed onto outbound trains, or arrive and are delivered to the customer. The Company’s largest yards and terminals based on 2022 volume (number of railcars or intermodal containers processed) are listed below.
These serve as points of connectivity between the Company and its local customers and as sorting facilities where railcars and intermodal containers are received, classed for destination and placed onto outbound trains, or arrive and are delivered to the customer. The Company’s largest yards and terminals based on 2023 volume (number of railcars or intermodal containers processed) are listed below.
Insulated box cars deliver food products, canned goods, beer and wine. Flat cars – Used for shipping intermodal containers and trailers or bulk and finished goods, such as lumber, pipe, plywood, drywall and pulpwood. Other cars – Primarily leased refrigerator cars and slab steel cars. Containers – Weather-proof boxes used for bulk shipment of freight, primarily in intermodal service.
Insulated box cars deliver food products, canned goods, beer and wine. Flat cars – Used for shipping intermodal containers and trailers or bulk and finished goods, such as lumber, pipe, plywood, drywall and pulpwood. Other cars – Primarily slab steel cars. Containers – Weather-proof boxes used for bulk shipment of freight, primarily in intermodal service.
Freight locomotives are used primarily to pull trains while switching locomotives are used in yards. Auxiliary units are typically used to provide extra traction for heavy trains in hilly terrain. Of owned locomotives, approximately 68% were in active service as of December 31, 2022, and the remainder were in storage to be utilized as needed.
Freight locomotives are used primarily to pull trains while switching locomotives are used in yards. Auxiliary units are typically used to provide extra traction for heavy trains in hilly terrain. Of owned locomotives, approximately 68% were in active service as of December 31, 2023, and the remainder were in storage to be utilized as needed.
Track and Infrastructure Serving 26 states, the District of Columbia, and the Canadian provinces of Ontario and Quebec, the CSXT rail network serves, among other markets, New York, Philadelphia and Boston in the Northeast and Mid-Atlantic, the southeast markets of Atlanta, Miami and New Orleans, and the midwestern markets of St. Louis, Memphis and Chicago.
Track and Infrastructure Serving 26 states, the District of Columbia, and the Canadian provinces of Ontario and Quebec, the CSXT rail network serves, among other markets, New York, Philadelphia and Boston in the Northeast and Mid-Atlantic, the southeast markets of Atlanta, Miami and New Orleans, and the midwestern markets of St. Louis, Columbus and Chicago.
CSX 2022 Form 10-K p.16 CSX CORPORATION PART I The Company’s revenue-generating equipment, either owned or long-term leased, primarily consists of freight cars and containers as described below. Gondolas – Support CSXT’s metals markets and provide transport for woodchips and other bulk commodities. Some gondolas are equipped with special hoods for protecting products like coil and sheet steel.
CSX 2023 Form 10-K p.19 CSX CORPORATION PART I The Company’s revenue-generating equipment, either owned or long-term leased, primarily consists of freight cars and containers as described below. Gondolas – Support CSXT’s metals markets and provide transport for woodchips and other bulk commodities. Some gondolas are equipped with special hoods for protecting products like coil and sheet steel.
Of total owned and long-term leased equipment, approximately 91% was in active service as of December 31, 2022, and the remainder were in storage to be utilized as needed.
Of total owned and long-term leased equipment, approximately 89% was in active service as of December 31, 2023, and the remainder were in storage to be utilized as needed.
CSX 2022 Form 10-K p.14 CSX CORPORATION PART I CSX Rail Network CSX 2022 Form 10-K p.15 CSX CORPORATION PART I Locomotives As of December 2022, CSXT owns or long-term leases more than 3,600 locomotives. From time to time, the Company also short-term leases locomotives based on business needs.
CSX 2023 Form 10-K p.17 CSX CORPORATION PART I CSX Rail Network CSX 2023 Form 10-K p.18 CSX CORPORATION PART I Locomotives As of December 2023, CSXT owns or long-term leases more than 3,500 locomotives. From time to time, the Company also short-term leases locomotives based on business needs.
Louis and Memphis through the cities of Nashville, Birmingham, and Atlanta and markets in the Southeast. The Southeastern Corridor is the premier rail route connecting these key cities, gateways, and markets and positions CSXT to efficiently handle projected traffic volumes of intermodal, automotive and general merchandise traffic.
The Southeastern Corridor is the premier rail route connecting these key cities, gateways, and markets and positions CSXT to efficiently handle projected traffic volumes of intermodal, automotive and general merchandise traffic.
At December 2022, the breakdown of track miles was as follows: Track Miles Single Mainline Track 19,879 Other Mainline Track 5,662 Terminals and Switching Yards 9,308 Passing Sidings and Turnouts 901 Total 35,750 In addition to its physical track structure, the Company operates numerous yards and terminals for rail and intermodal service.
At December 2023, the breakdown of track miles was as follows: Track Miles Single Mainline Track 19,671 Other Mainline Track 5,652 Terminals and Switching Yards 9,270 Passing Sidings and Turnouts 896 Total 35,489 In addition to its physical track structure, the Company operates numerous yards and terminals for rail and intermodal service.
As of December 2022, CSXT’s fleet of owned or long-term leased locomotives consisted of the following types: Locomotives % Average Age (years) Freight 3,194 89 % 23 Switching 237 6 % 45 Auxiliary Units 177 5 % 29 Total locomotives 3,608 100 % 25 Equipment The Company owns or long-term leases rail equipment, including several types of freight cars and intermodal containers.
As of December 2023, CSXT’s fleet of owned or long-term leased locomotives consisted of the following types: Locomotives % Average Age (in Years) Freight 3,160 89 % 23 Switching 234 6 % 46 Auxiliary Units 175 5 % 30 Total Locomotives 3,569 100 % 25 Equipment The Company owns or long-term leases rail equipment, including several types of freight cars and intermodal containers.
Coal Network – The CSXT coal network connects the coal mining operations in the Appalachian mountain region and Illinois basin with industrial areas in the Southeast, Northeast and Mid-Atlantic, as well as many river, lake, and deep water port facilities.
Coal Network – The CSXT coal network connects the coal mining operations in the Appalachian mountain region and Illinois basin with industrial areas in the Southeast, Northeast and Mid-Atlantic, as well as many river, lake, and deep water port facilities. The domestic coal market has declined significantly over the last decade and export coal remains subject to volatility.
Most of the export coal the Company transports is used for steelmaking, while the majority of domestic coal the Company ships is used for electricity generation. See the following page for a map of the CSX Rail Network. Also included on the map, "CSX Operating Agreement" indicates areas within which CSX can operate through trackage rights beyond the CSX network.
See the following page for a map of the CSX Rail Network. Also included on the map, "CSX Operating Agreement" indicates areas within which CSX can operate through trackage rights beyond the CSX network.
As of December 2022, the Company’s owned and long-term leased equipment consisted of the following: Equipment Number of Units % Gondolas 18,613 40 % Multi-level Flat Cars 10,736 23 % Open-top Hoppers 6,403 14 % Covered Hoppers 6,366 13 % Box Cars 3,745 8 % Flat Cars 565 1 % Other Cars 596 1 % Subtotal Freight Cars 47,024 100 % Containers 19,405 Total Equipment 66,429 At any time, approximately two-thirds of the railcars on the CSXT system are not owned or leased by the Company.
As of December 2023, the Company’s owned and long-term leased equipment consisted of the following: Equipment Number of Units % Gondolas 18,978 41 % Multi-level Flat Cars 11,095 24 % Open-top Hoppers 6,215 13 % Covered Hoppers 6,088 13 % Box Cars 3,059 7 % Flat Cars 575 1 % Other Cars 586 1 % Subtotal Freight Cars 46,596 100 % Containers 19,230 Total Equipment 65,826 At any time, approximately two-thirds of the railcars on the CSXT system are not owned or leased by the Company.
CSXT primarily transports food and consumer products, as well as metals and chemicals along this line. It is the leading rail corridor along the eastern seaboard south of the District of Columbia and provides access to major eastern ports. Southeastern Corridor – This critical part of the network runs between CSXT’s western gateways of Chicago, St.
It is the leading rail corridor along the eastern seaboard south of the District of Columbia and provides access to major eastern ports. Southeastern Corridor – This critical part of the network runs between CSXT’s western gateways of Chicago, St. Louis and Memphis through the cities of Nashville, Birmingham, and Atlanta and markets in the Southeast.
This route carries goods from all three of the Company’s major rail markets – merchandise, intermodal and coal. Interstate 95 (I-95) Corridor – The CSXT I-95 Corridor connects Charleston, Jacksonville, Miami and many other cities throughout the Southeast with the heavily populated mid-Atlantic and northeastern cities of Baltimore, Philadelphia and New York.
Interstate 95 (I-95) Corridor – The CSXT I-95 Corridor connects Charleston, Jacksonville, Miami and many other cities throughout the Southeast with the heavily populated mid-Atlantic and northeastern cities of Baltimore, Philadelphia and New York. CSXT primarily transports food and consumer products, as well as metals and chemicals along this line.
The domestic coal market has declined significantly over the last decade and export coal remains subject to a high degree of volatility. CSXT’s coal network remains well positioned to supply utility markets in both the Northeast and Southeast and to transport coal shipments for export outside of the U.S.
CSXT’s coal network remains well positioned to supply utility markets in both the Northeast and Southeast and to transport coal shipments for export outside of the U.S. Most of the export coal the Company transports is used for steelmaking, while the majority of domestic coal the Company ships is used for electricity generation.
This corridor is a primary route for import traffic coming from the far east through western ports moving eastward across the country, through Chicago and into the population centers in the Northeast. The I-90 Corridor is also a critical link between ports in New York, New Jersey, and Pennsylvania and consumption markets in the Midwest.
These engineering attributes permit the corridor to support high-speed service across intermodal, automotive and merchandise commodities. This corridor is a primary route for import traffic coming from the far east through western ports moving eastward across the country, through Chicago and into the population centers in the Northeast.
This route, also known as the “waterlevel route,” has minimal hills and grades and nearly all of it has two main tracks (referred to as double track). These engineering attributes permit the corridor to support high-speed service across intermodal, automotive and merchandise commodities.
Interstate 90 (I-90) Corridor – This CSXT corridor links Chicago and the Midwest to metropolitan areas in New York and New England. This route, also known as the “waterlevel route,” has minimal hills and grades and nearly all of it has two main tracks (referred to as double track).
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Yards and Terminals Annual Volume Waycross, GA 931,488 Bedford Park Intermodal Terminal (Chicago) 886,636 Selkirk, NY 636,750 Nashville, TN 627,868 Cincinnati, OH 622,906 Avon, IN (Indianapolis) 574,775 Walbridge, OH (Toledo) 372,880 Fairburn, GA Intermodal Terminal (Atlanta) 358,416 Louisville, KY 352,029 Chicago 59th St.
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The I-90 Corridor is also a critical link between ports in New York, New Jersey, and Pennsylvania and consumption markets in the Midwest. This route carries goods from all three of the Company’s major rail markets – merchandise, intermodal and coal.
Removed
The corridor also provides direct rail service between the coal reserves of the southern Illinois basin and the demand for coal in the Southeast.

Item 4. Mine Safety Disclosures

Mine Safety Disclosures — required of mining issuers

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Biggest changeHe also served as a Vice President at Morgan Stanley in equity research and an associate at Merrill Lynch in the mergers and acquisitions group. Jamie J. Boychuk, 45 Executive Vice President of Operations Boychuk has served as CSXT's Executive Vice President of Operations since October 2019.
Biggest changeIn May 2019 he was named Chief Financial Officer. Before joining CSX in 2017, Mr. Boone worked as a Senior Equity Research Analyst at Janus Capital. He also served as a Vice President at Morgan Stanley in equity research and an associate at Merrill Lynch in the mergers and acquisitions group.
Hinrichs, 56 President and Chief Executive Officer Hinrichs, a leader with more than 30 years of experience in the global automotive, manufacturing, and energy sectors, was named President and Chief Executive Officer in September 2022. Hinrichs previously worked at Ford Motor Company from 2000 to 2020, most recently serving as President of Ford's global automotive business.
Hinrichs, 57 President and Chief Executive Officer Hinrichs, a leader with more than 30 years of experience in the global automotive, manufacturing, and energy sectors, was named President and Chief Executive Officer in September 2022. Hinrichs previously worked at Ford Motor Company from 2000 to 2020, most recently serving as President of Ford's global automotive business.
During her 19 years with the Company, she previously served as Assistant Vice President - Assistant Controller and in other various accounting roles. With more than 25 years of experience, Williams held various accounting and auditing positions prior to joining CSX. Ms. Williams is a Certified Public Accountant in the state of Florida.
During her 20 years with the Company, she previously served as Assistant Vice President - Assistant Controller and in other various accounting roles. With more than 25 years of experience, Williams held various accounting and auditing positions prior to joining CSX. Ms. Williams is a Certified Public Accountant in the state of Florida.
In this role, her responsibilities include human resources, people systems and analytics, total rewards, facilities and aviation. During her 11 years with the Company, Ms. Sorfleet has previously served as Chief Human Resources Officer. Prior to joining CSX, she worked in human resources for 20 years. Angela C.
In this role, her responsibilities include human resources, people systems and analytics, total rewards, facilities and aviation. During her 12 years with the Company, Ms. Sorfleet has previously served as Chief Human Resources Officer. Prior to joining CSX, she worked in human resources for 20 years. Angela C.
Williams, 48 Vice President and Chief Accounting Officer Williams has served as Vice President and Chief Accounting Officer of CSX since March 2018. She is responsible for financial and regulatory reporting, freight billing and collections, payroll, accounts payable and various other accounting processes.
Williams, 49 Vice President and Chief Accounting Officer Williams has served as Vice President and Chief Accounting Officer of CSX since March 2018. She is responsible for financial and regulatory reporting, freight billing and collections, payroll, accounts payable and various other accounting processes.
Goldman has previously served as Vice President of Risk Compliance and General Counsel and has overseen work in compliance, risk management and safety programs. Diana B. Sorfleet, 58 Executive Vice President and Chief Administrative Officer Sorfleet was named Executive Vice President and Chief Administrative Officer in July 2018.
Goldman has previously served as Vice President of Risk Compliance and General Counsel and has overseen work in compliance, risk management and safety programs. Diana B. Sorfleet, 59 Executive Vice President and Chief Administrative Officer Sorfleet was named Executive Vice President and Chief Administrative Officer in July 2018.
Goldman, 65 Executive Vice President and Chief Legal Officer Goldman has served as Executive Vice President and Chief Legal Officer, and Corporate Secretary of CSX since November 2017. In this role, he directs the Company’s legal affairs, government relations, risk management, public safety, environmental, and audit functions. During his 19 years with the Company, Mr.
Goldman, 66 Executive Vice President and Chief Legal Officer Goldman has served as Executive Vice President and Chief Legal Officer, and Corporate Secretary of CSX since November 2017. In this role, he directs the Company’s legal affairs, government relations, risk management, public safety, environmental, and audit functions. During his 20 years with the Company, Mr.
Item 4. Mine Safety Disclosure Not Applicable CSX 2022 Form 10-K p.17 CSX CORPORATION PART I Executive Officers of the Registrant Executive officers of the Company are elected by the CSX Board of Directors and generally hold office until the next annual election of officers.
Item 4. Mine Safety Disclosure Not Applicable CSX 2023 Form 10-K p.20 CSX CORPORATION PART I Executive Officers of the Registrant Executive officers of the Company are elected by the CSX Board of Directors and generally hold office until the next annual election of officers.
Other positions he held at Ford include President of Global Operations, President of the Americas, President of Asia Pacific and Africa, Chairman and CEO of Ford China, and Chairman & CEO of Ford Canada. Over the past four years, Hinrichs has also served in multiple advisory and board roles of various companies. Sean R.
Other positions he held at Ford include President of Global Operations, President of the Americas, President of Asia Pacific and Africa, Chairman and CEO of Ford China, and Chairman & CEO of Ford Canada. Over the four years prior to joining CSX, Hinrichs also served in multiple advisory and board roles of various companies. Sean R.
CSX 2022 Form 10-K p.19 CSX CORPORATION PART II
CSX 2023 Form 10-K p.22 CSX CORPORATION PART II
He joined CSX in September 2017 as Vice President of Corporate Affairs and Chief Investor Relations Officer and was later named Vice President, Marketing and Strategy leading research and data analysis to advance growth strategies for CSX. Before joining CSX in 2017, Mr. Boone worked as a Senior Equity Research Analyst at Janus Capital.
Boone has more than 20 years of experience in finance, accounting, mergers and acquisitions, and transportation performance analysis. He joined CSX in September 2017 as Vice President of Corporate Affairs and Chief Investor Relations Officer and was later named Vice President, Marketing and Strategy leading research and data analysis to advance growth strategies for CSX.
In his current role, he is responsible for all financial aspects of the Company's business including financial and economic analysis, accounting, tax, treasury, real estate and purchasing activities. Prior to 2017, he has held the positions of AVP Capital Markets and Director Performance Analysis. During his 17 years with CSX, Mr.
Prior to this role, Pelkey held the role of Vice President Finance & Treasury since 2017. Prior to 2017, he has held the positions of AVP Capital Markets and Director Performance Analysis. During his 18 years with CSX, Mr. Pelkey has held a variety of other roles, including financial planning and technology finance. Kevin S.
CSX 2022 Form 10-K p.18 CSX CORPORATION PART I Name and Age Business Experience During Past Five Years Stephen Fortune, 53 Executive Vice President and Chief Digital and Technology Officer Fortune was named CSX's Executive Vice President and Chief Digital and Technology Officer in April 2022.
CSX 2023 Form 10-K p.21 CSX CORPORATION PART I Name and Age Business Experience During Past Five Years Michael A. Cory, 61 Executive Vice President and Chief Operating Officer Cory was named Executive Vice President and Chief Operating Officer in September 2023. In this role, he is responsible for transportation, network operations including terminals, mechanical, engineering and labor relations. Mr.
Pelkey, 43 Executive Vice President and Chief Financial Officer Pelkey was named Executive Vice President and Chief Financial Officer in January 2022 after serving as Vice President and Acting Chief Financial Officer since June 2021. Prior to these roles, Pelkey held the role of Vice President Finance & Treasury since 2017.
Pelkey, 44 Executive Vice President and Chief Financial Officer Pelkey was named Executive Vice President and Chief Financial Officer in January 2022. In this role, he guides all of the finance activities for the Company including accounting, financial planning, investor relations, procurement, tax and treasury.
Removed
Pelkey has held a variety of other roles, including financial planning and technology finance. Kevin S. Boone, 45 Executive Vice President and Chief Sales & Marketing Officer Boone was named Executive Vice President and Chief Sales & Marketing Officer in June 2021 after serving as Chief Financial Officer since May 2019.
Added
Boone, 46 Executive Vice President and Chief Commercial Officer Boone has served as Executive Vice President and Chief Commercial Officer since June 2021. In his current role, he is responsible for developing and implementing the Company's commercial strategy and oversees functions including sales, marketing, customer solutions, real estate and industrial development. Mr.
Removed
In his current role, he is responsible for the commercial organization. Mr. Boone has more than 20 years of experience in finance, accounting, mergers and acquisitions, and transportation performance analysis.
Added
Cory is a seasoned railroad executive with approximately 40 years of operations experience, working at the Canadian National Railway Company ("CN") from 1981 to 2019. He served as Executive Vice President and Chief Operating Officer at CN.
Removed
In this role, he is responsible for transportation, network operations including terminals, mechanical, engineering and labor relations. Since joining CSXT in 2017, he has held the positions of Senior Vice President of Network, Engineering, Mechanical and Intermodal Operations; Vice President of Scheduled Railroading; and Assistant Vice President of Transportation Support. Mr.
Added
He also held positions including Vice President of Network Operations, Senior Vice President of Network Operations, Senior Vice President of the Eastern Region and Senior Vice President for the Western Region during his time at CN. After Mr.
Removed
Boychuk previously worked at Canadian National Railway, where he served for 20 years in various operational roles of increasing responsibility, including sub-region General Manager.
Added
Cory's retirement from CN in 2019, he continued to provide transportation consulting services as well as serving as the President of Pacific National, Australia's largest private railroad, in 2021. Stephen Fortune, 54 Executive Vice President and Chief Digital and Technology Officer Fortune was named CSX's Executive Vice President and Chief Digital and Technology Officer in April 2022.

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

6 edited+2 added−0 removed3 unchanged
Biggest changeCSX 2022 Form 10-K p.20 CSX CORPORATION PART II CSX Purchases of Equity Securities The Company continues to repurchase shares under the $5 billion program announced in July 2022. Total repurchase authority remaining as of December 31, 2022 was $3.3 billion. For more information about share repurchases, see Note 2, Earnings Per Share .
Biggest changeCSX 2023 Form 10-K p.24 CSX CORPORATION PART II CSX Purchases of Equity Securities During November 2023, the share repurchase program announced in July 2022 was completed and the Company began repurchasing shares under the $5 billion share repurchase program approved on October 17, 2023. Total repurchase authority remaining as of December 31, 2023 was $4.8 billion.
The weighted average of common shares outstanding, which was used in the calculation of diluted earnings per share, was 2,141 million as of December 31, 2022. (See Note 2, Earnings Per Share .) A total of 25 million shares of preferred stock is authorized, none of which is currently outstanding.
The weighted average of common shares outstanding, which was used in the calculation of diluted earnings per share, was 2,013 million as of December 31, 2023. (See Note 2, Earnings Per Share .) A total of 25 million shares of preferred stock is authorized, none of which is currently outstanding.
There are no preemptive rights, which are privileges extended to select shareholders that would allow them to purchase additional shares before other members of the general public in the event of an offering. At January 31, 2023, the latest practicable date that is closest to the filing date, there were 22,453 common stock shareholders of record.
There are no preemptive rights, which are privileges extended to select shareholders that would allow them to purchase additional shares before other members of the general public in the event of an offering. At January 31, 2024, the latest practicable date that is closest to the filing date, there were 21,547 common stock shareholders of record.
The official trading symbol is “CSX.” Description of Common and Preferred Stock A total of 5.4 billion shares of common stock are authorized, of which 2,066,350,050 shares were outstanding as of December 31, 2022. Each share is entitled to one vote in all matters requiring a vote of shareholders.
The official trading symbol is “CSX.” Description of Common and Preferred Stock A total of 5.4 billion shares of common stock are authorized, of which 1,958,427,685 shares were outstanding as of December 31, 2023. Each share is entitled to one vote in all matters requiring a vote of shareholders.
Quarter 1st 2nd 3rd 4th Year 2022 $ 0.100 $ 0.100 $ 0.100 $ 0.100 $ 0.400 2021 $ 0.093 $ 0.093 $ 0.093 $ 0.093 $ 0.372 Stock Performance Graph The cumulative shareholder returns, assuming reinvestment of dividends, on $100 invested at December 31, 2017 are illustrated on the graph below.
Quarter 1st 2nd 3rd 4th Year 2023 $ 0.11 $ 0.11 $ 0.11 $ 0.11 $ 0.44 2022 $ 0.10 $ 0.10 $ 0.10 $ 0.10 $ 0.40 CSX 2023 Form 10-K p.23 CSX CORPORATION PART II Stock Performance Graph The cumulative shareholder returns, assuming reinvestment of dividends, on $100 invested at December 31, 2018 are illustrated on the graph below.
Share repurchase activity of $1.0 billion for the fourth quarter 2022 was as follows: CSX Purchases of Equity Securities for the Quarter Fourth Quarter Total Number of Shares Purchased Average Price Paid per Share Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs Beginning Balance $ 4,292,997,017 October 1 - October 31, 2022 22,101,430 $ 27.50 22,101,430 3,685,141,410 November 1 - November 30, 2022 6,810,351 29.80 6,810,351 3,482,205,188 December 1 - December 31, 2022 6,710,050 31.33 6,710,050 3,271,977,916 Ending Balance 35,621,831 $ 28.66 35,621,831 $ 3,271,977,916
Share repurchase activity of $581 million for the fourth quarter 2023 was as follows: CSX Purchases of Equity Securities for the Quarter Fourth Quarter Total Number of Shares Purchased Average Price Paid per Share Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs Beginning Balance $ 371,411,668 October 1 - October 31, 2023 10,791,515 $ 30.53 10,791,515 41,950,017 November 1 - November 30, 2023 6,756,749 30.66 6,756,749 4,834,766,702 December 1 - December 31, 2023 1,326,238 33.45 1,326,238 4,790,399,073 Ending Balance 18,874,502 $ 30.78 18,874,502 $ 4,790,399,073
Added
This performance graph shall not be deemed "soliciting material" or to be "filed" with the SEC for purposes of Section 18 of the Exchange Act, or otherwise subject to liabilities under that Section, and shall not be deemed to be incorporated by reference into any filing of CSX Corp. under the Securities Act of 1933, as amended, or the Exchange Act.
Added
For more information about share repurchases, see Note 2, Earnings Per Share .

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

92 edited+24 added−34 removed49 unchanged
Biggest changeA discussion regarding results of operations and financial condition for the year ended December 31, 2021, compared to the year ended December 31, 2020, can be found in Part II, Item 7 of CSX's Annual Report on Form 10-K for the year ended 2021, filed with the Securities and Exchange Commission on February 16, 2022. 2022 vs. 2021 Results of Operations Years Ended 2022 2021 $ Change % Change (Dollars in Millions) Revenue $ 14,853 $ 12,522 $ 2,331 19 % Expense Labor and Fringe 2,861 2,550 (311) (12) Purchased Services and Other 2,685 2,135 (550) (26) Fuel 1,626 913 (713) (78) Depreciation and Amortization 1,500 1,420 (80) (6) Equipment and Other Rents 396 364 (32) (9) Gains on Property Dispositions (238) (454) (216) (48) Total Expense 8,830 6,928 (1,902) (27) Operating Income 6,023 5,594 429 8 Interest Expense (742) (722) (20) (3) Other Income - Net 133 79 54 68 Income Tax Expense (1,248) (1,170) (78) (7) Net Earnings $ 4,166 $ 3,781 $ 385 10 Earnings Per Diluted Share $ 1.95 $ 1.68 $ 0.27 16 % Operating Ratio 59.5 % 55.3 % (420) bps Appointment of New Chief Executive Officer On September 15, 2022, CSX announced that, as part of a planned succession process, its Board of Directors appointed Joseph R.
Biggest changeA discussion regarding results of operations and financial condition for the year ended December 31, 2022, compared to the year ended December 31, 2021, can be found in Part II, Item 7 of CSX's Annual Report on Form 10-K for the year ended 2022, filed with the Securities and Exchange Commission on February 15, 2023. 2023 vs. 2022 Results of Operations Years Ended 2023 2022 $ Change % Change (Dollars in Millions) Revenue $ 14,657 $ 14,853 $ (196) (1) % Expense Labor and Fringe 3,024 2,861 (163) (6) Purchased Services and Other 2,764 2,685 (79) (3) Depreciation and Amortization 1,611 1,500 (111) (7) Fuel 1,377 1,626 249 15 Equipment and Other Rents 354 396 42 11 Gains on Property Dispositions (34) (238) (204) (86) Total Expense 9,096 8,830 (266) (3) Operating Income 5,561 6,023 (462) (8) Interest Expense (809) (742) (67) (9) Other Income - Net 139 133 6 5 Income Tax Expense (1,176) (1,248) 72 6 Net Earnings $ 3,715 $ 4,166 $ (451) (11) Earnings Per Diluted Share $ 1.85 $ 1.95 $ (0.10) (5) % Operating Ratio 62.1 % 59.5 % (260) bps CSX 2023 Form 10-K p.28 CSX CORPORATION PART II Volume and Revenue (Unaudited) Volume (Thousands of Units); Revenue (Dollars in Millions); Revenue Per Unit (Dollars) Volume Revenue Revenue Per Unit 2023 2022 % Change 2023 2022 % Change 2023 2022 % Change Chemicals 642 641 — % $ 2,599 $ 2,584 1 % $ 4,048 $ 4,031 — % Agricultural and Food Products 468 481 (3) % 1,657 1,664 — % 3,541 3,459 2 % Automotive 388 338 15 % 1,219 1,054 16 % 3,142 3,118 1 % Minerals 358 337 6 % 733 658 11 % 2,047 1,953 5 % Metals and Equipment 284 267 6 % 917 828 11 % 3,229 3,101 4 % Forest Products 282 291 (3) % 1,012 996 2 % 3,589 3,423 5 % Fertilizers 199 203 (2) % 516 455 13 % 2,593 2,241 16 % Total Merchandise 2,621 2,558 2 % 8,653 8,239 5 % 3,301 3,221 2 % Intermodal 2,766 2,963 (7) % 2,060 2,306 (11) % 745 778 (4) % Coal 755 697 8 % 2,484 2,434 2 % 3,290 3,492 (6) % Trucking — — — % 882 966 (9) % — — — % Other — — — % 578 908 (36) % — — — % Total 6,142 6,218 (1) % $ 14,657 $ 14,853 (1) % $ 2,386 $ 2,389 — % CSX 2023 Form 10-K p.29 CSX CORPORATION PART II Revenue Total revenue decreased by $196 million in 2023, or 1%, when compared to the previous year primarily due to decreases in other revenue, lower fuel recovery, pricing declines in export coal due to the impact of lower benchmark rates and declines in intermodal volume.
Positive Train Control ("PTC") - An interoperable train control system designed to prevent train-to-train collisions, over-speed derailments, incursions into established work-zone limits, and train diversions onto another set of tracks. Revenue adequacy - The achievement of a rate of return on investment at least equal to the industry cost of investment capital, as measured by the STB.
Positive Train Control ("PTC") - An interoperable train control system designed to prevent train-to-train collisions, over-speed derailments, incursions into established work-zone limits, and train diversions onto another set of tracks. Revenue adequacy - The achievement of a rate of return on investment over time at least equal to the industry cost of investment capital, as measured by the STB.
Risk Factors and elsewhere in this report, may cause actual results to differ materially from those contemplated by any forward-looking statements: • legislative, regulatory or legal developments involving transportation, including rail or intermodal transportation, the environment, hazardous materials, taxation, international trade and initiatives to further regulate the rail industry; • the outcome of litigation, claims and other contingent liabilities, including, but not limited to, those related to fuel surcharge, environmental matters, taxes, shipper and rate claims subject to adjudication, personal injuries and occupational illnesses; • changes in domestic or international economic, political or business conditions, including those affecting the transportation industry (such as the impact of industry competition, conditions, performance and consolidation, as well as the impact of international trade agreements and tariffs) and the level of demand for products carried by CSXT; CSX 2022 Form 10-K p.42 CSX CORPORATION PART II • 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, equipment or supply chain; • competition from other modes of freight transportation, such as trucking, and competition and consolidation or financial distress within the transportation industry generally; • the cost of compliance with laws and regulations that differ from expectations as well as costs, penalties and operational and liquidity impacts associated with noncompliance with applicable laws or regulations; • the impact of increased passenger activities in capacity-constrained areas, including potential effects of high speed rail initiatives, or regulatory changes affecting when CSXT can transport freight or service routes; • unanticipated conditions in the financial markets that may affect timely access to capital markets and the cost of capital, as well as management's decisions regarding share repurchases; • changes in fuel prices, surcharges for fuel and the availability of fuel; • the impact of natural gas prices on coal-fired electricity generation; • the impact of global supply and price of seaborne coal on CSX's export coal market; • availability of insurance coverage at commercially reasonable rates or insufficient insurance coverage to cover claims or damages; • the inherent business risks associated with safety and security, including the transportation of hazardous materials or a cybersecurity attack which would threaten the availability and vulnerability of information technology; • adverse economic or operational effects from actual or threatened war or terrorist activities and any governmental response; • loss of key personnel or the inability to hire and retain qualified employees; • labor and benefit costs and labor difficulties, including stoppages affecting either the Company's operations or customers' ability to deliver goods to the Company for shipment; • the Company's success in implementing its strategic, financial and operational initiatives, including acquisitions; • the impact of conditions in the real estate market on the Company's ability to sell assets; • changes in operating conditions and costs, including the impacts of inflation, or commodity concentrations; • the impacts of a public health crisis and any policies or initiatives instituted in response; and • the inherent uncertainty associated with projecting economic and business conditions.
Risk Factors and elsewhere in this report, may cause actual results to differ materially from those contemplated by any forward-looking statements: • legislative, regulatory or legal developments involving transportation, including rail or intermodal transportation, the environment, hazardous materials, taxation, international trade and initiatives to further regulate the rail industry; • the outcome of litigation, claims and other contingent liabilities, including, but not limited to, those related to fuel surcharge, environmental matters, taxes, shipper and rate claims subject to adjudication, personal injuries and occupational illnesses; • changes in domestic or international economic, political or business conditions, including those affecting the transportation industry (such as the impact of industry competition, conditions, performance and consolidation, as well as the impact of international trade agreements and tariffs) and the level of demand for products carried by CSXT; CSX 2023 Form 10-K p.46 CSX CORPORATION PART II • 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, equipment or supply chain; • competition from other modes of freight transportation, such as trucking, and competition and consolidation or financial distress within the transportation industry generally; • the cost of compliance with laws and regulations that differ from expectations as well as costs, penalties and operational and liquidity impacts associated with noncompliance with applicable laws or regulations; • the impact of increased passenger activities in capacity-constrained areas, including potential effects of high speed rail initiatives, or regulatory changes affecting when CSXT can transport freight or service routes; • unanticipated conditions in the financial markets that may affect timely access to capital markets and the cost of capital, as well as management's decisions regarding share repurchases; • changes in fuel prices, surcharges for fuel and the availability of fuel; • the impact of natural gas prices on coal-fired electricity generation; • the impact of global supply and price of seaborne coal on CSX's export coal market; • availability of insurance coverage at commercially reasonable rates or insufficient insurance coverage to cover claims or damages; • the inherent business risks associated with safety and security, including the transportation of hazardous materials or a cybersecurity attack which would threaten the availability and reliability of information technology; • adverse economic or operational effects from actual or threatened war or terrorist activities and any governmental response; • loss of key personnel or the inability to hire and retain qualified employees; • labor and benefit costs and labor difficulties, including stoppages affecting either the Company's operations or customers' ability to deliver goods to the Company for shipment; • the Company's success in implementing its strategic, financial and operational initiatives, including acquisitions; • the impact of conditions in the real estate market on the Company's ability to sell assets; • changes in operating conditions and costs, including the impacts of inflation, or commodity concentrations; • the impacts of a public health crisis and any policies or initiatives instituted in response; and • the inherent uncertainty associated with projecting economic and business conditions.
Acquisition of Quality Carriers, Inc. On July 1, 2021, CSX acquired Quality Carriers, Inc. for a purchase price of $544 million in cash. This transaction was funded by cash on hand. For further details, refer to Note 17, Business Combinations .
On July 1, 2021, CSX acquired Quality Carriers, Inc. for a purchase price of $544 million in cash. This transaction was funded by cash on hand. For further details, refer to Note 17, Business Combinations.
The Company’s contractual obligations primarily consist of long-term debt and related interest payments, purchase commitments, leases, other-post employment benefits and agreements with Conrail. • As of December 31, 2022, the Company had outstanding fixed-rate notes with varying maturities. See Note 10, Debt and Credit Agreements , for additional information related to future debt payments.
The Company’s contractual obligations primarily consist of long-term debt and related interest payments, purchase commitments, leases, other-post employment benefits and agreements with Conrail. • As of December 31, 2023, the Company had outstanding fixed-rate notes with varying maturities. See Note 10, Debt and Credit Agreements , for additional information related to future debt payments.
As this assumption is long term, the annual review may result in less frequent adjustment than other assumptions used in pension accounting. The long-term rate of return on plan assets used by the Company to value its benefit cost for the subsequent plan year was 6.75% in both 2022 and 2021.
As this assumption is long term, the annual review may result in less frequent adjustment than other assumptions used in pension accounting. The long-term rate of return on plan assets used by the Company to value its benefit cost for the subsequent plan year was 6.75% in both 2023 and 2022.
The Company also has a commercial paper program, backed by the revolving credit facility, under which the Company may issue unsecured commercial paper notes up to a maximum aggregate principal amount of $1.0 billion outstanding at any one time. As of December 31, 2022, the Company had no outstanding debt under the commercial paper program.
The Company also has a commercial paper program, backed by the revolving credit facility, under which the Company may issue unsecured commercial paper notes up to a maximum aggregate principal amount of $1.0 billion outstanding at any one time. As of December 31, 2023, the Company had no outstanding debt under the commercial paper program.
In 2022, CSX continued to invest in its business to create long-term value for shareholders. The Company is committed to maintaining and improving its existing infrastructure and to positioning itself for long-term, profitable growth through optimizing network and terminal capacity. Funds used for property additions are further described below.
In 2023, CSX continued to invest in its business to create long-term value for shareholders. The Company is committed to maintaining and improving its existing infrastructure and to positioning itself for long-term, profitable growth through optimizing network and terminal capacity. Funds used for property additions are further described below.
To have a complete picture of a company’s liquidity, its sources and uses of cash, balance sheet and external factors should be reviewed. Significant Cash Flows The following charts highlight the operating, investing and financing components of the change in cash and cash equivalents for operating, investing and financing activities for full years 2022 and 2021.
To have a complete picture of a company’s liquidity, its sources and uses of cash, balance sheet and external factors should be reviewed. Significant Cash Flows The following charts highlight the operating, investing and financing components of the change in cash and cash equivalents for operating, investing and financing activities for full years 2023 and 2022.
New Accounting Pronouncements and Changes in Accounting Policy See Note 1, Nature of Operations and Significant Accounting Policies under the caption “New Accounting Pronouncements and Changes in Accounting Policy.” CSX 2022 Form 10-K p.41 CSX CORPORATION PART II FORWARD-LOOKING STATEMENTS Certain statements in this report and in other materials filed with the Securities and Exchange Commission, as well as information included in oral statements or other written statements made by the Company, are forward-looking statements.
New Accounting Pronouncements and Changes in Accounting Policy See Note 1, Nature of Operations and Significant Accounting Policies under the caption “New Accounting Pronouncements.” CSX 2023 Form 10-K p.45 CSX CORPORATION PART II FORWARD-LOOKING STATEMENTS Certain statements in this report and in other materials filed with the Securities and Exchange Commission, as well as information included in oral statements or other written statements made by the Company, are forward-looking statements.
See Note 8, Commitments and Contingencies , for additional information about future payments related to purchase commitments. • Capital expenditures include investments related to public-private partnerships. These partnership investments are typically for projects that are partially or wholly reimbursed to CSX through government awards or other funding sources.
See Note 8, Commitments and Contingencies , for additional information about future payments related to purchase commitments. • Capital expenditures include investments related to public-private partnerships. These partnership investments are typically for projects tha t are partially or wholly reimbursed to CSX through government awards or other funding sources.
CSX 2022 Form 10-K p.36 CSX CORPORATION PART II CRITICAL ACCOUNTING ESTIMATES 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.
CSX 2023 Form 10-K p.41 CSX CORPORATION PART II CRITICAL ACCOUNTING ESTIMATES 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.
RESULTS OF OPERATIONS The following section generally discusses the Company's results of operations and financial condition for the year ended December 31, 2022, compared to the year ended December 31, 2021.
RESULTS OF OPERATIONS The following section generally discusses the Company's results of operations and financial condition for the year ended December 31, 2023, compared to the year ended December 31, 2022.
A credit rating is not a recommendation to buy, sell or hold securities and may be subject to revision or withdrawal at any time by the assigning rating agency. The cost and availability of unsecured financing are materially affected by CSX's long-term credit ratings. CSX's credit ratings remained stable during 2022.
A credit rating is not a recommendation to buy, sell or hold securities and may be subject to revision or withdrawal at any time by the assigning rating agency. The cost and availability of unsecured financing are materially affected by CSX's long-term credit ratings.
CSX 2022 Form 10-K p.35 CSX CORPORATION PART II CONTRACTUAL OBLIGATIONS, OTHER COMMITMENTS AND OFF-BALANCE SHEET ARRANGEMENTS Contractual Obligations CSX is party to contractual arrangements that obligate the Company to make future cash payments. These obligations impact the Company’s liquidity and capital resource needs.
CSX 2023 Form 10-K p.40 CSX CORPORATION PART II CONTRACTUAL OBLIGATIONS, OTHER COMMITMENTS AND OFF-BALANCE SHEET ARRANGEMENTS Contractual Obligations CSX is party to contractual arrangements that obligate the Company to make future cash payments. These obligations impact the Company’s liquidity and capital resource needs.
The Company ended the year with $2.1 billion of cash, cash equivalents and short-term investments. Total assets as well as total liabilities and shareholders' equity increased $1.4 billion from prior year end.
The Company ended the year with $1.4 billion of cash, cash equivalents and short-term investments. Total assets as well as total liabilities and shareholders' equity increased $496 million from prior year end.
CSX 2022 Form 10-K p.32 CSX CORPORATION PART II CSX is committed to returning cash to shareholders. Capital structure, capital investments and cash distributions, including dividends and share repurchases, are reviewed at least annually by the Board of Directors.
CSX 2023 Form 10-K p.37 CSX CORPORATION PART II CSX is committed to returning cash to shareholders. Capital structure, capital investments and cash distributions, including dividends and share repurchases, are reviewed at least annually by the Board of Directors.
On February 14, 2023, the Company's Board of Directors authorized a 10% increase in the quarterly cash dividend to $0.11 per common share effective March 2023. Management's assessment of market conditions and other factors guides the timing and volume of repurchases. Future share repurchases are expected to be funded by cash on hand, cash generated from operations and debt issuances.
On February 14, 2024, the Company's Board of Directors authorized a 9% increase in the quarterly cash dividend to $0.12 per common share effective March 2024. Management's assessment of market conditions and other factors guides the timing and volume of repurchases. Future share repurchases are expected to be funded by cash on hand, cash generated from operations and debt issuances.
While CSX seeks to give itself flexibility with respect to cash requirements, there can be no assurance that market conditions would permit CSX to sell such securities on acceptable terms at any given time, or at all. In 2022, CSX issued $2.0 billion of long-term debt. See Note 10, Debt and Credit Agreements for more information.
While CSX seeks to give itself flexibility with respect to cash requirements, there can be no assurance that market conditions would permit CSX to sell such securities on acceptable terms at any given time, or at all. In 2023, CSX issued $600 million of long-term debt. See Note 10, Debt and Credit Agreements for more information.
CSX has access to a $1.2 billion five-year unsecured revolving credit facility backed by a diverse syndicate of banks that expires in March 2024. As of December 31, 2022, the Company had no outstanding balances under this facility.
CSX has access to a $1.2 billion five-year unsecured revolving credit facility backed by a diverse syndicate of banks that expires in February 2028. As of December 31, 2023, the Company had no outstanding balances under this facility.
The Company depreciates its railroad assets, including main-line track, locomotives and freight cars, using the group-life method of accounting. Assets depreciated under the group-life method comprise 84% of total fixed assets of $48.1 billion on a gross basis at December 31, 2022.
The Company depreciates its railroad assets, including main-line track, locomotives and freight cars, using the group-life method of accounting. Assets depreciated under the group-life method comprise 84% of total fixed assets of $50.3 billion on a gross basis at December 31, 2023.
CSX 2022 Form 10-K p.31 CSX CORPORATION PART II Sources of Cash and Liquidity The Company has multiple sources of liquidity, including cash generated from operations and financing sources.
CSX 2023 Form 10-K p.36 CSX CORPORATION PART II Sources of Cash and Liquidity The Company has multiple sources of liquidity, including cash generated from operations and financing sources.
Project contribution commitments that are not reimbursable total $80 million as of December 31, 2022. • The Company’s leases include property, equipment, and line leases.
Project contribution commitments that are not reimbursable total $55 million as of December 31, 2023. • The Company’s leases include property, equipment, and line leases.
The 2022 equipment study resulted in an expected increase in annual depreciation expense of approximately $80 million primarily due to deferred losses on assets depreciated using the group-life method.
The 2022 equipment study resulted in an increase in annual depreciation expense of approximately $80 million primarily due to deferred losses on assets depreciated using the group-life method. A depreciation study was not performed in 2023.
The information on the CSX website is not part of this annual report on Form 10-K. CSX 2022 Form 10-K p.43 CSX CORPORATION PART II
The information on the CSX website is not part of this annual report on Form 10-K. CSX 2023 Form 10-K p.47 CSX CORPORATION PART II
The closing price of $600 million was funded through a combination of common stock valued at $422 million and cash totaling $178 million, subject to certain customary purchase price adjustments. Total cash consideration paid to acquire the business includes a $30 million deposit paid in fourth quarter 2020. For further details, refer to Note 17, Business Combinations .
The closing price of $600 million was funded through a combination of common stock valued at $422 million and cash totaling $178 million. Total cash consideration paid to acquire the business includes a $30 million deposit paid in fourth quarter 2020. For further details, refer to Note 17, Business Combinations . Acquisition of Quality Carriers, Inc.
Working capital is considered a measure of a company’s ability to meet its short-term needs. CSX had a working capital surplus of $1.4 billion at December 2022 and $1.6 billion at December 2021, a decrease of $262 million.
Working capital is considered a measure of a company’s ability to meet its short-term needs. CSX had a working capital surplus of $160 million at December 2023 and $1.4 billion at December 2022.
Double-stack - Stacking containers two-high on specially equipped cars. Environmental Protection Agency (“EPA”) - A U.S. government agency that has regulatory authority with respect to environmental law. Federal Railroad Administration ("FRA") - The branch of the DOT that is responsible for developing and enforcing railroad safety regulations, including safety standards for rail infrastructure and equipment.
Environmental Protection Agency (“EPA”) - A U.S. government agency that has regulatory authority with respect to environmental law. Federal Railroad Administration ("FRA") - The branch of the DOT that is responsible for developing and enforcing railroad safety regulations, including safety standards for rail infrastructure and equipment.
The weighted average discount rate used by the Company to value its pension obligations was 5.02% and 2.78% as of December 2022, and December 2021, respectively. As of December 2022, the estimated duration of pension benefits is approximately 10 years.
The weighted average discount rate used by the Company to value its pension obligations was 4.82% and 5.02% as of December 2023, and December 2022, respectively. As of December 2023, the estimated duration of pension benefits is approximately 9 years.
Intermodal - A flexible way of transporting freight over highway, rail and water without being removed from the original transportation equipment, namely a container or trailer. Mainline - The main track thoroughfare, exclusive of terminals, yards, sidings and turnouts.
Intermodal - A flexible way of transporting freight over highway, rail and water without being removed from the original transportation equipment, namely a container or trailer. CSX 2023 Form 10-K p.26 CSX CORPORATION PART II Mainline - The main track thoroughfare, exclusive of terminals, yards, sidings and turnouts.
Future interest payments associated with outstanding debt total $14.8 billion, with $771 million payable in 2023. • Purchase commitments consist of CSX’s long-term locomotive maintenance program and other commitments to purchase technology, communications, railcar maintenance and other services.
Future interest payments associated with outstanding debt total $14.3 billion, with $804 million payable in 2024. • Purchase commitments consist o f CSX’s long-term locomotive maintenance program and other commitments to purchase technology, communications, railcar maintenance and other services.
The following sensitivity analysis illustrates the effects of a 1% change in certain assumptions on the 2023 estimated pension expense: (Dollars in Millions) Pension Expense Discount Rate $ 16 Long-term Rate of Return $ 24 Depreciation Policies for Assets Utilizing the Group-Life Method The depreciable assets of the Company are depreciated using either the group-life or straight-line method of accounting, which are both acceptable depreciation methods in accordance with GAAP.
The following sensitivity analysis illustrates the effects of a 1% change in certain assumptions on the 2024 estimated pension expense: (Dollars in Millions) Pension Expense Discount Rate $ 12 Long-term Rate of Return $ 25 CSX 2023 Form 10-K p.44 CSX CORPORATION PART II Critical Accounting Estimates, continued Depreciation Policies for Assets Utilizing the Group-Life Method The depreciable assets of the Company are depreciated using either the group-life or straight-line method of accounting, which are both acceptable depreciation methods in accordance with GAAP.
The Company is a party to various proceedings related to environmental issues, including administrative and judicial proceedings involving private parties and regulatory agencies. The Company has been identified as a potentially responsible party at approximately 240 environmentally impaired sites.
Environmental Environmental reserves were $154 million and $161 million for 2023 and 2022, respectively. The Company is a party to various proceedings related to environmental issues, including administrative and judicial proceedings involving private parties and regulatory agencies. The Company has been identified as a potentially responsible party at approximately 230 environmentally impaired sites.
As of December 2, 2022, all 12 rail unions at CSX that participated in national bargaining were covered by national agreements with the Class I railroads and CSX-specific agreements that will remain in effect through December 31, 2024.
LABOR AGREEMENTS Approximately 17,700 of the Company's approximately 23,000 employees are members of a rail labor union. As of December 2, 2022, all 12 rail unions at CSX that participated in national bargaining were covered by national agreements with the Class I railroads and CSX-specific agreements that will remain in effect through December 31, 2024.
Sale of Property Rights to the Commonwealth of Virginia On March 26, 2021, the Company entered into a comprehensive agreement to sell certain property rights in three CSX-owned line segments to the Commonwealth of Virginia (“Commonwealth”) over three phases for a total of $525 million. As of December 31, 2022, all three phases are closed.
Sale of Property Rights to the Commonwealth of Virginia On March 26, 2021, the Company entered into a comprehensive agreement to sell certain property rights in three CSX-owned line segments to the Commonwealth of Virginia (“Commonwealth”) over three phases.
CSX 2022 Form 10-K p.22 CSX CORPORATION PART II Pipeline and Hazardous Materials Safety Administration (“PHMSA”) - An agency within the DOT that, together with the FRA, has broad jurisdiction over railroad operating standards and practices, including hazardous materials requirements.
Pipeline and Hazardous Materials Safety Administration (“PHMSA”) - An agency within the DOT that, together with the FRA, has broad jurisdiction over railroad operating standards and practices, including hazardous materials requirements.
FRA Train Accident Rate - Number of FRA-reportable train accidents per million train-miles. CSX 2022 Form 10-K p.30 CSX CORPORATION PART II The Company is committed to continuous improvement in safety and service performance through training, innovation and investment. Training and safety programs are designed to prevent incidents that can adversely impact employees, customers and communities.
CSX 2023 Form 10-K p.35 CSX CORPORATION PART II The Company is committed to continuous improvement in safety and service performance through training, innovation and investment. Training and safety programs are designed to prevent incidents that can adversely impact employees, customers and communities.
Service cost expense is included in labor and fringe on the consolidated income statement and all other components of net pension expense are included in other income - net. Net periodic pension expense in 2022 was a credit of $41 million.
Net periodic pension benefit expense for 2024 is expected to include service cost expense of $23 million. Service cost expense is included in labor and fringe on the consolidated income statement and all other components of net pension expense are included in other income - net. Net periodic pension expense in 2023 was a credit of $1 million.
CSX 2022 Form 10-K p.23 CSX CORPORATION PART II 2022 HIGHLIGHTS • Revenue of $14.9 billion increased $2.3 billion or 19% versus the prior year. • Expenses of $8.8 billion increased $1.9 billion or 27% year over year. • Operating income of $6.0 billion increased $429 million or 8% year over year. • Operating ratio of 59.5% increased 420 basis points from 55.3%. • Earnings per diluted share of $1.95 increased $0.27 or 16% year over year.
CSX 2023 Form 10-K p.27 CSX CORPORATION PART II 2023 HIGHLIGHTS • Revenue of $14.7 billion decreased $196 million or 1% versus the prior year. • Expenses of $9.1 billion increased $266 million or 3% year over year. • Operating income of $5.6 billion decreased $462 million or 8% year over year. • Operating ratio of 62.1% increased 260 basis points from 59.5%. • Earnings per diluted share of $1.85 decreased $0.10 or 5% year over year.
Years Ended Capital Expenditures (Dollars in Millions) 2022 2021 Track $ 1,000 $ 876 Bridges, Signals and Other 673 567 Total Infrastructure 1,673 1,443 Strategic Projects and Commercial Facilities 251 194 Locomotives 104 89 Freight Cars 75 29 Regulatory (including PTC) 30 36 Total Capital Expenditures $ 2,133 1,791 Planned capital investments for 2023 are expected to be approximately $2.3 billion.
Years Ended Capital Expenditures (Dollars in Millions) 2023 2022 Track $ 1,007 $ 1,000 Bridges, Signals and Other 693 673 Total Infrastructure 1,700 1,673 Strategic Projects and Commercial Facilities 304 251 Freight Cars 136 75 Locomotives 117 104 Regulatory (including PTC) 24 30 Total Capital Expenditures $ 2,281 $ 2,133 Planned capital investments for 2024 are expected to be approximately $2.5 billion.
The accounting for these plans is subject to the guidance provided in the Compensation-Retirement Benefits Topic in the ASC. This rule requires that management make certain assumptions relating to the following: • discount rates used to measure future obligations and interest expense; • long-term rate of return on plan assets; and • other assumptions.
This rule requires that management make certain assumptions relating to the following: • discount rates used to measure future obligations and interest expense; • long-term rate of return on plan assets; and • other assumptions.
See Note 9, Employee Benefit Plans , for additional information about future payments under such plans. • Conrail owns rail infrastructure and operates for the joint benefit of CSX and NS. This is known as the shared asset area. Conrail charges fees for right-of-way usage, equipment rentals and transportation, switching and terminal service charges in the shared asset area.
See Note 9, Employee Benefit Plans , for additional information about future payments under such plans. • Conrail owns rail infrastructure and operates for the joint benefit of CSX and Norfolk Southern Corporation ("NS"). This is known as the shared asset area.
Fiscal Years 2022 2021 Improvement/ (Deterioration) Operations Performance Train Velocity (Miles per hour) (a) 16.1 17.9 (10) % Dwell (Hours) (a) 11.3 10.7 (6) % Cars Online (a) 138,074 131,564 (5) % On-Time Originations (a) 60 % 75 % (20) % On-Time Arrivals (a) 52 % 66 % (21) % Carload Trip Plan Performance (a) 64 % 69 % (7) % Intermodal Trip Plan Performance (a) 90 % 87 % 3 % Fuel Efficiency 0.99 0.96 (3) % Revenue Ton-Miles (Billions) Merchandise 126.0 126.3 — % Coal 33.8 35.4 (5) % Intermodal 30.0 31.5 (5) % Total Revenue Ton-Miles 189.8 193.2 (2) % Total Gross Ton-Miles (Billions) 375.5 376.0 — % Safety FRA Personal Injury Frequency Index (a) 0.96 0.96 — % FRA Train Accident Rate (a) 3.18 3.22 1 % (a) These metrics do not include results from the network acquired from Pan Am.
Fiscal Years 2023 2022 Improvement/ (Deterioration) Operations Performance (a) Train Velocity (Miles per hour) 18.0 16.1 12 % Dwell (Hours) 9.4 11.3 17 % Cars Online 125,580 138,074 9 % On-Time Originations 77 % 60 % 28 % On-Time Arrivals 71 % 52 % 37 % Carload Trip Plan Performance 84 % 64 % 31 % Intermodal Trip Plan Performance 95 % 90 % 6 % Fuel Efficiency 1.02 0.99 (3) % Revenue Ton-Miles (Billions) Merchandise 128.0 126.0 2 % Coal 37.4 33.8 11 % Intermodal 28.3 30.0 (6) % Total Revenue Ton-Miles 193.7 189.8 2 % Total Gross Ton-Miles (Billions) 381.3 375.5 2 % Safety (b) FRA Personal Injury Frequency Index 0.89 1.01 12 % FRA Train Accident Rate 3.32 3.37 1 % (a) Beginning second quarter 2023, all operations performance metrics include results from the network acquired from Pan Am.
Free cash flow before dividends decreased $101 million year-over-year to $3.7 billion primarily due to higher property additions and lower proceeds and advances from property dispositions, mostly attributable to the sale of property rights to the Commonwealth of Virginia. These decreases were partially offset by higher net cash provided by operating activities.
Free cash flow before dividends decreased $412 million year-over-year to $3.3 billion primarily due to lower proceeds and advances from property dispositions, mostly attributable to the sale of property rights to the Commonwealth of Virginia in the prior year, as well as higher property additions and less cash from operating activities.
Cars Online - Average number of active freight rail cars on lines operated by CSX, excluding rail cars that are being repaired, in storage, those that have been sold, or private cars dwelling at a customer location more than one day. On-Time Originations - Percent of scheduled road trains that depart the origin yard on-time or ahead of schedule.
Dwell - Average amount of time in hours between car arrival to and departure from the yard. Cars Online - Average number of active freight rail cars on lines operated by CSX, excluding rail cars that are being repaired, in storage, those that have been sold, or private cars dwelling at a customer location more than one day.
Other Assumptions The calculations made by the actuaries also include assumptions relating to mortality rates, turnover, retirement age and salary inflation rates. These assumptions are based upon historical data, recent plan experience and industry trends and are determined by management.
Other Assumptions The calculations made by the actuaries also include assumptions relating to mortality rates, turnover, retirement age and salary inflation rates. These assumptions are based upon historical data, recent plan experience and industry trends and are determined by management. 2024 Estimated Pension Expense Net periodic pension benefit expense for 2024 is expected to be a credit of $22 million.
The net decrease in the expected credit is primarily due to impacts from recent unfavorable pension asset experience, partially offset by the increase in discount rates.
The net increase in the expected credit is primarily due to impacts from recent favorable pension asset experience.
If CSX's credit ratings were to decline to below investment-grade levels, the Company could experience significant increases in its interest cost for new debt. In addition, a decline in CSX’s credit ratings to below investment grade levels could adversely affect the market’s demand, and thus the Company’s ability to readily issue new debt.
In addition, a decline in CSX’s credit ratings to below investment grade levels could adversely affect the market’s demand, and thus the Company’s ability to readily issue new debt. The Company is committed to maintaining an investment-grade credit profile.
CSX 2022 Form 10-K p.40 CSX CORPORATION PART II Critical Accounting Estimates, continued The STB requires depreciation studies be performed every three years for equipment assets (e.g., locomotives and freight cars) and every six years for road and track assets (e.g., bridges, signals, rail, ties, and ballast).
The STB requires depreciation studies be performed every three years for equipment assets (e.g., locomotives and freight cars) and every six years for road and track assets (e.g., bridges, signals, rail, ties, and ballast).
CSX 2022 Form 10-K p.38 CSX CORPORATION PART II Critical Accounting Estimates, continued Discount Rates Discount rates affect the amount of liability recorded and the service and interest cost components of pension expense.
Critical Accounting Estimates, continued Discount Rates Discount rates affect the amount of liability recorded and the service and interest cost components of pension expense.
Long-term Rate of Return on Plan Assets The expected long-term average rate of return on plan assets reflects the average rate of earnings expected on the funds invested, or to be invested, to provide for benefits included in the projected benefit obligation.
CSX 2023 Form 10-K p.43 CSX CORPORATION PART II Critical Accounting Estimates, continued Long-term Rate of Return on Plan Assets The expected long-term average rate of return on plan assets reflects the average rate of earnings expected on the funds invested, or to be invested, to provide for benefits included in the projected benefit obligation.
Other Income - Net Other Income - Net includes investment gains, losses and interest income, as well as components of net periodic pension and post-retirement benefit cost and other non-operating activities. Other income increased $54 million primarily due to higher interest income, driven by increased rates, and an increase in net pension benefit credits during 2022.
Other Income - Net Other Income - Net includes investment gains, losses, interest income, components of net periodic pension and post-retirement benefit cost and other non-operating activities. Other income increased $6 million primarily due to higher interest income and other non-significant items, partially offset by a decrease in net pension benefit credits.
Descriptions of each expense category as well as significant year-over-year changes are described below. Labor and Fringe expenses include employee wages and related payroll taxes, health and welfare costs, pension, other post-retirement benefits and incentive compensation.
CSX 2023 Form 10-K p.30 CSX CORPORATION PART II Expense In 2023, total expenses increased $266 million, or 3%, compared to prior year. Descriptions of each expense category as well as significant year-over-year changes are described below. Labor and Fringe expenses include employee wages and related payroll taxes, health and welfare costs, pension, other post-retirement benefits and incentive compensation.
Years Ended (Dollars in millions) 2022 2021 Gains $ 144 $ 349 Proceeds 125 400 CSX 2022 Form 10-K p.34 CSX CORPORATION PART II Credit Ratings Credit ratings reflect an independent agency’s judgment on the likelihood that a borrower will repay a debt obligation at maturity.
CSX 2023 Form 10-K p.39 CSX CORPORATION PART II Credit Ratings Credit ratings reflect an independent agency’s judgment on the likelihood that a borrower will repay a debt obligation at maturity.
Free Cash Flow Management believes that free cash flow is useful to investors as it is important in evaluating the Company’s financial performance. More specifically, free cash flow measures cash generated by the business after reinvestment. This measure represents cash available for both equity and bond investors to be used for dividends, share repurchases or principal reduction on outstanding debt.
More specifically, free cash flow measures cash generated by the business after reinvestment. This measure represents cash available for both equity and bond investors to be used for dividends, share repurchases or principal reduction on outstanding debt. Free cash flow is calculated by using net cash from operations and adjusting for property additions and proceeds from property dispositions.
CSX 2022 Form 10-K p.33 CSX CORPORATION PART II 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.
These decreases were partially offset by cash earned from operations of $5.5 billion and $600 million in cash received from debt issued. CSX 2023 Form 10-K p.38 CSX CORPORATION PART II 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.
Cash used in financing activities was $3.8 billion, which represents a decrease in net spend of $343 million from the prior year mostly driven by the issuance of long-term debt as well as lower repayments of debt, partially offset by higher share repurchases.
Cash used in financing activities was $3.9 billion, which represents an increase in net spend of $98 million from the prior year primarily due to lower proceeds from the issuance of long-term debt, partially offset by lower share repurchases.
Gross Ton-Miles (GTM's) - The movement of one ton of train weight over one mile. GTM's are calculated by multiplying total train weight by distance the train moved. Total train weight is comprised of the weight of the freight cars and their contents. FRA Personal Injury Frequency Index - Number of FRA-reportable injuries per 200,000 man-hours.
Total train weight is comprised of the weight of the freight cars and their contents. FRA Personal Injury 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.
There were no significant changes to the company's asset lives as a result of the 2022 and 2020 studies. For additional details, including a more detailed description of our related accounting policies, see Note 6, Properties, in the consolidated financial statements.
For additional details, including a more detailed description of our related accounting policies, see Note 6, Properties, in the consolidated financial statements.
Significant estimates using management judgment are made for the following areas: • personal injury and environmental reserves; • pension plan accounting; • depreciation policies for assets under the group-life method; and • goodwill and other intangible assets.
Significant estimates using management judgment are made for the following areas: • personal injury and environmental reserves; • pension plan accounting; and • depreciation policies for assets under the group-life method Personal Injury and Environmental Reserves Personal Injury Personal Injury reserves of $128 million and $126 million for 2023 and 2022, respectively, represent liabilities for employee work-related and third-party injuries.
The methodology used by the actuary includes a development factor to reflect growth or reduction in the value of these personal injury claims. It is based largely on CSXT's historical claims and settlement experience. Actual results may vary from estimates due to the number, type and severity of the injury, costs of medical treatments and uncertainties in litigation.
CSXT retains an independent actuary to assist management in assessing the value of personal injury claims. The methodology used by the actuary includes a development factor to reflect growth or reduction in the value of these personal injury claims. It is based largely on CSXT's historical claims and settlement experience.
Fuel expense includes locomotive diesel fuel as well as non-locomotive fuel. This expense is largely driven by the market price and locomotive consumption of diesel fuel. Fuel expense increased $713 million primarily due to a 66% price increase in locomotive fuel prices and the inclusion of non-locomotive fuel used for trucking.
Depreciation expense increased $111 million primarily due to the impacts of a 2022 equipment depreciation study as well as a larger net asset base. Fuel expense includes locomotive diesel fuel as well as non-locomotive fuel. This expense is largely driven by the market price and locomotive consumption of diesel fuel.
Intermodal Trip Plan Performance - Percent of measured containers destined for a customer that arrive at or ahead of the original estimated time of arrival, notification or interchange (as applicable). Fuel Efficiency - Gallons of locomotive fuel per 1,000 gross ton-miles. Revenue Ton-Miles (RTM's) - The movement of one revenue-producing ton of freight over a distance of one mile.
Intermodal Trip Plan Performance - Percent of measured containers (excludes port shipments along with empty containers and other non-scheduled service) destined for a customer that complete their scheduled plan at or ahead of the original estimated time of arrival, notification or interchange (as applicab le). Fuel Efficiency - Gallons of locomotive fuel per 1,000 gross ton-miles.
Related to this transaction, CSX recognized gains of $144 million in 2022 and $349 million in 2021. CSX 2022 Form 10-K p.27 CSX CORPORATION PART II Interest Expense Interest Expense includes interest on long-term debt, equipment obligations and finance leases. Interest expense increased $20 million primarily as a result of higher average debt balances, partially offset by increased capitalized interest.
CSX 2023 Form 10-K p.31 CSX CORPORATION PART II Interest Expense Interest Expense includes interest on long-term debt and related fair value hedges, equipment obligations and finance leases. Interest expense increased $67 million primarily as a result of higher average debt balances and higher effective interest rates.
Free cash flow is calculated by using net cash from operations and adjusting for property additions and proceeds from property dispositions. This measure should be considered in addition to, rather than a substitute for, cash provided by operating activities.
This measure should be considered in addition to, rather than a substitute for, cash provided by operating activities.
These metrics will be updated to include the Pan Am network results as data becomes available. Key Performance Measures Definitions: Train Velocity - Average train speed between origin and destination in miles per hour (does not include locals, yard jobs, work trains or passenger trains).
Key Performance Measures Definitions: Train Velocity - Average train speed between origin and destination in miles per hour (does not include locals, yard jobs, work trains or passenger trains). Train velocity measures actual train miles and times of a train movement on CSX's network.
Minerals - Increased due to higher shipments of aggregates driven by construction demand. Forest Products – Decreased due to lower shipments of pulpboard and building products. Metals and Equipment - Decreased primarily due to lower steel shipments, partially offset by higher scrap shipments and equipment moves. Fertilizers - Decreased due to declines in short-haul and long-haul phosphate shipments.
Forest Products – Decreased primarily due to lower shipments of pulpboard, paper, and lumber, partially offset by higher shipments of other building products. Fertilizers - Decreased due to declines in short-haul shipments, which were partially offset by increases in long-haul potash and phosphate shipments.
This category of expenses also includes expenses for short-term and long-term leases of locomotives, railcars, containers, tractors and trailers, offices and other rentals. These expenses increased $32 million primarily due to increased car hire costs as well as the addition of Quality Carriers' costs.
This category of expenses also includes expenses for short-term and long-term leases of locomotives, railcars, containers, tractors and trailers, offices and other rentals. These expenses decreased $42 million primarily due to lower car hire costs from improved car cycle times, partially offset by costs related to higher automotive volume.
These increases were partially offset by debt repayments of $186 million. Total shareholders' equity decreased $875 million from prior year end primarily driven by share repurchases of $4.7 billion and dividends paid of $852 million, partially offset by net earnings of $4.2 billion and $422 million of common stock issued to acquire Pan Am.
These increases were partially offset by payouts of accrued retroactive wages and bonuses totaling $238 million and debt repayments of $153 million. Total shareholders' equity decreased $492 million from prior year end primarily driven by share repurchases of $3.5 billion and dividends paid of $882 million, partially offset by net earnings of $3.7 billion.
On-Time Arrivals - Percent of scheduled road trains that arrive at the destination yard on-time to within two hours of scheduled arrival. Carload Trip Plan Performance - Percent of measured cars destined for a customer that arrive at or ahead of the original estimated time of arrival, notification or interchange (as applicable).
Carload Trip Plan Performance - Percent of measured cars (excludes unit trains and other non-scheduled service as well as empty automotive shipments) destined for a customer that complete their scheduled plan at or ahead of the original estimated time of arrival or interchange (as applicable).
Net cash used in investing activities was $2.1 billion, an increase in net spend of $254 million from the prior year primarily as a result of higher property additions and lower proceeds and advances from property dispositions, partially offset by decreased costs for business acquisitions.
This decrease was partially offset by the impact of $381 million of postponed federal estimated tax payments mentioned above. Net cash used in investing activities was $2.3 billion, an increase in net spend of $156 million from the prior year primarily due to lower proceeds from property dispositions and higher property additions, partially offset by decreased acquisition spending.
For employees hired prior to 2003, the plans provide eligible employees with retirement benefits based predominantly on years of service and compensation rates near retirement. For employees hired between 2003 and 2019, benefits are determined based on a cash balance formula, which provides benefits by utilizing interest and pay credits based upon age, service and compensation.
For employees hired between 2003 and 2019, benefits are determined based on a cash balance formula, which provides benefits by utilizing interest and pay credits based upon age, service and compensation. Beginning in 2020, the CSX Pension Plan was closed to new participants. As of December 2023, the projected benefit obligation for the Company’s pension plans was $2.3 billion .
Recent experience with depreciation studies has resulted in changes to accumulated depreciation and depreciation rates that did not materially affect the Company's depreciation expense of $1.4 billion in both 2021 and 2020. A 1% change in the average estimated useful life of all group-life assets would result in an approximate $12 million change to the Company’s annual depreciation expense.
A 1% change in the average estimated useful life of all group-life assets would result in an approximate $13 million change to the Company’s annual depreciation expense. There were no significant changes to the Company's asset lives as a result of the 2022 and 2020 studies.
From a safety perspective, the FRA personal injury index was flat compared to prior year while the train-accident rate improved by 1%. Safety remains a top priority at CSX, and the Company is committed to reducing risk and enhancing the overall safety of its employees, customers and communities in which the Company operates.
From a safety perspective, the FRA personal injury index improved by 12% and the train-accident rate improved by 1% compared to prior year. Safety is a guiding principle at CSX and the Company remains focused on its strong safety culture, including instilling the importance of safety in new hires.
Depreciation expense increased $80 million primarily due to a larger net asset base, which includes Quality Carriers' assets, as well as the impacts of a 2022 equipment depreciation study. Equipment and Other Rents expense includes rent paid for freight cars owned by other railroads or private companies, net of rents received by CSXT for use of its equipment.
Fuel expense decreased $249 million primarily due to a 19% decrease in locomotive fuel prices, partially offset by higher fuel consumption. Equipment and Other Rents expense includes rent paid for freight cars owned by other railroads or private companies, net of rents received by CSXT for use of its equipment.
Of the 2023 investment, approximately 75% is expected to be used to sustain the core infrastructure and operating equipment. The remaining amounts will be used to promote profitable growth, including projects supporting service enhancements and productivity initiatives. CSX intends to fund capital investments primarily through cash generated from operations.
Spending to sustain core infrastructure with a focus on safety and reliability will be a top priority. In addition, management is committed to investments that promote profitable growth, including projects supporting service enhancements and productivity initiatives, including investments in locomotives and freight cars. CSX intends to fund capital investments primarily through cash generated from operations.
For additional details, including a description of our related accounting policies, see Note 5, Casualty, Environmental and Other Reserves, in the consolidated financial statements. Environmental Environmental reserves were $161 million and $108 million for 2022 and 2021, respectively.
Actual results may vary from estimates due to the number, type and severity of the injury, costs of medical treatments and uncertainties in litigation. For additional details, including a description of our related accounting policies, see Note 5, Casualty, Environmental and Other Reserves, in the consolidated financial statements.
CSX 2022 Form 10-K p.28 CSX CORPORATION PART II NON-GAAP MEASURES (Unaudited) CSX reports its financial results in accordance with United States generally accepted accounting principles ("GAAP").
Average shares outstanding was lower as a result of share repurchase activity during the year and had a favorable impact on earnings per diluted share. CSX 2023 Form 10-K p.32 CSX CORPORATION PART II NON-GAAP MEASURES (Unaudited) CSX reports its financial results in accordance with United States generally accepted accounting principles ("GAAP").
Car hire costs increased due to higher days per load and inflation, partially offset by lower volume. Gains on Property Dispositions decreased to $238 million in 2022 from $454 million in 2021 primarily due to lower gains from the sale of property rights to the Commonwealth of Virginia.
Gains on Property Dispositions decreased to $34 million in 2023 from $238 million in 2022 primarily due to the inclusion of $144 million of gains in 2022 from the sale of property rights to the Commonwealth of Virginia.
As of both December 2022 and December 2021, S&P's long-term rating on CSX was BBB+ (Stable), and Moody's was Baa1 (Stable). Ratings of BBB- and Baa3 or better by S&P and Moody’s, respectively, reflect ratings on debt obligations that fall within a band of credit quality considered to be investment grade.
Ratings of BBB- and Baa3 or better by S&P and Moody’s, respectively, reflect ratings on debt obligations that fall within a band of credit quality considered to be investment grade. If CSX's credit ratings were to decline to below investment-grade levels, the Company could experience significant increases in its interest cost for new debt.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

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Biggest changeFinancial Statements and Supplementary Data CONSOLIDATED CASH FLOW STATEMENTS (Dollars in Millions) Years Ended 2022 2021 2020 OPERATING ACTIVITIES Net Earnings $ 4,166 $ 3,781 $ 2,765 Adjustments to Reconcile Net Earnings to Net Cash Provided by Operating Activities: Depreciation and Amortization 1,500 1,420 1,383 Deferred Income Taxes 117 167 180 Gains on Property Dispositions (238) (454) (35) Other Operating Activities (17) 12 (32) Changes in Operating Assets and Liabilities: Accounts Receivable (101) (141) 83 Other Current Assets (22) (25) (75) Accounts Payable 140 128 (20) Income and Other Taxes Payable (39) 72 39 Other Current Liabilities 113 139 (25) Net Cash Provided by Operating Activities 5,619 5,099 4,263 INVESTING ACTIVITIES Property Additions (2,133) (1,791) (1,626) Purchases of Short-term Investments (59) (75) (426) Proceeds from Sales of Short-term Investments 9 5 1,424 Proceeds and Advances from Property Dispositions 246 529 56 Business Acquisition, Net of Cash Acquired (Note 17) (227) (541) — Other Investing Activities 33 (4) (77) Net Cash Used in Investing Activities (2,131) (1,877) (649) FINANCING ACTIVITIES Shares Repurchased (4,731) (2,886) (867) Dividends Paid (852) (839) (797) Long-term Debt Repaid (186) (426) (745) Long-term Debt Issued (Note 10) 2,000 — 1,000 Other Financing Activities — 39 (34) Net Cash Used in Financing Activities (3,769) (4,112) (1,443) Net (Decrease) Increase in Cash and Cash Equivalents (281) (890) 2,171 CASH AND CASH EQUIVALENTS Cash and Cash Equivalents at Beginning of Period 2,239 3,129 958 Cash and Cash Equivalents at End of Period $ 1,958 $ 2,239 $ 3,129 SUPPLEMENTAL CASH FLOW INFORMATION Issuance of Common Stock as Consideration for Acquisition $ 422 — — Interest Paid - Net of Amounts Capitalized $ 729 $ 718 $ 750 Income Taxes Paid $ 1,167 $ 931 $ 664 See accompanying Notes to Consolidated Financial Statements.
Biggest changeFinancial Statements and Supplementary Data CONSOLIDATED CASH FLOW STATEMENTS (Dollars in Millions) Years Ended 2023 2022 2021 OPERATING ACTIVITIES Net Earnings $ 3,715 $ 4,166 $ 3,781 Adjustments to Reconcile Net Earnings to Net Cash Provided by Operating Activities: Depreciation and Amortization 1,611 1,500 1,420 Deferred Income Taxes 140 117 167 Gains on Property Dispositions (34) (238) (454) Other Operating Activities (5) (17) 12 Changes in Operating Assets and Liabilities: Accounts Receivable (51) (101) (141) Other Current Assets (120) (22) (25) Accounts Payable 83 140 128 Income and Other Taxes Payable 431 (39) 72 Other Current Liabilities (221) 113 139 Net Cash Provided by Operating Activities 5,549 5,619 5,099 INVESTING ACTIVITIES Property Additions (2,281) (2,133) (1,791) Purchases of Short-term Investments (104) (59) (75) Proceeds from Sales of Short-term Investments 153 9 5 Proceeds and Advances from Property Dispositions 52 246 529 Business Acquisition, Net of Cash Acquired (Note 17) (31) (227) (541) Other Investing Activities (76) 33 (4) Net Cash Used in Investing Activities (2,287) (2,131) (1,877) FINANCING ACTIVITIES Shares Repurchased (3,482) (4,731) (2,886) Dividends Paid (882) (852) (839) Long-term Debt Repaid (153) (186) (426) Long-term Debt Issued (Note 10) 600 2,000 — Other Financing Activities 50 — 39 Net Cash Used in Financing Activities (3,867) (3,769) (4,112) Net Decrease in Cash and Cash Equivalents (605) (281) (890) CASH AND CASH EQUIVALENTS Cash and Cash Equivalents at Beginning of Period 1,958 2,239 3,129 Cash and Cash Equivalents at End of Period $ 1,353 $ 1,958 $ 2,239 SUPPLEMENTAL CASH FLOW INFORMATION Issuance of Common Stock as Consideration for Acquisition $ — $ 422 $ — Interest Paid - Net of Amounts Capitalized $ 806 $ 729 $ 718 Income Taxes Paid $ 630 $ 1,167 $ 931 See accompanying Notes to Consolidated Financial Statements.
To test the estimated useful lives and salvage values of the Company’s group-life assets, we performed audit procedures that included, among others: obtaining the periodic depreciation studies and annual data reviews performed by the Company’s third-party specialist and reviewed by management; assessing the completeness and accuracy of the data provided by management to the third-party specialist; and including a specialist on our team to evaluate the methods used by the third-party specialist and reviewed by management in determining the estimated useful lives and salvage values of assets resulting from the depreciation studies and any changes to the estimated useful lives and salvage values, if any, resulting from the annual data reviews.
To test the estimated useful lives and salvage values of the Company’s group-life assets, we performed audit procedures that included, among others: obtaining the periodic depreciation studies and annual data reviews performed by the Company’s third-party specialist and reviewed by management; assessing the completeness and accuracy of the data provided by management to the third-party specialist; and including a specialist on our team to evaluate the methods used by the third-party specialist and reviewed by management in determining if any changes were necessary to the estimated useful lives and salvage values resulting from the annual data reviews.
Financial Statements and Supplementary Data REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Shareholders and the Board of Directors of CSX Corporation Opinion on the Financial Statements We have audited the accompanying consolidated balance sheets of CSX Corporation (the Company) as of December 31, 2022 and 2021, the related consolidated statements of income, comprehensive income, cash flows, and changes in shareholders’ equity for each of the three years in the period ended December 31, 2022, and the related notes (collectively referred to as the “consolidated financial statements”).
Financial Statements and Supplementary Data REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM To the Shareholders and the Board of Directors of CSX Corporation Opinion on the Financial Statements We have audited the accompanying consolidated balance sheets of CSX Corporation (the Company) as of December 31, 2023 and 2022, the related consolidated statements of income, comprehensive income, changes in shareholders’ equity and cash flows for each of the three years in the period ended December 31, 2023 and the related notes (collectively referred to as the “consolidated financial statements”).
In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2022 and 2021, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2022, in conformity with U.S. generally accepted accounting principles.
In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2023 and 2022, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2023, in conformity with U.S. generally accepted accounting principles.
We also have audited, in accordance with standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company’s internal control over financial reporting as of December 31, 2022, based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework), and our report dated February 15, 2023 expressed an unqualified opinion thereon.
We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company’s internal control over financial reporting as of December 31, 2023, based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework), and our report dated February 14, 2024 expressed an unqualified opinion thereon.
Depreciation studies are performed every three years for equipment assets and every six years for road and track assets. In years when depreciation studies are not performed, annual data reviews are conducted by a third-party specialist and analyzed by the Company’s management to review the asset service lives. A depreciation study was performed in 2022 for equipment assets.
Depreciation studies are performed every three years for equipment assets and every six years for road and track assets. In years when depreciation studies are not performed, annual data reviews are conducted by a third-party specialist and analyzed by the Company’s management to review the asset service lives.
In 2020, the Company executed two forward starting interest rate swaps with a notional value of $250 million for an aggregate notional value of $500 million. These swaps were effected to hedge the benchmark interest rate associated with future interest payments related to the anticipated refinancing of notes due in 2027.
In 2020, the Company executed two forward starting interest rate swaps with an aggregate notional value of $500 million. These swaps were effected to hedge the benchmark interest rate associated with future interest payments related to the anticipated refinancing of notes due in 2027.
The following information, together with information included in Note 10, Debt and Credit Agreements , describes the key aspects of such contracts and the related market risk to CSX. Changes in interest rates could impact the fair value of the Company's forward starting interest rate swap.
The following information, together with information included in Note 10, Debt and Credit Agreements , and Note 13, Fair Value Measurements , describes the key aspects of such contracts and the related market risk to CSX. Changes in interest rates could impact the fair value of the Company's forward starting interest rate swaps.
We compared the methods used by management to those used throughout the industry and within other depreciation studies. We assessed the historical accuracy of management’s estimates via retrospective review and independently calculated the current year depreciation rates.
We compared the assumptions used by management to those used throughout the industry and within other depreciation studies. We assessed the historical accuracy of management’s estimates via retrospective review and independently recalculated the current year depreciation rates.
CSX 2022 Form 10-K p.46 CSX CORPORATION PART II Item 8. Financial Statements and Supplementary Data REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM, continued Depreciation Policies for Assets Utilizing the Group-Life Method Description of the Matter As of December 31, 2022, assets depreciated under the group-life method comprised 84% of total gross fixed assets of $48.1 billion.
CSX 2023 Form 10-K p.50 CSX CORPORATION PART II Item 8. Financial Statements and Supplementary Data REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM, continued Depreciation Policies for Assets Utilizing the Group-Life Method Description of the Matter As of December 31, 2023, assets depreciated under the group-life method comprised 84% of total gross fixed assets of $50.3 billion.
CSX 2022 Form 10-K p.48 CSX CORPORATION PART II Item 8.
CSX 2023 Form 10-K p.48 CSX CORPORATION PART II Item 8.
Financial Statements and Supplementary Data INDEX TO CONSOLIDATED FINANCIAL STATEMENTS Page Report of Independent Registered Public Accounting Firm (PCAOB ID: 42) 46 CSX Corporation Consolidated Financial Statements and Notes to Consolidated Financial Statements Herewith: Consolidated Income Statements for the Years Ended: 48 December 31, 2022 December 31, 2021 December 31, 2020 Consolidated Comprehensive Income Statements for the Years Ended: 49 December 31, 2022 December 31, 2021 December 31, 2020 Consolidated Balance Sheets as of: 50 December 31, 2022 December 31, 2021 Consolidated Cash Flow Statements for Years Ended: 51 December 31, 2022 December 31, 2021 December 31, 2020 Consolidated Statements of Changes in Shareholders' Equity: 52 December 31, 2022 December 31, 2021 December 31, 2020 Notes to Consolidated Financial Statements 53 CSX 2022 Form 10-K p.45 CSX CORPORATION PART II Item 8.
Financial Statements and Supplementary Data INDEX TO CONSOLIDATED FINANCIAL STATEMENTS Page Report of Independent Registered Public Accounting Firm (PCAOB ID: 42) 50 CSX Corporation Consolidated Financial Statements and Notes to Consolidated Financial Statements Herewith: Consolidated Income Statements for the Years Ended: 52 December 31, 2023 December 31, 2022 December 31, 2021 Consolidated Comprehensive Income Statements for the Years Ended: 53 December 31, 2023 December 31, 2022 December 31, 2021 Consolidated Balance Sheets as of: 54 December 31, 2023 December 31, 2022 Consolidated Cash Flow Statements for Years Ended: 55 December 31, 2023 December 31, 2022 December 31, 2021 Consolidated Statements of Changes in Shareholders' Equity: 56 December 31, 2023 December 31, 2022 December 31, 2021 Notes to Consolidated Financial Statements 57 CSX 2023 Form 10-K p.49 CSX CORPORATION PART II Item 8.
Financial Statements and Supplementary Data CONSOLIDATED COMPREHENSIVE INCOME STATEMENTS (Dollars in Millions) Years Ended 2022 2021 2020 Net Earnings $ 4,166 $ 3,781 $ 2,765 Other Comprehensive Income (Loss) - Net of Tax: Pension and Other Post-Employment Benefits (66) 167 21 Interest Rate Derivatives 80 8 62 Other 6 15 (6) Total Other Comprehensive Income (Loss) (Note 16) 20 190 77 Comprehensive Earnings $ 4,186 $ 3,971 $ 2,842 See accompanying Notes to Consolidated Financial Statements.
Financial Statements and Supplementary Data CONSOLIDATED COMPREHENSIVE INCOME STATEMENTS (Dollars in Millions) Years Ended 2023 2022 2021 Net Earnings $ 3,715 $ 4,166 $ 3,781 Other Comprehensive Income (Loss) - Net of Tax: Pension and Other Post-Employment Benefits 74 (66) 167 Interest Rate Derivatives — 80 8 Other 2 6 15 Total Other Comprehensive Income (Note 16) 76 20 190 Comprehensive Earnings $ 3,791 $ 4,186 $ 3,971 See accompanying Notes to Consolidated Financial Statements.
We have served as the Company’s auditor since 1981. /s/ Ernst & Young LLP Jacksonville, Florida February 15, 2023 CSX 2022 Form 10-K p.47 CSX CORPORATION PART II Item 8.
We have served as the Company’s auditor since 1981. /s/ Ernst & Young LLP Jacksonville, Florida February 14, 2024 CSX 2023 Form 10-K p.51 CSX CORPORATION PART II Item 8.
For example, we tested controls over management’s review of the depreciation study for equipment assets and review of depreciation expense and estimated useful lives. We also tested controls over management’s annual data review of asset activity and assumptions that could impact the estimated useful lives determined in the most recent depreciation study of road and track assets.
For example, we tested controls over management’s review of asset activity that could impact the estimated useful lives determined in the most recent depreciation studies of equipment and road and track assets.
As of December 31, 2022, the potential change in fair value resulting from a hypothetical 10% change in interest rates would not be material. Changes in interest rates could impact the fair value of the Company's fixed-to-floating interest rate swaps. In 2022, CSX entered into five separate fixed-to-floating interest rate swaps classified as fair value hedges.
As of December 31, 2023, the potential change in fair value of forward starting interest rate swaps resulting from a hypothetical 10% change in interest rates would not be material. Changes in interest rates could impact the fair value of the Company's fixed-to-floating interest rate swaps.
Financial Statements and Supplementary Data CONSOLIDATED INCOME STATEMENTS (Dollars in Millions, Except Per Share Amounts) Years Ended 2022 2021 2020 Revenue $ 14,853 $ 12,522 $ 10,583 Expense Labor and Fringe 2,861 2,550 2,275 Purchased Services and Other 2,685 2,135 1,719 Fuel 1,626 913 541 Depreciation and Amortization 1,500 1,420 1,383 Equipment and Other Rents 396 364 338 Gains on Property Dispositions (238) (454) (35) Total Expense 8,830 6,928 6,221 Operating Income 6,023 5,594 4,362 Interest Expense (742) (722) (754) Other Income - Net (Note 14) 133 79 19 Earnings Before Income Taxes 5,414 4,951 3,627 Income Tax Expense (Note 12) (1,248) (1,170) (862) Net Earnings $ 4,166 $ 3,781 $ 2,765 Per Common Share (Note 2) Net Earnings Per Share Basic $ 1.95 $ 1.68 $ 1.20 Assuming Dilution $ 1.95 $ 1.68 $ 1.20 Average Common Shares Outstanding (Millions) Basic 2,136 2,250 2,300 Assuming Dilution 2,141 2,255 2,305 See accompanying Notes to Consolidated Financial Statements.
Financial Statements and Supplementary Data CONSOLIDATED INCOME STATEMENTS (Dollars in Millions, Except Per Share Amounts) Years Ended 2023 2022 2021 Revenue $ 14,657 $ 14,853 $ 12,522 Expense Labor and Fringe 3,024 2,861 2,550 Purchased Services and Other 2,764 2,685 2,135 Depreciation and Amortization 1,611 1,500 1,420 Fuel 1,377 1,626 913 Equipment and Other Rents 354 396 364 Gains on Property Dispositions (34) (238) (454) Total Expense 9,096 8,830 6,928 Operating Income 5,561 6,023 5,594 Interest Expense (809) (742) (722) Other Income - Net (Note 14) 139 133 79 Earnings Before Income Taxes 4,891 5,414 4,951 Income Tax Expense (Note 12) (1,176) (1,248) (1,170) Net Earnings $ 3,715 $ 4,166 $ 3,781 Per Common Share (Note 2) Net Earnings Per Share Basic $ 1.85 $ 1.95 $ 1.68 Assuming Dilution $ 1.85 $ 1.95 $ 1.68 Average Common Shares Outstanding (Millions) Basic 2,008 2,136 2,250 Assuming Dilution 2,013 2,141 2,255 See accompanying Notes to Consolidated Financial Statements.
CSX 2022 Form 10-K p.49 CSX CORPORATION PART II Item 8.
CSX 2023 Form 10-K p.52 CSX CORPORATION PART II Item 8.
CSX 2022 Form 10-K p.50 CSX CORPORATION PART II Item 8.
CSX 2023 Form 10-K p.53 CSX CORPORATION PART II Item 8.
The swaps are designed to hedge 10 years of interest rate risk associated with market fluctuations attributable to the Secured Overnight Financing Rate on a cumulative $800 million of fixed rate outstanding notes, which are due between 2036 and 2040.
The swaps are designed to hedge 10 years of interest rate risk associated with market fluctuations attributable to SOFR on a cumulative $800 million of fixed rate outstanding notes, which are due between 2036 and 2040. As of December 31, 2023, the cumulative fair value of these swaps was a $107 million liability.
As of December 31, 2022, the potential change in fair value resulting from a hypothetical 10% change in interest rates would not be material. As of December 31, 2022, CSX has no floating rate notes outstanding. However, changes in interest rates could impact the fair value (but not the carrying value) of the Company's fixed rate long-term debt.
As of December 31, 2023, the potential change in fair value of fixed-to-floating interest rate swaps resulting from a hypothetical 10% change in interest rates would not be material. As of December 31, 2023, CSX has no floating rate notes outstanding.
CSX 2022 Form 10-K p.51 CSX CORPORATION PART II
CSX 2023 Form 10-K p.55 CSX CORPORATION PART II
Financial Statements and Supplementary Data CONSOLIDATED BALANCE SHEETS (Dollars in Millions) December December 2022 2021 ASSETS Current Assets: Cash and Cash Equivalents $ 1,958 $ 2,239 Short-term Investments 129 77 Accounts Receivable - Net (Note 11) 1,313 1,148 Materials and Supplies 341 339 Other Current Assets 108 70 Total Current Assets 3,849 3,873 Properties 48,105 46,505 Accumulated Depreciation (13,863) (13,490) Properties - Net (Note 6) 34,242 33,015 Investment in Affiliates and Other Companies (Note 15) 2,292 2,099 Right of Use Lease Asset (Note 7) 505 501 Goodwill and Other Intangible Assets - Net (Note 18) 502 451 Other Long-term Assets 522 592 Total Assets $ 41,912 $ 40,531 LIABILITIES AND SHAREHOLDERS' EQUITY Current Liabilities: Accounts Payable $ 1,130 $ 963 Labor and Fringe Benefits Payable 707 630 Casualty, Environmental and Other Reserves (Note 5) 144 118 Current Maturities of Long-term Debt (Note 10) 151 181 Income and Other Taxes Payable 111 134 Other Current Liabilities 228 207 Total Current Liabilities 2,471 2,233 Casualty, Environmental and Other Reserves (Note 5) 292 250 Long-term Debt (Note 10) 17,896 16,185 Deferred Income Taxes - Net (Note 12) 7,569 7,383 Long-term Lease Liability (Note 7) 488 478 Other Long-term Liabilities 571 502 Total Liabilities 29,287 27,031 Shareholders' Equity: Common Stock, $1 Par Value (Note 3) 2,066 2,202 Other Capital 574 66 Retained Earnings 10,363 11,630 Accumulated Other Comprehensive Loss (Note 16) (388) (408) Non-controlling Minority Interest 10 10 Total Shareholders' Equity 12,625 13,500 Total Liabilities and Shareholders' Equity $ 41,912 $ 40,531 See accompanying Notes to Consolidated Financial Statements.
Financial Statements and Supplementary Data CONSOLIDATED BALANCE SHEETS (Dollars in Millions) December December 2023 2022 ASSETS Current Assets: Cash and Cash Equivalents $ 1,353 $ 1,958 Short-term Investments 83 129 Accounts Receivable - Net (Note 11) 1,393 1,313 Materials and Supplies 446 341 Other Current Assets 109 108 Total Current Assets 3,384 3,849 Properties 50,320 48,105 Accumulated Depreciation (15,385) (13,863) Properties - Net (Note 6) 34,935 34,242 Investment in Affiliates and Other Companies (Note 15) 2,397 2,292 Right of Use Lease Asset (Note 7) 498 505 Goodwill and Other Intangible Assets - Net (Note 18) 506 502 Other Long-term Assets 688 522 Total Assets $ 42,408 $ 41,912 LIABILITIES AND SHAREHOLDERS' EQUITY Current Liabilities: Accounts Payable $ 1,237 $ 1,130 Labor and Fringe Benefits Payable 517 707 Casualty, Environmental and Other Reserves (Note 5) 144 144 Current Maturities of Long-term Debt (Note 10) 558 151 Income and Other Taxes Payable 525 111 Other Current Liabilities 243 228 Total Current Liabilities 3,224 2,471 Casualty, Environmental and Other Reserves (Note 5) 296 292 Long-term Debt (Note 10) 17,975 17,896 Deferred Income Taxes - Net (Note 12) 7,746 7,569 Long-term Lease Liability (Note 7) 491 488 Other Long-term Liabilities 543 571 Total Liabilities 30,275 29,287 Shareholders' Equity: Common Stock, $1 Par Value (Note 3) 1,959 2,066 Other Capital 691 574 Retained Earnings 9,790 10,363 Accumulated Other Comprehensive Loss (Note 16) (312) (388) Non-controlling Minority Interest 5 10 Total Shareholders' Equity 12,133 12,625 Total Liabilities and Shareholders' Equity $ 42,408 $ 41,912 See accompanying Notes to Consolidated Financial Statements.
For road and track assets, the most recent depreciation study was performed in 2020 and was evaluated in the current year through an annual data review.
For road and track assets and equipment assets, the most recent depreciation studies were performed in 2020 and 2022, respectively. These studies were evaluated by the Company’s management in the current year through an annual data review.
The underlying fair values of the Company's long-term debt were estimated based on quoted market prices or on the current rates offered for debt with similar terms and maturities. CSX 2022 Form 10-K p.44 CSX CORPORATION PART II Item 8.
Treasury rates, or approximately 40 basis points, is estimated to be $730 million as of December 31, 2023, and $709 million as of December 31, 2022. The underlying fair values of the Company's long-term debt were estimated based on quoted market prices or on the current rates offered for debt with similar terms and maturities.
The potential decrease in fair value of the Company's fixed rate long-term debt resulting from a hypothetical 10% increase in U.S. Treasury rates, or approximately 40 basis points, is estimated to be $709 million as of December 31, 2022, and $448 million as of December 31, 2021.
However, changes in interest rates could impact the fair value (but not the carrying value) of the Company's fixed rate long-term debt. The potential decrease in fair value of the Company's fixed rate long-term debt resulting from a hypothetical 10% increase in U.S.
In fourth quarter 2022, CSX settled a portion equal to $160 million notional value of the aggregate $500 million cash flow hedges, which resulted in CSX receiving a cash payment of $52 million.
In 2022, CSX settled a portion equal to $160 million notional value of the cash flow hedges. In 2023, CSX executed two partial settlements equal to $226 million notional value of the cash flow hedges. As of December 31, 2023, these cash flow hedges had an aggregate notional value of $114 million and an asset value of $48 million.
Removed
The Company recognized an unrealized gain of $80 million and $8 million net of tax during the years ended December 31, 2022 and 2021, respectively, in the consolidated statements of comprehensive income with the related asset on the balance sheet as of December 31, 2022.
Added
In 2023, CSX entered into two separate fixed-to-floating interest rate swaps classified as fair value hedges. The swaps are designed to hedge 10 years of interest rate risk associated with market fluctuations attributable to the Secured Overnight Financing Rate ("SOFR") on a cumulative $250 million of fixed rate outstanding notes which are due in 2033.
Removed
The gain associated with the settled portion of the hedges will continue to be classified in accumulated other comprehensive income (“AOCI”) until the associated debt instrument is issued in the future.
Added
As of December 31, 2023, the cumulative fair value of these swaps was a $19 million asset. In 2022, CSX entered into five separate fixed-to-floating interest rate swaps classified as fair value hedges.
Removed
Upon final settlement of the swaps, which expire in 2027, the unrealized gain or loss in AOCI will be recognized in earnings as an adjustment to interest expense over the same period during which the hedged transaction affects earnings.
Added
CSX 2023 Form 10-K p.54 CSX CORPORATION PART II Item 8.
Removed
As of December 31, 2022, the cumulative fair value of these swaps was a $118 million liability, which is included in other long-term liabilities on the consolidated balance sheet. The associated cumulative adjustment to the hedged notes is included in long-term debt.
Removed
Gains and losses resulting from changes in fair value of the interest rate swaps offset changes in the fair value of the hedged portion of the underlying debt with no gain or loss recognized due to hedge ineffectiveness.
Removed
The difference in the net fixed-to-float interest settlement on the derivatives is recognized in interest expense and was not material for the year ending at December 31, 2022. The swaps will expire in 2032. If settled early, the remaining liability or asset will be amortized over the remaining life of the associated notes.

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