Company Quick10K Filing
Price68.87 EPS4
Shares805 P/E16
MCap55,440 P/FCF15
Net Debt14,471 EBIT4,178
TEV69,911 TEV/EBIT17
TTM 2019-09-30, in MM, except price, ratios
10-K 2020-12-31 Filed 2021-02-10
10-Q 2020-09-30 Filed 2020-10-22
10-Q 2020-06-30 Filed 2020-07-23
10-Q 2020-03-31 Filed 2020-04-23
10-K 2019-12-31 Filed 2020-02-12
10-Q 2019-09-30 Filed 2019-10-17
10-Q 2019-06-30 Filed 2019-07-17
10-Q 2019-03-31 Filed 2019-04-17
10-K 2018-12-31 Filed 2019-02-06
10-Q 2018-09-30 Filed 2018-10-17
10-Q 2018-06-30 Filed 2018-07-18
10-Q 2018-03-31 Filed 2018-04-18
10-K 2017-12-31 Filed 2018-02-07
10-Q 2017-09-30 Filed 2017-10-18
10-Q 2017-06-30 Filed 2017-07-19
10-Q 2017-03-31 Filed 2017-04-20
10-K 2016-12-30 Filed 2017-02-14
10-Q 2016-09-23 Filed 2016-10-12
10-Q 2016-06-24 Filed 2016-07-14
10-Q 2016-03-25 Filed 2016-04-13
10-K 2015-12-25 Filed 2016-02-10
10-Q 2015-09-25 Filed 2015-10-14
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10-K 2014-12-26 Filed 2015-02-11
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10-Q 2014-06-27 Filed 2014-07-15
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10-Q 2013-09-27 Filed 2013-10-16
10-Q 2013-06-28 Filed 2013-07-17
10-Q 2013-03-29 Filed 2013-04-16
10-K 2012-12-28 Filed 2013-02-19
10-Q 2012-09-28 Filed 2012-10-16
10-Q 2012-06-29 Filed 2012-07-19
10-Q 2012-03-30 Filed 2012-04-19
10-Q 2011-09-30 Filed 2011-10-26
10-Q 2011-07-01 Filed 2011-07-21
10-Q 2011-04-01 Filed 2011-04-20
10-K 2010-12-31 Filed 2011-02-18
10-Q 2010-09-24 Filed 2010-10-15
10-Q 2010-06-25 Filed 2010-07-15
10-Q 2010-03-26 Filed 2010-04-19
10-K 2009-12-25 Filed 2010-02-19
8-K 2021-02-09 Officers
8-K 2021-01-22 Officers
8-K 2021-01-21 Earnings, Exhibits
8-K 2020-12-10 Off-BS Arrangement, Other Events, Exhibits
8-K 2020-12-01 Enter Agreement, Exhibits
8-K 2020-12-01 Regulation FD
8-K 2020-10-21
8-K 2020-10-07
8-K 2020-07-22
8-K 2020-07-08
8-K 2020-06-11
8-K 2020-05-22
8-K 2020-05-06
8-K 2020-05-05
8-K 2020-04-22
8-K 2020-03-26
8-K 2020-03-26
8-K 2020-02-18
8-K 2020-01-16
8-K 2019-12-19
8-K 2019-12-04
8-K 2019-10-17
8-K 2019-10-16
8-K 2019-10-02
8-K 2019-09-12
8-K 2019-09-03
8-K 2019-07-16
8-K 2019-05-28
8-K 2019-05-03
8-K 2019-04-16
8-K 2019-03-29
8-K 2019-02-21
8-K 2019-02-06
8-K 2019-01-16
8-K 2018-12-16
8-K 2018-10-16
8-K 2018-10-03
8-K 2018-09-14
8-K 2018-08-02
8-K 2018-07-19
8-K 2018-07-17
8-K 2018-05-18
8-K 2018-04-17
8-K 2018-03-19
8-K 2018-02-22
8-K 2018-02-15
8-K 2018-02-12
8-K 2018-02-06
8-K 2018-01-16
8-K 2018-01-08
8-K 2017-11-07

CSX 10K Annual Report

Part I
Item 1. Business
Item 1A. Risk Factors
Part I
Item 1B. Unresolved Staff Comments
Item 2. Properties
Part I
Item 3. Legal Proceedings
Item 4. Mine Safety Disclosure
Part I
Part II
Item 5. Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
Item 6. Selected Financial Data
Part II
Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations
Item 7A. Quantitative and Qualitative Disclosures About Market Risk
Part II
Item 8. Financial Statements and Supplementary Data
Note 1. Nature of Operations and Significant Accounting Policies
Part II
Item 8. Financial Statements and Supplementary Data
Note 2. Earnings per Share
Part II
Item 8. Financial Statements and Supplementary Data
Note 3. Shareholders' Equity
Note 4. Stock Plans and Share - Based Compensation
Part II
Item 8. Financial Statements and Supplementary Data
Note 5. Casualty, Environmental and Other Reserves
Part II
Item 8. Financial Statements and Supplementary Data
Note 6. Properties
Part II
Item 8. Financial Statements and Supplementary Data
Note 7. Leases
Part II
Item 8. Financial Statements and Supplementary Data
Note 8. Commitments and Contingencies
Part II
Item 8. Financial Statements and Supplementary Data
Note 9. Employee Benefit Plans
Part II
Item 8. Financial Statements and Supplementary Data
Note 10. Debt and Credit Agreements
Part II
Item 8. Financial Statements and Supplementary Data
Note 11. Revenues
Part II
Item 8. Financial Statements and Supplementary Data
Note 12. Income Taxes
Part II
Item 8. Financial Statements and Supplementary Data
Note 13. Fair Value Measurements
Part II
Item 8. Financial Statements and Supplementary Data
Note 14. Other Income - Net
Part II
Item 8. Financial Statements and Supplementary Data
Note 15. Investment in Affiliates and Related - Party Transactions
Part II
Item 8. Financial Statements and Supplementary Data
Note 16. Other Comprehensive Income / (Loss)
Part II
Item 8. Financial Statements and Supplementary Data
Item 9. Changes in and Disagreements with Accountants on Accounting and Financial Disclosure
Item 9A. Controls and Procedures
Part II
Item 9B. Other Information
Part III
Item 10. Directors, Executive Officers of The Registrant and Corporate Governance
Item 11. Executive Compensation
Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters
Item 13. Certain Relationships and Related Transactions, and Director Independence
Item 14. Principal Accounting Fees and Services
Part IV
Item 15. Exhibits, Financial Statement Schedules
EX-21 csx-12312020ex21subsidiari.htm
EX-22.1 csx123120ex221listofsubsid.htm
EX-23 csx-12312020ex23consentofp.htm
EX-24 csx-12312020ex24powerofatt.htm
EX-31 csx-12312020ex31certificat.htm
EX-32 csx-12312020ex32certificat.htm

CSX Earnings 2020-12-31

Balance SheetIncome StatementCash Flow
Assets, Equity
Rev, G Profit, Net Income
Ops, Inv, Fin




For the fiscal year ended December 31, 2020
For the transition period from __________ to __________

Commission File Number 1-8022
(Exact name of registrant as specified in its charter)
(I.R.S. Employer Identification No.)
500 Water Street15th FloorJacksonvilleFL32202904359-3200
(Address of principal executive offices)(Zip Code)(Telephone number, including area code)
Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of exchange on which registered
Common Stock, $1 Par ValueCSXNasdaq Global Select Market
Securities registered pursuant to Section 12(g) of the Act:  None
Indicate by check mark if the registrant is a well-known seasoned issuer, as defined in Rule 405 of the Securities Act.
Yes (X) No (  )
Indicate by check mark if the registrant is not required to file reports pursuant to Section 13 or Section 15(d) of the Act.
Yes (  ) No (X)
Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Yes (X)   No (  )
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§ 232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).        
Yes (X) No (  )
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company (as defined in Exchange Act Rule 12b-2).
Large Accelerated Filer (X)        Accelerated Filer (  )        Non-accelerated Filer (  ) Smaller reporting company ()
Emerging growth company ()

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ( )

Indicate by check mark whether the registrant has filed a report on and attestation to its management’s assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report ()

Indicate by check mark whether the registrant is a shell company (as defined in Exchange Act Rule 12b-2).
Yes () No (X)

On June 30, 2020 (which is the last day of the second quarter and the required date to use), the aggregate market value of the Registrant’s voting stock held by non-affiliates was approximately $53 billion (based on the close price as reported on the NASDAQ National Market System on such date).

There were 762,505,058 shares of Common Stock outstanding on January 31, 2021 (the latest practicable date that is closest to the filing date).

Portions of the Registrant’s Definitive Proxy Statement (the “Proxy Statement”) to be filed no later than 120 days after the end of the fiscal year with respect to its 2020 annual meeting of shareholders.
CSX 2020 Form 10-K p.1

Item No. Page
CSX 2020 Form 10-K p.2


Item 1.  Business

CSX Corporation, together with its subsidiaries ("CSX" or the “Company”), based in Jacksonville, Florida, is one of the nation's leading transportation companies. The Company provides rail-based freight transportation services including traditional rail service, the transport of intermodal containers and trailers, as well as other transportation services such as rail-to-truck transfers and bulk commodity operations. CSX and the rail industry provide customers with access to an expansive and interconnected transportation network that plays a key role in North American commerce and is critical to the long-term economic success and improved global competitiveness of the United States. In addition, freight railroads provide the most economical and environmentally efficient means to transport goods over land.

CSX Transportation, Inc.
CSX’s principal operating subsidiary, CSX Transportation, Inc. (“CSXT”), provides an important link to the transportation supply chain through its approximately 19,500 route-mile rail network, which serves major population centers in 23 states east of the Mississippi River, the District of Columbia and the Canadian provinces of Ontario and Quebec. It has access to over 70 ocean, river and lake port terminals along the Atlantic and Gulf Coasts, the Mississippi River, the Great Lakes and the St. Lawrence Seaway. This access allows the Company to meet the dynamic transportation needs of manufacturers, industrial producers, the automotive industry, construction companies, farmers and feed mills, wholesalers and retailers, and energy producers. The Company’s intermodal business links customers to railroads via trucks and terminals. CSXT also serves thousands of production and distribution facilities through track connections with other Class I railroads and more than 230 short-line and regional railroads.

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.

Other Entities
In addition to CSXT, the Company’s subsidiaries include CSX Intermodal Terminals, Inc. (“CSX Intermodal Terminals”), Total Distribution Services, Inc. (“TDSI”), Transflo Terminal Services, Inc. (“Transflo”), CSX Technology, Inc. (“CSX Technology”) and other subsidiaries. CSX Intermodal Terminals owns and operates a system of intermodal terminals, predominantly in the eastern United States, and also provides drayage services (the pickup and delivery of intermodal shipments) for certain customers. TDSI serves the automotive industry with distribution centers and storage locations. Transflo connects non-rail served customers to the many benefits of rail by transferring products from rail to trucks. The biggest Transflo markets are chemicals and agriculture, which includes shipments of plastics and ethanol. CSX Technology and other subsidiaries provide support services for the Company.

CSX 2020 Form 10-K p.3


Lines of Business
During 2020, the Company's services generated $10.6 billion of revenue and served three primary lines of business: merchandise, intermodal and coal.
The merchandise business shipped 2.5 million carloads (43 percent of volume) and generated 67 percent of revenue in 2020. 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 2.7 million units (46 percent of volume) and generated 16 percent of revenue in 2020. The intermodal business combines the superior economics of rail transportation with the flexibility of trucks and offers a cost and environmental advantage over long-haul trucking. 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 637 thousand carloads (11 percent of volume) and generated 13 percent of revenue in 2020. The Company transports domestic coal, coke and iron ore to electricity-generating power plants, steel manufacturers and industrial plants as well as export coal to deep-water port facilities. Approximately one-quarter to one-third of export coal and the majority of the domestic coal that the Company transports is used for generating electricity or industrial purposes.

Other revenue accounted for 4 percent of the Company’s total revenue in 2020. This category includes revenue from regional subsidiary railroads, demurrage, storage at intermodal facilities, revenue for customer volume commitments not met, switching, other incidental charges and adjustments to revenue reserves. Revenue from regional railroads includes shipments by railroads that the Company does not directly operate. Demurrage represents charges assessed when freight cars or other equipment are held beyond a specified period of time. Switching represents charges assessed when a railroad switches cars for a customer or another railroad.

Human Capital
Most of the Company’s employees provide or support transportation services. The Company had nearly 19,300 employees as of December 2020, which includes approximately 15,700 employees that are members of a labor union. For the 13 rail unions that participate in national bargaining, a round of negotiations for benefits, wages and work rules is underway. Typically, these negotiations take several years. Current agreements remain in place until modified by new agreements.

CSX prioritizes workplace safety for employees and is committed to continued safety improvement through enhanced training, processes and technology. 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 0.81 in 2020 and 0.90 in 2019, representing a 10% improvement year over year. Compared to 2019, both the number of injuries and the number of man-hours declined in 2020. In response to the novel coronavirus ("COVID-19") pandemic, additional policies and procedures were developed to protect the health and safety of employees. A cross-functional task force continues to monitor the situation to ensure that appropriate safety measures are being taken.

CSX 2020 Form 10-K p.4


The Compensation and Talent Management Committee of the Board of Directors is charged with oversight of human capital management. The Company is committed to developing a culture that promotes workforce diversity and inclusion and encourages ethical behavior. In 2019, CSX was recognized as a “Best Place to Work for Disability Inclusion” by Disability:IN and the American Association of People with Disabilities after receiving a 100% score on their disability equality index. The CSX Code of Ethics serves as a guiding standard for ethical behavior and covers many types of matters, including discrimination and harassment as well as safety. Annually, all management employees are required, and union employees are highly encouraged, to complete ethics training.

Operating Model
The Company is focused on developing and strictly maintaining a scheduled service plan with an emphasis on optimizing assets. When this operating model is executed effectively, customer service is improved, enabling the Company to better compete for an increased share of the U.S. freight market. Further, this model leads to reduced costs and strong free cash flow generation.

Financial Information
See Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations for operating revenue, operating income and total assets for each of the last three fiscal years.

Company History
A leader in freight rail transportation for more than 190 years, the Company’s heritage dates back to the early nineteenth century when The Baltimore and Ohio Railroad Company (“B&O”) – the nation’s first common carrier – was chartered in 1827. Since that time, the Company has built on this foundation to create a railroad that could safely and reliably service the ever-increasing demands of a growing nation.

Since its founding, numerous railroads have combined with the former B&O through merger and consolidation to create what has become CSX. Each of the railroads that combined into the CSX family brought new geographical reach to valuable markets, gateways, cities, ports and transportation corridors.

CSX Corporation was incorporated in 1978 under Virginia law. In 1980, the Company completed the merger of the Chessie System and Seaboard Coast Line Industries into CSX. The merger allowed the Company to connect northern population centers and Appalachian coal fields to growing southeastern markets. Later, the Company’s acquisition of key portions of Conrail, Inc. ("Conrail") allowed CSXT to link the northeast, including New England and the New York metropolitan area, with Chicago and midwestern markets as well as the growing areas in the Southeast already served by CSXT. This current rail network allows the Company to directly serve every major market in the eastern United States with safe, dependable, environmentally responsible and fuel efficient freight transportation and intermodal service.

CSX 2020 Form 10-K p.5


    The business environment in which the Company operates is highly competitive. Shippers typically select transportation providers that offer the most compelling combination of service and price. Service requirements, both in terms of transit time and reliability, vary by shipper and commodity. As a result, the Company’s primary competition varies by commodity, geographic location and mode of available transportation and includes other railroads, motor carriers that operate similar routes across its service area and, to a less significant extent, barges, ships and pipelines.

    CSXT’s primary rail competitor is Norfolk Southern Railway, which operates throughout much of the Company’s territory. Other railroads also operate in parts of the Company’s territory. Depending on the specific market, competing railroads and deregulated motor carriers may exert pressure on price and service levels. For further discussion on the risk of competition to the Company, see Item 1A. Risk Factors.

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. In the U.S., the railroad operations conducted by the Company's subsidiaries, including CSXT, are subject to the regulatory jurisdiction of the Surface Transportation Board (“STB”), the Federal Railroad Administration (“FRA”), and its sister agency within the U.S. Department of Transportation ("DOT"), the Pipeline and Hazardous Materials Safety Administration (“PHMSA”). Together, FRA and PHMSA have broad jurisdiction over railroad operating standards and practices, including track, freight cars, locomotives and hazardous materials requirements. In addition, the U.S. Environmental Protection Agency (“EPA”) has regulatory authority with respect to matters that impact the Company's properties and operations. 

    The Transportation Security Administration (“TSA”), a component of the Department of Homeland Security, has broad authority over railroad operating practices that may have homeland security implications. In Canada, the railroad operations conducted by the Company’s subsidiaries, including CSXT, are subject to the regulatory jurisdiction of the Canadian Transportation Agency.

    Although the Staggers Act of 1980 significantly deregulated the U.S. rail industry, the STB has broad jurisdiction over rail carriers. The STB regulates routes, fuel surcharges, conditions of service, rates for non-exempt traffic, acquisitions of control over rail common carriers and the transfer, extension or abandonment of rail lines, among other railroad activities. Any new rules from the STB regarding, among other things, competitive access or revenue adequacy could have a material adverse effect on the Company's financial condition, results of operations and liquidity as well as its ability to invest in enhancing and maintaining vital infrastructure. For further discussion on regulatory risks to the Company, see Item 1A. Risk Factors.

CSX 2020 Form 10-K p.6


Positive Train Control
    In 2008, Congress enacted the Rail Safety Improvement Act, which included a mandate that all Class I freight railroads implement an interoperable positive train control system (“PTC”) by the initial deadline of December 31, 2015. Subsequently, the Positive Train Control Enforcement and Implementation Act of 2015 extended this deadline. In accordance with this Act, the Company completed installation of all PTC hardware by December 31, 2018, and the PTC system was fully operational and interoperable before December 31, 2020. PTC is designed to prevent train-to-train collisions, over-speed derailments, incursions into established work-zone limits, and train diversions onto another set of tracks. PTC must be installed on all main lines with passenger and commuter operations as well as most of those over which toxic-by-inhalation hazardous materials are transported. 

    While the Company expects ongoing PTC costs, PTC implementation is complete at a total cost of $2.4 billion. Implementation costs included installing new equipment along tracks, upgrading locomotives, adding communication equipment and developing new technologies.

Other Information
    CSX makes available on its website, free of charge, its annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and all amendments to those reports as soon as reasonably practicable after such reports are filed with or furnished to the Securities and Exchange Commission (“SEC”). The information on the CSX website is not part of this annual report on Form 10-K. Additionally, the Company has posted its code of ethics on its website, which is also available to any shareholder who requests it. This Form 10-K and other SEC filings made by CSX are also accessible through the SEC’s website at
    CSX has included the certifications of its Chief Executive Officer (“CEO”) and the Chief Financial Officer (“CFO”) required by Section 302 of the Sarbanes-Oxley Act of 2002 (“the Act”) as Exhibit 31, as well as Section 906 of the Act as Exhibit 32 to this Form 10-K report.
For additional information concerning business conducted by the Company during 2020, see Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations.

CSX 2020 Form 10-K p.7


Item 1A.  Risk Factors

    The risks set forth in the following risk factors could have a material adverse effect on the Company's financial condition, results of operations or liquidity, and could cause those results to differ materially from those expressed or implied in the Company's forward-looking statements. 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.
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.
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. New or modified rules or regulations by these agencies could increase the Company's operating costs, adversely impact revenue or reduce operating efficiencies and affect service performance. Noncompliance with applicable laws or regulations could erode public confidence in the Company and can subject the Company to fines, penalties and other legal or regulatory sanctions.

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. 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. 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. Finally, legislation preventing the transport of hazardous materials through certain cities could result in network congestion and increase the length of haul for hazardous substances, which could increase operating costs, reduce operating efficiency or increase the risk of an accident involving the transport of hazardous materials.

CSX 2020 Form 10-K p.8


The Company may be subject to various claims and lawsuits that could result in significant expenditures.
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. Although the Company maintains insurance to cover some of these types of claims and establishes reserves when appropriate, final amounts determined to be due on any outstanding matters may exceed the Company's insurance coverage or differ materially from the recorded reserves. Additionally, the Company could be impacted by adverse developments not currently reflected in the Company's reserve estimates.

Operational, Safety and Business Disruption

An epidemic or pandemic, including the ongoing COVID-19 pandemic, and the initiatives to reduce its transmission could adversely affect the Company's business.
The Company could be materially and adversely affected by a public health crisis, including a widespread epidemic or pandemic. As COVID-19 has spread globally, including significant impacts in the United States, CSX continues to take a variety of measures to ensure the availability of its transportation services, promote the safety and security of its employees and support the communities in which it operates. However, public and private sector policies and initiatives to reduce the transmission of COVID-19, such as closures of businesses and manufacturing facilities, the promotion of social distancing, the adoption of working from home by companies and institutions, and travel restrictions could continue to adversely affect demand for the commodities and products that the Company transports, including import and export volume.

In addition, COVID-19 and the related initiatives to reduce transmission may result in greater supply chain disruption, which could continue to have an adverse impact on volumes and make it more difficult for the Company to serve its customers. The extent to which this coronavirus impacts operations will depend on future developments, which are highly uncertain and cannot be predicted with confidence, including the duration of the outbreak, new information which may emerge concerning the severity of this coronavirus and the actions to contain the coronavirus or treat its impact, among others. Moreover, operations could be negatively affected if a significant number of employees are quarantined as the result of exposure to a contagious illness. To the extent COVID-19 adversely affects the Company's business and financial results, it may also have the effect of heightening many of the other risks described under Part I, Item 1A (Risk Factors) of this annual report on Form 10-K.

The Company relies on the security, stability and availability of its technology systems to operate its business.
The Company relies on information technology in all aspects of its business. The performance and reliability of the Company's technology systems are critical to its ability to operate and compete safely and effectively. A cybersecurity attack, which is a deliberate theft of data or impairment of information technology systems, or other significant disruption or failure, could result in a service interruption, train accident, misappropriation of confidential information, process failure, security breach or other operational difficulties. Such an event could result in decreased revenues and increased capital, insurance or operating costs, including increased security costs to protect the Company's infrastructure. Insurance maintained by the Company to protect against loss of business and other related consequences resulting from cyber incidents may not be sufficient to cover all damages. A disruption or compromise of the Company's information technology systems, even for short periods of time, could have a material adverse effect.

CSX 2020 Form 10-K p.9


Network constraints could have a negative impact on service and operating efficiency.
CSXT could experience rail network difficulties related to: (i) unpredictable increases in demand; (ii) locomotive or crew shortages; (iii) extreme weather conditions; (iv) impacts from changes in yard capacity, or network structure or composition, including train routes; (v) increased passenger activities; or (vi) regulatory changes impacting where and how fast CSXT can transport freight or maintain routes, which could impact CSXT's operational fluidity, leading to deterioration of service, asset utilization and overall efficiency.

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. CSXT's rail lines, other key infrastructure and information technology systems may be targets or indirect casualties of acts of terror or war. This risk could cause significant business interruption and result in increased costs and liabilities and decreased revenues. In addition, premiums charged for some or all of the insurance coverage currently maintained by the Company could increase dramatically, or the coverage may no longer be available.

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. 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.
The Company's operations may be affected by external factors such as severe weather and other natural occurrences, including floods, fires, hurricanes and earthquakes. As a result, the Company's rail network may be damaged, its workforce may be unavailable, fuel costs may rise and significant business interruptions could occur. In addition, the performance of locomotives and railcars could be adversely affected by extreme weather conditions. Insurance maintained by the Company to protect against loss of business and other related consequences resulting from these natural occurrences is subject to coverage limitations, depending on the nature of the risk insured. This insurance may not be sufficient to cover all of the Company's damages or damages to others, and this insurance may not continue to be available at commercially reasonable rates. Even with insurance, if any natural occurrence leads to a catastrophic interruption of service, the Company may not be able to restore service without a significant interruption in operations.

CSX 2020 Form 10-K p.10


Competitive, Economic and Financial

The Company faces competition from other transportation providers.
The Company experiences competition in pricing, service, reliability and other factors from various transportation providers including railroads and motor carriers that operate similar routes across its service area and, to a less significant extent, barges, ships and pipelines. Other transportation providers generally use public rights-of-way that are built and maintained by governmental entities, while CSXT and other railroads must build and maintain rail networks largely using internal resources. Any future improvements or expenditures materially increasing the quality or reducing the cost of alternative modes of transportation such as through the use of automation, autonomy or electrification, or legislation providing for less stringent size or weight restrictions on trucks, could negatively impact the Company's competitive position. 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.
A decline or disruption in general domestic and global economic conditions that affects demand for the commodities and products the Company transports, including import and export volume, could reduce revenues or have other adverse effects on the Company's cost structure and profitability. For example, slower rates of economic growth in Asia, contraction of European economies, and changes in the global supply of seaborne coal or price of seaborne coal have adverse impacts on U.S. export coal volume and result in lower coal revenue for CSX. Additionally, changes to trade agreements or policies could result in reduced import and export volumes due to increased tariffs and lower consumer demand. If the Company experiences significant declines in demand for its transportation services with respect to one or more commodities and products, the Company may experience reduced revenue and increased operating costs, workforce adjustments, and other related activities, which could have a material adverse effect on the Company's financial condition, results of operations and liquidity.
Changing dynamics in the U.S. and global energy markets could negatively impact profitability.
Increases in production and source locations of natural gas in the U.S. have resulted in lower natural gas prices in CSX’s service territory. As a result of sustained low natural gas prices, many coal-fired power plants have been displaced by natural gas-fired power generation facilities. If natural gas prices were to remain low, additional coal-fired plants could be displaced, which would likely further reduce the Company's domestic coal volumes and revenues. Additionally, crude oil prices combined with changes in pipeline capacity have resulted in volatility in domestic crude oil production, which has affected crude oil volumes for CSX.

Weaknesses in the capital and credit markets could negatively impact the Company’s access to capital.
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. A significant deterioration of the Company’s financial condition could also reduce credit ratings and could limit or affect its access to external sources of capital and increase the costs of short and long-term debt financing.

CSX 2020 Form 10-K p.11


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.
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. 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. 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.

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 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.
The Company is subject to wide-ranging federal, state, provincial and local environmental laws and regulations concerning, among other things, emissions into the air, ground and water; the handling, storage, use, generation, transportation and disposal of waste and other materials; the clean-up of hazardous material and petroleum releases and the health and safety of our employees. If the Company violates or fails to comply with these laws and regulations, CSX could be fined or otherwise sanctioned by regulators. The Company can also be held liable for consequences arising out of human exposure to any hazardous substances for which CSX is responsible. In certain circumstances, environmental liability can extend to formerly owned or operated properties, leased properties, adjacent properties and properties owned by third parties or Company predecessors, as well as to properties currently owned, leased or used by the Company.

The Company has been, and may in the future be, subject to allegations or findings to the effect that it has violated, or is strictly liable under, environmental laws or regulations, and such violations can result in the Company's incurring fines, penalties or costs relating to the cleanup of environmental contamination. Although the Company believes it has appropriately recorded current and long-term liabilities for known and reasonably estimable future environmental costs, it could incur significant costs that exceed reserves or require unanticipated cash expenditures as a result of any of the foregoing. The Company also may be required to incur significant expenses to investigate and remediate known, unknown or future environmental contamination.

CSX 2020 Form 10-K p.12


Availability of Critical Supplies and Labor

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, rolling stock equipment and locomotives) limits the number of railroad equipment suppliers. If any of the current manufacturers stops production or experiences a supply shortage, CSXT could experience a significant cost increase or material shortage. In addition, a few critical railroad suppliers are foreign and, as such, adverse developments in international relations, new trade regulations, disruptions in international shipping or increases in global demand could make procurement of these supplies more difficult or increase CSXT's costs. Additionally, if a fuel supply shortage were to arise, the Company would be negatively impacted.

Failure to complete negotiations on collective bargaining agreements could result in strikes and/or work stoppages.
Most of CSX's employees are represented by labor unions and are covered by collective bargaining agreements. These agreements are either bargained for nationally by the National Carriers Conference Committee or locally between CSX and the union. Such agreements are negotiated over the course of several years and previously have not resulted in any extended work stoppages. Under the Railway Labor Act's procedures (which include mediation, cooling-off periods and the possibility of an intervention by the President of the United States), during negotiations neither party may take action until the procedures are exhausted. If, however, CSX is unable to negotiate acceptable agreements, the employees covered by the Railway Labor Act could strike, which could result in loss of business and increased operating costs as a result of higher wages or benefits paid to union members. 

The unavailability of critical resources could adversely affect the Company’s operational efficiency and ability to meet demand.
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. Although the Company believes that it has adequate resources and personnel for the current business environment, unpredictable increases in demand for rail services or extreme weather conditions may exacerbate such risks, which could have a negative impact on the Company’s operational efficiency and otherwise have a material adverse effect on the Company’s financial condition, results of operations, or liquidity in a particular period.

Item 1B.  Unresolved Staff Comments


CSX 2020 Form 10-K p.13


Item 2.  Properties

The Company’s properties primarily consist of track and its related infrastructure, locomotives and freight cars and equipment. These categories and the geography of the network are described below.

Track and Infrastructure
Serving 23 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.

CSXT’s track structure includes mainline track, connecting terminals and yards, track within terminals and switching yards, sidings used for passing trains, track connecting CSXT's track to customer locations and track that diverts trains from one track to another known as turnouts. Total track miles, which reflect the size of CSXT’s network that connects markets, customers and western railroads, are greater than CSXT’s approximately 19,500 route miles. At December 2020, the breakdown of track miles was as follows:
Single mainline track19,605 
Other mainline track5,695 
Terminals and switching yards9,289 
Passing sidings and turnouts896 

In addition to its physical track structure, the Company operates numerous yards and terminals for rail and intermodal service. 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 2020 volume (number of railcars or intermodal containers processed) are listed below.
Yards and TerminalsAnnual Volume
Waycross, GA907,445 
Bedford Park Intermodal Terminal (Chicago)896,474 
Nashville, TN653,643 
Avon, IN (Indianapolis)626,868 
Cincinnati, OH603,773 
Selkirk, NY597,966 
Fairburn, GA Intermodal Terminal (Atlanta)424,377 
Walbridge, OH (Toledo)389,169 
Chicago, IL334,743 
Louisville, KY296,277 
CSX 2020 Form 10-K p.14


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. 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. 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. This route carries goods from all three of the Company’s major 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. 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. 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 corridor also provides direct rail service between the coal reserves of the southern Illinois basin and the demand for coal in the Southeast.

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 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. Approximately one-quarter to one-third of export coal and the majority of the domestic coal that the Company transports is used for generating electricity or industrial purposes.

    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.
CSX 2020 Form 10-K p.15


CSX Rail Network

CSX 2020 Form 10-K p.16


As of December 2020, 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. 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 66% were in active service as of December 31, 2020, and the remainder were in storage to be utilized as needed. Storing locomotives and equipment allows the Company to quickly adjust its active fleet based on demand and other factors while avoiding delays due to supply limitations or excessive lead times to acquire additional equipment. As of December 2020, CSXT’s fleet of owned or long-term leased locomotives consisted of the following types:

Average Age
Freight3,142 89 %21 
Switching219 %42 
Auxiliary units178 %28 
Total locomotives3,539 100 %21 
The Company owns or long-term leases equipment, including several types of freight cars and intermodal containers. Of total owned and long-term leased equipment, approximately 77% was in active service as of December 31, 2020, and the remainder were in storage to be utilized as needed. As of December 2020, the Company’s owned and long-term leased equipment consisted of the following:

EquipmentNumber of Units%
Gondolas18,656 37 %
Multi-level flat cars11,161 22 %
Covered hoppers7,832 16 %
Open-top hoppers6,970 14 %
Box cars4,247 %
Flat cars658 %
Other cars242 %
Subtotal freight cars49,766 100 %
Total equipment67,200 

At any time, over half of the railcars on the CSXT system are not owned or leased by the Company. Examples of these include railcars owned by other railroads (which are utilized by CSXT), shipper-furnished or private cars (which are generally used only in that shipper’s service), multi-level railcars used to transport automobiles (which are shared between railroads) and double-stack railcars, or well cars (which are industry pooled), that allow for two intermodal containers to be loaded one above the other.
CSX 2020 Form 10-K p.17


    The Company’s revenue-generating equipment, either owned or long-term leased, 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.

Multi-level flat cars – Transport finished automobiles and are differentiated by the number of levels: bi-levels for large vehicles such as pickup trucks and SUVs and tri-levels for sedans and smaller automobiles.

Covered hoppers – Have a permanent roof and are segregated based upon commodity density. Lighter bulk commodities such as grain, fertilizer, flour, salt, sugar, clay and lime are shipped in large cars called jumbo covered hoppers. Heavier commodities like cement, ground limestone and industrial sand are shipped in small cube covered hoppers.

Open-top hoppers – Transport heavy dry bulk commodities such as coal, coke, stone, sand, ores and gravel that are resistant to weather conditions.

Box cars – Include a variety of tonnages, sizes, door configurations and heights to accommodate a wide range of finished products, including paper, auto parts, appliances and building materials.  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.

Item 3.  Legal Proceedings

    For further details, please refer to Note 8. Commitments and Contingencies of this annual report on Form 10-K.

Item 4.  Mine Safety Disclosure

Not Applicable

CSX 2020 Form 10-K p.18


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. There are no family relationships or any arrangement or understanding between any officer and any other person pursuant to which such officer was elected. As of the date of this filing, the executive officers’ names, ages and business experience are:

 Name and Age Business Experience During Past Five Years
James M. Foote, 67
President and Chief Executive Officer 

Foote has served as President and Chief Executive Office since December 2017. He joined CSX in October 2017 as Chief Operating Officer, with responsibility for both operations and sales and marketing.

Mr. Foote has more than 40 years of railroad industry experience. Most recently, he was President and Chief Executive Officer of Bright Rail Energy. Before heading Bright Rail, he was Executive Vice President, Sales and Marketing with Canadian National Railway Company. At Canadian National, Mr. Foote also served as Vice President – Investor Relations and Vice President Sales and Marketing – Merchandise.
Kevin S. Boone, 43
Executive Vice President and Chief Financial Officer
Boone was named Executive Vice President and Chief Financial Officer in October 2019 after serving as Interim Chief Financial Officer since May 2019. In this 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.

Mr. Boone has more than 19 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. 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.
Jamie J. Boychuk, 43
Executive Vice President of Operations
Boychuk has served as CSXT's Executive Vice President of Operations since October 2019. In this role, he is responsible for mechanical, engineering, transportation and network operations, including terminals.

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. 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.
Nathan D. Goldman, 63
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, corporate communications, risk management, public safety, environmental, and audit functions.

During his 17 years with the Company, Mr. Goldman has previously served as Vice President of Risk Compliance and General Counsel and has overseen work in compliance, risk management and safety programs.
CSX 2020 Form 10-K p.19


 Name and Age Business Experience During Past Five Years
Diana B. Sorfleet, 56
Executive Vice President and Chief Administrative Officer
Sorfleet was named Executive Vice President and Chief Administrative Officer in July 2018. In this role, her responsibilities include human resources, information technology, labor relations, people systems and analytics, total rewards and aviation.

During her 9 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.
Mark K. Wallace, 51
Executive Vice President and Chief Sales & Marketing Officer

Wallace has served as Executive Vice President of Sales and Marketing since July 2018. In his current role, Mr. Wallace is responsible for the commercial organization. He joined the Company in March 2017 and previously served as Executive Vice President and Chief Administrative Officer and Executive Vice President of Corporate Affairs and Chief of Staff to the CEO.

Prior to joining CSX, he served as the Vice President of Corporate Affairs at Canadian Pacific Railway Limited with responsibility for the corporate communications and public affairs, investor relations, facilities and real estate functions. Prior to his time at Canadian Pacific, Mr. Wallace spent more than 15 years in various senior management positions with Canadian National Railway Company.
Angela C. Williams, 46
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.

During her 17 years with the Company, she previously served as Assistant Vice President - Assistant Controller and in other various accounting roles. With more than 24 years of experience, Williams held various accounting and auditing positions prior to joining CSX. Ms. Williams is a Certified Public Accountant.
CSX 2020 Form 10-K p.20

Item 5.  Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities

Market Information
CSX’s common stock is listed on the Nasdaq Global Select Market, which is its principal trading market, and is traded over-the-counter and on exchanges nationwide. The official trading symbol is “CSX.” 

Description of Common and Preferred Stock
    A total of 1.8 billion shares of common stock are authorized, of which 762,529,119 shares were outstanding as of December 31, 2020. Each share is entitled to one vote in all matters requiring a vote of shareholders. 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, 2021, the latest practicable date that is closest to the filing date, there were 24,100 common stock shareholders of record. The weighted average of common shares outstanding, which was used in the calculation of diluted earnings per share, was 768 million as of December 31, 2020. (See Note 2, Earnings Per Share.) A total of 25 million shares of preferred stock is authorized, none of which is currently outstanding.

    The following table sets forth, for the quarters indicated, the dividends declared on CSX common stock.
2020$0.26 $0.26 $0.26 $0.26 $1.04 
2019$0.24 $0.24 $0.24 $0.24 $0.96 

Stock Performance Graph
    The cumulative shareholder returns, assuming reinvestment of dividends, on $100 invested at December 31, 2015 are illustrated on the graph below. The Company references the Standard & Poor's 500 Stock Index (“S&P 500 ®”), and the Dow Jones U.S. Transportation Average Index, which provide comparisons to a broad-based market index and other companies in the transportation industry.
CSX 2020 Form 10-K p.21

CSX Purchases of Equity Securities
    The Company continues to repurchase shares under the $5 billion program announced in January 2019. On October 21, 2020, the Company announced a new, incremental $5 billion share repurchase program. For more information about share repurchases, see Note 2 Earnings Per Share. Share repurchase activity of $203 million for the fourth quarter 2020 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(a)
Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs
Beginning Balance$1,092,188,096 
October 1 - October 31, 2020978,384 $78.51 978,384 6,015,375,220 
November 1 - November 30, 2020348,885 78.81 334,275 5,989,233,126 
December 1 - December 31, 20201,110,784 90.03 1,110,784 5,889,233,126 
Ending Balance2,438,053 $83.80 2,423,443 $5,889,233,126 
(a) The difference between the "Total Number of Shares Purchased" and the "Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs" of 14,610 shares for the quarter represents shares purchased to fund the Company's contribution to a 401(k) plan that covers certain union employees.

Item 6.  Selected Financial Data

Not Applicable

CSX 2020 Form 10-K p.22

Item 7.  Management's Discussion and Analysis of Financial Condition and Results of Operations


    When used in this report, unless otherwise indicated by the context, these terms are used to mean the following:

Car hire - A charge paid by one railroad for its use of cars belonging to another railroad or car owner.

Class I freight railroad - One of the largest line haul freight railroads as determined based on operating revenue; the exact revenue required to be in each class is periodically adjusted for inflation by the Surface Transportation Board. Smaller railroads are classified as Class II or Class III.

Common carrier mandate - A federal mandate that requires U.S. railroads to accommodate reasonable requests from shippers to carry any freight, including hazardous materials.

Demurrage - A charge assessed by railroads for the use of rail cars by shippers or receivers of freight beyond a specified free time.

Department of Transportation ("DOT") - A U.S. government agency with jurisdiction over matters of all modes of transportation.

Depreciation study - Conducted by a third-party specialist and analyzed by management, a periodic statistical analysis of fixed asset service lives, salvage values, accumulated depreciation, and other factors for group assets along with a comparison of similar asset groups at other companies.

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.

Free cash flow - The calculation of a non-GAAP measure by using net cash provided by operating activities and adjusting for property additions and certain other investing activities. Free cash flow is a measure of cash available for paying dividends, share repurchases and principal reduction on outstanding debt.

Group-life depreciation - A type of depreciation in which assets with similar useful lives and characteristics are aggregated into groups. Instead of calculating depreciation for individual assets, depreciation is calculated as a whole for each group.

Incidental revenue - Revenue for switching, demurrage, storage, etc.

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.

CSX 2020 Form 10-K p.23

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. 

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.

Shipper - A customer shipping freight via rail.

Siding - Track adjacent to the mainline used for passing trains.

Staggers Act of 1980 - Congressional law that significantly deregulated the rail industry, replacing the regulatory structure in existence since the 1887 Interstate Commerce Act. Where previously rates were controlled by the Interstate Commerce Commission, the Staggers Act allowed railroads to establish their own rates for shipments, enhancing their ability to compete with other modes of transportation.

Surface Transportation Board ("STB") - An independent governmental adjudicatory body administratively housed within the DOT, responsible for the economic regulation of interstate surface transportation within the United States.

Switching - Putting cars in a specific order, placing cars for loading, retrieving empty cars or adding or removing cars from a train at an intermediate point. 

Terminal - A facility, typically owned by a railroad, for the handling of freight and for the breaking up, making up, forwarding and servicing of trains.

Transportation Security Administration (“TSA”) - A component of the Department of Homeland Security with broad authority over railroad operating practices that may have homeland security implications.

TTX Company ("TTX") - A company that provides its owner-railroads with standardized fleets of intermodal, automotive and general use railcars at time and mileage rates. CSX owns about 20 percent of TTX's common stock, and the remainder is owned by the other leading North American railroads and their affiliates.

Turnout - A track that diverts trains from one track to another. 

Yard - A system of tracks, other than main tracks and sidings, used for making up trains, storing cars and other purposes.

CSX 2020 Form 10-K p.24


• Revenue of $10.6 billion decreased $1.4 billion or 11% versus the prior year.
• Expenses of $6.2 billion decreased $751 million or 11% year over year.
• Operating income of $4.4 billion decreased $603 million or 12% year over year.
• Operating ratio of 58.8% increased 40 basis points from 58.4%.
• Earnings per diluted share of $3.60 decreased $0.57 or 14% year over year.


2020 vs. 2019 Results of Operations
 Fiscal Years  
(Dollars in Millions)   
Revenue$10,583 $11,937 $(1,354)(11)%
Labor and Fringe2,275 2,616 341 13 
Materials, Supplies and Other1,684 1,749 65 
Depreciation1,383 1,349 (34)(3)
Fuel541 906 365 40 
Equipment and Other Rents338 352 14 
Total Expense6,221 6,972 751 11 
Operating Income4,362 4,965 (603)(12)
Interest Expense(754)(737)(17)(2)
Other Income - Net19 88 (69)(78)
Income Tax Expense(862)(985)123 12 
Net Earnings$2,765 $3,331 $(566)(17)
Earnings Per Diluted Share:
Net Earnings$3.60 $4.17 $(0.57)(14)%
Operating Ratio58.8 %58.4 %(40)bps

CSX 2020 Form 10-K p.25


Global economic uncertainty, including the effects of COVID-19 global pandemic, continues to impact the Company's results of operations. Demand for rail services saw large and rapid declines in the first half of the year, followed by steep sequential increases in the second half, but the effects of the disruption of global manufacturing, supply chains and consumer spending as a result of the COVID-19 pandemic are ongoing. While operating cash flows have also been impacted by these economic conditions, the Company maintains a strong cash balance and access to committed funding sources and other sources of external liquidity if required. As this is a dynamic situation, it is difficult to determine the future impacts of the pandemic. The full implications of COVID-19, including the extent of its impact on the Company’s financial and operating results, will be determined by the length of time that the pandemic continues, its effect on the demand for the Company’s transportation services and the supply chain, as well as the effect of governmental regulations imposed in response to the pandemic. The duration of the pandemic is dependent on several factors, including the timing of vaccine production and distribution as well as the impacts of virus mutations and case resurgences across the country.

CSX employees that provide efficient and reliable rail service are essential to keeping supply chains fluid in response to this challenge. Accordingly, business operations have been modified to ensure the safety of employees across the network while continuing to provide a high level of service to customers. A cross-functional task force monitors and coordinates the Company’s response to COVID-19. Policies and procedures established to protect the health and safety of employees and customers and to safeguard CSX operations include rigorous cleaning regimens for equipment and facilities, provision of sanitation supplies, distribution of disposable face coverings, facilitation of social distancing measures and administration of temperature testing at certain facilities. These precautions remain in place despite the easing of pandemic restrictions by state and local governments across the network. Additionally, remote work arrangements have been made where possible in order to reduce the density of employees in a single location, and alternative locations for key functions, such as dispatch, are being utilized as needed.

In March 2020, the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) was enacted to provide relief to businesses in response to the COVID-19 pandemic. The most significant remaining impact to the Company is the deferral of certain payroll tax payments to 2021 and 2022. The provisions of the CARES Act are not expected to have an impact on CSX’s results of operations or effective tax rate.
CSX 2020 Form 10-K p.26

Volume and Revenue (Unaudited)
Volume (Thousands of units); Revenue (Dollars in Millions); Revenue Per Unit (Dollars)
 VolumeRevenueRevenue Per Unit
 20202019% Change20202019% Change20202019% Change
664 670 (1)%$2,309 $2,349 (2)%$3,477 $3,506 (1)%
Agricultural and Food Products463 469 (1)%1,386 1,410 (2)%2,994 3,006 — %
Automotive344 456 (25)%920 1,236 (26)%2,674 2,711 (1)%
321 337 (5)%538 559 (4)%1,676 1,659 %
Forest Products(a)
270 283 (5)%824 862 (4)%3,052 3,046 — %
Metals and Equipment(a)
239 249 (4)%675 742 (9)%2,824 2,980 (5)%
Fertilizers234 243 (4)%424 431 (2)%1,812 1,774 %
Total Merchandise2,535 2,707 (6)%7,076 7,589 (7)%2,791 2,803 — %
Intermodal2,720 2,670 %1,702 1,760 (3)%626 659 (5)%
Coal637 843 (24)%1,397 2,070 (33)%2,193 2,456 (11)%
Other — — %408 518 (21)% — — %
Total5,892 6,220 (5)%$10,583 $11,937 (11)%$1,796 $1,919 (6)%
(a) In first quarter 2020, changes were made in the categorization of certain lines of business, impacting Chemicals, Minerals, Forest Products, and Metals and Equipment. The impacts were not material and prior periods have been reclassified to conform to the current presentation.

CSX 2020 Form 10-K p.27

    The COVID-19 pandemic significantly impacted overall volume in 2020. Total revenue decreased $1.4 billion, in 2020 or 11%, when compared to the previous year due to declines in coal, lower merchandise volumes, decreases in fuel recovery and lower other revenue. These decreases were partially offset by pricing increases in merchandise and volume and pricing increases in intermodal.

Merchandise Volume
Chemicals - Declined due to reduced frac sand and waste shipments, partially offset by growth in plastics shipments.

Agricultural and Food Products - Decreased due to lower shipments of feed grain as well as food and consumer products, partially offset by growth in sweeteners and oils.

Automotive - Declined due to lower North American vehicle production.

Minerals - Decreased due to lower shipments for aggregates and other minerals.

Forest Products - Declined due to lower shipments of printing paper and building products, partially offset by higher pulpboard shipments.

Metals and Equipment - Declined due to lower metals shipments, primarily in the steel, construction and scrap markets, as well as reduced equipment shipments.

Fertilizers - Declined due to reduced short-haul phosphate shipments.

Intermodal Volume
Increases in both domestic and international shipments resulted from tightening truck capacity and inventory replenishments in the second half of the year and growth in rail volumes from east coast ports.

Coal Volume
Domestic coal declined primarily due to lower shipments of utility coal as a result of continued competition from natural gas and reduced electrical demand, as well as lower steel and industrial shipments due to lower industrial production. Export coal declined due to reduced international shipments of thermal and metallurgical coal as a result of lower global benchmark prices.

Other revenue decreased $110 million versus prior year primarily due to lower affiliate revenue, lower revenue for demurrage and a favorable contract settlement with a customer in the prior year.

CSX 2020 Form 10-K p.28

    In 2020, total expenses decreased $751 million, or 11%, 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. These expenses decreased $341 million due to the following items:
Efficiency and volume savings of $288 million primarily resulted from structural changes to the train plan that resulted in reduced crew starts as well as lower headcount.
Incentive compensation decreased $86 million primarily due to lower expected annual incentive payouts as well as higher prior year accelerated stock compensation expense for certain retirement-eligible employees.
Other costs increased $33 million primarily due to inflation and several other non-significant items, including severance costs.

Materials, Supplies and Other expenses consist primarily of contracted services to maintain infrastructure and equipment, terminal and pier services and professional services. This category also includes costs related to materials, travel, casualty claims, environmental remediation, train accidents, property and sales tax, utilities and other items including gains on property dispositions. Total materials, supplies and other expenses decreased $65 million driven by the following:
Efficiency and volume savings of $185 million primarily resulted from lower operating support costs, lower terminal costs as a result of record productivity levels at intermodal terminals, and reduced equipment maintenance expenses.
Gains from real estate and line sales were $35 million in 2020 compared to $151 million in 2019.
All other costs increased $4 million primarily due to inflation and other non-significant costs that were mostly offset by a $22 million non-railroad asset impairment in the prior year related to an intermodal terminal sale agreement.

Depreciation expense primarily relates to recognizing the costs of capital assets, such as locomotives, railcars and track structure, over their respective useful lives, which are reviewed periodically as part of depreciation studies. This expense is impacted primarily by the capital expenditures made each year. Depreciation expense increased $34 million primarily due to the impacts of the 2019 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. Fuel expense decreased $365 million primarily due to a 31% price decrease that drove savings of $243 million, volume savings and a 5% improvement in fuel efficiency.

Equipment and Other expenses include rent paid for freight cars owned by other railroads or private companies, net of rents received by CSXT for use of its equipment. This category of expenses also includes expenses for short-term and long-term leases of locomotives, railcars, containers and trailers, offices and other rentals. These expenses decreased $14 million primarily due to volume savings, partially offset by higher days per load for automotive and other merchandise markets that resulted in increased car hire costs.

CSX 2020 Form 10-K p.29

Interest Expense
Interest Expense includes interest on long-term debt, equipment obligations and finance leases. Interest expense increased $17 million as higher average debt balances were partially offset by lower average rates.

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 decreased $69 million primarily due to a $38 million increase in debt repurchase expense and decreased interest income driven by lower interest rates, partially offset by higher average cash and short-term investment balances.

Income Tax Expense
Income Tax Expense decreased $123 million primarily due to lower earnings before income taxes, partially offset by lower tax benefits from the impacts of stock option exercises and the vesting of other equity awards as well as prior year benefits from the resolution of certain state tax matters.

Net Earnings and Earnings per Diluted Share
Net Earnings decreased $566 million to $2.8 billion, and earnings per diluted share decreased $0.57 to $3.60, due to the factors mentioned above. 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.

2019 vs. 2018 Results of Operations
    See discussion of 2019 results of operations compared to 2018 results of operations in Part II, Item 7, Management’s Discussion and Analysis of Financial Condition and Results of Operations in the Company's Annual Report on Form 10-K for the year ended December 31, 2019.
CSX 2020 Form 10-K p.30

Non-GAAP Measures - Unaudited
    CSX reports its financial results in accordance with United States generally accepted accounting principles ("GAAP"). CSX also uses certain non-GAAP measures that fall within the meaning of Securities and Exchange Commission Regulation G and Regulation S-K Item 10(e), which may provide users of the financial information with additional meaningful comparison to prior reported results. Non-GAAP measures do not have standardized definitions and are not defined by GAAP. Therefore, CSX’s non-GAAP measures are unlikely to be comparable to similar measures presented by other companies. The presentation of these non-GAAP measures should not be considered in isolation from, as a substitute for, or as superior to the financial information presented in accordance with GAAP. Reconciliations of non-GAAP measures to corresponding GAAP measures are below.

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. Free cash flow is calculated by using net cash from operations and adjusting for property additions and certain other investing activities, which includes proceeds from property dispositions. This measure should be considered in addition to, rather than a substitute for, cash provided by operating activities. Free cash flow before dividends decreased $832 million year-over-year to $2.6 billion primarily due to lower net cash provided by operating activities and lower proceeds from property dispositions.
    The following table reconciles cash provided by operating activities (GAAP measure) to free cash flow and adjusted free cash flow (both non-GAAP measures).
 Fiscal Years
(Dollars in Millions)
Net cash provided by operating activities (a)
$4,263 $4,850 
Property additions (1,626)(1,657)
Other investing activities (b)
Free Cash Flow, before dividends (non-GAAP)$2,646 $3,478 

(a) Net cash provided by operating activities for the year ended December 31, 2020, includes the impact of $21 million paid to settle a liability for non-controlling interest in an affiliate.
(b) For the year ended December 31, 2020, certain other investing activities used in the calculation of free cash flow do not include the impact of a $30 million deposit paid by the Company related to its signed definitive agreement to acquire Pan Am Railways, Inc. This transaction remains subject to regulatory review and approval by the Surface Transportation Board. This deposit is included in the other investing activities total on the consolidated cash flow statement for the year ended December 31, 2020.

CSX 2020 Form 10-K p.31

Operating Statistics (Estimated)
Fiscal Years
Operations Performance
Train Velocity (Miles per hour)(a)
20.2 20.5 (1)%
Dwell (Hours)(a)
9.3 8.6 (8)%
Cars Online112,718 117,562 %
Revenue Ton-Miles (Billions)
Merchandise124.4 128.0 (3)%
Intermodal28.1 26.9 %
Coal30.1 41.1 (27)%
Total Revenue Ton-Miles182.6 196.0 (7)%
Total Gross Ton-Miles (Billions)
358.3 388.3 (8)%
On-Time Originations87 %89 %(2)%
On-Time Arrivals77 %79 %(3)%
FRA Personal Injury Frequency Index0.81 0.90 10 %
FRA Train Accident Rate2.76 2.35 (17)%

(a) The methodologies for calculating train velocity, dwell and cars online differ from those prescribed by the STB as the Company believes these numbers more accurately reflect railroad performance. CSXT will continue to report these metrics, using the prescribed methodology, to the STB on a weekly basis. See additional discussion on the Company's website.
Certain operating statistics are estimated and can continue to be updated as actuals settle.

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 the profiled schedule of trains (from departure to arrival and all interim time), and train profiles are periodically updated to align with a changing operation.
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.
Revenue Ton-Miles (RTM's) - The movement of one revenue-producing ton of freight over a distance of one mile.
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.
On-Time Originations - Percent of scheduled road trains that depart the origin yard on time or ahead of schedule.
On-Time Arrivals - Percent of scheduled road trains that arrive at the destination yard on time to within two hours of scheduled arrival.
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.

    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. Technological innovations that can detect and avoid many types of human factor incidents are designed to serve as an additional layer of protection for the Company's employees. Continued capital investment in the Company's assets, including track, bridges, signals, equipment and detection technology also supports safety performance.

    Despite operating challenges presented by the COVID-19 pandemic, the Company remained focused on safety, service and controlling costs. Train velocity was roughly in line with last year’s record performance, declining 1% relative to 2019. Dwell increased by 8% compared to last year, while cars online decreased by 4% in 2020.

CSX 2020 Form 10-K p.32

From a safety perspective, the FRA personal injury index improved 10% and train-accident rate increased 17% from the prior year. In 2020, the number of FRA reportable injuries reached a new all-time record low for the second consecutive year. The number of FRA reportable train accidents remained at a record-low level, but a reduction in train miles negatively impacted the FRA train accident rate. The Company is committed to operational and safety improvement, while remaining focused on reducing risk and enhancing the overall safety of its employees, customers and communities in which the Company operates.

    Liquidity is a company’s ability to generate adequate amounts of cash to meet both current and future needs for obligations as they mature and to provide for planned capital expenditures, including those to address regulatory and legislative requirements. 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 components of the change in cash and cash equivalents for operating, investing and financing activities for full years 2020 and 2019.

    In 2020, the Company generated $4.3 billion of cash provided by operating activities, which was $587 million lower than prior year primarily driven by lower cash-generating income and unfavorable working capital activities. Net cash used in investing activities was $649 million, a decrease in net spend of $1.5 billion from the prior year primarily as a result of higher net sales of short-term investments, partially offset by lower proceeds from property dispositions. Net cash used in financing activities was $1.4 billion, which represents a decrease in net spend of $1.2 billion from the prior year primarily driven by lower share repurchases, partially offset by lower proceeds from debt issuances and higher debt repayments.

Sources of Cash and Liquidity
    The Company has multiple sources of liquidity, including cash generated from operations and financing sources. The Company filed a shelf registration statement with the SEC in February 2019 which is unlimited as to amount and may be used to issue debt or equity securities at CSX’s discretion, subject to market conditions and CSX Board authorization. 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 2020, CSX issued a total of $1.0 billion of new long-term debt.

CSX 2020 Form 10-K p.33

    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, 2020, the Company had no outstanding balances under this facility. See Note 10, Debt and Credit Agreements for more information. 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, 2020, the Company had no outstanding debt under the commercial paper program.

Uses of Cash
    CSX uses current cash balances for general corporate purposes, which may include working capital requirements, repayment of additional indebtedness outstanding from time to time, repurchases of CSX's common stock, capital investments, improvements in productivity and other cost reduction initiatives. The Company also uses cash for scheduled payments of debt and leases.

    In 2020, 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.
 Fiscal Years
Capital Expenditures (Dollars in Millions)
Track$858 $860 
Bridges, Signals and Other508 493 
Total Infrastructure1,366 1,353 
Strategic Projects and Commercial Facilities143 141 
Locomotives57 55 
Regulatory (including PTC)39 91 
Freight Cars21 17 
Total Capital Expenditures $1,626 1,657 
Planned capital investments for 2021 are expected to be between $1.7 billion and $1.8 billion. Of the total 2021 investment, the majority will be used to sustain the core infrastructure and the remaining amounts will be allocated to projects supporting service enhancements, productivity initiatives and profitable growth. CSX intends to fund capital investments through cash generated from operations.

    PTC implementation is complete at a total cost of $2.4 billion, which included installing new equipment along tracks, upgrading locomotives, adding communication equipment and developing new technologies. While the Company expects ongoing PTC costs, future PTC implementation costs are not expected to be material.

    CSX is continually evaluating market and regulatory conditions that could affect the Company’s ability to generate sufficient returns on capital investments. CSX may revise its future estimates for capital spending as a result of changes in business conditions, tax legislation or the enactment of new laws or regulations, which could have a material adverse effect on the Company’s operations and financial performance in the future (see Risk Factors under Item 1A of this Form 10-K).

CSX 2020 Form 10-K p.34

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 10, 2021, the Company's Board of Directors authorized an 8% increase in the quarterly cash dividend to $0.28 per common share. 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.

Material Changes in the Consolidated Balance Sheets and Working Capital
    CSX's balance sheet reflects its strong capital base and the impact of CSX's balanced approach in deploying capital for the benefit of its shareholders, which includes investments in infrastructure, dividend payments and share repurchases. Further, CSX is well positioned from a liquidity standpoint. The Company ended the year with $3.1 billion of cash, cash equivalents and short-term investments.

    Total assets as well as total liabilities and shareholders' equity increased $1.5 billion from prior year end. The increase in assets was primarily due to the net increase of $1.2 billion in cash and short-term investments as well as $276 million in net property additions. The net increase in cash and short-term investments was driven by $4.3 billion in cash from operations and proceeds from the issuance of $1.0 billion of long-term debt. These increases were partially offset by property additions of $1.6 billion, share repurchases of $867 million, dividends paid of $797 million and long-term debt repayments of $745 million.

Total liabilities increased $289 million from prior year end primarily due to the issuance of $1.0 billion of long-term debt and a $207 million increase in deferred tax liabilities primarily driven by accelerated tax depreciation. These increases were partially offset by debt repayments of $745 million and a $234 million decrease in accounts payable primarily due to the conversion of accounts payable to Conrail into notes payable. Total shareholders' equity increased $1.2 billion from prior year end primarily driven by net earnings of $2.8 billion, partially offset by share repurchases of $867 million and dividends paid of $797 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 $2.4 billion at December 2020 and $1.1 billion at December 2019, an increase of $1.3 billion. The increase in current assets was primarily driven by the net increase in cash and short-term investments described above and the decrease in current liabilities was due to lower accounts payable partially offset by higher current maturities of long-term debt.

    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. Although the Company currently has a surplus, a working capital deficit is not unusual for CSX or other companies in the industry and does not indicate a lack of liquidity. The Company continues to maintain adequate current assets to satisfy current liabilities and maturing obligations when they come due. Furthermore, CSX has sufficient financial capacity, including its revolving credit facility, commercial paper program and shelf registration statement to manage its day-to-day cash requirements and any anticipated obligations. The Company from time to time accesses the credit markets for additional liquidity.

CSX 2020 Form 10-K p.35

Credit Ratings
    Credit ratings reflect an independent agency’s judgment on the likelihood that a borrower will repay a debt obligation at maturity. The ratings reflect many considerations, such as the nature of the borrower’s industry and its competitive position, the size of the company, its liquidity and access to capital and the sensitivity of a company’s cash flows to changes in the economy. The two largest rating agencies, Standard & Poor’s Ratings Services (“S&P”) and Moody’s Investors Service (“Moody’s”), use alphanumeric codes to designate their ratings. The highest quality rating for long-term credit obligations is AAA and Aaa for S&P and Moody’s, respectively. 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 2020. As of December 2020 and December 2019, 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. 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. The Company is committed to maintaining an investment-grade credit profile.

Guaranteed Notes Issued By CSXT
In March 2020, the SEC adopted amendments to reduce and simplify the financial disclosure requirements for guarantors and issuers of guaranteed registered securities effective January 4, 2021, with early voluntary compliance permitted. CSX elected to comply with these amendments effective second quarter 2020. As a result, separate condensed consolidating financial information for wholly-owned subsidiaries who issued or guaranteed notes is no longer included in the footnotes to the financial statements in Quarterly and Annual Reports on Form 10-Q and Form 10-K. Also in accordance with the amendments, CSX is not required to present combined summary financial information regarding such subsidiary issuers and guarantors because the assets, liabilities and results of operations of the combined issuers and guarantors of the notes are not materially different from the corresponding amounts presented in the consolidated financial statements.

In 2007, CSXT, a wholly-owned subsidiary of CSX Corporation, issued $381 million of secured equipment notes maturing in 2023 in a registered public offering. CSX Corporation has fully and unconditionally guaranteed the notes. At CSXT’s option, CSXT may redeem any or all of the notes, in whole or in part, at any time, at the redemption price including premium. In the case of loss or destruction of any item of equipment securing the notes, if CSXT does not substitute another item of equipment for the item suffering such loss or destruction, CSXT will be required to redeem the notes in part at par. The guarantee of the notes will rank equally in right of payment with all existing and future senior obligations of CSX Corporation and will be effectively subordinated to all future secured indebtedness of CSX Corporation to the extent of the assets securing such indebtedness. The guarantee is subject to release in limited circumstances only upon the occurrence of certain customary conditions. As of December 31, 2020, the principal balance of these secured equipment notes was $160 million.

CSX 2020 Form 10-K p.36


    The following tables set forth maturities of the Company's contractual obligations and other significant commitments:
Type of Obligation20212022202320242025ThereafterTotal
(Dollars in Millions) (Unaudited)       
Contractual Obligations       
Total Debt (See Note 10)$401 $162 $139 $551 $601 $14,851 $16,705 
Interest on Debt712 698 684 680 661 10,805 14,240 
Purchase Obligations (See Note 8)234 226 248 284 298 1,985 3,275 
Other Post-Employment Benefits (a)
33 26 25 25 24 102 235 
Operating Leases - Net (See Note 7)47 43 36 36 35 1,172 1,369 
Agreements with Conrail (See Note 15)30 30 30 22 — — 112 
Total Contractual Obligations$1,457 $1,185 $1,162 $1,598 $1,619 $28,915 $35,936 
Other Commitments (b)
$74 $$— $— $— $— $76 
(a) Other post-employment benefits include estimated other post-retirement medical and life insurance payments and payments under non-qualified pension plans that are unfunded. No amounts are included for funded pension obligations as no contributions are currently required. See Note 9, Employee Benefit Plans.
(b) Other commitments of $76 million consisted of surety bonds, letters of credit, uncertain tax positions and public private partnerships. Surety bonds of $29 million and letters of credit of $27 million arise from assurances issued by a third-party that CSX will fulfill certain obligations and are typically a contract, state, federal or court requirement. Uncertain tax positions of $16 million, which include interest and penalties, are all included in year 2021 as the year of settlement cannot be reasonably estimated. Contractual commitments related to public-private partnerships are $4 million.

CSX 2020 Form 10-K p.37


    For detailed information about the Company’s guarantees, operating leases and purchase obligations, see Note 8, Commitments and Contingencies. There are no off-balance sheet arrangements that are reasonably likely to have a material effect on the Company’s financial condition, results of operations or liquidity.


    Approximately 15,700 of the Company's nearly 19,300 employees are members of a labor union. In November 2019, notices were served to the 13 rail unions that participate in national bargaining to begin negotiations for benefits, wages and work rules for the next labor bargaining round for 2020. Current agreements remain in place until modified by these negotiations. Typically, such negotiations take several years before agreements are reached.


    The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires that management make estimates in reporting the amounts of certain assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and certain revenues and expenses during the reporting period. Actual results may differ from those estimates. These estimates and assumptions are discussed with the Audit Committee of the Board of Directors on a regular basis. Significant estimates using management judgment are made for the following areas:
personal injury, environmental and legal reserves;
pension and post-retirement medical plan accounting; and
depreciation policies for assets under the group-life method.

Personal Injury, Environmental and Legal Reserves

Personal Injury
    Personal Injury reserves of $131 million and $129 million for 2020 and 2019, respectively, represent liabilities for employee work-related and third-party injuries. 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. 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 2020 Form 10-K p.38

Critical Accounting Estimates, continued

    Environmental reserves were $76 million and $74 million in 2020 and 2019, 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 220 environmentally impaired sites. The Company reviews its potential liability with respect to each site identified, giving consideration to a number of factors such as:
type of clean-up required;
nature of the Company’s alleged connection to the location (e.g., generator of waste sent to the site or owner or operator of the site);
extent of the Company’s alleged connection (e.g., volume of waste sent to the location and other relevant factors); and
number, connection and financial viability of other named and unnamed potentially responsible parties at the location.

    Conditions that are currently unknown could, at any given location, result in additional exposure, the amount and materiality of which cannot presently be reasonably estimated. For additional details, including a description of our related accounting policies, see Note 5, Casualty, Environmental and Other Reserves in the consolidated financial statements.

    The Company is involved in litigation incidental to its business and is a party to a number of legal actions and claims, various governmental proceedings and private civil lawsuits. The Company evaluates all exposures relating to legal liabilities at least quarterly and adjusts reserves when appropriate. The amount of a particular reserve may be influenced by factors that include official rulings, newly discovered or developed evidence, or changes in laws, regulations and evidentiary standards. An unexpected adverse resolution of one or more of these items could have a material adverse effect on the Company's financial condition, results of operations or liquidity in that particular period. For additional details, including a description of our related accounting policies, see Note 5, Casualty, Environmental and Other Reserves in the consolidated financial statements. Additionally, see Item 3. Legal Proceedings for further discussion of these items.

Pension and Post-retirement Medical Plan Accounting
    The Company sponsors defined benefit pension plans principally for salaried, management personnel. 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. Beginning in 2020, the CSX Pension Plan was closed to new participants. As of December 2020, the projected benefit obligation for the Company’s pension plans was $3.3 billion.

CSX 2020 Form 10-K p.39

Critical Accounting Estimates, continued

In addition to these plans, the Company sponsors a post-retirement medical plan and a life insurance plan that provide certain benefits to full-time, salaried, management employees hired prior to 2003 upon their retirement if certain eligibility requirements are met. Changes to the post-retirement medical and life insurance plans were communicated to participants in October 2018. Beginning in 2019, both the life insurance benefit for eligible active employees and health savings account contributions made by the Company to eligible retirees younger than 65 were eliminated. Beginning in 2020, the employer-funded health reimbursement arrangements for eligible retirees 65 years or older were eliminated. As a result of these plan amendments, the Company recognized a decrease of $102 million in the post-retirement benefit liability and a corresponding gain in other comprehensive income in 2018. As of December 2020, the projected benefit obligation for the Company’s other post-retirement benefit plans was $96 million.

For information related to the funded status of the Company's pension and other post-retirement benefit plans, see Note 9, Employee Benefit Plans.

    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;
salary scale inflation rates; and
other assumptions.

    The Company engages independent actuaries to compute the amounts of liabilities and expenses relating to these plans subject to the assumptions that the Company determines are appropriate based on historical trends, current market rates and future projections. These amounts are reviewed by management.

Discount Rates
    Discount rates affect the amount of liability recorded and the service and interest cost components of pension and post-retirement expense. Discount rates reflect the rates at which pension and other post-retirement benefits could be effectively settled, or in other words, how much it would cost the Company to buy enough high quality bonds to generate cash flow equal to the Company's expected future benefit payments. The Company determines the discount rate based on the market yield as of year-end for high quality corporate bonds whose maturities match the plans' expected benefit payments.

    The Company measures the service and interest cost components of the net pension and post-retirement benefits expense by using individual spot rates matched with separate cash flows for each future year. Under the spot rate approach, individual spot discount rates along the same high quality corporate bonds yield curve used to measure the pension and post-retirement benefit liabilities are applied to the relevant projected cash flows at the relevant maturity.

CSX 2020 Form 10-K p.40

Critical Accounting Estimates, continued

The weighted average discount rates used by the Company to value its 2020 pension and post-retirement obligations are 2.43 percent and 2.07 percent, respectively. For 2019, the weighted average discount rates used by the Company to value its pension and post-retirement obligations were 3.13 percent and 2.87 percent, respectively. Discount rates may differ for pension and post-retirement benefits due to varying duration of the liabilities for projected payments for each plan. As of December 2020, the estimated duration of pensions and post-retirement benefits is approximately 12 years and 8 years, respectively.

    Each year, these discount rates are reevaluated and adjusted using the current market interest rates for high quality corporate bonds to reflect the best estimate of the current effective settlement rates. In general, if interest rates decline or rise, the assumed discount rates will change.

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. In estimating that rate, the Company gives appropriate consideration to the returns being earned by the plan assets in the funds and the rates of return expected to be available for reinvestment as well as the current and projected asset mix of the funds. Management, with the assistance of an outsourced investment manager, balances market expectations obtained from various investment managers with both market and actual plan historical returns to develop a reasonable estimate of the expected long-term rate of return on assets. 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 percent in both 2020 and 2019.

Salary Scale Inflation Rates
    Salary scale inflation rates are based on current trends and historical data accumulated by the Company.  The Company reviews recent wage increases and management incentive compensation payments over the past five years in its assessment of salary scale inflation rates. The Company used a salary scale rate of 4.60 percent in both 2020 and 2019 to value its pension obligations.

Other Assumptions
    The calculations made by the actuaries also include assumptions relating to health care cost trend rates, mortality rates, turnover and retirement age. These assumptions are based upon historical data, recent plan experience and industry trends and are determined by management.

2021 Estimated Pension and Post-retirement Expense
    Net periodic pension and post-retirement benefits expenses for 2021 are expected to be a $21 million credit and a $5 million credit, respectively. Net periodic pension and post-retirement benefits expenses for 2021 are expected to include service cost expense of $38 million and $1 million, respectively. Service cost expense is included in labor and fringe on the consolidated income statement and all other components of net pension expense and post-retirement benefits expense are included in other income - net. Net periodic pension expense and post-retirement benefits expense in 2020 were costs of $3 million and less than $1 million, respectively. The net decrease in the expected expense is primarily due to expected favorable pension asset experience.

CSX 2020 Form 10-K p.41

Critical Accounting Estimates, continued

The following sensitivity analysis illustrates the effects of a one percent change in certain assumptions like discount rates, long-term rate of return and salaries on the 2021 estimated pension and post-retirement expense:
(Dollars in Millions)Pension ExpensePost-Retirement Expense
Discount Rate$20 $
Long-term Rate of Return$28 N/A
Salary Inflation$N/A

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 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 87% of total fixed assets of $45.5 billion on a gross basis at December 31, 2020. The remaining depreciable assets of the Company, including non-railroad assets and assets under finance leases, are depreciated using the straight-line method on a per asset basis. Land is not depreciated.

    Management performs a review of depreciation expense and useful lives on a regular basis. Under the group-life method, the service lives and salvage values for each group of assets are determined by completing periodic depreciation studies and applying management’s methods to determine the service lives of its properties. There are several factors taken into account during the depreciation study and they include:
statistical analysis of historical life and salvage data for each group of property;
statistical analysis of historical retirements for each group of property;
evaluation of current operations;
evaluation of technological advances and maintenance schedules;
previous assessment of the condition of the assets;
management's outlook on the future use of certain asset groups;
expected net salvage to be received upon retirement; and
comparison of assets to the same asset groups with other companies.

    The Company completed a depreciation study for its road and track assets in 2020 and for equipment assets in 2019, both of which resulted in changes to accumulated depreciation, service lives, salvage values, and other related factors for certain assets. 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, $1.3 billion and $1.3 billion for 2020, 2019 and 2018, respectively. A one percent 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. For additional details, including a more detailed description of our related accounting policies, see Note 6, Properties in the consolidated financial 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 and Changes in Accounting Policy.”
CSX 2020 Form 10-K p.42


    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. The Company intends for all such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and the provisions of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. These forward-looking statements within the meaning of the Private Securities Litigation Reform Act may contain, among others, statements regarding:

projections and estimates of earnings, revenues, margins, volumes, rates, cost-savings, expenses, taxes or other financial items;

expectations as to results of operations and operational initiatives;
expectations as to the effect of claims, lawsuits, environmental costs, commitments, contingent liabilities, labor negotiations or agreements on the Company's financial condition, results of operations or liquidity;
management's plans, strategies and objectives for future operations, capital expenditures, workforce levels, dividends, share repurchases, safety and service performance, proposed new services and other matters that are not historical facts, and management's expectations as to future performance and operations and the time by which objectives will be achieved; and
future economic, industry or market conditions or performance and their effect on the Company's financial condition, results of operations or liquidity.
    Forward-looking statements are typically identified by words or phrases such as "will," "should," “believe,” “expect,” “anticipate,” “project,” “estimate,” “preliminary” and similar expressions. The Company cautions against placing undue reliance on forward-looking statements, which reflect its good faith beliefs with respect to future events and are based on information currently available to it as of the date the forward-looking statement is made.  Forward-looking statements should not be read as a guarantee of future performance or results and will not necessarily be accurate indications of the timing when, or by which, such performance or results will be achieved.
    Forward-looking statements are subject to a number of risks and uncertainties and actual performance or results could differ materially from those anticipated by any forward-looking statements. The Company undertakes no obligation to update or revise any forward-looking statement. If the Company does update any forward-looking statement, no inference should be drawn that the Company will make additional updates with respect to that statement or any other forward-looking statements.

    The following important factors, in addition to those discussed in Part II, Item 1A. Risk Factors 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;
CSX 2020 Form 10-K p.43

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;
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;
the impact of conditions in the real estate market on the Company's ability to sell assets;
changes in operating conditions and costs or commodity concentrations;
the continued and uncertain impact of the COVID-19 pandemic; and
the inherent uncertainty associated with projecting economic and business conditions.

    Other important assumptions and factors that could cause actual results to differ materially from those in the forward-looking statements are specified elsewhere in this report and in CSX's other SEC reports, which are accessible on the SEC's website at and the Company's website at The information on the CSX website is not part of this annual report on Form 10-K.

CSX 2020 Form 10-K p.44


Item 7A.  Quantitative and Qualitative Disclosures about Market Risk