csx-20230331

Table of Contents

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(☒) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2023

(☐) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from __________ to __________

Commission File Number 1-8022

CSX CORPORATION

(Exact name of registrant as specified in its charter)

Virginia

62-1051971

(State or other jurisdiction of incorporation or organization)

(I.R.S. Employer Identification No.)

500 Water Street

15th Floor

Jacksonville

32202

904

359-3200

(Address of principal executive offices)

(Zip Code)

(Telephone number, including area code)

No Change

(Former name, former address and former fiscal year, if changed since last report.)

Securities registered pursuant to Section 12(b) of the Act:

Title of each class

Trading Symbol(s)

Name of exchange on which registered

Common Stock, $1 Par Value

CSX

Nasdaq Global Select Market

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 and posted 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 a check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes (☐) No (X)

There were 2,033,054,922 shares of common stock outstanding on March 31, 2023 (the latest practicable date that is closest to the filing date).

CSX Q1 2023 Form 10-Q p.1

Table of Contents

CSX CORPORATION

FORM 10-Q

FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2023

INDEX


		Page
PART I.	FINANCIAL INFORMATION
Item 1.	Financial Statements	3

	Consolidated Income Statements (Unaudited) - Quarters Ended March 31, 2023 and March 31, 2022	3

	Condensed Consolidated Comprehensive Income Statements (Unaudited) - Quarters Ended March 31, 2023 and March 31, 2022	3

	Consolidated Balance Sheets - At March 31, 2023 (Unaudited) and December 31, 2022	4

	Consolidated Cash Flow Statements (Unaudited) - Three Months Ended March 31, 2023 and March 31, 2022	5

	Consolidated Statement of Changes in Shareholders' Equity (Unaudited) - Quarters Ended March 31, 2023 and March 31, 2022	6

	Notes to Consolidated Financial Statements (Unaudited)	7

Item 2.	Management's Discussion and Analysis of Financial Condition and Results of Operations	24

Item 3.	Quantitative and Qualitative Disclosures about Market Risk	36

Item 4.	Controls and Procedures	36

PART II.	OTHER INFORMATION
Item 1.	Legal Proceedings	37

Item 1A.	Risk Factors	37

Item 2.	CSX Purchases of Equity Securities	37

Item 3.	Defaults Upon Senior Securities	37

Item 4.	Mine Safety Disclosures	37

Item 5.	Other Information	37

Item 6.	Exhibits	38

Signature		39

CSX Q1 2023 Form 10-Q p.2

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CSX CORPORATION

PART I - FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

CONSOLIDATED INCOME STATEMENTS (Unaudited)

(Dollars in millions, except per share amounts)


	First Quarters
	2023		2022

Revenue	$	3,706	$	3,413
Expense
Labor and Fringe	723		692
Purchased Services and Other	688		675
Depreciation and Amortization	393		360
Fuel	364		331
Equipment and Other Rents	82		100
Gains on Property Dispositions	(8)		(27)
Total Expense	2,242		2,131

Operating Income	1,464		1,282

Interest Expense	(201)		(179)
Other Income - Net	41		26
Earnings Before Income Taxes	1,304		1,129

Income Tax Expense	(317)		(270)
Net Earnings	$	987	$	859

Per Common Share (Note 2)
Net Earnings Per Share, Basic	$	0.48	$	0.39
Net Earnings Per Share, Assuming Dilution	$	0.48	$	0.39


Average Shares Outstanding (In millions)	2,054		2,188
Average Shares Outstanding, Assuming Dilution (In millions)	2,058		2,193

CONDENSED CONSOLIDATED COMPREHENSIVE INCOME STATEMENTS (Unaudited)

(Dollars in millions)


	First Quarters
	2023		2022
Total Comprehensive Earnings (Note 10)	$	989	$	890

See accompanying notes to consolidated financial statements.

CSX Q1 2023 Form 10-Q p.3

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CSX CORPORATION

ITEM 1. FINANCIAL STATEMENTS

CONSOLIDATED BALANCE SHEETS

(Dollars in millions)


	(Unaudited)
	March 31, 2023		December 31, 2022
ASSETS
Current Assets:
Cash and Cash Equivalents	$	1,291	$	1,958
Short-term Investments	178		129
Accounts Receivable - Net (Note 8)	1,377		1,313
Materials and Supplies	394		341

Other Current Assets	115		108
Total Current Assets	3,355		3,849

Properties	48,441		48,105
Accumulated Depreciation	(14,148)		(13,863)
Properties - Net	34,293		34,242

Investment in Affiliates and Other Companies	2,313		2,292
Right-of-Use Lease Asset	489		505
Goodwill and Other Intangible Assets - Net	500		502
Other Long-term Assets	528		522
Total Assets	$	41,478	$	41,912

LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Accounts Payable	$	1,203	$	1,130
Labor and Fringe Benefits Payable	367		707
Casualty, Environmental and Other Reserves (Note 4)	151		144

Current Maturities of Long-term Debt (Note 7)	11		151
Income and Other Taxes Payable	361		111
Other Current Liabilities	228		228
Total Current Liabilities	2,321		2,471

Casualty, Environmental and Other Reserves (Note 4)	287		292
Long-term Debt (Note 7)	17,911		17,896
Deferred Income Taxes - Net	7,605		7,569
Long-term Lease Liability	478		488
Other Long-term Liabilities	542		571
Total Liabilities	29,144		29,287

Shareholders' Equity:
Common Stock, $1 Par Value	2,033		2,066
Other Capital	587		574
Retained Earnings	10,092		10,363
Accumulated Other Comprehensive Loss (Note 10)	(386)		(388)
Non-controlling Minority Interest	8		10
Total Shareholders' Equity	12,334		12,625
Total Liabilities and Shareholders' Equity	$	41,478	$	41,912

See accompanying notes to consolidated financial statements.

CSX Q1 2023 Form 10-Q p.4

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CSX CORPORATION

ITEM 1. FINANCIAL STATEMENTS

CONSOLIDATED CASH FLOW STATEMENTS (Unaudited)

(Dollars in millions)


	Three Months
	2023		2022

OPERATING ACTIVITIES
Net Earnings	$	987	$	859
Adjustments to Reconcile Net Earnings to Net Cash Provided by Operating Activities:
Depreciation and Amortization	393		360
Deferred Income Taxes	35		37
Gains on Property Dispositions	(8)		(27)




Other Operating Activities	(31)		4
Changes in Operating Assets and Liabilities:
Accounts Receivable	(63)		(131)
Other Current Assets	(72)		(40)
Accounts Payable	70		82
Income and Other Taxes Payable	266		225
Other Current Liabilities	(326)		(70)
Net Cash Provided by Operating Activities	1,251		1,299

INVESTING ACTIVITIES
Property Additions	(443)		(331)
Purchases of Short-term Investments	(101)		(19)
Proceeds from Sales of Short-term Investments	53		—
Proceeds and Advances from Property Dispositions	8		8
Business Acquisition, Net of Cash Acquired	(2)		(9)
Other Investing Activities	5		(17)
Net Cash Used In Investing Activities	(480)		(368)

FINANCING ACTIVITIES
Long-term Debt Repaid (Note 7)	(142)		(6)
Dividends Paid	(226)		(218)
Shares Repurchased	(1,067)		(1,016)



Other Financing Activities	(3)		6
Net Cash Used in Financing Activities	(1,438)		(1,234)

Net Decrease in Cash and Cash Equivalents	(667)		(303)

CASH AND CASH EQUIVALENTS
Cash and Cash Equivalents at Beginning of Period	1,958		2,239
Cash and Cash Equivalents at End of Period	$	1,291	$	1,936

See accompanying notes to consolidated financial statements.

CSX Q1 2023 Form 10-Q p.5

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CSX CORPORATION

ITEM 1. FINANCIAL STATEMENTS

CONSOLIDATED STATEMENTS OF CHANGES

IN SHAREHOLDERS' EQUITY (Unaudited)

(Dollars in millions)


Three Months 2023	Common Shares Outstanding (Thousands)	Common Stock and Other Capital		Retained Earnings		Accumulated Other Comprehensive Income (Loss)(a)		Non-controlling Minority Interest		Total Shareholders' Equity

Balance December 31, 2022	2,066,367	$	2,640	$	10,363	$	(388)	$	10	$	12,625
Comprehensive Earnings:
Net Earnings	—	—		987		—		—		987
Other Comprehensive Income	—	—		—		2		—		2
Total Comprehensive Earnings										989

Common stock dividends, $0.11 per share	—	—		(226)		—		—		(226)
Share Repurchases	(35,157)	(35)		(1,032)		—		—		(1,067)

Stock Option Exercises and Other	1,865	15		—		—		(2)		13
Balance March 31, 2023	2,033,075	$	2,620	$	10,092	$	(386)	$	8	$	12,334


Three Months 2022	Common Shares Outstanding (Thousands)	Common Stock and Other Capital		Retained Earnings		Accumulated Other Comprehensive Income (Loss)(a)		Non-controlling Minority Interest		Total Shareholders' Equity

Balance December 31, 2021	2,201,787	$	2,268	$	11,630	$	(408)	$	10	13,500
Comprehensive Earnings:
Net Earnings	—	—		859		—		—		859
Other Comprehensive Income	—	—		—		31		—		31
Total Comprehensive Earnings										890

Common stock dividends, $0.10 per share	—	—		(218)		—		—		(218)
Share Repurchases	(29,365)	(29)		(987)		—		—		(

SEC Form 10-Q filed by CSX Corporation