CSX CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
NOTE 4. Casualty, Environmental and Other Reserves
Personal injury and environmental reserves are considered critical accounting estimates due to the need for management judgment. Casualty, environmental and other reserves are provided for in the consolidated balance sheets as shown in the table below.
|
| | | | | | | | | | | | | | | | | | | |
| | September 30, 2019 | | December 31, 2018 |
| (Dollars in millions) | Current | Long-term | Total | | Current | Long-term | Total |
| | | | | | | | |
| Casualty: | | | | | | | |
| Personal Injury | $ | 47 |
| $ | 78 |
| $ | 125 |
| | $ | 40 |
| $ | 103 |
| $ | 143 |
|
| Occupational | 9 |
| 50 |
| 59 |
| | 10 |
| 46 |
| 56 |
|
| Total Casualty | 56 |
| 128 |
| 184 |
| | 50 |
| 149 |
| 199 |
|
| Environmental | 32 |
| 46 |
| 78 |
| | 39 |
| 41 |
| 80 |
|
| Other | 22 |
| 21 |
| 43 |
| | 24 |
| 21 |
| 45 |
|
| Total | $ | 110 |
| $ | 195 |
| $ | 305 |
| | $ | 113 |
| $ | 211 |
| $ | 324 |
|
| | | | | | | | | | | | | | | | | | | | | | | |
| June 30, 2020 | | | | December 31, 2019 | | |
| (Dollars in millions) | Current | Long-term | Total | | Current | Long-term | Total |
| | | | | | | |
| Casualty: | | | | | | | |
| Personal Injury | $ | 44 | | $ | 83 | | $ | 127 | | | $ | 42 | | $ | 87 | | $ | 129 | |
| Occupational | 9 | | 52 | | 61 | | | 6 | | 52 | | 58 | |
| Total Casualty | 53 | | 135 | | 188 | | | 48 | | 139 | | 187 | |
| Environmental | 30 | | 45 | | 75 | | | 31 | | 43 | | 74 | |
| Other | 20 | | 23 | | 43 | | | 21 | | 23 | | 44 | |
| Total | $ | 103 | | $ | 203 | | $ | 306 | | | $ | 100 | | $ | 205 | | $ | 305 | |
These liabilities are accrued when probable and reasonably estimable in accordance with the Contingencies Topic in the ASC. Actual settlements and claims received could differ, and final outcomes of these matters cannot be predicted with certainty. Considering the legal defenses currently available, the liabilities that have been recorded and other factors, it is the opinion of management that none of these items individually, when finally resolved, will have a material adverse effect on the Company's financial condition, results of operations or liquidity. Should a number of these items occur in the same period, however, their combined effect could be material in that particular period.
Casualty
Casualty reserves of $184$188 million and $199$187 million as of SeptemberJune 30, 20192020 and December 31, 2018,2019, respectively, represent accruals for personal injury, occupational disease and occupational injury claims. During second quarter 2018, the Company increased itsThe Company's self-insured retention amount for these claims from $50 million tois $75 million per occurrence for claims occurring on or after June 1, 2018.occurrence. Currently, 0 individual claim is expected to exceed the self-insured retention amount. In accordance with the Contingencies Topic in the ASC, to the extent the value of an individual claim exceeds the self-insured retention amount, the Company would present the liability on a gross basis with a corresponding receivable for insurance recoveries. These reserves fluctuate based upon the timing of payments as well as changes in estimate. Actual results may vary from estimates due to the number, type and severity of the injury, costs of medical treatments and uncertainties in litigation. Most of the Company's casualty claims relate to CSXT. Defense and processing costs, which historically have been insignificant and are anticipated to be insignificant in the future, are not included in the recorded liabilities.
Personal Injury
Personal injury reserves represent liabilities for employee work-related and third-party injuries. Work-related injuries for CSXT employees are primarily subject to the Federal Employers’ Liability Act (“FELA”). CSXT retains an independent actuary to assist management in assessing the value of personal injury claims. An analysis is performed by the actuary quarterly and is reviewed by management. This analysis for the quarter did not result in a material adjustment to the personal injury reserve in the quarter ended SeptemberJune 30, 20192020 or SeptemberJune 30, 2018.2019. The methodology used by the actuary includes a development factor to reflect growth or reduction in the value of these personal injury claims based largely on CSXT's historical claims and settlement experience.
CSX Q2 2020 Form 10-Q p.14
|
| | |
| CSX Q3 2019 Form 10-Q p.15
|
|
CSX CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
NOTE 4. Casualty, Environmental and Other Reserves, continued
Occupational
Occupational reserves represent liabilities for occupational disease and injury claims. Occupational disease claims arise primarily from allegations of exposure to asbestos in the workplace. Occupational injury claims arisearising from allegations of exposure to certain other materials in the workplace such(such as solvents, soaps, chemicals (collectively referred to as “irritants”) and diesel fuels (like exhaust fumes), past exposure to asbestos or allegations of chronic physical injuries resulting from work conditions such(such as repetitive stress injuries. Theinjuries). Beginning in second quarter 2020, the Company retains an independent actuary to analyze the Company’s historical claim filings, settlement amounts, and dismissal rates to assist in determining future anticipated claim filing rates and average settlement values. This analysis is performed by the actuary and reviewed by management forquarterly. Previously, the quarter did not result in aquarterly analysis was performed by management. There were no material adjustmentadjustments to the occupational reserve in the quarter ended SeptemberJune 30, 20192020 or SeptemberJune 30, 2018.2019.
Environmental
Environmental reserves were $78$75 million and $80$74 million as of SeptemberJune 30, 20192020 and December 31, 2018,2019, 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 231220 environmentally impaired sites. Many of these are, or may be, subject to remedial action under the federal Comprehensive Environmental Response, Compensation and Liability Act of 1980 ("CERCLA"), also known as the Superfund Law, or similar state statutes. Most of these proceedings arose from environmental conditions on properties used for ongoing or discontinued railroad operations. A number of these proceedings, however, are based on allegations that the Company, or its predecessors, sent hazardous substances to facilities owned or operated by others for treatment, recycling or disposal. In addition, some of the Company's land holdings were leased to others for commercial or industrial uses that may have resulted in releases of hazardous substances or other regulated materials onto the property and could give rise to proceedings against the Company.
In any such proceedings, the Company is subject to environmental clean-up and enforcement actions under the Superfund Law, as well as similar state laws that may impose joint and several liability for clean-up and enforcement costs on current and former owners and operators of a site without regard to fault or the legality of the original conduct. These costs could be substantial.
In accordance with the Asset Retirement and Environmental Obligations Topic in the ASC, the Company reviews its role with respect to each site identified at least quarterly, 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.
CSX Q2 2020 Form 10-Q p.15
CSX CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
NOTE 4. Casualty, Environmental and Other Reserves, continued
Based on themanagement's review process, the Company hasamounts have been recorded amounts to cover contingent anticipated future environmental remediation costs with respect to each site to the extent such costs are reasonably estimable and probable. The recorded liabilities for estimated future environmental costs are undiscounted. The liability includes future costs for remediation and restoration of sites as well as any significant ongoing monitoring costs, but excludes any anticipated insurance recoveries. Payments related to these liabilities are expected to be made over the next several years. Environmental remediation costs are included in materials, supplies and other on the consolidated income statements.
|
| | |
| CSX Q3 2019 Form 10-Q p.16
|
|
CSX CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
NOTE 4. Casualty, Environmental and Other Reserves, continued
Currently, the Company does not possess sufficient information to reasonably estimate the amounts of additional liabilities, if any, on some sites until completion of future environmental studies. In addition, 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. Based upon information currently available, however, the Company believes its environmental reserves accurately reflect the estimated cost of remedial actions currently required.
Other
Other reserves were $43 million and $45$44 million as of SeptemberJune 30, 20192020 and December 31, 2018,2019, respectively. These reserves include liabilities for various claims, such as property, automobile and general liability. Also included in other reserves are longshoremen disability claims related to a previously owned international shipping business (these claims are in runoff) as well as claims for current port employees.
NOTE 5. Leases
CSX has various lease agreements with terms up to 50 years, including leases of land, land with integral equipment (e.g. track), buildings and various equipment. Some leases include options to purchase, terminate or extend for one or more years. These options are included in the lease term when it is reasonably certain that the option will be exercised.
At inception, the Company determines if an arrangement contains a lease and whether that lease meets the classification criteria of a finance or operating lease. Some of the Company’s lease arrangements contain lease components (e.g. minimum rent payments) and non-lease components (e.g. maintenance, labor charges, etc.). The Company generally accounts for each component separately based on the estimated standalone price of each component. For certain equipment leases, such as freight car, vehicles and work equipment, the Company accounts for the lease and non-lease components as a single lease component.
Certain of the Company’s lease agreements include rental payments that are adjusted periodically for an index or rate. The leases are initially measured using the projected payments adjusted for the index or rate in effect at the commencement date. The Company’s lease agreements do not contain any material residual value guarantees or material restrictive covenants.
Operating Leases
Operating leases are included in right-of-use lease assets, other current liabilities and long-term lease liabilities on the consolidated balance sheets. These assets and liabilities are recognized at the commencement date based on the present value of remaining lease payments over the lease term using the Company’s secured incremental borrowing rates or implicit rates, when readily determinable. Short-term operating leases, which have an initial term of 12 months or less, are not recorded on the balance sheet.
Lease expense for operating leases is recognized on a straight-line basis over the lease term. Variable lease expense is recognized in the period in which the obligation for those payments is incurred. Lease expense is included in equipment and other rents on the consolidated income statements and is reported net of lease income. Lease income is not material to the results of operations for the quarter or nine months ended September 2019.
|
| | |
| CSX Q3 2019 Form 10-Q p.17
|
|
CSX CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
NOTE 5. Leases, continued
The following table presents information about the amount, timing and uncertainty of cash flows arising from the Company’s operating leases as of September 30, 2019.
|
| | | |
| (Dollars in Millions) | September 30, 2019 |
| Maturity of Lease Liabilities | Lease Payments |
| 2019 (remaining) | $ | 14 |
|
| 2020 | 61 |
|
| 2021 | 53 |
|
| 2022 | 46 |
|
| 2023 | 38 |
|
| Thereafter | 1,242 |
|
| Total undiscounted operating lease payments | $ | 1,454 |
|
| Less: Imputed interest | (901 | ) |
| Present value of operating lease liabilities | $ | 553 |
|
| | |
| Balance Sheet Classification | |
| Current lease liabilities (recorded in other current liabilities) | $ | 59 |
|
| Long-term lease liabilities | 494 |
|
| Total operating lease liabilities | $ | 553 |
|
| | |
| Other Information | |
| Weighted-average remaining lease term for operating leases | 32 years |
|
| Weighted-average discount rate for operating leases | 5.0 | % |
Cash Flows
An initial right-of-use asset of $534 million was recognized as a non-cash asset addition with the adoption of the new lease accounting standard. Additional right-of-use assets of $41 million were recognized as non-cash asset additions that resulted from new operating lease liabilities during the nine months ended September 30, 2019. Cash paid for amounts included in the present value of operating lease liabilities was $44 million during the nine months ended September 30, 2019 and is included in operating cash flows.
Operating Lease Costs
Operating lease costs were $21 million during third quarter 2019 and $60 million for the nine months ended September 30, 2019. These costs are primarily related to long-term operating leases, but also include immaterial amounts for variable leases and short-term leases with terms greater than 30 days.
Finance Leases
Finance leases are included in properties-net and long-term debt on the consolidated balance sheets. The associated amortization expense and interest expense are included in depreciation and interest expense, respectively, on the consolidated income statements. These leases are not material to the consolidated financial statements as of September 30, 2019.
|
| | |
| CSX Q3 2019 Form 10-Q p.18
|
|
CSX CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
NOTE 6.5. Commitments and Contingencies
Insurance
The Company maintains insurance programs with substantial limits for property damage, (which includesincluding resulting business interruption)interruption, and third-party liability. A certain amount of risk is retained by the Company on each ofinsurance program. In first quarter 2020, the Company restructured its property and liability programs. Theinsurance program to increase the level at which the Company has aretains all risk from $50 million to $100 million per occurrence retention for losses from floods and named windstorms and afrom $25 million to $75 million per occurrence retention for other property losses other than floods and named windstorms.losses. For claims occurring on or after June 1, 2018, the Company increased its self-insured retention for third-party liability claims, from $50 millionthe Company retains all risk up to $75 million per occurrence. While the Company believes its insurance coverage is adequate, future claims could exceed existing insurance coverage or insurance may not continue to be available at commercially reasonable rates.
CSX Q2 2020 Form 10-Q p.16
CSX CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
NOTE 5. Commitments and Contingencies, continued
Legal
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, including, but not limited to, those related to fuel surcharge practices, tax matters, environmental and hazardous material exposure matters, FELA and labor claims by current or former employees, other personal injury or property claims and disputes and complaints involving certain transportation rates and charges. Some of the legal proceedings include claims for compensatory as well as punitive damages and others are, or are purported to be, class actions. While the final outcome of these matters cannot be reasonably determined,predicted with certainty, considering, among other things, the legal defenses available and liabilities that have been recorded along with applicable insurance, it is currently the opinion of management that none of these pending items is likely to have a material adverse effect on the Company's financial condition, results of operations or liquidity. An unexpected adverse resolution of 1one or more of these items, however, could have a material adverse effect on the Company's financial condition, results of operations or liquidity in that particular period.
The Company is able to estimate a range of possible loss for certain legal proceedings for which a loss is reasonably possible in excess of reserves established. The Company has estimated this range to be $1 million to $28$43 million in aggregate at SeptemberJune 30, 2019.2020. This estimated aggregate range is based upon currently available information and is subject to significant judgment and a variety of assumptions. Accordingly, the Company's estimate will change from time to time, and actual losses may vary significantly from the current estimate.
Fuel Surcharge Antitrust Litigation
In May 2007, class action lawsuits were filed against CSXT and 3 other U.S.-based Class I railroads alleging that the defendants' fuel surcharge practices relating to contract and unregulated traffic resulted from an illegal conspiracy in violation of antitrust laws. The class action lawsuits were consolidated into 1 case in federal court in the District of Columbia. In 2017, the District Court issued its decision denying class certification. On August 16, 2019, the U.S. Court of Appeals for the D.C. Circuit affirmed the District Court’s ruling.
|
| | |
| CSX Q3 2019 Form 10-Q p.19
|
|
CSX CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
NOTE 6. Commitments and Contingencies, continued
The District Court had delayed proceedings on the merits of the consolidated case pending the outcome of the class certification proceedings. The 8 named plaintiffsconsolidated case is now moving forward without class certification. Although a class was not certified, shippers other than those who brought the original lawsuit in the underlying case2007 can now choose whether to proceed with their claims. Because there is no class, other shippers must decide whether to bring an individual claimclaims against one or more railroads. Some individualIndividual shipper claims filed to date have been filed.consolidated into a separate case.
CSXT believes that its fuel surcharge practices were arrived at and applied lawfully and that the case is without merit. Accordingly, the Company intends to defend itself vigorously. However, penalties for violating antitrust laws can be severe, and resolution of these matters individually or when aggregated could have a material adverse effect on the Company's financial condition, results of operations or liquidity in that particular period.
CSX Q2 2020 Form 10-Q p.17
CSX CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
NOTE 5. Commitments and Contingencies, continued
Environmental
CSXT is indemnifying Pharmacia LLC, (formerlyformerly known as Monsanto Company)Company, ("Pharmacia") for certain liabilities associated with real estate located in Kearny, New Jersey along the Lower Passaic River (the “Property”). The Property, which was formerly owned by Pharmacia, is now owned by CSXT. CSXT's indemnification and defense duties arise with respect to several matters. The U.S. Environmental Protection Agency ("EPA"), using its CERCLA authority, seeks cleanupthe investigation and removal costs and other damages associated with the presencecleanup of hazardous substances in the 17-mile Lower Passaic River Study Area (the "Study Area”). CSXT, on behalf of Pharmacia, and a significant number of other potentially responsible parties are together conducting a Remedial Investigation and Feasibility Study of the Study Area pursuant to an Administrative Settlement Agreement and Order on Consent with the EPA. Pharmacia’s share of responsibility, indemnified by CSXT, for the investigation and cleanup costs of the Study Area may be determined through various mechanisms including (a) an allocation and settlement with EPA; (b) litigation brought by EPA against non-settling parties; or (c) litigation among the responsible parties.
In March 2016, EPA issued its Record of Decision detailing the agency’s mandated remedial process for the lower 8 miles of the Study Area. Approximately 80 parties, including Pharmacia, are participating in an EPA-directed allocation process to assign responsibility for costs to be incurred implementing the remedy selected for the lower 8 miles of the Study Area. CSXT is participating in the allocation process on behalf of Pharmacia. At a later date, EPA will select a remedy for the remainder of the Study Area and is expected to again seek the participation of private parties to implement the selected remedy using EPA’s CERCLA authority to compel such participation, if necessary.
CSXT is also defending and indemnifying Pharmacia with regard to the Property in litigation filed by Occidental Chemical Corporation ("Occidental"), which is seeking to recover various costs. These costs include costs for the remedial design of the lower 8 miles of the Study Area, as well as anticipated costs associated with the future remediation of the lower 8 miles of the Study Area and potentially the entire Study Area. Alternatively, Occidental seeks to compel some, or all of the defendants to participate in the remediation of the Study Area. Pharmacia is one of approximately 110 defendants in this federal lawsuit filed by Occidental on June 30, 2018.
CSXT is also defending and indemnifying Pharmacia in a cooperative natural resource damages assessment process related to the Property. Based on currently available information, the Company does not believe any indemnification or remediation costs potentially allocable to CSXT with respect to the Property and the Study Area would be material to the Company's financial condition, results of operations or liquidity.
CSX Q2 2020 Form 10-Q p.18
|
| | |
| CSX Q3 2019 Form 10-Q p.20
|
|
CSX CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
NOTE 7.6. Employee Benefit Plans
The Company sponsors defined benefit pension plans principally for salaried, management personnel. Beginning in 2020, the CSX Pension Plan is closed to new participants.
CSX also sponsors a non-contributory post-retirement medical plan and a life insurance plan that provide certain benefits to eligible employees hired prior to January 1, 2003. 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 have been eliminated. Independent actuaries 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.
Only the service cost component of net periodic benefit costs is included in labor and fringe expense on the consolidated income statement. All other components of net periodic benefit cost are included in other income - net.
|
| | | | | | | | | | | | | | | |
| | Pension Benefits Cost |
| (Dollars in millions) | Third Quarters | | Nine Months |
| | 2019 | | 2018 | | 2019 | | 2018 |
| Service Cost Included in Labor and Fringe | $ | 8 |
| | $ | 8 |
| | $ | 24 |
| | $ | 24 |
|
| | | | | | | | |
| Interest Cost | 25 |
| | 23 |
| | 77 |
| | 69 |
|
| Expected Return on Plan Assets | (43 | ) | | (44 | ) | | (129 | ) | | (131 | ) |
| Amortization of Net Loss | 8 |
| | 10 |
| | 23 |
| | 30 |
|
| Total Included in Other Income - Net | (10 | ) | | (11 | ) | | (29 | ) | | (32 | ) |
| | | | | | | | |
| Net Periodic Benefit Credit | $ | (2 | ) | | $ | (3 | ) | | $ | (5 | ) | | $ | (8 | ) |
| | | | | | | | |
| | | | | | | | |
| | Other Post-retirement Benefits Cost |
| (Dollars in millions) | Third Quarters | | Nine Months |
| | 2019 | | 2018 | | 2019 | | 2018 |
| Service Cost Included in Labor and Fringe | $ | — |
| | $ | — |
| | $ | 1 |
| | $ | 1 |
|
| | | | | | | | |
| Interest Cost | — |
| | 2 |
| | 2 |
| | 5 |
|
| Amortization of Prior Service Costs | (2 | ) | | — |
| | (5 | ) | | — |
|
| Total Included in Other Income - Net | (2 | ) | | 2 |
| | (3 | ) | | 5 |
|
| | | | | | | | |
| Net Periodic Benefit (Credit)/Cost | $ | (2 | ) | | $ | 2 |
| | $ | (2 | ) | | $ | 6 |
|
| | | | | | | | |
| | | | | | | | | | | | | | | | | | | | | | | |
| Pension Benefits Cost | | | | | | |
| (Dollars in millions) | Second Quarters | | | | Six Months | | |
| 2020 | | 2019 | | 2020 | | 2019 |
| Service Cost Included in Labor and Fringe | $ | 10 | | | $ | 8 | | | $ | 20 | | | $ | 16 | |
| | | | | | | |
| Interest Cost | 21 | | | 26 | | | 41 | | | 52 | |
| Expected Return on Plan Assets | (44) | | | (43) | | | (87) | | | (86) | |
| Amortization of Net Loss | 14 | | | 8 | | | 28 | | | 15 | |
| Total Included in Other Income - Net | (9) | | | (9) | | | (18) | | | (19) | |
| | | | | | | |
| Net Periodic Benefit Cost/(Credit) | $ | 1 | | | $ | (1) | | | $ | 2 | | | $ | (3) | |
| | | | | | | |
| | | | | | | |
| | | | | | | |
| | | | | | | |
| Other Post-retirement Benefits Cost | | | | | | |
| (Dollars in millions) | Second Quarters | | | | Six Months | | |
| 2020 | | 2019 | | 2020 | | 2019 |
| Service Cost Included in Labor and Fringe | $ | 1 | | | $ | 1 | | | $ | 1 | | | $ | 1 | |
| | | | | | | |
| Interest Cost | — | | | 1 | | | 1 | | | 2 | |
| | | | | | | |
| Amortization of Prior Service Costs | (1) | | | (1) | | | (3) | | | (3) | |
| Total Included in Other Income - Net | (1) | | | — | | | (2) | | | (1) | |
| | | | | | | |
| Net Periodic Benefit Cost/(Credit) | $ | — | | | $ | 1 | | | $ | (1) | | | $ | — | |
| | | | | | | |
| | | | | | | |
| | | | | | | |
Qualified pension plan obligations are funded in accordance with regulatory requirements and with an objective of meeting or exceeding minimum funding requirements necessary to avoid restrictions on flexibility of plan operation and benefit payments. NaN contributions to the Company's qualified pension plans are requiredexpected in 2019.2020.
CSX Q2 2020 Form 10-Q p.19
|
| | |
| CSX Q3 2019 Form 10-Q p.21
|
|
CSX CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
NOTE 8.7. Debt and Credit Agreements
Total activity related to long-term debt as of the end of thirdsecond quarter 20192020 is shown in the table below. For fair value information related to the Company's long-term debt, see Note 11,10, Fair Value Measurements.
|
| | | | | | | | | |
| (Dollars in millions) | Current Portion | Long-term Portion | Total |
| Long-term debt as of December 31, 2018 | $ | 18 |
| $ | 14,739 |
| $ | 14,757 |
|
| 2019 activity: | | | |
| Long-term debt issued | — |
| 2,000 |
| 2,000 |
|
| Long-term debt repaid | (18 | ) | — |
| (18 | ) |
| Reclassifications | 745 |
| (745 | ) | — |
|
| Discount, premium and other activity | — |
| (2 | ) | (2 | ) |
| Long-term debt as of September 30, 2019 | $ | 745 |
| $ | 15,992 |
| $ | 16,737 |
|
| | | | | | | | | | | |
| (Dollars in millions) | Current Portion | Long-term Portion | Total |
| Long-term debt as of December 31, 2019 | $ | 245 | | $ | 15,993 | | $ | 16,238 | |
| 2020 activity: | | | |
| Long-term debt issued | — | | 500 | | 500 | |
| Long-term debt repaid | (227) | | — | | (227) | |
| Reclassifications | 360 | | (360) | | — | |
| Discount, premium and other activity | — | | (5) | | (5) | |
| | | |
| Long-term debt as of June 30, 2020 | $ | 378 | | $ | 16,128 | | $ | 16,506 | |
Debt Issuance
On September 12, 2019,March 30, 2020, CSX issued$400 million of 2.40% notes due 2030 and $600 million of 3.35% notes due 2049. These notes are included in the consolidated balance sheets under long-term debt and may be redeemed by the Company at any time, subject to payment of certain make-whole premiums. On October 15, 2019, a portion of the net proceeds was used to fully redeem CSX’s outstanding $500 million of 3.70% notes originally due October 30, 2020. As the Company issued notification on September 12, 2019 of its intent to redeem the October 2020 notes early, these notes were included in current maturities of long-term debt on the consolidated balance sheet as of September 30, 2019. The remaining net proceeds from the September 2019 issuance will also be used for general corporate purposes, which may include repurchases of CSX’s common stock, capital investment, working capital requirements, improvements in productivity and other cost reductions at CSX’s major transportation units.
On February 28, 2019, CSX issued $600 million of 4.25%3.8% notes due 2029, which was a reopening of existing notes originally issued in November 2018, and $400 million of 4.50% notes due 2049.2050. These notes are included in the consolidated balance sheets under long-term debt and may be redeemed by the Company at any time, subject to payment of certain make-whole premiums. The net proceeds will be used for general corporate purposes, which may include debt repayments, repurchases of CSX'sCSX’s common stock, capital investment, working capital requirements, improvements in productivity and other cost reduction initiatives atreductions.
Interest Rate Derivatives
On April 29, 2020, the Company’s major transportation units.Company executed a forward starting interest rate swap with an aggregate notional value of $250 million to hedge the benchmark interest rate associated with future interest payments related to the anticipated refinancing of $850 million of 3.25% notes due 2027. In accordance with the Derivatives and Hedging Topic in the ASC, the Company has designated this swap as a cash flow hedge. As of June 30, 2020, the asset value of the forward starting interest rate swap was $11 million and was recorded in other long-term assets on the consolidated balance sheet.
Unrealized gains or losses associated with changes in the fair value of the hedge are recorded net of tax in accumulated other comprehensive income (“AOCI”) on the consolidated balance sheet. Unless settled early, the swap will expire in 2027 and the unrealized gain or loss in AOCI will be recognized in earnings as an adjustment to interest expense over the same period during which the hedged transaction affects earnings. Unrealized gains were $9 million net of tax during the quarter and six months ended June 30, 2020.
Credit Facility
In March 2019, CSX replaced its existing $1.0 billion unsecured, revolving credit facility withhas a new $1.2 billion unsecured, revolving credit facility backed by a diverse syndicate of banks. The newThis facility allows same-day borrowings at floating interest rates, based on LIBOR or an agreed-upon replacement, plus a spread that depends upon CSX's senior unsecured debt ratings. LIBOR is the London Interbank Offered Rate which is a daily reference rate based on the interest rates at which banks offer to lend unsecured funds. This facility expires in March 2024, and at SeptemberJune 30, 2019,2020, the Company had 0 outstanding balances under this facility.
Commitment fees and interest rates payable under the facility were similar to fees and rates available to comparably rated investment-grade borrowers. As of thirdsecond quarter 2019,2020, CSX was in compliance with all covenant requirements under this facility.
CSX Q2 2020 Form 10-Q p.20
|
| | |
| CSX Q3 2019 Form 10-Q p.22
|
|
CSX CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
NOTE 8.7. Debt and Credit Agreements, continued
Commercial Paper
Under its commercial paper program, which is backed by the revolving credit facility, the Company may issue unsecured commercial paper notes up to a maximum aggregate principal amount of $1.0 billion outstanding at any one time. Proceeds from issuances of the notes are expected to be used for general corporate purposes. At SeptemberJune 30, 2019,2020, the Company had 0 outstanding debt under the commercial paper program.
NOTE 9.8. Revenues
The Company’s revenues are primarily derived from the transportation of freight as performance obligations that arise from its contracts with customers are satisfied. The following table presents the Company’s revenues disaggregated by market as this best depicts how the nature, amount, timing and uncertainty of revenue and cash flows are affected by economic factors:
| | | | | | | | | | | | | | | | | |
| Second Quarters | | | Six Months | |
| (Dollars in millions) | 2020 | 2019 | | 2020 | 2019 |
| | | | | |
Chemicals(a) | $ | 531 | | $ | 592 | | | $ | 1,157 | | $ | 1,180 | |
| Agricultural and Food Products | 311 | | 358 | | | 676 | | 702 | |
Forest Products(a) | 194 | | 218 | | | 411 | | 430 | |
Metals and Equipment(a) | 142 | | 188 | | | 341 | | 377 | |
Minerals(a) | 134 | | 147 | | | 261 | | 272 | |
| Fertilizers | 103 | | 112 | | | 215 | | 222 | |
| Automotive | 93 | | 329 | | | 374 | | 640 | |
| Total Merchandise | 1,508 | | 1,944 | | | 3,435 | | 3,823 | |
| | | | | |
| Coal | 287 | | 557 | | | 692 | | 1,095 | |
| | | | | |
| Intermodal | 359 | | 436 | | | 781 | | 864 | |
| | | | | |
| Other | 101 | | 124 | | | 202 | | 292 | |
| | | | | |
| Total | $ | 2,255 | | $ | 3,061 | | | $ | 5,110 | | $ | 6,074 | |
|
| | | | | | | | | | | | | |
| | Third Quarters | | Nine Months |
| (Dollars in millions) | 2019 | 2018 | | 2019 | 2018 |
| | | | | | |
| Chemicals | $ | 589 |
| $ | 596 |
| | $ | 1,766 |
| $ | 1,741 |
|
| Agricultural and Food Products | 354 |
| 325 |
| | 1,056 |
| 959 |
|
| Automotive | 297 |
| 300 |
| | 937 |
| 934 |
|
| Forest Products | 225 |
| 223 |
| | 664 |
| 633 |
|
| Metals and Equipment | 195 |
| 205 |
| | 571 |
| 589 |
|
| Minerals | 145 |
| 137 |
| | 412 |
| 388 |
|
| Fertilizers | 101 |
| 104 |
| | 323 |
| 332 |
|
| Total Merchandise | 1,906 |
| 1,890 |
| | 5,729 |
| 5,576 |
|
| | | | | | |
| Coal | 516 |
| 588 |
| | 1,611 |
| 1,660 |
|
| | | | | | |
| Intermodal | 447 |
| 500 |
| | 1,311 |
| 1,439 |
|
| | | | | | |
| Other | 109 |
| 151 |
| | 401 |
| 432 |
|
| | | | | | |
| Total | $ | 2,978 |
| $ | 3,129 |
| | $ | 9,052 |
| $ | 9,107 |
|
Revenue Recognition
The Company generates revenue from freight billings under contracts with customers generally on a rate per carload, container or ton-basis based on length of haul and commodities carried. The Company’s performance obligation arises when it receives a bill of lading (“BOL”) to transport a customer's commodities at a negotiated price contained in a transportation services agreement or a publicly disclosed tariff rate. Once a BOL is received, a contract is formed whereby the parties are committed to perform, collectability of consideration is probable and the rights of the parties, shipping terms and conditions, and payment terms are identified. A customer may submit several BOLs for transportation services at various times throughout a service agreement term but each shipment represents a distinct service that is a separately identified performance obligation.
CSX Q2 2020 Form 10-Q p.21
|
| | |
| CSX Q3 2019 Form 10-Q p.23
|
|
CSX CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
NOTE 9.8. Revenues, continued
The average transit time to complete a shipment is between 3 to 8 days depending on market. Payments for transportation services are normally billed once a BOL is received and are generally due within 15 days after the invoice date. The Company recognizes revenue over transit time of freight as it moves from origin to destination. Revenue for services started but not completed at the reporting date is allocated based on the relative transit time in each reporting period, with the portion allocated for services subsequent to the reporting date considered remaining performance obligations.
The certain key estimates included in the recognition and measurement of revenue and related accounts receivable are as follows:
•Revenue associated with shipments in transit is recognized ratably over transit time and is based on average cycle times to move commodities and products from their origin to their final destination or interchange;
•Adjustments to revenue for billing corrections and billing discounts;
•Adjustments to revenue for overcharge claims filed by customers, which are based on historical payments to customers for rate overcharges as a percentage of total billing; and
•Incentive-based refunds to customers, which are primarily volume-related, are recorded as a reduction to revenue on the basis of the projected liability (this estimate is based on historical activity, current volume levels and forecasted future volume).
Revenue related to interline transportation services that involve the services of another party, such as another railroad, is reported on a net basis. The portion of the gross amount billed to customers that is remitted by the Company to another party is not reflected as revenue.
Other revenue is comprised of revenue from regional subsidiary railroads and incidental charges, including demurrage and switching. It is recorded upon completion of the service and accounts for an immaterial percentage of the Company's total revenue. Revenue from regional subsidiary railroads includes shipments by railroads that the Company does not directly operate. Demurrage represents charges assessed when freight cars are held by a customer beyond a specified period of time. Switching revenue is primarily generatedrepresents charges assessed when the Companya railroad switches cars for a customer or another railroad.
During the thirdsecond quarters and ninesix months 2019ended 2020 and 2018,2019, revenue recognized from performance obligations related to prior periods (for example, due to changes in transaction price), was not material.
Remaining Performance Obligations
Remaining performance obligations represent the transaction price allocated to future reporting periods for freight services started but not completed at the reporting date. This includes the unearned portion of billed and unbilled amounts for cancellable freight shipments in transit. The Company expects to recognize the unearned portion of revenue for freight services in transit within one week of the reporting date. As of SeptemberJune 30, 2019, the Company had 0 material2020, remaining performance obligations.obligations were not material.
Contract Balances and Accounts Receivable
The timing of revenue recognition, billings and cash collections results in accounts receivable and customer advances and deposits (contract liabilities) on the consolidated balance sheets. The Company had 0 material contractContract assets, contract liabilities orand deferred contract costs recorded on the consolidated balance sheet as of SeptemberJune 30, 2019.
CSX Q2 2020 Form 10-Q p.22
|
| | |
| CSX Q3 2019 Form 10-Q p.24
|
|
CSX CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
NOTE 9.8. Revenues, continued
The Company’s accounts receivable - net consists of freight and non-freight receivables, reduced by an allowance for doubtful accounts.credit losses.
| | | | | | | | |
| (Dollars in millions) | June 30,
2020 | December 31,
2019 |
| | |
| Freight Receivables | $ | 644 | | $ | 790 | |
| Freight Allowance for Credit Losses | (17) | | (21) | |
| Freight Receivables, net | 627 | | 769 | �� |
| | |
| Non-Freight Receivables | 244 | | 226 | |
| Non-Freight Allowance for Credit Losses | (11) | | (9) | |
| Non-Freight Receivables, net | 233 | | 217 | |
| Total Accounts Receivable, net | $ | 860 | | $ | 986 | |
|
| | | | | | |
| (Dollars in millions) | September 30,
2019 | December 31,
2018 |
| | | |
| Freight Receivables | $ | 861 |
| $ | 846 |
|
| Freight Allowance for Doubtful Accounts | (20 | ) | (18 | ) |
| Freight Receivables, net | 841 |
| 828 |
|
| | | |
| Non-Freight Receivables | 269 |
| 190 |
|
| Non-Freight Allowance for Doubtful Accounts | (9 | ) | (8 | ) |
| Non-Freight Receivables, net | 260 |
| 182 |
|
| Total Accounts Receivable, net | $ | 1,101 |
| $ | 1,010 |
|
Freight receivables include amounts earned, billed and unbilled, and currently due from customers for transportation-related services. Non-freight receivables include amounts billed and unbilled and currently due related to government reimbursement receivables and other non-revenue receivables. The Company maintains an allowance for doubtful accountscredit losses to provide for the estimated amount of receivables that will not be collected. The allowance is based upon an assessment of customer creditworthiness,risk characteristics, historical payment experience, and the age of outstanding receivables andadjusted for forward-looking economic conditions.conditions as necessary. ImpairmentCredit losses recognized on the Company’s accounts receivable were 0tnot material in the thirdsecond quarters or ninesix months 2019ended 2020 and 2018.2019.
NOTE 10.9. Income Taxes
There have been 0no material changes to the balance of unrecognized tax benefits reported at December 31, 2018.2019.
CSX Q2 2020 Form 10-Q p.23
|
| | |
| CSX Q3 2019 Form 10-Q p.25
|
|
CSX CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
NOTE 11.10. Fair Value Measurements
The Financial Instruments Topic in the ASC requires disclosures about fair value of financial instruments in annual reports as well as in quarterly reports. For CSX, this statement applies to certain investments, long-term debt and long-term debt.interest rate derivatives. Disclosure of the fair value of pension plan assets is only required annually. Also, this rule clarifies the definition of fair value for financial reporting, establishes a framework for measuring fair value and requires additional disclosures about the use of fair value measurements.
Various inputs are considered when determining the value of the Company's investments, pension plan assets, long-term debt and long-term debt.interest rate derivatives. The inputs or methodologies used for valuing securities are not necessarily an indication of the risk associated with investing in these securities. These inputs are summarized in the three broad levels listed below.
•Level 1 - observable market inputs that are unadjusted quoted prices for identical assets or liabilities in active markets;
•Level 2 - other significant observable inputs (including quoted prices for similar securities, interest rates, credit risk, etc.); and
•Level 3 - significant unobservable inputs (including the Company's own assumptions about the assumptions market participants would use in determining the fair value of investments).
The valuation methods described below may produce a fair value calculation that may not be indicative of net realizable value or reflective of future fair values. Furthermore, while the Company believes its valuation methods are appropriate and consistent with other market participants, the use of different methodologies or assumptions to determine the fair value of certain financial instruments could result in a different fair value measurement at the reporting date.
Investments
The Company's investment assets, valued with assistance from a third-party trustee, consist of certificates of deposits, commercial paper, corporate bonds and government securities and are carried at fair value on the consolidated balance sheet per the Fair Value Measurements and Disclosures Topic in the ASC. There are several valuation methodologies used for those assets as described below.
| |
• | Certificates of Deposit and Commercial Paper (Level 2)
: Valued at amortized cost, which approximates fair value; and
|
| |
• | Corporate Bonds and Government Securities (Level 2): Valued using broker quotes that utilize observable market inputs.
|
•Commercial Paper and Certificates of Deposit (Level 2): Valued at amortized cost, which approximates fair value; and
•Corporate Bonds and Government Securities (Level 2): Valued using broker quotes that utilize observable market inputs.
CSX Q2 2020 Form 10-Q p.24
CSX CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
NOTE 10. Fair Value Measurements, continued
The Company's investment assets are carried at fair value on the consolidated balance sheets as summarized in the following table. All of the inputs used to determine the fair value of the Company's investments are Level 2 inputs. The amortized cost basis of these investments was $1,118 million and $340 million as of September 30, 2019 and December 31, 2018, respectively.
| | | | | | | | |
| (Dollars in Millions) | June 30,
2020 | December 31,
2019 |
| | |
| Commercial Paper and Certificates of Deposit | $ | 202 | | $ | 989 | |
| Corporate Bonds | 67 | | 59 | |
| Government Securities | 35 | | 36 | |
| | |
| Total investments at fair value | $ | 304 | | $ | 1,084 | |
| | |
| Total investments at amortized cost | $ | 294 | | $ | 1,076 | |
|
| | | | | | |
| (Dollars in Millions) | September 30,
2019 | December 31,
2018 |
| Certificates of Deposit and Commercial Paper | $ | 1,029 |
| $ | 250 |
|
| Corporate Bonds | 62 |
| 56 |
|
| Government Securities | 35 |
| 35 |
|
| Total investments at fair value | $ | 1,126 |
| $ | 341 |
|
|
| | |
| CSX Q3 2019 Form 10-Q p.26
|
|
CSX CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
NOTE 11. Fair Value Measurements, continued
These investments have the following maturities:
| | | | | | | | | | | |
| (Dollars in millions) | June 30,
2020 | | December 31,
2019 |
| Less than 1 year | $ | 203 | | | $ | 996 | |
| 1 - 5 years | 11 | | | 10 | |
| 5 - 10 years | 37 | | | 25 | |
| Greater than 10 years | 53 | | | 53 | |
| Total investments at fair value | $ | 304 | | | $ | 1,084 | |
|
| | | | | | | |
| (Dollars in millions) | September 30,
2019 | | December 31,
2018 |
| Less than 1 year | $ | 1,037 |
| | $ | 253 |
|
| 1 - 5 years | 9 |
| | 14 |
|
| 5 - 10 years | 26 |
| | 26 |
|
| Greater than 10 years | 54 |
| | 48 |
|
| Total investments at fair value | $ | 1,126 |
| | $ | 341 |
|
Long-term Debt
Long-term debt is reported at carrying amount on the consolidated balance sheets and is the Company's only financial instrument with fair values significantly different from their carrying amounts. The majority of the Company's long-term debt is valued with assistance from an independenta third party adviser that utilizes closing transactions, market quotes or market values of comparable debt. For those instruments not valued by the independent adviser,third party, the fair value has been estimated by applying market rates of similar instruments to the scheduled contractual debt payments and maturities. These market rates are provided by the same independent adviser.third party. All of the inputs used to determine the fair value of the Company's long-term debt are Level 2 inputs.
The fair value of outstanding debt fluctuates with changes in a number of factors. Such factors include, but are not limited to, interest rates, market conditions, credit ratings, values of similar financial instruments, size of the transaction, cash flow projections and comparable trades. Fair value will exceed carrying value when the current market interest rate is lower than the interest rate at which the debt was originally issued. The fair value of a company's debt is a measure of its current value under present market conditions. Under current accounting rules, the fair value of debtIt does not impact the financial statements.statements under current accounting rules. The fair value and carrying value of the Company's long-term debt is as follows:
| | | | | | | | | | | |
| (Dollars in millions) | June 30,
2020 | | December 31,
2019 |
| Long-term Debt (Including Current Maturities): | | | |
| Fair Value | $ | 20,733 | | | $ | 18,503 | |
| Carrying Value | 16,506 | | | 16,238 | |
|
| | | | | | | |
| (Dollars in millions) | September 30,
2019 | | December 31,
2018 |
| Long-term Debt (Including Current Maturities): | | | |
| Fair Value | $ | 18,923 |
| | $ | 14,914 |
|
| Carrying Value | 16,737 |
| | 14,757 |
|
CSX Q2 2020 Form 10-Q p.25
|
| | |
| CSX Q3 2019 Form 10-Q p.27
|
|
CSX CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
NOTE 10. Fair Value Measurements, continued
Interest Rate Derivatives
The Company’s forward starting interest rate swap is carried at fair value and is valued with assistance from a third party based upon pricing models using inputs observed from actively quoted markets. All of the inputs used to determine the fair value of the swap are Level 2 inputs. The fair value of the Company’s forward starting interest rate swap asset was $11 million at June 30, 2020. See Note 7, Debt and Credit Agreements for further information.
NOTE 12.11. Other Comprehensive Income (Loss)
CSX reports comprehensive earnings or loss in accordance with the Comprehensive Income Topic in the ASC in the Consolidated Comprehensive Income Statement. Total comprehensive earnings are defined as all changes in shareholders' equity during a period, other than those resulting from investments by and distributions to shareholders (e.g. issuance of equity securities and dividends). Generally, for CSX, total comprehensive earnings equal net earnings plus or minus adjustments for pension and other post-retirement liabilities.liabilities as well as other adjustments. Total comprehensive earnings represent the activity for a period net of tax and were $863$519 million and $901$874 million for thirdsecond quarters 2020 and $2.62019 and $1.3 billion and $2.4$1.7 billion for the ninesix months2019 2020 and 2018,2019, respectively.
While total comprehensive earnings is the activity in a period and is largely driven by net earnings in that period, accumulated other comprehensive income or loss (“AOCI”) represents the cumulative balance of other comprehensive income, net of tax, as of the balance sheet date. For CSX, AOCI is primarily the cumulative balance related to pension and other post-retirement benefit adjustments, interest rate derivatives and CSX's share of AOCI of equity method investees.
Changes in the AOCI balance by component are shown in the following table. Amounts reclassified in pension and other post-employment benefits to net earnings relate to the amortization of actuarial losses and are included in other income - net on the consolidated income statements. See Note 7,6, Employee Benefit Plans, for further information. Interest rate derivatives consist of forward starting interest rate swaps classified as cash flow hedges. See Note 7, Debt and Credit Agreements for further information. Other primarily represents CSX's share of AOCI of equity method investees. Amounts reclassified in other to net earnings are included in equity earnings of affiliatesmaterials, supplies and other or equipment and other rents on the consolidated income statements.
| | | | | | | | | | | | | | |
| Pension and Other Post-Employment Benefits | Interest Rate Derivatives | Other | Accumulated Other Comprehensive Income (Loss) |
| (Dollars in millions) | | | | |
| Balance December 31, 2019, Net of Tax | $ | (619) | | $ | — | | $ | (56) | | $ | (675) | |
| Other Comprehensive Income (Loss) | | | | |
| Income (Loss) Before Reclassifications | — | | 11 | | (8) | | 3 | |
| Amounts Reclassified to Net Earnings | 28 | | — | | — | | 28 | |
| Tax Expense | (6) | | (2) | | — | | (8) | |
| Total Other Comprehensive Income (Loss) | 22 | | 9 | | (8) | | 23 | |
| Balance June 30, 2020, Net of Tax | $ | (597) | | $ | 9 | | $ | (64) | | $ | (652) | |
| | | | |
|
| | | | | | | | | | | |
| | Pension and Other Post-Employment Benefits | | Other | | Accumulated Other Comprehensive Income (Loss) |
| (Dollars in millions) | | | | | |
| Balance December 31, 2018, Net of Tax | $ | (604 | ) | | $ | (57 | ) | | $ | (661 | ) |
| Other Comprehensive Income (Loss) | | | | | |
| Loss Before Reclassifications | — |
| | (5 | ) | | (5 | ) |
| Amounts Reclassified to Net Earnings | 18 |
| | 6 |
| | 24 |
|
| Tax Expense | (4 | ) | | (2 | ) | | (6 | ) |
| Total Other Comprehensive Income (Loss) | 14 |
| | (1 | ) | | 13 |
|
| Balance September 30, 2019, Net of Tax | $ | (590 | ) | | $ | (58 | ) | | $ | (648 | ) |
NOTE 13. Summarized Consolidating Financial Data
In 2007, CSXT, a wholly-owned subsidiary of CSX Corporation, sold secured equipment notes maturing in 2023 in a registered public offering. CSX has fully and unconditionally guaranteed the notes. In connection with the notes, the Company is providing the following condensed consolidating financial information in accordance with SEC disclosure requirements. Each entity in the consolidating financial information follows the same accounting policies as described in the consolidated financial statements, except for the use of the equity method of accounting to reflect ownership interests in subsidiaries which are eliminated upon consolidation and the allocation of certain expenses of CSX incurred for the benefit of its subsidiaries. Condensed consolidating financial information for the obligor, CSXT, and parent guarantor, CSX, is shown in the following tables.Q2 2020 Form 10-Q p.26
|
| | |
| CSX Q3 2019 Form 10-Q p.28
|
|
CSX CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
NOTE 13.Summarized Consolidating Financial Data, continued
|
| | | | | | | | | | | | |
| Consolidating Income Statements |
| (Dollars in millions) |
| Third Quarter 2019 | CSX Corporation | CSX Transportation | Eliminations and Other | Consolidated |
| Revenue | $ | — |
| $ | 2,958 |
| $ | 20 |
| $ | 2,978 |
|
| Expense | (138 | ) | 1,862 |
| (33 | ) | 1,691 |
|
| Operating Income | 138 |
| 1,096 |
| 53 |
| 1,287 |
|
| | | | | |
| Equity in Earnings of Subsidiaries | 883 |
| — |
| (883 | ) | — |
|
| Interest (Expense) / Benefit | (220 | ) | (11 | ) | 45 |
| (186 | ) |
| Other Income / (Expense) - Net | 9 |
| 47 |
| (32 | ) | 24 |
|
| | | | | |
| Earnings Before Income Taxes | 810 |
| 1,132 |
| (817 | ) | 1,125 |
|
| Income Tax Benefit / (Expense) | 46 |
| (267 | ) | (48 | ) | (269 | ) |
| Net Earnings | $ | 856 |
| $ | 865 |
| $ | (865 | ) | $ | 856 |
|
| | | | | |
| Total Comprehensive Earnings | $ | 863 |
| $ | 864 |
| $ | (864 | ) | $ | 863 |
|
| | | | | |
| Third Quarter 2018 | CSX Corporation | CSX Transportation | Eliminations and Other | Consolidated |
| Revenue | $ | — |
| $ | 3,110 |
| $ | 19 |
| $ | 3,129 |
|
| Expense | (86 | ) | 1,952 |
| (30 | ) | 1,836 |
|
| Operating Income | 86 |
| 1,158 |
| 49 |
| 1,293 |
|
| | | | | |
| Equity in Earnings of Subsidiaries | 953 |
| — |
| (953 | ) | — |
|
| Interest (Expense) / Benefit | (190 | ) | (11 | ) | 39 |
| (162 | ) |
| Other Income / (Expense) - Net | 6 |
| 35 |
| (22 | ) | 19 |
|
| | | | | |
| Earnings Before Income Taxes | 855 |
| 1,182 |
| (887 | ) | 1,150 |
|
| Income Tax Benefit / (Expense) | 39 |
| (278 | ) | (17 | ) | (256 | ) |
| Net Earnings | $ | 894 |
| $ | 904 |
| $ | (904 | ) | $ | 894 |
|
| | | | | |
| Total Comprehensive Earnings | $ | 901 |
| $ | 903 |
| $ | (903 | ) | $ | 901 |
|
|
| | |
| CSX Q3 2019 Form 10-Q p.29
|
|
CSX CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
NOTE 13.Summarized Consolidating Financial Data, continued
|
| | | | | | | | | | | | |
| Consolidating Income Statements |
| (Dollars in millions) |
| Nine Months 2019 | CSX Corporation | CSX Transportation | Eliminations and Other | Consolidated |
| Revenue | $ | — |
| $ | 8,992 |
| $ | 60 |
| $ | 9,052 |
|
| Expense | (413 | ) | 5,776 |
| (122 | ) | 5,241 |
|
| Operating Income | 413 |
| 3,216 |
| 182 |
| 3,811 |
|
| | | | | |
| Equity in Earnings of Subsidiaries | 2,683 |
| — |
| (2,683 | ) | — |
|
| Interest (Expense) / Benefit | (658 | ) | (32 | ) | 142 |
| (548 | ) |
| Other Income / (Expense) - Net | 28 |
| 150 |
| (106 | ) | 72 |
|
| | | | | |
| Earnings Before Income Taxes | 2,466 |
| 3,334 |
| (2,465 | ) | 3,335 |
|
| Income Tax (Expense) / Benefit | 94 |
| (788 | ) | (81 | ) | (775 | ) |
| Net Earnings | $ | 2,560 |
| $ | 2,546 |
| $ | (2,546 | ) | $ | 2,560 |
|
| | | | | |
| Total Comprehensive Earnings | $ | 2,573 |
| $ | 2,542 |
| $ | (2,542 | ) | $ | 2,573 |
|
| | | | | |
| Nine Months 2018 | CSX Corporation | CSX Transportation | Eliminations and Other | Consolidated |
| Revenue | $ | — |
| $ | 9,050 |
| $ | 57 |
| $ | 9,107 |
|
| Expense | (248 | ) | 5,843 |
| (108 | ) | 5,487 |
|
| Operating Income | 248 |
| 3,207 |
| 165 |
| 3,620 |
|
| | | | | |
| Equity in Earnings of Subsidiaries | 2,653 |
| — |
| (2,653 | ) | — |
|
| Interest (Expense) / Benefit | (535 | ) | (28 | ) | 95 |
| (468 | ) |
| Other Income / (Expense) - Net | 16 |
| 87 |
| (49 | ) | 54 |
|
| | | | | |
| Earnings Before Income Taxes | 2,382 |
| 3,266 |
| (2,442 | ) | 3,206 |
|
| Income Tax (Expense) / Benefit | 84 |
| (776 | ) | (48 | ) | (740 | ) |
| Net Earnings | $ | 2,466 |
| $ | 2,490 |
| $ | (2,490 | ) | $ | 2,466 |
|
| | | | | |
| Total Comprehensive Earnings | $ | 2,378 |
| $ | 2,484 |
| $ | (2,484 | ) | $ | 2,378 |
|
| | | | | |
|
| | |
| CSX Q3 2019 Form 10-Q p.30
|
|
CSX CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
NOTE 13.Summarized Consolidating Financial Data, continued
|
| | | | | | | | | | | | |
| Consolidating Balance Sheet |
| (Dollars in millions) |
| September 30, 2019 | CSX Corporation | CSX Transportation | Eliminations and Other | Consolidated |
| | | | | |
| ASSETS |
| Current Assets | | | | |
| Cash and Cash Equivalents | $ | 1,355 |
| $ | 152 |
| $ | 14 |
| $ | 1,521 |
|
| Short-term Investments | 1,028 |
| — |
| 9 |
| 1,037 |
|
| Accounts Receivable - Net | 2 |
| 1,044 |
| 55 |
| 1,101 |
|
| Receivable from Affiliates | 874 |
| 6,918 |
| (7,792 | ) | — |
|
| Materials and Supplies | — |
| 235 |
| — |
| 235 |
|
| Other Current Assets | (1 | ) | 50 |
| 17 |
| 66 |
|
| Total Current Assets | 3,258 |
| 8,399 |
| (7,697 | ) | 3,960 |
|
| | | | | |
| Properties | 1 |
| 42,055 |
| 2,956 |
| 45,012 |
|
| Accumulated Depreciation | (1 | ) | (11,231 | ) | (1,702 | ) | (12,934 | ) |
| Properties - Net | — |
| 30,824 |
| 1,254 |
| 32,078 |
|
| | | | | |
| Investments in Conrail | — |
| — |
| 969 |
| 969 |
|
| Affiliates and Other Companies | (39 | ) | 904 |
| 15 |
| 880 |
|
| Investments in Consolidated Subsidiaries | 33,966 |
| — |
| (33,966 | ) | — |
|
| Right-of-Use Lease Asset | — |
| 519 |
| 20 |
| 539 |
|
| Other Long-term Assets | 3 |
| 608 |
| (242 | ) | 369 |
|
| Total Assets | $ | 37,188 |
| $ | 41,254 |
| $ | (39,647 | ) | $ | 38,795 |
|
| | | | | |
| LIABILITIES AND SHAREHOLDERS' EQUITY | | |
| Current Liabilities | | | | |
| Accounts Payable | $ | 200 |
| $ | 832 |
| $ | 69 |
| $ | 1,101 |
|
| Labor and Fringe Benefits Payable | 36 |
| 411 |
| 39 |
| 486 |
|
| Payable to Affiliates | 8,959 |
| 385 |
| (9,344 | ) | — |
|
| Casualty, Environmental and Other Reserves | — |
| 95 |
| 15 |
| 110 |
|
| Current Maturities of Long-term Debt | 500 |
| 245 |
| — |
| 745 |
|
| Income and Other Taxes Payable | (428 | ) | 570 |
| 13 |
| 155 |
|
| Other Current Liabilities | — |
| 197 |
| 11 |
| 208 |
|
| Total Current Liabilities | 9,267 |
| 2,735 |
| (9,197 | ) | 2,805 |
|
| | | | | |
| Casualty, Environmental and Other Reserves | — |
| 161 |
| 34 |
| 195 |
|
| Long-term Debt | 15,532 |
| 460 |
| — |
| 15,992 |
|
| Deferred Income Taxes - Net | (150 | ) | 6,755 |
| 277 |
| 6,882 |
|
| Long-term Lease Liability | — |
| 481 |
| 13 |
| 494 |
|
| Other Long-term Liabilities | 675 |
| 203 |
| (330 | ) | 548 |
|
| Total Liabilities | $ | 25,324 |
| $ | 10,795 |
| $ | (9,203 | ) | $ | 26,916 |
|
| | | | | |
| Shareholders' Equity | | | | |
| Common Stock, $1 Par Value | $ | 782 |
| $ | 181 |
| $ | (181 | ) | $ | 782 |
|
| Other Capital | 314 |
| 5,096 |
| (5,096 | ) | 314 |
|
| Retained Earnings | 11,416 |
| 25,118 |
| (25,118 | ) | 11,416 |
|
| Accumulated Other Comprehensive Loss | (648 | ) | 49 |
| (49 | ) | (648 | ) |
| Noncontrolling Interest | — |
| 15 |
| — |
| 15 |
|
| Total Shareholders' Equity | $ | 11,864 |
| $ | 30,459 |
| $ | (30,444 | ) | $ | 11,879 |
|
| Total Liabilities and Shareholders' Equity | $ | 37,188 |
| $ | 41,254 |
| $ | (39,647 | ) | $ | 38,795 |
|
|
| | |
| CSX Q3 2019 Form 10-Q p.31
|
|
CSX CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
NOTE 13.Summarized Consolidating Financial Data, continued
|
| | | | | | | | | | | | |
Consolidating Balance Sheet (Dollars in millions) |
| December 31, 2018 | CSX Corporation | CSX Transportation | Eliminations and Other | Consolidated |
| ASSETS |
| Current Assets | | | | |
| Cash and Cash Equivalents | $ | 716 |
| $ | 130 |
| $ | 12 |
| $ | 858 |
|
| Short-term Investments | 250 |
| — |
| 3 |
| 253 |
|
| Accounts Receivable - Net | 1 |
| 1,003 |
| 6 |
| 1,010 |
|
| Receivable from Affiliates | 1,020 |
| 5,214 |
| (6,234 | ) | — |
|
| Materials and Supplies | — |
| 263 |
| — |
| 263 |
|
| Other Current Assets | 63 |
| 104 |
| 14 |
| 181 |
|
| Total Current Assets | 2,050 |
| 6,714 |
| (6,199 | ) | 2,565 |
|
| | | | | |
| Properties | 1 |
| 41,897 |
| 2,907 |
| 44,805 |
|
| Accumulated Depreciation | (1 | ) | (11,194 | ) | (1,612 | ) | (12,807 | ) |
| Properties - Net | — |
| 30,703 |
| 1,295 |
| 31,998 |
|
| | | | | |
| Investments in Conrail | — |
| — |
| 943 |
| 943 |
|
| Affiliates and Other Companies | (39 | ) | 859 |
| 16 |
| 836 |
|
| Investment in Consolidated Subsidiaries | 32,033 |
| — |
| (32,033 | ) | — |
|
| Other Long-term Assets | 2 |
| 598 |
| (213 | ) | 387 |
|
| Total Assets | $ | 34,046 |
| $ | 38,874 |
| $ | (36,191 | ) | $ | 36,729 |
|
| | | | | |
| LIABILITIES AND SHAREHOLDERS' EQUITY | | |
| Current Liabilities | | | | |
| Accounts Payable | $ | 132 |
| $ | 763 |
| $ | 54 |
| $ | 949 |
|
| Labor and Fringe Benefits Payable | 41 |
| 440 |
| 69 |
| 550 |
|
| Payable to Affiliates | 6,973 |
| 633 |
| (7,606 | ) | — |
|
| Casualty, Environmental and Other Reserves | — |
| 99 |
| 14 |
| 113 |
|
| Current Maturities of Long-term Debt | — |
| 18 |
| — |
| 18 |
|
| Income and Other Taxes Payable | (290 | ) | 392 |
| 4 |
| 106 |
|
| Other Current Liabilities | 11 |
| 162 |
| 6 |
| 179 |
|
| Total Current Liabilities | 6,867 |
| 2,507 |
| (7,459 | ) | 1,915 |
|
| | | | | |
| Casualty, Environmental and Other Reserves | — |
| 176 |
| 35 |
| 211 |
|
| Long-term Debt | 14,029 |
| 710 |
| — |
| 14,739 |
|
| Deferred Income Taxes - Net | (134 | ) | 6,601 |
| 223 |
| 6,690 |
|
| Other Long-term Liabilities | 721 |
| 211 |
| (338 | ) | 594 |
|
| Total Liabilities | $ | 21,483 |
| $ | 10,205 |
| $ | (7,539 | ) | $ | 24,149 |
|
| | | | | |
| Shareholders' Equity | | | | |
| Common Stock, $1 Par Value | $ | 818 |
| $ | 181 |
| $ | (181 | ) | $ | 818 |
|
| Other Capital | 249 |
| 5,096 |
| (5,096 | ) | 249 |
|
| Retained Earnings | 12,157 |
| 23,322 |
| (23,322 | ) | 12,157 |
|
| Accumulated Other Comprehensive Loss | (661 | ) | 53 |
| (53 | ) | (661 | ) |
| Noncontrolling Minority Interest | — |
| 17 |
| — |
| 17 |
|
| Total Shareholders' Equity | $ | 12,563 |
| $ | 28,669 |
| $ | (28,652 | ) | $ | 12,580 |
|
| Total Liabilities and Shareholders' Equity | $ | 34,046 |
| $ | 38,874 |
| $ | (36,191 | ) | $ | 36,729 |
|
|
| | |
| CSX Q3 2019 Form 10-Q p.32
|
|
CSX CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
NOTE 13.Summarized Consolidating Financial Data, continued
|
| | | | | | | | | | | | |
| Consolidating Cash Flow Statements |
| (Dollars in millions) |
| Nine Months 2019 | CSX Corporation | CSX Transportation | Eliminations and Other | Consolidated |
| Operating Activities | | | | |
| Net Cash Provided by (Used in) Operating Activities | $ | 2,732 |
| $ | 1,629 |
| $ | (624 | ) | $ | 3,737 |
|
| Investing Activities | |
| | |
| Property Additions | — |
| (1,085 | ) | (106 | ) | (1,191 | ) |
| Proceeds from Property Dispositions | — |
| 218 |
| — |
| 218 |
|
| Purchases of Short-term Investments | (2,255 | ) | — |
| — |
| (2,255 | ) |
| Proceeds from Sales of Short-term Investments | 1,480 |
| — |
| — |
| 1,480 |
|
| Other Investing Activities | 4 |
| 33 |
| (18 | ) | 19 |
|
| Net Cash Used in Investing Activities | (771 | ) | (834 | ) | (124 | ) | (1,729 | ) |
| Financing Activities | | | | |
| Long-term Debt Issued | 2,000 |
| — |
| — |
| 2,000 |
|
| Long-term Debt Repaid | — |
| (18 | ) | — |
| (18 | ) |
| Dividends Paid | (577 | ) | (750 | ) | 750 |
| (577 | ) |
| Shares Repurchased | (2,767 | ) | — |
| — |
| (2,767 | ) |
| Other Financing Activities | 22 |
| (5 | ) | — |
| 17 |
|
| Net Cash (Used in) Provided by Financing Activities | (1,322 | ) | (773 | ) | 750 |
| (1,345 | ) |
| Net Increase in Cash and Cash Equivalents | 639 |
| 22 |
| 2 |
| 663 |
|
| Cash and Cash Equivalents at Beginning of Period | 716 |
| 130 |
| 12 |
| 858 |
|
| Cash and Cash Equivalents at End of Period | $ | 1,355 |
| $ | 152 |
| $ | 14 |
| $ | 1,521 |
|
|
| | |
| CSX Q3 2019 Form 10-Q p.33
|
|
CSX CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)
NOTE 13.Summarized Consolidating Financial Data, continued
|
| | | | | | | | | | | | |
| Consolidating Cash Flow Statements |
| (Dollars in millions) |
| Nine Months 2018 | CSX Corporation | CSX Transportation | Eliminations and Other | Consolidated |
| Operating Activities | | | | |
| Net Cash Provided by (Used in) Operating Activities | $ | 2,417 |
| $ | 1,792 |
| $ | (803 | ) | $ | 3,406 |
|
| Investing Activities | | | | |
| Property Additions | — |
| (1,134 | ) | (106 | ) | (1,240 | ) |
| Proceeds from Property Dispositions | — |
| 257 |
| — |
| 257 |
|
| Purchases of Short-term Investments | (609 | ) | — |
| (2 | ) | (611 | ) |
| Proceeds from Sales of Short-term Investments | — |
| — |
| 15 |
| 15 |
|
| Other Investing Activities | (1 | ) | (149 | ) | 142 |
| (8 | ) |
| Net Cash (Used in) Provided by Investing Activities | (610 | ) | (1,026 | ) | 49 |
| (1,587 | ) |
| Financing Activities | | | | |
| Long-term Debt Issued | 2,000 |
| — |
| — |
| 2,000 |
|
| Long-term Debt Repaid | — |
| (19 | ) | — |
| (19 | ) |
| Dividends Paid | (570 | ) | (750 | ) | 750 |
| (570 | ) |
| Shares Repurchased | (2,816 | ) | — |
| — |
| (2,816 | ) |
| Accelerated Share Repurchase Pending Final Settlement | (100 | ) | — |
| — |
| (100 | ) |
| Other Financing Activities | (58 | ) | (2 | ) | 8 |
| (52 | ) |
| Net Cash (Used in) Provided by Financing Activities | (1,544 | ) | (771 | ) | 758 |
| (1,557 | ) |
| Net Increase (Decrease) in Cash and Cash Equivalents | 263 |
| (5 | ) | 4 |
| 262 |
|
| Cash and Cash Equivalents at Beginning of Period | 274 |
| 121 |
| 6 |
| 401 |
|
| Cash and Cash Equivalents at End of Period | $ | 537 |
| $ | 116 |
| $ | 10 |
| $ | 663 |
|
|
| | |
| CSX Q3 2019 Form 10-Q p.34
|
|
CSX CORPORATION
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
THIRD
SECOND QUARTER 20192020 HIGHLIGHTS
•Revenue decreased $151$806 million, or 5%26% year over year.
| |
• | •Expenses decreased$329 million, or 19% year over year. •$145 million, or 8% year over year. |
Operating income of $1.3 billion$828 million decreased $6$477 million year over year.
•Operating ratio of 56.8% improved 19063.3% increased 590 basis points versus last year's quarter.
| |
• | Earnings per diluted share of $1.08 increased$0.03, or 3% year over year.
|
•Earnings per diluted share of $0.65 decreased$0.43, or 40% year over year. |
| | | | | | | | | | | | | | | | | |
| | Third Quarters | | Nine Months |
| | 2019 | 2018 | Fav / (Unfav) | % Change | | 2019 | 2018 | Fav /
(Unfav) | % Change |
Volume (in thousands) | 1,569 |
| 1,656 |
| (87) | (5)% | | 4,681 |
| 4,834 |
| (153) | (3)% |
| | | | | | | | | | |
| (in millions) | | | | | | | | | |
| Revenue | $ | 2,978 |
| $ | 3,129 |
| $(151) | (5) | | $ | 9,052 |
| $ | 9,107 |
| $(55) | (1) |
| Expense | 1,691 |
| 1,836 |
| 145 | 8 | | 5,241 |
| 5,487 |
| 246 | 4 |
| Operating Income | $ | 1,287 |
| $ | 1,293 |
| $(6) | —% | | $ | 3,811 |
| $ | 3,620 |
| $191 | 5% |
| | | | | | | | | | |
| Operating Ratio | 56.8 | % | 58.7 | % | 190 | bps | | 57.9 | % | 60.3 | % | 240 | bps |
| | | | | | | | | | |
| Earnings Per Diluted Share | $ | 1.08 |
| $ | 1.05 |
| $0.03 | 3% | | $ | 3.18 |
| $ | 2.83 |
| $0.35 | 12% |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Second Quarters | | | | | Six Months | | | |
| 2020 | 2019 | Fav /
(Unfav) | % Change | | 2020 | 2019 | Fav /
(Unfav) | % Change |
Volume (in thousands) | 1,257 | | 1,581 | | (324) | | (20)% | | 2,771 | | 3,112 | | (341) | (11)% |
| | | | | | | | | |
| (in millions) | | | | | | | | | |
| Revenue | $ | 2,255 | | $ | 3,061 | | $ | (806) | | (26) | | $ | 5,110 | | $ | 6,074 | | $(964) | (16) |
| Expense | 1,427 | | 1,756 | | 329 | | 19 | | 3,104 | | 3,550 | | 446 | 13 |
| Operating Income | $ | 828 | | $ | 1,305 | | $ | (477) | | (37)% | | $ | 2,006 | | $ | 2,524 | | $(518) | (21)% |
| | | | | | | | | |
| Operating Ratio | 63.3 | % | 57.4 | % | (590) | | bps | | 60.7 | % | 58.4 | % | (230) | | bps |
| | | | | | | | | |
| Earnings Per Diluted Share | $ | 0.65 | | $ | 1.08 | | $ | (0.43) | | (40)% | | $ | 1.65 | | $ | 2.10 | | $(0.45) | (21)% |
|
| | |
| CSX Q3 2019 Form 10-Q p.35CSX Q2 2020 Form 10-Q p.27
|
|
CSX CORPORATION
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Weaker global economic conditions, including the effects of the novel coronavirus ("COVID-19") global pandemic, have significantly impacted and will continue to impact the Company's results of operations. Demand for rail services has been affected by the disruption of global manufacturing, supply chains and consumer spending as a result of the COVID-19 pandemic. 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 ultimate magnitude 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.
CSX will continue to adapt its business operations to ensure safety while providing a high level of service for customers as efficient and reliable rail service is essential to keeping supply chains fluid in response to this challenge. A cross-functional task force continues to monitor and coordinate 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. Additionally, remote work assignments have been arranged where possible in order to reduce the density of employees in a single location, and alternative locations for key functions, such as dispatch, have been utilized as needed.
On March 27, 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 impacts to the Company include the deferral of federal estimated tax payments to third quarter 2020 and 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 Q2 2020 Form 10-Q p.28
|
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Volume and Revenue (Unaudited) |
| Volume (Thousands of units); Revenue (Dollars in Millions); Revenue Per Unit (Dollars) |
| Third Quarters |
| | Volume | | Revenue | | Revenue Per Unit |
| | 2019 | | 2018 | | % Change | | 2019 | | 2018 | | % Change | | 2019 | | 2018 | | % Change |
| Chemicals | 166 |
| | 172 |
| | (3 | )% | | $ | 589 |
| | $ | 596 |
| | (1 | )% | | $ | 3,548 |
| | $ | 3,465 |
| | 2 | % |
| Agricultural and Food Products | 119 |
| | 112 |
| | 6 |
| | 354 |
| | 325 |
| | 9 |
| | 2,975 |
| | 2,902 |
| | 3 |
|
| Automotive | 110 |
| | 111 |
| | (1 | ) | | 297 |
| | 300 |
| | (1 | ) | | 2,700 |
| | 2,703 |
| | — |
|
| Minerals | 90 |
| | 85 |
| | 6 |
| | 145 |
| | 137 |
| | 6 |
| | 1,611 |
| | 1,612 |
| | — |
|
| Forest Products | 73 |
| | 74 |
| | (1 | ) | | 225 |
| | 223 |
| | 1 |
| | 3,082 |
| | 3,014 |
| | 2 |
|
| Metals and Equipment | 65 |
| | 69 |
| | (6 | ) | | 195 |
| | 205 |
| | (5 | ) | | 3,000 |
| | 2,971 |
| | 1 |
|
| Fertilizers | 60 |
| | 60 |
| | — |
| | 101 |
| | 104 |
| | (3 | ) | | 1,683 |
| | 1,733 |
| | (3 | ) |
| Total Merchandise | 683 |
| | 683 |
| | — |
| | 1,906 |
| | 1,890 |
| | 1 |
| | 2,791 |
| | 2,767 |
| | 1 |
|
| Coal | 213 |
| | 234 |
| | (9 | ) | | 516 |
| | 588 |
| | (12 | ) | | 2,423 |
| | 2,513 |
| | (4 | ) |
| Intermodal | 673 |
| | 739 |
| | (9 | ) | | 447 |
| | 500 |
| | (11 | ) | | 664 |
| | 677 |
| | (2 | ) |
| Other | — |
| | — |
| | — |
| | 109 |
| | 151 |
| | (28 | ) | | — |
| | — |
| | — |
|
| Total | 1,569 |
| | 1,656 |
| | (5 | )% | | $ | 2,978 |
| | $ | 3,129 |
| | (5 | )% | | $ | 1,898 |
| | $ | 1,889 |
| | — | % |
| | | | | | | | | | | | | | | | | | |
| Nine Months |
| | Volume | | Revenue | | Revenue Per Unit |
| | 2019 | | 2018 | | % Change | | 2019 | | 2018 | | % Change | | 2019 | | 2018 | | % Change |
| Chemicals | 505 |
| | 503 |
| | — | % | | $ | 1,766 |
| | $ | 1,741 |
| | 1 | % | | $ | 3,497 |
| | $ | 3,461 |
| | 1 | % |
| Agricultural and Food Products | 351 |
| | 331 |
| | 6 |
| | 1,056 |
| | 959 |
| | 10 |
| | 3,009 |
| | 2,897 |
| | 4 |
|
| Automotive | 346 |
| | 341 |
| | 1 |
| | 937 |
| | 934 |
| | — |
| | 2,708 |
| | 2,739 |
| | (1 | ) |
| Minerals | 248 |
| | 237 |
| | 5 |
| | 412 |
| | 388 |
| | 6 |
| | 1,661 |
| | 1,637 |
| | 1 |
|
| Forest Products | 217 |
| | 212 |
| | 2 |
| | 664 |
| | 633 |
| | 5 |
| | 3,060 |
| | 2,986 |
| | 2 |
|
| Metals and Equipment | 192 |
| | 202 |
| | (5 | ) | | 571 |
| | 589 |
| | (3 | ) | | 2,974 |
| | 2,916 |
| | 2 |
|
| Fertilizers | 183 |
| | 188 |
| | (3 | ) | | 323 |
| | 332 |
| | (3 | ) | | 1,765 |
| | 1,766 |
| | — |
|
| Total Merchandise | 2,042 |
| | 2,014 |
| | 1 |
| | 5,729 |
| | 5,576 |
| | 3 |
| | 2,806 |
| | 2,769 |
| | 1 |
|
| Coal | 651 |
| | 657 |
| | (1 | ) | | 1,611 |
| | 1,660 |
| | (3 | ) | | 2,475 |
| | 2,527 |
| | (2 | ) |
| Intermodal | 1,988 |
| | 2,163 |
| | (8 | ) | | 1,311 |
| | 1,439 |
| | (9 | ) | | 659 |
| | 665 |
| | (1 | ) |
| Other | — |
| | — |
| | — |
| | 401 |
| | 432 |
| | (7 | ) | | — |
| | — |
| | — |
|
| Total | 4,681 |
| | 4,834 |
| | (3 | )% | | $ | 9,052 |
| | $ | 9,107 |
| | (1 | )% | | $ | 1,934 |
| | $ | 1,884 |
| | 3 | % |
|
| | |
| CSX Q3 2019 Form 10-Q p.36
|
|
CSX CORPORATION
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
Volume and Revenue (Unaudited) | | | | | | | | | | | | | | | | | |
| Volume (Thousands of units); Revenue (Dollars in Millions); Revenue Per Unit (Dollars) | | | | | | | | | | | | | | | | | |
| Second Quarters | | | | | | | | | | | | | | | | | |
| | Volume | | | | | | Revenue | | | | | | Revenue Per Unit | | | | |
| | 2020 | | 2019 | | % Change | | 2020 | | 2019 | | % Change | | 2020 | | 2019 | | % Change |
Chemicals(a) | 152 | | | 173 | | | (12) | % | | $ | 531 | | | $ | 592 | | | (10) | % | | $ | 3,493 | | | $ | 3,422 | | | 2 | % |
| Agricultural and Food Products | 102 | | | 118 | | | (14) | | | 311 | | | 358 | | | (13) | | | 3,049 | | | 3,034 | | | — | |
Minerals(a) | 83 | | | 90 | | | (8) | | | 134 | | | 147 | | | (9) | | | 1,614 | | | 1,633 | | | (1) | |
Forest Products(a) | 64 | | | 71 | | | (10) | | | 194 | | | 218 | | | (11) | | | 3,031 | | | 3,070 | | | (1) | |
| Fertilizers | 60 | | | 61 | | | (2) | | | 103 | | | 112 | | | (8) | | | 1,717 | | | 1,836 | | | (6) | |
Metals and Equipment(a) | 48 | | | 63 | | | (24) | | | 142 | | | 188 | | | (24) | | | 2,958 | | | 2,984 | | | (1) | |
| Automotive | 35 | | | 121 | | | (71) | | | 93 | | | 329 | | | (72) | | | 2,657 | | | 2,719 | | | (2) | |
| Total Merchandise | 544 | | | 697 | | | (22) | | | 1,508 | | | 1,944 | | | (22) | | | 2,772 | | | 2,789 | | | (1) | |
| Coal | 127 | | | 226 | | | (44) | | | 287 | | | 557 | | | (48) | | | 2,260 | | | 2,465 | | | (8) | |
| Intermodal | 586 | | | 658 | | | (11) | | | 359 | | | 436 | | | (18) | | | 613 | | | 663 | | | (8) | |
| Other | — | | | — | | | — | | | 101 | | | 124 | | | (19) | | | — | | | — | | | — | |
| Total | 1,257 | | | 1,581 | | | (20) | % | | $ | 2,255 | | | $ | 3,061 | | | (26) | % | | $ | 1,794 | | | $ | 1,936 | | | (7) | % |
| | | | | | | | | | | | | | | | | |
| Six Months | | | | | | | | | | | | | | | | | |
| | Volume | | | | | | Revenue | | | | | | Revenue Per Unit | | | | |
| | 2020 | | 2019 | | % Change | | 2020 | | 2019 | | % Change | | 2020 | | 2019 | | % Change |
Chemicals(a) | 330 | | | 340 | | | (3) | % | | $ | 1,157 | | | $ | 1,180 | | | (2) | % | | $ | 3,506 | | | $ | 3,471 | | | 1 | % |
| Agricultural and Food Products | 223 | | | 232 | | | (4) | | | 676 | | | 702 | | | (4) | | | 3,031 | | | 3,026 | | | — | |
Minerals(a) | 157 | | | 160 | | | (2) | | | 261 | | | 272 | | | (4) | | | 1,662 | | | 1,700 | | | (2) | |
Forest Products(a) | 135 | | | 141 | | | (4) | | | 411 | | | 430 | | | (4) | | | 3,044 | | | 3,050 | | | — | |
| Fertilizers | 118 | | | 123 | | | (4) | | | 215 | | | 222 | | | (3) | | | 1,822 | | | 1,805 | | | 1 | |
Metals and Equipment(a) | 115 | | | 127 | | | (9) | | | 341 | | | 377 | | | (10) | | | 2,965 | | | 2,969 | | | — | |
| Automotive | 139 | | | 236 | | | (41) | | | 374 | | | 640 | | | (42) | | | 2,691 | | | 2,712 | | | (1) | |
| Total Merchandise | 1,217 | | | 1,359 | | | (10) | | | 3,435 | | | 3,823 | | | (10) | | | 2,823 | | | 2,813 | | | — | |
| Coal | 308 | | | 438 | | | (30) | | | 692 | | | 1,095 | | | (37) | | | 2,247 | | | 2,500 | | | (10) | |
| Intermodal | 1,246 | | | 1,315 | | | (5) | | | 781 | | | 864 | | | (10) | | | 627 | | | 657 | | | (5) | |
| Other | — | | | — | | | — | | | 202 | | | 292 | | | (31) | | | — | | | — | | | — | |
| Total | 2,771 | | | 3,112 | | | (11) | % | | $ | 5,110 | | | $ | 6,074 | | | (16) | % | | $ | 1,844 | | | $ | 1,952 | | | (6) | % |
Third Quarter 2019
Revenue
Revenue decreased 5 percent year over year due to intermodal and coal volume decreases, lower other revenue and decreases(a) In first quarter 2020, changes were made in fuel recovery, partially offset by pricing gains across nearly all markets and favorable mix.
Merchandise Volume
Chemicals - Declined due to reduced natural gas liquids and fly ash shipments, partially offset by growth in industrial chemicals as well as industrial and municipal waste.
Agricultural and Food Products - Increased due to gains in feed grain and ingredients, sweeteners and oils, and ethanol.
Automotive - Declined due to lower passenger car shipments, partially offset by higher shipmentsthe categorization of trucks and SUVs.
Minerals - Increased due to higher shipments for construction and paving projects.
certain lines of business, impacting Chemicals, Forest Products, - Declined due to reduced pulpboard shipments, partially offset by higher demand for wood pulp.
Metals and Equipment, - Declined due and Minerals. The impacts were not material and prior periods have been reclassified to reduced metals shipments, primarily inconform to the steel, construction and scrap markets.current presentation.
Fertilizers - Volume gains on short-haul phosphate shipments were offset by declines in long-haul fertilizer shipments.
Coal Volume
Domestic coal volume declined primarily due to lower shipments of utility coal as a result of continued competition from natural gas. Export coal volume declined due to lower international shipments of both thermal and metallurgical coal as global benchmark prices declined.
Intermodal Volume
Domestic and international volumes declined primarily due to rationalization of low-density lanes.
Other Revenue
Other revenue decreased $42 million versus prior year primarily due to lower revenue for storage at intermodal facilities and demurrage.
CSX Q2 2020 Form 10-Q p.29
|
| | |
| CSX Q3 2019 Form 10-Q p.37
|
|
CSX CORPORATION
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Expenses
ExpensesRevenue
The effects of $1.7 billionthe COVID-19 pandemic significantly impacted overall volume in the second quarter 2020. Total revenue decreased $145 million, or 8 percent year over year, primarily driven by efficiency gains as well as26% in second quarter 2020 when compared to second quarter 2019 due to volume savingsdeclines, unfavorable mix, decreases in fuel recovery, declines in coal pricing and lower fuel prices, partially offset by inflation.
Labor and Fringe expense decreased $57 million due to the following:
Efficiency and volume savings of $54 million primarily resulted from lower headcount and reduced crew starts.
Other cost savings were partially offset by inflation.
Materials, Supplies and Other expense decreased $59 million due to the following:
Efficiency and volume savings of $64 million primarily resulted from lower operating support costs, lower trucking and terminal costs and reduced equipment maintenance expenses.
Gains from real estate and line sales were $65 million in 2019 compared to $53 million in 2018.
All other costs increased $17 million primarily due to a $22 million non-railroad asset impairment related to an intermodal terminal sale agreement.
Depreciation expense increased $4 million primarily due to a larger asset base.
Fuel expense decreased $45 million primarily due to a 13% price decrease, record fuel efficiency and lower volume.revenue. These decreases were partially offset by a $15 million net expense related to state fuel tax matters.pricing gains in merchandise and intermodal.
Equipment and Other RentsChemicals expense increased $15 million primarily- Decreased due to several non-significant items, including inflation,lower shipments of industrial chemicals, energy and waste.
Agricultural and Food Products - Declined due to lower shipments of food and consumer products, grain and feed, and ethanol.
Minerals - Decreased due to lower shipments of cement, lime and limestone, and other minerals.
Forest Products - Declined due to lower shipments of building products and printing paper, partially offset by volume and efficiency savings.higher shipments of pulpboard.
Interest Expense
Interest expense increased $24 million primarilyFertilizers - Decreased due to lower long-haul fertilizer shipments, which was partially offset by higher average debt balances.
Other Income - Netshort-haul phosphate shipments.
Other income
Metals and Equipment - net increasedDeclined due to reduced metals shipments driven by lower automotive and industrial production.
Automotive - $5 million primarilyDeclined due to increased interest incomelower North American vehicle production primarily associated with plant closures resulting from COVID-19.
Coal Volume
Domestic coal declined due to lower shipments of utility coal as a result of higher average investment balances.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.
Income Tax Expense Declines in both domestic and international shipments were primarily driven by the global economic impacts from COVID-19.
Income tax expense increased $13
Other Revenue
Other revenue decreased $23 million versus prior year primarily due to benefitslower affiliate revenue as well as declines in 2018 related to the resolution of a state tax matterdemurrage and a federal deferred tax adjustment, partially offset by lower earnings before income taxes.
CSX Q2 2020 Form 10-Q p.30
|
| | |
| CSX Q3 2019 Form 10-Q p.38
|
|
CSX CORPORATION
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Nine Months Results Expenses of Operations
Revenue
Labor and Fringe expense decreased $55$141 million due to the following:
•Volume and efficiency savings of $109 million primarily resulted from reduced crew starts and lower headcount.
•Total incentive compensation decreased $39 million primarily due to volume decreases, particularly in intermodal, partially offset by price increases and favorable mix.lower expected payouts on existing plans.
Total expense• decreased $246Other costs increased $7 million primarily due to labor, fuel and other operational efficiencies$10 million of severance expense in addition to volume-related savings and lower fuel prices,the quarter, partially offset by inflation.other non-significant items.
Interest expenseMaterials, Supplies and Other expense decreased $38 million due to the following:
•Volume and efficiency savings of $84 million primarily resulted from lower recurring operating support costs, lower terminal costs and reduced equipment maintenance expenses.
•Gains from real estate and line sales were $11 million in 2020 compared to $37 million in 2019.
•All other costs increased $80$20 million primarily driven by $9 million for COVID-19 supplies and other non-significant items including asset impairments and inflation.
Depreciation expense increased $7 million primarily due to the results of a 2019 equipment depreciation study.
Fuel expense decreased $143 million due to a 50% price decrease, lower volumes and record fuel efficiency.
Equipment and Other Rents expense decreased $14 million primarily driven by reduced freight car rents on significantly lower volume levels.
Interest Expense
Interest expense increased $7 million primarily due to higher average debt balances.balances, partially offset by lower average interest rates.
Other income - net increased $18 decreased $10 millionprimarily due to increasedlower interest income as a result ofrates associated with changes in asset holdings from short-term investments to cash, partially offset by higher average cash and short-term investment balances.
Income tax expense increased $35 decreased $123 millionprimarily due to increasedlower earnings before income taxes as well as benefits in 2018 related to state legislative changes and a federal deferred tax adjustment. These increases were partially offset by tax benefits from the impacts of options exercises and the vesting of other equity awards.
CSX Q2 2020 Form 10-Q p.31
|
| | |
| CSX Q3 2019 Form 10-Q p.39
|
|
CSX CORPORATION
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Six Months Results of Operations
Revenue decreased $964 million due to volume declines, unfavorable mix, lower other revenue, decreases in fuel recovery and declines in coal pricing. These decreases were partially offset by pricing gains in merchandise and intermodal.
Total expense decreased $446 million driven by lower volume-related costs; savings from labor, fuel and other operational efficiencies; fuel price savings and decreased incentive compensation costs. These decreases were partially offset by lower gains from real estate and line sales as well as inflation.
Interest expense increased $16 million primarily due to higher average debt balances, partially offset by lower average interest rates.
Other income - net decreased $11 million primarily due to lower interest rates associated with changes in asset holdings from short-term investments to cash, partially offset by higher average cash and short-term investment balances.
Income tax expense decreased $110 million primarily due to lower earnings before income taxes, partially offset by lower benefits from the impacts of option exercises and the vesting of other equity awards.
CSX Q2 2020 Form 10-Q p.32
CSX CORPORATION
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Non-GAAP Measures - Unaudited
CSX reports its financial results in accordance with accounting principles generally accepted in the United States of America (U.S. 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 U.S. 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.
Adjusted Free Cash Flow
Management believes that free cash flow is supplemental information 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. Adjusted free cash flow excludes the impact of cash payments for restructuring charge. Free cash flow and adjusted free cash flow should be considered in addition to, rather than a substitute for, cash provided by operating activities. The increasedecrease in adjusted free cash flow before dividends from the prior year of $357$242 million is primarily due to higher cashlower proceeds from operating activitiesproperty dispositions and lower property additions.net cash provided by operating activities.
The following table reconciles cash provided by operating activities (GAAP measure) to adjusted free cash flow, after restructuring, before dividends (non-GAAP measure). The restructuring charge impact to free cash flow in 2018 was tax effected using the Company's applicable tax rate.
| | | | | | | | |
| Six Months | |
| (Dollars in millions) | 2020 | 2019 |
| Net cash provided by operating activities | $ | 2,184 | | $ | 2,267 | |
| Property Additions | (801) | | (769) | |
| Other Investing Activities | 3 | | 130 | |
| Free Cash Flow (before payment of dividends) | $ | 1,386 | | $ | 1,628 | |
|
| | | | | | |
| | Nine Months |
| (Dollars in millions) | 2019 | 2018 |
| Net cash provided by operating activities | $ | 3,737 |
| $ | 3,406 |
|
| Property Additions | (1,191 | ) | (1,240 | ) |
| Other Investing Activities | 237 |
| 249 |
|
| Free Cash Flow (before payment of dividends) | 2,783 |
| 2,415 |
|
Add back: Cash Payments for Restructuring Charge (after-tax) (a) | — |
| 11 |
|
| Adjusted Free Cash Flow Before Dividends (non-GAAP) | $ | 2,783 |
| $ | 2,426 |
|
(a) The Company made cash payments related to the restructuring charge of $14 million in the nine months ended 2018.
Operating Statistics (Estimated)
The Company strives for continuous improvement in safety and service performance through training, innovation and investment. Investment in training and technology also is designed to allow the Company's employees to have an additional layer of protection that can detect and avoid many types of human factor incidents. Safety programs are designed to prevent incidents that can adversely impact employees, customers and communities. Continued capital investment in the Company's assets, including track, bridges, signals, equipment and detection technology also supports safety performance.
Train velocity, and terminal dwell and cars online in the following table are calculated using methodologies that differ from those prescribed by the Surface Transportation Board ("STB") as the Company believes these numbers more accurately reflect railroad performance. Train velocity and dwellThese metrics will continue to be reported, using the prescribed methodology, to the STB on a weekly basis.
CSX Q2 2020 Form 10-Q p.33
|
| | |
| CSX Q3 2019 Form 10-Q p.40
|
|
CSX CORPORATION
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
Operating performance remained strong in the third quarter of 2019 as trainTrain velocity improved 13% to record levels for the third quarter,increased by 6% year over year while car dwell remained relatively stable near record levels.increased 2%. The Company remains focused on executing the operationaloperating plan to deliver further service gains, improveimproved transit times and driveincreased asset utilization while controllingcontinuing to control costs.
From a safety perspective, CSX had an all-time low number of FRA-reportable train accidents in the second quarter of 2020. This improvement was outpaced by a significant reduction in train miles, which caused the FRA reportabletrain accident rate to degrade 9% year over year to 2.33. The FRA personal injury frequency index of 0.84 for the third quarter 2019 improved 6%year over year, driven by a significant reduction1.16 in the number ofsecond quarter degraded 40% versus the prior year as an increase in FRA-reportable personal injuries. Similarly,injuries was compounded by lower man-hours in the FRA train accident frequency rate of 1.59for the quarter improved 51% year over year, driven by an all-time record low number of FRA reported train accidents.
quarter. The Company is committed to continuous safety improvement and remains focused on reducing risk and enhancing the overall safety of its employees, customers and the communities in which the Company operates.
|
| | | | | | | | | | | | | |
| Third Quarters | | Nine Months |
| | 2019 | 2018 | Improvement/ (Deterioration) | | 2019 | 2018 | Improvement/ (Deterioration) |
| Operations Performance | | | | | | | |
Train Velocity (Miles per hour)(a) | 20.3 |
| 18.0 |
| 13 | % | | 20.2 |
| 17.7 |
| 14 | % |
Dwell (Hours)(a) | 9.2 |
| 8.9 |
| (3 | )% | | 9.0 |
| 9.6 |
| 6 | % |
| | | | | | | | |
| Revenue Ton-Miles (Billions) | | | | | | | |
| Merchandise | 32.1 |
| 32.0 |
| — | % | | 96.7 |
| 96.2 |
| 1 | % |
| Coal | 10.3 |
| 12.0 |
| (14 | )% | | 31.7 |
| 34.1 |
| (7 | )% |
| Intermodal | 6.7 |
| 7.3 |
| (8 | )% | | 20.0 |
| 22.0 |
| (9 | )% |
| Total Revenue Ton-Miles | 49.1 |
| 51.3 |
| (4 | )% | | 148.4 |
| 152.3 |
| (3 | )% |
| | | | | | | | |
Total Gross Ton-Miles (Billions) | 97.1 |
| 102.1 |
| (5 | )% | | 293.7 |
| 301.8 |
| (3 | )% |
| On-Time Originations | 93 | % | 85 | % | 9 | % | | 88 | % | 84 | % | 5 | % |
On-Time Arrivals(b) | 79 | % | 80 | % | (1 | )% | | 77 | % | 75 | % | 3 | % |
| | | | | | | | |
| Safety | | | | | | | |
| FRA Personal Injury Frequency Index | 0.84 |
| 0.89 |
| 6 | % | | 0.80 |
| 1.04 |
| 23 | % |
| FRA Train Accident Rate | 1.59 |
| 3.27 |
| 51 | % | | 2.11 |
| 3.82 |
| 45 | % |
| | | | | | | | | | | | | | | | | | | | | | | |
| Second Quarters | | | | Six Months | | |
| 2020 | 2019 | Improvement/
(Deterioration) | | 2020 | 2019 | Improvement/
(Deterioration) |
| Operations Performance | | | | | | | |
Train Velocity (Miles per hour) | 21.2 | | 20.0 | | 6 | % | | 21.2 | | 20.2 | | 5 | % |
Dwell (Hours) | 8.9 | | 8.7 | | (2) | % | | 8.6 | | 8.6 | | — | % |
| Cars Online | 98,606 | | 120,919 | | 18 | % | | 104,703 | | 119,959 | | 13 | % |
| | | | | | | |
| Revenue Ton-Miles (Billions) | | | | | | | |
| Merchandise | 27.8 | | 33.0 | | (16) | % | | 60.9 | | 64.6 | | (6) | % |
| Coal | 6.0 | | 10.9 | | (45) | % | | 14.6 | | 21.4 | | (32) | % |
| Intermodal | 6.1 | | 6.8 | | (10) | % | | 12.9 | | 13.3 | | (3) | % |
| Total Revenue Ton-Miles | 39.9 | | 50.7 | | (21) | % | | 88.4 | | 99.3 | | (11) | % |
| | | | | | | |
Total Gross Ton-Miles (Billions) | 77.0 | | 99.9 | | (23) | % | | 172.3 | | 196.6 | | (12) | % |
| On-Time Originations | 88 | % | 88 | % | — | % | | 90 | % | 85 | % | 6 | % |
On-Time Arrivals(a) | 84 | % | 73 | % | 15 | % | | 84 | % | 77 | % | 9 | % |
| | | | | | | |
| Safety | | | | | | | |
| FRA Personal Injury Frequency Index | 1.16 | | 0.83 | | (40) | % | | 0.86 | | 0.81 | | (6) | % |
| FRA Train Accident Rate | 2.33 | | 2.13 | | (9) | % | | 2.19 | | 2.47 | | 11 | % |
Certain operating statistics are estimated and can continue to be updated as actuals settle.
(a) The methodology for calculating train velocity and dwell differ from that prescribed by the STB. CSXT will continue to report train velocity and dwell, using the prescribed methodology, to the STB on a weekly basis. See additional discussion on the Company's website.
(b) Beginning in the third quarter 2019, the calculation of on-time arrivals has changed to consider a train "on time" if it is delivered within two hours of scheduled arrival. Prior year periods have been restated to conform to this change.
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.
CSX Q2 2020 Form 10-Q p.34
|
| | |
| CSX Q3 2019 Form 10-Q p.41
|
|
CSX CORPORATION
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
LIQUIDITY AND CAPITAL RESOURCES
The following are material changes in the significant cash flows, sources of cash and liquidity, capital investments, consolidated balance sheets and working capital, which provide an update to the discussion included in CSX's most recent annual report on Form 10-K.
Material Changes in Significant Cash Flows
Significant Cash Flows
The following chart highlights the components of the net increasesincrease of $663 million$1.4 billion and $262net decrease of $5 million in cash and cash equivalents for operating, investing and financing activities for ninesix months ended 20192020 and 2018,2019, respectively.
•Cash provided by operating activities increased $331decreased $83 million primarily driven by higherlower cash-generating income, andpartially offset by favorable changes in working capital.capital including the impacts of tax payment deferrals available under the CARES Act.
•Cash used in investing activities decreased $1.3 billion primarily as a result of decreased purchases and increased $142 million primarily drivensales of short-term investments, partially offset by an increase in net short-term investment purchases.lower proceeds from property dispositions.
•Cash used in financing activities decreased $212$268 million driven by lower share repurchase activity in the current year.repurchases, partially offset by lower proceeds from debt issuances and higher debt repayments.
Sources of Cash and Liquidity and Uses of Cash
As of the end of thirdsecond quarter 2019,2020, CSX had $2.6 billion of cash, cash equivalents and short-term investments. CSX uses current cash balances for general corporate purposes, which may include reduction or refinancing of outstanding indebtedness, capital expenditures, working capital requirements, contributions to the Company's qualified pension plan, redemptions and repurchases of CSX common stock and dividends to shareholders. See Note 8,7, Debt and Credit Agreements.
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 on February 12, 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 nineDuring six months 2019,ended 2020, CSX issued a total of $2.0 billion$500 million of new long-term debt.
CSX Q2 2020 Form 10-Q p.35
|
| | |
| CSX Q3 2019 Form 10-Q p.42
|
|
CSX CORPORATION
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
CSX has a $1.2 billion unsecured, revolving credit facility backed by a diverse syndicate of banks that expires in March 2024. At SeptemberJune 30, 2019,2020, the Company had no outstanding balances under this facility. 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. At SeptemberJune 30, 2019,2020, the Company had no outstanding debt under the commercial paper program.
Planned capital investments for 20192020 are expected to be between $1.6 billion and $1.7 billion, including approximately $100 million for Positive Train Control ("PTC").billion. Of the 2019total 2020 investment, over half will be used to sustain the core infrastructure. Theinfrastructure 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.
The Company expects to continue incurring capital costs in connection with the implementation of PTC. CSX estimates that Of the total multi-year2020 investment, approximately $50 million is planned to fund Positive Train Control ("PTC") implementation. PTC implementation is essentially complete at a total cost of PTC implementation will be approximately $2.4 billion. This estimate includes costs forbillion which included installing the new system along tracks, upgrading locomotives, adding communication equipment and developing new technologies. TotalWhile the Company expects ongoing PTC spending through September 2019 was $2.3 billion.costs, future PTC implementation costs are not expected to be material.
Material Changes in the Consolidated Balance Sheets and Working Capital
Consolidated Balance Sheets
Total assets increased $2.1 billion$647 million from year end primarily due to the net increase of $640 million in cash and short-term investments of $1.4 billion and the right-of-use lease asset of $539 million resulting from the adoption of the new lease accounting standard. The increase in cash and short-term investments was primarily a result ofdriven by cash from operations of $3.7$2.2 billion and proceeds from the issuance of $2.0 billion in$500 million of long-term debt, partially offset by property additions of $801 million, share repurchases of $2.8 billion, property additions of $1.2 billion and$616 million, dividends paid of $577$400 million and debt repayments of $227 million.
Total liabilities increased $347 million from year end primarily due to the issuance of $500 million of long-term debt and an increase in income and other taxes payable of $311 million driven by tax payment deferrals available under the CARES Act. These increases were partially offset by debt repayments of $227 million, a decrease in labor and fringe benefit payable of $137 million primarily resulting from the payment of incentive compensation and a decrease in accounts payable of $83 million. Total liabilities and shareholders' equity combined also increased $2.1 billion$300 million from year end primarily driven by net earnings of $2.6$1.3 billion, the issuance of $2.0 billion in long-term debt and the total lease liability of $553 million resulting from the adoption of the new lease accounting standard. These increases were partially offset by share repurchases of $2.8 billion$616 million and dividends paid of $577$400 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 $1.2$1.4 billion and $650 million$1.1 billion as of SeptemberJune 30, 20192020 and December 31, 2018,2019, respectively. The increase in working capital since year end of $505$317 million is primarily due to the net increase of $640 million in cash and short-term investments described above as well as the decreases in labor and fringe benefit payable of $1.4 billion,$137 million and accounts payable of $83 million. These favorable changes were partially offset by thean increase in income taxes payable of $311 million, an increase in current maturities of long-term debt primarily asof $133 million and a resultdecrease in accounts receivable of $126 million commensurate with lower revenues resulting from the early redemption on October 15, 2019 of notes originally due October 2020.COVID-19 pandemic.
CSX Q2 2020 Form 10-Q p.36
CSX CORPORATION
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
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 as discussed above. The Company continues to maintain adequate liquidity to satisfy current liabilities and maturing obligations when they come due. 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 is committed to returning cash to shareholders and maintaining an investment grade credit profile. Capital structure, capital investments and cash distributions, including dividends and share repurchases, are reviewed at least annually by the Board of Directors. 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.
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 has 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 will no longer be 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 than 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. At June 30, 2020, the principal balance of these secured equipment notes was $178 million.
CSX Q2 2020 Form 10-Q p.37
|
| | |
| CSX Q3 2019 Form 10-Q p.43
|
|
CSX CORPORATION
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
LABOR AGREEMENTS
All Approximately 15,000 of the Company's nearly 19,000 employees are members of a labor union. In November 2019, notices were served to the 13 rail unions that participate in national bargaining reached national agreements with the Class I railroads via ratification, executive action or interest arbitration. These agreements are effective January 1, 2015 through December 31, 2019. In November 2019, notices are expected to be served to those 13 rail unions to begin negotiations for benefits, wages and work rules for the next labor bargaining round for 2020 through 2024.2020. Current agreements remain in place until modified by these negotiations. Typically, such negotiations take several years before agreements are reached.
CRITICAL ACCOUNTING ESTIMATES
The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires that management make estimates in reporting the amounts of certain assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and certain revenues and expenses during the reporting period. 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. Consistent with the prior year, significant estimates using management judgment are made for the areas below. For further discussion of CSX's critical accounting estimates, see the Company's most recent annual report on Form 10-K.
•personal injury, environmental and legal reserves;
•pension and post-retirement medical plan accounting; and
•depreciation policies for assets under the group-life method; andmethod.
income taxes.
CSX Q2 2020 Form 10-Q p.38
CSX CORPORATION
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
FORWARD-LOOKING STATEMENTS
Certain statements in this report and in other materials filed with the Securities and Exchange Commission, as well as information included in oral statements or other written statements made by the Company, are forward-looking statements. 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.
|
| | |
| CSX Q3 2019 Form 10-Q p.44
|
|
CSX CORPORATION
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
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 I, Item 1A Risk Factors of CSX's most recent annual report on Form 10-K 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 Q2 2020 Form 10-Q p.39
CSX CORPORATION
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
•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) 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, including the recent outbreak of the coronavirus COVID-19, 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 (including those associated with PTC implementation) 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 CSXT's export coal market;
•availability of insurance coverage at commercially reasonable rates or insufficient insurance coverage to cover claims or damages;
|
| | |
| CSX Q3 2019 Form 10-Q p.45
|
|
CSX CORPORATION
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
•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; 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 www.sec.gov and the Company's website at www.csx.com. The information on the CSX website is not part of this quarterly report on Form 10-Q.
CSX Q2 2020 Form 10-Q p.40
CSX CORPORATION
ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK
There have been no material changes in market risk from the information provided under Part II, Item 7A (Quantitative and Qualitative Disclosures about Market Risk) of CSX's most recent annual report on Form 10-K.10-K except as provided below.
Changes in interest rates may impact the cost of future long-term debt issued by the Company, and as a result, represent interest rate risk to the Company. In an effort to manage this risk, CSX may use certain financial instruments such as interest rate forward contracts. The following information, together with information included in Note 7, Debt and Credit Agreements, describes the key aspects of such contracts and the related market risk to CSX.
On April 29, 2020, the Company executed a forward starting interest rate swap with an aggregate notional value of $250 million. The purpose of this swap, designated as a cash flow hedge, is to hedge against changes in the benchmark interest rate associated with future interest payments related to the anticipated refinancing of notes due 2027.The Company recognized an unrealized gain of $9 million, net of tax, in the consolidated statements of comprehensive income during the quarter ended June 30, 2020 with the related asset on the balance sheet as of June 30, 2020. Upon settlement of the swap, which expires in 2027, the unrealized gain or loss in AOCI will be recognized in earnings as an adjustment to interest expense over the same period during which the hedged transaction affects earnings.
ITEM 4. CONTROLS AND PROCEDURES
As of SeptemberJune 30, 2019,2020, under the supervision and with the participation of CSX's Chief Executive Officer (“CEO”) and Chief Financial Officer (“CFO”), management has evaluated the effectiveness of the design and operation of the Company's disclosure controls and procedures. Based on that evaluation, the CEO and CFO concluded that, as of SeptemberJune 30, 2019,2020, the Company's disclosure controls and procedures were effective at the reasonable assurance level in timely alerting them to material information required to be included in CSX's periodic SEC reports. There were no changes in the Company's internal controls over financial reporting during the thirdsecond quarter of 20192020 that have materially affected or are reasonably likely to materially affect the Company's internal control over financial reporting.
CSX Q2 2020 Form 10-Q p.41
PART II - OTHER INFORMATION
Item 1. Legal Proceedings
For further details, please refer to Note 6.5. Commitments and Contingencies of this quarterly report on Form 10-Q. Also refer to Part I, Item 3. Legal Proceedings in CSX's most recent annual report on Form 10-K.
Item 1A. Risk Factors
For information regarding factors that could affect the Company's results of operations, financial condition and liquidity, see the risk factors discussed under Part I, Item 1A (Risk Factors) of CSX's most recent annual report on Form 10-K.10-K and under Part II, Item 1A of the Company’s quarterly report on Form 10-Q for first quarter 2020. See also Part I, Item 2 (Forward-Looking Statements) of this quarterly report on Form 10-Q.
|
| | |
| CSX Q3 2019 Form 10-Q p.46
|
|
Item 2. CSX Purchases of Equity Securities
The Company continues to repurchase shares under the $5 billion program announced in January 2019. For more information about share repurchases, see Note 2 Earnings Per Share. Share repurchase activity for the thirdsecond quarter 20192020 was as follows:
|
| | | | | | | | | | |
| | CSX Purchases of Equity Securities for the Quarter | |
| Third 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 | | | | $ | 3,472,696,563 |
|
| July 1 - July 31, 2019 | 6,597,475 |
| $ | 72.72 |
| 6,494,370 |
| 3,000,185,426 |
|
| August 1 - August 31, 2019 | 4,517,613 |
| 66.53 |
| 4,517,408 |
| 2,699,630,841 |
|
| September 1 - September 30, 2019 | 5,090,719 |
| 66.22 |
| 5,090,719 |
| 2,362,512,464 |
|
| Ending Balance | 16,205,807 |
| $ | 68.95 |
| 16,102,497 |
| $ | 2,362,512,464 |
|
| | | | | | | | | | | | | | |
| CSX Purchases of Equity Securities
for the Quarter | | | |
| Second 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 | | | | $ | 1,179,116,549 | |
| April 1 - April 30, 2020 | 17,470 | | $ | 63.69 | | — | | 1,179,116,549 | |
| May 1 - May 31, 2020 | — | | — | | — | | 1,179,116,549 | |
| June 1 - June 30, 2020 | 579,541 | | 67.28 | | 579,541 | | 1,140,125,168 | |
| Ending Balance | 597,011 | | $ | 67.17 | | 579,541 | | $ | 1,140,125,168 | |
(a) The difference of 103,31017,470 shares between the "Total Number of Shares Purchased" and the "Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs" for the quarter represents shares purchased to fund the Company's contribution to a 401(k) plan that covers certain union employees.
Item 3. Defaults Upon Senior Securities
None
Item 4. Mine Safety Disclosures
Not Applicable
Item 5. Other Information
None
CSX Q2 2020 Form 10-Q p.42
|
| | |
| CSX Q3 2019 Form 10-Q p.47
|
|
Item 6. Exhibits
| | | | | | | | |
| Exhibit designation | Nature of exhibit | Previously filed
as exhibit to |
| | |
| Material contracts: | | |
| 10.1 | | May 8, 2020
Exhibit 10.1, Form 8-K |
| | |
| Officer certifications: | | |
| 31* | | |
| 32* | | |
| | |
Exhibit designation | Nature of exhibit | Previously filed
as exhibit to
|
| | |
Material contracts: |
10.1** | | October 8, 2019
Exhibit 10.1, Form 8-K
|
| | |
Officer certifications: |
31* | | |
32* | | |
| | |
| Interactive data files: | | |
| 101* | The following financial information from CSX Corporation's Quarterly Report on Form 10-Q for the quarter ended SeptemberJune 30, 20192020 filed with the SEC on October 16, 2019,July 22, 2020, formatted in inline XBRL includes: (i) consolidated income statements for the quarters ended June 30, 2020 and nine months ended SeptemberJune 30, 2019, and September 30, 2018, (ii) condensed consolidated comprehensive income statements for the quarters ended June 30, 2020 and nine months ended SeptemberJune 30, 2019, and September 30, 2018, (iii) consolidated balance sheets at SeptemberJune 30, 20192020 and December 31, 2018,2019, (iv) consolidated cash flow statements for the ninesix months ended SeptemberJune 30, 20192020 and SeptemberJune 30, 2018,2019, (v) consolidated statement of changes in shareholders' equity for the quarters ended June 30, 2020 and nine months ended SeptemberJune 30, 2019, and September 30, 2018, and (vi) the notes to consolidated financial statements.
| |
| 104 | Cover Page Interactive Data File (embedded within the Inline XBRL document contained in Exhibit 101) | |
* Filed herewith | | |
|
| | |
| Other exhibits: | | |
| 22.1* | CSX Q3 2019 Form 10-Q p.48
|
|
| | |
| * Filed herewith | | |
CSX Q2 2020 Form 10-Q p.43
SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
CSX CORPORATION
(Registrant)
By: /s/ ANGELA C. WILLIAMS
Angela C. Williams
Vice President and
Chief Accounting Officer
(Principal Accounting Officer)
Dated: October 16, 2019July 22, 2020
CSX Q2 2020 Form 10-Q p.44
|
| | |
| CSX Q3 2019 Form 10-Q p.49
|
|
