CSX (CSX) 10-K risk factor changes: FY2017 vs FY2016

[removed: Noncompliance] [added: Although CSX remains on track to meet this regulatory requirement, noncompliance] with these and other applicable laws or regulations could erode public confidence in the Company and can subject the Company to fines, penalties and other legal or regulatory sanctions.

[removed: Most] [added: Approximately 70 percent] of these agreements are bargained for nationally by the National Carriers Conference Committee and negotiated over the course of several years and previously have not resulted in any extended work stoppages.

[removed: Capacity] [added: Network] constraints could have a negative impact on service and operating efficiency.

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

CSX [removed: 2016] [added: 2017] Form 10-K p.

For example, if the rate of economic growth in Asia [removed: slows or if] [added: slows,] European economies contract, [added: or if the global supply of seaborne coal or price of seaborne coal changes from its current levels,] U.S. export coal volume could be adversely impacted resulting in lower revenue for CSX.

If the Company experiences significant declines in demand for its transportation services with respect to one or more commodities and products, the Company may experience reduced revenue and increased operating [removed: costs associated with the storage of locomotives, railcars and other equipment,] [added: costs,] workforce adjustments, and other related activities, which could have a material adverse effect on the Company's financial condition, results of operations and liquidity.

Over the past few years, production [added: and source locations] of natural gas in the U.S. [removed: has] [added: have] also increased dramatically, which has resulted in lower natural gas [removed: prices.][added: prices in CSX’s service territory.]

Such an event could result in [added: decreased revenues and] increased capital, insurance or operating costs, including increased security costs to protect the Company's infrastructure.

A disruption or compromise of the Company's information technology systems, even for short periods of time, could have a material adverse [removed: effect on the Company.][added: effect.]

Additionally, if a fuel supply shortage were to arise, [removed: whether due to production restrictions, lower refinery outputs, a disruption of oil imports, adverse political developments or otherwise,] the Company would be negatively impacted.

Any future improvements or expenditures materially increasing the quality or reducing the cost of alternative modes of [removed: transportation,] [added: transportation such as through the use of automation, autonomy] or [added: electrification, or] legislation providing for less stringent size or weight restrictions on trucks, could negatively impact the Company's competitive position.

CSXT's rail lines, other key infrastructure and information technology systems may be [removed: direct] targets or indirect casualties of acts of terror or war.

Additionally, the Company [removed: is subject to] [added: could be impacted by] adverse developments not currently reflected in the Company's reserve estimates.

Marketplace conditions for resources like locomotives as well as the availability of qualified personnel, particularly engineers and [removed: trainmen,] [added: conductors,] could each have a negative impact on the Company’s ability to meet demand for rail service.

The Company’s business strategies may not achieve the anticipated objectives.

The implementation of the Company’s business strategies could result in operational disruptions, loss of existing customers, regulatory issues and other adverse consequences.

If these strategies fail to achieve the anticipated benefits or take longer to implement than expected, the Company’s operations and financial results may be adversely affected.

Additionally, from time to time, the Company enters into CSX-specific, or “local”, bargaining agreements which could also be critical to the Company and its new business strategies.

Additionally, changes to trade agreements or policies could result in reduced import and export volumes due to increased tariffs and lower consumer demand.

Additionally, crude oil prices combined with increased pipeline activity have resulted in volatility in domestic crude oil production, which has adversely affected crude oil volumes for CSX.

CSX 2017 Form 10-K p.

Insurance maintained by the Company to protect against loss of business and other related consequences resulting from cyber incidents may not be sufficient to cover all damages.

CSX 2017 Form 10-K p.

CSX 2017 Form 10-K p.

11

Additionally, depressed crude oil prices due to increased supply or lower demand could result in a further decrease in domestic crude oil production, which could have an adverse effect on crude oil volumes for CSX.

In addition, new regulations related to the shipment of crude oil by rail, including proposed rail car safety standards, could increase costs for CSX, negatively impact network fluidity or have an adverse impact on customers.

The Company could be adversely impacted by actions of activist stockholders, and such activism could impact the value of the Company’s securities.

While the Company continually engages with shareholders and considers their views on business and strategy, responding to activist shareholders can be costly and time-consuming, disrupt operations and divert the attention of management and employees.

The uncertainties associated with such activities could interfere with the Company’s ability to effectively execute its strategic plan, impact customer retention and long-term growth, and limit the Company's ability to hire and retain personnel.

In addition, a proxy contest for the election of directors could require the Company to incur significant legal fees and proxy solicitation expenses and require significant time and attention by management and the board of directors.

Uncertainties related to, or the results of, such activism could affect the market price and volatility of the Company's securities.

Department of Transportation ("DOT") - A [removed: U.S] [added: U.S.] Government agency with jurisdiction over matters of all modes of transportation.

Depreciation study [removed: (also referred to as a "life study")] - A periodic statistical analysis of fixed asset service lives, salvage values, accumulated depreciation, and other factors for group assets along with a comparison of similar asset groups at other companies conducted by a third-party specialist.

CSX [removed: 2016] [added: 2017] Form 10-K p.

- Revenue of [removed: $11.1] [added: $11.4] billion [removed: decreased $742] [added: increased $339] million or [removed: six] [added: three] percent versus the prior year.

- Expenses of $7.7 billion [removed: decreased $547] [added: increased $61] million or [removed: seven] [added: one] percent year over year.

- Operating income of [removed: $3.4] [added: $3.7] billion [removed: decreased $195] [added: increased $278] million or [removed: five] [added: eight] percent year over year.

- Operating ratio of [removed: 69.4] [added: 67.9] percent improved [removed: 30] [added: 150] basis points from [removed: 69.7] [added: 69.4] percent.

| • | Earnings per diluted share of [removed: $1.81 decreased $0.19] [added: $5.99 increased $4.18] or [removed: 10] [added: 231] percent year over year. |

2016 vs. 2015 Results of [removed: Operations (a)][added: Operations(a)]

| Materials, Supplies and Other | [removed: 2,069] [added: 2,113] | | | | [removed: 2,336] [added: 2,092] | | | | [removed: 267] [added: (21] | | [added: )] | | [removed: 11] [added: (1] | [added: )] | |

| Equipment and Other Rents | [removed: 438] [added: 429] | | | | [removed: 436] [added: 465] | | | | [removed: (2] [added: 36] | | [removed: )] | | [removed: —] [added: 8] | | |

| Debt Repurchase Expense | [removed: (115] [added: —] | | [removed: )] | | [removed: —] [added: (115] | | [added: )] | | [removed: (115] [added: 115] | | [removed: )] | | (100 | ) | |

(a) [added: Prior to third quarter 2017,] CSX [removed: follows] [added: followed] a 52/53 week fiscal reporting calendar.

All 2016 information presented in Results of Operations is on a 53-week basis, under [removed: Generally Accepted Accounting Principles ("GAAP").][added: GAAP.]

| Volume and Revenue (Unaudited) [removed: (b)] [added: (a)] | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | |

| Agricultural and Food Products [removed: (a)] | 477 | | | 503 | | | (5 | [removed: )% |] [added: )] | [removed: $] | 1,286 | | | [removed: $] | 1,345 | | | [removed: (4] | [removed: )%] [added: (4] | [added: )] | [removed: $] | 2,696 | | | [removed: $] | 2,674 | | | [added: |] 1 | % |

| Fertilizers [removed: (a)] | 300 | | | 301 | | | — | | | 463 | | | | 489 | | | | (5 | ) | | 1,543 | | | | 1,625 | | | | (5 | [removed: )] [added: )%] |

| Chemicals [removed: (a)] | 700 | | | 726 | | | (4 | [removed: )] [added: )%] | | 2,191 | | | | 2,284 | | | | (4 | [removed: )] [added: )%] | | 3,130 | | | | 3,146 | | | | (1 | [removed: )] [added: )%] |

| Automotive | 482 | | | 450 | | | 7 | | | 1,261 | | | | 1,175 | | | | 7 | | | 2,616 | | | | 2,611 | | | | — | [added: %] |

| Metals and Equipment [removed: (a)] | 259 | | | 284 | | | (9 | ) | | 704 | | | | 723 | | | | (3 | ) | | 2,718 | | | | 2,546 | | | | 7 | [added: %] |

| Minerals [removed: (a)] | 310 | | | 306 | | | 1 | | | 464 | | | | 459 | | | | 1 | | | 1,497 | | | | 1,500 | | | | — | [added: %] |

| Forest Products | 274 | | | 290 | | | (6 | ) | | 773 | | | | 796 | | | | (3 | ) | | 2,821 | | | | 2,745 | | | | 3 | [added: %] |

| Total Merchandise | 2,802 | | | 2,860 | | | (2 | ) | | 7,142 | | | | 7,271 | | | | (2 | ) | | 2,549 | | | | 2,542 | | | | — | [added: %] |

| Coal | 838 | | | 1,063 | | | (21 | ) | | 1,833 | | | | 2,300 | | | | (20 | ) | | 2,187 | | | | 2,164 | | | | 1 | [added: %] |

| Intermodal | 2,811 | | | 2,838 | | | (1 | ) | | 1,726 | | | | 1,762 | | | | (2 | ) | | 614 | | | | 621 | | | | (1 | [removed: )] [added: )%] |

| Other | — | | | — | | | — | | | 368 | | | | 478 | | | | (23 | ) | | — | | | | — | | | | — | [added: %] |

[removed: (b)] [added: (a) Prior to third quarter 2017,] CSX [removed: follows] [added: followed] a 52/53 week fiscal reporting calendar and 2016 included 53 weeks.

In 2016, revenue decreased $742 million, or six percent, due to a five percent decline in volume (including the $178 million positive impact of an extra week of volume) and a significant decline in fuel recoveries, partially offset by [removed: pricing strength.][added: increased pricing.]

Agricultural and Food Products [removed: \-] [added: -] Volume declined as the strong U.S. dollar continued to support import grain and a robust Southeastern crop spurred additional local truck sourcing, displacing grain shipments by rail.

Domestic - Volume declined [added: 23 percent] as mild winter weather in the beginning of the year and low natural gas prices reduced utility coal burn rates and resulted in inflated coal stockpiles.

Export - Volume was down [added: 15 percent] in both metallurgical and thermal coal as a result of the strong U.S. dollar and global oversupply which impacted U.S. competitiveness in the world market, particularly in the first half of the year.

Domestic - Volume increased [added: 4 percent] as secular growth [removed: from the highway-to-rail conversion program] and new service offerings were partially offset by excess truck capacity headwinds and a short-haul competitive loss.

International - Volume declined [added: 9 percent] as headwinds from competitive losses more than offset moderate growth across other customers.

Total materials, supplies and other expenses decreased [removed: $267] [added: $264] million driven by the following:

| • | Various other costs decreased [removed: $45] [added: $6] million. |

These expenses increased [removed: $2] [added: $9] million driven by the following:

| • | Net other costs decreased [removed: $14] [added: $7] million. |

[removed: 2015] [added: 2017] vs. [removed: 2014] [added: 2016] Results of Operations [added: (a)]

| Materials, Supplies and Other | [removed: 2,336] [added: 2,092] | | | | [removed: 2,484] [added: 2,356] | | | | [removed: 148] [added: 264] | | | | [removed: 6] [added: 11] | | |

| Equipment and Other Rents | [removed: 436] [added: 465] | | | | [removed: 428] [added: 456] | | | | [removed: (8] [added: (9] | | ) | | (2 | ) | |

Scheduled railroading - An operating model focused on developing and strictly maintaining a scheduled service plan with an emphasis on optimizing assets.

CSX 2017 Form 10-K p.

2017 HIGHLIGHTS

Tax Reform

With the enactment of the Tax Cuts and Jobs Act (the "Act") on December 22, 2017, the federal corporate income tax rate was reduced from 35% to 21% effective January 1, 2018.

The Company's 2017 financial results included a $3.5 billion, or $3.81 per share, non-cash reduction in income tax expense, primarily resulting from revaluing the Company's net deferred tax liabilities to reflect the recently enacted lower tax rate effective January 1, 2018.

Beginning in 2018, CSX expects its effective federal and state income tax rate to be approximately 25%.

The Company's affiliates also revalued their deferred tax liabilities to reflect the lower federal corporate tax rate, which resulted in the Company recognizing a benefit of $142 million, or $0.10 per share after-tax, in equity earnings of affiliates, which is included in operating income.

(See additional discussion over income taxes in Note 11, Income Taxes and equity earnings of affiliates in Note 12, Related Parties and Affiliates.)

Restructuring Charge

The total restructuring charge of $325 million in 2017 includes costs related to the management workforce reduction, executive retirements, reimbursement arrangements, the proration of equity awards and other advisory costs related to the leadership transition during the year.

The Company expects estimated pre-tax savings on both future earnings and cash flows resulting from this program to be approximately $200 million per year.

(See additional discussion over the restructuring charge in Note 1, Nature of Operations and Significant Accounting Policies.)

CSX 2017 Form 10-K p.

| | 2017 | | | | 2016 | | | | $ Change | | | | % Change | | |

| Revenue | $ | 11,408 | | | $ | 11,069 | | | $ | 339 | | | 3 | % | |

| Labor and Fringe | 2,914 | | | | 3,159 | | | | 245 | | | | 8 | | |

| Depreciation | 1,315 | | | | 1,301 | | | | (14 | | ) | | (1 | ) | |

| Fuel | 864 | | | | 713 | | | | (151 | | ) | | (21 | ) | |

| Restructuring Charge | 325 | | | | — | | | | (325 | | ) | | — | | |

| Equity Earnings of Affiliates | (219 | | ) | | (50 | | ) | | 169 | | | | 338 | | |

| Total Expense | 7,741 | | | | 7,680 | | | | (61 | | ) | | (1 | ) | |

| Operating Income | 3,667 | | | | 3,389 | | | | 278 | | | | 8 | | |

| Interest Expense | (546 | | ) | | (579 | | ) | | 33 | | | | 6 | | |

| Income Tax Benefit (Expense) | 2,329 | | | | (1,027 | | ) | | 3,356 | | | | 327 | | |

| Net Earnings | $ | 5,471 | | | $ | 1,714 | | | $ | 3,757 | | | 219 | | |

| Net Earnings | $ | 5.99 | | | $ | 1.81 | | | $ | 4.18 | | | 231 | % | |

| Operating Ratio | 67.9 | | % | | 69.4 | | % | | | | | | 150 | | bps |

CSX 2017 Form 10-K p.

| | 2017 | | | 2016 | | | % Change | | | 2017 | | | | 2016 | | | | % Change | | | 2017 | | | | 2016 | | | | % Change | |

| Chemicals | 672 | | | 700 | | | (4 | )% | | $ | 2,210 | | | $ | 2,191 | | | 1 | % | | $ | 3,289 | | | $ | 3,130 | | | 5 | % |

| Automotive | 457 | | | 482 | | | (5 | )% | | 1,195 | | | | 1,261 | | | | (5 | )% | | 2,615 | | | | 2,616 | | | | — | % |

| Agricultural and Food Products | 454 | | | 477 | | | (5 | )% | | 1,262 | | | | 1,286 | | | | (2 | )% | | 2,780 | | | | 2,696 | | | | 3 | % |

| Minerals | 308 | | | 310 | | | (1 | )% | | 477 | | | | 464 | | | | 3 | % | | 1,549 | | | | 1,497 | | | | 3 | % |

| Fertilizers | 291 | | | 300 | | | (3 | )% | | 466 | | | | 463 | | | | 1 | % | | 1,601 | | | | 1,543 | | | | 4 | % |

| Forest Products | 264 | | | 274 | | | (4 | )% | | 755 | | | | 773 | | | | (2 | )% | | 2,860 | | | | 2,821 | | | | 1 | % |

| Metals and Equipment | 256 | | | 259 | | | (1 | )% | | 703 | | | | 704 | | | | — | % | | 2,746 | | | | 2,718 | | | | 1 | % |

| Total Merchandise | 2,702 | | | 2,802 | | | (4 | )% | | 7,068 | | | | 7,142 | | | | (1 | )% | | 2,616 | | | | 2,549 | | | | 3 | % |

| Coal | 855 | | | 838 | | | 2 | % | | 2,107 | | | | 1,833 | | | | 15 | % | | 2,464 | | | | 2,187 | | | | 13 | % |

| Intermodal | 2,843 | | | 2,811 | | | 1 | % | | 1,799 | | | | 1,726 | | | | 4 | % | | 633 | | | | 614 | | | | 3 | % |

Highway-to-rail \- An initiative to assist new and existing customers in identifying freight moves that would benefit from converting from a highway-only move to one that utilizes intermodal containers on rail and local drayage by truck.

CSX CORPORATION

PART II

National Gateway - A multi-phase construction initiative aimed at increasing intermodal capacity on the CSX network by clearing key corridors between mid-Atlantic ports and the Midwest for double-stack trains.

Construction on National Gateway projects is funded by CSX, the federal government, and individual states.

STRATEGIC OVERVIEW

CSX provides rail-based freight transportation services including traditional rail service, the transport of intermodal containers and trailers, as well as other transportation services such as rail-to-truck transfers and bulk commodity operations.

The Company and the rail industry provide customers with access to an expansive and interconnected transportation network that plays a key role in North American commerce and is critical to the long-term economic success and improved global competitiveness of the United States.

In addition, freight railroads provide the most economical and environmentally efficient means to transport goods over land.

CSX's transportation solutions connect industries and population centers across the United States with each other and with global markets through access to over 70 port facilities allowing the Company to meet the dynamic transportation needs of manufacturers, industrial producers, construction companies, farmers and feed mills, wholesalers and retailers, energy producers and the U.S. Armed Forces.

Through its network, the Company transports a diverse portfolio of commodities and products to meet the country's needs.

These products range from agricultural goods, such as grains, to chemicals, automobiles, metals, building materials, paper, consumer products, and energy sources like coal, ethanol and liquefied petroleum gas.

The Company categorizes these products into three primary lines of business: merchandise, intermodal and coal.

To support long-term growth and value creation consistent with the evolving trends in freight transportation, CSX has launched a new strategic initiative known as the CSX of Tomorrow: a safe, highly automated, resource-efficient railroad enabling Service Excellence, profitable growth and improved cash flow.

The CSX of Tomorrow is comprised of four distinct strategic pillars and builds on the Company’s vision, purpose and core values.

CSX of Tomorrow Strategic Initiatives

Network of Tomorrow

The CSX of Tomorrow relies on the reach, capability and efficiency of the Company’s rail network to safely and effectively meet the demands of the evolving marketplace and provide increasingly flexible and responsive service to more diverse customers.

To facilitate future productivity and growth, CSX is implementing a fundamentally new approach to the network—transforming the railroad into two interconnected networks: a primary network and a local network.

The Company is expanding capacity in its primary network to enable increasingly dense traffic while providing improved service for customers and enabling future growth.

Further, the Company’s capacity investments along the primary network will allow for additional train lengthening, improving efficiency and profitability.

The local network will be operated at lower density and speed and will better allow for new customer site development as a result of easier access to the local network and the Company’s enhanced focus on local pickup and delivery of freight to customers.

Expanding capacity on U.S. rail networks provides substantial public benefits including job creation, increased business activity at U.S. ports, reduced highway congestion and lower air emissions.

Therefore, CSX and its government partners are jointly working to invest in multi-year rail infrastructure projects.

These public-private partnerships are a critical part of the Network of Tomorrow strategy for the Company.

An example of one of these initiatives is the National Gateway, which is a public-private partnership that will increase intermodal capacity and create substantial environmental and efficiency advantages by clearing key corridors between mid-Atlantic ports and the Midwest for double-stack intermodal trains.

The modernization of the Virginia Avenue Tunnel in Washington, D.C. is the capstone project for the second, and final phase, of the National Gateway.

This project improves the flow of freight traffic through the District of Columbia and eliminates a rail traffic bottleneck that also impacts commuter and passenger trains in the region.

CSX completed the first of two new double-stack-cleared tunnels in 2016, and the second tunnel will be finished in late 2018.

With the completion of the first tunnel, 95% of CSX intermodal freight now moves in double-stack service.

Going forward, CSX will continue to explore other opportunities to partner with the public sector to maximize the many public benefits of freight rail.

The Network of Tomorrow, along with enhanced operational efficiency, will allow CSX to continue to improve safety, lower the cost structure and provide superior service to customers.

Service Excellence

Service Excellence has long been a core component of CSX’s culture that engages all employees to focus on delivering value to customers through improved service levels, communications tools and advanced technologies.

As part of the CSX of Tomorrow, the Company will continually strive to consistently meet, or exceed, customer commitments while ensuring all interactions with customers result in a positive experience.

Improving the customer experience will allow CSX to continue delivering a safe, reliable and competitive product while enhancing the ability to profitably grow the business and continue to value price its service product.

In addition, Service Excellence across the Network of Tomorrow will enable additional volume growth opportunities with new and existing customers, especially in the Company’s intermodal and merchandise businesses.

For example, CSX’s intermodal network connects all major population centers east of the Mississippi River and positions the Company to capture a significant share of the growing domestic intermodal market opportunity, currently estimated at nine million truckloads in the eastern United States that move over 550 miles.

The company’s highway-to-rail initiative assists in growing this traffic by helping customers identify new conversion opportunities for both domestic intermodal moves and the U.S. portion of international intermodal moves.

To further enhance the Company’s intermodal offering and support future growth, CSX announced a new terminal in eastern North Carolina, known as the Carolina Connector, to capture local, regional, national and international intermodal freight movement opportunities prevalent in the vibrant mid-Atlantic market.

As of December [removed: 2016,] [added: 2017,] CSX does not have a material amount of floating rate debt obligations outstanding, and therefore fluctuations in the interest rate would not have a material impact on the Company's financial condition, results of operations or liquidity.

CSX [removed: 2016] [added: 2017] Form 10-K p.

| Report of Independent Registered Public Accounting Firm | | [removed: [58](#s8AB7455252325F0FBCDF3969C7E1BE80)] [added: [55](#s41A2E0734BA851ED94150266C7787CDB)] |

| Consolidated Income Statements for the Fiscal Years Ended: | | [removed: [59](#sF09AE7C0C27453299BC787F9A4606F9E)] [added: [56](#s8BCB4D96D45257D294C43563D19B1EC9)] |

| | December [removed: 25, 2015] | | [added: | | December | | | | December | | | | December | | |]

| [removed: |] December 26, 2014 | [added: $] | [added: 265 | | | $ | 94 | | | $ | 59 | | | $ | 418 | |]

| Consolidated Comprehensive Income Statements for the Fiscal Years Ended: | | [removed: [60](#s3437F4C073235AAE9F61DD1C79236E59)] [added: [57](#sE785BD3D26F653C691022FDAE521698A)] |

| Consolidated Balance Sheets as of: | | [removed: [61](#sAFEEDBA96CBB54599D8AE664665A6B13)] [added: [58](#sE225AA61EFA2597A9D6E883BDABE4BB8)] |

| Consolidated Cash Flow Statements for Fiscal Years Ended: | | [removed: [62](#sEDA9084C9C54583AB2E402FA5BCE2A1C)] [added: [59](#sB615406B4C21578BA8BAFE0E66917B92)] |

| Consolidated Statements of Changes in Shareholders' Equity: | | [removed: [63](#sF9F4E137C0FD533B853CF2603C49660C)] [added: [60](#s8562AB703CFC5854ABE3B840F50D324E)] |

| Notes to Consolidated Financial Statements | | [removed: [64](#s5C652409EA3354A1BF59B2EC9D780646)] [added: [61](#s3FEA959122B3561691DA604E6A09BAC2)] |

We have audited the accompanying consolidated balance sheets of CSX Corporation [added: (the Company)] as of December [removed: 30, 2016] [added: 31, 2017] and December [removed: 25, 2015,] [added: 30, 2016,] and the related consolidated statements of income, comprehensive income, cash flows, and changes in shareholders’ equity for each of the three fiscal years in the period ended December [removed: 30, 2016.][added: 31, 2017, and the related notes (collectively referred to as the “financial statements”).]

Our responsibility is to express an opinion on [removed: these] [added: the Company’s] financial statements based on our audits.

We conducted our audits in accordance with the standards of the [removed: Public Company Accounting Oversight Board (United States).][added: PCAOB.]

Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material [removed: misstatement.][added: misstatement, whether due to error or fraud.]

[removed: An audit includes] [added: Such procedures included] examining, on a test basis, evidence [removed: supporting] [added: regarding] the amounts and disclosures in the financial statements.

[removed: An audit] [added: Our audits] also [removed: includes assessing] [added: included evaluating] the accounting principles used and significant estimates made by management, as well as evaluating the overall [added: presentation of the] financial [removed: statement presentation.][added: statements.]

In our opinion, the financial statements [removed: referred to above] present fairly, in all material respects, the consolidated financial position of [removed: CSX Corporation] [added: the Company] at December [removed: 30, 2016] [added: 31, 2017] and December [removed: 25, 2015,] [added: 30, 2016,] and the consolidated results of its operations and its cash flows for each of the three [removed: fiscal] years in the period ended December [removed: 30, 2016,] [added: 31, 2017,] in conformity with U.S. generally accepted accounting principles.

We also have audited, in accordance with [removed: the] standards of the Public Company Accounting Oversight Board (United [removed: States), CSX Corporation's] [added: States) (PCAOB), the Company’s] internal control over financial reporting as of December [removed: 30, 2016,] [added: 31, 2017,] based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 [removed: framework)] [added: framework),] and our report dated February [removed: 14, 2017] [added: 7, 2018] expressed an unqualified opinion thereon.

| | [removed: 2016] [added: 2017] | | | | [removed: 2015] [added: 2016] | | | | [removed: 2014] [added: 2015] | | |

| Revenue | $ | [removed: 11,069] [added: 11,408] | | | $ | [removed: 11,811] [added: 11,069] | | | $ | [removed: 12,669] [added: 11,811] | |

| Labor and Fringe | [removed: 3,159] [added: 2,914] | | | | [removed: 3,290] [added: 3,159] | | | | [removed: 3,377] [added: 3,290] | | |

| Materials, Supplies and Other | [removed: 2,069] [added: 2,113] | | | | [removed: 2,336] [added: 2,092] | | | | [removed: 2,484] [added: 2,356] | | |

| Fuel | [removed: 713] [added: 864] | | | | [removed: 957] [added: 713] | | | | [removed: 1,616] [added: 957] | | |

| Depreciation | [removed: 1,301] [added: 1,315] | | | | [removed: 1,208] [added: 1,301] | | | | [removed: 1,151] [added: 1,208] | | |

| Equipment and Other Rents | [removed: 438] [added: 429] | | | | [removed: 436] [added: 465] | | | | [removed: 428] [added: 456] | | |

| Total Expense | [removed: 7,680] [added: 7,741] | | | | [removed: 8,227] [added: 7,680] | | | | [removed: 9,056] [added: 8,227] | | |

| Operating Income | [removed: 3,389] [added: 3,667] | | | | [removed: 3,584] [added: 3,389] | | | | [removed: 3,613] [added: 3,584] | | |

| Interest Expense | [removed: (579] [added: (546] | | ) | | [removed: (544] [added: (579] | | ) | | [removed: (545] [added: (544] | | ) |

| Debt Repurchase Expense | [removed: (115] [added: —] | | [removed: )] | | [removed: —] [added: (115] | | [added: )] | | [removed: (16] [added: —] | | [removed: )] |

| Other Income (Expense) - Net (Note 10) | [removed: 46] [added: 21] | | | | [removed: 98] [added: 46] | | | | [removed: (8] [added: 98] | | [removed: )] |

| Earnings Before Income Taxes | [removed: 2,741] [added: 3,142] | | | | [removed: 3,138] [added: 2,741] | | | | [removed: 3,044] [added: 3,138] | | |

| Income Tax [removed: Expense] [added: Benefit (Expense)] (Note 11) | [removed: (1,027] [added: 2,329] | | [removed: )] | | [removed: (1,170] [added: (1,027] | | ) | | [removed: (1,117] [added: (1,170] | | ) |

| Net Earnings | $ | [removed: 1,714] [added: 5,471] | | | $ | [removed: 1,968] [added: 1,714] | | | $ | [removed: 1,927] [added: 1,968] | |

| Basic | $ | [removed: 1.81] [added: 6.01] | | | $ | [removed: 2.00] [added: 1.81] | | | $ | [removed: 1.93] [added: 2.00] | |

| Assuming Dilution | $ | [removed: 1.81] [added: 5.99] | | | $ | [removed: 2.00] [added: 1.81] | | | $ | [removed: 1.92] [added: 2.00] | |

| Basic | [removed: 947] [added: 911] | | | | [removed: 983] [added: 947] | | | | [removed: 1,001] [added: 983] | | |

| Assuming Dilution | [removed: 948] [added: 914] | | | | [removed: 984] [added: 948] | | | | [removed: 1,002] [added: 984] | | |

| Cash Dividends Paid Per Common Share | $ | [removed: 0.72] [added: 0.78] | | | $ | [removed: 0.70] [added: 0.72] | | | $ | [removed: 0.63] [added: 0.70] | |

| | [removed: 2016] [added: 2017] | | | [removed: 2015] [added: 2016] | | | [removed: 2014] [added: 2015] | | |

53

| | December 31, 2017 | |

| | December 31, 2017 | |

| | December 31, 2017 | |

| | December 31, 2017 | |

CSX 2017 Form 10-K p.

54

Opinion on the Financial Statements

Basis for Opinion

We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks.

We have served as the Company’s auditor since 1981.

February 7, 2018

CSX 2017 Form 10-K p.

55

| Restructuring Charges (Note 1) | 325 | | | | — | | | | — | | |

| Equity Earnings of Affiliates | (219 | | ) | | (50 | | ) | | (40 | | ) |

CSX 2017 Form 10-K p.

| Total Other Comprehensive Income (Loss) | 154 | | | 25 | | | 1 | | |

CSX 2017 Form 10-K p.

| | 2017 | | | | 2016 | | |

CSX 2017 Form 10-K p.

| Net Earnings | $ | 5,471 | | | $ | 1,714 | | | $ | 1,968 | |

| Depreciation | 1,315 | | | | 1,301 | | | | 1,208 | | |

| Restructuring Charge (Note 1) | 325 | | | | — | | | | — | | |

| Cash Payments for Restructuring Charge | (187 | | ) | | — | | | | — | | |

| Earnings of equity-method investments | (219 | | ) | | (50 | | ) | | (40 | | ) |

Certain prior year data has been reclassified to conform to the current presentation.

CSX 2017 Form 10-K p.

| Other Comprehensive Income (Note 14) | — | | | — | | — | | | 154 | | | — | | | 154 | | |

| Share Repurchases | (38,785 | ) | | (39 | ) | (1,931 | | ) | — | | | — | | | (1,970 | | ) |

| December 31, 2017 | 889,851 | | $ | 1,107 | | $ | 14,084 | | $ | (486 | ) | $ | 16 | | $ | 14,721 | |

CSX 2017 Form 10-K p.

In addition, as substantially all real estate sales, leasing, acquisition and management and development activities are focused on supporting railroad operations, all results of these activities are included in operating income beginning in 2017.

Previously, the results of these activities were classified as operating or non-operating based on the nature of the activity and were not material for any periods presented.

CSX 2017 Form 10-K p.

CSX 2017 Form 10-K p.

Through the second quarter 2017, CSX followed a 52/53 week fiscal reporting calendar with the last day of each reporting period ending on a Friday.

The 52/53 week calendar allowed for every quarter and year to be of equal duration, 13 weeks and 52 weeks, respectively.

On July 7, 2017, the Board of Directors of CSX approved a change in the fiscal reporting calendar from a 52/53 week year ending on the last Friday of December to a calendar year ending on December 31 each year, effective beginning with fiscal third quarter 2017.

February 14, 2017

| December 27, 2013 | 1,008,860 | | $ | 1,070 | | $ | 9,936 | | $ | (523 | ) | $ | 21 | | $ | 10,504 | |

| Share Repurchases | (17,010 | ) | | (17 | ) | (500 | | ) | — | | | — | | | (517 | | ) |

| Bond Conversions | 134 | | | 1 | | — | | | — | | | — | | | 1 | | |

These activities are classified in either operating income or other income - net depending upon the nature of the activity.

Results of these activities fluctuate with the timing of real estate transactions.

CSX follows a 52/53 week fiscal reporting calendar.

This fiscal calendar allows every quarter to consistently end on a Friday and typically, to be of equal duration (13 weeks), resulting in a 52 week fiscal year.

Fiscal years 2015 and 2014 each consisted of 52 weeks ending on December 25, 2015 and December 26, 2014, respectively.

In March 2016, the Financial Accounting Standards Board ("FASB") issued Accounting Standards Update ("ASU"), Improvements to Employee Share-based Payment Accounting, which requires excess tax benefits and deficiencies to be recorded as income tax expense or benefit in the income statement rather than being recorded in additional paid-in capital.

In November 2015, the FASB issued ASU, Balance Sheet Classification of Deferred Taxes, which requires that all deferred income taxes be classified as noncurrent in the balance sheet, rather than being separated into current and noncurrent amounts.

The Company adopted the provisions of this ASU during second quarter 2016 and applied them retrospectively.

Current deferred income tax assets of $126 million as of December 25, 2015 have been reclassified and reported as a reduction of deferred income tax liabilities on the consolidated balance sheet.

This standard will become effective for CSX beginning with the first quarter 2018 and can be adopted either retrospectively to each prior reporting period presented or as a cumulative effect adjustment as of the date of adoption.

The Company continues to evaluate the expected financial impact of this standard update.

During 2016, 2015 and 2014, CSX repurchased $1.1 billion, or 38 million shares, $804 million or 26 million shares, and $517 million, or 17 million shares, respectively, of common stock.

Workforce Reduction Plans, Separation & Other Costs

Union agreements

In November 2015, CSX finalized a union agreement that will improve efficiency across the CSX network.

This agreement allowed certain employees impacted by work transitions to voluntarily separate from the Company with enhanced benefits and provided relocation benefits to employees not electing to separate.

As a result, approximately 300 union employees were impacted.

Separation benefits were paid from general corporate funds.

Facility closures

In October 2015, CSX closed facilities in Erwin, Tennessee and Corbin, Kentucky as a result of the decline in coal movements in these regions.

These closures impacted approximately 500 positions.

The Company recorded a charge resulting from separation, relocation and furlough costs, as well as asset impairment charges related to the facility closures.

Management streamlining

In 2014, the Company announced a workforce reduction plan to streamline the organization.

quarter of 2014 and the first quarter of 2015.

There were no stock options outstanding for 2014.

| Unvested at December 25, 2015 | 1,941 | | | $ | 31.73 | |

| Granted | 852 | | | 24.17 | | |

| Forfeited | (118 | ) | | 29.22 | | |

| Vested | (1,094 | ) | | 28.60 | | |

| Unvested at December 25, 2015 | 1,157 | | | $ | 28.66 | |

| Granted | 509 | | | 24.21 | | |

| Forfeited | (52 | ) | | 28.19 | | |

| Vested | (538 | ) | | 25.44 | | |

No stock options were granted in 2014.

| Outstanding at December 25, 2015 | 2,514 | | | $ | 24.99 | |

The Company provides rail-based [added: freight] transportation services including traditional rail [removed: service and] [added: service,] the transport of intermodal containers and [removed: trailers.][added: trailers, as well as other transportation services such as rail-to-truck transfers and bulk commodity operations.]

The Company’s number of employees was approximately [removed: 27,000] [added: 24,000] as of December [removed: 2016,] [added: 2017,] which includes approximately [removed: 22,000] [added: 20,000] union employees.

CSXT also serves thousands of production and distribution facilities through track connections [removed: to] [added: with other Class I railroads and] approximately [removed: 240] [added: 230] short-line and regional railroads.

During [removed: 2016,] [added: 2017,] the Company's services generated [removed: $11.1] [added: $11.4] billion of revenue and served three primary lines of business: [added: merchandise, coal and intermodal.]

| • | The merchandise business shipped [removed: 2.8] [added: 2.7] million carloads and generated [removed: 64%] [added: 62 percent] of revenue and [removed: 43%] [added: 42 percent] of volume in [removed: 2016.] [added: 2017.] The Company’s merchandise business is comprised of shipments in the following diverse markets: [added: chemicals, automotive,] agricultural and food products, [added: minerals,] fertilizers, [removed: chemicals, automotive, metals] [added: forest products,] and [removed: equipment, minerals] [added: metals] and [removed: forest products.] [added: equipment.] |

| • | The coal business shipped [removed: 838] [added: 855] thousand carloads and accounted for [removed: 17%] [added: 18 percent] of revenue and [removed: 13%] [added: 13 percent] of volume in [removed: 2016.] [added: 2017.] The Company transports domestic coal, coke and iron ore to electricity-generating power plants, steel manufacturers and industrial plants as well as export coal to deep-water port facilities. Roughly one-third of export coal and the majority of the domestic coal that the Company transports is used for generating electricity. |

| • | The intermodal business accounted for [removed: 16%] [added: 16 percent] of revenue and [removed: 44%] [added: 44 percent] of volume in [removed: 2016.] [added: 2017.] The intermodal business combines the superior economics of rail transportation with the short-haul flexibility of trucks and offers a cost advantage over long-haul trucking. Through a network of more than [removed: 50] [added: 40] terminals, the intermodal business serves all major markets east of the Mississippi River and transports mainly manufactured consumer goods in containers, providing customers with truck-like service for longer shipments. |

Other revenue accounted for [removed: 3%] [added: 4 percent] of the Company’s total revenue in [removed: 2016.][added: 2017.]

Demurrage represents charges assessed when freight cars [added: or other equipment] are held beyond a specified period of time.

CSX [removed: 2016] [added: 2017] Form 10-K p.

[removed: CSX’s other holdings include CSX Real Property, Inc., a subsidiary] [added: CSXT is now] responsible for the [removed: Company’s operating and non-operating] [added: Company's] real estate sales, leasing, acquisition and management and development [removed: activities.][added: activities after a merger with CSX Real Property, Inc., a former wholly-owned CSX subsidiary, on July 1, 2017.]

A leader in freight rail transportation for [removed: nearly] [added: more than] 190 years, the Company’s heritage dates back to the early nineteenth century when The Baltimore and Ohio Railroad Company (“B&O”) – the nation’s first common carrier – was chartered in 1827.

The Company expects to [removed: incur] [added: continue incurring] significant capital costs in connection with the implementation of PTC as well as related ongoing operating expenses.

Total PTC investment through [removed: 2016] [added: 2017] was [removed: $1.8] [added: $2] billion.

[removed: More recently, the] [added: The] STB held a hearing in July 2015 to receive further input from participating parties.

For additional information concerning business conducted by the Company during [removed: 2016,] [added: 2017,] see Item 7.

CSX and the rail industry provide customers with access to an expansive and interconnected transportation network that plays a key role in North American commerce and is critical to the long-term economic success and improved global competitiveness of the United States.

In addition, freight railroads provide the most economical and environmentally efficient means to transport goods over land.

This access allows the Company to meet the dynamic transportation needs of manufacturers, industrial producers, the automotive industry, construction companies, farmers and feed mills, wholesalers and retailers, and energy producers.

In addition, as substantially all real estate sales, leasing, acquisition and management and development activities are focused on supporting railroad operations, all results of these activities are included in operating income beginning in 2017.

Previously, the results of these activities were classified as operating or non-operating based on the nature of the activity and were not material for any periods presented.

Scheduled Railroading

In 2017, the Company began transitioning its operating model to scheduled railroading, which is focused on developing and strictly maintaining a scheduled service plan with an emphasis on optimizing assets.

When the operating model is executed effectively, customer service is improved, costs are reduced and free cash flow is generated, allowing financial growth.

E.

Hunter Harrison created and refined the model during his decades of railroad leadership experience, successfully implementing it at three different railroads prior to being named CEO of CSX in March 2017.

In October 2017, the Company hired James M.

Foote, a railroad executive with extensive scheduled railroading experience, as Chief Operating Officer.

Upon Mr. Harrison's death in December 2017, Foote was appointed CEO by the Board of Directors to continue driving CSX's transformation under the new operating model.

Additionally, Edmond L.

Harris was named Executive Vice President of Operations in January 2018, further strengthening the scheduled railroading experience of the leadership team.

CSX 2017 Form 10-K p.

CSX 2017 Form 10-K p.

CSX participated in a public listening session on October 11, 2017 at the STB in response to service complaints.

During the session, the Company addressed customer concerns and detailed the Company’s service recovery plans at that time.

At the STB's request, CSX is providing additional operating measures on a weekly basis that are available on the Company's website.

CSX 2017 Form 10-K p.

CSX 2017 Form 10-K p.

CSX CORPORATION

PART I

These activities are classified in either operating income or other income - net depending upon the nature of the activity.

Results of these activities fluctuate with the timing of real estate transactions.

For the fiscal year ended December [removed: 30, 2016][added: 31, 2017]

On June [removed: 24, 2016] [added: 30, 2017] (which is the last day of the second quarter and the required date to use), the aggregate market value of the Registrant’s voting stock held by non-affiliates was approximately [removed: $24] [added: $47] billion (based on the [removed: New York Stock Exchange closing] [added: close] price [added: as reported] on [added: the NASDAQ National Market System on] such date).

There were [removed: 926,446,993] [added: 887,236,080] shares of Common Stock outstanding on January [removed: 27, 2017] [added: 31, 2018] (the latest practicable date that is closest to the filing date).

Portions of the Registrant’s Definitive Proxy Statement (the “Proxy Statement”) to be filed no later than 120 days after the end of the fiscal year with respect to its [removed: 2017] [added: 2018] annual meeting of shareholders.

CSX [removed: 2016] [added: 2017] Form 10-K p.

| | [1A. Risk [removed: Factors](#sDDDA57A18A3E585A80C5B4272CE60837)] [added: Factors](#sC5555EC654375A46A3A7B5A9C26355BA)] | | | [removed: [7](#sDDDA57A18A3E585A80C5B4272CE60837)] [added: [8](#sC5555EC654375A46A3A7B5A9C26355BA)] |

| | [1B. Unresolved Staff [removed: Comments](#sDB0DEA6729D35D13A6F3BCC680488D7D)] [added: Comments](#s55131BA5CA1D52AA83B13B98578FCA7E)] | | | [removed: [11](#sDB0DEA6729D35D13A6F3BCC680488D7D)] [added: [12](#s55131BA5CA1D52AA83B13B98578FCA7E)] |

| 3. | [Legal [removed: Proceedings](#s5F5B5BA7B10D5995A59C212C817CB86F)] [added: Proceedings](#s2F2ABE1B75BC57A0840AEE59724D62F0)] | | | [removed: [17](#s5F5B5BA7B10D5995A59C212C817CB86F)] [added: [17](#s2F2ABE1B75BC57A0840AEE59724D62F0)] |

| 4. | [Mine Safety [removed: Disclosures](#s845FF478335A5E4C9F74060463EBF1C4)] [added: Disclosures](#s7888F1A8B994518BB43122D79E5384C6)] | | | [removed: [17](#s845FF478335A5E4C9F74060463EBF1C4)] [added: [17](#s7888F1A8B994518BB43122D79E5384C6)] |

| | [Executive Officers of the [removed: Registrant](#sA4047DC551EF5BDC9D472040C0F064F5)] [added: Registrant](#s1BA39830CD915D378F9D2EF197E98ABC)] | | | [removed: [18](#sA4047DC551EF5BDC9D472040C0F064F5)] [added: [18](#s1BA39830CD915D378F9D2EF197E98ABC)] |

| 5. | [Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity [removed: Securities](#s979175DB06D4584CA4281F3C9A5DCABE)] [added: Securities](#s2F19F48214B15A479A1E23A68FE46409)] | | | [removed: [20](#s979175DB06D4584CA4281F3C9A5DCABE)] [added: [20](#s2F19F48214B15A479A1E23A68FE46409)] |

| 6. | [Selected Financial [removed: Data](#s9BB985C701DC51F28D8AA3471EDF76A2)] [added: Data](#sB087A2E5F68C5262AA07B59E4B21B16A)] | | | [removed: [23](#s9BB985C701DC51F28D8AA3471EDF76A2)] [added: [23](#sB087A2E5F68C5262AA07B59E4B21B16A)] |

| 7. | [Management's Discussion and Analysis of Financial Condition and Results of [removed: Operations](#sE23C47F0F9525DF58313CB5D0E73630E)] [added: Operations](#sAEDDFB1A72BC5C75925C5C677364E3FB)] | | | [removed: [24](#sE23C47F0F9525DF58313CB5D0E73630E)] [added: [24](#sAEDDFB1A72BC5C75925C5C677364E3FB)] |

| | | | · Terms Used by CSX | [removed: [24](#see5ad6e9828142d1a8c4ebc3d53e3a98)] [added: [24](#s0D61A383E25457DF9337F44FAA917656)] |

| | | | · [Results of [removed: Operations](#s20D8A5FF22FF5E4988B9714B7C468320)] [added: Operations](#s323F0D64223E53A988740E6F1C75742C)] | [removed: [29](#s20D8A5FF22FF5E4988B9714B7C468320)] [added: [27](#s323F0D64223E53A988740E6F1C75742C)] |

| | | | · [Liquidity and Capital [removed: Resources](#s0A7A2E6B506A54E285FD0612CC905F99)] [added: Resources](#s34322652F5FD56D6A72377641C692A17)] | [removed: [41](#s0A7A2E6B506A54E285FD0612CC905F99)] [added: [41](#s34322652F5FD56D6A72377641C692A17)] |

| | | | · [Schedule of Contractual Obligations and Commercial [removed: Commitments](#sAA520B06DD065DD3A2A86413D7A96E9A)] [added: Commitments](#s292B7FF419C259F8A5F224C73B8C1086)] | [removed: [46](#sAA520B06DD065DD3A2A86413D7A96E9A)] [added: [45](#s292B7FF419C259F8A5F224C73B8C1086)] |

| | | | · [Off-Balance Sheet [removed: Arrangements](#s9FD508303EDA590BA639603A28D3C955)] [added: Arrangements](#s9D403C5BB0B6558497F9AE02A9070875)] | [removed: [46](#s9FD508303EDA590BA639603A28D3C955)] [added: [45](#s9D403C5BB0B6558497F9AE02A9070875)] |

| | | | · Critical Accounting Estimates | [removed: [47](#sA02FB59EA683586BBFD4F5CD29AB2541)] [added: [46](#s55C12FEC0F4F5B839D6AA9A72EB2BEF1)] |

| | | | · Forward-Looking Statements | [removed: [54](#s53AF446EA36657608F32A003EFF33963)] [added: [51](#sFA0FA5D377D5537F87BDA219C9DE2A33)] |

| 7A. | [Quantitative and Qualitative Disclosures about Market [removed: Risk](#s1733A4EAF3FD5185AF82044C5F007333)] [added: Risk](#s56430343406054C18E203EE51896EC23)] | | | [removed: [56](#s1733A4EAF3FD5185AF82044C5F007333)] [added: [53](#s56430343406054C18E203EE51896EC23)] |

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| 9. | [Changes in and Disagreements with Accountants on Accounting and Financial [removed: Disclosure](#s4342ECB56AF95C999A8D62666F933E44)] [added: Disclosure](#s20F35A5DE7A750CB98076557D56140CE)] | | | [removed: [114](#s4342ECB56AF95C999A8D62666F933E44)] [added: [116](#s20F35A5DE7A750CB98076557D56140CE)] |

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| 9B. | [Other [removed: Information](#s43432F8834E458A2B7C064C1F5296705)] [added: Information](#sA5F1BE6E80C15DCEB77BA86F810792D2)] | | | [removed: [116](#s43432F8834E458A2B7C064C1F5296705)] [added: [119](#sA5F1BE6E80C15DCEB77BA86F810792D2)] |

| 10. | [Directors, Executive [removed: Officers](#s1FF93335833453E69F9BD733BD1AC4F6)] [added: Officers](#s204D46234FD05C69B645438AC9D0E474)] of the Registrant and Corporate Governance | | | [removed: [116](#s1FF93335833453E69F9BD733BD1AC4F6)] [added: [119](#s204D46234FD05C69B645438AC9D0E474)] |

| 11. | [Executive [removed: Compensation](#s0EBD2763BE7551B8B9423EEE22E2515F)] [added: Compensation](#s0A1FAF557C47566C85DC6446A7E8BFB2)] | | | [removed: [116](#s0EBD2763BE7551B8B9423EEE22E2515F)] [added: [119](#s0A1FAF557C47566C85DC6446A7E8BFB2)] |

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| 13. | [Certain Relationships and Related Transactions, and Director [removed: Independence](#s282CCE070817555584E2D5116B80A044)] [added: Independence](#s3A461461406557EF9AFC489C88910E4B)] | | | [removed: [116](#s282CCE070817555584E2D5116B80A044)] [added: [119](#s3A461461406557EF9AFC489C88910E4B)] |

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| 15. | [Exhibits, Financial Statement [removed: Schedules](#s1A06E612F39451C3B2854C05455B9775)] [added: Schedules](#sC5241C20E959587EB199214B60479CE4)] | | | [removed: [116](#s1A06E612F39451C3B2854C05455B9775)] [added: [119](#sC5241C20E959587EB199214B60479CE4)] |

10-K 1 csx-12312017x10k.htm 10-K


Emerging growth company ( )

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

( )

| --- | --- | --- | --- | --- |

| 1. | [Business](#s0A2A014D05115493940C3E6F8B7649E9) | | | [3](#s0A2A014D05115493940C3E6F8B7649E9) |

| 2. | [Properties](#s25F9808EDE08590F9B5A076723713570) | | | [13](#s25F9808EDE08590F9B5A076723713570) |

| | | | · 2017 Highlights | [26](#sCF794BE944795158BE2BE1089EEA4587) |

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| [Signatures](#sBC2E242C80B15F0A9B5426993E8A31BD) | | | | [124](#sBC2E242C80B15F0A9B5426993E8A31BD) |

CSX 2017 Form 10-K p.

10-K 1 csx-12302016x10k.htm 10-K

| 1. | [Business](#s8AF9708E23585357A16935A9FBDEDFC1) | | | [3](#s8AF9708E23585357A16935A9FBDEDFC1) |

| 2. | [Properties](#s64680A0A656C5C53A718B5FDFD2F86E7) | | | [12](#s64680A0A656C5C53A718B5FDFD2F86E7) |

| | | | · [Strategic Overview](#s98629EB8888053AEAFFB01A38BFF6D32) | [26](#s98629EB8888053AEAFFB01A38BFF6D32) |

| | | | · 2016 Highlights | [29](#sDCEB4A31C3105608B1FEE10309EC0E37) |

| [Signatures](#s9E81442D1AEB57D9ABF082CF9AB495D4) | | | | [121](#s9E81442D1AEB57D9ABF082CF9AB495D4) |

CSX [removed: 2016] [added: 2017] Form 10-K p.

12

11

CSXT’s track structure includes [removed: main thoroughfares,] [added: mainline track,] connecting terminals and [removed: yards (known as mainline track),] [added: yards,] track within terminals and switching yards, [removed: track adjacent to the mainlines] [added: sidings] used for passing trains, track connecting [removed: the mainline] [added: CSXT's] track to customer locations and track that diverts trains from one track to another known as turnouts.

Total track [removed: miles are greater than CSXT’s approximately 21,000 route] miles, which reflect the size of CSXT’s network that connects markets, customers and western [removed: railroads.][added: railroads, are greater than CSXT’s approximately 21,000 route miles.]

At December [removed: 2016,] [added: 2017,] the breakdown of track miles was as follows:

| Mainline track | [removed: 26,530] [added: 26,500] | |

| Terminals and switching yards | [removed: 9,396] [added: 9,348] | |

| Passing sidings and turnouts | [removed: 937] [added: 920] | |

These serve as [removed: hubs] [added: points of connectivity] between the Company and its local customers and as sorting facilities where railcars and intermodal containers [removed: often] are received, [removed: re-sorted] [added: classed for destination] and placed onto [removed: new] outbound [removed: trains.][added: trains, or arrive and are delivered to the customer.]

The Company’s [removed: ten] largest yards and terminals based on [removed: annual] [added: 2017] volume (number of railcars or intermodal containers processed) are listed [removed: in the table] below.

| Chicago, IL [removed: (Bedford Park)] - [added: Bedford Park] Intermodal [removed: | 1,136,124 |] [added: Terminal] |

| North Baltimore, OH [removed: (Northwest Ohio)] - [added: Northwest Ohio] Intermodal [removed: | 809,254 |] [added: Terminal] |

CSX [removed: 2016] [added: 2017] Form 10-K p.

These [removed: superior] engineering attributes permit the corridor to support [removed: consistent,] high-speed [added: service across] intermodal, automotive and merchandise [removed: service.][added: commodities.]

See the following [removed: pages] [added: page] for [removed: maps] [added: a map] of the CSX Rail [removed: Network and CSX Intermodal Rail] Network.

[removed: ][added: ]

At December [removed: 2016,] [added: 2017,] CSXT owned [removed: 4,400] [added: more than 4,000] locomotives.

Freight locomotives are [removed: the power source] used primarily to pull [removed: trains.][added: trains while switching locomotives are used in yards.]

At December [removed: 2016,] [added: 2017,] CSXT’s fleet of owned locomotives consisted of the following types:

| Auxiliary Units | [removed: 209] [added: 208] | | | 5 | % | | 24 | |

| Total | [removed: 4,400] [added: 4,166] | | | 100 | % | | 20 | |

At December [removed: 2016,] [added: 2017,] the Company’s owned and long-term leased equipment consisted of the following:

| Multi-level flat cars | [removed: 12,069] [added: 11,686] | | | 19 | % |

| Open-top hoppers | [removed: 11,089] [added: 10,298] | | | 17 | % |

| Covered hoppers | [removed: 10,030] [added: 9,623] | | | [removed: 15] [added: 16] | % |

| Box cars | [removed: 7,151] [added: 6,374] | | | 11 | % |

| Flat cars | [removed: 648] [added: 624] | | | 1 | % |

| Other cars | [removed: 370] [added: 337] | | | — | % |

| Subtotal freight cars | [removed: 65,159] [added: 60,151] | | | 100 | % |

| Total equipment | [removed: 83,306] [added: 78,239] | | | | |

| Total | 36,768 | |

In 2017, CSX converted a number of hump yards to flat switching operations which allows for less intermediate processing and the opportunity to improve transit time.

| |

| --- |

| |

| Yards and Terminals |

| Waycross, GA |

| Cincinnati, OH |

| Selkirk, NY |

| Avon, IN (Indianapolis) |

| Willard, OH |

| Nashville, TN |

| Louisville, KY |

| Hamlet, NC |

CSX 2017 Form 10-K p.

CSX 2017 Form 10-K p.

| Freight | 3,659 | | | 88 | % | | 20 | |

| Switching | 299 | | | 7 | % | | 37 | |

| Gondolas | 21,209 | | | 35 | % |

| Containers | 18,088 | | | | |

CSX 2017 Form 10-K p.

| | | |

| --- | --- | --- |

| Total | 36,863 | |

| Yards and Terminals | Annual Volume (number of units processed) | |

| Waycross, GA | 677,003 | |

| Selkirk, NY | 545,310 | |

| Nashville, TN | 539,407 | |

| Willard, OH | 515,335 | |

| Cincinnati, OH | 496,299 | |

| Indianapolis, IN | 496,235 | |

| Hamlet, NC | 458,760 | |

| Louisville, KY | 417,679 | |

12

CSX CORPORATION

PART I

CSX Intermodal Rail Network


Switching locomotives are used in yards to sort railcars so that the right railcar is attached to the right train in order to deliver it to its final destination.

| Freight | 3,880 | | | 88 | % | | 20 | |

| Switching | 311 | | | 7 | % | | 37 | |

In 2016, the average daily fleet of cars on line consisted of approximately 208,000 cars.

| Gondolas | 23,802 | | | 37 | % |

| Containers | 18,147 | | | | |

CSX [removed: 2016] [added: 2017] Form 10-K p.

| Frank A. Lonegro, [removed: 48] [added: 49] Executive Vice President and Chief Financial Officer | Lonegro has served as Executive Vice President and Chief Financial Officer of CSX since September 2015. In this capacity, he directs all financial [removed: and strategic planning activities,] [added: aspects of the company’s business,] including [removed: accounting,] financial [removed: planning, purchasing,] [added: and economic analysis, accounting,] tax, treasury and [removed: investor relations. During] [added: purchasing activities. In] his [removed: 16-year tenure] [added: 17 years] with [removed: the Company,] [added: CSX, Mr.] Lonegro [added: has] also served as Vice President Internal Audit, President of CSX Technology, Vice President Mechanical and Vice President Service Design. Additionally, he led development and implementation of Positive Train Control, an advanced train control system, to further enhance the Company’s safety performance. |

| [removed: Carolyn T. Sizemore, 54] [added: Andrew L. Glassman, 48] Vice President and Controller | [removed: Sizemore] [added: Glassman] has served as Vice President and Controller of CSX since [removed: April 2002. She] [added: May 2017. He] is responsible for financial and regulatory reporting, [added: tax,] freight billing and collections, payroll, accounts payable and various other accounting processes. [removed: Sizemore’s responsibilities during her 27-year] [added: During his 14-year] tenure with the [removed: Company have included roles in finance] [added: Company, Mr. Glassman previously served as Vice President of Strategic Planning, Vice President of Commercial Finance, Vice President of Operations Finance, Assistant Vice President of Intermodal Marketing] and [removed: audit-related areas including a variety] [added: Assistant Vice President] of [removed: positions in accounting, finance strategies, budgets] [added: Financial Planning] and [removed: performance analysis.] [added: Analysis.] |

| James M. Foote, 64 President and Chief Executive Officer | Foote has served as President and Chief Executive Office since December 2017. He joined CSX in October 2017 as Chief Operating Officer, with responsibility for both operations and sales and marketing. Mr. Foote has more than 40 years of railroad industry experience. Most recently, he was President and Chief Executive Officer of Bright Rail Energy. Before heading Bright Rail, he was Executive Vice President, Sales and Marketing with Canadian National Railway Company. At Canadian National, Mr. Foote also served as Vice President – Investor Relations and Vice President Sales and Marketing – Merchandise. |

| Edmond L. Harris, 68 Executive Vice President of Operations | Harris has served as CSX's Executive Vice President of Operations since January 2018. In this role, he is responsible for mechanical, engineering, transportation and network operations. Mr. Harris has more than 40 years of railroad industry experience. Most recently, Mr. Harris served as a senior advisor to Global Infrastructure Partners, an independent fund that invests in infrastructure assets worldwide; Chairman of Omnitrax Rail Network; and Board Director for Universal Rail Services. His previous experience also includes having served as Chief Operations Officer at Canadian Pacific, and subsequently, a member of the Board. He also served as Executive Vice President of Operations at Canadian National. |

CSX 2017 Form 10-K p.

| Nathan D. Goldman, 60 Executive Vice President and Chief Legal Officer, Corporate Secretary | Goldman has served as Executive Vice President and Chief Legal Officer, and Corporate Secretary of CSX since October 2017. In this role he directs the company’s legal affairs, government relations, risk management, public safety, environmental, and audit functions. During his nearly 15 years with the Company, Mr. Goldman has previously served as Vice President of Risk Compliance and General Counsel and has overseen work in compliance, risk management and safety programs. |

| Mark K. Wallace, 48 Executive Vice President and Chief Administrative Officer | Wallace has served as Executive Vice President and Chief Administrative Officer since January 2018, after having joined the Company in March 2017 as Executive Vice President of Corporate Affairs and Chief of Staff to the CEO. In his current role, Mr. Wallace is responsible for human resources, labor relations, information technology, corporate communications, investor relations and the real estate and facilities functions. Prior to joining CSX, he served as the Vice President of Corporate Affairs at Canadian Pacific Railway Limited with responsibility for the corporate communications and public affairs, investor relations, facilities and real estate functions. Prior to his time at Canadian Pacific, Mr. Wallace spent more than 15 years in various senior management positions with Canadian National Railway Company. |

CSX 2017 Form 10-K p.

| Michael J. Ward, 66 Chairman and Chief Executive Officer | A 39-year veteran of the Company, Ward has served as Chairman and Chief Executive Officer of CSX since January 2003. Ward’s distinguished railroad career has included key executive positions in nearly all aspects of the Company’s business, including sales and marketing, operations and finance. |

| Clarence W. Gooden, 65 President | Clarence Gooden has served as President of CSX since September 2015 with responsibility for operations and sales and marketing. In this role, he is responsible for safe and reliable operations as well as a highly diversified market portfolio serving all facets of the North American economy. As an employee of the Company for 46 years, Gooden previously served as Executive Vice President and Chief Commercial Officer since 2004 where he was responsible for generating customer revenue, forecasting business trends and developing CSX's model for future revenue growth. Gooden has also held key executive positions in both operations and sales and marketing. |

| Cindy M. Sanborn, 52 Executive Vice President and Chief Operating Officer | Sanborn has served as Executive Vice President and Chief Operating Officer of CSXT since September 2015. In this capacity, she is responsible for all aspects of safe, reliable and cost-effective service delivery. She directs daily train operations, maintains the Company's locomotive and rail car fleet as well as maintains and upgrades the Company’s more than 21,000-route-mile network in the eastern United States and two Canadian provinces. Since joining the Company in 1987, she also served as Executive Vice President - Operations, Vice President and Chief Transportation Officer, Vice President of Operations for the Northern Region and various other key roles in network operations, locomotive management and division operations. |

| Fredrik J. Eliasson, 46 Executive Vice President and Chief Sales and Marketing Officer | Eliasson has served as Executive Vice President and Chief Sales and Marketing Officer of CSX since September 2015. In this capacity, he directs all customer-facing aspects of the Company’s business, including market growth, forecasting business trends and development of strategic plans for revenue growth. During his 21-year tenure with the Company, he also served as Executive Vice President and Chief Financial Officer. Prior to becoming CFO, he led development of two of the Company’s major markets as Vice President of Chemicals and Fertilizer and Vice President of Emerging Markets. He also supported Sales and Marketing in a previous position as Vice President of Commercial Finance. |

| Ellen M. Fitzsimmons, 56 Executive Vice President of Law and Public Affairs, General Counsel and Corporate Secretary | Fitzsimmons has been the Executive Vice President of Law and Public Affairs, General Counsel, and Corporate Secretary of CSX since December 2003. She serves as the Company’s Chief Legal Officer and oversees all government relations and public affairs activities as well as internal audit and other risk management functions. During her 25-year tenure with the Company, her broad responsibilities have included key roles in major risk and corporate governance-related areas. |

| Cressie D. Brown, 55 Senior Vice President and Chief Administrative Officer | Brown has served as Senior Vice President and Chief Administrative Officer since July 2016. She is responsible for human resources, employee compensation and benefits, labor relations, real estate, facilities and aviation. During her 28-year tenure with the Company, Brown previously served as Vice President of Labor Relations and Vice President of Service Design and Advanced Technology. She also has significant experience in technology, finance and customer service. |

| Kathleen Brandt, 53 Senior Vice President and Chief Information Officer | Brandt has been Senior Vice President and Chief Information Officer since July 2016. In this role, she directs the information technology to support the company's strategic objectives and leads the development and application of the tools and information to maximize safety, service excellence, and efficiency. During her 31-year tenure with the Company, she previously served as President CSX Technology and has also made significant contributions to organizational strategy and capital planning. |

A total of 1.8 billion shares of common stock are authorized, of which [removed: 928,179,723] [added: 889,851,090] shares were outstanding as of December [removed: 30, 2016.][added: 31, 2017.]

At January [removed: 27, 2017,] [added: 31, 2018,] the latest practicable date that is closest to the filing date, there were [removed: 28,956] [added: 27,624] common stock shareholders of record.

The weighted average of common shares outstanding, which was used in the calculation of diluted earnings per share, was [removed: 948] [added: 914] million as of December [removed: 30, 2016.][added: 31, 2017.]

CSX [removed: 2016] [added: 2017] Form 10-K p.

The cumulative shareholder returns, assuming reinvestment of dividends, on $100 invested at December 31, [removed: 2011] [added: 2012] are illustrated on the graph below.

The Company references the Standard & [removed: Poor] [added: Poor's] 500 Stock Index (“S&P [removed: 500”), which is a registered trademark of the McGraw-Hill Companies, Inc.,] [added: 500 ®”),] and the Dow Jones U.S. Transportation Average Index, which provide comparisons to a broad-based market index and other companies in the transportation industry.

[removed: ][added: ]

[removed: In April 2015,] [added: Share repurchases under] the [removed: Company announced a] $2 billion [removed: share repurchase program, which is expected to be] [added: program announced in April 2015 were] completed [removed: by] [added: in] April 2017.

Generally, retained earnings are only [added: otherwise] impacted by net earnings and dividends.

Share repurchase activity of [removed: $278] [added: $207] million for the fourth quarter [removed: 2016] [added: 2017] was as follows:

| Fourth Quarter [removed: (a)] | Total Number of Shares Purchased [removed: (b)] | | | Average Price Paid per Share | | | Total Number of Shares Purchased as Part of Publicly Announced Plans or [removed: Programs(b)] [added: Programs(a)] | | | Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs | | |

[removed: (b)] [added: (a)] The difference of [removed: 21,550] [added: 94,859] 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.

| 2017 | | | | | | | | | | | | | | | | | | | |

| Dividends | $ | 0.18 | | | $ | 0.20 | | | $ | 0.20 | | | $ | 0.20 | | | $ | 0.78 | |

| High | $ | 50.31 | | | $ | 55.06 | | | $ | 55.48 | | | $ | 58.35 | | | $ | 58.35 | |

| Low | $ | 35.59 | | | $ | 46.04 | | | $ | 47.99 | | | $ | 48.26 | | | $ | 35.59 | |

CSX 2017 Form 10-K p.

The Company subsequently announced a $1 billion share repurchase program in April 2017, with additional authority of $500 million added in July 2017.

Repurchases under that program were completed on October 2, 2017, and the Company announced a new $1.5 billion share repurchase program on October 25, 2017.

During 2017, 2016, and 2015, CSX repurchased the following shares:

| | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| | | | | | | | | | | | |

| | Fiscal Years | | | | | | | | | | |

| | 2017 | | | | 2016 | | | | 2015 | | |

| Shares Repurchased (Units in Millions) | 39 | | | | 38 | | | | 26 | | |

| Cost of Shares (Dollars in Millions) | $ | 1,970 | | | $ | 1,056 | | | $ | 804 | |

| Beginning Balance | | | | | | | | | | $ | 7,696,097 | |

| October 1 - October 31, 2017 | 165,307 | | | $ | 53.59 | | 142,982 | | | | 1,500,000,000 | |

| November 1 - November 30, 2017 | 1,560,559 | | | | 50.17 | | 1,560,559 | | | | 1,421,712,580 | |

| December 1 - December 31, 2017 | 2,261,847 | | | | 55.64 | | 2,189,313 | | | | 1,299,953,624 | |

| Ending Balance | 3,987,713 | | | $ | 53.41 | | 3,892,854 | | | $ | 1,299,953,624 | |

CSX 2017 Form 10-K p.

| 2015 | | | | | | | | | | | | | | | | | | | |

| Dividends | $ | 0.16 | | | $ | 0.18 | | | $ | 0.18 | | | $ | 0.18 | | | $ | 0.70 | |

| High | $ | 36.96 | | | $ | 37.67 | | | $ | 33.63 | | | $ | 30.53 | | | $ | 37.67 | |

| Low | $ | 32.71 | | | $ | 31.87 | | | $ | 24.47 | | | $ | 24.58 | | | $ | 24.47 | |

During 2016, 2015, and 2014, CSX repurchased $1.1 billion or 38 million shares, $804 million or 26 million shares, and $517 million or 17 million shares, respectively, of common stock.

| Beginning Balance | | | | | | | | | | $ | 548,855,151 | |

| October | 2,757,869 | | | $ | 30.39 | | 2,736,609 | | | | 465,695,348 | |

| November | 3,117,190 | | | | 32.02 | | 3,116,900 | | | | 365,903,976 | |

| December | 2,634,900 | | | | 36.30 | | 2,634,900 | | | | 270,270,134 | |

| Ending Balance | 8,509,959 | | | $ | 32.82 | | 8,488,409 | | | $ | 270,270,134 | |

(a) Fourth quarter 2016 consisted of the following fiscal periods: October (September 24, 2016 - October 21, 2016), November (October 22, 2016 - November 25, 2016), and December (November 26, 2015 - December 30, 2016).

| (Dollars and Shares in Millions, Except Per Share Amounts) | | [removed: 2016] [added: 2017] | | | | [removed: 2015] [added: 2016] | | | | [removed: 2014] [added: 2015] | | | | [removed: 2013] [added: 2014] | | | | [removed: 2012] [added: 2013] | | |

| | Revenue | $ | [removed: 11,069] [added: 11,408] | | | $ | [removed: 11,811] [added: 11,069] | | | $ | [removed: 12,669] [added: 11,811] | | | $ | [removed: 12,026] [added: 12,669] | | | $ | [removed: 11,763] [added: 12,026] | |

| | Expense | [removed: 7,680] [added: 7,741] | | | | [removed: 8,227] [added: 7,680] | | | | [removed: 9,056] [added: 8,227] | | | | [removed: 8,553] [added: 9,056] | | | | [removed: 8,299] [added: 8,553] | | |

| | Operating Income | $ | [removed: 3,389] [added: 3,667] | | | $ | [removed: 3,584] [added: 3,389] | | | $ | [removed: 3,613] [added: 3,584] | | | $ | [removed: 3,473] [added: 3,613] | | | $ | [removed: 3,464] [added: 3,473] | |

| Net Earnings from Continuing [removed: Operations] [added: Operations(b)] | | [removed: 1,714] [added: 5,471] | | | | [removed: 1,968] [added: 1,714] | | | | [removed: 1,927] [added: 1,968] | | | | [removed: 1,864] [added: 1,927] | | | | [removed: 1,863] [added: 1,864] | | |

| | Operating Ratio | [removed: 69.4] [added: 67.9] | | % | | [removed: 69.7] [added: 69.4] | | % | | [removed: 71.5] [added: 69.7] | | % | | [removed: 71.1] [added: 71.5] | | % | | [removed: 70.6] [added: 71.1] | | % |

| | From Continuing Operations, [removed: Basic] [added: Basic(b)] | $ | [removed: 1.81] [added: 6.01] | | | $ | [removed: 2.00] [added: 1.81] | | | $ | [removed: 1.93] [added: 2.00] | | | $ | [removed: 1.83] [added: 1.93] | | | $ | [removed: 1.80] [added: 1.83] | |

| | From Continuing Operations, Assuming [removed: Dilution] [added: Dilution(b)] | [removed: 1.81] [added: 5.99] | | | | [removed: 2.00] [added: 1.81] | | | | [removed: 1.92] [added: 2.00] | | | | [removed: 1.83] [added: 1.92] | | | | [removed: 1.79] [added: 1.83] | | |

| | Basic | [removed: 947] [added: 911] | | | | [removed: 983] [added: 947] | | | | [removed: 1,001] [added: 983] | | | | [removed: 1,019] [added: 1,001] | | | | [removed: 1,038] [added: 1,019] | | |

| | Assuming Dilution | [removed: 948] [added: 914] | | | | [removed: 984] [added: 948] | | | | [removed: 1,002] [added: 984] | | | | [removed: 1,019] [added: 1,002] | | | | [removed: 1,040] [added: 1,019] | | |

| | Cash, Cash Equivalents and Short-term Investments | $ | [removed: 1,020] [added: 419] | | | $ | [removed: 1,438] [added: 1,020] | | | $ | [removed: 961] [added: 1,438] | | | $ | [removed: 1,079] [added: 961] | | | $ | [removed: 1,371] [added: 1,079] | |

| | Total Assets | [removed: 35,414] [added: 35,739] | | | | [removed: 34,745] [added: 35,414] | | | | [removed: 32,747] [added: 34,745] | | | | [removed: 31,462] [added: 32,747] | | | | [removed: 30,436] [added: 31,462] | | |

| | Long-term Debt | [removed: 10,962] [added: 11,790] | | | | [removed: 10,515] [added: 10,962] | | | | [removed: 9,349] [added: 10,515] | | | | [removed: 8,857] [added: 9,349] | | | | [removed: 8,884] [added: 8,857] | | |

| | Shareholders' Equity | [removed: 11,694] [added: 14,721] | | | | [removed: 11,668] [added: 11,694] | | | | [removed: 11,176] [added: 11,668] | | | | [removed: 10,504] [added: 11,176] | | | | [removed: 9,136] [added: 10,504] | | |

| | Dividend Per Share | $ | [removed: 0.72] [added: 0.78] | | | $ | [removed: 0.70] [added: 0.72] | | | $ | [removed: 0.63] [added: 0.70] | | | $ | [removed: 0.59] [added: 0.63] | | | $ | [removed: 0.54] [added: 0.59] | |

| | Capital Expenditures [removed: (a)] | $ | [removed: 2,705] [added: 2,040] | | | $ | [removed: 2,562] [added: 2,705] | | | $ | [removed: 2,449] [added: 2,562] | | | $ | [removed: 2,313] [added: 2,449] | | | $ | [removed: 2,341] [added: 2,313] | |

| | Employees -- Annual Averages (estimated) | [removed: 27,350] [added: 25,230] | | | | [removed: 31,285] [added: 27,350] | | | | [removed: 31,511] [added: 31,285] | | | | [removed: 31,254] [added: 31,511] | | | | [removed: 32,120] [added: 31,254] | | |

| | Employees -- Year-end Count (estimated) | [removed: 26,628] [added: 24,006] | | | | [removed: 29,410] [added: 26,628] | | | | [removed: 32,287] [added: 29,410] | | | | [removed: 31,413] [added: 32,287] | | | | [removed: 30,787] [added: 31,413] | | |

CSX [removed: 2016] [added: 2017] Form 10-K p.

| | Adjusted Operating Income(a) | $ | 3,850 | | | $ | 3,389 | | | $ | 3,584 | | | $ | 3,613 | | | $ | 3,473 | |

| Adjusted Net Earnings from Continuing Operations(a) | | 2,097 | | | | 1,714 | | | | 1,968 | | | | 1,927 | | | | 1,864 | | |

| | Adjusted Operating Ratio(a) | 66.3 | | % | | 69.4 | | % | | 69.7 | | % | | 71.5 | | % | | 71.1 | | % |

| | Adjusted From Continuing Operations, Assuming Dilution(a) | 2.30 | | | | 1.81 | | | | 2.00 | | | | 1.92 | | | | 1.83 | | |

(a) 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 presented in Item 7.

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

(b) These results include a $3.6 billion, or $3.91 per share, net tax reform benefit.

See further discussion in Note 11, Income Taxes.

| | |

| --- | --- |

| (a) | Capital expenditures include investments related to reimbursable public-private partnerships. These partnership investments of $41 million, $14 million, $8 million, $40 million and $166 million in 2016, 2015, 2014, 2013 and 2012, respectively, are projects that are partially or wholly reimbursed to CSX through either government grants or other funding sources such as cash received from a property sale. These reimbursements may not be fully received in a given year; therefore, the timing of receipts may differ from the timing of the investment. See the capital expenditures table on page 46 for additional information. |

CSX [removed: 2016] [added: 2017] Form 10-K p.

[added: |] Long-term Debt [added: Issued | 850 | | | | — | | | | — | | | | 850 | | |]

| Fiscal Year Ended December [removed: 2016] [added: 2017] | CSX Corporation | | | | CSX Transportation | | | | Eliminations and Other | | | | CSX Consolidated | | |

| [added: Purchases of] Short-term Investments | [removed: 810] [added: (774] | | [added: )] | | — | | | | [removed: —] [added: (8] | | [added: )] | | [removed: 810] [added: (782] | | [added: )] |

| Net [removed: Decrease] [added: (Decrease) Increase] in Cash and Cash Equivalents | (139 | | ) | | 106 | | | | 8 | | | | (25 | | ) |

| Net Cash Provided by (Used in) Operating Activities | $ | [removed: 583] [added: 1,719] | | | $ | [removed: 3,278] [added: 2,112] | | | $ | [removed: (518] [added: (359] | ) | | $ | [removed: 3,343] [added: 3,472] | |

| Property Additions | — | | | | [removed: (2,192] [added: (1,848] | | ) | | [removed: (257] [added: (192] | | ) | | [removed: (2,449] [added: (2,040] | | ) |

| Proceeds from Sales of Short-term Investments | [removed: 1,642] [added: 1,190] | | | | — | | | | [removed: 32] [added: 3] | | | | [removed: 1,674] [added: 1,193] | | |

| Proceeds from Property Dispositions | — | | | | [removed: 62] [added: 97] | | | | — | | | | [removed: 62] [added: 97] | | |

| Other Investing Activities | [removed: —] [added: (2] | | [added: )] | | [removed: (128] [added: 94] | | [removed: )] | | [removed: 91] [added: (55] | | [added: )] | | [removed: (37] [added: 37] | | [removed: )] |

| Net Cash Provided by (Used in) Investing Activities | [removed: 223] [added: 414] | | | | [removed: (2,258] [added: (1,657] | | ) | | [removed: (148] [added: (252] | | ) | | [removed: (2,183] [added: (1,495] | | ) |

| Long-term Debt Repaid | [removed: (600] [added: (313] | | ) | | [removed: (333] [added: (20] | | ) | | — | | | | [removed: (933] [added: (333] | | ) |

| Shares Repurchased | [removed: (517] [added: (1,970] | | ) | | — | | | | — | | | | [removed: (517] [added: (1,970] | | ) |

| Other Financing Activities | [removed: 11] [added: (23] | | [added: )] | | [removed: (18] [added: 5] | | [removed: )] | | [removed: 3] [added: —] | | | | [removed: (4] [added: (18] | | ) |

| Net Cash Provided by (Used in) Financing Activities | [removed: (735] [added: (2,164] | | ) | | [removed: (1,011] [added: (615] | | ) | | [removed: 663] [added: 600] | | | | [removed: (1,083] [added: (2,179] | | ) |

| Net [removed: (Decrease) Increase] [added: Decrease] in Cash and Cash Equivalents | [removed: 71] [added: (31] | | [added: )] | | [removed: 9] [added: (160] | | [added: )] | | [removed: (3] [added: (11] | | ) | | [removed: 77] [added: (202] | | [added: )] |

| Cash and Cash Equivalents at Beginning of Period | [removed: 439] [added: 305] | | | | [removed: 91] [added: 281] | | | | [removed: 62] [added: 17] | | | | [removed: 592] [added: 603] | | |

| Cash and Cash Equivalents at End of Period | $ | [removed: 510] [added: 274] | | | $ | [removed: 100] [added: 121] | | | $ | [removed: 59] [added: 6] | | | $ | [removed: 669] [added: 401] | |

| Dividends Paid | (708 | | ) | | (600 | | ) | | 600 | | | | (708 | | ) |

CSX 2017 Form 10-K p.

CSX 2017 Form 10-K p.

114

CSX 2017 Form 10-K p.

115

NOTE 8.

Employee Benefit Plans, continued

Under the supervision of the Investment Committee, individual investments or fund managers are selected in accordance with standards of prudence applicable to asset diversification and investment suitability.

The Company also selects fund managers with differing investment styles and benchmarks their investment returns against appropriate indices.

Fund investment performance is continuously monitored.

Acceptable performance is determined in the context of the long-term return objectives of the fund and appropriate asset class benchmarks.

Within the Company's equity funds, the U.S. stock segment includes diversification among large and small capitalization stocks.

The international stock segment is diversified in a similar manner as well as in developed versus emerging markets stocks.

Guidelines established with individual managers limit investment by industry sectors, individual stock issuer concentration and the use of derivatives and CSX securities.

Fixed income securities guidelines established with individual managers specify the types of allowable investments, such as government, corporate and asset-backed bonds, target certain allocation ranges for domestic and foreign investments and limit the use of certain derivatives.

Additionally, guidelines stipulate minimum credit quality constraints and any prohibited securities.

For detailed information regarding the fair value of pension assets, see Note 13, Fair Value Measurements.

Benefit Obligation, Plan Assets and Funded Status

Changes in benefit obligation and the fair value of plan assets for the 2016 and 2015 calendar plan years are as follows:

| | | | | | | | | | | | | | | | |

| --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- |

| | Pension Benefits | | | | | | | | Post-retirement Benefits | | | | | | |

| | Plan Year | | | | Plan Year | | | | Plan Year | | | | Plan Year | | |

| (Dollars in Millions) | 2016 | | | | 2015 | | | | 2016 | | | | 2015 | | |

| Actuarial Present Value of Benefit Obligation | | | | | | | | | | | | | | | |

| Accumulated Benefit Obligation | $ | 2,717 | | | $ | 2,672 | | | N/A | | | | N/A | | |

| Projected Benefit Obligation | 2,871 | | | | 2,860 | | | | $ | 274 | | | $ | 314 | |

| Change in Projected Benefit Obligation: | | | | | | | | | | | | | | | |

| Projected Benefit Obligation at Beginning of Plan Year | $ | 2,860 | | | $ | 3,002 | | | $ | 314 | | | $ | 340 | |

| Service Cost | 48 | | | | 45 | | | | 2 | | | | 2 | | |

| Interest Cost | 119 | | | | 116 | | | | 12 | | | | 12 | | |

| Plan Participants' Contributions | — | | | | — | | | | 6 | | | | 7 | | |

| Workforce Reduction Program/Curtailment | — | | | | 7 | | | | — | | | | — | | |

| Actuarial Loss (Gain) | 20 | | | | (110 | | ) | | (22 | | ) | | (7 | | ) |

| Benefits Paid | (176 | | ) | | (200 | | ) | | (38 | | ) | | (40 | | ) |

| Benefit Obligation at End of Plan Year | $ | 2,871 | | | $ | 2,860 | | | $ | 274 | | | $ | 314 | |

| Change in Plan Assets: | | | | | | | | | | | | | | | |

| Fair Value of Plan Assets at Beginning of Plan Year | $ | 2,309 | | | $ | 2,504 | | | $ | — | | | $ | — | |

| Actual Return on Plan Assets | 139 | | | | (9 | | ) | | — | | | | — | | |

| Qualified Employer Contributions | 250 | | | | — | | | | — | | | | — | | |

| Non-qualified Employer Contributions | 17 | | | | 14 | | | | 32 | | | | 33 | | |

| Fair Value of Plan Assets at End of Plan Year | 2,539 | | | | 2,309 | | | | — | | | | — | | |

| Funded Status at End of Plan Year | $ | (332 | ) | | $ | (551 | ) | | $ | (274 | ) | | $ | (314 | ) |

90

CSX CORPORATION

None

None.

As of December [removed: 30, 2016,] [added: 31, 2017,] 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 December [removed: 30, 2016,] [added: 31, 2017,] 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.

Under the supervision and with the participation of the management of CSX, including CSX’s CEO and CFO, CSX conducted an evaluation of the effectiveness of the Company’s internal control over financial reporting as of December [removed: 30, 2016] [added: 31, 2017] based on the 2013 framework in Internal Control – Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission which is also referred to as COSO.

Based on that evaluation, management of CSX concluded that the Company’s internal control over financial reporting was effective as of December [removed: 30, 2016.][added: 31, 2017.]

The Company’s internal control over financial reporting as of December [removed: 30, 2016] [added: 31, 2017] has been audited by Ernst & Young LLP, an independent registered public accounting firm, as stated in their report which is included elsewhere herein.

CSX [removed: 2016] [added: 2017] Form 10-K p.

[removed: The] [added: To the Shareholders and the] Board of Directors [removed: and Shareholders] of CSX Corporation

We have audited CSX Corporation’s [removed: (CSX)] internal control over financial reporting as of December [removed: 30, 2016,] [added: 31, 2017,] based on criteria established in Internal [removed: Control—Integrated] [added: Control-Integrated] Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) (the COSO criteria).

[removed: CSX's] [added: The Company’s] management is responsible for maintaining effective internal control over financial [removed: reporting,] [added: reporting] and for its assessment of the effectiveness of internal control over financial reporting included in the accompanying Management’s Report on Internal Control over Financial Reporting.

We conducted our audit in accordance with the standards of the [removed: Public Company Accounting Oversight Board (United States).][added: PCAOB.]

In our opinion, CSX [added: Corporation (the Company)] maintained, in all material respects, effective internal control over financial reporting as of December [removed: 30, 2016,] [added: 31, 2017,] based on the COSO criteria.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United [removed: States),] [added: States) (PCAOB),] the [removed: 2016] consolidated [removed: financial statements] [added: balance sheets] of CSX [added: Corporation as of December 31, 2017] and [added: December 30, 2016, and the related consolidated statements of income, comprehensive income, cash flows, and changes in shareholders’ equity for each of the three fiscal years in the period ended December 31, 2017, and the related notes (collectively referred to as the “financial statements”) of the Company and] our report dated February [removed: 14, 2017] [added: 7, 2018] expressed an unqualified opinion thereon.

116

Opinion on Internal Control over Financial Reporting

Basis for Opinion

We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

Definition and Limitations of Internal Control over Financial Reporting

CSX 2017 Form 10-K p.

117

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM, continued

February 7, 2018

CSX 2017 Form 10-K p.

118

CSX CORPORATION

PART II

114

February 14, 2017

115

The Proxy Statement will be filed not later than April [removed: 29, 2017] [added: 30, 2018] with respect to its [removed: 2017] [added: 2018] annual meeting of shareholders, except for the information regarding the executive officers of the Company.

| See Index to Consolidated Financial Statements on page | [removed: [57](#s7A00BBE499CF5B57BEF5FD85FBFFCE2E).] [added: [54](#s67CAFE238B095615AF0DE5FEE5070B2E).] |

CSX [removed: 2016] [added: 2017] Form 10-K p.

| 2.1 | [removed: Distribution] [added: [Distribution] Agreement, dated as of July 26, 2004, by and among CSX Corporation, CSX Transportation, Inc., CSX Rail Holding Corporation, CSX Northeast Holding Corporation, Norfolk Southern Corporation, Norfolk Southern Railway Company, CRR Holdings LLC, Green Acquisition Corp., Conrail Inc., Consolidated Rail Corporation, New York Central Lines LLC, Pennsylvania Lines LLC, NYC Newco, Inc. and PRR Newco, [removed: Inc.] [added: Inc.](http://www.sec.gov/Archives/edgar/data/88128/000095012304010597/y01612bexv2w1.txt)] | September 2, 2004, Exhibit 2.1, Form 8-K |

| 3.1 | [removed: Amended] [added: [Amended] and Restated Articles of Incorporation of [removed: the Registrant,] [added: CSX Corporation,] effective as of October 7, [removed: 2015] [added: 2015](http://www.sec.gov/Archives/edgar/data/277948/000119312515341287/d79889dex31.htm)] | October 9, 2015, Exhibit 3.1, Form 8-K |

| 3.2 | [removed: Amended] [added: [Amended] and Restated Bylaws of [removed: the Registrant, amended] [added: CSX Corporation,] effective as of [removed: February 8, 2017] [added: July 7, 2017](http://www.sec.gov/Archives/edgar/data/277948/000119312517225733/d424183dex31.htm)] | [removed: February 10,] [added: July 11,] 2017, Exhibit 3.1, Form 8-K |

| [removed: 4.1(a)] [added: 4.1(a)(P)] | Indenture, dated August 1, 1990, between the Registrant and The Chase Manhattan Bank, as Trustee | September 7, 1990, Form SE |

| [removed: 4.1(b)] [added: 4.1(b)(P)] | First Supplemental Indenture, dated as of June 15, 1991, between the Registrant and The Chase Manhattan Bank, as Trustee | May 28, 1992, Exhibit 4(c), Form SE |

| 4.1(c) | [removed: Second] [added: [Second] Supplemental Indenture, dated as of May 6, 1997, between the Registrant and The Chase Manhattan Bank, as [removed: Trustee] [added: Trustee](http://www.sec.gov/Archives/edgar/data/277948/0000950109-97-004446.txt)] | June 5, 1997, Exhibit 4.3, Form S-4 (Registration No. 333-28523) |

| 4.1(d) | [removed: Third] [added: [Third] Supplemental Indenture, dated as of April 22, 1998, between the Registrant and The Chase Manhattan Bank, as [removed: Trustee] [added: Trustee](http://www.sec.gov/Archives/edgar/data/277948/0001021408-98-000336.txt)] | May 12, 1998, Exhibit 4.2, Form 8-K |

| 4.1(e) | [removed: Fourth] [added: [Fourth] Supplemental Indenture, dated as of October 30, 2001, between the Registrant and The Chase Manhattan Bank, as [removed: Trustee] [added: Trustee](http://www.sec.gov/Archives/edgar/data/277948/000091664101501469/dex41.txt)] | November 7, 2001, Exhibit 4.1, Form 10-Q |

| 4.1(f) | [removed: Fifth] [added: [Fifth] Supplemental Indenture, dated as of October 27, 2003 between the Registrant and The Chase Manhattan Bank, as [removed: Trustee] [added: Trustee](http://www.sec.gov/Archives/edgar/data/277948/000119312503067336/dex41.htm)] | October 27, 2003, Exhibit 4.1, Form 8-K |

| 4.1(g) | [removed: Sixth] [added: [Sixth] Supplemental Indenture, dated as of September 23, 2004 between the Registrant and JP Morgan Chase Bank, formerly The Chase Manhattan Bank, as [removed: Trustee] [added: Trustee](http://www.sec.gov/Archives/edgar/data/277948/000095014404010373/g91589exv4w1.htm)] | November 3, 2004, Exhibit 4.1, Form 10-Q |

| 4.1(h) | [removed: Seventh] [added: [Seventh] Supplemental Indenture, dated as of April 25, 2007, between the Registrant and The Bank of New York (as successor to JP Morgan Chase Bank), as [removed: Trustee] [added: Trustee](http://www.sec.gov/Archives/edgar/data/277948/000095015707000613/ex4-4.htm)] | April 26, 2007, Exhibit 4.4, Form 8-K |

| 4.1(i) | [removed: Eighth] [added: [Eighth] Supplemental Indenture, dated as of March 24, 2010, between the Registrant and The Bank of New York Mellon(as successor to JP Morgan Chase Bank), as [removed: Trustee] [added: Trustee](http://www.sec.gov/Archives/edgar/data/277948/000027794810000025/exhibit_4.htm)] | April 19, 2010, Exhibit 4.1, Form 10-Q |

| [removed: 10.2] [added: 10.1] | [removed: CSX] [added: [CSX] Directors’ Pre-2005 Deferred Compensation Plan (as amended through January 8, [removed: 2008)] [added: 2008)](http://www.sec.gov/Archives/edgar/data/277948/000027794808000036/ex102.htm)] | February 22, 2008, Exhibit 10.2, Form 10-K |

| [removed: 10.3] [added: 10.2] | [removed: CSX] [added: [CSX] Directors’ Deferred Compensation Plan effective January 1, [removed: 2005] [added: 2005](http://www.sec.gov/Archives/edgar/data/277948/000027794808000036/ex103.htm)] | February 22, 2008, Exhibit 10.3, Form 10-K |

| [removed: 10.4] [added: 10.3] | [removed: CSX] [added: [CSX] Directors' Charitable Gift Plan, as [removed: amended] [added: amended](http://www.sec.gov/Archives/edgar/data/277948/0000277948-94-000002-index.html)] | March 4, 1994, Exhibit 10.4, Form 10-K |

| [removed: 10.5] [added: 10.4] | [removed: CSX] [added: [CSX] Directors' Matching Gift Plan (as amended through February 9, [removed: 2011)] [added: 2011)](http://www.sec.gov/Archives/edgar/data/277948/0000277948-94-000002.txt)] | [added: March 4, 1994, Exhibit 10.5, Form 10-K] |

| [removed: 10.12] [added: 10.5] | [removed: Special] [added: [Special] Retirement Plan of CSX Corporation and Affiliated Companies (as amended through February 14, [removed: 2001)] [added: 2001)](http://www.sec.gov/Archives/edgar/data/277948/000091664102000350/dex1023.txt)] | March 4, 2002, Exhibit 10.23, Form 10-K |

| [removed: 10.13] [added: 10.6] | [removed: Supplemental] [added: [Supplemental] Retirement Benefit Plan of CSX Corporation and Affiliated Companies (as amended through February 14, [removed: 2001)] [added: 2001)](http://www.sec.gov/Archives/edgar/data/277948/000091664102000350/dex1024.txt)] | March 4, 2002, Exhibit 10.24, Form 10-K |

| [removed: 10.14] [added: 10.7] | [removed: Senior] [added: [Senior] Executive Incentive Compensation [removed: Plan] [added: Plan](http://www.sec.gov/Archives/edgar/data/277948/000091664100000258/0000916641-00-000258.txt)] | March 17, 2000, Appendix B, Definitive Proxy Statement |

| [removed: 10.16] [added: 10.8] | [removed: Transaction] [added: [Transaction] Agreement, dated as of June 10, 1997, by and among CSX Corporation, CSX Transportation, Inc., Norfolk Southern Corporation, Norfolk Southern Railway Company, Conrail Inc., Consolidated Rail Corporation and CRR Holdings LLC, with certain schedules [removed: thereto] [added: thereto](http://www.sec.gov/Archives/edgar/data/277948/0000277948-97-000017.txt)] | July 8, 1997, Exhibit 10, Form 8-K |

| [removed: 10.17] [added: 10.9] | [removed: Amendment] [added: [Amendment] No. 1, dated as of August 22, 1998, to the Transaction Agreement, dated as of June 10, 1997, by and among CSX Corporation, CSX Transportation, Inc., Norfolk Southern Corporation, Norfolk Southern Railway Company, Conrail Inc., Consolidated Rail Corporation and CRR Holdings, [removed: LLC] [added: LLC](http://www.sec.gov/Archives/edgar/data/277948/000027794899000008/0000277948-99-000008.txt)] | June 11, 1999, Exhibit 10.1, Form 8-K |

| [removed: 10.18] [added: 10.10] | [removed: Amendment] [added: [Amendment] No. 2, dated as of June 1, 1999, to the Transaction Agreement, dated as of June 10, 1997, by and among CSX Corporation, CSX Transportation, Inc., Norfolk Southern Corporation, Norfolk Southern Railway Company, Conrail Inc., Consolidated Rail Corporation and CRR Holdings, [removed: LLC] [added: LLC](http://www.sec.gov/Archives/edgar/data/277948/000027794899000008/0000277948-99-000008.txt)] | June 11, 1999, Exhibit 10.2, Form 8-K |

| [removed: 10.19] [added: 10.11] | [removed: Amendment] [added: [Amendment] No. 3, dated as of August 1, 2000, to the Transaction Agreement by and among CSX Corporation, CSX Transportation, Inc., Norfolk Southern Corporation, Norfolk Southern Railway Company, Conrail Inc., Consolidated Rail Corporation, and CRR Holdings, [removed: LLC.] [added: LLC.](http://www.sec.gov/Archives/edgar/data/277948/000102140801001422/0001021408-01-001422-0008.txt)] | March 1, 2001, Exhibit 10.34, Form 10-K |

| [removed: 10.20] [added: 10.12] | [removed: Amendment] [added: [Amendment] No. 4, dated and effective as of June 1, 1999, and executed in April 2004, to the Transaction Agreement, dated as of June 10, 1997, by and among CSX Corporation, CSX Transportation, Inc., Norfolk Southern Corporation, Norfolk Southern Railway Company, Conrail Inc., Consolidated Rail Corporation and CRR Holdings, [removed: LLC] [added: LLC](http://www.sec.gov/Archives/edgar/data/277948/000119312504134444/dex991.htm)] | August 6, 2004, Exhibit 99.1, Form 8-K |

| [removed: 10.21] [added: 10.13] | [removed: Amendment] [added: [Amendment] No. 5, dated as of August 27, 2004, to the Transaction Agreement, dated as of June 10, 1997, by and among CSX Corporation, CSX Transportation, Inc., Norfolk Southern Corporation, Norfolk Southern Railway Company, Conrail Inc., Consolidated Rail Corporation and CRR Holdings [removed: LLC] [added: LLC](http://www.sec.gov/Archives/edgar/data/88128/000095012304010597/y01612bexv10w1.txt)] | September 2, 2004, Exhibit 10.1, Form 8-K |

| [removed: 10.22] [added: 10.14] | [removed: Shared] [added: [Shared] Assets Area Operating Agreement for Detroit, dated as of June 1, 1999, by and among Consolidated Rail Corporation, CSX Transportation, Inc. and Norfolk Southern Railway Corporation, with exhibit [removed: thereto] [added: thereto](http://www.sec.gov/Archives/edgar/data/277948/000027794899000008/0000277948-99-000008.txt)] | June 11, 1999, Exhibit 10.6, Form 8-K, |