filings.toolsItem 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
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Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities
Market Information
CSX’s common stock is listed on the Nasdaq Global Select Market, which is its principal trading market, and is traded over-the-counter and on exchanges nationwide. The official trading symbol is “CSX.”
Description of Common and Preferred Stock
A total of 1.8 billion shares of common stock are authorized, of which 818,179,988 shares were outstanding as of December 31, 2018. Each share is entitled to one vote in all matters requiring a vote of shareholders. There are no pre-emptive rights, which are privileges extended to select shareholders that would allow them to purchase additional shares before other members of the general public in the event of an offering. At January 31, 2019, the latest practicable date that is closest to the filing date, there were 26,281 common stock shareholders of record. The weighted average of common shares outstanding, which was used in the calculation of diluted earnings per share, was 861 million as of December 31, 2018. (See Note 2, Earnings Per Share.) A total of 25 million shares of preferred stock is authorized, none of which is currently outstanding.
The following table sets forth, for the quarters indicated, the dividends declared and the high and low share prices of CSX common stock.
| Quarter | |||||||||||||||||||
| 1st | 2nd | 3rd | 4th | Year | |||||||||||||||
| 2018 | |||||||||||||||||||
| Dividends | $ | 0.22 | $ | 0.22 | $ | 0.22 | $ | 0.22 | $ | 0.88 | |||||||||
| Common Stock Price | |||||||||||||||||||
| High | $ | 60.04 | $ | 67.69 | $ | 76.24 | $ | 75.66 | $ | 76.24 | |||||||||
| Low | $ | 48.43 | $ | 53.53 | $ | 63.23 | $ | 58.47 | $ | 48.43 | |||||||||
| 2017 | |||||||||||||||||||
| Dividends | $ | 0.18 | $ | 0.20 | $ | 0.20 | $ | 0.20 | $ | 0.78 | |||||||||
| Common Stock Price | |||||||||||||||||||
| High | $ | 50.31 | $ | 55.06 | $ | 55.48 | $ | 58.35 | $ | 58.35 | |||||||||
| Low | $ | 35.59 | $ | 46.04 | $ | 47.99 | $ | 48.26 | $ | 35.59 |
CSX 2018 Form 10-K p. 19
CSX CORPORATION
PART II
Stock Performance Graph
The cumulative shareholder returns, assuming reinvestment of dividends, on $100 invested at December 31, 2013 are illustrated on the graph below. The Company references the Standard & Poor's 500 Stock Index (“S&P 500 ®”), and the Dow Jones U.S. Transportation Average Index, which provide comparisons to a broad-based market index and other companies in the transportation industry.
CSX 2018 Form 10-K p. 20
CSX CORPORATION
PART II
CSX Purchases of Equity Securities
CSX purchases its own shares for two primary reasons: (1) to further its goals under its share repurchase programs and (2) to fund the Company’s contribution required to be paid in CSX common stock under a 401(k) plan that covers certain union employees.
In February 2018, the Company announced an increase to the $1.5 billion share repurchase program first announced in October 2017, bringing the total authorized to $5 billion. This program was completed on January 16, 2019. Also on January 16, 2019, the Company announced a new $5 billion share repurchase program. The repurchases may be made through a variety of methods including, but not limited to, open market purchases, purchases pursuant to Rule 10b5-1 plans, accelerated share repurchases and negotiated block purchases. The timing of share repurchases depends upon marketplace conditions and other factors, and the program remains subject to the discretion of the Board of Directors.
During 2018, 2017, and 2016, CSX repurchased the following shares:
| Fiscal Years | |||||||||||
| 2018 | 2017 | 2016 | |||||||||
| Shares Repurchased (Units in Millions) | 72 | 39 | 38 | ||||||||
| Cost of Shares (Dollars in Millions) | $ | 4,671 | $ | 1,970 | $ | 1,056 | |||||
| Average Price Paid per Share | $ | 64.64 | $ | 50.80 | $ | 27.52 |
During 2018, the Company entered into four accelerated share repurchase agreements to repurchase shares of the Company’s common stock. Under these agreements, the Company paid $1.5 billion and received approximately 22 million total shares, which are included in the table above.
Management's assessment of market conditions and other factors guide the timing and volume of repurchases. Future share repurchases are expected to be funded by cash on hand, cash generated from operations and debt issuances. Shares are retired immediately upon repurchase. In accordance with the Equity Topic in the Accounting Standards Codification ("ASC"), the excess of repurchase price over par value is recorded in retained earnings. Generally, retained earnings are only otherwise impacted by net earnings and dividends.
Share repurchase activity of $1.9 billion for the fourth quarter 2018 was as follows:
| CSX Purchases of Equity Securities for the Quarter | ||||||||||||
| Fourth Quarter | Total Number of Shares Purchased | Average Price Paid per Share | Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs(a) | Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs | ||||||||
| Beginning Balance | $ | 1,983,650,599 | ||||||||||
| October 1 - October 31, 2018 | 11,715,179 | $ | 70.89 | 11,694,469 | 1,154,480,380 | |||||||
| November 1 - November 30, 2018 | 9,619,372 | 69.43 | 9,619,222 | 486,661,734 | ||||||||
| December 1 - December 31, 2018 | 5,257,087 | 68.01 | 5,257,087 | 129,128,793 | ||||||||
| Ending Balance | 26,591,638 | $ | 69.79 | 26,570,778 | $ | 129,128,793 |
(a) The difference of 20,860 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.
CSX 2018 Form 10-K p. 21
CSX CORPORATION
PART II
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