CSX (CSX) 10-K risk factor changes: FY2020 vs FY2019

Legislation passed by Congress, new regulations issued by federal agencies or executive orders issued by the President of the United States could significantly affect the revenues, [removed: costs] [added: costs, including income taxes,] and profitability of the Company's business.

[removed: Although CSX remains on track to meet this regulatory requirement, noncompliance] [added: Noncompliance] with [removed: 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.

Additionally, crude oil prices combined with [removed: increased] [added: changes in] pipeline [removed: activity] [added: capacity] have resulted in volatility in domestic crude oil production, which has affected crude oil volumes for CSX.

Any of these pending or proposed laws or [removed: regulations] [added: regulations, including any proposed or implemented under the Biden administration,] could adversely affect the Company's operations and financial results by, among other things: (i) reducing coal-fired electricity generation due to mandated emission standards; (ii) reducing the consumption of coal as a viable energy resource in the United States and Canada; (iii) increasing the Company's fuel, capital and other operating costs and negatively affecting operating and fuel efficiencies; and (iv) making it difficult for the Company's customers in the U.S. and Canada to produce products in a cost competitive manner.

The Company has been, and may in the future be, subject to allegations or findings to the effect that it has violated, or is strictly liable under, environmental laws or regulations, and such violations can result in the Company's incurring fines, penalties or costs relating to the [removed: clean-up] [added: cleanup] of environmental contamination.

The capital intensive and unique nature of core rail equipment (including [added: rail, ties,] rolling stock [removed: equipment, locomotives, rail,] [added: equipment] and [removed: ties)] [added: locomotives)] limits the number of railroad equipment suppliers.

In addition, a few critical railroad suppliers are foreign and, as such, adverse developments in international relations, new trade regulations, disruptions in international shipping or increases in global demand could make procurement of these supplies more difficult or increase CSXT's [removed: operating] costs.

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

Regulatory, Legislative and Legal

Operational, Safety and Business Disruption

An epidemic or pandemic, including the ongoing COVID-19 pandemic, and the initiatives to reduce its transmission could adversely affect the Company's business.

The Company could be materially and adversely affected by a public health crisis, including a widespread epidemic or pandemic.

As COVID-19 has spread globally, including significant impacts in the United States, CSX continues to take a variety of measures to ensure the availability of its transportation services, promote the safety and security of its employees and support the communities in which it operates.

However, public and private sector policies and initiatives to reduce the transmission of COVID-19, such as closures of businesses and manufacturing facilities, the promotion of social distancing, the adoption of working from home by companies and institutions, and travel restrictions could continue to adversely affect demand for the commodities and products that the Company transports, including import and export volume.

In addition, COVID-19 and the related initiatives to reduce transmission may result in greater supply chain disruption, which could continue to have an adverse impact on volumes and make it more difficult for the Company to serve its customers.

The extent to which this coronavirus impacts operations will depend on future developments, which are highly uncertain and cannot be predicted with confidence, including the duration of the outbreak, new information which may emerge concerning the severity of this coronavirus and the actions to contain the coronavirus or treat its impact, among others.

Moreover, operations could be negatively affected if a significant number of employees are quarantined as the result of exposure to a contagious illness.

To the extent COVID-19 adversely affects the Company's business and financial results, it may also have the effect of heightening many of the other risks described under Part I, Item 1A (Risk Factors) of this annual report on Form 10-K.

Competitive, Economic and Financial

Climate Change and Environmental

CSX CORPORATION

PART I

Availability of Critical Supplies and Labor

For example, the RSIA, as amended, mandated that the installation of PTC hardware be completed by December 31, 2018, and requires that the PTC system be fully operational by December 31, 2020 on main lines that carry certain hazardous materials and on lines that have commuter or passenger operations.

CSX 2019 Form 10-K p.

CSX 2019 Form 10-K p.

CSX 2019 Form 10-K p.

CSX 2019 Form 10-K p.

10

Staggers Act of 1980 - Congressional law [removed: which] [added: that] significantly deregulated the rail industry, replacing the regulatory structure in existence since the 1887 Interstate Commerce Act.

- Revenue of [removed: $11.9] [added: $10.6] billion decreased [removed: $313 million] [added: $1.4 billion] or [removed: 3%] [added: 11%] versus the prior year.

- Expenses of [removed: $7.0] [added: $6.2] billion decreased [removed: $409] [added: $751] million or [removed: 6%] [added: 11%] year over year.

- Operating income of [removed: $5.0] [added: $4.4] billion [removed: increased $96] [added: decreased $603] million or [removed: 2%] [added: 12%] year over year.

- Operating ratio of [removed: 58.4% improved 190] [added: 58.8% increased 40] basis points from [removed: 60.3%.][added: 58.4%.]

- Earnings per diluted share of [removed: $4.17 increased $0.33] [added: $3.60 decreased $0.57] or [removed: 9%] [added: 14%] year over year.

[removed: 2019 vs. 2018 Results] [added: 2019 vs. 2018 Results] of Operations

| | [added: | |] Fiscal Years | | | | | | | | | | | | | | | [added: | | | | | | | | |]

| | [removed: 2019] | | [added: 2020] | | [removed: 2018] | | | | [removed: *$* *Change*] [added: 2019] | | | | [removed: *%* *Change*] | | [added: *$ Change*] | [added: | | | | | *% Change* | | | | | |]

| *(Dollars in Millions)* | | | | | | | | | | | | | | | | [added: | | | | | | | | | | |]

| Expense | | | | | | | | | | | | | | | | [added: | | | | | | | | | | |]

| Labor and Fringe | [removed: 2,616] | | [added: 2,275] | | [removed: 2,738] | | | | [removed: *122*] [added: 2,616] | | | | [removed: *4*] | | [added: *341*] | [added: | | | | | *13* | | | | | |]

| Materials, Supplies and Other | [removed: 1,784] | | [added: 1,684] | | [removed: 1,967] | | | | [removed: *183*] [added: 1,749] | | | | [removed: *9*] | | [added: *65*] | [added: | | | | | *4* | | | | | |]

| Depreciation | [removed: 1,349] | | [added: 1,383] | | [removed: 1,331] | | | | [removed: *(18*] [added: 1,349] | | [removed: *)*] | | [removed: *(1*] | [removed: *)*] | [added: *(34)*] | [added: | | | | | *(3)* | | | | | |]

| Equipment and Other Rents | [removed: 408] | | [added: 338] | | [removed: 395] | | | | [removed: *(13*] [added: 352] | | [removed: *)*] | | [removed: *(3*] | [removed: *)*] | [added: *14*] | [added: | | | | | *4* | | | | | |]

| Total Expense | [removed: 6,972] | | [added: 6,221] | | [removed: 7,381] | | | | [removed: *409*] [added: 6,972] | | | | [removed: *6*] | | [added: *751*] | [added: | | | | | *11* | | | | | |]

| Operating Income | [removed: 4,965] | | [added: 4,362] | | [removed: 4,869] | | | | [removed: *96*] [added: 4,965] | | | | [removed: *2*] | | [added: *(603)*] | [added: | | | | | *(12)* | | | | | |]

| Interest Expense | [removed: (737] | | [removed: )] [added: (754)] | | [removed: (639] | | [removed: )] | | [removed: *(98*] [added: (737)] | | [removed: *)*] | | [removed: *(15*] | [removed: *)*] | [added: *(17)*] | [added: | | | | | *(2)* | | | | | |]

| Other Income - Net | [removed: 88] | | [added: 19] | | [removed: 74] | | | | [removed: *14*] [added: 88] | | | | [removed: *19*] | | [added: *(69)*] | [added: | | | | | *(78)* | | | | | |]

| Income Tax Expense | [removed: (985] | | [removed: )] [added: (862)] | | [removed: (995] | | [removed: )] | | [removed: *10*] [added: (985)] | | | | [removed: *1*] | | [added: *123*] | [added: | | | | | *12* | | | | | |]

| Net Earnings | [added: | |] $ | [removed: 3,331] [added: 2,765] | | | [added: | |] $ | [removed: 3,309] [added: 3,331] | | | [added: | |] *$* | [removed: *22*] [added: *(566)*] | | | [removed: *1*] | | [added: *(17)*] | [added: | | | | |]

| Earnings Per Diluted Share: | | | | | | | | | | | | | | | | [added: | | | | | | | | | | |]

| Net Earnings | [added: | |] $ | [removed: 4.17] [added: 3.60] | | | [added: | |] $ | [removed: 3.84] [added: 4.17] | | | [added: | |] *$* | [removed: *0.33*] [added: *(0.57)*] | | | [removed: *9*] | [added: | *(14)* | |] *%* | | [added: | |]

| Operating Ratio | [removed: 58.4] | | [added: 58.8 | |] % | | [removed: 60.3] | | [added: 58.4 | |] % | | | | | | [removed: *190*] | | [added: | | *(40)* | | |] bps | [added: | |]

[removed: 2019 vs. 2018 Results] [added: 2020 vs. 2019 Results] of [removed: Operations, *continued*][added: Operations]

| Volume and Revenue *(Unaudited)* | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | [added: | | | | | | | | | | | | | | | | | | | | | | |]

| *Volume (Thousands of units); Revenue (Dollars in Millions); Revenue Per Unit (Dollars)* | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | | [added: | | | | | | | | | | | | | | | | | | | | | | |]

| | [added: | |] Volume | | | | | | | | | [added: | | | | | | | | |] Revenue | | | | | | | | | | | [added: | | | | | | |] Revenue Per Unit | | | | | | | | | | [added: | | | | |]

| | [removed: 2019] | | [added: 2020] | [removed: 2018] | | | [added: | | 2019 | | | | | |] *% Change* | | | [removed: 2019] | | | [added: 2020] | [removed: 2018] | | | | [added: | 2019 | | | | | |] *% Change* | | | [removed: 2019] | | | [added: 2020] | [removed: 2018] | | | | [added: | 2019 | | | | | |] *% Change* | | [added: |]

| *Agricultural and Food Products* | [removed: 469] | | [added: 463] | [removed: 447] | | | [removed: 5] | [added: | 469 | | | | | | (1) | |] % | | [removed: 1,410] | | [added: 1,386] | | [removed: 1,306] | | | | [removed: 8] [added: 1,410] | [added: | | | | | (2) | |] % | | [removed: 3,006] | | [added: 2,994] | | [removed: 2,922] | | | | [removed: 3] [added: 3,006] | [added: | | | | | — | |] % |

| *Automotive* | [removed: 456] | | [added: 344] | [removed: 463] | | | [removed: (2] | [removed: )%] | [added: 456] | [removed: 1,236] | | | | [removed: 1,267] | [added: (25)] | | [added: %] | [removed: (2] | [removed: )%] | | [removed: 2,711] [added: 920] | | | | [removed: 2,737] | | [added: 1,236] | | [removed: (1] | [removed: )%] | [added: | | (26) | | % | | | | 2,674 | | | | | | 2,711 | | | | | | (1) | | % |]

| *Fertilizers* | [removed: 243] | | [added: 234] | [removed: 248] | | | [removed: (2] | [removed: )%] | [added: 243] | [removed: 431] | | | | [removed: 442] | [added: (4)] | | [added: %] | [removed: (2] | [removed: )%] | | [removed: 1,774] [added: 424] | | | | [removed: 1,782] | | [added: 431] | | [removed: —] | [added: | | | (2) | |] % | [added: | | | 1,812 | | | | | | 1,774 | | | | | | 2 | | % |]

| Total Merchandise | [removed: 2,707] | | [added: 2,535] | [removed: 2,700] | | | [removed: —] | [added: | 2,707 | | | | | | (6) | |] % | | [removed: 7,589] | | [added: 7,076] | | [removed: 7,491] | | | | [removed: 1] [added: 7,589] | [added: | | | | | (7) | |] % | | [removed: 2,803] | | [added: 2,791] | | [removed: 2,774] | | | | [removed: 1] [added: 2,803] | [added: | | | | | — | |] % |

| Coal | [removed: 843] | | [added: 637] | [removed: 887] | | | [removed: (5] | [removed: )%] | [added: 843] | [removed: 2,070] | | | | [removed: 2,246] | [added: (24)] | | [added: %] | [removed: (8] | [removed: )%] | | [removed: 2,456] [added: 1,397] | | | | [removed: 2,532] | | [added: 2,070] | | [removed: (3] | [removed: )%] | [added: | | (33) | | % | | | | 2,193 | | | | | | 2,456 | | | | | | (11) | | % |]

| Intermodal | [removed: 2,670] | | [added: 2,720] | [removed: 2,895] | | | [removed: (8] | [removed: )%] | [added: 2,670] | [removed: 1,760] | | | | [removed: 1,931] | [added: 2] | | [added: %] | [removed: (9] | [removed: )%] | | [removed: 659] [added: 1,702] | | | | [removed: 667] | | [added: 1,760] | | [removed: (1] | [removed: )%] | [added: | | (3) | | % | | | | 626 | | | | | | 659 | | | | | | (5) | | % |]

| Other | [added: | |] — | | | [added: | | |] — | | | [added: | | |] — | [added: |] % | | [removed: 518] | | [added: 408] | | [removed: 582] | | | | [removed: (11] [added: 518] | [removed: )%] | | [added: | | | (21) | | % | | | |] — | | | | [added: | |] — | | | | [added: | |] — | [added: |] % |

| Total | [removed: 6,220] | | [added: 5,892] | [removed: 6,482] | | | [removed: *(4*] | [removed: *)%*] | [added: 6,220] | [added: | | | | | *(5)* | | *%* | | | |] $ | [removed: 11,937] [added: 10,583] | | | [added: | |] $ | [removed: 12,250] [added: 11,937] | | | [removed: *(3*] | [removed: *)%*] | [added: *(11)*] | [added: | *%* | | | |] $ | [removed: 1,919] [added: 1,796] | | | [added: | |] $ | [removed: 1,890] [added: 1,919] | | | [removed: *2*] | [added: | *(6)* | |] *%* |

[removed: In 2019,] [added: Total] revenue decreased [removed: $313 million,] [added: $1.4 billion, in 2020] or [removed: 3%,] [added: 11%,] when compared to the previous year due to [removed: volume declines,] [added: declines in coal,] lower [removed: other revenue and] [added: merchandise volumes,] decreases in fuel [removed: recovery.][added: recovery and lower other revenue.]

These decreases were partially offset by [added: pricing increases in] merchandise and [removed: intermodal pricing gains] [added: volume] and [removed: favorable mix.][added: pricing increases in intermodal.]

Agricultural and Food Products - [removed: Increased] [added: Decreased] due to [removed: gains in] [added: lower shipments of] feed grain [removed: and ingredients, ethanol,] as well as [added: food and consumer products, partially offset by growth in] sweeteners and oils.

2020 HIGHLIGHTS

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

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

| Revenue | | | $ | 10,583 | | | | | $ | 11,937 | | | | | *$* | *(1,354)* | | | | | *(11)* | | *%* | | | |

| Fuel | | | 541 | | | | | | 906 | | | | | | *365* | | | | | | *40* | | | | | |

Global economic uncertainty, including the effects of COVID-19 global pandemic, continues to impact the Company's results of operations.

Demand for rail services saw large and rapid declines in the first half of the year, followed by steep sequential increases in the second half, but the effects of the disruption of global manufacturing, supply chains and consumer spending as a result of the COVID-19 pandemic are ongoing.

While operating cash flows have also been impacted by these economic conditions, the Company maintains a strong cash balance and access to committed funding sources and other sources of external liquidity if required.

As this is a dynamic situation, it is difficult to determine the future impacts of the pandemic.

The full implications of COVID-19, including the extent of its impact on the Company’s financial and operating results, will be determined by the length of time that the pandemic continues, its effect on the demand for the Company’s transportation services and the supply chain, as well as the effect of governmental regulations imposed in response to the pandemic.

The duration of the pandemic is dependent on several factors, including the timing of vaccine production and distribution as well as the impacts of virus mutations and case resurgences across the country.

CSX employees that provide efficient and reliable rail service are essential to keeping supply chains fluid in response to this challenge.

Accordingly, business operations have been modified to ensure the safety of employees across the network while continuing to provide a high level of service to customers.

A cross-functional task force monitors and coordinates the Company’s response to COVID-19.

Policies and procedures established to protect the health and safety of employees and customers and to safeguard CSX operations include rigorous cleaning regimens for equipment and facilities, provision of sanitation supplies, distribution of disposable face coverings, facilitation of social distancing measures and administration of temperature testing at certain facilities.

These precautions remain in place despite the easing of pandemic restrictions by state and local governments across the network.

Additionally, remote work arrangements have been made where possible in order to reduce the density of employees in a single location, and alternative locations for key functions, such as dispatch, are being utilized as needed.

In March 2020, the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) was enacted to provide relief to businesses in response to the COVID-19 pandemic.

The most significant remaining impact to the Company is the deferral of certain payroll tax payments to 2021 and 2022.

The provisions of the CARES Act are not expected to have an impact on CSX’s results of operations or effective tax rate.

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

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

| *Chemicals(a)* | | | 664 | | | | | | 670 | | | | | | (1) | | % | | | | $ | 2,309 | | | | | $ | 2,349 | | | | | (2) | | % | | | | $ | 3,477 | | | | | $ | 3,506 | | | | | (1) | | % |

| *Minerals(a)* | | | 321 | | | | | | 337 | | | | | | (5) | | % | | | | 538 | | | | | | 559 | | | | | | (4) | | % | | | | 1,676 | | | | | | 1,659 | | | | | | 1 | | % |

| *Forest Products(a)* | | | 270 | | | | | | 283 | | | | | | (5) | | % | | | | 824 | | | | | | 862 | | | | | | (4) | | % | | | | 3,052 | | | | | | 3,046 | | | | | | — | | % |

| *Metals and Equipment(a)* | | | 239 | | | | | | 249 | | | | | | (4) | | % | | | | 675 | | | | | | 742 | | | | | | (9) | | % | | | | 2,824 | | | | | | 2,980 | | | | | | (5) | | % |

*(a) In first quarter 2020, changes were made in the categorization of certain lines of business, impacting Chemicals, Minerals, Forest Products, and Metals and Equipment.

The impacts were not material and prior periods have been reclassified to conform to the current presentation.*

The COVID-19 pandemic significantly impacted overall volume in 2020.

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

Automotive - Declined due to lower North American vehicle production.

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

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

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

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

- All other costs increased $4 million primarily due to inflation and other non-significant costs that were mostly offset by a $22 million non-railroad asset impairment in the prior year related to an intermodal terminal sale agreement.

Depreciation expense increased $34 million primarily due to the impacts of the 2019 equipment depreciation study as well as a larger net asset base.

These expenses decreased $14 million primarily due to volume savings, partially offset by higher days per load for automotive and other merchandise markets that resulted in increased car hire costs.

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

Drayage \- The pickup or delivery of intermodal shipments by truck.

CSX 2019 Form 10-K p.

22

CSX 2019 Form 10-K p.

23

2019 HIGHLIGHTS

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

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

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

| Revenue | $ | 11,937 | | | $ | 12,250 | | | *$* | *(313* | *)* | | *(3* | *)%* | |

| Fuel | 906 | | | | 1,046 | | | | *140* | | | | *13* | | |

| Equity Earnings of Affiliates | (91 | | ) | | (96 | | ) | | *(5* | | *)* | | *(5* | *)* | |

CSX 2019 Form 10-K p.

24

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

| *Chemicals* | 668 | | | 675 | | | (1 | )% | | $ | 2,343 | | | $ | 2,339 | | | — | % | | $ | 3,507 | | | $ | 3,465 | | | 1 | % |

| *Minerals* | 335 | | | 315 | | | 6 | % | | 550 | | | | 518 | | | | 6 | % | | 1,642 | | | | 1,644 | | | | — | % |

| *Forest Products* | 288 | | | 285 | | | 1 | % | | 878 | | | | 850 | | | | 3 | % | | 3,049 | | | | 2,982 | | | | 2 | % |

| *Metals and Equipment* | 248 | | | 267 | | | (7 | )% | | 741 | | | | 769 | | | | (4 | )% | | 2,988 | | | | 2,880 | | | | 4 | % |

CSX 2019 Form 10-K p.

25

Chemicals - Declined due to reduced natural gas liquids and fly ash shipments, partially offset by growth in crude oil as well as industrial and municipal waste.

Minerals - Increased due to higher shipments for highway construction and paving projects.

Forest Products - Increased due to higher demand for wood pulp and other fiber products as well as lumber, partially offset by reduced pulpboard shipments.

Fertilizers - Declined due to unfavorable weather conditions throughout the year that impacted fertilizer applications.

Domestic and international intermodal declined primarily due to rationalization of low-density lanes.

Other revenue decreased $64 million versus prior year primarily due to lower revenue for storage at intermodal facilities and a decrease in settlements from customers that did not meet volume commitments.

These decreases were partially offset by a favorable contract settlement with a customer.

CSX 2019 Form 10-K p.

26

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| --- | --- |

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[removed: Changes] [added: However, changes] in interest rates could impact the fair value [added: (but not the carrying value)] of the Company's fixed rate long-term debt.

The potential decrease in fair value of the Company's fixed rate long-term debt resulting from a hypothetical 10% increase in interest rates, or approximately [removed: 25] [added: 15] basis points, is estimated to be [removed: $498 million as of December 31, 2019 and $472] [added: $428] million as of December 31, [removed: 2018.][added: 2020.]

The underlying fair values of [removed: our] [added: the Company's] long-term debt were estimated based on quoted market prices or on the current rates offered for debt with similar terms and maturities.

[added: |] CSX [removed: CORPORATION][added: Corporation | | | | | | | | |]

[added: | Consolidated] Financial Statements and [removed: Supplementary Data][added: Notes to Consolidated Financial Statements | | | | | | | | |]

| INDEX TO CONSOLIDATED FINANCIAL STATEMENTS | | | [added: | | | | | |]

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| Report of Independent Registered Public Accounting Firm | | [removed: [45](#s4FFB6A845AB258BE8EC7B75C8ED0DCBF)] | [added: | | | [47](#i1736d3dd31584f79bc1bd00543c5b4bd_79) | | |]

| [removed: Consolidated Financial Statements and] Notes to Consolidated Financial Statements | | | [added: | | | [54](#i1736d3dd31584f79bc1bd00543c5b4bd_103) | | |]

| | [added: | |] Herewith: | | [added: | | | |]

| Consolidated Income Statements for the Fiscal Years Ended: | | [removed: [47](#s5F827309BA005B18A7B594F29DA95DD3)] | [added: | | | [49](#i1736d3dd31584f79bc1bd00543c5b4bd_82) | | |]

| | [added: | |] December 31, 2019 | | [added: | | | |]

| | [added: | |] December 31, 2018 | | [added: | | | |]

| | [added: | | December | | | | | |] December [removed: 31, 2017] | | [added: |]

| Consolidated Comprehensive Income Statements for the Fiscal Years Ended: | | [removed: [48](#s360A33CC495157E2B035507992287C56)] | [added: | | | [50](#i1736d3dd31584f79bc1bd00543c5b4bd_85) | | |]

| | [added: | |] December 31, 2019 | | [added: | | | |]

| | [added: | |] December 31, 2018 | | [added: | | | |]

| [removed: | December] [added: December] 31, [removed: 2017] [added: 2017] | | [added: | $ | 228 | | | | | $ | 90 | | | | | $ | 56 | | | | | $ | 374 | |]

| Consolidated Balance Sheets as of: | | [removed: [49](#s8589E7598F2250BAB5DEA4B13BAED159)] | [added: | | | [51](#i1736d3dd31584f79bc1bd00543c5b4bd_88) | | |]

| | [added: | |] December 31, 2019 | | [added: | | | |]

| | [added: | |] December 31, 2018 | | [added: | | | |]

| Consolidated Cash Flow Statements for Fiscal Years Ended: | | [removed: [50](#sDF3D33E3BEA554DCA90716A80042A082)] | [added: | | | [52](#i1736d3dd31584f79bc1bd00543c5b4bd_94) | | |]

| | [added: | |] December 31, 2019 | | [added: | | | |]

| | [added: | |] December 31, 2018 | | [added: | | | |]

| Consolidated Statements of Changes in Shareholders' Equity: | | [removed: [51](#s4B1F5B4328215AB3B845D77EEC0BC9F1)] | [added: | | | [53](#i1736d3dd31584f79bc1bd00543c5b4bd_97) | | |]

| | [added: | |] December 31, 2019 | | [added: | | | |]

| [removed: | December] [added: December] 31, [removed: 2018] [added: 2018] | | [added: | 199 | | | | | | 80 | | | | | | 45 | | | | | | 324 | | |]

We have audited the accompanying consolidated balance sheets of CSX Corporation (the Company) as of December 31, [removed: 2019] [added: 2020] and [removed: 2018,] [added: 2019,] and the related consolidated statements of income, comprehensive income, cash flows, and changes in shareholders’ equity for each of the three years in the period ended December 31, [removed: 2019,] [added: 2020,] and the related notes (collectively referred to as the “consolidated financial statements”).

In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 31, [removed: 2019] [added: 2020] and [removed: 2018,] [added: 2019,] and the results of its operations and its cash flows for each of the three years in the period ended December 31, [removed: 2019,] [added: 2020,] in conformity with U.S. generally accepted accounting principles.

We also have audited, in accordance with standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company’s internal control over financial reporting as of December 31, [removed: 2019,] [added: 2020,] based on criteria established in Internal Control-Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework), and our report dated February [removed: 12, 2020] [added: 10, 2021] expressed an unqualified opinion thereon.

| | [added: | |] Depreciation Policies for Assets Utilizing the Group-Life Method | | | [added: | | | | | |]

| *Description of the Matter* | [added: | |] At December 31, [removed: 2019,] [added: 2020,] assets depreciated under the group-life method comprised 87% of total gross fixed assets of [removed: $45] [added: $45.5] billion. As discussed in Note 6 of the consolidated financial statements, the group-life method aggregates assets with similar lives and characteristics into groups and depreciates each of these groups as a whole. When using the group-life method, an underlying assumption is that each group of assets, as a whole, is used and depreciated to the end of the group’s recoverable life. The Company utilizes different depreciable asset categories to account for depreciation expense for the railroad assets that are depreciated under the group-life method. Under the group-life method, depreciation studies are completed to review asset service lives, salvage values, accumulated depreciation and other factors related to group assets. Depreciation studies are performed every three years for equipment assets and every six years for road and track assets. A depreciation study was performed in 2019 for equipment assets and [removed: 2014] [added: 2020] for road and track assets. The most recent depreciation studies are reviewed by management each year to determine if there have been significant factors that result in changes to the group-life method key assumptions. Auditing depreciation expense for assets subject to the group-life method was complex and required the involvement of specialists due to the nature of the methods used in the depreciation studies to determine the useful service lives and salvage values of the Company’s assets. These methods have a significant effect on depreciation expense. | | | [added: | | | | | |]

| *How We Addressed the Matter in Our Audit* | [added: | |] We obtained an understanding, evaluated the design and tested the operating effectiveness of controls over the Company’s process related to the assessment of periodic depreciation studies of its group-life assets. For example, we tested controls over management’s review of the depreciation study for [removed: equipment] [added: road and track] assets and review of depreciation expense and useful lives. We also tested controls over management’s review of asset activity and assumptions that could impact the most recent depreciation study of [removed: road and track] [added: equipment] assets. To test the estimated useful lives and salvage values of the Company’s group-life assets, we performed audit procedures that included, among others: obtaining the periodic depreciation studies provided by the Company’s third-party specialist and subsequent updates by management; assessing the completeness and accuracy of the data provided to the third-party specialist and used by management; and including a specialist on our team to evaluate the methods used by the third-party specialist and management in determining the average service lives and salvage values of assets to perform the depreciation studies. We compared the significant methods used by management to those used throughout the industry and within other [removed: useful life] [added: depreciation] studies. We also assessed the historical accuracy of management’s estimates via retrospective review and independently calculated a sample of the annual depreciation rates. | | | [added: | | | | | |]

| | [added: | |] Fiscal Years | | | | | | | | | | | [added: | | | |]

| | [removed: 2019] | | [added: 2020] | | [removed: 2018] | | | | [removed: 2017] [added: 2019] | | | [added: | | | 2018 | | |]

| Revenue | [added: | |] $ | [removed: 11,937] [added: 10,583] | | | [added: | |] $ | [removed: 12,250] [added: 11,937] | | | [added: | |] $ | [removed: 11,408] [added: 12,250] | |

| Expense | | | | | | | | | | | | [added: | | | | | |]

| Labor and Fringe | [removed: 2,616] | | [added: 2,275] | | [removed: 2,738] | | | | [removed: 2,946] [added: 2,616] | | | [added: | | | 2,738 | | |]

| Materials, Supplies and Other | [removed: 1,784] | | [added: 1,684] | | [removed: 1,967] | | | | [removed: 2,113] [added: 1,749] | | | [added: | | | 1,931 | | |]

| Depreciation | [removed: 1,349] | | [added: 1,383] | | [removed: 1,331] | | | | [removed: 1,315] [added: 1,349] | | | [added: | | | 1,331 | | |]

Changes in interest rates may impact the cost of future long-term debt issued by the Company, and as a result, represent interest rate risk to the Company.

In an effort to manage this risk, CSX may use certain financial instruments such as interest rate forward contracts.

The following information, together with information included in Note 10, Debt and Credit Agreements, describes the key aspects of such contracts and the related market risk to CSX.

Changes in interest rates could impact the fair value of the Company's forward starting interest rate swap.

On both April 29, 2020, and July 9, 2020, the Company executed a forward starting interest rate swap with a notional value of $250 million for an aggregate notional value of $500 million.

These swaps were effected to hedge the benchmark interest rate associated with future interest payments related to the anticipated refinancing of notes due in 2027.

The Company recognized an unrealized gain of $62 million net of tax during the year ended December 31, 2020 in the consolidated statements of comprehensive income with the related asset on the balance sheet as of December 31, 2020.

Upon settlement of the swaps, which expire in 2027, the unrealized gain or loss in AOCI will be recognized in earnings as an adjustment to interest expense over the same period during which the hedged transaction affects earnings.

As of December 31, 2020, the potential change in fair value resulting from a hypothetical 10% change in interest rates would not be material.

As of December 2020, CSX has no floating rate debt obligations outstanding.

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

| Interest Rate Derivatives | | | 62 | | | — | | | — | | |

| | | | 2020 | | | | | | 2019 | | |

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

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

| Share Repurchases | | | (12,614) | | | | | | (13) | | | (854) | | | — | | | — | | | (867) | | |

| December 31, 2020 | | | 762,529 | | | $ | | | 1,172 | | | $ | 12,527 | | $ | (598) | | $ | 9 | | $ | 13,110 | |

*Acquisition of Pan-Am Railways*

On November 30, 2020, CSX signed a definitive agreement to acquire Pan Am Railways, Inc. (“Pan Am”) which owns and operates a highly integrated, nearly 1,200-mile rail network and has a partial interest in the more than 600-mile Pan Am Southern system.

This will expand CSX’s reach in Connecticut, New York and Massachusetts while adding Vermont, New Hampshire and Maine to its existing network.

A $30 million deposit paid by the Company related to its agreement to acquire Pan Am is included in other investing activities on the consolidated cash flow statement.

CSX does not hold or issue derivative financial instruments for trading purposes.

Historically, the Company has used derivative financial instruments to address market risk exposure to fluctuations in interest rates.

As of December 2019, 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 2019 Form 10-K p.

43

PART II

Item 8.

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| CSX Corporation | | |

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| | December 31, 2017 | |

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| | December 31, 2017 | |

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| Notes to Consolidated Financial Statements | | [52](#s486DB20AA9075089AA2C604AAB9E1E6F) |

CSX 2019 Form 10-K p.

44

CSX CORPORATION

PART II

Item 8.

Financial Statements and Supplementary Data

CSX 2019 Form 10-K p.

45

CSX CORPORATION

PART II

Item 8.

Financial Statements and Supplementary Data

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

| | | | |

February 12, 2020

CSX 2019 Form 10-K p.

CSX [removed: Corporation] [added: Corporation,] together with its subsidiaries ("CSX" or the “Company”), based in Jacksonville, Florida, is one of the nation's leading transportation companies.

CSX’s principal operating subsidiary, CSX Transportation, Inc. (“CSXT”), provides an important link to the transportation supply chain through its approximately [removed: 20,000 route mile] [added: 19,500 route-mile] rail network, which serves major population centers in 23 states east of the Mississippi River, the District of Columbia and the Canadian provinces of Ontario and Quebec.

CSX Intermodal Terminals owns and operates a system of intermodal terminals, predominantly in the eastern United [removed: States] [added: States,] and also [removed: performs] [added: provides] drayage services (the pickup and delivery of intermodal shipments) for certain [removed: customers and trucking dispatch operations.][added: customers.]

During [removed: 2019,] [added: 2020,] the Company's services generated [removed: $11.9] [added: $10.6] billion of revenue and served three primary lines of business: merchandise, [removed: coal] [added: intermodal] and [removed: intermodal.][added: coal.]

[removed: | • |] The [removed: merchandise business shipped 2.7 million carloads (43 percent of volume) and generated 64 percent of revenue in 2019. The] Company’s merchandise business is comprised of shipments in the following diverse markets: chemicals, [removed: automotive,] agricultural and food products, [added: automotive,] minerals, [removed: fertilizers,] forest products, [removed: and] metals and [removed: equipment. |][added: equipment, and fertilizers.]

[removed: | • |] The [removed: coal business shipped 843 thousand carloads (14 percent of volume) and generated 17 percent of revenue in 2019. 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. [removed: Roughly one-third of export coal and the majority of the domestic coal that the Company transports is used for generating electricity. |]

[removed: | • | The intermodal business shipped 2.7 million units (43 percent of volume) and generated 15 percent of revenue in 2019. The intermodal business combines the superior economics of rail transportation with the flexibility of trucks and offers a cost and environmental advantage over long-haul trucking.] Through a network of approximately 30 terminals, the intermodal business serves all major markets east of the Mississippi River and transports mainly manufactured consumer goods in containers, providing customers with truck-like service for longer shipments. [removed: |]

Other revenue accounted for 4 percent of the Company’s total revenue in [removed: 2019.][added: 2020.]

[removed: The legislation] [added: In 2008, Congress enacted the Rail Safety Improvement Act, which] included a mandate that all Class I freight railroads implement an interoperable positive train control system (“PTC”) by [added: the initial deadline of] December 31, 2015.

[removed: Implementation of a] PTC [removed: system] is designed to prevent train-to-train collisions, over-speed derailments, incursions into established work-zone limits, and train diversions onto another set of tracks.

[removed: On October 29, 2015, the President of the United States signed] [added: Subsequently,] the Positive Train Control Enforcement and Implementation Act of 2015 [removed: into law extending the] [added: extended this] deadline.

In accordance with this Act, the Company completed installation of all PTC hardware by December 31, [removed: 2018.][added: 2018, and the PTC system was fully operational and interoperable before December 31, 2020.]

For additional information concerning business conducted by the Company during [removed: 2019,] [added: 2020,] see Item 7.

- The merchandise business shipped 2.5 million carloads (43 percent of volume) and generated 67 percent of revenue in 2020.

- The intermodal business shipped 2.7 million units (46 percent of volume) and generated 16 percent of revenue in 2020.

The intermodal business combines the superior economics of rail transportation with the flexibility of trucks and offers a cost and environmental advantage over long-haul trucking.

- The coal business shipped 637 thousand carloads (11 percent of volume) and generated 13 percent of revenue in 2020.

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

*Human Capital*

The Company had nearly 19,300 employees as of December 2020, which includes approximately 15,700 employees that are members of a labor union.

For the 13 rail unions that participate in national bargaining, a round of negotiations for benefits, wages and work rules is underway.

Typically, these negotiations take several years.

Current agreements remain in place until modified by new agreements.

CSX prioritizes workplace safety for employees and is committed to continued safety improvement through enhanced training, processes and technology.

The attainment of key safety targets is a component of management's annual incentive program.

The FRA Personal Injury Frequency Index, a measure of the number of FRA-reportable injuries per 200,000 man-hours, was 0.81 in 2020 and 0.90 in 2019, representing a 10% improvement year over year.

Compared to 2019, both the number of injuries and the number of man-hours declined in 2020.

In response to the novel coronavirus ("COVID-19") pandemic, additional policies and procedures were developed to protect the health and safety of employees.

A cross-functional task force continues to monitor the situation to ensure that appropriate safety measures are being taken.

The Compensation and Talent Management Committee of the Board of Directors is charged with oversight of human capital management.

The Company is committed to developing a culture that promotes workforce diversity and inclusion and encourages ethical behavior.

In 2019, CSX was recognized as a “Best Place to Work for Disability Inclusion” by Disability:IN and the American Association of People with Disabilities after receiving a 100% score on their disability equality index.

The CSX Code of Ethics serves as a guiding standard for ethical behavior and covers many types of matters, including discrimination and harassment as well as safety.

Annually, all management employees are required, and union employees are highly encouraged, to complete ethics training.

While the Company expects ongoing PTC costs, PTC implementation is complete at a total cost of $2.4 billion.

Implementation costs included installing new equipment along tracks, upgrading locomotives, adding communication equipment and developing new technologies.

CSX CORPORATION

PART I

CSX 2019 Form 10-K p.

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*Employees*

The Company's number of employees was nearly 21,000 as of December 2019, which includes approximately 17,000 union employees.

CSX 2019 Form 10-K p.

CSX 2019 Form 10-K p.

In 2008, Congress enacted the Rail Safety Improvement Act (the “RSIA”).

The Company met all criteria required by the Act to be approved for an extension by the FRA.

The PTC system is now required to be fully operational by December 31, 2020.

CSX remains on track to meet this regulatory requirement.

The Company expects to continue incurring capital costs in connection with the implementation of PTC as well as related ongoing operating expenses.

CSX currently estimates that the total multi-year cost of PTC implementation will be approximately $2.4 billion for the Company.

Total PTC investment through 2019 was $2.3 billion.

The information set forth in Item 6.

Selected Financial Data is incorporated herein by reference.

CSX 2019 Form 10-K p.

[removed: FORM 10-K][added: FORM 10-K]

For the fiscal year ended December 31, [removed: 2019][added: 2020]

[removed: ][added: ]

| (Exact name of registrant as specified in its charter) | | | | | | | | | | | [added: | | | | | | | | | | | | | | | | | | | | | |]

| Virginia | | | | | | | | | [added: | | | | | | | | | | | | | | | | | |] 62-1051971 | | [added: | | | |]

| | | | | | | | | | [added: | | | | | | | | | | | | | | | | | |] *(I.R.S. Employer Identification No.)* | | [added: | | | |]

| 500 Water Street | [added: | |] 15th Floor | [added: | |] Jacksonville | [added: | |] FL | | | | [added: | | | | | | | |] 32202 | | [added: | | | |] 904 | [added: | |] 359-3200 | [added: | |]

| *(Address of principal executive offices)* | | | | | | | [added: | | | | | | | | | | | | | |] *(Zip Code)* | | [added: | | | |] *(Telephone number, including area code)* | | [added: | | | |]

| Securities registered pursuant to Section 12(b) of the Act: | | | | | | | | | | | [added: | | | | | | | | | | | | | | | | | | | | | |]

| Title of each class | | | | | [added: | | | | | | | | | |] Trading Symbol(s) | | | | [added: | | | | | | | |] Name of exchange on which registered | | [added: | | | |]

| Common Stock, $1 Par Value | | | | | [added: | | | | | | | | | |] CSX | | | | [added: | | | | | | | |] Nasdaq Global Select Market | | [added: | | | |]

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth [removed: company.][added: company (as defined in Exchange Act Rule 12b-2).]

On June 30, [removed: 2019] [added: 2020] (which is the last day of the second quarter and the required date to use), the aggregate market value of the Registrant’s voting stock held by non-affiliates was approximately [removed: $59] [added: $53] billion (based on the close price as reported on the NASDAQ National Market System on such date).

There were [removed: 773,825,565] [added: 762,505,058] shares of Common Stock outstanding on January 31, [removed: 2020] [added: 2021] (the latest practicable date that is closest to the filing date).

| CSX CORPORATION | | | | | [added: | | | | | | | | | |]

| FORM 10-K | | | | | [added: | | | | | | | | | |]

| TABLE OF CONTENTS | | | | | [added: | | | | | | | | | |]

| Item No. | | | | [added: | | | | | | | |] Page | [added: | |]

| PART I | | | | | [added: | | | | | | | | | |]

| | [added: | |] [1A. Risk [removed: Factors](#sB6668F32A3015006A5F9C03A128CD352)] [added: Factors](#i1736d3dd31584f79bc1bd00543c5b4bd_13)] | | | [removed: [7](#sB6668F32A3015006A5F9C03A128CD352)] | [added: | | | | | [8](#i1736d3dd31584f79bc1bd00543c5b4bd_13) | | |]

| | [added: | |] [1B. Unresolved Staff [removed: Comments](#s8B21686345E15A25AE71D06FFDA9E55A)] [added: Comments](#i1736d3dd31584f79bc1bd00543c5b4bd_16)] | | | [removed: [11](#s8B21686345E15A25AE71D06FFDA9E55A)] | [added: | | | | | [13](#i1736d3dd31584f79bc1bd00543c5b4bd_16) | | |]

| 3. | [added: | |] [Legal [removed: Proceedings](#sAC6F2CC98C995C42BCB4240BCBFEBFDA)] [added: Proceedings](#i1736d3dd31584f79bc1bd00543c5b4bd_22)] | | | [removed: [16](#sAC6F2CC98C995C42BCB4240BCBFEBFDA)] | [added: | | | | | [18](#i1736d3dd31584f79bc1bd00543c5b4bd_22) | | |]

| 4. | [added: | |] [Mine Safety [removed: Disclosures](#s3EB39E7451745217A7C57C873AF2DF25)] [added: Disclosures](#i1736d3dd31584f79bc1bd00543c5b4bd_25)] | | | [removed: [16](#s3EB39E7451745217A7C57C873AF2DF25)] | [added: | | | | | [18](#i1736d3dd31584f79bc1bd00543c5b4bd_25) | | |]

| | [added: | |] [Executive Officers of the [removed: Registrant](#s6D11D9571F995BCAB9AFB4F85D44FFC0)] [added: Registrant](#i1736d3dd31584f79bc1bd00543c5b4bd_28)] | | | [removed: [17](#s6D11D9571F995BCAB9AFB4F85D44FFC0)] | [added: | | | | | [19](#i1736d3dd31584f79bc1bd00543c5b4bd_28) | | |]

| PART II | | | | | [added: | | | | | | | | | |]

| 5. | [added: | |] [Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity [removed: Securities](#s062DEA1997E45011AA329FD8E8429D7F)] [added: Securities](#i1736d3dd31584f79bc1bd00543c5b4bd_31)] | | | [removed: [19](#s062DEA1997E45011AA329FD8E8429D7F)] | [added: | | | | | [21](#i1736d3dd31584f79bc1bd00543c5b4bd_31) | | |]

| 6. | [added: | |] [Selected Financial [removed: Data](#sBAF047C83DFC53CAB2864564D2497BEF)] [added: Data](#i1736d3dd31584f79bc1bd00543c5b4bd_34)] | | | [removed: [21](#sBAF047C83DFC53CAB2864564D2497BEF)] | [added: | | | | | [22](#i1736d3dd31584f79bc1bd00543c5b4bd_34) | | |]

| 7. | [added: | |] [Management's Discussion and Analysis of Financial Condition and Results of [removed: Operations](#s248DC15AFD0C550C9A8FE80197E09B73)] [added: Operations](#i1736d3dd31584f79bc1bd00543c5b4bd_37)] | | | [removed: [22](#s248DC15AFD0C550C9A8FE80197E09B73)] | [added: | | | | | [23](#i1736d3dd31584f79bc1bd00543c5b4bd_37) | | |]

| | | | [removed: ·] [added: | | | | | | [·] Terms Used by [removed: CSX] [added: CSX](#i1736d3dd31584f79bc1bd00543c5b4bd_40)] | [removed: [22](#sE5270E81930A567F91C0E3F5568CFE91)] | [added: | [23](#i1736d3dd31584f79bc1bd00543c5b4bd_40) | | |]

| | | | [added: | | | | | |] · [Results of [removed: Operations](#s9675D777D4E45EEBB8DB6151EB30BBCA)] [added: Operations](#i1736d3dd31584f79bc1bd00543c5b4bd_46)] | [removed: [24](#s9675D777D4E45EEBB8DB6151EB30BBCA)] | [added: | [25](#i1736d3dd31584f79bc1bd00543c5b4bd_46) | | |]

| | | | [added: | | | | | |] · [Liquidity and Capital [removed: Resources](#s21459D5D4D355CB299E66CA216DC1188)] [added: Resources](#i1736d3dd31584f79bc1bd00543c5b4bd_55)] | [removed: [32](#s21459D5D4D355CB299E66CA216DC1188)] | [added: | [33](#i1736d3dd31584f79bc1bd00543c5b4bd_55) | | |]

| | | | [added: | | | | | |] · [Schedule of Contractual Obligations and Commercial [removed: Commitments](#s64EB306797D458EC9040E18452FA1A61)] [added: Commitments](#i1736d3dd31584f79bc1bd00543c5b4bd_58)] | [removed: [35](#s64EB306797D458EC9040E18452FA1A61)] | [added: | [36](#i1736d3dd31584f79bc1bd00543c5b4bd_58) | | |]

| | | | [added: | | | | | |] · [Off-Balance Sheet [removed: Arrangements](#s4BD3E81ED8FC52298AC1A425371CCE38)] [added: Arrangements](#i1736d3dd31584f79bc1bd00543c5b4bd_61)] | [removed: [36](#s4BD3E81ED8FC52298AC1A425371CCE38)] | [added: | [38](#i1736d3dd31584f79bc1bd00543c5b4bd_61) | | |]

| | | | [removed: ·] [added: | | | | | | [·] Labor [removed: Agreements] [added: Agreements](#i1736d3dd31584f79bc1bd00543c5b4bd_64)] | [removed: [36](#s4BD3E81ED8FC52298AC1A425371CCE38)] | [added: | [38](#i1736d3dd31584f79bc1bd00543c5b4bd_61) | | |]

| | | | [removed: · Critical] [added: | | | | | | [·](#i1736d3dd31584f79bc1bd00543c5b4bd_67) [Critical] Accounting [removed: Estimates] [added: Estimates](#i1736d3dd31584f79bc1bd00543c5b4bd_67)] | [removed: [36](#s1A2E1C82E6695CE6A3EC80FECBEB7BD1)] | [added: | [38](#i1736d3dd31584f79bc1bd00543c5b4bd_67) | | |]

| | | | [removed: · Forward-Looking Statements] | [removed: [41](#s9FAC5E257E375DF5A97618DCA5A1740D)] | [added: | | | | [·](#i1736d3dd31584f79bc1bd00543c5b4bd_70) [Forward-Looking Statements](#i1736d3dd31584f79bc1bd00543c5b4bd_70) | | | [43](#i1736d3dd31584f79bc1bd00543c5b4bd_70) | | |]

| 7A. | [added: | |] [Quantitative and Qualitative Disclosures about Market [removed: Risk](#s6248673205315B71932C5A39372B9C4D)] [added: Risk](#i1736d3dd31584f79bc1bd00543c5b4bd_73)] | | | [removed: [43](#s6248673205315B71932C5A39372B9C4D)] | [added: | | | | | [45](#i1736d3dd31584f79bc1bd00543c5b4bd_73) | | |]

| 8. | [added: | |] [Financial Statements and Supplementary [removed: Data](#s7A32069F7FCF5E4DB1C17EEF503875F5)] [added: Data](#i1736d3dd31584f79bc1bd00543c5b4bd_76)] | | | [removed: [44](#s7A32069F7FCF5E4DB1C17EEF503875F5)] | [added: | | | | | [46](#i1736d3dd31584f79bc1bd00543c5b4bd_76) | | |]

| 9. | [added: | |] [Changes in and Disagreements with Accountants on Accounting and Financial [removed: Disclosure](#s64D2ABA744BA540786099E5BFF9354E6)] [added: Disclosure](#i1736d3dd31584f79bc1bd00543c5b4bd_178)] | | | [removed: [108](#s64D2ABA744BA540786099E5BFF9354E6)] | [added: | | | | | [101](#i1736d3dd31584f79bc1bd00543c5b4bd_178) | | |]

| 9A. | [added: | |] [Controls and [removed: Procedures](#s4229995537D85424869EE8E7CC14822B)] [added: Procedures](#i1736d3dd31584f79bc1bd00543c5b4bd_181)] | | | [removed: [108](#s4229995537D85424869EE8E7CC14822B)] | [added: | | | | | [101](#i1736d3dd31584f79bc1bd00543c5b4bd_181) | | |]

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

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| 1. | | | [Business](#i1736d3dd31584f79bc1bd00543c5b4bd_10) | | | | | | | | | [3](#i1736d3dd31584f79bc1bd00543c5b4bd_10) | | |

| 2. | | | [Properties](#i1736d3dd31584f79bc1bd00543c5b4bd_19) | | | | | | | | | [14](#i1736d3dd31584f79bc1bd00543c5b4bd_19) | | |

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| | | | | | | | | | [· 2020 Highlights](#i1736d3dd31584f79bc1bd00543c5b4bd_43) | | | [25](#i1736d3dd31584f79bc1bd00543c5b4bd_43) | | |

| 9B. | | | [Other Information](#i1736d3dd31584f79bc1bd00543c5b4bd_184) | | | | | | | | | [104](#i1736d3dd31584f79bc1bd00543c5b4bd_184) | | |

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| 11. | | | [Executive Compensation](#i1736d3dd31584f79bc1bd00543c5b4bd_190) | | | | | | | | | [104](#i1736d3dd31584f79bc1bd00543c5b4bd_190) | | |

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| [Signatures](#i1736d3dd31584f79bc1bd00543c5b4bd_205) | | | | | | | | | | | | [109](#i1736d3dd31584f79bc1bd00543c5b4bd_205) | | |

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(as defined in Exchange Act Rule 12b-2).

CSX 2019 Form 10-K p.

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| 1. | [Business](#sA07C3B3427B55C338805B4258C34D414) | | | [3](#sA07C3B3427B55C338805B4258C34D414) |

| 2. | [Properties](#s4E839C5F17C35DD39BC9B8F02B526DD9) | | | [12](#s4E839C5F17C35DD39BC9B8F02B526DD9) |

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| | | | · 2019 Highlights | [24](#s3BE0B9363A13542698EA554A19013E89) |

| 9B. | [Other Information](#sC1033A3CFBA45E6F884C4B823E138CE5) | | | [111](#sC1033A3CFBA45E6F884C4B823E138CE5) |

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| 11. | [Executive Compensation](#s69E160B3E81B5DDA824BD79490FBA6AB) | | | [111](#s69E160B3E81B5DDA824BD79490FBA6AB) |

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| [Signatures](#sAFA7C8ADECF452AC9F7EC06ACD3EEED0) | | | | [116](#sAFA7C8ADECF452AC9F7EC06ACD3EEED0) |

CSX 2019 Form 10-K p.

CSX 2019 Form 10-K p.

11

Total track miles, which reflect the size of CSXT’s network that connects markets, customers and western railroads, are greater than CSXT’s approximately [removed: 20,000] [added: 19,500] route miles.

At December [removed: 2019,] [added: 2020,] the breakdown of track miles was as follows:

| | [added: | |] Track | | [added: |]

| | [added: | |] Miles | | [added: |]

| [removed: Mainline] [added: Single mainline] track | [removed: 25,793] | | [added: 19,605 | | |]

| Terminals and switching yards | [removed: 9,316] | | [added: 9,289 | | |]

| Passing sidings and turnouts | [removed: 921] | | [added: 896 | | |]

The Company’s largest yards and terminals based on [removed: 2019] [added: 2020] volume (number of railcars or intermodal containers processed) are listed below.

| Yards and Terminals | [added: | |] Annual Volume | | [added: |]

| Bedford Park Intermodal Terminal [removed: - Chicago, IL] [added: (Chicago)] | [removed: 820,362] | | [added: 896,474 | | |]

| Fairburn, GA Intermodal Terminal [added: (Atlanta)] | [removed: 377,736] | | [added: 424,377 | | |]

CSXT’s operations are primarily focused on four major transportation networks and corridors [removed: which] [added: that] are defined geographically and by commodity flows below.

This route carries goods from all three of the Company’s major markets – merchandise, [removed: coal] [added: intermodal] and [removed: intermodal.][added: coal.]

It is the leading rail corridor along the eastern seaboard south of the District of [removed: Columbia,] [added: Columbia] and provides access to major eastern ports.

CSXT’s coal network remains well positioned to supply utility markets in both the Northeast and Southeast and to transport coal shipments for export outside of the U.S. [removed: Roughly] [added: Approximately one-quarter to] one-third of [removed: the tons of] export coal and the majority of the domestic coal that the Company transports is used for generating [removed: electricity.][added: electricity or industrial purposes.]

[removed: ][added: ]

[removed: At] [added: As of] December [removed: 2019,] [added: 2020,] CSXT [removed: owned] [added: owns or long-term leases] more than 3,500 locomotives.

Of owned locomotives, approximately [removed: 65%] [added: 66%] were in active service as of December 31, [removed: 2019,] [added: 2020,] and the remainder were in storage to be utilized as needed.

[removed: At] [added: As of] December [removed: 2019,] [added: 2020,] CSXT’s fleet of owned [added: or long-term leased] locomotives consisted of the following types:

| | [added: | |] Locomotives | | | [added: | | |] % | | | [added: | | |] Average Age *(years)* | | [added: |]

| Auxiliary [removed: Units] [added: units] | [removed: 179] | | [added: 178] | [added: | | | | |] 5 | [added: |] % | | [removed: 27] | | [added: 28 | | |]

| [removed: Total] [added: Total locomotives] | [removed: 3,561] | | [added: 3,539] | [added: | | | | |] 100 | [added: |] % | | [added: | |] 21 | | [added: |]

Of total owned and long-term leased equipment, approximately [removed: 65%] [added: 77%] was in active service [removed: on] [added: as of] December 31, [removed: 2019,] [added: 2020,] and the remainder [removed: was] [added: were] in storage to be utilized as needed.

[removed: At] [added: As of] December [removed: 2019,] [added: 2020,] the Company’s owned and long-term leased equipment consisted of the following:

| Equipment | [added: | |] Number of Units | | | [added: | | |] % | | [added: |]

| Multi-level flat cars | [removed: 11,172] | | [added: 11,161] | [added: | | | | |] 22 | [added: |] % |

| Covered hoppers | [removed: 8,346] | | [added: 7,832] | [added: | | | | |] 16 | [added: |] % |

| Open-top hoppers | [removed: 7,405] | | [added: 6,970] | [added: | | | | |] 14 | [added: |] % |

| Box cars | [removed: 4,509] | | [added: 4,247] | [added: | | | | |] 9 | [added: |] % |

| Flat cars | [removed: 702] | | [added: 658] | [added: | | | | |] 1 | [added: |] % |

| Other cars | [removed: 262] | | [added: 242] | [added: | | | | |] 1 | [added: |] % |

| Subtotal freight cars | [removed: 51,498] | | [added: 49,766] | [added: | | | | |] 100 | [added: |] % |

| Total equipment | [removed: 69,479] | | [added: 67,200] | | | [added: | | | | | |]

| Other mainline track | | | 5,695 | | |

| Total | | | 35,485 | | |

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

| Waycross, GA | | | 907,445 | | |

| Nashville, TN | | | 653,643 | | |

| Avon, IN (Indianapolis) | | | 626,868 | | |

| Cincinnati, OH | | | 603,773 | | |

| Selkirk, NY | | | 597,966 | | |

| Walbridge, OH (Toledo) | | | 389,169 | | |

| Chicago, IL | | | 334,743 | | |

| Louisville, KY | | | 296,277 | | |

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

| Freight | | | 3,142 | | | | | | 89 | | % | | | | 21 | | |

| Switching | | | 219 | | | | | | 6 | | % | | | | 42 | | |

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| Gondolas | | | 18,656 | | | | | | 37 | | % |

| Containers | | | 17,434 | | | | | | | | |

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| Total | 36,030 | |

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| Waycross, GA | 874,474 | |

| Nashville, TN | 648,311 | |

| Selkirk, NY | 642,869 | |

| Avon, IN (Indianapolis) | 609,468 | |

| Cincinnati, OH | 567,582 | |

| Louisville, KY | 397,246 | |

| Walbridge, OH (Toledo) | 323,672 | |

| Chicago, IL | 308,653 | |

CSX 2019 Form 10-K p.

12

CSX 2019 Form 10-K p.

13

CSX 2019 Form 10-K p.

14

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| Freight | 3,162 | | | 89 | % | | 20 | |

| Switching | 220 | | | 6 | % | | 42 | |

| Gondolas | 19,102 | | | 37 | % |

| Containers | 17,981 | | | | |

CSX 2019 Form 10-K p.

15

| Name and Age | [added: | |] Business Experience During Past Five Years | [added: | |]

| James M. Foote, [removed: 66] [added: 67] *President and Chief Executive Officer* | [added: | |] 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. | [added: | |]

| Kevin S. Boone, [removed: 42] [added: 43] *Executive Vice President and Chief Financial Officer* | [added: | |] Boone was named Executive Vice President and Chief Financial Officer in October 2019 after serving as Interim Chief Financial Officer since May 2019. In this role, he is responsible for all financial aspects of the Company's business including financial and economic analysis, accounting, tax, treasury, real estate and purchasing activities. Mr. Boone has more than [removed: 18] [added: 19] years of experience in finance, accounting, mergers and acquisitions, and transportation performance analysis. He joined CSX in September 2017 as Vice President of Corporate Affairs and Chief Investor Relations Officer and was later named Vice President, Marketing and Strategy leading research and data analysis to advance growth strategies for CSX. Before joining CSX in 2017, Mr. Boone worked as a Senior Equity Research Analyst at Janus Capital. He also served as a Vice President at Morgan Stanley in equity research and an associate at Merrill Lynch in the mergers and acquisitions group. | [added: | |]

| Jamie J. Boychuk, [removed: 42] [added: 43] *Executive Vice President of Operations* | [added: | |] Boychuk has served as CSXT's Executive Vice President of Operations since October 2019. In this role, he is responsible for mechanical, engineering, transportation and network operations, including terminals. Since joining CSXT in 2017, he has held the positions of Senior Vice President of Network, Engineering, Mechanical and Intermodal Operations; Vice President of Scheduled Railroading; and Assistant Vice President of Transportation Support. Mr. Boychuk previously worked at Canadian National Railway, where he served for 20 years in various operational roles of increasing responsibility, including sub-region General Manager. | [added: | |]

| Name and Age | [added: | |] Business Experience During Past Five Years | [added: | |]

| Nathan D. Goldman, [removed: 62] [added: 63] *Executive Vice President and Chief Legal Officer* | [added: | |] Goldman has served as Executive Vice President and Chief Legal Officer, and Corporate Secretary of CSX since November 2017. In this role, he directs the Company’s legal affairs, government relations, corporate communications, risk management, public safety, environmental, and audit functions. During his [removed: 16] [added: 17] years with the Company, Mr. Goldman has previously served as Vice President of Risk Compliance and General Counsel and has overseen work in compliance, risk management and safety programs. | [added: | |]

| Diana B. Sorfleet, [removed: 55] [added: 56] *Executive Vice President and Chief Administrative Officer* | [added: | |] Sorfleet was named Executive Vice President and Chief Administrative Officer in July 2018. In this role, her responsibilities include human resources, information technology, labor relations, people systems and analytics, total rewards and aviation. During her [removed: 8] [added: 9] years with the Company, Ms. Sorfleet has previously served as Chief Human Resources Officer. Prior to joining CSX, she worked in human resources for 20 years. | [added: | |]

| Mark K. Wallace, [removed: 50] [added: 51] *Executive Vice President and Chief Sales & Marketing Officer* | [added: | |] Wallace has served as Executive Vice President of Sales and Marketing since July 2018. In his current role, Mr. Wallace is responsible for the commercial organization. He joined the Company in March 2017 and previously served as Executive Vice President and Chief Administrative Officer and Executive Vice President of Corporate Affairs and Chief of Staff to the CEO. Prior to joining CSX, he served as the Vice President of Corporate Affairs at Canadian Pacific Railway Limited with responsibility for the corporate communications and public affairs, investor relations, facilities and real estate functions. Prior to his time at Canadian Pacific, Mr. Wallace spent more than 15 years in various senior management positions with Canadian National Railway Company. | [added: | |]

| Angela C. Williams, [removed: 45] [added: 46] *Vice President and Chief Accounting Officer* | [added: | |] Williams has served as Vice President and Chief Accounting Officer of CSX since March 2018. She is responsible for financial and regulatory reporting, freight billing and collections, payroll, accounts payable and various other accounting processes. During her [removed: 16] [added: 17] years with the Company, she previously served as Assistant Vice President - Assistant Controller and in other various accounting roles. [removed: Prior to joining CSX, she] [added: With more than 24 years of experience, Williams] held various accounting and auditing positions [removed: for over 6 years.] [added: prior to joining CSX.] Ms. Williams is a Certified Public Accountant. | [added: | |]

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CSX 2019 Form 10-K p.

16

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| Edmond L. Harris, 70 *Executive Vice President* | Harris has served as an Executive Vice President of CSX since October 2019. In this role, he is responsible for safety, performance metrics, operational planning, and facilities. In 2018, he joined CSXT as Executive Vice President of Operations. Mr. Harris has more than 40 years of railroad industry experience, including service as a senior adviser to Global Infrastructure Partners, an independent fund that invests in infrastructure assets worldwide; Chairman of Omnitrax Rail Network; and a member of the board of directors 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 2019 Form 10-K p.

17

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CSX 2019 Form 10-K p.

18

A total of 1.8 billion shares of common stock are authorized, of which [removed: 773,470,825] [added: 762,529,119] shares were outstanding as of December 31, [removed: 2019.][added: 2020.]

At January 31, [removed: 2020,] [added: 2021,] the latest practicable date that is closest to the filing date, there were [removed: 25,127] [added: 24,100] common stock shareholders of record.

The weighted average of common shares outstanding, which was used in the calculation of diluted earnings per share, was [removed: 798] [added: 768] million as of December 31, [removed: 2019.][added: 2020.]

| | [added: | |] Quarter | | | | | | | | | | | | | | | | | | | [added: | | | | | | | |]

| | [added: | |] 1st | | | | [added: | |] 2nd | | | | [added: | |] 3rd | | | | [added: | |] 4th | | | | [added: | |] Year | | |

| [removed: 2019] [added: 2019] | [removed: $] | [removed: 0.24] | [added: $] | [added: 0.24] | [removed: $] | [removed: 0.24] | | | [removed: $] [added: $] | [removed: 0.24] [added: 0.24] | | | [removed: $] | [removed: 0.24] | [added: $] | [added: 0.24] | [removed: $] | [removed: 0.96] | | [added: | $ | 0.24 | | | | | $ | 0.96 | |]

The cumulative shareholder returns, assuming reinvestment of dividends, on $100 invested at December 31, [removed: 2014] [added: 2015] are illustrated on the graph below.

[removed: ][added: ]

Share repurchase activity of [removed: $606] [added: $203] million for the fourth quarter [removed: 2019] [added: 2020] was as follows:

| CSX Purchases of Equity Securities for the Quarter | | | | | | | | | | | | | [added: | | | | | | | | | | | | | |]

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

*(a) The difference between the "Total Number of Shares Purchased" and the "Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs" [removed: of* *18,930* *shares] [added: of 14,610 shares] for the quarter represents shares purchased to fund the Company's contribution to a 401(k) plan that covers certain union employees.*

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

| 2020 | | | $ | 0.26 | | | | | $ | 0.26 | | | | | $ | 0.26 | | | | | $ | 0.26 | | | | | $ | 1.04 | |

On October 21, 2020, the Company announced a new, incremental $5 billion share repurchase program.

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

| Beginning Balance | | | | | | | | | | | | | | | | | | | | | $ | | | 1,092,188,096 | | |

| October 1 - October 31, 2020 | | | 978,384 | | | | | | $ | | | 78.51 | | | 978,384 | | | | | | | | | 6,015,375,220 | | |

| November 1 - November 30, 2020 | | | 348,885 | | | | | | | | | 78.81 | | | 334,275 | | | | | | | | | 5,989,233,126 | | |

| December 1 - December 31, 2020 | | | 1,110,784 | | | | | | | | | 90.03 | | | 1,110,784 | | | | | | | | | 5,889,233,126 | | |

| Ending Balance | | | 2,438,053 | | | | | | $ | | | 83.80 | | | 2,423,443 | | | | | | $ | | | 5,889,233,126 | | |

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| 2018 | $ | 0.22 | | | $ | 0.22 | | | $ | 0.22 | | | $ | 0.22 | | | $ | 0.88 | |

CSX 2019 Form 10-K p.

19

CSX CORPORATION

PART II

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

| Beginning Balance | | | | | | | | | | $ | 2,362,512,464 | |

| October 1 - October 31, 2019 | 7,738,077 | | | $ | 67.74 | | 7,719,147 | | | | 1,839,693,245 | |

| November 1 - November 30, 2019 | 1,191,270 | | | | 70.42 | | 1,191,270 | | | | 1,755,803,734 | |

| December 1 - December 31, 2019 | — | | | | — | | — | | | | 1,755,803,734 | |

| Ending Balance | 8,929,347 | | | $ | 68.10 | | 8,910,417 | | | $ | 1,755,803,734 | |

CSX 2019 Form 10-K p.

20

Not Applicable

Selected financial data related to the Company’s financial results for the last five fiscal years are listed below.

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

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

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

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

| *(Dollars and Shares in Millions, Except Per Share Amounts)* | | 2019 | | | | 2018 | | | | 2017 | | | | 2016 | | | | 2015 | | |

| Financial Performance | | | | | | | | | | | | | | | | | | | | |

| | Revenue | $ | 11,937 | | | $ | 12,250 | | | $ | 11,408 | | | $ | 11,069 | | | $ | 11,811 | |

| | Expense | 6,972 | | | | 7,381 | | | | 7,688 | | | | 7,656 | | | | 8,183 | | |

| | Operating Income | $ | 4,965 | | | $ | 4,869 | | | $ | 3,720 | | | $ | 3,413 | | | $ | 3,628 | |

| | Adjusted Operating Income(a) | 4,965 | | | | 4,869 | | | | 3,818 | | | | 3,413 | | | | 3,628 | | |

| Net Earnings from Continuing Operations | | $ | 3,331 | | | $ | 3,309 | | | $ | 5,471 | | | $ | 1,714 | | | $ | 1,968 | |

| Adjusted Net Earnings from Continuing Operations(a) | | 3,331 | | | | 3,309 | | | | 2,097 | | | | 1,714 | | | | 1,968 | | |

| | Operating Ratio | 58.4 | | % | | 60.3 | | % | | 67.4 | | % | | 69.2 | | % | | 69.3 | | % |

| | Adjusted Operating Ratio(a) | 58.4 | | % | | 60.3 | | % | | 66.5 | | % | | 69.2 | | % | | 69.3 | | % |

| Net Earnings Per Share: | | | | | | | | | | | | | | | | | | | | |

| | From Continuing Operations, Basic | $ | 4.18 | | | $ | 3.86 | | | $ | 6.01 | | | $ | 1.81 | | | $ | 2.00 | |

| | From Continuing Operations, Assuming Dilution | 4.17 | | | | 3.84 | | | | 5.99 | | | | 1.81 | | | | 2.00 | | |

| | Adjusted From Continuing Operations, Assuming Dilution(a) | 4.17 | | | | 3.84 | | | | 2.30 | | | | 1.81 | | | | 2.00 | | |

| Average Common Shares Outstanding | | | | | | | | | | | | | | | | | | | | |

| | Basic | 796 | | | | 857 | | | | 911 | | | | 947 | | | | 983 | | |

| | Assuming Dilution | 798 | | | | 861 | | | | 914 | | | | 948 | | | | 984 | | |

| Financial Position | | | | | | | | | | | | | | | | | | | | |

| | Cash, Cash Equivalents and Short-term Investments | $ | 1,954 | | | $ | 1,111 | | | $ | 419 | | | $ | 1,020 | | | $ | 1,438 | |

| | Total Assets | 38,257 | | | | 36,729 | | | | 35,739 | | | | 35,414 | | | | 34,745 | | |

| | Long-term Debt | 15,993 | | | | 14,739 | | | | 11,790 | | | | 10,962 | | | | 10,515 | | |

| | Shareholders' Equity | 11,863 | | | | 12,580 | | | | 14,721 | | | | 11,694 | | | | 11,668 | | |

| | Dividend Per Share | $ | 0.96 | | | $ | 0.88 | | | $ | 0.78 | | | $ | 0.72 | | | $ | 0.70 | |

| Additional Data | | | | | | | | | | | | | | | | | | | | |

| | Capital Expenditures | $ | 1,657 | | | $ | 1,745 | | | $ | 2,040 | | | $ | 2,705 | | | $ | 2,562 | |

| | Employees -- Annual Averages *(estimated)* | 21,561 | | | | 22,901 | | | | 25,230 | | | | 27,350 | | | | 31,285 | | |

| | Employees -- Year-end Count *(estimated)* | 20,908 | | | | 22,475 | | | | 24,006 | | | | 26,628 | | | | 29,410 | | |

*(a) Adjusted operating income, adjusted net earnings and adjusted earnings per share assuming dilution are non-GAAP measures that exclude the impacts of tax reform and restructuring activities in 2017.

These 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.*

CSX 2019 Form 10-K p.

21

[added: |] *(Dollars in [removed: Millions)*][added: millions)* | | | | | | | | | | | | | | |]

| [removed: Investments in] Conrail | [removed: —] | | [removed: | | — |] [added: $] | [added: 1,025] | | [removed: 982] | | | [added: $] | 982 | | [removed: |]

[removed: | Accumulated] Other Comprehensive [removed: Loss | (675 | | ) | | 35 | | | | (35 | | ) | | (675 | | ) |][added: Income / (Loss)]

[added: |] *(Dollars in Millions)* [added: | | | Level 1 | | | | | | Level 2 | | | | | | | | | | | | Total | | | | | | Level 1 | | | | | | Level 2 | | | | | | | | | | | | Total | | |]

| [removed: Accumulated] Other Comprehensive [removed: Loss | (661] [added: Income (Loss)] | | [removed: )] | | [removed: 53] | | | | [removed: (53] | | [removed: )] | | [removed: (661] | | [removed: )] |

[added: |] *(Dollars in Millions)* [added: | | | 2020 | | | | | | 2019 | | |]

[added: |] *(Dollars in Millions)* [added: | | | Conrail Shared | | |]

[added: |] *(Dollars in Millions)* [added: | | | 2020 | | | | | | 2019 | | |]

NOTE 13.

Fair Value Measurements, *continued*

The pension plan assets at fair value by level, within the fair value hierarchy, as of calendar plan years 2020 and 2019 are shown in the table below.

For additional information related to pension assets, see Note 9, Employee Benefit Plans.

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

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

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

| | | | 2020 | | | | | | | | | | | | | | | | | | 2019 | | | | | | | | | | | | | | | | | | | | | | | | | | |

| Common Stock | | | $ | 337 | | | | | $ | — | | | | | | | | | | | $ | 337 | | | | | $ | 823 | | | | | $ | — | | | | | | | | | | | $ | 823 | |

| Mutual funds | | | 21 | | | | | | — | | | | | | | | | | | | 21 | | | | | | 78 | | | | | | — | | | | | | | | | | | | 78 | | |

| Cash and cash equivalents | | | 387 | | | | | | — | | | | | | | | | | | | 387 | | | | | | 229 | | | | | | — | | | | | | | | | | | | 229 | | |

| Corporate bonds | | | — | | | | | | 1,026 | | | | | | | | | | | | 1,026 | | | | | | — | | | | | | 588 | | | | | | | | | | | | 588 | | |

| Government securities | | | — | | | | | | 164 | | | | | | | | | | | | 164 | | | | | | — | | | | | | 217 | | | | | | | | | | | | 217 | | |

| Asset-backed securities, derivatives and other | | | — | | | | | | 85 | | | | | | | | | | | | 85 | | | | | | — | | | | | | 17 | | | | | | | | | | | | 17 | | |

| Total investments in the fair value hierarchy | | | $ | 745 | | | | | $ | 1,275 | | | | | | | | | | | $ | 2,020 | | | | | $ | 1,130 | | | | | $ | 822 | | | | | | | | | | | $ | 1,952 | |

| Investments measured at net asset value *(a)* | | | n/a | | | | | | n/a | | | | | | | | | | | | $ | 980 | | | | | n/a | | | | | | n/a | | | | | | | | | | | | $ | 873 | |

| Investments at fair value | | | $ | 745 | | | | | $ | 1,275 | | | | | | | | | | | $ | 3,000 | | | | | $ | 1,130 | | | | | $ | 822 | | | | | | | | | | | $ | 2,825 | |

*(a) Investments measured at net asset value represent certain investments that have been measured at net asset value per share (or its equivalent) and thus are not classified in the fair value hierarchy.

In accordance with ASC 820, Fair Value Measurements, the fair value amounts presented in this table are intended to permit reconciliation of the fair value hierarchy to the pension assets disclosed in Note 9, Employee Benefit Plans.*

NOTE 14.

Other Income - Net

The Company derives income from items that are not considered operating activities.

Income from these items is reported net of related expense.

All components of net periodic pension and post-retirement benefit costs, excluding service cost, are included in other income - net on the consolidated income statement.

Miscellaneous income (expense) may fluctuate due to timing and includes investment gains, losses and interest income as well as other non-operating activities.

Interest income decreased from 2019 to 2020 primarily as a result of lower interest rates, partially offset by higher average investment balances.

Interest income increased from 2018 to 2019 primarily as a result of higher average cash and short-term investment balances.

Debt repurchase expense increased from 2019 to 2020 primarily as a result of long-term debt being redeemed earlier relative to maturity date.

Other income – net consisted of the following:

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

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

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

| *(Dollars in Millions)* | | | 2020 | | | | | | 2019 | | | | | | 2018 | | |

| Net Periodic Pension and Post-retirement Benefit Credit *(a)* | | | $ | 42 | | | | | $ | 43 | | | | | $ | 38 | |

| Interest Income | | | 17 | | | | | | 48 | | | | | | 32 | | |

| Debt Repurchase Expense | | | (48) | | | | | | (10) | | | | | | — | | |

| Miscellaneous Income | | | 8 | | | | | | 7 | | | | | | 4 | | |

| Total Other Income - Net | | | $ | 19 | | | | | $ | 88 | | | | | $ | 74 | |

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

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

NOTE 18.

Summarized Consolidating Financial Data, *continued*

Consolidating Balance Sheets

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

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

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

| As of December 31, 2019 | CSX Corporation | | | | CSX Transportation | | | | Eliminations and Other | | | | CSX Consolidated | | |

| ASSETS | | | | | | | | | | | | | | | |

| Current Assets: | | | | | | | | | | | | | | | |

| Cash and Cash Equivalents | $ | 814 | | | $ | 136 | | | $ | 8 | | | $ | 958 | |

| Short-term Investments | 989 | | | | — | | | | 7 | | | | 996 | | |

| Accounts Receivable - Net | 4 | | | | 969 | | | | 13 | | | | 986 | | |

| Receivable from Affiliates | 1,054 | | | | 7,405 | | | | (8,459 | | ) | | — | | |

| Materials and Supplies | — | | | | 261 | | | | — | | | | 261 | | |

| Other Current Assets | 26 | | | | 30 | | | | 21 | | | | 77 | | |

| Total Current Assets | 2,887 | | | | 8,801 | | | | (8,410 | | ) | | 3,278 | | |

| Properties | 1 | | | | 42,110 | | | | 2,989 | | | | 45,100 | | |

| Accumulated Depreciation | (1 | | ) | | (11,199 | | ) | | (1,732 | | ) | | (12,932 | | ) |

| Properties - Net | — | | | | 30,911 | | | | 1,257 | | | | 32,168 | | |

| Affiliates and Other Companies | (39 | | ) | | 923 | | | | 13 | | | | 897 | | |

| Investment in Consolidated Subsidiaries | 34,528 | | | | — | | | | (34,528 | | ) | | — | | |

| Right of Use Lease Asset | — | | | | 514 | | | | 18 | | | | 532 | | |

| Other Long-term Assets | 3 | | | | 629 | | | | (232 | | ) | | 400 | | |

| Total Assets | $ | 37,379 | | | $ | 41,778 | | | $ | (40,900 | ) | | $ | 38,257 | |

| LIABILITIES AND SHAREHOLDERS' EQUITY | | | | | | | | | | | | | | | |

| Current Liabilities: | | | | | | | | | | | | | | | |

| Accounts Payable | $ | 153 | | | $ | 830 | | | $ | 60 | | | $ | 1,043 | |

| Labor and Fringe Benefits Payable | 38 | | | | 386 | | | | 65 | | | | 489 | | |

| Payable to Affiliates | 9,552 | | | | 574 | | | | (10,126 | | ) | | — | | |

| Casualty, Environmental and Other Reserves | — | | | | 87 | | | | 13 | | | | 100 | | |

| Current Maturities of Long-term Debt | — | | | | 245 | | | | — | | | | 245 | | |

| Income and Other Taxes Payable | (286 | | ) | | 340 | | | | 15 | | | | 69 | | |

| Other Current Liabilities | — | | | | 192 | | | | 13 | | | | 205 | | |

| Total Current Liabilities | 9,457 | | | | 2,654 | | | | (9,960 | | ) | | 2,151 | | |

| Casualty, Environmental and Other Reserves | — | | | | 169 | | | | 36 | | | | 205 | | |

| Long-term Debt | 15,534 | | | | 459 | | | | — | | | | 15,993 | | |

| Deferred Income Taxes - Net | (152 | | ) | | 6,827 | | | | 286 | | | | 6,961 | | |

| Long-term Lease Liability | — | | | | 481 | | | | 12 | | | | 493 | | |

| Other Long-term Liabilities | 692 | | | | 215 | | | | (316 | | ) | | 591 | | |

| Total Liabilities | 25,531 | | | | 10,805 | | | | (9,942 | | ) | | 26,394 | | |

As of December 31, [removed: 2019,] [added: 2020,] under the supervision and with the participation of CSX's Chief Executive Officer (“CEO”) and Chief Financial Officer (“CFO”), management has evaluated the effectiveness of the design and operation of the Company's disclosure controls and procedures.

Based on that evaluation, the CEO and CFO concluded that, as of December 31, [removed: 2019,] [added: 2020,] the Company's disclosure controls and procedures were effective at the reasonable assurance level in timely alerting them to material information required to be included in CSX’s periodic SEC reports.

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 31, [removed: 2019] [added: 2020] 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 31, [removed: 2019.][added: 2020.]

The Company’s internal control over financial reporting as of December 31, [removed: 2019] [added: 2020] has been audited by Ernst & Young LLP, an independent registered public accounting firm, as stated in their report which is included elsewhere herein.

We have audited CSX Corporation’s internal control over financial reporting as of December 31, [removed: 2019,] [added: 2020,] 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).

In our opinion, CSX Corporation (the Company) maintained, in all material respects, effective internal control over financial reporting as of December 31, [removed: 2019,] [added: 2020,] based on the COSO criteria.

We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the consolidated balance sheets of CSX Corporation as of December 31, [removed: 2019] [added: 2020] and [removed: 2018,] [added: 2019,] and the related consolidated statements of income, comprehensive income, cash flows, and changes in shareholders’ equity for each of the three years in the period ended December 31, [removed: 2019,] [added: 2020,] and the related notes of the Company and our report dated February [removed: 12, 2020] [added: 10, 2021] expressed an unqualified opinion thereon.

February 10, 2021

CSX 2019 Form 10-K p.

108

CSX 2019 Form 10-K p.

109

February 12, 2020

CSX 2019 Form 10-K p.

110

The Proxy Statement will be filed [removed: not] [added: no] later than April 30, [removed: 2020] [added: 2021] with respect to the [removed: 2020] [added: 2021] annual meeting of shareholders, except for the information regarding the executive officers of the Company.

| See Index to Consolidated Financial Statements on page | [removed: [44](#s7A32069F7FCF5E4DB1C17EEF503875F5).] | [added: | [46](#i1736d3dd31584f79bc1bd00543c5b4bd_76). | | |]

| Exhibit designation | [added: | |] Nature of exhibit | [added: | |] Previously [removed: filed as] [added: filed as] exhibit to | [added: | |]

| 2.1 | [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, Inc.](http://www.sec.gov/Archives/edgar/data/88128/000095012304010597/y01612bexv2w1.txt) | [added: | |] September 2, 2004, Exhibit 2.1, Form 8-K | [added: | |]

| 3.1 | [added: | |] [Amended and Restated Articles of Incorporation [removed: of CSX Corporation,] [added: of](https://www.sec.gov/Archives/edgar/data/277948/000027794815000010/csx12262014exhibit31amende.htm) [CSX Corporation](https://www.sec.gov/Archives/edgar/data/277948/000027794815000010/csx12262014exhibit31amende.htm)[,] effective as of [removed: October 7, 2015](http://www.sec.gov/Archives/edgar/data/277948/000119312515341287/d79889dex31.htm)] [added: December 16, 2014](https://www.sec.gov/Archives/edgar/data/277948/000027794815000010/csx12262014exhibit31amende.htm)] | [removed: October 9,] [added: | | February 11,] 2015, Exhibit 3.1, Form [removed: 8-K] [added: 10-K] | [added: | |]

| 3.2 | [added: | |] [Amended and Restated Bylaws of CSX Corporation, effective as of [removed: July] [added: October] 7, [removed: 2017](http://www.sec.gov/Archives/edgar/data/277948/000119312517225733/d424183dex31.htm)] [added: 2020](http://www.sec.gov/Archives/edgar/data/277948/000119312520268055/d942836dex31.htm)] | [removed: July 11, 2017,] [added: | | October 13, 2020] Exhibit 3.1, Form 8-K | [added: | |]

| Instruments Defining the Rights of Security Holders, Including Debentures: | | | [added: | | | | | |]

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

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

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

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

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

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

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