CSX (CSX) 10-K risk factor changes: FY2023 vs FY2022

New [removed: legislation or] [added: legislation,] regulatory changes [added: or other governmental actions] could impact the Company's earnings or restrict its ability to independently negotiate prices.

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

In addition, statutes or regulations [removed: imposing] [added: that, among other things, impose] price constraints or affecting rail-to-rail competition could adversely affect the Company's profitability.

The Company is subject to the jurisdiction of various regulatory agencies, including the STB, FRA, PHMSA, TSA, EPA and other state, [removed: provincial] [added: provincial, local] and federal regulatory agencies for a variety of economic, health, safety, labor, environmental, tax, [removed: legal] [added: legal, cybersecurity] and other matters.

CSXT, as a common carrier by rail, [removed: is required by law to transport] [added: transports] hazardous materials, which could expose the Company to significant costs and [removed: claims.][added: claims in the event of a train accident.]

A train accident involving the transport of hazardous materials could result in significant [added: costs and] claims arising from personal injury, property or natural resource damage, environmental penalties and remediation obligations.

Such claims, if insured, could exceed existing insurance coverage or insurance may not continue to be available at commercially reasonable [removed: rates.][added: rates, which could have a material adverse effect on the Company's results of operations, financial condition, and liquidity.]

Under federal regulations, CSXT is required to transport [added: certain] hazardous materials under the legal duty referred to as the common carrier [removed: mandate.][added: mandate regardless of risk or potential exposure to loss.]

CSXT is [removed: also] required to comply with regulations regarding the handling of hazardous [removed: materials.][added: materials and has a legal obligation to transport certain hazardous materials under the common carrier mandate.]

[removed: In November 2008,] [added: Applicable rules issued by] the TSA [removed: issued final rules placing] [added: place] significant [removed: new] security and safety requirements on passenger and freight railroad carriers, rail transit systems and facilities that ship hazardous materials by rail.

CSX [removed: 2022] [added: 2023] Form 10-K p.7

As part of its railroad and other operations, the Company is subject to various claims and lawsuits related to disputes over commercial practices, labor and unemployment matters, occupational and personal injury claims, property [added: damage or freight] damage, environmental and other matters.

The security, stability and availability of the Company’s and its key third-party vendors’ [added: information] technology systems are critical to its ability to operate safely and effectively and to compete within the transportation industry.

A disruption or compromise of the Company’s [added: or its key third-party vendors'] information technology systems, even for short periods of time, and any resulting theft or compromise of Company confidential or proprietary information (including personal information), could adversely affect the Company’s business or reputation, create significant legal, regulatory or financial exposure and have a material adverse impact on CSX’s business, financial condition or operations.

CSX [removed: 2022] [added: 2023] Form 10-K p.8

These incidents may include, among other things, malware, ransomware, distributed denial of service attacks, social engineering, phishing, theft, malfeasance or improper access by employees or third-party vendors, [added: software bugs, server malfunctions, software or hardware failures,] human error, fraud, or other modes of attack or disruption.

Attacks of these nature are increasing in frequency, levels of persistence, intensity and [removed: sophistication.][added: sophistication, including by nation-state threat actors or those associated with nation-states.]

Further, the Company may be at increased risk of [added: experiencing] a cyber-attack as a result of being a component of the critical U.S. infrastructure.

[removed: A public health crisis could also increase the risk that the] [added: The] Company or its third-party vendors may [added: also] experience cybersecurity incidents as a result of employees, third-party vendors and other third parties with which they interact working remotely on less secure systems and environments.

Due to applicable [removed: laws] [added: laws, rules] and regulations or contractual obligations, CSX may be held responsible for data breaches, cyber-attacks or other similar incidents attributed to its third-party vendors as they relate to the information CSX shares with them.

Additionally, if CSX is unable to [added: successfully] acquire, develop or implement new technology, [added: including artificial intelligence,] it may suffer a competitive disadvantage within the rail industry and with companies providing other modes of transportation [removed: service.][added: services.]

CSX [removed: 2022] [added: 2023] Form 10-K p.9

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

CSX [removed: 2022] [added: 2023] Form 10-K p.10

Changes in natural gas prices, or other factors impacting demand for electricity, could impact future power generation at coal-fired plants, which would affect the Company's [removed: domestic] coal volumes and revenues.

Instability or disruptions of the capital markets, including credit markets, [added: significant increases in interest rates,] or the deterioration of the Company’s financial condition due to internal or external factors, could restrict or prohibit access and could increase financing costs.

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

CSX [removed: 2022] [added: 2023] Form 10-K p.11

These final and proposed laws and regulations take the form of restrictions, caps, taxes or other controls on [removed: emissions.][added: emissions as well as requirements to disclose information relating to climate change.]

Any of these pending or proposed laws or regulations, [removed: 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.

CSXT, as a common carrier by rail, is required by law to transport hazardous materials and could be adversely impacted by non-compliance with applicable regulations or from regulatory and legislative changes.

If such an event takes place, the Company may be required to incur significant expenses in excess of existing cybersecurity insurance coverage.

In addition, CSX may become subject to legal requirements to disclose climate change related information and may become subject to demands or expectations by its supply chain partners, customers or other stakeholders to disclose information relating to climate risk or set related targets or goals.

The Company's current practices with respect to climate risk disclosure may fail to meet these developing legal requirements or stakeholder demands or expectations.

In addition, legislative or regulatory uncertainties and change regarding climate-related risks, including inconsistent perspectives or requirements, are likely to result in higher regulatory, compliance, credit, reputational and other risks and costs.

CSX 2023 Form 10-K p.12

CSX CORPORATION

PART I

While CSX’s security protocols have detected attempts to gain unauthorized access to the Company’s information technology systems, none of such attempts have resulted in any material breach of or disruption to the Company’s systems.

For example, CSX has experienced distributed denial of service attacks that have resulted in brief system disruptions, but none have resulted in access to CSX systems.

Additionally, despite routine security assessment of the Company’s key third-party vendors, some vendors have experienced cyber-attacks in the past, but none of such attacks have had a material adverse impact on CSX’s business or operations.

Revenue adequacy - The achievement of a rate of return on investment [added: over time] at least equal to the industry cost of investment capital, as measured by the STB.

- Revenue of [removed: $14.9 billion increased $2.3] [added: $14.7] billion [added: decreased $196 million] or [removed: 19%] [added: 1%] versus the prior year.

- Expenses of [removed: $8.8] [added: $9.1] billion increased [removed: $1.9 billion] [added: $266 million] or [removed: 27%] [added: 3%] year over year.

- Operating income of [removed: $6.0] [added: $5.6] billion [removed: increased $429] [added: decreased $462] million or 8% year over year.

- Operating ratio of [removed: 59.5%] [added: 62.1%] increased [removed: 420] [added: 260] basis points from [removed: 55.3%.][added: 59.5%.]

- Earnings per diluted share of [removed: $1.95 increased $0.27] [added: $1.85 decreased $0.10] or [removed: 16%] [added: 5%] year over year.

The following section generally discusses the Company's results of operations and financial condition for the year ended December 31, [removed: 2022,] [added: 2023,] compared to the year ended December 31, [removed: 2021.][added: 2022.]

A discussion regarding results of operations and financial condition for the year ended December 31, [removed: 2021,] [added: 2022,] compared to the year ended December 31, [removed: 2020,] [added: 2021,] can be found in Part II, Item 7 of CSX's Annual Report on Form 10-K for the year ended [removed: 2021,] [added: 2022,] filed with the Securities and Exchange Commission on February [removed: 16, 2022.][added: 15, 2023.]

[removed: 2022] [added: 2023] vs. [removed: 2021] [added: 2022] Results of Operations

| | | | [removed: 2022] [added: 2023] | | | | | | [removed: 2021] [added: 2022] | | | | | | *$ Change* | | | | | | *% Change* | | | | | |

| Labor and Fringe | | | [removed: 2,861] [added: 3,024] | | | | | | [removed: 2,550] [added: 2,861] | | | | | | [removed: *(311)*] [added: *(163)*] | | | | | | [removed: *(12)*] [added: *(6)*] | | | | | |

| Purchased Services and Other | | | [removed: 2,685] [added: 2,764] | | | | | | [removed: 2,135] [added: 2,685] | | | | | | [removed: *(550)*] [added: *(79)*] | | | | | | [removed: *(26)*] [added: *(3)*] | | | | | |

| Depreciation and Amortization | | | [removed: 1,500] [added: 1,611] | | | | | | [removed: 1,420] [added: 1,500] | | | | | | [removed: *(80)*] [added: *(111)*] | | | | | | [removed: *(6)*] [added: *(7)*] | | | | | |

| Equipment and Other Rents | | | [removed: 396] [added: 354] | | | | | | [removed: 364] [added: 396] | | | | | | [removed: *(32)*] [added: *42*] | | | | | | [removed: *(9)*] [added: *11*] | | | | | |

| Gains on Property Dispositions | | | [removed: (238)] [added: (34)] | | | | | | [removed: (454)] [added: (238)] | | | | | | [removed: *(216)*] [added: *(204)*] | | | | | | [removed: *(48)*] [added: *(86)*] | | | | | |

| Total Expense | | | [removed: 8,830] [added: 9,096] | | | | | | [removed: 6,928] [added: 8,830] | | | | | | [removed: *(1,902)*] [added: *(266)*] | | | | | | [removed: *(27)*] [added: *(3)*] | | | | | |

| Operating Income | | | [removed: 6,023] [added: 5,561] | | | | | | [removed: 5,594] [added: 6,023] | | | | | | [removed: *429*] [added: *(462)*] | | | | | | [removed: *8*] [added: *(8)*] | | | | | |

| Interest Expense | | | [removed: (742)] [added: (809)] | | | | | | [removed: (722)] [added: (742)] | | | | | | [removed: *(20)*] [added: *(67)*] | | | | | | [removed: *(3)*] [added: *(9)*] | | | | | |

| Other Income - Net | | | [removed: 133] [added: 139] | | | | | | [removed: 79] [added: 133] | | | | | | [removed: *54*] [added: *6*] | | | | | | [removed: *68*] [added: *5*] | | | | | |

| Income Tax Expense | | | [removed: (1,248)] [added: (1,176)] | | | | | | [removed: (1,170)] [added: (1,248)] | | | | | | [removed: *(78)*] [added: *72*] | | | | | | [removed: *(7)*] [added: *6*] | | | | | |

| Net Earnings | | | $ | [removed: 4,166] [added: 3,715] | | | | | $ | [removed: 3,781] [added: 4,166] | | | | | *$* | [removed: *385*] [added: *(451)*] | | | | | [removed: *10*] [added: *(11)*] | | | | | |

| Earnings Per Diluted Share | | | $ | [removed: 1.95] [added: 1.85] | | | | | $ | [removed: 1.68] [added: 1.95] | | | | | *$* | [removed: *0.27*] [added: *(0.10)*] | | | | | [removed: *16*] [added: *(5)*] | | *%* | | | |

| Operating Ratio | | | [removed: 59.5] [added: 62.1] | | % | | | | [removed: 55.3] [added: 59.5] | | % | | | | | | | | | | [removed: *(420)*] [added: *(260)*] | | | bps | | |

[removed: On June 1, 2022, CSX acquired Pan Am for a purchase] [added: The closing] price of $600 million [added: was] funded through a combination of common stock valued at $422 million and cash totaling $178 million.

For further details, refer to Note 17, *Business [removed: Combinations*.][added: Combinations.*]

| | | | [removed: 2022] [added: 2023] | | | | | | [removed: 2021] [added: 2022] | | | | | | *% Change* | | | | | | [removed: 2022] [added: 2023] | | | | | | [removed: 2021] [added: 2022] | | | | | | *% Change* | | | | | | [removed: 2022] [added: 2023] | | | | | | [removed: 2021] [added: 2022] | | | | | | *% Change* | | |

| *Chemicals* | | | [removed: 641] [added: 642] | | | | | | [removed: 659] [added: 641] | | | | | | [removed: (3)] [added: —] | | % | | | | $ | [removed: 2,584] [added: 2,599] | | | | | $ | [removed: 2,421] [added: 2,584] | | | | | [removed: 7] [added: 1] | | % | | | | $ | [removed: 4,031] [added: 4,048] | | | | | $ | [removed: 3,674] [added: 4,031] | | | | | [removed: 10] [added: —] | | % |

| *Agricultural and Food Products* | | | [removed: 481] [added: 468] | | | | | | [removed: 467] [added: 481] | | | | | | [removed: 3] [added: (3)] | | % | | | | [removed: 1,664] [added: 1,657] | | | | | | [removed: 1,461] [added: 1,664] | | | | | | [removed: 14] [added: —] | | % | | | | [removed: 3,459] [added: 3,541] | | | | | | [removed: 3,128] [added: 3,459] | | | | | | [removed: 11] [added: 2] | | % |

| *Automotive* | | | [removed: 338] [added: 388] | | | | | | [removed: 318] [added: 338] | | | | | | [removed: 6] [added: 15] | | % | | | | [removed: 1,054] [added: 1,219] | | | | | | [removed: 886] [added: 1,054] | | | | | | [removed: 19] [added: 16] | | % | | | | [removed: 3,118] [added: 3,142] | | | | | | [removed: 2,786] [added: 3,118] | | | | | | [removed: 12] [added: 1] | | % |

| *Minerals* | | | [removed: 337] [added: 358] | | | | | | [removed: 325] [added: 337] | | | | | | [removed: 4] [added: 6] | | % | | | | [removed: 658] [added: 733] | | | | | | [removed: 587] [added: 658] | | | | | | [removed: 12] [added: 11] | | % | | | | [removed: 1,953] [added: 2,047] | | | | | | [removed: 1,806] [added: 1,953] | | | | | | [removed: 8] [added: 5] | | % |

| *Forest Products* | | | [removed: 291] [added: 282] | | | | | | [removed: 296] [added: 291] | | | | | | [removed: (2)] [added: (3)] | | % | | | | [removed: 996] [added: 1,012] | | | | | | [removed: 918] [added: 996] | | | | | | [removed: 8] [added: 2] | | % | | | | [removed: 3,423] [added: 3,589] | | | | | | [removed: 3,101] [added: 3,423] | | | | | | [removed: 10] [added: 5] | | % |

| *Metals and Equipment* | | | [removed: 267] [added: 284] | | | | | | [removed: 277] [added: 267] | | | | | | [removed: (4)] [added: 6] | | % | | | | [removed: 828] [added: 917] | | | | | | [removed: 796] [added: 828] | | | | | | [removed: 4] [added: 11] | | % | | | | [removed: 3,101] [added: 3,229] | | | | | | [removed: 2,874] [added: 3,101] | | | | | | [removed: 8] [added: 4] | | % |

| *Fertilizers* | | | [removed: 203] [added: 199] | | | | | | [removed: 229] [added: 203] | | | | | | [removed: (11)] [added: (2)] | | % | | | | [removed: 455] [added: 516] | | | | | | [removed: 470] [added: 455] | | | | | | [removed: (3)] [added: 13] | | % | | | | [removed: 2,241] [added: 2,593] | | | | | | [removed: 2,052] [added: 2,241] | | | | | | [removed: 9] [added: 16] | | % |

| Total Merchandise | | | [removed: 2,558] [added: 2,621] | | | | | | [removed: 2,571] [added: 2,558] | | | | | | [removed: (1)] [added: 2] | | % | | | | [removed: 8,239] [added: 8,653] | | | | | | [removed: 7,539] [added: 8,239] | | | | | | [removed: 9] [added: 5] | | % | | | | [removed: 3,221] [added: 3,301] | | | | | | [removed: 2,932] [added: 3,221] | | | | | | [removed: 10] [added: 2] | | % |

| Intermodal | | | [removed: 2,963] [added: 2,766] | | | | | | [removed: 2,976] [added: 2,963] | | | | | | [removed: —] [added: (7)] | | % | | | | [removed: 2,306] [added: 2,060] | | | | | | [removed: 2,039] [added: 2,306] | | | | | | [removed: 13] [added: (11)] | | % | | | | [removed: 778] [added: 745] | | | | | | [removed: 685] [added: 778] | | | | | | [removed: 14] [added: (4)] | | % |

| Coal | | | [removed: 697] [added: 755] | | | | | | [removed: 706] [added: 697] | | | | | | [removed: (1)] [added: 8] | | % | | | | [removed: 2,434] [added: 2,484] | | | | | | [removed: 1,790] [added: 2,434] | | | | | | [removed: 36] [added: 2] | | % | | | | [removed: 3,492] [added: 3,290] | | | | | | [removed: 2,535] [added: 3,492] | | | | | | [removed: 38] [added: (6)] | | % |

| Trucking [removed: (a)] | | | — | | | | | | — | | | | | | — | | % | | | | [removed: 966] [added: 882] | | | | | | [removed: 410] [added: 966] | | | | | | [removed: 136] [added: (9)] | | % | | | | — | | | | | | — | | | | | | — | | % |

| Other | | | — | | | | | | — | | | | | | — | | % | | | | [removed: 908] [added: 578] | | | | | | [removed: 744] [added: 908] | | | | | | [removed: 22] [added: (36)] | | % | | | | — | | | | | | — | | | | | | — | | % |

| Total | | | [removed: 6,218] [added: 6,142] | | | | | | [removed: 6,253] [added: 6,218] | | | | | | *(1)* | | *%* | | | | $ | [removed: 14,853] [added: 14,657] | | | | | $ | [removed: 12,522] [added: 14,853] | | | | | [removed: *19*] [added: *(1)*] | | *%* | | | | $ | [removed: 2,389] [added: 2,386] | | | | | $ | [removed: 2,003] [added: 2,389] | | | | | [removed: *19*] [added: *—*] | | *%* |

Total revenue [removed: increased] [added: decreased] by [removed: $2.3 billion] [added: $196 million] in [removed: 2022,] [added: 2023,] or [removed: 19%,] [added: 1%,] when compared to the previous year primarily due to [removed: higher] [added: decreases in other revenue, lower] fuel recovery, pricing [removed: gains that include the benefit of higher] [added: declines in] export coal [removed: benchmark rates, and] [added: due to] the [removed: inclusion] [added: impact] of [removed: Quality Carriers’ results.][added: lower benchmark rates and declines in intermodal volume.]

Economic Profit (CSX Cash Earnings or CCE) \- A non-GAAP measure designed to incentivize strategic investments earning more than the required return.

Economic Profit is calculated as CSX’s gross cash earnings (after-tax adjusted EBITDA) minus the capital charge (long-term average cost of capital) on gross operating assets.

2023 HIGHLIGHTS

| Revenue | | | $ | 14,657 | | | | | $ | 14,853 | | | | | *$* | *(196)* | | | | | *(1)* | | *%* | | | |

| Fuel | | | 1,377 | | | | | | 1,626 | | | | | | *249* | | | | | | *15* | | | | | |

These declines were partially offset by pricing and volume gains in merchandise and higher coal volumes.

Chemicals - Increased shipments of export plastics, waste, and sand were offset by lower shipments of materials used in making plastics.

Agricultural and Food Products – Decreased primarily due to lower shipments of ethanol and export grain.

Lower volume was due to decreased international shipments driven by high inventory levels and lower imports.

Domestic shipments increased due to growth with key customers as well as the prior year impact of supply-side constraints.

Export coal increased due to higher shipments of metallurgical and thermal coal.

Domestic coal decreased due to lower shipments of coal to northern utility plants.

Other revenue was $330 million lower, primarily resulting from lower intermodal storage and equipment usage.

- An increase of $144 million was driven by inflation.

- An increase of $89 million was due to the impacts of higher headcount and union employee vacation and sick benefits.

- Prior year amounts included $32 million of out-of-period labor and benefit costs due to the agreement reached with labor unions.

- Other costs decreased by $4 million due to non-significant items.

- An increase of $101 million was due to higher operating support costs, which were primarily due to inflation and higher repair and maintenance costs.

These increases were partially offset by lower volume and reduced congestion in intermodal operations.

- A decrease of $54 million was due to insurance recoveries in the current year.

- All other costs increased $32 million as higher technology spending, inflation and other increases were partially offset by lower trucking expenses and other non-significant items.

Fuel expense decreased $249 million primarily due to a 19% decrease in locomotive fuel prices, partially offset by higher fuel consumption.

These expenses decreased $42 million primarily due to lower car hire costs from improved car cycle times, partially offset by costs related to higher automotive volume.

*Economic Profit*

Management believes Economic Profit (CSX Cash Earnings or CCE) provides additional perspective to investors about financial returns generated by the business by representing a profit generated over and above the cost of capital used by the business to generate that profit.

Economic Profit is designed to incentivize strategic investments that earn more than the required return.

Increases in Economic Profit indicate that the Company is effectively allocating capital and rewarding shareholders by generating growth in excess of the incremental cost of capital associated with reinvestment in the business.

This measure should be considered in addition to, rather than a substitute for, net income.

This measure is defined by the Company as gross cash earnings minus the capital charge on gross operating assets.

Gross cash earnings is calculated as Adjusted Earnings before Interest, Taxes, Depreciation and Amortization ("Adjusted EBITDA"), less an assumed 15% cash tax.

The capital charge uses a long-term average cost of capital of 8% multiplied by the gross operating assets.

CSX's gross operating assets include gross properties and other non-cash assets, net of non-interest bearing liabilities.

The following table reconciles net income (GAAP measure) to Economic Profit (non-GAAP measure).

| Net Income | | | $ | 3,715 | | $ | 4,166 | |

| Add: Income Tax Expense | | | 1,176 | | | 1,248 | | |

| Remove: Other Income - Net | | | (139) | | | (133) | | |

| Add: Interest Expense | | | 809 | | | 742 | | |

| Add: Depreciation, Amortization, and Operating Lease Expense | | | 1,720 | | | 1,609 | | |

| Remove: Unusual Items (a) | | | — | | | (144) | | |

| Adjusted EBITDA | | | 7,281 | | | 7,488 | | |

CSX 2022 Form 10-K p.22

CSX 2022 Form 10-K p.23

2022 HIGHLIGHTS

| Revenue | | | $ | 14,853 | | | | | $ | 12,522 | | | | | *$* | *2,331* | | | | | *19* | | *%* | | | |

| Fuel | | | 1,626 | | | | | | 913 | | | | | | *(713)* | | | | | | *(78)* | | | | | |

*Appointment of New Chief Executive Officer*

On September 15, 2022, CSX announced that, as part of a planned succession process, its Board of Directors appointed Joseph R.

Hinrichs as the Company’s new President and Chief Executive Officer and as a member of the Board of Directors, effective September 26, 2022.

*Acquisition of Pan Am Systems, Inc.*

Accordingly, the consolidated 2022 results include the results of Pan Am's operations after the acquisition date.

CSX 2022 Form 10-K p.24

*(a) Effective third quarter 2021, Trucking revenue is comprised of revenue from the operations of Quality Carriers, which was acquired by CSX effective July 1, 2021.*

CSX 2022 Form 10-K p.25

Chemicals - Decreased due to lower shipments of crude oil and other energy-related commodities as well as waste.

Agricultural and Food Products – Increased as a result of higher shipments of ethanol, sweeteners and vegetable oils, and grain.

Lower domestic shipments due to continued supply-side constraints, more subdued seasonal demand than prior year and a softening truck market were mostly offset by increased international shipments.

Domestic coal decreased due to lower shipments of utility coal, including the impacts of limited coal availability during mine disruptions during the year, as well as lower steel and industrial shipments.

Export coal decreased due to lower shipments of thermal coal, partially driven by reduced capacity at Curtis Bay coal pier due to an outage at a portion of the facility.

The facility is now back at full capacity.

Other revenue was $164 million higher than prior year driven by increases in revenue for intermodal storage and equipment usage, increases in demurrage and higher affiliate revenue.

- The impacts of agreements reached with labor unions as well as inflation totaled $199 million.

Of the total, $32 million relates to labor and benefits in prior years.

- The inclusion of Quality Carriers' operations for the full year in 2022 versus a portion of the year in 2021 resulted in increased costs of $74 million.

- Other costs increased $67 million primarily due to hiring and retention costs, the inclusion of Pan Am's operations and other non-significant items.

- The inclusion of Quality Carriers' operations for the full year in 2022 versus a portion of the year in 2021 drove $280 million of additional costs.

- Higher operating support costs, primarily due to inflation, higher intermodal terminal costs and an increased active locomotive fleet, drove an increase of $182 million.

- Adjustments to environmental reserves resulted in $21 million higher expense.

- All other costs increased $67 million primarily due to several non-significant items including Pan Am's operations and acquisition-related costs.

Fuel expense increased $713 million primarily due to a 66% price increase in locomotive fuel prices and the inclusion of non-locomotive fuel used for trucking.

These expenses increased $32 million primarily due to increased car hire costs as well as the addition of Quality Carriers' costs.

Car hire costs increased due to higher days per load and inflation, partially offset by lower volume.

Related to this transaction, CSX recognized gains of $144 million in 2022 and $349 million in 2021.

These decreases were partially offset by higher net cash provided by operating activities.

| | | | 2022 | | | | | | 2021 | | | | | | | | |

| Other Investing Activities *(a)* | | | n/a | | | | | | (4) | | | | | | | | |

*(a) Effective first quarter 2022, the results of other investing activities are no longer included in free cash flow.

Prior year has not been restated as the change is immaterial.*

Train velocity measures the profiled schedule of trains (from departure to arrival and all interim time), and train profiles are periodically updated to align with a changing operation.

Train velocity declined 10% relative to 2021.

Dwell increased by 6% and cars online increased 5% in 2022.

The following information, together with information included in Note 10, *Debt and Credit Agreements*, [added: and Note 13, *Fair Value Measurements*,] 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 [removed: swap.][added: swaps.]

In 2020, the Company executed two forward starting interest rate swaps with [removed: a notional value of $250 million for] an aggregate notional value of $500 million.

In [removed: fourth quarter] 2022, CSX settled a portion equal to $160 million notional value of the [removed: aggregate $500 million] cash flow [removed: hedges, which resulted in CSX receiving a cash payment of $52 million.][added: hedges.]

As of December 31, [removed: 2022,] [added: 2023,] the potential change in fair value [added: of forward starting interest rate swaps] resulting from a hypothetical 10% change in interest rates would not be material.

The swaps are designed to hedge 10 years of interest rate risk associated with market fluctuations attributable to [removed: the Secured Overnight Financing Rate] [added: SOFR] on a cumulative $800 million of fixed rate outstanding notes, which are due between 2036 and 2040.

As of December 31, [removed: 2022,] [added: 2023,] CSX has no floating rate notes outstanding.

The potential decrease in fair value of the Company's fixed rate long-term debt resulting from a hypothetical 10% increase in U.S. Treasury rates, or approximately 40 basis points, is estimated to be [removed: $709] [added: $730] million as of December 31, [removed: 2022,] [added: 2023,] and [removed: $448] [added: $709] million as of December 31, [removed: 2021.][added: 2022.]

| Report of Independent Registered Public Accounting Firm (PCAOB ID: 42) | | | | | | [removed: [46](#i40071d158dbf4c538fc6bcfb987a65d1_76)] [added: [50](#i40071d158dbf4c538fc6bcfb987a65d1_76)] | | |

| Consolidated Income Statements for the Years Ended: | | | | | | [removed: [48](#i40071d158dbf4c538fc6bcfb987a65d1_79)] [added: [52](#i40071d158dbf4c538fc6bcfb987a65d1_79)] | | |

| Consolidated Comprehensive Income Statements for the Years Ended: | | | | | | [removed: [49](#i40071d158dbf4c538fc6bcfb987a65d1_82)] [added: [53](#i40071d158dbf4c538fc6bcfb987a65d1_82)] | | |

| Consolidated Balance Sheets as of: | | | | | | [removed: [50](#i40071d158dbf4c538fc6bcfb987a65d1_85)] [added: [54](#i40071d158dbf4c538fc6bcfb987a65d1_85)] | | |

| Consolidated Cash Flow Statements for Years Ended: | | | | | | [removed: [51](#i40071d158dbf4c538fc6bcfb987a65d1_88)] [added: [55](#i40071d158dbf4c538fc6bcfb987a65d1_88)] | | |

| Consolidated Statements of Changes in Shareholders' Equity: | | | | | | [removed: [52](#i40071d158dbf4c538fc6bcfb987a65d1_91)] [added: [56](#i40071d158dbf4c538fc6bcfb987a65d1_91)] | | |

| Notes to Consolidated Financial Statements | | | | | | [removed: [53](#i40071d158dbf4c538fc6bcfb987a65d1_94)] [added: [57](#i40071d158dbf4c538fc6bcfb987a65d1_94)] | | |

We have audited the accompanying consolidated balance sheets of CSX Corporation (the Company) as of December 31, [removed: 2022] [added: 2023] and [removed: 2021,] [added: 2022,] the related consolidated statements of income, comprehensive income, [removed: cash flows, and] changes in shareholders’ equity [added: and cash flows] for each of the three years in the period ended December 31, [removed: 2022,] [added: 2023] 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: 2022] [added: 2023] and [removed: 2021,] [added: 2022,] and the results of its operations and its cash flows for each of the three years in the period ended December 31, [removed: 2022,] [added: 2023,] in conformity with U.S. generally accepted accounting principles.

We also have audited, in accordance with [added: the] standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company’s internal control over financial reporting as of December 31, [removed: 2022,] [added: 2023,] 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: 15, 2023] [added: 14, 2024] expressed an unqualified opinion thereon.

| *Description of the Matter* | | | As of December 31, [removed: 2022,] [added: 2023,] assets depreciated under the group-life method comprised 84% of total gross fixed assets of [removed: $48.1] [added: $50.3] 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 conducted by a third-party specialist and analyzed by the Company’s management 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. In years when depreciation studies are not performed, annual data reviews are conducted by a third-party specialist and analyzed by the Company’s management to review the asset service lives. [removed: A depreciation study was performed in 2022 for equipment assets.] For road and track [added: assets and equipment] assets, the most recent depreciation [removed: study was] [added: studies were] performed in 2020 and [removed: was] [added: 2022, respectively. These studies were] evaluated [added: by the Company’s management] in the current year through an annual data review. 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. | | | | | | | | |

| *How We Addressed the Matter in Our Audit* | | | 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 and annual data reviews of its group-life assets. For example, we tested controls over management’s review of [removed: the depreciation study for equipment assets and review of depreciation expense and estimated useful lives. We also tested controls over management’s annual data review of] asset activity [removed: and assumptions] that could impact the estimated useful lives determined in the most recent depreciation [removed: study] [added: studies] of [added: equipment and] road and track 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 and annual data reviews performed by the Company’s third-party specialist and reviewed by management; assessing the completeness and accuracy of the data provided by management to the third-party specialist; and including a specialist on our team to evaluate the methods used by the third-party specialist and reviewed by management in determining [removed: the estimated useful lives and salvage values of assets resulting from the depreciation studies and] [added: if] any changes [added: were necessary] to the estimated useful lives and salvage [removed: values, if any,] [added: values] resulting from the annual data reviews. We compared the [removed: methods] [added: assumptions] used by management to those used throughout the industry and within other depreciation studies. We assessed the historical accuracy of management’s estimates via retrospective review and independently [removed: calculated] [added: recalculated] the current year depreciation rates. | | | | | | | | |

| | | | [removed: 2022] [added: 2023] | | | | | | [removed: 2021] [added: 2022] | | | | | | [removed: 2020] [added: 2021] | | |

| Revenue | | | $ | [removed: 14,853] [added: 14,657] | | | | | $ | [removed: 12,522] [added: 14,853] | | | | | $ | [removed: 10,583] [added: 12,522] | |

| Labor and Fringe | | | [removed: 2,861] [added: 3,024] | | | | | | [removed: 2,550] [added: 2,861] | | | | | | [removed: 2,275] [added: 2,550] | | |

| Purchased Services and Other | | | [removed: 2,685] [added: 2,764] | | | | | | [removed: 2,135] [added: 2,685] | | | | | | [removed: 1,719] [added: 2,135] | | |

| Fuel | | | [removed: 1,626] [added: 1,377] | | | | | | [removed: 913] [added: 1,626] | | | | | | [removed: 541] [added: 913] | | |

| Depreciation and Amortization | | | [removed: 1,500] [added: 1,611] | | | | | | [removed: 1,420] [added: 1,500] | | | | | | [removed: 1,383] [added: 1,420] | | |

| Equipment and Other Rents | | | [removed: 396] [added: 354] | | | | | | [removed: 364] [added: 396] | | | | | | [removed: 338] [added: 364] | | |

| Gains on Property Dispositions | | | [removed: (238)] [added: (34)] | | | | | | [removed: (454)] [added: (238)] | | | | | | [removed: (35)] [added: (454)] | | |

| Total Expense | | | [removed: 8,830] [added: 9,096] | | | | | | [removed: 6,928] [added: 8,830] | | | | | | [removed: 6,221] [added: 6,928] | | |

| Operating Income | | | [removed: 6,023] [added: 5,561] | | | | | | [removed: 5,594] [added: 6,023] | | | | | | [removed: 4,362] [added: 5,594] | | |

| Interest Expense | | | [removed: (742)] [added: (809)] | | | | | | [removed: (722)] [added: (742)] | | | | | | [removed: (754)] [added: (722)] | | |

| Other Income - Net (Note 14) | | | [removed: 133] [added: 139] | | | | | | [removed: 79] [added: 133] | | | | | | [removed: 19] [added: 79] | | |

| Earnings Before Income Taxes | | | [removed: 5,414] [added: 4,891] | | | | | | [removed: 4,951] [added: 5,414] | | | | | | [removed: 3,627] [added: 4,951] | | |

| Income Tax Expense (Note 12) | | | [removed: (1,248)] [added: (1,176)] | | | | | | [removed: (1,170)] [added: (1,248)] | | | | | | [removed: (862)] [added: (1,170)] | | |

| Net Earnings | | | $ | [removed: 4,166] [added: 3,715] | | | | | $ | [removed: 3,781] [added: 4,166] | | | | | $ | [removed: 2,765] [added: 3,781] | |

| Basic | | | $ | [removed: 1.95] [added: 1.85] | | | | | $ | [removed: 1.68] [added: 1.95] | | | | | $ | [removed: 1.20] [added: 1.68] | |

| Assuming Dilution | | | $ | [removed: 1.95] [added: 1.85] | | | | | $ | [removed: 1.68] [added: 1.95] | | | | | $ | [removed: 1.20] [added: 1.68] | |

| Basic | | | [removed: 2,136] [added: 2,008] | | | | | | [removed: 2,250] [added: 2,136] | | | | | | [removed: 2,300] [added: 2,250] | | |

| Assuming Dilution | | | [removed: 2,141] [added: 2,013] | | | | | | [removed: 2,255] [added: 2,141] | | | | | | [removed: 2,305] [added: 2,255] | | |

CSX [removed: 2022] [added: 2023] Form 10-K p.48

In 2023, CSX executed two partial settlements equal to $226 million notional value of the cash flow hedges.

As of December 31, 2023, these cash flow hedges had an aggregate notional value of $114 million and an asset value of $48 million.

In 2023, CSX entered into two separate fixed-to-floating interest rate swaps classified as fair value hedges.

The swaps are designed to hedge 10 years of interest rate risk associated with market fluctuations attributable to the Secured Overnight Financing Rate ("SOFR") on a cumulative $250 million of fixed rate outstanding notes which are due in 2033.

As of December 31, 2023, the cumulative fair value of these swaps was a $19 million asset.

As of December 31, 2023, the cumulative fair value of these swaps was a $107 million liability.

As of December 31, 2023, the potential change in fair value of fixed-to-floating interest rate swaps resulting from a hypothetical 10% change in interest rates would not be material.

| | | | December 31, 2023 | | | | | |

| | | | December 31, 2023 | | | | | |

| | | | December 31, 2023 | | | | | |

| | | | December 31, 2023 | | | | | |

| | | | December 31, 2023 | | | | | |

February 14, 2024

CSX 2023 Form 10-K p.51

CSX 2023 Form 10-K p.52

CSX 2023 Form 10-K p.53

| | | | 2023 | | | | | | 2022 | | |

CSX 2023 Form 10-K p.54

The Company recognized an unrealized gain of $80 million and $8 million net of tax during the years ended December 31, 2022 and 2021, respectively, in the consolidated statements of comprehensive income with the related asset on the balance sheet as of December 31, 2022.

The gain associated with the settled portion of the hedges will continue to be classified in accumulated other comprehensive income (“AOCI”) until the associated debt instrument is issued in the future.

Upon final 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, 2022, the cumulative fair value of these swaps was a $118 million liability, which is included in other long-term liabilities on the consolidated balance sheet.

The associated cumulative adjustment to the hedged notes is included in long-term debt.

Gains and losses resulting from changes in fair value of the interest rate swaps offset changes in the fair value of the hedged portion of the underlying debt with no gain or loss recognized due to hedge ineffectiveness.

The difference in the net fixed-to-float interest settlement on the derivatives is recognized in interest expense and was not material for the year ending at December 31, 2022.

The swaps will expire in 2032.

If settled early, the remaining liability or asset will be amortized over the remaining life of the associated notes.

CSX 2022 Form 10-K p.44

| | | | December 31, 2021 | | | | | |

| | | | December 31, 2020 | | | | | |

CSX 2022 Form 10-K p.45

CSX 2022 Form 10-K p.46

February 15, 2023

CSX 2022 Form 10-K p.47

| | | | 2022 | | | | | | 2021 | | |

On June 1, 2022, CSX completed its acquisition of Pan Am Systems, Inc. (“Pan [removed: Am”)] [added: Am”),] which is the parent company of Pan Am Railways, Inc. This acquisition [removed: expands] [added: expanded] CSXT’s reach in the Northeastern United States.

For further details, refer to Note 17, *Business [removed: Combinations*.][added: Combinations.*]

[added: For further details, refer to Note 17, *Business Combinations.*] CSX Intermodal Terminals owns and operates a system of intermodal terminals, predominantly in the eastern United States, and also provides drayage services (the pickup and delivery of intermodal shipments) for certain customers.

CSX [removed: 2022] [added: 2023] Form 10-K p.3

During [removed: 2022,] [added: 2023,] the Company's services generated [removed: $14.9] [added: $14.7] billion of revenue and served four primary lines of business: merchandise, intermodal, coal and trucking.

- The merchandise business shipped 2.6 million carloads [removed: (41%] [added: (43%] of volume) and generated [removed: $8.2] [added: $8.7] billion in revenue [removed: (55%] [added: (59%] of revenue) in [removed: 2022.][added: 2023.]

The Company’s merchandise business is comprised of shipments in the following diverse markets: chemicals, agricultural and food products, [removed: minerals,] automotive, [added: minerals,] forest products, metals and equipment, and fertilizers.

- The intermodal business shipped [removed: 3.0] [added: 2.8] million units [removed: (48%] [added: (45%] of volume) and generated [removed: $2.3] [added: $2.1] billion in revenue [removed: (16%] [added: (14%] of revenue) in [removed: 2022.][added: 2023.]

- The coal business shipped [removed: 697] [added: 755] thousand carloads [removed: (11%] [added: (12%] of volume) and generated [removed: $2.4] [added: $2.5] billion in revenue [removed: (16%] [added: (17%] of revenue) in [removed: 2022.][added: 2023.]

- The trucking business generated [removed: $966] [added: $882] million, or [removed: 7%,] [added: 6%,] of revenue in [removed: 2022.][added: 2023.]

Other revenue accounted for [removed: 6%] [added: 4%] of the Company’s total revenue in [removed: 2022.][added: 2023.]

The Company had more than [removed: 22,500] [added: 23,000] employees as of December [removed: 2022,] [added: 2023,] which includes approximately [removed: 17,100] [added: 17,700] employees that are members of a rail labor union.

The FRA Personal Injury Frequency Index, a measure of the number of FRA-reportable injuries per 200,000 man-hours, was [removed: 0.96] [added: 0.89] in [removed: both 2022] [added: 2023] and [removed: 2021, remaining flat] [added: 1.01 in 2022, improving] year over year.

CSX [removed: 2022] [added: 2023] Form 10-K p.4

As of December 31, [removed: 2022,] [added: 2023,] approximately [removed: 21%] [added: 23%] of CSX's overall workforce and [removed: 36%] [added: 37%] of management was diverse, calculated as the percentage of males of color and all females.

In [removed: 2022,] [added: 2023,] CSX was recognized as a “Best Place to Work for Disability Inclusion” by Disability:IN and the American Association of People with Disabilities for a [removed: fourth] [added: fifth] consecutive year after receiving a top score on their disability equality index.

CSX [removed: 2022] [added: 2023] Form 10-K p.5

[removed: Management’s] [added: *Management’s] Discussion and Analysis of Financial [removed: Condition.][added: Condition and Results of Operations.*]

For additional information concerning business conducted by the Company during [removed: 2022,] [added: 2023,] see Item 7.

[removed: Management's] [added: *Management's] Discussion and Analysis of Financial Condition and Results of [removed: Operations.][added: Operations.*]

CSX [removed: 2022] [added: 2023] Form 10-K p.6

Collective agreements under the Railway Labor Act do not expire, but continue until amended, and formal notices to amend these agreements may be served as early as November 1, 2024.

*Risk Factors*.

In the face of supply chain disruption and a tight labor market, CSX continues to focus on ensuring the hiring pipeline for frontline railroaders is adequate to meet customer needs and has implemented new recruiting and staffing measures.

Risk Factors.

For the fiscal year ended December 31, [removed: 2022][added: 2023]

[removed: ][added: ]

On June 30, [removed: 2022] [added: 2023] (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: $62] [added: $68] billion (based on the close price as reported on the NASDAQ National Market System on such date).

There were [removed: 2,062,605,434] [added: 1,959,134,342] shares of Common Stock outstanding on January 31, [removed: 2023] [added: 2024] (the latest practicable date that is closest to the filing date).

Portions of the Registrant’s Definitive Proxy Statement (the “Proxy Statement”) to be filed no later than 120 days after the end of the fiscal year with respect to its [removed: 2023] [added: 2024] annual meeting of shareholders.

CSX [removed: 2022] [added: 2023] Form 10-K p.1

| | | | [1B. Unresolved Staff Comments](#i40071d158dbf4c538fc6bcfb987a65d1_16) | | | | | | | | | [removed: [12](#i40071d158dbf4c538fc6bcfb987a65d1_16)] [added: [13](#i40071d158dbf4c538fc6bcfb987a65d1_16)] | | |

| 2. | | | [Properties](#i40071d158dbf4c538fc6bcfb987a65d1_19) | | | | | | | | | [removed: [13](#i40071d158dbf4c538fc6bcfb987a65d1_19)] [added: [16](#i40071d158dbf4c538fc6bcfb987a65d1_19)] | | |

| 3. | | | [Legal Proceedings](#i40071d158dbf4c538fc6bcfb987a65d1_22) | | | | | | | | | [removed: [17](#i40071d158dbf4c538fc6bcfb987a65d1_22)] [added: [20](#i40071d158dbf4c538fc6bcfb987a65d1_22)] | | |

| 4. | | | [Mine Safety Disclosures](#i40071d158dbf4c538fc6bcfb987a65d1_25) | | | | | | | | | [removed: [17](#i40071d158dbf4c538fc6bcfb987a65d1_25)] [added: [20](#i40071d158dbf4c538fc6bcfb987a65d1_25)] | | |

| | | | [Executive Officers of the Registrant](#i40071d158dbf4c538fc6bcfb987a65d1_28) | | | | | | | | | [removed: [18](#i40071d158dbf4c538fc6bcfb987a65d1_28)] [added: [21](#i40071d158dbf4c538fc6bcfb987a65d1_28)] | | |

| 5. | | | [Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities](#i40071d158dbf4c538fc6bcfb987a65d1_31) | | | | | | | | | [removed: [20](#i40071d158dbf4c538fc6bcfb987a65d1_31)] [added: [23](#i40071d158dbf4c538fc6bcfb987a65d1_31)] | | |

| 6. | | | [Reserved](#i40071d158dbf4c538fc6bcfb987a65d1_34) | | | | | | | | | [removed: [21](#i40071d158dbf4c538fc6bcfb987a65d1_34)] [added: [25](#i40071d158dbf4c538fc6bcfb987a65d1_34)] | | |

| 7. | | | [Management's Discussion and Analysis of Financial Condition and Results of Operations](#i40071d158dbf4c538fc6bcfb987a65d1_37) | | | | | | | | | [removed: [22](#i40071d158dbf4c538fc6bcfb987a65d1_37)] [added: [26](#i40071d158dbf4c538fc6bcfb987a65d1_37)] | | |

| | | | | | | | | | [· Terms Used by CSX](#i40071d158dbf4c538fc6bcfb987a65d1_40) | | | [removed: [22](#i40071d158dbf4c538fc6bcfb987a65d1_40)] [added: [26](#i40071d158dbf4c538fc6bcfb987a65d1_40)] | | |

| | | | | | | | | | [· [removed: 2022 Highlights](#i40071d158dbf4c538fc6bcfb987a65d1_43)] [added: 202](#i40071d158dbf4c538fc6bcfb987a65d1_43)[3](#i40071d158dbf4c538fc6bcfb987a65d1_43) [Highlights](#i40071d158dbf4c538fc6bcfb987a65d1_43)] | | | [removed: [24](#i40071d158dbf4c538fc6bcfb987a65d1_43)] [added: [28](#i40071d158dbf4c538fc6bcfb987a65d1_43)] | | |

| | | | | | | | | | · [Results of Operations](#i40071d158dbf4c538fc6bcfb987a65d1_46) | | | [removed: [24](#i40071d158dbf4c538fc6bcfb987a65d1_46)] [added: [28](#i40071d158dbf4c538fc6bcfb987a65d1_46)] | | |

| | | | | | | | | | · [Liquidity and Capital Resources](#i40071d158dbf4c538fc6bcfb987a65d1_55) | | | [removed: [31](#i40071d158dbf4c538fc6bcfb987a65d1_55)] [added: [36](#i40071d158dbf4c538fc6bcfb987a65d1_55)] | | |

| | | | | | | | | | [· Contractual Obligations, Other Commitments and Off-Balance Sheet Arrangements](#i40071d158dbf4c538fc6bcfb987a65d1_58) | | | [removed: [36](#i40071d158dbf4c538fc6bcfb987a65d1_58)] [added: [41](#i40071d158dbf4c538fc6bcfb987a65d1_58)] | | |

| | | | | | | | | | [· Labor Agreements](#i40071d158dbf4c538fc6bcfb987a65d1_61) | | | [removed: [36](#i40071d158dbf4c538fc6bcfb987a65d1_61)] [added: [41](#i40071d158dbf4c538fc6bcfb987a65d1_61)] | | |

| | | | | | | | | | [· Critical Accounting Estimates](#i40071d158dbf4c538fc6bcfb987a65d1_64) | | | [removed: [37](#i40071d158dbf4c538fc6bcfb987a65d1_64)] [added: [42](#i40071d158dbf4c538fc6bcfb987a65d1_64)] | | |

| | | | | | | | | | [· Forward-Looking Statements](#i40071d158dbf4c538fc6bcfb987a65d1_67) | | | [removed: [42](#i40071d158dbf4c538fc6bcfb987a65d1_67)] [added: [46](#i40071d158dbf4c538fc6bcfb987a65d1_67)] | | |

| 7A. | | | [Quantitative and Qualitative Disclosures about Market Risk](#i40071d158dbf4c538fc6bcfb987a65d1_70) | | | | | | | | | [removed: [44](#i40071d158dbf4c538fc6bcfb987a65d1_70)] [added: [48](#i40071d158dbf4c538fc6bcfb987a65d1_70)] | | |

| 8. | | | [Financial Statements and Supplementary Data](#i40071d158dbf4c538fc6bcfb987a65d1_73) | | | | | | | | | [removed: [45](#i40071d158dbf4c538fc6bcfb987a65d1_73)] [added: [49](#i40071d158dbf4c538fc6bcfb987a65d1_73)] | | |

| 9. | | | [Changes in and Disagreements with Accountants on Accounting and Financial Disclosure](#i40071d158dbf4c538fc6bcfb987a65d1_160) | | | | | | | | | [removed: [111](#i40071d158dbf4c538fc6bcfb987a65d1_160)] [added: [116](#i40071d158dbf4c538fc6bcfb987a65d1_160)] | | |

| 9A. | | | [Controls and Procedures](#i40071d158dbf4c538fc6bcfb987a65d1_163) | | | | | | | | | [removed: [111](#i40071d158dbf4c538fc6bcfb987a65d1_163)] [added: [116](#i40071d158dbf4c538fc6bcfb987a65d1_163)] | | |

| 9B. | | | [Other Information](#i40071d158dbf4c538fc6bcfb987a65d1_166) | | | | | | | | | [removed: [114](#i40071d158dbf4c538fc6bcfb987a65d1_166)] [added: [119](#i40071d158dbf4c538fc6bcfb987a65d1_166)] | | |

| 9C. | | | [Disclosure Regarding Foreign Jurisdictions that Prevent Inspections](#i40071d158dbf4c538fc6bcfb987a65d1_169) | | | | | | | | | [removed: [114](#i40071d158dbf4c538fc6bcfb987a65d1_169)] [added: [119](#i40071d158dbf4c538fc6bcfb987a65d1_169)] | | |

| 10. | | | [Directors, Executive Officers of the Registrant and Corporate Governance](#i40071d158dbf4c538fc6bcfb987a65d1_172) | | | | | | | | | [removed: [114](#i40071d158dbf4c538fc6bcfb987a65d1_172)] [added: [119](#i40071d158dbf4c538fc6bcfb987a65d1_172)] | | |

| 11. | | | [Executive Compensation](#i40071d158dbf4c538fc6bcfb987a65d1_175) | | | | | | | | | [removed: [114](#i40071d158dbf4c538fc6bcfb987a65d1_175)] [added: [119](#i40071d158dbf4c538fc6bcfb987a65d1_175)] | | |

| 12. | | | [Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters](#i40071d158dbf4c538fc6bcfb987a65d1_178) | | | | | | | | | [removed: [114](#i40071d158dbf4c538fc6bcfb987a65d1_178)] [added: [119](#i40071d158dbf4c538fc6bcfb987a65d1_178)] | | |

| 13. | | | [Certain Relationships and Related Transactions, and Director Independence](#i40071d158dbf4c538fc6bcfb987a65d1_181) | | | | | | | | | [removed: [114](#i40071d158dbf4c538fc6bcfb987a65d1_181)] [added: [119](#i40071d158dbf4c538fc6bcfb987a65d1_181)] | | |

| 14. | | | [Principal Accounting Fees and Services](#i40071d158dbf4c538fc6bcfb987a65d1_184) | | | | | | | | | [removed: [114](#i40071d158dbf4c538fc6bcfb987a65d1_184)] [added: [119](#i40071d158dbf4c538fc6bcfb987a65d1_184)] | | |

| 15. | | | [Exhibits, Financial Statement Schedules](#i40071d158dbf4c538fc6bcfb987a65d1_187) | | | | | | | | | [removed: [115](#i40071d158dbf4c538fc6bcfb987a65d1_187)] [added: [120](#i40071d158dbf4c538fc6bcfb987a65d1_187)] | | |

| [Signatures](#i40071d158dbf4c538fc6bcfb987a65d1_190) | | | | | | | | | | | | [removed: [119](#i40071d158dbf4c538fc6bcfb987a65d1_190)] [added: [124](#i40071d158dbf4c538fc6bcfb987a65d1_190)] | | |

CSX [removed: 2022] [added: 2023] Form 10-K p.2

| | | | [1C. Cybersecurity](#i40071d158dbf4c538fc6bcfb987a65d1_1669) | | | | | | | | | [14](#i40071d158dbf4c538fc6bcfb987a65d1_1669) | | |

CSX 2023 Form 10-K p.13

CSX 2022 Form 10-K p.12

Cybersecurity Risk Management and Strategy

Strong performance and reliability of the Company's technology systems are critical to operating safely and effectively, and protecting personal and customer data is essential to maintaining stakeholder trust.

The Company has implemented processes designed to assess, identify, and manage material cybersecurity risks, as described further below.

CSX maintains a cybersecurity framework that is integrated across the organization through people, processes and technology to help protect the personal information of its customers, its contractors and its suppliers as well as protect the integrity of its own operations.

Cybersecurity is also integrated into the Company’s Enterprise Risk Management (“ERM”) program.

The Company equips CSX systems with various cybersecurity tools, conducts vulnerability scans and provides critical cybersecurity information to application users, as appropriate.

The Company also takes proactive measures to advise CSX employees of how they can assist the Company in its cybersecurity practices.

CSX informs employees on cybersecurity best practices, including how to identify cyber-related suspicious activity, how to report such activity and, as appropriate, proactive measures employees can take to safeguard company information and devices.

The Company also provides cybersecurity awareness training to employees and conducts cybersecurity testing exercises to help maintain cybersecurity vigilance.

With the assistance of third-party consultants, the Company conducts an annual cybersecurity exercise, which is often a "tabletop" scenario involving a cross-functional group responding to a hypothetical cybersecurity threat.

The Company considers its material cybersecurity-related risks, as described in more detail below and at Item 1A.

*Risk Factors*, and applies various frameworks to establish controls that are reasonably designed to identify, protect, detect, respond to, and recover from significant cybersecurity incidents.

The Company also tests its cybersecurity program to assess whether enhancements to cybersecurity measures are appropriate, such as additional detection and prevention capabilities.

These tests may include the use of internal or third-party external risk assessments, and penetration testing.

The Company also conducts periodic cybersecurity assessments, as appropriate, pursuant to its annual risk assessment process.

Third party resources may also be used for these assessments.

As part of its cybersecurity program, CSX partners with a third-party to provide a managed service that is designed to enable continuous monitoring at its Security Operation Center ("SOC").

The SOC has established processes to identify, address, and remediate cybersecurity threats or vulnerabilities.

This includes the engagement, where necessary, of third-party experts, advisors, and other cybersecurity professionals that have been retained by the Company to assist in responding to cybersecurity incidents or threats.

Company processes also include various procedures for notifying members of the company's cybersecurity department, Chief Information Security Officer ("CISO"), legal department, accounting department, and others as applicable.

The Company has processes designed to provide reasonable oversight for the identification of cybersecurity risks associated with certain third-party service providers.

As appropriate, the Company requires certain third-party providers to complete a cybersecurity questionnaire, to provide Service Organization Control assessment results, if such results exist, or to agree to contractual language regarding cybersecurity and incident notification obligations in agreements with the company.

CSX also has processes that help monitor risks associated with its key third-party vendors’ technology systems, including, where appropriate, performing security assessments of cyber incidents through dashboard alerting for reported events.

CSX’s internal cybersecurity processes and disclosure protocols consider cybersecurity incidents involving key applications provided by third-parties.

CSX 2023 Form 10-K p.14

CSX CORPORATION

PART I

The Company, its third-party vendors and other companies in the rail and transportation industries have been subject to, and are likely to continue to be the target of, data breaches, cyber-attacks and other similar incidents as discussed in more detail in Item 1A.

*Risk Factors*.

In light of the numerous cybersecurity risks that CSX faces, it is reasonably likely that any of the related risks, individually or collectively, if significant, could materially affect the Company’s operations, including but not limited to service interruption, train accident or derailment, misappropriation of confidential or proprietary information (including personal information), process failure, or other operational difficulties.

Cybersecurity Governance

The cybersecurity program and related risks at CSX are managed by the VP Technology and CISO.

The Company's CISO is a Certified Information Systems Auditor with over 30 years of industry experience including information security leadership positions at multiple publicly-traded companies.

The CISO is notified of cybersecurity events as needed based on the Company’s processes for addressing cybersecurity incidents and threats.

The CISO is supported by a team that includes the SOC, which consists of the Deputy Chief Information Security Officer and other cybersecurity professionals as well as a team of third-party contractors.

The SOC, with the assistance of outside third-parties as needed, analyzes, evaluates and remediates cybersecurity incidents and provides investigative information to the CISO.

Depending on the significance of any specific cybersecurity incident or threat, and/or relation to prior incidents, the CISO will escalate relevant information, as appropriate, and the Company’s legal and accounting groups, with assistance from other company departments and third parties, will assist in assessing potential SEC disclosure obligations.

The CISO coordinates disclosure to other agencies, when necessary, including requirements under the Transportation Security Administration directives.

More significant cybersecurity incidents or threats may result in notifications to senior leadership and, if necessary, to the Audit Committee and the Board of Directors.

Additionally, a cybersecurity governance briefing takes place quarterly with leaders from the Company's technology, operations, commercial, legal, and accounting departments to discuss cybersecurity risks, threats, and incidents, including updates from the SOC and an assessment of ways to mitigate and remediate any threats or incidents the Company may be facing.

The Company’s properties primarily consist of track and its related infrastructure, [removed: locomotives] [added: locomotives,] and freight cars and equipment.

Serving 26 states, the District of Columbia, and the Canadian provinces of Ontario and Quebec, the CSXT rail network serves, among other markets, New York, Philadelphia and Boston in the Northeast and Mid-Atlantic, the southeast markets of Atlanta, Miami and New Orleans, and the midwestern markets of St. Louis, [removed: Memphis] [added: Columbus] and Chicago.

At December [removed: 2022,] [added: 2023,] the breakdown of track miles was as follows:

| Single Mainline Track | | | [removed: 19,879] [added: 19,671] | | |

| Other Mainline Track | | | [removed: 5,662] [added: 5,652] | | |

| Terminals and Switching Yards | | | [removed: 9,308] [added: 9,270] | | |

| Passing Sidings and Turnouts | | | [removed: 901] [added: 896] | | |

The Company’s largest yards and terminals based on [removed: 2022] [added: 2023] volume (number of railcars or intermodal containers processed) are listed below.

| Bedford Park Intermodal Terminal (Chicago) | | | [removed: 886,636] [added: 926,845] | | |

| Fairburn, GA Intermodal Terminal (Atlanta) | | | [removed: 358,416] [added: 362,767] | | |

The domestic coal market has declined significantly over the last decade and export coal remains subject to [removed: a high degree of] volatility.

[removed: ][added: ]

As of December [removed: 2022,] [added: 2023,] CSXT owns or long-term leases more than [removed: 3,600] [added: 3,500] locomotives.

Of owned locomotives, approximately 68% were in active service as of December 31, [removed: 2022,] [added: 2023,] and the remainder were in storage to be utilized as needed.

As of December [removed: 2022,] [added: 2023,] CSXT’s fleet of owned or long-term leased locomotives consisted of the following types:

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

| Auxiliary Units | | | [removed: 177] [added: 175] | | | | | | 5 | | % | | | | [removed: 29] [added: 30] | | |

| Total [removed: locomotives] [added: Locomotives] | | | [removed: 3,608] [added: 3,569] | | | | | | 100 | | % | | | | 25 | | |

Of total owned and long-term leased equipment, approximately [removed: 91%] [added: 89%] was in active service as of December 31, [removed: 2022,] [added: 2023,] and the remainder were in storage to be utilized as needed.

As of December [removed: 2022,] [added: 2023,] the Company’s owned and long-term leased equipment consisted of the following:

| Multi-level Flat Cars | | | [removed: 10,736] [added: 11,095] | | | | | | [removed: 23] [added: 24] | | % |

| Open-top Hoppers | | | [removed: 6,403] [added: 6,215] | | | | | | [removed: 14] [added: 13] | | % |

| Covered Hoppers | | | [removed: 6,366] [added: 6,088] | | | | | | 13 | | % |

| Box Cars | | | [removed: 3,745] [added: 3,059] | | | | | | [removed: 8] [added: 7] | | % |

| Flat Cars | | | [removed: 565] [added: 575] | | | | | | 1 | | % |

| Other Cars | | | [removed: 596] [added: 586] | | | | | | 1 | | % |

| Subtotal Freight Cars | | | [removed: 47,024] [added: 46,596] | | | | | | 100 | | % |

| Total Equipment | | | [removed: 66,429] [added: 65,826] | | | | | | | | |

CSX [removed: 2022] [added: 2023] Form 10-K p.16

Other cars – Primarily [removed: leased refrigerator cars and] slab steel cars.

| Total | | | 35,489 | | |

| Waycross, GA | | | 930,651 | | |

| Nashville, TN | | | 645,352 | | |

| Cincinnati, OH | | | 644,478 | | |

| Selkirk, NY | | | 625,308 | | |

| Avon, IN (Indianapolis) | | | 597,169 | | |

| Walbridge, OH (Toledo) | | | 378,869 | | |

| Louisville, KY | | | 356,740 | | |

| Chicago, IL | | | 307,588 | | |

CSX 2023 Form 10-K p.17

CSX 2023 Form 10-K p.18

| Freight | | | 3,160 | | | | | | 89 | | % | | | | 23 | | |

| Switching | | | 234 | | | | | | 6 | | % | | | | 46 | | |

| Gondolas | | | 18,978 | | | | | | 41 | | % |

| Containers | | | 19,230 | | | | | | | | |

CSX 2023 Form 10-K p.19

| Total | | | 35,750 | | |

| Waycross, GA | | | 931,488 | | |

| Selkirk, NY | | | 636,750 | | |

| Nashville, TN | | | 627,868 | | |

| Cincinnati, OH | | | 622,906 | | |

| Avon, IN (Indianapolis) | | | 574,775 | | |

| Walbridge, OH (Toledo) | | | 372,880 | | |

| Louisville, KY | | | 352,029 | | |

| Chicago 59th St. Intermodal Terminal | | | 308,421 | | |

CSX 2022 Form 10-K p.13

The corridor also provides direct rail service between the coal reserves of the southern Illinois basin and the demand for coal in the Southeast.

CSX 2022 Form 10-K p.14

CSX 2022 Form 10-K p.15

| Freight | | | 3,194 | | | | | | 89 | | % | | | | 23 | | |

| Switching | | | 237 | | | | | | 6 | | % | | | | 45 | | |

| Gondolas | | | 18,613 | | | | | | 40 | | % |

| Containers | | | 19,405 | | | | | | | | |

| Joseph R. Hinrichs, [removed: 56] [added: 57] *President and Chief Executive Officer* | | | Hinrichs, a leader with more than 30 years of experience in the global automotive, manufacturing, and energy sectors, was named President and Chief Executive Officer in September 2022. Hinrichs previously worked at Ford Motor Company from 2000 to 2020, most recently serving as President of Ford's global automotive business. In that role, he led the company’s automotive operations, overseeing Ford’s global business units and the Ford and Lincoln brands. He also led Ford’s automotive skill teams, overseeing product development, purchasing, manufacturing, labor affairs, marketing and sales, government affairs, information technology, sustainability, safety and environmental engineering. Other positions he held at Ford include President of Global Operations, President of the Americas, President of Asia Pacific and Africa, Chairman and CEO of Ford China, and Chairman & CEO of Ford Canada. Over the [removed: past] four [removed: years,] [added: years prior to joining CSX,] Hinrichs [removed: has] also served in multiple advisory and board roles of various companies. | | |

| Sean R. Pelkey, [removed: 43] [added: 44] *Executive Vice President and Chief Financial Officer* | | | Pelkey was named Executive Vice President and Chief Financial Officer in January [removed: 2022 after serving as Vice President] [added: 2022. In this role, he guides all of the finance activities for the Company including accounting, financial planning, investor relations, procurement, tax] and [removed: Acting Chief Financial Officer since June 2021.] [added: treasury.] Prior to [removed: these roles,] [added: this role,] Pelkey held the role of Vice President Finance & Treasury since 2017. [removed: In his current 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.] Prior to 2017, he has held the positions of AVP Capital Markets and Director Performance Analysis. During his [removed: 17] [added: 18] years with CSX, Mr. Pelkey has held a variety of other roles, including financial planning and technology finance. | | |

| Kevin S. Boone, [removed: 45] [added: 46] *Executive Vice President and Chief [removed: Sales & Marketing] [added: Commercial] Officer* | | | Boone [removed: was named] [added: has served as] Executive Vice President and Chief [removed: Sales & Marketing Officer in June 2021 after serving as Chief Financial] [added: Commercial] Officer since [removed: May 2019.] [added: June 2021.] In his current role, he is responsible for [added: developing and implementing] the [added: Company's] commercial [removed: organization.] [added: strategy and oversees functions including sales, marketing, customer solutions, real estate and industrial development.] Mr. Boone has more than 20 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. [added: In May 2019 he was named Chief Financial Officer.] 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. | | |

| Stephen Fortune, [removed: 53] [added: 54] *Executive Vice President and Chief Digital and Technology Officer* | | | Fortune was named CSX's Executive Vice President and Chief Digital and Technology Officer in April 2022. In this role, he is responsible for leading the Company's technology strategy development and all aspects of CSX's information technology systems operations, including cybersecurity. Prior to joining CSX with nearly 20 years of information technology experience, he spent 30 years at BP, most recently as Chief Information Officer of the global BP group. | | |

| Nathan D. Goldman, [removed: 65] [added: 66] *Executive Vice President and Chief Legal Officer* | | | 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, risk management, public safety, environmental, and audit functions. During his [removed: 19] [added: 20] 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. | | |

| Diana B. Sorfleet, [removed: 58] [added: 59] *Executive Vice President and Chief Administrative Officer* | | | Sorfleet was named Executive Vice President and Chief Administrative Officer in July 2018. In this role, her responsibilities include human resources, people systems and analytics, total rewards, facilities and aviation. During her [removed: 11] [added: 12] 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. | | |

| Angela C. Williams, [removed: 48] [added: 49] *Vice President and Chief Accounting Officer* | | | 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: 19] [added: 20] years with the Company, she previously served as Assistant Vice President - Assistant Controller and in other various accounting roles. With more than 25 years of experience, Williams held various accounting and auditing positions prior to joining CSX. Ms. Williams is a Certified Public Accountant in the state of Florida. | | |

CSX 2023 Form 10-K p.20

CSX 2023 Form 10-K p.21

| Michael A. Cory, 61 *Executive Vice President and Chief Operating Officer* | | | Cory was named Executive Vice President and Chief Operating Officer in September 2023. In this role, he is responsible for transportation, network operations including terminals, mechanical, engineering and labor relations. Mr. Cory is a seasoned railroad executive with approximately 40 years of operations experience, working at the Canadian National Railway Company ("CN") from 1981 to 2019. He served as Executive Vice President and Chief Operating Officer at CN. He also held positions including Vice President of Network Operations, Senior Vice President of Network Operations, Senior Vice President of the Eastern Region and Senior Vice President for the Western Region during his time at CN. After Mr. Cory's retirement from CN in 2019, he continued to provide transportation consulting services as well as serving as the President of Pacific National, Australia's largest private railroad, in 2021. | | |

CSX 2023 Form 10-K p.22

CSX 2022 Form 10-K p.17

| Jamie J. Boychuk, 45 *Executive Vice President of Operations* | | | Boychuk has served as CSXT's Executive Vice President of Operations since October 2019. In this role, he is responsible for transportation, network operations including terminals, mechanical, engineering and labor relations. 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. | | |

CSX 2022 Form 10-K p.18

CSX 2022 Form 10-K p.19

A total of 5.4 billion shares of common stock are authorized, of which [removed: 2,066,350,050] [added: 1,958,427,685] shares were outstanding as of December 31, [removed: 2022.][added: 2023.]

At January 31, [removed: 2023,] [added: 2024,] the latest practicable date that is closest to the filing date, there were [removed: 22,453] [added: 21,547] 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: 2,141] [added: 2,013] million as of December 31, [removed: 2022.][added: 2023.]

The cumulative shareholder returns, assuming reinvestment of dividends, on $100 invested at December 31, [removed: 2017] [added: 2018] are illustrated on the graph below.

[removed: ][added: ]

Total repurchase authority remaining as of December 31, [removed: 2022] [added: 2023] was [removed: $3.3] [added: $4.8] billion.

Share repurchase activity of [removed: $1.0 billion] [added: $581 million] for the fourth quarter [removed: 2022] [added: 2023] was as follows:

| 2023 | | | $ | 0.11 | | | | | $ | 0.11 | | | | | $ | 0.11 | | | | | $ | 0.11 | | | | | $ | 0.44 | |

| 2022 | | | $ | 0.10 | | | | | $ | 0.10 | | | | | $ | 0.10 | | | | | $ | 0.10 | | | | | $ | 0.40 | |

CSX 2023 Form 10-K p.23

This performance graph shall not be deemed "soliciting material" or to be "filed" with the SEC for purposes of Section 18 of the Exchange Act, or otherwise subject to liabilities under that Section, and shall not be deemed to be incorporated by reference into any filing of CSX Corp. under the Securities Act of 1933, as amended, or the Exchange Act.

CSX 2023 Form 10-K p.24

CSX CORPORATION

PART II

During November 2023, the share repurchase program announced in July 2022 was completed and the Company began repurchasing shares under the $5 billion share repurchase program approved on October 17, 2023.

| Beginning Balance | | | | | | | | | | | | | | | | | | | | | $ | | | 371,411,668 | | |

| October 1 - October 31, 2023 | | | 10,791,515 | | | | | | $ | | | 30.53 | | | 10,791,515 | | | | | | | | | 41,950,017 | | |

| November 1 - November 30, 2023 | | | 6,756,749 | | | | | | | | | 30.66 | | | 6,756,749 | | | | | | | | | 4,834,766,702 | | |

| December 1 - December 31, 2023 | | | 1,326,238 | | | | | | | | | 33.45 | | | 1,326,238 | | | | | | | | | 4,790,399,073 | | |

| Ending Balance | | | 18,874,502 | | | | | | $ | | | 30.78 | | | 18,874,502 | | | | | | $ | | | 4,790,399,073 | | |

| 2022 | | | $ | 0.100 | | | | | $ | 0.100 | | | | | $ | 0.100 | | | | | $ | 0.100 | | | | | $ | 0.400 | |

| 2021 | | | $ | 0.093 | | | | | $ | 0.093 | | | | | $ | 0.093 | | | | | $ | 0.093 | | | | | $ | 0.372 | |

CSX 2022 Form 10-K p.20

The Company continues to repurchase shares under the $5 billion program announced in July 2022.

| Beginning Balance | | | | | | | | | | | | | | | | | | | | | $ | | | 4,292,997,017 | | |

| October 1 - October 31, 2022 | | | 22,101,430 | | | | | | $ | | | 27.50 | | | 22,101,430 | | | | | | | | | 3,685,141,410 | | |

| November 1 - November 30, 2022 | | | 6,810,351 | | | | | | | | | 29.80 | | | 6,810,351 | | | | | | | | | 3,482,205,188 | | |

| December 1 - December 31, 2022 | | | 6,710,050 | | | | | | | | | 31.33 | | | 6,710,050 | | | | | | | | | 3,271,977,916 | | |

| Ending Balance | | | 35,621,831 | | | | | | $ | | | 28.66 | | | 35,621,831 | | | | | | $ | | | 3,271,977,916 | | |

CSX 2023 Form 10-K p.25

CSX 2022 Form 10-K p.21

| | | | Years Ended | | | | | | | | | [removed: | | | | | |]

| | | | [removed: 2022] [added: 2023] | | | | | | [removed: 2021] [added: 2022] | | | | | | [removed: 2020] [added: 2021] | | |

| Net Earnings | | | $ | [removed: 4,166] [added: 3,715] | | | | | $ | [removed: 3,781] [added: 4,166] | | | | | $ | [removed: 2,765] [added: 3,781] | |

| Depreciation and Amortization | | | [removed: 1,500] [added: 1,611] | | | | | | [removed: 1,420] [added: 1,500] | | | | | | [removed: 1,383] [added: 1,420] | | |

| Deferred Income Taxes | | | [removed: 117] [added: 140] | | | | | | [removed: 167] [added: 117] | | | | | | [removed: 180] [added: 167] | | |

| Gains on Property Dispositions | | | [removed: (238)] [added: (34)] | | | | | | [removed: (454)] [added: (238)] | | | | | | [removed: (35)] [added: (454)] | | |

| Other Operating Activities | | | [removed: (17)] [added: (5)] | | | | | | [removed: 12] [added: (17)] | | | | | | [removed: (32)] [added: 12] | | |

| Accounts Receivable | | | [removed: (101)] [added: (51)] | | | | | | [removed: (141)] [added: (101)] | | | | | | [removed: 83] [added: (141)] | | |

| Other Current Assets | | | [removed: (22)] [added: (120)] | | | | | | [removed: (25)] [added: (22)] | | | | | | [removed: (75)] [added: (25)] | | |

| Accounts Payable | | | [removed: 140] [added: 83] | | | | | | [removed: 128] [added: 140] | | | | | | [removed: (20)] [added: 128] | | |

| Income and Other Taxes Payable | | | [removed: (39)] [added: 431] | | | | | | [removed: 72] [added: (39)] | | | | | | [removed: 39] [added: 72] | | |

| Other Current Liabilities | | | [removed: 113] [added: (221)] | | | | | | [removed: 139] [added: 113] | | | | | | [removed: (25)] [added: 139] | | |

| Net Cash Provided by Operating Activities | | | [removed: 5,619] [added: 5,549] | | | | | | [removed: 5,099] [added: 5,619] | | | | | | [removed: 4,263] [added: 5,099] | | |

| Property Additions | | | [removed: (2,133)] [added: (2,281)] | | | | | | [removed: (1,791)] [added: (2,133)] | | | | | | [removed: (1,626)] [added: (1,791)] | | |

| Purchases of Short-term Investments | | | [removed: (59)] [added: (104)] | | | | | | [removed: (75)] [added: (59)] | | | | | | [removed: (426)] [added: (75)] | | |

| Proceeds from Sales of Short-term Investments | | | [removed: 9] [added: 153] | | | | | | [removed: 5] [added: 9] | | | | | | [removed: 1,424] [added: 5] | | |

| Proceeds and Advances from Property Dispositions | | | [removed: 246] [added: 52] | | | | | | [removed: 529] [added: 246] | | | | | | [removed: 56] [added: 529] | | |

| Business Acquisition, Net of Cash Acquired (Note 17) | | | [removed: (227)] [added: (31)] | | | | | | [removed: (541)] [added: (227)] | | | | | | [removed: —] [added: (541)] | | |

| Other Investing Activities | | | [removed: 33] [added: (76)] | | | | | | [removed: (4)] [added: 33] | | | | | | [removed: (77)] [added: (4)] | | |

| Net Cash Used in Investing Activities | | | [removed: (2,131)] [added: (2,287)] | | | | | | [removed: (1,877)] [added: (2,131)] | | | | | | [removed: (649)] [added: (1,877)] | | |

| Shares Repurchased | | | [removed: (4,731)] [added: (3,482)] | | | | | | [removed: (2,886)] [added: (4,731)] | | | | | | [removed: (867)] [added: (2,886)] | | |

| Dividends Paid | | | [removed: (852)] [added: (882)] | | | | | | [removed: (839)] [added: (852)] | | | | | | [removed: (797)] [added: (839)] | | |

| Long-term Debt Repaid | | | [removed: (186)] [added: (153)] | | | | | | [removed: (426)] [added: (186)] | | | | | | [removed: (745)] [added: (426)] | | |

| Long-term Debt Issued (Note 10) | | | [removed: 2,000] [added: 600] | | | | | | [removed: —] [added: 2,000] | | | | | | [removed: 1,000] [added: —] | | |

| Other Financing Activities | | | [removed: —] [added: 50] | | | | | | [removed: 39] [added: —] | | | | | | [removed: (34)] [added: 39] | | |

| Net Cash Used in Financing Activities | | | [removed: (3,769)] [added: (3,867)] | | | | | | [removed: (4,112)] [added: (3,769)] | | | | | | [removed: (1,443)] [added: (4,112)] | | |

| Net [removed: (Decrease) Increase] [added: Decrease] in Cash and Cash Equivalents | | | [removed: (281)] [added: (605)] | | | | | | [removed: (890)] [added: (281)] | | | | | | [removed: 2,171] [added: (890)] | | |

| Cash and Cash Equivalents at Beginning of Period | | | [removed: 2,239] [added: 1,958] | | | | | | [removed: 3,129] [added: 2,239] | | | | | | [removed: 958] [added: 3,129] | | |

| Cash and Cash Equivalents at End of Period | | | $ | [removed: 1,958] [added: 1,353] | | | | | $ | [removed: 2,239] [added: 1,958] | | | | | $ | [removed: 3,129] [added: 2,239] | |

| Issuance of Common Stock as Consideration for Acquisition | | | $ | [removed: 422] [added: —] | | | | | [removed: —] [added: $] | [added: 422] | | | | | [removed: —] [added: $] | [added: —] | |

| Interest Paid - Net of Amounts Capitalized | | | $ | [removed: 729] [added: 806] | | | | | $ | [removed: 718] [added: 729] | | | | | $ | [removed: 750] [added: 718] | |

| Income Taxes Paid | | | $ | [removed: 1,167] [added: 630] | | | | | $ | [removed: 931] [added: 1,167] | | | | | $ | [removed: 664] [added: 931] | |

| | | | Common Shares Outstanding *(Thousands)* | | | Common Stock and Other Capital | | | | | | Retained Earnings | | | Accumulated Other Comprehensive [removed: Income (Loss) (a)] [added: (Loss) Income(a)] | | | Non- controlling Minority Interest | | | Total Shareholders' Equity | | |

| Net Earnings | | | — | | | | | | — | | | [removed: 2,765] [added: 3,715] | | | — | | | — | | | [removed: 2,765] [added: 3,715] | | |

| Other Comprehensive Income (Note 16) | | | — | | | | | | — | | | — | | | [removed: 77] [added: 76] | | | — | | | [removed: 77] [added: 76] | | |

| Total Comprehensive Earnings | | | | | | | | | | | | | | | | | | | | | [removed: 2,842] [added: 3,791] | | |

| Common stock [removed: dividends,$0.35] [added: dividends,$0.37] per share | | | [removed: —] | | | | | | [removed: —] | | | [removed: (797)] [added: (839)] | | | [removed: —] | | | [removed: —] | | | [removed: (797)] [added: (839)] | | |

| Other | | | [removed: 5,015] [added: 51] | | | | | | [removed: 66] [added: 40] | | | [removed: 9] | | | [removed: —] [added: 91] | | | [removed: (6)] | | | [removed: 69] [added: 41] | | | [added: | | | 40 | | | | | | 81 | | |]

| December 31, 2020 | | | 2,287,587 | | | [added: $] | | | 2,440 | | | [added: $ |] 11,259 | | [added: $] | (598) | | [added: $] | 9 | | [added: $] | 13,110 | | [removed: |]

| Common stock dividends, [removed: $0.37] [added: $0.44] per share | | | [added: —] | | | | | | [added: —] | | | [removed: (839)] [added: (882)] | | | [added: —] | | | [added: —] | | | [removed: (839)] [added: (882)] | | |

| Share Repurchases | | | (112,484) | | | | | | (112) | | | (3,370) | | | — | | | — | | | (3,482) | | |

| Excise Tax on Net Share Repurchases | | | — | | | | | | — | | | (33) | | | — | | | — | | | (33) | | |

| Other | | | 4,874 | | | | | | 122 | | | (3) | | | — | | | (5) | | | 114 | | |

| December 31, 2023 | | | 1,958,757 | | | $ | | | 2,650 | | | $ | 9,790 | | $ | (312) | | $ | 5 | | $ | 12,133 | |

The Company applied the practical expedient to its forward starting interest rate swaps effective June 30, 2023.

See *Note 10, Debt and Credit Agreements*, for additional information.

The Company does not have any other contracts that are affected by the transition from LIBOR.

In November 2023, the FASB issued ASU 2023-07, *Improvements to Reportable Segment Disclosures*.

This standard update requires additional interim and annual disclosures about a reportable segment’s expenses, even for companies with only one reportable segment.

The Company is required to adopt the guidance for its 2024 annual report filed on Form 10-K, though early adoption is permitted.

The Company is currently evaluating the impact of these amendments on its disclosures, but this standard update will not impact the Company's results of operations or financial position.

In December 2023, the FASB issued ASU 2023-09, *Improvements to Income Tax Disclosures*.

This standard update requires additional interim and annual disclosures about a company’s income taxes, including more detailed information around the annual rate reconciliation and income taxes paid.

The Company is required to adopt the guidance for its 2025 annual report filed on Form 10-K, though early adoption is permitted.

The Company is currently evaluating the impact of these amendments on its disclosures, but this standard update will not impact the Company's results of operations or financial position.

Previous share repurchase programs were announced in October 2020 and January 2019 and were completed in July 2022 and June 2021, respectively.

The Inflation Reduction Act of 2022 imposes a nondeductible 1% excise tax on the net value of most share repurchases made after December 31, 2022.

Excise tax commensurate with net share repurchases is reflected in equity and a corresponding liability for excise taxes payable is included in other current liabilities on the consolidated balance sheet.

Amounts shown in the table above exclude the impact of this excise tax.

As defined under the plan, Economic Profit incentivizes strategic investments earning more than the required return and is calculated as CSX’s gross cash earnings (after-tax adjusted EBITDA) minus the long-term average cost of capital on gross operating assets.

| Granted | | | 755 | | | | | | 31.57 | | |

| Forfeited | | | (118) | | | | | | 32.20 | | |

| Vested | | | (570) | | | | | | 30.23 | | |

| Unvested at December 31, 2023 | | | 1,321 | | | | | | $ | 32.65 | |

| Granted | | | 1,234 | | | | | | 31.54 | | | | | | | | | | | | | | |

| Forfeited | | | (189) | | | | | | 32.68 | | | | | | | | | | | | | | |

| Exercised | | | (2,351) | | | | | | 22.06 | | | | | | | | | | | | | | |

| Outstanding at December 31, 2023 | | | 12,094 | | | | | | $ | 25.04 | | | | | 6.0 | | | | | | $ | 117 | |

| Exercisable at December 31, 2023 | | | 9,239 | | | | | | $ | 22.73 | | | | | 5.3 | | | | | | $ | 111 | |

| Granted | | | 880 | | | | | | 31.46 | | |

| Forfeited | | | (100) | | | | | | 31.92 | | |

| Vested | | | (303) | | | | | | 27.49 | | |

| Unvested at December 31, 2023 | | | 2,029 | | | | | | $ | 31.70 | |

| | | | 2023 | | | 2022 | | | 2021 | | |

| December 31, 2023 | | | $ | 195 | | | | | $ | 154 | | | | | $ | 91 | | | | | $ | 440 | |

| Total Road | | | | | | | | | | | | 36,590 | | | | | | (10,926) | | | | | | 25,664 | | | | | | | | | | | | | | | | | | | | |

| | | | | | | Locomotive | | | | | | 4,952 | | | | | | (1,981) | | | | | | 2,971 | | | | | | 3.8% | | | | | | 26 | | | | | | Group Life | | |

| | | | | | | Freight Cars | | | | | | 2,300 | | | | | | (378) | | | | | | 1,922 | | | | | | 3.1% | | | | | | 32 | | | | | | Group Life | | |

| Total Equipment | | | | | | | | | | | | 10,643 | | | | | | (4,459) | | | | | | 6,184 | | | | | | | | | | | | | | | | | | | | |

| Total Properties | | | | | | | | | | | | $ | 50,320 | | | | | $ | (15,385) | | | | | $ | 34,935 | | | | | | | | | | | | | | | | | | | |

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

CSX 2022 Form 10-K p.51

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

| December 31, 2019 | | | 2,320,414 | | | $ | | | 2,412 | | | $ | 10,111 | | $ | (675) | | $ | 15 | | $ | 11,863 | |

| Share Repurchases | | | (37,842) | | | | | | (38) | | | (829) | | | — | | | — | | | (867) | | |

CSX 2022 Form 10-K p.52

CSX 2022 Form 10-K p.53

CSX 2022 Form 10-K p.54

Where applicable, prior year information has been reclassified to conform to current presentation.

- goodwill and other intangible assets (see Note 17, *Business Combinations* and Note 18, *Goodwill and Other Intangibles*).

CSX's revolving line of credit currently uses LIBOR as a reference rate.

As of December 31, 2022, the Company has not applied the practical expedient to any contracts.

In November 2021, the FASB issued ASU 2021-10, *Disclosure by Business Entities about Government Assistance*.

This standard update requires annual disclosure of the nature of any government assistance received, accounting policies related to such assistance and the effect of that assistance on the entity’s financial statements.

The Company adopted this guidance effective year end 2022 and the standard update did not impact the Company's results of operations or financial position as the update only impacts disclosures.

See Note 6, *Properties.*

| Dividend Equivalents on Restricted Stock | | | — | | | | | | — | | | | | | — | | |

Previously, shares were repurchased under a program announced in January 2019 that was completed in June 2021.

In December 2020, the Company completed a structured share repurchase.

Under this agreement, the Company paid a total of $100 million and received approximately 3.3 million shares.

| | | | | | |

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

Prior period amounts have also been retroactively adjusted as needed to bring the other capital balance to zero.

Participants will receive stock dividend equivalents declared over the performance period based on the number of performance units paid upon vesting.

As defined under the plan, CCE is a cash-flow-based measure that incentivizes strategic investments earning more than the required return.

CCE equals CSX’s gross cash earnings (after-tax EBITDA) minus the required return on gross operating assets.

- For the 2020-2022 LTIP plan, the cumulative operating income and cumulative free cash flow over the plan period will each comprise 50% of the payout and will be measured independently of the other.

| Unvested at December 31, 2021 | | | 1,576 | | | | | | $ | 27.21 | |

| Granted | | | 670 | | | | | | 33.89 | | |

| Forfeited | | | (33) | | | | | | 25.65 | | |

| Vested | | | (959) | | | | | | 25.52 | | |

| Outstanding at December 31, 2021 | | | 12,512 | | | | | | $ | 22.42 | | | | | | | | | | | | | |

| Granted | | | 1,726 | | | | | | 35.12 | | | | | | | | | | | | | | |

| Forfeited | | | (123) | | | | | | 30.19 | | | | | | | | | | | | | | |

| Exercised | | | (715) | | | | | | 21.53 | | | | | | | | | | | | | | |

| Exercisable at December 31, 2022 | | | 9,175 | | | | | | $ | 20.85 | | | | | 5.8 | | | | | | $ | 93 | |

| Unvested at December 31, 2021 | | | 1,023 | | | | | | $ | 27.53 | |

| Granted | | | 801 | | | | | | 34.55 | | |

| Forfeited | | | (54) | | | | | | 29.85 | | |

| Vested | | | (218) | | | | | | 23.33 | | |

As of December 31, [removed: 2022,] [added: 2023,] 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: 2022,] [added: 2023,] 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: 2022] [added: 2023] 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: 2022.][added: 2023.]

The Company’s internal control over financial reporting as of December 31, [removed: 2022] [added: 2023] 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: 2022,] [added: 2023,] based on criteria established in Internal 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: 2022,] [added: 2023,] 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 [removed: CSX Corporation] [added: the Company] as of December 31, [removed: 2022 and 2021,] [added: 2023] and [added: 2022,] the related consolidated statements of income, comprehensive income, [removed: cash flows, and] changes in [removed: shareholders’] [added: shareholders'] equity [added: and cash flows] for each of the three years in the period ended December 31, [removed: 2022,] [added: 2023,] and the related notes [removed: of the Company] and our report dated February [removed: 15, 2023] [added: 14, 2024,] expressed an unqualified opinion thereon.

CSX 2023 Form 10-K p.116

CSX 2023 Form 10-K p.117

February 14, 2024

CSX 2023 Form 10-K p.118

CSX 2022 Form 10-K p.111

CSX 2022 Form 10-K p.112

February 15, 2023

CSX 2022 Form 10-K p.113

On November 10, 2023, Nathan D.

Goldman, Executive Vice President, Chief Legal Officer and Corporate Secretary, adopted a trading plan intended to satisfy Rule 10b5-1(c) to sell up to 83,000 shares of CSX common stock and 161,487 employee stock options to be exercised via same-day-sale on or after February 20, 2024, subject to certain conditions, to be in effect until November 8, 2024 unless otherwise terminated pursuant to the terms of the trading plan.

During the fourth quarter of 2023, no other Company directors or officers adopted or terminated any "Rule 10b5-1 trading arrangement" or any "non-Rule 10b5-1 trading arrangement" as each term is defined in Item 408 of Regulation S-K.

None

The Proxy Statement will be filed no later than [removed: May 1, 2023] [added: April 30, 2024] with respect to the [removed: 2023] [added: 2024] annual meeting of shareholders, except for the information regarding the executive officers of the Company.

CSX 2023 Form 10-K p.119

CSX 2022 Form 10-K p.114

| See Index to Consolidated Financial Statements on page | | | [removed: [45](#i40071d158dbf4c538fc6bcfb987a65d1_73).] [added: [49](#i40071d158dbf4c538fc6bcfb987a65d1_73).] | | |

| 4.2* | | | [Description of Common [removed: Stock](https://www.sec.gov/Archives/edgar/data/277948/000027794823000006/csx-12312022ex42descriptio.htm)] [added: Stock](https://www.sec.gov/Archives/edgar/data/277948/000027794824000010/csx-12312023ex42descriptio.htm)] | | | | | |

| 10.18 | | | [Employment Agreement, effective as of [removed: March 29,] [added: December 22,] 2017, between CSX Corporation and [removed: Mark K. Wallace](https://www.sec.gov/Archives/edgar/data/277948/000027794818000009/wallaceemploymentagreement.htm)] [added: James M. Foote](http://www.sec.gov/Archives/edgar/data/277948/000027794818000009/footeemploymentagreement.htm)] | | | February 7, 2018 Exhibit [removed: 10.41,] [added: 10.42,] Form 10-K | | |

| [removed: 10.19] [added: 10.21] | | | [removed: [Employment] [added: [Transition] Agreement, [removed: effective as of December 22, 2017,] [added: dated September 14, 2022,] between CSX Corporation and James M. [removed: Foote](http://www.sec.gov/Archives/edgar/data/277948/000027794818000009/footeemploymentagreement.htm)] [added: Foote](https://www.sec.gov/Archives/edgar/data/277948/000027794822000045/exhibit102footetransitiona.htm)] | | | [removed: February 7, 2018] [added: October 21, 2022,] Exhibit [removed: 10.42,] [added: 10.2,] Form [removed: 10-K] [added: 10-Q] | | |