Cover and table of contents

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D.C. 20549

FORM 10-Q

(☒) QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the quarterly period ended March 31, 2022

OR

(☐) TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from __________ to __________

Commission File Number 1-8022

CSX CORPORATION

(Exact name of registrant as specified in its charter)
Virginia																											62-1051971
																											(I.R.S. Employer Identification No.)
500 Water Street			15th Floor			Jacksonville			FL												32202						904			359-3200
(Address of principal executive offices)																					(Zip Code)						(Telephone number, including area code)
															No Change
(Former name, former address and former fiscal year, if changed since last report.)
Securities registered pursuant to Section 12(b) of the Act:
Title of each class															Trading Symbol(s)												Name of exchange on which registered
Common Stock, $1 Par Value															CSX												Nasdaq Global Select Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.

Yes (X) No ( )

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).

Yes (X) No ( )

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

Large Accelerated Filer (X) Accelerated Filer ( ) Non-accelerated Filer ( ) Smaller Reporting Company (☐) Emerging growth company (☐)

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

Indicate by a check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).

Yes (☐) No (X)

There were 2,174,259,952 shares of common stock outstanding on March 31, 2022 (the latest practicable date that is closest to the filing date).

CSX Q1 2022 Form 10-Q p.1

CSX CORPORATION

FORM 10-Q

FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2022

INDEX

									Page
PART I.			FINANCIAL INFORMATION
Item 1.			Financial Statements						3
			Consolidated Income Statements (Unaudited) - Quarters Ended March 31, 2022 and March 31, 2021						3
			Condensed Consolidated Comprehensive Income Statements (Unaudited) - Quarters Ended March 31, 2022 and March 31, 2021						3
			Consolidated Balance Sheets - At March 31, 2022 (Unaudited) and December 31, 2021						4
			Consolidated Cash Flow Statements (Unaudited) - Three Months Ended March 31, 2022 and March 31, 2021						5
			Consolidated Statement of Changes in Shareholders' Equity (Unaudited) - Three Months Ended March 31, 2022 and March 31, 2021						6
			Notes to Consolidated Financial Statements (Unaudited)						7
Item 2.			Management's Discussion and Analysis of Financial Condition and Results of Operations						28
Item 3.			Quantitative and Qualitative Disclosures about Market Risk						41
Item 4.			Controls and Procedures						41
PART II.			OTHER INFORMATION
Item 1.			Legal Proceedings						42
Item 1A.			Risk Factors						42
Item 2.			CSX Purchases of Equity Securities						42
Item 3.			Defaults upon Senior Securities						42
Item 4.			Mine Safety Disclosures						42
Item 5.			Other Information						42
Item 6.			Exhibits						43
Signature									44

CSX Q1 2022 Form 10-Q p.2

CSX CORPORATION

PART I - FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS

CONSOLIDATED INCOME STATEMENTS (Unaudited)

(Dollars in millions, except per share amounts)

			First Quarters
			2022			2021
Revenue			$	3,413		$	2,813
Expense
Labor and Fringe			692			620
Purchased Services and Other			675			472
Depreciation and Amortization			360			345
Fuel			331			190
Equipment and Other Rents			100			88
Gains on Property Dispositions			(27)			(3)
Total Expense			2,131			1,712
Operating Income			1,282			1,101
Interest Expense			(179)			(184)
Other Income - Net			26			20
Earnings Before Income Taxes			1,129			937
Income Tax Expense			(270)			(231)
Net Earnings			$	859		$	706
Per Common Share (Note 2)
Net Earnings Per Share, Basic			$	0.39		$	0.31
Net Earnings Per Share, Assuming Dilution			$	0.39		$	0.31
Average Shares Outstanding (In millions)			2,188			2,282
Average Shares Outstanding, Assuming Dilution (In millions)			2,193			2,286

Beginning third quarter 2021, the Company changed the name of Materials, Supplies and Other expense to Purchased Services and Other, which better describes the composition of this expense amount. This change in naming convention does not impact previously reported results.

All prior period share and per share data has been retroactively adjusted to reflect the stock split effective June 28, 2021. Certain prior year data has been reclassified to conform to the current presentation.

CONDENSED CONSOLIDATED COMPREHENSIVE INCOME STATEMENTS (Unaudited)

(Dollars in millions)

			First Quarters
			2022			2021
Total Comprehensive Earnings (Note 11)			$	890		$	774

See accompanying notes to consolidated financial statements.

CSX Q1 2022 Form 10-Q p.3

CSX CORPORATION

ITEM 1. FINANCIAL STATEMENTS

CONSOLIDATED BALANCE SHEETS

(Dollars in millions)

			(Unaudited)
			March 31, 2022			December 31, 2021
ASSETS
Current Assets:
Cash and Cash Equivalents			$	1,936		$	2,239
Short-term Investments			96			77
Accounts Receivable - Net (Note 8)			1,277			1,148
Materials and Supplies			351			339
Other Current Assets			97			70
Total Current Assets			3,757			3,873
Properties			46,597			46,505
Accumulated Depreciation			(13,613)			(13,490)
Properties - Net			32,984			33,015
Investment in Affiliates and Other Companies			2,143			2,099
Right-of-Use Lease Asset			496			501
Goodwill and Other Intangible Assets - Net			453			451
Other Long-term Assets			619			592
Total Assets			$	40,452		$	40,531
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Accounts Payable			$	1,050		$	963
Labor and Fringe Benefits Payable			547			630
Casualty, Environmental and Other Reserves (Note 4)			118			118
Current Maturities of Long-term Debt (Note 7)			317			181
Income and Other Taxes Payable			359			134
Other Current Liabilities			184			207
Total Current Liabilities			2,575			2,233
Casualty, Environmental and Other Reserves (Note 4)			267			250
Long-term Debt (Note 7)			16,019			16,185
Deferred Income Taxes - Net			7,428			7,383
Long-term Lease Liability			476			478
Other Long-term Liabilities			492			502
Total Liabilities			27,257			27,031
Shareholders' Equity:
Common Stock, $1 Par Value			2,174			2,202
Other Capital			103			66
Retained Earnings			11,284			11,630
Accumulated Other Comprehensive Loss (Note 11)			(377)			(408)
Non-controlling Minority Interest			11			10
Total Shareholders' Equity			13,195			13,500
Total Liabilities and Shareholders' Equity			$	40,452		$	40,531

Certain prior year data has been retroactively adjusted to reflect the stock split effective June 28, 2021 or reclassified to conform to the current presentation. See accompanying notes to consolidated financial statements.

CSX Q1 2022 Form 10-Q p.4

CSX CORPORATION

ITEM 1. FINANCIAL STATEMENTS

CONSOLIDATED CASH FLOW STATEMENTS (Unaudited)

(Dollars in millions)

			Three Months
			2022			2021
OPERATING ACTIVITIES
Net Earnings			$	859		$	706
Adjustments to Reconcile Net Earnings to Net Cash Provided by Operating Activities:
Depreciation and Amortization			360			345
Deferred Income Taxes			37			40
Gains on Property Dispositions			(27)			(3)
Other Operating Activities			4			28
Changes in Operating Assets and Liabilities:
Accounts Receivable			(131)			(64)
Other Current Assets			(40)			(5)
Accounts Payable			82			53
Income and Other Taxes Payable			225			192
Other Current Liabilities			(70)			(60)
Net Cash Provided by Operating Activities			1,299			1,232
INVESTING ACTIVITIES
Property Additions			(331)			(306)
Purchases of Short-term Investments			(19)			—
Proceeds from Sales of Short-term Investments			—			1
Proceeds and Advances from Property Dispositions			8			—
Business Acquisition, Net of Cash Acquired			(9)			—
Other Investing Activities			(17)			8
Net Cash Used In Investing Activities			(368)			(297)
FINANCING ACTIVITIES
Long-term Debt Repaid (Note 7)			(6)			(360)
Dividends Paid			(218)			(213)
Shares Repurchased			(1,016)			(551)
Other Financing Activities			6			15
Net Cash Used in Financing Activities			(1,234)			(1,109)
Net Decrease in Cash and Cash Equivalents			(303)			(174)
CASH AND CASH EQUIVALENTS
Cash and Cash Equivalents at Beginning of Period			2,239			3,129
Cash and Cash Equivalents at End of Period			$	1,936		$	2,955

See accompanying notes to consolidated financial statements.

CSX Q1 2022 Form 10-Q p.5

CSX CORPORATION