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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 June 30, 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 2,141,241,136 shares of common stock outstanding on June 30, 2022 (the latest practicable date that is closest to the filing date).
CSX Q2 2022 Form 10-Q p.1
CSX CORPORATION
FORM 10-Q
FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2022
INDEX
CSX Q2 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)
| Second Quarters | Six Months | ||||||||||||||||
| 2022 | 2021 | 2022 | 2021 | ||||||||||||||
| Revenue | $ | 3,815 | $ | 2,990 | $ | 7,228 | $ | 5,803 | |||||||||
| Expense | |||||||||||||||||
| Labor and Fringe | 684 | 596 | 1,376 | 1,216 | |||||||||||||
| Purchased Services and Other | 647 | 441 | 1,322 | 913 | |||||||||||||
| Fuel | 446 | 194 | 777 | 384 | |||||||||||||
| Depreciation and Amortization | 369 | 348 | 729 | 693 | |||||||||||||
| Equipment and Other Rents | 95 | 87 | 195 | 175 | |||||||||||||
| Gains on Property Dispositions | (129) | (367) | (156) | (370) | |||||||||||||
| Total Expense | 2,112 | 1,299 | 4,243 | 3,011 | |||||||||||||
| Operating Income | 1,703 | 1,691 | 2,985 | 2,792 | |||||||||||||
| Interest Expense | (171) | (181) | (350) | (365) | |||||||||||||
| Other Income - Net | 26 | 20 | 52 | 40 | |||||||||||||
| Earnings Before Income Taxes | 1,558 | 1,530 | 2,687 | 2,467 | |||||||||||||
| Income Tax Expense | (380) | (357) | (650) | (588) | |||||||||||||
| Net Earnings | $ | 1,178 | $ | 1,173 | $ | 2,037 | $ | 1,879 | |||||||||
| Per Common Share (Note 2) | |||||||||||||||||
| Net Earnings Per Share, Basic | $ | 0.55 | $ | 0.52 | $ | 0.94 | $ | 0.83 | |||||||||
| Net Earnings Per Share, Assuming Dilution | $ | 0.54 | $ | 0.52 | $ | 0.94 | $ | 0.82 | |||||||||
| Average Shares Outstanding (In millions) | 2,158 | 2,270 | 2,173 | 2,276 | |||||||||||||
| Average Shares Outstanding, Assuming Dilution (In millions) | 2,163 | 2,275 | 2,178 | 2,281 |
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.
CONDENSED CONSOLIDATED COMPREHENSIVE INCOME STATEMENTS (Unaudited)
(Dollars in millions)
| Second Quarters | Six Months | ||||||||||||||||
| 2022 | 2021 | 2022 | 2021 | ||||||||||||||
| Total Comprehensive Earnings (Note 10) | $ | 1,217 | $ | 1,152 | $ | 2,107 | $ | 1,926 |
See accompanying notes to consolidated financial statements.
CSX Q2 2022 Form 10-Q p.3
CSX CORPORATION
ITEM 1. FINANCIAL STATEMENTS
CONSOLIDATED BALANCE SHEETS
(Dollars in millions)
| (Unaudited) | ||||||||
| June 30, 2022 | December 31, 2021 | |||||||
| ASSETS | ||||||||
| Current Assets: | ||||||||
| Cash and Cash Equivalents | $ | 724 | $ | 2,239 | ||||
| Short-term Investments | 88 | 77 | ||||||
| Accounts Receivable - Net (Note 8) | 1,489 | 1,148 | ||||||
| Materials and Supplies | 379 | 339 | ||||||
| Other Current Assets | 104 | 70 | ||||||
| Total Current Assets | 2,784 | 3,873 | ||||||
| Properties | 47,446 | 46,505 | ||||||
| Accumulated Depreciation | (13,802) | (13,490) | ||||||
| Properties - Net | 33,644 | 33,015 | ||||||
| Investment in Affiliates and Other Companies | 2,252 | 2,099 | ||||||
| Right-of-Use Lease Asset | 489 | 501 | ||||||
| Goodwill and Other Intangible Assets - Net | 557 | 451 | ||||||
| Other Long-term Assets | 640 | 592 | ||||||
| Total Assets | $ | 40,366 | $ | 40,531 | ||||
| LIABILITIES AND SHAREHOLDERS' EQUITY | ||||||||
| Current Liabilities: | ||||||||
| Accounts Payable | $ | 1,055 | $ | 963 | ||||
| Labor and Fringe Benefits Payable | 615 | 630 | ||||||
| Casualty, Environmental and Other Reserves (Note 4) | 113 | 118 | ||||||
| Current Maturities of Long-term Debt (Note 7) | 236 | 181 | ||||||
| Income and Other Taxes Payable | 177 | 134 | ||||||
| Other Current Liabilities | 197 | 207 | ||||||
| Total Current Liabilities | 2,393 | 2,233 | ||||||
| Casualty, Environmental and Other Reserves (Note 4) | 290 | 250 | ||||||
| Long-term Debt (Note 7) | 15,974 | 16,185 | ||||||
| Deferred Income Taxes - Net | 7,592 | 7,383 | ||||||
| Long-term Lease Liability | 473 | 478 | ||||||
| Other Long-term Liabilities | 503 | 502 | ||||||
| Total Liabilities | 27,225 | 27,031 | ||||||
| Shareholders' Equity: | ||||||||
| Common Stock, $1 Par Value | 2,141 | 2,202 | ||||||
| Other Capital | 534 | 66 | ||||||
| Retained Earnings | 10,794 | 11,630 | ||||||
| Accumulated Other Comprehensive Loss (Note 10) | (338) | (408) | ||||||
| Non-controlling Minority Interest | 10 | 10 | ||||||
| Total Shareholders' Equity | 13,141 | 13,500 | ||||||
| Total Liabilities and Shareholders' Equity | $ | 40,366 | $ | 40,531 |
See accompanying notes to consolidated financial statements.
CSX Q2 2022 Form 10-Q p.4
CSX CORPORATION
ITEM 1. FINANCIAL STATEMENTS
CONSOLIDATED CASH FLOW STATEMENTS (Unaudited)
(Dollars in millions)
| Six Months | ||||||||
| 2022 | 2021 | |||||||
| OPERATING ACTIVITIES | ||||||||
| Net Earnings | $ | 2,037 | $ | 1,879 | ||||
| Adjustments to Reconcile Net Earnings to Net Cash Provided by Operating Activities: | ||||||||
| Depreciation and Amortization | 729 | 693 | ||||||
| Deferred Income Taxes | 106 | 66 | ||||||
| Gains on Property Dispositions | (156) | (370) | ||||||
| Other Operating Activities | (14) | 28 | ||||||
| Changes in Operating Assets and Liabilities: | ||||||||
| Accounts Receivable | (198) | (127) | ||||||
| Other Current Assets | (71) | (4) | ||||||
| Accounts Payable | 61 | 73 | ||||||
| Income and Other Taxes Payable | 43 | 181 | ||||||
| Other Current Liabilities | (7) | (20) | ||||||
| Net Cash Provided by Operating Activities | 2,530 | 2,399 | ||||||
| INVESTING ACTIVITIES | ||||||||
| Property Additions | (811) | (754) | ||||||
| Purchases of Short-term Investments | (19) | — | ||||||
| Proceeds from Sales of Short-term Investments | 9 | 1 | ||||||
| Proceeds and Advances from Property Dispositions | 29 | 227 | ||||||
| Business Acquisition, Net of Cash Acquired | (208) | — | ||||||
| Other Investing Activities | (19) | (1) | ||||||
| Net Cash Used In Investing Activities | (1,019) | (527) | ||||||
| FINANCING ACTIVITIES | ||||||||
| Long-term Debt Repaid (Note 7) | (93) | (360) | ||||||
| Dividends Paid | (433) | (425) | ||||||
| Shares Repurchased | (2,515) | (1,252) | ||||||
| Other Financing Activities | 15 | 22 | ||||||
| Net Cash Used in Financing Activities | (3,026) | (2,015) | ||||||
| Net Decrease in Cash and Cash Equivalents | (1,515) | (143) | ||||||
| CASH AND CASH EQUIVALENTS | ||||||||
| Cash and Cash Equivalents at Beginning of Period | 2,239 | 3,129 | ||||||
| Cash and Cash Equivalents at End of Period | $ | 724 | $ | 2,986 | ||||
| SUPPLEMENTAL CASH FLOW INFORMATION | ||||||||
| Issuance of common stock as consideration for acquisition | $ | 422 | $ | — |
See accompanying notes to consolidated financial statements.
CSX Q2 2022 Form 10-Q p.5
CSX CORPORATION
ITEM 1. FINANCIAL STATEMENTS
CONSOLIDATED STATEMENTS OF CHANGES
IN SHAREHOLDERS' EQUITY (Unaudited)
(Dollars in millions)
| Six Months 2022 | Common Shares Outstanding (Thousands) | Common Stock and Other Capital | Retained Earnings | Accumulated Other Comprehensive Income (Loss)****(a) | Non-controlling Minority Interest | Total Shareholders' Equity | ||||||||||||||
| Balance December 31, 2021 | 2,201,787 | $ | 2,268 | $ | 11,630 | $ | (408) | $ | 10 | $ | 13,500 | |||||||||
| Comprehensive Earnings: | ||||||||||||||||||||
| Net Earnings | — | — | 859 | — | — | 859 | ||||||||||||||
| Other Comprehensive Income | — | — | — | 31 | — | 31 | ||||||||||||||
| Total Comprehensive Earnings | 890 | |||||||||||||||||||
| Common stock dividends, $0.10 per share | — | — | (218) | — | — | (218) | ||||||||||||||
| Share Repurchases | (29,365) | (29) | (987) | — | — | (1,016) | ||||||||||||||
| Stock Option Exercises and Other | 1,831 | 38 | — | 1 | 39 | |||||||||||||||
| Balance March 31, 2022 | 2,174,253 | $ | 2,277 | $ | 11,284 | $ | (377) | $ | 11 | $ | 13,195 | |||||||||
| Comprehensive Earnings: | ||||||||||||||||||||
| Net Earnings | — | 1,178 | — | — | 1,178 | |||||||||||||||
| Other Comprehensive Income | — | — | 39 | — | 39 | |||||||||||||||
| Total Comprehensive Earnings | 1,217 | |||||||||||||||||||
| Common stock dividends, $0.10 per share | — | — | (215) | — | — | (215) | ||||||||||||||
| Share Repurchases | (46,508) | (47) | (1,452) | — | — | (1,499) | ||||||||||||||
| Issuance of common stock for acquisition of Pan Am Systems, Inc. | 13,173 | 422 | — | — | 422 | |||||||||||||||
| Stock Option Exercises and Other | 314 | 23 | (1) | — | (1) | 21 | ||||||||||||||
| Balance June 30, 2022 | 2,141,232 | $ | 2,675 | $ | 10,794 | $ | (338) | $ | 10 | $ | 13,141 | |||||||||
(a) Accumulated Other Comprehensive Loss balances shown above are net of tax. The associated taxes were $99 million and $88 million as of first and second quarters 2022, respectively. For additional information, see Note 10, Other Comprehensive Income.
See accompanying notes to consolidated financial statements.
CSX Q2 2022 Form 10-Q p.6
CSX CORPORATION
Next: Item 1. FINANCIAL STATEMENTS