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, 2023

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
(State or other jurisdiction of incorporation or organization)																											(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 2,033,054,922 shares of common stock outstanding on March 31, 2023 (the latest practicable date that is closest to the filing date).

CSX Q1 2023 Form 10-Q p.1

CSX CORPORATION

FORM 10-Q

FOR THE QUARTERLY PERIOD ENDED MARCH 31, 2023

INDEX

									Page
PART I.			FINANCIAL INFORMATION
Item 1.			Financial Statements						3
			Consolidated Income Statements (Unaudited) - Quarters Ended March 31, 2023 and March 31, 2022						3
			Condensed Consolidated Comprehensive Income Statements (Unaudited) - Quarters Ended March 31, 2023 and March 31, 2022						3
			Consolidated Balance Sheets - At March 31, 2023 (Unaudited) and December 31, 2022						4
			Consolidated Cash Flow Statements (Unaudited) - Three Months Ended March 31, 2023 and March 31, 2022						5
			Consolidated Statement of Changes in Shareholders' Equity (Unaudited) - Quarters Ended March 31, 2023 and March 31, 2022						6
			Notes to Consolidated Financial Statements (Unaudited)						7
Item 2.			Management's Discussion and Analysis of Financial Condition and Results of Operations						24
Item 3.			Quantitative and Qualitative Disclosures about Market Risk						36
Item 4.			Controls and Procedures						36
PART II.			OTHER INFORMATION
Item 1.			Legal Proceedings						37
Item 1A.			Risk Factors						37
Item 2.			CSX Purchases of Equity Securities						37
Item 3.			Defaults Upon Senior Securities						37
Item 4.			Mine Safety Disclosures						37
Item 5.			Other Information						37
Item 6.			Exhibits						38
Signature									39

CSX Q1 2023 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
			2023			2022
Revenue			$	3,706		$	3,413
Expense
Labor and Fringe			723			692
Purchased Services and Other			688			675
Depreciation and Amortization			393			360
Fuel			364			331
Equipment and Other Rents			82			100
Gains on Property Dispositions			(8)			(27)
Total Expense			2,242			2,131
Operating Income			1,464			1,282
Interest Expense			(201)			(179)
Other Income - Net			41			26
Earnings Before Income Taxes			1,304			1,129
Income Tax Expense			(317)			(270)
Net Earnings			$	987		$	859
Per Common Share (Note 2)
Net Earnings Per Share, Basic			$	0.48		$	0.39
Net Earnings Per Share, Assuming Dilution			$	0.48		$	0.39
Average Shares Outstanding (In millions)			2,054			2,188
Average Shares Outstanding, Assuming Dilution (In millions)			2,058			2,193

CONDENSED CONSOLIDATED COMPREHENSIVE INCOME STATEMENTS (Unaudited)

(Dollars in millions)

			First Quarters
			2023			2022
Total Comprehensive Earnings (Note 10)			$	989		$	890

See accompanying notes to consolidated financial statements.

CSX Q1 2023 Form 10-Q p.3

CSX CORPORATION

ITEM 1. FINANCIAL STATEMENTS

CONSOLIDATED BALANCE SHEETS

(Dollars in millions)

			(Unaudited)
			March 31, 2023			December 31, 2022
ASSETS
Current Assets:
Cash and Cash Equivalents			$	1,291		$	1,958
Short-term Investments			178			129
Accounts Receivable - Net (Note 8)			1,377			1,313
Materials and Supplies			394			341
Other Current Assets			115			108
Total Current Assets			3,355			3,849
Properties			48,441			48,105
Accumulated Depreciation			(14,148)			(13,863)
Properties - Net			34,293			34,242
Investment in Affiliates and Other Companies			2,313			2,292
Right-of-Use Lease Asset			489			505
Goodwill and Other Intangible Assets - Net			500			502
Other Long-term Assets			528			522
Total Assets			$	41,478		$	41,912
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Accounts Payable			$	1,203		$	1,130
Labor and Fringe Benefits Payable			367			707
Casualty, Environmental and Other Reserves (Note 4)			151			144
Current Maturities of Long-term Debt (Note 7)			11			151
Income and Other Taxes Payable			361			111
Other Current Liabilities			228			228
Total Current Liabilities			2,321			2,471
Casualty, Environmental and Other Reserves (Note 4)			287			292
Long-term Debt (Note 7)			17,911			17,896
Deferred Income Taxes - Net			7,605			7,569
Long-term Lease Liability			478			488
Other Long-term Liabilities			542			571
Total Liabilities			29,144			29,287
Shareholders' Equity:
Common Stock, $1 Par Value			2,033			2,066
Other Capital			587			574
Retained Earnings			10,092			10,363
Accumulated Other Comprehensive Loss (Note 10)			(386)			(388)
Non-controlling Minority Interest			8			10
Total Shareholders' Equity			12,334			12,625
Total Liabilities and Shareholders' Equity			$	41,478		$	41,912

See accompanying notes to consolidated financial statements.

CSX Q1 2023 Form 10-Q p.4

CSX CORPORATION

ITEM 1. FINANCIAL STATEMENTS

CONSOLIDATED CASH FLOW STATEMENTS (Unaudited)

(Dollars in millions)

			Three Months
			2023			2022
OPERATING ACTIVITIES
Net Earnings			$	987		$	859
Adjustments to Reconcile Net Earnings to Net Cash Provided by Operating Activities:
Depreciation and Amortization			393			360
Deferred Income Taxes			35			37
Gains on Property Dispositions			(8)			(27)
Other Operating Activities			(31)			4
Changes in Operating Assets and Liabilities:
Accounts Receivable			(63)			(131)
Other Current Assets			(72)			(40)
Accounts Payable			70			82
Income and Other Taxes Payable			266			225
Other Current Liabilities			(326)			(70)
Net Cash Provided by Operating Activities			1,251			1,299
INVESTING ACTIVITIES
Property Additions			(443)			(331)
Purchases of Short-term Investments			(101)			(19)
Proceeds from Sales of Short-term Investments			53			—
Proceeds and Advances from Property Dispositions			8			8
Business Acquisition, Net of Cash Acquired			(2)			(9)
Other Investing Activities			5			(17)
Net Cash Used In Investing Activities			(480)			(368)
FINANCING ACTIVITIES
Long-term Debt Repaid (Note 7)			(142)			(6)
Dividends Paid			(226)			(218)
Shares Repurchased			(1,067)			(1,016)
Other Financing Activities			(3)			6
Net Cash Used in Financing Activities			(1,438)			(1,234)
Net Decrease in Cash and Cash Equivalents			(667)			(303)
CASH AND CASH EQUIVALENTS
Cash and Cash Equivalents at Beginning of Period			1,958			2,239
Cash and Cash Equivalents at End of Period			$	1,291		$	1,936

See accompanying notes to consolidated financial statements.

CSX Q1 2023 Form 10-Q p.5

CSX CORPORATION