CSX 10-Q 2025-06-30

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, 2025

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 1,864,277,014 shares of common stock outstanding on June 30, 2025 (the latest practicable date that is closest to the filing date).

CSX Q2 2025 Form 10-Q p.1

CSX CORPORATION

FORM 10-Q

FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2025

INDEX

									Page
PART I.			FINANCIAL INFORMATION
Item 1.			Financial Statements						3
			Consolidated Income Statements (Unaudited) - Quarters and Six Months Ended June 30, 2025 and June 30, 2024						3
			Condensed Consolidated Comprehensive Income Statements (Unaudited) - Quarters and Six Months Ended June 30, 2025 and June 30, 2024						3
			Consolidated Balance Sheets - At June 30, 2025 (Unaudited) and December 31, 2024						4
			Consolidated Cash Flow Statements (Unaudited) - Six Months Ended June 30, 2025 and June 30, 2024						5
			Consolidated Statements of Changes in Shareholders' Equity (Unaudited) - Quarters and Six Months Ended June 30, 2025 and June 30, 2024						6
			Notes to Consolidated Financial Statements (Unaudited)						8
Item 2.			Management's Discussion and Analysis of Financial Condition and Results of Operations						31
Item 3.			Quantitative and Qualitative Disclosures about Market Risk						46
Item 4.			Controls and Procedures						46
PART II.			OTHER INFORMATION
Item 1.			Legal Proceedings						47
Item 1A.			Risk Factors						47
Item 2.			CSX Purchases of Equity Securities						47
Item 3.			Defaults Upon Senior Securities						48
Item 4.			Mine Safety Disclosures						48
Item 5.			Other Information						48
Item 6.			Exhibits						49
Signature									50

CSX Q2 2025 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
			2025			2024						2025			2024
Revenue			$	3,574		$	3,701					$	6,997		$	7,382
Expense
Labor and Fringe			791			766						1,612			1,571
Purchased Services and Other			710			691						1,484			1,411
Depreciation and Amortization			427			410						852			820
Fuel			269			301						544			626
Equipment and Other Rents			94			85						181			169
Total Expense			2,291			2,253						4,673			4,597
Operating Income			1,283			1,448						2,324			2,785
Interest Expense			(212)			(209)						(421)			(419)
Other Income - Net			22			28						48			69
Earnings Before Income Taxes			1,093			1,267						1,951			2,435
Income Tax Expense			(264)			(304)						(476)			(592)
Net Earnings			$	829		$	963					$	1,475		$	1,843
Per Common Share (Note 2)
Net Earnings Per Share, Basic			$	0.44		$	0.50					$	0.79		$	0.94
Net Earnings Per Share, Assuming Dilution			$	0.44		$	0.49					$	0.78		$	0.94
Average Shares Outstanding (In Millions)			1,867			1,944						1,878			1,951
Average Shares Outstanding, Assuming Dilution (In Millions)			1,869			1,948						1,881			1,955

CONDENSED CONSOLIDATED COMPREHENSIVE INCOME STATEMENTS (Unaudited)

(Dollars in Millions)

			Second Quarters									Six Months
			2025			2024						2025			2024
Total Comprehensive Earnings (Note 10)			$	832		$	966					$	1,483		$	1,852

See accompanying notes to consolidated financial statements.

CSX Q2 2025 Form 10-Q p.3

CSX CORPORATION

ITEM 1. FINANCIAL STATEMENTS

CONSOLIDATED BALANCE SHEETS

(Dollars in Millions)

			(Unaudited)
			June 30, 2025			December 31, 2024
ASSETS
Current Assets:
Cash and Cash Equivalents			$	387		$	933
Short-term Investments (Note 9)			6			72
Accounts Receivable - Net (Note 8)			1,409			1,326
Materials and Supplies			420			414
Other Current Assets			83			75
Total Current Assets			2,305			2,820
Properties			53,331			52,191
Accumulated Depreciation			(17,083)			(16,533)
Properties - Net			36,248			35,658
Investment in Affiliates and Other Companies			2,574			2,520
Right-of-Use Lease Asset			476			487
Goodwill and Other Intangible Assets - Net			437			433
Other Long-term Assets			889			846
Total Assets			$	42,929		$	42,764
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Accounts Payable			$	1,273		$	1,290
Labor and Fringe Benefits Payable			453			480
Casualty, Environmental and Other Reserves (Note 4)			158			149
Current Maturities of Long-term Debt (Note 7)			616			606
Income and Other Taxes Payable			156			508
Other Current Liabilities			327			243
Total Current Liabilities			2,983			3,276
Casualty, Environmental and Other Reserves (Note 4)			304			313
Long-term Debt (Note 7)			18,550			17,897
Deferred Income Taxes - Net			7,718			7,725
Long-term Lease Liability			484			486
Other Long-term Liabilities			513			560
Total Liabilities			30,552			30,257
Shareholders' Equity:
Common Stock, $1 Par Value			1,864			1,900
Other Capital			882			846
Retained Earnings			9,850			9,988
Accumulated Other Comprehensive Loss (Note 10)			(224)			(232)
Non-controlling Minority Interest			5			5
Total Shareholders' Equity			12,377			12,507
Total Liabilities and Shareholders' Equity			$	42,929		$	42,764

See accompanying notes to consolidated financial statements.

CSX Q2 2025 Form 10-Q p.4

CSX CORPORATION

ITEM 1. FINANCIAL STATEMENTS

CONSOLIDATED CASH FLOW STATEMENTS (Unaudited)

(Dollars in Millions)

			Six Months
			2025			2024
OPERATING ACTIVITIES
Net Earnings			$	1,475		$	1,843
Adjustments to Reconcile Net Earnings to Net Cash Provided by Operating Activities:
Depreciation and Amortization			852			820
Deferred Income Taxes			(1)			14
Other Operating Activities			(50)			(19)
Changes in Operating Assets and Liabilities:
Accounts Receivable			(36)			(19)
Other Current Assets			(13)			25
Accounts Payable			18			(42)
Income and Other Taxes Payable			(362)			(403)
Other Current Liabilities			7			(46)
Net Cash Provided by Operating Activities			1,890			2,173
INVESTING ACTIVITIES
Property Additions			(1,495)			(1,066)
Proceeds from Sales of Short-term Investments			69			81
Proceeds and Advances from Property Dispositions			49			43
Business Acquisition, Net of Cash Acquired			(14)			(50)
Other Investing Activities			(63)			(56)
Net Cash Used In Investing Activities			(1,454)			(1,048)
FINANCING ACTIVITIES
Shares Repurchased			(1,172)			(810)
Dividends Paid			(488)			(468)
Long-term Debt Repaid (Note 7)			(3)			(4)
Long-term Debt Issued (Note 7)			600			—
Other Financing Activities			81			42
Net Cash Used in Financing Activities			(982)			(1,240)
Net Decrease in Cash and Cash Equivalents			(546)			(115)
CASH AND CASH EQUIVALENTS
Cash and Cash Equivalents at Beginning of Period			933			1,353
Cash and Cash Equivalents at End of Period			$	387		$	1,238

See accompanying notes to consolidated financial statements.

CSX Q2 2025 Form 10-Q p.5

CSX CORPORATION

ITEM 1. FINANCIAL STATEMENTS

CONSOLIDATED STATEMENTS OF CHANGES

IN SHAREHOLDERS' EQUITY (Unaudited)

(Dollars in Millions)

Six Months 2025			Common Shares Outstanding (Thousands)			Common Stock and Other Capital			Retained Earnings			Accumulated Other Comprehensive (Loss) Income**(a)**			Non-controlling Minority Interest			Total Shareholders' Equity
Balance December 31, 2024			1,900,190			$	2,746		$	9,988		$	(232)		$	5		$	12,507
Comprehensive Earnings:
Net Earnings			—			—			646			—			—			646
Other Comprehensive Income			—			—			—			5			—			5
Total Comprehensive Earnings																		651
Common stock dividends, $0.13 per share			—			—			(245)			—			—			(245)
Share Repurchases			(23,707)			(24)			(727)			—			—			(751)
Excise Tax on Net Share Repurchases			—			—			(7)			—			—			(7)
Stock Option Exercises and Other			1,894			20			—			—			—			20
Balance March 31, 2025			1,878,377			$	2,742		$	9,655		$	(227)		$	5		$	12,175
Comprehensive Earnings:
Net Earnings			—			—			829			—			—			829
Other Comprehensive Income			—			—			—			3			—			3
Total Comprehensive Earnings																		832
Common stock dividends, $0.13 per share			—			—			(243)			—			—			(243)
Share Repurchases			(14,209)			(14)			(387)			—			—			(401)
Excise Tax on Net Share Repurchases			—			—			(4)			—			—			(4)
Stock Option Exercises and Other			112			18			—			—			—			18
Balance June 30, 2025			1,864,280			$	2,746		$	9,850		$	(224)		$	5		$	12,377

(a) Accumulated Other Comprehensive Loss balances shown above are net of tax. The associated taxes were $61 million as of December 31, 2024, $59 million as of March 31, 2025, and $58 million as of June 30, 2025. For additional information, see Note 10, Other Comprehensive Income.

See accompanying notes to consolidated financial statements.

CSX Q2 2025 Form 10-Q p.6

CSX CORPORATION

CONSOLIDATED STATEMENTS OF CHANGES

IN SHAREHOLDERS' EQUITY (Unaudited)

(Dollars in Millions)

Six Months 2024			Common Shares Outstanding (Thousands)			Common Stock and Other Capital			Retained Earnings			Accumulated Other Comprehensive (Loss) Income**(a)**			Non-controlling Minority Interest			Total Shareholders' Equity
Balance December 31, 2023			1,958,757			$	2,650		$	9,609		$	(279)		$	5		$	11,985
Comprehensive Earnings:
Net Earnings			—			—			880			—			—			880
Other Comprehensive Income			—			—			—			6			—			6
Total Comprehensive Earnings																		886
Common stock dividends, $0.12 per share			—			—			(235)			—			—			(235)
Share Repurchases			(6,789)			(7)			(240)			—			—			(247)
Excise Tax on Net Share Repurchases			—			—			(1)			—			—			(1)
Stock Option Exercises and Other			2,961			55			(2)			—			—			53
Balance March 31, 2024			1,954,929			$	2,698		$	10,011		$	(273)		$	5		$	12,441
Comprehensive Earnings:
Net Earnings			—			—			963			—			—			963
Other Comprehensive Income			—			—			—			3			—			3
Total Comprehensive Earnings																		966
Common stock dividends, $0.12 per share			—			—			(233)			—			—			(233)
Share Repurchases			(16,308)			(16)			(547)			—			—			(563)
Excise Tax on Net Share Repurchases			—			—			(6)			—			—			(6)
Stock Option Exercises and Other			124			15			1			—			(1)			15
Balance June 30, 2024			1,938,745			$	2,697		$	10,189		$	(270)		$	4		$	12,620

(a) Accumulated Other Comprehensive Loss balances shown above are net of tax. The associated taxes were $74 million as of December 31, 2023, $72 million as of March 31, 2024, and $72 million as of June 30, 2024. For additional information, see Note 10, Other Comprehensive Income.

See accompanying notes to consolidated financial statements.

CSX Q2 2025 Form 10-Q p.7

CSX CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

NOTE 1. Nature of Operations and Significant Accounting Policies

Background

CSX Corporation together with its subsidiaries ("CSX" or the “Company”), based in Jacksonville, Florida, is one of the nation's leading transportation companies. The Company provides rail-based transportation services including traditional rail service, the transport of intermodal containers and trailers, as well as other transportation services such as rail-to-truck transfers and bulk commodity operations.

CSX's principal operating subsidiary, CSX Transportation, Inc. (“CSXT”), provides an important link to the transportation supply chain through its approximately 20,000 route-mile rail network and serves major population centers in 26 states east of the Mississippi River, the District of Columbia and the Canadian provinces of Ontario and Quebec. The Company's intermodal business links customers to railroads via trucks and terminals. CSXT is also responsible for the Company's real estate sales, leasing, acquisition, and management and development activities, substantially all of which are focused on supporting railroad operations.

Other entities

In addition to CSXT, the Company’s subsidiaries include Quality Carriers, Inc. ("Quality Carriers"), CSX Intermodal Terminals, Inc. (“CSX Intermodal Terminals”), Total Distribution Services, Inc. (“TDSI”), Transflo Terminal Services, Inc. (“Transflo”), CSX Technology, Inc. (“CSX Technology”) and other subsidiaries. Quality Carriers is the largest provider of bulk liquid chemicals truck transportation in North America. CSX Intermodal Terminals owns and operates a system of intermodal terminals, predominantly in the eastern United States and also performs drayage services (the pickup and delivery of intermodal shipments) for certain customers. TDSI serves the automotive industry with distribution centers and storage locations. Transflo connects non-rail served customers to the many benefits of rail by transferring products from rail to trucks. The biggest Transflo markets are chemicals and agriculture, which includes shipments of plastics and ethanol. CSX Technology and other subsidiaries provide support services for the Company.

CSX Q2 2025 Form 10-Q p.8

CSX CORPORATION

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

(Unaudited)

NOTE 1. Nature of Operations and Significant Accounting Policies, continued

Basis of Presentation

In the opinion of management, the accompanying consolidated financial statements contain all normal, recurring adjustments necessary to fairly present the consolidated financial statements and accompanying notes. Where applicable, prior year information has been reclassified to conform to the current presentation. Pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”), certain information and disclosures normally included in the notes to the annual financial statements prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) have b

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Volume and Revenue (Unaudited)
Volume (Thousands of Units); Revenue (Dollars in Millions); Revenue Per Unit (Dollars)
Second Quarters
			Volume																		Revenue																		Revenue Per Unit
			2025						2024						% Change						2025						2024						% Change						2025						2024						% Change
Chemicals			164						174						(6)		%				$	701					$	722					(3)		%				$	4,274					$	4,149					3		%
Agricultural and Food Products			117						115						2						418						406						3						3,573						3,530						1
Automotive			103						105						(2)						320						336						(5)						3,107						3,200						(3)
Minerals			99						97						2						218						207						5						2,202						2,134						3
Forest Products			70						74						(5)						250						269						(7)						3,571						3,635						(2)
Metals and Equipment			70						68						3						224						230						(3)						3,200						3,382						(5)
Fertilizers			47						50						(6)						126						126						—						2,681						2,520						6
Total Merchandise			670						683						(2)						2,257						2,296						(2)						3,369						3,362						—
Intermodal			729						716						2						491						506						(3)						674						707						(5)
Coal			181						179						1						477						563						(15)						2,635						3,145						(16)
Trucking			—						—						—						211						221						(5)						—						—						—
Other			—						—						—						138						115						20						—						—						—
Total			1,580						1,578						—		%				$	3,574					$	3,701					(3)		%				$	2,262					$	2,345					(4)		%
Six Months
			Volume																		Revenue																		Revenue Per Unit
			2025						2024						% Change						2025						2024						% Change						2025						2024						% Change
Chemicals			330						341						(3)		%				$	1,399					$	1,415					(1)		%				$	4,239					$	4,150					2		%
Agricultural and Food Products			232						229						1						826						813						2						3,560						3,550						—
Automotive			190						199						(5)						591						629						(6)						3,111						3,161						(2)
Minerals			178						177						1						399						381						5						2,242						2,153						4
Forest Products			140						147						(5)						499						531						(6)						3,564						3,612						(1)
Metals and Equipment			135						138						(2)						433						450						(4)						3,207						3,261						(2)
Fertilizers			95						97						(2)						262						262						—						2,758						2,701						2
Total Merchandise			1,300						1,328						(2)						4,409						4,481						(2)						3,392						3,374						1
Intermodal			1,445						1,417						2						984						1,012						(3)						681						714						(5)
Coal			353						367						(4)						938						1,195						(22)						2,657						3,256						(18)
Trucking			—						—						—						413						436						(5)						—						—						—
Other			—						—						—						253						258						(2)						—						—						—
Total			3,098						3,112						—		%				$	6,997					$	7,382					(5)		%				$	2,259					$	2,372					(5)		%

CSX Q2 2025 Form 10-Q p.32

CSX CORPORATION

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Second Quarter 2025

Revenue

Total revenue decreased 3% in second quarter 2025 when compared to second quarter 2024, due to decreases in export coal revenue, including the impact of lower benchmark rates, as well as lower fuel recovery and declines in merchandise volume. These decreases were partially offset by higher pricing in merchandise and increases in other revenue.

Merchandise Volume

Chemicals - Decreased due to lower shipments of plastics, including the impact of a temporary outage at a customer location, as well as lower shipments of crude oil, petroleum products, and other industrial chemicals.

Agricultural and Food Products - Increased due to higher shipments of domestic feed grain.

Automotive - Decreased due to lower North American vehicle production.

Minerals - Increased primarily due to higher shipments of cement and aggregates.

Forest Products - Decreased due to lower shipments of paper products, which includes the impact of both temporary outages and permanent plant closures, as well as lower shipments of building products.

Metals and Equipment - Increased due to higher scrap and steel shipments, partially offset by lower equipment shipments.

Fertilizers - Decreased due to lower shipments of phosphates, fertilizers and potash.

Intermodal Volume

International shipments increased driven by higher port volumes and growth with key customers. Domestic shipments decreased due to the impacts of a continued soft trucking environment.

Coal Volume

Domestic coal increased due to higher shipments to utility plants, partially offset by lower thermal shipments to river terminals and reduced shipments to steel manufacturing locations. Export coal decreased due to lower metallurgical coal shipments, including the impact of outages at customer facilities.

Trucking Revenue

Trucking revenue decreased $10 million versus the prior year due to lower fuel surcharge and rates.

Other Revenue

Other revenue increased $23 million primarily due to a decrease in the reserve for freight in transit, driven by sequential improvement in transit times, as well as higher haulage revenue.

CSX Q2 2025 Form 10-Q p.33

CSX CORPORATION

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Expenses

Expenses of $2.3 billion increased $38 million, or 2%, in second quarter 2025 when compared to the second quarter 2024.

Labor and Fringe expense increased $25 million due to the following:

• An increase of $18 million was due to inflation.

• All other net costs increased $7 million as higher trucking headcount from the conversion of previously independent affiliates and higher incentive compensation expense were partially offset by other non-significant items.

Purchased Services and Other expense increased $19 million due to the following:

• Inflation and higher volume-related costs associated with intermodal and other terminals drove an increase of $21 million.

• Increased costs of approximately $14 million were due to the effects of network disruptions and congestion, including rerouting impacts.

• Gains on property dispositions were flat at $8 million in both years.

• All other net costs decreased $16 million, which includes the prior year impact of an unfavorable inventory adjustment as well as current year trucking savings from affiliate conversions, partially offset by lower insurance recoveries.

Depreciation and Amortization expense increased $17 million as a result of a larger asset base.

Fuel costs decreased $32 million primarily as a result of a 12% decrease in locomotive fuel prices, partially offset by the impact of additional gross ton-miles associated with reroutes.

Equipment and Other Rents expense increased $9 million due to increased net car hire costs driven by inflation and the impact of reroutes on car cycle times.

Interest Expense

Interest expense increased $3 million primarily due to higher average debt balances.

Other Income - Net

Other income - net decreased $6 million primarily due to lower interest income, partially offset by other non-significant items.

Income Tax Expense

Income tax expense decreased $40 million primarily due to lower earnings before income taxes.

CSX Q2 2025 Form 10-Q p.34

CSX CORPORATION

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Six Months Results of Operations

Revenue decreased $385 million primarily due to lower coal revenue, which includes the impact of lower global benchmark rates, as well as lower fuel recovery and declines in merchandise volume. These declines were partially offset by pricing gains in merchandise.

Total expense increased $76 million primarily due to inflation, costs due to network disruptions and congestion, and higher depreciation. These increases were partially offset by lower fuel prices.

Interest expense increased $2 million as higher average debt balances were mostly offset by favorable hedge impacts.

Other income - net decreased $21 million primarily due to lower interest income, which resulted from lower interest rates and lower cash balances.

Income tax expense decreased $116 million primarily due to lower earnings before income taxes.

CSX Q2 2025 Form 10-Q p.35

CSX CORPORATION

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Non-GAAP Measures - Unaudited

CSX reports its financial results in accordance with accounting principles generally accepted in the United States of America ("GAAP"). CSX also uses certain non-GAAP measures that fall within the meaning of Securities and Exchange Commission Regulation G and Regulation S-K Item 10(e), which may provide users of the financial information with additional meaningful comparison to prior reported results. Non-GAAP measures do not have standardized definitions and are not defined by GAAP. Therefore, CSX’s non-GAAP measures are unlikely to be comparable to similar measures presented by other companies. The presentation of these non-GAAP measures should not be considered in isolation from, as a substitute for, or as superior to the financial information presented in accordance with GAAP. Reconciliations of non-GAAP measures to corresponding GAAP measures are below.

Economic Profit

Management believes Economic Profit provides an additional perspective to investors about financial returns generated by the business by representing a measure showing 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 management’s desired minimum required return and is broadly utilized by management to make investment decisions. Therefore, disclosing Economic Profit on how management performs in this regard provides additional useful information to investors regarding the Company’s performance compared to its goals.

Economic Profit should be considered in addition to, rather than a substitute for, operating income, which is the most directly comparable GAAP measure. Economic Profit is defined by the Company as Gross Cash Earnings (“GCE”) minus the Capital Charge on Gross Operating Assets (“GOA”). Increases in Economic Profit indicate that the Company is effectively allocating capital and rewarding shareholders by generating returns in excess of the incremental cost of capital associated with reinvestment in the business.

GCE is calculated as operating income plus depreciation, amortization and operating lease expense, less unusual items and taxes. The Capital Charge uses a minimum required return multiplied by the GOA. CSX's GOAs include gross properties and other non-cash assets, net of non-interest bearing liabilities. The Company used a 15% tax rate and an 8% required return, for both periods presented, which is consistent with rates used for investment decisions and performance evaluation within those same periods. The tax rate is the approximate equivalent of the Company’s actual income tax expense as a percentage of pre-tax GCE. The required return rate represents management’s desired minimum return on any investment. CSX annually re-evaluates these rates to ensure they accurately represent taxes and a required return in light of internal and external factors and would adjust the rate if the annual review resulted in a preset deviation from the current rates. This focuses the Economic Profit measure on value generated by management instead of external factors, such as legislative tax policy or interest rate volatility.

CSX Q2 2025 Form 10-Q p.36

CSX CORPORATION

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following table reconciles operating income (the most directly comparable GAAP measure) to Economic Profit (non-GAAP measure).

			Six Months
(Dollars in Millions)			2025			2024
Operating Income			$	2,324		$	2,785
Add: Depreciation, Amortization, and Operating Lease Expense			907			877
Remove: Unusual Items (a)			—			—
Taxes (b)			(485)			(549)
Gross Cash Earnings			2,746			3,113
Operating Assets
Current Assets (Less Cash and Short-term Investments)			1,893			1,950
Gross Properties			53,003			50,841
Other Assets			4,349			4,222
Operating Liabilities
Non-Interest Bearing Liabilities (c)			(11,118)			(10,887)
Gross Operating Assets (d)			48,127			46,126
Capital Charge (e)			(1,925)			(1,845)
Economic Profit (Non-GAAP) calculated as GCE less Capital Charge			$	821		$	1,268

(a) Unusual items are defined by management as unique events with greater than $100 million full year operating income impact, consistent with the terms of the Company's long-term incentive plan agreements. There were no unusual items for either period presented.

(b) The tax percentage rate was 15% for both periods presented. This rate is applied to the sum of operating income, depreciation, amortization and operating lease expense, and unusual items.

(c) Non-interest bearing liabilities represents all liabilities excluding debt, long-term lease liabilities, and commercial paper ($75 million outstanding in other current liabilities as of June 30, 2025, and none outstanding in any other period).

(d) Gross operating assets reflects an average of the year-to-date quarter-end amounts reported for each period presented.

(e) The capital charge of 8% for both years is calculated as the minimum return multiplied by gross operating assets. This is an annualized rate equivalent to 2% per quarter.

Free Cash Flow

Management believes that Free Cash Flow ("FCF") is supplemental information useful to investors as it is important in evaluating the Company’s financial performance. More specifically, FCF measures cash generated by the business after reinvestment. This measure represents cash available for both equity and bond investors to be used for dividends, share repurchases or principal reduction on outstanding debt. FCF is calculated by using net cash from operations and adjusting for property additions and proceeds and advances from property dispositions. FCF should be considered in addition to, rather than a substitute for, cash provided by operating activities.

The decrease in FCF before dividends from the prior year of $706 million is primarily due to higher property additions and a decrease in net earnings, as well as higher payments of previously postponed income taxes.

CSX Q2 2025 Form 10-Q p.37

CSX CORPORATION

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following table reconciles cash provided by operating activities (GAAP measure) to FCF before dividends (non-GAAP measure).

			Six Months
(Dollars in Millions)			2025			2024
Net cash provided by operating activities			$	1,890		$	2,173
Property Additions			(1,495)			(1,066)
Proceeds and Advances from Property Dispositions			49			43
Free Cash Flow (before payment of dividends)			$	444		$	1,150

Operating Statistics (Estimated)

The Company is committed to continuous improvement in safety and service performance through training, innovation and investment. Training and safety programs are designed to prevent incidents that can adversely impact employees, customers and communities. Technological innovations that can detect and avoid many types of human factor incidents are designed to serve as an additional layer of protection for the Company's employees. Continued capital investment in the Company's assets, including track, bridges, signals, equipment and detection technology also supports safety performance.

In the second quarter of 2025, velocity decreased by 4% and dwell increased by 2% versus prior year. Carload trip plan performance decreased by 6% and intermodal trip plan performance decreased by 4%. Network performance and service metrics, including on-time originations and arrivals, showed improvement over the course of the quarter with performance meaningfully stronger in June 2025 compared to April 2025. The Company continues to focus on operational improvements and executing the operating plan to deliver safe, reliable, and efficient service to customers.

The personal injury frequency index of 0.99 in second quarter 2025 improved 26% compared to prior year, while the FRA train accident rate of 3.70 increased by 29%. Safety is a top priority at CSX, and the Company is committed to reducing risk and enhancing the overall safety of its employees, customers, and communities in which it operates.

CSX Q2 2025 Form 10-Q p.38

CSX CORPORATION

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

			Second Quarters												Six Months
			2025			2024			Improvement / (Deterioration)						2025			2024			Improvement / (Deterioration)
Operations Performance
Train Velocity (Miles Per Hour)			17.5			18.2			(4)		%				17.6			18.2			(3)		%
Dwell (Hours)			10.4			10.2			(2)		%				11.0			9.9			(11)		%
Cars Online			129,738			126,164			(3)		%				130,962			125,442			(4)		%
On-Time Originations			69		%	74		%	(7)		%				68		%	75		%	(9)		%
On-Time Arrivals			55		%	64		%	(14)		%				55		%	67		%	(18)		%
Carload Trip Plan Performance			75		%	80		%	(6)		%				72		%	81		%	(11)		%
Intermodal Trip Plan Performance			90		%	94		%	(4)		%				90		%	94		%	(4)		%
Fuel Efficiency			0.98			0.97			(1)		%				0.98			0.99			1		%
Revenue Ton-Miles (Billions)
Merchandise			33.2			32.7			2		%				65.5			64.7			1		%
Coal			9.3			8.8			6		%				17.7			18.2			(3)		%
Intermodal			7.5			7.2			4		%				14.6			14.3			2		%
Total Revenue Ton-Miles			50.0			48.7			3		%				97.8			97.2			1		%
Total Gross Ton-Miles (Billions)			99.6			96.8			3		%				193.5			192.6			—		%
Safety
FRA Personal Injury Frequency Index			0.99			1.33			26		%				0.96			1.28			25		%
FRA Train Accident Rate			3.70			2.86			(29)		%				3.63			3.47			(5)		%

Certain operating statistics are estimated and can continue to be updated as actuals settle. The methodology for calculating train velocity, dwell, cars online and trip plan performance differs from that used by the Surface Transportation Board. The Company will continue to report these metrics to the Surface Transportation Board using the prescribed methodology.

Key Performance Measures Definitions

Train Velocity - Average train speed between origin and destination in miles per hour (does not include locals, yard jobs, work trains or passenger trains). Train velocity measures actual train miles and times of a train movement on CSX's network.

Dwell - Average amount of time in hours between car arrival to and departure from the yard.

Cars Online - Average number of active freight rail cars on lines operated by CSX, excluding rail cars that are being repaired, in storage, those that have been sold, or private cars dwelling at a customer location more than one day.

On-Time Originations - Percent of scheduled road trains that depart the origin yard on-time or ahead of schedule.

On-Time Arrivals - Percent of scheduled road trains that arrive at the destination yard on-time to within two hours of scheduled arrival.

Carload Trip Plan Performance - Percent of measured cars (excludes unit trains and other non-scheduled service as well as empty automotive shipments) destined for a customer that complete their scheduled plan at or ahead of the original estimated time of arrival or interchange (as applicable).

Intermodal Trip Plan Performance - Percent of measured containers (excludes port shipments along with empty containers and other non-scheduled service) destined for a customer that complete their scheduled plan at or ahead of the original estimated time of arrival, notification or interchange (as applicable).

Fuel Efficiency - Gallons of locomotive fuel per 1,000 gross ton-miles.

Revenue Ton-Miles (RTM's) - The movement of one revenue-producing ton of freight over a distance of one mile.

Gross Ton-Miles (GTM's) - The movement of one ton of train weight over one mile. GTM's are calculated by multiplying total train weight by distance the train moved. Total train weight is comprised of the weight of the freight cars and their contents.

FRA Personal Injury Frequency Index - Number of FRA-reportable injuries per 200,000 man-hours.

FRA Train Accident Rate - Number of FRA-reportable train accidents per million train-miles.

CSX Q2 2025 Form 10-Q p.39

CSX CORPORATION

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

LIQUIDITY AND CAPITAL RESOURCES

The following are material changes in the significant cash flows, sources of cash and liquidity, capital investments, consolidated balance sheets and working capital, which provide an update to the discussion included in CSX's most recent annual report on Form 10-K.

Material Changes in Significant Cash Flows

Significant Cash Flows

The following chart highlights the operating, investing and financing components of the net decrease of $546 million and $115 million in cash and cash equivalents for the six months ended June 30, 2025, and June 30, 2024, respectively.

• The Company generated $283 million less cash from operating activities primarily due to lower cash-generating net earnings, partially offset by favorable working capital activities.

• CSX used $406 million more cash for investing activities primarily due to higher property additions consistent with planned capital expenditures, including approximately $295 million incremental property additions related to rebuilding the Blue Ridge subdivision as a result of impacts from Hurricane Helene.

• The Company used $258 million less cash for financing activities due to a $600 million debt issuance and a $75 million net commercial paper issuance, which was partially offset by higher share repurchases.

CSX Q2 2025 Form 10-Q p.40

CSX CORPORATION

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Sources of Cash and Liquidity and Uses of Cash

As of the end of second quarter 2025, CSX had $393 million of cash, cash equivalents and short-term investments. CSX uses current cash balances for general corporate purposes, which may include capital expenditures, working capital requirements, reduction or refinancing of outstanding indebtedness, redemptions and repurchases of CSX common stock, dividends to shareholders, acquisitions and other business opportunities, and contributions to the Company's qualified pension plan. See Note 7, Debt and Credit Agreements.

The Company has multiple sources of liquidity, including cash generated from operations and financing sources. The Company filed a shelf registration statement with the SEC on February 27, 2025, which may be used to issue debt or equity securities at CSX’s discretion, subject to market conditions and CSX Board authorization. While CSX seeks to give itself flexibility with respect to cash requirements, there can be no assurance that market conditions would permit CSX to sell such securities on acceptable terms at any given time, or at all. During the six months ended June 30, 2025, CSX issued a total of $600 million of long-term debt.

CSX has a $1.2 billion unsecured, revolving credit facility backed by a diverse syndicate of banks that expires in February 2028. At June 30, 2025, the Company had no outstanding balances under this facility. The Company also has a commercial paper program, backed by the revolving credit facility, under which the Company may issue unsecured short-term commercial paper notes up to a maximum aggregate principal amount of $1.0 billion outstanding at any one time. At June 30, 2025, the Company had $75 million of debt outstanding under the commercial paper program.

Planned capital investments for 2025 are expected to be consistent with 2024 spending at approximately $2.5 billion, except for additional costs to rebuild the Blue Ridge subdivision as a result of impacts from Hurricane Helene. Total spending on the Blue Ridge rebuild will exceed $400 million, including approximately $50 million spent in 2024 and approximately $295 million spent in the six months ended June 30, 2025. Spending to sustain core infrastructure with a focus on safety and reliability will also remain a top priority. In addition, management is committed to investments that promote profitable growth, including projects supporting service enhancements and productivity initiatives, which includes investments in locomotives and freight cars. CSX intends to fund capital investments primarily through cash generated from operations.

The Company is assessing its planned cash income tax payments and related balance sheet impacts as a result of the changes in bonus tax depreciation that were enacted into law on July 4, 2025, as part of what is commonly known as the One Big Beautiful Bill Act. The Company currently expects the impact of applying this provision to result in favorable cash tax impacts of approximately $250 million for the 2025 tax year and a related balance sheet reclassification from current income and other taxes payable to long-term deferred income tax liabilities.

CSX Q2 2025 Form 10-Q p.41

CSX CORPORATION

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Material Changes in the Consolidated Balance Sheets and Working Capital

Consolidated Balance Sheets

Total assets increased $165 million from year end primarily due to a $590 million increase in net property consistent with planned capital expenditures, including incremental property additions related to rebuilding the Blue Ridge subdivision, and an $83 million increase in accounts receivable due to increased revenue at the end of the quarter and the timing of collections. These increases were partially offset by a $546 million decrease in cash and cash equivalents as noted above.

Total liabilities increased $295 million from year end primarily due to the issuance of $600 million in long-term debt and net issuance of $75 million of commercial paper. These increases were partially offset by a $352 million decrease in income and other taxes payable, which was mostly driven by the payment of previously postponed federal and state taxes. Total shareholders' equity decreased $130 million from year end primarily driven by share repurchases of $1.2 billion and dividends paid of $488 million, partially offset by net earnings of $1.5 billion.

Working capital is considered a measure of a company's ability to meet its short-term needs. CSX had a working capital deficit of $678 million as of June 30, 2025, and $456 million as of December 31, 2024. The decrease in working capital of $222 million since year end was primarily due to cash used for property additions of $1.5 billion, share repurchases of $1.2 billion, and dividend payments of $488 million, partially offset by cash-generating net earnings of $2.3 billion and a debt issuance of $600 million. The Company's working capital balance varies due to factors such as the timing of scheduled debt payments and changes in cash and cash equivalent balances as discussed above. The Company continues to maintain adequate liquidity to satisfy current liabilities and maturing obligations when they come due. CSX has sufficient financial capacity, including its revolving credit facility, commercial paper program and shelf registration statement to manage its day-to-day cash requirements and any anticipated obligations. The Company from time to time accesses the credit markets for additional liquidity.

CSX is committed to returning cash to shareholders and maintaining an investment-grade credit profile. Capital structure, capital investments and cash distributions, including dividends and share repurchases, are reviewed at least annually by the Board of Directors. Management's assessment of market conditions and other factors guides the timing and volume of repurchases. Future share repurchases are expected to be funded by cash on hand, cash generated from operations and debt issuances.

This discussion should be read in conjunction with our Condensed Consolidated Financial Statements and the related notes that appear elsewhere in this document.

LABOR AGREEMENTS

Approximately 17,500 of the Company's approximately 23,500 employees are members of a rail labor union and covered by national agreements with the Class I railroads or CSX-specific agreements. As of the date of this filing, new agreements with an effective date of January 1, 2025, have been fully ratified by most unions, representing nearly 75% of the Company's unionized workforce. The remaining unionized employees are covered under previous agreements while negotiations take place since collective agreements under the Railway Labor Act do not expire, but continue until amended or replaced.

CSX Q2 2025 Form 10-Q p.42

CSX CORPORATION

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

CRITICAL ACCOUNTING ESTIMATES

The preparation of financial statements in conformity with accounting principles generally accepted in the United States requires that management make estimates in reporting the amounts of certain assets and liabilities, the disclosure of contingent assets and liabilities at the date of the financial statements and certain revenues and expenses during the reporting period. Actual results may differ from those estimates. These estimates and assumptions are discussed with the Audit Committee of the Board of Directors on a regular basis. Consistent with the prior year, significant estimates using management judgment are made for the areas below. For further discussion of CSX's critical accounting estimates, see the Company's most recent annual report on Form 10-K.

• personal injury and environmental reserves;

• pension plan accounting; and

• depreciation policies for assets under the group-life method.

FORWARD-LOOKING STATEMENTS

Certain statements in this report and in other materials filed with the Securities and Exchange Commission, as well as information included in oral statements or other written statements made by the Company, are forward-looking statements. The Company intends for all such forward-looking statements to be covered by the safe harbor provisions for forward-looking statements within the meaning of the Private Securities Litigation Reform Act of 1995 and the provisions of Section 27A of the Securities Act of 1933 and Section 21E of the Securities Exchange Act of 1934. These forward-looking statements within the meaning of the Private Securities Litigation Reform Act may contain, among others, statements regarding:

• projections and estimates of earnings, revenues, margins, volumes, rates, cost savings, expenses, taxes or other financial items;

• expectations as to results of operations and operational initiatives;

• expectations as to the effect of claims, lawsuits, environmental costs, commitments, contingent liabilities, labor negotiations or agreements on the Company's financial condition, results of operations or liquidity;

• management's plans, strategies and objectives for future operations, capital expenditures, workforce levels, dividends, share repurchases, safety and service performance, proposed new services and other matters that are not historical facts, and management's expectations as to future performance and operations and the time by which objectives will be achieved; and

• future economic, industry or market conditions or performance and their effect on the Company's financial condition, results of operations or liquidity.

Forward-looking statements are typically identified by words or phrases such as “will,” “should,” “believe,” “expect,” “anticipate,” “project,” “estimate,” “preliminary” and similar expressions. The Company cautions against placing undue reliance on forward-looking statements, which reflect its good faith beliefs with respect to future events and are based on information currently available to it as of the date the forward-looking statement is made. Forward-looking statements should not be read as a guarantee of future performance or results and will not necessarily be accurate indications of the timing when, or by which, such performance or results will be achieved.

CSX Q2 2025 Form 10-Q p.43

CSX CORPORATION

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

Forward-looking statements are subject to a number of risks and uncertainties and actual performance or results could differ materially from those anticipated by any forward-looking statements. The Company undertakes no obligation to update or revise any forward-looking statement. If the Company does update any forward-looking statement, no inference should be drawn that the Company will make additional updates with respect to that statement or any other forward-looking statements. The following important factors, in addition to those discussed in Part I, Item 1A Risk Factors of CSX's most recent annual report on Form 10-K and elsewhere in this report, may cause actual results to differ materially from those contemplated by any forward-looking statements:

• legislative, regulatory or legal developments involving transportation, including rail or intermodal transportation, the environment, hazardous materials, taxation, international trade and initiatives to further regulate the rail industry;

• the outcome of litigation, claims and other contingent liabilities, including, but not limited to, those related to fuel surcharge, environmental matters, taxes, shipper and rate claims subject to adjudication, personal injuries and occupational illnesses;

• changes in domestic or international economic, political or business conditions, including those directly affecting the transportation industry (such as the impact of industry competition, conditions, performance and consolidation, as well as the impact of international trade agreements and tariffs) and those affecting the level of demand for products carried by CSXT or by truck, which could impact the performance and value of the Company's rail and trucking-related investments;

• natural events such as severe weather conditions, including floods, fire, hurricanes and earthquakes, a pandemic crisis affecting the health of the Company's employees, its shippers or the consumers of goods, or other unforeseen disruptions of the Company's operations, systems, property, equipment or supply chain;

• competition from other modes of freight transportation, such as trucking and competition and consolidation or financial distress within the transportation industry generally;

• the cost of compliance with laws and regulations that differ from expectations as well as costs, penalties and operational and liquidity impacts associated with noncompliance with applicable laws or regulations;

• the impact of increased passenger activities in capacity-constrained areas, including potential effects of high speed rail initiatives, or regulatory changes affecting when CSXT can transport freight or service routes;

• unanticipated conditions in the financial markets that may affect timely access to capital markets and the cost of capital, as well as management's decisions regarding share repurchases;

• changes in fuel prices, surcharges for fuel and the availability of fuel;

• the impact of natural gas prices on coal-fired electricity generation;

• the impact of global supply and price of seaborne coal on CSX's export coal market;

• availability of insurance coverage at commercially reasonable rates or insufficient insurance coverage to cover claims or damages;

• the inherent business risks associated with safety and security, including the transportation of hazardous materials or a cybersecurity attack which would threaten the availability and reliability of information technology;

• adverse economic or operational effects from actual or threatened war or terrorist activities and any governmental response;

• loss of key personnel or the inability to hire and retain qualified employees;

CSX Q2 2025 Form 10-Q p.44

CSX CORPORATION

ITEM 2. MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS

• labor and benefit costs and labor difficulties, including stoppages affecting either the Company's operations or customers' ability to deliver goods to the Company for shipment;

• the Company's success in implementing its strategic, financial and operational initiatives, including acquisitions;

• the impact of conditions in the real estate market on the Company's ability to sell assets;

• changes in operating conditions and costs, including the impacts of inflation, or commodity concentrations;

• the impacts of a public health crisis and any policies or initiatives instituted in response; and

• the inherent uncertainty associated with projecting economic and business conditions.

Other important assumptions and factors that could cause actual results to differ materially from those in the forward-looking statements are specified elsewhere in this report and in CSX's other SEC reports, which are accessible on the SEC's website at www.sec.gov and the Company's website at www.csx.com. The information on the CSX website is not part of this quarterly report on Form 10-Q.

CSX Q2 2025 Form 10-Q p.45

CSX CORPORATION

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK