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

Volume and Revenue (Unaudited)
Volume (Thousands of Units); Revenue (Dollars in Millions); Revenue Per Unit (Dollars)
Third Quarters
			Volume																		Revenue																		Revenue Per Unit
			2025						2024						% Change						2025						2024						% Change						2025						2024						% Change
Chemicals			164						176						(7)		%				$	697					$	727					(4)		%				$	4,250					$	4,131					3		%
Agricultural and Food Products			110						118						(7)						382						416						(8)						3,473						3,525						(1)
Minerals			104						96						8						226						202						12						2,173						2,104						3
Automotive			99						98						1						306						301						2						3,091						3,071						1
Forest Products			68						73						(7)						247						259						(5)						3,632						3,548						2
Metals and Equipment			67						64						5						224						208						8						3,343						3,250						3
Fertilizers			48						45						7						126						118						7						2,625						2,622						—
Total Merchandise			660						670						(1)						2,208						2,231						(1)						3,345						3,330						—
Intermodal			768						730						5						527						509						4						686						697						(2)
Coal			184						190						(3)						490						553						(11)						2,663						2,911						(9)
Trucking			—						—						—						207						214						(3)						—						—						—
Other			—						—						—						155						112						38						—						—						—
Total			1,612						1,590						1		%				$	3,587					$	3,619					(1)		%				$	2,225					$	2,276					(2)		%
Nine Months
			Volume																		Revenue																		Revenue Per Unit
			2025						2024						% Change						2025						2024						% Change						2025						2024						% Change
Chemicals			494						517						(4)		%				$	2,096					$	2,142					(2)		%				$	4,243					$	4,143					2		%
Agricultural and Food Products			342						347						(1)						1,208						1,229						(2)						3,532						3,542						—
Minerals			282						273						3						625						583						7						2,216						2,136						4
Automotive			289						297						(3)						897						930						(4)						3,104						3,131						(1)
Forest Products			208						220						(5)						746						790						(6)						3,587						3,591						—
Metals and Equipment			202						202						—						657						658						—						3,252						3,257						—
Fertilizers			143						142						1						388						380						2						2,713						2,676						1
Total Merchandise			1,960						1,998						(2)						6,617						6,712						(1)						3,376						3,359						1
Intermodal			2,213						2,147						3						1,511						1,521						(1)						683						708						(4)
Coal			537						557						(4)						1,428						1,748						(18)						2,659						3,138						(15)
Trucking			—						—						—						620						650						(5)						—						—						—
Other			—						—						—						408						370						10						—						—						—
Total			4,710						4,702						—		%				$	10,584					$	11,001					(4)		%				$	2,247					$	2,340					(4)		%

CSX Q3 2025 Form 10-Q p.33

CSX CORPORATION

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

Third Quarter 2025

Revenue

Total revenue decreased 1% in third quarter 2025 when compared to third quarter 2024, due to decreases in export coal revenue, including the impact of lower benchmark rates, as well as declines in merchandise volume. These decreases were partially offset by increases in other revenue, higher pricing in merchandise, and intermodal volume growth.

Merchandise Volume

Chemicals - Decreased due to lower shipments of crude oil, petroleum products, other industrial chemicals, and plastics.

Agricultural and Food Products - Decreased due to lower shipments of domestic feed grain, ethanol, and soybeans.

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

Automotive - Increased due to higher North American vehicle production.

Forest Products - Decreased due to lower shipments of pulp and 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 pipe shipments. Increases were partially offset by lower steel shipments, which includes the impact of plant closures, as well as lower equipment shipments.

Fertilizers - Increased due to higher shipments of raw materials, as well as higher exports through Gulf Coast ports.

Intermodal Volume

International shipments increased driven by higher port volumes and growth with key customers. Domestic shipments increased, despite the impacts of a continued soft trucking environment, due to share wins with key customers and new service offerings.

Coal Volume

Export coal decreased primarily due to reduced production, including impacts from outages at customer facilities. Domestic coal increased due to higher shipments to utility plants, partially offset by lower shipments to steel manufacturing locations and lake terminals.

Trucking Revenue

Trucking revenue decreased $7 million versus the prior year due to lower rates and fuel surcharge.

Other Revenue

Other revenue increased $43 million primarily due to higher carload demurrage and payments from customers that did not meet volume commitments.

CSX Q3 2025 Form 10-Q p.34

CSX CORPORATION

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

Expenses

Expenses of $2.5 billion increased $235 million, or 10%, in third quarter 2025 when compared to the third quarter 2024.

Labor and Fringe expense increased $9 million due to the following:

• An increase of $22 million was due to management and executive severance costs.

• An increase of $15 million was due to inflation.

• A decrease of $19 million resulted from lower incentive compensation expense driven by lower expected payouts.

• All other net costs decreased $9 million driven by efficiency savings, which include the impact of lower rail headcount, and other non-significant net decreases. These items were partially offset by higher trucking headcount, which includes impacts from acquiring previously independent affiliates.

Purchased Services and Other expense increased $54 million due to the following:

• Inflation and higher volume drove an increase of $18 million.

• An increase of $13 million was due to technology contract restructuring costs as well as advisory expenses.

• Increased costs of approximately $13 million were due to the effects of network disruptions and rerouting impacts.

• Gains on property dispositions were $7 million in third quarter 2025 compared to a $1 million loss in the prior year.

• All other net costs increased $18 million resulting from a favorable inventory adjustment in the prior year, higher trucking casualty and rail freight damage claims in the current year, and other non-significant increases, which were partially offset by efficiency savings across the organization.

Depreciation and Amortization expense increased $8 million primarily as a result of a larger asset base.

Fuel costs increased $5 million as the impacts of additional gross ton-miles associated with reroutes as well as a 1% increase in locomotive fuel prices were partially offset by improved efficiency.

Equipment and Other Rents expense decreased $5 million due to several non-significant items.

Goodwill Impairment expense for Quality Carriers was $164 million for 2025.

Interest Expense

Interest expense increased $4 million primarily due to higher average debt balances.

Other Income - Net

Other income - net decreased $15 million primarily due to lower interest income.

Income Tax Expense

Income tax expense decreased $86 million primarily due to lower earnings before income taxes.

CSX Q3 2025 Form 10-Q p.35

CSX CORPORATION

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

Nine Months Results of Operations

Revenue decreased $417 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 $311 million primarily due to the Quality Carriers goodwill impairment, inflation, costs due to network disruptions, and higher depreciation. These increases were partially offset by lower fuel prices and efficiency savings.

Interest expense increased $6 million as higher average debt balances were mostly offset by higher capitalized interest.

Other income - net decreased $36 million primarily due to lower interest income and lower pension benefit credits.

Income tax expense decreased $202 million primarily due to lower earnings before income taxes.

CSX Q3 2025 Form 10-Q p.36

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.

Adjusted Operating Results

Management believes that adjusted operating income, adjusted operating margin, adjusted net earnings, and adjusted net earnings per share, assuming dilution are important in evaluating the Company's performance and for planning and forecasting future business operations and future profitability. These non-GAAP measures provide meaningful supplemental information regarding operating results because they exclude the third quarter 2025 non-cash impairment of the remaining amount of Quality Carriers' goodwill, which is a significant item that is not considered indicative of future financial trends. The goodwill impairment was tax-effected using rates reflective of the applicable tax amounts related to the impairment charge. These adjusted results should be considered in addition to, rather than as a substitute for, the Company's GAAP operating results.

The following tables reconcile the Company's GAAP operating results to adjusted operating results (non-GAAP measures).

						Quarter Ended September 30, 2025
(Dollars in millions, except per share amounts)						Operating Income						Operating Margin						Net Earnings						Net Earnings Per Share, Assuming Dilution
GAAP Operating Results						$	1,087					30.3		%				$	694					$	0.37
Goodwill Impairment						164						4.6						124						0.07
Adjusted Operating Results (non-GAAP)						$	1,251					34.9		%				$	818					$	0.44

						Nine Months Ended September 30, 2025
(Dollars in millions, except per share amounts)						Operating Income						Operating Margin						Net Earnings						Net Earnings Per Share, Assuming Dilution
GAAP Operating Results						$	3,411					32.2		%				$	2,169					$	1.16
Goodwill Impairment						164						1.6						124						0.06
Adjusted Operating Results (non-GAAP)						$	3,575					33.8		%				$	2,293					$	1.22

CSX Q3 2025 Form 10-Q p.37

CSX CORPORATION

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

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 Q3 2025 Form 10-Q p.38

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).

			Nine Months
(Dollars in Millions)			2025			2024
Operating Income			$	3,411		$	4,139
Add: Depreciation, Amortization, and Operating Lease Expense			1,359			1,323
Remove: Unusual Items (a)			164			—
Taxes (b)			(740)			(819)
Gross Cash Earnings			4,194			4,643
Operating Assets
Current Assets (Less Cash and Short-term Investments)			1,893			1,940
Gross Properties			53,290			51,062
Other Assets			4,310			4,255
Operating Liabilities
Non-Interest Bearing Liabilities (c)			(11,038)			(10,957)
Gross Operating Assets (d)			48,455			46,300
Capital Charge (e)			(2,907)			(2,778)
Economic Profit (Non-GAAP) calculated as GCE less Capital Charge			$	1,287		$	1,865

(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. The Quality Carriers goodwill impairment charge of $164 million in third quarter 2025 met the definition of an unusual item.

(b) The tax percentage rate was 15% for both periods presented. This rate is applied to the sum of operating income, depreciation, amortization, 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 of commercial paper was 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.

CSX Q3 2025 Form 10-Q p.39

CSX CORPORATION

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

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 $1.2 billion is primarily due to higher property additions, including $440 million related to rebuilding the Blue Ridge subdivision, as well as $429 million of federal and state tax payments related to the 2024 tax year that were previously postponed and lower cash-generating net earnings. Tax payment postponements related to hurricane tax relief were available in 2023 and 2024, but not in 2025.

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

			Nine Months
(Dollars in Millions)			2025			2024
Net cash provided by operating activities			$	3,227		$	3,859
Property Additions			(2,225)			(1,691)
Proceeds and Advances from Property Dispositions			64			50
Free Cash Flow (before payment of dividends)			$	1,066		$	2,218

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 third quarter of 2025, velocity increased by 2%, and dwell improved 8% versus prior year. Carload trip plan performance increased by 4% and intermodal trip plan performance increased by 1%. 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 1.16 in third quarter 2025 improved 7% compared to prior year and the FRA train accident rate of 2.55 improved 21%. 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 Q3 2025 Form 10-Q p.40

CSX CORPORATION

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

			Third Quarters												Nine Months
			2025			2024			Improvement / (Deterioration)						2025			2024			Improvement / (Deterioration)
Operations Performance
Train Velocity (Miles Per Hour)			18.9			18.6			2		%				18.0			18.3			(2)		%
Dwell (Hours)			9.5			10.3			8		%				10.5			10.0			(5)		%
Cars Online			121,278			126,623			4		%				127,698			125,839			(1)		%
On-Time Originations			75		%	72		%	4		%				71		%	74		%	(4)		%
On-Time Arrivals			64		%	66		%	(3)		%				59		%	67		%	(12)		%
Carload Trip Plan Performance			83		%	80		%	4		%				76		%	81		%	(6)		%
Intermodal Trip Plan Performance			93		%	92		%	1		%				91		%	94		%	(3)		%
Fuel Efficiency			0.94			0.95			1		%				0.97			0.98			1		%
Revenue Ton-Miles (Billions)
Merchandise			32.8			32.5			1		%				98.3			97.2			1		%
Coal			9.9			9.1			9		%				27.6			27.3			1		%
Intermodal			7.7			7.2			7		%				22.3			21.5			4		%
Total Revenue Ton-Miles			50.4			48.8			3		%				148.2			146.0			2		%
Total Gross Ton-Miles (Billions)			98.8			95.7			3		%				292.3			288.3			1		%
Safety
FRA Personal Injury Frequency Index			1.16			1.25			7		%				1.05			1.27			17		%
FRA Train Accident Rate			2.55			3.21			21		%				3.32			3.38			2		%

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 Q3 2025 Form 10-Q p.41

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 $321 million and increase of $291 million in cash and cash equivalents for the nine months ended September 30, 2025, and September 30, 2024, respectively.

• The Company generated $632 million less cash from operating activities primarily due to the payment of $429 million of previously postponed taxes and lower cash-generating net earnings.

• CSX used $423 million more cash for investing activities primarily due to higher property additions consistent with planned capital expenditures, including approximately $440 million in property additions related to rebuilding the Blue Ridge subdivision as a result of impacts from Hurricane Helene. This increase was partially offset by lower spending on acquisitions of previously independent trucking affiliates.

• The Company used $443 million less cash for financing activities driven by lower repayments of long-term debt, partially offset by higher share repurchases.

CSX Q3 2025 Form 10-Q p.42

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 third quarter 2025, CSX had $618 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 nine months ended September 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 September 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 time. At September 30, 2025, the Company had no 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 $500 million, including approximately $50 million spent in 2024 and approximately $440 million spent in the nine months ended September 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's planned cash income tax payments and related payable and deferred liabilities were impacted by changes in bonus tax depreciation that were enacted into law on July 4, 2025, as part of Public Law 119-21, commonly known as the One Big Beautiful Bill Act. The impact of applying this provision will result in favorable cash tax impacts of approximately $250 million for the 2025 tax year.

CSX Q3 2025 Form 10-Q p.43

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 $515 million from year end primarily due to a $876 million increase in net property consistent with planned capital expenditures, including incremental property additions related to rebuilding the Blue Ridge subdivision, and a $78 million increase in investments in affiliates and other companies. These increases were partially offset by a $321 million decrease in cash and cash equivalents as noted above and a $164 million impairment of Quality Carriers' goodwill.

Total liabilities increased $264 million from year end primarily due to the issuance of $600 million in long-term debt, partially offset by a $344 million decrease in income and other taxes payable primarily resulting from the payment of previously postponed federal and state income taxes. Total shareholders' equity increased $251 million from year end primarily driven by net earnings of $2.2 billion, offset by share repurchases of $1.3 billion and dividends paid of $730 million.

Working capital is considered a measure of a company's ability to meet its short-term needs. CSX had a working capital deficit of $455 million as of September 30, 2025, and $456 million as of December 31, 2024. Flat working capital was primarily the result of a decline in cash, offset by a decrease in income and other taxes payable due to payments for previously postponed income taxes. 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 17,400 of the Company's approximately 23,200 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 Q3 2025 Form 10-Q p.44

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 Q3 2025 Form 10-Q p.45

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 Q3 2025 Form 10-Q p.46

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 Q3 2025 Form 10-Q p.47

CSX CORPORATION

ITEM 3. QUANTITATIVE AND QUALITATIVE DISCLOSURES ABOUT MARKET RISK