CSX CORP

Previous wording

•Operating margin of 30.4% decreased 590 basis points versus prior year.

Current wording

•Operating margin of 35.9% decreased 320 basis points versus prior year.

Previous wording

•Earnings per diluted share of $0.34 decreased $0.11, or 24%, year over year.

Current wording

•Earnings per diluted share of $0.44 decreased $0.05, or 10%, year over year.

Previous wording

Total revenue decreased 7% in the first quarter 2025 when compared to first quarter 2024, due to decreases in coal revenue, lower fuel recovery, declines in merchandise volume, decreases in other revenue, and lower trucking revenue. These decreases were partially offset by higher pricing in merchandise as well as higher intermodal volume.

Current wording

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.

Previous wording

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

Current wording

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

Previous wording

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

Current wording

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.

Previous wording

International shipments increased driven by higher port volumes and growth with key customers. Domestic shipments were relatively flat as increased transcontinental shipments were offset by the impacts of a continued soft trucking environment.

Current wording

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.

Previous wording

Export coal decreased primarily due to reduced production, including outages at customer facilities, and weather impacts on the overall supply chain. Domestic coal decreased due to lower thermal shipments to river terminals and reduced shipments to steel manufacturing locations, partially offset by higher shipments to utility plants.

Current wording

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.

Previous wording

Trucking revenue decreased $13 million versus the prior year due to lower rates and fuel surcharge.

Current wording

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

Previous wording

Expenses of $2.4 billion increased $38 million, or 2%, in first quarter 2025 when compared to the first quarter 2024.

Current wording

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

Previous wording

Labor and Fringe expense increased $16 million, primarily resulting from inflation. Other items largely offset and included higher union employee benefits for sick leave and vacation, increased labor costs associated with network disruptions and lower incentive compensation expense.

Current wording

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

Previous wording

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

Current wording

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

Previous wording

•Increased costs of approximately $25 million were due to the effects of network disruptions and congestion, including higher locomotive usage costs and rerouting charges associated with the Howard Street Tunnel project, as well as severe winter weather.

Current wording

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

Previous wording

Depreciation and Amortization expense increased $15 million as a result of a larger asset base.

Current wording

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

Previous wording

Fuel costs decreased $50 million primarily as a result of a 15% decrease in locomotive fuel prices, as well as efficiency and volume savings despite additional gross ton-miles associated with reroutes.

Current wording

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.

Previous wording

Equipment and Other Rents expense increased $3 million due to several non-significant items, including the impact of reroutes on car cycle times.

Current wording

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.

Previous wording

Income tax expense decreased $76 million primarily due to lower earnings before income taxes.

Current wording

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

Previous wording

(d) Gross operating assets reflects an average of the year-to-date quarter-end amounts reported for each period presented. Accordingly, averages are not applicable for the first quarter of each year.

Current wording

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

Previous wording

The decrease in FCF before dividends from the prior year of $1 million is primarily due to higher property additions offset by higher operating cash flows, which increased despite lower cash-generating net earnings in the current year as 2024 included $387 million of tax payments postponed from the 2023 tax year.

Current wording

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.

Previous wording

In the first quarter of 2025, velocity decreased by 3% and dwell increased by 19% versus prior year. Carload trip plan performance decreased by 16% and intermodal trip plan performance decreased by 4%. The Company continues to focus on operational improvements and executing the operating plan to deliver safe, reliable and efficient service to customers.

Current wording

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.

Previous wording

The personal injury frequency index of 0.95 improved 22% compared to prior year. The FRA train accident rate of 3.43 improved 16% compared to prior year. 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.

Current wording

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.

Previous wording

The following chart highlights the operating, investing and financing components of the net increase of $206 million and $130 million in cash and cash equivalents for the three months ended March 31, 2025, and March 31, 2024, respectively.

Current wording

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.

Previous wording

•CSX used $161 million more cash for investing activities primarily due to higher property additions consistent with planned capital expenditures, including $133 million related to rebuilding the Blue Ridge subdivision as a result of impacts from Hurricane Helene.

Current wording

•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.

Previous wording

•The Company used $48 million less cash for financing activities as higher share repurchases were offset by a $600 million debt issuance.

Current wording

•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.

Previous wording

As of the end of first quarter 2025, CSX had $1.1 billion 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.

Current wording

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.

Previous wording

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 three months ended March 31, 2025, CSX issued a total of $600 million of long-term debt.

Current wording

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.

Previous wording

CSX has a $1.2 billion unsecured, revolving credit facility backed by a diverse syndicate of banks that expires in February 2028. At March 31, 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 commercial paper notes up to a maximum aggregate principal amount of $1.0 billion outstanding at any one time. At March 31, 2025, the Company had no outstanding debt under the commercial paper program.

Current wording

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.

Previous wording

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. Spending on the Blue Ridge rebuild is currently estimated to exceed $400 million in total, including approximately $50 million spent in 2024. 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.

Current wording

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.

Previous wording

Total assets increased $435 million from year end primarily due to a $206 million increase in cash and cash equivalents as noted above and a $200 million increase in net property consistent with planned capital expenditures, including $133 million related to rebuilding the Blue Ridge subdivision.

Current wording

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.

Previous wording

Total liabilities increased $767 million from year end primarily due to the issuance of $600 million in long-term debt and a $177 million increase in income and other taxes payable due to the timing of tax payments. Total shareholders' equity decreased $332 million from year end primarily driven by share repurchases of $751 million and dividends paid of $245 million, partially offset by net earnings of $646 million.

Current wording

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.

Previous wording

Working capital is considered a measure of a company's ability to meet its short-term needs. CSX had a working capital deficit of $401 million as of March 31, 2025, and $456 million as of December 31, 2024. This improvement of $55 million since year end was primarily driven by a $206 million increase in cash as noted above, partially offset by a $177 million increase in income and other taxes payable. 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.

Current wording

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.

Previous wording

This discussion should be read in conjunction with our Condensed Consolidated Financial Statements and the related notes that appear elsewhere in this document. The Company revised certain prior period financial statements for misstatements between the balance sheet and expense that were determined to be immaterial to previously issued financial statements. See Note 20, Revision of Prior Period Financial Statements, in Item 8 of the filed 2024 Form 10-K.

Current wording

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

Previous wording

Approximately 17,600 of the Company's approximately 23,400 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 several unions, representing approximately 45% of the Company's unionized workforce, and tentative agreements have been reached with additional unions. 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.

Current wording

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.

Previous wording

•changes in domestic or international economic, political or business conditions, including those 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 the level of demand for products carried by CSXT;

Current wording

•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;