csx-20211231

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 freight 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 and the rail industry provide customers with access to an expansive and interconnected transportation network that plays a key role in North American commerce and is critical to the long-term economic success and improved global competitiveness of the United States. In addition, freight railroads provide the most economical and environmentally efficient means to transport goods over land.

CSX’s principal operating subsidiary, CSX Transportation, Inc. (“CSXT”), provides an important link to the transportation supply chain through its approximately 19,500 route-mile rail network, which serves major population centers in 23 states east of the Mississippi River, the District of Columbia and the Canadian provinces of Ontario and Quebec. It has access to over 70 ocean, river and lake port terminals along the Atlantic and Gulf Coasts, the Mississippi River, the Great Lakes and the St. Lawrence Seaway. This access allows the Company to meet the dynamic transportation needs of manufacturers, industrial producers, the automotive industry, construction companies, farmers and feed mills, wholesalers and retailers, and energy producers. The Company’s intermodal business links customers to railroads via trucks and terminals. CSXT also serves thousands of production and distribution facilities through track connections with other Class I railroads and more than 230 short-line and regional railroads.

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. Effective July 1, 2021, CSX acquired Quality Carriers, the largest provider of bulk liquid chemicals truck transportation in North America, from Quality Distribution, Inc. For further details, refer to Note 17, Business Combinations. CSX Intermodal Terminals owns and operates a system of intermodal terminals, predominantly in the eastern United States, and also provides 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.

Other revenue accounted for 7% of the Company’s total revenue in 2021. This category includes revenue from regional subsidiary railroads and incidental charges, including intermodal storage and equipment usage, demurrage and switching. Revenue from regional subsidiary railroads includes shipments by railroads that the Company does not directly operate. Intermodal storage represents charges for customer storage of containers at an intermodal terminal, ramp facility or offsite location beyond a specified period of time. Demurrage represents charges assessed when freight cars are held by a customer beyond a specified period of time. Switching represents charges assessed when a railroad switches cars for a customer or another railroad.

CSX prioritizes workplace safety for employees and is committed to continued improvement through enhanced processes, training, technology, communication, and continuous collaboration with customers and peers across the railroad industry. Training programs and processes are focused on injury and accident prevention as well as emergency preparedness. The attainment of key safety targets is a component of management's annual incentive program. The FRA Personal Injury Frequency Index, a measure of the number of FRA-reportable injuries per 200,000 man-hours, was 0.92 in 2021 and 0.82 in 2020, representing a 12% increase year over year.

The Compensation and Talent Management Committee of the Board of Directors is charged with oversight of CSX's workforce. The Company is committed to developing a culture that promotes workforce diversity and inclusion and encourages ethical behavior. As of December 31, 2021, approximately 20% of CSX's overall workforce and 37% of management was diverse, calculated as the percentage of males of color and all females. In 2021, CSX was recognized as a “Best Place to Work for Disability Inclusion” by Disability:IN and the American Association of People with Disabilities for a third consecutive year after receiving a top score on their disability equality index. The CSX Code of Ethics serves as a guiding standard for ethical behavior and covers many types of matters, including discrimination and harassment as well as safety. Annually, all management employees are required, and union employees are highly encouraged, to complete ethics training.

A leader in freight rail transportation for more than 190 years, the Company’s heritage dates back to the early nineteenth century when The Baltimore and Ohio Railroad Company (“B&O”), the nation’s first common carrier, was chartered in 1827. Since that time, the Company has built on this foundation to create a railroad that could safely and reliably service the ever-increasing demands of a growing nation. Since its founding, numerous railroads have combined with the former B&O through merger and consolidation to create what has become CSX. Each of the railroads that combined into the CSX family brought new geographical reach to valuable markets, gateways, cities, ports and transportation corridors.

CSX Corporation was incorporated in 1978 under Virginia law. In 1980, the Company completed the merger of the Chessie System and Seaboard Coast Line Industries into CSX. The merger allowed the Company to connect northern population centers and Appalachian coal fields to growing southeastern markets. Later, the Company’s acquisition of key portions of Conrail, Inc. ("Conrail") allowed CSXT to link the northeast, including New England and the New York metropolitan area, with Chicago and midwestern markets as well as the growing areas in the Southeast already served by CSXT. This current rail network allows the Company to directly serve every major market in the eastern United States with safe, dependable, environmentally responsible and fuel efficient freight transportation and intermodal service.

The Company's operations are subject to various federal, state, provincial (Canada) and local laws and regulations generally applicable to businesses operating in the United States and Canada. In the U.S., the railroad operations conducted by the Company's subsidiaries, including CSXT, are subject to the regulatory jurisdiction of the Surface Transportation Board (“STB”), the Federal Railroad Administration (“FRA”), and its sister agency within the U.S. Department of Transportation ("DOT"), the Pipeline and Hazardous Materials Safety Administration (“PHMSA”). Together, FRA and PHMSA have broad jurisdiction over railroad operating standards and practices, including track, freight cars, locomotives and hazardous materials requirements. In addition, the U.S. Environmental Protection Agency (“EPA”) has regulatory authority with respect to matters that impact the Company's properties and operations.

Although the Staggers Act of 1980 significantly deregulated the U.S. rail industry, the STB has broad jurisdiction over rail carriers. The STB regulates routes, fuel surcharges, conditions of service, rates for non-exempt traffic, acquisitions of control over rail common carriers and the transfer, extension or abandonment of rail lines, among other railroad activities. Any new rules from the STB regarding, among other things, competitive access or revenue adequacy could have a material adverse effect on the Company's financial condition, results of operations and liquidity as well as its ability to invest in enhancing and maintaining vital infrastructure. For further discussion on regulatory risks to the Company, see Item 1A. Risk Factors.

CSX makes available on its website www.csx.com, free of charge, its annual reports on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K and all amendments to those reports as soon as reasonably practicable after such reports are filed with or furnished to the Securities and Exchange Commission (“SEC”). The information on the CSX website is not part of this annual report on Form 10-K. Additionally, the Company has posted its code of ethics on its website, which is also available to any shareholder who requests it. This Form 10-K and other SEC filings made by CSX are also accessible through the SEC’s website at www.sec.gov.

The Company is subject to the jurisdiction of various regulatory agencies, including the STB, FRA, PHMSA, TSA, EPA and other state, provincial and federal regulatory agencies for a variety of economic, health, safety, labor, environmental, tax, legal and other matters. New or modified rules or regulations by these agencies could increase the Company's operating costs, adversely impact revenue or reduce operating efficiencies and affect service performance. Noncompliance with applicable laws or regulations could erode public confidence in the Company and can subject the Company to fines, penalties and other legal or regulatory sanctions.

CSXT is also required to comply with regulations regarding the handling of hazardous materials. In November 2008, the TSA issued final rules placing significant new security and safety requirements on passenger and freight railroad carriers, rail transit systems and facilities that ship hazardous materials by rail. Noncompliance with these rules can subject the Company to significant penalties and could be a factor in litigation arising out of a train accident. Finally, legislation preventing the transport of hazardous materials through certain cities could result in network congestion and increase the length of haul for hazardous substances, which could increase operating costs, reduce operating efficiency or increase the risk of an accident involving the transport of hazardous materials.

As part of its railroad and other operations, the Company is subject to various claims and lawsuits related to disputes over commercial practices, labor and unemployment matters, occupational and personal injury claims, property damage, environmental and other matters. The Company may experience material judgments or incur significant costs to defend existing and future lawsuits. Although the Company maintains insurance to cover some of these types of claims and establishes reserves when appropriate, final amounts determined to be due on any outstanding matters may exceed the Company's insurance coverage or differ materially from the recorded reserves. Additionally, the Company could be impacted by adverse developments not currently reflected in the Company's reserve estimates.

The Company could be materially and adversely affected by a public health crisis, including a widespread epidemic or pandemic. As COVID-19 and its variant strains have spread globally, including significant impacts in the United States, CSX continues to take a variety of measures to ensure the availability of its transportation services, promote the safety and security of its employees and support the communities in which it operates. However, public and private sector policies and initiatives to reduce the transmission of COVID-19, such as closures of businesses and manufacturing facilities, the promotion of social distancing, the adoption of working from home by companies and institutions, and travel restrictions could continue to adversely affect demand for the commodities and products that the Company transports, including import and export volume.

In addition, COVID-19 and the related initiatives to reduce transmission have resulted in greater supply chain disruption, which could continue to impact volumes and make it more difficult for the Company to serve its customers. The extent to which COVID-19 continues to impact operations will depend on future developments, which are highly uncertain and cannot be predicted with confidence, including the duration of the outbreak, its effects on demand for the Company’s transportation services and the supply chain, as well as the effect of governmental regulations imposed in response to the pandemic. The duration of the pandemic is dependent on several factors, including the impacts of virus variants and case resurgences across the country. Moreover, operations are negatively affected when a significant number of employees are quarantined as the result of exposure to a contagious illness. To the extent COVID-19 adversely affects the Company's business and financial results, it may also have the effect of heightening many of the other risks described herein.

The Company relies on information technology in all aspects of its business. The security, stability and availability of the Company’s and its key third-party vendors’ technology systems are critical to its ability to operate safely and effectively and to compete within the transportation industry. A successful data breach, cyber-attack, or the occurrence of any similar incident that impacts the Company’s or its key third-party vendors’ information technology systems could result in a service interruption, train accident, misappropriation of confidential or proprietary information (including personal information), process failure, or other operational difficulties. A disruption or compromise of the Company’s information technology systems, even for short periods of time, and any resulting theft or compromise of Company confidential or proprietary information (including personal information), could adversely affect the Company’s business or reputation, create significant legal, regulatory or financial exposure and have a material adverse impact on CSX’s business, financial condition or operations.

The Company, its third-party vendors and other companies in the rail and transportation industries have been subject to, and are likely to continue to be the target of, data breaches, cyber-attacks and other similar incidents. These incidents may include, among other things, malware, ransomware, distributed denial of service attacks, social engineering, phishing, theft, malfeasance or improper access by employees or third-party vendors, human error, fraud, or other modes of attack or disruption. Attacks of these nature are increasing in frequency, levels of persistence, intensity and sophistication. Further, the Company may be at increased risk of a cyber-attack as a result of being a component of the critical U.S. infrastructure. As cybersecurity threats continue to evolve, the Company may be required to expend significant additional resources to continue to modify or enhance its protective measures or to investigate and remediate any information security vulnerabilities, data breaches, cyber-attacks or other similar incidents. The ongoing COVID-19 pandemic also increases the risk that the Company or its third-party vendors may experience cybersecurity incidents as a result of employees, third-party vendors and other third parties with which they interact working remotely on less secure systems and environments.

Despite the Company’s efforts to protect its information technology systems, it may not be able to prevent or anticipate all data breaches, cyber-attacks or other similar incidents, detect or react to such incidents in a timely manner or adequately remediate any such incident. While CSX’s security protocols have detected attempts to gain unauthorized access to the Company’s information technology systems, none of such attempts have resulted in any material breach of or disruption to the Company’s systems. For example, CSX has experienced distributed denial of service attacks that have resulted in brief system disruptions, but none have resulted in access to CSX systems. Additionally, despite routine security assessment of the Company’s key third-party vendors, some vendors have experienced cyber-attacks in the past, but none of such attacks have had a material adverse impact on CSX’s business or operations. Due to applicable laws and regulations or contractual obligations, CSX may be held responsible for data breaches, cyber-attacks or other similar incidents attributed to its third-party vendors as they relate to the information CSX shares with them.

CSXT could experience rail network difficulties related to: (i) unpredictable increases in demand; (ii) locomotive or crew shortages; (iii) labor shortages or other service disruptions in the supply chain affecting trucking, ports, handling facilities, customer facilities or other railroads; (iv) reductions in availability of pooled equipment, including chassis; (v) extreme weather conditions; (vi) impacts from changes in yard capacity, or network structure or composition, including train routes; (vii) increased passenger activities; or (viii) regulatory changes resulting in forced access or impacting where and how fast CSXT can transport freight or maintain routes, which could impact CSXT's operational fluidity, leading to deterioration of service, asset utilization and overall efficiency.

The Company's operations may be affected by external factors such as severe weather and other natural occurrences, including floods, fires, hurricanes and earthquakes. As a result, the Company's rail network may be damaged, its workforce may be unavailable, fuel costs may rise and significant business interruptions could occur. In addition, the performance of locomotives and railcars could be adversely affected by extreme weather conditions. Insurance maintained by the Company to protect against loss of business and other related consequences resulting from these natural occurrences is subject to coverage limitations, depending on the nature of the risk insured. This insurance may not be sufficient to cover all of the Company's damages or damages to others, and this insurance may not continue to be available at commercially reasonable rates. Even with insurance, if any natural occurrence leads to a catastrophic interruption of service, the Company may not be able to restore service without a significant interruption in operations.

The Company experiences competition in pricing, service, reliability and other factors from various transportation providers including railroads and motor carriers that operate similar routes across its service area and, to a less significant extent, barges, ships and pipelines. Other transportation providers generally use public rights-of-way that are built and maintained by governmental entities, while CSXT and other railroads must build and maintain rail networks largely using internal resources. Any future improvements or expenditures materially increasing the quality or reducing the cost of alternative modes of transportation such as through the use of automation, autonomy or electrification, or legislation providing for less stringent size or weight restrictions on trucks, could negatively impact the Company's competitive position. Additionally, any future consolidation in the rail industry could materially affect the regulatory and competitive environment in which the Company operates.

A decline or disruption in general domestic and global economic conditions that affects demand for the commodities and products the Company transports, including import and export volume, could reduce revenues or have other adverse effects on the Company's cost structure and profitability. For example, slower rates of economic growth in Asia, contraction of European economies, and changes in the global supply of seaborne coal or price of seaborne coal have adverse impacts on U.S. export coal volume and result in lower coal revenue for CSX. Additionally, changes to trade agreements or policies could result in reduced import and export volumes due to increased tariffs and lower consumer demand. If the Company experiences significant declines in demand for its transportation services with respect to one or more commodities and products, the Company may experience reduced revenue and increased operating costs, workforce adjustments, and other related activities, which could have a material adverse effect on the Company's financial condition, results of operations and liquidity.

Marketplace conditions for resources like locomotives as well as the availability of qualified personnel, particularly engineers and conductors, could each have a negative impact on the Company’s ability to meet demand for rail service. Although the Company strives to maintain adequate resources and personnel for the current business environment, unpredictable increases in demand for rail services or extreme weather conditions may exacerbate such risks, which could have a negative impact on the Company’s operational efficiency and otherwise have a material adverse effect on the Company’s financial condition, results of operations, or liquidity in a particular period.

The capital intensive and unique nature of core rail equipment (including rail, ties, rolling stock equipment and locomotives) limits the number of railroad equipment suppliers. If any of the current manufacturers stops production or experiences a supply shortage, CSXT could experience a significant cost increase or material shortage. In addition, a few critical railroad suppliers are foreign and, as such, adverse developments in international relations, new trade regulations, disruptions in international shipping or increases in global demand could make procurement of these supplies more difficult or increase CSXT's costs. Additionally, if a fuel supply shortage were to arise, the Company would be negatively impacted.

Most of CSX's employees are represented by labor unions and are covered by collective bargaining agreements. These agreements are either bargained for nationally by the National Carriers Conference Committee or locally between CSX and the union. Such agreements are negotiated over the course of several years and previously have not resulted in any extended work stoppages. Under the Railway Labor Act's procedures (which include mediation, cooling-off periods and the possibility of an intervention by the President of the United States), during negotiations neither party may take action until the procedures are exhausted. If, however, CSX is unable to negotiate acceptable agreements, the employees covered by the Railway Labor Act could strike, which could result in loss of business and increased operating costs as a result of higher wages or benefits paid to union members.

There is potential for operational impacts from changing weather patterns or rising sea levels in the Company's operational territory, which could impact the Company's network or other assets. Climate change and other emissions-related laws and regulations have been proposed and, in some cases adopted, on the federal, state, provincial and local levels. These final and proposed laws and regulations take the form of restrictions, caps, taxes or other controls on emissions. In particular, the EPA has issued various regulations and may issue additional regulations targeting emissions, including rules and standards governing emissions from certain stationary sources and from vehicles.

Any of these pending or proposed laws or regulations, including any proposed or implemented under the Biden administration, could adversely affect the Company's operations and financial results by, among other things: (i) reducing coal-fired electricity generation due to mandated emission standards; (ii) reducing the consumption of coal as a viable energy resource in the United States and Canada; (iii) increasing the Company's fuel, capital and other operating costs and negatively affecting operating and fuel efficiencies; and (iv) making it difficult for the Company's customers in the U.S. and Canada to produce products in a cost competitive manner. Any of these factors could reduce the amount of shipments the Company handles and have a material adverse effect on the Company's financial condition, results of operations or liquidity.

The Company is subject to wide-ranging federal, state, provincial and local environmental laws and regulations concerning, among other things, emissions into the air, ground and water; the handling, storage, use, generation, transportation and disposal of waste and other materials; the clean-up of hazardous material and petroleum releases and the health and safety of our employees. If the Company violates or fails to comply with these laws and regulations, CSX could be fined or otherwise sanctioned by regulators. The Company can also be held liable for consequences arising out of human exposure to any hazardous substances for which CSX is responsible. In certain circumstances, environmental liability can extend to formerly owned or operated properties, leased properties, adjacent properties and properties owned by third parties or Company predecessors, as well as to properties currently owned, leased or used by the Company.

The Company has been, and may in the future be, subject to allegations or findings to the effect that it has violated, or is strictly liable under, environmental laws or regulations, and such violations can result in the Company's incurring fines, penalties or costs relating to the cleanup of environmental contamination. Although the Company believes it has appropriately recorded current and long-term liabilities for known and reasonably estimable future environmental costs, it could incur significant costs that exceed reserves or require unanticipated cash expenditures as a result of any of the foregoing. The Company also may be required to incur significant expenses to investigate and remediate known, unknown or future environmental contamination.

Interstate 90 (I-90) Corridor – This CSXT corridor links Chicago and the Midwest to metropolitan areas in New York and New England. This route, also known as the “waterlevel route,” has minimal hills and grades and nearly all of it has two main tracks (referred to as double track). These engineering attributes permit the corridor to support high-speed service across intermodal, automotive and merchandise commodities. This corridor is a primary route for import traffic coming from the far east through western ports moving eastward across the country, through Chicago and into the population centers in the Northeast. The I-90 Corridor is also a critical link between ports in New York, New Jersey, and Pennsylvania and consumption markets in the Midwest. This route carries goods from all three of the Company’s major markets – merchandise, intermodal and coal.

Coal Network – The CSXT coal network connects the coal mining operations in the Appalachian mountain region and Illinois basin with industrial areas in the Southeast, Northeast and Mid-Atlantic, as well as many river, lake, and deep water port facilities. The domestic coal market has declined significantly over the last decade and export coal remains subject to a high degree of volatility. CSXT’s coal network remains well positioned to supply utility markets in both the Northeast and Southeast and to transport coal shipments for export outside of the U.S. Approximately one-quarter of export coal and the majority of the domestic coal that the Company transports is used for generating electricity or industrial purposes.

As of December 2021, CSXT owns or long-term leases more than 3,500 locomotives. From time to time, the Company also short-term leases locomotives based on business needs. Freight locomotives are used primarily to pull trains while switching locomotives are used in yards. Auxiliary units are typically used to provide extra traction for heavy trains in hilly terrain. Of owned locomotives, approximately 68% were in active service as of December 31, 2021, and the remainder were in storage to be utilized as needed. Storing locomotives and equipment allows the Company to quickly adjust its active fleet based on demand and other factors while avoiding delays due to supply limitations or excessive lead times to acquire additional equipment. As of December 2021, CSXT’s fleet of owned or long-term leased locomotives consisted of the following types:


Name and Age			Business Experience During Past Five Years
James M. Foote, 68 President and Chief Executive Officer			Foote has served as President and Chief Executive Office since December 2017. He joined CSX in October 2017 as Chief Operating Officer, with responsibility for both operations and sales and marketing. Mr. Foote has more than 40 years of railroad industry experience. Most recently, he was President and Chief Executive Officer of Bright Rail Energy. Before heading Bright Rail, he was Executive Vice President, Sales and Marketing with Canadian National Railway Company. At Canadian National, Mr. Foote also served as Vice President – Investor Relations and Vice President Sales and Marketing – Merchandise.
Sean R. Pelkey, 42 Executive Vice President and Chief Financial Officer			Pelkey was named Executive Vice President and Chief Financial Officer in January 2022 after serving as Vice President and Acting Chief Financial Officer since June 2021. Prior to these roles, Pelkey held the role of Vice President Finance & Treasury since 2017. In his current role, he is responsible for all financial aspects of the Company's business including financial and economic analysis, accounting, tax, treasury, real estate and purchasing activities. Prior to 2017, he has held the positions of AVP Capital Markets and Director Performance Analysis. During his 16 years with CSX, Mr. Pelkey has held a variety of other roles, including financial planning and technology finance.
Kevin S. Boone, 44 Executive Vice President and Chief Sales & Marketing Officer			Boone was named Executive Vice President and Chief Sales & Marketing Officer in June 2021 after serving as Chief Financial Officer since May 2019. In his current role, he is responsible for the commercial organization. Mr. Boone has more than 20 years of experience in finance, accounting, mergers and acquisitions, and transportation performance analysis. He joined CSX in September 2017 as Vice President of Corporate Affairs and Chief Investor Relations Officer and was later named Vice President, Marketing and Strategy leading research and data analysis to advance growth strategies for CSX. Before joining CSX in 2017, Mr. Boone worked as a Senior Equity Research Analyst at Janus Capital. He also served as a Vice President at Morgan Stanley in equity research and an associate at Merrill Lynch in the mergers and acquisitions group.
Jamie J. Boychuk, 44 Executive Vice President of Operations			Boychuk has served as CSXT's Executive Vice President of Operations since October 2019. In this role, he is responsible for mechanical, engineering, transportation and network operations, including terminals. Since joining CSXT in 2017, he has held the positions of Senior Vice President of Network, Engineering, Mechanical and Intermodal Operations; Vice President of Scheduled Railroading; and Assistant Vice President of Transportation Support. Mr. Boychuk previously worked at Canadian National Railway, where he served for 20 years in various operational roles of increasing responsibility, including sub-region General Manager.


Name and Age			Business Experience During Past Five Years
Nathan D. Goldman, 64 Executive Vice President and Chief Legal Officer			Goldman has served as Executive Vice President and Chief Legal Officer, and Corporate Secretary of CSX since November 2017. In this role, he directs the Company’s legal affairs, government relations, corporate communications, risk management, public safety, environmental, and audit functions. During his 18 years with the Company, Mr. Goldman has previously served as Vice President of Risk Compliance and General Counsel and has overseen work in compliance, risk management and safety programs.
Diana B. Sorfleet, 57 Executive Vice President and Chief Administrative Officer			Sorfleet was named Executive Vice President and Chief Administrative Officer in July 2018. In this role, her responsibilities include human resources, information technology, labor relations, people systems and analytics, total rewards and aviation. During her 10 years with the Company, Ms. Sorfleet has previously served as Chief Human Resources Officer. Prior to joining CSX, she worked in human resources for 20 years.
Angela C. Williams, 47 Vice President and Chief Accounting Officer			Williams has served as Vice President and Chief Accounting Officer of CSX since March 2018. She is responsible for financial and regulatory reporting, freight billing and collections, payroll, accounts payable and various other accounting processes. During her 18 years with the Company, she previously served as Assistant Vice President - Assistant Controller and in other various accounting roles. With more than 24 years of experience, Williams held various accounting and auditing positions prior to joining CSX. Ms. Williams is a Certified Public Accountant.

A total of 5.4 billion shares of common stock are authorized, of which 2,201,787,404 shares were outstanding as of December 31, 2021. Each share is entitled to one vote in all matters requiring a vote of shareholders. There are no preemptive rights, which are privileges extended to select shareholders that would allow them to purchase additional shares before other members of the general public in the event of an offering. At January 31, 2022, the latest practicable date that is closest to the filing date, there were 23,137 common stock shareholders of record. The weighted average of common shares outstanding, which was used in the calculation of diluted earnings per share, was 2,255 million as of December 31, 2021. (See Note 2, Earnings Per Share.) A total of 25 million shares of preferred stock is authorized, none of which is currently outstanding.


	Fiscal Years
	2021			2020			$ Change		% Change
(Dollars in Millions)
Revenue	$	12,522		$	10,583		$	1,939	18	%
Expense
Labor and Fringe	2,550			2,275			(275)		(12)
Purchased Services and Other(a)	2,135			1,719			(416)		(24)
Depreciation	1,420			1,383			(37)		(3)
Fuel	913			541			(372)		(69)
Equipment and Other Rents	364			338			(26)		(8)
Gains on Property Dispositions	(454)			(35)			419		NM
Total Expense	6,928			6,221			(707)		(11)
Operating Income	5,594			4,362			1,232		28
Interest Expense	(722)			(754)			32		4
Other Income - Net	79			19			60		316
Income Tax Expense	(1,170)			(862)			(308)		(36)
Net Earnings	$	3,781		$	2,765		$	1,016	37

Earnings Per Diluted Share(b)	$	1.68		$	1.20		$	0.48	40	%
Operating Ratio	55.3		%	58.8		%			350		bps

Demand for rail services has improved from steep declines in the first half of 2020, but the effects of the disruption of global manufacturing, supply chains and consumer spending as a result of the COVID-19 global pandemic are ongoing. Future impacts of the pandemic on the Company’s financial and operating results will be determined by its duration, effects on the demand for the Company’s transportation services and the supply chain, as well as the effect of governmental regulations imposed and legislative stimulus packages passed in response to the pandemic. The duration of the pandemic is dependent on several factors, including the impacts of virus mutations and case resurgences across the country.


Volume and Revenue (Unaudited)
Volume (Thousands of units); Revenue (Dollars in Millions); Revenue Per Unit (Dollars)
	Volume				Revenue						Revenue Per Unit
	2021	2020	% Change		2021		2020		% Change		2021		2020		% Change

Chemicals	659	664	(1)	%	$	2,421	$	2,309	5	%	$	3,674	$	3,477	6	%
Agricultural and Food Products	467	463	1	%	1,461		1,386		5	%	3,128		2,994		4	%
Minerals	325	321	1	%	587		538		9	%	1,806		1,676		8	%
Automotive	318	344	(8)	%	886		920		(4)	%	2,786		2,674		4	%
Forest Products (a)	296	278	6	%	918		834		10	%	3,101		3,000		3	%
Metals and Equipment	277	239	16	%	796		675		18	%	2,874		2,824		2	%
Fertilizers (a)	229	226	1	%	470		414		14	%	2,052		1,832		12	%
Total Merchandise	2,571	2,535	1	%	7,539		7,076		7	%	2,932		2,791		5	%
Intermodal	2,976	2,720	9	%	2,039		1,702		20	%	685		626		9	%
Coal	706	637	11	%	1,790		1,397		28	%	2,535		2,193		16	%
Trucking (b)	—	—	—	%	410		—		NM		—		—		—	%
Other	—	—	—	%	744		408		82	%	—		—		—	%
Total	6,253	5,892	6	%	$	12,522	$	10,583	18	%	$	2,003	$	1,796	12	%

CSX reports its financial results in accordance with United States generally accepted accounting principles ("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.

Management believes that free cash flow is useful to investors as it is important in evaluating the Company’s financial performance. More specifically, free cash flow 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. Free cash flow is calculated by using net cash from operations and adjusting for property additions and certain other investing activities, which includes proceeds from property dispositions. This measure should be considered in addition to, rather than a substitute for, cash provided by operating activities. Free cash flow before dividends increased $1.2 billion year-over-year to $3.8 billion primarily due to higher net cash provided by operating activities and higher proceeds and advances from property dispositions, including $400 million of proceeds related to the conveyance of a permanent land easement to the Commonwealth of Virginia in 2021. These increases were partially offset by higher property additions.


	Fiscal Years
	2021		2020		Improvement/ (Deterioration)
Operations Performance
Train Velocity (Miles per hour)(a)	17.9		20.2		(11)	%
Dwell (Hours)(a)	10.7		9.3		(15)	%
Cars Online(a)	131,564		112,718		(17)	%
On-Time Originations	75	%	87	%	(14)	%
On-Time Arrivals	66	%	77	%	(14)	%
Carload Trip Plan Performance	69	%	77	%	(10)	%
Intermodal Trip Plan Performance	87	%	90	%	(3)	%
Fuel Efficiency	0.96		0.96		—	%

Revenue Ton-Miles (Billions)
Merchandise	126.3		124.4		2	%
Coal	35.4		30.1		18	%
Intermodal	31.5		28.1		12	%
Total Revenue Ton-Miles	193.2		182.6		6	%

Total Gross Ton-Miles (Billions)	376.0		358.3		5	%

Safety
FRA Personal Injury Frequency Index	0.92		0.82		(12)	%
FRA Train Accident Rate	2.90		3.16		8	%

In 2021, the Company generated $5.1 billion of cash from by operating activities, which was $836 million higher than prior year primarily driven by higher cash-generating income and favorable working capital activities. Net cash used in investing activities was $1.9 billion, an increase in net spend of $1.2 billion from the prior year primarily as a result of decreased net sales of short-term investments and cash paid to acquire Quality Carriers, partially offset by higher proceeds and advances from property dispositions. Net cash used in financing activities was $4.1 billion, which represents an increase in net spend of $2.7 billion from the prior year primarily driven by higher share repurchases and lower proceeds from debt issuances, partially offset by lower debt repayments.

Total assets as well as total liabilities and shareholders' equity increased $738 million from prior year end. The increase in total assets was primarily due to a net increase in property of $571 million attributable to capital expenditures and the consolidation of Quality Carrier's properties, the recognition of $393 million of goodwill and intangible assets related to the acquisition of Quality Carriers, a $236 million increase in accounts receivable commensurate with higher revenue and a $226 million increase in net assets for qualified pension plans primarily driven by favorable discount rates. These increases were partially offset by the $890 million decrease in cash described above.

Total liabilities increased $348 million from year end primarily due to an increase in deferred tax liabilities of $215 million driven by accelerated tax depreciation, an increase in accounts payable of $154 million due to the timing of payments, an increase in labor and fringe benefit payable of $148 million partly due higher expected incentive compensation payouts, the assumption of $68 million in debt as a result of the acquisition of Quality Carriers, and an increase in income and other taxes payable of $61 million. These and other increases were offset by debt repayments of $426 million. Total shareholders' equity increased $390 million from year end primarily driven by net earnings of nearly $3.8 billion, mostly offset by share repurchases of $2.9 billion and dividends paid of $839 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. Although the Company currently has a surplus, a working capital deficit is not unusual for CSX or other companies in the industry and does not indicate a lack of liquidity. The Company continues to maintain adequate current assets to satisfy current liabilities and maturing obligations when they come due. Furthermore, 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.

On November 30, 2020, CSX signed a definitive agreement to acquire Pan Am Systems, Inc. (“Pan Am”) which is the parent company of Pan Am Railways, Inc. who jointly owns Pan Am Southern, LLC with a subsidiary of Norfolk Southern Corporation. Pan Am owns and operates a highly integrated, nearly 1,200-mile rail network and has a joint interest in the more than 600-mile Pan Am Southern system. This acquisition, if approved, will expand CSX’s reach in the Northeastern United States. Assets and facilities to be acquired as part of the proposed transaction include road and track assets, work equipment, land, buildings and other assets. On February 25, 2021, the Company began the process of seeking approval from the STB. On January 13 and 14, 2022, the Company participated in a hearing before the STB to discuss the proposed transaction and a decision is expected by mid-April 2022. This proposed acquisition is not expected to be material with respect to the Company's financial statements when reviewed under the quantitative and qualitative considerations of Regulation S-X Article 11 and ASC 805, Business Combinations.

On March 26, 2021, the Company entered into a comprehensive agreement to sell certain property rights in three CSX-owned line segments to the Commonwealth of Virginia (“Commonwealth”) over three phases for a total of $525 million. The timing and amount of gains recognized are based on the allocation of fair value to each conveyance, the timing of future conveyances and collectability. In April 2021, upon closing of the first phase of the agreement, the Company collected $200 million in proceeds and recognized a $349 million gain. In fourth quarter 2021, the Company collected additional proceeds of $200 million, a portion of which was attributable to the first phase with the remaining attributable to the second phase. There was no gain recognized in fourth quarter 2021 related to this agreement. As the second phase closed on January 10, 2022, the resulting $20 million gain will be recognized in first quarter 2022.

Credit ratings reflect an independent agency’s judgment on the likelihood that a borrower will repay a debt obligation at maturity. The ratings reflect many considerations, such as the nature of the borrower’s industry and its competitive position, the size of the company, its liquidity and access to capital and the sensitivity of a company’s cash flows to changes in the economy. The two largest rating agencies, Standard & Poor’s Ratings Services (“S&P”) and Moody’s Investors Service (“Moody’s”), use alphanumeric codes to designate their ratings. The highest quality rating for long-term credit obligations is AAA and Aaa for S&P and Moody’s, respectively. A credit rating is not a recommendation to buy, sell or hold securities and may be subject to revision or withdrawal at any time by the assigning rating agency.

The cost and availability of unsecured financing are materially affected by CSX's long-term credit ratings. CSX's credit ratings remained stable during 2021. As of December 2021 and December 2020, S&P's long-term rating on CSX was BBB+ (Stable), and Moody's was Baa1 (Stable). Ratings of BBB- and Baa3 or better by S&P and Moody’s, respectively, reflect ratings on debt obligations that fall within a band of credit quality considered to be investment grade. If CSX's credit ratings were to decline to below investment-grade levels, the Company could experience significant increases in its interest cost for new debt. In addition, a decline in CSX’s credit ratings to below investment grade levels could adversely affect the market’s demand, and thus the Company’s ability to readily issue new debt. The Company is committed to maintaining an investment-grade credit profile.

In 2007, CSXT, a wholly-owned subsidiary of CSX Corporation, issued in a registered public offering $381 million of secured equipment notes maturing in 2023. CSX Corporation has fully and unconditionally guaranteed the notes. At CSXT’s option, CSXT may redeem any or all of the notes, in whole or in part, at any time, at the redemption price including premium. In the case of loss or destruction of any item of equipment securing the notes, if CSXT does not substitute another item of equipment for the item suffering such loss or destruction, CSXT will be required to redeem the notes in part at par. The guarantee of the notes will rank equally in right of payment with all existing and future senior obligations of CSX Corporation and will be effectively subordinated to all future secured indebtedness of CSX Corporation to the extent of the assets securing such indebtedness. The guarantee is subject to release in limited circumstances only upon the occurrence of certain customary conditions. As of December 31, 2021, the principal balance of these secured equipment notes was $149 million.

Personal Injury reserves of $118 million and $131 million for 2021 and 2020, respectively, represent liabilities for employee work-related and third-party injuries. CSXT retains an independent actuary to assist management in assessing the value of personal injury claims. The methodology used by the actuary includes a development factor to reflect growth or reduction in the value of these personal injury claims. It is based largely on CSXT's historical claims and settlement experience. Actual results may vary from estimates due to the number, type and severity of the injury, costs of medical treatments and uncertainties in litigation. For additional details, including a description of our related accounting policies, see Note 5, Casualty, Environmental and Other Reserves, in the consolidated financial statements.

The Company sponsors defined benefit pension plans principally for salaried, management personnel. For employees hired prior to 2003, the plans provide eligible employees with retirement benefits based predominantly on years of service and compensation rates near retirement. For employees hired between 2003 and 2019, benefits are determined based on a cash balance formula, which provides benefits by utilizing interest and pay credits based upon age, service and compensation. Beginning in 2020, the CSX Pension Plan was closed to new participants. As of December 2021, the projected benefit obligation for the Company’s pension plans was $3.0 billion.

In addition to these plans, the Company sponsors a post-retirement medical plan and a life insurance plan that provide certain benefits to full-time, salaried, management employees hired prior to 2003 upon their retirement if certain eligibility requirements are met. Beginning in 2019, both the life insurance benefit for eligible active management employees and health savings account contributions made by the Company to eligible retirees younger than 65 were eliminated. Beginning in 2020, the employer-funded health reimbursement arrangements for eligible retirees 65 years or older were eliminated. As of December 2021, the projected benefit obligation for the Company’s other post-retirement benefit plans was $81 million.

The expected long-term average rate of return on plan assets reflects the average rate of earnings expected on the funds invested, or to be invested, to provide for benefits included in the projected benefit obligation. In estimating that rate, the Company gives appropriate consideration to the returns being earned by the plan assets in the funds and the rates of return expected to be available for reinvestment as well as the current and projected asset mix of the funds. Management, with the assistance of an outsourced investment manager, balances market expectations obtained from various investment managers with both market and actual plan historical returns to develop a reasonable estimate of the expected long-term rate of return on assets. As this assumption is long term, the annual review may result in less frequent adjustment than other assumptions used in pension accounting. The long-term rate of return on plan assets used by the Company to value its benefit cost for the subsequent plan year was 6.75% in both 2021 and 2020.

Net periodic pension and post-retirement benefits expenses for 2022 are expected to be credits of $42 million and $5 million, respectively. Net periodic pension and post-retirement benefits expenses for 2022 are expected to include service cost expense of $32 million and $1 million, respectively. Service cost expense is included in labor and fringe on the consolidated income statement and all other components of net pension expense and post-retirement benefits expense are included in other income - net. Net periodic pension expense and post-retirement benefits expense in 2021 were credits of $17 million and $5 million, respectively. The net increase in the expected credit is primarily due to impacts from the increase in discount rates and recent favorable pension asset experience.

The depreciable assets of the Company are depreciated using either the group-life or straight-line method of accounting, which are both acceptable depreciation methods in accordance with GAAP. The Company depreciates its railroad assets, including main-line track, locomotives and freight cars, using the group-life method of accounting. Assets depreciated under the group-life method comprise 86% of total fixed assets of $46.5 billion on a gross basis at December 31, 2021. The remaining depreciable assets of the Company, including non-railroad assets and assets under finance leases, are depreciated using the straight-line method on a per asset basis. Land is not depreciated.

The STB requires depreciation studies be performed every three years for equipment assets (e.g., locomotives and freight cars) and every six years for road and track assets (e.g., bridges, signals, rail, ties, and ballast). The Company completed a depreciation study for its road and track assets in 2020 and for equipment assets in 2019, both of which resulted in changes to accumulated depreciation, service lives, salvage values, and other related factors for certain assets. Recent experience with depreciation studies has resulted in changes to accumulated depreciation and depreciation rates that did not materially affect the Company's depreciation expense of $1.4 billion, $1.4 billion and $1.3 billion for 2021, 2020 and 2019, respectively. A 1% change in the average estimated useful life of all group-life assets would result in an approximate $12 million change to the Company’s annual depreciation expense. For additional details, including a more detailed description of our related accounting policies, see Note 6, Properties, in the consolidated financial statements.

In applying the acquisition method of accounting for business combinations, management must determine the fair value of assets acquired and liabilities assumed in order to properly allocate purchase price consideration between depreciable and amortizable assets and goodwill. The fair values assigned to tangible and intangible assets acquired and liabilities assumed are based on management’s estimates and assumptions, as well as other information compiled by management, including valuations that utilize customary valuation procedures and techniques. Estimates and assumptions include, but are not limited to, the cash flows that an asset is expected to generate in the future and the appropriate weighted-average cost of capital.

CSX evaluates goodwill and intangible assets for impairment on an annual basis, or sooner if indicators of impairment exist. In performing the qualitative impairment assessment, CSX considers relevant events and conditions, including but not limited to: macroeconomic trends, industry and market conditions, overall financial performance, company-specific events, and legal and regulatory factors. If the qualitative assessments indicate that it is more likely than not that the fair value of the reporting unit or intangible assets are less than their carrying amounts, the Company would perform a quantitative impairment test. If the carrying amount of the reporting unit's goodwill or intangible asset exceeded the fair value under the quantitative test, an impairment loss would be recorded. Measurement of the fair value of a reporting unit could be based on one or more of the following fair value measures: amounts at which the unit as a whole could be bought or sold in a current transaction between willing parties, present value techniques of estimated future cash flows, valuation techniques based on multiples of earnings or revenue, or a similar performance measure.

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:

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.

Changes in interest rates could impact the fair value of the Company's forward starting interest rate swap. On both April 29, 2020, and July 9, 2020, the Company executed a forward starting interest rate swap with a notional value of $250 million for an aggregate notional value of $500 million. These swaps were effected to hedge the benchmark interest rate associated with future interest payments related to the anticipated refinancing of notes due in 2027. The Company recognized an unrealized gain of $8 million and $62 million net of tax during the years ended December 31, 2021 and 2020, respectively, in the consolidated statements of comprehensive income with the related asset on the balance sheet as of December 31, 2021. Upon settlement of the swaps, which expire in 2027, the unrealized gain or loss in AOCI will be recognized in earnings as an adjustment to interest expense over the same period during which the hedged transaction affects earnings. As of December 31, 2021, the potential change in fair value resulting from a hypothetical 10% change in interest rates would not be material.

As of December 31, 2021, CSX has no floating rate debt obligations outstanding. However, changes in interest rates could impact the fair value (but not the carrying value) of the Company's fixed rate long-term debt. The potential decrease in fair value of the Company's fixed rate long-term debt resulting from a hypothetical 10% increase in U.S. Treasury rates, or approximately 15 basis points, is estimated to be $448 million as of December 31, 2021 and $428 million as of December 31, 2020. The underlying fair values of the Company's long-term debt were estimated based on quoted market prices or on the current rates offered for debt with similar terms and maturities.


INDEX TO CONSOLIDATED FINANCIAL STATEMENTS

		Page
Report of Independent Registered Public Accounting Firm (PCAOB ID: 42)		49

CSX Corporation

Consolidated Financial Statements and Notes to Consolidated Financial Statements
	Herewith:

Consolidated Income Statements for the Fiscal Years Ended:		51
	December 31, 2021
	December 31, 2020
	December 31, 2019

Consolidated Comprehensive Income Statements for the Fiscal Years Ended:		52
	December 31, 2021
	December 31, 2020
	December 31, 2019

Consolidated Balance Sheets as of:		53
	December 31, 2021
	December 31, 2020

Consolidated Cash Flow Statements for Fiscal Years Ended:		54
	December 31, 2021
	December 31, 2020
	December 31, 2019

Consolidated Statements of Changes in Shareholders' Equity:		55
	December 31, 2021
	December 31, 2020
	December 31, 2019

Notes to Consolidated Financial Statements		56

We have audited the accompanying consolidated balance sheets of CSX Corporation (the Company) as of December 31, 2021 and 2020, and the related consolidated statements of income, comprehensive income, cash flows, and changes in shareholders’ equity for each of the three years in the period ended December 31, 2021, and the related notes (collectively referred to as the “consolidated financial statements”). In our opinion, the consolidated financial statements present fairly, in all material respects, the financial position of the Company at December 31, 2021 and 2020, and the results of its operations and its cash flows for each of the three years in the period ended December 31, 2021, in conformity with U.S. generally accepted accounting principles.

We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion.

The critical audit matter communicated below is a matter arising from the current period audit of the financial statements that was communicated or required to be communicated to the audit committee and that: (1) relates to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of the critical audit matter does not alter in any way our opinion on the consolidated financial statements, taken as a whole, and we are not, by communicating the critical audit matter below providing a separate opinion on the critical audit matter or on the accounts or disclosure to which it relates.


			Depreciation Policies for Assets Utilizing the Group-Life Method
Description of the Matter			At December 31, 2021, assets depreciated under the group-life method comprised 86% of total gross fixed assets of $46.5 billion. As discussed in Note 6 of the consolidated financial statements, the group-life method aggregates assets with similar lives and characteristics into groups and depreciates each of these groups as a whole. When using the group-life method, an underlying assumption is that each group of assets, as a whole, is used and depreciated to the end of the group’s recoverable life. The Company utilizes different depreciable asset categories to account for depreciation expense for the railroad assets that are depreciated under the group-life method. Under the group-life method, depreciation studies are completed to review asset service lives, salvage values, accumulated depreciation and other factors related to group assets. Depreciation studies are performed every three years for equipment assets and every six years for road and track assets. A depreciation study was performed in 2019 for equipment assets and 2020 for road and track assets. The most recent depreciation studies are reviewed by management each year through an annual data review to determine if there have been significant factors that result in changes to the group-life method key assumptions. Auditing depreciation expense for assets subject to the group-life method was complex and required the involvement of specialists due to the nature of the methods used in the depreciation studies to determine the useful service lives and salvage values of the Company’s assets. These methods have a significant effect on depreciation expense.
How We Addressed the Matter in Our Audit			We obtained an understanding, evaluated the design and tested the operating effectiveness of controls over the Company’s process related to the assessment of periodic depreciation studies and annual data reviews of its group-life assets. For example, we tested controls over management’s review of asset activity and assumptions that could impact the most recent depreciation study of equipment and road and track assets. To test the estimated useful lives and salvage values of the Company’s group-life assets, we performed audit procedures that included, among others: obtaining the periodic depreciation studies and annual data reviews provided by the Company’s third-party specialist; assessing the completeness and accuracy of the data provided by management to the third-party specialist; and including a specialist on our team to evaluate the methods used by the third-party specialist and management in determining the average service lives and salvage values of assets to perform the depreciation studies and any changes to the service lives and salvage values, if any, resulting from the annual data reviews. We compared the significant methods used by management to those used throughout the industry and within other depreciation studies. We assessed the historical accuracy of management’s estimates via retrospective review and independently calculated the current year depreciation rates.


	Fiscal Years
	2021		2020		2019
Revenue	$	12,522	$	10,583	$	11,937
Expense
Labor and Fringe	2,550		2,275		2,616
Purchased Services and Other	2,135		1,719		1,900
Depreciation	1,420		1,383		1,349
Fuel	913		541		906
Equipment and Other Rents	364		338		352
Gains on Property Dispositions	(454)		(35)		(151)

Total Expense	6,928		6,221		6,972

Operating Income	5,594		4,362		4,965

Interest Expense	(722)		(754)		(737)


Other Income - Net (Note 14)	79		19		88
Earnings Before Income Taxes	4,951		3,627		4,316

Income Tax Expense (Note 12)	(1,170)		(862)		(985)
Net Earnings	$	3,781	$	2,765	$	3,331

Per Common Share (Note 2)
Net Earnings Per Share
Basic	$	1.68	$	1.20	$	1.39
Assuming Dilution	$	1.68	$	1.20	$	1.39

Average Common Shares Outstanding (Millions)
Basic	2,250		2,300		2,389
Assuming Dilution	2,255		2,305		2,395


	December		December
	2021		2020
ASSETS
Current Assets:
Cash and Cash Equivalents	$	2,239	$	3,129
Short-term Investments	77		2
Accounts Receivable - Net (Note 11)	1,148		912
Materials and Supplies	339		302
Other Current Assets	70		96
Total Current Assets	3,873		4,441

Properties	46,505		45,530
Accumulated Depreciation	(13,490)		(13,086)
Properties - Net (Note 6)	33,015		32,444

Investment in Affiliates and Other Companies (Note 15)	2,099		1,985
Right of Use Lease Asset (Note 7)	501		472
Goodwill and Other Intangible Assets - Net (Note 18)	451		63
Other Long-term Assets	592		388
Total Assets	$	40,531	$	39,793
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
Accounts Payable	$	963	$	809
Labor and Fringe Benefits Payable	630		482
Casualty, Environmental and Other Reserves (Note 5)	118		90
Current Maturities of Long-term Debt (Note 10)	181		401
Income and Other Taxes Payable	134		73
Other Current Liabilities	207		164
Total Current Liabilities	2,233		2,019

Casualty, Environmental and Other Reserves (Note 5)	250		224
Long-term Debt (Note 10)	16,185		16,304
Deferred Income Taxes - Net (Note 12)	7,383		7,168
Long-term Lease Liability (Note 7)	478		455
Other Long-term Liabilities	502		513
Total Liabilities	27,031		26,683

Shareholders' Equity:
Common Stock, $1 Par Value (Note 3)	2,202		2,288
Other Capital	66		152
Retained Earnings	11,630		11,259
Accumulated Other Comprehensive Loss (Note 16)	(408)		(598)
Non-controlling Minority Interest	10		9
Total Shareholders' Equity	13,500		13,110
Total Liabilities and Shareholders' Equity	$	40,531	$	39,793


	Fiscal Years
	2021		2020		2019
OPERATING ACTIVITIES
Net Earnings	$	3,781	$	2,765	$	3,331
Adjustments to Reconcile Net Earnings to Net Cash
Provided by Operating Activities:
Depreciation	1,420		1,383		1,349
Deferred Income Taxes	167		180		273
Gains on Property Dispositions	(454)		(35)		(151)

Other Operating Activities	12		(32)		(69)
Changes in Operating Assets and Liabilities:
Accounts Receivable	(141)		83		45
Other Current Assets	(25)		(75)		68
Accounts Payable	128		(20)		98
Income and Other Taxes Payable	72		39		2
Other Current Liabilities	139		(25)		(96)
Net Cash Provided by Operating Activities	5,099		4,263		4,850
INVESTING ACTIVITIES
Property Additions	(1,791)		(1,626)		(1,657)
Purchases of Short-term Investments	(75)		(426)		(2,838)
Proceeds from Sales of Short-term Investments	5		1,424		2,108
Proceeds and Advances from Property Dispositions	529		56		254
Business Acquisition, Net of Cash Acquired (Note 17)	(541)		—		—
Other Investing Activities	(4)		(77)		31
Net Cash Used in Investing Activities	(1,877)		(649)		(2,102)
FINANCING ACTIVITIES

Shares Repurchased	(2,886)		(867)		(3,373)
Dividends Paid	(839)		(797)		(763)
Long-term Debt Repaid	(426)		(745)		(518)

Long-term Debt Issued (Note 10)	—		1,000		2,000
Other Financing Activities	39		(34)		6
Net Cash Used in Financing Activities	(4,112)		(1,443)		(2,648)
Net Increase in Cash and Cash Equivalents	(890)		2,171		100
CASH AND CASH EQUIVALENTS
Cash and Cash Equivalents at Beginning of Period	3,129		958		858
Cash and Cash Equivalents at End of Period	$	2,239	$	3,129	$	958

SUPPLEMENTAL CASH FLOW INFORMATION
Interest Paid - Net of Amounts Capitalized	$	718	$	750	$	717
Income Taxes Paid	$	931	$	664	$	691


	Common Shares Outstanding (Thousands)	Common Stock and Other Capital		Retained Earnings		Accumulated Other Comprehensive Income (Loss) (a)		Non- controlling Minority Interest		Total Shareholders' Equity
December 31, 2018	2,454,540	$	2,455	$	10,769	$	(661)	$	17	$	12,580
Comprehensive Earnings:
Net Earnings	—		—	3,331		—		—		3,331
Other Comprehensive Loss (Note 16)	—		—	—		(14)		—		(14)
Total Comprehensive Earnings										3,317
Common stock dividends,$0.29 per share	—		—	(763)		—		—		(763)
Share Repurchases	(143,457)		(143)	(3,230)		—		—		(3,373)

Other	9,331		100	4		—		(2)		102
December 31, 2019	2,320,414		2,412	10,111		(675)		15		11,863
Comprehensive Earnings:
Net Earnings	—		—	2,765		—		—		2,765
Other Comprehensive Loss (Note 16)	—		—	—		77		—		77
Total Comprehensive Earnings										2,842
Common stock dividends, $0.35 per share	—		—	(797)		—		—		(797)
Share Repurchases	(37,842)		(38)	(829)		—		—		(867)

Other	5,015		66	9		—		(6)		69
December 31, 2020	2,287,587		2,440	11,259		(598)		9		13,110
Comprehensive Earnings:
Net Earnings	—		—	3,781		—		—		3,781
Other Comprehensive Income (Note 16)	—		—	—		190		—		190
Total Comprehensive Earnings										3,971
Common stock dividends, $0.37 per share	—		—	(839)		—		—		(839)
Share Repurchases	(90,431)		(90)	(2,796)		—		—		(2,886)

Other	4,631		(82)	225		—		1		144
December 31, 2021	2,201,787	$	2,268	$	11,630	$	(408)	$	10	$	13,500

CSX’s management is responsible for establishing and maintaining adequate internal control over financial reporting, as such term is defined in Exchange Act Rules 13a-15(f) and 15d-15(f). Under the supervision and with the participation of the management of CSX, including CSX’s CEO and CFO, CSX conducted an evaluation of the effectiveness of the Company’s internal control over financial reporting as of December 31, 2021 based on the 2013 framework in Internal Control – Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission, which is also referred to as COSO. Based on that evaluation, management of CSX concluded that the Company’s internal control over financial reporting was effective as of December 31, 2021. Management's assessment of the effectiveness of internal control over financial reporting is expressed at the level of reasonable assurance because a control system, no matter how well designed and operated, can provide only reasonable, but not absolute, assurance that the control system's objectives will be met.

The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting included in the accompanying Management’s Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements.


Exhibit designation	Nature of exhibit	Previously filed as exhibit to
Officer certifications:
31*	Rule 13a-14(a) Certifications
32*	Section 1350 Certifications
Interactive data files:
101*	The following financial information from CSX Corporation’s Annual Report on Form 10-K for the year ended December 31, 2021 filed with the SEC on February 16, 2022, formatted in XBRL includes: (i) Consolidated Income Statements for the fiscal periods ended December 31, 2021, December 31, 2020, and December 31, 2019, (ii) Consolidated Comprehensive Income Statements for the fiscal periods ended December 31, 2021, December 31, 2020, and December 31, 2019, (iii) Consolidated Balance Sheets at December 31, 2021 and December 31, 2020, (iv) Consolidated Cash Flow Statements for the fiscal periods ended December 31, 2021, December 31, 2020 and December 31, 2019, (v) Consolidated Statements of Changes in Shareholders' Equity for the fiscal periods ended December 31, 2021, December 31, 2020 and December 31, 2019, and (vi) the Notes to Consolidated Financial Statements.
Other exhibits:
21*	Subsidiaries of the Registrant
22.1*	List of Subsidiary Issuers and Guarantors
23*	Consent of Independent Registered Public Accounting Firm
24*	Powers of Attorney

	* Filed herewith
	** Management Contract or Compensatory Plan or Arrangement
	(P) This Exhibit has been paper filed and is not subject to Item 601 of Reg S-K for hyperlinks.
	Note: Items not filed herewith have been submitted in previous SEC filings.


CSX CORPORATION
FORM 10-K
TABLE OF CONTENTS

Item No.			Page

PART I
1.	Business		3
	1A. Risk Factors		7
	1B. Unresolved Staff Comments		12
2.	Properties		13
3.	Legal Proceedings		17
4.	Mine Safety Disclosures		17
	Executive Officers of the Registrant		18

PART II
5.	Market for Registrant's Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities		20
6.	Reserved		21
7.	Management's Discussion and Analysis of Financial Condition and Results of Operations		22
		· Terms Used by CSX	22
		· 202 1 Highlights	24
		· Results of Operations	24
		· Liquidity and Capital Resources	34
		· Contractual Obligations, Other Commitments and Off-Balance Sheet Arrangements	39
		· Labor Agreements	40
		· Critical Accounting Estimates	40
		· Forward-Looking Statements	45
7A.	Quantitative and Qualitative Disclosures about Market Risk		47
8.	Financial Statements and Supplementary Data		48
9.	Changes in and Disagreements with Accountants on Accounting and Financial Disclosure		110
9A.	Controls and Procedures		110
9B.	Other Information		113
9C.	D isclosure Regarding Foreign Jurisdictions that Prevent Inspections		113

PART III
10.	Directors, Executive Officers of the Registrant and Corporate Governance		113
11.	Executive Compensation		113
12.	Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters		113
13.	Certain Relationships and Related Transactions, and Director Independence		113
14.	Principal Accounting Fees and Services		113

PART IV
15.	Exhibits, Financial Statement Schedules		114

Signatures			118


			Track
			Miles
Single mainline track			19,433
Other mainline track			5,707
Terminals and switching yards			9,278
Passing sidings and turnouts			887
Total			35,305


Yards and Terminals			Annual Volume
Waycross, GA			930,621
Bedford Park Intermodal Terminal (Chicago)			916,805
Avon, IN (Indianapolis)			671,856
Nashville, TN			660,424
Cincinnati, OH			644,679
Selkirk, NY			620,526
Walbridge, OH (Toledo)			407,205
Fairburn, GA Intermodal Terminal (Atlanta)			392,688
Louisville, KY			336,211
Chicago 59th St. Intermodal Terminal			313,870


Equipment	Number of Units	%
Gondolas	18,394	38	%
Multi-level flat cars	10,910	23	%
Covered hoppers	7,187	15	%
Open-top hoppers	6,610	14	%
Box cars	3,926	8	%
Flat cars	622	1	%
Other cars	384	1	%
Subtotal freight cars	48,033	100	%
Containers	17,147
Total equipment	65,180


	Quarter
	1st		2nd		3rd		4th		Year
2021	$	0.093	$	0.093	$	0.093	$	0.093	$	0.372
2020	$	0.087	$	0.087	$	0.087	$	0.087	$	0.348


	Locomotives	%		Average Age (years)
Freight	3,126	89	%	22
Switching	212	6	%	43
Auxiliary units	178	5	%	29
Total locomotives	3,516	100	%	22


CSX Purchases of Equity Securities for the Quarter
Fourth Quarter	Total Number of Shares Purchased	Average Price Paid per Share		Total Number of Shares Purchased as Part of Publicly Announced Plans or Programs	Approximate Dollar Value of Shares that May Yet Be Purchased Under the Plans or Programs
Beginning Balance					$	3,572,838,310
October 1 - October 31, 2021	5,194,579	$	31.56	5,194,579		3,408,904,138
November 1 - November 30, 2021	4,300,579		35.60	4,300,579		3,255,785,536
December 1 - December 31, 2021	6,984,577		36.17	6,984,577		3,003,170,964
Ending Balance	16,479,735	$	34.57	16,479,735	$	3,003,170,964


	Fiscal Years
Capital Expenditures (Dollars in Millions)	2021		2020
Track	$	876	$	858
Bridges, Signals and Other	567		508
Total Infrastructure	1,443		1,366
Strategic Projects and Commercial Facilities	194		143
Locomotives	89		57
Regulatory (including PTC)	36		39
Freight Cars	29		21
Total Capital Expenditures	$	1,791	1,626


(Dollars in Millions)	Pension Expense		Post-Retirement Expense
Discount Rate	$	20	$	1
Long-term Rate of Return	$	28	N/A
Salary Inflation	$	4	N/A


Common Stock, $1 Par Value			December 2021
			(Units in Millions)
Common Shares Authorized			5,400
Common Shares Issued and Outstanding			2,202

Preferred Stock
Preferred Shares Authorized			25
Preferred Shares Issued and Outstanding			—


Weighted-average assumptions used:	2021		2020		2019
Annual dividend yield	n/a		n/a		1.4	%
Risk-free interest rate	0.2	%	1.4	%	2.4	%
Annualized volatility	33.6	%	24.5	%	27.4	%
Expected life (in years)	2.9		2.9		2.8


	Performance Units Outstanding (in Thousands)	Weighted-Average Fair Value at Grant Date
Unvested at December 31, 2020	1,920	$	23.86
Granted	597	30.11
Forfeited	(59)	24.30
Vested	(882)	22.09
Unvested at December 31, 2021	1,576	$	27.21


	Stock Options Outstanding (in Thousands)	Weighted-Average Exercise Price		Weighted-Average Remaining Contractual Life (in Years)	Aggregate Intrinsic Value (in Millions)
Outstanding at December 31, 2020	12,652	$	20.29
Granted	2,005	29.69
Forfeited	(174)	26.91
Exercised	(1,971)	15.76
Outstanding at December 31, 2021	12,512	$	22.42	7.2	$	190
Exercisable at December 31, 2021	6,347	$	18.16	6.1	$	123


	Restricted Stock Units and Awards Outstanding (in Thousands)	Weighted-Average Fair Value at Grant Date
Unvested at December 31, 2020	1,055	$	22.36
Granted	561	29.84
Forfeited	(50)	27.31
Vested	(543)	21.26
Unvested at December 31, 2021	1,023	$	27.53


	Casualty		Environmental		Other
(Dollars in Millions)	Reserves		Reserves		Reserves		Total
December 31, 2018	$	199	$	80	$	45	$	324
Charged to Expense	56		17		34		107

Payments	(68)		(23)		(35)		(126)
December 31, 2019	187		74		44		305
Charged to Expense	55		20		32		107

Payments	(46)		(18)		(34)		(98)
December 31, 2020	196		76		42		314
Assumed in Acquisition of Quality Carriers	—		29		33		62
Charged to Expense	55		26		49		130

Payments	(71)		(23)		(44)		(138)
December 31, 2021	$	180	$	108	$	80	$	368


(Dollars in Millions)				Accumulated		Net Book		Annual Depreciation	Estimated Useful Life	Depreciation
December 2021		Cost		Depreciation		Value		Rate	( Avg. Years)	Method
Road
	Rail and Other Track Material	$	8,761	$	(1,835)	$	6,926	2.5%	41	Group Life
	Ties	6,522		(1,923)		4,599		3.5%	28	Group Life
	Grading	2,751		(624)		2,127		1.3%	75	Group Life
	Ballast	3,289		(1,094)		2,195		2.6%	38	Group Life
	Bridges, Trestles, and Culverts	2,794		(411)		2,383		1.7%	60	Group Life
	Signals and Interlockers	3,266		(1,086)		2,180		4.1%	24	Group Life
	Buildings	1,388		(514)		874		2.5%	40	Group Life/ Straight Line (a)
	Other	5,305		(2,207)		3,098		4.1%	25	Group Life/ Straight Line (a)
Total Road		34,076		(9,694)		24,382
Equipment
	Locomotive	4,912		(1,732)		3,180		3.6%	27	Group Life
	Freight Cars	2,322		(358)		1,964		2.9%	35	Group Life
	Work Equipment and Other	2,891		(1,706)		1,185		8.2%	12	Group Life/ Straight Line (a)
Total Equipment		10,125		(3,796)		6,329
Land		1,885		—		1,885		N/A	N/A	N/A
Construction In Progress		419		—		419		N/A	N/A	N/A

Total Properties		$	46,505	$	(13,490)	$	33,015


	December 2021						December 2020
(Dollars in Millions)	Current		Long-term		Total		Current		Long-term		Total
Casualty:
Personal Injury	$	37	$	81	$	118	$	38	$	93	$	131
Occupational	7		55		62		11		54		65
Total Casualty	$	44	$	136	$	180	$	49	$	147	$	196
Environmental	37		71		108		23		53		76
Other	37		43		80		18		24		42
Total	$	118	$	250	$	368	$	90	$	224	$	314


(Dollars in Millions)	December 2021
Maturity of Lease Liabilities	Lease Payments
2022	$	66
2023	55
2024	45
2025	40
2026	31
Thereafter	1,153
Total undiscounted operating lease payments	$	1,390
Less: Imputed interest	(848)
Present value of operating lease liabilities	$	542


(Dollars in Millions)	Locomotive Maintenance & Rebuild Payments		Other Commitments		Total
2022	$	205	$	45	$	250
2023	231		35		266
2024	273		31		304
2025	288		30		318
2026	218		13		231
Thereafter	1,643		81		1,724
Total	$	2,858	$	235	$	3,093


	Summary of Participants as of
	January 1, 2021
	Pension Plans	Post-retirement Medical Plan
Active Employees	3,019	698
Retirees and Beneficiaries	11,659	847
Other(a)	3,748	—
Total	18,426	1,545


	Expected Cash Flows
(Dollars in Millions)	Pension Benefits		Post-retirement Benefits
2022	$	193	$	12
2023	187		9
2024	186		8
2025	183		7
2026	181		7
2027-2031	881		25
Total	$	1,811	$	68


	December 2021				December 2020
			Percent of				Percent of
(Dollars in Millions)	Amount		Total Assets		Amount		Total Assets
Equity	$	1,559	52	%	$	1,324	44	%
Fixed Income	204		7		271		9
Cash and Cash Equivalents	49		1		221		8
Growth-Oriented	$	1,812	60	%	$	1,816	61	%
Fixed Income	1,145		38		1,018		34
Cash and Cash Equivalents	59		2		166		5
Immunizing	$	1,204	40	%	$	1,184	39	%
Total	$	3,016	100	%	$	3,000	100	%


	Pension Benefits				Post-retirement Benefits
	Plan Year		Plan Year		Plan Year		Plan Year
(Dollars in Millions)	2021		2020		2021		2020
Actuarial Present Value of Benefit Obligation
Accumulated Benefit Obligation	$	2,909	$	3,134	N/A		N/A
Projected Benefit Obligation	3,022		3,257		$	81	$	96

Change in Projected Benefit Obligation:
Projected Benefit Obligation at Beginning of Plan Year	$	3,257	$	3,122	$	96	$	117
Service Cost (a)	45		46		1		1
Interest Cost	55		82		1		5
Plan Participants' Contributions	—		—		4		6


Actuarial (Gain) Loss	(142)		197		(4)		(11)
Benefits Paid	(193)		(190)		(17)		(22)
Benefit Obligation at End of Plan Year	$	3,022	$	3,257	$	81	$	96

Change in Plan Assets:
Fair Value of Plan Assets at Beginning of Plan Year	$	3,000	$	2,825	$	—	$	—
Actual Return on Plan Assets	187		345		—		—

Non-qualified Employer Contributions	22		20		13		16
Plan Participants' Contributions	—		—		4		6
Benefits Paid	(193)		(190)		(17)		(22)
Fair Value of Plan Assets at End of Plan Year	$	3,016	$	3,000	$	—	$	—
Funded Status at End of Plan Year	$	(6)	$	(257)	$	(81)	$	(96)


	Aggregate
(Dollars in Millions)	Fair Value		Aggregate
Benefit Obligations in Excess of Plan Assets	of Plan Assets		Benefit Obligation
Projected Benefit Obligation	$	—	$	(261)
Accumulated Benefit Obligation	—		(249)


	Pension Benefits Fiscal Years						Post-retirement Benefits Fiscal Years
(Dollars in Millions)	2021		2020		2019		2021		2020		2019
Service Cost Included in Labor and Fringe	$	41	$	43	$	31	$	1	$	1	$	1

Interest Cost	55		82		103		1		5		2
Expected Return on Plan Assets	(186)		(176)		(171)		—		—		—
Amortization of Net Loss	73		54		30		—		1		—
Amortization of Prior Service Cost	—		—		—		(7)		(7)		(7)
Total Income Included in Other Income - Net	$	(58)	$	(40)	$	(38)	$	(6)	$	(1)	$	(5)
Net Periodic Benefit (Credit)/Cost	$	(17)	$	3	$	(7)	$	(5)	$	—	$	(4)

Settlement Gain	—		(1)		—		—		—		—
Total Periodic Benefit (Credit)/Cost	$	(17)	$	2	$	(7)	$	(5)	$	—	$	(4)


	Maturity at December	Average Interest Rates at December	December		December
(Dollars in Millions)	2021	2021	2021		2020
Notes	2022-2068	4.2%	$	16,166	$	16,542
Equipment Obligations(a)	2022-2024	6.2%	153		160
Finance Leases	2022-2032	6.1%	47		3

Subtotal Long-term Debt (including current portion)			$	16,366	$	16,705
Less Debt Due within One Year			(181)		(401)
Long-term Debt (excluding current portion)			$	16,185	$	16,304


(Dollars in Millions)	Maturities at
Fiscal Years Ending	December 2021
2022	$	181
2023	153
2024	560
2025	605
2026	704
Thereafter	14,163
Total Long-term Debt Maturities, including current portion	$	16,366


(Dollars in millions)	December 31, 2021		December 31, 2020

Freight Receivables	$	951	$	716
Freight Allowance for Credit Losses	(14)		(16)
Freight Receivables, net	937		700

Non-Freight Receivables	225		224
Non-Freight Allowance for Credit Losses	(14)		(12)
Non-Freight Receivables, net	211		212
Total Accounts Receivable, net	$	1,148	$	912


(Dollars in Millions)	Conrail Shared
Years	Asset Agreement
2022	$	31
2023	31
2024	23
2025	—
2026	—
Thereafter	—
Total	$	85


	December		December
Balance sheet information:	2021		2020
CSX payable to TTX	$	35	$	40


	Pension and Other Post-Employment Benefits		Interest Rate Derivatives		Other		Accumulated Other Comprehensive Income (Loss)
(Dollars in millions)
Balance December 31, 2018 - Net of Tax	$	(604)	$	—	$	(57)	$	(661)
Other Comprehensive Income (Loss)
Loss Before Reclassifications	(43)		—		(5)		(48)
Amounts Reclassified to Net Earnings	23		—		8		31
Tax Benefit	5		—		(2)		3
Total Other Comprehensive (Loss) Income	$	(15)	$	—	$	1	$	(14)
Balance December 31, 2019 - Net of Tax	$	(619)	$	—	$	(56)	$	(675)
Other Comprehensive Income (Loss)

Loss Before Reclassifications	(17)		80		(10)		53
Amounts Reclassified to Net Earnings	47		—		5		52
Tax Benefit (Expense)	(9)		(18)		(1)		(28)
Total Other Comprehensive Income (Loss)	$	21	$	62	$	(6)	$	77
Balance December 31, 2020 - Net of Tax	$	(598)	$	62	$	(62)	$	(598)
Other Comprehensive Income (Loss)

(Loss) Income Before Reclassifications	147		11		—		158
Amounts Reclassified to Net Earnings	66		—		15		81
Tax Expense	(46)		(3)		—		(49)
Total Other Comprehensive Income	$	167	$	8	$	15	$	190
Balance December 31, 2021 - Net of Tax	$	(431)	$	70	$	(47)	$	(408)


(Dollars in millions)	July 1, 2021
Assets Acquired:
Cash and Cash Equivalents	$	3
Accounts Receivable, net	113
Properties and Equipment, net	225
Goodwill	213
Intangible Assets	180
Other Assets	9
Total Assets Acquired	$	743
Liabilities Assumed:
Accounts Payable and Accrued Liabilities	$	48
Finance Lease Obligations and Notes Payable	68
Casualty, Environmental and Other Reserves	62
Other Long-term Liabilities	21
Total Liabilities Assumed	$	199
Fair Value of Assets Acquired, Net of Liabilities Assumed:	$	544


Fiscal Year Ended December 2021	Quarters
(Dollars in Millions, Except Per Share Amounts)	1st		2nd		3rd		4th		Full Year
Revenue	$	2,813	$	2,990	$	3,292	$	3,427	$	12,522
Operating Income	1,101		1,691		1,436		1,366		5,594
Net Earnings	706		1,173		968		934		3,781

Net Earnings Per Share, Basic	$	0.31	$	0.52	$	0.43	$	0.42	$	1.68
Net Earnings Per Share, Assuming Dilution	$	0.31	$	0.52	$	0.43	$	0.42	$	1.68

Fiscal year Ended December 2020
Revenue	$	2,855	$	2,255	$	2,648	$	2,825	$	10,583
Operating Income	1,178		828		1,141		1,215		4,362
Net Earnings	770		499		736		760		2,765

Net Earnings Per Share, Basic	$	0.33	$	0.22	$	0.32	$	0.33	$	1.20
Net Earnings Per Share, Assuming Dilution	$	0.33	$	0.22	$	0.32	$	0.33	$	1.20


Signature						Title

/s/ JAMES M. FOOTE						President, Chief Executive Officer and Director
James M. Foote						(Principal Executive Officer)

/s/SEAN R. PELKEY						Executive Vice President and Chief Financial
Sean R. Pelkey						Officer (Principal Financial Officer)

/s/ ANGELA C. WILLIAMS						Vice President and Chief Accounting Officer
Angela C. Williams						(Principal Accounting Officer)

/s/ NATHAN D. GOLDMAN						Executive Vice President and Chief Legal Officer, Corporate Secretary
Nathan D. Goldman						*Attorney-in-Fact


Signature						Title

*						Chairman of the Board and Director
John J. Zillmer

*						Director
Donna M. Alvarado

*						Director
Thomas P. Bostick

*						Director
Steven T. Halverson

*						Director
Paul C. Hilal

*						Director
David M. Moffett

*						Director
Linda H. Riefler

*						Director
Suzanne M. Vautrinot

*						Director
James L. Wainscott

*						Director
J. Steven Whisler



/s/ DONNA M. ALVARADO						/s/ LINDA H. RIEFLER
Donna M. Alvarado						Linda H. Riefler
February 16, 2022						February 16, 2022

/s/THOMAS P. BOSTICK						/s/ SUZANNE M. VAUTRINOT
Thomas P. Bostick						Suzanne M. Vautrinot
February 16, 2022						February 16, 2022

/s/ STEVEN T. HALVERSON						/s/ JAMES L. WAINSCOTT
Steven T. Halverson						James L. Wainscott
February 16, 2022						February 16, 2022

/s/ PAUL C. HILAL						/s/ J. STEVEN WHISLER
Paul C. Hilal						J. Steven Whisler
February 16, 2022						February 16, 2022

/s/ DAVID M. MOFFETT						/s/ JOHN J. ZILLMER
David M. Moffett						John J. Zillmer
February 16, 2022						February 16, 2022