Earnings Per Share

9 Months Ended

Sep. 30, 2023

The following table sets forth the computation of basic earnings per share and earnings per share, assuming dilution.


	Third Quarters				Nine Months
	2023		2022		2023		2022
Numerator (Dollars in millions):
Net Earnings	$	846	$	1,111	$	2,829	$	3,148



Denominator (Units in millions):
Average Common Shares Outstanding	1,994		2,122		2,022		2,156
Other Potentially Dilutive Common Shares	5		4		5		5
Average Common Shares Outstanding, Assuming Dilution	1,999		2,126		2,027		2,161

Net Earnings Per Share, Basic	$	0.42	$	0.52	$	1.40	$	1.46
Net Earnings Per Share, Assuming Dilution	$	0.42	$	0.52	$	1.40	$	1.46

Basic earnings per share is based on the weighted-average number of shares of common stock outstanding. Earnings per share, assuming dilution, is based on the weighted-average number of shares of common stock outstanding and common stock equivalents adjusted for the effects of common stock that may be issued as a result of potentially dilutive instruments. CSX's potentially dilutive instruments are made up of equity awards including performance units and employee stock options.

When calculating diluted earnings per share, the potential shares that would be outstanding if all outstanding stock options were exercised are included. This number is different from outstanding stock options because it is offset by shares CSX could repurchase using the proceeds from these hypothetical exercises to obtain the common stock equivalent. The total average outstanding stock options that were excluded from the diluted earnings per share calculation because their effect was antidilutive is in the table below.


	Third Quarters		Nine Months
	2023	2022	2023	2022
Antidilutive Stock Options Excluded from Diluted EPS (Units in millions)	3	3	4	3

NOTE 2. Earnings Per Share, continued

Share Repurchases

In July 2022, the Company announced a $5 billion share repurchase program. At September 30, 2023, approximately $371 million of repurchase authority remained under this program. On October 17, 2023, a new incremental $5 billion share repurchase program was approved.

Share repurchases may be made through a variety of methods including, but not limited to, open market purchases, purchases pursuant to Rule 10b5-1 plans, accelerated share repurchases and negotiated block purchases. The timing of share repurchases depends upon management's assessment of marketplace conditions and other factors, and the program remains subject to the discretion of the Board of Directors. Future share repurchases are expected to be funded by cash on hand, cash generated from operations and debt issuances. Shares are retired immediately upon repurchase. In accordance with the Equity Topic in the Accounting Standards Codification ("ASC"), the excess of repurchase price over par value is recorded in retained earnings.

During third quarters and nine months ended September 30, 2023, and September 30, 2022, the Company engaged in the following repurchase activities:


	Third Quarters				Nine Months
	2023		2022		2023		2022
Shares Repurchased (Millions)	31		40		94		116
Cost of Shares (Dollars in millions)	$	971	$	1,195	$	2,901	$	3,710

The Inflation Reduction Act of 2022 imposes a nondeductible 1% excise tax on the net value of most share repurchases made after December 31, 2022. Excise tax commensurate with net share repurchases is reflected in equity and a corresponding liability for excise taxes payable is included in other current liabilities on the consolidated balance sheet. Amounts shown in the table above exclude the impact of this excise tax.

Dividend Increase

In February 2023, the Company's Board of Directors authorized a 10% increase in the quarterly cash dividend to $0.11 per common share.