Earnings Per Share

12 Months Ended

Dec. 27, 2013

Earnings Per Share [Abstract]

Earnings Per Share

Earnings Per Share

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

	Fiscal Years
	2013		2012 (a)		2011 (a)
Numerator (Dollars in Millions):
Net Earnings	$	1,864	$	1,863	$	1,854
Dividend Equivalents on Restricted Stock	1		1		1
Net Earnings, Attributable to Common Shareholders	$	1,865	$	1,864	$	1,855
Denominator (Units in Millions):
Average Common Shares Outstanding	1,019		1,038		1,083
Other Potentially Dilutive Common Shares (b)	—		2		6
Average Common Shares Outstanding, Assuming Dilution	1,019		1,040		1,089
Net Earnings Per Share, Basic	$	1.83	$	1.80	$	1.71
Net Earnings Per Share, Assuming Dilution	$	1.83	$	1.79	$	1.70

(a) See the revision of prior period financial statements in Note 1. Nature of Operations and Significant Accounting Policies.

(b) Other potentially dilutive common shares include convertible debt, stock options, common stock equivalents and performance units granted under a long-term management incentive compensation plan.

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 adjusted for the effects of common stock that may be issued as a result of the following types of potentially dilutive instruments:

• convertible debt;

• employee stock options; and

• other equity awards, which include long-term incentive awards.

NOTE 2.  Earnings Per Share, continued

The Earnings Per Share Topic in the ASC requires CSX to include additional shares in the computation of earnings per share, assuming dilution.  The additional shares included in diluted earnings per share represent the number of shares that would be issued if all of the above potentially dilutive instruments were converted into CSX common stock.

When calculating diluted earnings per share, the Earnings Per Share Topic in the ASC requires CSX to include the potential shares that would be outstanding if all outstanding stock options were exercised.   This is offset by shares CSX could repurchase using the proceeds from these hypothetical exercises to obtain the common stock equivalent.  This number is different from outstanding stock options, which is included in Note 4, Stock Plans and Share-Based Compensation.  All stock options were dilutive for the periods presented; therefore, no stock options were excluded from the diluted earnings per share calculation.

Diluted shares outstanding are not impacted when debentures are converted into CSX common stock because those shares were already included in the diluted shares calculation.  Shares outstanding for basic earnings per share, however, are impacted on a weighted-average basis when conversions occur.  During 2013 and 2012, $7 thousand and $2 million, respectively, of face value convertible debentures were converted into approximately 1 thousand shares and 155 thousand shares of CSX common stock, respectively.  As of December 2013, approximately $2 million of convertible debentures at face value remained outstanding, which are convertible into 244 thousand shares of CSX common stock.