Earnings Per Share

6 Months Ended

Jun. 24, 2016

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



	Second Quarters				Six Months
	2016		2015		2016			2015
Numerator (Dollars in millions):
Net Earnings	$	445	$	553	$	801		$	995
Dividend Equivalents on Restricted Stock	—		—		(1		)	—
Net Earnings, Attributable to Common Shareholders	$	445	553		$	800		995

Denominator (Units in millions):
Average Common Shares Outstanding	952		988		957			989
Other Potentially Dilutive Common Shares	—		1		1			1
Average Common Shares Outstanding, Assuming Dilution	952		989		958			990

Net Earnings Per Share, Basic	$	0.47	$	0.56	$	0.84		$	1.01
Net Earnings Per Share, Assuming Dilution	$	0.47	$	0.56	$	0.84		$	1.00

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 equivalents outstanding 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, which include long-term incentive awards, and employee stock options.

The Earnings Per Share Topic in the FASB's Accounting Standards Codification ("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 number is different from outstanding stock options, which is included in Note 3, Share-Based Compensation, because it is offset by shares CSX could repurchase using the proceeds from these hypothetical exercises to obtain the common stock equivalent. Outstanding stock options were excluded from the diluted earnings per share calculation as the effect of their inclusion currently would be anti-dilutive.

Share Repurchases

In April 2015, the Company announced a new $2 billion share repurchase program, which is expected to be completed by April 2017. During the second quarters of 2016 and 2015, the Company repurchased approximately $266 million, or ten million shares, and $157 million, or four million shares, respectively. During the six months of 2016 and 2015, the Company repurchased $515 million, or 20 million shares, and $284 million, or eight million shares, respectively. Shares are retired immediately upon repurchase. Management's assessment of market conditions and other factors guides the timing and volume of repurchases. Future share repurchases are expected to be funded by cash on hand, cash generated from operations and debt issuances. In accordance with the Equity Topic in the ASC, the excess of repurchase price over par value is recorded in retained earnings. Generally, retained earnings is only impacted by net earnings and dividends.