Share-Based Compensation (Tables)

3 Months Ended

Mar. 31, 2017

Disclosure of Compensation Related Costs, Share-based Payments [Abstract]

Share-Based Compensation and Related Income Tax Benefit

The year over year increase in expense related to performance units and stock options is primarily due to modifications to the terms of awards (see Equity Award Modificationsbelow) and higher expected award payouts.

	First Quarters
(Dollars in millions)	2017		2016
Share-Based Compensation Expense
Performance Units	$	20	$	1
Stock Options	12		2
Restricted Stock Units and Awards	4		3
Stock Awards for Directors	2		2
Total Share-Based Compensation Expense	$	38	$	8
Income Tax Benefit	13		3

Summary of Fair Value Assumptions for Stock Option Awards

The fair value of all stock option awards during the quarter, including those granted along with 2017-2019 LTIP and the CEO stock option award, was estimated at the grant date with the following weighted average assumptions:

	First Quarters
	2017			2016
Weighted-average grant date fair value	$	12.83		$	4.68
Stock options valuation assumptions:
Annual dividend yield	1.5		%	3.0		%
Risk-free interest rate	2.2		%	1.4		%
Annualized volatility	27.1		%	27.3		%
Expected life (in years)	6.3			6.5
Other pricing model inputs:
Weighted-average grant-date market price of CSX stock (strike price)	$	49.61		$	24.13