Share-Based Compensation (Tables)

3 Months Ended

Mar. 31, 2018

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

Share-Based Compensation and Related Income Tax Benefit

Total pre-tax expense associated with share-based compensation and its related income tax benefit is shown in the table below. The year over year decrease in expense related to performance units, stock options and restricted stock units and awards is primarily due to modifications to the terms of awards in 2017 (see Equity Award Modifications below), the reduction of management headcount in 2017 and adjustments to reflect changes in the expected award payouts on existing plans for each year. Additionally, the 9 million stock options granted in February 2017 to former President and CEO E. Hunter Harrison were forfeited upon his death in December 2017.

	First Quarters
(Dollars in millions)	2018		2017
Share-Based Compensation Expense:
Performance Units	$	6	$	20
Stock Options	4		12
Restricted Stock Units and Awards	1		4
Stock Awards for Directors	2		2
Total Share-Based Compensation Expense	$	13	$	38
Income Tax Benefit	$	3	$	13

Schedule of Weighted Average Assumptions

The following weighted-average assumptions were used in the Monte-Carlo simulation for this award:

	First Quarter
	2018
Weighted-average assumptions used:
Annual dividend yield	1.6	%
Risk-free interest rate	2.3	%
Annualized volatility	29.15	%
Expected life (in years)	2.9

Summary of Fair Value Assumptions for Stock Option Awards

The fair values of all stock option awards during the first quarters ended March 31, 2018 and March 31, 2017 were estimated at the grant date with the following weighted average assumptions:

	First Quarters
	2018	2017
Weighted-average grant date fair value	$14.62	$12.83
Stock options valuation assumptions:
Annual dividend yield	1.5%	1.5%
Risk-free interest rate	2.6%	2.2%
Annualized volatility	27.0%	27.1%
Expected life (in years)	6.5	6.3
Other pricing model inputs:
Weighted-average grant-date market price of CSX stock (strike price)	$54.07	$49.61