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Table of Contents

UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM 10-Q
 
()
QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
For the quarterly period ended June 30, 2019
OR
()    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
    For the transition period from __________ to __________
Commission File Number 1-8022
csxlogo10qa08.jpg

CSX CORPORATION
(Exact name of registrant as specified in its charter)
Virginia
 
 
 
 
 
 
 
 
62-1051971
 
 
 
 
 
 
 
 
 
(I.R.S. Employer Identification No.)
 
 
 
 
 
 
 
 
 
 
 
500 Water Street
15th Floor
Jacksonville
FL
 
 
 
32202
 
904
359-3200
(Address of principal executive offices)
 
 
 
(Zip Code)
 
(Telephone number, including area code)
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
No Change
 
 
 
 
 
(Former name, former address and former fiscal year, if changed since last report.)
 
 
 
 
 
 
 
 
 
 
 
Securities registered pursuant to Section 12(b) of the Act:
Title of each class
 
 
Trading Symbol(s)
 
Name of exchange on which registered
Common Stock, $1 Par Value
 
 
CSX
 
Nasdaq Global Select Market

Indicate by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.
Yes (X) No ( )
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).
Yes (X) No ( )
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, a smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer", "accelerated filer” and "smaller reporting company" in Rule 12b-2 of the Exchange Act. (check one)
Large Accelerated Filer (X)    Accelerated Filer ( )    Non-accelerated Filer ( )    Smaller Reporting Company () Emerging growth company ()

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ( )

Indicate by a check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).
Yes () No (X)
There were 798,175,808 shares of common stock outstanding on June 30, 2019 (the latest practicable date that is closest to the filing date).

                    
 
CSX Q2 2019 Form 10-Q p.1





Table of Contents


CSX CORPORATION
FORM 10-Q
FOR THE QUARTERLY PERIOD ENDED JUNE 30, 2019
INDEX

 
 
 
Page
PART I.
FINANCIAL INFORMATION
 
 
Item 1.
 
 
 
 
 
 
Quarters and Six Months Ended June 30, 2019 and June 30, 2018
 
 
 
 
 
 
Quarters and Six Months Ended June 30, 2019 and June 30, 2018
 
 
 
 
 
 
At June 30, 2019 (Unaudited) and December 31, 2018
 
 
 
 
 
 
Six Months Ended June 30, 2019 and June 30, 2018
 
 
 
 
 
 
Quarters and Six Months Ended June 30, 2019 and June 30, 2018
 
 
 
 
 
 
 
 
 
 
 
Item 2.
 
 
 
 
 
Item 3.
 
 
 
 
 
Item 4.
 
 
 
 
 
PART II.
OTHER INFORMATION
 
 
Item 1.
 
 
 
 
 
Item 1A.
 
 
 
 
 
Item 2.
 
 
 
 
 
Item 3.
 
 
 
 
 
Item 4.
 
 
 
 
 
Item 5.
 
 
 
 
 
Item 6.
 
 
 
 
 
 
 


                    
 
CSX Q2 2019 Form 10-Q p.2





Table of Contents

CSX CORPORATION

PART I - FINANCIAL INFORMATION

ITEM 1. FINANCIAL STATEMENTS
CONSOLIDATED INCOME STATEMENTS (Unaudited)  
(Dollars in millions, except per share amounts)
 
Second Quarters
 
Six Months
 
2019
2018
 
2019
2018
 
 
 
 
 
 
Revenue
$
3,061

$
3,102

 
$
6,074

$
5,978

Expense
 
 
 
 
 
Labor and Fringe
648

669

 
1,320

1,365

Materials, Supplies and Other
455

469

 
933

951

Depreciation
337

329

 
667

652

Fuel
234

270

 
467

525

Equipment and Other Rents
103

112

 
203

213

Equity Earnings of Affiliates
(21
)
(30
)
 
(40
)
(55
)
Total Expense
1,756

1,819

 
3,550

3,651

 
 
 
 
 
 
Operating Income
1,305

1,283

 
2,524

2,327

 
 
 
 
 
 
Interest Expense
(184
)
(157
)
 
(362
)
(306
)
Other Income - Net
25

18

 
48

35

Earnings Before Income Taxes
1,146

1,144

 
2,210

2,056

 
 
 
 
 
 
Income Tax Expense
(276
)
(267
)
 
(506
)
(484
)
Net Earnings
$
870

$
877

 
$
1,704

$
1,572

 
 
 
 
 
 
Per Common Share (Note 2)
 
 
 
 
 
Net Earnings Per Share, Basic
$
1.08

$
1.02

 
$
2.10

$
1.80

Net Earnings Per Share, Assuming Dilution
$
1.08

$
1.01

 
$
2.10

$
1.79

 
 
 
 
 
 
 
 
 
 
 
 
Average Shares Outstanding (In millions)
805

864

 
810

875

Average Shares Outstanding, Assuming Dilution (In millions)
807

868

 
812

878

 
 
 
 
 
 


CONDENSED CONSOLIDATED COMPREHENSIVE INCOME STATEMENTS (Unaudited)  
(Dollars in millions)

 
Second Quarters
 
Six Months
 
2019
2018
 
2019
2018
Total Comprehensive Earnings (Note 12)
$
874

$
881

 
$
1,710

$
1,477


See accompanying notes to consolidated financial statements.


                    
 
CSX Q2 2019 Form 10-Q p.3





Table of Contents
CSX CORPORATION
ITEM 1. FINANCIAL STATEMENTS

CONSOLIDATED BALANCE SHEETS
(Dollars in millions)
 
(Unaudited)
 
 
June 30,
2019
December 31,
2018
ASSETS
Current Assets:
 
 
Cash and Cash Equivalents
$
853

$
858

Short-term Investments
878

253

Accounts Receivable - Net (Note 9)
1,111

1,010

Materials and Supplies
222

263

Other Current Assets
122

181

  Total Current Assets
3,186

2,565

 
 
 
Properties
44,756

44,805

Accumulated Depreciation
(12,737
)
(12,807
)
  Properties - Net
32,019

31,998

 
 
 
Investment in Conrail
959

943

Affiliates and Other Companies
863

836

Right-of-Use Lease Asset (Note 5)
550


Other Long-term Assets
347

387

  Total Assets
$
37,924

$
36,729

 
 
 
LIABILITIES AND SHAREHOLDERS' EQUITY
Current Liabilities:
 
 
Accounts Payable
$
989

$
949

Labor and Fringe Benefits Payable
412

550

Casualty, Environmental and Other Reserves (Note 4)
110

113

Current Maturities of Long-term Debt (Note 8)
245

18

Income and Other Taxes Payable
133

106

Other Current Liabilities
164

179

  Total Current Liabilities
2,053

1,915

 
 
 
Casualty, Environmental and Other Reserves (Note 4)
199

211

Long-term Debt (Note 8)
15,522

14,739

Deferred Income Taxes - Net
6,791

6,690

Long-term Lease Liability (Note 5)
501


Other Long-term Liabilities
568

594

  Total Liabilities
25,634

24,149

 
 
 
Shareholders' Equity:
 
 
Common Stock, $1 Par Value
798

818

Other Capital
290

249

Retained Earnings
11,843

12,157

Accumulated Other Comprehensive Loss (Note 12)
(655
)
(661
)
Noncontrolling Interest
14

17

Total Shareholders' Equity
12,290

12,580

Total Liabilities and Shareholders' Equity
$
37,924

$
36,729


See accompanying notes to consolidated financial statements.

                    
 
CSX Q2 2019 Form 10-Q p.4





Table of Contents
CSX CORPORATION
ITEM 1. FINANCIAL STATEMENTS

CONSOLIDATED CASH FLOW STATEMENTS (Unaudited)
(Dollars in millions)
 
Six Months
 
2019
2018
 
 
 
OPERATING ACTIVITIES
 
 
Net Earnings
$
1,704

$
1,572

Adjustments to Reconcile Net Earnings to Net Cash Provided by Operating Activities:
 
 
Depreciation
667

652

Deferred Income Taxes
97

98

Gain on Property Dispositions
(64
)
(69
)
Equity Earnings of Affiliates
(40
)
(55
)
Cash Payments for Restructuring Charge

(13
)
Other Operating Activities
(21
)
(15
)
Changes in Operating Assets and Liabilities:
 
 
Accounts Receivable
(61
)
(47
)
Other Current Assets
41

14

Accounts Payable
39

11

Income and Other Taxes Payable
89

(24
)
Other Current Liabilities
(184
)
(115
)
Net Cash Provided by Operating Activities
2,267

2,009

 
 
 
INVESTING ACTIVITIES
 
 
Property Additions
(769
)
(823
)
Proceeds from Property Dispositions
146

141

Purchase of Short-term Investments
(1,427
)
(77
)
Proceeds from Sales of Short-term Investments
810

12

Other Investing Activities
(16
)
(8
)
Net Cash Used In Investing Activities
(1,256
)
(755
)
 
 
 
FINANCING ACTIVITIES
 
 
Long-term Debt Issued (Note 8)
1,000

2,000

Dividends Paid
(388
)
(384
)
Shares Repurchased
(1,656
)
(1,810
)
Accelerated Share Repurchase Pending Final Settlement (Note 2)

(90
)
Other Financing Activities
28

(51
)
Net Cash Used in Financing Activities
(1,016
)
(335
)
 
 
 
Net (Decrease)/Increase in Cash and Cash Equivalents
(5
)
919

 
 
 
CASH AND CASH EQUIVALENTS
 
 
Cash and Cash Equivalents at Beginning of Period
858

401

Cash and Cash Equivalents at End of Period
$
853

$
1,320

 
 
 

See accompanying notes to consolidated financial statements.

                    
 
CSX Q2 2019 Form 10-Q p.5





Table of Contents
CSX CORPORATION
ITEM 1. FINANCIAL STATEMENTS

CONSOLIDATED STATEMENTS OF CHANGES
IN SHAREHOLDERS' EQUITY
(Dollars in Millions)

Six Months 2019
Common Shares Outstanding
(Thousands)
Common Stock and Other Capital
Retained Earnings
Accumulated
Other
Comprehensive Income
(Loss)(a)
Non-controlling Interest
Total Shareholders' Equity
 
 
 
 
 
 
 
Balance December 31, 2018
818,180

$
1,067

$
12,157

$
(661
)
$
17

$
12,580

Comprehensive Earnings:
 
 
 
 
 
 
Net Earnings


834



834

Other Comprehensive Income (Note 12)



2


2

Total Comprehensive Earnings
 
 
 
 
 
836

 
 
 
 
 
 
 
Common stock dividends, $0.24 per share


(195
)


(195
)
Share Repurchases
(11,540
)
(12
)
(784
)


(796
)
Stock Option Exercises and Other
2,524

21

(1
)


20

Balance March 31, 2019
809,164

$
1,076

$
12,011

$
(659
)
$
17

$
12,445

Comprehensive Earnings:
 
 
 
 
 
 
Net Earnings


870



870

Other Comprehensive Income (Note 12)



4


4

Total Comprehensive Earnings
 
 
 
 
 
874

 
 
 
 
 
 
 
Common stock dividends, $0.24 per share


(193
)


(193
)
Share Repurchases
(11,266
)
(11
)
(849
)


(860
)
Stock Option Exercises and Other
278

23

4


(3
)
24

Balance June 30, 2019
798,176

$
1,088

$
11,843

$
(655
)
$
14

$
12,290

Six Months 2018
 
 
 
 
 
 
Balance December 31, 2017
889,851

$
1,107

$
14,084

$
(486
)
$
16

$
14,721

Comprehensive Earnings:
 
 
 
 
 
 
Net Earnings


695



695

Other Comprehensive Loss



(99
)

(99
)
Total Comprehensive Earnings
 
 
 
 
 
596

 
 
 
 
 
 
 
Common stock dividends, $0.22 per share


(194
)


(194
)
Share Repurchases
(14,966
)
(15
)
(821
)


(836
)
Stock Option Exercises and Other
469

(2
)
109


(3
)
104

Balance March 31, 2018
875,354

$
1,090

$
13,873

$
(585
)
$
13

$
14,391

Comprehensive Earnings:
 
 
 
 
 
 
Net Earnings


877



877

Other Comprehensive Income



4


4

Total Comprehensive Earnings
 
 
 
 
 
881

 
 
 
 
 
 
 
Common stock dividends, $0.22 per share


(190
)


(190
)
Share Repurchases
(16,386
)
(16
)
(958
)


(974
)
Stock Option Exercises and Other
(157
)
(88
)
2


1

(85
)
Balance June 30, 2018
858,811

$
986

$
13,604

$
(581
)
$
14

$
14,023

(a) Accumulated Other Comprehensive Loss balances shown above are net of tax. The associated taxes were $179 million and $177 million as of first and second quarters 2019, and $160 million and $158 million as of first and second quarters 2018, respectively. For additional information, see Note 12, Other Comprehensive Income.
See accompanying notes to consolidated financial statements.

                    
 
CSX Q2 2019 Form 10-Q p.6





Table of Contents
CSX CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)


NOTE 1.Nature of Operations and Significant Accounting Policies

Background
CSX Corporation (“CSX”), together with its subsidiaries (the “Company”), based in Jacksonville, Florida, is one of the nation's leading transportation companies. The Company provides rail-based transportation services including traditional rail service and the transport of intermodal containers and trailers.

CSX's principal operating subsidiary, CSX Transportation, Inc. (“CSXT”), provides an important link to the transportation supply chain through its approximately 20,000 route mile rail network, which serves major population centers in 23 states east of the Mississippi River, the District of Columbia and the Canadian provinces of Ontario and Quebec. The Company's intermodal business links customers to railroads via trucks and terminals.

CSXT is also responsible for the Company's real estate sales, leasing, acquisition and management and development activities. In addition, as substantially all real estate sales, leasing, acquisition and management and development activities are focused on supporting railroad operations, all results of these activities are included in operating income.

Other entities
In addition to CSXT, the Company’s subsidiaries include CSX Intermodal Terminals, Inc. (“CSX Intermodal Terminals”), Total Distribution Services, Inc. (“TDSI”), Transflo Terminal Services, Inc. (“Transflo”), CSX Technology, Inc. (“CSX Technology”) and other subsidiaries. CSX Intermodal Terminals owns and operates a system of intermodal terminals, predominantly in the eastern United States and also performs drayage services (the pickup and delivery of intermodal shipments) for certain customers and trucking dispatch operations. TDSI serves the automotive industry with distribution centers and storage locations. Transflo connects non-rail served customers to the many benefits of rail by transferring products from rail to trucks. The biggest Transflo markets are chemicals and agriculture, which include shipments of plastics and ethanol. CSX Technology and other subsidiaries provide support services for the Company.
    
Basis of Presentation
In the opinion of management, the accompanying consolidated financial statements contain all normal, recurring adjustments necessary to fairly present the following:
  
Consolidated income statements for the quarter and six months ended June 30, 2019 and June 30, 2018;
Condensed consolidated comprehensive income statements for the quarter and six months ended June 30, 2019 and June 30, 2018;
Consolidated balance sheets at June 30, 2019 and December 31, 2018;
Consolidated cash flow statements for the six months ended June 30, 2019 and June 30, 2018; and
Consolidated statements of changes in shareholders' equity for the quarter and six months ended June 30, 2019 and June 30, 2018.

Pursuant to the rules and regulations of the Securities and Exchange Commission (“SEC”), certain information and disclosures normally included in the notes to the annual financial statements prepared in accordance with U.S. generally accepted accounting principles (“GAAP”) have been omitted from these interim financial statements. CSX suggests that these financial statements be read in conjunction with the audited financial statements and the notes included in CSX's most recent annual report on Form 10-K and any subsequently filed current reports on Form 8-K.


                    
 
CSX Q2 2019 Form 10-Q p.7





Table of Contents
CSX CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)

NOTE 1.    Nature of Operations and Significant Accounting Policies, continued

Fiscal Year
The Company's fiscal periods are based upon the calendar year. Except as otherwise specified, references to “second quarter(s)” or “six months” indicate CSX's fiscal periods ending June 30, 2019 and June 30, 2018, and references to "year-end" indicate the fiscal year ended December 31, 2018.

New Accounting Pronouncements
Pronouncements adopted in 2019    
In February 2016, the FASB issued ASU, Leases, which requires lessees to recognize most leases on their balance sheets as a right-of-use asset with a corresponding lease liability. Lessor accounting under the standard is substantially unchanged. Additional qualitative and quantitative disclosures are also required. CSX adopted the standard effective January 1, 2019 using the cumulative-effect adjustment transition method, which applies the provisions of the standard at the effective date without adjusting the comparative periods presented. The Company adopted the following practical expedients and elected the following accounting policies related to this standard update:

Carry forward of historical lease classifications and current accounting treatment for existing land easements;
Short-term lease accounting policy election allowing lessees to not recognize right-of-use assets and liabilities for leases with a term of 12 months or less; and
The option to not separate lease and non-lease components for certain equipment lease asset categories such as freight car, vehicles and work equipment.

Adoption of this standard resulted in the recognition of operating lease right-of-use assets and corresponding lease liabilities of $534 million on the consolidated balance sheet as of January 1, 2019. This amount is lower than previous estimates due to a lease amendment. The Company’s accounting for finance leases remained substantially unchanged. The standard did not materially impact operating results or liquidity. Disclosures related to the amount, timing and uncertainty of cash flows arising from leases are included in Note 5, Leases.

Pronouncements to be adopted    
In June 2016, the FASB issued ASU Measurement of Credit Losses on Financial Instruments, which replaces current methods for evaluating impairment of financial instruments not measured at fair value, including trade accounts receivable and certain debt securities, with a current expected credit loss model. CSX will adopt this new standard update effective January 1, 2020, and does not expect it to have a material effect on the Company's results of operations.



                    
 
CSX Q2 2019 Form 10-Q p.8





Table of Contents
CSX CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)

NOTE 2.    Earnings Per Share

The following table sets forth the computation of basic earnings per share and earnings per share, assuming dilution:
 
Second Quarters
 
Six Months
 
2019
2018
 
2019
2018
Numerator (Dollars in millions):
 
 
 
 
 
Net Earnings
$
870

$
877

 
$
1,704

$
1,572

 
 
 
 
 
 
Denominator (Units in millions):
 
 
 
 
 
Average Common Shares Outstanding
805

864

 
810

875

Other Potentially Dilutive Common Shares
2

4

 
2

3

Average Common Shares Outstanding, Assuming Dilution
807

868

 
812

878

 
 
 
 
 
 
Net Earnings Per Share, Basic
$
1.08

$
1.02

 
$
2.10

$
1.80

Net Earnings Per Share, Assuming Dilution
$
1.08

$
1.01

 
$
2.10

$
1.79



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. Approximately 900 thousand and 1 million of total average outstanding stock options for the quarters ended June 30, 2019 and June 30, 2018, respectively, and 800 thousand and 900 thousand for the six months ended June 30, 2019 and June 30, 2018, respectively, were excluded from the diluted earnings per share calculation because their effect was antidilutive.

Share Repurchases    
In February 2018, the Company announced an increase to the $1.5 billion share repurchase program first announced in October 2017, bringing the total authorized to $5 billion. This program was completed on January 16, 2019. Also on January 16, 2019, the Company announced a new $5 billion share repurchase program. During second quarter and six months ended 2019 and 2018, the Company engaged in the following repurchase activities:
 
Second Quarters
 
Six Months
 
2019
2018
 
2019
2018
Shares Repurchased (Millions)
11

16

 
23

31

Cost of Shares (Dollars in millions)
$
860

$
974

 
$
1,656

$
1,810




                    
 
CSX Q2 2019 Form 10-Q p.9





Table of Contents
CSX CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)

NOTE 2.    Earnings Per Share, continued

On April 20, 2018, the Company entered into an accelerated share repurchase agreement to repurchase shares of the Company’s common stock. Under this agreement, the Company made a prepayment of $450 million to a financial institution and received an initial delivery of shares valued at $360 million, or 6 million shares. The remaining balance of $90 million was settled through receipt of additional shares in July 2018, with the final net number of shares calculated based on the volume-weighted average price of the Company's common stock over the term of the agreement, less a discount. Approximately 7 million total shares were repurchased under this agreement. Under a separate accelerated share repurchase agreement in January 2018, the Company paid $150 million to a financial institution and received approximately 3 million total shares in first quarter 2018.

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 ASC, the excess of repurchase price over par value is recorded in retained earnings.

NOTE 3.     Share-Based Compensation

Under CSX's share-based compensation plans, awards consist of performance units, restricted stock awards, restricted stock units and stock options for management and stock grants for directors. Awards granted under the various programs are determined and approved by the Compensation Committee of the Board of Directors or, in certain circumstances, by the Chief Executive Officer for awards to management employees other than senior executives. The Board of Directors approves awards granted to CSX's non-management directors upon recommendation of the Governance Committee.

Share-based compensation expense for awards under share-based compensation plans and purchases made as part of the employee stock purchase plan is measured using the fair value of the award on the grant date and is recognized on a straight-line basis over the service period of the respective award. Total pre-tax expense and income tax benefits associated with share-based compensation are shown in the table below. Income tax benefits include impacts from option exercises and the vesting of other equity awards.

 
Second Quarters
 
Six Months
(Dollars in millions)
2019
2018
 
2019
2018
 
 
 
 
 
 
Share-Based Compensation Expense:
 
 
 
 
 
Performance Units
$
9

$
8

 
$
15

$
14

Stock Options
5

2

 
7

6

Restricted Stock Units and Awards
2

2

 
4

3

Stock Awards for Directors


 
2

2

Employee Stock Purchase Plan
1


 
2


Total Share-Based Compensation Expense
$
17

$
12

 
$
30

$
25

Income Tax Benefit
$
7

$
9

 
$
35

$
17




                    
 
CSX Q2 2019 Form 10-Q p.10





Table of Contents
CSX CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)

NOTE 3.     Share-Based Compensation, continued

Long-term Incentive Plan
In February 2019, the Company granted approximately 300 thousand performance units to certain employees under a new long-term incentive plan ("LTIP") for the years 2019 through 2021, which was adopted under the CSX 2010 Stock and Incentive Award Plan. On May 3, 2019, shareholders approved the CSX 2019 Stock and Incentive Award Plan, under which future awards will be granted.

Payouts of performance units for the cycle ending with fiscal year 2021 will be based on the achievement of goals related to both operating ratio and free cash flow, in each case excluding non-recurring items as disclosed in the Company's financial statements. The cumulative operating ratio and cumulative free cash flow over the plan period will each comprise 50% of the payout and will be measured independently of the other.

Grants were made in performance units, with each unit representing the right to receive one share of CSX common stock, and payouts will be made in CSX common stock. The payout range for participants will be between 0% and 200% of the target awards depending on Company performance against predetermined goals. Payouts for certain executive officers are subject to formulaic upward or downward adjustment by up to 25%, capped at an overall payout of 225%, based upon the Company's total shareholder return relative to specified comparable groups over the performance period. The fair values of the performance units awarded during the six months 2019 and 2018 were calculated using a Monte-Carlo simulation model with the following weighted-average assumptions:

 
 
Six Months
 
 
2019
2018
Weighted-average assumptions used:
 
 
 
Annual dividend yield
 
1.4
%
1.6
%
Risk-free interest rate
 
2.5
%
2.3
%
Annualized volatility
 
27.6
%
29.2
%
Expected life (in years)
 
2.9

2.9



Stock Options
Also, in February 2019, the Company granted approximately 843 thousand stock options along with the corresponding LTIP. The fair value of stock options on the date of grant was $17.45 per option, which was calculated using the Black-Scholes valuation model. These stock options were granted with ten-year terms and vest over three years in equal installments each year on the anniversary of the grant date. The exercise price for stock options granted equals the closing market price of the underlying stock on the date of grant. These awards are time-based and are not based upon attainment of performance goals. During second quarters 2019 and 2018, there were immaterial grants of stock options to certain members of management.


                    
 
CSX Q2 2019 Form 10-Q p.11





Table of Contents
CSX CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)

NOTE 3.     Share-Based Compensation, continued

The fair values of all stock option awards during the quarters and six months ended June 30, 2019 and June 30, 2018 were estimated at the grant date with the following weighted average assumptions:
 
Second Quarters
 
Six Months
 
2019
2018
 
2019
2018
Weighted-average grant-date fair value
$
20.51

$
17.62

 
$
18.00

$
14.64

 
 
 
 
 
 
Stock options valuation assumptions:
 
 
 
 
 
Annual dividend yield
1.2
%
1.3
%
 
1.3
%
1.5
%
Risk-free interest rate
2.4
%
2.8
%
 
2.5
%
2.6
%
Annualized volatility
25.4
%
25.8
%
 
25.7
%
27.0
%
Expected life (in years)
6.5

6.5

 
6.1

6.5

 
 
 
 
 
 
Other pricing model inputs:
 
 
 
 
 
Weighted-average grant-date market price of CSX stock (strike price)
$
78.58

$
65.44

 
$
69.97

$
54.14



Restricted Stock Units
Finally, in February 2019, the Company granted approximately 65 thousand restricted stock units along with the corresponding LTIP. The restricted stock units vest three years after the date of grant. Participants receive cash dividend equivalents on the unvested shares during the restriction period. These awards are time-based and are not based upon CSX's attainment of operational targets. Restricted stock units are paid-out in CSX common stock on a one-for-one basis. For information related to the Company's other outstanding long-term incentive compensation, see CSX's most recent annual report on Form 10-K.

Employee Stock Purchase Plan
In May 2018, shareholders approved the 2018 CSX Employee Stock Purchase Plan (“ESPP”) for the benefit of Company employees. The Company registered 4 million shares of common stock that may be issued pursuant to this plan. Under the ESPP, employees may contribute between 1% and 10% of base compensation, after-tax, to purchase up to $25,000 of CSX common stock per year at 85% of the closing market price on either the grant date or the last day of the six-month offering period, whichever is lower. In first quarter 2019, 105 thousand shares of CSX stock were issued at a weighted average purchase price of $52.81 per share. These issuances were related to employee contributions in 2018. There were no issuances in second quarter 2019.



                    
 
CSX Q2 2019 Form 10-Q p.12





Table of Contents
CSX CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)

NOTE 4.    Casualty, Environmental and Other Reserves

Personal injury and environmental reserves are considered critical accounting estimates due to the need for significant management judgment. Casualty, environmental and other reserves are provided for in the consolidated balance sheets as shown in the table below.
 
June 30, 2019
 
December 31, 2018
(Dollars in millions)
Current
Long-term
Total
 
Current
Long-term
Total
 
 
 
 
 
 
 
 
Casualty:
 
 
 
 
 
 
 
Personal Injury
$
47

$
83

$
130

 
$
40

$
103

$
143

Occupational
9

49

58

 
10

46

56

     Total Casualty
56

132

188

 
50

149

199

Environmental
32

46

78

 
39

41

80

Other
22

21

43

 
24

21

45

     Total
$
110

$
199

$
309

 
$
113

$
211

$
324



These liabilities are accrued when probable and reasonably estimable in accordance with the Contingencies Topic in the ASC. Actual settlements and claims received could differ, and final outcomes of these matters cannot be predicted with certainty. Considering the legal defenses currently available, the liabilities that have been recorded and other factors, it is the opinion of management that none of these items individually, when finally resolved, will have a material adverse effect on the Company's financial condition, results of operations or liquidity. Should a number of these items occur in the same period, however, their combined effect could be material in that particular period.

Casualty
Casualty reserves of $188 million and $199 million as of June 30, 2019 and December 31, 2018, respectively, represent accruals for personal injury, occupational disease and occupational injury claims. During second quarter 2018, the Company increased its self-insured retention amount for these claims from $50 million to $75 million per occurrence for claims occurring on or after June 1, 2018. Currently, no individual claim is expected to exceed the self-insured retention amount. In accordance with the Contingencies Topic in the ASC, to the extent the value of an individual claim exceeds the self-insured retention amount, the Company would present the liability on a gross basis with a corresponding receivable for insurance recoveries. These reserves fluctuate based upon the timing of payments as well as changes in estimate. Actual results may vary from estimates due to the number, type and severity of the injury, costs of medical treatments and uncertainties in litigation. Most of the Company's casualty claims relate to CSXT. Defense and processing costs, which historically have been insignificant and are anticipated to be insignificant in the future, are not included in the recorded liabilities.

Personal Injury
Personal injury reserves represent liabilities for employee work-related and third-party injuries. Work-related injuries for CSXT employees are primarily subject to the Federal Employers’ Liability Act (“FELA”). CSXT retains an independent actuary to assist management in assessing the value of personal injury claims. An analysis is performed by the actuary quarterly and is reviewed by management. This analysis for the quarter resulted in an immaterial adjustment to the personal injury reserve. The methodology used by the actuary includes a development factor to reflect growth or reduction in the value of these personal injury claims based largely on CSXT's historical claims and settlement experience.


                    
 
CSX Q2 2019 Form 10-Q p.13





Table of Contents
CSX CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)

NOTE 4.    Casualty, Environmental and Other Reserves, continued

Occupational
Occupational reserves represent liabilities for occupational disease and injury claims. Occupational disease claims arise primarily from allegations of exposure to asbestos in the workplace. Occupational injury claims arise from allegations of exposure to certain other materials in the workplace, such as solvents, soaps, chemicals (collectively referred to as “irritants”) and diesel fuels (like exhaust fumes) or allegations of chronic physical injuries resulting from work conditions, such as repetitive stress injuries. An analysis performed by management for the quarter resulted in an immaterial adjustment to the occupational reserve.

Environmental
Environmental reserves were $78 million and $80 million as of June 30, 2019 and December 31, 2018, respectively. The Company is a party to various proceedings related to environmental issues, including administrative and judicial proceedings involving private parties and regulatory agencies. The Company has been identified as a potentially responsible party at approximately 229 environmentally impaired sites. Many of these are, or may be, subject to remedial action under the federal Comprehensive Environmental Response, Compensation and Liability Act of 1980 ("CERCLA"), also known as the Superfund Law, or similar state statutes. Most of these proceedings arose from environmental conditions on properties used for ongoing or discontinued railroad operations. A number of these proceedings, however, are based on allegations that the Company, or its predecessors, sent hazardous substances to facilities owned or operated by others for treatment, recycling or disposal. In addition, some of the Company's land holdings were leased to others for commercial or industrial uses that may have resulted in releases of hazardous substances or other regulated materials onto the property and could give rise to proceedings against the Company.

In any such proceedings, the Company is subject to environmental clean-up and enforcement actions under the Superfund Law, as well as similar state laws that may impose joint and several liability for clean-up and enforcement costs on current and former owners and operators of a site without regard to fault or the legality of the original conduct. These costs could be substantial.

In accordance with the Asset Retirement and Environmental Obligations Topic in the ASC, the Company reviews its role with respect to each site identified at least quarterly, giving consideration to a number of factors such as:

type of clean-up required;
nature of the Company's alleged connection to the location (e.g., generator of waste sent to the site or owner or operator of the site);
extent of the Company's alleged connection (e.g., volume of waste sent to the location and other relevant factors); and
number, connection and financial viability of other named and unnamed potentially responsible parties at the location.

Based on the review process, the Company has recorded amounts to cover contingent anticipated future environmental remediation costs with respect to each site to the extent such costs are reasonably estimable and probable. The recorded liabilities for estimated future environmental costs are undiscounted. The liability includes future costs for remediation and restoration of sites as well as any significant ongoing
monitoring costs, but excludes any anticipated insurance recoveries. Payments related to these liabilities are expected to be made over the next several years. Environmental remediation costs are included in materials, supplies and other on the consolidated income statements.


                    
 
CSX Q2 2019 Form 10-Q p.14





Table of Contents
CSX CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)

NOTE 4.    Casualty, Environmental and Other Reserves, continued

Currently, the Company does not possess sufficient information to reasonably estimate the amounts of additional liabilities, if any, on some sites until completion of future environmental studies. In addition, conditions that are currently unknown could, at any given location, result in additional exposure, the amount and materiality of which cannot presently be reasonably estimated. Based upon information currently available, however, the Company believes its environmental reserves accurately reflect the estimated cost of remedial actions currently required.

Other
Other reserves were $43 million and $45 million as of June 30, 2019 and December 31, 2018, respectively. These reserves include liabilities for various claims, such as property, automobile and general liability. Also included in other reserves are longshoremen disability claims related to a previously owned international shipping business (these claims are in runoff) as well as claims for current port employees.

NOTE 5.     Leases

CSX has various lease agreements with terms up to 50 years, including leases of land, land with integral equipment (e.g. track), buildings and various equipment. Some leases include options to purchase, terminate or extend for one or more years. These options are included in the lease term when it is reasonably certain that the option will be exercised.

At inception, the Company determines if an arrangement contains a lease and whether that lease meets the classification criteria of a finance or operating lease. Some of the Company’s lease arrangements contain lease components (e.g. minimum rent payments) and non-lease components (e.g. maintenance, labor charges, etc.). The Company generally accounts for each component separately based on the estimated standalone price of each component. For certain equipment leases, such as freight car, vehicles and work equipment, the Company accounts for the lease and non-lease components as a single lease component.

Certain of the Company’s lease agreements include rental payments that are adjusted periodically for an index or rate. The leases are initially measured using the projected payments adjusted for the index or rate in effect at the commencement date. The Company’s lease agreements do not contain any material residual value guarantees or material restrictive covenants.

Operating Leases
Operating leases are included in right-of-use lease assets, other current liabilities and long-term lease liabilities on the consolidated balance sheets. These assets and liabilities are recognized at the commencement date based on the present value of remaining lease payments over the lease term using the Company’s secured incremental borrowing rates or implicit rates, when readily determinable. Short-term operating leases, which have an initial term of 12 months or less, are not recorded on the balance sheet.

Lease expense for operating leases is recognized on a straight-line basis over the lease term. Variable lease expense is recognized in the period in which the obligation for those payments is incurred. Lease expense is included in equipment and other rents on the consolidated income statements and is reported net of lease income. Lease income is not material to the results of operations for the quarter or six months ended June 2019.


                    
 
CSX Q2 2019 Form 10-Q p.15





Table of Contents
CSX CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)

NOTE 5.     Leases, continued

The following table presents information about the amount, timing and uncertainty of cash flows arising from the Company’s operating leases as of June 30, 2019.

(Dollars in Millions)
June 30, 2019
Maturity of Lease Liabilities
Lease Payments
2019 (remaining)
$
29

2020
61

2021
53

2022
46

2023
38

Thereafter
1,241

Total undiscounted operating lease payments
$
1,468

Less: Imputed interest
(908
)
Present value of operating lease liabilities
$
560

 
 
Balance Sheet Classification
 
Current lease liabilities (recorded in other current liabilities)
$
59

Long-term lease liabilities
501

Total operating lease liabilities
$
560

 
 
Other Information
 
Weighted-average remaining lease term for operating leases
33 years

Weighted-average discount rate for operating leases
5.0
%

Cash Flows
An initial right-of-use asset of $534 million was recognized as a non-cash asset addition with the adoption of the new lease accounting standard. Additional right-of-use assets of $40 million were recognized as non-cash asset additions that resulted from new operating lease liabilities during the six months ended June 30, 2019. Cash paid for amounts included in the present value of operating lease liabilities was $28 million during the six months ended June 30, 2019 and is included in operating cash flows.

Operating Lease Costs
Operating lease costs were $21 million during second quarter 2019 and $39 million for the six months ended June 30, 2019. These costs are primarily related to long-term operating leases, but also include immaterial amounts for variable leases and short-term leases with terms greater than 30 days.

Finance Leases
Finance leases are included in properties - net and long-term debt on the consolidated balance sheets. The associated amortization expense and interest expense are included in depreciation and interest expense, respectively, on the consolidated income statements. These leases are not material to the consolidated financial statements as of June 30, 2019.



                    
 
CSX Q2 2019 Form 10-Q p.16





Table of Contents
CSX CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)

NOTE 6.    Commitments and Contingencies

Insurance
The Company maintains insurance programs with substantial limits for property damage (which includes business interruption) and third-party liability.  A certain amount of risk is retained by the Company on each of the property and liability programs. The Company has a $50 million per occurrence retention for floods and named windstorms and a $25 million per occurrence retention for property losses other than floods and named windstorms. For claims occurring on or after June 1, 2018, the Company increased its self-insured retention for third-party liability claims from $50 million to $75 million per occurrence. While the Company believes its insurance coverage is adequate, future claims could exceed existing insurance coverage or insurance may not continue to be available at commercially reasonable rates.

Legal
    The Company is involved in litigation incidental to its business and is a party to a number of legal actions and claims, various governmental proceedings and private civil lawsuits, including, but not limited to, those related to fuel surcharge practices, tax matters, environmental and hazardous material exposure matters, FELA and labor claims by current or former employees, other personal injury or property claims and disputes and complaints involving certain transportation rates and charges. Some of the legal proceedings include claims for compensatory as well as punitive damages and others are, or are purported to be, class actions. While the final outcome of these matters cannot be reasonably determined, considering, among other things, the legal defenses available and liabilities that have been recorded along with applicable insurance, it is currently the opinion of management that none of these pending items is likely to have a material adverse effect on the Company's financial condition, results of operations or liquidity. An unexpected adverse resolution of one or more of these items, however, could have a material adverse effect on the Company's financial condition, results of operations or liquidity in that particular period.

The Company is able to estimate a range of possible loss for certain legal proceedings for which a loss is reasonably possible in excess of reserves established. The Company has estimated this range to be $3 million to $55 million in aggregate at June 30, 2019. This estimated aggregate range is based upon currently available information and is subject to significant judgment and a variety of assumptions. Accordingly, the Company's estimate will change from time to time, and actual losses may vary significantly from the current estimate.

Fuel Surcharge Antitrust Litigation
In May 2007, class action lawsuits were filed against CSXT and three other U.S.-based Class I railroads alleging that the defendants' fuel surcharge practices relating to contract and unregulated traffic resulted from an illegal conspiracy in violation of antitrust laws. In November 2007, the class action lawsuits were consolidated in federal court in the District of Columbia, where they are now pending. The suit seeks treble damages allegedly sustained by purported class members as well as attorneys' fees and other relief. Plaintiffs are expected to allege damages at least equal to the fuel surcharges at issue.


                    
 
CSX Q2 2019 Form 10-Q p.17





Table of Contents
CSX CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)

NOTE 6.    Commitments and Contingencies, continued

In June 2012, the District Court certified the case as a class action. The decision was not a ruling on the merits of plaintiffs' claims, but rather a decision to allow the plaintiffs to seek to prove the case as a class. The defendant railroads petitioned the U.S. Court of Appeals for the D.C. Circuit for permission to appeal the District Court's class certification decision. In August 2013, the D.C. Circuit issued a decision vacating the class certification decision and remanded the case to the District Court to reconsider its class certification decision. On October 10, 2017, the District Court issued an order denying class certification. The U.S. Court of Appeals for the D.C. Circuit is reviewing the District Court's denial of class certification and held oral argument on September 28, 2018, with a decision yet to be issued. The District Court has delayed proceedings on the merits of the case pending the outcome of the class certification proceedings.

CSXT believes that its fuel surcharge practices were arrived at and applied lawfully and that the case is without merit. Accordingly, the Company intends to defend itself vigorously. However, penalties for violating antitrust laws can be severe, and resolution of this matter or an unexpected adverse decision on the merits could have a material adverse effect on the Company's financial condition, results of operations or liquidity in that particular period.

Environmental
CSXT is indemnifying Pharmacia LLC (formerly known as Monsanto Company) for certain liabilities associated with real estate located in Kearny, New Jersey along the Lower Passaic River (the “Property”). The Property, which was formerly owned by Pharmacia, is now owned by CSXT. CSXT's indemnification and defense duties arise with respect to several matters. The U.S. Environmental Protection Agency ("EPA"), using its CERCLA authority, seeks cleanup and removal costs and other damages associated with the presence of hazardous substances in the 17-mile Lower Passaic River Study Area (the "Study Area”). CSXT, on behalf of Pharmacia, and a significant number of other potentially responsible parties are together conducting a Remedial Investigation and Feasibility Study of the Study Area pursuant to an Administrative Settlement Agreement and Order on Consent with the EPA.

In March 2016, EPA issued its Record of Decision detailing the agency’s mandated remedial process for the lower 8 miles of the Study Area. Approximately 80 parties, including Pharmacia, are participating in an EPA-directed allocation process to assign responsibility for costs to be incurred implementing the remedy selected for the lower 8 miles of the Study Area. CSXT is participating in the allocation process on behalf of Pharmacia. At a later date, EPA will select a remedy for the remainder of the Study Area and is expected to again seek the participation of private parties to implement the selected remedy using EPA’s CERCLA authority to compel such participation, if necessary.

CSXT is also defending and indemnifying Pharmacia in a cooperative natural resource damages assessment process related to the Property. Based on currently available information, the Company does not believe any indemnification or remediation costs potentially allocable to CSXT with respect to the Property and the Study Area would be material to the Company's financial condition, results of operations or liquidity.



                    
 
CSX Q2 2019 Form 10-Q p.18





Table of Contents
CSX CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)

NOTE 7.    Employee Benefit Plans

The Company sponsors defined benefit pension plans principally for salaried, management personnel. CSX also sponsors a non-contributory post-retirement medical plan and a life insurance plan that provide certain benefits to eligible employees hired prior to January 1, 2003. Independent actuaries compute the amounts of liabilities and expenses relating to these plans subject to the assumptions that the Company determines are appropriate based on historical trends, current market rates and future projections. These amounts are reviewed by management.

Only the service cost component of net periodic benefit costs is included in labor and fringe expense on the consolidated income statement. All other components of net periodic benefit cost are included in other income - net.
 
Pension Benefits Cost
(Dollars in millions)
Second Quarters
 
Six Months
 
2019
2018
 
2019
2018
Service Cost Included in Labor and Fringe
$
8

$
7

 
$
16

$
16

 
 
 
 
 
 
Interest Cost
26

23

 
52

46

Expected Return on Plan Assets
(43
)
(43
)
 
(86
)
(87
)
Amortization of Net Loss
8

10

 
15

20

Total Included in Other Income - Net
(9
)
(10
)
 
(19
)
(21
)
 
 
 
 
 
 
Net Periodic Benefit Credit
$
(1
)
$
(3
)
 
$
(3
)
$
(5
)
 
 
 
 
 
 
 
 
 
 
 
 
 
Other Post-retirement Benefits Cost
(Dollars in millions)
Second Quarters
 
Six Months
 
2019
2018
 
2019
2018
Service Cost Included in Labor and Fringe
$
1

$
1

 
$
1

$
1

 
 
 
 
 
 
Interest Cost
1

1

 
2

3

Amortization of Prior Service Costs
(1
)

 
(3
)

Total Included in Other Income - Net

1

 
(1
)
3

 
 
 
 
 
 
Net Periodic Benefit Cost
$
1

$
2

 
$

$
4

 
 
 
 
 
 

    
Qualified pension plan obligations are funded in accordance with regulatory requirements and with an objective of meeting or exceeding minimum funding requirements necessary to avoid restrictions on flexibility of plan operation and benefit payments. No contributions to the Company's qualified pension plans are required in 2019.



                    
 
CSX Q2 2019 Form 10-Q p.19





Table of Contents
CSX CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)

NOTE 8.    Debt and Credit Agreements

Total activity related to long-term debt as of the end of second quarter 2019 is shown in the table below. For fair value information related to the Company's long-term debt, see Note 11, Fair Value Measurements.

(Dollars in millions)
Current Portion
Long-term Portion
Total
Long-term debt as of December 31, 2018
$
18

$
14,739

$
14,757

2019 activity:
 
 
 
Long-term debt issued

1,000

1,000

Reclassifications
227

(227
)

Discount, premium and other activity

10

10

Long-term debt as of June 30, 2019
$
245

$
15,522

$
15,767


Debt Issuance
On February 28, 2019, CSX issued $600 million of 4.25% notes due 2029, which was a reopening of existing notes originally issued in November 2018, and $400 million of 4.50% notes due 2049. These notes are included in the consolidated balance sheets under long-term debt and may be redeemed by the Company at any time, subject to payment of certain make-whole premiums. The net proceeds will be used for general corporate purposes, which may include repurchases of CSX's common stock, capital investment, working capital requirements, improvements in productivity and other cost reduction initiatives at the Company’s major transportation units.

Credit Facility
In March 2019, CSX replaced its existing $1.0 billion unsecured, revolving credit facility with a new $1.2 billion unsecured, revolving credit facility backed by a diverse syndicate of banks. The new facility allows same-day borrowings at floating interest rates, based on LIBOR or an agreed-upon replacement, plus a spread that depends upon CSX's senior unsecured debt ratings. LIBOR is the London Interbank Offered Rate which is a daily reference rate based on the interest rates at which banks offer to lend unsecured funds. This facility expires in March 2024, and at June 30, 2019, the Company had no outstanding balances under this facility.

Commitment fees and interest rates payable under the facility were similar to fees and rates available to comparably rated investment-grade borrowers. As of second quarter 2019, CSX was in compliance with all covenant requirements under this facility.

Commercial Paper
In September 2018, the Company established a commercial paper program, backed by the revolving credit facility, under which the Company may issue unsecured commercial paper notes up to a maximum aggregate principal amount of $1.0 billion outstanding at any one time. Proceeds from issuances of the notes are expected to be used for general corporate purposes. At June 30, 2019, the Company had no outstanding debt under the commercial paper program.



                    
 
CSX Q2 2019 Form 10-Q p.20





Table of Contents
CSX CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
(Unaudited)

NOTE 9.     Revenues

The Company’s revenues are primarily derived from the transportation of freight as performance obligations that arise from its contracts with customers are satisfied. The following table presents the Company’s revenues disaggregated by market as this best depicts how the nature, amount, timing and uncertainty of revenue and cash flows are affected by economic factors:
 
Second Quarters
 
Six Months
(Dollars in millions)
2019
2018
 
2019
2018
 
 
 
 
 
 
Chemicals
$
591

$
588

 
$
1,177

$
1,145

Agricultural and Food Products
358

327

 
702

634

Automotive
329

330

 
640

634

Forest Products
223

215

 
439

410

Metals and Equipment
187

198

 
376

384

Minerals
144

137

 
267

251

Fertilizers
112

112

 
222

228

Total Merchandise
1,944

1,907

 
3,823

3,686